Transit officials on Monday said they would not commit any additional state funding beyond what has already been slated for the MBTA’s Green Line extension, an amount that was based on a budget estimate the project blew past earlier this year.
And no final decision about the project’s future will be made until strategies are in place to cut costs, the two boards that respectively oversee the MBTA and the state Department of Transportation voted.
The resolution, separately approved by the two boards, sets a hard reset on the over-budget expansion project to Somerville and Medford, and leaves in place the possibility that it could be canceled.
The Green Line extension was revealed to be as much as $1 billion over its previous $2 billion budget earlier this year, throwing its future into question. Construction and project management contracts were canceled last week after board members heard from consultants that the contracting process was largely to blame for the cost increase.
The federal government has agreed to pay about $1 billion for the project. The state was set to pay the other half of the $2 billion budget, plus the debt service, before the cost spike. If the project were outright canceled, it would result in more than $740 million in sunk costs.
Monday’s resolution says the project could still be canceled, and should not proceed until new project management, procurement, and design and engineering strategies are put in place, to lower costs and better ensure they stay put.
And if, after all that, the state still requires additional money beyond the previous project estimate, outside parties will need to cover it, the resolution said.
“They’re basically saying it’s a good investment for the Commonwealth at $1 billion, but it’s not a good investment at more than that amount of Commonwealth dollars,’’ Secretary of Transportation Stephanie Pollack said after the board votes.
Pollack said securing the outside money will be key to the project’s future, because she is “skeptical’’ the extension’s price tag will ever get back to $2 billion.
The resolution names the Boston Metropolitan Planning Organization, the cities that would most benefit from the project (which are Somerville, Medford and Cambridge), and landowners and developers in those cities, as possible outside funding sources.
“We all have to have skin in the game,’’ MBTA control board member Brian Lang said. “The T has skin in the game, the federal government has skin in the game. And I think the local communities, the developers in particular, who are going to make millions if not billions from what happens with that extension, all need to continue to have skin in the game.’’
The resolution did allow an exception to not seeking additional state funds for the project: if the federal government requires new state money to unlock an outside contribution. Following the meeting, Pollack, who chairs the MassDOT board, said an example would be a $20 million investment from the state triggering an $80 million contribution from the Metropolitan Planning Organization.
“If there were other MPO funds available and a small amount of additional state funding was necessary to match, that would be something [board members] would be willing to consider,’’ Pollack said. “The clear message is, the board fundamentally wants the Commonwealth’s investment limited to … $1 billion. But they’re not going to be so strict as to preclude the possibility of leveraging additional dollars with small amounts.’’
Prior to the vote, members of both boards suggested they could not justify paying more than already planned for the project because of other transportation costs facing the state, such as MBTA and roadway repairs.
“We need at least $500 million to fix the signal system, so we could reduce the headways, so people could have more confidence in the system as it exists. Which will create more riders, which will create more revenue,’’ Lang said. “We have to balance things like that against GLX.’’