Metro News Release

For immediate release: December 12, 2003

Metro’s Fiscal Year 2005 proposed operating and capital budgets address an expected shortfall, and the need for capital funding

Under a package of proposed budgets for fiscal year 2005 submitted today to the Washington Metropolitan Area Transit Authority (Metro) Board Budget Committee, the region’s transit system, announced plans to reduce expenses by nearly $30 million, while at the same time addressing the needs to close an estimated $29 to $36 million shortfall. The proposed budgets also allow for launching Metrorail service to the Largo Town Center on the Blue Line, and New York Avenue on the Red Line, late next year.

Metro Chief Executive Officer Richard A. White presented the proposed Fiscal Year 2005 operating and capital budgets to the Board’s Budget Committee today. The committee will review the proposals in detail over the next six months and make final recommendations to the full Board of Directors by June 2004. The Fiscal Year 2005 budget takes affect July 1, 2004.

The proposed Operating and Capital budgets submitted today total $1.2 billion, which equals the current fiscal year 2004 budget.

The operating portion of the proposed FY 05 budget represents a 7 percent increase from the current fiscal year (from $872 million in FY 2004 to $934 in FY 2005). The local jurisdictions" share of the budget would increase from $385 million in FY 2004 to $402.3 million in FY 2005, with a 4.5 percent subsidy increase, $394.9 million with a 2.6 percent subsidy increase, or remain at $385 with no subsidy growth.

"With Metro facing a potential $61-$65 million shortfall in FY 2005, we are once again faced with a challenge that requires responsible fiscal management while at the same time, thinking about the future," said Mr. White. "While Metrorail ridership continues to grow at a 3 percent rate, it is not growing at the same 6 to 7 percent rate we experienced in previous years. At the same time, costs have risen for paratransit service, insurance rates, and for employee benefits. As a result, we have proposed a series of cost control measures which will ensure our customers receive the same high level of service they are accustomed to when they ride Metrorail and Metrobus."

To cover the anticipated operating shortfall in FY 05, Metro has proposed further reductions in internal expenses in white collar administrative areas and through a reduction in professional, technical and external contract services. "These cost-containment actions will represent the fourth consecutive year in which Metro has made significant strides in spending reductions," said Mr. White. "It is important to note that over the last four years, Metro has reduced its expenses by nearly $78 million through cost containment actions, the majority of these savings were through white collar streamlining and reductions on outside consultants and services."

Metro’s proposed Capital Improvement Program (CIP) budget FY 2005 totals $311.3 million. However, based on reduced federal funding availability, the current six-year Infrastructure Renewal Program (IRP) is $132.3 million less than the previous Board adopted program. An additional $385 million is required to avoid deferral of necessary capital investments that are currently identified as unfunded urgent priorities. These funding reductions and program deferrals will occur in the CIP program in the last three years of the six-year period.

"Our first priority under the Capital Improvement Program is to preserve and maintain our rail and bus infrastructure systems," said Mr. White. "At this time, the Infrastructure Renewal Program (IRP) portion of the CIP is funded through 2006. However, in the last five years, we see a seven percent reduction in funds from the previously adopted program. While there is time to address these issues, it is critical that we secure a funding source in the later years to preserve safe and reliable operations for our customers."

In FY 2005, funds are available in the (IRP) portion of the Capital Improvement Program to support the following activities:

  • The addition of 75 Compressed Natural Gas buses.

  • facilities, maintenance facilities, tracks, structures, and systems.

  • The modernization and replacement of escalators, and rehabilitation of the Wheaton, Vienna North and Addison Road-Seat Pleasant parking structures.

  • The construction of a new police facility at Fort Totten.

However, capital funding shortfalls remain. Metro, which has served the national capital region for three decades, is facing serious funding challenges caused by a combination of its aging infrastructure and growing ridership. If not addressed, the under-investment will result in an inability to meet the public’s expectations for service reliability and demand for increased capacity to move people on a daily basis.

"At a bare minimum, Metro requires $1.5 billion more than has already been committed over the next six years to protect and secure the $9.4 billion it took to build the Metrorail system that would cost $24 billion today," said Mr. White.

The necessary funds would go toward the following:

  • Replacing and rehabilitating assets such as trains, buses, elevators, escalators, power cables, and tracks ($537.9 million).

  • Bringing additional capacity to customers by purchasing 120 new rail cars and support systems, putting eight-car trains into service, and purchasing 185 new buses ($796 million).

  • Enhancing security and ensuring Metro can continue to move people if there is a regional emergency ($150 million).

  • "If funding cannot be committed in the very near future, these deferred investments will result in increased operating expenditures, greater rail and bus service failures, and severe overcrowding that will force people from Metro services to other alternatives, adding greater impact to the region’s congestion and air quality problems," said Mr. White.

Under the System Access Program (SAP) of the Capital Improvement Program, FY 2005 funds are available for improvements to the Ballston Metrorail station to handle the growing ridership, and for implementation of the Metrobus Enhancement Program.

Under the System Expansion Program (SEP) of the Capital Improvement Program, FY 2005 funds are available for continued project development of corridor related transit services, and for opening the Blue Line extension to Largo Town Center.

News release issued on December 12, 2003.