BOSTON – Boston commuter-rail riders who blame January’s service delays on snow, ice, gusty winds or arrogant conductors are missing a larger problem that has bogged down America’s oldest transit system for years.
The Massachusetts Bay Transportation Authority, whose railroad moves about 70,000 commuters a day, is in such fiscal disarray that there’s no money to repair or replace aging engines and passenger cars, said Charles Chieppo, a former state policy official. He served on a commission in 2000 that examined the finances of the agency, known locally as the T.
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“It’s like Havana, when you see all those pictures of people driving around in 1957 Chevys,” said Chieppo, 51. “At some point, the 1957 Chevy stops working.”
The more than 6 feet of snow that has fallen on the region since Dec. 1 has stalled locomotives, frozen signals, jammed gate-crossings and more, stranding thousands of riders. The railroad’s performance last month was the worst in three years, with 27 percent of trains arriving late, according to the authority. The T’s biggest problem is debt, Chieppo said.
The authority had $5.3 billion in bonds outstanding as of June, according to a regulatory filing this month. By 2014, annual debt service will increase to more than $500 million, said Jim Stergios, executive director of the Pioneer Institute, a nonprofit research group in Boston. At current ticket prices, that cost will consume more than the revenue the T gets from fares, he said.
Weather No Excuse
After waiting more than 90 minutes in suburban South Attleboro for her train one frigid morning, Patricia Murphy, a legal secretary in Boston, called the T to complain.
“They said they were having a tough winter,” said Murphy, 61. “I told them we’re all having a tough winter. Get your act together.”
About 75 percent of the T’s locomotives and rail cars are near or beyond the 25 years of useful life recommended by manufacturers, said Scott Farmelant, a spokesman for the Massachusetts Bay Commuter Railroad Co., a joint venture that the T hired to run its trains through 2013.
“The weather really revealed the vulnerability of a system that relies on aging locomotives and passenger coaches,” he said.
A 2009 study led by David D’Alessandro, former CEO of John Hancock Financial Services, said the authority needed to spend $694 million in fiscal 2010 just to keep a $3 billion backlog of needed maintenance and equipment replacement from growing.
Operating Loss
In the year ended in June, the T spent $386 million on equipment and infrastructure for its 13 rail lines, with 394 miles (634 kilometers) of track, said Joe Pesaturo, a spokesman. The authority had an operating loss of about $1.15 billion, 7.5 percent bigger than the previous year.
“And we wonder when there’s 3 feet of snow on the ground and its 5 degrees out why everything doesn’t work right,” Chieppo said.
The authority has said it lacks a dedicated revenue source to help pay off its debt, including $3.3 billion that was placed on its books by the state in 2000, when it was reorganized financially. About half of that, $1.8 billion, was related to the so-called Big Dig highway-tunnel project in Boston, the T said in a 2009 report, “Born Broke.”
The authority paid about $434.5 million in debt service last fiscal year, Pesaturo said. Transportation revenue fell 2.1 percent from a year earlier to $439.3 million.
Compared with other cities, Boston’s T pays the biggest portion of its operating revenue in debt service, at 24 percent, according to “Broke.” Citing the National Transit Database, the T said New York City Transit, a Metropolitan Transportation Authority unit, pays 13 percent of revenue toward debt, while the Chicago Transit Authority pays 9.9 percent.
Top-Rated
The T’s debt gets AAA top ratings from Standard & Poor’s, partly on the strength of the regional economy and because of some revenue sources, according to a Nov. 16 report by Robin Prunty and David G. Hitchcock, analysts in New York. A 20-year bond traded to yield 5.76 percent on Feb. 22, or 1.46 percentage points more than Treasury securities of similar maturity, according to a Bloomberg Valuation Index.
Service assessments from 175 Massachusetts cities and towns with 4.66 million residents reached about $150 million in the past fiscal year, according to the T’s annual report. The authority also gets a fixed portion of the state’s sales-tax revenue, which came to about $770 million, the report indicates.
Moody’s Downgrade
“That’s why the bond rating is strong,” Nicole Johnson, a senior analyst at Moody’s Investors Service in New York, said on Feb. 24 in an interview. Moody’s cut its rating on $764 million of T assessment bonds one step to Aa1, the second-highest grade, on Feb. 10, citing a change in its evaluation of the credit of the cities and towns in the service area.
The authority also operates the oldest subway and streetcar system in the U.S., with 64 miles of track and 751 miles of bus and trackless-trolley routes, as well as ferries out of Boston Harbor, according to a 2009 report on its website.
Snowstorms starting Dec. 26 and continuing into early February piled up 72.5 inches (184 centimeters) of snow at Boston’s Logan International Airport since Dec. 1, according to the National Weather Service. That’s about 43 inches more than the city usually gets in an entire winter, while still less than the 1995-1996 record of 107.6 inches.
January’s train delays generated a record 1,300 customer e-mails and telephone calls, Farmelant said. Steps are being taken to improve reliability and communications when trains are running late or not at all, Farmelant and Pesaturo said.
Rene Robillard, 38, a financial software specialist at Investment Technology Group Inc. in Boston who has ridden the rails for 10 years, said he has “zero” confidence in the T’s intentions to improve service. He no longer bothers to venture out to the Mansfield train stop, 35 miles southwest of Boston, when there’s a heavy snowstorm.
“I just stay in and work at home,” he said.
