In 2016, the Federal City Council began a pursuit toward real Metro reform. The effort is rooted in the belief that the WMATA Compact, the Authority’s guiding document, is fundamentally flawed, and that for there to be successful Metro reform there needs to be a new compact.
Through a series of opinion pieces and discussions with regional leadership, the idea of a complete transformation of Metro’s governance, funding, and operational capabilities gained significant traction. In the second piece of a continuing series, Emeka Moneme, the Federal City Council’s deputy executive director (and a GGWash board member), responds to recent questions about his organization’s proposal for Metro reform.
In my first post, I wrote about how the WMATA Compact, written in 1967, was an effective document for building the Metro system, not operating it. It has given us a governance structure that asks board members to simultaneously do what’s best for Metro as well as for the jurisdiction that appointed them. The region needs a new WMATA Compact that outlines a different vision for the Board of Directors.
I also wrote about how in the short term, we need a separate reform board that works to address Metro’s financial and maintenance problems as the region identifies dedicated funding sources and plans for future growth.
Of course, there are legitimate questions about how exactly to both revamp WMATA’s Board of Directors and establish a reform board. Below are my answers to some of the most frequent questions in response to the Federal City Council proposal:
1. What authority will the reform board have?
The reform board would assume the authorities and responsibilities of the current board – determining service levels, setting fares, approving budgets, issuing debt - but would also have the power to renegotiate existing contracts or other actions that may improve the quality of service and efficiency of the organization.
In undertaking this effort, the reform board would have to maintain open dialogue and consultation with the ridership and funding jurisdictions about its analysis, findings, and proposals to address issues that might impact service or funding levels.
2. What is the plan/objective for the reform board?
In addition to overseeing WMATA’s ongoing operations, the reform board would be tasked with completing a comprehensive review of the system's capital needs, operating practices, safety standards and finances. The review would provide guidance to prioritize the primary capital needs going forward, a menu of potential system service profile alternatives, and identify the most effective cost savings proposals across the system, all without regard to jurisdictional boundaries or previous operational frameworks.
The goal would be to establish a cost-effective baseline for Metro’s operating and capital plan, and then outline for the jurisdictions a menu of level of service options at different subsidy levels and/or due to different policy decisions.
The outcome of this analysis would be a proposed plan of action that would be ratified by the jurisdictions as part of their coming year’s budget approval. But note below.
3. What is the difference between the reform board and the Board of Directors under the new WMATA Compact?
The purpose of the reform board is to stabilize and analyze Metro’s operations, finances, and governance to identify and (in some cases) implement changes that would positively impact Metro’s performance and sustainability. These goals are achieved by allowing for a comprehensive and independent assessment of Metro to identify savings, then negotiating restructuring and concessions. The reform board would be in place for no more than three years, and would report to the congressional committees of each jurisdiction as well as the legislative bodies of it signatories.
A new Compact board would be created to govern Metro in an operationally reliable, fiscally sustainable, and accountable manner. It would be an upgraded version of the existing Board of Directors, as it would include additional responsibilities that were not envisioned in the original WMATA Compact. This includes the approval of a performance management plan and a requirement for identifying and implementing innovation in addition to the oversight of funding provided to Metro.
Most importantly, members of the new board must meet a specific set of criteria that includes relevant expertise in transit and business operations. In addition, the process by which members are appointed will be changed in order to rid the board of its current dysfunction (more on this below).
4. What is the term/ timing for the reform board?
The reform board should be constituted within 60-days of the passing of its authorizing legislation. The initial review and reform plan must be submitted to the U.S. Department of Transportation and the Compact signatories within six months after the constitution of the board.
The Compact signatories would then have 90-days to approve the plan. The reform board will oversee the execution of the approved plan for the balance of three years from the authorization of the reform board. During this same time, the Compact signatories would develop, negotiate, and approve a new WMATA Compact that must include:
A new governance structure.
Changes that would allow Metro to operate more efficiently.
A long-term funding commitment.
5. Who appoints the reform board?
The WMATA Compact signatory jurisdictions, which include the District of Columbia, Maryland and Virginia, and the US DOT, would make one appointment each; WMATA’s general manager could be the fifth member.
The signatory jurisdictions would develop their own processes for nominating appointees to their chief executive and certifying their qualifications. It is important that the chief executives of the WMATA Compact signatories, the governors and mayor, retain ownership of the new governance structure by making the appointments to the reform board and new Compact board.
6. How can we prevent the political nature of the existing board from carrying over to the reform board?
The primary strategy for reducing the political dynamics within Metro’s current governance structure is to ensure that appointees to the new reform board have a fiduciary relationship with WMATA rather than a political agenda. This relationship can be strengthened by:
Establishing appointment criteria (as determined by the Compact) for the board members.
Having WMATA provide compensation (stipend and/or expenses) to the members.
Allowing board members to be removed for cause (against WMATA regulations, negligent actions, or illegal behavior) through board voting.
The criteria for board appointments should disqualify prospective members that hold, or have held in the four years prior, any elected or appointed office. Prospective members must have demonstrable experience in the field of engineering, mass transit or logistics management, public sector financial management, corporate CEO and or CFO experience, or served on a publicly-traded corporate Board of Directors. Finally, a majority of the members must be residents of the DC metropolitan area (defined as District of Columbia, Maryland and Northern Virginia).
Compensation to board members should be uniform, which is a change from current practice where some members are compensated by the appointing authority or their board duties are an extension of their primary job duties. Compensation should be appropriate given the responsibilities and complexities, and come from WMATA.
Finally, removal from the board is initiated by its member but should be certified by an external party (i.e., US Secretary of Transportation, Compact signatories, etc.) . Removal should only be for cause or neglect of duty.
7. Does the reform board have the authority to break an existing contract, or just approve the terms of a new agreement?
I think that the implementation of the DC Control Board in 1995 offers an instructive precedent. In order to address the financial, management, and structural challenges facing the District, there were no “untouchable” issues imposed upon the board.
Similarly, the Metro reform board should have similar authority to evaluate and renegotiate existing and future agreements (for financial, operational, and technical services) if they are found to have a material impact on the effectiveness and sustainability of the system. Everything should be on the table.
8. How do you ensure that the reform board does not continue in perpetuity?
Failure to adopt a new WMATA Compact and establish a permanent board by the end of the defined term could result in 1) a reversion to the previous Compact terms and 2) a withholding of federal funds from Metro. Tying financial support to the establishment of a new Compact and board will ensure diligence from the reform board and cooperation from the Compact signatories.
In addition, federal legislation can stipulate measurable criteria for the early removal of the reform board. We would propose, at a minimum, the following criteria:
Agreement and passage of a new compact with a new governance structure, consistent with the recommendations above on appointment qualifications.
Establishment of a regional dedicated funding source, created for the purpose of providing Metro with direct access to the financial resources (versus the annual appropriations process).
FTA certification of a state safety oversight program.
9. Which should come first, the governance reform or additional funding?
They are both required immediately. Focusing on governance first will bring organizational focus and control to Metro, allowing it to more effectively use existing funding sources and build the credibility needed to attract new sources of funding. It is unrealistic to expect strong public support for necessary reforms if WMATA does not have the tools and can prove its ability to effectively manage the activities being funded. However, it is also absolutely essential that Metro secure additional funding. Therefore they must occur in tandem.
10. Would the Federal City Council’s proposed governance changes actually fix Metro’s problems?
The solution to what ails Metro lies in neither governance restructuring nor funding reform alone, because Metro requires both in order to improve. However, sound governance will be the foundation of subsequent reforms, related to funding and operations, and of a sustainable transit authority that is able to meet the long-term needs of the region.
In the short-term, changes in governance would allow the authority to undertake policy and operational changes that address the most difficult issues at Metro – reviewing the underlying business model, increasing the productivity of the workforce, and long-term liabilities that threaten solvency. The experience, tools and political will for undertaking these issues does not exist in the current governance set-up.
In the long-term, an improved governance structure, with a correctly aligned fiduciary relationship to Metro, will focus how best to provide services that will:
Meet the service expectations of paying riders.
Provide value to the jurisdictions providing subsidies to Metro.
Do both in a manner that is sustainable, given the known resources available.
We believe that delivering the promised service with the resources provided is not just “fixing” Metro, but resetting its foundation for long-term sustainability as a premier transit system for the region.
11. Do we need Congress? Is Congress likely to impose these changes? What are the risks associated with inviting the federal government further into the governance of Metro?
Hypothetically, regional leaders could agree to a new WMATA Compact and address the structural issues that plague Metro. However, given the urgency of the situation and the historical lack of coordinated leadership (see the extended timeline to establish the Metro Safety Commission), it is reasonable to assume that true reform will not take place without congressional intervention.
With so much at stake, immediate action is needed and the region must thoughtfully pursue this option.
As for risks of federal involvement, the federal government is already fundamentally vested in the system. The first “whereas” citation in Congress’ consent legislation to the WMATA Compact reads as follows:
“Whereas Congress heretofore has declared…….. that a coordinated system of rail rapid transit, bus transportation service, and highways is essential in the National Capital Region for the satisfactory movement of people and goods, the alleviation of present and future traffic congestion, the economic welfare and vitality of all parts of the Region, the effective performance of the functions of the United States Government located within the Region, the orderly growth and development of the Region, the comfort and convenience of the residents and visitors to the Region…….that such a system should be developed cooperatively by the Federal, State, and local governments of the National Capital Region, with the costs of the necessary facilities financed……..by persons using or benefiting from such facilities and the remaining costs shared equitably among the Federal, State, and local governments.”
I would argue that the federal government is just as exposed to risks of a dysfunctional Metro as the rest of the region. If our regional delegation of elected officials can find common ground and hang together, they can be a force for Metro reform.