Metro officials have warned they will need to make unprecedented cuts to train and bus service and to trim hundreds of jobs in the coming months — even as more people are using the transit system.
The move seems contradictory: Why cut service when more people need it?
The proposal comes as the transit agency, like those nationwide, is struggling with an economic downturn that is pinching from all sides. And more riders, paying more fares, doesn’t actually help.
“Every rider in the system is subsidized,” explained Peter Benjamin, a Metro board member who used to be the agency’s chief financial officer. “As more people ride, it costs us more.”
Metro’s ridership on its trains and buses rose 3 percent through the end of November. Its MetroAccess service for those with disabilities rose even more, up 20 percent.
But fares don’t cover everything, especially in the case of MetroAccess where the average ride costs the system $38. Meanwhile, the maximum fare for the federally required service is $6.50.
Altogether, riders’ fares and parking fees probably will cover only half of the system’s projected operating expenses, while advertising and other private partnerships bring in additional money.
The rest comes from government subsidies out of the jurisdictions that receive the transit services. Metro General Manager John Catoe said last week that the recession has hit those communities hard and he doesn’t want to ask them to increase the overall subsidy in the coming budget.
The agency raised fares last January and pledged not to do so this year.
However, the agency likely will face a $176 million gap in the coming budget, Catoe said. He has proposed cutting 891 positions and $87 million in service to bridge the projected shortfall.
The gap exists because revenue from some items, such as parking fees and rental properties, are bringing in less money. The agency said it also is facing rising costs in many areas.
Catoe said it faces a projected $13 million extra in energy costs. Although gasoline costs have dropped significantly in the past few months from record highs this summer, Metro trains run on electricity and Metrobuses run on diesel or compressed natural gas. Those energy sectors haven’t dropped as much as gasoline. In November, gas cost $2.15 a gallon, while diesel cost $2.88, according to the federal Energy Information Administration. It’s also hard to predict how those will fluctuate in the coming months.
The transit agency also faces a projected $44 million increase in payroll, with 83 percent of it coming from union contract costs negotiated in the past. Metro could face as much as $44 million in pension losses in the stock market, Catoe said.
Metro’s board of directors will need to look at the proposal in the coming months before making any decisions by June 30, when the current fiscal year ends.
