Metro riders would face no fare increases or service cuts for the next 20 months, but the jurisdictions that fund the transit agency would pay more to subsidize its costs under a new budget proposed by Metro General Manager Paul J. Wiedefeld and scheduled to be released Monday.
Instead of burdening riders, who are still smarting from this year's fare hikes and service reductions, the $3.1 billion operating and capital budget for the fiscal year that begins July 1 would rely on a $165 million increase in subsidies from the District, Maryland and Virginia to cover Metro's needs.
The ask from the governments is less onerous than many had anticipated. But it's still more than the jurisdictions have said they can afford, and Wiedefeld warned it's just a taste of much bigger demands to come.
The budget, a summary of which was obtained by The Washington Post, projects that the need for additional capital spending for new equipment and repairs will soar in coming years to nearly triple what local governments are contributing now.
"The region has got to come to grips with how they're going to afford that," Wiedefeld said in an interview. "There are structural issues here that we need to address. We cannot maintain this into the future."
Regional leaders have argued for more than a year over how to cover Metro's long-term costs, but the issue has been mired in infighting among local governments and political resistance to new taxes.
Wiedefeld's budget appears to be designed to buy time by keeping new demands comparatively low, thus giving the region more time to come up with a plan for a long-term, dedicated revenue source.
At the same time, he is sounding an alarm that demands on local governments will become unsustainable unless they approve dedicated funding and Congress extends a federal subsidy for the agency that is scheduled to expire in two years.
Wiedefeld is scheduled to present the initial budget plan to the Metro board Thursday. A formal proposal will be published in December, followed by board deliberations and public outreach, with adoption in March.
When it comes to day-to-day operations, Wiedefeld's proposed budget holds the line on expenses: The operating budget would increase by $12 million, or less than 1 percent, to about $1.84 billion.
Metro officials anticipate ridership will remain flat in the coming year, which is down 5 percent from the fiscal year that ended in June.
Wiedefeld said the agency can balance its books through a combination of management cuts, reductions in overtime, outsourcing, increased parking fees and new advertising revenue. Those measures would free up about $38 million.
Metro is asking for a 3 percent increase, for a total of $29 million, in the operational subsidy from the District, Maryland and Virginia. That is significantly lower than the $134 million that Metro sought last year. The smaller request is in line with Wiedefeld's previous vow to limit annual growth in operational subsidies to the level of inflation.
"We have to continue to show that we're managing this as tightly as we can," Wiedefeld said.
As for the capital budget, Wiedefeld is asking the jurisdictions for an increase of $136 million in subsidies.
That also is considerably less than the average of $500 million a year over 10 years that Wiedefeld is seeking in the form of new taxes or some other stable revenue source to pay for capital costs.
But without dedicated funding, Wiedefeld noted, the jurisdictions have said they don't know how they'll come up with enough for a $136 million increase, much less $500 million.
Moreover, the six-year forecast included in the budget documents points to mushrooming capital demands in the future.
This fiscal year, the jurisdictions are contributing $360 million in direct capital subsidies. In the following six years, through fiscal 2024, the Metro forecast calls for direct contributions averaging $1.05 billion a year.
The demands could decrease if Congress extends the annual $150 million federal subsidy for Metro that is scheduled to expire after the fiscal year that ends in June 2020.
The capital money would be used for projects including more of the new 7000-series rail cars, buses and paratransit vans; upgrades to the radio and cellphone communication infrastructure; rehabilitating station platforms; and track and tunnel repairs.
Still, there are major items that are not included in the spending plan. There's no money to pay for operations of phase two of the Silver Line, which is scheduled to open for passenger service in 2020. There is no additional bus or rail service — no new bus routes, no revival of late-night service, no decrease in wait times between trains.
Wiedefeld also is not asking for money for one of his priorities, a "rainy day fund" to cover costs from storms or other unexpected events. The budget also rebuffs a request for extra funding for the Office of the Inspector General, which has stepped up its activities in hope of reducing waste, corruption and inefficiencies.
And the budget does not provide for the possibility that Metro workers will win a wage increase for fiscal 2019 or the preceding year. That is a tenuous assumption, as contract negotiations between Metro and its largest union have broken down, and decisions on wages are expected to come from an arbitration board.
If arbitrators award workers raises for fiscal 2018 and 2019, Metro will have to scramble to figure out how to get the money to cover those costs.
"We're not making an assumption of what comes out of the arbitration process," Wiedefeld said. "We don't know what that is, and we'll see how that plays out. So that will be a risk going forward."
Wiedefeld's budget also includes a proposal that could be important for bus riders: He is commissioning a study to overhaul the Metrobus system and establish new routes that could function more efficiently.
"We want to take a fresh look at the entire bus network, similar to what's been done in other places," Wiedefeld said, citing comparable network overhauls that have taken place in Houston, Seattle and Philadelphia. "Does it still make sense with current development patterns, and what do customers want?"
Such an overhaul could be a boon for some riders who live in places that are underserved by buses. But an overhaul also could result in Metro officials choosing to eliminate routes that riders have relied on for years.
One goal of the bus study is "to control future operating cost growth," the agency said in a news release.