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New York Post

 

Perilous MTA Pick

July 15, 2009

By Nicole Gelinas

PRINTER FRIENDLY

JAY Walder, named yester day by Gov. Paterson to be the next MTA chief, seems smart and competent -- but it may not be good enough.

Taxpayers and transit riders alike should hope Walder sets some conditions for taking the job: If he can’t get guarantees of political support for some tough moves, he could wind up as just a highly paid manager of Albany-made decline.

An American who once worked at the MTA, Walder spent most of the past decade in Britain as finance director of London’s MTA (called TfL). He then went over to the fancy consulting firm McKinsey. And his record shows good instincts.

In London, Walder used financial smarts to try to benefit the taxpayer: He was the point man for the city’s fight against the Blair administration’s effort to hand over long-term responsibility for maintaining and building the Tube to private companies.

The privatization was stupid, because the Tube, like the banks, was too big to fail. When one of the companies went bust, taxpayers were stuck with the bill. At a cost of hundreds of millions of dollars, the government got Walder’s point: The most complicated contract in the world can’t erase the government’s responsibility to invest in mass transit.

Plus, Walder wasn’t shy about telling the public and the pols that the fares had to go up to pay for those vital investments. That will help in New York, where fare demagoguery is perennial.

The job also gave Walder experience with good privatization, which New York needs. London contracts out its bus services to competitive companies. Service has vastly improved.

Yet there’s an important subtlety: Private bus operators can’t do a good job without competent government managers -- who have to ensure that private operators aren’t taking advantage of the taxpayer.

But not everything Walder did and saw abroad bodes well for New York. For starters, he and his colleagues enjoyed ex tremely generous pay and expense accounts. Walder (who wasn’t even the top guy) raked in nearly half a million dollars a year, including housing benefits. That’s 40 percent more than what recently ousted MTA chief Lee Sander made.

The governor says Walder’s pay package is up to the MTA board. But the job is also subject to confirmation by the state Senate. If Walder lands a generous package, senators should ask if he plans to bring in a new management team with similar pay demands.

There’s nothing wrong with paying for someone who can get a lot done -- but that’s the key question. The MTA chief can do little of substance without support from Paterson and the Legislature: They have to support a new union contract that allows for experimentation with bus contracting and other labor flexibility.

In the next few months, state arbitrators will likely hand down a new contract for the Transport Workers Union that puts the MTA in a bind for another three years. As a financial expert, Walder should grasp immediately that inflexible, unreformed labor is the MTA’s biggest problem -- and one that sucks money that should go toward capital investment.

He should tell the Senate and the governor publicly that unless he can get political support to win savings from the union -- including immediate legislation reforming pension costs -- then there’s really no point in hiring him.

Walder’s London experience doesn’t offer much help here. Union costs there are as bad as ever, and a key part of his solution for long-term infrastructure spending was to teach London how to borrow money.

We already know how to do that. Our problem is that we’ve borrowed so much, we really need labor reform, and now.

Walder’s spent the past couple of years at McKinsey -- where he’s probably gotten used to people telling him how brilliant he is. So he may think that, despite political and labor constraints, he can still do plenty to build up the MTA’s credibility to win the public support to pressure the pols on labor reform, later.

It’s a tall order, especially since Paterson may have just a year left, and even with a longer fixed term, Walder could feel unwelcome after his political supporter leaves.

Original Source: http://www.nypost.com/seven/07152009/postopinion/opedcolumnists/perilous_mta_pick_179286.htm

 

 
 
 

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