Massachusetts Department of Transportation Secretary’s Report Meeting of the Massachusetts Department of Transportation Board Room, 10 Park Plaza, Boston, Massachusetts 16th Meeting Monday, February 7, 2011 1:00 p.m. Report of the Secretary This report is available on MassDOT’s website at www.mass.gov/massdot/information. 1. Personnel Report You all know that Luisa Paiewonsky has announced that she is stepping down as Highway Administrator. I have publicly acknowledged her contributions both to the former Highway Department and to the DOT several times, but want to take the time to do so once again here at today’s meeting. Thank you, Luisa. A search committee comprised of Susan Quinones, Chairman Jenkins and Director Levin is reviewing resumes we have received from interested candidates for the Highway Administrator’s position. Obviously, this will be an important issue for us in the early months of this year. Last Friday, Deputy Secretary Brian Murphy announced that he is leaving the DOT to become the Assistant City Manager for Community Development at the City of Cambridge. Brian has made a huge contribution to our organization, primarily tracking priority projects and monitoring our progress on job creation and economic development coordination. He will be missed. Luisa will be staying with us in another capacity. Brian is moving on, but he will not be far away. Let me congratulate and thank both Luisa and Brian at this moment in their careers and wish them well as they move forward. Both represent the best that the DOT has to offer. 2. MassDOT Employee Recognition Program I am pleased to announce the Employee of the Month Award recipients for February. Terri Furlong is an Assistant Manager of Toll Collection for Tunnels-Bridges. Everyday, Terri utilizes her strong work ethic and exceptional communication and organizational skills to effectively and efficiently manage the toll collection operations at the Sumner Tunnel, Ted Williams Tunnel and Tobin Bridge. Her dependability to both her employees and supervisors positions the groups she supervises to provide good service to customers who utilize the Tobin Bridge and the Tunnels. Terri’s leadership and compassion for her employees during 1 their transitions from either the former Turnpike or Massport helped them maintain a positive morale during the past 15 months of changes. Terri is a model MassDOT employee. Jean MacEachern is an Administrative Coordinator at the MBTA’s Design and Construction Department. She recognized that the cell phones of T customers have the potential to offer them new consumer experiences and benefits, including “self-service ticket purchasing,” instant access to information, travel planning and instant customer feedback. Jean was initially part of a team that introduced this idea to the T’s General Manager during an MBTA Tomorrow’s Leaders training program. The GM was impressed and Jean volunteered for additional responsibilities as project coordinator and later as project lead. As a result of Jean’s efforts, an outside vendor will bring the idea of using cell phones to enhance T riders’ customer service experience to fruition within the next few months. 3. Second Quarter Financial Report Our financial team continues to make good progress in the merger of the systems that the agencies that make up the DOT used to use and on developing reporting systems that are appropriate for the Board and for the DOT’s senior leadership. Attached is a report (marked as “Item 3”) developed by the team, which includes a narrative of highlights. I will let the report speak for itself, but will note that revenues in the toll cost centers is slightly ahead of budget and that payroll is under budget due to layoffs, attrition and tight control of vacancies. Please let me know if this report is helpful and if you have comments or suggestions on the presentation. I intend to provide to the Board a monthly financial report going forward. 4. Snow and Ice Program It is no secret that this has been a challenging year for our snow and ice teams in every part of the DOT. Let me thank all of our employees and vendors who have worked so hard and had so much success keeping our facilities safe. The attached report (marked as “Item 4”) documents the status of the snow and ice budgets as of 8:00 a.m. on February 3rd. We have spent $74M, have $10.9M in current encumbrances, and are $22.5M over budget. We are working with the Executive Office for Administration and Finance on cash flow issues so that we can continue to pay our vendors on time. We are also working with ANF and members of the legislature to receive a supplemental appropriation for these costs. We do not have good historical information on snow and ice for the current configuration of our responsibilities because of the many agencies that were involved in snow and ice control in the past. The attachment includes a chart showing spending over the past five years. For comparison purposes, we have spent $71.7M on snow and ice control on the state highway system as of 8:00 a.m. on February 3rd. During FY 05, we spend a total of $106M, and in FY 09, we spent a total of $127.5M. The five-year average for nearly the same roads is $80.7M, and the 10 year average is $75M. 5. Highway Approvals Attached (marked as “Item 5”) is a report of contracts and agreements executed in the Highway Division during the month of January that are within the current delegated authority levels. 2 6. Legislative Leadership Changes Both chairmen of the Legislature’s Joint Committee on Transportation, Senator Steve Baddour and Representative Joe Wagner, have moved on to new assignments in the Legislature. In their place, Senator Thomas McGee from Lynn and Representative Bill Straus from Mattapoisett have been appointed. Jefferson Smith and I have met with both new Chairs and are excited to begin working with them. I have called them both, but want to publicly thank Senator Baddour and Representative Wagner for their leadership and significant contributions to transportation reform over the past few years. 7. Commonwealth’s Comprehensive Annual Financial Review On January 18th , Martin Benison, Comptroller of the Commonwealth published the Commonwealth’s CAFR for the fiscal year ended June 30, 2010. Copies of the report are available on request. This report represents the first financial report after the creation of the DOT, which is documented on page 21 as a significant structural change to [the] government operations, and notes the hybrid nature of our organization, having attributes of both a state department and an independent authority. The report also documents the transfer of over $8.9B in assets from the Commonwealth to MassDOT since MassDOT’s creation. Consistent with its status as an entity separate and apart from the Commonwealth itself, MassDOT is reported in the CAFR as a Component Unit of the Commonwealth. 8. Other News • The Office of Transition Management filed the most recent transition report with the Legislature on Friday, February 4th. • This morning, several of the staff joined Lt. Governor Murray and Rich Davey on the inaugural ride of the first new locomotive to be added to the MBTA commuter rail fleet in over 20 years. This investment, approved by the Board last year, represents the type of investments we need to continue to make. • Consistent with our Anti-Fraud Policy, we have set up the Anti-Fraud Hotline at 866- 604-1224. The number is managed by a vendor selected by competitive procurement. We have assigned a member of the legal team to handle intake on the line. ************* 3 Secretary Mullan Report to the MassDOT Board FY 11 Second Quarter Year to Date Consolidated Operating Results Revenue o Good News o Toll Revenue is 5% ahead of budget as of 12/31/10 o Non Toll Revenue is running 5% above budget o MassDOT Departmental Revenue is trending to budget Operating Expenses o Payroll • Payroll under budget due to tight monitoring of vacancies. o Other Operating Expenses • Utilities, fuel, and administrative expenses are slightly under budget and will be monitored closely over the next six months. Debt Service o Principal and Interest costs are trending to the budgeted costs. Pay Go Capital o Reminder – this program funds operating and capital maintenance, construction, on the WT, MHS, and Tobin Bridge. o The source of funding is Toll and Non Toll Revenue, not Bond Funds. o Currently, we are trending well under budget. The reason for the under spending is delays in design and advertising of construction projects this fall. This will lead to a delay in spending during the construction season this spring, but those projects will partially carry over in to FY 12. Snow and Ice o The FY 11 budget is $62.9 million (includes $7.8 million for toll roads). o The non toll budget is $55.0 million. o The current incurred expenses as of 2/3/11 are $80 million, a deficit of $25 million for the non toll snow and ice operations. o The Governor filed a supplemental budget request on 1/26/11 in the amount of $25 million, which is needed to meet current costs. o Please note additional funding will be needed in order to cover the costs of future storms during the balance of the winter. o Short Term Plan – snow and ice • This is a cash flow issue. • We need to pay contractors, employees, and ensure there are adequate materials on hand to deal with the rest of the winter. • ANF has agreed to advance MassDOT’s allotment of funding from the MTTF in order to meet our immediate expenditures for snow and ice. • The Administration is working closely with the Legislature to pass the snow and ice supplemental budget as soon as possible. • We will continue to pay contractors, employees, and purchase needed materials. Summary o At the end of the second quarter, with the exception of snow and ice, expenses are trending to budget and we expect no surprises between now and year end.
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