June 2 (Bloomberg) -- The Port Authority of New York and New Jersey, formed 93 years ago to manage marine terminals on the Hudson River, is increasingly operating as a security agency that runs bridges, tunnels and airports.
Spending on policing has doubled since the Sept. 11, 2001, terrorist attacks and now consumes almost a quarter of its $2.8 billion operating budget. The authority, which also owns the World Trade Center site where the twin towers stood, spends more to police its assets than to maintain them.
A panel formed by Governors Chris Christie of New Jersey and Andrew Cuomo of New York is poised to review security costs as part of a sweeping re-examination of the agency. Spending on police is draining the budget for capital improvements, such as a replacement for the decaying 64-year-old bus terminal near Times Square, which serves 230,000 commuters daily.
“We really need to have a top-to-bottom analysis of all the security that we have and see why it’s growing at such a disproportionate rate,” said Kenneth Lipper, one of nine Port Authority commissioners. “It’s significant.”
The review may include potential mergers with local and state police agencies, according to a person with knowledge of the work of the governors' panel who asked not to be identified because its deliberations are private.
While public attention has focused on the scandal involving the shutting of lanes at the George Washington Bridge by allies of Christie, reports of political abuse, mismanagement and interstate rivalry have overshadowed the agency’s eroding finances, according to an April report by New York University’s Rudin Center for Transportation Policy & Management. Lawmakers in both states are calling for more transparency and accountability.
Spending on police is projected at $652 million this year, up from $279 million in 2001, according to data provided by the Port Authority. The budget includes $115 million for private security, mostly at the three major airports and the World Trade Center, a 16-acre site that’s being transformed from a construction zone into a museum, memorial and commercial district.
Capital spending on security -- money allocated to new projects and equipment -- has increased to $282 million this year from $8 million in 2001. In that span, the authority has built a vehicle-security center at the World Trade Center, installed intrusion-detections systems and new baggage screening at airports, and added closed-circuit television and identification systems at other facilities.
“We police high-value targets and we do it rather well, and it’s a very expensive thing to do,” said Bobby Egbert, a spokesman for the Port Authority Police Benevolent Association, which represents 1,300 rank-and-file officers.
The agency is always reviewing costs, said Chris Valens, a Port Authority spokesman. As the World Trade Center construction winds down, capital spending on security should decline, he said.
Founded in 1921, the Port Authority funds itself through tolls, fares, rent, surcharges on airline tickets, parking and other fees. It receives no tax money.
Police costs are straining the agency at a time when it’s subsidizing money-losing operations. This year, the PATH railroad, the bus terminal, ports and the World Trade Center are projected to lose a combined $1.2 billion. That’s up from $656 million in 2009.
In 2011, the agency raised bridge and tunnel cash tolls to $12 from $8, citing growing security costs since Sept. 11 as one of the reasons. It boosted the cost to $13 the following year and plans $1 increases in December of this year and in 2015.
Since 2001, the Port Authority Police Department staff has increased to about 1,875 from 1,340 as its budget swelled by 133 percent. Overtime almost tripled to $139 million.
By comparison, the New York Police Department’s 35,000-member force has shrunk by about 5 percent since 2002, while its budget has increased about 30 percent. With a force almost 20 times larger, the NYPD spent only 4.5 times more than the Port Authority on overtime.
At $84 an hour, senior Port Authority officers make more than counterparts in the NYPD; Newark and Jersey City, New Jersey; and both state police forces, according to a 2012 report by the Citizens Budget Commission, a business-funded watchdog group in New York City. Port Authority officers made less than police in the suburbs of Nassau and Suffolk counties.
The commission’s study didn’t include overtime, which has been a long-standing issue at the Port Authority. A 2012 consultant’s report found that police work rules are complicated and appear to create significant staffing challenges and inefficiency that can often lead to excessive overtime and compensation.
Police logged 384,000 hours more overtime than budgeted last year. Payroll data provided by the agency show that 187 Port Authority police officers and supervisors earned more than $200,000, often doubling their base salaries through overtime and other compensation.
Eight members of the force made more than $300,000, including Andrew Kurpat, who earned about $331,000, including almost $215,000 in overtime, making him the highest-paid Port Authority employee.
“We’re short-staffed across the board,” said Joseph Dunne, who was hired in 2012 as the authority’s chief security officer after the board ordered a confidential review by former U.S. Homeland Security Director Michael Chertoff.
A message left for an Andrew Kurpat in Berlin, New Jersey, wasn’t returned for comment.
Additional foot patrols at the airports, background checks on new recruits, commuter train inspections and posts established at the George Washington Bridge in response to suicides all required more overtime, Dunne said.
Dunne, a former second-in-command at the NYPD, created a new management structure, assigning chiefs to the New York and New Jersey airports and another to oversee bridges and the Lincoln and Holland tunnels. He also consolidated decision-making on technology and surveillance, and began trying to reduce overtime.
A key to that strategy is “right-sizing” the department by hiring more officers, Dunne said. The agency hired 195 recruits last year and plans to add an additional 260 this year. More officers will curb the need for overtime, according to Dunne.
“People tend to think that the cops are overtime hungry,” he said in an interview. “Just the opposite. In many cases, it’s affecting morale because officers are being kept beyond their tours of duty.”
Doubling spending on security hasn’t prevented the Port Authority from suffering critical breaches in the last few months.
In March, a teenager from New Jersey crawled through a fence at the World Trade Center site, rode an elevator and climbed to the roof of 1 World Trade Center, 1,368 feet (417 meters) above ground. Six months before, three men parachuted from the roof.
Maki Haberfeld, a professor at John Jay College of Criminal Justice in Manhattan, said she is concerned about those incidents.
“There’s no doubt in my mind that quite a few terrorists groups or individuals are looking at this as their next target,” Haberfeld said. “Of course, you can’t secure everybody and everything all the time, but there are targets that need to be secured better than others.”
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