Metro scouring for cash to plug growing budget gap
By: Kytja Weir
Examiner Staff Writer
November 3, 2009
 |
Metro is trying to find ways to cover a yawning $20.9 million budget shortfall three months into the fiscal year as ridership has dropped below expectations and costs have risen.
The transit agency is proposing to cobble together as much as $36 million from federal stimulus funds, rainy-day surplus reserves, insurance claims and presidential inauguration reimbursements to bridge the gap, according to an agency report.
Bad forecastMetro is gearing up for an even worse budget in the fiscal year that starts in July: A $144 million gap in the operating budget that typically exceeds more than $1 billion. The agency has been hosting forums on next year's crisis, with the remaining meetings slated for
Montgomery County andPrince George's County .» Montgomery County: 7 p.m. Tuesday, Kennedy High School cafeteria, 1901 Randolph Road, Silver Spring.
» Prince George's County: 7 p.m., Nov. 18, at Prince George's Community College Rennie Forum, Largo Student Center, 301 Largo Road in Largo.
The budget bailout proposal comes as the agency has seen a drop-off in its ridership from last year's record levels when commuters facing high gasoline prices ditched their cars for public transit. The problem is that the transit agency based its current budget projections on the assumption that ridership would continue to grow.
But fuel prices dropped and the economic crisis increased unemployment rates, meaning fewer workers have needed to use the transit system. And the deadliest crash in the system's history occurred on June 22, killing nine people and injuring dozens more. It caused months of delays across the rail system and limited the number of Red Line trains.
Rail ridership dropped 3 percent from July through September compared with the same period last year, 6 percent off from budget projections. Red Line ridership fell even further, although the plunge has tempered as service normalized after the crash: It improved from a 10.4 percent drop in July to an 8.3 percent decline in August to a 5 percent loss in September.
Meanwhile, average bus ridership dropped 6 percent compared with a year earlier.
The decline in riders means fewer fares. For the first three months of the fiscal year, revenue fell $12.4 million short. That's 6 percent off the agency's projections.
Meanwhile, Metro's expenses also rose 2 percent beyond expectations by $8.4 million. The two issues have created a growing gap of $20.9 million already. Just last month the agency had estimated a $22.4 million shortfall for the entire year.
The agency is proposing to plug the growing hole with as much as $20 million in federal stimulus funds. Officials also are hoping to get $7 million from their insurance agency to help pay for the additional overtime and parts needed following the June 22 crash.
Metro might use a $5.6 millionsurplus from last year as well. The agency already tapped into its reserves last spring to avoid major cuts to bus service.
