Metro approves budget, raises questions about fully-funded pensions

Metro’s finance committee on Thursday endorsed the agency’s proposed $2.5 billion annual budget and promised a close look at Metro’s pension costs.

Union employees of the transit agency do not contribute to their pensions, which are fully funded by Metro, and some board members are urging a change in policy. In fiscal 2013, the cost of the pension program is projected to rise 34 percent to $150 million. The fiscal 2013 budget also includes spending $67 million to buy 95 new diesel hybrid buses to replace nearly 100 Orion VI buses, a model plagued by problems. Two of the Orion VI buses recently caught fire.

The budget is expected to be approved by Metro’s full board in two weeks.

Last month, Metro approved across-the-board fare increases for riders on rail and bus and drivers who use its parking facilities, despite complaints from customers about poor service and a jump in prices. The increase is about 5 percent but varies depending on how far a rider travels in the system and at what time. The higher fares go into effect July 1.

Those increases, along with a $47 million increase in subsidies from local governments, will help close a $103 million budget gap.

Richard Sarles, Metro’s general manager, said in a statement that the budget “continues the path of improvements we’ve made in safety and rebuilding our system.”

“We are investing more to improve the day-to-day customer experience through increased preventive maintenance of escalators, enhanced bus corridor service and added rail rush hour service in preparation for the Silver Line,” the new rail route under construction in Northern Virginia.

The concerns about pensions come as Metro starts to negotiate with Local 689, which represents about 8,000 of its employees, whose contract expires at the end of June.

Management has said that workers shouldn’t expect to see a pay increase given that the agency was ordered by a court to give a 9 percent pay increase the past three years. Metro said it has been seeing a rise in pension costs in large part because of changes in the financial markets that required it to put more money into pensions.

After the committee meeting, Metro board member Muriel Bowser, a Democrat who represents Ward 4 on the D.C. Council in addition to serving on the transit board, said she’s concerned about the rising pension and labor costs.

“We can’t keep paying the costs,” she said. “They’re too high.It comes out of jurisdictions and riders.”

She said employees of local governments in the region “have been asked to share more of the pension costs, but that is not happening” with Metro.

Board member Artis Hampshire-Cowan, who represents Prince George’s County, agreed.

“People today don’t have pensions they’re not paying into,” she said. “I’d like to see Metro come in line with area jurisdictions. Metro is the only major agency that has employees not paying into their pensions.”

Board members on Metro’s safety and security committee were briefed Thursday on several recent safety incidents, including the two bus fires, two Metrorail incidents in which brake parts broke or fell off, and a derailment.

In one of the bus incidents, a loose part allowed hydraulic fluid to leak onto the engine, causing a fire. In the other, a mechanic attached the wrong hose and put it on incorrectly, causing a similar leak and fire. No one was injured in either case.

Metro said the 12-year-old buses have had problems with excessive heat around wheels and exhaust. But “we thought we had fixed those as we went along,” said Jack Requa, head of Metro’s bus division. “We felt the buses were safe. But now . . . it seems better to let it rest and get a new one.”

Since the incidents, Metro has taken its nearly 100 Orion VI buses out of service and plans to get rid of them and buy hybrid diesel buses by New Flyer. The new batch of buses is expected to arrive in the fall, if the final budget is approved.

Metro safety officials said “mechanical fatigue” is to blame for brake parts that fractured on a 3000 series rail car and a similar brake part that fell off a 2000 series rail car on the Orange Line. Both incidents occurred in January, and no one was injured in either case.

The derailment last month, in Rosslyn, occurred because a technician failed to check whether a switch had been properly installed. Metro officials said. James Dougherty, Metro’s chief safety officer, told the board that the technician “did not recall if he checked” a clamp to secure the switchpoint. Switches are important because they send trains in the proper direction. Dan Stessel, Metro’s chief spokesman, said the technician “no longer works” for the agency.

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