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MBTA: RI owes $6M for South County train losses

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MBTA commuter rail T train RI_174444

NORTH KINGSTOWN, R.I. (WPRI) – The MBTA is seeking more than $6 million from Rhode Island to cover the new South County Commuter Rail’s operating losses as fare revenue falls far short of meeting expenses, a Target 12 investigation has found.

An MBTA invoice obtained by Target 12 says the Massachusetts agency spent $10 million providing commuter rail service to the two South County stops – T.F. Green Airport in Warwick and Wickford Junction in North Kingstown – between November 2010 and June 2014. But it only collected $3.68 million in fares, leaving a shortfall of $6.36 million.

And that’s only part of the price tag.

According to the R.I. Department of Transportation, the South County Commuter Rail’s base operating cost is estimated at $5.5 million a year, which covers rental of the rail line from Amtrak, insurance, operations at Wickford Junction, and “related costs.” That base cost is over and above the shortfalls incurred by the MBTA in running the South County service.

RIDOT spokeswoman Rose Amoros said base operating costs actually came out to a combined $14.6 million in the 2012, 2013 and 2014 fiscal years – putting the total tab for South County Commuter Rail service north of $21 million since trains to T.F. Green began running in November 2010.

However, RIDOT officials say they’re not convinced Rhode Island owes as much as the MBTA says to cover South County rail’s losses. “The new RIDOT administration is currently reviewing these reports and our initial analysis uncovered several areas where we disagree with the analysis provided by MBTA,” Bryan Lucier, a RIDOT spokesman, said in an email.

“We will be discussing our concerns with MBTA officials in order to assure compliance with the terms of our contract,” he said. “As with any agreement RIDOT has entered into, upon a full review and analysis we remain committed to contribute our fair share in accordance with this MBTA agreement.​”

The MBTA – which has operated commuter rail service in Rhode Island since 1988 – signed an agreement with RIDOT in 2010 to run commuter trains 20 miles south of Providence. The deal stipulates that RIDOT “shall pay for all costs incurred by MBTA that would not have been incurred by MBTA but for its operation of the South County Service.”

Target 12 first reported Monday that ridership at the three-year-old Wickford Junction station stood at 391 trips a day as of last September, far below the projections used to fund the project, which forecast it would see 3,386 trips a day by 2020. T.F. Green station ridership was at 412 trips a day; the projection there is for 529 trips by 2020. Low ridership has resulted in low fare revenue.

The Wickford Junction station cost $45 million to build, while the T.F. Green station was completed as part of the $267-million InterLink project.

It took repeated requests from Target 12 – which eventually required going over RIDOT’s head to the governor’s office – to get the department to disclose how much the MBTA has billed it for South County Commuter Rail so far. After providing the data, Lucier defended the project’s losses as nothing out of the ordinary in the United States.

“The majority of transit systems across the country, if not all, operate at a loss,” he said in an email. “Rhode Island’s South County Commuter Rail Service is no exception.”

On the plus side, the MBTA invoice shows South County Commuter Rail fare revenue rose from $1.2 million in the 2012-13 fiscal year – the first year when both stations were in service for all 12 months – to $1.5 million in 2013-14. That reduced the MBTA’s shortfall after fare revenue from $2.15 million in 2012-13 to $1.95 million in 2013-14.

The 2010 agreement for the South County train service calls for the MBTA to provide RIDOT with an expense statement every three months breaking down how much it spent on the T.F. Green and Wickford stations. It also says: “RIDOT shall pay the MBTA the full amount of such shortfall within thirty (30) days of its receipt of an invoice for such amount.”

But Lucier said RIDOT received no information about the costs until last October – almost four years after service started at the T.F. Green station.

“RIDOT has no record of any quarterly reports or any other financial reports being filed by MBTA,” he said, adding: “In the future, our new administration will be requesting that MBTA provide all previous statements and reports per our agreements so we can have [a] fresh look at this and that they continue to report in a timely manner.”

So who’s on the hook to cover the South County Commuter Rail’s heavy operating losses? For the most part, it’s the federal government.

RIDOT said the roughly $5.5 million base operating cost for the South County trains is paid for through the federal Congestion Mitigation and Air Quality Improvement (CMAQ) Program with “no state match of funds.” CMAQ funds projects “that contribute air quality improvements and provide congestion relief,” according to its website; supporters promoted the South County rail service in part as an alternative to highways.

The operating losses tabulated by the MBTA will be handled somewhat differently. “That payment will be made by RIDOT contributing federal funds for MBTA capital projects,” Lucier said.

Under the terms of the 2010 agreement, the MBTA agreed that RIDOT could cover those losses by using federal highway money to pay for MBTA capital projects they agree upon. Amoros said the two sides have decided Rhode Island’s South County rail reimbursements will go toward investments at the Pawtucket Layover Facility and the South Attleboro train station.

The projects are subject to approval by the Federal Transit Administration, as well, according to the 2010 agreement between the two agencies.

A third agency also has a financial role in the South County Commuter Rail project. The R.I. Public Rail Corporation, a quasi-public agency, “was the signatory on the agreement that established the service and has the power to defend, indemnify, and save harmless its designated operator and Amtrak for damage or liability,” state documents show.

U.S. Sen. Jack Reed, one of the South County Commuter Rail’s biggest champions and a senior member of the Senate Appropriations Committee, secured nearly $33 million in federal funding for the Wickford Junction station between 1998 and 2009. In an interview, he defended the project as a long-term investment.

“For many people it will be a better means of commuting, it will have positive environmental effects, it will avoid for a lot of people the hours trying to get into Boston with an automobile, the parking fees in Boston, and also today especially, a lot of people using the train, particularly out of Providence, use the time productively on their computers to do work,” Reed said.

Reed and others have suggested one way to improve the outlook for the South County Commuter Rail would be to add more daily stops – and perhaps weekend service – at both T.F. Green and Wickford Junction, in order to make it more convenient for people to use the stations.

“These projects are intended to reduce congestion along the I-95 and Route 1/Route 4 corridors, provide intermodal connections to T.F. Green Airport, add system capacity without expanding the road network, and attract economic development,” Rhode Island officials wrote in the most recent statewide railroad planning document.

T.F. Green and Wickford Junction may not be the last expansions of commuter rail service in Rhode Island. RIDOT is also studying the possibility of adding stops in Pawtucket/Central Falls, Cranston, East Greenwich, West Davisville, Kingston and Westerly.Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi Tim White (twhite@wpri.com) is the Target 12 investigative reporter for WPRI 12 and Fox Providence. Follow him on Twitter: @TimWhiteRI

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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