Second Annual FMCB Report Cites Fiscal and Other Improvements at MBTA

In its second annual report to the Massachusetts Legislature, the MBTA Fiscal and Management Control Board (FMCB) details progress on improving T finances, management, and operations but says both the Board and the T must "accelerate progress" so that system users actually experience a better T.

"FMCB members are well aware that the sometimes invisible efforts underway to rebuild the MBTA's organization and infrastructure matter little to customers if commutes are not getting better or if buses and trains are overcrowded, slow, late, or even canceled," the Board wrote in the 70-page report delivered to Beacon Hill today. The five-member FMCB cited the need to implement "immediate improvements for riders" as one of its top priorities in the year ahead, along with developing a long-term MBTA Strategic Plan and further improving "how much, how quickly, and how effectively the T spends its capital dollars."

"We believe our efforts to date have helped to lay the foundation for a much more reliable and efficient MBTA," said FMCB Board Chair Joseph Aiello, who praised "the hard work and dedication" of both his fellow Board directors and MBTA employees. "The FMCB has operated as transparently as possible and has sought to be candid with taxpayers, riders, and others about the depth of the challenges we face. That has sometimes meant some very difficult decisions, but the public that depends upon the T deserves nothing less from us."

The FMCB was created by the Legislature in the wake of the MBTA's collapse during the winter of 2015. Since its first formal meeting on July 21, 2015, the Board has conducted more than 70 public sessions, most of which have opened with a public comment period, and heard hundreds of presentations about MBTA budgetary, operational, performance, and other issues.

Among other points, the FMCB annual report finds:

The MBTA's operating budget structural deficit was cut in half during the last fiscal year, due mainly to internal cost controls and better-than-expected revenues, mainly from advertising, parking, and real estate, as well as savings in debt service costs. Though the MBTA's annual growth rate in operating expenses was the lowest in at least 15 years, "The operating budget still faces a structural deficit because MBTA revenues alone continue to be insufficient to cover operating costs, even with the recent fare increase," said the report. "Serious challenges face the T as it moves toward the mandate of balancing its operating budget."
While on-time performance of the T's main subway lines was about the same as the previous year and somewhat better on the Green Line, "performance for bus and commuter rail service has declined." The T is taking both short-term and long-term actions to improve the core system and is working "closely with Keolis to address and improve on-time performance."
The T must accelerate the delivery of MBTA capital projects, especially state of good repair investments that increase system performance and reliability. "Over the last decade, the MBTA has spent less than 70 percent of the money it's had available for capital projects," the report notes. While "it will be a challenge" for the T to achieve its FY2017 capital spending target of $850 million to $950 million, "the FMCB is confident that the reforms and new procedures now in place will more fully bear fruit in subsequent years."
MBTA workforce productivity has improved, with both overtime and absenteeism, which can lead to dropped bus trips and inconvenience for customers, down. It also now takes the T less time to hire new employees. However, looking ahead, the MBTA "needs to establish a compensation structure to attract and retain leadership talent to sustain and continue to deliver the transformation agenda."
"The Board can report significantly more progress in how the MBTA procures goods and services as well as how these contracts with hundreds of public and private sector partners are managed and enforced," the report finds. "Better monitoring of current contracts has already produced significant revenues and cost savings."
The MBTA's new policy for accepting unsolicited bids for innovative approaches "has led to innovative ideas coming to the T about, for example, proposals to offer late-night service."
The FMCB and management team continue to analyze the total savings opportunity that could be realized through leveraging flexible contracting. "The Board will do this while simultaneously working with management and labor forces to seek significant productivity gains," said the report.

The challenge facing the FMCB now is to translate the foundation it has laid into better service for riders. "Better performance, in turn, will hopefully help restore public confidence that the transformation of the MBTA is not only possible - it is in fact underway," the FMCB writes in the report.

To read the complete Second Annual Report, please visit MBTA.com.