Metro News Release

For immediate release: January 8, 2009

Metro weighs service and staffing cuts in upcoming budget

Transit agency faces $176 million budget gap

Amid intense economic pressures, Metro faces cutting hundreds of jobs and train, bus and paratransit service as part of its $1.7 billion fiscal 2010 budget presented today to the agency’s Board of Directors.

“The budget year ahead is as bleak as the national economy. However, we are proposing to deliver a balanced spending plan that remains focused on safety and customer service without asking local governments or our riders to pay more,” said Metro General Manager John Catoe.

Under the $1.3 billion proposed operating budget, the transit agency faces a $176 million, or more than 13 percent, budget gap. Budget analysts said expenses increased by $159 million from last year due to stock market losses in the pension fund, paratransit ridership exploding, and rising energy and labor contract costs. Meanwhile, despite growing ridership, revenues dipped by $17 million due to unfilled parking lots and declining investment interest, less revenue from fiber optics and lower property rental incomes. Revenue also dipped due to the loss of a one-time fare reserve.

“To close this $176 million gap, we propose to cut our projected expenses by $103 million. Then, as a last resort we are proposing $73 million in service cuts,” Catoe said.

Metro plans to work with local governments in the coming weeks to come up with recommendations for specific service reductions, which will be presented to the Board. The transit agency has cut jobs and expenses over the years to fill budget gaps, but has not cut service in 13 years. Last fall, Catoe cut pay raises and vacancies, froze hiring, and trimmed internal contract, travel and other administrative costs. Still, the transit agency is now faced with cutting 891 positions, about half of which are vacant.

“We appreciate the dedication and service of all our employees, and we will do everything we can to ease the transition of those employees who will leave Metro,” Catoe said.

This is the second proposed round of layoffs in three years for the transit agency. In 2007, Metro cut 254 positions, or nearly 20 percent of its administrative staff. The proposed layoffs, if implemented, would reduce the number of total positions to about 10,100 -- down to 2006 levels.

Metro is not alone in its financial troubles. Transit systems across the nation in New York, Boston, Atlanta, San Francisco and Chicago are facing service cuts.

“The big difference here is there is no fare increase in this proposed budget,” Catoe said.

Metro’s capital improvement budget is $478 million, with most of the money going toward urgent repairs to stations, tracks and trains, overhauling escalators, improving aging bus and rail facilities and buying 100 hybrid-electric buses.

“At a time when we need capital funding more than ever, the fiscal 2010 capital budget has decreased by a third compared to the last fiscal year, and highlights the urgent need for more capital funding,” said Metro Board Chairman Christopher Zimmerman.

Proposed service cuts will be discussed at Board finance committee meetings and by local government officials and the Riders Advisory Council over the next several months. Public hearings on potential cuts are expected to be held in March, and the Metro Board is expected to approve a final budget in June. The fiscal year 2010 begins July 1, 2009.

News release issued at 3:40 pm, January 8, 2009.