METRO, THE national capital’s transit agency, is effectively on probation. As a result of shoddy management, it has joined Miami-Dade Transit as one of two major systems in the country that has been subjected to what could be a years-long special regime imposed by federal regulators, who will now scrutinize every dollar that Metro wants to draw from the accounts containing its federal grant money. The agency was already facing a cash crunch, and it may now intensify. Passengers beware.
In response to the shackles slapped on by the Federal Transit Administration, Metro has gone into crisis-response mode. It has publicly acknowledged miscues and management shortcomings (even as some Metro board members whisper that the allegations are overblown). It has issued a point-by-point response to concerns raised by an FTA consultant’s audit — a blueprint to fix the problems.
And in an emergency meeting earlier this month, Metro’s board of directors approved new policies governing procurement and the management of grants (including the $500 million in federal grants that comprise a sixth of the transit agency’s budget), two problem areas spotlighted in the FTA audit.
In addition, Metro’s general manager, Richard Sarles, has accepted the resignation of the agency’s chief financial officer, Carol Kissal. Officials said Ms. Kissal’s resignation had nothing to do with the scathing criticism leveled by federal officials and the consultant’s audit.
If the board of directors’ actions are fully implemented, they’re a step in the right direction — but only a step. They include what Metro called the “unusual” approach of establishing a procurement process, even for contracts that are not funded with federal dollars, that follows federal guidelines designed to ensure open and fair competition among vendors. In addition, to guarantee that federal grant money is not mishandled in the future, as it evidently has been in the past, Metro is developing new policies and procedures.
All well and good. But the fact is that the agency has already dug itself a deep hole. Digging out will take time, and may disrupt projects underway to expand and improve service.
After the fact, Metro has figured out that it has not kept its accounts up to date or closed the books on 15 federally funded projects, meaning the agency has not received reimbursements amounting to some $400 million. To cover costs, it has been drawing on bank loans more heavily than planned. Ordinarily, drawing down federal grant dollars to cover project expenses is as easy as withdrawing money from an ATM. But the FTA sanctions mean that money will not flow until Metro has provided extensive documentation to prove that rules have been followed and its books are in order.
It is, in short, a mess — a mess of Metro’s own making. Metro’s board, which credits Mr. Sarles for improving safety standards since a fatal rail accident that killed nine people in 2009, is now counting on him to dig his way out of the current crisis. But what role did he play as Metro dug the hole? How much time will the board give him? And what price will Metro customers pay in the meantime?