Tough Choices: The Efforts of Five To Fix the MBTA

When asked to say the first word that came to their mind after hearing “MBTA”, people at the Harvard Square T stop supplied “broken”, “old”, and one woman said “very very late … like late-all-the-time-late.”

Citizen’s feelings are justified; the system has been deteriorating for years. David Luberoff, Lecturer on Sociology and the Senior Associate Director of the Joint Center for Housing Studies at Harvard University, told the HPR, “it’s really a miracle the T kept running for all those years, a bunch of people kept it going with basically duct tape and oatmeal”. In the winter of 2015, the system finally buckled under a series of heavy snowfall, dubbed “the Snowpocalypse”.

Control Board Formation

Following the collapse, Massachusetts Governor Charlie Baker decided that the “duct tape and oatmeal” strategy couldn’t continue and commissioned a special panel to review the MBTA. 

The panel’s report, released in April of 2015, diagnosed failings at essentially every level of the agency. The report stated that the MBTA was in “severe financial distress” and needed substantial aid from the commonwealth, lacked repair plans “even though those are core responsibilities of the agency”, and had poor workplace culture that encouraged inefficiency and lack of accountability —for example, the average MBTA employee missed a stunning 57 work days a year.

The report also recommended a big change: a complete overhaul of the MBTA’s leadership. More specifically, it advocated that the reins of the agency be turned over to a five-person Fiscal and Management Control Board.  By the end of the summer the new management had been assembled.

The group, appointed by Baker, was a sharp contrast from previous leadership. In an interview with the HPR, control board member Monica Tibbits-Nutt explained that the board consisted of “five people who are subject matter experts. On the board before, some people knew a little bit about this or that, but when the governor put this team together, each of the things that each of the five of us is focused on is literally what we have done our entire career.” The control board is unique in that the members are unpaid and also work other jobs; each member is not in for the money, but rather to help put the MBTA back together.

To shore up the finances of the MBTA, Baker appointed Brian Shortsleeve to be the first ever Chief Administrator. As a former marine, Harvard Business School graduate, and experienced consultant and venture capitalist, Shortsleeve didn’t fit the usual profile of the leader of a transit agency. But Tibbits-Nutt said that Shortsleeve was perfect because “a lot of short-comings in operations were because of financing and poor management. With an agency in crisis like that, you need a CEO type … someone who gets what it takes to put the house in order.”

The Control Board Weighs Options

When the control board got to work in the fall of 2015, they faced a steep uphill battle. At a meeting in September, Shortsleeve revealed that the annual operation deficit would double to $430 million by 2020 if things didn’t change.

Required by law to propose a balance budget, the board could only do so in two ways: increasing revenue and cutting costs.

In October, the board considered ways to raise more revenue other than increasing fares. They discussed allowing alcohol advertisements to return to stations. However, the idea lost traction after Boston Mayor Marty Walsh, a recovering alcoholic, voiced his displeasure with the proposal. The board examined hiking parking rates and selling MBTA-owned real estate but this proved nearly impossible when it was revealed that the MBTA didn’t have much real estate left to sell.

By December, the MBTA was still in a tough spot. Facing a $7.3 billion repair backlog and $242 million budget deficit for the next fiscal year, the board began to weigh the inevitably unpopular fare hikes. The proposed hikes were criticized since the level of service provided by the MBTA had not improved. Former Massachusetts Secretary of Transportation Jim Aloisi wrote in Commonwealth Magazine “imagine a company that sells sour milk thinking that the first step toward rebuilding its business is to charge more for sour milk.”

In mid-December, the board reached a turning point when Shortsleeve gave a presentation on closing the operating deficit for the 2017 fiscal year. The presentation, aptly titled “Tough Choices,” reiterated how the board was required by law to establish budgets balanced through internal cost controls and increasing own-source revenue starting with FY17. It was clear that it was time to act—it was time to start making tough choices.

Control Board Action

On December 22, the MBTA Fiscal and Management Control Board First Annual Report was released. It began with the following: “The FMCB is now moving from analysis to action. Many of FMCB’s decisions will be difficult and unpopular. But continued inaction on the MBTA is simply not an option”.

In February, the first unpopular measure was undertaken: the control board voted to end-late night service. It came under fire, with critics arguing that the ending of late-night service disproportionately affected low-income and minority riders; they called on the MBTA to complete a federally-mandated equity analysis. The MBTA did eventually complete the analysis, finding that the cancellation did not have an adverse impact on low-income and minority riders. However, critics questioned the analysis’s methodology.

Tibbits-Nutt said that the ending of late-night service “wasn’t a particularly hard decision”. She discussed how late-night service was a poor use of MBTA resources since it was used by a very small portion of riders and cost almost a million dollars a month. Most importantly, Tibbits-Nutt hammered home that it was “a pilot project that had no baseline metrics, no goals, no parameters, no way to measure whether it was successful or not, and had gone far beyond the 12-month pilot period” and that it totaled to “a million dollars a month.”

The board pushed forward and turned their attention to fare increases. In a highly contentious meeting in March, protesters against the fare hikes made so much noise that board members were not discernible over the shouting. Despite the chaos, the board went on with the meeting and approved a system-wide average fare increase of 9.3 percent.

The control board needed to generate more revenue and, after exhausting other options such as alcohol advertisements and selling real estate, raising fares was the way to go. Tibbits-Nutt explained “we only have so many tools to raise money, fares is pretty much it. We can raise fares and we can lay off people and we can cut services … everything else is a legislative mechanism that we have no control over.” The board understood that fare increases burdened some populations more than others, and strategically raised fares to “not burden students and low income people” said Tibbits-Nutt. She pointed out that the MBTA still has some of the lowest fares in the country, even after the increase.

By March, the control board was able to cite cautious improvements. Absenteeism had declined by 29 percent in vehicle operators, 14,000 fewer work days had been lost due to unscheduled absences compared to the previous year, and the amount of dropped week day bus trips were down by 40 percent. Moreover, the agency was in better fiscal shape, with the expected budget deficit for 2017 going from $242 million to $80 million. When deducted from the $187 million the legislature was set to provided, the MBTA would have $107 million to put towards repairs.

In June, the control board turned to the next hurdle: privatization. In the summer of 2015 the legislature also granted the MBTA a three-year exemption from the Pacheco Law: a law that makes privatization difficult by requiring proof that the private contractor can do the work for less money while providing equal or better service.  

So far, the board has privatized security—replacing transit police with private security outside the “money room” and saving $350,000 a year. However, the vote didn’t go before the control board since it involved less than a million dollars. The first public privatization vote took place in early October. It was a flashback to the wage hike protests; the protesters were loud and passionate and seven union members were actually arrested and removed. The control board voted to have private firm Brinks take over cash handling operations. The control board also has plans to privatize warehouse operations.

Tibbits-Nutt said that the privatization efforts are being undertaken so that the agency only has to focus on ”core services.” Luberoff echoed her sentiment: “there is some merit to what the T has been saying: given our limited management capacity, it makes to contract out things for which there is a really obvious private sector analogy.”

What comes next?

The control board still has a lot of work ahead of it. For all the improvements that have been made, the customer’s experience still hasn’t improved. The board is very conscious of this. Tibbits-Nutt put it bluntly: “stabilizing the agency is going to seem a lot easier than compared to the task of earning back the public’s trust because right now they have no reason to trust us…has your daily commute gotten any better? No. Have the trains gotten any less crowded? No. Have we become any more on time? Not really.” She said that the customer experience should improve in 2018 when the automated fare collection system is put in place and in 2019 and 2020 when new orange and red line cars arrive.

However, the Green Line Extension project’s future remains uncertain. Though it may be fiscally unfeasible, delaying it further or cancelling it presents a “democratic legitimacy issue” said Luberoff. “If you’ve been telling the people of Somerville for 25 years that you’re going to build a transit line its sort of tough to say ‘no, it’s too expensive.’” It’s unclear how the board will handle pressure for expansion with the harsh realities of balancing a budget.

Lastly, the future of the board itself remains uncertain. The legislation creating the board stipulated that it will only operate for a three to five year period. It’s unclear when and how the board will turn over power to a more traditional form of leadership, and what the new leadership will look like.

Until the MBTA is in better shape, the control board will continue to soldier on. When prompted how she manages the time-crunch of working a full-time job while serving on the board, Tibbits-Nutt said “because it’s so important—it’s just so important. We can’t fail. I feel like it makes it a little bit easier because if the five of us don’t fix it, then the system fails and that’s not an option.”

Image Credit: Wikimedia Commons

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