Board to Catoe: Cut service to balance budget

Transit

Board to Catoe: Cut service to balance budget

by Michael Perkins • September 21, 2009 9:59 am

According to this draft resolution, the WMATA Board will ask General Manager John Catoe to develop a plan to fill Metro's $100 million budget gap primarily through cuts to transit service instead of jurisdictional increases or targeted revenues beyond the modest and already-planned fare increase.

Photo by Diego Cupolo.

The resolution provides the following guidance for the FY 2011 budget, which starts next July:

Assume that jurisdiction subsidies will not likely increase.
Assume a fare increase in line with inflation (approximately a 3% increase).
Determine whether the FY 2011 budget can be balanced by funding preventive maintenance with capital funds, and assess how that affects the capital program.
Propose how to keep MetroAccess costs from growing unsustainably.
Recommend how to adjust rail and bus service levels to provide a balanced budget.

The last item is key. Once you've put fare increases above inflation and government assistance off the table, you have to find the money either through cutting service or some other Metro expense. Since last year's budget was mainly balanced by cutting Metro administrative expenses, it seems unlikely that much more will be possible, leaving Metro's staff in the uncomfortable position of recommending severe service cuts.

As we discussed earlier, we prefer a balanced approach, with the burden shared evenly between subsidies, fares and service cuts. We also strongly endorse measures to keep the growth of MetroAccess costs down, as well as working with local departments of transportation to speed up bus service, allowing fewer buses to provide the same level of service.

Last year, the Board took most options off the table early, putting the burden of all budget problems onto bus service cuts. That did force jurisdictions to increase subsidies, but also hit a small number of riders very hard and deprived everyone of an opportunity to debate the merits of various options. This year, with a much tougher budget gap, the Board shouldn't be preemptively ruling anything out. It's fine for the Board to ask staff to investigate certain scenarios, but they should keep all options open, including additional targeted revenue increases. They should also ask the General Manager to develop a menu of cuts beyond the minimum necessary to balance the budget, so they and the public can choose among different ways to spread the cuts around.

30 comments — Share	— tags: service cuts, WMATA budget

How can Metro close a $100 million gap? (Sep 14, 2009)
Metro faces big budget gap even with a fare hike (Sep 10, 2009)
Metro's options for balancing the budget (Mar 13, 2009)
Metrobus, MetroAccess fares have declined with inflation (Mar 9, 2009)
Metro staff propose service cuts (Feb 20, 2009)

Comments

The link seems broken ... try this.

http://www.wmata.com/about_metro/board_of_directors/board_docs/092409_FAOA100441ProposedFY2011BudgetGuidance.pdf

by jnb on Sep 21, 2009 10:45 am

"We moved more riders than ever before, let's cut service!"

And people say it's Glen Beck who took reason of the table.

by Jasper on Sep 21, 2009 10:50 am

Two words: Fare hike. The cheap rides for Mount Pleasant and Southeast have to end sometime as the John Galts of the suburbs are about to collapse from holding their weight.

by Jason on Sep 21, 2009 10:57 am

I would rather pay higher fares than see service cut. If I can't get where I want when I want on transit, I drive. Because I would rather not drive, I will still take transit if it works for me, even if I pay more.

by kenf on Sep 21, 2009 10:58 am

For the past 4 months we're have over 1% DEflation.

May -1.28% June -1.43% July -2.10% August -1.48%

So we'll adjust fares accordingly? Cool!

by Tom A on Sep 21, 2009 11:11 am

Can we please get rid of Catoe NOW! While he has improved the bus culture of WMATA somewhat, he has been an unmitigated disaster for Metrorail. Metro's credibility is teetering on the edge, and further service cuts will merely solidify its new reputation. Anecdotally, the train headways are already a lot longer than they were 2-3 years ago. They can pretend this is not the case, or try providing "evidence" that it's more or less the same, but those of us who have used Metro for the past decade or so know the truth.

Raise fares and cut salaries and front office bureaucracy. WMATA employees make above-market salaries already. Let's trim the fat there, and the rest of us can make sacrifices by paying higher base fares for metro. The $1.35 base can safely be raised to $1.75 like it is for other systems around the country. But cutting service would be disastrous and encourage yet more people to drive instead of take transit.

We need a new head of WMATA who is a reformer who will remake the culture of the agency by being customer service oriented and bolder in implementing TOD development around stations.

by SG on Sep 21, 2009 11:13 am

Two words: Fare hike. The cheap rides for Mount Pleasant and Southeast have to end sometime as the John Galts of the suburbs are about to collapse from holding their weight.

What does this even mean?

People are awfully hand wavey about cutting salaries. Aren't most metro employee in unions with contracts? Metro likely can't impose reduced salaries on any employees outside of administration.

by jcm on Sep 21, 2009 11:19 am

@toma, it would be inflation over two years since we haven't had a fare increase since 2008.

by Michael Perkins on Sep 21, 2009 11:28 am

Higher levels of subsidies from jurisdictions should not be off the table. Last year Maryland, the District, Arlington and Fairfax all increased their contributions. I don't see local state or local jurisdictions shutting down roads because they can't afford maintenance. It makes sense to slow new road and even transit projects to preserve existing levels of transit service. Its not going to help economic recovery to curtail existing transportation services.

As written earlier in this blog, increasing stop spacing for Metrobus to one every .2 or .25 miles will save a huge amount of money (around 20%) while increasing bus speed and reliability. Rush hour bus lanes on major corridors will also save money while increasing bus speed and reliability.

Yes, there can be some service efficiencies on rail--weekday schedules shouldn't be run on "minor holidays" and other days where ridership is low (day after Thanksgiving). And closing some mezzanines early where there are two entrances shouldn't be off the table.

With a budget shortfall as large as this one, fare increases above 3% should not be off the table either.

by kreeggo on Sep 21, 2009 11:35 am

@jcm: John Galt refers to the main character in Ayn Rand's Atlas Shrugged. John encourages the other characters in the book to remove themselves from society rather than bear the increased burden of taxation and regulation to support "moochers". They then retreat to a libertarian fantasy-land where the money is gold, the metal is Rearden, and the hookups are based on "rational self interest".

Most metro employees are unionized. Their salaries/wages and benefits cannot be cut while still employing them. Service cuts would result in layoffs, which would reduce personnel costs. The union contracts are subject to arbitration, so unlike BART, the Board or management cannot impose terms unilaterally.

by Michael Perkins on Sep 21, 2009 11:36 am

@jcm The reason often cited for Metrobus's really low fares has been that it benefits those with low incomes. Many of the routes in Southeast south/east of the Anacostia pay a lower fare (75 cents vs. $1.25/$1.35) because of a subsidy program that exists there. Also, the immigrant population of Mount Pleasant is what led Jim Graham to near unilaterally derail a 5 cent fare hike Virginia and Maryland wanted to do for FY2010.

Yet another reason why the entire Metro fare structure needs reform and that the dual structure for bus and rail should be merged into one. If every other TA can do it, why can't we?

by Jason on Sep 21, 2009 11:38 am

@SG

I don't see how this particular issue is Catoe's fault. He's being asked (or will be asked) to implement policy. The Board is deciding the policy, he's merely the instrument of that policy.

Also, as Michael notes, you can't just cut salaries - these are set via union contracts.

by Alex B. on Sep 21, 2009 11:44 am

Its funny how some people jump to salary cuts as the first thing to save money, but those same people would be the first to riot if their salary was cut at their job. Additionally if you start paying lower wages youre going to attend to attract a different quality of employee as well. Considering the cost of living around here let them make a far wage.

In addition 80 million was already cut last year from salaries and admin last year so there is not a whole lot left to cut in that area.

by matt on Sep 21, 2009 11:55 am

>Two words: Fare hike. The cheap rides for Mount Pleasant and Southeast have to end sometime as the John Galts of the suburbs are about to collapse from holding their weight.

Of course, if we're going to go down that route the rail fares for long trips from the suburbs will have to up dramatically, as they are more heavily subsidized than short rail trips inside the city.

by BeyondDC on Sep 21, 2009 12:02 pm

@ kreeggo: I don't see local state or local jurisdictions shutting down roads because they can't afford maintenance.

VDOT is reduced it's landscaping frequency to an jungle like minimum. Weeds are growing 5-6' high along the VA roads.

Are those roads closed? No.
But neither is a bus line with reduced service.

@ BDC: the rail fares for long trips from the suburbs will have to up dramatically, as they are more heavily subsidized than short rail trips inside the city.

Sure. Price those folks out of WMATA into their cars.

by Jasper on Sep 21, 2009 12:31 pm

Jasper: There is no less capacity on a road with weeds on the side. There is reduced capacity when you cut service on a bus line or eliminate it.

by kreeggo on Sep 21, 2009 12:43 pm

@ Jasper: "Sure. Price those folks out of WMATA into their cars."

I love this old chestnut. If "John Galt" wants to live out his libertarian fantasy, I'm fine with that, but I don't want to subsidize him getting to his government job. Neither would Ayn Rand, I bet.

by TimK on Sep 21, 2009 12:48 pm

@ TimK: I don't want to subsidize him getting to his government job

Not all people on metro have a government job.

by Jasper on Sep 21, 2009 1:22 pm

As to bus stop spacing, I think there are some rational reforms here which might speed buses up and thus reduce costs, but if you cut back too much you start to have significant reductions in service.

One extreme: 38B along Clarendon Blvd. Between Wayne St. and Rhodes St. (0.4 miles), there are 5 stops (at Wayne, Uhle, Court House, Scott, and Rhodes).

Opposite extreme: Circulator along 14th St. Between Columbia Heights and Logan Circle (1.3 miles), there are only 3 stops (at P, U, and Irving). Between U and Irving is 0.8 miles(!)

by Gavin Baker on Sep 21, 2009 2:12 pm

(I realize the Circulator is supposed to be more tourist- than resident-oriented, and that it's not run by WMATA -- but it's just an example.)

by Gavin Baker on Sep 21, 2009 2:13 pm

The big surprise is not looking for targeted revenue opportunities. Experimenting with higher parking rates at full garages is a great idea. So is raising the minimum fare to at least $1.50 for both bus and rail (at least for cash on bus -- maybe maintaining a SmarTrip discount). And what about looking for new ways to increase ridership and advertising sales?

But at least they took the difficult step of looking for ways to rein in MetroAccess costs.

by Gavin Baker on Sep 21, 2009 2:25 pm

@ Jasper

True, many of them aren't. But I have a hard time seeing how your "John Galts" match riders of mass transit, be they government or private sector.

by TimK on Sep 21, 2009 2:34 pm

The "John Galt" analogy is that the suburban riders with their highly priced rides to subsidize the inner city poor can only take so much before they crack and are driven (back) to their cars. They're bearing the burden that the literal Atlas had.

If it was feasible for SmarTrip to adopt the same sort of fare structure MBTA has with the Charlie Card (which oddly everyone there though would lead to distance-based fares), I'd be in heaven.

by Jason on Sep 21, 2009 3:00 pm

No, I get what he's trying to say. I just imagine Ayn Rand would be spinning in her grave. After all, wouldn't these Galts be then getting on state built and maintained highways?

Not to mention that their ride is already subsidized. Perhaps not as much as inner city ones, and certainly not as much as bus riders, but it's not like someone hopping on at Franconia-Springfield is defraying the cost of me riding two stops in DC.

Drive away, John Galt, I'm pretty sure the system doesn't need you as much as you think it does.

by TimK on Sep 21, 2009 3:04 pm

I am not familiar with the John Galt reference, but it sounds like the argument that voting is useless to the individual because no election ever got decided by a single vote. So why vote?

by Jasper on Sep 21, 2009 4:29 pm

The number of parking spaces in downtown DC does not change in response to changes in demand, until five years or so have gone by. (Time to design and build new office buildings with garages.) If more people drive into DC because of a Metro fare increase, the garages will become overcrowded and raise their rates until they drive those people back onto Metro. (Yes, you'll lose a few to carpooling, but John Galt doesn't carpool.)

Where you could get a loss of ridership is in DC residents who reverse commute, since there is excess parking at most suburban job locations.

by tt on Sep 21, 2009 4:51 pm

Jasper, my apologies. It was Jason, not you that started the John Galt thread. I think his point was that commuting suburbanites subsidize short trip urbanites by paying higher rates.

It was a silly point, especially if you use John Galt to illustrate it. I'm sorry to have tagged you with it.

by TimK on Sep 21, 2009 5:10 pm

@tt: Great idea! Let the free market drive up prices so that people loose their money before they even come home!

Roads are "free". Transit should be too.

by Jasper on Sep 21, 2009 9:15 pm

RE: "Roads are free. Transit should be too."??? last time I checked I paid taxes that pay for the roads. Before you can make transit free you need more tax money to do it. The small amount that goes to transit is not enough to cover it. So either A) increase fairs to cover costs, or B) increase taxes to make transit free.

by tc on Sep 22, 2009 3:15 pm

What about increasing the cost of farecards and passes that are mainly used by tourists? Visitors are much less sensitive to price and SmarTrip fares could be increased by a lesser amount. I also like the idea of increasing fares during the busiest portion of the peak period.

by Matthias on Sep 23, 2009 10:32 am