T notes: GLX will be big money loser
Commuter rail revenues keep rising
THE MBTA IS FORECASTING that the cost of running the Green Line extension in its first full year of operation will far exceed the revenue gained.
According to projections provided to the T’s Fiscal and Management Control Board on Monday, the cost of running the Green Line extension will be $44.6 million while the revenue will be just over $1 million. The fare recovery ratio (revenue divided by expenses) will be just 2.3 percent.
By contrast, the fare recovery ratio on the Red and Orange Lines once new cars are fully introduced will lead to fare recovery ratios of 237 percent and 258 percent, respectively. For South Coast Rail, once it is up and running, revenues will be roughly half of expenses, a fare recovery ratio of 50.3 percent.
David Panagore, the chief administrative officer of the T, called the Green Line extension numbers an “outlier,” and suggested the low fare recovery ratio may be due to projected staffing levels that are set too high. Members of the control board raised a host of other concerns, suggesting ridership assumptions may be off and cost figures may be inflated. Panagore promised to do a deeper dive on the numbers in the future.
The MBTA may be struggling to rein in operating expenses, but its revenues are running ahead of forecast thanks to growing sales tax revenues and an increase in fare income from commuter rail and ferry service.
In a briefing to the T’s Fiscal and Management Control Board, officials said fare revenue ran $6 million ahead of budget forecasts in the first three months of this fiscal year. Officials said close to 90 percent of the increase came from commuter rail, with the balance of the increase coming from ferry operations. Panagore said subway and bus revenues are flat.
The sales tax, which provides the bulk of T revenues, is running $36 million ahead of forecast.
The T’s own-source revenues came in $15 million below projections in fiscal 2019 and are currently expected to be $14 million below projections this fiscal year. Actual parking revenues are expected to decline $1 million in fiscal 2020 compared to the year before, while real estate and advertising revenues are expected to rise $5 million and $2 million, respectively.
The T implemented a new fare structure for parking in September 2018 and so far the approach has failed to yield much new revenue. The new fare approach hiked fares at peak times at high-demand garages and lowered fares at many underused garages. At the 33 parking facilities where prices went up, occupancy decreased 14 percent, or 1,900 parking sessions per day. At the 22 facilities where prices were cut, occupancy increased 28 percent, or 1,000 parking sessions per day. At the 10 busiest garages, revenue was up 11 percent with the price increase.
Advertising revenues are projected to hit $36.4 million this fiscal year, up from $28.3 million in the previous year. The T is also gearing up to roll out digital billboards – what the T calls outdoor information panels – and Panagore said each new panel is worth a minimum of $205,000 a year in revenue.
Supersized Orange Line shutdown this weekend
Poftak said weekend closures on the Red Line from Kendall to Broadway will start up after the Orange Line work is finished. The closures start November 16 and 17, continue the following weekend, skip the weekend after Thanksgiving, and resume the first two weekends in December.