Feds take rare step of ordering MBTA to improve safety, stop prioritizing projects

The Federal Transit Authority released a report Wednesday reprimanding the Massachusetts Bay Transportation Authority for favoring its capital program over safety, which it did in part by transferring $500 million into its capital budget from its general fund.

The FTA ordered the MBTA and its state oversight agency, the Department of Public Utilities, to immediately take action to improve safety across the system.

“There have been decisions made along the line over the years that have prioritized things other than safety, and our goal is to stop that,” Paul Kincaid, an FTA administrator, said Wednesday during a call with reporters. “This is an opportunity for them to begin creating a safety culture.”

The FTA launched a safety management inspection in April amid what it called the MBTA’s “compromised” culture of safety after a series of high-profile accidents.

It’s only the second time the FTA has targeted a specific agency after its 2015 quasi-takeover of the Washington Metropolitan Area Transit Authority.

The 90-page report orders the MBTA to carry out 53 special directives that focus on four areas: workforce shortages, safety management information, effective safety communication and operating conditions and training. The directives require the agency to take immediate action on the issue within a set period of time.

Prioritizing projects over daily operations is a key problem, the feds said.

“MBTA’s leadership is focused on using longer-term capital projects to ‘build the agency’ out of many of the challenges of a legacy system,” the report said. But “key elements of this approach are significantly impacting preventive maintenance inspections and repairs for the aging system, exacerbating the deterioration of aging infrastructure and assets that are not the focus of the capital program.”

In January 2022, the MBTA leadership team and board “took the unprecedented step of transferring an additional $500 million from the MBTA’s operating budget to the capital budget,” the report said.

In the press call, Kincaid said moving the funds was “not advisable.” He added that “there’s not really a way for us to involve punitive actions toward the personnel at the MTBA,” which is the job of the state’s DPU, which the FTA criticized for not fulfilling its oversight role.

The report also warned that the MBTA “lacks resources to adequately manage its $2 billion capital program and complete capital projects on time and without need for retrofits and workarounds.”

The nation’s oldest and fifth largest transit system, the MBTA operates subway, trolleys, bus and commuter rail service in eastern Massachusetts. It borrows under a number of credits, but its chief credit is a AA-rated senior sales tax bond that’s backed by a statewide tax.

The agency had $5.3 billion of bonds and $5.1 billion of notes outstanding as of June 30, 2021, according to its 2021 financial statement.

Its capital improvement plan has doubled since fiscal 2018, rising to $2 billion from $875 billion, the FTA said.

To finance the program, it expects to rely on new-money borrowing of nearly $600 million from fiscal years 2022-2026 and $500 million a year from 2027-2031, according to S&P Global Ratings.

The MBTA historically has used a rolling five-year CIP, which totaled $8.2 billion for 2020-2024, S&P said. “However, due to disruption caused by the pandemic, the MBTA operated under a one-year CIP in fiscal 2021 and is expected to do so again for fiscal 2022,” S&P said in a March 2021 report.

Like other transit agencies, the MBTA has had a tough time hiring enough staff. The FTA is aware of the problem, Kincaid said, and is working “with the MBTA and all of our partner agencies to help them staff up and help them live up to the promise made under the infrastructure law.”

Massachusetts U.S. Rep. Seth Moulton told a Boston radio station Wednesday that the agency needs a leadership change.

“We need to bring in some professionals who know how to run transit systems,” he said.

Immediately after the FTA’s report, the MBTA announced it had created a new office to address the FTA’s findings that will be headed by the agency’s current Chief of Capital Delivery.

“The MBTA’s number one priority remains safety for both our riders and our employees. We are grateful to the FTA for their recommendations as we build on numerous actions and initiatives already in place across the organization to strengthen our safety management,” said General Manager Steve Poftak in a statement.

Gov. Charlie Baker announced he would file a supplemental budget making $200 million available to the MBTA to address safety requirements and $10 million to help it staff up.

“I appreciate the FTA’s thorough review of the MBTA, and this report will make the system safer and more reliable for riders and the T workforce,” Baker said in a statement.