The MBTA has come a long way from the winter of 2015! With the formation of the Fiscal and Management Control Board and the waiver of the Pacheco law (regarding privatization), the T has reduced its operating expenses substantially, allowing more money to go to critical capital improvements. The growth in operating expenses averaged 5% annually over the last 15 years (against a 2% annual increase in revenue during the same period), but, for the first time, showed negative expense growth in 2016, with zero growth projected for 2017!

The reforms are working and consumer ratings are up. Here are some of the changes over the past 18 months that have been implemented to put the MBTA on a fiscally sustainable path:

• Introduced monthly financial targets and manager accountability
• Moved MBTA onto statewide contracts and payroll system
• Streamlined corporate HQ/admin positions with 30% reduction
• Strengthened and enforced overtime and attendance policies
• Modernized cash-handling & warehouse through contracting
• Restructured Carmen’s Union contract work-rules and wage rates
• Launched Uber/Lyft and Taxi paratransit pilots
• Restructured and refinanced debt portfolio; locked electricity rates
• Rebid parking/advertising and raised system-wide fares
• $100M winter resiliency investments / $140M in capital lock-box

In addition, the MBTA is in the process of privatizing the “cash room” operation and the manual route scheduling system. Both of these are projected to save the T over $12.2 million annually.

Another example of reforms is the pilot project for “The Ride”, providing access to the disabled community. An average ride has cost the T $46; however, the pilot using Lyft/Uber brought the cost down to $8.98. Along with that, consumer satisfaction shot to 79%. The transit industry standard is 12% and the MBTA, as a whole, has been a -1%.

The next proposal in front of the FMCB will be the privatization of Bus Maintenance.  A privatized machinists staffing is projected to be based on 200K miles per machinist versus 100k miles for the current MBTA staffing (requiring half of the current maintenance staff).

NAIOP has been a strong supporter of MBTA reforms and has been a part of a broad business and municipal “Fix Our T” coalition. We encourage the administration and the control board to continue bringing efficiency and cost savings to the T, while investing in its capital plan, providing the riders and the tax payers with a first class transit system.