WMATA: Search under way for the Next General Manager of DC’s Metro System; Transit Authority Needs Dedicated Revenue Source

The Washington Metropolitan Area Transit Authority (WMATA) is searching for another General Manager. Finalists from an initial search were released because of a difference of opinion of what type of General Manager (GM) WMATA should have–a “financial turnaround specialist” or a traditional transit executive. A transit executive would be preferable because (1) transit is a public service, not a profit-generating business, and (2) the system is responsible to the welfare of all human beings using or operating the system each day.

I am skeptical of any financial turnaround specialist because the true test for one was in 2008 during the United States financial crisis. None showed up (excepting the Obama Administration), and, thus, I do not expect any candidates for WMATA.

State Amount of Funding
(components are rounded; in millions of dollars)
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Maryland 215.6 228.1 246.4 263.6 279.7
District of Columbia 201.6 214.15 233.3 249.1 271.7
Virginia 129.4 129.7 142.2 156.5 181.0
Subtotal subsidy 546.7 572 622 669.2 732.4
Debt service 27.5 48.7 48.7 37 33.0
Audit adj fy 2011 and 2012 -30.5
Total (budgeted) 574.2 620.7 670.7 706.2 734.9
Actual* [630.7] [722.51] [687.02] [711.10]
(6/30/10) (6/30/11) (6/30/12) (6/30/13)

The difficulty with deciding to take the GM job with WMATA remains the same as specified in a previous post. Primarily, WMATA still does not have a dedicated source of revenue. It is interesting that Maryland supports a financial turnaround specialist for WMATA, yet Maryland provides funds for Baltimore’s subway and light rail system. WMATA’s unique financial and political circumstances make WMATA a challenge, one most incumbents only keep the job for about 3-4 years, excepting Richard White. Even with the challenges, there should be transit executives willing to accept the GM job, well aware of the high stakes (and potentially short-term nature) of the job.

Passenger Fares and Parking Fees
(rounded; in millions of dollars)
FY 2010 FY 2011 FY 2012 FY 2013
Budgeted 702.7 789.5 767.7 874.0
Actual* 727.8 (6/30/10) 804.5 (6/30/11) 816.7 (6/30/12) 856.8 (6/30/13)
*Actual amount comes from Metro’s statement of revenues, expenses, and changes in net assets. This statement does not identify parking fee revenue; I used the total revenue amount in the table.

The financial statements are not yet available for 2014, and the ridership numbers are estimated for 2013. However, I have updated information for WMATA as it was available at the time of this post.

Ridership
(in number of trips)
2010 2011 2012 2013
Rail Bus Rail Bus Rail Bus Rail Bus
217,219,146 123,670,000 217,052,000 124,173,000 212,188,640 131,780,990 209,000,000* 136,000,000*
* Estimated
Source: Metro Facts.

Interesting Background Facts (source: Metro Facts 2014)

Metrorail system age: 39

Organizational Structure of Metro (Metro Compact Article III)

[Four legislative bodies–Congress (federal government), D.C. City Council, Md. state legislature (Montgomery and Prince George’s), Va. state legislature (Arlington, Fairfax, and Alexandria) (subsidy funding)]

Board of Directors (8 members selected from each jurisdiction [federal government, District of Columbia, Maryland, and Virginia]) [Note:  There are 8 alternates.]

Officers (General Manager, Secretary, Treasurer, Comptroller and General Counsel and such other officers as the Board may provide.)

Metrobus

328 routes (breakdown by jurisdiction not available)

Metrorail stations (by state)

Total: 91

District of Columbia: 40 (38.3 miles of track)

Maryland: 26 (Prince George’s County (15) and Montgomery County (11)) (38.31 miles) [Note: The state of Maryland operates its own subway in Baltimore, Md.]

Virginia: 25 (Arlington County (11), Fairfax County (11), and the City of Alexandria (3)) (41.47 miles)

 

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WMATA: Virginia Governor Calls for Safety Oversight for Metro System; No Mention on Providing Funding

It is unfortunate that the Washington Metropolitan Area Transit Authority (Metro) system has become a political football by those who are responsible for the system. It seems that denouncing Metro is seen as politically expedient while at the same time those same politicians refuse to provide funds that will allow Metro system to maintain and operate its capital plant.

For example, see this article about Robert McDonnell, Virginia Governor, calling for increased safety oversight for Metro. As I have mentioned before, this is a laudable and necessary goal, but it requires money (it was unmentioned whether Gov. McDonnell discussed how to pay for the oversight).

Subsidy Funding (fiscal year 2010) (Source: WMATA)

Maryland $215.6 million
District of Columbia $201.6 million
Virginia $129.4 million
Total subsidy $546.7 million (+27.5 million debt service)= $574.2 million

Passenger fares and parking fees: $702.7 million

Metro System Information

Metrobus 340 routes (breakdown by jurisdiction not available)

Metrorail stations (by state)

Total: 86

District of Columbia 40 (38.3 miles of track)

Maryland 26 (Montgomery County (11) and Prince George’s County (15)) (38.31 miles) [Note: The state of Maryland operates its own subway in Baltimore, Md.]

Virginia 20 (Arlington County (11), Fairfax County (6), and the City of Alexandria (3)) (29.47 miles)

Source: WMATA.

The days of expecting the ridership to cover the funding shortfalls has come to an end; the jurisdictions must step forward with additional funding. Metro is an instrument that many taxpayers use to get to work or social activities all around the metropolitan area. So providing money to Metro is not really a money drain but rather an input to capital which allows for the same jurisdictions to receive an output (tax receipts).

Post Script:

Fair Share for Metro

WMATA: Search Underway for the Next General Manager of DC’s Metro System; Risks Presented by GM Job May Lead to High-Salary Candidate

[Update 25-January-2011: Richard Sarles selected to be WMATA General Manager/CEO.]

[Update 23-April-2015: New WMATA post on blog.]

The present General Manager of the Washington Metropolitan Area Transit Authority (Metro) system, John B. Catoe, Jr. (bio-General Manager John B Catoe), is leaving the post on April 2, 2010. Catoe is an experienced transit manager, yet he is leaving after little more than 3 years (the general tenure for Metro’s General Managers).

Who will be Catoe’s permanent successor? The Metro system will attract candidates because of its location in the nation’s capital; however, Metro presents significant challenges for candidates to consider.

The Metro system’s organizational structure is complex, its capital structure is aging and is in need of an overhaul for its next 33 years, it is an industrial organization in a white-collar, service-oriented region, its funding is generally uncertain, and all actions of the transit agency are evaluated by four jurisdictions, plus the ridership.

I think that the political wild card of having to deal with the unpredictable (often bombastic (witness Senator Barbara Mikulski’s (D-Md. [Baltimore (Baltimore, Md. has its own subway, so Md. pays for two systems (one with the MTA and the D.C. Metro)].) comments) and diffuse scrutiny of Congress may cause a successor to want more money to compensate for the high-stakes risk he or she will accept as the general manager.

In addition, Metro does not have a fixed source of revenue, outside ridership fares and fees and cannot rely on a state for support like all of the other subway systems in the country. This means a yearly passing of the tin cup for your operations, something a potential general manager must consider heavily before assuming the job.

Over the past 20 years (from 1990-2010), only one Metro general manager had a 10-year tenure-Richard White (August 1996-February 2006). The others had tenures of 3 years or less.

Potential candidates will likely consist of transit managers from other transit agencies in the United States.

Interesting Background Facts

Metrorail system age: 33

Organizational Structure of Metro (Metro Compact Article III)

[Four legislative bodies–Congress (federal government), D.C. City Council, Md. state legislature (Montgomery and Prince George’s), Va. state legislature (Arlington, Fairfax, and Alexandria) (subsidy funding)]

Board of Directors (8 members selected from each jurisdiction [federal government, District of Columbia, Maryland, and Virginia]) [Note:  There are 8 alternates.]

Officers (General Manager, Secretary, Treasurer, Comptroller and General Counsel and such other officers as the Board may provide.)

Subsidy Funding (fiscal year 2010)

Maryland $215.6 million

District of Columbia $201.6 million.

Virginia $129.4 million

Total subsidy $546.7 million (+27.5 million debt service)= $574.2 million

Passenger fares and parking fees: $702.7 million

Metrobus

340 routes (breakdown by jurisdiction not available)

Metrorail stations (by state)

Total: 86

District of Columbia 40 (38.3 miles of track)

Maryland 26 (Montgomery County (11) and Prince George’s County (15)) (38.31 miles) [Note: The state of Maryland operates its own subway in Baltimore, Md.]

Virginia 20 (Arlington County (11), Fairfax County (6), and the City of Alexandria (3)) (29.47 miles)

Metro FY 2010 budget