BOSTON — A sweeping review of MBTA finances found the largest transportation provider in Massachusetts has relied on an overly optimistic and unsustainable financing model that now is compromising safety because it cannot fund critical maintenance and equipment replacements.
The scathing 36-page review classified 51 projects as “a danger to life or limb of passengers and/or employees” and suggested prioritizing those subway, bus and commuter rail repairs.
One, an $80 million project to replace floating concrete slabs designed to absorb track vibration on the Red Line between the Alewife and Harvard stations, has been unfunded for three years. Leaving it uncompleted raises potential for a derailment, as well as the prospect of speed restrictions on a heavily used subway line.
“It may require an extended period to address them properly, but what could be more important?” asked the report, the details of which were first reported by The Boston Globe.
The report was written by former John Hancock chief David D’Alessandro and ordered by Gov. Deval Patrick this summer as his administration ousted T General Manager Daniel Grabauskas and clashed with key legislators over his decision to spend more than $300,000 buying out his contract.
D’Alessandro told The Associated Press on Wednesday he would not ride the portion of the Red Line highlighted in the report, though Patrick told listeners to his monthly radio call-in show that he would. The governor said the problems are well known, but he ordered additional inspections Wednesday morning.
D’Alessandro refused to place all the blame with Grabauskas, the T’s third longest-serving general manager. He said the administration and legislative oversight committees also were aware of the authority’s funding and maintenance problems.
“In my view, everybody has responsibility,” D’Alessandro said.
While Patrick told listeners on WTKK-FM that there would be no increase in T fares “in the next few” years, D’Alessandro said overseers need to provide “a more secure revenue source.”
D’Alessandro suggested a tax on businesses based on how often their workers use the T.
“You have to ask, ‘Are they paying their fair share to get their employees to work?’” he said. “Who’s benefiting the most from moving these employees around?”
The report focuses first on finances at the Massachusetts Bay Transportation Authority, which runs the nation’s oldest subway system, and concludes, “A private sector firm faced with this mountain of red ink would likely fold or seek bankruptcy.”
It notes the Legislature implemented a plan in July 2000 to make the T self-sufficient by giving it 20 percent of state sales tax revenues and forcing it to live within a budget. Previously, the House and Senate provided “backward financing” by giving the T whatever funds it needed at the end of the fiscal year to close its budget deficit.
Instead, the “forward-financing” plan that was implemented substantially underestimated the system’s main cost centers, including things it can control, such as wages, and things outside its control, such as energy, health insurance and contracted services such as commuter rail and federally mandated individual transportation to the disabled.
“Contrary to not trying, we found evidence that the MBTA did make some hard expense choices. Across-the-board cuts were routinely made to departmental budgets. Periodic layoffs and hiring freezes restrained the headcount. Individual managers took pride in eliminating inefficiencies and redundancies, while embracing a new organizational ethic of customer service.
“Yet in the end, they could not pare staff below the number needed to move hundreds of thousands of riders across hundreds of routes each workday,” it said.
D’Alessandro and his team were especially critical of T debt restructuring, writing, “MBTA debt finances are exactly opposite the position advocated by the Finance Plan, as if these warnings had never been issued.”
While a sweeping overhaul of the Massachusetts transportation bureaucracy went into effect Sunday, “the transfer of $160 million this summer to close the MBTA’s FY10 budget deficit marked a return to ‘backward funding.’”
On the subject of safety, the report noted that MBTA trains, subway cars and buses provide 1.2 million rider trips each weekday.
“Maintaining the fleet is a Herculean and expensive task, particularly since it is aging and many vehicles are due for overhauls or replacement,” it said.
The T has identified over $3 billion worth of projects that need attention under its “state-of-good-repair” program, but it has funded only 15 of those 201 projects — worth just $203 million. The other 94 percent of projects went unfunded.
They include rehabbing bridges, replacing station platform stairs and backup power generators, as well as replacing 60-year-old cable.
“It stands to reason that an aging, complex and underfunded transportation system will have to confront unpleasant surprises that can result in safety hazards and service delays,” the report adds.