T notes: Falling behind on own-source revenues

THE MBTA, which is seeking a 6.3 percent average fare increase, is failing to meet its goals for generating own-source revenue from advertising, parking, and real estate.

During a revenue presentation to the Fiscal and Management Control Board on Monday, Evan Rowe, the T’s director of revenue, portrayed the agency’s so-called own-source revenue in a positive light, highlighting increases in parking and advertising revenue.

But Transportation Secretary Stephanie Pollack questioned whether Rowe was using the correct yardstick for measuring success. Instead of comparing own-source revenue in fiscal 2019 to own-source revenue in fiscal 2018, Pollack said, the T should be comparing own-source revenue in fiscal 2019 to own-source revenue forecasted in the fiscal 2019 budget.

Using that metric, Rowe said, advertising revenue is forecasted to hit $27.2 million this fiscal year, well below the budget forecast of $41.6 million. He said the budget also called for $63 million in gross revenue from parking, but the T is on pace to do just $53.2 million.

“So we’re not making the numbers,” Pollack said. “We’re not on course.”

According to Rowe’s presentation, the T has seen an uptick in own-source revenue. The transit agency reported $43 million in real estate, advertising, and parking revenues in fiscal 2015 and is projected to hit $70 million in the current fiscal year. (The $70 million number includes net parking revenues of $24 million, which is what is left over after deducting $29.2 million in debt costs and operating expenses from the gross parking revenue number of $53.2 million.)

The T had hoped to reach $100 million in own-source revenues this year, but Pollack said the agency is unlikely to meet that target and is probably unlikely to reach the $100 million figure over the next few years. “There’s no way we’re going to get to that number,” Pollack said.

Rowe did not dispute her characterization.

The T is expected to see its revenue from real estate activities rise $1 million this fiscal year to $18 million. Brian Lang, a member of the control board, said he was not impressed. “In the environment we’re in, that’s our most valuable asset,” Lang said of the transit agency’s real estate. “It’s a huge miss on our part.”

Rowe said the T has had little luck in enticing colleges and universities to subsidize transit passes for their students. Indeed, UMass Lowell recently discontinued a pilot program that offered free commuter rail passes between Lowell and Boston for students and staff. Asked why UMass Lowell dropped out, Rowe said: “Budget issues on their end.”

Rowe had more promising news on the weekend commuter rail fare, which allows riders to pay $10 and ride as much as they want on Saturday and Sunday. Rowe said the T is selling between 7,000 and 8,000 passes a week.

Joseph Aiello, the chair of the control board, suggested the T could possibly attract more weekend riders if a separate, less-than-$10 weekend fare was sold to riders closer into Boston. A regular roundtrip fare between Worcester and Boston, for example, costs $23, while a roundtrip fare from Zone 1 areas near Boston costs $12.50.

Rowe said a relaunch of the T’s corporate pass program under the new name Perq has attracted 110 new corporate customers and $150,000 in revenues over a three-month period. Rowe said the cost of the relaunch was about $200,000, but sources at the T say the figure is closer to $300,000.

Commuter rail confusion

There’s been a lot of talk recently about whether commuter rail ridership is going up or going down.

One study comparing ridership in 2012 and 2018 found a 21 percent increase. But conductor counts, which are considered to be less reliable, indicated roughly the same level of ridership in 2018, but the trend lines were going down, not up. In other words, it wasn’t clear if ridership is going down or up.

On Monday, MBTA General Manager Steven Poftak appeared to side with those who believe ridership is increasing. “The system is very much approaching capacity,” he told the Fiscal and Management Control Board.

Lockbox flexibility

Each year the T tries to set aside $150 million of a legislative appropriation in a special fund called a lockbox, and then taps the money for all sorts of capital projects.

The T has spent $275 million in lockbox money since spring 2016 on 165 relatively small projects, including the purchase of 75 new paratransit vans, track infrastructure work, and commuter rail locomotive repairs.

Monica Tibbits-Nutt, a member of the control board, said the T’s use of the money seems appropriate, but she would like to see some of the money go for more mundane projects that riders might notice and appreciate such as power-washing the walls of subway stations, replacing light bulbs, and cleaning elevators.

“We put up a brand newssign in the station and everything around it is disgusting,” Tibbits-Nutt said. She singled out MBTA elevators as being particularly disgusting.

Transportation Secretary Stephanie Pollack said most of the money from the lockbox has gone for capital projects, but she said nothing prevents the control board from using the money to bolster operating expenditures for cleaning. Pollack called the lockbox funds “flexible money” that the board can spend how it wants.