Metro News Release
For immediate release: February 18, 2010
Metro facing $189 million shortfall in FY2011 budget
Combination of fare increases, service cuts likely
Metro is facing a $189.2 million shortfall in its FY2011 operating budget, due mostly to increased expenses and losses in revenue from lower than expected ridership, Metro officials told Board members today (Feb. 18).
“Labor, health and pension contributions are the biggest contributors to the deficit,” said Carol Kissal, Metro’s Chief Financial Officer and Deputy General Manager of Administration, at a briefing today to Metro’s Committee on Finance and Administration.
The shortfall is a result of lower revenues and increased expenses, examples of which are listed below.
Decrease in Revenues - $74.7 million
• $23.8 million in revenue due to lower ridership and parking revenues;
• $27 million from a multi-year advertising contract that expires on June 30;
• $13.3 million in reserve funds that were used in FY2010 and will not be available in FY2011; and
• $10.6 million in other revenues, including the end of a joint development project and offsetting proceeds from the sale of the Southeastern Bus Garage.
Increase in Expenditures - $114.5 million
• $35 million in contractual labor costs;
• $33.9 million in fringe benefits, which includes health care and pension contributions;
• $27 million in increased MetroAccess costs due to higher ridership; and
• $18.6 million in other expenditures, including $12.7 million for third party and worker compensation claims.
Metro’s preliminary budget proposal to close the $189 million shortfall includes a combination of fare increases, Metrorail and Metrobus service reductions, changes to the MetroAccess fare structure and service area allowed under the Americans with Disabilities Act and administrative cuts. Another $40 million has yet to be identified to fully close the gap.
Service reductions being considered for FY2011 include:
• Making seasonal adjustments to service to meet demand;
• Increasing intervals between trains and buses;
• Closing some station mezzanines and rail stations during periods of low ridership;
• Beginning rail service later in the mornings;
• Modifying late-night rail and bus service; and
• Eliminating some low-ridership bus service.
“Cutting service is absolutely the last resort,” said Metro General Manager John Catoe. “Unfortunately, it is something we are forced to consider.”
Metro plans to conduct a series of public hearings in April to allow for public input on proposals to balance the FY2011 budget. The Board of Directors is not expected to vote on the final FY2011 budget until June.
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Media contact for this news release: Angela Gates or Lisa Farbstein at 202-962-1051.
For all other inquiries, please call customer service at 202-637-7000.
News release issued at 6:39 pm, February 18, 2010.