Empowering Capital Construction and calling for consolidation, AlixPartners’ $4 million MTA transformation plan falls flat
While I was away on vacation, the lead-up to Friday’s unveiling of AlixPartners’ much-ballyhooed MTA Transformation Plan seemed to reinforce the political nature of the plan. Amidst ever-louder rumors that the recommendations had been written long ago by someone other than the consultants with the $4 million contract, Gov. Andrew Cuomo warned that not everyone would be happy with the plan, and early reporting indicated that Andy Byford could be stripped of some responsibilities and power (largely, it was theoried, as a short-sighted move in Cuomo’s ongoing one-sided grudge match against the popular and highly competent NYC Transit President). Palace intrigue stories ruled the roost.
Late in the day on Friday, the actual report landed, and it landed with both a thud and a hint at things to come. It promises the bare minimum of transformation while failing to explore true efficiencies such as combining the two commuter rail agencies into one with streamlined service and operations. Despite early word to the contrary, it ultimately didn’t end up recommending an immediate split of New York City Transit’s buses and subways into separate divisions, though contemplated such a split down the line, and it recommended that many MTA functions, particularly with respect to construction, be centralized under Capital Construction, without acknowledging the cost and performance issues that have plagued Capital Construction seemingly since its inception. As I’ll explore, transit advocates are particularly concerned with this proposal.
And of course there is the $40 billion plan: How does this transformation plan affect Andy Byford and his Fast Forward plan that, if allowed to proceed, would fix and modernize the subways? On that front, the plan isn’t particularly clear. It includes recommendations for a series of improvements — centers of excellence for customer communications, an accessibility guru, and a focus on maintenance and safety — that Byford has spent months implementing both as part of Fast Forward and as part of his job in repairing the transit network, but it also calls for removing all construction work, implicitly including signalling, the backbone of Fast Forward, from agency head purview to the Capital Construction group.
But here’s where things get murky: Despite the actual words in the report, multiple MTA officials have told me Byford will retain control and oversight of the bulk of Fast Forward, including the key resignalling initiatives. It’s possible that when the dust settles, Cuomo may find a way to push Byford out of that role as well or attempt to step on the NYC Transit president’s toes as he is trying to do with Save Safe Seconds. But for now, a report that simply should have embraced Fast Forward as the best practices model for reforming the key parts of the MTA seems to muddy the waters. It’s ultimately a superficial report without clear indication as to which, if any, international best practices it was modeled after, and sources tell me AlixPartners have struggled to defend even some of the more basic recommendations (such as splitting up buses and subways). It seems more akin to political cover for Cuomo’s ongoing attempts at controlling the minutiae of the multi-billion-dollar MTA, but that would just be par for course.
Inside the Plan: The Seven Recommendations
So with that in mind, let’s take a quick look at what this thing, available here as a pdf, actually says. Here are the seven recommendations:
- Recommendation: The MTA should refocus agencies on service delivery, core safety, operations and maintenance activities, and centralize all support functions. In the new organization, the agencies should focus exclusively on service delivery, safety, day-to-day operations and maintenance, rather than general support functions. The agencies will have reporting lines to a Chief Operating Officer. All other services will be merged and coordinated centrally with a goal of driving a higher level of services at lower costs. This would result in consolidation of more than 40 functional groups within the existing MTA Agencies to six departments in the new MTA organization. Furthermore, the Transformation Plan calls for changes to the fundamental ways the MTA does business in order to achieve more effective and efficient performance.
- Recommendation: MTA should centralize all capital-related functions across MTA into a new central group responsible for planning, development, and delivery of a Capital Program that improves service, the customer experience and accountability. To address slow, costly, and bureaucratic processes and to create accountability, all Capital-related functions across the MTA should be merged into a central group. This new capital group will be accountable for planning, development, and delivery of the Capital Program. This group would identify optimal project delivery (groupings, timing, delivery), increase competition in a historically constrained supplier market, and complete important capital projects that improve service and customer experience quicker.
- Recommendation: MTA should create a new central engineering function reporting to a new Chief Engineering Officer to set standards, ensure quality and sustainability of infrastructure. To address inconsistent engineering methods across agencies and eliminate the duplication of processes and standards and ensure quality and sustainability of infrastructure, a new central Engineering group reporting to a Chief Engineering Officer will establish clear engineering and maintenance standards to be executed consistently across all agencies. This will provide consistent standards and specifications and eliminate unnecessary complexity and duplication.
- Recommendation: MTA should create a new central customer communication function to provide high quality and consistent customer engagement led by communications specialists. To address many existing differing communication types (i.e., service updates, timetables, customer feedback, etc.) from several different agencies, MTA should centralize communications to clearly and consistently manage the message, medium and content.
- Recommendation: MTA should centralize all operating support functions (i.e., operating standards and service design) focusing agencies on service delivery. To eliminate silos and enable multimodal network design optimization, the MTA should centralize operating standards and service design. Currently each MTA agency has its own internal operations standards and service design capabilities, which would be better managed under one integrated function serving all agencies.
- Recommendation: MTA should centralize all human resource functions to reduce redundancies (such as differing organizational structures and too many layers across agencies) and drive clearer lines of accountability. The MTA should create a centralized human resources department focused on attracting, developing, and retaining the talent required to improve MTA performance and service delivery. This new entity will be tasked with clearly articulating a new talent strategy. This will help to resolve issues of duplication and improve analytics, data consistency, and data integrity.
- To drive the transformation, the MTA will require a selection of new leadership roles and capabilities [including a Chief Operating Office reporting to the CEO and the MTA Board, if the Board chooses; a Chief Transformation Officer reporting directly to the Board; and an MTA Accessibility Officer reporting directly to the CEO].
As you can see, these transformations are hardly that transforming. Consolidating true back-office functions such as human resources, legal and communications are true efficiencies that should have been realized decades ago but speak of the siloed nature of the MTA’s sub-agencies. The rest of the recommendations are either covered by plans put forward by current leadership or seem flimsy. Why, for instance, should a transit agency not be in charge of operating standards and service design for its own service delivery? It doesn’t make sense, operationally or otherwise, to, say, remove oversight of operating standards and service design for buses and subways from the auspices of New York City Transit and place these responsibilities under a centralized agency. There is no inherent benefit to placing service design for commuter rail with service design for local buses and subways, and it works instead to create communications and inter-agency
pain points. The report itself fails to argue why this type of consolidation would be useful and doesn’t name a signal transit agency that has implemented such an approach to ops planning and ops execution.
With respect to the personnel recommendations, in addition to the accessibility overlap, it’s also worth questioning the call for a COO. Ronnie Hakim is currently the Managing Director of the MTA, reporting to the agency’s CEO and Chair. If she isn’t already fulfilling the COO role AlixPartners identified, what exactly is her job at the MTA and how could it be reformed so that she is essentially this COO? Questions such as these — ones probing the role certain Cuomo allies play at the agency — were seemingly ignored.
Reactions to a ‘Rush Job’
Ultimately, this $4 million plan reads more like a basic PowerPoint presentation of bare concepts that aren’t truly transformational and contain wrong information about the MTA’s structure and history. It reads very much like a rush job thrown together to support the political buried within. One MTA source acknowledged the conceptual nature of the report, indicating that the Board expects more detailed plans in the final report due in September. But this is what the Board will vote on later this month, and advocates aren’t impressed. Nick Sifuentes, the executive director of the Tri-State Transportation Campaign, did not mince words:
“A rushed, three-month process with no public input is a lesson in how not to do reform of the nation’s largest transit system. This brief report would be laughable if it wasn’t so serious for the millions of New Yorkers who rely on subways, buses, and commuter rail every single day. Especially with service improving, the governor should commit to an actual democratic process for MTA reform, not something done in, basically the dead of night.
The AlixPartners ‘plan’ relies heavily on the purposed ‘success’ of the governor’s Subway Action Plan, which has been wildly overstated by its proponents. Analysis by Aaron Gordon and others have shown that the SAP has actually not significantly improved service. If this plan relies on the SAP process as justification for wholesale change at the MTA, that foundation is pretty thin. The report’s revisionist history and factual inaccuracies just further the conclusion that this is not the way to handle sweeping reform of the single largest public entity in the state.”
Transit Center, too, released a strident statement objecting to the central tenet of the reorganization report. That transit watchdogs are so opposed to empowering capital construction, one of the more problematic elements of the MTA, with key modernization initiatives should be telling.
TransitCenter statement on MTA recommendations from AlixPartners: pic.twitter.com/cdcicmbiEs
— TransitCenter (@TransitCenter) July 12, 2019
And so we’re left with an expensive report, an uncertain future for Andy Byford, the key leader with loads of public support, the most riding on the report and seemingly the touchiest relationship with the governor, and haziness around the recommendations. Will this transform the MTA or simply shuffle the deck chairs of this Titantic as Captain Cuomo steers the ship toward an iceberg? You can probably guess my answer.