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Panel: MBTA finances in pretty bad shape

The governor's MBTA Fiscal and Management Control Board released its first formal report today and the news could be better: The T's daily spending is rising faster than anticipated income and it continues to fall farther and farther behind on things such as track and train maintenance.

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 SGR backlog from growing greater. That backlog has risen to $7.3 billion, reflecting both this prolonged underspending as well improvements in the SGR data base. The SGR backlog does not, however, account for inflation. Other non-SGR needs, including safety and security, better accessibility, and improved capacity and modernization, add further pressure to the capital budget.

Still, the board found some glimmers of good news: The T is budgeted to spend $1 billion on capital projects in the current fiscal year, and the capital backlog will shrink once the T begins rolling out those new Red and Orange Line trains from China, since they should be in a "state of good repair" when they're delivered.

Also, commuter-rail performance is up and and lots of track and third-rail "resiliency" work on the Red and Orange Lines - along with the stockpiling of train motors - this summer should help stave off the paralyzing problems the lines suffered in the past winter.

The board said the T can ameliorate some of its financial problems through more aggressive monitoring of employee sick leave - in part by hiring an outside contractor to oversee employee leave - and by ramping up efforts to bring in additional income through advertising and real-estate deals, parking fees and private partnerships to subsidize particular stations.

The board added it's now paying close attention to figuring out what to do about the Green Line extension to Medford, the estimated cost for which has now ballooned to $3 billion.

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Comments

But don't worry. We will vote for the next guy who runs for office on cutting government spending again and again.

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T spending hasn't been cut - it's been significantly increased and after dedicating a portion of the sales tax to the T, we have since provided 2 more distinct revenue streams to the T and it's still not enough. Almost all of the increases in spending over the last 15 years up until the last couple of years have gone to increases in payroll costs. Almost none to maintenance - although that's changed in the last couple of years.

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Labor costs, fares, and ongoing maintenance costs all contribute to the total… but two of those are highly immune to anyone doing something about them. Fares haven't kept up with other systems, and labor compensation is protected by a very effective labor monopoly that most industries don't have to deal with. There's probably no shortage of crony deals going out to the construction firms either… but this all seems to be the Boston status quo, and questioning it simply means you just hate the working class (pardon me while my eyes roll into the back of my skull)

http://www.wcvb.com/news/5-investigates-breaks-down-mbta-payroll-numbers...

In 2014, more than 2,000, or 27 percent, of the 7,400 employees earned more than $100,000 a year.

According to MA Open Checkbook, in 2014, 7,423 employees made more than $100,000 versus 6,570 employees in 2013.

Unlike fares and maintenance, however, labor is 70% of the MBTA operating cost just like most industries: https://cbsboston.files.wordpress.com/2013/04/runaway-transportation-cos...

Just because the T is running a large deficit, doesn't mean it is necessarily under-funded, I'm sure plenty of the real working class would love to have the bloated pay the T doles out.

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Fairs are pretty on par with other systems, actually, especially given the lack of reach of the T. Admittedly the monthly passes are dirt cheap.

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I pay $50 for a monthly local bus pass and I think I'm getting away with murder. If it was raised to say, $70, I wouldn't complain, and I don't think anyone else should, given that everyone on board seems to be able to afford a smartphone these days.

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Fares have increased since the early 2000s at twice the rate of inflation.* How much faster would you like to see them go up? Maybe if we pay three times the rate of inflation, we'll get slightly less-shoddy service than we do now.

* A single-ride fare for the subway was $1.00 in 2000, which is $1.36 now. Source. Yet the fare for the same is now $2.65.

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http://www.mbta.com/uploadedfiles/About_the_T/Board_Meetings/FMCB60dayRe...
On page 12 is a nice chart. In the past 2 years, ridership is up 0.25%, total revenues up 0.20%, and operating expenses (excludes debt obligation) is up 6.50%. Labor costs are the biggest budget buster. Capital expenditures like the GLX, silver line extension, and Government Center rebuild are also up. People driving cars, don't have to pay drivers, making it so much less expensive.

Fares only cover 30% of the cost of running the MBTA, so you are still getting a huge bargain.

If you paid higher fares, you would still be stuck with the same MBTA employees.

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The State did get burned on the dedicated sales tax transfer. The initial projections in 2000 were for a 6% growth rate year on year - that turned out to be way too heady and the real rate for much of the 2000s was closer to 1%, the MBTA was always due to receive a base, but the expected extra revenue never materialized and the necessary maint work fell in line behind payroll. Not that it undermines your point at all, letting a necessary function atrophy and be tortured the way the MBTA has been (by many interests) should be a damning critique of Beacon Hill (but you know, of course it's not their fault).

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In most cities and towns, the town plus school employees represent the largest employer and they vote with who gives them pay and benefit raises... Somebody who supports unions, oh, like Maaaahty.

Go spend money in a Mass store if you want to support the MBTA and not shop on-line unless Amazon or a Massachusetts store.

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Spending money in a Massachusetts store is a nice idea, and it should be done as much as possible. Unfortunately, however, (and I know from personal experience) that it's not always possible to purchase things here in town (Tools/other supplies related to my work, for example, or even an occasional necessity for my pet African Grey Parrot.), and have had to be either purchased at an online venue such as Amazon, or I've had to send away to a regular out-of-state off-line venue for tools/supplies that I could not obtain anywhere here in the Bay State.

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Dedicating a portion of a tax which immediately dropped due to a longstanding recession and which has never met the projections for how much it was supposed to give the T isn't really a "significant increase"

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T revenues have increased at a very heady rate over the past 15 years for a number of reasons. Far faster than inflation and infinitely faster than most people's salaries (those that don't work for the T and a few other public entities anyway).

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IMAGE( http://replygif.net/i/692.gif )

I think that says it all.

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...but the talk of budgetary woes and this gif remind me of Lucille's question to Michael: "It's just a banana, Michael. What can it cost, $10?"

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The board said the T can ameliorate some of its financial problems through more aggressive monitoring of employee sick leave - in part by hiring an outside contractor to oversee employee leave.

This is a slippery slope. I've read a lot about them having problems with employees abusing the system, but too much micromanagement could kill morale (if there is any), and sometimes these outside firms can cost more than they're worth. I used to work for a company with a system that often resulted in a lot of people coming to work sick and mini-pandemics throughout the building every winter.

And by ramping up efforts to bring in additional income through advertising and real-estate deals, parking fees and private partnerships to subsidize particular stations

My de facto thesis in graduate school (the nature of my program made a traditional thesis unnecessary) was a complete overhaul of the MBTA's social media strategy, while also touching on some operational and marketing aspects as well. PPP's were something I was very big on, and they make a lot more sense than the idea of selling naming rights to the highest bidder that was discussed years ago.

Here's an example of how it could work. Note that numbers would need to be crunched to make sure it made financial sense on both sides, and without access to any sort of data for this, I'm ballparking it based on what COULD work:

Take a station that is named for and/or primarily serves a certain institution, let's say Aquarium or the MFA for example. You get this institution to "sponsor" the station and assume (financial) responsibility for cleaning and maintaining the station, in exchange for rights to all ad space at that station at no cost to them/a steep discount for their own advertisements, as well as some sort of other ad deal for trains and other stations that still saves both sides money in the long run and true naming rights to the station. In the case of Universities, they could even work something out that has campus police handling station patrols and arrests and then working with transit PD after the fact.

Again, numbers to be crunched to see how feasible it is, but there is a lot of opportunity there and it blows my mind that it hasn't been done yet.

I really don't think most of us will see the system improve in our lifetimes, but who knows?

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The board said the T can ameliorate some of its financial problems through more aggressive monitoring of employee sick leave - in part by hiring an outside contractor to oversee employee leave.

This is a slippery slope. I've read a lot about them having problems with employees abusing the system, but too much micromanagement could kill morale (if there is any), and sometimes these outside firms can cost more than they're worth. I used to work for a company with a system that often resulted in a lot of people coming to work sick and resulting in mini-pandemics throughout the building every winter.

I agree. I want to know how this is cost savings. We all know "contractors" are more expensive than FTE's.. Sure it's probably significantly cheaper than all the 'sick leave' taken, but if its legit, are we really saving money?

Plus I'd like to know what the penalties for folks who abuse the system? We know the T Union is pretty powerful, and will put up a big stink.. so will anything really be done except for throwing money at a consultant?

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Or should we just maintain status quo? Cause thats been going real well... Penalties? Fire them. I know its easier said then done when dealing with Unions. But in the private sector, you abuse sick time - pack you bags!

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"fire them"

Yeah good luck with that.

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throwing money at consultants is a feature to republicans

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Any chance you want to share said pseudo-thesis? I did my own on the North-South Rail Link — spent too much time with Professor Dukakis, I know — but that sounds like a fascinating read.

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The parts that equal the whole were for a few different courses, so I'll have to pull it all together.

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I'm curious - what about the NSRL did your thesis cover? Was this an engineering analysis, or political, or financial?

I ask because yours might also be a fascinating read.

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all the other T attempts to sell station naming rights, etc.

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Between selling off naming rights to Coca Cola, and a PPP between the MBTA and another organization within the community that has a station serving it, if not named for it.

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lots of track and third-rail "resiliency" work on the Red and Orange Lines - along with the stockpiling of train motors - this summer should help stave off the paralyzing problems the lines suffered in the past winter

In celebration, I'm going to go buy a dozen eggs at the grocery, which should help stave off a potential chicken shortage in a few months.

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The reason for the never ending weeknight bussing currently going on on the north end of the Orange Line...we'll see if it pays off this winter.

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...and the capital backlog will shrink once the T begins rolling out those new Red and Orange Line trains from China, since they should be in a "state of good repair" when they're delivered.

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No, it won't. All 200 remaining single-level commuter rail coaches and all 40+ legacy commuter rail locomotives not displaced by the ongoing order are converging on 2020-22 projected retirement dates per the T's own commuter rail fleet plan documentation. If they get pushed into service beyond that expiration date because of lack of funding for replacements, we end up down the exact same rabbit hole of mass old equipment failures we just experienced this winter. Even if you slap them silly to stop @#$% ordering unproven, overcustomized unicorn equipment and just buy proven off-shelf generics, that's still another $1.5B in state-of-repair related programmed replacements that absolutely positively have to get funded by fiscal years 2016-18 if they're going to have any hope of arriving on the property before the old stuff really starts falling off a cliff on reliability.

And that's just the single biggest-ticket item for maintaining reliability of existing service. There's way more in mundane upkeep they have to stay on top of to keep a systemic implosion from happening again, because there's always vehicles or infrastructure hitting end-of-service-life requiring replacement. Can't stay on top of the next 5 years worth of recommended replacements if you're still catching up on 20 years ago's worth of recommended replacements now turned dire five-alarm mandatory replacements.

This isn't a one-time fix then pat on back for a job well done. They're on a constantly moving treadmill set at steepest inclination because of past deferred maintenance. And overcoming that means they've got to sprint and sprint until that treadmill gradually gets less steep. Even if it ever hits level it still never ever stops moving. They aren't funded well enough to keep pace at normal and level, much less trying to huff and puff for another 2 decades to tame a steep incline.

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Makes the Green Line Extension trackless trolleys, similar to the Silverline

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That would actually cost more not less.

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Yes because the Silver Li(n)e has been such a success story...

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Water wet, fire hot.

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on your face.

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....you people are cynical....

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...since they should be in a "state of good repair" when they're delivered.

Clearly these people have no knowledge of the history of MBTA procurement.

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Commuter Rail performance is up? Ummm, obviously they do not take the Needham Line. We still aren't on the normal schedule from before the storms.

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Allegedly, a lightning bolt struck the Amtrak electrical substation back in June. In any event, while Amtrak repairs the thing, there have been slight changes to the schedule. That said, there are in fact more trains running on the Needham line now than there were before last January (I get to say more since they restored Saturday service last fall, but the same week-day services as last year.) The only difference is that the times of the runs are off by a few minutes.

I've taken the Needham line one day in the past year, yet somehow I knew this.

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