Live chat with Chris Zimmerman

BudgetBy Michael Perkins (Contributor) December 11, 2009 4

Welcome to our live chat with Chris Zimmerman, member of the WMATA Board, Arlington County board, Northern Virginia Transportation Authority, and more.

Greater Greater Washington Live Chat: Chris Zimmerman

(12/11/2009)

12:53

David Alpert:

Welcome to our live chat with Chris Zimmerman. Mr. Zimmerman will be joining us around 1:00. Feel free to submit your questions in the meantime.

Friday December 11, 2009 12:53 David Alpert

12:53

David Alpert:

They’ve added the feature to log in with Facebook or Twitter, so if you’d like to try that, go ahead. You can also tweet your questions using the hashtag #ggwashlive.

Friday December 11, 2009 12:53 David Alpert

1:00

Michael Perkins:

Welcome to our live chat with Chris Zimmerman, Arlington County Board Member and Member of the Metro Board of Directors. He’s here to talk to us today about Metro’s over $170M budget gap.

Friday December 11, 2009 1:00 Michael Perkins

1:00

Michael Perkins:

Thanks for joining us, Chris.

Friday December 11, 2009 1:00 Michael Perkins

1:00

CZ:

Thank you.

Friday December 11, 2009 1:00 CZ

1:00

Michael Perkins:

So before we start on reader questions, let’s talk about the budget gap. Why are we here today with such a large deficit?

Friday December 11, 2009 1:00 Michael Perkins

1:02

CZ:

Expenses up, revenues down — the former for a variety of reasons, but mostly compensation costs and paratransit growth; the latter because of falling ridership.

Friday December 11, 2009 1:02 CZ

1:02

Michael Perkins:

There are a lot of folks that think the falling ridership is due to Metro’s recent accidents and a perception of poor service, to what extent might that be the cause?

Friday December 11, 2009 1:02 Michael Perkins

1:03

CZ:

And of course, costs from the June 22 accident.

Friday December 11, 2009 1:03 CZ

1:03

CZ:

Falling ridership is mostly due to the economy.

Friday December 11, 2009 1:03 CZ

1:04

CZ:

Car travel has been falling for even longer, transit ridership continued to grow for months into the recession, but eventually it had to catch up, and it has.

Friday December 11, 2009 1:04 CZ

1:04

CZ:

When you have, for instance, double digit unemployment in the District, bus ridership is going to fall, and it has.

Friday December 11, 2009 1:04 CZ

1:04

Michael Perkins:

Is there a way for us to tell how many might be avoiding it for the other reasons?

Friday December 11, 2009 1:04 Michael Perkins

1:05

CZ:

I suppose one could survey.

Friday December 11, 2009 1:05 CZ

1:06

CZ:

I will say this: If the budget situation forces significant cutbacks in service, you will see ridership suffer further.

Friday December 11, 2009 1:06 CZ

1:06

Michael Perkins:

Ok, so what about other forms of revenue. You have some pretty strong opinions about advertising revenue, which some people think Metro should explore doing more of.

Friday December 11, 2009 1:06 Michael Perkins

1:07

CZ:

We have explored many options for advertising over the past 5-6 years — and implemented quite a few of them. The problem is a) there’s just not that much revenue to be had in advertising, and b) right now the market for advertising is lousy (there’s that recession again).

Friday December 11, 2009 1:07 CZ

1:08

Michael Perkins:

And are there other opportunities for revenue like vendor sales in stations or just outside? Could that raise much revenue?

Friday December 11, 2009 1:08 Michael Perkins

1:08

CZ:

The sad truth is that we have been riding high on ad revenue, because of a very favorable contract the last time. We won’t get that again.

Friday December 11, 2009 1:08 CZ

1:09

CZ:

Several of us have been pushing for retail in and near stations for a long time, and I hope we are getting closer. As a revenue producer, however, this is probably something out in the future.

Friday December 11, 2009 1:09 CZ

1:10

CZ:

We won’t get much revenue, and we won’t see it for a while.

Friday December 11, 2009 1:10 CZ

1:10

Michael Perkins:

So it won’t help fix the $170M+ this year, but in future years it might make it less

Friday December 11, 2009 1:10 Michael Perkins

1:10

CZ:

Yes.

Friday December 11, 2009 1:10 CZ

1:10

Michael Perkins:

Metro staff in their presentation included a fairly substantial fare increase in order to help with about half of the gap. Do you think a fare increase is likely?

Friday December 11, 2009 1:10 Michael Perkins

1:10

CZ:

One last thing on advertising—

Friday December 11, 2009 1:10 CZ

1:12

CZ:

For 2010 the total take from advertising was about $42 million. That’s in a budget of $1.3 billion.

Friday December 11, 2009 1:12 CZ

1:12

CZ:

On fares—

Friday December 11, 2009 1:12 CZ

1:12

CZ:

The short answer is YES, there will be a fare increase.

Friday December 11, 2009 1:12 CZ

1:13

CZ:

The longer answer is, there will either be a BIG fare increase, or service will be slashed.

Friday December 11, 2009 1:13 CZ

1:13

CZ:

Unless of course, someone comes to our rescue. Which I don’t see right now.

Friday December 11, 2009 1:13 CZ

1:13

Michael Perkins:

I don’t think powerball jackpot is that high.

Friday December 11, 2009 1:13 Michael Perkins

1:13

Michael Perkins:

Ok, so how should it be designed? A fairly narrowly targeted increase at peak riders like we’ve seen recently?

Friday December 11, 2009 1:13 Michael Perkins

1:13

Michael Perkins:

or a broader increase that includes all fares?

Friday December 11, 2009 1:13 Michael Perkins

1:14

Michael Perkins:

Perhaps the better way to phrase the ? is what would you prefer to see?

Friday December 11, 2009 1:14 Michael Perkins

1:14

CZ:

It’s early to say exactly how to structure a fare increase. I;m interested in hearing people’s thoughts.

Friday December 11, 2009 1:14 CZ

1:14

[Comment From InArlington InArlington : ]

As it is, the fares to ride METRO trains are among the highest of any system in the world, especially during the peak time frames. If ridership fees are to increased again, which seems likely, many current riders may look for alternatives, further putting the damper on WMATA revenues.

Friday December 11, 2009 1:14 InArlington

1:15

CZ:

This is exactly the problem, and the dilemma we face.

Friday December 11, 2009 1:15 CZ

1:15

Michael Perkins:

Will you make sure that WMATA staff considers and presents for public review multiple options for combinations of fare/fee increases and service cuts, including those options that may be requested by citizens and advocacy groups? Typically, the staff does not present a wide range of options, and the public is left to consider only what Metro has already decided it wants to do- that is not acceptable this time around!

Friday December 11, 2009 1:15 Michael Perkins

1:15

CZ:

Raising fares too much will drive away riders — but so will cutting service.

Friday December 11, 2009 1:15 CZ

1:15

Michael Perkins:

That’s a question from one of our readers. Wants lots of options.

Friday December 11, 2009 1:15 Michael Perkins

1:16

CZ:

If I have my way, the public will see the widest range of options involving fares, fees, and service, before we make any real decisions — preferably before the funding jurisdictions make their own budget decisions.

Friday December 11, 2009 1:16 CZ

1:17

Michael Perkins:

Great. So, on to costs. There’s some criticism about Metro’s labor costs.

Friday December 11, 2009 1:17 Michael Perkins

1:17

[Comment From InArlington InArlington : ]

I feel the WMATA Board is guilty of mismangement, particularly in regard to personnel costs, which appear to be spinning nearly out of control. What percentage of WMATA’s budget, excluding capital projects, involve personnel? What percentage are personnel costs increasing from FY 2009 to FY 2010?

Friday December 11, 2009 1:17 InArlington

1:18

Michael Perkins:

He also asks whether WMATA employees or management will receive bonuses this year.

Friday December 11, 2009 1:18 Michael Perkins

1:19

CZ:

Well first, personnel costs are most of the budget. And they’re a substantial portion of the growth in costs. This includes things like health insurance (going up alot), pension costs (up due to low interest rates), and of course salaries.

Friday December 11, 2009 1:19 CZ

1:19

[Comment From Concerned Concerned : ]

At this point in the contract negotiations, does the Board or the GM have any influence over union contract negotiations, or do you have to accept the contract as a given?

Friday December 11, 2009 1:19 Concerned

1:20

CZ:

The largest group of Metro employees are under union contract, and that is something the Board has little to no control over, as it is governed by arbitration.

Friday December 11, 2009 1:20 CZ

1:21

CZ:

We recently received an arbitrator’s decision which would award significant increases for three years, which of course would make the hole bigger.

Friday December 11, 2009 1:21 CZ

1:21

Michael Perkins:

Management has some influence over what their requests are in arbitration, were there any pushes to move away from a pension and shift toward a defined contribution plan?

Friday December 11, 2009 1:21 Michael Perkins

1:22

CZ:

That is what is called a ‘non-starter’.

Friday December 11, 2009 1:22 CZ

1:22

Michael Perkins:

Gotcha.

Friday December 11, 2009 1:22 Michael Perkins

1:22

CZ:

Management, however, is not getting increases.

Friday December 11, 2009 1:22 CZ

1:23

CZ:

The Board has appealed the arbitrators decision, and we’ll see what happens.

Friday December 11, 2009 1:23 CZ

1:23

Michael Perkins:

Ok, that’s based on the adverse impact to the public, which was a requirement of the arbitrators decision?

Friday December 11, 2009 1:23 Michael Perkins

1:24

CZ:

Essentially.

Friday December 11, 2009 1:24 CZ

1:24

Michael Perkins:

Ok, so other costs.

Friday December 11, 2009 1:24 Michael Perkins

1:24

[Comment From David Alpert David Alpert : ]

The outlined budget includes using some capital funds for the FY2011 operating budget gap. Jim Graham suggested doing that more, using some of the $150 million Congress is appropriating. Peter Benjamin was strongly opposed to using any capital money at all. What do you think about this?

Friday December 11, 2009 1:24 David Alpert

1:24

Michael Perkins:

cut back on capital maintenance to close the budget gap?

Friday December 11, 2009 1:24 Michael Perkins

1:26

CZ:

I think that is a generally bad approach to budgeting, that could not come at a worst time than right now, considering a) the preoccupation with safety and the state of repair of the system, and b) the federal funds we are seeking.

Friday December 11, 2009 1:26 CZ

1:26

Michael Perkins:

Is there a way to set it up that the money gets repaid after our recession eases?

Friday December 11, 2009 1:26 Michael Perkins

1:26

Michael Perkins:

or do you always get behind?

Friday December 11, 2009 1:26 Michael Perkins

1:27

CZ:

If so, I would like to see it. In practice, it is very hard to put it back. And how long will that be, anyway?

Friday December 11, 2009 1:27 CZ

1:27

Michael Perkins:

Don’t know. So are there any other costs you think Metro should cut?

Friday December 11, 2009 1:27 Michael Perkins

1:28

Michael Perkins:

Oh, and on the labor costs issue, do you think Metro has a chance of winning its case?

Friday December 11, 2009 1:28 Michael Perkins

1:28

CZ:

Unfortunately, there isn’t much in the good ole ‘waste,fraud, & abuse’ line to cut. And all the “easy” stuff has been done the last two years.

Friday December 11, 2009 1:28 CZ

1:30

Michael Perkins:

So what’s left? Paratransit? It’s a mandate that some paratransit be provided, but what about scaling it back to the federal requirements?

Friday December 11, 2009 1:30 Michael Perkins

1:32

CZ:

The options that the Board will have will likely look pretty much like those that have been on the table before. Clearly, that includes proposals that would adjust MetroAccess to something closer to the federally-mandated level of service. It will also include lots of other things that nobody wants to do. (Station entrance closings, reduced hours of service, increased headways, etc.)

Friday December 11, 2009 1:32 CZ

1:33

[Comment From kreeggo kreeggo : ]

Bus and rail efficiencies should be examined. These include bus priority measures like bus lanes, queue jumper lanes, signal priority and measures like running all eight car trains in rush hour with slightly wider headways (same capacity — fewer trains).

Friday December 11, 2009 1:33 kreeggo

1:34

Michael Perkins:

Can we get some savings by improving the efficiency of the rail and bus system now?

Friday December 11, 2009 1:34 Michael Perkins

1:35

CZ:

These are some very good suggestions. I am hoping that we can look at running bus service more efficiently, along the lines “kreeeggo” proposes. A recent WMATA study indicates that improving average bus speed from 10 mph to 13 mph on a set of routes could lower annual cost by $40 or $50 million.

This of course depends upon cooperation from the highway departments.

Friday December 11, 2009 1:35 CZ

1:36

Michael Perkins:

Ok, let’s change gears and talk about the Mikulski comments.

Friday December 11, 2009 1:36 Michael Perkins

1:36

[Comment From joseph joseph : ]

In light of Sen. Mikulski’s comments on the Hill yesterday, when she specifically called on the Metro Board to make changes with management, will there be a reorganization at the executive level. Also when will it happen, and will Catoe go?

Friday December 11, 2009 1:36 joseph

1:38

CZ:

First, I don’t think it will do anybody any good to just make changes for the sake of making changes. This is not a baseball team, where you can throw out the manager to “shake things up” and it doesn’t really matter. In transit, the GM really DOES matter, and any time you make a change you will probably make things harder for the organization for a time. Second,

Friday December 11, 2009 1:38 CZ

1:39

CZ:

there is every reason to believe we currently have one of the very best transit managers in the country, and it is not clear that we would ever attract someone as good or better by firing him. Third,

Friday December 11, 2009 1:39 CZ

1:42

CZ:

it is very important to recognize that the problems WMATA has are not new, they did not arise when Mr. Catoe arrived less than three years ago, and no one has credibly suggested that he has somehow caused them. On the contrary, the fundamental problems at WMATA are related to long-standing underfunding of its capital needs — inadequate maintenance and replacement, insufficient investment in new equipment, “stretchouts” of the capital program, etc. Every GM and the Board has

Friday December 11, 2009 1:42 CZ

1:42

CZ:

warned the region about the consequences of this for years.

Friday December 11, 2009 1:42 CZ

1:43

Michael Perkins:

Here’s a pointed comment from someone that might vote based on that issue.

Friday December 11, 2009 1:43 Michael Perkins

1:43

[Comment From SOS Redline SOS Redline : ]

If Catoe does not go, do you really expect riders/voters to continue electorally support board members such as yourself? I may be in MD, but don’t think I’m not donating to Chairman Graham’s opponents.

Friday December 11, 2009 1:43 SOS Redline

1:44

CZ:

As a Board member I have to do what I believe is in the best interest of the system and its riders. If I think the GM is a problem, and that the system would be better off without him, I would fire him without hesitation. But, if I know that doing so would be more likely to make things worse, that would be stupid, and I won’ t do it. Even if it would be politically popular at the moment.

Friday December 11, 2009 1:44 CZ

1:45

[Comment From Karl Johnson Karl Johnson : ]

Do you have any outside the box ideas that might help?

Friday December 11, 2009 1:45 Karl Johnson

1:47

CZ:

I think one of the best “outside the box” ideas was suggested earlier — making our bus service work more efficiently by giving buses priority in traffic. WMATA has already identified a whole set of routes in which we could increase person-throughput if we took a lane away from cars and gave it to buses.

Friday December 11, 2009 1:47 CZ

1:48

CZ:

Needless to say, that is controversial. But it would move more people, and cost less.

Friday December 11, 2009 1:48 CZ

1:48

Michael Perkins:

I just need to ask about if you have any ideas that will fix the budget, and what you think about the prospects of getting the local jurisdictions to chip in more and avoid fare increases, service cuts and deferred maintenance.

Friday December 11, 2009 1:48 Michael Perkins

1:51

CZ:

Obviously my preference is always for greater jurisdictional contribution. And I am one of the folks who has to find that in my own jurisdictional budget. But I believe that the region would be far better off by devoting greater resources to public transportation overall.

Of course, this is a very hard time to make that ask, with every jurisdiction also in a budget hole. Perhaps when people understand the genuine difficulty of the choices we face, they will consider devoting more of their budgets to transit, and maybe that will help. But it is a very tough year.

Friday December 11, 2009 1:51 CZ

1:51

Michael Perkins:

And unfortunately I think that has to be the last question. Thank you very much for joining us, and thanks for your work on the Metro Board as well as other boards like the TPB, VRE, NVTA, Arlington County (did I miss one?)

Friday December 11, 2009 1:51 Michael Perkins

1:51

CZ:

Thank you for this opportunity.

Friday December 11, 2009 1:51 CZ

1:52

Michael Perkins:

Thanks to our commenters and readers for some great questions.

Friday December 11, 2009 1:52 Michael Perkins

1:53

David Alpert:

You can discuss your reactions to Mr. Zimmerman’s comments in the comments section of the post.

Friday December 11, 2009 1:53 David Alpert

1:53

David Alpert:

Thanks everyone and stay tuned for more chats as the budget season progresses.

Friday December 11, 2009 1:53 David Alpert

1:54

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