Metro’s general manager told the Metro Board of Directors’ finance committee that budget shortfalls may lead the public transit system back to the jurisdictions to ask for more money.
Board Chairman and D.C. Council member Jack Evans as well as Board member Michael Goldman have said they believe Metro will have to raise fares and reduce service, as Metro General Manager Paul Wiedefeld had proposed, for the FY 2018 budget because Metro needs the money.
Wiedefeld said Metro hopes to close the FY 2017 budget gap but that it might not be enough.
"The reality is, we are very close to (debt),” Wiedefeld said.
In the operating budget, Metro said Thursday part of what caused the deficit was decrease in ridership, which contributes money from fares. Metro had overestimated the amount of revenue it would receive from fares.
Evans said he wondered why the ridership estimation was off.
“How did we miss this?” he asked.
Finance department staff responded that they didn’t know SafeTrack was going to happen when they wrote the budget for the fiscal year.
“You'll keep us informed if you see that our projections are wrong?” he asked. “Because this is a big number,” Evans said, regarding the shortfall.
Wiedefeld said that even if Metro ridership was back to the levels it was in 2008, that factor would not close the budget gap. He took several steps to reduce costs in the last five months. He cut more than 500 jobs in 2016 to reduce costs. On Feb. 17, Wiedefeld directed staff to crack down on people who took more unpaid leave than they were allowed and to monitor the schedules of the “highest earners” of overtime pay, in hopes of saving $2 million.
Wiedefeld said at the meeting he would not be able to furlough workers, or put them on unpaid leave. However, Chief Financial Officer Dennis Anosike included it in a list of possible solutions for making up the remainder of the operating budget gap. Other options were freezing spending and hiring on non-safety-related personnel. Metro could also spend some of its surplus from the previous fiscal year and selling property.
Board members rejected some of these options. Two board members advised Wiedefeld not to furlough, and Board member Christian Dorsey asked him not to spend the budget surplus.
Anosike said Metro is reluctant to change Metro’s plans for long-term capital spending for SafeTrack and purchase more of the new 7000 series cars. Wiedefeld added that doing so might cost Metro more money in the long run.
Metro Board Chairman Jack Evans said Metro will have to close a budget gap of $125 million in capital funds.
Upon hearing that costs will not extend into the next fiscal year, he said, “We’ll see if that’s true.”
Wiedefeld said Metro went over budget in terms of capital projects partly due to SafeTrack and delivery of new 7000 series railcars which accelerated to a rate faster than expected. Last year, he had reduced the budget from $1 billion to $950 million because he saw Metro had a history of not spending all of its capital dollars.
However, that was before he created SafeTrack.
“The good news is, that's fundamental work we have to do and we're delivering that," Wiedefeld said.
Metro Board member Kathy Porter, who represents Montgomery County, said she does not think Metro should reduce railcar delivery or change SafeTrack despite budget challenges because they are helping to reduce problems and increase reliability.
Regarding train breakdowns, “We want those to stop,” Porter said.
Metro said it plans to replace its oldest railcars, the 1000 series, and its least reliable 4000 series by the end of the year, which should cut down on delays due to railcar failure.