The Port Authority of New York and New Jersey could be forced to pay out more than $150 million this year on a pair of complex and risky investments originally designed to save the agency money. READ MORE
Mayor Michael Bloomberg defended the push to open the September 11 Memorial and Museum by the tenth anniversary of the attacks after Governor Andrew Cuomo and New Jersey Governor Chris Christie released an audit citing the drive to open the facility by the historic date as a major factor behind $3.8 billion in cost overruns at the Ground Zero construction site.
“I dont know where those numbers come from,” Mayor Bloomberg said at a press conference yesterday. “Could you imagine if America couldn’t have come up with a memorial by the tenth anniversary? I would suggest the press would have had a field day. It would have gone on and on. It would have been embarrassment around the world.” Read More
Governor Andrew Cuomo said he thinks the students of the State University of New York system need to deal with tuition hikes and learn about “financial reality.” Read More
The Port Authority of New York and New Jersey is shelling out more than $2 million per month on three interest rate swaps tied to bonds that either never were issued or have long since been refunded.
In all, the agency has paid Wall Street banks more than $37 million since 2007 to cover the three swaps, which currently have a market value of approximately negative $145 million. When combined with other swaps the agency has paid to terminate over the past two years, the total swaps payout crests $70 million since 2007.
The swaps are basically an exchange of a fixed payment by the PA for a variable one from a counterparty tied to a short term interest rate. The derivatives, which are essentially a bet with another company on which way interest rates will move, are meant to protect the PA in the event that interest rates soar. When used as a hedge, a swap is designed to lock in a low fixed rate payment to offset the long term risk of a variable rate bond. The variable rate payment paid by the counter party is designed to track the rate paid by the PA on the bonds, offsetting each other and mitigating the risk of soaring rates. Read More
New York state Comptroller Tom DiNapoli’s audit about overtime at the Port Authority is adding momentum to Governor Cuomo’s criticism about the agency’s management.
On his weekly radio show this morning, Mayor Bloomberg — whose private sector ethos hasn’t been eroded by a decade of public service — offers a countervailing view of overtime.
“You can cut anything, that doesn’t make it a rational policy…overtime really is part of good management cause you just don’t want the maximum work force for the maximum one-time-a-year when you need it.”
In a scrum with reporters in Albany today, Governor Andrew Cuomo explained how much involvement his appointees to the Port Authority — which recently proposed massive toll hikes — have had so far.
“We’ve had two appointees who were put on, who attended one meeting,” Cuomo said.
The comment comes after a couple of news stories — from the New York Times and the Bergen Record — reported Cuomo and New Jersey Governor Chris Christie were aware that the Port Authority would propose toll hikes in advance of their announcement last week. Read More
In a joint statement with Governor Christie late this Friday afternoon, Governor Cuomo said blocking the Port Authority’s ability to raise money through borrowing and risking a downgrading of their bonds would be “a potentially disastrous result” and “unacceptable.”
The bi-state, quasi-independent agency announced plans for massive toll hikes to pay for operating costs and improvement, thanks to a lack of investment from the state. Read More
