Middlesex 3 Community Compact Transportation Study Transit Funding 11/22/2018 Middlesex 3 Coalition transportation study

Regional Transit Authorities In 1973, Chapter 161B defined the process by which RTAs can be formed and expanded RTAs may accept state or federal grants or loans, but must accede to the conditions and obligations imposed by such funds Must determine net cost of service and local assessment levels in consultation with MassDOT Must prepare an annual program, including a long range program for construction, reconstruction, or alteration of facilities The Commonwealth must pay 50% of the RTAs’ net cost of service and debt service (unless revenues of the RTA can cover debt) 11/22/2018 Middlesex 3 Coalition transportation study

Middlesex 3 Coalition transportation study RTAs (continued) RTAs are governed by advisory boards composed of a chief elected official from each service area community or his/her designee They manage their own operations but must hire an operating company to provide service RTAs require funding for annual operations and capital spending MassDOT Rail and Transit Division provides financial assistance 11/22/2018 Middlesex 3 Coalition transportation study

Operations Funding Issues Operations are funded through fares and with assistance from various federal state and local sources The largest funding source is state contract assistance (SCA), followed by Federal Transit Administration (FTA) grants and local assessment payments. The State Auditor determined that local assessments cover as much as 50% of an RTA’s net cost of service and that assessments were being paid up to 24 months in arrears. This caused RTAs to borrow for operating funds through revenue anticipation notes (RANs) Late assessment payments also make it difficult to fund any new service 11/22/2018 Middlesex 3 Coalition transportation study

Middlesex 3 Coalition transportation study Chapter 38 of the Acts of 2013 Forward funded RTA operating assistance and reduced the cost of issuing RANs The Office of State Treasurer and the Department of Revenue are now responsible for timely billing, collection and disbursement of local assessments RTAs must seek approval from the Secretary of Transportation to issue bonds, use their Reserve Fund or use their stabilization fund MassDOT imposes provisions to be included in operating contract between the RTAs and private operators MassDOT establishes guidelines for the distribution of bond funds among the RTAs, with 75% of the bond proceeds going to match federal or non-state funding 11/22/2018 Middlesex 3 Coalition transportation study

Middlesex 3 Coalition transportation study RTA Local Assessments Local assessments are based on the “loss” (operating cost minus revenue) for each specific transit route The annual increase in local assessments is capped at 2.5%, except when new service is implemented In order to establish local assessment amounts, RTAs are subject to an annual independent audit Audited reports are submitted to Division of Local Services (DLS), which generates the Local Aid Assessment sheets Assessments are deducted from state lottery revenue payments made to each community 11/22/2018 Middlesex 3 Coalition transportation study

Middlesex 3 Coalition transportation study MBTA Funding Process The MBTA was created in 1964 under Chapter 161A to supersede the MTA Under enabling legislation, local assessments to cover the operating deficit were levied on municipalities based on a formula that included population and the operating deficit of the individual services provided to each community Assessments and fares partly covered operations; remaining funds were provided by the legislature in arrears In 1999, Chapter 127 of the Acts of 1999, established forward funding for the MBTA, using 20% of the state sales tax revenue as a dedicated funding stream In addition, the MBTA service area was expanded to include 175 communities for the purpose of annual assessments 11/22/2018 Middlesex 3 Coalition transportation study

MBTA Funding Process (cont’d) Revenues are used to fund operations and maintenance costs for the T and to secure revenue bonds to match federal funds for capital projects Revenue sources include fares, non-fare sources, state contract assistance, state appropriations and federal operating assistance Under Chapter 27 of the Acts of 2009, $160 million per year was transferred to the MBTA by the legislature to account for debt from the Central Artery/Tunnel project Chapter 46 of the Acts of 2013 provided new revenue transfers, and MBTA fare increases were capped at 5% every two years In FY 2016, the RTAs had a total combined budget of $82 million, while the MBTA’s budget was approximately $1 billion The key difference is due to ridership—the ten top MBTA routes carry more trips than all of the regional bus networks combined 11/22/2018 Middlesex 3 Coalition transportation study

Middlesex 3 Coalition transportation study MBTA Assessments Municipalities are divided into 3 subgroups: “14 cities and towns” which comprised the original member of the pre-1964 MTA district “51 cities and towns” which consists of a majority of the remaining municipalities that were in the original post-1964 MBTA district (includes Bedford, Burlington and Lexington) “Other served communities” which includes the balance of 110 communities and primarily those that were added to the MBTA district after the 1999 legislation (includes Billerica, Chelmsford, Lowell, Tewksbury, and Tyngsborough) 11/22/2018 Middlesex 3 Coalition transportation study

MBTA Assessment (cont’d) A municipality’s share of the assessments is based on a weighted percentage of population assigned to the three subgroups Any increase or decrease in the level of MBTA service does not impact the assessment to the municipality Communities that do not receive MBTA fixed route bus service can subtract the assessments of a regional transit authority from their MBTA assessment Bedford, Burlington and Lexington receive MBTA fixed route bus service and paratransit service Billerica, Chelmsford, Lowell, Tewksbury and Tyngsborough do not receive MBTA fixed route service and may subtract their LRTA assessment from the MBTA assessment 11/22/2018 Middlesex 3 Coalition transportation study

Transit Funding Categories: Federal Funding Federal Operating Funding Programs 5307 – Urbanized Area Formula Program (LRTA) RTAs with Less Than 100 Buses in Peak Service 5310 – Enhanced Mobility of Seniors and Individuals with Disabilities Senior and ADA Van Services CMAQ – Congestion Mitigation and Air Quality New Transit Services (Up to 5 years of start up funding) Federal Capital Funding Programs 5307 – Urbanized Area Formula Program (MBTA, LRTA) Ada and Senior Vehicle and Equipment Purchase 5337 – State of Good Repair Grants (MBTA) Fixed Guideway (rail and BRT) 5339 - Bus and Bus Facilities Formula Grants (MBTA, LRTA) 11/22/2018 Middlesex 3 Coalition transportation study

Transit Funding Categories: Federal Operating Funding - 5307 5307 – Urbanized Area Formula Program Provides grants for Capital Projects, Operating and Planning Provides operating assistance in areas with populations greater than 200,000 No more than 50% of cost of operation – between 76 and 100 buses in peak operation (LRTA) Funds split among transit authorities serving each Urbanized Area (UZA) 11/22/2018 Middlesex 3 Coalition transportation study

Transit Funding Categories: Federal Funding - 5307 5307 – Urbanized Area Formula Program (UZA) Funds split among transit authorities serving the Boston Urbanized Area FFY 2017 $158,392,458 MBTA Mass Bay Transportation 88.13% BAT Brockton Area Transit 01.91% MVRTA Merrimack Valley Transit 03.56% LRTA Lowell Regional Transit 02.36% GATRA Greater Attleboro Transit 00.49% NHDOT State of New Hampshire 01.72% RIPTA Rhode Island Transit 00.00% CATA Cape Ann Transit 00.33% MWRTA Metro West Transit 01.42% MART Montachusett Regional Transit 00.08% 11/22/2018 Middlesex 3 Coalition transportation study

Congestion Mitigation and Air Quality Jointly Administered by the FHWA and FTA Must improve air quality and reduce congestion Eligibility Requirements Project must come from an approved Transportation Improvement Program (TIP) MassDOT is responsible for distributing CMAQ funds Federal share for most CMAQ eligible projects is 80% Eligible Projects New Transit Service – taps new markets for transit Includes Boston MPO Community Transportation Grants and Clean Air and Mobility Program System or Service Expansion – projects designed to attract new riders 11/22/2018 Middlesex 3 Coalition transportation study

Transit Funding Categories: State Contract Assistance SCA is the major source of state operating assistance for transit Funds are provided through the Commonwealth Transportation Fund (CTF) and the Massachusetts Transportation Trust Fund (MTTF) CTF is funded through gas taxes, registry fees and a portion of the state sales taxes. MTTF is funded through dedicated revenues from tolls, federal grants, and State budget The State must fund at least 50% of each RTA’s net cost of service Community Transit Grants Funds ADA and Senior services Community Compact Grants Best Practices 11/22/2018 Middlesex 3 Coalition Transportation study

Transit Funding Categories: Local Funding 2018 Cherry Sheet Assessments MBTA LRTA Bedford $ 305,001 Billerica $ 300,492 Burlington $ 556,612 Chelmsford $ 247,241 Lexington $ 715,935 Lowell $ 994,016 Tewksbury $ 264,723 Tyngsborough $ 81,549 Middlesex 3 Study Area $1,577,548 $1,888,021 11/22/2018 Middlesex 3 Coalition Transportation study

Other RTA and MBTA Generated Revenue Passenger Revenues Fixed Route and Paratransit Fares Terminal Revenues Retail/Commercial Space Rentals Concessions Parking Revenues Other Revenues Advertising 11/22/2018 Middlesex 3 Coalition Transportation study

Sources of Operating Funds: Funding Source MBTA LRTA Fare Revenues 33.8% 12.5% Local Funds (Assessments) 7.9% 22.4% State Funds 54.5% 28.8% Federal Assistance 0.7% 23.1% Other Funds 3.1% 13.2% Source: National Transit Database 2014 11/22/2018 Middlesex 3 Coalition Transportation study

Sources of Capital Funds: Funding Source MBTA LRTA Fare Revenues 0% Local Funds (Assessments) 20.8% State Funds 24.0% 10.0% Federal Assistance 54.7% 90.0% Other Funds 0.4% Source: National Transit Database 2014 11/22/2018 Middlesex 3 Coalition Transportation study

Total Cost of Transit Services Total Cost of Service per Revenue Hour Bus Service Fixed Route ADA Total MBTA $178.03 $76.76 $254.79 LRTA $ 98.21 $42.73 $140.94 11/22/2018 Middlesex 3 Coalition Transportation study

Barriers to Service Expansion There is no mechanism for charging a community that is outside the RTA Service Area for transportation services Communities within the RTA Service area are charged for the net cost of new transportation service . (Net cost = cost of new service less revenues collected on that route) 11/22/2018 Middlesex 3 Coalition Transportation study

Barriers to Service Expansion - Charter Service Prohibition Charter bus service is transportation provided for a fee by a Regional Transit Authority (RTA) Charter service is seen as unfair competition to private providers and is generally prohibited by the Federal Transit Administration (FTA) with few exceptions (government officials on official business, qualified human service organizations serving those with disabilities or very low income) 11/22/2018 Middlesex 3 Coalition Transportation study

Barriers to Service Expansion - ADA Paratransit Requirements Transit Authorities are required to provide Americans with Disabilities Act (ADA), demand response service LRTA strictly follows FTA guidelines ADA service is provided within ¾ miles of fixed route bus Time of service differs depending on hours of the bus route MBTA provides broader ADA service ADA service is provided community-wide Time of service is from 5:00am to 1:00am 11/22/2018 Middlesex 3 Coalition Transportation study