WMATA’s FY2010 Budget Presented to the Committee on Public Works and Transportation Council of the...

WMATA’s FY2010 Budget

Presented to the

Committee on Public Works and Transportation

Council of the District of ColumbiaThe Honorable Jim Graham, Chairman

by

John B. Catoe, Jr., General ManagerWashington Metropolitan Area Transit Authority

April 20, 2009

Increasing ridership demand

Rising cost of operations, including paratransit

2010 transit budget challenges

Global financial crisis impacts state & local funding ability

Aging systems require more maintenance

Preliminary budget numbers

Operating budget, $1.3 billion

Capital budget, $0.4 billion for FY2010 Metro Matters projects

Reimbursable operating projects, $17.3 million

Metro’s FY2010 budget process- Part 1: Operating budget

The Finance, Administration & Oversight Committee began monthly working sessions in January to resolve the projected budget shortfall

An operating budget shortfall is projected

Initial Board guidance – Start with:- No fare increase

- No increase in total local government subsidies

- Consider staffing and cost reductions

- Consider service adjustments

Recap- FY2009 jurisdictional contributions

$179M$535Mexcludes debt

MD MD

DC DC

VA VA

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Building the operating budget- as of January 8, 2009 starting point

$154 million projected budget gap, 11% of total budget

– Ridership growth insufficient to offset other revenue decline, $17 million

– Baseline expenses up by $137 million – Largest increases are in contractual labor costs ($44M), energy ($13M) , pension losses ($45M) and MetroAccess ($17M)

Management’s initial proposal:– $81 million staffing and other cost reductions.

(Metro has begun eliminating positions and laying-off employees, including over 300 from administrative functions so far)

– $73 million reductions in bus, rail and paratransit service

Ridership assumptions

Mid-year FY2009 results (July through December, 2008):– Metrorail +4% actual

ridership growth, 1% above budget

– Metrobus +3% actual ridership growth, 2% above budget

– MetroAccess +21% actual ridership growth, +4% above budget

FY2010 budget assumes these actual growth rates continue

Operating revenue summary graphic- as of 1/8/09

Passenger revenue Non-passenger revenue

dollars in millions

Operating expense summary graphic - as of 1/8/09

dollars in millions

Progress of Board work sessions- operating budget shortfall

Jurisdiction partner proposals- service reduction + subsidy adjustment

The proposed cuts are part of an overall effort to reduce Metro’s $29 million budget gap for FY 2010, which begins July 1, 2009

Proposed Metrobus service cuts and adjustments discussed at the public hearings net to approximately $13.5 million of budget reductions

Proposed changes to Metrobus service in the District of Columbia:– Eliminate routes M2 and D5; alternate routes available: F14 and D6

– Minimal increase to intervals between buses during rush hours on multiple routes.

• Larger buses will expand capacity for the H6• New express service on 16th Street began March 30

Public hearings- proposed service reductions

A total of six public hearings were held from April 13 through April 17

Two hearings were held in the District of Columbia:

– Wednesday, April 15 at Saint Francis Xavier Church, 2800 Pennsylvania Avenue, SE

– Friday, April 17 at Metro Headquarters Building, 600 Fifth Street, NW

The public hearings invited comments on the proposed FY 2010 budget and on proposed service adjustments to selected Metrobus routes

Public hearings- status report

Metro’s FY2010 annual capital budget combines two distinct capital programs:

Metro’s FY2010 budget process- Part 2: Capital budget

Budgeted expenditures for the Metro Matters program year

Continuation of Metro’s FY2009 “Stimulus” program, federally funded by the American Recovery and Reinvestment Act

The Metro Matters financing plan anticipated a need for issuing long-term debt – Metro intends to issue bonds this spring, subject to Board approval

The debt issued will be used to fund prior year capital expenditures which to date have been funded through the commercial paper program

Metro Matters

FY2005 through FY2010 program proceeding in accordance with the Metro Matters Funding Agreement

FY2010 budgeted capital expenditures for the year are $487 million

All jurisdictional contributions are occurring on budget and on schedule

FY10 Metro Matters budget development - use of funds summary

FY10 Metro Matters budget development - source of funds summary

FY10 Metro Matters budget development - summary debt strategy

Pending receipt of formal direction, the District has indicated it will decide to opt-in to the bonding program and pay its share of the debt service. A debt service amount of $12.8 million for this purpose is included in the District’s FY2010 budget

Metro Matters bonding- “opt out” provision for jurisdiction partners

The Metro Matters Funding Agreement (MMFA) provides for debt issuance as a component of the overall financing strategy

In lieu of issuing MMFA bonds, each jurisdiction has the option to pay the Authority its share of the proposed bond issuance amount, i.e. the “opt out” provision

American Recovery & Reinvestment Act- $202M allocation to Metro

Metro’s focus is regional and benefits accrue to each of our jurisdictional partners

Project Categories (dollars in millions)

Metro’s “Stimulus” program- spending continues into FY2010

DC highlights– New fare media sales center at Metro Center

– Upgrades to SmarTrip machines at DC Metrorail stations

– Red Line work between Rhode Island Avenue and Judiciary Square

– Expand the chemical detection system and buy emergency evacuation carts for DC Metrorail stations

– Increase security at our Bladensburg bus facility, and rehabilitate rest rooms at both the Bladensburg and Western garages

Action plan:– Prioritize capital needs inventory to support Authority goals

– Determine Federal and local sources of funding, timing and amounts

– Structure arrangement for receiving non-federal funds

Beyond Metro Matters

Staff are developing options for Metro’s next capital improvement program

Discussions with external stakeholders will begin in June

Transit Infrastructure Investment Fund- status of D.C. TIIF balances

DC Circulator highlights:

– Over 8 million riders since inception, July 2008

– 2 new routes added in March for a total of 5 routes connecting city neighborhoods. New routes are Woodley Park-Adams Morgan-McPherson Square Metro and Union Station-Navy Yard

– Purchased 14 Van Hool 30-foot buses. All will be placed into revenue service this month.

Metro’s FY2010 budget process- Part 3: Reimbursable project budgets

DC Circulator bus = $17 million

Transportation Technology School = $334 thousand

May 14 - Finance, Administration and Oversight Committee– FY 2010 Ridership and Revenue Update

– FY 2010 Final Budget Review

– Approve Terms of Metro Matters Bond Issue

– Approve Actions recommended as a result of Public Hearings

June 11 - Finance, Administration and Oversight Committee– Approve FY 2010 budget for referral to Board of Directors

– Closeout New York Avenue capital project (Board approval to set the final project budget and to return to the District of Columbia the residual funds)

– Closeout Navy Yard capital project (Board approval to set the final project budget and to return to the District of Columbia the residual funds)

June 25 – Board of Directors approval of the FY2010 budget

Next steps

Appendix

FY10 Metro Matters budget development - use of funds

FY10Metro Matters budget development

- source of funds

FY10 Metro Matters budget development - debt strategy

Metro’s “Stimulus” program- approved project list

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Public Hearings- attendance and no. of speakers

WMATA’s FY2010 Budget Presented to the Committee on Public Works and Transportation Council of the...

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