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Home My WebLink AboutAUDIT 09-01-1966 -- 09-30-1967 I I I I i I I I I I I i I I I I I JOHN J. LYONS TOWN CLERK NO, ANDOVER, MASS, ~ NO. 68-A-64 REPOKT ON THE EXA~-ilNATIONOF THE ACCOIINTS OF THE ~4ASSACHUSETTS BAY TRANSPORTATION AUTHORITY FROM SEPT~'~ER 1, 1966 TO SEPTt~I~iBER 30, 1967 DEPARTMEN OF THE STATE AUDITOR DIVISION OF AUTHORITY AUDITS "Guardian of the Commonwealth'' THADDEUS BUCZKO STATE AUDITOR 7M- ] 1-67-946298 ;'t TO: FROM: ALL PUBLIC OFFICIALS IN THE MASSACHUSETTS BAY TRANSPORTATION AUTHORITY DISTRICT STATE AUDITOR THADDEUS BUCZKO I am forwarding herewith a report on an examination of the accounts of the Massachusetts Bay Transportation Authority covering the fiscal period between September 1, 1966 and September 30, 1967. During the period involved the MBTA reported a net deficit of $2q,q76,135.3~, but, in reality, the cost to the taxpayer, as explained on page 20 of this report~ amounted to $33~882,$52.62. We find little evidence that the taxpayer can expect any relief from increasing assessments in the near future. In fact, the contrary can be be expected and operating deficits will continue to rise. For the most part, these increases will continue due to increased costs for labor, materials and equipment~ but, at the same time, we find little evidence that the officials of the railway exhibit any great interest in economies. In actual fact they have endeavored to increase assessments on the taxpayers as is evidenced by page 23 of the report, which demonstrates that despite the fact that the law does not permit the MBTA to add depreciation to the cost of the service, in every instance when the MBTA has presented its budget request to the Advisory Board they have included a substantial request for depreciation expense and each time the request has been denied by the Advisory Board. As a result of this denial by the Advisory Board the Authority, for reasons best known to itself, is carrying the grand total of these items as an unreimbursable deficit and to September 30, 1967, this item has amounted to $5,725~885.00 and it will continue to increase if the MBTA continues its present practices. We can only guess that the officials of the MBTA hope that some day they might be able to prevail upon the Advisory Board or the General Court to permit such a charge against the cities and towns. On page 26 of the report we point out that the cost of borrowing has increased substantially under the present statute, and we have recommended that an amendment be made to the present law to require the Authority to do all future financing through the Boston Metropolitan District. On page ~0 of this report, which relates to construction contracts, we call attention to the fact that the Board of Directors of the Authority approved an extra work omder of $276,82~.63 which resulted eithe~ from an error in construction or in design, and it appears to this Department that before a~reeing to this substantial payment some effort should have been made by the Directors to place responsibility lot the er~oro Much of this repomt, starting on page ~2, has been devoted to a study of Consultant Contracts, and it must be pointed out in the very beginnlnf that such a study was deemed necessamy since the Authority has awarded $13,~70,507.91 ~n Consultant Contracts since August ~, 1964. Attention at this time must be directed to the fact that the MBTA is compelled by statute to submit an operating budget to the Advisory Boamd, and this results in a degree of control ove~ operations. It must be pointed out, however, that the Authority has borrowed $110,000,000., and regardless of how extravagantly they may expend these funds the deficit only ~eflects the cost of amortization and interest in the fiscal period concerned. For that reason, we have recommended on page 29 of the report that the MBTA should be ~equired to submit, on an annual basis, informative budgets to the Advisory Board on all its capital expenditures pro,ams. The following is a summary of some of the comments made on Consultant Contracts beginning on page ~2 of the ~eport. a) Unless one engineering contract is renegotiated, one consultant will ~eceive mo~e than $750,000. in excessive fees duping the teTm of his contmact. b) Rates paid on a data processing contract were in excess of rates paid by State a~encies rom some of the services. c) One contract was terminated for poo~ performance afte~ incumrin~ costs of $88,~27.03. d) Plans and studies on which $251,507.03 had been expended were abandoned as the result of the decision of the MBTA and the consultant concerned to construct a foum track bridge ove~ the Mystic River instead of a thmee track concept previously planned. -3- You will note many other additional comments on Consultant Contracts in the report, and despite the fact that similar comments have been documented in prior audit reports, we find little or no effort has been directed by MBTA officials to correct these abuses and inadequacies. Should you have any questions with regard to this report, I shall be most happy to discuss them with you. 68-A-6~ TABLE OF CONTENTS O~ganlzation Statutory References, As Amended Int~oduct ion Scope of Audit Notes and Comments: 1. Cost to the Taxpayers for MBTA Operations 2. Deficit 3. Excess Depreciation 4. First MBTA Bond Issue 5. Financing Costs 6. Anelex Executive Office Costs 7. Budgets 8. MBTA Debt 9. Sale of Temporary Notes 10. Federal Urban Mass T~ansportation Capital ~ant Contracts with the MBTA 11. A~eement with Boston Redevelopment Authority 12. Railroad Commuter Subsidies 13. A~l~eement with Middlesex and Boston Street Railway Company Payrolls 15. Legal Fees 16. Passenger Automobiles 17. Out-of-State T~avel 18. Sales of Real Property 19. Proposed Purchase of the Eastern Massachusetts Street Railway Company 20. Construction Contracts Page 1- 3 5 6 6 - 19 20 20 - 23 23 - 25 26 26 - 28 28 29 30 30 - 31 31 - 32 32 32 - 33 33 - 3~ 3~. - 35 36 36 - 37 37 3"/ 37 - 38 39 68-A-64 TABLE OF CONTENTS (CONTINUED - 2) Notes and Comments (Continued): 21. Contract H.N.100 - Main Line Rapid Transit Extension - Haymarket Square to Vicinity of Proposed Massachusetts Bay Community College in Cha~lestown 22. Contract H.N.100 - Change Order #5 - Redesign Due to Sheeting Left in Place 23. Contract H.N.100 - Change Order #10 - Unde~in Central Artery Footing - Bent F-3 24. Consultants 25. Col. S. H. BinghamAssociates, Inc. - Excessive Fee - HN-004 26. Col. S. H. Bingham Associates, Inc. - Abandonment of Plans - HN-004 27. Col. S. H. Bingham Associates, Inc. - Claims 28. Design Fees 29. Arthur Andersen and Company - Data Processing Costs 30. Lockwood Greene Engineers, Inc. - Ter~nination of Contract - YS-001 31. Gibbs and Hill, Inc. - Central Area Systems Study - CS-001 32. T~affic Research Corporation - T~affic Analysis Studies - NC-016 33. Sanitation Systems, Incorporated - Sanitation Studies - SM-003 34. Geometrics, Inc. - Termination of Project - SM-012 35. Excessive Charges 36. Jackson g Moreland - Suspension of P~oject - SG-O01 Preliminary - SG-002 Final 37. The Bresnick Company, Inc. - Advertising 38. Audit Review Page 39 - 40 40 - 41 45 - 46 48 - 49 49 - 51 51 - 53 53 - 55 55 - 56 56 56 56 - 57 57 - 59 59 I I I I I I I I I I I I I I I I 68-A-64 TABLE OF CONTENTS (CONTINUED - 3) Financial Statements: I Balance Sheet, September 30, 1967 II Statement of Income and Cost of Service, September 1, 1966 to September 30, 1967 III Analysis of Income, September 1, 1966 to September 30, 1967 IV Paid and Potential Rent Charges - Cambridge Subway, September 30, 1967 V Status of Total Funded Debt, September 30, 1967 VI Status of O~iginal Debt, September 30, 1967 VII Status of O~iginal Subway Debt, September 30, 1967 VIII Status of Construction and Off-street Pa~king Debt, September 30, 1967 IX Status of Equipment Debt, September 30, 1967 XI Status of Bonds Authorized (Unissued and Issued) for T~ansit Construction, September 30, 1967 Status of Bonds Authorized (Unissued and Issued) for Revenue Equipment, September 30, 1967 XII Status of Bonds Issued and Outstanding on General Transportation System Bonds 1967, Series A, Interest 3.75% - 3.85% dated March 1, 1967, September 30, 1967 XIII Net Cost of Service Assessable to the 79 Cities and Towns, September 1, 1966 to September 30, 1967 Page S1 - S2 S3 S~ S5 S6 S7 S8 S9 - S10 Sll - S13 S15 - S16 S17 - S20 S21 - S2q 68-A-64 -1- ORGANIZATION Massachusetts Bay TranSportation Authorit~f September 30, 1967 Chapter 563 of the Acts of 1964 abolished the Metropolitan Transit Authority effective at the close of business August 3, 1964 and established its successor~ the Massachusetts Bay Transportation Authority by amending the General Laws and inserting therein Chapter 16lA. The affairs of the Authority are managed by a Board of five Directors appointed by the Governor of whom two were appointed with the approval of the Governor's Council~ one with the approval of the Advisory Board~; one with the approval of the fourteen cities and towns and one with the approval of the sixty-five cities and towns. No more than three of the five directors shall be members of the same political party. One of the appointees of the Governor shall be experienced in transportation, one a member of organized labor who shall be a member of a national or international labor organization and one experienced in administration and finance. The Authority maintains its own office building at 500 Arborway, Jamaica Plain, Massachusetts. However, during 1965 the Claim Department, Board of Directors, General Manager's Office, General Counsel's Office, Planning Department, Public Relations and the Commuter Office moved to the 6th floor of the Anelex Building, 150 Causeway Street, Boston. Rental of the approximately 22,840 square feet of space is covered by a lease dated May 19, 1966 for a period of five years, with an option for a three year renewal, at an annual rental of $77,656°00. An additional 600 square feet was added to the lease in November 1966 at an increased annual rental of $2,040.00. In addition to the above rental, the Authority pays $377.00 per month for 29 parking spaces. 68-A.-64 Name Philip Kramer 1175 Centre Street, Newton Robert P. Springer 28 Russell Circle, Natick William J. Fitzgerald 17 Standish Road, Newton -2- ORGANIZATION (CONTII,~ED - 2) Forrest I. Neal, Jr.* 186 Washington Street, Hanover Charles C. Cabot, Chairman Dedham Street, Dover Members of the Board of Directors September 30, 1967 Required Governor's Term Field of Appointment Expires Annual Experience Approved bY March 30 SalarZ Labor Governor's 1968 $ 7,500 00 Council Transportation Advisory Board 1969 7,500 00 Governor's 1970 7,500 00 Council 65 Cities and 1971 7,500 00 Towns Administration 14 Cities and 1972 10,000 O0 and Finance Towns Appointed by Governor Volpe July 10, 1967. Oath taken August 15, 1967. A list of Officers and Certain Executives with their yearly compensation as of December 31, 1967 follows: Name Leo J. Cusick Michael J. Powell Edward F. McLaughlin, Jr. James D. Fitzgerald William J. Fitzsimons William E. Ryan Vincent M. Banks Stanley R. Perry Donald M. Graham Title General Manager (Employed as of Nov. 1, 1967, approved by Advisory Board Sept. 28, 1967) Treasurer (As of Jan. 1, 1968) General Counsel Director of Engineering and Construction Director of Personnel Director of Safety and Training Assistant General Counsel, Claims and Compensation Director of Transportation Operations Acting Director of Research and Development palary. $40,000 O0 27,122 00 27,122 O0 26,438 00 23,737 O0 23,675 O0 20,000 O0 19,750 00 19,617 O0 68-A-64 Wa/Re James A. O'Neil J. David White Raymond F. Walsh Elmer H. Smith Philip A. Brine, Jr. Warren J. Higgins Joseph C. Kelly Chester W. Higgins Richard M. Bagnulo Philip G. Mead Joseph F. Malone John E. Senk Robert L. Parker LindsayW. Sutherland John J. Shea Francis J. McCarthy, Jr. Jeanette S. Corrigan -3- ORG~/~IZATION (CONTINUED- 3) Title Superintendent of Plant Engineering and Maintenance Director of Materials Superintendent of Equipment Engineering and Maintenance Assistant Superintendent of Plant Engineering and Maintenance Manager of Labor Relations Special Assistant for Management, Programming and Control Controller Manager Personnel Development Project Manager Station Modernization Supervisor Private Carrier Contract Operations Director of Public Information Manager of Systems and Procedures Supervisor of Civil Engineering Supervisor of Electrical Signal and Communications Maintenance Supervisor of Schedules Chief of Police Recording Secretary Salary $19,337 O0 18,918 00 18,918 O0 18,918 00 17,939 OO 17,927 00 17,400 O0 17,147 00 16,896 00 15,335 O0 15,250 00 15,100 00 14,700 O0 14,473 O0 14,200 O0 12,570 00 10,239 O0 I I I I I I ! I I I I I I I I I I I 68-A-64 St. 1964, c. 563 St. 1965, c. 323 St. 1965, e. 444 St. 1965, c. 509 St. 1965, c. 650 St. 1965, c. 684 St. 1965, e. 687 St. 1965, c. 723 St. 1965, e. 794 St. 1965, c. 864 -4- STATUTORY REFERENCES, AS A~NDED An Act abolishing the Metropolitan Transit Authority, establishing the Massachusetts Bay Transportation Authority, and providing for the acquisition and maintenance of mass transpor- tation facilities and services which shall be coordinated with highway systems and urban development plans throughout the Commonwealth An Act further defining the powers of the Board of Directors of the Massachusetts Bay Transpor- tation Authority An Act relating to the establishment of off-street parking facilities by the Massachusetts Bay Transportation Authority An Act relative to expenses of the Advisory Board of the Massachusetts Bay Transportation Authority An Act authorizing temporary borrowings by the Commonwealth to finance payments required to be made to the Massachusetts Bay Transportation Authority and otherwise amending the Act which established the Authority An Act authorizing the Massachusetts Bay Transporta- tion Authority to extend its mass transportation facilities in the cities of Boston, Somerville, Medford, Everett and Malden, and authorizing the removal of certain of its elevated structures between the City of Boston and the City of Everett An Act providing for dissolution of the Transit Mutual Insurance Company and the acquisition of its property, assets and liabilities by the Massachusetts Bay Transportation Authority An Act authorizing the Massachusetts Bay Transporta- tion Authority to extend its rapid transit facilities in the Cities of Boston and Quincy and the Towns of Braintree, Hingham, Hull, Scituate and Weymouth An Act relative to the terms of certain notes to be issued by the Commonwealth An Act authorizing the Massachusetts Bay Transporta- tion Authority to convey a part of a certain tract of land in Cambridge to the United States of America, and to sell the rest of said tract to John Fitzgerald Kennedy Library Incorporated, and providing that the Commonwealth reimburse the said Authority for the land given to the United States of America I I I I I I i I I I I I I I I I I 68-A-64 St. 1965, c. 882 St. 1966, c. 628 St. 1966, c. 636 St. 1967, c. 24 St. 1967, c. 81 St. 1967, c. 87 St. 1967, c. 537 St. 1967, c. 547 -5- STATUTORY REFE~.ENCE__S~ AS A~ENDED (CONTINUED An Act excluding operations of the Massachusetts Bay Transportation Authority with equipment o%med and operated by said Authority from the Juris- diction and control of city, town and certain other licensing authorities An Act prohibiting the Massachusetts Bay Trans- portatiom Authority from disposing of or selling its power plants An Act providing that sales of real estate to the Commonwealth, its political subdivisions or public authorities by the Massachusetts Bay Transportation Authority shall be exempt from the law requiring competitive bidding thereon An Act increasing the amount of contract assistance which may be provided by the Commonwealth to finance agreements with Railroads to provide for passenger service to and from Boston for an extended period An Act increasing the time which the Advisory Board of the Massachusetts Bay Transportation Authority may have to study and approve the budget of said Authority An Act providing for the addition of certain other municipalities to the area constituting the Massachusetts Bay Transportation Authority, and relating to certain assessments on the Town of Maynard under the Massachusetts Bay Transportation Authority law An Act authorizing the City of Quincy and the Massachusetts Bay Transportation Authority to lease, jointly, air rights and space over the City of Quincy parking facilities and Massachusetts Bay Transporta- tion Authority facilities in the City of Quincy An Act authorizing the Massachusetts Bay Transpor- tation Authority to lease air rights over its transportation facilities in the City of Quincy I I 68-A-64 -6- An examination has been made of the accounts of the Massachusetts Bay I I I Transportation Authority covering the period from September 1, 1966 to September 30, 1967. This period is provided for in Section 5 of Chapter 650 of the Acts of 1965 which amended Section 26 of Chapter 563 of the Acts of 1964 by changing the accounting periods of the Authority on which the net cost of service will be determined from a calendar year basis to the following fiscal periods: I I a) August 4, 1964 to July 31, 1965 b) August 1, 1965 to August 31, 1966 c) September 1, 1966 to September 30, 1967 d) October 1, 196~ to October 3~, 1968 e) November 1, 1968 to November 30, 1969 f) December 1, 1969 to December 31, 1970 I I The Authority shall operate on a calendar year basis thereafter. The examination was made under authority of Section 17 of Chapter 16lA, a new chapter to the General Laws, which was inserted by Section 18 of Chapter 563 of the Acts of 1964. In accordance with the provisions of Chapter 563 of the Acts of 1964, the Metropolitan Transit Authority was abolished and its powers, duties and I I I operations were assigned to the Massachusetts Bay Transportation Authority as of August 4, 1964, SCOPE OF AUDIT Change in Accounting System: Effective September 1, 1966, the Authority adopted Responsibility Accounting, a system for planning and controlling operations. I I I 1 I I Under the new system, expenditures are reported on the basis of where they were incurred and who had responsibility for them. The system was prepared and installed by a national accounting firm. This system involves the use of data processing equipment and employees were instructed by the accounting firm in the various phases of the system. The balance sheet of the Massachusetts Bay Transportation Authority and its related statement of income and cost of service for the period beginning September 1, 1966 and ending September 30, 1967 were examined. The internal pro- cedures and controls were reviewed, and such tests of the responsibility system 68-A-64 -7- ! ! records were made as were considered necessary under the circumstances. The general ledger and subsidiar~ ledgers formerly kept and posted by hand were discontinued and detail is now maintained by the data machine records. Fixed Assets: Additions to and retirements of physical properties were checked for proper authorizations. ! ! Reserve for Depreciation: account are summarized as follows: Increases: The changes in the Reserve for Depreciation Allowable depreciation representing interest paid on Funded Debt (considered part of reimbursable deficit) Other depreciation added to the reserve (not considered part of the reimbursable deficit): Depreciation of Ways and Structures Depreciation of Equipment Depreciation of Power Plants Amortization of Federal Grant received for purchase of new buses (not reimbursable) Depreciation for period August ~, 1964 to July 31, 1965 (added to the reserve account in period ended September 30, 1967 but charged to unreimhursed cost of service) $ 450,997 O0 1,~50,438 O0 ,248,0q9_00 Decreases: Cost of properties retired Net increase to the Reserve for Depreciation account for fiscal year ending September 30, 1967 $4,005,696 2,149,484 O0 105,503 O0 _~,526,000 O0 $7,786,683 42 The accounts reflecting the increases and decreases were test checked. Cash: The cash on hand and in banks on September 30, 1967 was verified by correspondence and the bank reconciliations as of that date were reviewed. Outstanding checks and other in-transit items were checked out subsequent to September 30, 1967. The detail of cash on hand and in banks follows: Cash in Banks: Regular Cash Accounts Special Cash Deposits Accounts: Weekly Payroll-Imprest Monthly Payroll-Imprest Freight Prepayment Workmen's Compensation Working Funds in Various Locations $400,000 O0 20,000 00 5,000 00 25,000 00 $3,087,283 97 450,000 00 ., 1~9.,385 00 $3,659,668 97 68-A-64 --8-- The fiscal year September 1, 1966 to September 30, 1967 was divided into 14 - 4 week accounting periods. The fiscal year October 1, 1967 to October 31, 1968 will also be composed of 14 - 4 week accounting periods. The bank reconciliations for the accounting period ended November 24, 1967 were also examined and reviewed. On September 30, 1967, the Authority had investments of Investments: regular cash as follows: Detail Certificates of Deposit Federal National Mortgage Association Notes Interest Accrued as of Sept. 30, 1967 Book Value $24,825,000 00 Maturity Value $25,365,001 02 ~L, 366,854 17 .. 4,500,000_Q0 $29,191,854 17 $29,865,001 02 15,44037 - ~_~9~29.7,294~5~_ $29,_865 001.0.~. The investments on hand as of September 30, 1967 were verified by direct correspondence with the custodian and tests were made of purchases and maturities during the period under audit. Interest is accrued and added to the book value of the investments each period. The interest which is included in the book value of the investments ($15,440.37) was verified by records kept in the Treasurer's Department. As of September 30, 1967, substantially all of the investments owned at that date resulted from purchases made on September 28, 1967 from proceeds of the sale of $30,000,000.00 temporary loan notes sold by the Authority to the First National Bank of Boston. These notes were dated September 28, 1967 and are due October 31, 1968 with interest at 3.37 - 3.45%. The money was borrowed for future current expenses. Special Deposits: An analysis of this account showed the following detail as of September 30, 1967: Transit Construction - Cash in Bank Transit Construction - Investments Capital Expansion Program - Cash in Bank Capital Expansion Program - Investments $ 4,599 63 240,000 O0 $ 244,599 63 $ 27,620 58 18,991,405 56 19,019,026 14 68-A-64 -9- Other Capital Costs - Cash in Bank Other Capital Costs - Investments Garage and Other Purposes - Cash in Bank Garage and Other Purposes - Investments Express Facilities - Cash in Bank Express Facilities - Investments Federal Aid Expansion - Cash in Bank Federal Aid Expansion - Investments $ 391 99 23,994,824 57 $23,995,216 56 $ 608 15 L1,9~9~,,538 15 2,000,146 30 $ 35,061 32 37~790,%93 84 $ 2,964 90 712 ~000 O0 37,825,255 16 $83,084,24379 714,964 90 $8.3~799,20869_ When the Authority received the proceeds from its first Bond Issue, General Transportation System Bonds of 1967 Series A, on March 1, 1967, $40,000,000.00 was allocated to a trust fund account whichwas earmarked to pay off the $40,000,000.00 Bond Anticipation notes dated September 15, 1966 with a maturity date of March 15, 1967. The $40,000,000.00 Trust Fund Cash was immediately invested in 41/2% U. S. Treasury Obligations that matured March 15, 1967 and the proceeds at that time was used to pay off the above mentioned $40,000,000.00 Bond Anticipation notes. The balance remaining from the sale of the bonds ($70,000,000.00) was allocated to various special cash accounts and the money was also invested in securities which yielded an average interest rate of approximately 5.30% which was 1.50% higher than the average interest cost of 3.79348% of the bond issue of March 1, 1967. The Authority as of March 1, 1967 also had an unexpended balance of $22,260,000.00 from the Bond Anticipation note sale of September 15, 1966 which also was carried in special cash and investment accounts by the Authority. These invest- ments had an average yield of about 5% as of March 1, 1967. As of the balance sheet date September 30, 1967, the total of both unexpended construction funds in cash or investments amounted to $83,084,243.79, as detailed above. In addition, the Authority carried in a special deposit account of cash and investments, an aggregate amount of $714,964.90 which represented an unexpended 68-A-64 -10- balance of amounts received from the Federal Government for Capital Expansion purposes and for acquisition of new buses. Other Special Deposits: As of the end of the audit period, the balance sheet shows cash held in special accounts for the following purposes: Deductions from Payrolls: Federal Income Tax Withheld State Income Tax Withheld Federal F.I.C.A. Tax Withheld U. S. Savings Bond - Payroll Plan Cash Deposited to Pay for Unsettled Land Takings $135,925 37 47,618 55 30,970 24 32,247 70 $2463761 86 . 63~590 81 $310,352 67 The balances in these accounts were checked to the supporting detail and balances were confirmed with the depositories. Accounts Receivable - Commonwealth of Massachusetts: As of September 30, 1967, the detail of the amount due from the Commonwealth was composed of the following: Reimbursable Deficit for the fiscal year ended September 30, 1967 Less: Advance payment made by the Commonwealth in September 1967 Balance due Balance due on contract for State Financial Assistance, which is based at a monthly rate of $250,000.00, total not to exceed $3,000,000.00 per year Amount due for the current fiscal year to September 30, 1967 for reimbursable gas and diesel fuel taxes (application for refund is made on a calendar year basis) Amount due for contract assistance in connection with the Authority's first Bond Issue of $110,000,000.00 (clause #1 and clause #3 of the contract) Amount due as of September 30, 1967 as provided for in the Grant of Contract Assistance between the Commonwealth and the MBTA, dated April 24, 1967 Pumsuant to Chapter 24 of the Acts of 1967. This amount represents 90% of the costs incurred by the Authority for railroad assistance from the date of the contract to the end of the present fiscal year of the Authority. The contract as provided, runs to June 30, 1968 and the maximum amount of the assistance is $4,500,000.00 $24,476,135 34 . 22,000,000 O0 $2,476,135 34 331,919 78 174,297 62 218,705 63 306,564 61 I I I I I I I I I I I I I I I I I I I I 68-A-64 -ll- The above amounts were verified by reference to the outstanding contracts and grants, copies of bills rendered by the Authority to the Commonwealth, and payments that had been made by the Commonwealth to September 30, 1967 and subsequent thereto. Accounts Receivable - Other: balance sheet was as follows: Unpaid bills for Collection Unpaid Special Bus Charges Unpaid Tickets and Token Charges Unpaid Employees' Uniforms Less: Reserve for Doubtful Accounts Items Pending Legal Adjustment Notes Receivable Rents Receivable Interest Accrued: On Special Cash Securities On Boston Metropolitan District Investments On Bond Proceeds Investments The detail making up this item on the $1,568,257 47 76,113 62 14,458 O0 1,83! 50 $1,660,660 59 703 70 $1,659,956 89 137,053 38 8,793 21 22,001 07 $ 431,453 03 34,685 14 1,350,17~ 39 1,816,3!2 56 $3,644,117 11 Trial balances of the unpaid bills for collection and other special accounts as of September 30, 1967 were checked to the books and other supporting detail. Payments received on account of these outstanding balances to November 24, 1967 were checked to the records of the Authority, and outstanding balances still open as of this date were verified by correspondence. Certain items of overdue accounts receivable are now carried in a special account under the control of the General Attorney of the Authority. Charge-offs and adjustments of these items during the audit period were test checked with proper authorization from the legal department and collections made by the legal department and turned over to the Authority were also test checked. The legal department confirmed by letter the amount they were holding. There were two notes receivable on hand as of the audit date, which were examined. Currently, payments are being made on these notes according to the terms of the agreements. m i 68-A-64 -12- Rents receivable were also reviewed from balances owing and a test check was made of the monthly or quarterly rents set up by accounting periods. Several overdue balances in this account were reviewed with the Authority's attorney who has instituted proceedings against the tenants. Unpaid rent bills as of the audit date were also test checked to subsequent cash receipts. The Authority also classifies interest accrued on its various investments, I I I except regular cash, as Accounts Receivable - Other for balance sheet purposes. The Treasurer's Department keeps a complete listing of its investments in various regular and special accounts, together with maturity dates, total income accruing on the investment and the amount to accrue for each period. The balances of the interest accrued as of September 30, 1967 in these various accounts were checked to the Authority's list of securities owned and the interest accrued thereon. Materials and Supplies: The net book value of materials and supplies on hand September 30, 1967 was as follows: Cost Less: Reserve for Obsolescence Net Book Value $2,532,308 33 67,156 36 $2,465, p1,...92 Procedures followed for additions to the ~aterial and Supplies account and transfers out of stock were test checked to the Monthly Status Report. prepaid Expenses: This account consisted of the following detail: Prepaid Insurance: Fire Insurance Fidelity and Holdup Boiler Liability Excess Public Liability Workmen's Compensation Self-Insurance Excess Coverage Prepaid Gas and Diesel Fuel Taxes - State $130,007 82 7,974 60 5,422 56 34,830 13 5,000 21 1,153 88 $184,389 20 3,953 20 $188,342 40 The prepaid insurance premiums were verified by computations and copies of I ! insurance policies in effect as of September 30, 1967 were examined. The amount shown as Prepaid Gas and Diesel Fuel Taxes - State represents a 68-A-64 -13- standard tax cost the Authority is carrying on their books applying to the standard inventory of gas and diesel fuel in the Materials and Supplies account. Deferred Charges: As of September 30, 1967 the deferred charges amounted to $6,329,975.73 as follows: Unamortized Expansion and Modernization Costs: Railroad Aid: Boston and Maine Railroad: Commuter subsidy Miscellaneous Expenses New York, New Haven and Hartford Railroad: Commuter Subsidy Miscellaneous Expenses Expansion Program Special Projects Preliminary Engineering Others: Advertising Contract - Sec. A Stationary Motors not in Active Status Boston and Maine Subsidy Outside ~TA Area New York, New Haven and Hartford Pmilroad Subsidy Outside MBTA Area Material Price Variance Bills for Collection in Process Unamortized Early Retirements (East Boston trucks) Unamortized Early Retirements (31 buses) Coding Suspense Account Miscellaneous Deferred Charges: Expenses to implement ABC system of inventory control PartitionAnelex Building Professional services in connection with Job classification, organization, planning, etc. Prepare and install a Responsibility Area Budget and Report System Loan to New York, New Haven and Hartford Railroad Reconstruction of Center Street Bridge, West Roxbury Vacation allowance paid in 1967 applicable to 1968 Prepayment of materials, Haymarket North Expense Implementation IBM 360 Design and Programming $3,669,705 79 91.,213_.4~ $3,760,919 24 $1,163,443 01 75,637 75 1,2~9~080 76 $5,000,000 O0 125,306 47 275,127 32 58,285 60 $ 26,445 91 25,373 79 15,804 83 4,903 07 1,800 74 57,231 39 157,217 89 43,540 35 3,579 20 335,897 17 $ 7,137 96 74,652 40 55,025 60 135,673 07 111,670 47 17,027 10 75,736 81 __5p,435 76 535,359 17 $6,329,975 73 Funded Debt: The funded debt as of September 30, 1967 was composed of the following: I I I I I I I I I I I I I I I I I 68-A-64 -14- Held by the Boston Metropolitan District General Transportation System Bonds Outstanding (Issued March 1, 1967) $134,085,409 74 110,000,000 O0 The funded debt as of September 30, 1967 held by the Boston Metropolitan District was verified by an audit of the District by the Department of the State Auditor. The balance of the funded debt $110,000,000.00, represented the entire outstanding issue of the General Transportation System Bonds 1967 Series A dated March 1, 1967 issued under General Law 16lA, Section 23. The transactions affecting these accounts were examined for the audit period~ Unreimbursed Cost of Service: This item was made up of the following detail: Unreimbursed deficit from fiscal year ended August 31, 1966 Add: (On a/c unapproved depreciation) Depreciation added retroactively to cover depreciation for the period August 4, 1964 to July 31, 1965 Cost of service in excess of income for the thirteen month period ended September 30, 1967 Deduct: Cost of service reimbursed by the Commonwealth of Massachusetts to be assessed to the cities and towns constituting the Authority Contract Assistance, portion of the cost of service paid by the Commonwealth of Massachusetts in accordance with a contract for financial assistance between the Authority and the Commonwealth; pursuant to Chapter 563 of the Acts of 1964 State diesel and gasoline fuel taxes reimbursable to the Authority in accordance with Section 2 of Chapter 563 of the Acts of 1964 Amortization of Federal Grant received toward the purchase of 175 new buses Credit $ 2,050,401 00 1,526,000 O0 31,757,850 O0 (24,476,135 34) (4,780,939 38) (245~788 28) 00) Notes Payable: The balance sheet total for notes payable of $30,000,000.00 was for a temporary note issued for current expenses. The note was dated September 28, 1967 and is payable October 31, 1968 with interest at 3.37 to 3.45%. A premium of $783.00 was receiVed on the sale of this note. I I I I I I i I I 68-A-64 -15- Accounts Payable: An analysis of the amount of $2,994,793.02 in this account follows: Vouchers Payable Unclaimed Wages Unvouchered Payable Contract Retainage $1,987,383 14 13,210 95 34,603 19 ~959,517 14 $2,994,714 42 The trial balance of unpaid vouchers as of September 30, 1967 was reconciled with the control account. Payments on these vouchers were test checked to cash disbursements made subsequent to September 30, 1967. Transactiorm affecting the Unclaimed Checks and Drafts accounts were verified for the audit period. Accrued Payroll: An analysis of the amount of $130,556.31 in this account follows: Accrued Payroll Accrued Back Pay Accrued F.I.C.A. Taxes $ 71,265 67 55,471 04 3,819 60 $_ 3 0,556 3! Accrued Interest: The total of $1,406,484.57 in this account is composed of the following items: Accrued Interest - Bonds (TA) Accrued Interest - Rapid Transit Bonds (SA) Accrued Interest - MTA Construction Bonds Accrued Interest - MTA Equipment Serial Bonds Accrued Interest - 8A Refunding Bonds Accrued Interest - Temporary Notes Current Expenses Accrued Rent - Cambridge Subway Accrued Interest - Bonds for Express (Sec. 23(1) Accrued Interest - Bonds for Buses and other purposes (Sec. 23(3) Accrued Interest - Bonds for Railroad Aid (Sec. 23(2) Accrued Interest - Bonds for Capital Costs (Sec. 23(4) Accrued Interest - Bonds for Garage and other purposes (Sec. 23(3) $ 391,224 56 17,972 60 159,591 12 158,004 16 170,825 33 5,710 55 157,131 25 232,912 50 11,875 O0 15,625 O0 79,318 75 6,293 75 $1,406,484 57 The accrued interest set up as of September 30, 1967 for the above outstanding debt was test checked for accuracy of the accruals. 68-A-64 -16- Other Accrued Liabilities: Other accrued liabilities totaling $1,145,733.12 included the following items: Accrued Liabilities - Employees' Deposits: F.I.C.A. Tax Federal Withholding Tax State Withholding Tax U. S. Savings Bonds Employee Pass, Punch and Badge Deposits Additional Rents: Fitz Inn Auto Parks O'Ryan and Batchelder C.F. and E. Allen B. O'Reilly Deposits (Includes $38,308.19, Master Medical Plan deduction) Deferred Compensation (General Manager) Accrued Expenses (Applicable to month of Sept. 1967) Articles Held for Redemption $ 30,970 24 135,925 37 47,618 55 32,247 70 $ 2,887 O1 21,932 11 90 08 471 34 $ 246,761 86 12,164 50 35,380 54 40,308 19 14,745 28 795,087 55 .... 1,2852__0 $1,145,733 12 The above accounts were analyzed for the audit period and detail supporting the balances in the accounts were reviewed. Unredeemed Tickets and Tokens: Unredeemed tickets and tokens amounted to $446,276.38 and consisted of the following accounts: Outstanding Pupil Tickets - Summer School Outstanding Special Pupils' Tickets Outstanding Student Tickets Outstanding Miscellaneous Tickets and Tokens Outstanding Tokens - MBTA Outstanding Pupil Tickets 2,653 O0 28,505 50 (2,500 00) 5,319 38 411,543 80 754 70 The activity in the above accounts was reviewed. Deferred Credits: Deferred credits amounted to $4,220,463.15 and consisted of the following accounts: Insurance Settlement (1941-43 Beacon Street) Payment to Middlesex and Boston Co. (10 buses) Rents, Old Colony Line Federal Aid - Station Modernization Federal Aid - Buses Federal Aid - Transportation Facilities Superior Court Land Takings $ 8,250 58 19,856 36 12,950 94 601,497 16 2,234,102 16 1,280,215 14 63,59o 8% The activity in the above accounts was reviewed. 68-A-64 -17- Workmen's Compensation Insurance Reserve: Balance September 30, 1967 $716,799.16 This amount represented the remaining balance left in a reserve that was transferr,d over to the Authority books from the Transit Mutual Insurance Company books at the time the Authority became a self-insurer for Workmen's Compensation Insurance on May 1, 1965. It represented an estimated amount that might have to be paid for claims pending against the former insurer, the Transit Mutual Insurance Company. During the audit period ending September 30, 1967 the balance of the reserve was reduced by $91,809.54 which represented claims and adjustments paid or made against these old claims against the former insurer. Test checks were made of the activity in this account during the audit period. Payments for Injury.and Damage Claims: Tests were made of available data, including signed releases from claimants and paid checks for settled injury and damage claims. Purchasing. Department: The procedures in the Purchasing Department were reviewed. A test analysis of certain bids and awards was made. Operating Expense~: An analysis of the internal control was made. Certain accounts were tested to determine the propriety of the charges to cost of services. Assessments on 79 Cities and Towns: The net cost of express service and local service to be assessed on the municipalities served by the Authority was verified to the Statement of Net Cost of Service by Express and Local for the audit period and to supporting schedules, exhibits and I.B.M. listings indicating the revenue, cost and resultant net profit or loss incurred on each route within the MBTA district. The data appearing on the schedules, exhibits and I.B.M. listings was checked to supporting records. The computation of the assessment for each of the 79 municipalities was 68-A-64 -18- verified to the formulas prescribed in Sections 8, 9, 10, 11 and 12 of Chapter 16lA of the General Laws for conformity with the statutory method for the distribution of the net cost of service upon the 79 cities and towns comprising the MBTA district. Income: The control of the flow of cash from operators and collectors to the depository banks was reviewed. Total cash received was compared with tile banks' records of deposits on the bank statements. Income from other sources was test checked to supporting documents. Boston and Maine Corporation: An analysis of the account of the subsidy to the Boston and Maine Corporation was made for the audit period. Also the amount due from the Commonwealth of Massachusetts under contract assistance was reviewed. New York, New Haven and Hartford Railroad Company_: An analysis of the account of the amounts due to this Corporation for the period under audit and the amount due from. the Commonwealth of Massachusetts under contract assistance was made. Middlesex and Boston Street Railway C.gmpany: An examination of the books and records of the above was not made during the period under audit. This Company is audited periodically by personnel of the Authority. The MBTA audit report of Middlesex and Boston Street Railway Company for the year ended June 30, 1967 was examined. Consultant Contracts: 1. Architectural 2. Engineering 3. Maintenance 4. Planning 5. Legal 6. Financial 7. Other The fees of consultant firms were test checked to the per diem rates established for each of the professional or technical classes of work to be performed for the Authority under the terms of their contracts. The project areas and the types I I I I I I I I I I I I I I I I I I I 68-A-64 -19- of work performed were also checked to the scope of work designated in their contracts. Ail contracts completed during the audit period were examined to determine that the total payments made on each of these contracts did not exceed the contract maximum or lump sum amount. Ail contracts abandoned, suspended or terminated prior to completion during the audit period were carefully reviewed and the reasons for their cessation noted in the audit report. 68-A-6~ -20- NOTES AND COMMENTS Cost to t~..Taxpayers for ~BTA Operation~.: Although the MBTA reported a net deficit of $2q,q76,135.3q for the period from September 1, 1966 to September 30, 1957, the cost of MBTA operations to the taxpayers was considerably more, as detailed below: Net Deficit Reported by MBTA Reimbursable Gas and Diesel Fuel Oil Taxes State Financial Assistance - Debt Service State Financial Assistance - Railroad Subsidies Boston Metropolitan District Budget Interest on Borrowing by the Commonwealth in Anticipation of Deficit Assessments $2[1.,u,76,135 3~ 2u,5,789 15 ~,780,939 38 3,396,536 75 16,000 00 ,,,966,952 02 $33,882,352 6~ The above items are discussed in detail further on in this report. As discussed in the previous audit report, the Authorit7 is continuing the following practices which have added to the financial burden of the taxpayers on whom the spiraling annual deficit is being assessed: a) ~ntal of the Administrative and Legal quarters in the Anelex Building, Causeway Street, Boston at an annual rental of $79,696.00 per yea~. The lease on this building runs to May 31, 1971. b) 29 parking spaces at an annual rental of $~,52~.00 at the Anelex Building: ~9 Authority automobiles for use of the personnel; and payments of $~6,320.08 to 10~ employees for the use of their cars. c) An executive annual payroll of $3,308,657.00 covering 288 employees. d) Consultant contracts totaling $13,q70,507.91 since the beginning of the MBTA in 196q to date. Deficit: The Authority reported a net deficit of $2q,q76,135.3q for the period September 1, 1966 to September 30, 1967, and the deficit will be assessed upon the 79 cities and towns in the MBTA district in November 1968. Maynard joined the MBTA system as its 79th member on January 1, 1967. The details of the assessments on the 79 cities and towns of the District can be found in Schedule No. XIII which accompanies this audit report. In comparing the MBTA deficit with that of its predecessor, the ~TA, it must be noted that the following subsidies, which were received by the MBTA during the audit period, were not available to the MTA: 68-A-6~ -21- 1. Reimbursable gas and diesel fuel oil taxes which amounted to $2~5,789.00 for the period under audit. State Financial Assistance for debt service of $250,000.00 per month, which amounted to $3,250,000.00 for the period covered by this audit. State Financial Assistance on railroad subsidies, Chapter 563 of the Acts of 196~ extending no later than December 31, 1987 for an amount equal to 50% of the total payments, not exceeding $10,000,000.00. $5,000,000.00 of this amount was contributed by the MBTA through their Series A Bond Issue. The amount billed to the Commonwealth during the period ending September 30, 1967, which completed the State's assistance, amounted to $1,757,7~1.67. State Financial Assistance on railroad subsidy contract, Chapter 2~ of the Acts of 1967 (90%) $1,638,795.08. State Financial Assistance to assist in paying a portion of the interest payments on the Authority's first bond issue. This amounted to $1,530,939.38 for the audit period ending September 30, 1967. Included in the deficit is the Middlesex and Boston Street Railway subsidy of $397,160.00 which is distributed as follows: Original 1~ Cities and Towns 65 Cities and Towns Total 79 Cities and Towns $117,756 76 279,~03 2~ $397~160 00 The assessments to the cities and towns on account of this subsidy is computed on the basis of two separate formulas. The share of the subsidy applicable to the 14 cities and towns is assessed on the component cities and towns as follows: 85% based on the 19qO passenger count and 15% based on the loss attributable to routes served. The share of the subsidy applicable to the remaining 65 cities and towns is assessed as follows: 50% based on population and 50% based on the loss attributable to routes served. The assessment to the original 1~ cities and towns on account of this subsidy is included in Column D of Schedule XIII. An analysis of this assessment of $117,756.76 follows: I I I I I I I I I I I I I I I I I I 68-A-6~ -22- Arlington $ ~,528 80 Belmont 2,663 52 Boston 6q,4q2 8~ Brookiine 3,910 Oq Cambridge 9,670 08 Chelsea 2,018 58 Everett 2,330 q? Malden 3,371 54 Medford 3,216 l0 Milton 776 ~2 Newton 12,975 26 Revere 1,636 93 Somerville 5,009 07 Watertown 1 207 11 $~7,756 76 An analysis of the assessments to the 65 cities and towns of $279,q03.24 is shown in Column E of Schedule No. XIII. The deficit of $2q,q76,135.3q, together with other charges of $982,951.83, will be assessed upon the cities and tow~%$ in the MBTA district in November 1968. The other charges which a~e not included in the cost of service a~e for interest on deficit advances made by the State T~easur~r and for the cost of operating the Boston Metropolitan District office. A summary of the charges totaling $25,~59,087.17, which will be levied upon the taxpayers of the MBTA district, follows: Deficit September 1, 1966 to September 30, 1967 Other Charges: Interest on Borrowings in Anticipation of Deficit Assessments Boston Metropolitan District Budget $24,~76,135 3~ $966,951 83 _ ,1,6~000 00, ,, 982,951 8.3. $.25 ,~59,,~,087 17 Chapter 563 of the Acts of 1964, which c~eated the MBTA, amended Chapter 71 of the General Laws by inserting Section 7B, which provides for reimbtucsements to the cities and towns to meet the cost of maintaining a public transportation system used for the transportation of pupils. This ~eimbu~sement is in addition to certain other reimbursements for pupil transportation provided by Section 7A of said Chapter 71. 68-A-6~ -23- The amount certified under Section 7B for payment to the cities and towns of the District was $1,2~6,~95.88, and it was distributed as follows: To lq Cities and Towns To 65 Cities and Towns $1,055,~98 86 .... ,1,90,997 02. $1~2~6,~95 88_ ~Xc~ss Depreciation: The cost of service in excess of i~come, as shown by the Authority's balance sheet, was $33,291,142.95 for the period September 1, 1966 to September 30, 1967. This amount was reduced by the following items: State Financial Assistance State Financial Assistance, Railroad Subsidy State Reimbursable Gas and Fuel Oil Taxes Unreimbursed Deficit Account of Excess Depreciation $4,780,939 88 1,688,795 08 2q5,789 15 2 ~,1~.9 ~,~.8~ 09 $8 ~..815,007 61 These credits reduced the reimbursable loss to $24,~76,135.3~, which was the reported deficit of the Authority. The unreimbursed deficit of $2,1~9,~8~.00 is the result of a difference of opinion between the Advisory Board and MBTA concerning charging depreciation over and shove the debt retirement to expense, and thus including the item in the deficit assessable on the cities and towns of the District. Since its inception, the MBTA has presented in its budgets requests for appropriations of varying sums for depreciation expense, and each time the request has been turned down by the Advisory Board. A study made by an engineering firm concluded that an annual appropriation of over $2,000,000.00 above debt retirement was needed in order to bring the Authority's depreciation account in agreement with the remaining life of the properties involved, namely: Road and Equipment Subways, Tunnels and other Facilities Acquired from the City of Boston August 3, 1949 Subways, Tunnels and other Facilities Constructed by the MTA since August 2, 1949 68-A-6~ I I I Since the Advisory Board refused to approve the Authority's 1967 budget request of $2,149,484.00 for depreciation, the unreimbursed deficit amount as of September 30, 1967 is $5,725,885.00, and it will continue to increase each audit period. The Department of the State Auditor in successive audit reports has been in agreement with the stand taken by the Advisory Board of the MBTA that no depreci- ation be char~ed to expense. Below is a summary of the comments of the Department of the State Auditor on depreciation. Paragraph 4 of Section 8 of Chapter 544 of the Acts of 1947 authorized the Trustees of the MTA to expend for capital purposes such amounts as are chatted to the cost of service for an annual allowance for depreciation. Section 11 of this statute permits the Trustees to include in the cost of service for depreciation: "...such a~lowance as the trustees, subject to the approval of the department, may deem necessary or advisa~ for depreciation of property . .." The Legislature, therefore, apparently intended that funds for capital I I I additions, not otherwise provided for, be obtained through char~es to the cost of service for depreciation. When Chapter 544 of the Acts of 1947 was originally enacted, there was some justification for a depreciation charge in the cost of service because revenue equip- ment was paid from the working capital of the Authority. Chapter 572 of the Acts of I I I 1949, however, eliminated the necessity for such a charge to the cost of sea, ice because it provided that funds for the acquisition of revenue equipment would be raised by bond issues, and that the bond retirements would be charged to the cost of service in lieu of depreciation. Because the cost of fixed assets is being amortized by bond retirements I I I charged to the cost of service or assessed directly upon the taxpayers, only those funds for capital expenditures not provided hy a bond issue or the sale or disposition of capital assets should he obtained by a depreciation charge to the cost of service, as outlined in Paragraph 4, Section 8 of Chapter 544 of the Acts of 1947, as amended. 68-A-64 -25- ! ! Previous audit reports have recommended that this charge for depreciation be discontinued and that the taxpayers of the District he charged, in the annual deficit, only for the cost of necessary replacements not otherwise provided for. Under such a procedure, the taxpayers would he reimbursing the Authority only for money actually expended for this purpose. This recommended change in MTA accounting ! ! procedures was also agreed to by an engineering and accounting survey of the MTA conducted in 1953 by a private organization at a cost to the Authority of $100,000.00. The MBTA Enabling Act repealed the above-mentioned Section 11 of Chapter of the Acts of 1947, which permitted the Trustees to provide for depreciation in the cost of service and omitted such a provision from the new definition of the cost of service (G.L. 16lA, S. 1). Recently, however, ~wo other examinations were made, one by a public accounting firm, and the other by an engineering firm. The accounting firm appended the followin~ note to its report. "($) Depreciation ~e Authority provides for depreciation by crediting payments on long-term debt together with a provision for depreciatio~ on certain items of property to the reserw for depreciation. A recent study of depreciation requirements of the authority indicates that~ under normal conditions, the annual provision for depreciation should be increased by opprozimately ~$~0,000.00 in order to ~mortize the cost of its property over the estimated remaini~j life. In addition, provision should also be made to o~ortise the undepreciated book value of facilities which it is presently contemplated wil~ be retired in advance of their normal life. To ~mortize s~h costs over ~ twent~j-year period wo~d require an additional charge to the cost of service of appromimately ~$00,000.00. Th~ Authority plans to provide these additional omounts beginning in 1~$." This ignores the enabling legislation and provides for duplicate assess- ments upon the cities and towns that must meet the "net cost of service" or deficit requirements. There is no need for such provision for depreciation to be included in the cost of service, since the cost of fixed assets will he amortized hy bond retirements charged to the cost of service. Cost of fixed assets not so provided for may he included in the budget pursuant to the provisions of the new legislation. 68-A-6~ -26- I I First MBTA Bond Issue: The MBTA floated its first Bond Issue, General Transportation System Bonds, 1967, Series A on February 15, 1967 in the mount of $110,000,000.00 at par plus a premium of $7,700.00. The bonds are dated March 1, 1967, bear interest rates varying from 3.75% to 3.85% for an average rate of 3.79%, and are to mature yearly in varying amounts beginning March 1, 1968 and ending March 1, 2007. The bonds were issued to provide funds for the following purposes: Express Service Transportation Facilities Agreements with Railroads Local Service Transportation Facilities Capital Costs of Certain Transportation Facilities, Including Yards, Shops, and Rolling Stock $ 74,000,000 00 5,000,000 00 5,800,000 00 .. ,25,20,0,000 00 $110 ~000,000 00 The proceeds are required to be used and applied as follows: For Payment of Principal of the Outstanding Notes of the Authority For Deposit in Bond Proceeds Accounts $ 40,000,000 00 70,000,000 00 .$110,000,000 00 ~inanc.i.ng Cost..s: The following comment appeared in the final audit report of the MTA which was issued by the Department of the State Auditor on August 6, 1965: I I I I I "6. Financing. - Boston Metropolitan District and Massachusetts Bay Tpans~ortation Autho'rit~.: The MassaChusetts Bay TransPortat~"on Authority now finds :itself involved in two sysCems of financing that are_ hardly complementary and are in many respects duplicating and consequently extravagant. "For the past $0 years the B.M.D. horn successfully supplied the money to purchase the bonds of the Boston Elevated RaiZway C~any and its successor the Metropolitan Tromsit Authority for operation of the trans- portation system. Outing this period the B.M.D. has sold B1 bond and note issues totaling ~,~17,4~$.45. To the M.T.A. alone the B.M.D. has pro- vided ~£10~160~817.$~ of which ~76,08~,88~.04 has been repaid to the District leaving as of December $I, 1~4~ ~1~4,074,~8.~,8 of the M.T.A. 's outstanding bonds in the hands of the District. The ~44~07~8.~8 of M.T.A. bonds in addition to ~??1~£.$~ in cash and investments is equal to the contra debt of the District of $I~4~846,6£0.64 of which ~£0,170~,62,0.~4 is held by the Sinking Fu~d Commissioners of the City of Boston and ~11~7~,000.00 is held by private investors. The awrage rate of inter~st paid by the M.T.A. (now M.B.T.A.) on the ~116~?~000.00 held by private investors and maturing in the n~xt $0 years is 68-A-6~ -27- "The following statement shows the expenses involved in recent bond issues involving more than $4000,000.00: Principal Interest Expense of Dat. e Of Issue ~mount _Rate Maturit.~ Date Premium Issue t4ar. 1~ 1962 $1~$16~000 O0 $.£0,~ Dee. 1~ ?£/£B - ) Mar. 1~ 1062 $~76~000 O0 $.00% Iviar. 1, 66/?? $ ?~117 60) $ 8~606 48 Oot. 1~ lgG~ 4OOO~O00 O0 $.~6% Dee. 1~ ?2/b~ 1B~601 ~$ 6~$8~ 66 Apr. 16~ IOG$ ?~O~?~O00 O0 ~.00~ Apr. 16~ Gd/O$ 6~1d6 00) Apr. 16~ IBG$ $~000~000 O0 A20% Apg. 16~ G~]O$ - ) ll~?~B OB Oot. 16~ 1065 ~16~000 O0 ~.26% Bee. 1~ ?~/O~ 1~?00 80) Oct. 16~ 106~ $~000,000 O0 $.~0% Oct. I6~ 6~/00 11~I~8 00) ~d?6 ~1 "The following temporary notes were issued during the s~me period: Principal Interest Note Dates Amount Rate Maturity Date. Jan. 1~ 1062 $~88~000 O0 1.18% Mar. 1~ I$62 Aug. 16~ 1962 60~000 O0 1.$$% Oct. 1~ 106B Aug. 16~ 1963 ?$~000 O0 1.60% Oct. 15~ 1965 "In face of this excellent $0 year performance of the Boston Metro- politan District, the District will be relegated to a passive existence for the next 30 years or until all its obligations have been met. The technical knowledge and the sophistication developed by the District in this field of finance will no longer be available to the M.B.T.A. The future responsibility of financing under the new Enabling Act will be that of the Board of Directors of the ~4. B.T.A. The actual processing of such bond and note issues will be handled by the General Manager~ and the Treasurer-Comptroller assisted by three finns of consultants and/or advisors~ namely~ a legal bond counse4 a financial advisor~ and a syndicated group of bond underwriters. "It is the opinion of the State A~ditor~ based on the agreements with the latter two firms and payments to the former (which exceeded ~5~000. O0 as of the end of April 1965) that the cost of fut~e financing of the M.B.T.~. will be far in excess of what the cost would have been to the B.M.D. It is suggested that the Enabling ~ct be ~ended to restore to the B.~.D. the fiscal responsibility under which it so ably performed in the past." The following is an excerpt from a further comment on this matter which appeared in our initial audit report of the ~,{BTA:. "Despite the arguments brought forward by the MBTA~ the opinion of the Department of the State ~ditorremains as it was stated in ou~ last a~dit report~ ~nd that is that the BMD should remain as a financing agency for the MBT~. However~ since the MBTA is presently n~gotiating a bond issue we believe that no legislative changes should be made or even contemplated at this time which would in any way effect the current negotiations. As soon as arrangements are completed for this present bond issue the whole question of coste~ etc.~ will resolve iteelfto I I I I I i I 68-A-64 "a matter of established fact, and it would be much more sensible to settle this issue and come to a decision at that time with regard to any legis- ~tlve changes that might be desirable." In this sa~e audit report it was po£nted out that since 1947 the 9M9 borrowed $136,136,000.00 in fifty-fou~ separate bond issues, and it is important to note that the premiums on these bond issues have amounted to $530,678.91, while the expenses of the B~D for the same issues totaled $186,159.88. The contention of the Depardrment of the State Auditor that the cost of the future financing of the MBTA would be fa~ in excess of what the cost would have been to the ~;iD is proven by the fact that the financing and incidental costs of the initial financing of the ~iBTA amounted to $161,000.00, as follows: Legal Advisor $ 85,000 00 Financial Advisor 56,500 00 Public Accounting Fi~m 19~$00 00_ $z61 000 00 In addition, it must be noted that the interest rates on the initial bond issue of the MBTA ranged from 3.75% to 3.85% for an average rate of 3.79%. It is therefore again recommended that the Enabling Act be amended to restore to the B~D the fiscal responsibility under which it so ably performed in the past. Anelex Executive Office Costs: A check of Authority expenditures shows an annual rental of $79,696.00 for the executive office, with additional rentals of $4,524.00 for 29 pa~king spaces, and also $7,743.00 for electricity. In the prior audit period payments in the amount of $69,253.40 had been made in connection with alterations and furnishings in the Anelex ~uarters of the Authority. In the current audit period, additional expenditures were made in the amount of $7,536.87, for a total to date of $76,790.27. An amount of $74,652.40 was set up in a deferred charge account, and it will be written off over the remaining life of the lease, starting with the next fiscal year (1968). The balance of the items mentioned above was charged currently to e~pense o 68--&-6~ -29- Budgets: The MBTA submits annual and supplementary budgets to the Advisory Board for its approval, ~e~ection or amendment. The recommendation that budgets be submitted for the approval of the cities and tOWns that constitute the ter~itol-y of the MBTA has been the subject of comment in the various reports of MTA audits conducted by the Depar%~nent of the State Auditor. Duleing the course of this audit, it was determined that the MBTA does not submit, nor is it ~equired to submits capital expenditure budgets to the Advisory Board of the MBTA. It was further deter~nined that the MBTA maintains for its own use records of its capital outlay programs on a current basis. It is the opinion of the Department of the State Auditor that the MBTA should submit informative budgets to the Advisory 9oa~d on all its capital expendittnee programs. The preliminal~y budget that has been approved by the Advisory Board for the fiscal yea~ ending October 31, 1968 indicates a net cost of service in excess of income of $40,457,188.00. State Contract Assistance reductions of $9,190,400.00 will reduce the estimated net loss to $31,266,788.00, and this loss will be furtheN reduced by unreimbu~sed items of depreciation amounting to $2,109,800.00. Therefore, the estimated assessable cost of service will amount to $29,156,988.00, as compared with the assessable deficit for September 30, 1967 of $24,476,135.34~ or an estimated increase of $~,680,852.66 in the net assessable deficit for the yea~ ending October 31, 1968. Recently the General Manager made an application for a fare increase to the Advisory Board, which, was temporarily tulmed down by the Advisory Board. It was estimated that, if the fare increase was approved~ it would add about $8,000,000.00 to the gross revenue of the Authority. On Ma~ch 19, 1968 the General Manager again asked for a fare increase of 10¢ on local lines. This sug[estion is again being studied by the Advisory Board. It mus~ be noted that Boston's Mayor is the biggest single influence on the Advisory Board, since Boston pays 62% of the I,IBTA deficit. 68-A-6~ -30- I I MBTA Debt: As of September 30, 1967 the debt of the ,085,409.74, as follows: Funded Debt: MBTA amounted to I I Boston Metropg~it_an DistMi.~. Bonds: Original Debt Subway Debt New Construction and Off-Street Parking Debt Revenue Equipment Debt $53,300,371 89 31,103,037 84 28,115,000 01 21,5 , 7, 000 00 $134,085 ,~09 74 I I I MBTA Series A T,.~anspor~ation Bonds - 1967: Express Service (Section 23-1) Railroad Aid (Section 23-2) Buses and Othen~ Purposes (Section 23-3) Garages and Other Purposes (Section 23-3) Other Capital Costs (Section 23-4) $74,000,000 00 5,000,000 O0 3,800,000 00 2,000,000 00 25,200,000 oo .1.10 ~000 ;000 00 0244,085,409 74 I I i I The debt service costs of $10,636,960.74 for the period f~em September 1, 1966 to September 30, 1967 follow: Principal Payments Paid or Accrued on BMD Bonds Interest Paid or Accrued on BMD Bonds Interest Paid or Accrued on MBTA Bonds $ 4,005,696 42 4,211,622 44 ... 2,419,~,641 88~ $10 ~636 ~.960 74 Sal~ of .~empora~y Note~: Sections 12 and 27 of Chapter 16lA of the General Laws, as amended, authorize the issue of temporary notes by the Authority. I I I I I I Section 12 of said Chapter 16lA states, in part, as follows: "Pending any payment from the state treasurer to th~ authority and at any other time when the a~thority~ in the opinion of the directors~ has not suffieient cash to make the payments required of it in the caur~e of its duties as s~eh payments become due~ the authority may temporarily borrow money and issue notes of the authority therefor." Section 27 of said Chapter 16lA ~eads, in part, as follows: "The authority is authorized to provide by resoZution at ons time or from time to time for the issue of inte~st bearing or discounted notes for the purposes and in the omounts that bonds may be issued. The notes shall be pay~le within three year8 from their dates or by June $0, ~?0~ whichever is later~ but the principal of and interest on notes issued for ~ shorter period may be renewed or paid from t~e to time by the issue of other notes hereunder matured within the required time from the date of the original loan being refunded.' 68-A-6~ -31- The detail of temporar~y notes issued for the period under audit, including the purpose of the issue, is as follows: Note Date Principal Interest Amount Date Due Rate Premium Purpose Sept. 15, 1966 Jan. 3, 1967 Sept. 28, 1967 $40,000,000 00 Mar. 15, 1967 4.89 5.75% $239 00 B) c) 25,000,000 00 Jan. 3, 1967 4 3/8% - A 30,000,000 00 Oct. 31, 1968 3.37 - 3.45% 783 00 A A - Pay current expenses B - Provide mass transportation facilities and equipment for use by Authority for local service pending bond issue C - Capital costs of Authority pending bond issue ,Federa~ Urban Mass Transportation Capital Grant Contracts with the_. MBTA: The MBTA has entered into the following agreements with the United States Government: Station Modernization and Improvement Program: Estimated Cost $9,115,920 00 Estimated Federal Contribution 4,557,960 O0 Estimated Additional Federal Contributions 1,519,320 00 Federal Contribution Payment to September 30, 1967 601,497 00 Date of Agreement August 17, 1965 B~ Purchase of 130 New 45 Passenger Air Conditioned Diesel Transit Buses: Estimated Cost Estimated Federal Contribution Estimated Additional Federal Contribution Federal Contribution Payment to September 30, 1967 Date of Agreement $4,800,000 00 2,400,000 00 800,000 00 2,339,605 00 June 3, 1966 Construction of a New Two Track Rapid Transit Tunnel and Related Facilities from the Vicinity of Haymarket Square to Charlestown at an Estimated Cost of $22,543,900.00 Estimated Net Cost Estimated Federal Contribution Estimated Additional Federal Contribution Federal Contribution Payment to September 30, 1967 Date of Agreement $18,000,000 00 9,000,000 00 3,000,000 O0 1,270,215 00 July 19, 1966 I i I The Authority has also signed the following Demonstration Grant with the Federal Department of Housing and Urban Development (HUD), the purpose of which is to research and demonstrate the capabilities of field-instrumentation systems in deep, braced cuts and to design approaches and principles, which will enable engineers to design more economical and safe tunnel structures: 68-A-6~ -32- I I I I Estimated Cost $2~0,900 00 Estimated Federal Contribution (2/3) 160,600 00 Federal Contribution Payment to Septembe~ 30, 1967 10,000 00 Date of A~reement Novembe~ 23, 1966 The Authority also has a contract with HUD for a Technical Study Grant in connection with the Southwest Rapid Transit Line. This study is being conducted in cooperation with the Massachusetts Institute of Technology. The project is known as Mass. Tg-1 and the details follow: Estimated Cost of Project $726,726 00 Estimated Federal Contribution (2/3) ~8~,~8~ 00 Federal Contr'~ticn Payment to September 30, 1967 ~ Date of Agreement September 11, 1967 Since September 30, 1967 an amount of $39,092.00 has L~,~ r~:.:'~iv6d from the Federal Agency In addition to th~ ~ove listed contracts, the Authority is awaiting approval from the Department of Housing and Urban Development of its amended appli- cation, dated August 17, 1967, for a capital grant of $35,000,000.00 fo~ its South Shore Rapid Transit Extension. (See Page 38) Agreement with Boston Red~yel0Pmen~ Authority: The Boston Redevelop- ment Authority and the MBTA signed a document on April 1, 1966 by which the MBTA agrees to remove its existing transit facilities located in the Cha~lestown Urban Renewal Area and to construct substitute transit facilities. The BRA is to reimburse the MBTA for the cost of demolition of existing transit facilities, acquisition of necessar~¢ land, construction of substitute transit facilities, consultant engineering services, and other miscellaneous work up to a maximum cost of $12,000,000.00. As of September 30, 1967 work on this contract amounting to $2,240,318.11 had been completed and billed to the Boston Redevelopment Authority. The major portion of the billing was for engineerin~ services. Railmoad Commuter Subsidies: Section 28 of Chapter 16lA of the General Laws, as amended, inserted by Section 18, of Chapter 563 of the Acts of 1964 in regard to contract assistance, states as follows: i I I I I I i I I I I I I I I I 6 8-A-64 '33' "Not more than a total of five million dollars to be paid to the Authority for not more than one half of the cost to the Authority of agreements with railroads a~thorized by paragraph (8) of section twenty three." This $10,000,000.00 of agreed payments for railroad subsidies was reached in April 1967, and the MBTA has been reimbursed $5,000,000.00 by the Commonwealth. The cost of these subsidies to the MBTA was met out of the proceeds of the first bond issue of the Authority. The MBTA set up a deferred charge for this $5,000,000.00, and it will be amortized over the 15 yea~ life of this particular part of the bond issue, and it will eventually he included in MBTA deficits. On March 1, 1967, Chapter 24 of the Acts of 1967 was enacted by the Legislature, and this Act provided for an additional amount of $5,000,000.00 to continue the subsidies to the railroads until June SO, 1968. The Commonwealth is to pay up to 90% of this amount, but not in excess of $4,500,000.00, and the MBTA will pay up to 10% or $500,000.00. This latter amount will also be reflected in MBTA deficits. The gross amount paid to railroads for the period ending September SO, 1967, under this new agreement and charged to the cost of service is summarized, as follows: Direct Payment to Boston and Maine for Subsidy Charges to Boston and Maine for Miscellaneous Expenses Direct Payments to New York, New Haven for Subsidy Charges to New York, New Haven for Miscellaneous Expenses $1,209,705 00 19,514 00 573,025 00 19,316 00 $1,821~560 As of September 30, 1967, the MBTA has received $1,638,795.00 from the Commonwealth as contract assistance, which represents 90% of the above listed $1,821,560.00. A~reement with Middlesex and Boston Stre.et Railway Company: A contract dated July 1, 1965, which provided that the amount payable by the MBTA shall be based on a net avoidable cost, expired on June 30, 1967. A new contract effective July 1, 1967 was signed July 18, 1967. This contract is for a term of 3 years unless terminated by written notice by the MBTA, 60 days prior to June 30, 1968 or 60 days I I I I I I 68-A-6q -34- prior to June 30, 1969. It is further understood that the continuation of this agree- ment is expressly conditioned upon obtaining budgetary approval of the Advisory Board of the net operating loss of the Railway Company for the MBTA's following fiscal periods: September 1, 1966 through September 30, 1967 October 1, 1967 through October 31, 1968 November 1, 1968 through November 30, 1969 December 1, 1969 through December 31, 1970 Below is a comparison of the net avoidable cost of the Middlesex and Boston Street Railway Company for the two fiscal periods ending June 30, 1966 and June 30, 1967: Gross Avoidable Revenue: Passenger Revenue Special Bus Revenue Other Total Gross Avoidable Revenue 12 Months 12 Months Increase Ended Ended or J,une 30, 1966 ~q? 30,_!96~ (Decrease) $1,102,382 O0 50,761 O0 po :16,,5,85 , ,0,? $1,042,458 O0 282,776 O0 11~.056 O0 ,~.1,336,290 00. $(59,924 00) 232,015 O0 (1,652 ...00 ) $170,439 O0 Gross Avoidable Cost: Wage and Fringe Benefits Expenses Total Gross Avoidable Cost Net Avoidable Cost $1,107,194 O0 $1,195,137 O0 $87,943 O0 502,473 O0 ...... 491,545 O0 (1..0,928 00) .$1,607,667...00 81,686,.,68.~2 00.. $77,015 O0 ($443,816 00) ($350,392 0_0) ($93~424 00) It should also be noted that although all 79 cities and towns of the system have been assessed to pay the above deficits, the Middlesex and Boston actually only serves 17 of the cities and towns in the system. Payrolls: A comparison of the number of employees of the Authority on weekly and monthly payrolls follows: Oct. l, 1966 Sept. 30~ 196~. Increase Weekly Payroll Monthly Payroll 5,321 5,340 19 251 288 37 5,572 5,628_ 56 68-A-64 -35- I I The number of persons on the monthly payroll has increased from 11~ as of August 3, 1964 to 288 as of September 1967. The following schedule shows the detail of the monthly payroll on an annual I I basis as of October 1, 1966 and September 30, 1967. Nun~.?r on Payrolls Oct. 1, Sept. 30, 1966 1967 .An_nua! ,Payroll Oct. 1~ 1966 Sept. 30, 1967 I I I I I I I I I Board of Directors 5 Directors' Office 1 General Manager's Office 5 Deputy General Manager's Office 3 Department of Public Relations Information 4 MBTA Police Force Office 2 Industrial Engineer's Office - Private Carrier's Office - Planning and Research Dept. 30 Transportation Operations Dept. 15 Engineering and New Construction Office 32 Treasurer's Dept. ~1 Law Dept. 37 Personnel Dept. 17 Materials Dept. 16 Equipment, Engineering and Maintenance Dept. 11 Plant Engineering and Maintenance Dept. Facilities Engineering Dept. Schedules Office Safety and Training Dept. 5 $ 40,000 00 $ 40,000 O0 1 9,793 O0 10,000 00 5 85,964 00 90,227 O0 ~ ~7,281 00 58,909 00 5 ~2,103 O0 60,806 O0 2 22,678 O0 22,978 O0 9 - 88,266 O0 8 - 78,350 O0 10 369,088 00 128,~92 00 15 180,662 O0 190,756 00 60 357,7~2 00 709,069 00 ~6 ~15,140 00 ~7,227 00 37 ~30,116 00 ~23,~10 00 20 185,97~ 00 216,~91 O0 16 161,376 00 166,552 O0 11 1~0,688 O0 1~,531 O0 17 17 199,791 O0 20q,332 O0 10 9 131,478 00 121,633 00 3 q- 33,850 O0 53,20q' O0 2 ~ .... 32,35,,8 O0 5,3,u, 2~ O0 25'1 28---~ $2,886,082 00 $3,308,657 _00 As noted by the above comparison the annual cost of the monthly payroll I I I I increased by $~22,575.00 in the last year. A comparison of total payrolls paid for the last two fiscal years follows: Charged to Cost of Service Charged to Capital Accounts Total Wages and Salaries Fiscal Period Fiscal Period Sept. 1, 1966 Au~. 1, 1965 to to Sept...30., 199.7' $.ug. 31, !966 $~7,q35,290 05 2,161,656_25 $~9 596 946 30 $~3,933,125 68 1,~03,178 8~ $~5~336,30~ 52 68-A-6~ -36- I I I .Legal Fees: A summaz~ of expense vouchers in this categor~ indicated that, during the period from September 1, 1966 to September 30, 1967, the MBTA retained the services of 16 attorneys at a cost of $63,300.35 for 6ertain trial cases. It should be noted that the monthly payroll for September 30, 1967 lists 37 employees in the Law Department, and shows the annual salaries as of that date I I I I I I I to be $~23,410.00. Passen.~9.r Automobiles: The ~ecords of the Authority list 49 Authority- owned automobiles as of September 30, 1967 assigned, as follows: General Manager General - Pool Car General - Board of Directors Director of Engineering and Construction Director of Materials MBTA Police Department Safety and Training Personnel Department Transportation Department Equipment Engineering and Haintenance Department Plant Engineering and Maintenance Department Engineering and New Construction Facilities Engineering 1 2 1 1 1 1 1 3 17 5 12 3 1 In the period f~om September 1, 1966 to September 30, 1967 the Authority's I I cars were driven 887,823 miles. Gasoline costs amounted to $13,312.39 and repairs, maintenance, inspection and service costs amounted to 817,999.00. The MBTA paid 104 employees $46,320.08 for the use of their personal cars, I I I I I I as follows: Liaison Officer to Advisor~ Board Law Department: Administrative Assistant Legal Legislative Assistants Court Assistants Adjusters Investigators Messengers Treasurer - Comptroller and Cashier Courier's Operation Plant Engineering and Maintenance Engineering and Construction Department Schedule Office Personnel Depaz~tment Employees' Counselling Sex'vice 376 00 898 16 1,020 O0 4,909 50 4,743 38 15,708 56 204 O0 $ 968 00 27,859 60 716 32 5,593 12 2,532 79 3,51~ 23 780 08 1,165 60 506 40 68-A-6~ -37- I I I I I Planning and Research Board Public Relations Department Safety and Training New Construction Out-of-State Travel: $ 713 92 1,123 60 5~9 7O 296 72 8~6,320 08 An examination of travel vouchers r~vealed that approximately 275 out-of-state trips were made by Authority personnel at a cost of over $36,800.00. Sales of Real.Prop~rty: Du~ing the period of audit certain propez~ties of the Authority were authorized for sale by the Directors, as follows: Approximate Authorized Location ,, Area Property Sales Price Broadway - Alewife Brook Parkway, Somerville 265,000 sq. ft. Land and $ 2~1,000 00 Buildings Washington, Pearl Street and Fay Place, Brookline 2,800 sq. ft. Land and 207,000 00 Buildings 77 Chelsea Street East Boston 2,000 sq. ft. Land 1,251 00 Bennett-Elliot Car Yards, Cambridge 10 acres Land 6,098,~00 O0 Extra land at Bennett-Elliot Ca~ Yards, Cambridge 2.18 acres @ Land $1~.00 per ~q. ft. 1,329,~5~ O0 E. 6th and E. 7th Streets, South Boston 25,030 sq. ft. Land 28,125 00 ~oposed Pu~ch. ase.,.gf the Eastern Massachusetts Street Railway Company: At an executive session of the Directors held on October 6, 1967, with a quorum of Mssrs. Cabot, Fitzgerald, K~amer and Neal present, it was voted that the General I I I Manager be authorized and directed to execute, in the name and behalf of the Authority, an agreement with the Eastern Massachusetts Street Railway Company providing for the purchase by the Authority and the sale by that Company, on January 1, 1968, or as soon thereafte~ as possible, the Antra-state transportation business of the Easter~3 Massachusetts Strict Railway Company, including certain personal property, real estate, I I and othe~ fixed assets of that Company, but excluding its interstate operating rights and its interest in its affiliated companies, the Union Street Railway Company and 68-A-6~ -38- Greater Portland Transportation Company, both of whose operations a~e entirely outside of the te~ito~y included in the cities and towns of the MBTA, at a gross purchase price of $6,509,000.00 subject to cash reimbursements to the Authority of an estimated amount of $261,000.00, resulting in a net cost to the Authority of $6,2~8,000.00. The implementation of this agreement will be subject to and contingent upon the approval by the United States Department of Housing and Urban Development of the Authcrity's amended application, dated August 17, 1967, for a capital grant of $35,000,000.00 for its South Shore Rapid Transit Extension and also subject to and contingent upon votes of the stockholders of the Eastern Massachusetts Street Railway Company and of its Board of Directors authorizing such transaction; said a~eement to be in Such form and to contain such other terms and provisions as may be approved by the General Counsel of the Authority. Mr. Fitzgerald, one of the Authority's directors, stated that it was his opinion that the property of the Eastern Massachusetts Street Railway Company was not worth $5,000,000.00, and that he voted in favor of the pumchase only because failume to purchase would jeopardize the Authority's application for a grant of $35,000,000.00 in Federal funds. The Chain~an stated that the records will show that perhaps the Board was very much influenced by the fact that if we do not do this, we will lose $35,000,000.00 in Federal funds. On March 12, 1988 Federal officials approved a $35,200,000.00 grant to the MBTA to help finance the South Shore Rapid Transit Extension Project. Final approval of the grant by the Department of Housing and Urban Develop- ment clea~s the way for completion of rapid transit extension to the South Shore and acquisition of the Eastern Massachusetts Street Railway Company. This was one of the largest transit grants in history. 68-A-6~ -39- I I I Construction Contracts: There were 13 construction contracts in effect du~ing the audit period. The total awamd amount of these contracts was $38,603,6q3.00, and this was increased by $230,618.23 for changes and alterations, making an adjusted contract total of $3q,83q,261.23. Payments of $8,581,393.10 have been made and $886,669.28 has been retained. During the period covered by this audit report 10 of the above construction contracts were awarded for $11,091,587.60 and payments of $965,~52.29 have been made. The following is a breakdown of these 10 contracts: Modernization of 3 Subway Stations Rapid Transit Extensions New Kenmore Surface Station Repairs to Government Center Station ~Award Amoun~t ~ayments $ 1,352,862 80 $189,29~ 85 9,397,535 80 677,850 22 2~7,669 O0 98,307 20 93,520 O0 - $11,091L~587 60 $965,q.52. ,~ .27 Cgntrag~ H.N..~90~ -..~ain Li~..Rapid Transit Extension.- Ha~mam~et Square to Vicinity' of,prop.gsed ~.J,gssa~h~setts, Bay Community, ~olle~e in Cha~!estow%,: This contract consists of 3q6 items, of which 275 are unit price items and 71 are lump sum. Of the unit price items 55 have been worked on, and of the lump sum items 22 have been worked on. The following is a listing of unit price items with overruns: Estimated Actual Item Quantities Quantities Unit Price Total Concrete, Granite and Rock Excavation Including Disposal Borings Excavation and Back Fill for Test Pits Crushed Stone in Place Cement Plaster for Manholes, Receiving Inlets and Basins in Place 260 Steel Chain Link Fence in Place Including Concrete Foundation 160 Cast in Place, Piles in Place 6,000 Extra Connection with Strengthening and Water- proofing Haymarket Square 2,010 Temporary Street and Side- walk Surface 550 3 Ply Waterproofing Including Cement Surface 1,580 100 776 $200 O0 C.Y. $135,200 00 990 1,199 10 O0 L.F. 2,090 00 100 361 ~0 O0 C.Y. 10,~0 O0 6~5 2,050 8 O0 C.Y. 11,2~0 O0 755 2 O0 S.F. 990 O0 383 6 00 L.F. 1,338 O0 10,853 9 O0 L.F. ~3,677 O0 2,725 10 00 C.Y. 7,150 OO 735 5 O0 S.Y. 925 O0 3,~9 7 O0 S.Y. .13,083 0q. $2~6~133 0q I I I I I I I I I I I I I I I I I I 68-A-64 This contract was awarded to Perini Corporation September 7, 1966 for $21,766,060.~0, and it has been dec,eased by credit change orders to $21,7~1,769.40. Payments to date amount to $5,964,393.98, and contract re%entions amount to $655,490.32. The completion date of this contract is March 27, 1969. The approved work to date amounts to $6,554,903.09, which is approximately 30% of the adjusted contract amount. However, q3 1/3% of the time allocated for this corrtract has been expended, and close attention should be given to its future progress in order that the date of completion can be met and additional costs can be avoided. Contract. H.N.IO0.. _. ,...'. Change O~de~. #5 - Redesign.. Due_ to Sheetin_ ~ Left in Place: The explanations of the Project Manager for this change order involving leaving sheeting in place and tunnel redesign follow: "Upon excavation of the tunnel cofferdom from Station 85~88 to 90~00 it was evident that the sheeting had twisted out of line and encroached into the structural concrete of the tunnel section~ due to unforeseen conditions not originally anticipated in the soils and excess number of piles in the old buried timber trestles through this area. "The contractor took every reasonable precaution in driving the sheeting in ~ plumb line, even using eztra high strength steel sheeting to prevent distortion of sheets. The contractor constructed a thirty foot high '~' frame to set the sheets in plw"b alignment, pre-excavated the sheeting trench to a depth of lift, an feet - plus or minus - and removed all evidence of old piling and still the sheets twisted. "~o maintain the schedule of ~onstruction~ it was decided to red, sign this portion of the tunnel from a reinforced concrete structure to a structural steel bo~. This redesign reduced the wall thickness of the structure~ thereby allowing construction of the tunnel without redriving the sheets." In the ar~a referred to as Station 85+88 to 90+00 it was noted that four of five test bo~ings showed boulders. It would seem reasonable to think that at this time the consultant should have given some thought to a desitin such as the one stipulated bY this change order. I I I I I I I I I I I I I I I I I I 68-A-6~ -41- The contractor started to drive the sheets five inches from the llne, and it seems that, had he allowed at least eighteen to twenty-four inches of tolerance, the redesign would possibly not have been necessary. It is the opinion of the Department of the State Auditor that, even though the sheeting was checked to the five inch tolerance at ground level, that had the tolerance been set back to eighteen inches or more the sheeting might not have encroached into the tunnel by buckling. A review should he made of this change order in order to fix responsibility, and the following questions should he answered: 1. Was the original design proper using all available infor- mation as to sub-surface conditions? 2. By what authority ~as the five inch tolerance set between the inner face of sheeting and the outside face of the protective concrete line of the structure? 3. Did the consulting engineer pass the five inch tolerance? Were all the specifications set in the contract met hy the contractor? 5. What caused the sheeting to buckle? 6. Was sufficient excavation made? ?. If an investigation shows the consulting engineer was at fault should he receive a fee on this change order? The cost of the redesi&m follows: 999,294 lbs. of sheeting left in place ~ $.137 lb. Difference between original design and redesign Additional extra cost over amount set in change order = $136,218 00 = 110,296 00 = 3,0,310 6 3 $~276,824 63 I I I I i I I I I I I I I I i I I I 68-A-6L~ Con,.t,~act H,.N: ,1.0.,0 - ChanEe., Order #10., ? Un,d. erpi,n, .C..entral ,Arte~¢ ,Foottn$ - Bent. F-3: Du~ing the course of the audit it was noted that the following opinions on this item were received from three consultants: 1. Consultant suggested that braces and wales be used. 2. Underpinning is not required. 3. No problem is anticipated with Central Artez~y piers. After a review was made of the above opinions the Department of Public Works insisted that underpinning be made of Section Bent-F3. This change order was then set up, and the total cost of this work order will be $910,000.00 if present plans are used. This could be increased if longer caissons a~e needed, or if mo~e rock is encountered which has to be drilled. Due to this change order, Change Order #11 was also executed which extended the contract time by 16 months and added $230,200.00 to the contract amount. The $230,200.00 is to cover the contractor's costs for escalation of labor rates and other costs resulting from the extension of time. A thorough review of change orders #10 and #11 will be made during the next audit. Consultants: The MBTA has awarded $13,q70,507.91 in consultant contracts since August q, 196q, and, as noted in prior audit reports and the following comments, the MBTA has been somewhat wasteful with the taxpayers' monies as evidenced by the payment of excessive fees, abandonment of plans and poor performance o Col..S...H. Sinsham...,A~so¢ig.tes~,,..In.p.'- Ex..~eSsiv.e' .Fee -. HN-00.~: This consultant fi~m was awarded a contract on November 17, 196~, for engineering services including the final design for the relocation of the rapid transit extension f~om Hayma~ket Square, Boston to the proposed Mass. Bay Community College in Charlestown. 68-A-64 -43- The fee for these services was 7.75% of the actual cost of the construction of this project. The ter~s of this contract, however, provided that if the Authority desired to have the work extended later north of the proposed MasK. Bay Community College to the Malden-Melrose boundary based substantially on the preliminary plans prepared by the consulting Engineers.the effective fee would be 6.75% of the actual cost of construction from Haymarket Square to the Malden-Melrose boundary. On August 26, 1966, this contract was amended to authorize the additional engineering services necessary for the final design and preparation of contract documents for rapid transit extension from the northerly limit of the present contract to the Malden-~ielrose boundary, effective December 1, 1965, for a total fee of 6.75% of the actual cost of construction for the entire project f~om Haymarket Square, Boston to the Malden-Melrose boundary. A comparison of the total fee charged by this consultant firm for this project with the total fee recommended by the American Society of Civil Engineers for projects of the same magnitude involving above-average complexity reveals that this consultant's total fee is 22.72% in excess of the Society's recommended fee. Consequently, unless this contract is re-negotiated, this consultant will receive over $750,000.00 in excessive fees during the term of this contract. A summary of the estimated construction costs of the two segments of this project, the estimated total consultant fee due under this contract, and the estimated fee recommended by the American Society of Civil Engineers appears as follows, as of September 30, 1967: Location Haymarket Square to Charlestown Charlestown to Malden-Melrose Line Total (Exclusive of Extra Work) Est. Const. Costs $21,902,305 40 ., s7,127,600 oo I i I 68-A-6~ Consultant' s Fee - per Co,ntract $59,029,905.40 x 6.75% -- -44- Consul..tant ',,s ., ,Fee - Recomme,nd~d,, kY ASCE $59.029.905.q0 x 5.5% = ~$3~984~518 60 The total fees paid to date on this contract are $2,,640,137 10 It was noted from the Authority's records that the total fees charged by two other consultants for engineering services involving projects in the same classi- fication of construction work amounted to only ~.61% and 3.70% of their respective estimated construction costs. A list of these projects and their estimated construc- tion costs appears, as follows: Contract LocatiOn Est. Const. Costs Proposal Harvard Square-Alewife Brook Extension South Cove Tunnel Area $41,253,000 O0 17,237,000 O0 $1,900,000 O0 638,100 O0 Co!. S. H' ,Bin~ham As,~oci!~es~ I,n~:- ~b,andonm~nt 9~,,,,,~lans,? HN-094: The engineering records indicate that preliminary studies and plans on which $251,507.03 had been expended were abandoned because of the decision of the AuthOri%7 and this consultant firm on October 26, 1967 to construct a four track Mystic River Bridge as originally contemplated instead of a three track concept upon which over $207,000.00 has been expended. This bridge is an integral part of the Authority's Rapid Transit Extension project from Charlestown to the Malden-Melrose boundary line. A description of the plans and the fees charged by this consultant firm for their services appears, as follows: ~c~iption Per$od of ~erv!~s Fee. November 1965 to April 1966 $ 3~,839 93~ 9,360 00t Four Track Brid~e - Prel. ,,Pl,ans (3 Rapid Transit - 1 Railroad Freight) Fo%lr Track,B~idge :, Feasibility,,~tud~ (3'~RaPid 'Tr~Sit ' 1 Railroad Freight) May 3, 1967 to June 16, 1967 68-A-64 Descript,ion .ThreeTrack Brid¢.p..- Prel. Plans Rapid Transit) South Approach 80% completed Substructure 85% " Superstructure 67% " North Approach 55% " -45- Period of Services September 1966 to October 1967 Fee $ 28,828 80 71,q71 qO 87,187 10 19,819 80 $251,507 0~ e Engineering officials of the Authority state that the plans prepared in 1965-66 and the studies for a proposed q track bridge cannot be utilized due to several factors. Col. S. H. B.ingham Associates, Inc. - Claims: An audit of the outstanding claims of this consultant fir~ involving work performed in 1965 and unpaid as of September 30, 1967 disclosed that $ql,915.81 of these previously disapproved claims were approved for payment in the early pa~t of 1968 without the submission of new authenticated data and/or facts. A summary of the Authority's action on these two claims appears, as follows: 1. Contract F~,8~2 _? Engineering ~ervices - Bowdoin Station: On August 23, 1966 the Superintendent of Facilities Engineering submitted a six page ~eport which cited the facts on the consultant's claim of $19,116.q9 for extra work performed in 1965. This Authority official recommended a payment not to exceed $6,750.00 for this extra work. The balance of the claim was disapproved as it represented work perfozvfled by the consultant on final design without the Authority's approval of the preliminary work and without the authorization to proceed on the final design. On November lq, 1967 the General Manager's office determined that only $6,256.89 was due on this claim. On February 15, 1968 the Director of Construction recommended to the General Manager that the consultant's outstanding claim of $19,116.~9 be paid in full. This action followed his review of the facts made du~ing a conference held with members of the consultant fi~ at their New York office on Januaz-y 2q, 1968. 68-A-6~ -46- 2. Contract HN-021 - Engineering Services - Ha~arket Sq.uare: On September 30, 1966 the Superintendent of Facilities Engineering submitted a six page report which listed all the facts pertinent to this consultant's claim of $29,056.21 for extra work performed in 1965. This Authority official stated that no justification appears for the approval of this claim as it represented work performed by the consultant on final design without obtaining the prior approval of the Authority of certain preliminary work on this project. On November 14, 1967 the General Manager's office determined that no payment was due on this claim as Article II, Section C of the contract provided for certain changes and/or additional preliminary plans and drawings, at no additional cost to the Authority, On April 16, 1968 the Director of Construction requested the General [vlanager to obtain Board approval of this consultant's outstanding claim of $29,056.21. This request originated after a conference held with members of this consultant firm at their New York Office on January 2g, 1968 at which time all of the related data pertinent to this claim was reviewed. On May 8, 1968 the Board approved the payment of this claim under a new contract HN-021 as no provision for payment of this extra work involving plan revisions was present in the original contract Design Fees: ..C.~ampbel!, Aldrich_gnd Nulty ss-008 Set% LJacks?n_ a.nd Associates SS-012 Samuel Glaser Associates SS-009 An examination of the contracts awarded to these three architectural con- sultant firms indicates that the basic design fees to be paid them appear to be in excess of the architect fees as recommended by the Massachusetts Chapter of the American Institute of Architects. Below is a list of the projects, a description of the items which comprise the total contract fee and the estimated construction costs: 68-A-6~ Contract No. SS-008 8S-012 8S-009 Effective Date April 14, 1966 Feb. 1~ 1967 Nov. 9~ 1966 Project Location Wollaston No'. Quincy Quincy Center Basic Design Fee Reimb. Expenses Contingency Allow. for Design and Construction Overruns Total Contract Fee Est. Constr. Costs: Station Parking Lot - 500 Cars Garage - 500 Cars Total Est. Costs $ 90,000 00 $ 90,000 O0 $i40~000 00 8~000 00 8~000 00 11,000 00 25,00o, ,.00 , 25,000_. oo ~8,soo q,o $1,2.3.,000 oo _$_123,000.,.,,0,0 81.89,500 0,9 $1~000 ~000 00 200 ~000 00 ,200 ~000. O0 $1~000,000 00 200 ~000 00 $1,200 ~000 O0 $1 ~000,000 O0 ...1,000,000 O0 $2,ooo ~,ooo ,o.,o Basic Design Fee Based on Total Est. Costs 7 1/2% 7 1/2% 7% The schedule of architects fees issued by the American Institute of Architects as a guide to architects for the determination of fees to be charged for various types of structures classify garages as being eligible for the lowest rate. The Authority in its negotiations with these consultant firms, however, merged the I I garage costs and/or the parking lot costs with the station costs which consequently resulted in a design fee based on a higher rate consistent with station structures. Excerpts from this schedule of architects fees appear as follows: MASSACHUSETTS CHAPTER A~IERIC~N INSTITUTE OF ARCHITECTS THE ARCHITECT'S FEES A-RATE For structures of simple architectural character such as: Industrial Plants Garages Warehouses Repetitive Dwelling Units B-RATE For structures of usual architectural character C-RATE For structures of individual or specialized architectural character D-RATE For structums of complex or artistic architectural character 68-A-6~ -48- SCHEDULE OF MINIMUM FEES ( Recommended ) ConstPuction Cost A B C D Rate Rate Rate Rate Up to $ 100,000 7.0% 8.5% 10.0% 12.0% 250,000 6.8% 8.3% 9.8% 11.8% 500,000 6.6% 8.1% 9.6% 11.6% 750,000 6.3% 7.8% 9.3% 11.3% 1,000 ~000 6.0% 7.5% 9.0% 11.0% 2,500 ,O00 5.0% 6.5% 8.0% 10.0% 5,000 ~000 4.0% 5.5% 7.0% 9.0% FoP altePations add 2.0% 2.5% 3.0% 3.5% The project manaEer responsible fop the negotiation of these consultant contracts reported that numePous factoPs were taken into consideration in the determination of a "B" Pate design fee for both the garage and/or parking lot and the station. Excerpts from this project manageP's report appea~, as follows: "A building of simple architectural design may involve complex mechanical services and a wide variety of technical problems. The extent of these complications and the study required for their solution must be considered in determining the applicable rate. "Examination of the schedule indicates no provision which is applicable for the design and construction of a rapid transit station. "Upon analysis of a station and its functions, it is apparent that there are portions of the stations which can be identified in each of the four rates established for payment. "In the final analysis for all the rates available for use, it should be recognized that individual segments of a rapid transit station could be identified with all four rates of fees. After evaluation of the above factsj the Project ~anager recommended that the most equitable solution to the problem of establishing fees which wo~ld be fair to both the Authority and the architect was the utilization of the 'B' rate for all architectural contracts on the South Shore Project." Arthu~ An~e.~$en...and Company - Data_ Pmocess~,ng......Costs: On May 3, 1967, the AuthoPity awarded this public accountinE firm a per diem contract not to exceed $80,000.00 fop consultant services for the conversion of its 1401 computer progPams to a 360 Computer Model 40 and for the development of procedures relating to certain other data processing activities. A summary of the fees paid them for their services appears ~ as follows: 68-A-64 -49- Classification Ave. Hour Weekly P~te Rate (40 Hrs. ) Total ch~,~es ! ! Principal or Partner Manager Manager Systems Specialist (Senior) Systems Specialist Systems Specialist (Temp.) Other Related Services Total Payments per Maximum Fee Contract $55 00 $2,200 00 38 50 1,540 00 25 00 1,000 00 22 00 880 00 18 00 720 00 18 00 720 00 $ 1,447 00 26,890 O0 13,765 00 14,542 00 22,218 00 1~152 00 $80,014 O0 3~549 O0 oo 87,,ooo qo,, A comparison of the hourly rates paid by State agencies to public accountino~ finns for similar services indicates that the rates paid by the Authority were in most instances in excess of the rates paid by the State agencies. Below is a summary of the rates paid by two State agencies in connection with the recent conversion of their data processin~ systems: Classification State Comptroller DePt. Publig. Works Hr. ~{k. H~. Wk. Rate Rate Rate Rate Principal or Partner $50 00 $2,000 00 $25 O0 $1,000 00 Manager 30 00 1,200 O0 25 00 1,000 O0 Manager 25 00 1,000 00 - - Manager 23 00 920 00 - - Systems Specialist 20 00 800 00 17 50 700 00 Systems Specialist 17 00 680 00 - - Systems Specialist 15 00 600 00 - - A review of the services performed under the consultant's contract for the Authority discloses that certain portions of this contract could have been performed by I.B.M. personnel and/or Authority personnel with a consequent reduction in consultan~ costs. ~ockwood G~ene ~ngineers, Inc. - Te~minatiop. of qontract..- YS-001: On February 1, 1967, this consultant firm was awarded a contract for $32,000.00, des- ignated as Phase !, for a vehicular maintenance study of potential shop sites for the relocation of the Bennett-Eliot shop. This contract was amended on April 20, 1967, to provide for Phase II, a vehicular maintenance study to ascertain the Authority's total ~equirements for vehicular suppox~ facilities, present and future, 68-A-6~ -50- and the development of a plan for their provision. The contract cost of Phase II was not to exceed $202,~00.00 and was to be completed on or about December 21, 1967. Phase I of this contract was satisfactorily comPleted on April 15, 1967. Phase II of this contract, however, was less than ~0% complete as of December 1, 1967. On December 13, 1967, the Authority notified this consultant fi~m to terminate immediately all work on this contract except two items which were near the final stages of completion. This contract apparently was terminated because of the poor performance of the work completed to date under Phase II and to a reassessment by the Authority of its objectives in the award of this contract. A report entitled, "Boston Urban Transit Master Scheme 2000 AD." submitted hy this consultant under Phase II of the contract did not receive favorable approval from the Authority's Planning Staff. Excerpts from memorandums issued on August 25, 1967 by two members of this staff after their examination of this report appear, as follows: 1) "I have reviewed the above report and have the following co~ents. "The master scheme is imaginative, but I think it represents an idealized syetem which is what the author would like to see, rather th~n what the system will probably actually be. There is no discussion of the 'probable evolution of the present system tew~rd~ the end,' although this was one of the requirements. According to diagrom #2, this ideal year ~000 system will be achieved in five "In closing, I would say the report leaves many qusstions un- answered and seems to ~ss~e abandonment or major changes in some sections of the line already under construction or in ~dvanced engineering." "The Loc~ood Gre~ae Report, 'Boston Urb~ Transit System, M~te~ S~e ~000 ~D' is a dis~poin~ent. It d~pen~ too hea~ly on ~- ~e~onted g~er~lizat~ ~ ~ves ~ too m~y ~st~tiat~d ~ncl~i~. It ~as ~t offer enoch c~eful~y ~~ted ~e~es with respect ~ s~port f~lities -- the m~n p~o~e for which ~he fi~ was hi~d~ ~ ~n s~e respects it go~s b~y~ the ~a of c~et~e of ~ e~~ fi~. In general~ it falZs f~ bel~ the level of pr~se ~ ~l enginee~ ~aly~is ~ which th~ ~utho~ty'~ pl~ni~ a~ progr~i~ operati~s sh~d be f~c~i~ at this p~nt in time. 68-A-6~. -51- ''In ehortj I reoo~end that the ~onouZtant be r~q~sted to b~o~ th~ ob~o~ ~d ~bli~ in v~ genera~i~ ~ i~t~ atar~ prod~i~ s~e ao~ e~ine~ propoea~ for ~id tr~it ~port faoi~iti~s. " The eonsul~ costs incurred ~der Phase II of ~his eon~ac~ ~o~ale4 $88,~27.03 of which $S,8~0.~7 was ~paid pendinE approval by ~hs Au~homity. An a4di~ional $3,~00.00 of ~sult~t costs was in disput~ ~d awai~inE a rulin~ of ~he Au~ho~i~y's l~al G~bs and H$l~t Inc. - Central ~ ~ys~ems S~.qd~..- CST0q.I: ~is con- sult~t fi~ was awamded a eontmact fora $90,000.00 effecti~ ~ce~e~ 1, 1966, to pemfo~ Phase I of the Centmal Ames Systems Study. This contract w~ to pmovide speci~ized skills and expemience to the Authomlty in the development of a c~p~- hensive long-range pl~ fora the modification and extension of the Centmal A~a P~lic Tm~spo~ation System. The f~etion of this fimst phase was to pmovide sm~l scale effo~$ whi~ would lead to early improvements in the G~en 5ins ~d Centmal Amea ~itial analysis and detailed planning of the pmogm~ fora Phase II ~d p~- liminamy engineeming on the Lechmeme extension. Upon the c~pletlon of Phase I of this Study on Apmil 23, 1967, the Authomity's Dimectom of Planing initiated a ~quest fora a 15-m~th extension of this contmact, effective May 1, 1967, to pe~it the planed continuati~ of the Central ~ea Systems Stu~. ~e pmoposed cost of this sec~d ph~e of engineeming studies w~ $3~7,000.00. The mequested e~tmact extension wo~d pe~it activation of Ph~e II which would c~sist of studies leading to ~ec~endations fora maj~ modifications to the G~een Line ~d the ovemall Central Ames distm~ution system fora both nea~fut~e ~d long-m~ge impmovements. It was noted that the PERT/CPM di~m~ developed ~dem Ph~e I called fo~ completion of the study in 15 months fm~ May 1, 1967. 68-A-6~. -52- The Board Secretary's records indicate the following action on this request: '~4ay $, 1967 - ~he r~qusst for Phase II approvaZ was brought befor~ the Board~ but action wa~ deferred. "May 10, 1967 - The Board again d~ferr~d action on Gibbs & Hill's II ¢ontract. "June 14~ ~967 - Mr. Keith's req~st of June lB was p~aoed on the ~enda for the J~e 14 Bo~rd Meeti~ but w~ sc~hed ~ ~e l~t con~i~t in s~e ~ with work b~ing ~ by oth~r c~s~lt~." I I I The Authority records disclose that Mr. Thomas Paine, of Lockwood Green Engineers, Inc., (YS-O01), who was conducting a general study of vehicle support facilities in connection with Phase II of his firm's contract, expressed concern that Gibbs g Hill's work would conflict with Article I Par I of his contract. This paragraph reads as follows: I I "£ea~istic definitions of the probable form and extent of th~ entire transportation system for which the MBT~ may be responsib~ by the end of this cent~y~ and of the prabab~e evolution of the present system toward that end." On August 21, 1967, officials of the Authority's Plannln~ Staff aEreed that further effo~s to secure approval of Gibbs & Hill's Phase II contract should be d~opped and Gibbs & Hill should be so advised. The CASS effort should continue as a staff project.. Lockwood Greene's repo~t was in the opinion of the group, quite unrealistic, but was to be analyzed. A summary of the work conducted by Gibbs & Hill, Inc., in connection with I I I Phase I of this Study indicated that certain preliminarg studies had begun on projects scheduled fo~ completion and/or for integration with other projects proposed under Phase II. When it became apparent that there would be a delay in securin~ approval of a Phase II contract extension Gibbs & Hill was requested to combine all of their I I I reports and data, even the unfinished per, ions, into a single volume coverinE all the work of Phase I. It is extremely doubtful if the $90,000.00 expenditure for Phase I of the Central Area System Study, which involved specialized skills and experience will ever be fully utilized. 68-A-6~ -53- Below is an excerpt from an Authority letter sent to Gibbs & Hill on May 16, 1967, which supports this contention. "The uninitiated observer would not realize that m~h of the Green Line work don~ in Phase I was preparatory for th~ more detai~ed an~ ~zhaustive study of Phase IIj which has been t~mporar~ly hsld up. Of course, we would not get the ful~ benefit of such work unless ~nd until the progr~ under Phase II is approved." Traffic Research Corporation - Traffic Analysis Studies - NC-016: This consultant firm was awarded a contract for $50,000.00, effective May 1, 1965, to perform certain traffic analysis studies. This contract was subsequently increased to ~625,000.00 by amendments for additional work assignments. A list of the effective dates of these amendments appears as follows: Effective Date ~escri~lio_n Expiritio~ Dat,~, Amount May 1, 1965 Contract December 31, 1965 $ 50,000 00 January 1, 1966 Amendment 1 June 30, 1966 75,000 O0 July 1, 1966 Amendment 2 August 31, 1966 45,000 00 September 1, 1966 Amendment 3 October 31, 1966 45,000 00 November 1, 1966 Amendment 4 December 31, 1966 70,000 00 January 1, 1967 Amendment 5 December 31, 1967 . 340~000 00 On December 1, 1966, the Authority's Director of Planning recommended to the General Manager the creation of a fourth unit in the planning organization to be known as the Special Systems Studies Department. One of its principal functions would be to keep consultant traffic study costs to a minimum. Below is an excerpt from this Director's memorandum. "For ezample~ the Department as requested would coet the Authority approximately ~?~0 per year plus c~puter machine costs. ~ portion oft he dmpartment--appro~imately one-fourth-- will do work that other- wise would have to be done by traffic analysis consultent contractors. Therefore approzimately ~4~00~ is a cost that would have been incurred through existing contractors. The ~emaining ~I$0,00~ is for analysis that would be new to the ~thority, but very essential to it." The Board approved the establishment of this new department at its meetin~ of December 7, 1966, and authorized the recruitment of ten positions to staff this unit. The records indicate, however, that this Board vote was never executed as the Authority failed to employ any personnel to activate this unit. Consequently, the 68-A-6q -54- $340,000.00 approved for the last amendment to this contract was practically depleted three months before the contract expiration date of December 31, 1967. The Acting Director of Research and Development in his request of September 19, 1967 for additional funds to complete the work under this contract cited the absence of this special unit as the principal factor for the acceleration of expenditures. Below is an excerpt from his request for new funds: "~hen the contract was initiated, as explained a~ove, the consulting work was to decrease with th~ addition and training of qualified Authority staff members. However, the expected hiring of these staff members never occurred, and the contractor was consequently not able to transfer work over to :Authority staff. In f~t, it worked the other way - name ly~ as the Authority management bec~me ~ware of the work being done and the capabilities of the contractor, both in terms of quality and epeed, it delegated additional work to the contractor." It was also noted from the Planning Department's work progrsm that this Special Systems Study group would he responsible for storing and documenting all data collected and helping to organize an Authority data bank. In connection with the audit of the Traffic Research Corp. contract ezpenditures the records indicate that $4§,700.00 has been ezpended hy this con- sultant firm for computer service costs. However, it was noted that the data tapes generated hy TRC for the MBTA's account are unuseable in their present format in connection with the MBTA computer at ~rhorway. This is due to TRC using an IBM ?094 series computer and the ~BTA's using a $60 model 40 computer. The "peripheral" equipment 360 series disk tape drives vs. 7094 tape drives is incompatible and ~he data tapes could only be used at ~BTA after these data tapes were transferred to da~a disks and/or tapes using computer "language" compa~ble with IB~ 360 series equipment. To avoid unnecessary expenditures hy ~he Authority for the procurement of traffic data already compiled on TRC tapes it is recommended that a concer~ed effort he made to convert the data appearing on the #7094 series tapes to #360 series tapes. This data should then he transferred to the Authority's Data Bank. Below is a list of this consultant's fees in effect since January 1, 1967: 68-A-6~ -55- I I I $170.00 per day 160.00 per day 145.00 per day 125.00 per day 100.00 per day 70.00 per day 50.00 per day 30.00 per day for principals for assistant principals for senior professionals for intermediate professionals for professionals for senior technicians for technicians for technical clerical plus certain other reimburseable expenses I I Sanit~tion~Systems,~ In.corporated - Sanitation._ Studi}s_ .. - SM-00$:. This consultant firm was awarded a contract for $45,650.00, effective December 7, 1966, to perform certain sanitation studies as follows: I I I I Services Pa~n_ ent Preparation and Installation of Standards System Services - I to VII Program Management and Integral First Year Follow-up Services VIII and IX Two Year Optional Follow-up Service X Second Year Third Year Total $27,720 O0 7,920 00 5,720 00 .4,290 O0 $45,650 00 - ;%- , ,'; I I I Payment for Services I to VII were to be made in six equal installments of $4,620.00 each to this consultant firm. The Authority records indicate that on September 30, 1967, date of audit, payments totaling $22,666.65 had been made on this contract. An inquiry was made on December 11, 1967 by the Authority's control engineer as to the current status of I I I '1 I I this pro~ect pending approval of the final billing for Services I to VII. Below is an excerpt from the consultant's reply dated December 22, 1967, as to the status of this project: "Although our billing for .Services I through VII, with the exception of the aforementioned ~S20, is complete, our work is not. This has come about because we have bi~ed, as the contract stipulated, in six bi-monthly installments. However, the installation, originally scheduled for May or June, then postponed for Septe~,ber~ has been postponed ~gain and we are still ~waiting word as to when our work can be res~ed. As a result of these delays, all the services connected with the installation, Services III~ IV, V, VI and the installation itself, Service VII, ~re still incomplete. We have, of cour~8, every intention of fulfilling these commitments as soon as we are permitted to proceed." 68-A-6~ -56- I I It is suggested that the Authority adopt appropriate control procedures to avoid the pre-payment of consultant services. Geometrics, In9. - Termination 9f Project.- SM-012.: On June 25, 1967, this consultant firm was awarded a contract amounting to $65,000.00 for architectural and engineering services for the modernization of Essex Station. On August 4, 1967, I I the Authority directed this engineering firm to cease all work on this project because of the Boston Redevelopment Authority's delay in finalizing its plans for the Central Business District of which Essex Station is an integral part. The first and final payment for services performed on this contract to the date of abandonment of work on August 4, 1967 amounted to $3,69~.91. I I I I Zxcess.ive Charg~ Bruce Campbell & Associates, Inc. C. L. Build Drilling & Boring Co., Inc. Francis J. Linehan, Jr., ~ Associates James P. Collins & Associates, Inc. NC-015 S SS Ext. SW-001 FE-815 SS-007 Excessive consultant charges totaling $2,077.56 were discovered during the course of the audit of consultant invoices. These cha~ges were brought to the attention of the Authority for appropriate action to effeCt recovery of these over- I I I I I I I payments. A list of these excessive charges, all of which were recovered prior to June l, 1968, appear~ as follows: CONTRACT NO. CONSULTANT CHARGE AMOUNT_ NC-015 Insurance $1,259 00 NC-015 Services 115 20 So. Shore Ext. Printing 42 46 SW-001 Services 582 41 FE-815 Services 45 00 SS-007 Telephone 33 4__.____~99 $2,077 56 Final: Jackson & MOreland - SusPension of...Project - SG-001 Preliminary.- SG,002 This consultant firm was awarded a contract not to exceed $10,000.00, effective November 17, 1966, to provide preliminary engineering services for the proposed replacement of outdated 15KV Class Switchgear at the South Boston Power Station. On December 29, 1966, this engineering firm submitted an interim ~eport 68-A-64 -57- that contained sufficient data on this project to enable the Authority to eliminate the preliminary design report from this contract and to proceed with the final design. The total consultant costs incurred under this contract amounted to $5,977.02. A second contract, effective January 4, 1967, was awarded to this con- sultant for $50,000.00, to prepare the final design and contract documents for the replacement of the 15KV Class Switchgear at the South Boston Power Station. However, on November 3, 1967, the Authority directed this engineering firm to suspend all work on this project and to close out all costs against this contract. The expla- nation given for this action is as follows: "Due to the continued uncer~ainity of our power generating status". The total consultant costs incurred under this second contract was $15,022.32. The records indicate that the Authority's Board of Directors filed a petition in December 1967 requesting the General Court to repeal the law prohibiting said Authority from disposing of or selling its power plants. This petition House #1748 received an adverse repor~ from the House of Representatives on April 25, 1968. It was noted that the Authority has taken no action to reactivate the final design con~ract of this consultant as of June ~0, 1968. T.~e.B~esn. ick .Com~any~ Inc....- Advertis.in~..: On February 8, 1967, the Authority awsmded this advertising consultant a contract for $40,000.00, of which $25,000.00 was to advertise the opening of the modernized Arlinffton Street Station and $15,000.00 to assist the Authority in its effort to obtain a Federal Transit Research Study Grant. The promotional budget for the Arlington Station project was subsequently reduced from $25,000.00 to $7,000.00. The records indicate that expenditures totaling $6,342.15 were incurred in connection with the openinE day ceremonies of Arlington Street Station which took place on August 17, 1967. A summary of these advex~tising expenses appears as follows: 68-A-6~ -58- DESCRIPTION Production and Printing - 17,800 Opening Day Brochures Production and Printing - 10,000 Shopping Souvenir Bags Production and One Page Advertising - Annual Mayor's Charity Program Music Band Production of Six Kiosk Signs Photographs and Prints Decorations of Arlington Street Station Other Signs Reception and Accommodations in Connection with Ceremony Food & Beverages in Connection with Ceremony Agency Commission of Bresnick Co. (17.65% of Agency Services of Bresnick Co. Connected with Opening of Arlington Street Station (includes time of Creative Department, Account Group, Media Department and Production Control) per Invoice Dated July 21, 1967 AMOUNT $1,6~4 45 797 20 333 24 285 O0 223 65 140 O0 90 O0 87 50 56 80 51 00 633 31 2 ~000 O0 $6,3~,2 15 In connection with the Authority's effort to obtain a Federal Transit Research Grant, a memorandum from the huthority's Director of Planning to the General Manager on April 28, 1967 indicated the futility of filing an application for the research grant. Below is an excerpt from this notification: "Secondly, and perhaps more important, it turns out that HUD had discussed a similar project with the Pittsburgh Port Authority prior to our initial inquiry. In March, it was becoming clear to um that HUD probably would not be interested in our intended proposal because of their advanced negotiations with Pittsburgh. Several weeks ago HUD formally announced approval of the grant to Pittsburgh. This does not preclude all other proposals but makes it more difficult." Nevertheless, the records indicate that this consultant firm billed the Authority an agency service fee of $2,000.00 each month for the period February 8, 1967 to June 30, 1967, less news media commissions. This consultant, as noted previously, also billed the Authority for $2,000.00 on July 21, 1967, for agency services performed by them in connection with the Arlington Street Station opening. The payment of this July 1967 billing appears to be in conflict with the terms of this contract. Excerpts from this contract pertinent to the term of the agreement and to the agency services covered by the monthly fee appear, as follows: I I I I I I I I I I I I I I I I I I 68-A-6~, -59- "£. The term of this agreement shall be from Febr~zmy 8~ 1967, to and including July 8, 1~67. "$. BRES~ICK will provide the services in two (2) specific w~ys; it will "A. Undertake an advertising project keyed to the opening of the modernized Arlington Station with an appeal toward attracting more mid-'day transit riding to Boston. Advertising cost under A. shall not exceed ¢25~000. "B. Prepare an application and seek approval for a Federal transit research study (Housing and Urban Development) grant for a demonstration of transit advertising techniques and values, at a fee not to exceed ~ 5, 000.00. "The AUTHORITY agrees to pay BRESJ~ICK a m~thly fee of two thousand dollars (~2~000.00) for the term of this agreement. This monthly fee will compensate BRE$~ICK for the following services without additional charges for these services: Management time, account executive services~ advertising and promotional copy~ production control (exclusive of material costs4 media buying~ research consultation (exclusive of specific authorized research projects). The monthly fee specifically does not include art and production costs, (art direction time~ layouts, type mechanicals~ plates photography~ finished art, etc.) which will be charged to the AUTHORITY at cost plus 17.~% mark-up. "The monthly fee of ~2~ 000 per month for the term of the agreement, not to exceed ~10~000 plus authorized expenses such as travel not to exceed ~000 to assist the A~THORITY, with reference to preparing and seeking approval of a federal transit research study grant for demonstration of transit advertising." It is recommended that the Authority take appropriate action to recover from this consultant firm the portion of the July 1967 fee paid for services per- formed beyond the contract expiration date. Audit Review: At the conclusion of the audit a draft of this report was reviewed with the Treasurer, the General Counsel and the Director of Engineering and Construction. 68~A-6~, -60- FINANCIAL STATEMENTS The financial statements listed in the "Table of Contents" ,follow: Fixed Assets: Transportation Property Subways, Tunnels and Other Facilities Purchased from City of Boston Facilities Constructed by I4.T.A. Construction Work in Progress ktaster Plan Expansion Program Miscellaneous Physical Property Less: Reserve for Depreciation Total Fixed Assets Less Reserve for Depreciation Current Assets: Cash in Banks and on Hand Security Investments Special Deposits: General Transportation System Bond Proceeds, (Including Investunents $83,727,962.12 ) Other Miscellaneous Accounts Receivable: Commonwealth of blassachusetts Other Material and Supplies, at Average Cost Less Reserve Prepaid Expenses Deferred Charges: Unamortized Expansion and ~iodernization Costs Other -Si- Schedule No. I Balance Sheet September 30, 1967 Assets $122,883,351 63 39,710,2~5 09 32,362,191 75 25,885,~68 8~ 3,508,999 61 , s!,,212 ~8 $83,799,208 69 310.~352 67 $3,507,622 98 3 ~,6~.~., 117 11. $22q,q07 ,u, 69 u,O ?8,095,652 61 $ 3,656,668 97 29,207,29~ 5u, 8~. ,109 ,561 36 7,151,7~0 09 2,q65,151 97 , 188~3~2 ~g $5,q58,719 39 871,256 3~ 68-A-6q $146,311,816 79 126,778,759 33 6~329t975 73 $279t~20,551 8~ mm mm m mm m mmm mm mmm m m mm m m m mmm m m mm mm -$2- 68-A-64 Long-Term Debt: Held by Boston Metropolitan DiStrict M.B.T.A. General Transportation System Bonds Current Liabilities: Notes Payable Accounts Payable Accrued Liabilities: Payroll Interest Other Unredeemed Tickets and Tokens Deferred Credits Workmen' s Compensation Reserve Un~eimbursed Cost of Service Liabilities $134,085,q09 7q ,,%z,o,ooo,ooo oo $30,000,000 O0 2,994,714 42 130,556 31 1,406,~8~ 57 1,145,733 12 446,276 38 $244,085,409 74 36,123,76q 80 4,220 ~463 15 716,799 16 (5,725 ,..885 00 ) $_279,~,,420,551 85 68-A-64 -S3- Schedule No. II Statement of Income and Cost of Service September l, 1966 to September 30, 1967 Income: Revenue from Transportation Revenue from Other Operations Total Operating Income Non-operating Income Total Income Operating Expenses: Ways and Structures Equipment Power Conducting Transportation General Total Operating Expenses Deficit before Other Deductions Other Deductions: Taxes Assigned to Operations Miscellaneous Rents Interest on Funded Debt Payment on Funded Debt Miscellaneous Total Other Deductions Cost of Service in Excess of Income Less: State Financial Contract Assistance Gas and Diesel Fuel Taxes Reimbursable Contract Assistance on Railroad Subsidy Net Cost of Service in Excess of Income $43,282,826 21 850~811 92 $44,133,638 13 4,489,227,,3_~_3 $48,61,9,865 .~9 $ 7,066,838 96 6,314,360 87 3,612,641 59 34,368,458 58 15,~4,6,,086 31 $66~508t,~86 31 $17,888,520 85 $ 2,181,651 29 405,007 92 6,631,264 32 4,005,696 42 29,5,18. 15 $13,253,138 10 $3!,i4!,658 95 $4,780,939 38 245,789 15 1,638.795 08 $6,665,523 61 $24,476., 135.3~.. I I I I I I 68-A-64 -Sq- Schedule No. II! Analys~s of income September l, 1966 to September 30, 1967 Revenue from Transportation: Passenger Revenue Special Cam and Bus Revenue Total Revenue from Transportation Revenue from Other Operations: Station and Car Privileges Rent of Tracks and Facilities Rent of Equipment Rent of Buildings and Other Property Power Miscellaneous Total Revenue from Other Operations Total Operating Income Non-operating Income: Income from Funded Securities Net Income, Miscellaneous Physical Property Release of Premiums on Funded Debt Miscellaneous Income Total Non-operating Income Total Income Does not include Contract Assistance of $6,665,525.61 $42,953,980 67 r 328,845 ~__.~ $43,~82,826 2~ $577,117 40 5,526 O0 6,100 27 247,286 14 1,706 10 13,276 01. 9850,811 92 $%~,133~638 13 $4,284,722 96 7,662 81 25,861 61 . .!67,979 .95 $~8~819~865 46~ I I I I 68-A-6~ -S5- Schedule No. IV Paid and Potential Rent Charges - Cambridge Subway September 30, 1967 Bond Issues of the Commonwealth: Cambridge Subway Loan (St. 1919, Ch. 369) Issued 1920, Matures 1970 Cambridge Subway Improvement Loan (St. 1923, Ch. 360) Issued i92q, Matinees 197~ Cambridge Subway Station Loan (St. 192q, Ch. qqq) Issued 1932, Matures 1981 Total Bonds Authorized and Issued Interest on Bond Issues to Maturity: Cambridge Subway Loan (St. 1919, Ch. 369) Cambridge Subway Improvement Loan (St. 1923, Ch. 360) Cambridge Subway Station Loan (St. 192q, Ch. ~q) Total Interest Payable 1920 - 1981 Total Potential Rent Charges $7,868,000 00 96,000 00 265,500 00 $13,215,495 O0 949240 O0 23~,952 75 $ 8,229,500 O0 $21,77 .,.,187 Payments and Rental Credits: Payments through August 31, 1966 Payments September l, 1966 to September 30, 1967 Lessee Rents for Cambridge Subway Property: Payments Received through August 31, 1966 Payments Received September l, 1966 to September 30, 1967 Total Payments and Rental Credits Balance Due Commonwealth to Liquidate October 1, 1967 to May 1, 1981 Total Rent Required $18,198,896 92 ., 374,065 OO $18,572,961 92 $13~,135 83 ._ ~500 O0 138,635 83 ~$18,711,597 75 _ 3_ 062 590,00, Balance due f~om Massachusetts Bay Transportation Authority (successors to the Metropolitan Transit Authority) subject to reduction for amounts received by Commonwealth for rents, tolls, etc., on Cambridge Subway Proper~y. On May 1, 1970, the final installment on the Cambridge Subway Loan in the amount of $2,i34,000.00 will become due and payable of which it is now contemplated that $1,865,000.00 will be refinanced. i i l i i I I i I 1 t i i I I 1 i 68-A-.64 -S6- Schedule No. V Status of Total Funded Debt September 30, 1967 Refunding Bond: Original Debt, Refinanced August 3, 1949 Rapid Transit Bonds: Subways, etc., Purchased from the City of Boston August 3, 1949 Construction Bonds: Rapid Transit, Subway Alterations and Off-street Parking Equipment Serial Bonds M.B.T.A. Series A Transportation Bonds - 1967: Express Service (Section 23-1) Railroad Aid (Section 23-2) Buses and Other Purposes (Section 23-3) Garages and Other Purposes (Section 23-3) Other Capital Costs (Section 23-4) Original Issue $ 71,418,371 89 40,219,445 43 33,661,666 67 36,635,000 O0 74,000,000 O0 5,000,000 O0 3,800,000 O0 2,000,000 O0 25,200,000 09. $291,934~48~ 99 Amounts Outstanding September 30% $ 58,300,371 89 31,103,037 84 28,115,000 O1 21,567,000 O0 74,000,000 O0 5,000,000 O0 3,800,000 O0 2,000,000 O0 25,200,000 O0 $244,08~,409 74 1 I I I i I I I I I I I I I I I I I I 68-A-64 -S7- Schedule No. VI Status ~_f__O_~igi~a~l Debt Septembem 30, 1967 Amount of Amount Omiginal Rate Date of Outstanding Issue P.e~ C.ent · Is. sue Se~p~tembe~.. 30, 196.~7 M.T.A. Refinancing Bond $71,q18,371 ~9 Note (A) Aug. 3, 1949(B) 853,300,371 89(C) :, 'r , ~ .... --~-- -- - -- NOTES: (A) - The intemest payable on this bond is the intemest payable by the Boston Metmopolitan Distmict on their contma debt and ~efunding issues. (B) - Date of financing (Section 7A, Chaptem 544, Acts of 1947, as amended). (C) - $500,000.00 payable each June 1 and Decembem 1, final installment of $418,371.89 on Decembe~ 1, 2020. Balance outstanding Septembem 30, 1967 includes a prepayment of $118,000.00 to the Boston Metmopolitan District to be applied towards the $500,000.00 payment due the District on December 1, 1967. Rapid Transit Bond NOTES: -SS- Schedule No. VII Status of OriEinal Subway Debt September 30, 1967 68-A-6~ Original Amount Issue Rate Date of Outstanding Issue Date Term Amount Per Cent Maturity September 30, 1967 75 Years $40 ,219 ,qq5 43 Note (A) Nov. 20, 2024 Aug. 3, 1949 $31,103,037 84(B) (A) - The interest on this bond is provided for by the M.T.A. Rapid Transit Note to the district, dated August 3, 19~9, wherein the Authority promises to pay direct to the City of Boston on behalf of the district the actual interest on the City of Boston Transit Debt, less income collected on their Transit Debt Sinking Fund. (B) - Rapid Transit Bond, issued under Sec. 8A (C), Chapter 54~, Acts of 1947, as amended, payable in 75 installments of $536,259.27 on each November 20, beginning November 20, 1950. This amount, which was formerly assessed directly by the State on the cities and towns of the district, was paid by the State to the Authority each November 20, and a like amount was paid by the Authority to the Boston ~etropolitan District on the same date in reduction of principal and was not included in the cost of service. Under the M.B.T.A. Enabling Act, Chapter 563 of the Acts of 1964, this amount is paid directly to the Boston Metropolitan District by the Authority and is included in the cost of senvice. 68-A-64 -sg- Schedule No. VIII Status of Cpnstruction. and Off-street Parking Debt September 30, 1967 Issue Date Amount of Rate Amount Original Per ~,~atu~ity Outstanding Tez~ Issu~ Cent. Date Sept,~._. 30, 1967 Notes Nov. 25, 1949 30 Years Mar. 1, 1951 30 Years Mar. 1, 1951 30 Years Mar. 1, 1951 30 Years Jan. 15, 1952 30 Years Mar. 1, 1953 30 Years Mar. 1, 1953 30 Years Mar. 1, 1954 30 Years July 1, 1958 30 Years Feb. 1, 1959 30 Years Sept. 15, 1960 30 Years Apr. 15, 1963 30 Yea~s Apr. 15, 1963 30 Years 7,650,000 00 2.00 Nov. 25, 1979 $ 5,916,000 00 A 4,500,000 00 1.50 Mar. 1, 1981 3,5~0,000 00 B 825,000 00 1.50 Mar. 1, 1981 1,331,000 O0 C 986,666 67 1.50 Mar. 1, 1981 916,666 67 D 1,650,000 00 2.10 Jan. 15, 1982 764,666 67 E 1,125,000 00 2.75 Ma~. 1, 1983 645,000 O0 F 2,400,000 O0 2.75 Mar. 1, 1983 1,952,000 O0 G 750,000 00 2.30 Mar. 1, 1984 620,000 00 H 4,125,000 00 3.00 July 1, 1988 3,630,000 00 I 5,225,000 00 3.60 Feb. 1, 1989 4,667,666 67 J 1,425,000 00 3.50 Sept. 15, 1990 1,292,000 00 K 2,775,000 00 3.20 Apr. 15, 1993 2,627,000 00 L 22 , 90. q9. 3.20 Apr. 15, 1993 __213, 0.00 M $33~661;666 67 $23~115~000 01 Prior to August ~, 1964, the amount of annual debt reduction of these bond issues was assessed directly by the Commonwealth on the cities and towns of the district, and on each November 20, the State Treasurer paid this amount to the Authority. The principal payments made by the Authority to the district were not included in the cost of service. Under the M.B.T.A. Enabling Act, Chapter 563 of the Acts of 1964, these payments are paid to the Boston Metropolitan District by the Authority and are in- cluded in the cost of service. The interest payable on these bonds is equal to the interest payable by the Boston Metropolitan District on its contra debt and is paid by the Authority to the district. Such payment is reflected in the annual deficit reported by the M.B.T.A. Notes: A - East Boston rapid transit, subway alterations and off-street pa~king facilities. $102,000.00 principal payment annually on November 21, to and including November 21, 1979, and one payment of $4,590,000.00 on November 25, 1979. (Sec. 8A (j), Chap. 544, Acts of 1947, as amended.) B - East Boston rapid transit, subway alterations. Payable $60,000.00 annually on March 1, to and including March 1~ 1980 and one payment of $2~760,000.00 on March 1, 1981. (Sec. 8A (j), Chap. 544, Acts of 1947, as amended.) C - Washington Street tunnel extensions (preliminary plans). Payable $11,000.00 annually on March 1, to and includin~ March 1, 1980 and one payment of $506,000.00 on Ma~ch 1, 1981. (Sec. 6, Chap. 649, Acts of 1949, as amended.) 68-A~6~ -StO- Schedule No. VIII (Continued - 2) Notes (Continued): D - Tremont Street subway addition (Park Street to Scollay Square - preliminary plans and alterations). Original issue of $1,000,000.00 dated April 15, 1950 paid March 1, 1951 and renewed for $986,666.67. 1/75th of the principal amount is payable annually, $13,333.33 and $13,333.3~ every third year on March 1, to and including March 1, 1980 and one payment of $600,000.00 on March 1, 1981. (Sec. 6, Chap. 6~9, Acts of 19~9, as amended.) E - East Boston rapid transit subway alterations. Payable $22,000.00 annually on January 15, to and including January 15, 1981 and one payment of $1~012,000.00 on January 15, 1982. (Sec. 8A (j), Chap. 5~g~ Acts of 19~7, as amended.) F - East Boston rapid transit, off-street parking facilities. Payable $15,000.00 annually on March 1, to and including March 1, 1982 and one payment of $690,000.00 on March 1, 1983. (Sec. 8A (j), Chap. 5~, Acts of 1947, as amended.) G - East Boston rapid transit extension to Revere and study of Cambridge subway extension. Payable $32,000.00 annually on March 1, to and including March 1, 1982 and one payment of $1,~72,000.00 on March 1, 1983. (Sec. 6, Chap. Acts of 19~9, as amended.) H - East Boston rapid transit extension. Payable $10,000.00 annually on March 1, to and including March 1, 198~ and one payment of $~50,000.00 on Ma~ch 1, 1984. (Sec. 6, Chap. 6~9, Acts of 19~9, as amended.) I - Newton Highlands branch. Payable $55,000.00 annually on July 1, 1959 to and including July 1, 1988 and $2,~75,000.00 on July 1, 1988. (Sec. 6, Chap. 649, Acts of 19~9~ as amended.) J - Newton Highlands branch - and Prudential development (preliminary plans). Payable $69,666.66 (and $69,666.67 every second and third years) on February 1~ 1960 to and including February 1, 1989 and one payment of $3,135,000.00 on February 1, 1989. (Sec. 6, Chap. 649, Acts of 19~9, as amended.) K - Highland branch extension - reimburse Authority for alterations. Payable $19,000.00 annually on September 15, 1961 to 1990, and one payment of $855,000.00 to be made on September 15, 1990. (Sec. 8A (j), Chap. 5~, Acts of 19~7~ as amended.) L - Subways and rapid transit facilities. Reimburse Authority for alterations. Payable $37,000.00 annually on April 15, 1964 to 1992 and one payment of $1,702,000.00 on April 15, 1993. (Sec. 8A (j), Chap. 54~, Acts of 19~7, as amended.) M - Highland branch extension. Payable $3,000.00 annually on April 15, 196~ to 1992 and one payment of $138,000.00 on April 15, 1993. (Sec. 6, Chap. 6~9, Acts of 19~9, as amended.) I68-A-64 -Sll- Schedule No. IX I I I I I I I I I Status of Equipment Debt September 30, 1967 Amount of Rate OPiginal PeP MatuPity Issue Date Te~m Issue Cent Date Amount Out standing Sept. ,30, 19,67 Notes MaP. 1, 1951 20 Yea~s $ 1,673,000 00 1.50 Ma~. 1, 1971 Map. 1, 1951 30 YeaPs 3,817,000 00 1.50 MaP. 1, 1981 Ma~. 1, 1953 20 Yea~s 1,545,000 00 2.50 Ma~. 1, 1973 MaP. 1, 1955 15 YeaPs 231,000 00 2.00 MaP. 1, 1970 MaP. 1, 1956 15 Yea~s 1,954,000 00 2.40 Sept. 1, 1970 Map. 1, 1957 15 YeaPs 2,082,000 00 3.10 Sept. 1, 1971 Mar. 1, 1957 30 YeaPs 3,824,000 00 2.90 MaP. 1, 1987 Ma~. 1, 1958 30 Yea~$ 3,936,000 00 2.90 Map. 1, 1988 July 1, 1958 15 Yea~s 1,347,000 00 S.50 July 1, 1973 Sept. 15, 1960 14 YeaPs 113,000 00 3.00 Sept. 15, 1974 Sept. 15, 1960 15 YeaPs 663,000 O0 3.00 Sept. 15, 1975 Sept. 15, 1960 15 YeaPs 1,227,000 00 3.00 Sept. 15, 1975 Map. 1, 1962 15 YeaPs 3,276,000 00 3.00 Ma~. 1, 1977 ApP. 15, 1963 15 Yea~s 2,552,000 00 3.00 App. 15, 1978 ApP. 15, 1963 15 Yea~s 331,000 O0 3.00 ApP. 15, 1978 App. 15, 1963 30 YeaPs 5,064,000 00 3.00 ApP. 15, 1993 Oct. 15, 1963 30 YeaPs 3~0007000 00 3.20 Oct. 15, 1993 ?o $ 335,000 00 A 1,779,000 00 B 270,000 00 C 47,000 00 D 390,000 O0 E 556,000 00 F 2,550,000 00 G 2,751,000 00 H 540,000 00 I 53,000 00 J 308,000 O0 K 656,000 00 L 2,186,000 00 M 1,870,000 00 N 184,000 00 O 4,392,000 00 P 2,700,000 00 Q $21~577,000 OO Issued undeP Section 22, ChapteP 544, Acts of 1947, as amended. This schedule does not ~eflect issues Pedeemed fop $2,459,000.00. I I I I Notes: Purchase of 97 tPackless tPolleys - Payable annually as follows: $88,000.00 MaPch 1, 1952 to 1955, inclusive 84,000.00 MaPch 1, 1956 to 1962, inclusive 83,000.00 MaPch 1, 1963, 1966 and 1969 84,000.00 MaPch 1, 1964, 1965, 1967, 1968, 1970 and 1971 B - Pmechase of 40 rapid tPansit ca~s Purchase of 50 street cams $1,980,000 O0 ,1,837,ooo 0o,, $3,~17,000 O0 ,I"-T ~ , ~ , - · ~' I I Payable as follows: $128,000.00 Ma~ch 1, 1952 to 1955, inclusive 127,000.00 March 1, 1956 to 1962, inclusive 128,000.00 March 1, 1963, 1966 and 1969 127,000.00 March 1, 1964, 19652 1967 and 1968 127,000.00 March 19 1970 to 19819 inclusive I I C - Capital additions om improvements to the cams, buses, tPackless tPolleys and acquisition of additional equipment therefoP - Payable annually as follows: $108,000.00 MaPch 19 1954 to 19589 inclusive 1022000.00 March 1, 1959 to 19619 inclusive 97,000.00 MaPch 1, 1962 to 1964, inclusive 46,000.00 MaPch 1, 1965 to 19679 inclusive 45,000.00 March 1, 1968 to 1973, inclusive 68-A-64 -S12- Schedule No. IX (Continued- 2) Notes (Continued): D - Purchase of 12 buses - Payable annually as follows: $16,000.00 March 1, 1956, 1959, 1962, 1965, 1968 and 1970 15,000.00 March 1, 1957, 1958, 1960, 1961, 1953, 1964, 1966, 1967 and 1969 E - Purchase of 100 buses - Payable annually as follows: $134,000.00 September 1, 1956 130,000.00 September 1, 1957 to 1970, inclusive F - Purchase of 100 buses - Payable annually as follows: $136,000.00 September 1, 1957 139,000.00 September 1, 1958 to 1971, inclusive G - Purchase of 50 rapid transit cars - Payable annually as follows: $127,000.00 March 1, 1958, 1959, 1961, 1963, 1965, 1967, 1969, 1971, 1973, 1975, 1977, 1979, 1981, 1983, 1985, 1987 128,000.00 March 1, 1960~ 1962, 1964, 1966, 1968, 1970, 1972, 1974, 1976, 1978, 1980, 1982, 1984 and 1986 H - Purchase of 50 rapid transit cars - Payable annually as follows: $137,000.00 March 1, 1959 131,000.00 March 1, 1960 to 1988, inclusive I - Purchase of 60 buses - Payable annually as follows: $87,000.00 July 1, 1959 90,000.00 July 1, 1960 to 1973, inclusive J - Purchase of 25 used surface cars - Payable annually as follows: $9,000.00 September 15, 1951, 1963, 1965, 1967 and 1969 8,000.00 September 15, 1962, 1964, 1966, 1968, 1970, 1971 and 1973 7,000.00 September 15, 1972 5,000.00 September 15, 1974 K - Capital additions and improvements to buses~ trackless trolleys, rapid transit cars, surface cars and fareboxes - Payable annually as follows: $55,000.00 September 15, 1961 to 1965, inclusive 40,000.00 September 15, 1966 to 1974, inclusive 28,000.00 September 15, 1975 L - Purchase of 50 diesel buses - Payable as follows: $81,000.00 September 15, 1961, 1962 and 1963 82~000.00 September 15, 1964 to 1975, inclusive M - Purchase of 125 diesel buses = Payable as follows: $218,000.00 March 1, 1953 to 1971, inclusive 219,000.00 March 1, 1972 to 1977, inclusive N - Purchase of 97 diesel buses - Payable as follows: $172,000.00 April 15, 1964 170,000.00 April 15, 1965 to 1978, inclusive O - Capital additions or improvements to passenger carrying rolling stock - Payable as follows: $37,000.00 April 15, 1964 to 1966, inclusive 36,000.00 April 15, 1967 to 1971, inclusive 6,000.00 April 15, 1972 to 1977, inclusive 4,000.00 April 15, 1978 I I I i I i I i i I I I I I I I 68,,,A-64 -S13- Schedule No. IX (Continued - 3) Notes (Continued): P-Q - Purchase of 74 rapid transit cars - Payable as follows: (P) $168,000.00 April 15~ 1964 to 1969, inclusive 169,000.00 April 15, 1970 to 1993, inclusive (Q) 100~000.00 October 15, 1964 to 1993, inclusive mm mmm mm mm mm m mm mm m mm mm mm mm m mm mm m mm mm 68-A-64 SCHEDULE NO. X STATUS OF {~ONDS AUTHORIZED [UNISSUED AND ISSUED) FOR TRANSIT CONSTRUCTION SEPTEMBER 30, 1967 AUTHORIZED EXPENDED UNEXPENDED BONDS AND CAPITAL TOTAL TO BALANCE AUTHORIZED UNISSUED(A) ISSUED PRENIUM PROCEEDS SEPT 30, 1967 SEPT. 30, 1967 EAST BOSTON RAPID TRANSIT EXTENSION OFF-STREET PARKING FACILITIES TREMONT SUBWAY ADDITION WASHINGTON TUNNEL EXTENSION ALTERATIONS - CHAPTER 520, ACTS OF 1948 CANBRIDGE SUBWAY EXTENSION EAST BOSTON RAPID TRANSIT EXTENSION TO REVERE ALTERATIONS - CHAPTER 417, ACTS OF 1954 NE'~rrON HIGHLANDS BRANCH EXTENSION STUOIES IN CONNECTION WITH THE PRUOENTIAL DEVELOPMENT OTHER ALTERATIONS TO RAPID TRANSIT FACILITIES IA) (B) 13,8c.~,000 O0 - $13,898,000 O0 $17,008 72 $13,915,008 72 $13,745,862 57 1,500,000 O0 $ 825,000 O0 675,000 O0 2,043 97 677,043 97 677,04,3 97 - 11,500,000 O0 10,500,000 ~00 I ,000,000 O0(B) .- 1,000o000 O0 761,868 26 55,000,000 O0 54,175,000 O0 825,000 O0 - 825,000 O0 750,271 58 352,000 O0 - 352,000 O0 1,578 43 200,000 O0 50,000 O0 150,000 O0 524- 85 3,000,000 O0 - 3,000,000 O0 - -** 9,475,000 O0 50,000 O0 9,425,000 O0 353,578 43 353,5'78 43 150,524 85 150,524 85 3,000,000 O0 2,995,83040 - 292,860 16" 9,425,000 O0 9,425,000 O0 ' 150,000 O0 . 150,000 O0 - 150,000 O0 150,000 O0 . ) - ) - ) - ) - ) 173.31575)*- - ) 5.~.~o ~) ~.o~ oo) 4.20o.o~ ~) - ) ~.~.~o m) 3.95~.~0..~) $2~.~9g ~) ALL ~S A~RIZED ~ UNISSUED HAVE BEEN REPEALED ~ CH~TER ~, ACTS OF 1964. OR~mA~v ~ $~ .om-.~.~. 3/~ ~ DRT~D ~Rm~ ~S. l~O. R~FU~O aY A ~m~.~.67. ~.~. ~0 YEAR BONO. THIS A~UNT AVAILA~E FOR ALTERATIONS - CritTER 417, A~S OF 19~, REP~SE~S STAT~ORY TR~SFERS OF UNEXPE~ED ~L~ F~ THE TRE~T SU~AY ADDITi~ AND ~A~I~TON TUNNEL EXTE~IONS PR~E~S - AS ~LL~S: TRE~ ~AY ~DITION $218,131 ~ WASHINGTON STREET T~EL 74,7~ ~ ..ST ~ST~ e~O T~NS~T ~XT~NS~O. ~.~ ~ ~AST ~S~.,~O TR*,S~Z ~XT~,ST~O, TO ~V~ ,.~ ~ 75 68-A-64 -Sl5- SCHEDULE NO. Xl STATUS OF BONDS AUTHORIZED (UNISSUED AND ISSUED).F. OR REVENUE EqUlPMEN1],, SEPTEMBER 30, 1967 ss,uE, AMOUNT DATE TERM RATE, 403,000 O0 DECEMBER 1 , 1949 15 YEARS 1 . 50~ 1,673,000 O0 MARCH 1, 1951 20 YEARS 1.50~ 3,817,000 O0 MARCH 1, 1951 ' 30 YEARS 1.50~ 166,000 O0 MARCH 1 , 1953 11 YEARS 2.50~ 1,545,000 O0 MARCH 1 , 1953 20 YEARS 2.50~ 98,000 O0 MARCH 1 , 1954 10 YEARS 2.30~ 231,000 O0 MARCH 1, 1955 15 YEARS 2.00~ 1 , 954,000 O0 MARCH 1 , 1956 15 YEARS 2.40~ 2,082,000 O0 MARCH 1, 1957 15 YEARS 3.10~ 3,824,000 O0 MARCH 1, 1957 30 YEARS 3,936,000 O0 MARCH I, 1958 30 YEARS 2.90~ 1,347,000 O0 JULY 1, 1958 15 YEARS 3.50~ 113,000 O0 SEPTEMBER 15, 1 gC:~ 14 YEARS 3.00~ 663,000 O0 SEPTEMBER 15, 1960 15 YEARS 3.00~ 1,227,000 O0 SEPTEMBER 15, 1960 15 YEARS 3.00~ 3,276,000 O0 MARCH 1 ,' 1902 15 YEARS 3.00~ 5,064,000 O0 APRIL 15, 1963 30 YEARS 3.00~ 2,552,000 O0 APRIL 15, 1963 15 YEARS 3.00~ 3,000,000 O0 OCTOBER 15, 1963 30 YEARS 3.20~ 331,000 O0 APRIL 15, 1903 15 YEARS 3.00~ ~G"7,302,000 O0 EXPENDITURES: COST OF EQUIPMENT AND iNCIDENTAL EXPENSES BALANCE APPLIED TO COST OF SERVICE, ST. 1958, CH. 303 PREMIUM 1,063 92 22,172 27 50,586 70 580 83 5,405 96 2,428 44 1,172 40 2,209 38 4,108 lO 5,236 40 2,134 08 309 15 '1,813 90 3,356 95 7,117 O0 3,278 56 1,652 23 11,148 O0 214 30 REVEN~[ EQUIPNENT..BO~IDs AUTHORIZATION (LIMITED TO UNPAID BONOS OUTSTANDING)* BONDS ISSUED (SEC. 22, pAR. 1 AND 4, ST. 1947, CHAP. 544) BONOS REDEEMED UNPAID BONOS OUTSTANDING LESS= BONDS OUTSTANDING ISSUED UNDER PAR. 4, SEC. 22, ST. 194:7, CHAP. 544 NOT SUEklECT TO ABOVE LIMITATION** UNPAID BONDS SUBJECT TO LIMITATION BONDS AUTHORIZED AND UNISSUED $14,658,0,00 QO(A) $34,763,000 O0 14~920,000 O0 $20,748,000 O0 10,242,000 O0 $10,501,000 O0 4,157,ooo PO(A) m 68-A-64 -S16- TOTAL PROCEEDS $ 404,063 92 I 0695,172 27 3,867,586 70 166,580 83 1,550,405 96 100,428 44 231,000 O0 1,955,172 40 2,084,269 38 3,828,168 16 3,941,236 40 1,349,134 08 113,309 15 664,813 go 1,230,356 95 3,283,117 60 5,067,278 56 2,553,652 23 3,011,148 O0 331 ~214 30 ~7,428,109 23 MOTOR SURFACE TRACKLESS MOTOR ~RANSIT CA.RS CARS TROLLEYS COACHES - $ 404,063 92 - - - 1 ,695,172 27 - $ 2,006,240 94 $1 ,861,345 76 - - - 166,580 83 - . . . $ 100,428 44 . _ - 231,000 O0 . . . 1,955,172 40 . . . 2,084,269 38 3,828,168 16 - - 3,941,236 40 - - - - - - 1,349,134 08 - 113~309 15 - . . . 1,230,356 95 . . . 3,283,117 60 5,067,278 56 - - - . - - Z,553,652 23 3,011,148 O0 - - - $17,854,o7.z. 06$1,974,654 91 ~ $12,78-{.,131 $37,346,167 92 $17,854,072 06 $1,897,342 70 $2,262,559 64 $12,785,759 36 8.1 ~g4,1,31 ,,77,~,312 21 3,257 38m 1 t371.72 $37,428..~,109.23 $17,8~..4,072_ 06 $1,974,654 9.1.: $2,26..5:,817 0;~. ~ CAPITAL ADD ~IONS.AND IMPROVF. NENTS TOREVEN~E, EgUIPMENT' AUTHORIZED*** BONOS ISSUED AND OUTSTANDING BONDS REDEEMED BONDS AUTHORIZED AND UNISSUED * SECTION 22, PARAGRAPH 1, CHAPTER 544, ACTS OF 1947 ** AUTHORIZATION $12,000,000.00 *** SECTION 22, PARAGRAPH 3, CHAPTER 544, ACTS O~ 1947 (A) REPEALED ST. 1964, CHAPTER 5G3 CAPITAL ADDITIONS AND IMPROVEMENTS $1,550,405 96 664,813 90 331,214 30 $2,546,434 16 $2,546,434 16 $3t000,000 O0(A) $ 824,000 O0 1,71 5,000 O0 .,_ 461,000 OQ(A) $3,0o0,000 O0(A) I YEA.__.~.R SCHEDULE NO. XII STATUS OF BONDS ISSUED ANO OUTSTANOING ON GENERAL TRANSPORTATION SYSTEM BONOS 1967, SERIES A, INTEREST ~.75~- 3.85~DATEO NARCH 1, 1967 68 -A -64. EXPRESS SERVICE FACILITIES (SEC. 23~1,) PRINCIPAL DUE INTEREST DUE NAR. 1 HAR. 1 SEPT. 1 1968 - $ 1,397,475 O0 $ '1,397,475 O0 1969 $ I ,8'75,000 O0 I ,397,4'75 O0 I ,362,3i8 75 1970 1,875,000 O0 1,362,318 75 1,327,162 50 1971 1,900o000 O0 I ,327,162 50 ' I ,291',53"/ 50 1972 1,8'75;000 O0 1,291,53'7 50 1,256,381 25 1973 1,8"/5,000 O0 1,256,381 25 1,221,225 O0 1974 1,900,000 O0 1,221,225 O0 1,185,600 O0 1975 I ,900',000 O0 1,185,600 O0 I ,149,g';5 O0 1976 1 ,cJO0,'O00 O0 I ,149,975 O0 1,114,350.00 1977 I ,900,000 O0 I ,114,350 O0 1,078,725 O0 1978 1,900,000 O0 I °078,725 O0 1,04,3,100 O0 1979 1,900,000 O0 1,04,3,100 O0 1,007,475 O0 1980 1,gO0,O00 O0 1,007,4.75 O0 971,850 O0 1981 1,980.,000 O0 g71 ,B50 O0 936,225 O0 1982 I ,900,000 O0 936,225 O0 900,600 O0 1983 1,900,000 O0 '900,600 O0 864,975 O0 1984 I ,900,000 O0 864,975 O0 829,350 O0 1985 1,900,000 O0 829,350 O0 793,725 O0 1986 1,900,000'00 793,725 O0 758,100 O0 1987 1 ,g0(~,090. O0 758,100 O0 722,475 O0 1988 I ,cJ06,000 O0 722,47/5 O0 686,850 O0 1989 1,000,000 O0 686,850 O0 651,225 O0 1990 1,900,000 O0 651,225 O0 615,600 O0 1991 1,900,000 O0 61'5,600 O0 579,975 O0 1992 I ,900,000 O0 579,975 O0 544,350.00 1993 1,900,000 O0 54~-,350100 508,725 O0 -~EPTENBER 30, 1967 cAPITAL COSTS (SEC. 23-4) -PRINCIPAL DUE INTEREST DUE NAR: 1 NAR. 1 SEPT. RAILROAD AID (SEC. 23-2) PRINCIPAL DUE INTEREST DUE NAR. I MAR. 1 SEPT. I $ 625,000 O0 ,625,000 O0 '625,000 O0 1625,000 O0 625,000 O0 625,000 O0 650,000 O0 650°000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,ooo oo 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 650,000 O0 475,912 50 $ 475,912 50 464,193 75 452,475 O0 440,756 25 429,037 50 417,318 75 393,412 50 381,225 O0 369,037 50 356,850 O0 344,662 50 332,4-75 O0 3;~0,287 50 308,100 O0 295,91 '2 50 283,725 O0 259,350 O0 247,162 50 234,975 O0 222,787 50 210,600 O0 198,412 50 186,225, O0 4.75,912 50 464,193 75 452,475 O0 440,756 25 429,037 50 417,31 8 75 405,600 O0 393,412 50 381,225 O0 369,037 50 356,850 O0 344.,662 50. 332,47/5 O0 320,2~F/ 50 308,100 O0 295,912 50 283,725 O0 259,350 O0 247,162 50 234,975 O0 222,787 50 210,600.00 198,412:50 186,225 O0 174,0.37 50 325,000 O0 $ 93,750 00 $ 87,656 25 325,000 O0 87,656 25 81,562 50 325,000 O0 81,562 50 75,468 75 325,000 O0 75,468 75 69,375 O0 325,000 O0 69,375 O0 63,281 25 325,000 O0 63,281 25 57,187 50 325,000 O0 57,187 50 51,093 75 325,000 O0 51,093 75 45,000 O0 325,000 O0 45,0G0 O0 38,906 25 325,000 O0 38,906 25 32,812 50 350,000 O0 32,812 50 26,250 O0 350,000 O0 26,250 O0 19,687 50 350,000 O0 19,687 50 13,125 O0 350,000 O0 13,125 O0 6,562 50 350,000 O0 6,562 50 - ,m m m ,mm m m m m m m mm m m m m m m mm m -SlS- 68-A-64 1994- 1995 1996 1997 1998 1999 2000 2.001 2002 2003 200,4. 2005 2006 2007 I, 900,000 O0 I, gO0,000 O0 1 900,000 O0 I .900,000 O0 I, 900,000 O0 1, go0,o00 O0 1,900,000 O0 1 , gO0,000 O0 1 900,000 O0 I, gOO, 000 O0 I, gOO, 000 O0 I ,go0,o00 O0 1, go0,000 O0 1, goo ~poo 00 ~74,ooq~.ooo oo 508,725 O0 473,100 O0 473,100 O0 437,000 O0 437,000 O0 400,900 O0 400,900 O0 364,800 O0 364,800 O0 328,700 O0 328,700 O0 292,600 O0 292,600 O0 256,025 O0 256,025 O0 219,450 O0 219,450 O0 182,875 O0 182,875 O0 146,300 O0 146,300 O0 109,725 O0 109,725 O0 73,150 O0 73,150 O0 36,575 O0 36,575 O0 - $29,518__z_025 O0 $28,1,20,5.50 O0 650,000 650,000 650,000 650,000 650,000 6 50,000 650,000 650,000 650,000 650 650,000 650,000 650,000 O0 174 037 50 O0 161 850 O0 O0 149 500 O0 O0 137 150 O0 O0 124 800 O0 O0 1 1 2 450 O0 O0 100 100 O0 O0 87 587 50 O0 75 075 O0 O0 62 562 50 O0 50 050 O0 O0 37 537 50 O0 25 025 O0 650,000 O0 -- 12, ,512 50 $25,200,000 ,00 $10,,9_8e,1m 25 161,850 O0 149,500 O0 137,150 O0 124,1300 O0 112,450 O0 100,100 O0 87,587 50 75,075 O0 62,562 50 50,050 O0 25,025 O0 12,512 50 ~75 $,5,000,000 O0 $761. ,718 75 $667,9.68 75r -S19- SCHEDULE NO._Xli (CONTINUED - 2) 68-A-F:>4. YEA.._.~R BUSES AND OTHER PURPOSES .JSEC. 23-3) PRINCIPAL DUE NAR. 1 1908 $ 300,000 O0 1969 300,000 O0 1970 300,000 O0 1071 300,000 O0 1972 325,000 O0 1 973 325,000 O0 1974 325,000 O0 1975 325,000 O0 1 976 325,000 00 I 977 ' 325,000 00 1 978 · 325,000 O0 1 079 325,000 O0 1980 1961 1982 - 1983 - 1 984 - 1985 - 1986 - 1987, - 1 989 - 1990 - 1991 - 1992 - 1993 - 1994 1995 - INTEREST DUE NAR. I SEPT. I C~ARAGES AND OTHER PURPOSES. {SEC, 23-3) PRINCIPAL DUE MAR. 1 71,250 O0 $ 65,625 00 - 65,625 O0 60,000 O0 $ '75'~000 O0 60,000 O0 54,375 O0 75,000 O0 54,375 O0 4~,750 O0 50,000 O0 48,750 O0 42,656 25 50,000 O0 42,656 25 36,562 ~ 50,000 O0 36,562 50 30,4'68 '75 50,000 O0 30,,4~58 '75 24,375 O0 50,000 O0 24,375 O0 1B,281 25 50,000 00 18,281 25 12,187 50 50,000 O0 12,187 50 0,093 75 · 50,000 O0 6,093 75 - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 - - 50,000 O0 INTEREST OUE MAR. I SEPT. 1 37,762 50 $ 37,762 50 37 ,'762 50 36,356 25 36,356 25 34,950 O0 34,950 O0 34,012 50 34,012 50 33,075 O0 33,075 O0 32,137 50 32,137 50 31,200 O0 31,200 O0 30,262 50 30,262 50 29,325 00 29,325 00' 28,387 50 28,387 50 27,450 O0 27,450 O0 26,512 50 26,512 50 25,575 O0 25,575 O0 2~,637 50 24,637 50 23,700 O0 23,700 O0 22,762 50 22,762 50 21,825 O0 21,825 O0 20,~'7 50 20,887 50 19,950 O0 19,950 O0 19,012 50 19,012 50 18,075 O0 18,075 O0 17,137 50 16,200 O0 15,262 50 15,262 50 14,325 O0 14,325 O0 13,387 50 13,387 50 12,450 O0 12,4.50 O0 11,500 O0 m mm m m mm mm mm mm mm mm mm mm mm mm m mm mm m m m m mmi i mm m mm mmm mmm mm m m mmm mmmm mm im m -S20- 68-A-64. 1 gg6 1 gg7 1 cjg8 1 ggg 2000 2001 2002 200:3 2004- 2005 2006 2007 ,$3,800,000 O0 - - 50,000 O0 11 ,500 O0 10,550 O0 - - 50,000 O0 10,550 O0 9,600 O0 - - 50,000 O0 9,600 O0 8,650 O0 - - 50,000 O0 8,650 O0 7,700 O0 - - 50,000 O0 7,700 O0 6,737 50 . - 50,000 O0 6,737 50 5,775 O0 - - 50,000 O0 5,775 O0 4,812 50 - - 50,000 O0 4,812 50 3,850 O0 - - 50,000 O0 3,850 O0 2,887 50 - - 50,000 O0 2,887 50 1,925 O0 - - 50,000 O0 ! ,925 O0 962 50 - - .... 50,000 O0 962 50 - $4-70,625 gO._ ~.9.9,375 O0 $2 :000 ,0~?0 O0 $'7'79,331 25 $'74-1 ,568 75 66-A-64 -S21- SCHEDULE NO. Xlll NET COST OF SERVICE 6~ESSABEE TQ THE 79 CITIES ANO TOWNS SEPTENBER 1, 1966 TO SEPTENBER 30, 1 967 NET COST NET COST NET COST NET COST NET COST NET COST NET COST OF EXPRESS OF EXPRESS OF EXPRESS OF LOCAL OF LOCAL OF' OF SERVICE .CJTtES AND TOWNS ..SERVICE (A) SERVICE (B) SERVICE (C) SERVICE (O) S.E. RVICE (E) SERVICE (F) PERCENTAGE ARLINGTON $ 7,470 04 $ 28,915 35 $ 2,080 50 $ 434,625 46 - $ 473,091 35 1.9329 ASHLAND 158 80 - 42 86 - $ 926 50 I, 1 28 16 .0046 BEDFORO 45'7 33 - 343 51 - 12,975 62 13,776 46 .0563 BELMONT 4,231 80 16,380 66 I ,142 10 265,588 69 - 287,343 25 1.1740 BEVERLY 1,004 62 - 6,128 38 - 4,300 42 11,433 42 .0467 BOSTON 252,807 12 978,574 45 52,812 02 13,913,587 65 - 15,197,781 24 62.0922 BRAiNTREE 2,783 61 - 751 26 - 3,700 27 7,235 14 .0296 BROOKLINE 10,180 52 39,407 O0 2,349 44 968,481 35 - 1,020,418 31 4.1690 BURLINGTON 893 22 - 241 07 - 1,530 57 2,664 86 .0109 CANBRIOGE 35,699 52 138,187 16 7,131 12 1,834,785 43 - 2,015,803 23 8.2358 CANTON 1,196 15 - 2,932 28 - 1,521 07 5,649 50 .0231 CHELSEA 3,158 78 12,227 65 852 51 445,050 61 - 461,289 55 1.8847 COHASSET 470 31 - 126 93 - 695 57 1,292 81 .0053 CONCORD 691 64 - 2,326 78 - 19,629 06 22,647 48 .0925 DANVERS 346 39 - 93 48 - 2,611 44 3,051 31 .0125 DEr'JHAM 3,008 78 - 6,759 28 - 2,842 79 12,610 85 .0515 DOVER 213 32 - 75 76 - 338 92 ~o28 O0 .0026 r~UXBURY 199 77 - 5~3 92 - 563 O0 816 69 ',0033 EVERETT 6,889 34 26,657 14 I ,368 82 541,400 96 - 576,326 26 2.3546 FRANINGH~.M 1,4;70 19 - 396 78 - 6,387 29 8,254 26 .0337 HAI~IILTON 208 13 - 1,374 30 - 65~ 66 2,236 09 .0091 HANOVER 272 57 - 73 56 - 705 49 1,051 62 .0043 HINGHAM 1,173 24 - 316 64, - I ,831 49 3,321 37 .0136 HOLBROOK 966 36 - 260 81 - 1,203 39 2,430 56 .0099 HULL 497 40 - 134 24 - 840 31 1 ,471 95 .0060 LEXINGTON 2,242 54 - 1,124 46 - 49,933 O0 53,300 O0 .2178 LINCOLN 355 41 - 953 21 - 7,316 87 8,625 49 .0352 -S22- 68-A-64. LYNN LYNNF I ELD MALDEN MANCHESTER MARBLEHEAD NARSHFI ELD MAYNARD MEDF i ELD NEDFORD MELROSE MI OOLETON MILLI$ H I LTON NAHANT NATI CK NEEDH,AM NORF~OLK NORTH READ i NG NORWELL NORWOOD PEABODY PEMBROKE QUINCY RANOOLPH READING REVERE ROCKLAND SALEM ' sAUGus SCI-TU~TE *- SHARON SHERBORN SOMERV I LLE STONEHAM SUOBURY SWAHPSCOTT TOPSF I ELD 2,983 84. - 415 80 - 5,361 36 20,753 39 217 95 - 1,125 16 - 373 47 - 65 O1 - 209 03 - 8,485 15 32,844. 26 3,119 61 - 62 30 - 17.5 96 - 5,088 11 19,695 50 280 70 I ,381 48 - 2,572 33 - 11.,637 39 4.5,045 72 107 11 - 404 29 341 98 ,- 1,461 05 ,- 845 48 - 201 13 -- 8,999 60 - 2,075 61 - 1, G34 30 - -6, .~:)0 69 25,425 521 1.0 790 85 - 1,405 ~ 786 56 1,049 og - 14,377' 89 55,653 78 1,330 01 - 318 62 790 49 102 26 - 3,068.16 - 112 22 - 1,555 14 747,489 48 1,454 71 - 303 66 - 100 79 - 17 55 -7950 2,666 gl 75~,253 64 10,399 33 - 16 81 I ,223 61 145,763 71 75 76 372 84 - 6,454 44 - 2,542 8'1 212,959 61 24783 '- 109 11 - 92 30 - 2,195 19 - 228 18 - 2,428 85 - 560 17 - 7,559 34 - 1,332.72 370,912 56 140 6~- - 3,515 o~ _ 379 ~ 212 28 - 3~,00¢ 47 - ~ -/6 - 3,8~ 3~/ I ,166,154 15 358 ~ - 380 24' 2,5B4 85 - 2-/ 60 - 11,252 27 17,304. 27 ,0-/07 I ,000 26 I ,528 28 .0062 - 775,159 37 3.1670 468 28 2,140, 94- ~0087 2,205 8g 3,634- 71 .0149 803 70 I , 277 96 .0052 3,198 47 3,281 03 .0134 717 09 I ,005 62 .004-1 - 797,24-9 96 3.2573 3,527 61 17,046 55 .0696 442 85 521 96 .0021 520 95 780 89 .0032 - 171,770 93 .7018 471 63 828 09 .0034 10,974 82 12,729 14. .0520 3,561 83 12,688 60 .0518 - 272,185 53 1.1120 413 38 768 32 .0031 992 16 1,505 56 .0062 620 14 I ,054- 42 : .004,3 2,965 31 6,621 55 .0271 3,835 23 4,908 89 .0201 585 91 841 32 .0034 10,410 43 21,838 88 .0892 2,251 01 4-,886 79 .0200 2,293 76 11,487 40 .0469 - 404-,239 86 1.6516 1,562 42 2,224 16 .0091 4,669 95 8,976 74 .0367 2,461 26 4.,246 ~ .0173 I ,335 55 2,334 39 .0095 1,199 34 5,252 90 .0215 215 14 326 94. .0013 - I ,240,066 19 5.0664 2,122 4.9 3,811 45 .0156 886 97 1,585 83 .0065 1,583 24. 4-,964 58 .0203 399 13 528 99 .0022 -S23- ~CHEDULE NO. Xlll (CONTINUED -2) 68-A-64 CITIES ANO TOWNS NET COST NET COST NET COST NET COST NET COST NET COST NET COST OF EXPRESS. OF EXPRESS OF EXPRESS OF LOCAL OF LOCAL OF OF SERVICE ~ERVICE (A) ~S[RVICE (~) SERVICE (C) S[,RVICE (D) SERVICE (E) SERVICE (FI PERCENTAGE WAKEFIELD WALPOLE WALTHAN WATERTOWN WAYLANO WELLESLEY WENHAN ~STON wEs~oo WEY~UTH WI~NG%ON WI N~ESTER WI NTHROP WO~RN $ 1,8§5 34 - $ 7,2Ol 71 - $ 2,893 50 $ 12,02o 55 .o491 499 ~ - 750 o7 - 1,675 44 2,924 94 .OlZO z,24~ 15 - 3,196 icj - 45,~-7§ 97 51,O1B 31 .2084 3,971 76 $ 15,375 14 1,071 92 $ 307,296 76 - 327,715 58 1.3389 593 34 - 427 67 - 2,~32 73 3,853 74 .01~7 2,034 30 , 5~9 03 - 7,7~3 115 10,336 49 .0422 63 ~3 r 22 5'7 - 333 19 439 39 .0018 675 62 - 761 13 - 963 92 2,420 67 .0099 1,091 86 - 614 45 - I ,233 15 2,939 46 .0120 3,777 06 -. 1,019 37 - 5,737 82 10,534 25 .0430 788 2§ - 2,431 B7 - 1,485 73 4,705 85 .0192 2,240 73 - 7,~4 28 - 2,307 73 12,132 74 ~0496 2,752 80 - 742 94 - 2,418 10 5,913 84 .0243 1,936. 23 - 4~240 96 - 3,717 60 g~Bg4 79 .0405 $451,4C~ 06 ~ ~ ~ $279,40,,3, 24 $24,476,135 34;,, 100____~.0000~ NOTES: (8) (c) NET COST OF EXPRESS SERVICE DURING SAID FISCAL PERIOD ASSESSABLE ON ALL THE CITIES AND TO~NS CONPRISING THE AUTHORITY~S TERRITORY; CONPUTED IN ACCORDANCE ~ITH THE FIRST PARAGRAPH OF SECTION B OF CHAPTER 10lA OF THE GENERAL LA~S AS NODIFIED BY CHAPTER 6500F THE ACTS OF 1965. THAT PART OF THE NET COST OF EXPRESS SERVICE DURINGSAID FISCAL PERIOD ~HICH REPRESENTS DEBT SERVICE OF ANY OBLIGATION OF THE NETROPOLITAN TRANSIT AUTHORITY ISSUED FOR EXPRESS'PURPOSES AND ASSESSABLE ON "FOURTEEN CITIES AND TO~NS" AS 'DEFINED IN CHAPTER 161A OF THE GENERAL LA~S; COMPUTED IN ACCORDANCE ~ITH THE SECOND PARAGRAPH OF SECTION 8 OF SAID CHAPTER 161A AS 140DIFIED BY CHAPTER 6500F THE ACTS OF 1965. THAT PART OF THE NET COST OF EXPRESS SERVICE DURING SAID FISCAL PERIOD WHICH IS ATTRIBUTABLE TO SERVICE PROVIDED NO LATER THAN JUNE 30~ 1~6B UNDER AGREEMENTS ~ITH RAILROADS TO PROVIDE PASSENGER SERVICE TO AND FRON BOSTON, COHPUTED IN ACCORDANCE ~ITH SECTION SA OF SAID CHAPTER 161A NET COST OF LOCAL SERVICE PROVIDED IN THE "FOURTEEN CITIES ANO TOWNS" AS DEFINED IN CHAPTER161A OF THE GENERAL LAWS DURING SAID FISCAL PERIOD; CONPUTED IN ACCORDANCE ~|TH TIlE REQUIRENENTS OF SECTION 9 OF SAID CHAPTER 161A AS NODIFIED BY CHAPTER 650 OF THE ACTS OF 1965. m m i m, im m m m --, m m m m m mm m It m m -S2~- 68-A-64. (E) NET COST Of LOCAL SERVICE PROVIDED IN THE "SIXTY-FOUR CITIES AND TOWNS" AS DEFINED IN CHAPTER 161A Of THE GENERAL LAWS DURING SAID PERIOD; COMPUTED IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 11 OF SAID CHAPTER 161A AS MODIFIED BY CHAPTER 650 OF THE ACTS OF 1965. (F) THE TOTAL NET COST OF SERVICE TO BE ASSESSED ON ALL THE CITIES AND TOWNS COMPRISING THE AUTHORITY~S TERRITORY.