'Withering' report says Metro needs 3 years to be turned around
Friday, March 12, 2010
Transit expert David L. Gunn gave a blunt assessment of Metro's management, financial and service problems to its board of directors Thursday, predicting that it will take three years to turn the nation's second-busiest transit system around, according to Metro officials and sources.
The board hired Gunn, 72, an industry veteran who served as Metro general manager from 1991 to 1994, to diagnose Metro's ills and outline solutions.
"It was more than frank, it was withering," board Chairman Peter Benjamin said after hearing Gunn's oral report at the board meeting.
"He gave us a very clear, very honest, unvarnished-truth type of assessment," Benjamin added, "and told us we have a lot of issues we have to deal with, and we have to deal with them immediately."
Gunn's report comes as Metro faces an unprecedented number of safety investigations into deadly accidents; instability and vacancies in its senior management; and growing deficits in its operating and capital budgets, including a projected $190 million gap in its $1.4 billion operating budget for the fiscal year that begins in July.
A two-page summary of the report released by Metro said Gunn urged the agency to "level with the public regarding the seriousness of the problems facing Metrorail" and end the "shoot the messenger" phenomenon that discourages employees from raising safety concerns.
In the latest safety incident, the front two wheels of a four-car train derailed Wednesday in the Brentwood rail yard as two train operators repositioned it. The car that derailed was a 5000 series, which has had problems with derailments in the past.
On personnel issues, Gunn stressed the need to move forward quickly to recruit a general manager with "a strong operating and technical background" as well as hiring and retaining "competent" senior managers with engineering experience.
Benjamin said "many people" have volunteered to be considered for the general manager job. General Manager John B. Catoe Jr. will depart April 2, to be replaced by interim chief Richard Sarles, the former head of New Jersey Transit whose hiring was announced last week.
One major personnel problem Gunn identified was absenteeism and low morale at the agency, which has about 10,000 employees, Benjamin said. Gunn pointed out that Metro's absentee rate is unusually high at more than 7.5 percent, compared with an industry average of about 4 percent, according to a source familiar with Gunn's assessment.
On budget and financial issues, Gunn said a major restructuring is in order.
"He looked at our financial structure and said it was basically unsustainable," Benjamin said.
Gunn singled out cost recovery on rail, bus and MetroAccess services, Benjamin said, and emphasized that Metro "could not continue to have the continuing increases in costs for our paratransit services." Gunn said that as much as $16 million in savings could be possible from MetroAccess and bus service, according to the industry source, who spoke on the condition of anonymity because of the confidential nature of Gunn's report.
From fiscal years 2010 to 2011, the subsidy to the Metrorail service, which has about 750,000 riders on weekdays, falls by $40 million. Meanwhile, the subsidy to the bus service, which has about 450,000 weekday riders, goes up $20 million, as does the subsidy to MetroAccess, which had about 2 million riders last year, Benjamin said.
"Rail and bus riders are subsidizing paratransit riders to a very, very great extent, and is that sustainable over a very long period of time?" he said. "We've had about a 25 percent per year growth rate in the subsidy to paratransit. Can we continue to do that and still run our normal bus and rail services?" Gunn "didn't think so," he said.
MetroAccess provides services that go substantially beyond the federal requirements for paratransit service.
Turning to how Metro is governed, Gunn stressed basic issues such as the importance of the board and general manager agreeing on Metro's "goals and objectives," according to the summary report. He recommended that the director of the Metro board should serve longer than a one-year term, although Benjamin said that given the long hours required for the unpaid position, people would be hard-pressed to stay on beyond a year.
Jim Dinegar, president and chief executive of the Greater Washington Board of Trade, which provided input from the business community for Gunn's report, said that the board is also advocating a review of how Metro is governed, saying that after four decades, the leadership structure needs reexamining.