With a looming budget deficit and no clear solution in sight, the Metro board chairman, Jack Evans, is pushing to nail down a fiscal 2018 spending plan by November — months earlier than usual.
The move by Evans is a signal that the transit agency is preparing to ask the District, Maryland and Virginia for additional money if fares are not raised or the federal government does not come forward with more funding.
The budget for the coming fiscal year is usually finalized by January, but Evans wants Metro finance officials to make haste so the board can pass a budget before state legislatures swing into session, Evans said at Thursday’s board meeting.
“We need to move quicker than usual,” he said.
If Metro does not find a new source of revenue, Evans warned, the agency could end up needing to request as much as $75 million to $100 million per jurisdiction so that the system can continue to function — a heavy burden for lawmakers who already believe they are spending far too much for substandard service.
Evans’s exhortation came at the end of a board meeting where independent consultants outlined a laundry list of Metro’s problems and recommendations for improvement: retooling workers’ compensation and pensions, increasing revenue from parking, finding a way to perform rail-car and bus maintenance more cheaply, and identifying a more efficient model to provide paratransit services.
One of the board’s biggest concerns: Metro’s full-time staff has increased by an average of 5 percent a year since 2011 — a particular consideration given the subway’s steady slide in ridership in recent years.
Buoyed by dozens of graphs and charts depicting Metro’s financial woes, consultant Tyler Duvall of McKinsey & Company indicated that Metro was paying significantly more for expenses than comparable transit agencies.
If fringe benefits had grown at the same rate as they did at the New York City Transit Authority between 2011 and 2015, Metro would have saved $25 million, according to the McKinsey report.
But Duvall also said it would not take long to enact radical changes within the agency that could yield big savings in coming years on rail-car maintenance, tech services and procurement.
Board member Malcolm Augustine, who represents Maryland, agreed that Metro needs to take a harder look at areas where costs can be cut, but he warned against cuts that would further diminish the agency’s ability to provide reliable service. Revenue is down because people are not riding, Augustine said, and the only way to bring those riders back is by consistently providing service that arrives on time and operates without significant delays.
“All this other stuff, it’s good — but if our customers are giving us a grade of 56 percent . . . in business, you’re in deep trouble if you’re at 56 percent,” Augustine said.
After the meeting, Jack Requa, Metro’s interim chief operating officer, countered that many of the suggestions outlined in the McKinsey report were already underway. Agency officials are coming up with plans on how to conduct rail-car maintenance more cheaply, he said.
The agency also is close to releasing a request for proposals for outside contractors capable of providing regional paratransit services at a lower cost than what it costs Metro now, he said. MetroAccess, the region’s door-to-door paratransit service, provides about 2 million trips a year at a cost of about $121 million, of which more than 90 percent is paid with local subsidies. It is one of the agency’s most costly services.
General Manager Paul J. Wiedefeld announced last month that he plans to cut 500 jobs in coming months. A majority of those jobs, Requa said Thursday, are already vacant.
“We have to look at a lot of things,” Requa said. “I think everything [Duvall] did talk about is in the general manager’s plan to be reviewed, to be analyzed — either now, or as soon as possible.”
Requa also acknowledged that the agency’s problems with safety continue to be an issue: Two red-signal violations have occurred in the past two weeks, including one in which the operator was fired after heading into the path of an oncoming train and threatening two track inspectors.
Requa said that incident will be discussed during a meeting of the Metro board’s safety committee scheduled for later this month.