So many problems, so little money. Few people understand, much less want to wrestle with, the MBTA’s financial morass. That’s why safety issues captured the headlines with this week’s release of David D’Alessandro’s MBTA review.
State officials [inserts gasps of horror here] are outraged yet again to discover that delayed maintenance causes major safety hazards, and that the delays can be traced to…the agency’s poor finances.
“For too long we have not dealt with service and financial problems that the T has faced,” said Gov. Deval Patrick at Wednesday’s press conference following the release of the D’Alessandro report. “The job now is to fix it. Today I have asked Secretary [of Transportation Jeffrey] Mullan to formulate a plan to improve service for riders and restore a culture of safety and transparency in the system. That includes a review of the backlog of capital projects to re-examine which to fund to keep riders and employees safe.”
But T riders, here’s the real news: Despite all the sturm und drang surrounding the MBTA review, there is nothing in the latest report that those in the know don’t already know.
Two years ago, after the release of the Transportation Finance Commission review, the Boston Globe reported:
What is also newsworthy is that there has never been any sustained outrage over the financial sleights-of-hand that keep the system operating — but also compromise the culture of safety and transparency that Patrick says is missing from the authority.
So what is the value of this latest tome?
First, D’Alessandro provides the clearest, most concise explanation to date of why, though the MBTA is technically broke, it has not gone bankrupt.
In the past, the authority’s huge debt, growing debt service payments, and the underperformance of the sales tax have all been fingered to varying degrees as culprits in the MBTA’s woes.
But as D’Alessandro, the former John Hancock CEO, points out, debt service payments between FY01 and FY08 were $515 million lower than projections.
What has brought the MBTA to its knees are faulty assumptions stemming from the finance plan that accompanied the move to "forward funding" in 2000, under which 20 percent of sales tax revenue goes to the MBTA.
As the D'Alessandro report said:
Through depleting cash reserves, restructuring debt, and delaying planned debt payments, the MBTA has managed to meet its requirement to balance its annual budget.
Unfortunately, the repeated restructuring of hundreds of millions of dollars in debt payments achieved the exact opposite intent of the legislation that sought to transform the MBTA and postponed the day of reckoning for repaying deferred interest and principal.
State officials further compromised the authority’s finances by not taking into account cost increases in energy, employee health insurance, and services like The Ride, a federally mandated system for people with disabilities. The MBTA is no better shape than a penniless homeowner with a subprime mortgage, the report concluded.
The second take-away from Wednesday’s events is the mystifying insistence of the Patrick administration that promoting a culture of safety and transparency and restoring consumer confidence can be done cost-free.
So T riders, to sum up: If the MBTA can’t raise fares, can’t add more debt, and can’t get debt relief or more revenue from Beacon Hill, just how is the agency supposed get a handle on safety?
The maintenance prioritization report due in January will define the scope the problem. In addition to $80 million worth of repairs to Red Line leaks, the D'Alessandro report identifies other projects including:
- $140 million to replace the cable that caused a fire on the Red Line in September
- Replacement stairways at Newtonville Station
- Backup power generator turbine replacements and system-wide tunnel lighting repairs
Could Washington come to rescue? Patrick would say only:
“I am going to see the [US] Secretary of Transportation in particular about some of our transportation needs in the Commonwealth generally, not limited to the MBTA. We will also be briefing the congressional delegation about this report because we are going need their help as well.”
But it is unlikely that Washington has $543 million to sink into the 51 "most critical" transit safety projects in metro Boston.
Although initially billed as a financial and management investigation, the D'Alessandro report is largely silent on managerial and operational matters. Here are a few issues that went unanswered by this “top to bottom” review:
- Somewhere along the way the MBTA managers knew that the forward funding plan wasn’t adding up. What did exactly did they know, and when did they know it? Why didn’t the Legislature and a succession of governors act before now?
- The review states that the agency pursued departmental budget cuts, layoffs, and hiring freezes, and that it eliminated inefficiencies and redundancies. Where is the data to back up this assertion?
- Where are the potential cost savings in rail and bus operations?
- Demoralized workers decrease productivity. What steps has the agency taken to address minority employees’ concerns about discriminatory hiring and promotion practices?
- One of the report’s recommendations is more transparency in the agency’s expenses, “so there is better control and more oversight in their uses.” Which areas of MBTA operations require “better control and oversight," and what exactly are those problems?
- Though the report provides "general recommendations," the authors said, “We were not asked for specific recommendations.” Why not?
The “general recommendations” did include slowing expansion (that means you, South Coast rail) developing secure new revenue sources, and improving safety and service before raising fares.
Good luck with that last one. As unwelcome as fare hikes are, they are one of the few revenue-raising tools the agency has at its disposal.
The bottom line: It is disingenuous for Gov. Patrick to suggest that the MBTA’s financial and safety concerns can be addressed without additional funding or a top-to-bottom reorganization of how the authority does business.
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