The following appears in the September 23-29, 2011 issue of the Long Island Business News:

Last month, the governors of New York and New Jersey relented and permitted the Port Authority to raise tolls and fares for the third time in 10 years. While the increases were half the amount the agency sought, nevertheless, it was a victory for incompetent bureaucrats who have squandered billions of toll payers’ hard-earned dollars and have run out of capital to complete Ground Zero construction.

In exchange for the OK, however, the governors must insist on genuine reforms that ensure the agency is never again rewarded for failure. To achieve this end, their respective board members must be given marching orders to overhaul the bloated capital projects budget, to scale down the $3.1 billion downtown PATH subway station, to punish those responsible for cost overruns and to hire an independent firm that reports directly to the board to root out waste and mismanagement. Both governors should also demand immediate resignations from P.A. commissioners appointed by prior governors.

One huge expense that needs to be curtailed is Port Authority employee overtime. In a blistering report released in mid-August, state Comptroller Tom DiNapoli declared, “Overtime flows like water at the Port Authority and management has no clear strategy to achieve its own benchmarks and goals for curbing costs.”

Between 2006 and 2010, $459 million was paid in overtime to over 5,000 of the P.A.’s 7,000 employees. There were two dozen whose overtime earnings were greater than their base salary. The P.A.’s 2010 budget, which claimed overtime would not exceed 15 percent of base salaries and agencywide would be reduced by 20 percent, came in at $85.7 million, down only 3 percent from 2009. Overtime for P.A. police and PATH workers was twice the limit and accounted for two-thirds of the total paid by the authority.

Reacting to these findings, the comptroller concluded, “Port Authority management set cost control goals, policies and overtime limits, and then proceeded to fall asleep at the wheel. They’ve made minimal progress in containing these costs, which are too high given the current fiscal environment.”

The comptroller’s report also revealed that as a result of these appalling O.T. costs, P.A. employees account for 23 percent of the state’s top 300 pension earners with lifetime guaranteed annual incomes ranging from $125,000 to $196,000. The average P.A. retiree receives $143,000 a year. Toll payers whose 401(k)s were wiped out during the Great Recession have every right to be outraged that they and their children and grandchildren will have to pay for these exorbitant pensions.

The people of the New York-New Jersey region deserve better. Govs. Chris Christie and Andrew Cuomo should make it clear that they will accept nothing less than fundamental change that results in a leaner and more responsive Port Authority.

 The following appears in the September 9-15, 2011 issue of the Long Island Business News:

Now that Hurricane Irene is over and electric service has been restored to the Island, it is time for a sober review of the performance of those who run our electric system.

In the mid-1990s, I served on a review group for the Long Island Power Authority’s future, appointed as a conservative member of that team. I remember the commitment that LIPA would have no more than two dozen employees and would oversee a private sector utility hired to operate and maintain the electric system. All agreed that LIPA didn’t have the expertise, experience or background to provide electricity to 3 million people.

That approach was reflected in LIPA’s acquisition of LILCO’s transmission and distribution businesses back in 1998. LIPA’s role was merely to serve as a financing conduit that issued billions of dollars in tax-exempt debt to refinance the billions in Shoreham debt LILCO had fruitlessly incurred. Further, as a public entity, LIPA would not have to pay federal or state income taxes or provide returns to the stockholders of a privately owned company. Those three sources permitted a 20 percent rate cut. Ratepayers cheered.

But a now-forgotten, long-time LIPA official began a campaign to position LIPA as the actual provider of electric service on Long Island. LIPA’s profile was raised as the place to look for storm restoration, maintenance matters and all the small and large tasks incident to providing power in a post-industrial society. When storms threatened, it was LIPA that held the prime spot at press conferences and the public concluded, incorrectly, that LIPA ran the electric system on Long Island.

During LIPA’s 13-year existence, Long Island was fortunate and missed the horrors of a full-scale hurricane, last seen in 1985 when Hurricane Gloria knocked out the power of 750,000 Long Island electric customers. On Aug. 28, Long Island’s lucky streak ended. Irene struck, casting over 500,000 customers into darkness. Thankfully, no life was lost and injuries were few.

The inevitable public outrage arose slowly at first and then loudly against LIPA for not restoring power quickly. (Gov. Andrew Cuomo’s strong intervention as recovery lagged undoubtedly played a role in bringing Irene’s impact to an end,) Throughout the entire crisis, one thing was certain: LIPA’s communication with its customers was horrid. Tens of thousands of calls were dropped, customers who got through were told nothing about crew assignments and when power would be restored. Even LIPA’s COO conceded that customer communication was poor.

But in fact, Long Island electric consumers may be directing their ire at the wrong place. That’s because LIPA’s 100-plus employees include zero electric linemen and zero tree trimmers and zero substation operators. LIPA’s employees – accountants, lawyers and the politically connected – only monitor the company that actually runs the electric system on the Island. That company is National Grid, an international energy company based in London with significant operations in New York and Massachusetts. Grid is the successor to Keyspan, which acquired LILCO’s generation and gas businesses in 1998. I will leave it to post-mortem reviewers to determine whether Grid was up to the job of restoring power. My sense is that International Brotherhood of Electrical Workers employees workers from National Grid and states as far away as Michigan, Missouri and Tennessee worked long and hard to restore power and deserve our thanks.

Just as the Federal Emergency Management Agency was roundly criticized following Hurricane Katrina for its inadequate response caused in part by being perceived as a first responder rather than a federal coordinating bureaucracy, so, too, LIPA’s past communications have misled the public and have confused responsibility for restoration of service. It’s high time for LIPA to clarify what it is and isn’t, and who actually bears responsibility for electric service on our Island.