Maryland reverses decision to defer $56 million payment to Metro
Friday, May 7, 2010
Maryland has reversed its decision to defer payment of $56 million in capital funds for the deteriorating Metro system over the next two years after receiving assurances that the transit agency will provide better accounting, senior Metro and Maryland officials said Thursday.
Interim General Manager Richard Sarles said that Maryland agreed to support Metro's proposed $5 billion capital improvement program for 2011 to 2016 in return for the agency providing greater "transparency" on how it spends the funds.
The details are being negotiated, he said.
"They have assured me we will get the $28 million for this current fiscal year" and are "committed to" supporting the program, called Metro Matters, Sarles said during a meeting of The Washington Post's editorial board. Maryland officials confirmed their position Thursday morning, he said.
"We are all in this together, and there is a need that the jurisdictions mutually support each other," Sarles said.
Maryland officials have contended that Metro has not efficiently used the capital funds, leading to about $375 million "sitting in a bank account," said Maryland Transportation Secretary Beverley K. Swaim-Staley. "We want to make sure when there is a certain amount of money in the bank there are periodic reviews to say: Why is there $350 million? Is it obligated? Is it going out the door for contracts in the next six months?" she said. "We need some accounting of capital projects in relationship to the funding."
Swaim-Staley said Maryland was raising the issue now because the Metro Matters program is up for renewal.
"It is important to the future of Metro that the jurisdictions address the management of the capital program in the next agreement," she said. "Maryland feels it is necessary to shine a light on this issue when the jurisdictions are in a position to implement long-term change."
"In exchange for the accountability, we will close out the Metro Matters payment" of $28 million for 2010 and Maryland will reaffirm its support for the new $5 billion capital plan, Swaim-Staley said. Metro has "agreed to work on establishing a much more accountable process as part of the new capital funding agreement that will take effect on July 1," she said.
Metro board members from Virginia and the District welcomed Maryland's pledge.
"If Maryland is actually going to pay what they owe, that would be a good thing," said Chris Zimmerman, a Metro board member from Arlington County, who added that he had not yet been informed of the decision. "It would be a step in the right direction."
Jim Graham, a board member from the District, said the move by Maryland represents "very good news for the regional transit system and the future of the cooperation for the next few years."
Graham, who was vocal in his objections to the Maryland deferral -- arguing that it would be a default on the regional agreement that governs Metro -- said it was only fair that Maryland make an upfront contribution to the capital fund as the other jurisdictions have. "D.C. has paid. Virginia has paid. Maryland should pay," he said.
In late March, then-Metro General Manager John B. Catoe Jr. informed the Metro board in a letter that Maryland had deferred $28.7 million in capital subsidy payments until 2012. But he said that because of "slower than expected spending," the delayed payment "will not materially impact Metro's capital program."
Sarles said that Metro's rate of capital procurement, between 60 and 70 percent, is on a par with that of other big city transit systems nationwide but could be improved. "We would all like to spend it faster," he said. "If we could get it up to 80 percent, that would be good."
One problem, Sarles said, was a shortage in Metro's staff for project management. He said he had plans to strengthen that by hiring more project managers, including contractors.
Graham also acknowledged that Metro's procurement process has been sluggish.
"Our procurement process has not been working with enough alacrity. It takes too long for the dollars to go out the door," he said. "But the answer to that is not taking the money away."