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[Senate Hearing 112-761]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-761

    RECOVERING FROM SUPERSTORM SANDY: REBUILDING OUR INFRASTRUCTURE

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
           HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT

                                 of the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

ADDRESSING CHALLENGES TO PUBLIC TRANSIT AND HOUSING IN THE NEW YORK-NEW 
    JERSEY REGION FOLLOWING SUPERSTORM SANDY AND ACTIONS NEEDED TO 
  STRENGTHEN THE REGION'S INFRASTRUCTURE TO PREVENT DEVASTATION FROM 
                           FUTURE SUPERSTORMS

                               __________

                           DECEMBER 20, 2012

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 Available at: http: //www.fdsys.gov /

                                _____

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80-540 PDF                WASHINGTON : 2013
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  TIM JOHNSON, South Dakota, Chairman

JACK REED, Rhode Island              RICHARD C. SHELBY, Alabama
CHARLES E. SCHUMER, New York         MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
DANIEL K. AKAKA, Hawaii              JIM DeMINT, South Carolina
SHERROD BROWN, Ohio                  DAVID VITTER, Louisiana
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
HERB KOHL, Wisconsin                 PATRICK J. TOOMEY, Pennsylvania
MARK R. WARNER, Virginia             MARK KIRK, Illinois
JEFF MERKLEY, Oregon                 JERRY MORAN, Kansas
MICHAEL F. BENNET, Colorado          ROGER F. WICKER, Mississippi
KAY HAGAN, North Carolina

                     Dwight Fettig, Staff Director

              William D. Duhnke, Republican Staff Director

                       Dawn Ratliff, Chief Clerk

                     Levon Bagramian, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                 ______

   Subcommittee on Housing, Transportation, and Community Development

                 ROBERT MENENDEZ, New Jersey, Chairman

         JIM DeMINT, South Carolina, Ranking Republican Member

JACK REED, Rhode Island              MIKE CRAPO, Idaho
CHARLES E. SCHUMER, New York         BOB CORKER, Tennessee
DANIEL K. AKAKA, Hawaii              PATRICK J. TOOMEY, Pennsylvania
SHERROD BROWN, Ohio                  MARK KIRK, Illinois
JON TESTER, Montana                  JERRY MORAN, Kansas
HERB KOHL, Wisconsin                 ROGER F. WICKER, Mississippi
JEFF MERKLEY, Oregon
MICHAEL F. BENNET, Colorado

             Michael Passante, Subcommittee Staff Director

          Jeff Murray, Republican Subcommittee Staff Director

                         Hal Connolly, Counsel

                                  (ii)

                            C O N T E N T S

                              ----------                              

                      THURSDAY, DECEMBER 20, 2012

                                                                   Page

Opening statement of Chairman Menendez...........................     1

Opening statements, comments, or prepared statements of:
    Senator Schumer
        Prepared statement.......................................    22

                               WITNESSES

Peter Rogoff, Federal Transit Administrator, Federal Transit 
  Administration.................................................     3
    Prepared statement...........................................    23
Yolanda Chavez, Deputy Assistant Secretary for Grant Programs, 
  Office of Community Planning and Development, Department of 
  Housing and Urban Development..................................     5
    Prepared statement...........................................    25
James Weinstein, Executive Director, NJ TRANSIT Corporation......    12
    Prepared statement...........................................    29
Thomas F. Prendergast, President, MTA New York City Transit, 
  Metropolitan Transportation Authority..........................    14
    Prepared statement...........................................    31
Patrick J. Foye, Executive Director, Port Authority of New York 
  and New Jersey.................................................    16
    Prepared statement...........................................    32

                                 (iii)

 
    RECOVERING FROM SUPERSTORM SANDY: REBUILDING OUR INFRASTRUCTURE

                              ----------                              

                      THURSDAY, DECEMBER 20, 2012

                                       U.S. Senate,
                   Subcommittee on Housing, Transportation,
                                 and Community Development,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Subcommittee met at 11 a.m. in room SD-538, Dirksen 
Senate Office Building, Hon. Robert Menendez, Chairman of the 
Subcommittee, presiding.

         OPENING STATEMENT OF CHAIRMAN ROBERT MENENDEZ

    Senator Menendez. Good morning. Let me welcome everyone to 
today's hearing discussing the unprecedented challenges our 
region's public transit and housing face as a result of 
Superstorm Sandy.
    It has been an incredibly tough morning. We started the day 
with a hearing on the loss of our Ambassador in Libya and those 
challenges, and then, of course, we just had an opening 
ceremony for Senator Inouye lying in state. And now we come to 
the devastation that the Northeast region has. So it has been a 
tough day, but we appreciate our witnesses' being here to help 
us shed some light and hopefully some commitment by our 
colleagues to meeting our challenges.
    As you all know, Sandy's destructive force overwhelmed the 
region, and particularly in New Jersey and New York, and the 
result is damage on a massive, unprecedented scale. 
Unprecedented but, unfortunately, this was our second hurricane 
in 2 years, and we expect extreme weather like this to become 
more common for our region.
    Because we need to prepare for the next storm, it is not 
enough for us to spend our time today simply discussing how we 
restore our housing and transit infrastructure to their 
vulnerable pre-storm condition. In my view, now is the time to 
determine what actions we must take in order to build back the 
region in a way that makes us less vulnerable in future storms.
    The term we use in Washington to describe this is 
``mitigation.'' But I do not think that word makes clear enough 
the critical task we are pursuing here. This is about 
rebuilding in a smarter, better, and stronger way. We should 
learn from the important lessons in the gulf after Hurricane 
Katrina. Transit agencies lost buses in the storm, and when 
these transit agencies started speaking with FEMA about 
replacing those buses, FEMA said they could not buy new buses. 
They had to buy used buses of roughly the same age to replace 
those buses.
    So these agencies were put in the absurd position of 
scouring the country trying to find someone who would sell them 
old buses. But with mitigation funding, we can pay for a new 
bus to replace the old one, and this same principle applies to 
rail transit. Hoboken PATH Station was badly flooded, and it is 
coming back to service weeks after the storm.
    Should we put that station back together with the same 
exact vulnerability to flooding? Or should we rebuild in a way 
that would prevent such extensive flood damage in the future?
    Of course, we should rebuild to protect against future 
storms. It seems to me that it is not only common sense, but 
for my friends who are fiscal hawks, the reality is that it is 
far more fiscally responsible to ultimately ensure that we do 
not have repetitive loss, that we do not have economic 
consequences, and that we do not have human consequences as a 
result of just simply going back to that which was. With a 
smart investment, we can prevent hundreds of millions of future 
damages to our transit system.
    To understand the importance of rebuilding in a way that 
hardens our infrastructure and makes us more resilient, let me 
begin by laying out some facts about the damage to our region.
    Based on preliminary estimates--and I underscore that--over 
300,000 homes in New Jersey alone were damaged, over 20,000 
homes were destroyed or made uninhabitable, and we fear the 
final numbers will be much higher. The preliminary damage 
estimate provided by my State alone is up to $36.9 billion in 
damage. I have lived in New Jersey my whole life, and I have 
never, ever seen the type of devastation we have now.
    I would like to tell you the story of just one of many of 
the homeowners who lost so much. Geri Lynch works as a realtor 
and lived in Oceanport for 10 years in a modest bungalow 
cottage. When word of the storm came, she evacuated with her 
car and as many possessions as she could. Her house was nearly 
destroyed with water rising to 4 feet, and it is still not 
clear if it will be totally torn down or repaired and put on 
higher stilts. And she does not yet know if she will have the 
money to do that.
    She says that practically the only houses in her 
neighborhood that survived were the ones that were built on 
higher stilts, which is exactly why we need resiliency in our 
rebuilding.
    So now she is living in FEMA housing until the end of 
December, and she does not know where she will be after that. 
She says that in the interim she is relying on friends and 
family and community to help her. She has a remarkably positive 
attitude despite all she has been through, which is exactly why 
New Jersey will come back from this stronger than ever. But if 
we do not have a robustly funded Community Development Block 
Grant program (CDBG), the funding for her to rebuild stronger 
simply may not be there.
    To illustrate just how serious the housing damage was up 
and down the Jersey shore, I would like to share these images 
from Union Beach, New Jersey, where homes, cars, and people's 
very lives were just totally destroyed. Sandy was one of the 
largest mass transit disasters in our Nation's history. Four 
out of ten of the Nation's transit riders had their commuters 
disrupted. In my home State of New Jersey, our public 
transportation network was completely devastated by Sandy. New 
Jersey Transit, which carries more than 900,000 riders daily, 
suffered damage to all 12 of its rail lines. Miles of track and 
roadbed were washed out. Electrical substations were flooded 
and destroyed. Hundreds of cars and locomotives were submerged, 
some suffering irreparable damage.
    The PATH System, which carries 77 million people between 
New Jersey and Manhattan each year, was brought to a halt by 
the flooding. The Hoboken Station in New Jersey, which provides 
service to about 30,000 people daily, reopened to the public 
only yesterday, more than a month and a half after Sandy made 
landfall.
    To help illustrate just how serious the flooding was, I 
would like to share this image from PATH security cameras 
showing corrosive seawater rushing into the Hoboken PATH 
Station.
    And in New York, where public transit carries more than 8 
million riders each day, the damage was unprecedented. Sandy 
shut down the entire MTA system for only the second time in its 
108-year history. Eight subway tunnels were flooded, some from 
floor to ceiling, and 12 subway stations suffered major damage 
or were destroyed entirely.
    Again, I want to stress the importance of investing now so 
we do not have to pay again the next time this happens. Where 
tracks need to be raised, we should raise them. Where subway 
stations need to be reinforced against flood waters, we should 
reinforce them. And where electrical substations need to be 
protected and elevated, let us protect and elevate them. The 
one thing we do not want is to find ourselves back in this room 
when the next major weather event strikes our region.
    So, with that, seeing no other Members here at this point--
some may come and, of course, we are on the Sandy recovery 
legislation as we speak--I want to introduce our first two 
witnesses, and I would ask you each to limit your testimony to 
roughly about 5 minutes, although your entire written testimony 
will be included in the record.
    The Honorable Peter Rogoff is the Administrator of the 
Federal Transit Administration. As someone whom the Committee 
knows very well and admires and is an able leader in this 
crisis, I look forward to hearing from him today about the 
Public Transportation Emergency Relief program that the Banking 
Committee helped create and how that will help our region 
recover in the months ahead.
    Ms. Yolanda Chavez is the Deputy Assistant Secretary for 
Grant Programs at the U.S. Department of Housing and Urban 
Development, and she is here to discuss how the Community 
Development Block Grant program can be used to quickly and 
flexibly provide relief following Superstorm Sandy.
    And with that, Mr. Administrator.

   STATEMENT OF PETER ROGOFF, FEDERAL TRANSIT ADMINISTRATOR, 
                 FEDERAL TRANSIT ADMINISTRATION

    Mr. Rogoff. Thank you, Mr. Chairman, Members of the 
Subcommittee. Thank you for inviting me here today to review 
Hurricane Sandy's devastating impact on public transportation 
and discuss the Obama administration's budget request for 
assistance through the FTA newly authorized Public Transit 
Emergency Relief program.
    As you pointed out in your opening statement, Mr. Chairman, 
Hurricane Sandy triggered the worst transit disaster in the 
history of the United States. On the Tuesday morning following 
the storm, more than half of the Nation's daily transit riders 
were without service. And even in the days that followed, as 
services in Boston, Philadelphia, Baltimore, and Washington, 
D.C., came back online, still 37 percent, well more than a 
third, of the Nation's transit riders were without service.
    We applaud the outstanding and tireless efforts of 
emergency responders throughout the region who worked together 
with all the affected transportation agencies to restore as 
much service as quickly as possible.
    FTA and the broader Department of Transportation also have 
been proactively engaged throughout this event. We were, even 
before the storm hit, in regular electronic touch with many of 
the transportation leaders, the Governors, and impacted mayors 
up in the region in terms of preparation, including some of the 
members that are on your second panel.
    FTA also, after the storm, worked with FEMA and the GSA to 
procure well over 200 buses to provide for mobility of 
thousands of New Jersey residents as a result of the loss of 
rail service.
    I personally got on the phone to secure some donated buses 
from other less impacted transit agencies, and we got on email 
as well as the phone to try and scare up some very hard to find 
but desperately needed equipment, which we found in Chicago and 
shipped out right away in order to get the PATH service back up 
and running.
    That said, there is still a great deal more to be done. 
President Obama's supplemental request for disaster assistance 
seeks $60.4 billion in Federal resources for response, 
recovery, and mitigation. The Department of Transportation's 
share of the request is $12.07 billion, and of that, $11.7 
billion, the majority portion, would directly support the FTA's 
effort to repair and replace the affected public transit 
infrastructure and make it more resilient.
    These funds would be administered through FTA's new Public 
Transportation Emergency Relief program, and I want to thank 
you, Mr. Chairman, and the rest of the Senate Banking Committee 
for its leadership in establishing this program in MAP-21 just 
a few months ago. The Administration requested this program in 
our budget and our policy priorities for reauthorization--you 
may recall I testified on its behalf before the Committee in 
May of 2011. We are also very grateful to the Senate 
Appropriations Committee for responding to the President's 
request for aid under this new program. The support of both 
Committees was both timely and prescient, as our new emergency 
relief program strengthens FTA's authority to provide financial 
disaster assistance to transit agencies in times of greatest 
need and to better coordinate with our partners at FEMA.
    FTA's request reflects two major priorities:
    First, we are requesting $6.2 billion in aid to repair and 
restore public transportation infrastructure in the affected 
areas of New York, New Jersey, also lesser amounts, obviously, 
in places like Connecticut and other States along the Eastern 
seaboard.
    FTA's staff and contractors are now working side by side 
under a FEMA mission assignment to conduct damage assessment 
and cost validation work for both operating and capital costs 
needed to restore and rebuild transit capacity. These early 
joint efforts should allow us to compensate the impacted 
transit agencies promptly once assistance is made available by 
Congress. This was sort of a first-time effort to get FTA 
contractors, FTA staff, and FEMA people working side by side to 
do cost validation quickly and in concert with one another so 
we have one common cost estimate and the ability to compensate 
people more rapidly.
    Second, the Administration is requesting $5.5 billion to 
make transit facilities more resilient to better withstand 
severe coastal flooding and other weather-related challenges. 
This country and its people cannot afford to endure the loss of 
life and property that occurs when catastrophic events repeat 
themselves over and over again. The sums needed to harden 
transit systems to protect them from such disasters can be far 
less than the cost to repair and restore them multiple times.
    Under our budget request, funds invested in projects to 
mitigate against future disasters will be guided by regional 
response plans with guidance and assistance from FTA and other 
Federal agencies along with State and local governments. 
Indeed, regional cooperation will be absolutely critical to 
this effort. President Obama, as you know, this month 
established a Hurricane Sandy Rebuilding Task Force under the 
leadership of HUD Secretary Donovan.
    The Deputy Secretary of Transportation, John Porcari, and I 
went up to New York just last week to sit with the heads of NJ 
TRANSIT, the MTA, representatives from Amtrak, as well as the 
Port Authority, to start the regional discussion off to make 
sure that folks are working in a cooperative way, to make sure 
that they identify and we have a process to identify the most 
cost-effective mitigation efforts.
    It is going to be critical that the regions, the two 
States, all the agencies work well together on this. It is 
really quite possible that, if not done correctly, one 
mitigation investment could worsen the potential damage on a 
neighboring transit asset. This really needs to be done in a 
coordinated fashion that bridges all of the local players, all 
of the local agencies, State and local government to make sure 
that the impacts of Hurricane Sandy do not repeat themselves.
    I see I am already over my time, so with that I will submit 
the rest of the statement for the record. Thank you.
    Senator Menendez. Thank you, Administrator.
    Madam Secretary.

  STATEMENT OF YOLANDA CHAVEZ, DEPUTY ASSISTANT SECRETARY FOR 
 GRANT PROGRAMS, OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT, 
          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Ms. Chavez. Good morning, Chairman Menendez, Members of the 
Subcommittee. Thank you for the opportunity to testify 
regarding recovering from Superstorm Sandy. In my role as 
Deputy Assistant Secretary for Grant Programs at HUD, I am 
responsible for the Community Development Block Grant program, 
better known as CDBG, the CDBG-Disaster Recovery grants, and 
the HOME program. The CDBG Disaster Recovery program is 
critical in helping communities recover from and rebuild after 
natural disasters like Superstorm Sandy.
    This morning I will discuss Sandy's impact on housing and 
the work that HUD has started and will continue through CDBG 
for long-term recovery in the region. Additional details on 
these points and on Secretary Donovan's role as head of the 
President's Sandy Recovery Task Force are provided in my 
written testimony.
    Hurricane Sandy and the nor'easter that followed have had 
massive and varied impacts along the Atlantic coast from 
Virginia to Rhode Island. Especially hard hit were New York and 
New Jersey, two of our Nation's critical economic engines.
    One of the major effects of storms like Sandy is damage to 
homes and apartments and the displacement of families and 
individuals. Excluding second homes, more than 150,000 housing 
units experienced substantial flooding as a result of Sandy. 
This means that housing will be a crucial part of the recovery 
and rebuilding effort. In New Jersey alone, over 44,000 primary 
residences had flooding, more than half experiencing at least a 
foot of flooding. We project that about half of the damaged 
primary homes in New Jersey were occupied by low- and moderate-
income households.
    Our research staff has also identified approximately 500 
neighborhoods in New York, New Jersey, and Connecticut where 
more than 20 percent of the homes were damaged. More than 175 
of these neighborhoods are in New Jersey.
    HUD is already assisting affected State and local 
governments. Immediately following the storm, we hosted 
technical assistance calls with these grantees to help them 
understand how existing resources such as CDBG and HOME may be 
used for response and recovery efforts. Further, HUD has issued 
a series of waivers that make it easier to use these funds for 
emerging needs.
    As you know, the proposed supplemental appropriation for 
Sandy recovery and rebuilding includes $17 billion for CDBG 
Disaster Recovery. This proposed allocation will provide the 
necessary resources to plan and implement long-term recovery in 
the region while helping impacted communities effectively 
mitigate future risk of disaster to prevent losses of this 
magnitude from recurring. Hazard mitigation is not just 
sensible, but it is cost effective. Studies have found that 
mitigation efforts offer a 4:1 dollar return on investment by 
preventing future damage.
    For example, in Hope, Indiana, a 2008 CDBG Disaster 
Recovery allocation of $40 million allowed for the rebuilding 
of stronger and safer water and wastewater facilities that have 
operated since then without disruption despite subsequent 
severe storms and flooding.
    Previous disaster response efforts have proven that CDBG 
offers important flexibility and effectiveness by allowing 
jurisdictions to design long-term housing and infrastructure 
recovery programs based on their specific needs. Our experience 
also demonstrates the importance of early appropriations so 
that it is clear that the funds will be available and planning 
efforts can include the full range of needs. Major 
infrastructure investments take time to spend out due to 
design, permitting, and staging requirements, but State and 
local governments are unlikely to proceed with these efforts 
without assurance that they have funding to implement the 
projects.
    Furthermore, after Katrina, the State of Louisiana waited 
for more than 10 months for a second appropriation before 
launching its main homeownership assistance program. This 
delayed much-needed assistance to more than 100,000 households.
    I should also note that CDBG Disaster Recovery funds are 
not actually drawn from the Treasury until shortly before 
actual payments are made. But the guarantee that these funds 
will be available is necessary to move the projects forward. 
The Administration urges Congress to pass a supplemental 
appropriations bill as soon as possible to give affected States 
and communities the support they need to recover and rebuild.
    Thank you for the opportunity to testify. I would be 
pleased to answer any questions you may have.
    Senator Menendez. Well, thank you both for your testimony, 
and there are a lot of important things here, both in your oral 
testimony as well as your written testimony.
    Secretary Chavez, you say, I believe, in your written 
testimony, you cite that New York and New Jersey combined 
employ 12.7 million workers, or 10 percent of the entire United 
States employment, and that they are an estimated 11 percent of 
GDP nationally, or about $1.4 trillion nationally.
    Don't those figures make the compelling case that the 
disaster supplemental is not just about building or rebuilding 
a few States, but is helping to rebuild at the same time a 
national economy?
    Ms. Chavez. Yes, we completely agree with that, Chairman. 
As you said, it is not only critical for the regional economy, 
but this recovery and rebuilding effort is critical for the 
national economy. If we cannot get New York and New Jersey 
workers and businesses back to the pre-storm pace in terms of 
economic recovery, I think we are going to see our economic 
recovery slow down instead of moving forward, as it has been in 
these last couple of months.
    Senator Menendez. Now, you also mentioned some incredible 
data there that you have determined at HUD that about 500 
neighborhoods where 20 percent of that neighborhood has, in 
fact, been damaged or lost, and 175 of those neighborhoods in 
New Jersey alone. What is the impact of that type of damage to 
a neighborhood? In my own visits in New Jersey, I have seen 
neighborhoods that are multigenerational in terms of their 
calling a part of a community, you know, their neighborhood, 
their home. As a matter of fact, I had a conference call a day 
or two ago with a whole host of our mayors, and Mayor Kelaher 
of Toms River told me that he had lost 20 percent of his entire 
ratable base--20 percent of his ratable base.
    Now, when you lose 20 percent of your ratable base--I was a 
mayor for 6 years--that is a nightmare because there is no way 
to make it up except for shifting the responsibility for that 
community's cost to all of the other ratepayers and/or 
dramatically cutting the various central services like public 
safety and sanitation collections and other critical elements. 
So what does that mean to neighborhoods?
    Ms. Chavez. You make the case for why the supplement is 
important. In order to rebuild the base, not only the community 
base but the economic base of that neighborhood, we need to 
start rebuilding. What it means, losing 20 percent of the 
residents, of the base, not only in terms of the tax base and 
property values but also in terms of neighborhood safety, is 
devastating to communities. And that is why it is critical that 
we start this process as soon as we can, because this type of 
disaster could take 4 to 10 years in terms of rebuilding. We 
have seen that in Louisiana and Mississippi. In Mississippi, we 
are still working with the State to provide assistance to 
homeowners that are still rehabilitating their homes. So we 
cannot wait any longer to start the process.
    Senator Menendez. Yes, and isn't it fair to say that a 
delayed recovery is a failed recovery at the end of the day?
    Ms. Chavez. A delayed recovery is a failed recovery. A 
recovery that does not allow for communities to plan for the 
range of needs, understanding that it may take 5 to 10 years to 
recover, we would also say is a failed recovery.
    Senator Menendez. Administrator, taking off from the 
Secretary's comments about the regional economy within the 
context of the national economy, transportation is a critical 
element, is it not, of getting people to work, getting a 
workforce to their jobs, being able to create productivity, 
being able to drive a better bottom line, being able to move an 
economy? I think sometimes we think maybe in other parts of the 
country of transportation, particularly transit, as some type 
of luxury. But isn't it, in essence, a necessity to economic 
success?
    Mr. Rogoff. Well, it absolutely is, Mr. Chairman, but 
nowhere is it more of a necessity than in the New York-New 
Jersey region. We are talking about 40 percent of the Nation's 
transit passengers all in the northern part of your State, 
central and northern part of your State, and in and around New 
York city and southwestern Connecticut.
    Importantly, many studies have shown that, after housing, 
transportation is the second largest draw on a family's 
paycheck, so in terms of the availability and affordability of 
that transportation, it is absolutely elemental to the overall 
economic health of the area. And as you pointed out in your 
statement, we are talking about more than 10 percent of the 
Nation's GDP just in that area.
    Senator Menendez. And what would you think--I know that you 
have helped FEMA do damage assessments, and I know you have 
been up and visited with us and others in the region in terms 
of reviewing the damage personally. Do you think that the 
region's transit system could possibly be rebuilt and protected 
with less than a third of the funds the Administration 
requested?
    Mr. Rogoff. No. In fact, we took note of one of the 
amendments that has been introduced in the Senate that would 
cut the President's request by more than 70 percent, 
specifically in transit emergency relief. That amount would not 
even cover the recovery estimates that we currently have, much 
less get to any of the necessary mitigation investments that 
have been requested under the President's budget.
    Senator Menendez. So that amount would not even cover the 
recovery----
    Mr. Rogoff. Just the restoration and recovery costs, most 
of which takes the form of reimbursements to the agencies that 
you will hear from on your second panel, will far exceed the 
amount proposed in that amendment. These are costs that in many 
cases have already been laid out by the MTA, by the Port 
Authority, by New Jersey Transit. We are working diligently 
with FEMA right now to validate those costs so we can 
expeditiously reimburse them so they can continue to turn out 
their service for the year.
    We have to remember that they still have to live within 
their own budget envelopes to provide reliable and desirable 
service for the people of the region on an ongoing basis 
through the fiscal year. Meanwhile, they have laid out a great 
deal of money just on restoration. They have depleted their 
stocks of spare equipment. In some cases, they are stealing 
equipment from one line to keep another up and running.
    Senator Menendez. And is it possible that if the Congress 
does not respond adequately, they will have to restore to a 
fare shock?
    Mr. Rogoff. Well, I think that question would be well put 
to the next panel in terms of how they would make the dollars 
add up. I already know that the MTA has announced that they 
will need to go out and have gone out for additional debt just 
to cash-flow the recovery until we can reimburse them. But I 
think there is the risk of serious service degradation to the 
public if they cannot, for example, restore their stocks of 
spare equipment to keep the system up and running.
    Senator Menendez. Now, some of our colleagues seem to think 
that any attempt to rebuild our transit systems with an eye 
toward mitigation and making them stronger for the future is a 
waste of money. What is your perspective of that?
    Mr. Rogoff. Well, one thing that became clear in our after-
action look at all this, which gave rise to the President's 
request, is that the operators have some of the most critical 
components to keep the systems up and running in some of the 
most vulnerable areas. And I think what those folks are saying 
when they say, well, we should not make mitigation investments, 
is we should take taxpayer money and rebuild those critical 
components right back in the same vulnerable environment. We 
can do this much smarter and, in fact, cheaper over the long 
run if we can make the necessary investment to protect that 
situation from happening again. So when it comes to things like 
propulsion power, signal systems, we know now that some of 
those critical elements that are absolutely critical to get 
that service up and running for 10 percent of the American 
economy are in very vulnerable places.
    None of us, no homeowner that has had their basement flood 
repeatedly, takes their best family heirlooms and stores it on 
the floor of the basement. We might buy some shelving. We might 
put those heirlooms up on a shelf. What those folks are saying, 
when we say we should not make any mitigation investments, is 
we should put the family heirlooms on the floor of the basement 
again and just wait for the next flood to happen.
    The other thing you need to remember is when we have these 
repeated disasters, much of those costs would be FEMA eligible, 
so the taxpayer is going to pay again. And we see no wisdom in 
that, and it is why we built the mitigation funding into the 
President's budget in a very strategic way. They are not going 
to be just dollars spread around without a plan. The whole 
notion of the meeting we had with Secretary Donovan and the 
impacted transit players up in New York is to start a 
meaningful conversation of what are the most cost-beneficial 
mitigation investments for the region, looking at the entire 
transportation network--Jersey Transit, the MTA, PATH, even the 
Staten Island Ferry, and all those things together.
    Senator Menendez. So, in essence, it is more fiscally 
prudent to do the mitigation than to just replace as it was and 
wait for the next storm and repay all over again?
    Mr. Rogoff. Absolutely. I know it seems trite, but I have a 
very large tree in front of my house. One branch fell and went 
through the windshield of one of my friend's cars this past 
year. One went through my car. We do not park under the tree 
anymore. We are smarter than that. And I think we need to be 
that way when it comes to transit.
    Senator Menendez. Is your neighbor still talking to you?
    [Laughter.]
    Senator Menendez. Let me ask you one final thing. I was 
pleased, as the Subcommittee Chair working with Senator Johnson 
and the full Committee, to create the program in MAP-21 on 
emergency relief. How do you think this program can help our 
agencies rebuild better and faster than if we simply had money 
going through FEMA?
    Mr. Rogoff. Well, I think you pointed out in your opening 
statement the challenges that we have under the FEMA Stafford 
Act rules where that fund will only reimburse transit agencies 
to their pre-existing condition. You talked about the folks in 
New Orleans after Katrina being told that they had to go find 
an 8-year-old bus to replace the destroyed 8-year-old bus.
    The program that you authorized, Mr. Chairman, allows us to 
restore the transit agency to the service the public needs, one 
that is reliable, and is up to modern technology. I think 
importantly, following on the conversation we just had, it also 
authorizes payments to prevent future disasters, which is why 
the mitigation investments are authorized under that program.
    The other fact, I believe--was that conversations that took 
place between FEMA and transit agencies after Katrina took 
many, many wasted months to figure out who owed who what. In 
our case, the FTA has an electronic grantmaking relationship 
that we use routinely with all of these agencies. We have that 
infrastructure in place. We have staff that know these 
facilities.
    Two of the most tragic elements of the disaster from Sandy, 
the South Ferry Station in Lower Manhattan and Hoboken Terminal 
are two facilities that the FTA had already just puts hundreds 
and hundreds of millions of taxpayer dollars in, and both 
sustained extraordinary damage. Our staff knows those 
facilities. We know what went in them. We worked with the very 
same staff. And rather than now have FEMA staff come in and 
manage the rebuilding, we think there is a lot of efficiency 
for the taxpayer to have the FTA still involved in that in a 
way that--as one transit grantee put it, ``We like having you 
here because you speak `transit.' '' We will save time and 
money because we do.
    Senator Menendez. Finally, Madam Secretary, let me just go 
back to a comment that you made in your oral testimony about 
having the resources necessary to understand and to rely upon 
so that a community or an individual or a business can make an 
informed decision depending upon and relying upon that that 
decision will be funded at the end of the day. What are the 
consequences of not having the resources under which you would 
make those decisions?
    Ms. Chavez. The consequences basically are that the 
recovery will take longer. As you wait longer, it becomes more 
expensive. And that is why it is critical that communities--and 
we have seen this time and again with our experiences in 
Mississippi, in Louisiana, in Iowa, where when communities 
understand the funding they have, they can really take all of 
the data in terms of their needs, design their program based on 
those needs, and plan ahead 2, 3, 5 years down the line because 
this disaster will take at least 5 years to rebuild. And that 
is why it is really critical that they know exactly what the 
resources are right up front, because as HUD, we are going to 
ask them to give us their plan for recovery based on their 
unmet need and based on the funding that is available to meet 
that and to help them recover.
    Senator Menendez. And, finally, in the CDBG grants that 
have the greatest flexibility, which I know Senator Landrieu by 
necessity has become almost an expert in this regard as a 
result of what she went through in Katrina in her State, and as 
the Chair of the Homeland Security Appropriations Subcommittee 
has made very clear, that, for example, a small business, which 
is the backbone, economic backbone, for which I have visited, 
you know, street after street of small businesses that have 
been closed, and that are trying to make a decision, do I start 
my business again or do I not, based upon trying to get a sense 
from the Government as to whether there will be any standards 
under which a grant will be considered, because while many have 
told me, look, I appreciate a small business loan, you know, at 
low rates and long term, that is just adding to a debt I 
already have. They took out debt to start off their business. 
They took out debt to survive the Great Recession. And now they 
are faced with having lost so much. For them, the choice 
between opening or not opening may very well depend upon a CDBG 
program that they can depend upon once standards are set. Is 
that not a fair statement?
    Ms. Chavez. That is a fair statement. In fact, grantees 
would have the flexibility to determine how to design that 
program. As you said, they could determine that they want to 
provide grants to their small businesses to get them restarted. 
In other situations where maybe the business has already opened 
but needs some additional assistance, they may determine that 
it is best to provide a low-interest loan or a forgivable loan. 
There are many options for grantees in designing these programs 
to help their businesses get back to working again.
    Senator Menendez. Well, I hope some of our colleagues and/
or their staff have been listening to this testimony because 
the reality is, I think some of these amendments on the floor 
that were offered are miserly, to say the least, a moment of 
national imperative, and do not have not only the spirit of the 
season but do not have the spirit of what America is all about. 
This is the United States of America. There is a reason we call 
ourselves the ``United States of America,'' is because we 
respond collectively to the needs of our citizens regardless of 
what part of the country they are from. And we cannot get the 
type of recovery that both we and the Nation need unless we 
have a more robust response than some are suggesting.
    I want to thank you both for your testimony. I appreciate 
it. I know we look forward to continuing to work with you. And 
as you depart, let me call up and introduce our next panel.
    James Weinstein is the Executive Director of New Jersey 
Transit, the largest Statewide transit agency in the Nation, 
and he has kept a cool head in a very tumultuous time for the 
agency, and he will help us understand the damage New Jersey 
Transit incurred and the challenges the agency faces in 
protecting its assets going forward.
    Mr. Tom Prendergast is the President of the Metropolitan 
Transportation Authority New York City Transit. The MTA 
suffered extensive flooding damage during the storm, and I am 
glad that he is here to help us wrap our minds around what 
those challenges are.
    And Mr. Patrick Foye is the Executive Director of the Port 
Authority of New York and New Jersey. We are happy to hear the 
PATH station is open again, but we know that there are 
significant challenges still.
    So I would like to ask each of you, starting with Mr. 
Weinstein, to give us about 5 minutes or oral testimony. All of 
your full statements will be included in the record, and then 
we can have a discussion.

       STATEMENT OF JAMES WEINSTEIN, EXECUTIVE DIRECTOR, 
                     NJ TRANSIT CORPORATION

    Mr. Weinstein. Good morning, Mr. Chairman.
    Thank you for your leadership in helping our State through 
this difficult time, and thank you and the Members of this 
Committee for providing this opportunity to address you today.
    New Jersey Transit is the second-largest transit agency in 
the Nation, and Sandy hit us particularly hard. While we took 
extraordinary steps to mitigate potential harm, nonetheless, 
the transit system suffered extraordinary damage to critical 
bridges, electrical substations, track and signal systems, 
rolling stock, and key terminals.
    In addition, under Governor Christie's leadership, we 
worked with the Federal Emergency Management Agency, U.S. DOT, 
the Federal Transit Administration, and other partners to 
immediately implement extensive interim bus service, ferry 
service, and other services to continue to deliver essential 
public transportation to our region's transit riders.
    But, Mr. Chairman, Sandy has shown we cannot merely restore 
our rail and other infrastructure to its previous state. That 
would only leave us vulnerable to the next storm.
    It is clear we must go further and make the rail and other 
transit modes more resistant in the face of future superstorms. 
Those steps will require additional resources.
    We have identified $1.2 billion in resiliency and 
restoration projects that would be eligible under FTA's 
Emergency Assistance program, projects that would improve our 
system's ability to withstand storms of all types, not just 
superstorms, that mimic Sandy's punishing surge.
    Let me quickly outline a few of these projects for you.
    More than 25 percent of our rail fleet, about 350 rail cars 
and locomotives, were damaged during Superstorm Sandy, most 
from flooding at our Meadows Maintenance Facility, our primary 
maintenance and repair facility that has never before flooded. 
To prevent a recurrence, a top priority is ensuring that we 
have sufficient stormproof rail yards to safely store 
locomotives and rail cares out of the reach of flood waters and 
also out of harm's way from falling trees, electrical wires, 
utility poles, and other storm-driven debris.
    To that end, we estimate it will cost about half a billion 
dollars to construct new rail yard and inspection facilities, 
including a new yard at a site along the Northeast corridor in 
New Brunswick that is currently owned by Amtrak. This facility 
will provide a centrally located site for safe storage and 
allow locomotives and rail cars to be rapidly reinspected and 
put back into service once a storm passes.
    Additionally, we are seeking $200 million to raise power 
and other systems at the Meadowlands Facility and the 
collocated Rail Operations Center above foreseeable flood 
levels, as well as flood control structures that will allow us 
to safeguard the most critical portions of the complex and 
ensure that the parts, generators, and repair machinery and 
other equipment can ride out any storm in place, as they must.
    Mr. Chairman, Sandy badly flooded, as you pointed out, the 
historic Hoboken Terminal, as well as portions of the Frank R. 
Lautenberg Station in Secaucus. We estimate it will cost about 
$125 million to restore and strengthen these and other key 
locations against storms.
    Sandy also ruined electrical substations along the North 
Jersey coastline and in Hudson County and elsewhere, which are 
vital for supplying the catenary wires that power our electric 
trains.
    So we are seeking $275 million to construct seven new 
elevated electrical substations and to improve the coastline's 
resiliency by constructing seawalls by bridges, building 
sheathing to prevent washouts at bridge approaches, and raising 
bridge control houses.
    Both the Hudson Bergen and the Newark Light Rail systems 
were impacted heavily by flood waters. Repairing the light rail 
systems and making them more resilient will cost about $25 
million.
    Finally, we are seeking $75 million to cover the cost of 
substitute bus and ferry emergency service provided after the 
storm, as well as to restore, expand, and enhance 
communications during a disaster. Real-time communications are 
vital, whether our customers are at a station, on a train, on a 
bus, on the Internet, or using a smart phone. This is not only 
a customer service issue; it is a safety issue, whether a 
disaster is a result of Mother Nature or an act of man.
    Mr. Chairman, we recognize there will be local match 
requirements for the funding we are seeking, and we are fully 
prepared to work with our local MPO partners to make whatever 
changes are needed to our existing capital program. We also are 
ready to expedite implementation of these projects, including 
by using fast-track design-build contracting.
    Mr. Chairman, I would note that these cost estimates are 
just that--estimates that may well evolve over time as we 
progress the work that lies ahead. However, it is clear that 
money invested preventing future storm damage will limit the 
bill for future storm relief, as well as ensure that our 
transit system has a better chance of avoiding service 
interruptions that disrupt people's lives and undermine the 
economic vitality of a region.
    We appreciate the Committee's interest, and any assistance 
you, the Committee, Congress, and the Administration can 
provide in helping renew and improve New Jersey's public 
transportation system will be greatly appreciated.
    Thank you, and I will be happy to answer any questions.
    Senator Menendez. Thank you very much.
    Mr. Prendergast.

  STATEMENT OF THOMAS F. PRENDERGAST, PRESIDENT, MTA NEW YORK 
      CITY TRANSIT, METROPOLITAN TRANSPORTATION AUTHORITY

    Mr. Prendergast. Good morning, Chairman Menendez and other 
Members of the Committee. Thank you for holding this hearing 
and inviting me to testify today. I am Tom Prendergast, 
president of MTA's New York City Transit. The New York MTA is 
the largest transportation provider in the country.
    Every day, the MTA moves more than 8.5 million people--
reliably, affordably, and safely -on our subways and buses, the 
Staten Island Railway, Metro-North Railroad, and the Long 
Island Rail Road. Our seven bridges and two tunnels carry 
nearly 300 million vehicles a year.
    The MTA is one of the few transit systems in the world that 
operates 24 hours a day, 7 days a week, 365 days a year. And 
along with the other transportation networks represented on 
this panel, we are the lifeblood of a $1.4 trillion dollar 
regional economy--the largest in the country, making up 11 
percent of the gross domestic product.
    About 2 months ago, however, our region came to a complete 
standstill in the aftermath of Superstorm Sandy--a disaster 
that brought our system to its knees. For the second time in 
its 108-year history and in a little over a year, the MTA shut 
down all of its services. And despite unprecedented 
preparations, we sustained damage on a level we had never 
experienced before.
    Today, most of our customers are seeing service, but our 
workers and those that run the system are seeing another 
reality: a fragile system that is safe but extremely 
vulnerable. The subway line and the bridge connecting the 
Rockaways Peninsula and the rest of Queens were completely 
washed away. The subway tunnel for the R train, the Montague 
Street tube connecting Brooklyn and Manhattan, is not 
operational and will only be so for the first time tomorrow. We 
have subway lines running at longer headways, resulting in 
longer commutes and severe crowding. We have drawn down about 
80 percent of our replacement equipment. The useful life for 
many of our signals, switches, and relays has depleted 
exponentially due to the damage sustained by the storm.
    We estimate nearly $5 billion in immediate repair needs 
left in Sandy's destructive wake and billions in project needs 
to protect our system from future flooding events like the ones 
we have experienced. And we will repair and rebuild our system 
as quickly as possible--8.5 million customers are depending on 
it.
    We have already spent hundreds of millions of dollars to 
restore service as quickly as possible. And just yesterday, our 
Board approved for us to move forward in selling $2.5 billion 
in bond anticipation notes that will be used for that 
rebuilding.
    But we are simply not able to shoulder this incredible 
burden on our own, and we cannot fully undertake these 
financing efforts without knowing what Congress plans to do to 
support us. A Federal commitment is needed to ensure that we 
can rebuild and we can build back stronger.
    Once a disaster relief supplemental appropriations bill is 
signed into law, we are prepared to immediately enter into 
contracts to begin the projects that are essential to our 
riders, projects such as: South Ferry/Whitehall station 
restoration; restoring the Rockaway line; repairing and 
replacing damaged signal equipment, including switches and 
relays, damaged vents, pumps, and communications equipment; and 
repairing the roadway structure, ventilation, and 
communications equipment in the Queens Midtown and Hugh L. 
Carey Tunnels.
    And as we work to bring our system back to normal, we must 
also make the necessary investments to protect this 108-year-
old system from future storms. We must rebuild smarter.
    Manhattan's South Ferry subway station is a perfect 
example. It was destroyed during the 9/11 attacks, and we spent 
over $500 million to rebuild it at that time. It serves over 
30,000 riders a day. It was completely destroyed due to 
Superstorm Sandy, and we need to replace it. This station, 
eight stories underground, was completely filled with water 
from floor to ceiling, corrosive salt water, which damaged 
everything. The last thing we want do is to come back to 
Congress for another $600 million after the next storm hits, 
but we will if we have to. It is in the best interest of the 
American taxpayers to protect this critical station and other 
infrastructure elements so that our large Federal investments 
can be wisely spent.
    As Superstorm Sandy demonstrated, when the MTA shuts down, 
the Nation's largest regional economy shuts down. It is 
absolutely critical that we make the necessary investments to 
protect the South Ferry station and other critical 
infrastructure elements.
    Our needs are great. But this is clearly much more than a 
New York story or a New York need. This is a national issue, a 
national need. And we need the Federal Government's help, not 
only to get us on the road to recovery but to protect these 
critical assets in the future.
    Once again, Chairman Menendez, thank you for holding this 
important hearing and for giving me the opportunity to testify 
today. I will answer any questions later.
    Senator Menendez. Thank you very much.
    Mr. Foye.

    STATEMENT OF PATRICK J. FOYE, EXECUTIVE DIRECTOR, PORT 
              AUTHORITY OF NEW YORK AND NEW JERSEY

    Mr. Foye. Chairman Menendez and Members of the Committee, 
thank you for holding this important hearing on the greatest 
transit disaster in our Nation's history.
    I am Pat Foye, Executive Director of The Port Authority of 
New York and New Jersey.
    Mr. Chairman, on behalf of the Port Authority, I thank you 
for your ongoing support of our agency and for the people of 
our region.
    I also want to thank Governor Andrew Cuomo of New York and 
Governor Chris Christie of New Jersey for their strong 
leadership before, during, and after Superstorm Sandy.
    For those unfamiliar with our agency, the Port Authority 
operates what is the most important multi-modal transportation 
network in the world. Our transportation assets include: the 
busiest airport system in the country, including JFK, 
LaGuardia, and Newark airports; four interstate bridges, among 
them the George Washington Bridge, which is the busiest 
vehicular crossing in the world; the Holland and Lincoln 
tunnels that link New York and New Jersey; the Nation's busiest 
bus terminal, located in Midtown Manhattan; the largest port 
complex on the east coast; and the bi-State commuter rail 
system known as PATH.
    Annually, about 77 million riders take PATH, and those who 
rely on it will tell you it is an indispensable part of their 
lives and jobs. While our PATH network is just over 13 miles 
long, it serves as a vital link in the region, carrying 
passengers under the Hudson between New Jersey and New York 
City. It is an essential artery in a region representing, as 
you have noted this morning, Mr. Chairman, more than $1.4 
trillion in economic output, fully 11 percent of our Nation's 
GDP.
    Of all our transportation facilities, PATH suffered the 
most severe blow in Superstorm Sandy. We took every step we 
could to prepare for the storm, but despite our preparations, 
this critical interstate link was completely devastated by the 
historic storm surge and flooding that reached over 2 feet 
above the prior 100-year flood level in Lower Manhattan.
    The storm surge breached and blasted through our passenger 
stations, as that slide you had up before, Mr. Chairman, 
indicates, and the PATH tunnels, which are ancient by today's 
mass transit standards, having been built at the turn of the 
last century more than 100 years ago.
    The PATH network is dense and closely contained with 
complex tunnels interlocking underneath the Hudson. These 
tunnels, along with the box-like structures called caissons 
connecting the tunnels, contained rack upon rack of critical 
and decades-old signal, switching, and communications equipment 
that were damaged in the deluge of corrosive seawater during 
Sandy.
    The waters damaged the signals, switching, communications, 
and other wayside equipment lining the tracks. Most visibly to 
the public, our stations experienced tsunami-like conditions. 
Our historic Hoboken Terminal, one of the busiest in our 
system, was inundated after flood waters crushed an enclosed 
elevator shaft, set forth on the easel, sending millions of 
gallons of water pouring into the station.
    In many of our stations, practically every wire, every 
circuit, and every last bit of infrastructure that existed 
below ground was damaged, destroyed, or otherwise left in need 
of attention and repair. To compound the problem, many of the 
parts that Sandy destroyed are no longer manufactured due to 
their age. It has been like trying to find replacement parts 
for an entire fleet of Model T Fords in the 21st century.
    Thanks to the heroic efforts of our staff and many others 
who provided assistance, we commenced partial service 
restoration of the system on November 6th, re-establishing 
service between Journal Square and 33rd Street in Manhattan. On 
November 12, we brought back service to Newark.
    With continued round-the-clock recovery efforts, on 
November 26th PATH resumed service to the World Trade Center 
and Exchange Place stations. And as you noted, Mr. Chairman, I 
am proud to say that just yesterday, I joined PATH employees 
for the inaugural run of restored Hoboken service to 33rd 
Street on the west side of Manhattan. With that, we have 
restored at least limited service to all of the stations in our 
network.
    We learned during the storm that the ingenuity and 
dedication of our public servants is unrivaled. In the first 
days after the storm, one of our workers, Tom O'Neill, risked 
his own life to jump into several feet of murky flood waters in 
a PATH tunnel to restart a pump by hand, thus preventing 
further flood damage. Tom O'Neill, in his own words, ``was just 
doing his job,'' and it is that attitude and the fortitude of 
all of our PATH employees that continues to bring us back.
    We could not have done this on our own, however. Companies 
and factories from all over the country have helped in our 
recovery. In Pearl, Mississippi, the employees at Trilogy 
Communications worked day and night, on a weekend, to prepare 2 
miles of replacement specialized communications cable for our 
tunnels leading to the World Trade Center.
    Invensys Rail, based in Louisville, Kentucky, did the same. 
U.S. DOT and FTA provided critical support. Administrator 
Rogoff was personally involved in securing desperately needed 
breakers from CTA in Chicago for restoration of PATH service.
    But with PATH still operating at less than full strength 
and on partial schedules, and as NJ Transit continues its own 
efforts to restore service, commutes are still badly disrupted.
    What normally was a 45-minute ride home for many has now 
doubled in length, or worse, as commuters displaced from PATH 
seek alternative transit, bus, or ferry service. Those with 
late evening shifts are still bearing the burden of limited 
service, having to rely on late night buses to make their way 
home.
    We continue to rebuild and repair across our network, but 
as is the case for the States of New York and New Jersey, the 
Port Authority will need the Federal Government's help.
    Simply put, we are not at full strength, and we have 
endured hundreds of millions of dollars of damage. Old electric 
substations have been patched together with cannibalized parts. 
Parts of our network are operating on so-called manual block, 
with personnel communicating by radio to mark trains passing 
stations while our signaling systems are still under repair.
    To bring our system back will require hundreds of millions 
of dollars. This will go immediately into signal system 
repairs, electric substation repairs, track work, and 
communications systems. We are still tallying the damage, Mr. 
Chairman, but we now estimate that the costs to fully repair 
and restore the PATH system may total more than $700 million 
dollars--much more than our early and preliminary estimate of 
$300 million.
    It is also critical that we invest in mitigation measures 
to protect our system from future storms so that we do not find 
ourselves in the same situation just a few years from now. This 
will include projects such as elevating portions of track, 
elevating critical substations, and strengthening critical 
caisson rooms within our tunnels beneath the Hudson River. 
These mitigation measures will come at significant cost, but 
without them, as we have learned over the last 2 months, the 
costs to the taxpayer will be even greater.
    Some of you know that the Port Authority receives no 
taxpayer money from either New York or New Jersey. We rely 
exclusively on user fees--the fares our passengers pay, and 
rents and other fees--all revenue streams that have their 
limitations. We are still assessing the exact costs of repair 
and recovery, but our needs are significant.
    Finally, I urge Congress to act as soon as possible, Mr. 
Chairman, in approving recovery funding for the New York, New 
Jersey, and Connecticut region. The final costs will no doubt 
be high, but the costs, should we fail to make necessary 
repairs and investments, are unfathomable in terms of the cost 
of lost productivity, lost jobs, a fractured transportation 
network, and the economic output that it powers.
    Thank you, Mr. Chairman.
    Senator Menendez. Thank you. Thank you all for your 
testimony. Let me start off.
    You know, some of my colleagues here think you plucked 
these numbers out of the sky and they are all inflated and, you 
know, not necessary. What would you say to them?
    Mr. Weinstein. Mr. Chairman, we have been very sensitive to 
that very issue. These are estimates that are a work in 
progress, and we keep saying that. But I will tell you that, at 
least from New Jersey Transit's standpoint, railroads are 
expensive. We move on our railroad every day a quarter of a 
million to 300,000 people. Those are people, if they are not on 
the railroad, they are on the roads. And when they are on the 
roads trying to get into Manhattan to get to work, the road 
system breaks down, Mr. Chairman. This is a network. It is very 
expensive to maintain it, but the return it has to the economy, 
the return that it has to the quality of life in our region is 
immeasurable.
    Mr. Prendergast. The net worth of the New York City 
Transit's part of the MTA infrastructure alone is $750 billion. 
We have spent over $75 billion to repair items since 1982. The 
damage we sustained is significant. It is affecting our ability 
to provide service. I think Mr. Weinstein elaborated very 
clearly, if you lived in the region and you experienced in the 
first few days after the storm the gridlock that existed not 
just in Manhattan but the outer boroughs and the region at 
large, you would see the impacts that occurred to the 
community. To say that the transportation network that all 
three of these agencies provide for the New York region is the 
lifeblood of the region is an understatement. So that would be 
the way I would respond to it.
    Senator Menendez. Mr. Foye, I heard your numbers. Your 
numbers went upwards from your original estimate, not 
downwards.
    Mr. Foye. They did.
    Senator Menendez. It is very likely that all of your 
numbers will go upwards, not downwards, at the end of the day.
    Mr. Foye. Mr. Chairman, I think that is right. Obviously, 
as you noted in the case of Hoboken Terminal, service was 
restored only yesterday. Our focus is obviously on restoring 
service for the 77 million passengers on an annual basis who 
use the PATH system. Allow me to note three points.
    One, in accordance with the approach that Governor Cuomo in 
New York and Governor Christie have taken, we at the Port 
Authority believe in accountability. We understand that we are 
going to be accountable to the Federal Government and to our 
Federal funders and ultimately to the taxpayers for every 
dollar we receive.
    The second point I would note is that the Port Authority 
has already spent out-of-pocket about $200 million since 
Superstorm Sandy occurred on October 29th. Those dollars are 
real. We are prepared to demonstrate every dollar.
    Third, I would note that none of our agencies are talking 
about a bridge to nowhere. We are talking about restoring 
tunnels and bridges and train stations, whether it is New 
Jersey Transit, MTA, or PATH, which exist, which serve millions 
and tens of millions of passengers a year, and the damage in 
the case of PATH and the caissons at PATH are to equipment that 
was installed 50, 60, 70 years ago, which is, frankly, only 
available and can be viewed at the Smithsonian. And we are 
prepared, Mr. Chairman, to demonstrate and be accountable for 
every dollar that we are provided.
    Senator Menendez. So tell me what would happen if a--I 
think you are all familiar with the supplemental as the 
Administration submitted it to Congress and that we are 
pursuing. What would happen if you get collectively less than a 
third of what is being offered? What are your decisions going 
to be like? How is it going to affect you?
    Mr. Prendergast. Well, in terms of what I had stated in my 
testimony, the board approved the additional funding of $2.5 
billion in bond anticipation notes, so we are going to run 
those down, and obviously we are going to deal with it on a 
priority basis.
    We are just getting the Montague Street tunnel back 
tomorrow. We have had extensive signal damage. It has taken us 
6 weeks to trouble-shoot and get that service running. Tens of 
thousands of people a day use that line.
    The Rockaways has not been restored, that service. That is 
going to draw a large share of that money. And as those monies 
get drawn down and we reach the point where, you know, we are 
reaching the limits of our own ability to generate funds that 
we can use for these types of repairs, we will be forced to put 
off critical repair needs that may result in other delays.
    What we saw in the Montague Street tube we have reason to 
believe will happen on some of the other tubes in terms of 
anticipated increased failures in those signal systems. So it 
would affect our ability to provide that safe, reliable service 
on an ongoing basis.
    Senator Menendez. And if you had to draw down the--$2.6 
billion, is it?
    Mr. Prendergast. $2.5.
    Senator Menendez. The $2.5 billion, and you do not get a 
significant Federal response toward that, you are going to have 
to pay those off.
    Mr. Prendergast. We are increasing the debt service to be 
able to do that, yes.
    Senator Menendez. And if you increase the debt service to 
do that, short of getting greater ridership, you are ultimately 
looking at the possibility of a fare increase.
    Mr. Prendergast. Yes, and we just are going forward with a 
fare increase right now according to the budget we had planned 
for both operating and capital needs, and that would have to be 
revisited.
    Senator Menendez. How about in the case of New Jersey 
Transit?
    Mr. Weinstein. Mr. Chairman, if we did not get the money 
that we are asking for, or close to it, we are not going to be 
able to make the repairs and, more importantly, the mitigation 
improvements. That is going to leave our system vulnerable for 
the next storm, and we noticed now that we are getting 100-year 
storms every year. And I feel a particular sensitivity at this 
point in light of the fact that our largest maintenance 
facility in Kearny, New Jersey, flooded for the first time in 
the history of our agency.
    So if we do not have that, we are going to have to make the 
immediate repairs that we need to run the system every day, and 
over an extended period of time, you know, we would probably 
have to make the repairs that would add the kind of resiliency. 
But during that time we would be exposed to the same kind of 
damage that we experienced in Superstorm Sandy, and the 
investments that we had made would be washed away, and we would 
be coming back to the Federal Government and to FEMA.
    And, Mr. Chairman, the other point, I think, to the issue 
about upping estimates and on that, I think that the system and 
the group that Administrator Rogoff spoke about, putting the 
FTA and FEMA and the agency teams together, working on the 
development of those project costs, working on the development 
of those, that is a very serious effort, and it is not a 
frivolous effort. As somebody who is regulated by the FTA on a 
day-to-day basis--and you know this very well, Mr. Chairman--
that agency takes how we spent Federal dollars very seriously; 
we take it very seriously. What we are engaged in is not a 
frivolous effort. It is an effort to make our system resilient 
so that we do not have to come back every time we have a 
superstorm.
    Senator Menendez. Mr. Foye--actually, all of you I think 
are involved in this, so you can all answer. Didn't we learn a 
lesson in a different context after September 11th that in a 
post-September 11th world, multiple modes of transportation are 
critical not just for all of the economic reasons we have 
talked about, not just about getting people, the workforce, to 
work, getting salespeople to their venues, getting people to 
hospitals, getting people to home, getting people to 
recreation, but, in fact, on that fateful day when every system 
of transportation was shut down, it was ferries that got people 
out of Lower Manhattan into New Jersey hospitals. So it sent us 
a lesson, I think, that the importance of multiple modes of 
transportation, in addition to all the normal reasons we 
accept, is also a security issue. So getting these systems up 
and running and getting them up and running in an efficient and 
safe manner is not only a driver to our economy and to our 
quality of life, it is also a security imperative. Would that 
be a misstatement?
    Mr. Foye. No, Mr. Chairman, that is exactly right. 
Obviously, the Port Authority was terribly impacted by 9/11, 
given the fact that 84 of our members died at the World Trade 
Center. One of the lessons of 9/11, Mr. Chairman, and 
Superstorm Sandy in October was that from an economic, from a 
national security point of view, from a homeland security point 
of view, the transportation system is critical, and that each 
of the transportation agencies--New Jersey Transit, PATH, the 
MTA, Amtrak--are interdependent. When one or more of them, or 
in this case all of them, are taken out of service, the impact 
on the region from an economic point of view, from a 
transportation point of view, but also from a public safety, 
national security, and homeland security point of view is 
magnified, Mr. Chairman, and that point is exactly right.
    Mr. Prendergast. I would like to add also, in addition to 
from a security standpoint, the integral element of the MTA 
Hurricane Plan, developed in concert with the city of New York, 
is that the MTA and its agencies are the service providers in 
evacuation. We are the ones that transport people in mass 
volumes from areas likely to see tidal surges and flooding. And 
without a transportation network that spans even beyond the 
MTA, would go in the case of New Jersey Transit and PATH, 
without those systems up and running before and after the 
storm, you could not provide for that. So it is an extremely 
important point.
    Senator Menendez. Well, thank you all for your testimony. I 
hope it makes the case with many of our colleagues here to 
understand the scope and magnitude of our challenge and why we 
need a strong Federal response to that challenge working with 
our State and regional partners.
    The record will remain open for 1 week for any Member who 
wishes to submit any questions for the record. We would ask all 
of our witnesses, if they do receive questions, to please 
respond as expeditiously as possible. And with the thanks of 
the Committee, this hearing is adjourned.
    [Whereupon, at 12:07 p.m., the hearing was adjourned.]
    [Prepared statements supplied for the record follow:]
            PREPARED STATEMENT OF SENATOR CHARLES E. SCHUMER
    Thank you for taking the time to hold this hearing to discuss 
Superstorm Sandy's devastating impact on the Nation's largest 
transportation systems and efforts to rebuild our infrastructure. I'd 
like to especially thank Chairman Menendez and Ranking Member Vitter 
for holding this hearing today and for their continued support during 
these difficult times.
    New York State suffered nearly $7.3 billion in transportation-
related and $9.6 billion in housing-related damages due to Superstorm 
Sandy. Over 300,000 households in New York have experienced damage to 
their home because of Sandy's high winds, heavy flooding and storm 
surge.
    Neighborhoods like Breezy Point Queens lost over one hundred homes 
alone due to a fast-moving fire that was sparked thanks to Sandy's 
swift winds, not to mention the many more that were lost in that region 
due to significant flooding. I personally toured the Red Hook Houses in 
Brooklyn, New York--one of New York City Housing Authority's oldest 
developments and among the nearly 40,000 units of public housing that 
lost power, running water, and heat for weeks after Sandy hit.
    While communities and neighborhoods are slowly picking up the 
pieces after Sandy, they cannot do it alone. Congress must not shirk 
from its responsibilities. Congress could provide immediate assistance 
to localities impacted by Sandy by funding the Community Development 
Block Grant CDBG adequately and ensuring flexibility with the program.
    Of the total transportation-related damages, the New York 
Metropolitan Transportation Authority sustained approximately $5 
billion in damages after its system was inundated with storm surge. As 
many of you know, the MTA is the largest public transportation system 
in the country and lifeblood of the New York metropolitan region. From 
New York City through Long Island, southeastern New York State and 
Connecticut, MTA's subways, buses and railroads provide New Yorkers 
with approximately 2.63 billion trips a year.
    While the MTA took all necessary precautions in preparation for 
Sandy, this 108 year-old system has never been subjected to a storm of 
this size or magnitude. To their credit, the MTA smartly put up 
temporary barriers placed in front of subway entrances for stops along 
the system. In many cases, they worked. But in other areas, like at the 
South Ferry Station, these barriers were knocked over by Sandy's high 
winds and flying debris, causing stations to become inundated with salt 
water.
    Overall the MTA sustained: 8 flooded subway tunnels and 2 flooded 
vehicular tunnels; 12 subway stations including the South Ferry Station 
are badly damaged or completely destroyed; an entire subway bridge and 
rail line serving the Rockaways in Queens no longer exists; 15 miles of 
damaged or destroyed signaling; entire rail yard and maintenance shops 
were underwater and are damaged; 80 of the general stock equipment has 
been depleted.
    Amazingly, despite the immense damage sustained by the MTA a large 
amount of service was recovered within a week of the storm because of 
the dedication and commitment of the MTA staff. There is no doubt in my 
mind that if Congress gives the MTA the right tools and adequate 
resources, this system can be back up and running as good as new. But 
the MTA is prohibited from entering into contracts for any capital 
project without a funding commitment that ensures that the full terms 
of the contract will be met. In order to move forward with the MTA's 
rebuilding effort, Congress must act in passing a comprehensive 
supplemental appropriations bill so that critical restoration work can 
begin.
    And as MTA continues to work to restore its system again, Congress 
should fund programs like the FTA's Emergency Repair program to ensure 
that mitigation is also a strong factor in the rebuilding effort. It 
does not make good fiscal sense for Congress to pay to fix our broken 
infrastructure--which we know we are legally required to do--without 
paying a little more to protect that investment and prevent similar 
costly damage in the future. New York has no choice: we must 
simultaneously rebuild and adapt to protect against future storms. We 
are a waterfront city and a waterfront State. It has become abundantly 
clear we are in the path of violent new weather realities. The modern 
infrastructure that powers and moves New York was not built to 
withstand Mother Nature's wrath in this rapidly changing climate.
    Congress must act now to support our critical infrastructure 
systems like the MTA. We cannot wait any longer. I thank the Chair and 
the Committee for this opportunity.
                                 ______
                                 
                   PREPARED STATEMENT OF PETER ROGOFF
     Federal Transit Administrator, Federal Transit Administration
                           December 20, 2012
    Mr. Chairman, Ranking Member DeMint, and Members of the 
Subcommittee:

    Thank you for inviting me to appear before you today to discuss 
Hurricane Sandy's devastating impact on public transportation systems 
and to discuss the Obama administration's budget request for assistance 
through the Federal Transit Administration's (FTA) newly authorized 
Public Transit Emergency Relief program.
    Hurricane Sandy triggered the worst transit disaster in U.S. 
history. On the Tuesday morning following the storm, more than half of 
the Nation's daily transit riders were without service. Even in the 
days that followed, as services in Boston, Philadelphia, Baltimore, and 
Washington, D.C. came back on line, 37 percent, or well over one-third, 
of the Nation's public transit riders still had no access to regular 
train or bus service. In the days that followed, the heroic efforts of 
thousands of transit and utility workers throughout the region allowed 
services to be brought back up incrementally. But, even today, there 
are passengers in the Rockaways and those who typically take the PATH 
trains from Hoboken Terminal into Lower Manhattan who are waiting to 
return to their normal commuting pattern.
    We applaud the outstanding and tireless efforts demonstrated by 
emergency responders throughout the region who have worked together 
with the Metropolitan Transportation Authority (MTA), the Port 
Authority of New York and New Jersey, Amtrak, New Jersey Transit and 
others in the weeks since the storm to restore as much service as 
possible, as quickly as possible. Even before the storm hit the 
impacted region, the leadership of the U.S. Department of 
Transportation (DOT) and the FTA were in careful and regular 
communication with the leadership of the responsible transportation 
agencies throughout the region.
    Following the superstorm, the FTA worked closely as part of the 
larger DOT effort to develop a rapid-response strategy to assist 
transit providers in the short-run, while laying the foundation for the 
responsible administration of Federal-aid funds in the months ahead. 
Among the steps the FTA has taken thus far:

    FTA worked with the Federal Emergency Management Agency 
        (FEMA) through the General Services Administration's Federal 
        Acquisition service to procure 250 buses to temporarily replace 
        lost rail service in New Jersey. This enabled commuters to take 
        buses to ferry terminals or directly to Manhattan.

    FEMA issued FTA two mission assignments directing FTA to 
        oversee and engage its project management oversight contractors 
        to conduct continuing damage assessments and cost-validation 
        work for both operating and capital costs associated with 
        restoring and rebuilding transit capacity. These early joint 
        efforts with FEMA are expected to allow us to compensate the 
        impacted transit agencies promptly once assistance is made 
        available by Congress.

    FTA worked with the Chicago Transit Authority to secure 
        hard-to-find but essential equipment so that PATH service could 
        be restored between New Jersey and New York.

    FTA drew upon its regional staff to stand up a Regional 
        Emergency Response Coordinator for the New England Region to 
        support the DOT's Emergency Support Function 1 under the 
        National Response Framework. This provides daily on-the-ground 
        monitoring and contact with the affected agencies to obtain a 
        real-time view of challenges, needs, and progress.

    FTA repositioned staff to Joint Field Offices in New York 
        and New Jersey to assist State and local governments and other 
        infrastructure owners in the effort to restore transportation 
        service.

We believe these are all important steps in the right direction, but a 
great deal of work remains to be done as we move into the recovery and 
rebuilding phases of the disaster.
    Thankfully, President Obama has responded to the needs of the 
region by promptly requesting resources to aid in the recovery of the 
region.
    In total, the Administration's Supplemental Appropriations Request 
for Disaster Assistance seeks $60.4 billion in Federal resources for 
response, recovery, and mitigation related to Hurricane Sandy damage in 
all affected States. This includes efforts to repair damage to homes 
and public infrastructure and to help affected communities prepare for 
future storms.
    The DOT's share of the President's total request is $12.07 billion, 
of which $370 million supports restitution of highways and bridges, 
aviation, and freight railroad infrastructure. The majority share--
$11.7 billion--would be directed to the FTA to repair and replace the 
affected public transit infrastructure and make it far more resilient.
    The FTA's $11.7 billion request reflects two important and related 
purposes:

    First, based on our ongoing cost-validation work with FEMA, FTA is 
requesting that $6.2 billion be directed to FTA's newly established 
Public Transportation Emergency Relief Program to aid in the repair and 
restoration of public transportation infrastructure in the New York 
City metropolitan area destroyed or damaged by Hurricane Sandy, 
including infrastructure controlled by the MTA, the Port Authority, New 
Jersey Transit, and the New York City Department of Transportation, as 
well as other transit providers throughout the impacted region. I want 
to thank the Senate Banking Committee for its leadership in 
establishing this program in response to the Administration's budget 
request and my testimony before the Committee on May 19, 2011. I am 
also grateful to the Senate Appropriations Committee for responding to 
President Obama's request for aid by proposing $10.78 billion in 
appropriations for the program. The support of both committees was both 
timely and prescient.
    The Public Transportation Emergency Relief program was created in 
the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Public 
Law 112-141)--the surface transportation reauthorization enacted on 
July 6, 2012. In the past, assistance for transit agencies to respond 
to and recover from Stafford Act disasters has typically been provided 
through FEMA. FTA's Emergency Relief program addresses recommendations 
made by the Government Accountability Office in 2008 that DOT should 
evaluate the feasibility of options to increase FTA's authority to 
provide financial disaster assistance to transit, noting that FTA has 
the capability to fulfill those roles and responsibilities; sufficient 
experience in dealing with needs of public transit providers and 
Federal transit assistance; and can target emergency relief funds to 
transit providers with the greatest needs.
    MAP-21 requires that DOT and FEMA work in concert to make sure that 
the use of emergency funds are coordinated. FTA's mission assignment 
from FEMA offers an opportunity to reach a single cost estimate for 
each damaged asset, or set of assets, which can then serve as the basis 
for reimbursement by the FTA Emergency Relief program.
    The FTA's $6.2 billion funding request assumes that a non-Federal 
match of 10 percent will be required and that funding will not be used 
to supplant third-party insurance coverage. In addition, an appropriate 
set-aside should be provided for transfer to the DOT's Inspector 
General for oversight of spending provided for Hurricane Sandy response 
and recovery, and an appropriate take-down must be provided for FTA's 
oversight and administrative expenses.
    It is extremely important that going forward, we rebuild our public 
transit and other transportation systems with greater resiliency, so 
they are able to better withstand powerful natural and man-made 
disasters. This also entails building greater redundancy into public 
transit and other transportation systems, to ensure that viable 
alternatives are available when primary systems--like the New York 
subway--are crippled.
    Therefore, the second component of the FTA's funding request is for 
$5.5 billion to support resiliency investments to make the region's 
transportation infrastructure able better withstand and recover from 
coastal flooding and other weather-related challenges.
    This will entail not only excellent financial stewardship, 
transparency, and accountability, but also unprecedented cooperation 
with our counterparts in numerous Federal departments and at the State 
and local level.
    Regional cooperation will be critically important for identifying 
the right resiliency investments. To foster greater regional 
cooperation and information-sharing and analysis, and address these 
challenges in a coordinated fashion, President Obama on December 7, 
2012 created the Hurricane Sandy Rebuilding Task Force (Executive Order 
13632), and appointed Department of Housing and Urban Development (HUD) 
Secretary Shaun Donovan as chairman. As President Obama stated on 
standing up this Task Force:

        A disaster of Hurricane Sandy's magnitude merits a 
        comprehensive and collaborative approach to the long-term 
        rebuilding plans for this critical region and its 
        infrastructure. Rebuilding efforts must address economic 
        conditions and the region's aged infrastructure--including its 
        public housing, transportation systems, and utilities--and 
        identify the requirements and resources necessary to bring 
        these systems to a more resilient condition given both current 
        and future risks.

In anticipation of these objectives, Deputy Transportation Secretary 
Porcari and I hosted a meeting with HUD Secretary Donovan last week in 
New York City to jump-start the local process on coordination of 
resiliency investments. We met with executives of Amtrak, the MTA, New 
Jersey Transit, and the Port Authority of New York and New Jersey to 
discuss resiliency investments and the need for multi-agency 
collaboration with the Task Force under Secretary Donovan's leadership.
    All of these initial efforts set the stage for making the necessary 
investments to rebuild our infrastructure and defend it against future 
incursions. As regional response plans are formulated, with guidance 
and assistance from FTA and other Federal agencies in partnership with 
State, and local entities, they will be instrumental in presenting 
options that can be ranked by their estimated cost-effectiveness, and 
developed in coordination with the Task Force.
    As the Office of Management and Budget (OMB) has reported, current 
projections are that Sandy is on track to be the second or third most 
costly natural disaster in U.S. history, behind Hurricane Katrina 
(2005) and close to Hurricane Andrew (1992). The setback to our public 
infrastructure was extremely severe. In Manhattan alone, all seven 
subway tunnels under the East River flooded, as did the Hudson River 
subway tunnel, the East River and Hoboken River commuter rail tunnels, 
and the subway tunnels in lower Manhattan. The South Ferry transit 
terminal, rebuilt and modernized with significant Federal assistance 
within the last 3 years, was virtually destroyed.
    We cannot, as a Nation, afford to be caught unprepared time after 
time as events like these befall us with little warning. We must 
prepare, and be prepared, to protect and preserve the public 
transportation infrastructure and other assets that the United States 
depends on to move people and goods, maintain the free flow of 
commerce, and drive our economy forward.
    The havoc wreaked by Hurricane Sandy was a tragedy and also a wake-
up call. It brought into sharp focus the need for us as a Nation to do 
a better job of building public transportation systems--and all of the 
infrastructure our economy depends on--to withstand strong physical 
forces. As Deputy Transportation Secretary Porcari has said, our 
watchwords must be resilience, redundancy, and regionalism.
    FTA and DOT will continue to work with all partners at the table--
Federal, regional, and local--to recover from this disaster and apply 
new lessons learned for the future. And we are committed to ensuring 
all Federal resources appropriated to us are used responsibly and that 
the recovery effort is a shared undertaking.
    Thank you, Mr. Chairman and Members of the Subcommittee, for 
inviting me to testify today. I would be happy to respond to any 
questions you may have.
                                 ______
                                 
                  PREPARED STATEMENT OF YOLANDA CHAVEZ
             Deputy Assistant Secretary for Grant Programs,
              Office of Community Planning and Development
              Department of Housing and Urban Development
                           December 20, 2012
    Chairman Menendez, Ranking Member DeMint, and Members of the 
Subcommittee, thank you for the opportunity to testify today regarding 
recovering from Superstorm Sandy and rebuilding the housing and 
transportation infrastructure in the affected region. I have served for 
more than 3 years as Deputy Assistant Secretary for Grant Programs in 
the Office of Community Planning and Development at the Department of 
Housing and Urban Development (HUD). In that role, I am responsible for 
overseeing key programs that promote affordable housing and community 
development, including the Community Development Block Grant (CDBG) 
program, the CDBG-Disaster Recovery (CDBG-DR) grants, and the HOME 
Investment Partnerships program. These grants, particularly the CDBG-DR 
program, have played a critical role in helping communities recover 
from and rebuild after natural disasters like Superstorm Sandy.
    In my testimony today, I will cover four subjects: 1) the damage 
caused by Superstorm Sandy, particularly to housing infrastructure; 2) 
HUD's participation in the ongoing response and recovery efforts; 3) 
the longer term rebuilding efforts with respect to Sandy, including the 
role of HUD and the special role of HUD Secretary Shaun Donovan under 
the President's Executive Order; and 4) the supplemental appropriations 
request that the Administration has submitted and which is currently 
under consideration by Congress.
The Impact of and damage caused by Superstorm Sandy
    Hurricane Sandy and the nor'easter that followed have had immense 
and varied impacts in New York, New Jersey, Connecticut, West Virginia, 
Maryland, and a number of other States. Within the United States, the 
hurricane itself resulted in 121 confirmed fatalities, major flooding, 
structural damage, and power loss to over 8.5 million homes and 
businesses, directly affecting more than 17 million people as far south 
as North Carolina, as far north as New Hampshire, and as far west as 
Indiana. Especially hard hit were New York and New Jersey, which are 
critical economic engines of our Nation. These two States employ 12.7 
million workers, accounting for about 10 percent of U.S. payroll 
employment. They export about $90 billion in goods annually, accounting 
for about 7 percent of such exports, and contributed $1.4 trillion to 
our gross domestic product (GDP) in 2011, accounting for more than 11 
percent of GDP. Thus, recovery and rebuilding is not only a State and 
local priority, but a crucial national priority as well.
    Unfortunately, one of the major effects of storms like Sandy is 
destruction and damage to the homes and apartments where people live, 
and the displacement of numerous families and individuals. Excluding 
second homes, more than 150,000 housing units experienced substantial 
flooding as a result of Sandy, meaning that work on housing will be an 
early, continuing, and crucial part of the recovery and rebuilding 
effort. In New Jersey, over 44,000 primary residences had flooding, 
more than half with over 1 foot of flooding in the first floor. We 
estimate around half of the damaged primary residences in New Jersey 
were occupied by low and moderate income households.
    But this is more than just damaged homes; this is also about the 
fabric that makes our communities work. Every county in New Jersey, for 
example, was a Presidentially declared disaster area. Our research 
staff has identified approximately 500 neighborhoods in New York, New 
Jersey, and Connecticut where more than 20 percent of the homes were 
damaged, more than 175 of these in New Jersey. When large numbers of 
units in a neighborhood are impacted, recovery takes longer, and 
families and communities need to make hard decisions about if, how, and 
where they should rebuild.
HUD's participation in ongoing response and recovery efforts
    HUD has played a significant role in response to and recovery from 
past major storms, and is doing so with respect to Sandy as well.
    Before I describe some of HUD's activities, it is important to note 
the unprecedented cooperation that is taking place among Federal, 
State, local, and tribal authorities. HUD, FEMA and other parts of the 
Department of Homeland Security (DHS), as well as the Departments of 
Transportation and Health and Human Services plus the Small Business 
Administration and the Army Corps of Engineers, are all in place and 
working together. We are all coordinating our work with State, local, 
and tribal officials, who are doing a truly herculean job on the 
response and recovery. The private sector has been deeply involved as 
well. This unprecedented level of cooperation and partnership will 
ensure that we continue to speed recovery resources and provide related 
assistance to the most affected areas.
    For example, within a week after Sandy hit there were almost 15,000 
Federal responders on the ground from FEMA, the National Guard and the 
Army Corps of Engineers, HUD, Department of Transportation, and HHS, as 
well as tens of thousands of utility workers from across the Nation. In 
the weeks since the storm, FEMA has approved nearly $2.7 billion in 
emergency assistance.
    A key HUD priority has been providing immediate help to storm-
displaced families to find temporary replacement housing, whether they 
were displaced from private or government-assisted housing. We have 
identified thousands of housing units, including more than 12,000 
available units in HUD-assisted housing, and have been working to 
ensure that the relevant information is provided to displaced 
individuals. We also are allowing providers of housing for seniors the 
flexibility to open up vacant units to storm evacuees.
    HUD has also focused on help to persons living in and owners of 
HUD-assisted housing damaged or destroyed by the storm. This includes, 
for example, helping to temporarily house displaced persons, getting 
boilers and generators to impacted developments that house low-income 
families, and waiving administrative requirements (while ensuring 
appropriate safeguards) so as to facilitate the rapid delivery of safe 
and decent housing to displaced public housing authority (PHA) and 
multifamily housing residents. We have also increased fair market 
rental allowances to make it easier for displaced Section 8 voucher 
recipients to find replacement housing.
    HUD is working to encourage the private sector to help displaced 
families. Shortly after the storm, HUD Secretary Donovan reached out to 
several private sector organizations to encourage their involvement in 
this effort, and a number have stepped forward at least partially as a 
result. This recognizes the importance of engagement by the private 
sector as well as government in relief efforts. For example, Angie's 
List is providing free, 1-year memberships to one thousand homeowners 
in the New York City tri-State area to help with Sandy relief by making 
it easier for families to find local contractors, auto repair 
specialists, and health care professionals who are highly rated by 
other consumers. Walk Score has launched a Web site to support people 
in search of temporary housing after Sandy. HotelTonight recently 
announced a $60,000 contribution to the American Red Cross to support 
relief efforts for Sandy victims, and will donate 10 percent of its net 
revenues in New York City for the month of November to the Red Cross 
for this purpose.
    We have deployed HUD personnel to help staff FEMA Disaster Recovery 
Centers and do other storm-related work. This has included providing 
local housing resource help, program information, and other help to 
storm victims, mobilizing special needs providers from other States to 
assist families in shelters, and activating our Northeast network of 
field offices to communicate daily with impacted PHAs.
    There are more than 200,000 homeowners with FHA-insured mortgages 
in the affected areas in New York, New Jersey, and Connecticut. HUD has 
provided foreclosure protection for storm victims with FHA-insured 
mortgages through a mandatory 90-day moratorium on foreclosures.
    We are also offering assistance to storm victims who must rebuild 
or replace their homes. In particular, FHA insurance is available to 
such disaster victims who seek new mortgages, and borrowers from 
participating FHA-approved lenders are eligible for 100 percent 
financing, including closing costs. HUD is also directing banks to 
provide insurance payments they receive related to the storm directly 
to homeowners, in order to avoid the problem that occurred after 
Hurricane Katrina where some mortgage companies used some insurance 
payments that were supposed to be used to rebuild damaged homes for 
other purposes. HUD is working to get information on these and other 
assistance efforts to affected homeowners.
    HUD is also providing help to affected State and local governments. 
Immediately after the storm, HUD hosted technical assistance conference 
calls with all HUD grantees. We have provided waivers of existing rules 
so that existing Federal CDBG and HOME funds in New Jersey and 
elsewhere can be used for disaster relief. Collectively, the CDBG and 
HOME grant programs allow grantees to meet a broad range of needs, 
including housing, economic development, infrastructure, and the 
provision of public services. We are also working with State and local 
governments and tribes to develop interim housing plans and to provide 
loan guarantees for housing rehabilitation.
The role of HUD and Secretary Donovan's role as designated by the 
        President concerning Federal rebuilding efforts
    As you know, on November 15, President Obama announced that HUD 
Secretary Donovan will lead coordination of the Federal action relating 
to Superstorm Sandy rebuilding efforts, and issued an Executive Order 
on December 7 providing that he will serve as chair of the Hurricane 
Sandy Rebuilding Task Force. This role is different from and in 
addition to the role that Secretary Donovan usually carries out with 
respect to disasters as HUD Secretary. In understanding the Secretary's 
role in relation to the National Disaster Recovery Framework (NDRF), it 
is important to understand the NDRF and how it was developed.
    Early in his first term, President Obama recognized that previous 
experience concerning Hurricane Katrina and other disasters highlighted 
the need for additional guidance, structure, and support to improve how 
we as a Nation address disaster-related recovery and rebuilding 
challenges. In September 2009, President Obama charged the Departments 
of HUD and Homeland Security to work on this effort and to establish a 
Long Term Disaster Recovery Working Group, composed of more than 20 
Federal agencies. HUD, DHS, and the Working Group consulted closely 
with State and local governments as well as experts and stakeholders, 
and worked on improving the Nation's approach to disaster recovery and 
on developing operational guidance for recovery efforts. As a result, 
FEMA published a draft of the NDRF in 2010, carefully reviewed and 
considered more than one hundred public comments, and the final version 
of the NDRF was published in September, 2011.
    The NDRF addresses the short, intermediate, and long-term 
challenges of managing disaster-related recovery and rebuilding. It 
recognizes the key role of State and local governments in such efforts, 
and sets forth flexible guidelines that enable Federal disaster 
recovery and restoration managers to operate in a unified and 
collaborative manner and to cooperate effectively with State and local 
governments. The NDRF defines core recovery principles; roles and 
responsibilities of recovery coordinators and other stakeholders; 
flexible and adaptable coordinating structures to align key roles and 
responsibilities and facilitate coordination and collaboration with 
State and local governments and others; and an overall process by which 
communities can capitalize on opportunities to rebuild stronger, 
smarter, and safer after a disaster.
    Under the NDRF itself, HUD plays an important role in recovery from 
disasters like Sandy. It is involved in carrying out several Federal 
recovery support functions, which provide the coordinating structure 
for Federal efforts to support State and local governments and tribes 
by facilitating problem solving, improving access to resources, and 
fostering coordination among all participants in recovery efforts. 
Under the NDRF, HUD is the coordinating agency for the housing recovery 
support function, and is charged with coordinating and facilitating the 
delivery of Federal resources and activities to assist local, State and 
Tribal governments in the rehabilitation and reconstruction of 
destroyed and damaged housing and the development of other new 
accessible, permanent housing options, where feasible.
    In addition, because Sandy will be one of the most devastating and 
costly disasters in our history, the President recognized that 
responding to this disaster required an additional focus on rebuilding 
efforts coordinated across Federal agencies and State, local, and 
Tribal governments in order to effectively address the enormous range 
of regional issues. Accordingly, the President signed the Executive 
Order creating the Hurricane Sandy Rebuilding Task Force and 
designating the Secretary of HUD to be the chair.
    The Secretary's responsibilities in this role will occur in 
coordination with the NDRF and will involve cooperating closely with 
FEMA and the other agencies already involved in recovery efforts. The 
focus will be on coordinating Federal support as State and local 
governments identify priorities, design individual rebuilding plans, 
and over time begin implementation. The Secretary will be the Federal 
Government's primary lead on engaging with States, tribes, local 
governments, the private sector, regional business, nonprofit, 
community and philanthropic organizations, and the public on long-term 
Hurricane Sandy rebuilding.
    Secretary Donovan has explained that the Task Force will not seek 
to impose a one-size-fits-all solution on localities. Instead, with the 
expertise of virtually the entire cabinet represented, it will provide 
leadership and connections that actively support local visions and 
rebuilding efforts. It will have four major responsibilities:

    First, and most important, it will coordinate with all stakeholders 
to support cohesive rebuilding strategies and develop a comprehensive 
regional plan within 6 months of its first meeting. It will share the 
best practices of recovering communities, creating a vision for long-
term rebuilding by State and local stakeholders--a vision that will be 
supported by more thoughtful planning and a focus on resilient 
rebuilding that addresses not only existing but future risk and long-
term sustainability of communities and ecosystems.
    Second, it will identify and work to remove obstacles to effective 
rebuilding efforts, particularly by helping State and local governments 
and tribes as they seek Federal assistance for longer term projects.
    Third, it will develop a plan for monitoring progress in rebuilding 
efforts. At a moment like this, because Americans are anxious about the 
recovery, they have little patience for ineffectiveness or waste.
    Finally, the Task Force will facilitate the offering of technical 
assistance and tools--providing critical support as those on the ground 
realize their vision for rebuilding and redevelopment.
    Work on the structure and functioning of this new effort is 
proceeding rapidly. Secretary Donovan has already met with a number of 
the most directly affected Federal, State, and local officials, and I 
know he is looking forward to working with this Subcommittee and other 
Senators and Representatives on this important effort.
The request for supplemental disaster assistance
    Rebuilding must be a community driven effort, with a community-
based vision at its heart. But supporting that vision through financial 
means is a key part of the Federal role--one that has consistently been 
provided by the Federal Government for communities experiencing 
disaster.
    On December 7, the President delivered to Congress a request for 
$60.4 billion in supplemental assistance to aid in Sandy recovery and 
rebuilding. The request includes funds for transportation, support for 
the Small Business Administration and its disaster loan program, CDBG-
DR funds to be provided to communities, and a range of other critical 
priorities.
    The Administration issued a Statement of Administration Policy on 
December 17 in support of the Senate legislation providing supplemental 
appropriations for fiscal year 2013 to respond to and recover from the 
severe damage caused by Superstorm Sandy. We look forward to working 
with the Congress to refine this legislation. The Senate measure will 
provide the necessary resources to continue ongoing response and 
recovery efforts, while helping impacted communities effectively 
mitigate future risk of disaster to prevent losses of this magnitude 
from recurring. Hazard mitigation is not just sensible, but it is also 
cost effective. The Multihazard Mitigation Council examined 10 years of 
FEMA mitigation grants data and found that mitigation efforts offer a 4 
to 1 dollar return on investment by preventing future damage.
    Given the emergency and one-time nature of the proposed 
supplemental appropriation, and in keeping with the response to 
Hurricane Katrina, Deepwater Horizon, and other disasters, the 
Administration supports the decision to not offset these funds. The 
proposed funding meets the definition of emergency funding that should 
not be offset, as set forth in the Balanced Budget and Emergency 
Deficit Control Act of 1985, because it is sudden, urgent, unforeseen, 
temporary, and needed for the prevention or mitigation of, or response 
to, loss of life or property. The Administration remains committed to 
balanced deficit reduction, and it believes that the Executive and the 
legislative branches can come together to achieve that, while ensuring 
that communities damaged by Sandy have the support they need to recover 
and rebuild.
    The proposed supplemental appropriations include $17 billion for 
CDBG-DR disaster funding. As we have seen with respect to previous 
disasters, such CDBG funding offers important flexibility and 
effectiveness in responding to disasters. Previous uses of CDBG 
disaster funding have included, for example:

    The State of Louisiana used CDBG-DR funds to leverage 
        private equity investment and Low-Income Housing Tax credits to 
        produce rental housing, spending more than $500 million that 
        has produced 6,780 rental housing units, 58 percent of which 
        are affordable housing.

    The State of Indiana budgeted approximately $40 million in 
        CDBG-DR funds to rebuild and mitigate damaged infrastructure 
        following 2008 flooding. As a result, water and wastewater 
        facilities in the town of Hope were rebuilt safer and stronger, 
        and the facilities have continued operation without disruption 
        despite subsequent severe storms.

    The State of Iowa budgeted some $260 million toward 
        voluntary buyout of homes and commercial properties within the 
        floodplain, resulting in the acquisition of more than 2,075 
        properties.

    The State of Louisiana supplemented its small business loan 
        program with $43 million in CDBG-DR funds to provide technical 
        assistance to help businesses get back on their feet and 
        maximize the impact of their loans. To date, more than 3,000 
        businesses have been helped.

    HUD has been a partner with State and local governments in the 
recovery efforts of several of the States in the region affected by 
Sandy. New York, New Jersey, and Rhode Island have CDBG disaster 
recovery experience and know the recovery grant process. New York and 
New Jersey received a 2011 CDBG-DR grant following Hurricane Irene, 
prepared CDBG disaster recovery action plans for that grant, and are 
expending the funds. Rhode Island, West Virginia, and Maryland have 
also received CDBG disaster recovery grants as a result of past 
hurricanes and flooding.
    Our experience with CDBG-DR also demonstrates the importance of 
early appropriations so that it is clear that the funds will be 
available and planning efforts encompass the full range of needs. For 
example, major infrastructure investments take time to spend out due to 
design, permitting and staging requirements, but governments receiving 
CDBG-DR funds are highly unlikely to proceed with these efforts without 
assurance that they have funding to implement the projects. The assured 
availability of these funds is crucial to ensure that workers can be 
hired and other commitments can be made to move projects forward.
    Providing the requested Federal funding for response, recovery, 
rebuilding, and mitigation following Superstorm Sandy will maintain the 
Nation's tradition of pulling together to help one another in times of 
greatest need. The Administration looks forward to working with 
Congress on the legislation and urges Congress to pass a supplemental 
appropriations bill as soon as possible to give affected States and 
communities the support they need to recover and rebuild.
    Thank you again for the opportunity to testify today. I would be 
pleased to answer any questions you may have.
                                 ______
                                 
                 PREPARED STATEMENT OF JAMES WEINSTEIN
               Executive Director, NJ TRANSIT Corporation
                           December 20, 2012
    Good morning Mr. Chairman and Senators.
    Thank you for the opportunity to appear before you today to outline 
the unprecedented damage Superstorm Sandy inflicted on NJ TRANSIT and, 
just as importantly, to describe the need to rebuild a more resilient 
transit system for the future.
    NJ TRANSIT is the Nation's second-largest transit agency, and Sandy 
hit us hard. NJ TRANSIT took sound steps to mitigate potential harm. 
Nonetheless, the transit system suffered extraordinary damage to 
critical bridges, electrical substations, track and signal systems, and 
rolling stock.
    In addition, under Governor Chris Christie's leadership, we worked 
with the Federal Emergency Management Agency, the Federal Transit 
Administration and other partners to immediately implement extensive 
interim emergency bus, ferry and other services to continue to deliver 
essential regional transportation services while the region's transit 
systems were being restored.
    But Mr. Chairman, Sandy has shown we cannot merely restore our rail 
and other infrastructure to its previous state. That would only leave 
us vulnerable to the next superstorm.
    We must go further and make the rail and other transit modes more 
resistant in the face of future superstorms. Those steps will require 
additional resources. We have identified some $1.2 billion in 
resiliency and restoration needs--resiliency projects that would be 
eligible under the Federal Transit Administration's Emergency 
Assistance program. Moreover, these projects are targeted to improve 
the transit system's ability to withstand storms of all types, not just 
superstorms that mimic Sandy's punishing surge.
    Let me outline a few of these projects for the Committee now.
    As you may know, more than 300 rail cars and locomotives were 
damaged during Superstorm Sandy. To prevent that from ever occurring 
again, our top priority is ensuring we have sufficient, stormproof rail 
yards to safely store locomotives and train cars, out of the reach of 
flood waters and also out of harm's way from falling trees, electrical 
wires, utility poles and other storm-driven debris.
    To that end, we estimate it will cost some $500 million to 
construct new rail yard and inspection facilities, including a new yard 
at a site along the Northeast Corridor in New Brunswick that is 
currently owned by Amtrak. This facility will provide a centrally 
located site for safe storage, and allow locomotives and rail cars to 
be rapidly re-inspected and put back into service once a storm passes.
    The Meadows Maintenance Complex in Kearny--the ``MMC,''--is our 
prime rail inspection, maintenance and repair facility, and is also a 
major site for rail equipment storage. The Rail Operations Center 
called the ``ROC,'' sits in the same complex and is the central nervous 
system for the railroad, controlling all dispatching and signaling 
system-wide. We are seeking $200 million to raise power and other 
systems for the MMC and the ROC above foreseeable flood levels, as well 
as to install beams and other anti-flood control structures, so that we 
can safeguard the most critical portions of the complex, and ensure 
that the parts, generators, and repair machinery and other equipment at 
the MMC can ride out any storm in place, as they must.
    Mr. Chairman, Sandy badly flooded the historic Hoboken Terminal, as 
well as portions of the Frank R. Lautenberg Station in Secaucus. We 
estimate it will cost $125 million to restore and strengthen these and 
other key locations against storms. This money will fund projects 
involving both temporary and permanent flood and storm water controls.
    Sandy was at her most wrathful along the Jersey Coast. I'm sure you 
saw the pictures of boats and even metal shipping containers left on 
our North Jersey Coast Line rail bridges by the storm. Sandy also 
ruined electrical substations along the coast and in Hudson County and 
elsewhere which are vital for supplying the catenary wires that power 
our electric trains.
    So we are seeking $275 million to restore the Coast Line, and 
construct seven new, raised electrical substations and to improve the 
Coast Line's resiliency by constructing sea walls by bridges, building 
sheathing to prevent washouts at bridge approaches and raising bridge 
control houses.
    Mr. Chairman, you are very familiar with our light rail systems. 
Both Hudson Bergen and the Newark Light Rail were impacted heavily when 
flood waters rushed in. Repairing the light rail systems and making 
them more resilient will cost an estimate $25 million.
    Finally, we are seeking $75 million to cover the cost of substitute 
bus and ferry emergency service provided after the storm, as well as to 
restore, expand and enhance communications during a disaster. Real-time 
communications are vital, whether our customers are at a station, on a 
train, on a bus, on the Internet or using a smart phone. This is not 
only a customer service issue; it is a safety issue, whether a disaster 
is a result of Mother Nature or an act of man.
    Mr. Chairman, we recognize that there will be local match 
requirements for the funding we are seeking and we are fully prepared 
to work with our local Metropolitan Planning Organization partners to 
make whatever changes are needed to our existing capital program. We 
are also ready to expedite implementation of these projects, including 
by using fast track design-build contracting.
    Mr. Chairman, I would note that these cost estimates are just 
that--estimates that may well evolve over time as we progress the work 
that lies ahead. Before I close, I want to thank Administrator Rogoff 
and the FTA, as well as the leaders and staff at FEMA and the U.S. 
Department of Transportation for their assistance and support during 
this trying time. They have been true partners in the recovery effort. 
And I want to thank Gov. Christie, for his continued emphasis on 
bringing New Jersey back to a state of normalcy for the people of the 
Garden State.
    I also want to again express my thanks to our hundreds of thousands 
of daily customers, for their patience and understanding while NJ 
TRANSIT, and, indeed, the entire State of New Jersey continues to 
rebuild after Sandy.
    Finally, I want to thank you, Mr. Chairman and the Committee for 
your interest and for the opportunity to speak today. Repairs and 
resilience both take funding. Money invested in preventing future storm 
damage will limit the bill for future storm relief--as well as ensuring 
that our transit systems have a better chance of avoiding service 
interruptions.
    We appreciate the Committee's interest and any assistance the 
Committee, Congress and Administration can provide in helping us renew 
New Jersey's transit system, and improve it for the future.
    Thank you and I will be happy to answer any questions you might 
have.
                                 ______
                                 
              PREPARED STATEMENT OF THOMAS F. PRENDERGAST
                  President, MTA New York City Transit
                 Metropolitan Transportation Authority
                           December 20, 2012
    Good morning, Chairman Menendez, Ranking Member DeMint, Senator 
Schumer and other Members of the Committee. Thank you for holding this 
hearing and inviting me to testify today. I'm Tom Prendergast, 
President of the MTA's New York City Transit. The New York MTA is the 
largest transportation provider in the country.
    Every day, the MTA moves more than eight and a half million 
people--reliably, affordably, and safely on our subways and buses, the 
Staten Island Railway, Metro-North Railroad, and the Long Island Rail 
Road. Our seven bridges and two tunnels carry nearly 300 million 
vehicles a year.
    The MTA is one of the few transit systems in the world that 
operates 24 hours a day, 7 days a week, 365 days a year. And along with 
the other transportation networks represented on this panel, we are the 
lifeblood of a $1.4 trillion dollar regional economy--the largest in 
the country, making up 11 percent of the Nation's GDP.
    About 2 months ago, however, our region came to a complete 
standstill in the aftermath of Superstorm Sandy--a disaster that 
brought our system to its knees. For the second time in our 108-year 
history, the MTA shut down all service. And despite unprecedented 
preparations, we sustained damage on a level we have never experienced.
    Today, most of our customers are seeing service, but our workers 
are seeing another reality--a fragile system that's safe but extremely 
vulnerable. The subway line and the bridge connecting the Rockaways 
Peninsula and the rest of Queens have completely washed away. The 
subway tunnel for the R train connecting Brooklyn and Manhattan still 
isn't operational. We have subway lines running at longer headways, 
resulting in longer commutes and severe crowding. We've drawn down 
about 80 percent of our replacement equipment. The useful life for many 
of our signals, switches, and relays has depleted exponentially.
    We estimate nearly $5 billion dollars in immediate repair needs 
left in Sandy's destructive wake, and billions in project needs to 
protect our system from future flooding. And we will repair and rebuild 
our system as quickly as possible--our 8.5 million customers are 
counting on it.
    We've already spent hundreds of millions of dollars to restore 
service as quickly as possible. And just yesterday, our Board approved 
for us to move forward in selling $2.5 billion dollars in Bond 
Anticipation Notes that will be used for rebuilding.
    But we are simply not able to shoulder this incredible burden on 
our own and we cannot fully undertake these financing efforts without 
knowing what Congress plans to do. A Federal commitment is needed to 
ensure that we can rebuild and we build back stronger.
    Once a Disaster Relief Supplemental Appropriations bill is signed 
into law, we are prepared to immediately enter into contracts to begin 
the projects that are essential to our riders. Projects such as:

    Restoring the South Ferry/Whitehall Street subway station;

    Restoring the Rockaway line;

    Repairing and replacing damaged signal equipment, including 
        switches and relays, and restoring our damaged vents, pumps, 
        and communications equipment; and

    Repairing the roadway structure, ventilation, and 
        communications equipment in the Queens Midtown and Hugh L. 
        Carey Tunnels.

And as we work to bring our system back to normal, we must also make 
the necessary investments to protect this 108-year old system from 
future storms. We must rebuild smarter.
    Manhattan's South Ferry subway station is a perfect example. This 
station, which was destroyed during the 9/11 attacks, reopened in 2009. 
The station cost over $500 million to rebuild and it serves over 30,000 
riders every day. It was completely destroyed, again, this time by 
Sandy. This station, eight stories underground, was completely filled 
from floor to ceiling with corrosive salt water. We estimate that 
rebuilding the station will cost the MTA around $600 million dollars. 
The last thing we want do is to come back to Congress for another $600 
million after the next storm hits but we will if we have to. It is in 
the best interest of the American tax payers to protect this critical 
station and other large Federal investments or we could be here again 
seeking billions of dollars to repair our system.
    As Superstorm Sandy demonstrated, when the MTA shuts down, the 
Nation's largest regional economy shuts down. It's absolutely critical 
that we make the necessary investments to protect the South Ferry 
station and the MTA's 108-year old assets from future storms. Failing 
to protect these assets places the region's $1.4 trillion dollar 
economy, representing 11 percent of the Nation's GDP, at risk.
    Our needs are great. But this is clearly much more than a New York 
story, or a New York need. This is a national issue . . . a national 
need. And we need the Federal Government's help--not only to get us on 
the road to recovery, but also to protect New York and our Nation's 
economy in the future.
    Once again, Chairman Menendez, thank you for holding this important 
hearing and for giving me the opportunity to testify before the 
Committee. I welcome any questions you may have.
                                 ______
                                 
                 PREPARED STATEMENT OF PATRICK J. FOYE
   Executive Director, the Port Authority of New York and New Jersey
                           December 20, 2012
    Chairman Menendez, Ranking Member DeMint, Senator Schumer, and 
Members of the Committee, thank you for holding this important hearing.
    I am Pat Foye, Executive Director of the Port Authority of New York 
and New Jersey.
    Chairman Menendez and Senator Schumer, on behalf of the Port 
Authority of New York and New Jersey, I thank you both for your ongoing 
support of the Port Authority and for the people of our region.
    I also want to thank Governors Andrew Cuomo of New York and Chris 
Christie of New Jersey for their strong leadership before, during and 
after Superstorm Sandy.
    For those unfamiliar with our agency, the Port Authority operates 
what is arguably the most important multi-mode transportation network 
in the world.

    Our transportation assets feature:

    the busiest airport system in the country, including JFK, 
        LaGuardia, and Newark airports;

    four interstate bridges, among them the George Washington 
        Bridge, which is the busiest vehicular crossing in the world;

    the Holland and Lincoln tunnels that link New York and New 
        Jersey;

    the Nation's busiest bus terminal, located in Midtown 
        Manhattan;

    the largest port complex on the East Coast; and

    the bi-State commuter rail system known as PATH.

    Annually, about 77 million riders take PATH, and those who rely on 
it will tell you it is an indispensable part of their lives. While our 
network is just over 13 miles long, it serves a vital link in the 
region, carrying passengers under the Hudson between New Jersey and New 
York. It is an essential artery in a region representing more than $1 
trillion in economic output; fully 11 percent of our entire Nation's 
GDP.
    Of all our transportation facilities, PATH suffered the most severe 
blow in Superstorm Sandy. We took every step we could to prepare for 
the storm, but despite our preparations, this critical interstate link 
between New Jersey and New York, was completely devastated by the 
historic storm surge and flooding that reached over two feet above the 
prior 100-year flood level in Lower Manhattan.
    The storm surge breached and blasted through our passenger stations 
and the PATH tunnels, which are ancient by many of today's mass transit 
standards, having been built at the turn of the last century more than 
100 years ago.
    The PATH network is dense and closely contained with complex 
tunnels interlocking underneath the Hudson. The tunnels, along with the 
box-like structures called caissons connecting the tunnels, contained 
racks upon racks of critical and decades-old signal, switching, and 
communications equipment that were flooded in a deluge of corrosive 
seawater during Sandy.
    The waters damaged the signals, switching, communications, and 
other wayside equipment lining the tracks. Perhaps most visibly to the 
public, our stations themselves experienced tsunami-like conditions. 
Our historic Hoboken Station, one of the busiest in our system, was 
flooded as an enclosed elevator shaft was crushed by the strength of 
the floodwaters, sending millions of gallons pouring into the station.
    In many of our stations, practically every wire, every circuit, 
every last bit of infrastructure that existed below ground was damaged, 
destroyed or otherwise in need of attention and repair. To compound the 
problem, many of the parts that Sandy destroyed are no longer 
manufactured because of their age and obsolescence. It has been like 
trying to find replacement parts for an entire fleet of Edsels in the 
21st century.
    Thanks to the heroic efforts of our staff and many others who came 
to help them, we commenced partial service restoration of the system on 
November 6, re-establishing service between Journal Square and 33rd 
Street in Manhattan. On November 12, we brought back service to Newark.
    With continued round-the-clock efforts, on November 26, PATH 
resumed service to the World Trade Center and Exchange Place stations. 
And finally I am proud to say that [just yesterday], I joined PATH 
employees for the inaugural run of restored Hoboken service. With that, 
we have restored at least limited service to all of the stations in our 
network.
    We learned during the storm that the ingenuity and dedication of 
our public servants is unrivaled. In the first days after the storm, 
one of our workers, Tom O'Neill, risked his own life to jump into 
several feet of murky floodwaters in a PATH tunnel to restart a pump by 
hand, thus preventing further flood damage. O'Neill, in his own words, 
``was just doing his job,'' and it is that attitude, that fortitude of 
all of our PATH employees, that continues to bring us back.
    We could not have come this far on our own. Companies and factories 
from all over the country have helped in our recovery. In Pearl, 
Mississippi the employees at Trilogy Communications worked day and 
night, on a weekend no less, to prepare 3,200 pounds of replacement 
specialized communications cable for our tunnels leading to the World 
Trade Center.
    Invensys Rail, based in Louisville, Kentucky, manufactured a 
replacement microprocessor for our destroyed caissons in Hoboken in 
record time: The process normally takes 6-9 months, but at our request, 
Invensys worked 24/7 to deliver the microprocessor in just 6 weeks. But 
with PATH still operating at less than full strength, and on partial 
schedules, and as NJ Transit continues its own efforts to restore full 
service, commutes are still badly disrupted.
    What normally was a 45-minute ride home for many has now doubled in 
length--or worse, as commuters displaced from PATH seek alternative 
transit, bus or ferry service. Those with late evening shifts are still 
bearing the burden of limited service, having to rely on late night 
buses to make their way home.
    We continue to rebuild and repair across our network, but as is the 
case for the States of New York and New Jersey, the Port Authority will 
need the Federal Government's help.
    Simply, we are not at full strength and we have endured hundreds of 
millions of dollars of damage. Old electric substations have been 
patched together with cannibalized parts. Parts of our network are 
operating on so-called ``manual block,'' with personnel communicating 
by radio to mark trains passing stations while our signaling systems 
are still under repair.
    To bring our system back will require hundreds of millions of 
dollars. This will go immediately into signal system repairs, electric 
substation repairs, track-work, and communications systems, and the 
rehab of rolling stock that was partially submerged in salt water. We 
are still tallying the damage, but we now estimate that the costs to 
fully repair and restore the PATH system may total over $700 million 
dollars--more than $400 million than what we originally estimated to 
repair our system.
    It is also critical that we invest in mitigation measures to 
protect our system from future storms so that we do not find ourselves 
in the same situation just a few years from now. This will include 
projects such as elevating portions of our track, elevating critical 
substations, and strengthening critical caisson rooms within our 
tunnels beneath the Hudson River. These mitigation measures will come 
at significant cost, but without them, as we have learned over the last 
2 months, the costs are even higher.
    Some of you know that the Port Authority receives no taxpayer money 
from either New York or New Jersey. We rely exclusively on user fees--
the fares our passengers pay, and rents and other fees--all revenue 
streams that have their limitations. We are still assessing the exact 
costs of repair and recovery, but our needs are significant.
    I urge Congress to act as soon as possible in approving recovery 
funding for the New York, New Jersey and Connecticut region. The final 
costs no doubt will be high, but the costs--should we fail to make 
necessary repairs and investments--are unfathomable in terms of the 
cost of lost productivity, a fractured transportation network, and the 
economic output that it powers.
    Thank you for your help, and for inviting me to speak today.
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