Report finds T’s riders at risk

The report, obtained by the Globe yesterday, found that the agency has left more than 50 critically important safety projects unfunded because of a “mountain of red ink.’’ In the unsparing words of the author, if the MBTA were a private firm, it “would likely fold or seek bankruptcy.’’

“It’s fair to say that they are not keeping up with the safety standards that they themselves subscribe to,’’ said David F. D’Alessandro, the former John Hancock chairman who led the review.

Patrick, who will join D’Alessandro in releasing the report this morning, requested the top-to-bottom analysis in August after he helped orchestrate the ouster of Daniel A. Grabauskas as general manager of the Massachusetts Bay Transportation Authority.

The report is generally uncritical of MBTA management. Instead, it places most of the blame on a change in the way the MBTA was funded, a change approved by the Legislature in 2000.

The idea at the time was to give the T a fixed annual subsidy, abandoning the unwieldy practice of using state money to pay off MBTA expenses at the end of each year. The concept, wrote D’Alessandro, was laudable. But the state underestimated the agency’s expenses by $558 million between 2000 and 2008, he wrote, because of unrealistic projections for operating costs that were outside the T’s control.

For example, the original plan left no money for workers’ health care cost increases, even though they grew by 73 percent in the first eight years. The T, the state’s largest electricity customer, saw fuel and utility costs more than double over the same period.

To balance the books, managers deferred debt payments, masking the size of the T’s problems, D’Alessandro concludes.

“As homeowners painfully learned in the subprime mortgage debacle, it is only a matter of time before those delayed payments are due,’’ he wrote. “That time has arrived.’’ By 2013, the report said, the agency’s annual debt payment will reach $525 million.

A spokesman for Patrick, who faces a run for reelection next year, declined to comment on the report last night. Representatives for the T could not be reached for comment, but in the past they have said that safety is a top priority and the riding public is not at risk.

The report - punctuated by foreboding subtitles such as “The outlook is bleak,’’ “A Faustian bargain,’’ and “At risk - system safety and reliability’’ - includes a list of recommendations, as well as a warning that there are no quick fixes.

Despite the agency’s financial woes, D’Alessandro recommends against raising fares after three increases in the past decade. Before adding still further to the burden on passengers, he wrote, “the riding public deserves to have tangible evidence that the MBTA is improving safety and service, not deteriorating further.’’

D’Alessandro, a bluntly spoken former corporate executive, also recommends against further expansion until the T can get its safety and maintenance problems under control. Simply controlling costs, he said, is no solution, given the magnitude of the agency’s problems and the need to employ large numbers of people to run the system.

In general, D’Alessandro recommends more transparency and more direct oversight of the MBTA by the new state transportation board, including a requirement that the T seek approval before it borrows any more money.

The strongest recommendation concerns safety. D’Alessandro implores the T’s new oversight board to conduct a high-level examination of what needs fixing.

“With 51 projects classified as ‘a danger to life or limb of passengers and/or employees,’ prioritizing these projects against public safety needs is imperative,’’ he wrote.

One delayed project highlighted in the report, which has been deemed critical to public safety, involves repair of a water leak on the Red Line between Alewife and Harvard stations. The $80 million project would replace a system of slabs and disks, designed to absorb train vibrations, that has been damaged by water leaks. In some areas, fasteners are corroding and the tracks are moving out of alignment, the report states, presenting “the possibility of train derailment.’’

The system’s age and the lack of consistent repairs has also had a direct impact on service, according to the report. A recent fire triggered by an old cable buried under muck on the Red Line shut down rush-hour service. It also forced some bus drivers to ferry those Red Line passengers, leaving parts of their regular routes uncovered and causing inconvenience across the system. The publicity forced the MBTA to agree to replace the cable, a $140 million project, “money that will be diverted from other projects such as overhauling vehicles,’’ the report states.

The 51 deferred projects deemed critically important carry a price tag of $543 million. But the T has a total of more than $3 billion in unfunded maintenance projects it considers necessary to keep the system operating smoothly, a list that is growing as trains and buses stay in service beyond their projected life and without crucial overhauls, according to the report.

The agency spends $470 million a year on maintenance, but would need an additional $224 million to keep its backlog from growing, the report said.

In the meantime, the T also faces an ever-growing gap in its yearly operating budget. The report predicts cumulative budget deficits of at least $550 million by 2014, a figure that will double if the Legislature declines to renew beyond this year an added $160 million subsidy it granted to the agency to prevent a fare hike.

Some of the problems cited in the report have been raised elsewhere. But D’Alessandro said that no one has previously documented the extent to which the MBTA’s deferred debt payments have created future problems and masked past failures. Nor has there been a full accounting of the critical safety projects at the T that have gone unfunded.

“If you ask the riding public ‘Who deserves to know what they’re not fixing?’ The answer is everyone should know,’’ he said.

Noah Bierman can be reached at nbierman@globe.com.