Transit
What is WMATA's 2025 budget? Should we care today?
In 2012, like the last few years, WMATA faces a budget shortfall. In coming months, it will make some cuts, secure more funding from jurisdictions, and increase fares considerably. Then, next year, the cycle will likely repeat.
Photo by kurichan+ on Flickr.
Will these routine funding crises end? If so, how many years will it take and how do we get there?
Riders don't have that information today. Some WMATA officials would like to collect and share it, but it will take support inside and outside the organization to make it happen.
Meanwhile, the largest repair effort in the agency's history is underway. It's absolutely necessary, but riders must suffer frequent single-tracking, delays from shuttle buses on weekends, and even entrances closing for months.
Will this end and will Metro reach and maintain a "state of good repair"? If so, when, and how much will it cost?
When asked about specifics of the repair timeline, CEO Richard Sarles has only said, "It'll be done when it's done." That answer certainly avoids setting any expectations that the agency might fail to meet, but it doesn't address a much deeper and critical question:
Will we ever get out of the proverbial woods?
WMATA knows how much its current employees are paid and can estimate the rate at which their compensation will increase. It knows or can project how much their pensions and benefits will cost. It's not impossible to estimate how fuel and electricity will change over time. Also, we can approximate how much it will cost to maintain equipment and keep it in a state of good repair.
In many industries with physical machinery, there are best practices in asset lifecycle management. For any part, one can predict how many of them have to be replaced per year, how many years each lasts on average, and how much each costs.
With this information, it should be possible to project WMATA's costs into the future. For a particular year, the estimates may be off in any direction for any of the variables, but over time, we should be able to make realistic estimates.
Divide the time by the cost and you get a dollar figure per year. Maybe one year will be higher if many things happen to break at the same time, but if the overall projection is on target, other years ought to cost less to balance it out.
What good is this? It's important because WMATA can't keep telling riders, year after year, that costs have increased unexpectedly. In 2009, it was because the pension contributions had gone up due to the stock market decline. Then fuel prices were rising. Health care costs were spiraling. Ridership was off because of the downturn. The arbitrator granted bigger raises than expected. And so on.
At some point, if costs keep exceeding projections, then something is wrong with the projections.
We're coming out of a bad economic time. Before, in good economic times, the budgets balanced more easily, fare increases weren't so large, Metro could put less into their pension funds, and local governments didn't have to keep paying more. But when they did that, they just pushed the problem off to the future.
Local governments will have to increase their contributions each year. Fares will have to rise over time. But how much, in the long run?
Riders deserve to see a long range plan that says, in effect, the following:
- Until 20XX, Metro will be in "catch-up mode." After that, they'll be in "keep it working" mode.
- During catch-up mode, Metro needs $x million in capital funds per year, increasing at a rate of x% per year. After that, they'll need $y million in keep it working mode (less than in catch-up mode).
- If we can still afford the catch-up mode funding once Metro reaches a state of good repair, then we can start using the surplus to pay for some projects to deal with the high passenger loads that there will be by this time, like adding physical walkways between Metro Center and Gallery Place, new entrances at busy stations like Foggy Bottom, or new lines or tracks in the core.
- If Metro doesn't get enough money in catch-up mode, then that mode will have to last longer. If it doesn't get enough in keep it working mode, then it may have to go back into catch-up mode.
- In keep it working mode, to maintain the existing service, given wages, pensions, fuel, health care, and so on, Metro will have to increase its budget by z% each year. A certain percentage of that can come from riders, while jurisdictions should plan on increasing their Metro contributions by the remaining amount necessary to reach the z% per year.
- In good years, Metro will use the extra money to top up its rainy day fund; in bad years, it'll spend money from that fund.
Many businesses do this type of planning as a matter of course. Households and financial advisers do the same to plan for retirement. Riders and local leaders should ask for the same from WMATA, an entity which provides a fundamental service that residents and visitors depend on every day, and which also benefits the region in enormous ways that we often take for granted.
From talking to some WMATA employees, my understanding is that many but not all top leaders want to be able to project like this. Some of the information about asset lifecycles they have, while some they hope to collect. It's less clear how much consensus there is over how deeply to share the information with the public.
Such a comprehensive analysis also takes time and cooperation from all departments. It will take pressure from Sarles, the board, jurisdictional officials, riders, the press, and other stakeholders to make this happen.
It would be worth it, though. A well-defined plan like this will build credibility with the public and help ensure WMATA gets the necessary funding to repair its system and maintain high-quality service for the long term.
 | David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater.   |
Comments
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The kinds of financial analysis and reporting requirements you're asking for should be conditions for a regional commitment to "dedicated funding" for transit -- not the kind of "dedicated funding" that comes mechanically from some tax that goes up or down according to the vagaries of the economy, but funding that local governments agree to commit to Metro subject to Metro demonstrating financial performance according to some adopted set of goals -- cost per bus revenue mile or railcar mile, etc. -- SOMETHING that would indicate improvement in operating performance or quality of customer service as a give-back over time for increased operating and capital costs.
by jnb on Apr 18, 2012 2:45 pm • link • report
I also doubt WMATA's capacity to even produce such a report.
by Jasper on Apr 18, 2012 3:12 pm • link • report
by SMB on Apr 18, 2012 3:31 pm • link • report
by Adam L on Apr 18, 2012 3:34 pm • link • report
Part of the problem is that producing such a report would be double-edged sword. It might help things by giving the public more information about what to expect. But it also provides ammunition for the union in negotiations: "see you planned for X% increases and now you're trying to give us less than that!"
by MLD on Apr 18, 2012 3:51 pm • link • report
You forgot MetroAccess.
The pension issue is pretty easy; just stop allowing new employees access into the pension plan and move them into a private account.
by charlie on Apr 18, 2012 4:25 pm • link • report
"Easy" in the sense that it is simple - but it's not "easy" because the workers are unionized and all get the same deal under the contract. Anything other than the pension would require a major overhaul when the contract comes up.
by MLD on Apr 18, 2012 4:29 pm • link • report
by Gavin on Apr 18, 2012 4:59 pm • link • report
by OctaviusIII on Apr 18, 2012 6:58 pm • link • report
A 5-year plan is a good horizon for many objectives. If you want to, say, streamline your procurement process, or develop a better employee training program, you might put that in a 5-year plan.
For long-term financial forecasting, though, I think we should look much farther out. This could, and should, definitely be part of the strategic plan.
by David Alpert on Apr 18, 2012 6:59 pm • link • report
@ David: A GAO report last summer identified as one of the deficiencies in WMATA that they needed a strategic plan.
My cynical self was going "of course not!", while my sane self was silently hoping my cynical self to be dead wrong. It is truly hurting me that David confirms that WMATA does not have a strategic plan. O.M.G. This is incredible. No wonder WMATA does not work efficiently. How the hell can you get somewhere if you don't know where you're going, or worse, where you are?
Seriously, we need to find a way to restart WMATA. The leadership needs to be thrown out, including the union leadership and contract. New people with clear ideas and management experience need to come in. Employees need to choose: sign up with the new tbd plan, or get out.
This current status is truly unacceptable. Nothing about it.
by Jasper on Apr 18, 2012 9:33 pm • link • report
The "latest wringing about VA Silver Line funding" isn't about Metro's capital planning. It's a debate between MWAA and the VA legislature.
@David Alpert--
Actually two other GAO reports (three, including the 2011 one you cited) have faulted WMATA for this. See WMATA Is Addressing Many Challenges, but Capital Planning Could Be Improved (2001) and also Information on the Federal Role in Funding the Washington Metropolitan Area Transit Authority (2005).
I applaud this the sentiment here. This post simplifies the complexities involved in capital budgeting (but hey, duh, it's a blog post) and downplays the uncertainty inherent in projections more than a few years into the future.
This pleads for a dedicated funding source as a key component of proper capital planning.
Overall, this is one of the more useful GGW posts I have read. I hope this site and other WMATA advocates continue to push for this proposal coupled with dedicated funding.
by WRD on Apr 18, 2012 11:26 pm • link • report
And speaking of WMATA here's my daily pet peeve: We allegedly have Metro Security Police (who seem more interested in sleeping, talking on cell phones & laughing with one another) but there is a no food or drink policy on all trains. Yet, yet... I see it happen every day...riders walk right by security with drinks and food... and the stations and tracks are a mess with cups and wrappers. How hard is it, even for a Union employee to ENFORCE the rules?
by Pelham1861 on Apr 19, 2012 8:02 am • link • report
First, separate operating and capital. They're conflated in the post (i.e. passenger frustration with track maintenance delays, but also with operating budget shortfalls) Capital in many ways is easier.
Operating is tricky. As noted, there are some real concerns with labor relations. Also, a great deal of the stated causes of the shortfalls were, indeed, hard-to-predict events. Likewise, making changes to the major cost pressure areas would require large-scale renegotiations with the union, which would be a substantial undertaking.
by Alex B. on Apr 19, 2012 9:09 am • link • report
by Jasper on Apr 19, 2012 9:20 am • link • report
On the capital side, Metro has a major asset base. Were it a development firm or most large non-profit institutions, it would have an asset management plan that specified what needed to happen, both to rectify past neglect due to funding shortfalls, and to set out a proactive schedule of maintenance and equipment replacement to protect and enhance the value of those assets, so we do not have to go through another frustrating catch-up period like this one, or have riders/Metro staff dying.
Interestingly, Metro now has on their Board Mort Downey, who was widely credited as one of the major architects of the turnaround of the NYC MTA. Hopefully, he is already engaged in helping to give policy direction to such an effort, wihch would include a systematic look at future demographics/demand,and opportunities for operating savings through the adoption of more energy-efficient lighting and other sustainability measures, to be incorporated at little cost as Metro catches up on deferred maintenance. There are other Board members now as well with impressive expertise in management, finance and government relations. While I am not recommending a return to the days of Board micro-management, the current Metro Board generally could play an important policy role in working with senior management to provide a strong strategic plan.
As I recall, sometime in the mid-nineties, the Federal City Council did one of their best piieces of work, identifying what was needed in the way of a capital budget and the gap between what was needed and what was being expended. Their predictions of the consequences of such an investment gap were, unfortunately, quite accurate, and we are bearing the burden now. But it shows that such a long-term framework can be provided, and it should be done again.
Re: operating budget, clearly there is a need for a strategic plan as well. But with respect to both plans, Metro needs to do a better job of sharing what they are considerng, and why, with their riders, elected officials and the general public. The riders are a vastly underutilized marketing/planning input resource. Even many who are not regular commuters do use Metro, especially in the Center City, at least occasionally. While we are enduring interminable waits for single-tracking trains, or stuck in cars jammed to the gills while door problems finally force everyone to exit, and just while we are riding buses or trains, Metro has a captive audience that can be targeted directly; at a low cost, WMATA could reach those who most care about their service, providing information about how it understands the problems, regrets inconvenience, and, most importantly, WHAT IS BEING DONE, now and in the future, to fix the problem. The blithe little signs about how improvements are on their way come off solely as PR, and do not enlighten users, who could be advocates, if they were knowledgeable. Thousands of us put up more or less willingly, with years of plywood streets, demolished buildings, construction blockages, etc. in the 70's and beyond for Metro construction, because we knew a new Metro system wsa coming. WMATA needs to use all the messaging options available, in vehicles, at bus stops, in stations, on escalator repair barriers, etc. to explain its plan to getting back to being a great transit system, and why it is necessary to obtain a guranteed funding stream to get there. Then regular riders might see a reason to communicate support to their elected officials and neighbors, and casual riders might be more receptive when fees are proposed.
But to get out of the kind of cycle that David has identified, we have to have a good, clear plan, that is clearly, frequently and effectively communicated.
by Ellen McCarthy on Apr 19, 2012 1:12 pm • link • report
If this is something that you feel strongly about, then will you use your position on the RAC (that is, as one of the 0.0014% of the daily ridership that WMATA even feigns attention to) to advocate for a meaningful long-range plan?
by Kurt Raschke on Apr 19, 2012 7:56 pm • link • report
However, I disagree that the board members only listen to RAC members. Michael Perkins has met with numerous members over passes, and they have listened to him. They listen to what people write here.
In general, I've found them receptive to listening to residents who engage them directly with thoughtful analysis of issues (as opposed to just lob insults on Twitter or something).
by David Alpert on Apr 19, 2012 8:30 pm • link • report
To all: Isn't there some (stupid) rule in the charter that WMATA is not allowed to lobby for itself? If so, then that rule should go.
by Jasper on Apr 19, 2012 9:27 pm • link • report
I'm glad that the idea seems to have taken root. The conversation for WMATA is changing slowly from "we can't do this, it would lose too much revenue" to "we can't do this, it's too hard on Smartrip", to "we can't do this right now but in a couple years it might be possible".
by Michael Perkins on Apr 19, 2012 9:48 pm • link • report
You did? Because I was at the last RAC meeting and could have sworn you weren't there. Were you referring to some sub-committee meeting between then and now? Also, why are you on a council if you're not going to attend the meetings?
by FixWMATA on Apr 20, 2012 6:58 am • link • report
I understand you have a lot of rage about what's going on at WMATA. Members of the RAC share much of that frustration and want to do what they can to fix it, though I've sometimes been frustrated in the past as well urging the RAC to do more and members to go to more committee meetings and the like. But attacking RAC members individually is not going to achieve anything productive.
Advisory boards are generally not especially impactful; I don't think many rider advisory groups in other cities achieve a whole lot. Under those constraints, we've done a lot in recent years, like our governance report, our well-publicized forum on bag searches when WMATA wouldn't talk to riders about it, and input on the budget which the board has often listened closely to (more in past years than this year).
by David Alpert on Apr 20, 2012 8:46 am • link • report
There are people out there who would like to be on the RAC but can't because you're busy making April Fools pages on your website and not attending the meetings.
Thank you for your service... to your own cause.
by FixWMATA on Apr 20, 2012 9:55 am • link • report
The RAC has never been unable to vote on new members because they don't vote on new members. The WMATA Board picks the members. What's going on here is that for the first time ever in the RAC, 2 new members have never shown up to any meetings, and aren't replying to any emails, yet haven't resigned.
The bylaws say that in that situation, the RAC can kick them off but needs a supermajority of ALL members. The previous month, we didn't have enough people to do that, and this month I guess that happened again.
The RAC has never taken this kind of vote before. Unfortunately the bylaws may have a flaw in that the truly nonparticipating members also count in the total, and when there are 2 such, when there's never even been 1, it's very hard to get the needed number.
This isn't such a huge crisis since the RAC can operate fine without these folks. And the WMATA Board can kick them off on its own anytime it wants to. At the previous meeting, I suggested sending the board a letter asking them to consider that action, which the RAC did unanimously. It's too bad the board didn't do it.
There are no people selected to be on who can't. If the existing ones get kicked off, then there would be some vacancies.
The RAC meeting has nothing to do with our April Fool's coverage. You're entitled not to enjoy some satire, but many people did. Satire can be a very effective tool to make points and change minds, by the way.
More importantly, firing off attacks against anyone and everyone, including people who share your broad goals, is extremely counterproductive. I think you have a lot of good ideas and suggestions, but advocating for them by nastily attacking all manner of people creates new obstacles rather than solving anything.
Anyway, I was already planning to resign from the RAC as I am lately very busy with many non-satirical commitments and am trying to cut down on evening meetings to spend more time with Greater Greater Wife. I am officially resigning before the next meeting so that the RAC can be more likely to reach their supermajority next time, and so the Board can start looking for someone new.
I encourage you to apply if you are interested, though I would caution you that being effective on the RAC requires building consensus with others in a cooperative way, and so you would need to work with the others in a way that doesn't involve personal attacks.
by David Alpert on Apr 20, 2012 11:38 am • link • report
by David Alpert on Apr 20, 2012 12:22 pm • link • report
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