If more ridership can be done without increasing the number of buses/rail cars/rail trips (as you suggest with your comment on increasing non-peak ridership), then yes, more ridership would help Metro's bottom line.

However, if due to capacity issues, more ridership is resulting in more buses/rail cars/train trips being provided, then that's going to cut into Metro's bottom line due to the maintenance/upkeep/operator costs of those extra buses/rail cars/trains. And that may at least partially explain the comment about how "As more people ride, it costs us more". ESPECIALLY if Metro is indeed running more buses and trains (or running its existing bus/railcar fleet more frequently).

The underlying issue, and the potential answer to your question David, is how much does running an extra bus or an extra rail car cost in operating costs as opposed to how much revenue that extra bus/rail car is bringing in.

by Froggie on Jan 12, 2009 6:16 pm • link • report

I find Metro's argument to be very hard to believe. I don't think their fixed costs go up much, if at all. More bluster from the "can't do" agency.

by SG on Jan 12, 2009 6:29 pm • link • report

We have to face the fact that Metro has a serious labor cost problem. It ballooned under White, and while it doesn't seem to be getting worse at the same rate, it's not getting better. The largest two fixed cost increases are from the labor contract (salary and pension income loss).

We have to reverse a lot of the labor plums that were awarded under less competent management.

by Reid on Jan 12, 2009 7:36 pm • link • report

Metro definitely has stepped variable costs as Froggie points out. In terms of cars, they obviously operate most efficiently (i.e., profitably) when all cars being run at all times are fully filled with passengers. (I.e., the minute there's one extra person and a new car needs to be added to a train, efficiency drops ... and only gradually rises again until that last car is full again ... and you have the same number of fares per car being run.) However, since you can only run 1 train per track at a time, once you've made the train as long as it can be and still fit in all stations it needs to stop at (i.e., when it is as long as the shortest platform on the route), then you need to think about adding another engine AND a minimum of whatever number of cars you need for a train. You also need to schedule it between already scheduled trains. And once you no longer have gaps in that scheduling when you need them (i.e., we might need another train at 6 pm but the only gap left is 2 am ...), then you need to build more tracks. Overall ... very complicated and very possible that the more passengers you have the more subsidies you need to put all these engines and cars in service ...and build more tracks ... or extend platforms ...

by Lance on Jan 12, 2009 7:38 pm • link • report

It's clear that this is a cost-driven problem. Total revenue is projected to fall by only 2.1% while costs are projected to increase by 12%. The major cost drivers are labor and MetroAccess. Payroll expense + MetroAccess account for almost half of the increase.

I think the budget is too pessimistic. The energy cost appears to assume $100/bbl oil, when it is now $45/bbl and unlikely to rise in FY10.

So, what can be done? Labor costs can be reduced by competitively contracting out service. Every jurisdiction is doing that now. Metro should do it, too. The unions will cry bloody murder, but they'll become quiet when they lose their jobs.

The bus system is in great need of rationalization. Right now, it's a hodgepodge of old streetcar and bus lines. The attempts to make them more efficient have been piecemeal. Metro needs to do something like San Francisco's Transit Effectiveness Project to identify and implement efficiencies. The unions will hate it because route consolidations may reduce jobs.

What Lance has identified is the limiting scenario of Metrorail. Given a fare structure, you can figure out the greatest profit possible (it could be negative, like now). The problem is that we're nowhere near that scenario and never will be due to the time variability of demand (rush-hours and weekends).

No bus or train line operates at a profit. This implies that cutting any line will reduce the deficit.

If we had full-recovery taxation of motor vehicles, the problems would be much less severe.

by Chuck Coleman on Jan 12, 2009 8:19 pm • link • report

I am not sure bus or train lines really ever operate at a profit.

Maybe if the cars are from the 30s, and still run, and mechanics are Cuban, yeah. I don't know, what about NYC's subway cars? Those things and the whole system seems so old and non technological that that could be what is keeping costs down, if costs there are down.

Anyway, I like your bold approach to this, but don't like the specific solutions. I think the unions have done well, not SUPER great, in giving us a pretty good workforce. I also think that compensation towards them in the form of overtime and pension, and whathave you, has gone a bit overboard, and needs to be reined in. I do not agree with abolishing the union.

I don't know what you mean by rationalization.

by Jazzy on Jan 12, 2009 8:26 pm • link • report

Jazzy: doesn't the NEC turn a profit? Or am I comparing apples and oranges?

On occasion, I'll dig through the National Transit Database and peruse some of the annual reports from various transit agencies. Taking a cursory glance at some of the major transit agencies across the country, I found that "salaries, wages, and benefits" generally comprises between 60% (Seattle) and 90% (NYC) of a transit agency's operating expenses. WMATA, for example, was just under 70% for the percentage of its operating expenses attributed to salaries/wages/benefits. The percentages show about a 5% from what was reported for many in 2003, but the fact remains that salaries and wages remain the single biggest operating expense of a given transit agency.

Based on 2007 numbers, if WMATA could shave just 5% off of its costs for salaries/wages/benefits, that would result in a $43 million savings. Not enough to knock out their shortfall, but not exactly chump change either.

by Froggie on Jan 12, 2009 9:55 pm • link • report

What's the NEC?

Shaving 5% sounds good to me. Especially in light of the abuses the Examiner uncovered last year.

by Jazzy on Jan 12, 2009 10:10 pm • link • report

Jazzy,

NEC is northeastern corridtor, but that's Amtrak. Not transit.

by AA on Jan 12, 2009 11:12 pm • link • report

Jazz, in response to your comment about New York's Subway, the New York City Subway requires a greater percentage subsidy than the Metro. Off the top of my head, the Subway gets in the 30% range of operating costs from the the farebox. The Metro gets in the 60% range from the farebox.

The New York MTA is in the same boat with WMATA right now. As for the specifics, I don't know enough about the nuts and bolts of each systems' financing to say.

There are specific features about our Metro that cause it to be more expensive to run than New York. However, they are not enough to change the big picture financing of operations. They both use the same technology and the cars are similarly expensive etc. In fact, New York has more maintenence costs because they have sections of their system that are a century old.

I have to agree with you about not breaking the union. Once something is broken, it's very hard to put back together. It would be more expensive to retrain new people than it would be to negotiate with the union. There is cost savings in having people working who are experienced and know what they're doing.

by Cavan on Jan 13, 2009 9:00 am • link • report

"There is cost savings in having people working who are experienced and know what they're doing."

Cavan, you're assuming that longevity brings with it experience and knowledge. From what I've read, Metro has a terrible record in regards to breakdowns, repairs, and simple maintenance. That doesn't indicate to me that longevity (and job protection) has translated to experience and knowledge in this case ... or at least applied experience and knowledge.

"It would be more expensive to retrain new people than it would be to negotiate with the union.

Fixing and maintaing a transportation system is not an inherently governmental function. In most fields, one contracts out this type of work to specialists in the field of repairs and maintenance. Even the feds do this for much of this type of work. There're no retraining costs in this case ...

by Lance on Jan 13, 2009 9:28 am • link • report

Someone explain to this doofus the difference between average and marginal.

by Ward 1 Guy on Jan 13, 2009 9:32 am • link • report

Metro's problem is pension costs. The declining stock market means they have to almost double their pension funding. That is pretty much a fourth of the shortfall right there.

by Kiran on Jan 13, 2009 9:36 am • link • report

Lance, you're assuming that the frequency of breakdowns is indicative of the knowledge of the employees rather than the quality of the equipment?

That's rather unorthodox. I can't speak for the skill sets of Metro staff one way or the other, but I can't see how the frequency of breakdowns is indicative of one's ability to fix them. Anyone who's ever owned a car knows that old stuff breaks down more often than new stuff, no matter how much skill is put into maintenance.

by Alex B. on Jan 13, 2009 9:44 am • link • report

Extra Metrorail and Metrobus riders are revenue positive until WMATA has to add service to accomodate them, then they cost money.

Metrorail's farebox recovery ratio for operating costs is in the mid-80s. Metrobus' farebox recovery ratio for operating costs is in the range of 25 to 30%. Metrorail's farebox recovery ratio is higher than NYC but Metrobus's farebox recovery is much lower than NYC due, in part, to the much lower bus ridership at off-peak times here.

by Mr. Transit on Jan 13, 2009 9:59 am • link • report

Cavan,

NYCT has a dedicated local subsidy source, WMATA does not. NYCT uses a flat fair, WMATA does not. WMATA is a regional public transit agency serving 2 states and the District of Columbia, NYCT operates solely within the 5 borough of the City New York and is a sub agency of the larger New York MTA that operates 2 commuter railroads and 9 bridges and tunnels.

by Sand Box John on Jan 13, 2009 10:08 am • link • report

"Anyone who's ever owned a car knows that old stuff breaks down more often than new stuff, no matter how much skill is put into maintenance."

Alex, With proper maintenance (including a good maintenance schedule and 'warning lights' systems), break downs should be very few and far between.

In some industries you can't afford to have breakdowns because of the danger posed by breakdown (e.g., nuclear power generating). In those cases you MUST put your money into preventative actions. In the case of Metro, for whatever reason, they are putting their money into repairs instead of prevention.

by Lance on Jan 13, 2009 10:33 am • link • report

Proper maintenance doesn't change the fact that old stuff breaks more often. Any car requires a lot more 'proper maintenance' when the odometer is way up there versus when the car still has that new car smell.

The point is that if breakdown frequency is your only metric for judging the skill of Metro employees, I think you're jumping to conclusions.

I'm also not trying to defend WMATA's workforce, I'm just trying to understand what you're basing your opinion on.

by Alex B. on Jan 13, 2009 10:39 am • link • report

Kiran: Another fifth of the shortfall (about 36 million) is the fact that the last time they increased fares, they raised the fares in January to apply to costs that wouldn't occur until July (WMATA has a July-based fiscal year).

In 2008-FY2009, They got to collect increased fares from 18 months of riders and apply them to only 12 months of expenses. Obviously, they can't do that repeatedly, so they are behind this year by a third of last year's fare increase.

This effect alone more than wipes out the increase in passenger revenues, which is expected to increase by 22 million, or about 3%.

The biggest drivers of this deficit ($176M shortfall total), in order, are:

$44M Payroll costs

$44M Pension costs

$36M Lost fare increase

$22M "Other" expense increase

$17M Paratransit contractor costs

$13M Energy Costs

I would expect to see the board cave on its previous assertion that no fare increase will be done. We'll probably see a fare increase about half of what was done last year, if only to get rid of the accounting mixup from 2009.

by Michael Perkins on Jan 13, 2009 11:34 am • link • report

I get so tired of this 'public transit costs money' argument. Yes it does. But it's not something that makes transit different from all other transportation. Driving your car costs money, building roads costs money, etc.

The question should not be 'do more riders cost metro more', but 'how can metro use its money as efficient as possible to get as many users from their departure to their destination'.

I recently did a back of the envelop calculation of what it'd cost me to drive my car to work. Let me redo this calculation.

Gas: 50 miles out and back. I go about 1 in 30 (in traffic). So that's 1.6 gallons @ 1.75: $2.80

Write off: I paid $13k for my car, and let's for easy of calculation assume it'll ride 260,000 miles, that makes 5 cents a mile: $2.50

Maintenance: $700 a year for 7000 miles in total, $0.10 per mile: $5

Insurance: ~$700 a year, ~$2 a day.

Parking: $10 a day.

Add up: $22.30 a ride. Metro costs me $10 a day, and that's pretax money.

Conclusion: If metro were able to use this argument efficiently, they can jack up their price quite a bit.

The problem is that most people only look at the gas they'd use on a trip, when comparing transit to driving.

by Jasper on Jan 13, 2009 11:35 am • link • report

Thanks Jasper. The other cost ususally left out is the health benefit and reduced healthcare costs to you (someone who uses transit instead of driving), your health insure-er, your employer (reduced time-off to illness to/increased production) b/c of the built-in daily physical activity accumulated from going by train/bus instead of driving; and the improved air quality and reduced lung impacts and associated health care costs to the rest of us.

by Bianchi on Jan 13, 2009 11:59 am • link • report

Alex, All I know is that I've read (on here and in the newspapers) that Metro breakdown record is far higher than for similar systems. From a professional background (as well as via common sense) that tells me there's something wrong with their preventative maintenance procedures and/or systems. If the same items are breaking down again (which they are, again from what I've read), that tells me that the repairs are not being done correctly.

by Lance on Jan 13, 2009 12:12 pm • link • report

Bianchi: the problem there is how do you quantify those "costs"? In a nutshell, you can't, at least not easily and not in a fashion that isn't apples-and-oranges with the costs Jasper listed.

by Froggie on Jan 13, 2009 12:23 pm • link • report

No two systems are alike, Lance. The CTA in Chicago has a lot of problems as well.

My point is that things break no matter how much maintenance you do. The fact that they break is not evidence of shoddy skills.

You can't infer that items are breaking due to shoddy maintenance without knowing what specific parts are breaking and what the maintenance history is behind them. Take Metro's escalators, for example - exposed outdoor escalators with all those moving parts are bound to break down from time to time, and the fact that they do is due in large part to the conditions specific to the system, rather than the skills of the maintenance techs.

To stick with my old car analogy - my old car burned oil like nobody's business, and as a result, carbon deposits would build up on various valves and whatnot. It caused a few breakdowns, despite my repeated efforts at maintenance. Is that a result of my lack of mechanic skills, or is it something inherent to the age and design of the car?

The answer, in reality, is a little bit of both. For you to infer that one is to blame exclusively is a failing of logic.

by Alex B. on Jan 13, 2009 12:54 pm • link • report

Alex, knowing when to replace parts (vs. continuing to repair them) is part and parcel of proper maintenance. If we're keeping parts (or systems) that keep failing at a rate much higher than average, than we have problems greater than 'poor mechanical skills.' Note that I never mentioned mechanical skills, I talked about 'applied experience and knowledge' ... which includeds 'knowing when to say no, we're not going to fix this part again, we're going to replace it.'

Of course, if from management's perspective you're stuck with fix labor costs (because of unions), you don't really have that option do you?

Using you as an example (as you've done), if you are sinking more money into keep your junker running than you would be replacing it or dropping a new engine in it, than you not making a good choice. (P.S. I'm glad you used yourself as the example and not the specific mechanics doing the job as that is where the responsibility and the blame should lie. I.e., for metro it's not the individual maintenance workers, but their department chiefs and the like ... Those who are also responsible for implementing and running preventative maintenance.)

by Lance on Jan 13, 2009 1:15 pm • link • report

Froggie, this type of health benefit/healthcare cost is quantified in numerous studies over many years. Reducing the health care costs associated with the negative health impacts from the change in our built environment over the last 40 years is a primary priority of payers of healthcare. Here's one study (realted) from 1993: http://www.cdc.gov/mmwr/preview/mmwrhtml/00021477.htm Airborne pollutants and ER visits for asthma, and the costs, are also quantified.

by Bianchi on Jan 13, 2009 2:16 pm • link • report

In order to more easily compare costs for Metro compared to roads, Metro's budget needs to be separated into infrastructure (tunnels, tracks and stations) and operation & maintenance (cars, personnel etc). It's the O&M costs that should be supported by fares (and perhaps advertising), since it's analagous to drivers paying for their cars and gas.

by Michael on Jan 13, 2009 2:49 pm • link • report

One incident does back up Weir's response. Two years ago Metro experiemented with 2-car trains on late night hours. They also raised fares for those trains. The reason was to cover the loss that running trains after midnight caused Metro.

The experiment was a failure, obviously, and I wondered if stifling the demand by lowering services and raising fares was the best way to go since adding more riders might help the agence break even, at least on travel after midnight.

I don't know it after midnight train service is still such a money loser, but I think the service is valuable and in demand.

by Tim on Jan 13, 2009 3:40 pm • link • report

@Jazzy:

By "rationalization", I mean taking a systems view of the bus system and redesigning the network to make less circuitous runs, increase stop spacing, take advantage of the street grid and use information about passenger journeys.

@Jaaper:

Metro has an underpublicized cost-comparison tool at http://www.wmata.com/rider_tools/calculator/calculator.cfm. It's not perfect, but it does provide information.

About breakdowns:

Engineering has the concept of the bathtub curve: When a system begins operation, it has a high breakdown rate. As the problems are worked out, the breakdown rate falls and bottoms out. As the system approaches the end of life, the breakdown rate increases.

by Chuck Coleman on Jan 13, 2009 8:50 pm • link • report

Chuck, Thanks for the bathtub curve explanation. Considering that subway systems are meant to operate centuries (as evidenced by the London tube and NYC subway), I think our 'barely turned 30' system is safely within the flat bottom part of your bathtub curve - even more securely so if you consider that only a very small part of the system (3 or 4 redlines stations) even go back that far ... with the last station opened something like only 5 years ago.) If Metro is having the problems it is having at this stage in its lifecycle, either the system was designed flawed (and the flaws never corrected) or the preventative (and reparative) maintenance system isn't working.

by Lance on Jan 14, 2009 9:03 am • link • report

Perhaps the preventive maintence portion of the capital budget is a bit underfunded? Due to years of underfunding, the agency has not had enough for capital improvements that would cut down on repairing things after they break.

It's sort of a catch-22. They are blamed for asking for money to do preventive maintenence, then denied funding. Later, they are blamed when stuff breaks.

You do an excellent job of displaying both a lack of comprehension and empathy at the same time, sometimes.

by Cavan on Jan 14, 2009 9:18 am • link • report

It's too simplistic to think of this as one system, Lance. From the bathtub perspective, the tunnels will last for centuries. How many issues have we had with the actual tunnels caving in? The railcars were designed to last for 30, 40 years or so - and the oldest ones are the ones that have the highest failure rates, as you'd expect - since they are approaching the end of their designed life span. Escalators and elevators are yet another system within the system.

Again, there's nothing there to suggest that there's an inherent design flaw or that the maintenance 'system' isn't working (funding aside).

by Alex B. on Jan 14, 2009 9:22 am • link • report

@ Alex B: The Big Dig in Boston?

http://en.wikipedia.org/wiki/Big_Dig_(Boston,_Massachusetts)

by Jasper on Jan 14, 2009 10:04 am • link • report

Yeah, what about it? I'm not following your point.

by Alex B. on Jan 14, 2009 10:31 am • link • report

Isn't one of the things that "breaks down" most often in our metro the escalators? I used quotes b/c when an escalator stops running it's still completely functional as stairs. if the escalator repairs were subtracted what would the repair rate look like? Those 100 year old systems certainly did not have escalators, let alone escalators that until recently were completely exposed to precipitation.

by Bianchi on Jan 14, 2009 10:53 am • link • report

Yes, the escalators break down a lot. Escalators in general do - they have a lot of moving parts, there's a whole lot than can go wrong.

If you wanted to make the design flaw argument, Metro's escalators would be a good place to start - not particularly designed for outdoor use, most were not covered, etc.

Still, that is but one set of systems within the much larger apparatus of Metro.

by Alex B. on Jan 14, 2009 11:03 am • link • report