NEW YORK CITY-Citing concerns about an under-funded capital program for the New York metropolitan region, the Metropolitan Transportation Authority proposed a financial strategy at its Wednesday morning board meeting to increase its debt plan to $6.9 billion for its 2010-2014 capital projects budget, while retiring $6.2 billion of existing debt this year. The move comes on the heels of ongoing mega-projects such as the expansion of the Long Island Rail Road to Grand Central Station, the 7 subway line extension to Manhattan’s Far West Side and the Fulton Street Transit Hub, which are all under construction.

The plan is comprised of a $3 billion federal loan from the Railroad Rehabilitation & Improvement Financing (RRIF) program, $2.2 billion of which would be used for new expenditures; and a $4.7 billion bond issue that would be reallocated to support existing debt. The program--with no new taxes or fare increases--will utilize longer maturity bonds and flexible terms, which the MTA says “are appropriate for new infrastructure projects that have very long, useful lives.”

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The $6.9 billion is one chunk needed to help fund the MTA’s total $24 billion capital budget for next seven years. Since June 2010, the MTA has cut $2 billion from its capital program and is “committed” to doubling that to a total of $4 billion by finding ways to deliver benefits more efficiently, officials said at the meeting. In an effort to produce cost-savings, the MTA will complete an overhaul of business practices by eliminating 15% of administrative staff, reducing costs of train and bus purchases and partnering with contractors to reduce bid costs.