Massachusetts Bay Transportation Authority
MBTAState of Good Repair Database
Transit Finance Learning Exchange
Jonathan R. DavisDeputy General Manager & Chief Financial Officer
April 7, 2008
Massachusetts Bay Transportation Authority
Background: Assessing the Authority's Transit System
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
Slide 10
MBTA Capital Needs: Tracks
Highland Branch
Before After
Massachusetts Bay Transportation Authority
Slide 11
MBTA Capital Needs: Stations
Boylston Station
After renovation
Massachusetts Bay Transportation Authority
Slide 12
MBTA Capital Needs: Tunnels
New Equipment for Pump Rooms
Before After
Massachusetts Bay Transportation Authority
Slide 13
MBTA Capital Needs: Power
Substation DC Breakers
Before After
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
Defining the Issue: Developing the State of Good Repair Model
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
Implementation: Designing the State of Good Repair Database
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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SGR Main Menu Example
Massachusetts Bay Transportation Authority
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State of Good Repair Input Variables
Massachusetts Bay Transportation Authority
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State of Good Repair Database — Assets Table
Stores information about all key MBTA assets Vehicles Facilities Systems
Massachusetts Bay Transportation Authority
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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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
Using the State of Good Repair Database as a Management Tool
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
Slide 32
The MBTA Has Used the SGR Database in Several Contexts
Internal management
Discussions with policy Makers
Planning and analyses
Massachusetts Bay Transportation Authority
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?
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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
Massachusetts Bay Transportation Authority
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