NY's governor taps ex-CFO, London expert to lead MTA

By Joan Gralla

NEW YORK (Reuters) - New York Governor David Paterson on Tuesday nominated Jay Walder, the former chief financial officer of the Metropolitan Transportation Authority, to the MTA's top two posts, combining the roles of chairman and chief executive for a six-year appointment.

Walder, a London-based partner with management consultant McKinsey & Co, rose to become CFO of the nation's largest mass transit agency when he worked there from 1983 to 1995.

In early May, the Democratic governor accepted the resignation of CEO Elliot Sander. That left Chairman Dale Hemmerdinger as the sole senior official to oversee the transition to a new chief.

The Democratic-led state Senate must confirm Walder for the MTA's top spots. Some Democrats have bashed the MTA for misleading the public about its finances and Paterson has made its reforms a signature issue.

In a statement, Paterson praised Walder for overseeing the "wildly successful" Oystercard, which grew into Europe's "largest contactless smartcard." Walder also served on a team that helped London's Underground save $2 billion, he said.

Though Walder will serve at the governor's pleasure, Paterson said combining the MTA's top two jobs would give New Yorkers "one independent leader."

Walder told reporters that restoring the public's trust in the MTA and securing its new capital program were among his top priorities. His list included developing new lines.

The MTA is still living down a former state comptroller's charge that it misled the public by keeping two sets of books. With its share of real estate and other taxes shrinking with the recession, it recently raised fares for buses, subways and commuter railroads, and increased bridge and tunnel tolls.

The state Legislature eased the severity of the fare hikes and service cuts the MTA had said would otherwise be needed by approving a new payroll tax for local employers. But lawmakers only provided funds for two years of capital investments, not the usual five-year plan.

Walder said it was too soon for him to make specific recommendations, but he estimated that the MTA has invested $70 billion in its system since New York City's mid-1970s fiscal crisis. He recalled the surprise and disbelief that straphangers displayed when the first subway cars without that era's distinctive graffiti went into service.

"Everybody looked around like they were in the wrong place, like they had dropped down from Mars," he said, contrasting the new graffiti-free subway cars with the old ones, which often had malfunctioning doors, for example.

(Reporting by Joan Gralla; Editing by Jan Paschal)