A scathing new audit of the Port Authority of New York and New Jersey has found that costs at the World Trade Center now top $14.8 billion dollars. That’s an increase of $3.8 billion since the last public forecast in 2008.
The audit cited the Port Authority for a lack of consistent leadership, poor capital planning, insufficient cost controls, and a lack of transparent and effective oversight for problems at the World Trade Center. The audit also identified approximately $1 billion in additional cost overruns that it says will happen unless the Port Authority finds a way to trim costs.
The audit, performed by Navigant Consulting, outlined other problems at the agency. It found that 93% of Port Authority employees make no contribution to their health care. The average total compensation for a Port Authority employee exceeds $143,000 annually, with little evidence that compensation is tied to performance. The audit also found that average overtime or other add-on compensation in 2010 topped $20,000 per employee.
Another finding: the Port Authority’s exposure to debt has more than doubled over the past ten years, from about $9.1 billion just over a decade ago to $19.5 billion at the end of last year. Future cash flow from operations alone will not be able to fund ongoing capital projects, according to the interim report.
Port Authority executive director Pat Foye acknowledged the problems in a statement on the agency’s website. “The consultant’s preliminary review underscores the need for the Port Authority to refocus,” said Foye. “A poorly coordinated capital planning process, insufficient cost controls and a lack of transparent and effective oversight of the World Trade Center program that has obscured full awareness of billions of dollars in exposure to the Port Authority all played a role in getting us to where we are today." Port Authority vice chairman Scott Rechler also made a statement on the agency website: “For too long, the Port Authority has followed past historical management and financial practices, and the time has come for that to change."
New York Governor Andrew Cuomo and New Jersey Governor Chris Christie requested the audit after the agency voted to raise bridge and tunnel tolls in August. In a joint statement, the two said: “This record of historic failure must be reversed.”
You can find the audit here.