State auditor: MBTA efforts to reduce debt increased debt
State Auditor Joe DeNucci today released a report on MBTA efforts to reduce its overburdening debt (highest of any transit authority in the country; suck it, New York!). Didn't work, DeNucci concluded:
In an effort to manage their annual debt service costs on its $4.6 billion of outstanding debt, the MBTA decided to utilize interest rate derivatives to try to reduce their exposure to rising interest rates and lower their annual bond interest expense. During this period the MBTA entered into 12 such agreements totaling approximately $1.632 billion. However, we determined that contrary to their expected savings, the MBTA incurred additional interest costs of more than $55 million during the period July 1, 2000 to December 31, 2005 by utilizing interest rate derivative agreements. As a result, the MBTA actually increased their total indebtedness by using derivatives to manage their debt.
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When does it end?
At what point does the MANAGEMENT finally get shit-canned for MISMANAGEMENT?
Get Grabauskas Gone!
Here's the thing about Dan Grabauskas (mini-essay ahead)
Warning: This turned out a lot longer than I planned.
You could replace Dan Grabauskas with anybody, and it's unlikely that you would witness a sea change in the manner in which the MBTA is run. There are too, too many layers of management in the MBTA and the EOT for any individual to really alter the manner in which the T operates. And there are a good number of well-connected people and competing interests at work to complicate matters as well.
Policy decisions come from some sort of vaguely-definable group of individuals that Dan Grabauskas probably couldn't go against if he tried. This is not to say he's a helpless actor in the organization, but he's not the dictator of Boston transit that he's often betrayed as being. He could be replaced tomorrow, and he knows it.
As it stands, major decisions are often made behind closed doors, and the public is none the wiser. There is no transparency, because that would risk accountability. Dan serves as a public face for those who make or break mass transit in the region.
Ultimately though, the public lose out by having Dan receive a disproportionate amount of attention. Because even if they grow to hate him and his policies, and he gets the blame for things that are done at the many levels above him, it means that replacing him ultimately stands to achieve nothing.
We're still going to get the Silver Line expansion that simply can't handle the number of riders the line could be expected to receive. Why? Because "Bus Rapid Transit" was deemed to be the future of Boston long before Grabauskas got his job , even though building a BRT line would cost 600 million more than simply activating the rail lines that have been sitting abandoned for decades. (and would carry many more passengers)
(Not to mention the fact that destructive *busway* construction is being used as an excuse to tear up a huge swath of the Common to double the size of the parking garage from which city hall sees a huge windfall.)
The chance of Dan being able to stop that? Virtually none. He'd have to go against Menino. I'd wish him luck with that.
The state is obsessed with extending the commuter rail to New Bedford - no matter what. The initial price tag of 1.4 billion is probably a very optimistic estimate. Let's say it'll cost closer to 2 billion-ish. Guess how many riders they expect to gain? About 1,000 a day. The #39 bus carries 14 times that each day, and Jamaica Plain can't even get the Green Line back. (#39 ridership has dropped 25% in the past ten years, while Orange Line ridership has not increased)
The chance of Dan being able to change things? Slim.
Which is not to say he doesn't support any of these questionable policies and work to push them forward.
This is not a Dan Grabauskas defense piece. What it is, is a reminder that if you want real change, you have to start at the top. You can fire Dan, fire his replacement, and fire the next person who takes the job as well, but the structural problems will remain, and the MBTA will continue to be an instrument of people who don't really seem to like mass transit at all, and probably don't use it. Not that Dan really does, either. He's admitted as much.
Remember how Somerville and Medford absolutely flipped out when the EOT tried to delay the Green Line extension yet again? Pressure was put on Deval Patrick directly, and suddenly the extension wasn't delayed, it was coming early. Funny how that works.
On the flip-side, remember when the EOT and MBTA were told by a court they absolutely had to restore Green Line service to Jamaica Plain? (Something about singing a binding legal agreement in exchange for funding The Big Dig) They had to go along with it until Mitt Romney simply had his cronies rewrite the Commonwealth's environmental laws to void the agreement.
If you want to change a lot of things, Dan Grabauskas is not your man. He's the guy you go to when you want to get the T to start buying useful fare gates, tweak bus routings and frequencies. He's the guy you go to when something breaks, but to alter the structure of the organization, to alter the course of the agency, you need to look elsewhere.
I'm not trying to say the man has no power, but he doesn't have as much as many think, and it's important that people not only direct their opinions towards him, but to those sitting at the top of the power structure.
So what?
Fine, name names. Give me the names of the cabal that supposedly *really* pulls the strings. The mismanagement of these funds are exactly what Grabauskas is supposed to not be screwing up. The fact that the green line is the most transited line on the system (second only to busses)...and yet the worst monitored and worst scheduled is exactly what you say Grabauskas is responsible for. Also, read the responses from the MBTA...nothing conciliatory at all in how things were handled or solutions moving forward. The auditor reviewed what happened and made suggested fixes...and the MBTA pushed it aside and stone-walled their past decisions. The auditor comes back again with more problems...and the MBTA just outright dismisses them with no valid reason. It's like reading the "Letters to the T" from Grabauskas in the Metro.
Placate, patronize, deny, ignore, next fantasy.
I don't care who gets wiped out to get the current situation under control. I'm tired of waiting 30 minutes for a bus, spending over an hour to get from one side of the river to the other in any meaningful fashion, and ever-increasing fare rates when 2 out of 3 people get on for free regularly. It's even worse to hear that the BIG dollar items like debt management are not even being handled appropriately.
I don't care if Grabauskas is the first or last one against the wall. Even if his only responsibility is keeping sharpened pencils on his desk, I'm willing to bet every tip is blunt. Whatever you claim his job is limited to, it's not getting done.
The MBTA is a total failure currently from maintenance, to morale, to service, to construction, to scheduling, to cleanliness, to debt management, to timeliness, to everything.
Common garage
Not to mention the fact that destructive *busway* construction is being used as an excuse to tear up a huge swath of the Common to double the size of the parking garage from which city hall sees a huge windfall.
The city doesn't get anything from the garage since it's owned by Yet Another State Authority: the Mass. Convention Center Authority.
Yeah, that's what I get for
Yeah, that's what I get for posting a mega-rant at 1:14 in the morning. ;)
Then he should resign and
Then he should resign and make this a issue.
Look, the problem is he's the veritable CEO and if he isn't being allowed to do his job, he needs to step down. There's a board of directors, and the Secretary of transportation that might have a little influence on him, and of course Mumbles, but it's not beyond his position to push back against such interests. He hasn't been doing his job, hasn't been reaching out to those who could help in the state legislator, and he needs to go. Who the hell goes on vacation when their organization might be crippled from a major strike shutting down south station? The answer is a incompetent leader who just doesn't really give a shit and is sucking up public money.
The fact is, the position has turned into a cushy job for higher up state workers, and everyone knows it. Dan's over his head with no plan.
Write Deval
If you think the MBTA is mismanaged (which it appears to be) write/email Governor Patrick and, if you live in Boston, your city counselor. Although venting about it here is theraputic and may convince others of your viewpoint, it is of little practical effect.
In the MBTA's own words: "The MBTA runs under the day-to-day leadership of General Manager Daniel Grabauskas and is governed by the MBTA Board of Directors, which is Chaired by the Secretary of Transportation, Bernard Cohen."
Governor Patrick is Bernard Cohen's boss. Moreover, the governor no doubt has some influence in appointing members of the board who, from their biographies, could probably use a little more background in running a major transportation network. I am sure that they are all good citizens and bright people, but you would think that they would have some experitice that would help them guide the nation's fourth busiest public transportation system.
Biographies:
http://www.mbta.com/about_the_mbta/leadership/?id=1046
Don't hold your breath
I finally got so fed up with the T about 6 weeks ago I wrote to the governor asking him what he planned to do about it. Three or four weeks later, I called his office because I hasn't heard back from him. The flunky they put on the phone with me basically said "The T is governed by an independent board of directors, the governor has no control over the affairs of the MBTA, blah, blah, blah." I told him that the gov has enough control over the T to make sure his name gets put on all the signs and all the literature, so if he is going to get the free advertising he opens himself up to hearing my complaints as well.
Pssst. Hey buddy.
You could put your debt to bed with this bridge I got here. It's a beauty.
While we're talking, how about some collateralized debt obligations? They're a sure deal. Trust me.
keystone konductors at it
keystone konductors at it again
Yeah, Derivatives, that's the ticket!
We can't manage to get a train from point A to point
B on any given day. So let's get into the easy-to-understand
Derivatives market! How hard could that be?
Should be against state regs
Yet another example of a munincipal/state authority running into trouble with derivatives. Anybody remember Orange County in the 90s? The whole county went bankrupt thanks to derivatives.
Not to say that there isn't a place for such investments, but that place is with private funds, not public funds entrusted to officials who probably aren't hired for their financial expertise. There should be a rule that tax payer owned agencies cannot invest in such instruments.