$s & SAFETY:NY Thruway strong revenue growth

June 18, 2000
By Peter Samuel

$s & SAFETY:NY Thruway strong revenue growth

Originally published in issue 49 of Tollroads Newsletter, which came out in May 2000.

Page:24

Subjects:safety financials profit annual revenue wimp boards

Facilities:New York State Thruway

Agencies:Thruway NYSTA

Locations:NY

The New York State Thruway Authority’s annual report did a sterling job in 1999 in containing costs and earning extra income. Total operating costs and maintenance were almost unchanged at $198m while toll revenues rose almost $18m or 4.8% to $392m. Concession revenue edged up slightly to $12.3m from $12.1m the year before.

The authority unfortunately uses a primitive form of governmental accounting called ‘fund accounting’ whereby no depreciation is charged and no profits or losses are declared. Instead of accounting for its all important capital assets it has various mysterious adjustments, and reserve funds into which surpluses go, and the support of some capital projects.

NYSTA’s net income without depreciation was $143m in 1999 versus $125m in 1998. It values the Thruway at $2,974m which depreciated over 30 years should be attracting a depreciation charge of almost exactly $100m, which would produce a profit figure of $43m for 1999. In 1998 the depreciation should have been a bit lower so maybe the profit was $30m. Those are a miserable return on capital employed (1.5% and 1.0%) but state owned toll agencies are not geared up for competing in their use of capital. Whenever they have to go to the capital markets in a serious way they have to play catchup and raise the toll rates drastically.

NYSTA is the largest toll revenue generator in the US after the Triborough Bridge and Tunnel Authority (MTA B&T) in New York City. Toll revenue last year was $392m from 247m toll transactions, or an average of 676k daily. Its revenue is just about equally split between a central trip-toll system based on entry and exit registrations with some 52 toll plazas, and a point toll system at 8 barrier plazas. It operates around 350 toll lanes.

NSTA is famous for its in-house engineering expertise. It was the earliest adopter of electronic tolling (ET) in the northeast and in 1994 had an Amtech backscatter system. This was swapped out for a Mark IV system in accordance with agreements with the E-ZPass inter-agency group (IAG) in 1995. It now has on issue nearly 700k tags and 41% of its transactions are electronic.

Most of these are 5mph roll-through transactions in regular toll lanes retrofitted for ET. In August 99 at the New Rochelle toll plaza on I-95, a northbound toll-only site that takes an average 55k tolls/day NYSTA introduced 20mph posted speed ET in the three inside lanes. That gives a throughput of up to 1,400 vehicles/toll-lane/hour NYSTA says compared to about 1,000 at the 5mph posted ET-only lanes. Being a one way toll point the New Rochelle plaza has no employees having to cross the higher speed lanes. (Of course in Texas they’d have stuff flying through lanes like those at 80mph, not 20mph.)

ET express in design

NYSTA has begun preliminary designs on a full highway speed ET operation in the Albany area for a complex interchange IC-24, known as the Washington IC, where the Thruway meets untolled sections of I-90 from the east and I-87, the NYSDOT expressway often locally called Northway that heads up into the finger-lakes area and to Montreal. The toll lanes here cater not only to the two motorway standard roads but to the Crossgates Mall, a large nearby shopping center, a state univ NY (SUNY) campus and other businesses. The toll plaza handles 35k/toll payments/day and issues 33k entry tickets/day. The most likely scheme is to build a long flyover for ET-only patrons that would take them right over the top of the toll plazas.

ET-only IC

In the Buffalo area an ET-only interchange is being discussed at Gunville Rd Lancaster (to be IC-48B?). A bridge over the Thruway would get ET-only lanes. Direct connections to the Thruway would serve a large food warehouse with 300 employees and trucks coming and going all day, as well as other smaller businesses that presently have to travel several miles on local streets to get on the Thruway.

Toll collection cost $57.5m on the Thruway in 1999, a drop of 3.1% or nearly $2m on the previous year and 14.7% of toll revenue compared to 15.9% for 1998.

Safety

NYSTA features its safety record in the 1999 report. 31 people died on the Thruway system during the year compared to the previous lows of 34. Vehicle-miles traveled on the Thruway were 9,772m, so this is a fatality rate of 3.2/billionVMT. The Thruway touts this as “one-fifth the national fatality rate.” The national fatality rate of 16 includes all classes of roads most of which are not really comparable. Most of the 16 death rate is attributable to at grade intersections, lack of a median, abutting property entrances and exits, poor sight distances, utility poles at the curb etc. A more persuasive comparison is with interstate highways, which for 1996 was 8 based on the urban rate of 6 and the rural rate of 13 (Highway Stats 1998 Table Fl-1). NYSTA’s safety is almost three times that of comparable mostly free roads in the interstate system.

The most accurate way of stating the safety issue is to say: If the Thruway had had smashes at the rate and severity per vehicle mile typical of ‘free’ urban and rural interstates around the country it could have been expected to have had 80 to 90 fatalities last year. In fact it had 31 fatalities, so 50 to 60 people lived in 1999 because of the better safety record of the Thruway.

NYSTA credits a high level of policing, edge-line rumble grooves that rouse drowsy drivers, and a high seat belt use rate (85%) for its lower death rate. Maybe more thorough ice prevention, debris removal and more attention to roadside hazards are also a factor?

An ‘independent’ public corp

NYSTA’s annual report says proudly in the introduction that the Authority is “an independent public corporation.” This was put to the test earlier this year when politicians criticized a decision of the NYSTA board to support its capital program with annual construction-cost indexed toll increases. The Governor asked them to look for “alternative financing.”

Following this the board deferred for three months the toll increase and hired Vollmer Associates to look at alternative financing prospects. Vollmer subsequently reported that there were several options: (1) the Authority’s plan for an indexed set of flat-rate toll increases (2) increases in toll rates limited to peak hours in the congested New York section, around the state capital region and in Buffalo, and an end to frequent user discount plans (3) a system competitively bidding out major Thruway Authority functions to drive costs down [though Vollmer warned this raised sensitive labor issues] (4) the Thruway be relieved of responsibility for maintaining the non-revenue generating historic Erie Canal system which should be turned over to the state park service and tolls be levied on presently untolled highways NYSTA owns and maintains, such as I-95 east of New Rochelle, I-84 and I-287. The Thruway after public hearings and discussions with key elected officials is planning a phased-in version of (3) and (1). It considers (2) which the New Jersey Turnpike has embraced as inapplicable to the Thruway because of more severe congestion. It won’t touch (3) because of the strong position of labor unions at the Thruway.

The paragraph immediately above is fantasy. Not a word of it is true. It is what an independent NYSTA might have done.

In fact the NYSTA board proved themselves to be complete sycophants of the politicians. Although they had unanimously voted for the annually indexed toll increase they unanimously withdrew the whole plan without a word of response, following criticism from several legislators and a request from the governor to look at “alternatives” to the toll increases. COMMENT: The Authority may in theory be an “independent public corporation” but its board makes a mockery of that when they act in such a craven manner. No person of dignity, of even the most minimal self-respect, would allow themself to be overridden in this fashion. Wimps!

BACKGROUND: The Thruway is the longest toll system in the US with 1026km (641mi) centerline under its control. What it calls its Mainline is 682km (426mi) from Yonkers in New York City, over the Hudson River on the Tappan Zee bridge at Tarrytown north to Albany (all classified as I-87), then west to the outskirts of Buffalo at Williamsville (all classified ass I-90). It operates (1) another 100km (60mi) of toll road (I-90) from near Lackawanna on the southern outskirts of the Buffalo area, close to the shore of Lake Erie, almost to the Pennsylvania state line (2) several stretches of I-190 in the Buffalo area including the Grand Island bridges near the Niagara Falls (3) the Berkshire Spur 44km (28mi) from Albany east, an I-90 connector to the Massachusetts Turnpike (4) New England Thruway a 16km (10mi) stretch of I-95 between Pelham and Rye with a mainline plaza northbound at New Rochelle (5) untolled I-84, an east-west highway that crosses the Thruway at Newburgh 85km (54mi) north of NYC (6) the Cross-Westchester Exwy (I-287), a 17km (11mi) spur off the Mainline near the Tappan Zee Bridge that links with I-95 near Rye NY.

The Thruway authority was created by the NY state legislature in 1950 and the first stretch of the toll road opened in 1954. (Contact Terry O’Brien 518 436 2983)

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