Traffic snarls below a Silver Line train of commuters in McLean, Va. (Amanda Voisard/For The Washington Post)

Metro’s financial problems are so severe that the agency needs to obtain $800 million in loans and a long-delayed federal grant by September to avoid running out of money, District officials said this week.

Describing Metro’s cash-flow condition as “very serious,” an official in the District said that without the infusion of cash, “they’re insolvent.”

Metro said it is confident it can get the money, but the situation highlights the agency’s fragile financial status as General Manager Paul J. Wiede­feld has begun warning that significant new funding is necessary to keep the system running beyond summer 2018.

The agency’s “unrestricted cash,” a key measure of available funds, is expected to drop to $15.8 million in March. That’s a small reserve in a $3 billion budget, but it would go even lower if the loans and grant aren’t obtained, according to Metro financial forecasts.

The Metro board will have to approve fare increases and service cuts in the coming year to help deal with the budget pressures, according to Chairman Jack Evans and other board members. That’s necessary even though Metro has taken aggressive cost-cutting measures and plans more.

The agency also needs significant additional revenue to make up for steep ridership losses­ and higher-than-expected costs for repairs and maintenance.

A Metro board discussion of the budget Thursday led to tense ex­changes, including the suggestion by board member Tom Bulger that the agency consider selling the naming rights to stations — similar to action undertaken by the Los Angeles County Metro system late last year.

“We’ve started seeing . . . the scraping of the bottom of the barrel,” Bulger said. “I’m worried.”

The latest signs of Metro’s dire finances raise pressure on the District, Maryland and Northern Virginia to approve a regionwide sales tax or other dedicated funding source. D.C. Mayor Muriel E. Bowser (D) has already pledged to support such a measure, which supporters would like to see approved in the Virginia and Maryland legislatures in early 2018.

But political obstacles to a new tax are formidable. In addition, Evans warned that current plans would not yield a tax or other dedicated funding by the time Wiedefeld says he’ll need the extra money starting in July 2018.

“In many ways, it’s too late,” Evans said. “In the time frame that Metro needs funding, it had to have been approved in the current [legislative] sessions.”

Metro’s immediate cash-flow challenge was initially described by officials in the District, who spoke on the condition of anonymity to discuss confidential financial projections. Evans confirmed the account.

Metro budget director Thomas Webster confirmed that the agency needs the extra borrowing and the federal grant but said he did not expect to have trouble obtaining them.

“We certainly need to have the borrowing to continue,” Webster said. “It’s a function of increased investment in the capital program.”

According to the District officials, Metro needs three significant infusions of cash by September to stay afloat.

First, it needs to raise its short-term borrowing from banks by $100 million in April. The board will be asked on March 23 to approve increasing Metro’s line of credit from $250 million to $350 million.

That raises some concerns because Metro has struggled in the past when it relied too much on short-term borrowing.

Second, Metro needs to obtain a grant of at least $130.9 million in June from the Federal Transit Administration that has been delayed for years. The FTA has held up the money because it said Metro lacked the proper paperwork.

Evans said Metro assured him that the money was “very likely” to arrive in June, but he warned that might not happen.

“We were supposed to have it in February, March, April,” Evans said. “June may come and go and we don’t get it.”

An FTA spokeswoman said Thursday that the agency was “working with” Metro to address the problem but warned, “to date, [Metro] has been unable to provide adequate support documentation” to justify the grants.

Third, Metro needs to increase long-term borrowing by $575.2 million by September. The board has not yet approved floating those bonds.

“They need all three. If they don’t get them, they’re insolvent,” the official in the District said.

Asked about the official’s comment, Evans said he agreed.

He said he had been told all three sources of money were “likely” to come through, but he added: “If any of them don’t, it will pose a real problem for Metro.”

Evans said that if cash on hand dries up entirely, Metro could continue to cover its payroll and other urgent bills by borrowing from funds committed to capital spending. For instance, it could delay payments for rail cars or other equipment pur­chases.

But that could involve breaking contracts, and in any case, it’s undesirable to pay day-to-day costs with funds allocated for long-term purposes.

Metro has increased its capital spending this year, especially for new rail cars, track repairs and ­buses. That’s a positive step, because the system has suffered from under­investment for decades, but it has contributed to the budget problems.

Webster also said Metro expected available cash would be low in March, as the agency awaits its quarterly subsidies from the District, Maryland and Virginia at the start of the next quarter in April.

In addition to a $290 million budget shortfall for the fiscal year that begins July 1, Metro faces a $125 million revenue gap for the current fiscal year, partly driven by ridership losses­ due to the year-long SafeTrack program.

At Thursday’s board meeting, member Michael Goldman said the agency had no way of predicting the extent of the shortfall, because the budget was approved before SafeTrack was conceived. Metro says it has lost $50 million in revenue due to the program, $10 million more than anticipated.

That drew a strong response from Evans.

“We cannot continue to put out ex­cuses that make no sense,” Evans said. “This system is not failing because we are losing riders. This system is failing because from the beginning it never had enough money to be run properly.”

Ridership is down about 100,000 daily trips from 2009 peaks, driven by the system’s chronic reliability problems and other factors, such as increased competition and lower fuel prices driving more people back to their cars.

Evans said he has been warning of Metro’s long-term financial distress for the entirety of his tenure, to the point that regional leaders stopped believing him. But he noted that Wiede­feld’s views have more influence, and the general manager has recently started referring to the need for a regional solution to the agency’s problems.

“This structural financial issue is getting to a point where we just can’t get much further” with internal cost-cutting, Wiedefeld told the board Thursday. “[We] just do not have many more things I can turn to.”

Although Wiede­feld has stopped short of explicitly calling for a new tax or dedicated funding, Evans says the general manager’s new tone is significant.

Turning to Wiede­feld, Evans said, “When you say we are in trouble, people listen.”

Later, Evans said in an interview: “When we enter fiscal 2019, the general manager is saying that we are at the cliff and he has used all the tools in his box. Without substantial additional money from the jurisdictions, Metro will not be able to operate.”

Through the first half of the current fiscal year, Metro has saved $59 million through aggressive cost-cutting measures that Wiede­feld said are not sustainable over the long term. The agency eliminated 500 positions and plans to freeze hiring and spending in non-safety-critical areas, in addition to tapping $17 million in operating surpluses from prior years.

The agency says it plans to make up $29 million of the budget gap by selling off real estate assets and to save $15 million to $20 million by freezing hiring and spending in non-safety-critical areas.

Lori Aratani contributed to this report