T cites progress on structural deficit
Officials suggest replacing all 220 Green Line cars
MBTA OFFICIALS ON MONDAY said they are making progress in eliminating the T’s structural deficit and told the agency’s oversight board that major decisions must be made in the next six months on replacing all 220 Green Line cars, overhauling or replacing 86 Red Line cars, and finding a new way to provide service between Ashmont and Mattapan Square.
Through the first five months of the current fiscal year, the T’s structural deficit was $51 million, less than half the forecasted amount of $104 million. The lower deficit was attributed to a decrease in the growth of operating expenses, primarily because of a $6.5 million decline in fuel and electricity costs and a 16 percent uptick in revenues from advertising and real estate.
Overall, the growth in non-debt operating expenses for the first five months of the year was about $7 million, or about 1.2, which was less than half the 3.2 percent rate for the same period last year and well below the average long-term rate of 5.2 percent. One bright spot was a 3 percent increase in commuter rail fare revenue for the first six months of the fiscal year, which contrasted with a 0.3 percent increase in subway, bus, and ferry revenue.
Brian Shortsleeve, the chief administrator of the T, said he didn’t know whether the higher revenue number for commuter rail reflected more ridership or whether more aggressive fare collection efforts were paying off. “But the trend so far there is positive,” he said.
Shortsleeve said the T will face a serious challenge next year in trying to balance revenues and expenses because it will incur $74.5 million in new costs, including the absorption of employees who are currently being paid with borrowed capital funds, wage hikes for existing employees, and rising debt service costs.
The T is planning a number of initiatives to cut costs, including reductions in overtime and bus maintenance expenditures and better cash handling procedures. The MBTA wants to reduce the cost of the RIDE, the agency’s paratransit program, by $13 million to $25 million by shifting more users to taxis and ride-sharing services such as Uber and Lyft. And the agency hopes to save an estimated $30 to $36 million by offering a one-time financial retirement incentive to workers who are currently eligible to retire.
Shortsleeve said 1,000 employees, or 15 percent of the agency’s workforce, have 23 years on the job and are eligible to retire. He said about 400 of those workers operate vehicles and would not be eligible for the retirement incentive. Of the remaining 600 workers, Shortsleeve said he hopes 400 will retire. He said agency officials will be allowed to backfill only 100 of the positions, for a net decrease in employees of 300. He said the average salary of the eligible employees is $81,000, and the total cost to the agency, including benefits, is $120,000 per person per year.
Shortsleeve said he hopes to continue making progress bringing revenues and expenses into balance through the remainder of the current fiscal year and into fiscal 2017, which begins July 1. He said any savings will be plowed into the agency’s capital budget. “It’s capital investment over time that will really make a difference for our riders,” he said.In that vein, T officials told members of the agency’s Fiscal Management and Control Board that they have major decisions to make over the next six months on vehicle purchases and maintenance plans. Jeffrey Gonneville, the T’s chief operating officer, said the T’s subway, light rail, and bus fleet requires $3.7 billion in capital investment over the next 10 years, of which $1.6 billion has been budgeted.
The T has already purchased new Red Line and Orange Line cars that are scheduled for delivery in 2019 and beyond. Gonneville also urged the Fiscal Management and Control Board to consider replacing all 220 Green Line cars, overhaul or replace another 86 Red Line cars, and replace in some fashion the 10 ancient trolley cars used on the Ashmont-Mattapan line.