MINUTES
MassDOT BOARD MEETING OF JUNE 9, 2015
At the call of the Chair, a Meeting of the Board of Directors of the
Massachusetts
Department
of
Transportation
was
held
at
the
State
Transportation Building, MassDOT Boardroom, Suite 3830, Boston, MA.
Those present were: Misses Bonsignore, Secretary Pollack, Taylor, and
Messrs. Blue, Lang, Moylan and Poftak being the Board of Directors of the
Massachusetts Department of Transportation.
Also present were Frank DePaola, Interim General Manager, Tom Tinlin,
Acting
Highway
Administrator,
Christopher
Willenborg,
Aeronautics
Administrator, Erin Devaney, Registrar of Motor Vehicles, Astrid Glynn, Rail and
Transit Administrator, Dana Levenson, Chief Financial Officer-MassDOT;
Jonathan Davis, Chief Financial Officer-MBTA; Owen Kane, Senior Counsel to
the Board, Joe Pesaturo, Michael Verseckes and Paula Fallon.
The Chair, Ms. Bonsignore, presided.
Chair Bonsignore called the Open Meeting to Order and presented the
order of business.
Leading the Nation in Transportation Excellence
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www.mass.gov/massdot
Chair Bonsignore opened up public comment period.
The first speaker was Louis Baxter from TRU. Ms. Baxter is happy about
the investment the Governor wants to put into the MBTA. She would like to make
sure it will not be paid for on the backs of the riders.
The next speaker was Rich Salvatore. Mr. Salvatore rides the MBTA
everyday and he would like to encourage the Board to do the same so they can
experience the MBTA. He also made a comment regarding the Public Private
Partnership Commission (PPP) and how he would like to see more transparency.
The next speaker was Tara Doucette, Lead Counsel for Greater Boston
Legal Services. Ms. Doucette works with the MBTA and System Wide
Accessibility. She noted they have a great relationship and they would like to
continue the progress of updating accessibility on the MBTA to one day have a
20 year CIP that includes 100% accessibility for the MBTA.
The next speaker was Tom Gilbert, Plaintiff for the BCIL lawsuit. Mr.
Gilbert wants to share how important it is to have system wide accessibility on all
modes and he looks forward to working with the new Board.
The next speaker was Andrew Forman, Senior Disability Advocate from
BCIL. Mr. Forman currently has a great working relationship with the MBTA and
is looking forward to working with the new Board noting there still is a lot of work
to do.
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The next two speakers were Kyle Dexter and Bruce Bolduc. Mr. Dexter
from Local 25 and Mr. Bolduc from Local 42 in Lynn would like the Board to take
a look at the interpretation of the MassDOT rule for physicals that are required for
drivers. The new rule has resulted in 13 long time drivers losing their jobs when
the people that have lost their jobs don’t need to pass the physical tests for the
current certain types of vehicles they are driving.
Chair Bonsignore closed public comment period.
Next was approval of the minutes for May 13, 2015. The Chair asked the
minutes include the discussion of the OPED liability.
On motion duly made and second, it was;
VOTED: to approve the minutes of May 13, 2015 as amended.
Next the Chair took up the governance structure of the Board. The Chair
handed a draft list for the Board to read on the nominations on positions.
On motion duly made and seconded, it was voted;
VOTED: To appoint Steven Poftak as Vice Chair of the MassDOT
Board of Directors for a term of one year.
On motion duly made and seconded, it was voted;
VOTED: to appoint Betsy Taylor as Treasurer to the MassDOT Board
of Directors for a term of two years.
On motion duly made and seconded, it was voted;
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VOTED: to appoint Robert Moylan as Secretary to the MassDOT
Board for a term of two years.
Next the Board discussed the three Committees, the Finance and Audit
Committee, Compensation and Labor and Capital Program Committee. The
Finance and Audit Committee members will be Betsy Taylor as Chair, Dominic
Blue and Steven Poftak. The next committee is the Compensation and Labor
Committee the members are Dominic Blue as Chair, Brian Lang and Robert
Moylan. The Capital Program Committee, created to look at projects long range,
will be Robert Moylan as Chair, Steven Poftak and Ruth Bonsignore. It was
discussed if there was a vote needed to create the new Committee. Owen Kane
answered that it was not needed because it is included in the bylaws that
committees can be made by Chair and or the Secretary.
Next the Board discussed the By-Laws. Owen Kane noted that the draft
bylaws deal with MassDOT only and with the uncertainty of the legislation
passing soon, he recommended that they defer the adoption of bylaws for a
couple of months until the legislation passes. The Board agreed to defer the item.
Next Secretary Pollack gave opening remarks to the new board. She
began her report discussing the Capital Investment Plan discussion that will be
taking place at the meeting. The plans are available on the MassDOT and MBTA
websites for public review, and MassDOT will be in Amherst on Monday evening
to kick off a series of 10 public meetings. Both capital plans, which they will
discuss later in greater detail, include lists of statewide investments for each
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operating division. In both cases, the plans help to move MassDOT toward the
goal of a statewide, sustainable, and strategic transportation system.
At a total of more than $3 billion, the investments made by MassDOT and
the MBTA over the upcoming fiscal year will continue to improve state highway
infrastructure;
provide
local
aid
for
municipal
roadways;
support
the
Commonwealth’s general use airports; continue the modernization of the RMV’s
out-of-date licensing and registration database; and make critical upgrades to
track, switch, and signal systems on the MBTA system that were so desperately
needed this past winter (along with many other things). The capital plans are
one-year update plans. They expect to release full five-year capital plans by the
end of this calendar year, and will base those plans on a new system of
evaluating and prioritizing capital projects. The fact is, past capital plans have
sometimes been ‘wish lists’ of projects that exceed available funds and, in many
cases, lack a cohesive vision for our statewide transportation network. This new
system, which is in the final stages of development by the Project Selection
Advisory Council, will use objective criteria for scoring projects based on
established criteria and then rank them in order of priority for funding. The results
will be a roadmap for future capital expenditures – driven by data, regionally
equitable, and using scoring criteria that allow projects such as multi-use paths to
compete on a level playing-field with other more major infrastructure
improvements. This means they are moving forward with the extension of the
Green Line to Somerville and Medford; they are committed to installing Positive
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Train Control technology; still moving forward with new Red and Orange line
vehicles; but also pivoting toward a new way of thinking about capital
investments, by using new methodology that wisely spends precious capital
dollars on the core needs of our system, across all modes and regions. On the
same subject of capital spending, Baker and General Manager DePaola
announced the details of the T’s Winter Resiliency Plan. The $82 million plan will
make investments in key areas of infrastructure, vehicles and equipment, and
operations. Work is set to get under way by the end of June to start replacement
of third-rail heaters on the most vulnerable segments of the Red and Orange
lines. The plan will also restore and repair existing snow-fighting tools, as well as
start the procurement for additional equipment, and will also support the T’s
operations by setting aside approximately $11 million for contractor assistance to
support the T’s resources to clear snow and ice from bus stops, train stations,
and along the rail right-of-way. This plan will be funded through a combination of
capital
and
operating
dollars.
The
Secretary
ended
with
personnel
announcements. She announced Jeffrey D. Gonneville as Acting Chief Operating
Officer for the MBTA, Astrid C. Glynn as Rail and Transit Administrator, and
Gerard J. Polcari as Chief Procurement Officer.
Next Administrator Tinlin gave a presentation on structurally deficient
bridges and the Tobin Bridge fine line structure. He began with the Accelerated
Bridge Overview (ACB). The 8-year, $3 billion program Legislation was signed in
August 2008 and all projects must be advertised by September 2016.There are
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currently 98% contracts advertised (197/201), 84% contracts complete/beneficial
use and 270 bridges repaired or replaced. Mr. Tinlin discussed the areas where
there are structurally deficient bridges, projects that don’t qualify and the jobs that
were created by this ABP program. The next steps are to review the successes of
the program, lessons learned from Design Build and incorporating these practices
into day-to-day operations. Next Mr. Tinlin presented the Tobin Bridge Toll Fine
update. Before drivers were billed through pay-by-plate system and a bill was
mailed to address of the registration holder. After 60 days of non-payment a $50
fee was attached and after 120 days, the fine increased by $40 to $90. The
Amnesty Program is a 30 day window (6/1 – 6/30) where all fines are waived,
drivers must pay tolls in full and it waives any fines accrued including the $20 fee
on license/registration holds at RMV. The new fee structure is the first 1-30 days
you pay the Toll only, 31-60 days you pay the Toll plus $1, 61-90 days the price
is the Toll plus $2 and 91days plus you pay Toll plus $3 + $20 RMV fee. The
maximum is $500 in fines annually (plus tolls) and $20 RMV fee. MassDOT is
working with local media to get the information out and to increase awareness.
The Secretary discussed how the ABP program helped reduce a number of
structurally deficient bridges. The Board asked what staff was doing in regard to
implementing innovative processes besides design build. Mr. Tinlin responded
that they are using what they have learned, noting you can’t be too aggressive.
They are utilizing programs like incentive/disincentive clauses and closing down
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roads for a short period of time to get more done instead of trying to do it all while
it is open.
Next Registrar Erin Deveney gave her report. She update the Board on
the RMV’s efforts to improve its delivery of customer service by focusing on the
following key areas the customers want improved: Wait times, alternative service
options, and technical improvements aimed at increased service and efficiencies.
In May 2015, 276,164 customers appeared at RMV branches, which was a 10%
decrease from the 305,864 customers that appeared at branches in May 2014.
269,079 customers were served (had a transaction completed) last month, which
was a 7% decrease from the 289,599 customers served in May 2014. The
statewide average wait time for May 2015 was 28 minutes, 34 seconds. The
statewide average wait time for May 2014 was 32 minutes, 4 seconds. Tier 1
branches (12K+ customers served; average wait time goal of 25 minutes).For the
month of May 2015, Tier 1 branches served 118,012 customers with an average
wait of 30:55. The Wilmington branch met the goal for the month with an average
wait time of 24:13. Tier 2 branches (7K-12K customers; average wait time goal of
20 minutes). For the month of May 2015, Tier 2 branches served 105,842
customers with an average wait of 35:53. Our Fall River branch met the target
goal for the month with an average wait of 19:27. Fall River also was the only
Tier 2 branch to meet its goal for April 2015. Tier 3 branches (7K customers or
less; average wait time of 10 minutes or less).For the month of May 2015, Tier 3
branches served 45,225 customers with an average wait of 20:56. Attleboro,
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Martha’s Vineyard, and North Adams all met their goal for the month. Next the
Registrar updated the Board on the call center. The RMV phone center
customers, in May 2015 the RMV received 67,957 calls and 44,068 were
answered. Call abandonment rate was 35%. Average call handling time was
4:39. In May 2014, the RMV received 84,829 calls and 33,383 calls were
answered. Call abandonment rate was 61% with an average call handling time of
4:44. There was a 29% increase in the number of calls handled per phone center
agent year-to-year with an average of 1,422 calls handled per agent in May 2015
compared to 1,103 per agent in May 2014. In May 2015 marked the first month in
which the RMV had its 10 kiosk pilot program fully operational in our 8 branch
locations. The kiosks processed 3735 successful transactions. The kiosk at the
Springfield RMV processed the fewest number of successful transactions at 243
transactions for the month. As part of this pilot, the RMV business team
continues to work with our licensing system vendor, Morpho Trust, to find ways in
which we can increase the usability of these devices to increase customer ease
of using these as an alternative service delivery method. On May 28, 2015, the
RMV joined with its partners from Pioneer Valley AAA at the official grand
opening for RMV services at the Hadley AAA office location. This is the final of
12 offices under the existing pilot initiative. Our AAA partners performed 13, 488
RMV transactions for its members in May 2015. The Worcester AAA office, which
is one of the longest standing locations, conducted the most transactions at 1953
for the month. With Technical Improvements-RMVM, work continues on Task
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Order 2 with the scheduled release date remaining 12/13/15 for features
including the 360 customer’s view of their business, increased case management
functionality; electronic submission of vision test results for license renewals.
Performance for May 2015 did not identify any issues or delays that would
negatively impact the critical path for the December release.
Next Chris Willenborg, Administrator of Aeronautics gave his report. Mr.
Willenborg updated the Board on the camera systems that will be going in at
different airports. He also updated the Board on the runway safety program. He
also recognized Lawrence High school for winning the Real World Design
Challenge. There will be airport open houses on June 13 at the Chatham Airport
and on June 20 at the Turner Falls Airport.
Next Astrid Glynn, Rail and Transit Administrator gave a brief report. She
wanted to give the Board a preview of her plans as Administrator. She will be
working with freight rail, commuter rail and Amtrak as well as the geographic
diversity of the 15 Regional Transit Authorities. She looks forward to working
closely with the Board.
Next Frank DePaola, Acting General Manager gave his report. The
General Manager began his report with ridership numbers. Ridership was down
3.9% in comparison to April 2014. The MBTA is starting to recover to normal
ridership levels since the winter. Operating Revenue is up 2.7 million due to
favorable variances on the fare restructure. The average cost per passenger is
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$3.11 so the MBTA is only recovering 40% of their costs. Next he went through
the heavy rail performance and key bus routes. Director Moylan asked if there is
a way to improve traffic movement to improve the metrics. Mr. DePaola
answered that there is planning group that checks the numbers and figure out
different scenarios. Director Poftak asked if it was calculated on a per passenger
or per run basis. Mr. DePaola wasn’t sure but he said he would get back to the
Board. Next he discussed accessibility on the system. A key thing they keep an
eye on at stations is elevators and escalators. The MBTA is very aggressive at
keeping these working. Their target for elevators is 99%. The Board asked what
percent of stations are accessible. Mr. DePaola went through the list of key
stations like Government Center which was the last of the core stations. He also
noted that any station that is due to get an upgrade they will automatically
included being accessible. Overall he noted only a small number of stations are
fully accessible. Next Mr. DePaola discussed the Youth Pass Program. The
MOU’s with Boston, Malden, Somerville and the Chelsea Collaborative are close
to signature. There were over 2700 applications received for the 1500 spots.
There was a random drawing completed for the spots. The city partners are
ready to enroll selected participants. The pass sales will begin July 1, 2015 and
participants must consent to have their card usage monitored and answer
surveys to gather data to analyze the costs and benefits of the pass. Next he
briefly went over the Capital Investment Program for the MBTA. To date, the
MBTA has expended $655 million with the projected year end at $695 million in
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expenditures. The RIDE Means Testing Pilot program will begin on July 1st; $1
off each one-way trip at point of sale, with participants coded into scheduling
software. The initial mailing to 10,250 frequent riders returned ~3,000 responses.
The second mailing to 900 (even distribution geographically) has returned 170
responses. To ensure July 1st start date, they are enrolling all who return signed
consent forms; accepting means-testing documents as participant is able to
retrieve them. Mr. DePaola ended with Commuter Rail’s Positive Train (PTC)
Control Update. They have two procurement proposals evaluated and scored,
they are entering BAFO stage. The goal is to have the contract presented for
September 2015 Board approval. They are working with Amtrak, Pan Am, CSX
and Providence & Worcester RR to coordinate PTC activities. They are
scheduling a briefing with FRA for June 10, 2015.
Next was the presentation on the MassDOT’s Capital Investment Plan.
Secretary opened up the discussion. Together, the Capital Investment Program
for MassDOT and for the MBTA commit just over $3 billion to our statewide
transportation system in FY2016, a level of spending that exceeds the peak
years of the Central Artery project. The joint development and issuance of both
CIPs reflect our continuing commitment to operating as ‘One MassDOT’ that
provides the best transportation services and investments that we can for the
Commonwealth. The vast majority of the expenditures to be made by the
MassDOT agencies in FY2016 will be based on prior contracts and
commitments; this plan does not yet fully reflect potential changes to MassDOT’s
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investment priorities. The number of ongoing projects reflects the importance of
continuous investment in our transportation system, including investments in
maintenance and system preservation. Even with the need to fulfill existing
contracts and maintain existing assets, the plan accommodates smaller but
strategic investments that have been proven to be effective (such as the
Industrial Rail Access Program and grants to public use airports) and a new
Complete Streets Certification Program. This plan accounts for every state and
federal dollar available to MassDOT for expenditure on capital projects and
programs during FY2016. MassDOT and the MBTA both need to develop fully
revised, five year CIPs to guide future capital investment and preparation of
those longer-term investment plans will begin as soon as the FY2016 plan is
finalized. In developing those plans, MassDOT will use project selection criteria
to assist in the selection of investments. These criteria, now undergoing review
by a legislatively created council, are scheduled to be finalized by June 30, 2015.
With these project selection criteria, MassDOT will have an important tool for
evaluating and prioritizing our investments to ensure that the Commonwealth
achieves the best possible return on its transportation investments. Next Dana
Levenson went through the projects. MassDOT and MBTA CIPs are closely tied
to each other. The Commonwealth has committed capital funding to a number of
MBTA
investments,
including
the
extension
of
the
Green
Line
to
Somerville/Medford and the purchase of new Red and Orange Line cars. Those
funds – $340.2 million in FY2016 – flow through MassDOT to the MBTA via
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project-specific contracts, and so are shown in both CIPs. The funding sources
for Fiscal 2016 are from State Bond Cap, Federal Highway funding, Accelerated
Bridge Program, Special Obligation Debt, Tolls, Federal Transit Authority
Funding, third party and Federal Aviation Administration funding. He went into
detail into each area. The Secretary discussed one other source they received
funds from was the Transportation Infrastructure and Development Fund. They
received $25.375 million from the Gaming Revenue Fund (Chapter 23K Section
62): Half must go to cities and towns through Chapter 90 or Chapter 90-like
programs. The other half is allocated at the discretion of the MassDOT Secretary.
MassDOT will use these funds for strategic priorities that cannot be funded with
federal or state bond cap funds: The half dedicated to cities and towns will be
used for the new Complete Streets Certification Program, with $5 million to be
released in FY2016 The remaining funds would be used to provide: $500,000 for
Transportation Management Associations (that has been funded from federal
CMAQ but cannot be in FY2016) $8.3 million for signal improvements on the
Worcester Line (in connection with the New Balance station partnership). Next
they went through the FY16 capital uses. The money will go to the Highway
Division, MBTA, Chapter 90, Office of the Secretary, RMV, Transit, Aeronautics
and Rail Divisions. Director Taylor would like to make sure if there are safety
issues they will be given higher than six out of eight. Secretary answered that
safety is weighed in each project to measure if it is safety critical such as PTC.
Director Taylor also asked about the FY17 budget and beyond amounts. She
14
would like to know how they factor in that priorities may change and funding may
change. The Secretary noted that there are many projects at MassDOT and
MBTA that are already underway that include commitments that are legally
binding and contractual. This is a plan that reflects that there is an immense
interest in investing in the system for capital projects. The Board must first see
through the projects that are already in the plan and as time goes on money will
become available and the Board can start to make more choices. Director
Moylan asked about the Chapter 90 allocation amounts and whey they were
reduced. Mr. Levenson answered that it was increased to $300 million this past
January. The $200 million that was allocated in the past was thought to be the
right amount of money that MassDOT could afford. Mr. Levenson will get further
information to the Board. Director Moylan asked that they also identify the
Chapter 90 levels for the last five years. Chair Bonsignore added her advice for
the CIP. She asked if the plan would do a better job explaining what the plan will
be accomplishing with the money invested (i.e. state of good repair). It would be
good to know in a simple way what the target for performance of these
investments is. It needs to be clear to the public that this is a draft plan that the
Board has not acted on yet.
Next General Manager DePaola, Jonathan Davis and Thom Dugan
presented the MBTA’s Capital Investment Plan. Mr. Davis went through the
process and planning for the Capital Investment Plan. One Year Capital Plan
provides transition to forthcoming Project Selection Advisory Council criteria, a
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fully revised plan for FY2017 to FY2021, and a new long term capital program
developed through the Program for Mass Transportation. Mr. Dugan went
through the sources. One source is from Federal Sources; Annual apportionment
of Federal Transit Administration (FTA) formula funds, carryover of federal funds
obligated for certain projects and programs, discretionary programs for specific
projects (New Starts, Small Starts, TIGER). The MBTA Sources are revenue
bonds for federal matching funds and other non federal projects, project financing
includes anticipated RRIF and TIFIA loans, and reimbursements and capital
maintenance funds include pay-as-you-go from surplus operating income and
other sources. The State Sources are from special obligation and general
obligation bonds issued by the Commonwealth, funds are authorized in 2014
legislation and allocated through interagency agreements with MassDOT.
Funding through the Federal Program: Moving Ahead for Progress in the 21st
Century
(MAP-21) authorizes
investment
in
transit
and
other
surface
transportation programs, 2 Year Bill for Federal Fiscal Years (FFY) 2013 and
2014, extended through May of 2015 and currently apportioned 8/12 of the full
year funding. The MBTA Revenue Bonds issued to fund the local share of the
federal formula program and certain projects that do not qualify for federal
funding. The Project Fund = $72 million, New Money issuance of approximately
$200 million under consideration for early state fiscal year 2016. Next he went
through the MBTA Sources of Funds, FY2016 Spending by Program Area,
FY2016 Projected Spending, Commuter Rail Positive Train Control, The Green
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Line Extension, and the Winter Resiliency Program. Mr. DePaola went into detail
about the Winter Resiliency Program. The program will spend $12.7M for Red
and Orange Line Third Rail and Heater replacements, $11.7M for contracted
snow removal at stations, $10M for vehicle propulsion improvements, traction
motors, and specialized snow removal equipment and $7M in commuter rail track
infrastructure, fiberglass switch panels and hot air electric heaters. Next Mr.
DePaola went through the FY2016 program highlights. The investment in
revenue vehicles for Red & Orange Vehicles for $79 million, Bus Overhaul
Program for $24 million, and New Bus Procurement
for $18 million. With
infrastructure there will be Track Upgrades - $18.7 million, Signal Upgrades ­
$18.9 million, Power Upgrades - $21.8 million, Bridge Program - $66.2 million
and Bus Facilities - $22.7 million. Accessibility will have upgrades at Government
Center - $19.4 million and Elevators & Escalators for $27 million. Money for
expansion will be spent on the Green Line Ext - $251.7 million and South Coast
Rail - $16.1 million. Under compliance money will go to Positive Train Control ­
$23.4 million (RRIF/TIFIA). Director Poftak asked about the state of good repair
upgrades spending on the signal upgrades is low even though the backlog is
high. There have been a lot of projects in FY16 that have already been funded
but going forward they will look at where funding should go using SGR repair
databases. Director Poftak asked about rolling stock procurement for Commuter
Rail coaches, funds are more than 90% dispersed in this fiscal year. What is
level of confidence of them being in revenue this fiscal year? Mr. DePaola is
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confident all the locomotives and Hyundai Rotem coaches will be delivered this
calendar year. They are also in the process of the rehab of the Kawasaki cars.
They are behind on the delivery but the rate the coaches are coming they are
confident they will be able to get them right in to revenue service. The Chair
asked about Positive Train Control coming before the Board. That will come to
the Board with a two phase award. One will be an early action item with a limited
scope with the intent that once funding is secured they will come back to the
board for the implementation construction. The implementation will be with the
same vendor. The Chair noted that an interim meeting will be needed. Secretary
asked the Board to email any questions or information.
The next item presented by Jerry Polcari, Chief Procurement Officer was
the request to authorize the Interim General Manager, to execute a Two Year
Base Contract with Sprague Operating Resources, LLC (“Sprague”) to supply
ultra low sulfur diesel fuel on an as needed basis, with two (2), one-year options,
subject to pricing in effect at the time of delivery, with a total contract value not to
exceed $127,306,500.00. The contract pricing with Sprague is based upon the
benchmark established daily by the Platts US Marketscan, Atlantic Coast, New
York Barge, Low Posting for Ultra Low Sulfur Diesel. The variable pricing
structure for this contract uses a fixed-price profit margin (or “markup”) applied to
the daily commodity index price. The costs to the MBTA are based on the index
for the day fuel is delivered, plus the contractor’s markup. As a government
subdivision, the MBTA does not pay the combined state and federal tax of
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$.5104 per gallon. This is the same pricing structure used for the Authority’s bus
diesel and gasoline purchases. Director Poftak asked about the pricing structure
of the contract. What does Sprague bid on? They first bid on delivery at $14
million/year and pick up at Sprague at $1 million/year. They have a not to exceed
amount of $1.95/gallon. Today’s price is down and the rate is stable. The bidders
are evaluated by a certain date. Mr. Davis added that they have a hedging
process once they contract is awarded looking for price certainty. The Board
asked why out of 90 bidders on the list only two bid the contract. Mr. Polcari
noted that there are numerous bidders signed up for the energy list and they all
receive the same bid. The Chair asked how they negotiate a markup. Mr. Polcari
answered they submit a bid price and the lowest qualified bid. Mr. Polcari noted
that this procurement was already in the process when he came aboard and that
the next time they are going to try and work to go out to bid together with
MassDOT to get a better price.
On motion duly made and seconded, it was;
VOTED: That the Interim General Manager be, and hereby is, authorized to
execute in the name and on behalf of the Authority, and in a form approved
by the General Counsel, a contract with Sprague Operating Resources LLC,
of Portsmouth, NH, to supply Ultra Low Sulfur Diesel Fuel on an as-needed
basis for a four-year period, subject to price in effect at the time of delivery,
with an additional one-year option, at a total value not to exceed
$70,313,700.00; said company being the lowest responsive and responsible
bidder in response to solicitation IFB 198-14.
The next item on the agenda was approval to execute a Four Year Base
Contract with Sprague Operating Resources, LLC (“Sprague”) to supply Ultra
19
Low Sulfur Diesel Fuel on an as-needed basis, with an additional one-year
option, subject to pricing in effect at the time of delivery, at a total contract value
not to exceed $70,313,700.00. The contract pricing with Sprague is based upon
the benchmark established daily by the Platts US Marketscan, Atlantic Coast,
New York Barge, Low Posting for Ultra Low Sulfur Diesel. The variable pricing
structure for this contract uses a fixed-price profit margin (or “markup”) applied to
the daily commodity index price. The costs to the MBTA are based on the index
for the day fuel is delivered, plus the contractor’s markup. As a government
subdivision, the MBTA does not pay the combined state and federal tax of
$.5104 per gallon. This is the same pricing structure used for the Authority’s
commuter rail diesel and non-revenue vehicle gasoline purchases.
On motion duly made and seconded, it was;
VOTED: That the Interim General Manager be, and hereby is, authorized to
execute in the name and on behalf of the Authority, and in a form approved
by the General Counsel, a contract with Sprague Operating Resources LLC,
of Portsmouth, NH, to supply Ultra Low Sulfur Diesel Fuel on an as needed
basis for a two-year period, with two, one-year options, subject to price in
effect at the time of delivery, at a total value not to exceed $127,306,500.00;
said company being the lowest responsive and responsible bidder in
response to solicitation IFB 7-15.
The next item on the agenda presented by Secretary Pollack was the
appointment of Betsy Taylor, Steven Grossman and Michael Heffernan to the
MBTA Retirement Board. The MBTA Retirement Fund was created via
agreement between Local 589 and the MBTA in 1970. The MBTA Retirement
Board of Trustees oversees the MBTA’s $1.59 billion pension fund, which
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provides retirement payments to the 6,000 MBTA retirees. The MBTA Pension
Board is a private trust and concerns have been raised around issues of
transparency and accountability, most recently in the report of the MBTA expert
panel. The fund is administered by seven trustees. Three management trustees
are appointed by the MassDOT Board of Directors, one of whom must be a
member of the MassDOT Board. Two trustees are designated by Local 589 (the
Carmen’s Union), one is elected by the non-589 union employees of the MBTA,
and a seventh member is elected by the other six Trustees.
The seventh
member votes only in the case of a tie. Trustees serve at the pleasure of the
MassDOT Board.
The pension board member who was a member of the
previous MassDOT Board has, of course, resigned and so that position is vacant.
Currently the two members appointed by the MassDOT Board are Jonathan
Davis, Deputy General Manager of the MBTA, and Darnell Williams. Trustees do
not serve set terms and the MassDOT board can appoint new trustees at any
time. The MassDOT Board needs to appoint a Board member to serve on the
MBTA Pension Board and should also appoint two new members to represent
the interests of MBTA management on the MBTA Retirement Board of Trustees.
While Jon Davis and Darnell Williams have served ably and should (and will) be
thanked for their service, this Board can send a strong signal to the MBTA
Retirement Fund about the need to be more transparent and accountable by
appointing new management trustees who will work to ensure that all activities of
the Pension Board are transparent and accountable and that the considerable
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sums that are entrusted to the Retirement Fund by the MBTA are being invested
appropriately. This Board should therefore appoint as members of the MBTA
Retirement Board of Trustees individuals who would bring extensive expertise in
dealing with issues of pension investment and deep knowledge of best practices
in the transparent and accountable operation of a public employee pension fund.
On motion duly made and seconded, it was;
VOTED: to appoint Betsy Taylor the MBTA Retirement Fund Board.
On motion duly made and seconded, it was;
VOTED: to appoint Steven Grossman to the MBTA Retirement Fund
Board.
On motion duly made and seconded, it was;
VOTED: to appoint Michael Heffernan to the MBTA Retirement Fund
Board.
Next Dana Levenson, MassDOT Chief Financial Officer gave a brief
overview on MassDOT’s FY16 Operating Budget. The operating budget enables
the day-to-day functioning of MassDOT by paying for recurring expenditures for
programs and services. The budget is aligned with the department’s strategic
objectives and goals for the next fiscal year. The operating budget is presented
on a consolidated basis inclusive of all revenues and expenses accounted for
within the Massachusetts Transportation Trust Fund, Motor Vehicle Safety
Inspection Fund and Federal Grants Fund.
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These funds are established in
various acts, including the department’s enabling legislation, as subject to the
appropriation of the Board of Directors. Mr. Levenson went through the salient
Features of Revenues within the proposed FY’16 MassDOT operating budget.
Tolls are expected to increase by 7% to $424.9 million as compared to the more
usual 1% per annum, the result of significantly lower gas prices. The annual
transfer from the Commonwealth Transportation Fund is increasing by $19.1
million (4%) to $458.8 million for the purpose of increasing the expense budget
for Snow and Ice and continuing to move expenditures off capital onto the
operating budget. The increase in the own source revenue of the annual motor
vehicle inspection fee which was imposed but not budgeted in FY’15 is now fully
budgeted in FY’16 bringing in a total of $54.6 million (an increase of $23.6million
or 76%). Federal grants are decreasing by $26.5 million (30%) mainly because
projects are nearing completion. “Other Financing Sources,” which are draws
from reserves, are increasing by $3.85 million (15%) to $30 million. Total
MassDOT Revenues in FY’16 are budgeted to increase by $43.4 million (3.6%)
to $1.256 billion. Next Mr. Levenson went through the features of Expenses.
Salaries are increasing by 3% to $442 million based upon collective bargaining
contracts as well as a plan to hire approximately 258 FTEs which brings the total
number of MassDOT employees to 4,589. Materials, Supplies and Services,
Office and Administrative Expenses, and Construction and Maintenance all are
increasing by $50.7 million (22%) collectively, primarily as a result of these
expenditures moving off of capital and onto the operating budget. Spending of
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Grants, Subsidies and Contract Assistance is decreasing by $24.4 million (18%)
due to the close-out of certain grants and reduced spending for the South Station
Expansion and Knowledge Corridor as they near completion. Snow and Ice
spend is budgeted at the 5-year average which is $110.2 million, constituting a
$2.8 million or 3% increase over the FY’15 budget. Debt Service which pays the
principal and interest on $2 billion of outstanding Metropolitan Highway System
bonds is predetermined. Total MassDOT Expenses in FY’16 are budgeted to
increase by $41.5 million (4.0%) to $1.077 billion. Mr. Levenson went through
important points about the proposed operating budget. By statute, MassDOT
runs two enterprises: a toll-funded account and a non-toll funded account. This
is governed by MassDOT’s enabling legislation [M.G.L. 6C] which states that
revenues collected on the toll road must be spent only on the toll road. The nontoll account funds the RMV’s operating expenses, RTA’s operating expenses,
salaries for employees that do not work on the toll road, Snow and Ice
expenditures on non-tolled state highways, the Aeronautics, Rail & Transit, and
the Office of the Secretary departments of MassDOT. The effect of the Early
Retirement Incentive Program (ERIP) is not factored into this budget. When the
plan is legislated and the effect of the plan on MassDOT in terms of how many
employees choose to retire under the plan is known, we will adjust our budget
accordingly. While the Snow & Ice spend budget is at the 5-year average for
FY’16, the differential between the 5-year average of $110.2 million and the
actual spend during winter of 2015 of $162.3 million was $52.1 million. While we
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have been successful at moving over more than $200 million in expenses
formerly funded by the capital budget, we will move another $38.4
million
in
FY’16 as made possible by increased own source and Commonwealth revenues.
He ended discussing the new initiatives. New initiatives in this budget are sparse,
due to financial constraints. However, they list the following; diverse engineers
hiring program making virtually all transactions at the RMV credit and debit card
eligible, hiring a significant number of Customer Service Representatives at the
RMV, budgeting Snow & Ice funding and spending closer to reality, establishing
a fuel hedging capability, increase the budget for All Electronic Tolling
implementation so that it is up and running in calendar year 2016, pursuing the
ability to refund outstanding MHS bonds for the purpose of annual savings due to
lower interest rates as well as freeing up capital for the purpose of funding tollroad projects and MassDOT acquired the State Transportation Building from the
Commonwealth in December, 2014 and is now actively managing the property
for the benefit of MassDOT. Director Taylor asked about the plan to hire 200
FTE’s. Mr. Levenson noted that the budget that will be approved in terms of the
CT transfer allows them to hire FTE’s. The amount of transfer will be reduced do
to the early retirement program (ERIP). The budget was put together before the
ERIP was announced. They have been working to identify priority hires even
during the hire freeze.
On motion duly made and seconded, it was;
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VOTED: To adjourn.
Documents used for this reports
Minutes for May 13, 2015
Report by the General Manager
Report by the Highway Division
MassDOT’s Capital Investment Plan
MBTA Capital Investment Plan
Committee Descriptions
Staff Summary for Fuel Contracts
MBTA Retirement Board Memo
MassDOT FY16 Operating Budget Staff Summary
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