Overlords of the MBTA
A close-up look at the T's Fiscal and Management Control Board
Photographs by Michael Manning
THE NAME JOSEPH AIELLO probably means nothing to most MBTA riders. But the first major snowstorm might change that. Aiello is the chairman of the five-member MBTA Fiscal and Management Control Board that has the job that has overwhelmed governors, transportation secretaries, and the system’s general managers for more than a decade: Molding the MBTA into a reliable transit system run by people who have a handle on what they are doing, especially when it snows.
Aiello and the four other members of the MBTA control board have embraced the chore with a rigor that the MBTA hasn’t seen in years. They are holding meetings, issuing reports, grilling staff, and generally upending business as usual at the woebegone MBTA. Calling on five experts in various fields to work part-time to clear out the miasma hanging over the country’s fifth-largest transit system is an unusual tack to take. Yet it was a similar type of control board that recently brought the city of Springfield back from the brink of financial disaster. Gov. Charlie Baker is hoping the same can be done at the MBTA.
The T was never at the top of candidate Baker’s to-do list. If Mother Nature had not forced Baker’s hand, the MBTA would have continued to plod along with the delays and other idiosyncrasies that bus, subway, and commuter rail riders grin and bear. However, the snows of 2015 presented a not-to-be-ignored opportunity to confront the crisis and wrestle with the problems.
Yet no sooner had Baker moved on to other priorities than the MBTA work got more complicated. In August, MBTA General Manager Frank DePaola announced that the Green Line extension to Somerville and West Medford had incurred cost overruns of as much as $1 billion. “It just doesn’t compute in my brain that it was possible to happen,” Aiello says.
But it did happen. And how the control board deals with this latest crisis, one that sums up many of the MBTA’s bureaucratic pathologies, may determine the outcome of this latest turnaround exercise.
“To have a governor that is hands-on and taken responsibility for fixing this problem, to have both House and Senate leadership be very, very clear that they want this problem fixed and that they are prepared to be complicit in this, is a highly unusual alignment of interests,” says Aiello.
In 2006, Joseph Aiello made it onto former governor Deval Patrick’s short list for secretary of transportation along with Jim Aloisi (who served as one of Patrick’s transportation secretaries) and Stephanie Pollack, the current secretary appointed by Baker. Aiello did not get the top job, but he has returned to the state transportation sector in a more challenging role.
He has long been a player in transportation circles, working as a deputy to Fred Salvucci, former governor Michael Dukakis’s transportation czar. Currently, he is a partner and North America CEO at Meridiam, an international infrastructure firm.
Aiello is well-suited to cope with the challenge of the T, including the Green Line cost shocker, the first big crisis to land in the board’s lap. As an expert on public-private partnerships, he has had deep experience in project management over the course of his career. He has overseen mega-projects such as the Port of Miami Tunnel, which opened last year; the Greater San Juan subway system in Puerto Rico, the first in the Caribbean; and the redevelopment of South Station, which faces another transformation.
“Joe has a good sense of what is going on around the nation and knows the right questions to ask to get at some of the core issues that are facing the MBTA,” says Jeffrey Mullan, who succeeded Aloisi as transportation secretary.
Aiello went on to work at the MBTA for 10 years as a planning and budget and construction and finance official. He commutes to his New York City office during the week from his home in Winthrop and uses the Blue Line on weekends. “He cares about the average person using the T,” says Aloisi, who is a close friend and also grew up in East Boston.
Aiello devotes one day a week in Boston to MBTA issues. He meets with Pollack, attends briefings, and presides over the control board’s public sessions. He admits that “glamorizing the good old days” is a hazard for someone who has been gone from the T for some time and now is back on a more difficult mission.
He says people who work on large transit construction operations typically think in billions of dollars. Sometimes they forget that “the savings on a $2 billion project could be passed on to an opioid clinic to save kids’ lives,” he says. “The preciousness of that dollar was really evident when I was there. I hope that we can get back to that point.”
The physical deterioration of the system and the state of mind of MBTA employees troubles him. “The place feels sort of beat up,” Aiello says. “There doesn’t seem to be a culture of excellence that you want an organization to have.”
His control board colleague Monica Tibbits-Nutt, the executive director of the 128 Business Council, agrees. “Anyone who has had a crappy job with a crappy culture [knows] that it trickles down,” says Tibbits-Nutt, whose organization provides transportation strategies and solutions, such as shuttle services, for businesses, institutions, and communities. “You are not rewarded for doing good work, you are not rewarded for being innovative or trying to actually make a change because the culture doesn’t care. You take great professionals and basically make them irrelevant.”
The control board held its first meeting in July and divided its work into seven areas, each overseen by one member of the control board and a designated MBTA staff person, according to their areas of expertise. Aiello examines procurement and contracting issues. Tibbits-Nutt handles performance standards, and customer survey improvements and planning. Lisa Calise, the former administration and finance director for the city of Boston and the current chief financial officer at Watertown’s Perkins School for the Blind, is tackling the capital and operating budget. That has her working closely with Brian Shortsleeve, Baker’s hand-picked finance guru, who holds the new title of MBTA chief administrator, a position suggested by a special panel that Baker appointed after the winter collapse to study the MBTA’s deficiencies and come up with new strategies to cope with them.
While the panel called for the chief administrator to take over the duties of the general manager, Pollack announced that those responsibilities would be divided between Shortsleeve and DePaola. The arrangement enables DePaola, who inherited the title of general manager, to concentrate on buses, subways, commuter rail, and other daily operations issues. That frees up Shortsleeve, a General Catalyst Partners and Bain & Company veteran, to focus on stabilizing the authority’s capital and operations budgets.
Steve Poftak, the executive director of Harvard’s Rappaport Institute for Greater Boston, dissects capital planning and system maintenance and considers what to do about system expansion. Brian Lang, the head of Unite Here Local 26, the Boston hotel and service workers union, studies how to modernize the MBTA workplace and implement best workplace practices. The entire control board works together on safety and security and winter preparedness.
Three of the control board members — Aiello, Poftak, and Tibbets-Nutt — have some history with the MBTA. Poftak, was a former research director at the Pioneer Institute, which has been a persistent critic of the MBTA, particularly on labor issues. Tibitts-Nutt served as a consultant to the MBTA Advisory Board which, provides oversight of the MBTA on behalf of 175 cities and towns. Poftak, Tibbits-Nutt, and Calise also sit on the MassDOT board that oversees the rest of the state transportation sector.
No one has given up their day job to serve on the control board, so that translates into lots of night and weekend work for the five volunteers, who are eligible for annual reimbursements of up to $6,000 for certain expenses.
The control board represents “the last, best chance for the T to finally succeed,” says Pollack. “The history of the T has been to address whatever the most current big problem is in the hope of going back to the way things always were. This is not a group of people that is interested in letting the T go back and operate the way it always has.”
The special panel Baker appointed last winter carried out a seven-week “rapid diagnostic” review. It confirmed that the MBTA is ailing badly, providing a rationale for the control board, whose mandate is to figure out the cure. Under the terms of the authorizing legislation, the control board has three years to overhaul the T’s operations, finances, and management. If the MBTA still needs more work after June 2018, the board can ask the Legislature to grant it two additional years.
The control board is well into a multi-pronged probe of more than a dozen distinct areas of the MBTA: procurement and contracting practices, infrastructure maintenance backlog, debt, capital planning, operations budgeting, workforce productivity, and more. The goal is a complete overhaul and turnaround to produce a solvent transit system, an efficient people-mover, and a better-functioning work environment.
The control board delivered its first major report in September, a 60-day “baseline” evaluation of the system’s major challenges. The MBTA had dribbled out the bad news over several weeks, so the report landed with more of a thud than a bang. Though the control board announced that some problems were “more serious and deep-seated” than the governor’s special panel found earlier in the year, their conclusions were also in sync with the dismal downward trajectory for the transit authority that previous administrations had identified.
The report focused on operating, capital, and workforce issues. The authority has a $ 7.3 billion deferred maintenance and capital investment backlog; an operating deficit of $242 million in fiscal 2017 that rockets up to $427 million by fiscal 2020; and flat ridership and revenue. The report indicated operating expenses are rising at a rate that is three times the rate of revenue growth, numbers that surprised Shortsleeve when he arrived at the MBTA.
The MBTA faces additional pressures from the Green Line cost overruns and federally-mandated safety mandates such as installing positive train control systems. These systems track train speeds and movements to avoid collisions and will cost the MBTA about $500 million.
The data that the five members churn through during board meetings provide a window into what it takes to decode the complex MBTA bureaucracy. They know how to mine the transit authority’s data and pose tough questions to MBTA staff during public sessions. Understanding that material will help the board guard against being viewed by MBTA staff members as another group of outsiders that they can maneuver around if they wait long enough.
“We’ve been trying to make sure that we really do give a good scrub of those numbers,” Aiello says. “All we can do is lay out the facts.”
In fact, however, the board is doing much more than just laying out facts. Its members are rolling up their sleeves and taking on the job of problem fixers. Unlike traditional boards, they’re digging into operations and giving marching orders for new policies and procedures.
To understand why problems at the MBTA have been so difficult to tackle, consider that, between the five-member control board and the management duties that have been split between Shortsleeve and DePaola, seven people now oversee functions that had been the responsibility of one person overseeing a team of senior staff.
Dan Grabauskas, who ran the system as general manager from 2005 to 2009, was hailed as the man who would duplicate his successful overhaul of the Registry of Motor Vehicles at the MBTA. He stepped down after coming out on the losing end of Patrick administration infighting over safety issues and the mounting fiscal crisis.
Neither of his successors, Rich Davey, a former Massachusetts Bay Commuter Rail executive, or Beverly Scott, the one-time head of the metro Atlanta transit system who took over from Davey when he was promoted to transportation secretary, had any better success with taming the T.
Some transportation observers such as former governor Dukakis support a shorter oversight period control board, for a year or two. He would then prefer to see the authority turned over to a CEO who could install deputies to head key areas, such as maintenance, operations, and planning and construction. The CEO “doesn’t need to be a transit person but must be an excellent public manager,” says Dukakis.
The view from the state transportation building is that the MBTA needs as much hands-on attention as it can get for as long as possible. “It’s a three- to five-year effort,” says Pollack, the state transportation secretary. “No one thinks that fixing the T is a six- or nine- or 12-month effort.”
Given what the T is now up against, a general manager on his or her own, without the new chief administrative officer slot Shortsleeve fills and without the efforts of the five-member control board, would have been “working 100 to 110 hours per week,” says Tibbits-Nutt. Even then, the attitude would have been “let’s just keep it going, just keep it running,” she says. “But it gives you no room to actually fix any of the problems.”
To manage her slice of the MBTA pie, Tibbits-Nutt is in almost constant communication with the MBTA, speaking to staff members and getting reports every day. She sits down with them one to two days per week and averages about 35 hours each week reading materials and researching best practices in other large urban transit system that can be adapted for use at the MBTA.
While the big issues are systemic, there are easy fixes that can be implemented right away, too. One of her first moves was to find ways to better use the MBTA Twitter account, which has been criticized for not providing timely information about delays and other system problems. She has directed the three people who currently monitor the feed to follow trending hash tags closely.
“If someone is tweeting that a subway car is super-hot and super-crowded, we can start tracking that,” Tibbits-Nutt says. Data that a rider provides can be matched with specific vehicles to determine where problems lie.
The control board wants to see more accountability in subway operations. The board proposed that the MBTA return to a single “chief of the line,” akin to an executive director for each subway line, a position the MBTA dispensed with years ago. Currently, there are managers for subway signals, fleet maintenance, and the like. But there is no one, in the words of Aiello, who had the job of “having nightmares” about the Red Line. The new heads should be in place before the winter.
When it comes to the T workforce, figuring out who works where is not easy. Brian Lang is working on a master list of all the MBTA job classifications, such as machinist or customer service agent, with the goal of totaling up how many people work in those positions and how many of the positions are currently vacant.
On the financial side of the ledger, recent boards of directors and general managers have not been able to plug growing deficits, so perhaps the most surprising thing about the board is its optimism on that score.
Calise, the former city of Boston finance director, believes that the group has an opening to provide stronger controls in areas like hiring, which can provide longer-term savings. She says that during the Menino era, the city had strong, central administrative controls on expenditures.
In July, she was surprised to learn that the MBTA had not placed a moratorium on one practice that has been widely criticized: paying employees through the capital budget rather than the operating budget.
“We don’t necessarily have controls in place to make sure that we aren’t adding to our problem,” she says. According to a MBTA spokesman, the practice of putting brand new employees on the capital budget has since ended.
The control board has kicked transparency up a notch with meeting minutes and reports promptly posted to the MBTA web site, a modest if long-overdue move. Even so, a T Riders Union representative questioned that commitment at a September meeting (where the board discussed a downgrade of the MBTA’s credit rating): The meeting notice had not been posted in the usual news media outlets.
The key difference for the control board is not just more bodies, but more power. With the exceptions of fares and binding arbitration, the five members have latitude to operate in areas that previous MBTA general managers did not have. The three-year suspension for the MBTA of the Pacheco law regulating the privatizing of services is the most important and controversial of these powers.
The control board aims to hire private firms to run late night, express, and moderately-used bus routes. Some MBTA union leaders were put off by how quickly those discussions moved. Robert Gittlen, who sits on the state Department of Transportation board and is the New England area director of the International Association of Machinists and Aerospace Workers, the T’s second largest union, claimed he had been left out of the talks. Although the MBTA says that bus drivers now on those routes would be transferred to busier ones, union members view the move as an attempt to chip away at the workforce. Gittlen later met with DePaola and Shortsleeve and downplayed the earlier discord. Baker jumped into the mix to emphasize that the MBTA would have to get bids that save money or it would abandon the plan.
There had been chatter in transportation circles for months before the news broke that the Green Line extension was over budget. Cost overruns on large projects are not unusual. But the size of the budget bust floored everyone. The price tag surged from $1.9 billion in January, when Federal Transit Administration formally agreed to provide about half of the funding for the train line, to nearly $3 billion in mid-year. “I can’t think of anything in my private sector experience where you’ve seen a cost overrun of that magnitude in that short a period of time,” says Shortsleeve.
Somerville and Medford leaders have indicated that they would be willing to accept a scaled-back train line rather than none at all. Shaving off a few million here and there, however, won’t get the MBTA to the $1 billion needed to close the gap. The control board will bring on an outside firm, which they can do under the legislation that established the board, to investigate the Green Line overruns.
The Green Line issue undermines the MBTA’s ability to make a case for new state funding. However, the sad state of the T has not tempered calls for transit expansion. Planning for the future is always good, but conversations about the South Coast Rail project and the North-South Rail Link only amplify the MBTA’s distress.
Aiello doesn’t think the Green Line cost overruns are going to be the last surprise for the control board. The situation is an unwelcome development, since it will hinder the control board’s ability to make any future case for new revenues. In the current political climate, it is not surprising that all five members of the control board deflected questions about new revenues. “It’s not a topic that we have looked at now,” says Poftak.
“We have to demonstrate to the governor, the Legislature, and the taxpayer that if they give the MBTA a dollar, it will spend that dollar wisely and efficiently,” says Aiello. “I don’t think we are there today.”
Baker was even more definitive on the subject at a September news conference designed to showcase the system’s winter preparations. “I’m not talking taxes, period,” Baker told reporters. He said the T has “a long way to go here to demonstrate to the public, to each other, and to everybody else that this is a grade-A, super-functioning machine that’s doing all the things it should be doing.”
Rep. William Straus, the House chairman of the Legislature’s Joint Transportation Committee, says that the Green Line procurement issues are just more evidence that the MBTA should be folded into the state Department of Transportation. To him, money problems are old hat, especially after the Legislature looked at the problems in depth two years ago. “To do all these things, they are going to need more money than they have coming in now,” Straus says.
The authority is staring at a structural of deficit of $242 million next year. The control board and Shortsleeve, the chief administrator, believe that the MBTA can squeeze extra dollars from current revenues streams such as advertising, and selling real estate to help balance the authority’s fiscal 2017 without having to go to Beacon Hill for extra funds as the authority has had to do in the past.
Not everyone believes that. “The discussions that we are having now are not new; they took place when Dan Grabauskas was here, when Bev Scott was here, when Rich Davey was here,” says Paul Regan, executive director of the MBTA Advisory Board, the T’s municipal oversight group. “Unless somebody is going to get way outside the box, there are no ways to tweak the revenue streams that the MBTA currently enjoys to the tune of quarter of a billion dollars.”
Despite 10 years of focused attention from state lawmakers, transportation officials, and advocates, poor planning, procurement, management, and oversight practices remain embedded in the authority. No state lawmaker of sound mind would vote for new funding as long as the perception persists that MBTA construction projects will go $1 billion over estimates in a matter of months.
The changing Boston skyline is just one marker of a growing and expanding city. But the region is yoked to a transit system that cannot keep up. Aiello understands that there are limits to the patience of the governor, state lawmakers, and the T-riding public. There will be deep and grave consequences if [the MBTA] can’t be fixed,” he says. “If we can’t straighten it out to the satisfaction of [the stakeholders], there is a danger that it could be constituted in a radically different form.”The Green Line extension snafu was a there-you-go-again moment for the MBTA. Seeking to disrupt old ways of doing business, the fiscal and management control board came face to face with the fallout from the old ways of doing business. “The T has to earn the right to have a conversation about revenue,” says Shortsleeve, the chief administrator. “When the system runs better, we can talk.”
The control board is the last chance for the MBTA. If these five people cannot break the system down and build it back up, it is looking very unlikely that anyone or any other management fix-it strategy can.