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NEW YORK CITY-Thursday’s resignation by Elliot Sander, executive director and CEO of the Metropolitan Transportation Authority, was first offered to New York Gov. David Paterson earlier this year in anticipation of legislation that combines the chairman and CEO positions at the MTA, according to sources at the transit agency.

Sander’s resignation, accepted May 7 by the governor, is effective May 22. The move ends a tenure that started back in January 2007, when he was appointed by then-Gov. Eliot Spitzer. While in charge of the system with its 70,000 employees, Sander oversaw the integration of the MTA’s three bus companies, the merging of back office functions across seven agencies and the introduction of line general managers on the subway system.

Once it became apparent the devastating recession with its free fall in real estate tax revenue would injure the system’s finances, Sander stood at the helm as the MTA board was forced to pass its “doomsday” budget. But that budget–first grimly pedaled in March–was then utilized as a warning to Albany lawmakers that a huge chunk of financial intervention would be necessary.

MTA leaders, Paterson and Assembly Speaker Sheldon Silver initially supported the plan crafted by a commission headed by former MTA head Richard Ravitch, known as the Ravitch Plan. That plan involved a series of taxes, bridge tolls over the East River and Harlem River bridges and modest fare increases that the plan said would close MTA’s billion-dollar-plus budget gap.

But the plan became the source of a contentious funding battle that stoked longstanding passions about bridge tolls, outer borough resentment and other inter-regional tax spats as debates grew increasingly shrill over who got bigger pieces of revenue pie. Meanwhile, the public’s anxiety and anger increased daily as threats of deep service cuts and steep fare hikes were detailed daily in headlines set against a backdrop of Albany bickering.

In the end, a deal was reached, and on May 7 Paterson signed the rescue bill. For now, it staves off the “doomsday” fare hikes and service cuts Sander had warned about, but does include stipulations on governance of the agency, including the combination of the two top jobs at the MTA. H. Dale Hemmerdinger, president of Atco Properties and Management, reportedly will leave his unpaid position as chairman of the MTA’s board next month. Calls to Hemmerdinger for comment were not returned by deadline.

One of the more audible opponents of the original Ravitch plan was State Senate Majority Leader Malcolm Smith of Queens, who says the public should not be “misled” by Sander’s resignation. “The MTA was a mess long before Lee Sander became its CEO,” a spokesman for Smith tells GlobeSt.com. “With the reform package the senate passed which features a provision for a forensic audit, we will have the tools to get at the guts of the MTA’s problems and clean up their mess.”

In a statement from MTA, Sander begs to differ, saying he’s “tremendously proud of our accomplishments making the MTA a leaner, more efficient and effective organization.” He adds that “each of the MTA’s agencies is performing at peak levels.”

Among supporters of long-term capital improvements, praise was directed at Sander. In a statement, New York Building Congress president Richard Anderson says that Sander has devoted equal and unyielding attention to the system’s immediate operating needs and its considerable long term capital needs.” He adds that Sander “has worked exceptionally well with all the varied constituencies that rely on a dependable transit network.”

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