AAA Loses First Round in Legal Battle Over PA Toll Hikes; Audit Criticizes Agency on Spending
A federal court has denied the American Automobile Association’s request to immediately roll back the controversial Hudson River crossings toll hikes that the Port Authority of New York and New Jersey put into effect last September. The Feb. 6 decision by Judge Richard J. Holwell of the U.S. District Court in Manhattan is part of a lawsuit that AAA’s Automobile Club of New York filed against the Port Authority in September charging that the agency uses toll revenues to pay for non-transportation projects including the World Trade Center redevelopment. The suit is ongoing.
The Port Authority says the lawsuit is without merit. “We are pleased that the court has denied [AAA’s] application for a preliminary injunction,” the agency says.
AAA will continue to seek a permanent injunction to have the tolls reversed as well as “declaratory relief” to prevent the Port Authority from spending toll money on any non-transportation-related projects, says Robert Sinclair, a AAA spokesperson. The court has granted AAA time to review financial documentation for its case, he says.
“We are pleased that the court recognized that the financial information submitted by the Port Authority had never been previously disclosed to the public and are looking forward to the opportunity to support our claims with more than just the documents available on the Authority’s Web site,” Sinclair says.
Separately, results from a recent audit of the Port Authority found that the WTC project’s gross costs grew from about $11 billion in 2008 to about $14.8 billion at present and will likely rise further. It found that an estimated net cost to the agency, after third-party reimbursements, rose from about $6 billion to about $7.7 billion during that same time period. The report also says the agency’s debt load at year-end 2011 was $19.5 billion and is expected to rise to about $20.8 billion by the end of 2012.
The 51-page, phase-one interim report, compiled by Navigant Consulting Inc. and Rothschild Inc. at the request of governors Andrew Cuomo and Chris Christie, says the agency is an “organization at the crossroads” and is in need of a “top-to-bottom overhaul of its management structure.”
The report makes several recommendations including establishment of new financial and management controls for all aspects of the WTC project to help mitigate roughly $1 billion of potential incremental cost exposure.
The report also recommends maximizing cost recovery on behalf of third-party stakeholders and limiting any new financial commitments related to increased scope and third-party work. “The Port Authority already needs to recover approximately $1.6 billion from public agencies and private entities, such as the National September 11 Memorial and Museum,” the report says. Work on the museum, located on the WTC site, has slowed due to financial disputes between the agency and the museum’s foundation.
Port Authority Chairman David Samson says the agency is committed to a top-to-bottom review. “The first phase of our independent review provides an objective analysis of what hasn’t worked, particularly with respect to management controls of World Trade Center redevelopment costs, and the findings of the report provide a strong foundation for current executive leadership to get things moving in the right direction,” Samson says.