Draft for Discussion & Policy Purposes Only
ACEC/MA State Markets Conference
April 6, 2017
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Governor’s Special Panel On MBTA – April 2015 Findings
ACEC/MA State Markets Conference 2017
Unsustainable Operating Budget
Flawed Contracting Processes
Lack of Accountability
Chronic Capital Underinvestment
Bottlenecked Project Delivery
Ineffective Workplace Practices
Organizational Instability
Shortsighted Expansion Program
Lack of Customer Focus
3
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Winter Storm NIKO (Feb 9):New Gas Heating System for 50+ Priority Rails Kept Switches Functioning
ACEC/MA State Markets Conference 2017
Old Electric Heating New Gas Heating
• New gas heaters blow warm air continuously keeping switches clear
• Older electric heaters take longer to heat up and allow snow and ice to accumulate
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Winter Storm NIKO (Feb 9): Snow Fighting Equipment (Snowzillas) Running on Red and Orange Line
ACEC/MA State Markets Conference 2017
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Winter Storm STELLA (March 14): MassDOT and MBTA represented at MEMA bunker during winter events
ACEC/MA State Markets Conference 2017
• During storms / special events, MEMA State EOC is activated with state agency liaisons and utilities
• MassDOT and MBTA are represented “Emergency Support Function (ESF) 1 - Transportation”
• During Winter Storm STELLA, National Grid power outage disabled Orange Line signals from Malden to Assembly
• ESF1 desk worked with National Grid to prioritize impact circuits and restored power in less than1 hour (from original estimate of 9 hours)
MEMA
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The fiscal challenge: Operating expenses not controlled Costs rose 10x as quickly as ridership
ACEC/MA State Markets Conference 2017
0
500
1,000
1,500
$2,000M
0
500
1,000
1,500M
355 364 389 389 390 395 380 358 371 367 356 381 402 395 409 385
711 737 773 801 836 888 938 980 1,0381,138 1,177 1,220
1,293 1,329
Annual Unlinked TripsOperating
Expenses
1,4301,509
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
-0.9% -3.0% 6.9% 5.5% -1.6% 3.5% -5.9%2.7% 6.8% -0.1% 0.3% 1.3% -3.7% -6.0% 3.7%Unlinked Trips Growth Rate
9.7% 3.4% 3.7% 6.0% 2.8% 7.6% 5.5%3.7% 4.9% 3.6% 4.4% 6.2% 5.6% 4.6% 5.8%Opex Growth Rate
Operating Expense Annual Growth Rate FY00-FY15: 5%
Ridership Annual Unlinked TripsAnnual Growth FY00-FY15: 0.5%
Expenses Ridership
NOTE: FY14 and FY15 unlinked trip are internal MBTA figures and subject to revision.
MBTA increased operating expenses by $470M between FY08 and FY15
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With expenses growing 3x faster than dedicated revenues, operating deficit was forecast to reach $400M by FY20
ACEC/MA State Markets Conference 2017
1,500
2,000
$2,500M
2,021
2,135
2,250
2,3402,402
FY16B FY17P FY18P FY19P FY20P
1.6%
4.4%
CAGR (%)
1,8511,893 1,915
1,949 1,975
-$170M -$242M -$335M -$391M -$427MStructural Deficit
Includes Debt Service
Total RevenueTotal Expenses including Employee Transfer
STATUS QUO FY17:20 PRO FORMAJuly 2015
Projected Structural Deficit
Note: Structural deficit includes debt service and transferred capital employees annual expense, does not include Additional Assistance
FY18P:$335M
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FMCB Goal: Deliver a Balanced MBTA Operating Budget
Under Section 203 of Chapter 46 of the Acts of2015, the FMCB may:
“Establish 1- and 5-year operating budgets,beginning in fiscal year 2017, which are balancedprimarily through a combination of internal costcontrols and increased own-source revenues”
ACEC/MA State Markets Conference 2017
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Putting MBTA on path to fiscal sustainabilityManagement Actions – FMCB first 18 months
ACEC/MA State Markets Conference 2017
Introduced monthly financial targets and manager accountability
Moved MBTA onto statewide contracts and payroll system
Streamlined corporate HQ/admin positions with 30% reduction
Strengthened and enforced overtime and attendance policies
Modernized cash-handling & warehouse through contracting
Restructured Carmen’s Union contract work-rules and wage rates
Launched Uber/Lyft and Taxi paratransit pilots
Restructured and refinanced debt portfolio; locked electricity rates
Rebid parking/advertising and raised system-wide fares
$100M invested in winter resiliency / $140M in capital lock-box
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-1.0%
1.0%
3.0%
5.0%
7.0%
9.0%
10.0%
FY0
0
2.4%
FY0
1
3.7%
FY0
2
FY0
3
3.6%
FY0
4
FY0
56.2%
FY0
65.6%
FY0
7
FY0
8
5.8%
FY0
9
9.7%
FY1
0
3.4%
FY1
1
3.7%
FY1
2
6.0%
FY1
3
2.8%
FY1
4
7.6%
FY1
5
5.5%
FY1
6
-0.3%
FY1
7P
Annual operating expense growth rate
(excluding debt)
4.9%4.4% 4.6%
0.0%
Early results positive:Operating expenses growth lowest in 15 years
ACEC/MA State Markets Conference 2017
Note: For comparative purposes, FY17 core operating expenses do not include new Amtrak/PRIAA expenses or capital employees transferred in FY17Note: Energy costs forecast to be $8M less in FY17 than in FY16
FY00 – FY15 Average: 5%
Incremental operating expense FY08 – FY15: $471M
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Early results positive:FY17 projected operating deficit reduced to $50M
ACEC/MA State Markets Conference 2017
0
100
200
300
400
$500M
Structural deficit
$119M$101M
$170M
$335M
$391M$427M
FY14 FY15 FY16 FY17E FY18E FY19E FY20E
FY17 Budget Recast (Feb 2017)$50M$86M
FY17 Status Quo Pro-Forma
$242M
Source: MBTA management in process of recasting FY18-FY20. Operating Deficit does not include additional state assistance of $155M in FY16 or $187M FY17 (forecast)
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FY2018 House 1 Budget: MBTA to receive $187M in additional state assistance ($127M operating / $60M capital)
ACEC/MA State Markets Conference 2017
0
50
100
150
$200M
Additional State
Assistance
FY2016
Actual
Operating
$156M
$187M
FY2018
H1 Budget
$127M
$60M
$187M
Capital
$31M
• Governor’s budget recommends MBTA receive $187M in additional state assistance in FY18
• $187M matches the total commitment in FY16 and FY17
• MBTA will receive the $187M in two segments:
• $127M in direct assistance for the operating budget
• $60M for FY18 state capital budget for the Capital Maintenance Lock Box
• MBTA management believes the $127M in operating fund assistance will be sufficient to cover any operating budget deficit in FY18
• Management plans to use a portion of those operating funds for capital projects as the MBTA’s fiscal outlook continues to improve
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MBTA Has Under Invested in State of Good Repair (SGR)
0
200
400
600
$800M
SGR Average $441M
(FY11-FY16)
FY11
$373M
FY12
$366M
FY13
$414M
$493M
FY14
$469M
$631M
FY15
$522M
$748M
FY16
$502M
$743M
FY17
(Projected)
$675M
$775M
51% 46% 62% 47% 58% 71%% of Capital
Plan Achieved
SGR Average $441M
(FY11-FY16)
$398M $408M
SGRExpansion
MBTA Capital Spending$765M annual SGR investment required
to eliminate $7B backlog in 25yrs
ACEC/MA State Markets Conference 2017
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MBTA Capital Spending by Priority
ACEC/MA State Markets Conference 2017
FY17-FY21
($millions) FY17-FY21 CIP
Reliability $3,883.3
Modernization $1,112.5
Expansion $1,508.8
Total $6,506.6
SGR = $4,995.8M (Reliability + Modernization)
Expansion $1,509M
Modernization$1,113M Reliability
$3,883M
Reliability Modernization Expansion
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5YR Capital Plan doubles investment in track, power, signals and vehicles
0
500
1,000
1,500
$2,000M
FY2012 - 2016
$485M
FY2017 - 2021
$1,080M
0
500
1,000
1,500
$2,000M
FY2012 - 2016
$665M
FY2017 - 2021
$1,605M
Track, power, and signals spending Revenue vehicle spending
+123%
+141%
Source: DOT and MBTA internal estimates of available sources and applicable uses; Division initial estimates of program sizes
ACEC/MA State Markets Conference 2017
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Full Red Line fleet replacement positions the MBTA for long-term success
ACEC/MA State Markets Conference 2017
0
100
200
300
Cars
Red Line Fleet
CRRC Procurement
Initial Car
Procurement
Arrival
2019 - 2020
132 Cars
Additional Car
Procurement
Arrival
2021-2022
120 Cars
Total Red
Line Fleet
Full Fleet
Replacement
2022
14 Optional Cars
266 CarsRed Line Subway Car
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Increase SGR Construction Contract Awards
ACEC/MA State Markets Conference 2017
Low contract awards over past 36 months are now impacting current spend
0
100
200
300
400
$500M
Dollar Value of Contracts ($M)
FY 2012
$154M
FY 2013
$213M
FY 2014
$74M
FY 2015
$75M
FY 2016
$110M
FY 2017(Projected)
$111M
$300M
FY 2018(Projected)
$450M
ContractsAwarded (Actual)
ContractsAwarded(Projected)
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Upcoming Construction Contract Awards
ACEC/MA State Markets Conference 2017
Project Engineer’s Estimate Projected Adv. Date Projected Bid Date Projected NTP
Alewife Replacement Elevators $5.4M 1/19/17 (Actual) 2/22/17 (Actual) April 2017
Bridge Repairs Contract $10.0M 2/16/17 (Actual) 3/16/17 (Actual) April 2017
Shawsheen River Bridge $2.0M 3/10/17 (Actual) April 2017 June 2017
Orange Line Test Track at Wellington Yard $5.0M 3/24/17 (Actual) April 2017 June 2017
Wellington Maintenance Facility $82.5M 3/23/17 (Actual) April 2017 June 2017
Central Square and Harvard Station Elevators $8.0M 3/24/17 (Actual) April 2017 June 2017
45 High St. IT Data Center $6.7M 3/30/17 (Actual) April 2017 June 2017
Pawtucket Layover Facility Upgrades $3.2M 3/31/17 (Actual) April 2017 June 2017
Neponset River Bridge $5.0M April 2017 May 2017 July 2017
East Street Bridge $17.2M April 2017 May 2017 July 2017
Wollaston Station Improvements & Quincy Garage Demolition $63.1M April 2017 May 2017 July 2017
South Shore Garages $73.0M April 2017 May 2017 July 2017
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Upcoming Construction Contract Awards (2)
ACEC/MA State Markets Conference 2017
Project Engineer’s Estimate Projected Adv. Date Projected Bid Date Projected NTP
Parking & Paving On-Call $30.0M April 2017 May 2017 July 2017
Ruggles Station Improvements $22.0M April 2017 May 2017 July 2017
Charlestown Bus – Alford Street Seawall Rehab $40.0M April 2017 May 2017 July 2017
Gloucester Drawbridge $50.0M May 2017 June 2017 August 2017
Red Line Test Track $26.0M May 2017 June 2017 August 2017
Transit Tie Replacement On-Call $15.0M May 2017 June 2017 August 2017
Orange Line Direct Fixation – SW Corridor $15.0M May 2017 June 2017 August 2017
Green Line Grade Crossing $15.0M May 2017 June 2017 August 2017
Commuter Rail Track, Ties, and Switches On-Call $30.0M May 2017 June 2017 August 2017
Commuter Rail Culverts, Bridges, and ROW On-Call $20.0M May 2017 June 2017 August 2017
Orange Line Tunnel Repairs $40.0M June 2017 July 2017 September 2017
Facilities On-Call – Contract 2 $15.0M July 2017 August 2017 October 2017
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Upcoming Construction Contract Awards (3)
ACEC/MA State Markets Conference 2017
Project Engineer’s Estimate Projected Adv. Date Projected Bid Date Projected NTP
Silver Line Gateway Phase II $22.5M August 2017 September 2017 November 2017
Trackless Trolley – Cambridge, Watertown, Belmont $35.0M October 2017 November 2017 January 2018
Fenway Portal Flood Protection $22.0M October 2017 November 2017 January 2018
Wellington Yard Zones A-B $35.0M October 2017 November 2017 January 2018
Cabot Yard Zones A-C $40.0M October 2017 November 2017 January 2018
Cabot Maintenance Facility $67.0M December 2017 January 2018 March 2018
Iron Horse Park North Side Operations Center $15.0M January 2018 February 2018 April 2018
Winchester Station Improvements $25.0M February 2018 March 2018 May 2018
North Station Terminal Signal Improvements $25.0M March 2018 April 2018 June 2018
Wellington Yard State of Good Repair $120.0M TBD TBD TBD
Cabot Yard State of Good Repair $135.0M TBD TBD TBD
Red Line / Orange Line Remaining Signal Upgrades $80.0M TBD TBD TBD
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Ongoing and Anticipated Design-Build Procurements
ACEC/MA State Markets Conference 2017
Project Engineer’s Estimate RFLOI RFQ Selection NTP
AFC 2.0 Installation $49.0M 11/15/16 12/22/16 August 2017 November 2017
Red Line / Orange Line Signal Upgrades $185.0M 2/24/17 April 2017 November 2017 December 2017
Bridge Bundling (6 Bridges) $100.0M May 2017 June 2017 February 2018 April 2018
Draw 1 Bridge Replacement $100.0M TBD TBD TBD TBD
Green Line Signal Upgrades $100.0M TBD TBD TBD TBD
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Ongoing and Anticipated Consultant Procurements
ACEC/MA State Markets Conference 2017
Project Estimated Value Projected Adv. Date
On-Call Project Development and Design Review Services (3) $3M February 2017
On-Call Cost Estimating and Scheduling Services (3) $1M February 2017
On-Call Climate Change Resiliency GEC (3) $1M March 2017
On-Call Program Management / Construction Management GEC (3) $15M March 2017
On-Call CM Support for Resident Engineering, Inspection, & Construction Phase Services (5) $3M April 2017
On-Call Transit Oriented Development (TOD) Services (3) $2M April 2017
On-Call Garages /Parking GEC (3) $5M April 2017
On-Call Safety Department GEC (3) $3M April 2017
On-Call Stations / Facilities GEC (3) $5M May 2017
Green Line Stations Improvements PM/CM TBD May 2017
On-Call Infrastructure / ROW Transit & Commuter Rail GEC (3) $5M May 2017
On-Call Audit Services for Capital Delivery Contracts (4) $2M May 2017
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Ongoing and Anticipated Consultant Procurements (2)
ACEC/MA State Markets Conference 2017
Project Estimated Value Projected Adv. Date
On-Call Owner's Representative GEC (3) $3M June 2017
Longfellow Approach and MGH Station Upgrades TBD June 2017
On-Call Tunnel Inspection/Repairs Services (3) $5M June 2017
On-Call Bridges/Tunnels GEC (3) $5M September 2017
On-Call Vertical Transportation Elevator Phase II (3) $10M September 2017
Symphony Improvements 30% Design - CPS TBD September 2017
Forest Hill Station Accessibility Improvements Design and Construction Phase Services $5M October 2017
On-Call Bridge Inspection / Rating / Repairs (5) $5M October 2017
Red Line / Orange Line Connection at Downtown Crossing (Full Station Upgrade) $10M November 2017
Lynn Garage Improvements Design and Construction Phase Services TBD TBD
Alewife Garage Improvements Design and Costruction Phase Services TBD TBD
Boylston Station Improvements Design and Construction Phase Services TBD TBD
Green Line Signal Upgrades Program Management/Construction Management Services TBD TBD
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