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Board of Commissioners Endorses Recommendations of the Special Panel on the Future of The Port Authority

At the first Board of Commissioners meeting of the year, the Port Authority Board formally received and voted unanimously in support of the core structural and strategic recommendations of the bi-state Special Panel on the Future of the Port Authority appointed by New Jersey Governor Chris Christie and New York Governor Andrew Cuomo in May 2014.

The Special Panel’s December 26, 2014 report, “Keeping the Region Moving,” recommended both a comprehensive overhaul of the governance of the agency, with a single Chief Executive Officer selected by and accountable to the Board replacing the current Executive Director and Deputy Executive Director, and a recommitment to the agency’s core transportation mission as its role in the redevelopment of the World Trade Center nears completion.

Endorsed by both governors in a joint statement late last year, the report’s recommendations range from a renewed commitment to the modernization of the region’s airports to a call for Port Authority leadership and regional coordination in the effort to expand cross-Hudson transit capacity for the region’s commuters and businesses.  The Board noted in its resolution, however, that it would determine whether individual operational suggestions also contained in the report were the best means to pursue the recommended reforms.

The Board also established a Special Panel Implementation Office within the agency to coordinate implementation of the Special Panel’s recommendations.  The Special Panel Implementation Office, which will be overseen by the Chairman and Vice Chairman, will submit a work plan and schedule for each element of the reform agenda to the Board for approval at its March meeting.  The Board will then receive a progress report on the individual implementation initiatives at each monthly Board meeting.

“The Governors made it clear that nothing less than transformative change would be acceptable, and we believe the recommendations offered by the Special Panel and endorsed by the Board today represent a historic step forward for the Port Authority,” said Port Authority Chairman John Degnan.  “These reforms will enable the agency to tackle the many challenges facing our regional transportation system in the years ahead with an efficient leadership structure and a clear strategic focus.”

“Over the past few years we have made a number of incremental changes at the Port Authority, but only through a major overhaul of the Port Authority’s mission, structure, management, operations, and overall governance can we truly place this critical bi-state agency in a position to address the region’s transportation challenges,”  said Port Authority Vice Chairman Scott Rechler. “With today’s action by the Board, we can begin to re-establish the Port Authority as a global transportation leader.”

The specific recommendations of the Special Panel endorsed today by the Board of Commissioners include:

  • Replacing the Executive Director and Deputy Executive Director with a single Chief Executive Officer selected by and accountable to the Board of Commissioners
  • Replacing the Chair and Vice Chair with rotating chairs from each state.
  • Creating a new Chief Ethics and Compliance Officer
  • Issuing a new Port Authority Code of Conduct for employees, Commissioners and vendors
  • Adopting a new Mission Statement to refocus the authority on its core mission of developing and overseeing regional transportation infrastructure
  • Reinstating the Port Authority’s regional leadership role by initiating a comprehensive planning effort in 2015 with a strategic vision focused on expanding and developing new regional transportation capacity by:
  • Bringing 21st Century airports to the region;
  • Addressing the growing Trans-Hudson transportation crises; and
  • Ensuring that our ports remain the premier destination for our nation’s freight.
  • Redeploying $600 million in unallocated Regional Development funds to addressing the transportation needs of the region.
  • Revitalizing the Port Authority’s core transportation assets, including LaGuardia, Kennedy and Newark Liberty Airports, the Port Authority Bus Terminal, Port Commerce and the PATH divesting from the non-core real estate and development, including the World Trade Center;
  • Employing more innovative and flexible financing techniques such as updating the Port Authority’s consolidated bond resolution, Public Private Partnerships, exploring innovative financing tools such as variable rate financing, and retaining a global investment advisory firm.

The Port Authority has been notified by the governors that it is their preference for a rotating chair between the states, rotating every two years, starting with a New York appointee.  This structure will begin once a new CEO is appointed by the Board.

The Board also acted to dissolve its temporary Special Oversight Committee, which was established in February 2014 to focus on the need for governance and operational reforms at the agency.  Based on its recommendations, the Board in early 2014 replaced the “consent calendar” method of voting with individual roll call votes in public session and modified the Commissioner recusal process to inform the public of any recusals prior to Board action.  The Board commended the members of the Special Oversight Committee for their contributions to the ongoing process of reform at the agency.

In related action, the Board of Commissioners today adopted a resolution to authorize the Chairman and Vice Chairman to engage an executive search firm, following an appropriate procurement process, to assist the agency in identifying candidates for the new position of Chief Executive Officer of the Port Authority.

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