WMATA s FY 2010 Budget Presented to the Committee

WMATA’s FY 2010 Budget Presented to the Committee on Public Works and Transportation Council of the District of Columbia The Honorable Jim Graham, Chairman by John B. Catoe, Jr. , General Manager Washington Metropolitan Area Transit Authority April 20, 2009

2010 transit budget challenges § Global financial crisis impacts state & local funding ability § Aging systems require more maintenance § Increasing ridership demand § Rising cost of operations, including paratransit Page 1

Preliminary budget numbers § Operating budget, $1. 3 billion § Capital budget, $0. 4 billion for FY 2010 Metro Matters projects § Reimbursable operating projects, $17. 3 million Page 2

Metro’s FY 2010 budget process - Part 1: Operating budget § An operating budget shortfall is projected § Initial Board guidance – Start with: - No fare increase - No increase in total local government subsidies - Consider staffing and cost reductions - Consider service adjustments § The Finance, Administration & Oversight Committee began monthly working sessions in January to resolve the projected budget shortfall Page 3

Recap - FY 2009 jurisdictional contributions hide VA VA MD MD DC DC $535 M $179 M excludes debt Page 4

Building the operating budget - as of January 8, 2009 starting point § $154 million projected budget gap, 11% of total budget – Ridership growth insufficient to offset other revenue decline, $17 million – Baseline expenses up by $137 million – Largest increases are in contractual labor costs ($44 M), energy ($13 M) , pension losses ($45 M) and Metro. Access ($17 M) § Management’s initial proposal: – $81 million staffing and other cost reductions. (Metro has begun eliminating positions and laying-off employees, including over 300 from administrative functions so far) – $73 million reductions in bus, rail and paratransit service Page 5

Ridership assumptions § Mid-year FY 2009 results (July through December, 2008): – Metrorail +4% actual ridership growth, 1% above budget – Metrobus +3% actual ridership growth, 2% above budget FY 2010 budget assumes these actual growth rates continue – Metro. Access +21% actual ridership growth, +4% above budget Page 6

Operating revenue summary graphic - as of 1/8/09 Passenger revenue dollars in millions Non-passenger revenue Page 7

Operating expense summary graphic - as of 1/8/09 dollars in millions Page 8

Progress of Board work sessions - operating budget shortfall Page 9

Jurisdiction partner proposals - service reduction + subsidy adjustment Page 10

Public hearings - proposed service reductions § The proposed cuts are part of an overall effort to reduce Metro’s $29 million budget gap for FY 2010, which begins July 1, 2009 § Proposed Metrobus service cuts and adjustments discussed at the public hearings net to approximately $13. 5 million of budget reductions § Proposed changes to Metrobus service in the District of Columbia: – Eliminate routes M 2 and D 5; alternate routes available: F 14 and D 6 – Minimal increase to intervals between buses during rush hours on multiple routes. • Larger buses will expand capacity for the H 6 • New express service on 16 th Street began March 30 Page 11

Public hearings - status report § A total of six public hearings were held from April 13 through April 17 § Two hearings were held in the District of Columbia: – Wednesday, April 15 at Saint Francis Xavier Church, 2800 Pennsylvania Avenue, SE – Friday, April 17 at Metro Headquarters Building, 600 Fifth Street, NW § The public hearings invited comments on the proposed FY 2010 budget and on proposed service adjustments to selected Metrobus routes Page 12

Metro’s FY 2010 budget process - Part 2: Capital budget § Metro’s FY 2010 annual capital budget combines two distinct capital programs: § Budgeted expenditures for the Metro Matters program year § Continuation of Metro’s FY 2009 “Stimulus” program, federally funded by the American Recovery and Reinvestment Act Page 13

Metro Matters § FY 2005 through FY 2010 program proceeding in accordance with the Metro Matters Funding Agreement § FY 2010 budgeted capital expenditures for the year are $487 million § All jurisdictional contributions are occurring on budget and on schedule § The Metro Matters financing plan anticipated a need for issuing long-term debt – Metro intends to issue bonds this spring, subject to Board approval § The debt issued will be used to fund prior year capital expenditures which to date have been funded through the commercial paper program Page 14

FY 10 Metro Matters budget development - use of funds summary Page 15

FY 10 Metro Matters budget development - source of funds summary Page 16

FY 10 Metro Matters budget development - summary debt strategy Page 17

Metro Matters bonding - “opt out” provision for jurisdiction partners § The Metro Matters Funding Agreement (MMFA) provides for debt issuance as a component of the overall financing strategy § In lieu of issuing MMFA bonds, each jurisdiction has the option to pay the Authority its share of the proposed bond issuance amount, i. e. the “opt out” provision § Pending receipt of formal direction, the District has indicated it will decide to opt-in to the bonding program and pay its share of the debt service. A debt service amount of $12. 8 million for this purpose is included in the District’s FY 2010 budget Page 18

American Recovery & Reinvestment Act - $202 M allocation to Metro Project Categories (dollars in millions) Metro’s focus is regional and benefits accrue to each of our jurisdictional partners Page 19

Metro’s “Stimulus” program - spending continues into FY 2010 § DC highlights – New fare media sales center at Metro Center – Upgrades to Smar. Trip machines at DC Metrorail stations – Red Line work between Rhode Island Avenue and Judiciary Square – Expand the chemical detection system and buy emergency evacuation carts for DC Metrorail stations – Increase security at our Bladensburg bus facility, and rehabilitate rest rooms at both the Bladensburg and Western garages Page 20

Beyond Metro Matters § Staff are developing options for Metro’s next capital improvement program § Discussions with external stakeholders will begin in June § Action plan: – Prioritize capital needs inventory to support Authority goals – Determine Federal and local sources of funding, timing and amounts – Structure arrangement for receiving non-federal funds Page 21

Transit Infrastructure Investment Fund - status of D. C. TIIF balances Page 22

Metro’s FY 2010 budget process - Part 3: Reimbursable project budgets § DC Circulator bus = $17 million § Transportation Technology School = $334 thousand § DC Circulator highlights: – Over 8 million riders sinception, July 2008 – 2 new routes added in March for a total of 5 routes connecting city neighborhoods. New routes are Woodley Park-Adams Morgan. Mc. Pherson Square Metro and Union Station-Navy Yard – Purchased 14 Van Hool 30 -foot buses. All will be placed into revenue service this month. Page 23

Next steps § May 14 - Finance, Administration and Oversight Committee – FY 2010 Ridership and Revenue Update – FY 2010 Final Budget Review – Approve Terms of Metro Matters Bond Issue – Approve Actions recommended as a result of Public Hearings § June 11 - Finance, Administration and Oversight Committee – Approve FY 2010 budget for referral to Board of Directors – Closeout New York Avenue capital project (Board approval to set the final project budget and to return to the District of Columbia the residual funds) – Closeout Navy Yard capital project (Board approval to set the final project budget and to return to the District of Columbia the residual funds) § June 25 – Board of Directors approval of the FY 2010 budget Page 24

Appendix Page 25

FY 10 Metro Matters budget development - use of funds Page 26

FY 10 Metro Matters budget development - source of funds Page 27

FY 10 Metro Matters budget development - debt strategy Page 28

Metro’s “Stimulus” program - approved project list Page 29

Link to WMATA website: http: //www. wmata. com/community_outreach/B 09_landing/B 093_landing. cfm § Vienna (Monday 4/13): Attendance: 5 people, excluding Metro/County staff # of Speakers: 5 § West Hyattsville (Monday, 4/13): Attendance: approx 120 # of speakers: 38 § Wheaton (Tuesday, 4/14): Attendance: Approximately 70 people, excluding Metro staff # of Speakers: 28 § Arlington (Wednesday, 4/15): Attendance: Approximately 25 people, excluding Metro staff # of Speakers: 16 § SE Washington DC (Wednesday, 4/15): Attendance: Approximately 70 -80 people, excluding Metro staff # of Speakers: 18 § NW Washington, DC Metro Headquarters (Friday, 4/17): Attendance: 150 excluding Metro staff. # of Speakers: 50 (The number of speakers are those that actually spoke at the hearings) Public Hearings - attendance and no. of speakers Page 30