MBTA Fiscal and Management Control Board Releases First Report

In its first report to the Legislature, the MBTA Fiscal and Management Control Board detailed underlying problems at the MBTA that are even more serious and deep-seated than reported in April by the Governor’s Special Panel to Review the MBTA.

The Fiscal and Management Control Board’s baseline analysis of MBTA finances, operations, and management identifies significant structural challenges in the authority specifically regarding rising expenses and for the first time accurately calculates the state of good repair backlog.

“Without question, this report paints a bleak picture of the current state of the MBTA,” said Fiscal and Management Control Board Chair Joseph Aiello. “But it provides the baseline we need to be able to move forward with actions to get the MBTA back on track.”

For this baseline report, FMCB working groups identified two findings of particular concern that require immediate action by all MBTA stakeholders:

• The MBTA’s operating budget (including debt service) is unsustainable, with expenses increasing at nearly
  three times the rate of revenue growth. Left unaddressed, the structural operating deficit of the MBTA will reach
  $427 million in FY2020.
  
• Annual capital spending on deferred maintenance and capital investment – the “state of good repair” backlog –
  has historically fallen substantially below the $472 million annual spending needed to prevent the backlog
  from growing greater. That backlog has risen to $7.3 billion.

The report also cited progress under the MBTA’s new governance structure and leadership.

The winter resiliency program, currently under way, will enable the MBTA to better withstand major storms and extended cold, it notes, and a new agreement between the MBTA and Keolis Commuter Services is targeting shortfalls in the system’s commuter rail service.

Framingham has a commuter rail station on the Worcester line.

Items on the Keolis Commuter Services Improvement Plan include:

• 92 percentage on time requirement average; no month below 90%. Peak & Off-Peak disaggregated
  
• 65 locomotives daily
• Fines based on daily, not monthly performance
  
• Mystery shoppers to check fare collection
  
• 64 new assistant conductors by 12/31/15 focused on revenue collection

The MBTA is also doing a better job of spending available funds on capital projects and has taken steps to improve workforce productivity and reduce absenteeism, the leading cause of dropped trips on both buses and the subway system.

The Fiscal and Management Control Board was established as a separate entity to provide focused and dedicated oversight of the MBTA’s core functions.

Since its first meeting on July 21, the Fiscal and Management Control Board has met weekly and individual working groups have been formed to more deeply examine operational, fiscal and other issues.

This week’s baseline analysis will be followed by a series of other reports, including the Fiscal and Management Control Board’s first annual report, which is due Dec. 15. That document will offer a more comprehensive review of the MBTA and offer an initial set of recommendations, including steps to balance the MBTA operating budget.

Click here to read the 50-page report.

The Fiscal and Management Control Board was charged with developing a detailed strategy and implementation plan for these fiscal, managerial and
operational areas of the MBTA:
1. Capital planning
2. Separation of capital and operating budgets
3. Own-source revenue
4. Expansion proposals
5. Procurement and contracting improvements
6. Emergency preparedness
7. Internal reorganization
8. Customer-oriented performance management
9. Best practices for workplace productivity
10. Reduction of employee absenteeism
11. Public-private partnerships
12. Sale and lease of real estate assets
13. Development of performance metrics across organization

14. Developing one- and five- year operating budgets, beginning with FY2017, balanced primarily through own-source
revenue and cost control, which will facilitate the transfer of capital employees to the operating budget
15. Establishing five- and 20-year capital plans
16. Establishing a performance management system
17. Reviewing any service contract
18. Changing fares consistent with statute
19. Reorganizing the internal structure of the MBTA (pending MassDOT board approval)