2019 FMCB Annual Report
This report fulfills the requirements of Section 207 of Chapter 46 of the Acts of 2015 specifying
that the MBTA Fiscal and Management Control Board (FMCB) report annually on, among other
things, the Massachusetts Bay Transportation Authority’s “own-source revenue, operating
budget, capital plan and progress toward meeting performance metrics and targets. This final
report is presented to the Legislature after four and a half years of governance by the FMCB,
with just under six months left in our term.
The FMCB has chosen to depart from the format of previous reports and provide a narrative
regarding what we have learned, which accomplishments have been satisfactory, and which have
not, and to make certain recommendations for the future of the MBTA. We have included much
of the required data reporting as an Appendix to this Report.
The FMCB Directors certainly understood that the Authority was adrift and plagued by a variety
of challenges at our inception in July 2015. We quickly began to understand that enormous
physical and psychological disrepair and management inertia had set in. The causes of the
disrepair were many but likely driven by long-term neglect, long-term/repeated turnover in
General Managers (GMs), and lack of a common vision within the organization. We cannot
stress enough what a challenging environment we found.
Indicators of these serious challenges were unreliable service, a dispirited workforce, lack of
sufficient management capacity, lack of clear expectations on safety and customer service, and a
dismal approach to financial discipline.
Today, the MBTA is on a stable course and seeing improvement every day. However, the road to
achieving the MBTA’s vision for its future will be a long one. Put simply, the FMCB believes
that the only acceptable future for the MBTA is one in which it has become a globally premier
transit system. This system must put safety and customer service first, be an excellent steward of
the public trust and resources, support mobility needs within the metropolitan area, be resilient to
climate change, and transform itself into a largely decarbonized enterprise.
The road to recovery will indeed be long and challenging, but executive leadership and extensive
stakeholder engagement will help overcome the obstacles that lie ahead.
A FEW OBSERVATIONS
Safety and organizational culture must go hand-in-hand. Faced with dissatisfaction on attention
to Safety, The FMCB commissioned an Independent Safety Panel. The Safety Panel Report
informed us that safety systems, processes, and procedures were found wanting. Beyond
significantly underperforming in those areas we must recognize that while they are essential for a
best-in-class safety organization, they are insufficient on their own. Developing a CULTURE
where every employee and contractor understands and is committed to their individual and
collective safety responsibilities is critical. The General Manager has begun to undertake this
cultural shift, but it must be a permanent priority of the governing board that will succeed the
FMCB. A shared commitment by every employee and contractor toward creating a truly world-
class transit system is essential. If our workforce does not believe in that future, it will never be
attained.
The battle for talent and retention is real—and is a real barrier toward success. While the FMCB
has seen the introduction of new training and certification programs and has had some success
with senior management recruitment, these accomplishments have been meager compared to the
challenge. Out-of-date recruitment, compensation, and professional development packages
represent an urgent situation at the T that must be addressed.
Transparency, listening, and dialogue create value. One cultural breakthrough the FMCB has
observed is the evolution of staff’s relationships with stakeholders from wariness to effective
collaboration in identifying and solving problems. Our metropolitan region benefits from a
richness of individuals and organizations from all walks of life and philosophies. We have
watched the staff grow in their respect for and appreciation of what the community we serve has
to offer.
NEW INITIATIVES
The FMCB has been proudly aggressive in its insistence on a rapid pace of change for the better.
We have no regrets, despite some disappointments, in launching a wide variety of initiatives
during our tenure. A sample of these is given below:
Safety Review Panel Report – On June 11, 2019, a single Red Line car from a six-car set ran
off the tracks at JFK/UMass near Columbia Junction. This damaging incident highlighted the
need for greater safety oversight at the MBTA and led the FMCB to engage three transportation
experts to review the safety shortcomings at the MBTA. The Safety Review Panel’s report found
that the T is safe to ride, but many aspects of the organization’s approach to safety, operations,
and workplace culture are questionable and require immediate attention. It is clear from the
report’s recommended corrective actions that improving safety at the MBTA will require
sustained attention from senior management, more financial resources, and the oversight of the
FMCB’s successor. The FMCB cannot overstate the need for the MBTA to get safety systems
(including enhanced preventative maintenance and preventative maintenance inspections) and a
safety culture up to best in class status as urgently as possible.
Reform of the Red and Orange Line improvement programs – We inherited a procurement
of new vehicles, but we pivoted to an objective of adding significant extra capacity coupled with
a long-term performance promise to our customers. The asset management programs that we
have adopted will enable 3- and 4.5-minute rush-hour headways at 95% or greater on-time
performance starting in 2025. Each year on the road to 2025 will see improved on-time
performance and additional capacity. Our promise to the public is to follow a specific asset
management plan to ensure that we adhere to the previously stated performance objectives for a
minimum of 25 years starting in 2025. No other US transit is making such a long term
performance guarantee via its public workforce.
Green Line Extension – We inherited a poorly scoped, poorly procured, and poorly managed
but essential investment. Through staff and consulting changes, an improved procurement
method, and best-in-class management tools, the project is on course toward outcomes we all can
be proud of and opening by the end of 2021. Our estimate is that we will deliver this project with
at least a $500 million reduction from the program we inherited.
Green Line Transformation – We will double capacity on the Green Line via a coordinated set
of investments in vehicles, stations, track, signals, power, and other infrastructure to improve
safety, reliability, capacity, and accessibility. These investments will enable the T to buy off-the-
shelf vehicles and take advantage of new technology to carry the same number of passengers as a
current two-car trainset with only one driver and 60% of its length.
South Coast Rail – In 2019, the South Coast Rail program obtained permits and full funding for
phase one to provide commuter rail service to New Bedford and Fall River. In July, construction
of South Coast Rail commenced with a groundbreaking event, with work underway on culverts,
early bridge reconstruction, and purchase of track material. In September, FMCB approved the
purchase of 16 bi-level coaches for South Coast Rail service. The design of the Fall River Line
and the New Bedford Line is complete, with contracts ready to be advertised in February 2020
and April 2020. The project is on schedule to provide revenue service by the end of 2023.
Blue Line improvements – The Blue Line has seen signal modifications between Wood Island
and Airport Station to improve headways while maintaining safe braking distances and track
improvements throughout the line. We have set in motion signal and power upgrades and
resiliency investments to protect against flooding. We have also restarted the Red-Blue
Connector to extend the Blue Line to meet the Red Line at Charles/MGH. These investments
will make the overall downtown Boston transit network more resilient but also make the Blue
Line more productive while protecting access to Logan International Airport and accommodating
significant growth in East Boston, Revere, and near MGH.
Rail transformation – The Board recently adopted a set of policies (See Appendix J) to
transform our current Commuter Rail system into a largely electrified/de-carbonized rail system
that provides more frequent all-day service throughout the system. The goal of the first phase is
to introduce EMU-powered service along the Providence/Stoughton, Fairmount, and a portion of
the Newburyport/Rockport Lines within four years. The first phase will also include strategic
improvements to the balance of the network. (See Appendix K for a map of the first phase
implementation.)
Better Bus Project – The MBTA has set its course for creating a more reliable and customer-
friendly bus system. We have worked with key municipal leaders to add bus shelters, more bus
lanes, and traffic signal prioritization to move buses in those corridors much more quickly. We
have initiated a municipal bus challenge to encourage these and other municipalities to rapidly
accelerate investments so that bus trips become a more attractive option to riders. We are in the
process of expanding the bus fleet and finally making progress on long–awaited modern
maintenance facilities that can accommodate 20% more buses and that will eventually support
our planned conversion to battery electric buses. This includes planning for modernized and
expanded bus maintenance facilities in Quincy, Boston, and elsewhere. A new facility in Quincy,
for example, will be able to support enhanced service and a more rapid transition to hybrid and
electrified fleets, as well as improve working conditions for MBTA employees.
Replacement of an outdated fare collection system – We moved from an initiative that had
been moving slowly with no committed budget to one that has been fast-tracked to success.
While this project will not be able to maintain its initial aggressive schedule, the new system’s
benefits will begin to materialize in 2020. Over the next few years we’ll see full fare integration
of the Commuter Rail and ferry systems, a reduction in the use of cash to cut dwell times, the
ability to introduce more targeted fare policies such as time-of-day discounts, distance and
directionality considerations, and many other features.
Reduction in carbon emissions – We have taken numerous steps to get smarter and more
efficient in the way the MBTA handles energy by improving the way we buy energy and
capitalize on economies of scale, investing in improvements that reduce energy consumption,
and running cleaner and more fuel-efficient vehicles. In FY14, the MBTA spent $48.3 million on
electricity; in FY19, it only spent $43 million, despite the cost of electricity rising by 12.5%.
Overall, we have reduced greenhouse gas emissions by 27,000 metric tons per year. As we
transition to even cleaner and electric vehicles and continue to implement energy efficiency
improvements, we will reduce carbon emissions even further.
Stewardship of the public’s dollars – During the FMCB’s five-year tenure, we greatly
accelerated our state of good repair investments (i.e. replacing outdated power, signals, track,
vehicles, etc.) for a safer and more reliable system. We have added more than 10,000 additional
annual Commuter Rail trips at the highest on-time performance rate in several years, introduced
the Silver Line 3 service to Chelsea, and made other service improvements while keeping budget
growth to an annual rate of less than 3% on average. The MBTA invested more than $1 billion in
safer and modernized systems in FY2019. In the current FY20 we are on a pathway to reach and
then sustain an annual minimum of $1.5 billion of capex.
Customer care – We inherited an organization that had an overburdened set of professionals
who only thought about a discrete set of customers. Today we have the foundation of a
centralized and strategically oriented Customer Experience enterprise which ensures that we are
thinking strategically about customer care, communications, analyzing feedback, and engaging
more fully on social media. This transformation into a customer-centric culture is essential to
becoming a best-in-class transit system.
CONCLUSION
We have previously opined that the MBTA needs its own board of directors and that the
Secretary of Transportation should be a member of the board. The hiring and firing of the GM
should be the role of the Board with certain rights reserved for the Secretary. With the exception
of the Secretary, the future MBTA board members shall not also serve as MassDOT board
members. The position of the Secretary shall be responsible for providing interagency and
intermodal collaboration from a policy and program perspective. With this understanding, we
further recommend reducing the number of required meetings from 36 annually to 15. We
recommend that a Safety update be a required agenda item at every future Board meeting. The
FMCB will institute this practice starting with its January 27 meeting.
We have come to believe that clear control of the board by a sitting Governor is critical to its
success. We agree with the Safety Review Panel finding that at least one member be a specialist
in operations and safety. We also believe that full transparency with the public is the best long-
term safeguard against a relapse of pre-2015 conditions. Transparency has associated costs, but
in the long term it is undoubtedly less expensive. We strongly encourage the Legislature to set in
motion a plan for establishing a successor board at least 45 days before the end of the FMCB’s
term on June 30. A strong and coordinated transition will be helpful to all.
Finally, we are grateful to Governor Baker for asking each of the seven directors to have served
over these past five years. We thank him for his support and for the independence he granted us
to do our jobs. We certainly did not perform infallibly, but our intent has always been clear: to
move the MBTA toward the system that our region needs and that can stand among the great
transit systems of the world. The journey continues as we pass the baton to the next board.
Appendices
A. Fiscal sustainability
B. Maintaining a priority list of immediate capital needs for the next 5 years and
procurement and implementation plans
C. Imposing a barrier between the commingling of operating and capital budgets
D. Increasing own-source revenue as required by section 61 of chapter 46 of the acts of 2013
and utilizing the lease and sale of real estate assets to support the long-term health of the
system and implementing value capture strategies
E. Centralizing authority procurement and contracting, implementing best procurement and
contracting practices and sharing or consolidating authority procurement and contracting
with that of the department consistent with this act
F. Planning and preparedness processes and adopting an incident command system
G. Improving customer relations and instituting a customer-oriented performance
management program
H. Identifying and implementing best practices supporting workforce productivity and
engagement and reducing employee absenteeism
I. Reducing barriers to public-private partnerships
J. FMCB Vote on Rail and Bus Transformation
K. Rail Transformation: Phase 1 Implementation
 Appendix A: Fiscal Sustainability
In 2015, the status quo Pro Forma projected a 5% cumulative annual growth rate in total
expenses, leading to a $391 million structural deficit by FY19. However, with the guidance of
the FMCB, the MBTA achieved a cumulative cost savings of $796 million, despite adding new
services, and posted its first balanced budget in a decade in FY18. Core operating expense
growth increased at a rate of 1.9%, below the inflation rate for the third straight year.
 Appendix B: Maintaining a priority list of immediate capital needs for the next 5 years
and procurement and implementation plans
The FY20-24 Capital Investment Plan (CIP) continues the MBTA’s focus on core system capital
investments to deliver a safe, reliable, and modern transit system. The overarching goals of
addressing asset condition and modernizing the system by 2032 remain the CIP’s principal focus.
In total, the CIP identifies $9.4 billion in available funding sources and assigns those funds to
three priorities (reliability, modernization, and expansion) and 17 investment programs. The
Authority has laid out an aggressive plan for how to invest available funding while recognizing
the importance of a realistic and feasible set of goals for project delivery and execution. The CIP
allocates funding to high-priority programs and projects based on FMCB-approved program
sizes and anticipated project cash flows. The overall spending target of $8.2 billion over five
years reflects a more gradual ramp-up. This schedule allows for the development of internal and
external delivery capacity.
 Appendix C: Imposing a barrier between the commingling of operating and capital budgets
December 9, 2019
Mr. Joseph Aiello, Chairperson
Financial Management Control Board
Massachusetts Bay Transportation Authority
Ten Park Plaza
Boston, MA 02116
Dear Chairperson Aiello,
The FY 19 Budget (CH 154 of the Acts of 2018) amended the Massachusetts Bay Transportation
Authority (Authority) legislation requiring an itemized budget by further specifying requirements
for expenditures and the classification of any employee on the capital budget. The section
provided that such classification be in accordance with federal funding requirements,
government accounting standards, applicable state finance, and federal laws. The amended
language further requires an annual review by an independent third-party auditor of the
Authority’s practices related to classifying employees on the capital budget. (See attached
outside section 45)
In order to ensure compliance with section 45, we have enhanced procedures related to
classification and review of capital personnel. These procedures included a review in the first
quarter of each capital employee’s wor