After Boston's mass transit system ground to a halt during the region's harsh winter, the wheels for overhauling the agency that runs it have begun to turn.
Gov. Charlie Baker, acting quickly on a scathing report by his own hand-picked panel about Massachusetts Bay Transportation Authority operations, filed far-reaching
Widespread calls for an overhaul of the "T," as locals nickname the authority, followed a winter with 109 inches of snow that at times paralyzed transit operations. According to the group, the catastrophic winter breakdowns reflected structural problems that require fundamental change in virtually all aspects of the authority.
Dysfunction ruled while the snow mounted in January and February. Baker and MBTA general manager Beverly Scott - an appointee of previous Gov. Deval Patrick -- didn't speak to each other until the crisis was full-blown. Scott resigned in mid-February; Frank DePaola is now the authority's interim chief.
"It's a target-rich environment," said Charles Chieppo, a principal with Needham, Mass., public policy firm Chieppo Strategies LLC.
Baker's bill also would separate the authority's capital and operating budgets; establish one- and five-year operating budgets beginning with fiscal 2017; establish five- and 20-year plans; establish performance metrics; review contacts, notably involving commuter rail and paratransit services; and require a full, independent audit of the MBTA Retirement Fund, whose secrecy has drawn fire from sunshine advocates.
The new board would also assume responsibility for the MBTA bond covenants.
Chieppo praised Baker and the panel for wanting to link authority funding to performance metrics.
"I've long believed that fixing the T will take more money and I still do, but simply giving the MBTA more money is like pouring water into a glass that has no bottom," said Chieppo.
Earlier this month, a six-member panel that included former Federal Aviation Administration chief Jane Garvey lambasted the MBTA
Baker expects a tough battle in the state legislature over the MBTA bill.
"Every legislative debate about everything is always a little bit complicated and this one will be, too," he told reporters earlier in the week.
The panel called out the MBTA for an unsustainable operating budget, chronic capital underinvestment, project delivery bottlenecks - some Red Line subway trains have been running since 1969 - and ineffective workplace practices. One headline grabber was the average MBTA employee missing 57 days a year, including vacation time.
While the MBTA has acknowledged a $6.7 billion backlog in basic maintenance "state of good repair" efforts, the actual number is "considerably higher," the report said, citing large gaps in the MBTA's data and capital asset management systems.
Other red flags, according to the report, include a shortsighted expansion program, instability from frequent leadership changes, an inefficient and decentralized procurement process and lack of direct accountability to the governor or legislature despite the commonwealth providing the MBTA more than half its operating budget and substantial additional funding for capital projects.
Baker, a Republican and former healthcare administrator who took office in January, has hitched his wagon to mass transit.
"It's clearly an issue this governor is willing to take on," said Joshua Schank, president of the Washington think tank Eno Center for Transportation. "If you had asked last year, people would not have transit was their number one issue. It's become that after the winter storms, though frankly I'm not sure if any system would have survived what Boston went through."
The panel's suggested changes include synchronizing the terms of MassDOT board members with the governor's own four-year term.
"I don't recommend a financial control board, but I like the idea of aligning board members with the governor's term," said Schank, whose organization sponsored an April 16 conference at the Massachusetts Institute of Technology in Cambridge.
The control board would function as the MBTA's de-facto board and consist of five members - three appointed by the governor, and one each referred to the governor by the Senate president and House speaker, through June 30, 2018. A chief administrator, which the governor would appoint, would handle the daily operational, budgeting and planning duties.
"One of the rules of politics is that whenever anyone gets elected, he or she has to spend a lot of time on something they least expected, and that's certainly the case here," said Chieppo. "I don't think the T was Gov. Baker's major concern, but to his credit, he's said hey, he needs to fix it, he needs to own it."
Richard Dimino, president of the Boston business group A Better City, said the transit catastrophe, which Bostonians nicknamed "Snowmageddon," have opened the window for meaningful change.
"Certainly there's a lot discussion about the snow and the opportunity this presents for thinking outside the box. We have an opportunity to seize the moment," said Dimino, Boston's transportation commissioner from 1985 to 1993.
Dimino praised the special panel for rejecting the "revenue vs. reform" debate because the MBTA needs both. "To separate reform and revenue is kind of a silly premise," he said.
The panel's recommended financial overhaul would have the commonwealth assume direct payment responsibility for $1.8 billion of debt issued for mitigation transit projects related to the Central Artery/Tunnel project, the megaproject commonly known as the Big Dig. For fiscal 2016, however, the MBTA would still need to pony up about $187 million to transition to the new structure.
The MBTA has about $5.5 billion in outstanding debt.
Too much of the MBTA's annual operating budget - 21.9% in fiscal 2015 -- is for debt service, according to the report. Frequent restructurings have pushed out debt and constrained the authority's ability to borrow effectively. As of 2014, its unfunded pension and compensation liabilities and retiree health care/other post-employment benefit liabilities were $836 million and $1.8 billion, respectively.
Principal debt includes $3.5 billion the authority has issued since 2000 for its own capital needs - when so-called forward funding took effect -- and $230 million related to legacy debt it incurred before 2000.
Under forward funding, the T got one-fifth of the state's sales tax revenue and issued its own debt, and in return had to balance its budget.
According to Moody's Investors Service, the MBTA's operations do not affect the dedicated revenue streams that secure its debt, including a gross pledge of a portion of the state's sales tax. Moody's assigns an Aa2 rating to the MBTA's primary credit, its senior sales tax bonds.
Moody's rates four different MBTA securities, including the sales tax bonds, all secured by different dedicated revenue streams and none dependent on net operating revenues. The others are assessment bonds, parking revenue bonds and general transportation system bonds.
"These dedicated revenue structures are legally separated from MBTA operations, provide ample debt service coverage and are highly rated despite weak operations," Moody's said.
The Big Dig environmental mitigation forced the MBTA to undertake a massive expansion, notably in commuter rail service and the bus rapid transit Silver Line, without the money to pay for it, aggravating the T's financial problems, said Chieppo.
That undertaking helped Massachusetts settle a Big Dig-related environmental suit by the Conservation Law Foundation, but pushed basic maintenance to the back burner priority-wise. The system is also under a federal mandate to expand Green Line light-rail service from Lechmere Square in Cambridge north to Somerville and Medford.
"All this commuter rail expansion and we were the only commuter rail system that lost ridership," said Chieppo. "All that service to the suburbs and not enough in there for the core."
Dimino, though, said the MBTA should proceed with expansion projects, given the accelerating demand for reliable transit and changing commuter patterns.
The South Boston waterfront is a continuing growth area, said Dimino, who also cited Kendall Square in Cambridge, in the shadow of MIT; Ruggles Street, where Boston's Roxbury neighborhood abuts ever-expanding Northeastern University; Sullivan Square in Charlestown, near a proposed new casino in neighboring Everett; Allston's Beacon Yards; and the former Bayside Exposition Center site in Dorchester, which the University of Massachusetts-Boston owns.
Baker's panel also called for the authority create innovative partnerships with the many universities in the region as well as major developers; boost advertising; and seek grants for transit development projects.
According to Chieppo, the blue-ribbon committee on forward funding missed opportunities to fix the system, fixes more difficult to implement today.
"I was on the committee and I blame myself," he said. "There was a variety of issues - smaller issues at the time - that we didn't take up." Chief among them, he said, was the MBTA expansion as a lawsuit settlement chip.
"The Big Dig was a political third rail," he said. "I certainly regret it, not taking on the issue."
Another political third rail - and Boston is not alone - is congestion pricing. In New York, former city transportation commissioner "Gridlock Sam" Schwartz has revived his proposal to charge vehicles entering Manhattan south of 60th Street and toll East River bridges to raise what he estimates is $1.5 billion annually for mass transit and road and bridge infrastructure.
"You'd have to look at spillover traffic and what the impact would be," said Dimino. "But an even bigger question is whether there is the political will to do it. You need political leadership."
