Overview
The Massachusetts Bay Transportation Authority (MBTA) was created in 1964, pursuant to Chapter 161A of the Massachusetts General Laws. The agency provides the following: a rapid transit system, commuter rail services, bus services, ferry routes, and transit services for people with disabilities. According to its website, the MBTA is “one of the largest public transit systems in the country, serving nearly 200 cities and towns and over 1 million daily riders.”
According to Section 7 of Chapter 161A of the General Laws, the MBTA is governed by a nine-member board of directors. This section states,
The board shall consist of: secretary [of Transportation], who shall serve ex officio; 1 person to be appointed by the mayor of the city of Boston; 1 person to be appointed by the advisory board who shall have municipal government experience in the service area constituting the authority and experience in transportation operations, transportation planning, housing policy, urban planning or public or private finance; provided, however, that said person shall not represent the city of Boston; and 6 persons to be appointed by the governor, 1 of whom shall have experience in safety, 1 of whom shall have experience in transportation operations, 1 of whom shall have experience in public or private finance, 1 of whom shall be a rider as defined in section 1 [of the General Laws] and a resident of an environmental justice population as defined in section 62 of chapter 30 [of the General Laws], 1 of whom shall be a municipal official representing a city or town located in the area constituting the authority representing the service area . . . and 1 of whom shall be selected from a list of 3 persons recommended by the president of the Massachusetts State Labor Council.
Not less than 2 of the appointed members shall also be members of the board of directors of the Massachusetts Department of Transportation.
The MBTA is also overseen by the Massachusetts Department of Transportation board of directors, whose 11 members are appointed by the Governor. According to Section 3(d) of Chapter 161A of the General Laws, the General Manager of the MBTA is hired by the Secretary of Transportation and oversees the MBTA’s day-to-day activities.
The MBTA’s Commuter Rail System
The MBTA’s website states,1
[The MBTA commuter rail] connects communities in eastern Massachusetts and Rhode Island to downtown Boston, with 137 stops throughout the region. The service area includes 12 [commuter rail] lines that run seven days a week, plus special service to Gillette Stadium from Boston and Providence for sporting events and concerts.
Each commuter rail line runs on a set schedule, with services starting as early as 5:00 a.m. and running until as late as 1:00 a.m. at certain stops.
According to the MBTA’s website, the average weekly ridership on the MBTA commuter rail fluctuated greatly during the audit period because of the COVID-19 pandemic. For example, in June 2020, the average weekly ridership totaled 5,044 riders. In January 2020, before COVID-19, the average weekly ridership totaled 114,518 riders. Over time, as the Commonwealth addressed the COVID-19 pandemic, there was a gradual increase in the average number of weekly riders. By December 2023, the average weekly ridership totaled 95,966 riders.
Average of Weekly Ridership June 1, 2020 through December 31, 2023
Commuter Rail Operating Agreement
On February 5, 2014, the MBTA entered an eight-year contract (worth $2,686,344,294) with Keolis to maintain and operate the commuter rail system on behalf of the MBTA. This initial contract covered the period July 1, 2014 through June 30, 2022. On July 1, 2020, the MBTA and Keolis added an extension to their contract, expiring June 30, 2026. This extension included the option for an additional one-year extension through June 30, 2027, which the MBTA exercised on April 25, 2024.
Under this contract and its amendments, Keolis is responsible for operating, managing, and staffing the MBTA’s commuter rail services. Keolis also inspects, maintains, and repairs commuter rail trains, tracks, station facilities, and other infrastructure owned by the MBTA. In addition, Keolis is responsible for collecting fares from all customers along the MBTA commuter rail system.
Keolis Performance Evaluation
The MBTA’s contract with Keolis includes a fixed price for a certain level of service but also allows Keolis to earn financial incentives or incur financial penalties based on its performance in certain areas. According to Section 1 of Schedule 6.1 of the MBTA’s “Commuter Rail Operating Agreement 159–12” with Keolis, the MBTA evaluates Keolis’s performance monthly in four key areas: on-time performance, seat availability, fleet maintenance, and passenger comfort and amenities. The MBTA uses its Financial Management Information System to record penalty and incentive adjustments to Keolis’s invoices.
On-Time Performance
According to the MBTA’s contract with Keolis, on-time performance is measured by the percentage of commuter rail trains that arrive at their final destination within five minutes of their scheduled time. The MBTA monitors on-time performance of all trains for each route through daily, monthly, and annual reports that are required to be produced by Keolis. Within these reports, each scheduled trip is detailed with its scheduled arrival and departure times, its actual arrival and departure times, whether the train is operating within peak1 or off-peak2 commuter hours, its status (on time, late, etc.), and the number of minutes late the train arrived, if applicable.
If a commuter rail train is late (for example, it arrives five minutes after its scheduled time), terminated (for example, it arrives over 40 minutes late or did not make it to its destination), or canceled, Keolis incurs a financial penalty. The amount of the penalty is determined by (1) the number of minutes late or whether the train was terminated or canceled and (2) whether the train was operating within peak or off-peak hours. The penalties range from $287 to $11,482 and escalate in amount each year. (See Appendix A.) Penalties are not assessed if the MBTA determines that the delay was caused by something outside of Keolis’s control (e.g., a police or fire department held up the train). Keolis was charged $10,644,273 in on-time performance penalties during the audit period ($247,541 per month, on average).
The MBTA’s contract establishes that Keolis must meet an on-time performance standard of 92%. Keolis can earn incentive payments monthly for lines that are on time over 92.5% of the time. The amount of the incentive varies based on the actual on-time performance percentage and the specific commuter rail line. These incentives range from $2,500 to $70,000 and escalate in amount each year. (See Appendix B.) Keolis can earn up to $2 million per year in on-time performance incentives. Keolis earned $7,447,562 in on-time performance incentives during the audit period ($177,323 per month, on average).
Seat Availability4
Keolis is responsible for ensuring that the scheduled commuter rail trains meet the required number of seats or capacity each trip, which is detailed in its Train Staffing Plan. This report is updated quarterly. The minimum number of seats is determined by north and south division and the fiscal year. The seating required can range from 1 to 1,160 seats per train. During the COVID-19 pandemic, there was a reduction in seating required.
The MBTA monitors seat availability through reports that are required to be produced by Keolis. Within each report, each scheduled trip is detailed with its required number of seats, the number of seats on the trainset, and the number of seats short, if applicable. If a trainset is short by 49 or more seats, Keolis receives a penalty. The penalty is $575 per train and escalates in amount each year. (See Appendix C.) Keolis was charged $396,371 in seat availability penalties during the audit period ($9,218 per month, on average).
The MBTA also promotes seat availability through incentive payments. Keolis earns incentive payments for each trainset operating during peak commuter hours that exceeds the required number of seats by 48 or more seats. The amount of the incentive is determined by the ridership level. The incentives range from $202 to $808 per train and escalate in amount each year. (See Appendix D.) Keolis earned $7,496,534 in seat availability incentives during the audit period ($178,489 per month, on average).
Fleet Availability
Within its contract with Keolis, the MBTA has established that a minimum number of locomotive5 and coach trains be available for revenue service “at the start of each of the two daily weekday peak periods from 5:00 AM to 10:00 AM and from 4:00 PM to 9:00 PM.” This is defined as the following: (1) the northern division of the commuter rail network6 requiring 24 locomotives and 131 coaches, which includes a minimum of 4 bilevel coaches and 24 cab control coaches (CTCs);7 and (2) the southern division of the commuter rail network8 requiring 38 locomotives and 228 coaches, which includes a minimum of 126 bilevel coaches and 37 CTCs. The MBTA monitors fleet availability through reports that are required to be produced by Keolis. Within each report, each locomotive and coach is listed with whether it was available for service for each day of the month. If the required number of locomotives or coaches is not available for service during each day of the month, Keolis is assessed a penalty. The penalty is $575 per day that Keolis does not supply the minimum number of trains and escalates in amount each year. (See Appendix C.) Keolis was not charged any penalties for fleet availability during the audit period.
Americans with Disabilities Act Compliance
Within Section 1.1 of Schedule 3.3 of the Keolis contract, Keolis is required to comply with Subpart I of Part B of Title II of the Americans with Disabilities Act (ADA) of 1990, which requires that each trainset has an operable ADA wheelchair device(s) and at least one lavatory-equipped coach, which must be located either on the first or second coach behind the locomotive. The MBTA monitors ADA compliance by performing physical inspections.
ADA inspections focus on the presence and functionality of ADA wheelchair devices, the presence of lavatories, and their locations on the train. If the Commuter Rail Department inspector finds that the train is not in ADA compliance, then the inspection is considered a failed inspection.
The MBTA is authorized under contract to penalize Keolis based on the number of failed ADA inspections. The penalty is $575 per train and escalates in amount each year. (See Appendix C.) Keolis was charged $18,770 in ADA compliance penalties ($437 per month, on average) and $23,759 in ADA toilet compliance penalties ($553 per month, on average).
Fleet Maintenance
According to the MBTA’s 2022 “Transit Asset Management Plan,” the MBTA uses a revenue fleet of 105 locomotives and 452 passenger coaches to provide commuter rail service across its 12 lines.9 According to the MBTA’s contract with Keolis, Keolis performs a “periodic maintenance inspection” on locomotives and CTCs every 92 days and on blind trailer coaches (BTCs)10 every 184 days. The MBTA monitors Keolis’s compliance with the periodic maintenance inspections by conducting its own fleet maintenance inspections, which are performed after Keolis completes its maintenance inspection. During these routine preventive maintenance inspections, mechanics inspect vehicles’ brakes and schedule repairs for any cracked or broken components and any leaks found.
The inspections consist of reviewing Keolis’s inspection reports that detail the maintenance performed, visual inspections of reliability features on the train, and safety features on the train.
The number of inspections required to be completed by the MBTA is determined by the number of locomotive, CTC, and BTC fleet maintenance inspections performed by Keolis. Using the number of fleet maintenance inspections performed by Keolis, the MBTA uses a 99% confidence level11 with a confidence interval12 of 10 to calculate the number of inspections that the MBTA must perform. If the MBTA does not perform the minimum number of inspections, then it cannot penalize Keolis for any fleet maintenance inspections that result in a failing score.
If the MBTA inspector finds issues during an inspection, the MBTA will open a service request. The service request prompts Keolis to fix the issues identified.
The MBTA is authorized under contract to penalize Keolis based on a percentage of fleet maintenance inspections performed by the MBTA. The amount of the penalty is determined by the type of train (locomotive, CTC, or BTC) and the percentage of passing inspections for each type of train. The penalties range from $7,750 to $114,814 based on a percentage of passing fleet maintenance inspections and escalate in amount each year. (See Appendix E.) Keolis incurred $128,495 in CTC fleet maintenance penalties ($2,988 per month, on average) and $66,536 in BTC fleet maintenance penalties ($1,547 per month, on average) during the audit period. Keolis was not charged any penalties for locomotive fleet maintenance during the audit period.
Passenger Comfort and Service Amenities
Vehicle Cleaning Standards
Within its contract with Keolis, the MBTA established cleaning standards for its commuter rail passenger coaches. These cleaning standards are broken down into categories based on the level of cleaning applied.
Class A cleaning is the highest level of cleaning applied to the vehicles, and Keolis is required to perform this cleaning on each coach at least once every 30 days. According to Section 3.5.7 of Schedule 3.3 of the MBTA’s “Commuter Rail Operating Agreement 159–12” with Keolis, Class A cleaning involves the following work:
Interior: (a) Remove all trash; (b) Hand wash interior panels; (c) Hand wash seat backs and bottoms; (d) Hand wash seat frames; (e) Wash and squeegee windows; (f) Wash floor and heater guards; (g) Toilet Room – wash all surfaces with an approved anti-bacterial cleaner; (h) Hand wash all stanchions and partitions; (i) Hand wash all cab surfaces; (j) Hand wash all trash receptacles; (k) Hand wash all light lenses (covers); (l) Inspect all decals and repair/replace as required; and (m) Remove all graffiti and unauthorized materials (stickers, gum, etc., from interior surfaces).
Exterior: (a) Wash coach exterior with an approved cleaner; (b) Hand wash and squeegee windshields; (c) Remove all debris from the exterior of the vehicle; (d) Inspect all decals and reflective materials and repair/replace as required; and (e) Remove all graffiti and unauthorized materials (stickers, gum, etc., from exterior surfaces).
Class C cleaning is the lowest level of cleaning applied to the vehicles, and Keolis is required to perform this cleaning on each coach daily. According to Section 3.5.9 of Schedule 3.3 of the MBTA’s “Commuter Rail Operating Agreement 159–12” with Keolis, Class C cleaning involves the following work:
Interior: (a) Remove all trash; (b) Wipe down all seating surfaces; (c) Clean all spills on floors; (d) Clean all windows; (e) Sweep and wet mop floor and stairs; (f) Wipe down all handles and passenger grab handles, stanchions and hand-holds; (g) Toilet Room – wash all surfaces; and (h) Remove all graffiti and unauthorized materials (stickers, gum, etc. from interior surfaces).
The MBTA monitors Keolis’s compliance with its vehicle cleanliness standards by performing physical inspections of passenger coaches. As seen in the table below, the MBTA has developed a Vehicle Cleanliness Matrix, which identifies certain conditions that affect the cleanliness of a train.
| Passenger Coach Condition | Points | ✔ | Total |
|---|---|---|---|
| Bathrooms – litter (as defined below), grime and liquids on floor and surfaces, generally unclean | 7 | ||
| Bathrooms – odor | 7 | ||
| Cabin – dust on HVAC grills | 1 | ||
| Cabin – odor | 2 | ||
| Floor – dried footprints, dried salt and sand | 1 | ||
| Interior ledges – dust or grime | 1 | ||
| Litter – dried gum | 2 | ||
| Litter – ticket stubs, paper punches, newspaper, other passenger trash | 2 | ||
| Misc. – bodily fluids | 7 | ||
| Misc. – dried beverage spills | 2 | ||
| Misc. – dirty joints, seat pedestals, and other interior crevices | 1 | ||
| Misc. – food or beverages | 2 | ||
| Seats – spilled liquids and grime | 2 | ||
| Seats – torn or damaged over 12 in. | 2 | ||
| Seats – torn or damaged under 12 in. (can temporarily use fabric tape) | 2 | ||
| Vandalism and graffiti – paint, ink, and other removable substances | 2 | ||
| Vandalism and graffiti – window and panel etchings | 2 | ||
| Vandalism and graffiti – offensive (must be removed immediately) | 7 | ||
| Vertical surfaces – torn advertisements, damaged notices, old flyers | 2 | ||
| Vertical surfaces – unauthorized posters, signs, stickers | 2 | ||
| Windows – dust or grime | 2 | ||
| Windows – hair or hand prints | 2 |
The MBTA assigns points to each of the conditions as criteria for determining a failed inspection. During an inspection, if the conditions identified by the MBTA amount to seven or more points, then the inspection is considered a failed inspection. The MBTA penalizes Keolis based on the number of failed inspections. The penalty for Class A is $1,148 per failed inspection, and for Class C, it is $575 per failed inspection. Both these failure penalties escalate in amount each year (see Appendix F). Keolis incurred $323,288 in Class C cleaning penalties ($7,518 per month, on average) during the audit period. Keolis did not incur any penalties for Class A cleaning during the audit period.
Service Amenities
Keolis is responsible for maintaining the commuter rail fleet in good working condition to ensure that the performance levels outlined in the contract can be achieved. The MBTA evaluates Keolis’s performance regarding passenger comfort by monitoring failures in the following in-service amenities:
- heating, ventilation, and air conditioning system—failure to maintain temperatures within a designated range;
- door system—failure of a door to operate as designed;
- lighting system—failure of at least 10% of a vehicle’s interior lights to remain illuminated for the duration of a trip;
- toilet system—failure of the toilet system to function properly; and
- communication system—failure of the public address system, intercommunication system, signage, or vehicle radio.
The MBTA monitors failures in in-service amenities of the trains by performing periodic inspections and by reviewing reports that are required to be produced by Keolis. During a periodic inspection or by reviewing reports, if any one of the amenities above are not in compliance, then each amenity that is not in compliance is marked as a failed area. For periodic inspections, the MBTA penalizes Keolis based on the number of failed areas. For report inspections, the MBTA penalizes Keolis based on the number of failed areas that are not corrected within 24 hours of the notification of the failure. The penalty is $2,297 for heating, ventilation, and air conditioning system failures, $575 for door system failures, $575 for lighting system failures, $862 for toilet system failures, and $575 for communication system failures, and all penalties escalate in amount each year. (See Appendix F.)
Keolis incurred $107,444 in heating, ventilation, and air conditioning system penalties ($2,499 per month, on average), $235,670 in door system penalties ($5,481 per month, on average), $56,328 in lighting system penalties ($1,310 per month, on average), $446,630 in toilet system penalties ($10,387 per month, on average), and $60,437 in communication system penalties ($1,406 per month, on average) during the audit period.
Train Staffing
Keolis is responsible for staffing each train in accordance with its “Train Staffing Plan,” which is required to be updated and produced by Keolis on a quarterly basis. The “Train Staffing Plan” states that “train staffing is based on the Keolis ridership counts for each train,” which is “based on the minimum ridership of three hundred passengers per train staff member.”
The MBTA monitors the commuter rail train staffing through reports that are required to be produced by Keolis. Within each report, each scheduled trip is detailed with its required number of staff members, the actual number of staff members, and the number of staff members by which the train was short, if applicable. If a train does not have the required number of conductors and assistant conductors, Keolis is assessed a penalty for each train with a staffing shortage. The penalty is $862 per train and escalates in amount each year. (See Appendix G.) Keolis incurred $1,396,889 in train staffing penalties during the audit period ($32,486 per month, on average).
The MBTA also promotes properly staffed trains through incentive payments. Incentive payments are earned by Keolis for each trainset that exceeds the required number of staff members that operates during peak hours. The amount of the incentive is determined by the ridership level. The incentives range from $477 to $1,432 per train and escalate in amount each year. (See Appendix H.) Keolis earned $11,066,138 in train staffing incentives during the audit period ($263,479 per month, on average).
Commuter Rail Station Maintenance
According to Section 5.8.2 of Schedule 3.2 of the MBTA’s “Commuter Rail Operating Agreement 159–12” with Keolis, Keolis is responsible for keeping all exterior and interior surfaces of MBTA commuter rail stations free of trash, debris, and graffiti. The MBTA performs weekly physical inspections of stations to ensure that Keolis is complying with this requirement. If the MBTA finds issues during an inspection, then the MBTA will either open a service request or contact Keolis. By doing so, Keolis will be prompted to fix the issue(s) identified. The MBTA verifies at a later date whether the issue(s) identified have been corrected.
Upon its follow-up inspection, if the MBTA finds that the issue(s) have not been corrected, then Keolis is assessed a financial penalty. The penalty is $2,297 per failed inspection and escalates in amount each year. (See Appendix I.) Keolis was not charged any penalties for station maintenance during the audit period.
Snow and Ice Removal
To keep riders and employees safe and to minimize liability to the MBTA, Keolis is responsible for keeping all commuter rail station platforms, walkways, ramps, and parking areas clear of ice and snow. Keolis is responsible for reacting quickly to remove ice and snow from traveled areas. According to Section 8.1.8 of Schedule 3.2 of the MBTA’s “Commuter Rail Operating Agreement 159–12” with Keolis,
Snow removal shall begin no later than when a snowfall of two inches has accumulated when any storm forecast projects an accumulation of more than four inches or when icy conditions on streets and walkways require sanding or salting. Snow removal shall continue uninterrupted until snow removal is complete.
The MBTA monitors snow and ice removal through physical inspections when winter weather conditions are predicted to impact the commuter rail service. If the MBTA inspector finds issues during the inspection, then the MBTA contacts Keolis. By doing so, Keolis will be prompted to fix the identified issues. The MBTA inspectors return to the station to ensure that the issue was corrected.
If the MBTA finds that the issue was not corrected upon its follow-up inspection, then Keolis may be assessed a penalty. The penalty is $1,148 per failed inspection and escalates in amount each year. (See Appendix I.) Keolis was not charged any penalties for snow and ice removal during the audit period.
Fare Collection
As previously mentioned, Keolis is responsible for collecting fares from all customers along the MBTA commuter rail system. The MBTA conducts visual inspections when resources allow to ensure that Keolis conductors and assistant conductors are on board commuter rail trains collecting passenger fares.
If the MBTA finds a Keolis employee not performing this part of their duties during the inspection, then the MBTA inspector will file an Operator Corrective Action Request. If this report is filed, Keolis is assessed a penalty. The penalty is $575 per issue and escalates in amount each year. (See Appendix I.) Keolis was not charged any penalties for fare collection during the audit period.
The total performance penalties for all areas above (on-time performance, seat availability, ADA compliance, fleet maintenance, passenger comfort and service amenities, and train staffing) totaled approximately $2.6 million in fiscal year 2021, $5.1 million in fiscal year 2022, $5.1 million in fiscal year 2023, and $945,975 for the first six months of fiscal year 2024.
Operator Deliverable Requirement List Reports
The MBTA’s contract with Keolis established a reporting mechanism, the Operator Deliverable Requirement List (ODRL) reports, to identify operating deliverables. Keolis is required to submit these reports to the MBTA. These ODRL reports allow the MBTA to monitor the performance of the commuter rail system. For each report listed on the ODRL, there is a report number, a description of the report, and its due date. The due dates vary depending on the report and can be due one time (at the start of the contract), on request (if an occurrence triggers a report), on demand (be available continuously), or at a regular interval. Regular intervals include reports that are required to be delivered daily, weekly, quarterly, or annually. According to the MBTA’s contract with Keolis (Section 2.1.4 of Schedule 3.14), Keolis is required to deliver the regular interval report to the MBTA as follows:
- daily reports—“No later than 9:00 am on the next business day immediately following the day to which the report relates”;
- weekly reports—“No later than the close of business on the Monday of the following week”;
- quarterly reports—“No later than the date of the submission . . . of its monthly invoice for the first month of the following quarter”; and
- annual reports—“No later than the date of the . . . submission of the invoice for the first month of the subsequent MBTA fiscal year, unless otherwise specified.”
To ensure that reports are accurate and delivered on time, the contract defines the monetary penalties charged to Keolis for erroneous or late reports. For example, for a report submitted with inaccuracies, a penalty between $25,000 and $200,000 applies, depending on the type of content.13 A service penalty between $5,000 and $10,000 applies for a report submitted late and varies depending on the delay.14
Penalties for Inaccurate Reports
| Failure to Achieve Service Level | Dollar Amount of Penalty |
|---|---|
| Inaccuracy in a report that involves safety, bodily harm, or security | $200,000 |
| Inaccuracy in a report that does not involve safety, bodily harm, or security | $25,000 |
Penalties for Untimely Delivery of Reports
| Failure to Achieve Service Level | Dollar Amount of Penalty |
|---|---|
| Delay between two and six hours in delivery of a report | $5,000 |
| Delay of six or more hours in delivery of a report | $10,000 |
Incentive Caps and Revenue Sharing
According to MBTA’s contract with Keolis (Section 6.5 of Schedule 6.1), the total amount in performance incentive payments that Keolis is entitled to earn annually is $7 million across all categories of incentives.15 The $7 million cap escalates each fiscal year. Keolis earned incentive payments of approximately $7 million in fiscal year 2021, $7.1 million in fiscal year 2022, and $7.4 million in fiscal year 2023.
Amount in Performance Incentive Payments Earned by Category
| Performance Category | Fiscal Year 2021 | Fiscal Year 2022 | Fiscal Year 2023 | Fiscal Year 2024 (partial) |
|---|---|---|---|---|
| On-Time Performance | $ 2,000,000 | $ 2,042,910 | $ 2,104,200 | $ 1,300,452 |
| Train Staffing | 3,000,000 | 3,064,370 | 3,051,090 | 1,950,678 |
| Train Seating | 2,000,000 | 2,042,910 | 2,209,410 | 1,244,214 |
| Total | $ 7,000,000 | $ 7,150,190 | $ 7,364,700 | $ 4,495,344 |
On June 30, 2017, the MBTA and Keolis entered into a “Revenue Growth Service Change Agreement.” The driving force of this amendment was to increase shared revenue between the MBTA and Keolis, to increase ridership, and to improve the efficiency of commuter rail service operation. The MBTA and Keolis agreed on a revenue model designed by an outside consultant. The revenue model is used to develop a revenue baseline to forecast revenues. The revenue baseline is reviewed annually. During the annual review, the revenue baseline is updated with actual data for the year that just ended and to project revenues for the coming year.
For each agreement year, revenue generated above the annual revenue baseline is shared between the MBTA and Keolis, promoting a mutual interest between the two parties to increase commuter rail revenue and ridership. According to the “Revenue Growth Service Change Agreement,” revenue above the revenue baseline is used to compensate Keolis for operational and capital expenses incurred as a result of this agreement. The “Revenue Growth Service Change Agreement” outlines a maximum annual payment of up to $7 million for operating expenses and $2 million for capital expenses to Keolis. Keolis is required to submit an annual budget for planned operating and capital expenditures to the MBTA for approval no later than June 1st each year for the subsequent year. Additionally, Keolis provides the MBTA with an annual invoice, accompanied by supporting documentation, to facilitate proper reimbursement. The annual invoice must be submitted to the MBTA on or before the 10th business day of October each year. Once the operational and capital expenses are reimbursed to Keolis, the MBTA receives $1 million from the remaining funds over the revenue baseline. The table below further outlines how revenue above the revenue baseline is shared between the MBTA and Keolis.
Revenue Sharing Above Baseline
| Incremental Revenue | The MBTA’s Share | Keolis’s Share |
|---|---|---|
| $1–$7,000,000 | $0 | 100% (operating expense reimbursement) |
| $7,000,001–$9,000,000 | $0 | 100% (capital expense reimbursement) |
| $9,000,001–$10,000,000 | 100% | 0% |
| $10,000,001–$16,000,000 | 50% | 50% |
| $16,000,001–$20,000,000 | 40% | 60% |
| $20,000,001–$30,000,000 | 25% | 75% |
| $30,000,001 or more | 50% | 50% |
| Date published: | March 4, 2025 |
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