Today’s Finance Administration and Oversight working meeting today had WMATA chief John Catoe and Chief Financial Officer Carol Kissal discussing potential "service adjustments" (service cuts) in order to close the remaining $73M budget hole for the 2010 fiscal year, which starts July 1.
During the previous FAO meeting, the WMATA board committee gave instructions to WMATA staff about some assumptions to change in the budget that would help close the gap, at the loss of some conservatism in the figures. If some of these assumptions turn out to be wrong, it’s unclear what the fix would be. It’s possible in that situation WMATA could pass a mid-year fare increase, could cut back on service, place employees on involuntary leave, or request more money from jurisdictions. Some of the adjustments are:
- Assume $5M more revenue from the elimination of bus transfers due to the reduction in fraud
- Assume $1.2M more revenue from renting space for fiber optic telecommunications lines
- Defer funding WMATA’s unfunded health insurance fund by $4M for an additional year
- Use $10M more in available Federal capital funding to perform capital-like operating maintenance expenses. This would take money from capital funding which would either have to be replaced or WMATA would reduce the ability to invest in the future
- Save $7M this year based on smoothing pension liabilities over a 5-year period as opposed to a 3-year period, something David alluded to in a previous GGW post
- Cut $12M based on "wage settlement", which was not discussed in the handout, but could be the result of negotiations between WMATA and its transit unions. The FAO Committee has been holding executive (closed) session meetings with union negotiations as the stated topic of discussion, so it will likely be the results of these meetings.
After these and other changes, WMATA’s budget shortfall is $28.8M for the year, about a third of the shortfall from FY 2009 that required large fare increases in January of last year.
From there, WMATA staff proposed various service cuts. First, to save $10M they proposed eliminating some bus routes that duplicate other bus service:
- DC: Eliminate bus routes 60, L4, N3, P2, cut short the 42 bus, the 80 and buses that serve schools (last year the FTA limited transit agencies’ ability to provide special bus service for schools in an effort to not allow federally subsidized transit agencies to compete with charter buses)
- MD: Eliminate bus routes C4 (portion), C8 (off-peak and Saturday), L7, P17&19 (cut short), W13&14 (cut short), J3
- VA: Cut back 9A, Cut back 10A, 10E, Eliminate 18R&S, cut back service on 28A&B
Next, to save $3.3M, they proposed widening headways (time between vehicles) on buses. As part of this change, WMATA assumed no loss of ridership and therefore no loss of revenue.
They then proposed saving $7.5M by reducing the frequency of trains:
- Less frequent service between 6 and 7am
- Less frequent service between 6:30pm and 9pm (15 minutes between trains) and 9 and midnight (20 minutes)
- Less frequent service during mid-day (probably 15 minutes)
- Less frequent service on Saturdays from 10am to 6pm (15 minutes)
Last, some additional station entrances would be closed on weekends and earlier on weekdays, saving $700K.
Total savings for all the described service cuts is $21.4M, leaving only $7.4M of budget gap out of an over $500M subsidy.
From here, it’s possible that WMATA could do any of three things. They could send the $7.4M out as a request for increased subsidy (after all, it’s only about 1.5% of the budget), they could figure out a minor fare increase (approximately ten cents on rail or bus would probably do it), or they could come up with additional service cuts. Considering that $7.4M is about a third of the cuts they already made, the rest of the cuts would likely be to service that affects even more riders, an undesirable situation.
After these cuts and "service adjustments", we’re getting very close to having a workable budget. The WMATA board meeting is next Thursday, February 26. I don’t think that any potential service cuts would be in a form ready for the Board to authorize public hearings at that time, but we’re getting close.
Photo courtesy giveawayboy on flickr, crossposted on greatergreaterwashington.org