A promised 50 percent price cut for Metro SmarTrip cards looks dim after erroneous staff reports, coupled with fears regarding unanticipated financial losses, turned months of discussion into what one member of Metro’s board of directors called “a debacle.”
Members of Metro’s finance committee met with the transit agency’s staff on Thursday to review options for lowering the price of SmarTrip cards from $5 to $2.50. But despite the staff’s recommendation to approve the price reduction, the committee was mostly opposed because selling the cards at that price would lose money for Metro.
“We wanted to do this, we wish we could, but we’re not,” said board member Cathy Hudgins, in an attempt to sum up the committee’s opinion.
Metro’s board approved the proposed price drop in June, around the time the board was also voting to implement system-wide fare increases.
But several Metro board members on Thursday complained that when they approved the price drop, they did so under the impression that the cost to Metro for each SmarTrip card was less than $2.50.
After the board voted to approve the price reduction, Metro Chief Financial Officer Carol Kissal and members of her staff informed the finance committee that Metro pays $3.40 for each SmarTrip card, not $2.50, as her department had reported.
The $3.40 price tag means the price reduction would be a guaranteed money loser for a transit system already wrestling with millions of dollars in budget deficits. Metro staff, however, has suggested covering the loss with the agency’s SmarTrip reserve account balance.
“I supported the price reduction at the time, but apparently that was a flawed decision,” said board member Jim Graham. “We’re facing a harsh budget reality, and this decision [to lower the SmarTrip card price] was based on a mistake.”
To make matters more complicated, Metro’s board members also learned after they voted to approve the reduction that the price cut could open up new opportunities for riders to “game” the agency’s fare system, potentially costing Metro millions.
“This is a debacle,” said Jeff McKay, who called the staff’s analysis “poor” and said the board should have been able to vote on the price reduction weeks ago.
Some finance committee members seemed willing to consider lowering the price of the SmarTrip card to $4, and asked the staff to come back with more analysis. But the $2.50 reduction appeared all but dead.
The finance committee plans to revisit the topic next month.
