FMCB Third Annual Report: T Transformation is 'Gaining Speed'
Posted on December 15, 2017
Fiscal, operational, and other changes are already paying off, with "groundwork in place for a much better future."
BOSTON – Less than 3 years after its near physical and organizational collapse, the MBTA's transformation into a safe, reliable, and well-managed transit system "is gaining speed," according to the Third Annual Report of the Fiscal and Management Control Board. The FMCB was created to govern the T in the wake of the system's winter woes in 2015.
While the T and its users still face challenges caused by decades of neglect, the FMCB Annual Report filed with the Legislature today chronicles how "steady fiscal discipline, proven leadership and talent, and other organizational moves" have already made the T "a much-improved operation compared to when this Board began." The 5-member FMCB has heard hundreds of presentations during more than 115 public meetings, which generally open with an extensive public comment period, since its first formal session in July 2015.
"Fixing a system as complex and challenged as the T was never going to be quick or easy," notes the 87-page report, but riders are already seeing direct improvement, from much better information about system performance to investments in signals and switches to boost system reliability.
"The groundwork is in place for a much better future," the report continues. It notes that new buses are already in service and that entire new fleets of Red and Orange Line vehicles are on the way. The T is now much more capable of making State of Good repair and other critical investments.
The report adds that the T now has stable leadership and governance, with the appointment of General Manager Luis Manuel Ramírez and the extension of the FMCB's term through June 2020. The T has also improved its procurement, human resources, and other internal systems, according to the report.
"Due to the hard work of T employees, the Authority is now much better positioned to achieve its strategic goals," said FMCB Chairman Joseph Aiello. "We still have work to do, but we believe that our most important stakeholders – the people who use and pay for the T every day – will continue to experience steady improvements as the system becomes more reliable and capable of meeting this region’s current and future needs."
Two recent developments are "clear evidence of the new institutional capacity in place at the T," says the report, citing:
- The Green Line Extension Project, all but buried less than 2 years ago by cost overruns, is now poised for construction. As approved by the FMCB on November 20, 2017, the contract for this long-delayed project is under the original budget limits – and it includes all 6 additional upgrade options sought by stakeholders;
- The public-private partnership model approved by the FMCB for the next generation of fare collection – AFC 2.0 – paves the way for customers to interact much more effectively with the T, with more options to pay, more fare media available for use, and with compatibility across all modes.
"Since the day I joined the MBTA, I’ve heard from customers from across the region who tell me how important the T is to their lives," said General Manager Ramírez. "I want to thank our employees for all they do and acknowledge their dedication to delivering the service our customers want and deserve. This report serves as an affirmation for T leadership and for our customers and the public about how far the T has come since 2015. But it’s also a reminder of how much more we need to do."
The FMCB’s Third Annual Report, which is available https://www.mbta.com/2017-annual-report, notes a range of significant improvements since 2015, including:
- In 2015, the T was facing steadily increasing operating budget deficits, with the FY17 deficit projected to reach $242 million. Instead, the FY17 deficit was $30 million, with savings from operating costs directly going to system improvements. The fiscal discipline and controls now in place, reflected by zero growth in core operating expenses for 2 straight years, will help enable the T to confront serious fiscal headwinds, especially in FY19 and beyond;
- In FY17, the T invested $811 million in its capital program (more than double what it was just 5 years ago);
- In FY18, the T is awarding $450 million in SGR contracts, fueling a robust pipeline for current and future improvements (In FY15, the T awarded just $75 million in construction contracts to improve the T’s State of Good Repair);
- Marking a "generational improvement," new fleets of buses and subway cars are in the works. The Authority has purchased 375 new buses, 369 of which are already in service. And the first of 152 Orange line cars will be tested on MBTA tracks in early 2018 and will be carrying customers by the end of 2018;
- The T is attracting and retaining the talent it needs to plan, maintain, and operate the system that exists today and the system being planned for tomorrow;
- The T is working to make today’s rides faster and better, with an emphasis on better bus service through steps such as better scheduling and municipal partnerships for Transit Signal Priority and dedicated bus lanes.
Looking ahead, the FMCB looks forward to the further transformation of the T. “[T]his third year of the FMCB has seen [that] transformation gain speed,” says the report. “The greatest challenge facing this Board and the T in the years ahead is to ensure that the structural, fiscal, and operational changes that have been or are being currently put in place truly translate into meaningful, consistent improvements for system users.”
Highlights of the Report
Green Line Extension: After being placed on hold 2 years ago due to cost overruns, the Green Line Extension Project is now poised for construction. On November 20, 2017, the FMCB awarded the design-build contract to GLX Constructors under the original budget limits ($1,082,118,600). The bid includes all 6 additional upgrade options (in addition to track infrastructure and 7 station stops, construction will include platform canopies, additional elevators at select stations, public art, additional community connection to the community path located on Chester Street in Somerville, extension of the community path between East Somerville and Lechmere Stations, and an enhanced vehicle maintenance facility in Somerville). The MBTA plans to issue the Notice-To-Proceed to GLX Constructors upon release of federal funding from the FTA.
AFC 2.0: The next generation of fare collection is moving forward with the FMCB’s approval of a public-private partnership model in November 2017. Customers will have more payment options, more fare media available, and compatibility across all modes. And the T will have better data with which to plan and operate service.
Operating Budget: The FY17 operating budget deficit, once projected to reach $242 million, was $30 million. Savings from operating costs went directly to system improvements. Additionally, there was zero growth in core operating expenses for the second year in a row. Own-source revenues grew at 14 percent annually from FY15 through FY17, with the T on pace to hit the Strategic Plan’s target of $100 million in annual own-source revenue by FY21.
Bond Buyer “Northeast Deal of the Year:” In an innovative transaction that earned national notice, the T this year became the first public agency in the nation to issue “sustainability bonds,” the proceeds from which are exclusively used on projects with environmental and/or social benefits. The $420 million in tax-exempt MBTA sustainability bonds represented the majority of a total $576 million bond issuance in September 2017. The September issuance, which respected financial publication The Bond Buyer selected as "The Northeast Deal of the Year," will help support the T’s Capital Investment Program, including climate resilience, energy efficiency, accessibility, passenger safety and other projects.
The bond sale was the MBTA's second competitive issuance in as many years. In June 2016, the MBTA refunded existing debt through its first competitive transaction in 21 years. The Sustainability Bonds and traditional bonds are rated AA by S&P Global and Aa3 by Moody’s Investor Services.
Capital Investment Program: The $811 million investment by the T on the FY17 capital program was more than double what it was just 5 years ago. State of Good Repair (SGR) spending was up by 50 percent in FY17 over FY16. Investment on SGR vehicles in FY17 exceeded the goal set last year by the FMCB for a 40 percent improvement over FY16. Among the major capital projects completed in 2017 was the complete replacement of the 120-year-old, swing-span Beverly Drawbridge. This work was done over a 28-day shutdown, with shuttle buses replacing the Newburyport/Rockport Commuter Rail Line. Commuters were satisfied with the diversion, which also enabled the T to conduct PTC work on the line.
Green Line Track Improvement: The MBTA’s Track Department was able to install 500 or more feet of new Green Line track in 3-hour segments during overnight hours, work that previously took entire weekends to complete. By replacing nearly 25,000 feet of track and reducing rail defects by 50 percent, the T estimates that travel time on the Green Line has improved by 7 minutes. In addition, 1,000 ties and tie plates have been replaced.
New Buses: The Authority has purchased 375 new buses, with 369 in service now. The remaining 6 buses are advanced electric technology buses that the Authority will be prototyping on the Silver Line, servicing the Transitway tunnel next year.
New Service Delivery Policy: The new Service Delivery Policy approved by the FMCB in January 2017 sets how the MBTA measures the performance of its fixed route services and how it plans bus service. The goal of the revised policy is to update measures and use the best data available to reflect the customer experience. New measures include a rider-based wait time reliability measure for subway and light rail as well as an ADA accessibility subway measure for how many hours of platform time are not accessible, either due to an inaccessible station or elevator outages. For bus, a new measure will determine passenger minutes in crowded conditions in order to take into account how long passengers are traveling in crowded buses.
Transit Signal Priority Pilot: After positive results from a Transit Signal Priority (TSP) pilot, the FMCB has approved plans to expand the T’s TSP pilot in early 2018 to include broad corridors of the MBTA street-level system. TSP provides faster service to bus and trolley passengers by using signal technology to reduce dwell times for vehicles that operate in mixed traffic. This is accomplished by extending green-light time or shortening red-light time. The MBTA developed TSP software in 2017 that was piloted on individual signals. The results of the initial pilot was a faster commute for MBTA passengers and, significantly, no demonstrably negative effect on the mixed vehicle traffic in which these bus routes and trolleys operated. The estimated cost for this corridor TSP pilot is approximately $1.125 million, or $12,640 per signal.
All-door Boarding Pilot: This pilot program to test all-door boarding on the Silver Line showed the effectiveness of this faster boarding process and demonstrates the transformational benefits for riders that will come when AFC 2.0 enables such boarding on all buses and trains. During the pilot, which was funded by the Barr Foundation, all doors were opened and no fares collected at all stops along the SL4 and SL5 bus routes.
New Bus Service Planning Policy: The purpose of bus service planning is to improve bus service by first analyzing where service is not meeting current Service Delivery Policy standards and to then recommend actions to improve reliability and reduce overcrowding. As it proceeds with service planning, the T will evaluate a range of tools and options, such as improving bus dispatch and run times, upgrading infrastructure, and better vehicle design and vehicle upgrades.
Better Procurement Processes:
- The T’s first fully electronic Purchase Order approval process went live in November 2017. This will streamline and standardize the purchase order process, which in the past often involved 4 separate steps, including manually carrying hard copy purchase orders from place to place for signature.
- FairMarkIT: One of the technology-focused improvements to procurement processes is the new e-bidding platform, FairMarkIT. This pilot was designed to make more efficient and transparent the procurement process for T purchases, the vast majority of which are for goods or services worth less than $50,000. FairMarkIT online public bidding system stores electronic quotes, stores vendor purchasing history in a central location, simplifies the process of inviting new bidders, and it is completely open for new bidders to enroll themselves.
Customer service call center: A contract signed in June 2017 will provide the T with state-of-the-art call center technologies to improve the customer experience and reduce call volume while cutting costs by more than half over 5 years. The contract will expand weekday hours and provide weekend customer service, which had been discontinued through the in-house call center due to budgetary pressures.
Transit Ambassadors Program: This contract will deliver improved customer service with "transit ambassadors" in stations using tablets and other technology to more quickly provide accurate information to customers and report system issues to T operations. Once fully implemented by FY2019, the contract is expected to save the authority $4 million annually.
Advertising: More than 250 new digital screens have been or will be installed under the MBTA’s partnership with new advertising vendor, Outfront Media – all at no cost to the MBTA. New high-impact advertising formats on the MBTA bus fleet have helped generate more than $500,000 in the first 6 months of FY18. The T also anticipates $2.5 million as a result of the alcohol advertising approved by the Board last month.
Positive Train Control: After successfully closing on 2 federal loans under the TIFIA and RRIF loan programs totaling $382 million on December 8, 2017, the MBTA now has guaranteed funding in place to complete work on federally mandated Positive Train Control technology and associated infrastructure. PTC is an advanced system designed to automatically stop a train before certain accidents, including train-to-train collisions, can occur. Integrated command, control, communications, and information PTC systems control train movements with safety, security, precision, and efficiency.
Winter Preparedness: By the winter of 2016-17, MBTA workers had installed nearly 105,000 linear feet of brand new third rail between JFK/UMass Station and Quincy on the Red Line; more than 52,000 linear feet of “Heater Element Infrastructure,” which includes the conduit, wiring, and junction boxes to support the Red Line’s third rail heating systems; 200,000 linear feet of new wiring for the Orange Line’s third rail heating system; and 5,321 linear feet of snow fencing along Orange Line tracks. The MBTA also has 80 stainless steel plows for Red and Orange Line trains and continues to equip trains with rail de-icing equipment. In 2017, the T added a 1.5 megawatt portable generator, which is capable of temporarily replacing the traction power feed at a substation. This is the first time the T has had such an important tool.
Other Preparedness: In April 2017, the MBTA and MassDOT hosted a security screen workshop with Boston Harbor Cruises, U.S. Coast Guard, TSA, and other stakeholders to identify ways to enhance security screening and other measures during periods of elevated threats to the MBTA system or the region as a whole. In October 2017, the MBTA, MassDOT, MEMA, Keolis, Pan Am Railways, the Town of Ayer, and numerous surrounding communities conducted a commuter rail drill simulating a collision between a passenger train and a freight locomotive. In December 2017, the MBTA and MassDOT will conduct their annual subway drill, consisting of a simulated subway train derailment at the MBTA’s state-of-the-art Emergency Training Center.
Human Resources Initiative: As it moves towards a "People First" approach to HR, the T needs to create and convey a value proposition that compels individuals to JOIN-STAY-GROW. This initiative was launched in January 2017 with the revamping of the Job Lottery, followed by launching a new Careers landing page that is visually attractive to candidates and allows them to experience a bit of the MBTA prior to filling out an online application. The Careers landing page includes a video that features MBTA and MassDOT employee testimonials on why they decided to join, why they continue to stay, and how they’ve grown in their careers.
FMCB Transparency: Beginning with its October 23, 2017 meeting, the FMCB began live streaming its meetings online. The videos remain on MBTA.com, keeping proceedings available for MBTA customers and the public.
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