NEWARK, N.J. (AP) -- The mood was jubilant at New Jersey Transit headquarters the night of March 11 when Gov. Chris Christie stopped by to announce a tentative labor agreement with rail workers, averting a potential strike that would have caused historic gridlock for New York-bound commuters.

By the following month, a new executive director, former Amtrak executive William Crosbie, was to take the helm of the nation's third-largest commuter bus and rail network, providing a measure of stability as the agency tackled its annual fiscal challenges.

Three months later, much has changed, and not necessarily for the better.

Crosbie backed out of the job the week before he was to begin, and no replacement has been named. Two of the rail unions have yet to ratify the contract, starting the clock ticking toward another potential showdown.

NJ Transit also has faced criticism after it was revealed in separate news reports that it was using audio surveillance on its light rail lines and that a locomotive engineer was driving trains despite having a suspended driver's license for repeated DWI violations.

On the positive side, NJ Transit's proposed operating budget for fiscal 2017 released Friday included no fare increases, as Christie promised when he announced the labor agreement in March.

NJ Transit still faces a $46 million gap in its operating budget, officials said Friday. That's largely due to retroactive pay bus workers are owed under terms of a labor agreement reached last fall.

"The bus contract settlement was an arbitrated award that represented an equitable and fiscally responsible resolution for both the union members and New Jersey taxpayers," NJ Transit said in a statement Friday. "We continue to pursue self-help measures that will further reduce this deficit while ensuring the prudent use of taxpayer and fare box revenue in order to avoid passing the costs on to our customers or to the state."

The bus workers had worked without a contract for five years before the settlement, in what one transit expert called "very questionable management."

"These are difficult situations, but you can't lose sight of the fact the retroactivity should never have occurred," said Martin Robins, founding director of Rutgers University's Alan M. Voorhees Transportation Center and a longtime transportation policy planner.

"When you run a rail or bus enterprise, you don't go five years after the contract expires and then start seriously negotiating without recognizing you are imposing on yourself a very serious financial burden," he added.

The turmoil of the last few months has fallen on the shoulders of Dennis Martin, the former head of NJ Transit bus operations who is in his seventh month as interim executive director.

Some of the agency's staunchest critics lobbied at last week's board meeting for him to have the interim tag removed and serve until Christie leaves office in early 2018. Martin said the uncertainty at the top of the agency hasn't been an obstacle.

"I'm flattered by the comments I heard today," Martin said Wednesday. "We are operating the agency as if I I'm permanent because that's the way I behave, so I don't see any downside in that."

Spokespeople for Christie's office didn't respond to a message last week asking whether new candidates were being interviewed for the executive director's position.

Martin said labor negotiations are ongoing and talk of contingency plans in the event of a strike was premature. In March, as negotiations moved toward a strike deadline, NJ Transit released a plan involving buses, ferries and PATH trains it conceded wouldn't be able to accommodate about four in 10 NJ Transit rail riders into New York.

A spokesman for the conductors' union, one of the two holdouts, didn't return a message seeking comment Friday.

The engineer with the DWI convictions has been reassigned, and Martin said last week NJ Transit is working with federal rail officials and rail unions to strengthen safety rules covering engineers.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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