Background

In light of the extreme weather challenges faced by the city and the MBTA in 2015, Governor Charlie Baker convened a special panel to review the finances and operations of the organization. In April, the panel released a detailed report and plan of action to reform and improve the T going forward.

Over a 6-week period, the panel met 18 times to review past studies and data. Along with MBTA staff and MassDOT leadership, transit advocates, and labor representatives, they were able to benchmark the MBTA against peer agencies and analyze performance objectively. They synthesized recent MBTA studies, conducted a performance review, examined the MBTA’s core functions, and compared results with other transit operations to assess the status of the system’s governance, finances, and capital planning.

Panel Members

Chairperson Katie Lapp, Executive Vice President for Harvard University and former Executive Director and CEO for the New York Metropolitan Transportation Authority

Chairperson Brian McMorrow of Massport

Jane Garvey, a national leader in transportation policy

Jose A. Gomez-Ibanez, Derek C. Bok Professor of Urban Planning and Public Policy at Harvard University

Joseph Sullivan, Mayor of Braintree and former Chair of the Joint House-Senate Transportation Committee

Robert Gittens, Vice President of Public Affairs at Northeastern University

Key Findings

From a press conference at the State House on April 8, 2015, the Baker Administration and members of the panel announced a summary of key findings and proposed recommendations for short- and long-term reforms.

“Massachusetts deserves a reliable, well-managed, cost-effective transportation system, and this in-depth report offers a plan of action to responsibly pursue organizational and operational reforms to reach this goal,” said Governor Baker. “Thanks to the hard work of the panel members, we have action items to improve service reliability, correct the failures that would bankrupt the MBTA if left unchecked, and rescue the transportation system our economy relies upon.”

Unsustainable Operating Budget: The MBTA would be insolvent if not for continuing and increasing subsidies due to a severe imbalance between costs and revenue.

The MBTA would be insolvent if not for continuing and increasing subsidies due to a severe imbalance between costs and revenue. Chronic Capital Underinvestment: The MBTA has not spent the capital funds already available to it, resulting in chronic underinvestment in its aging fleet and infrastructure.

The MBTA has not spent the capital funds already available to it, resulting in chronic underinvestment in its aging fleet and infrastructure. Bottleneck Project Delivery: The MBTA struggles to get projects completed.

The MBTA struggles to get projects completed. Ineffective Workplace Practices: The MBTA is ineffective at managing work due to weak workplace practices and chronic absenteeism.

The MBTA is ineffective at managing work due to weak workplace practices and chronic absenteeism. Shortsighted Expansion Program: MassDOT and the MBTA lack a long-range expansion strategy shaped around the physical and financial capacity of the MBTA and future needs for regional transit.

MassDOT and the MBTA lack a long-range expansion strategy shaped around the physical and financial capacity of the MBTA and future needs for regional transit. Organizational Instability: The MBTA is hampered by frequent leadership changes, vacancies, and looming attrition.

The MBTA is hampered by frequent leadership changes, vacancies, and looming attrition. Lack of Customer Focus: The MBTA is not organized to operate as a customer-oriented business.

The MBTA is not organized to operate as a customer-oriented business. Flawed Contracting Process: The MBTA’s procurement and contract management is inefficient.

The MBTA’s procurement and contract management is inefficient. Lack of Accountability: The Commonwealth provides more than half of the MBTA operating budget and additional funding for capital projects, but the MBTA is not accountable to the Governor or the Legislature.

Recommendations

After considering a range of scenarios, the panel recommended creating the Fiscal and Management Control Board to enforce new oversight and management support and increase accountability over the next 3-5 years. Their goals will include structural, financial, operational, and governance reform through executive and legislative actions that embrace transparency and develop stability.

Oversight of Fiscal and Management Operations: Replace the current MassDOT Board with a 5-member Fiscal and Management Control Board. The Governor will appoint 3 members of the board, as well as a Chief Administrative Officer who will report to the board. 2 additional members will be nominated by the Speaker of the House and the Senate President, respectively.

Replace the current MassDOT Board with a 5-member Fiscal and Management Control Board. The Governor will appoint 3 members of the board, as well as a Chief Administrative Officer who will report to the board. 2 additional members will be nominated by the Speaker of the House and the Senate President, respectively. Capture Revenue Opportunities: Significantly increase revenue from fares, advertising, and real estate, as well as grants and federal programs.

Significantly increase revenue from fares, advertising, and real estate, as well as grants and federal programs. Budget Firewall: Build a firewall between the operating and capital budgets, and construct 1-, 5-, and 20-year plans for each.

Build a firewall between the operating and capital budgets, and construct 1-, 5-, and 20-year plans for each. Capital Planning: Create a dedicated state-funded capital program to modernize vehicles and infrastructure, and pause construction spending for system expansion—except for federally funded projects—until such a plan is in place.

Create a dedicated state-funded capital program to modernize vehicles and infrastructure, and pause construction spending for system expansion—except for federally funded projects—until such a plan is in place. Customer Service: Create customer-oriented performance management and strengthen communications.

Create customer-oriented performance management and strengthen communications. Update System Routes: Rationalize and reform system routes, including buses.

Bill H.3347: An Act for a Reliable, Sustainable MBTA