Watchdog group calls for transparency in Port Authority budget

Steve Strunsky/The Star-Ledger By Steve Strunsky/The Star-Ledger
July 16, 2013 at 4:08 PM

The Citizens Budgets Commission, a New York City-based watchdog group, said the budgeting process of the Port Authority of New York and New Jersey, despite the agency's repeated pledge of transparency, lacks precisely that.

So, the commission today called for the upcoming budget to include more detail and to be accompanied by a capital plan. The commission also released a letter to the Port Authority's executive director that contained a series of recommendations for reforms, some of which mirror processes already in place at other public agencies in the region.

"Prior to 2013 the agency prepared a detailed annual budget that included capital and operating expenses for each activity, but it did not have regularly updated multi-year financial plans for operating or capital expenses," Carol Kellermann, the commission's president, wrote to Port Authority Executive Director Patrick Foye.

"Its 2013 operating budget is a shorter and less detailed document than that of previous years and was adopted without opportunity for prior public scrutiny," Kellermann wrote.

The Port Authority board currently approves capital investments on a project-by-project basis, wrote Kellermann, adding that Port Authority is working on a capital plan.

The Port Authority issued a statement saying some of what the citizen commission, or CBC, is calling for is already in the works.

?Many of the CBC?s recommendations are already in place or underway at the Port Authority and as the CBC already knew, the agency announced work on its long-term capital plan months ago," the statement read. "The soon-to-be released capital budget is currently undergoing one of the most deliberate, detailed evaluations in agency history. The budget will lay out not only a short-term spending plan, but also a long-term capital strategy and vision for the bi-state agency."

"(The Port Authority's) 2013 operating budget is a shorter and less detailed document than that of previous years and was adopted without opportunity for prior public scrutiny. It contains major categories of operating expenses, but no capital budget

In December, the board adopted a $2.58 billion budget for the 2013 calendar year, which included salaries for the agency's 6,777 employees and other ongoing operating costs. But unlike previous years, there was no accompanying capital budget detailing spending on major projects, which is often comparable in size to the spending plan for operations. The 2012 capital budget was $3.66 billion.

Most of the agency's revenues are derived from rent at its airports, sea ports and other facilities, and from tolls at its bridges and tunnels. Capital items are typical financed by bonds, repaid by subsequent revenues.

The CBC has been critical of the Port Authority in the past. Days before the agency adopted its 2013 operating budget, the CBC issued a report finding that Port Authority Police officers were paid more than their counterparts in the New York City and Newark police departments, and on the New York and New Jersey State Police departments.

The Port Authority's failure to present a capital budget as it usually does in December followed an effort in July 2012 by the AAA clubs of New York and Northern New Jersey to obtain capital spending records from the agency. AAA filed a motion in federal court in Manhattan seeking the records under a lawsuit that sought to determine whether it was illegally spending toll money on the World Trade Center's redevelopment. The ruling on the motion was not definitive, and AAA has not received the documents it wants.

Marta Genovese, a AAA New York spokeswoman, applauded the CBC, saying the group was calling for rational steps that would enhance transparency and accountability.

?Despite the Port Authority?s talking about transparency, it seems like they?ve gone backward this year,? said Genovese.

In the letter to Foye, the CBC made six recommendations:

1. The Port Authority "should have a detailed annual operating budget and a four-year financial plan," prepared in accordance with generally accepted accounting principles.

2. "The operating budget should be adopted only after opportunities for public review and should be revised and updated during the fiscal year," with the release of a preliminary budget in July, updated and adopted in December, and updated again in February.

3. The agency's capital budgeting should be guided by a 10-to-20-year strategy, revised every four years, and based on assessments of facilities maintenance and other needs.

4. The agency should produce annual and four-year capital commitment plans, revised annually, that specify projects to be initiated and their expected cost, accompanied by a financing plan that indicates revenue sources for each project.

5. Agency staff should produce quarterly reports to the board of commissioners and the public on the status of each capital project, as gauged by independent engineering consultants.

6. Quarterly reports should be made to commissioners with performance measures of activities and accomplishments, comparing actual and targeted performance.

"The staff and I would be glad to discuss them with you and your colleagues," Kellermann concluded in her letter. "We look forward to continuing to work constructively with you."

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