Reducing Costs at MTA Bridges &Tunnels
The MTA's business transformation continued this week with a top to bottom overhaul of MTA Bridges and Tunnels to reduce costs and improve efficiency. When combined with previously announced administrative reductions and project deferrals, savings at the nation's largest tolling authority will exceed $20 million in 2010.
The total cost savings account for approximately five percent of Bridges and Tunnels' total operating budget. New savings will be achieved through a significant decrease in overtime ($4.8 million savings); the elimination of approximately 90 additional positions including a reduction in layers of management ($4.2 million savings); and the reduction of outside vendor contracts ($1.5 million in savings).
"This is another example of the cultural shift to adopt a new business model here at the MTA," said MTA Chairman and CEO Jay H. Walder. "Permanent structural change creates leaner, more effective organization with ongoing savings. In this instance, we will see $25 million in recurring savings moving forward."
The thorough review of the agency revealed that savings could be achieved by centralizing maintenance operations. For example, each B & T facility currently has its own garage to service vehicles. That will soon change as the agency moves to consolidate operations by moving from eight garages to four garages while still having the ability to service all of its critical vehicles.
B & T was also able to work with labor to improve productivity and customer service while reducing overtime. Previously, all maintenance workers were on an 8 a.m. -; 4 p.m. shift, limiting productivity due to rush hour and leading to excessive overtime. The agency will now be able to limit overtime by adding an 11 p.m. -; 7 a.m. shift that will increase productive overnight maintenance and save $1 million in the process.
"No stone was left unturned in realizing additional savings," said Bridges and Tunnels President Jim Ferrara. "We're eliminating a warehouse that housed materials for the agency and required maintenance personnel to do pick up and delivery to all of our facilities. Our new approach will utilize desktop ordering of materials and will allow us to move warehouse staff to janitorial positions and eliminate an outside cleaning contract."
These budget reductions are the latest in a series of efforts to close an almost $800 million budget gap created by State cuts and deteriorating tax revenues. The MTA had previously announced initiatives to eliminate 15 percent of administrative payroll ($49 million savings in 2010), renegotiate with its suppliers ($18 million savings in 2010), and eliminate or defer half of the projects in the 2010 operating budget ($40 million savings). A week ago, the MTA announced $115 million in agency budget reductions by improving inventory management, further reducing administrative staffing levels, and select changes to cleaning, maintenance and customer service while limiting the impact to customers. Approximately 1,000 additional positions will be eliminated across the MTA through a combination of the removal of vacant positions, attrition and layoffs.