Massachusetts Bay Transportation Authority MBTA State of Good Repair Database Transit Finance...

Massachusetts Bay Transportation Authority

MBTAState of Good Repair Database

Transit Finance Learning Exchange

Jonathan R. DavisDeputy General Manager & Chief Financial Officer

April 7, 2008


Background: Assessing the Authority's Transit System


Slide 3

MBTA Profile

The oldest subway system in the United States – 1897

5th largest transit property

Multimodal public authority

175 communities and 4.5 million people served

1.1 million passengers per day

55% of all work trips to Boston are made on the MBTA

60% of the commuters traveling to Boston’s financial district ride the MBTA


Slide 4

2002 – Massachusetts Taxpayers Foundation

Elimination of unlimited state subsidies under forward funding changes the way Capital projects are evaluated

Debt burden limits the ability of MBTA to fund Capital program

Reliance on debt financing and limited “paygo” capital adds to the debt burden

Capital needs of antiquated system are growing faster than revenues

Maintenance and modernization of the current system must be the top priority


Slide 5

2003 – Capital Spending and Infrastructure Report

MBTA must operate within well defined limits to fund the capital program

State of Good Repair (SGR) study assessed the condition of MBTA’s capital assets

SGR Database provides a uniform and equitable system for identifying and prioritizing capital Needs

Assets within their useful life are in a State of Good Repair

Backlog of capital investments needed to achieve SGR estimated at $2.7 billion


Slide 6

2007 – Transportation Finance Commission Findings

The MBTA has a capital backlog of $2.7 billion for rehabilitation (excluding expansions)

Spending $470 million per year will keep the system in its current state but will not allow a reduction in the $2.7 billion backlog

In order to eliminate this capital backlog within the next 20 years, the MBTA needs to spend $620 million or more per year

These maintenance needs do not go away; they just become more expensive


Slide 7

Capital Investment Program (CIP)

Rolling 5-year capital program

Implements the 25-year Program for Mass Transportation

Which is not financially constrained

The CIP is financially constrained

The Draft CIP includes the current fiscal year (FY 2007)

Includes $470 million per year in State of Good Repair investments


Slide 8

Capital Investment Program Statutorily Mandated Criteria

Effectiveness of the State’s transportation system

Service quality

Environment

Health and safety

Operating costs

State of Good Repair

Debt Service


Slide 9

The MBTA’s infrastructure is extensive and has The MBTA’s infrastructure is extensive and has majormajor capital needs. capital needs.

What does the Capital Program Invest in?

275 Stations

476 Bridges 20 Miles of Tunnels 19 Maintenance Shops

885 Miles of TrackOver 2,500 Revenue Vehicles


Slide 10

MBTA Capital Needs: Tracks

Highland Branch

Before After


Slide 11

MBTA Capital Needs: Stations

Boylston Station

After renovation


Slide 12

MBTA Capital Needs: Tunnels

New Equipment for Pump Rooms

Before After


Slide 13

MBTA Capital Needs: Power

Substation DC Breakers

Before After


Slide 14

Revenue

Vehicles

32%

Signals and

Power

21%

Track

18%

Shops and

Facilities

9%

Bridges

7%

Stations

6%

Other

7%

MBTA Asset 20-Year Replacement Cost - By Asset Type

The required infrastructure investment far surpasses the Authority's The required infrastructure investment far surpasses the Authority's financial resourcesfinancial resources

Total 20-Year Replacement

Cost: $12.4 billion


Defining the Issue: Developing the State of Good Repair Model


Slide 16

State of Good Repair (SGR) Initiative“Fix It First” strategy

Assessed current state of capital assets

System to identify and prioritize capital renewal and replacement needs

Estimated backlog ~ $2.7 billion

Annual capital spending of $620 million needed to eliminate the backlog in 20 years

SGR investment rate

Approximately 94% of FY08 – FY13 Capital Investment Program

MBTA Vehicle Miles and Capital Expenditures


Slide 17

What is the State of Good Repair?

State-of-Good Repair — Replace and Renew assets when needed

Assets are renewed at critical midlife points Engine replacements, bridge re-deckings, roof replacements

Assets are replaced at the end of their useful lives Buses 15 years Rail cars 35 years Bridges 50 years


Slide 18

State of Good Repair Defined

State of Good Repair: The ideal operating condition

A “perfect” capital replacement policy

All assets within their service life

All assets beyond their service life

SGR


Implementation: Designing the State of Good Repair Database


Slide 20

State of Good Repair (SGR) Database Two Project Objectives

Demonstrate ongoing funding needs and consequences Engineering assessment of current assets

Develop long range capital planning model Project programming under constrained funding


Slide 21

What is the SGR Database?

It is a tool to assist the MBTA in identifying and prioritizing renewal and replacement actions needed to bring and sustain existing capital assets to a state of good repair

Front-end Microsoft Access driven application

Analyzes more than 2,400 individual capital asset records


Slide 22

SGR Database Main Functions

Organize, store and facilitate various types of queries of the capital asset information

Identify asset renewal and replacement activities and cost necessary to bring and maintain the MBTA system to a state of good repair

Score and rank candidate actions subject to MBTA capital budget criteria

Create, analyze and compare capital budget and related policy (e.g., asset useful lives, renewal cycles, capital budget allocation priorities) scenarios


Slide 23

SGR Database (Model) Requirements

Focus on high-cost MBTA assets Not a maintenance

database of all assetsRequires periodic data updates Not a static database Staff and resources

required Support objective analysis Uniform criteria and process Reports consequences

Run scenarios in reasonable time frame Less than 5 minutes


Slide 24

SGR Programming Process is Sequential (Year-by-Year)

Identify candidate projects Actions come due Delayed projects from prior years

Score and rank projects

Fund projects in rank order until Cost of project is greater than the funds remaining

Mark unfunded projects as candidates for next year

Carryover remaining funds to next year


Slide 25

SGR Main Menu Example


Slide 26

State of Good Repair Input Variables


Slide 27

State of Good Repair Database — Assets Table

Stores information about all key MBTA assets Vehicles Facilities Systems


Slide 28

Asset Table Attributes

“Condition” Measures Age Life

Project “Action” Costs Replacement/Renewal Contingency Factors Cash flow years

Ranking Measures Condition measures Operational importance Affected ridership


Slide 29

Scoring Project Candidates

Default Weighting

Age60%

Operations Impact20%

Cost effective

20%

Age Age as % of

Service Life

Operational Impact Yes/No Selected assets are

essential to system operations

Cost-Effectiveness Cost of

Action/Ridership Reflects customer

service impacts


Using the State of Good Repair Database as a Management Tool


Slide 31

Funding the Backlog of Infrastructure Investment

Current State of Good Repair backlog – $2.7 billion*

Chart 1 – Investing $410 million per year increases backlog to $4 billion in 2024

Chart 2 – Investing $470 million annually maintains the backlog at $2.7 billion

Chart 3 – An investment of $620 million per year is necessary to eliminate the backlog by 2024

*Analysis performed in 2006


Slide 32

The MBTA Has Used the SGR Database in Several Contexts

Internal management

Discussions with policy Makers

Planning and analyses


Slide 33

Internal Management Uses

Implications of Current Investment Patterns Where are we headed ?

MBTA SGR Goal SettingWhere would we like to go?

Yard Stick to Measure Progress Towards SGR Are we getting closer to our goals?


Slide 34

External Uses: Discussions with Policy Makers “SGR Database as the Bully Pulpit”

Briefing the Board of Directors and Secretary of Transportation

Informed funding discussions with the state legislature and Governor’s office

Emphasizing the need for state of good repair investments with customers and other stakeholders


Slide 35

Other Potential SGR Enhancements and Licensing

The Authority is currently upgrading and increasing the functionality of the State of Good Repair Database Updated cost drivers Ability to calculate the impact of State of Good Repair

investments on the operating budget

MBTA has begun to look at the possibility of licensing the State of Good Repair Database Applicability to many infrastructure intensive government agencies


Slide 36

State of Good Repair Conclusion

No transit system can meet the “ideal” system condition

We can better understand the capital investment needs of our organization

We can optimize our investments

We can make more effective and informed decisions

Massachusetts Bay Transportation Authority MBTA State of Good Repair Database Transit Finance...

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