T’S GM urges no fare hikes in January

T’S GM urges no fare hikes in January

But members of oversight board say it’s too early to rule them out

THE MBTA’s GENERAL MANAGER recommended on Monday that fares not be increased on January 1, but two members of the T’s oversight board said they weren’t ready to take hikes off the table yet because of the agency’s fluid budget situation.

Even as T officials rolled out a series of options to increase revenues and rein in spending, the agency also urged members of the Fiscal and Management Control Board to approve a number of new initiatives that could increase spending by $18 million. The new initiatives included an overnight bus service pilot, new employee teams to address rush-hour breakdowns, and the leasing of five commuter rail locomotives for four years.

With all of the different proposals being floated to boost revenues and cut or raise spending, it was difficult to say what options the control board will eventually settle on. But board members did set a few firm benchmarks on Monday.

The T relies on four revenue sources: state sales taxes; own-source revenues from advertising, leases and parking; fares; and a $187 million legislative appropriation. The control board would like to operate the T without touching the legislative appropriation, and use all of that money to finance long-term capital investments. The last two years, however, the T has had to tap $30 million of the legislative appropriation to balance its books.

Steven Poftak, the vice chair of the board, said he was willing to use $37 million of the legislative appropriation to balance the fiscal 2019 budget, but no more. He noted the T is counting on $150 million of the legislative appropriation to help fund longer-term capital projects. Brian Lane, another board member, said he also wouldn’t go above $37 million. Brian Shortsleeve, the third board member in attendance on Monday, indicated he would prefer to pare back spending rather than tap more of the legislative appropriation.

That could be a challenge. T officials are currently projecting a $100 million budget shortfall for fiscal 2019 — $118 million if the new spending initiatives are included.  The T has asked the Legislature for relief from a requirement that all employees paid with capital funds be shifted to the operating budget. If the Legislature goes along with that request, the shortfall for fiscal 2019 would be reduced by about $27 million. Assuming the control board taps $37 million from the legislative appropriation to help balance the budget, that would leave a shortfall of between $36 million and $54 million.

Here are some of the options under consideration for closing the gap.

NEW REVENUES

Evan Rowe, the T’s director of revenue, said he thinks the agency can boost sales of corporate passes by $10 million to $20 million by rebranding the product and selling it more aggressively. He estimated the T would need to spend $400,000 to build a better sales operation. The T currently has 123,000 corporate pass customers. Poftak was skeptical that $20 million could be raised, but overall control board members said they were in favor of the plan.

Rowe also said the T could raise $12 million by hiking parking fees, but control board members said they were opposed to an across-the-board fare hike of $1 that would raise $5 million. The board favored a more selective approach, one that would hike fees at garages that sell out quickly and perhaps lower fees at parking lots that rarely fill up. Board members also favored a proposal to raise $1 million by charging a premium for reserved spots and hiking fees at lots used by people attending off-peak downtown Boston events, such as a Celtics game, on the T.

Luis Ramirez, the general manager of the T, estimated the transit authority could raise between $12 million and $15 million by hiking rider fares, but he recommended not pushing ahead with an increase on January 1 in the middle of the winter. He said he would prefer to hold off until the beginning of a fiscal year, perhaps mid-year 2019, to give the T more time to prepare for the hike. Any fare increase would require the reprogramming of 1,600 bus fare boxes and 450 fare vending machines, all of which are about to be replaced by new fare technology. Poftak and Lane said they could not rule out a fare increase on January 1 with so many budget balls in the air.

SPENDING REDUCTION PROPOSALS

MBTA officials proposed a series of initiatives to reduce spending, but few of them were outlined in any detail. Ramirez proposed a system-wide effort to increase productivity and reduce costs, resulting in savings of about $30 million.  He offered few other details.

Michael Abramo, the T’s chief administrative officer, estimated $10 to $20 million could be saved by offering the 700 employees currently eligible for retirement a financial incentive to retire immediately. A similar program offered in fiscal 2017 resulted in 180 buyouts and saved $17 million. Shortsleeve said removing elderly T employees and replacing them with lower-cost employees as allowed under new union contracts could save the T money. Abramo noted another benefit. “It gives us the opportunity to bring some new blood into the organization,” he said.

T officials also proposed revamping the highly successful use of ride-hailing apps to serve paratransit customers to cut costs by $1 million in fiscal 2019. The proposal would increase rider fares and require the ride-hailing apps “to match RIDE practices,” presumably to offer wheelchair accessible vehicles to more customers who want them. The only knock on the ride-hailing program so far has been that its heavy use by customers overwhelmed the savings from its lower pricing.

NEW SPENDING PROPOSALS

Ramirez said no private vendor was interested in providing all-night bus service for customers who work overnight in the Boston area. As a result, he said, the T would have to run bus service every half hour between Mattapan and Revere from 1 a.m. to 4:15 a.m. if it wanted to pursue an overnight pilot. The cost is estimated at $2 million, he said. T officials have raised concerns about the high cost in the past, but Ramirez indicted he wanted to push forward. “My intent is to find a solution to this,” he said.

T officials want to lease five commuter rail locomotives for at least four years at an annual cost of $3 million a year. T officials gave conflicting answers on whether the lease costs could be partially offset by lower payments to Keolis by taking old, breakdown-prone locomotives out of service.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Jeffrey Gonneville, deputy general manager of the T, said he wanted to spend $8 million to hire 123 new bus drivers, or 7 percent of the current total of 1,700. Sixty-seven of the new drivers would be used to reduce overtime and dropped trips caused by workers taking vacations and other absences. Gonneville said the addition of the other 55 bus drivers would help improve on-time performance, but he had difficulty explaining how on-time performance would improve without adding new buses. “It’s a l;ot of extra drivers,” said Transportation Secretary Stephanie Pollack.

Gonneville also wanted to spend $2 million to hire five new emergency response crews to deal with problems that arise during rush hour. He said the crews would allow the T to recover faster when breakdowns occur, but he acknowledged the teams might not be necessary once new Orange and Red Line trains come into service over the next few years.