Ray LaHood, then US Secretary of Transportation, at Union Station. Official White House photo by David Lienemann.

Ray LaHood, Obama's first Secretary of Transportation and a former Republican Illinois congressman, has been writing a report on how to fix WMATA's funding, governance, and other problems. The Washington Post's Bob McCartney got a leaked copy of the report last weekend.

The report, commissioned by Virginia governor Terry McAuliffe, makes numerous recommendations. Some are much-needed, like support for the growing consensus that the system needs dedicated funding, and a suggestion to shrink the size of the board of directors. 

Others are poorly reasoned or downright bad, like an analysis of fare evasion or a recommendation, unsupported by the data in the report, to both raise bus fares and cut bus service.

Metro really needs new dedicated funding

There's no getting around it, the report says: Metro's equipment is wearing out, and there has never been enough money to replace what's breaking. Funds from the PRIIA bill in 2009 help, but were both too late and, ultimately, too little.

The WMATA rail system opened in 1976, and many of its components began to reach their 30-year useful life around 2006. A major increase in capital funding would have been appropriate at this point. Unfortunately, PRIIA funds were not approved by Congress until FY2009, and these funds did not flow to WMATA until FY2011. It took even longer for WMATA to ramp up spending to use the new funds.

In FY2017, capital investment finally reached a level sufficient to stabilize the system, but the decade-long lag between growing need and lower-than-necessary investment helped create a backlog of deteriorated assets currently estimated at $7 billion. 

In addition, as each year passes additional assets wear out and must be renewed. Over the period FY2018 to FY2026, this ongoing need is estimated at a further $1.1 billion per year.

The report recommends WMATA find savings of $40 million per year, and also needs a dedicated revenue source of $500 million a year which it can bond against now to raise $6 billion in the short term. Bonding is critical because the maintenance needs are immediate.

Should there be a dedicated sales tax, as DC officials have suggested, or some other mechanism? On that question, the report does not have an answer. It supports the approach, favored by Virginia, that each jurisdiction come up with its share of funding in its own way.

What about labor costs?

LaHood found that labor costs at WMATA are not significantly higher than at other transit agencies. This may take some wind from the sails of those in the Virginia legislature and elsewhere who want to significantly weaken or eliminate the union as part of any financing deal.

The report does recommend workers pay some more toward their pension; they now contribute 3.1 percent, and LaHood found the national average to be 7.1 percent. He also suggests curbing how much overtime can count toward earnings after retirement. Now, workers about to retire have a strong incentive to work huge overtime to increase their pay in the key years which are used to calculate post-retirement pay.

However, LaHood emphasizes that these factors don't push overall labor costs above what other transit systems pay, and in some ways, WMATA compensation is less generous than at other agencies.

The National Transportation Safety Board listens to testimony in its investigation of the January 2015 smoke and electrical arcing incident near L"Enfant Plaza. Image by NTSB.

The board is too big

There's pretty widespread agreement among advocates that 16 members, two voting and two alternate from each of DC, Maryland, Virginia, and the federal government is too many to work effectively. LaHood endorsed a recommendation from the Federal City Council to create a temporary "reform board" of five members, one per jurisdiction including the federal government. The four would then pick a fifth person to be chair. This board would take about three years to get the agency back on track and recommend a permanent board structure.

The report doesn't go into much detail about why the board should be temporary. Others, like Maryland delegate Marc Korman, proposed a permanently smaller board made up of the secretaries of transportation; the LaHood recommendation leaves the long-term governance to the reform board. Some feel this is necessary because getting the jurisdictions to agree on governance reform right now would be too difficult.

There's also been growing support for removing elected officials from the board. LaHood notes that 22 percent of transit agencies do have elected officials, but those agencies have their own revenue streams. LaHood writes,

Where a transit agency is supported directly by dedicated taxes, any elected officials on the board can avoid the awkward position of both requesting funds on behalf of the transit agency, and then responding to that request on behalf of their home jurisdictions. ...

With members often appointed to the board with the explicit understanding that they will represent their home jurisdiction's policy, operational and financial preferences, WMATA faces major challenges in sustaining a unified vision for the agency and clear parameters under which management can pursue such a vision.

Massachusetts instituted a similar "reform board." But David Bragdon, head of the national transit advocacy foundation TransitCenter, warned that unlike in Massachusetts, which has one executive above them all, board members appointed by DC, Maryland, and Virginia will still be "responsible back to four different governments, [and] they’re still going to have parochial concerns."

He added that this cuts out local governments entirely. Local officials are often most interested in and supportive of Metro's success, given that Metro riders live in their counties, compared to the state governments. On the other hand, he noted, "A five member board for WMATA would certainly concentrate public attention and visibility, and the 'emergency' framing will give it more ability to do difficult things."

Fare evasion and other ways to get more money

A big part of closing WMATA's budget deficits is increasing revenue. Falling ridership, of course, is the biggest factor, and LaHood says that ridership returning to 1.9 percent below FY2015 levels could bring in a net of $57 million per year. (Though some aren't so sure; Stephen Repetski and Martin di Caro pointed out that peak ridership has already rebounded to about 2015 (pre-SafeTrack) levels, and there are fewer trains now. There's room in off-peak ridership, but questions remain about whether there's enough rebounding left to get the money LaHood estimates.)

The report also says WMATA could get more money from advertising. Advertising pays 1.32 percent of its operations and maintenance costs. Chicago, which has the most advertising of any major transit system, has 1.84 percent. Getting to the CTA level would bring in $10 million, which is something, but not huge.

A third proposal, and the thinnest, is to curb fare evasion. LaHood suggests WMATA could bring in $18 million more a year, but what's that based on?

Very little reliable information exists about the extent of fare evasion at WMATA. Nevertheless, a rough estimate was made. This scenario assumes that fare evasion deprives WMATA of 5 percent of potential revenues from bus and rail fares, and that stricter enforcement and other measures could cut this loss by 50 percent. An estimate of the incremental cost of undertaking such enforcement measures was not made. 

Hmm. Pulling numbers out of thin air? No comparison to other systems? For all we know, the cost of enforcing fare collection more than WMATA already does could exceed the benefit. (Or, perhaps it would be great! We just don't know and don't learn anything from this report.) It can have other collateral negative effects:

Image by MJW15 licensed under Creative Commons.

Bus service, WTF

The most poorly-reasoned and problematic part of the report is a suggestion to both raise bus fares and cut service:

In 2015, fare box recovery for WMATA's Metrobus system was just 23 percent, well below WMATA's peer agencies, which recovered 32 percent of their bus O&M costs on average. ... The poor fare box recovery is not due to high costs. WMATA's cost to deliver an hour of bus service is average. ...

Metrobus's poor fare box recovery is due to two non-cost factors. The first is low fares. Until mid-2018 [sic], WMATA's bus fare was $1.75, lowest among peer agencies. The base fare has since been raised to $2.00, closer to the peer average of $2.16. However, a weekly pass still costs $17.50.

The second factor is high service levels compared to ridership. Hours of bus service offered by WMATA per 10,000 passenger trips are 25 percent above the peer average.

Comparison of Metrobus systems to peer bus systems.

As a consequence, the report recommends raising bus fares to $2.10 and reducing some bus service, which it acknowledges would decrease bus ridership. It says, "This analysis is presented not so much to endorse specific bus service changes, but ... WMATA should consider undertaking what we are calling a 'bus reset'; that is, a comprehensive bus service study that looks at routing, schedules, bus garage locations, work practices and the other major attributes of the bus system.

A comprehensive study is not a bad idea, and many have called for it. However, the rest of the discussion exhibits the kind of depth and sophistication of analysis that you'd expect from a random rider commenting on Twitter instead of a group of transportation experts doing a detailed report that's supposed to find common ground in the region.

You can't talk fares without talking transfers

I have debunked many, many times the canard that WMATA bus fares are lower than peer agencies. The price of one bus ride alone is indeed lower (but not as much any more). However, a large proportion of bus riders do not just take a bus; they take a bus to a train, or two buses and a train, or whatever. 

These riders are penalized quite heavily by WMATA as compared to peer agencies. WMATA charges $1.50 to ride a bus if you just got off a train. In most other cities with trains and buses, it's free (like in New York, LA, Boston, and Atlanta), or very cheap (like 25¢ in Chicago). Only in Philadelphia ($1.00 from SEPTA, $1.65 from PATCO) and San Francisco (free from MUNI, but $2.00 from BART) is it comparable.

An analysis of bus costs is grossly incomplete without looking at the way the cost of rail+bus trips are allocated. 

Metrobus isn't quite like other cities' bus systems

There are other significant differences, not analyzed in the report, which may account for some or all of the difference. Ben Ross wrote:

This is a skewed comparison because many of the "peer" agencies are serving geographies that are denser and more transit-serviceable. The New York and Chicago agencies serve only the city and not the suburbs. The MBTA service area includes suburbs, but its bus service is almost entirely limited to the area that was built up before World War 2 and has a "streetcar suburb" development pattern. (Many of the bus routes were once streetcars.)

New Jersey and Philadelphia serve suburbs, but they developed earlier and have a much higher proportion of streetcar-suburb development patterns (relative to late-20th-century superblocks) than Washington does. I'm not sure where the LA bus service area fits in this discussion, but I'd note Jarrett Walker has written that LA's main streets are laid out in a grid that facilitates bus service. Only Atlanta is truly a peer here.

There are similar issues for the rail system. Our heavy rail system reaches farther into the suburbs than the other systems (on the whole), so service per trip is not a fair measure.

There are two ways this distorts the comparison. First, trips are longer in the more spread-out city. At the very least, LaHood should have compared passenger-miles per vehicle-mile, rather than trips per vehicle-mile. Second, the more spread-out land use intrinsically drives down ridership.

Image by SchuminWeb licensed under Creative Commons.

Offer a baseline service and add-on packages for extra charge

Metrobus does have some very winding routes that serve few people, but which act as a lifeline for lower-income residents, seniors, and people with disabilities (whose disabilities let them still use the fixed-route bus instead of the far more expensive MetroAccess). Perhaps some of these can be replaced with jitneys, subsidized ride hailing, or in the future autonomous vans, but for now, there's a need for some transportation.

It'd be worthwhile for Metro to split out in its analyses and budgeting a "line haul" truly regional bus network, and then "coverage service" additions. Already, many of the latter are paid for 100 percent by the jurisdiction they're in. Rather than tar Metrobus as a whole with "poor fare box recovery" because of it, let's analyze the two.

After all, suppose that the Metrobus division happened to also operate neighborhood playgrounds. Each jurisdiction agrees to reimburse 100 percent of the cost of the playground, and we all agree a playground is an important public service. But the playground earns very little revenue — a bit from organized sports leagues, but it has a low "rental box recovery ratio."

And let's suppose that for some reason, Metro's accounting lumped the playgrounds and buses together. Would it make sense for LaHood to claim Metrobus is less efficient? No, it's just that the accounting confounds an apples-to-apples analysis. LaHood isn't making a good comparison here, either. It would be welcome if he could, or if WMATA could offer better transparency into this part of the budget.

TransitCenter's Bragdon agreed:

There’s no justification for the report’s contradictory twin premises with regard to ridership: that a rise in rail ridership would be a good thing and a reduction in bus ridership is acceptable. A fundamental premise of the report is that rail ridership needs to grow, as farebox revenue is important and because carrying passengers is the purpose of a transit agency. By contrast, the bus section says outright that its recommendations will cause a reduction in patronage.

It’s too early to say that a drop in bus ridership is ok, without trying anything to increase it. There’s inherent geographic discrimination, if not other types of discrimination, in stating a premise that we want people near rail services to be attracted back to the system but we don’t mind if people not near rail services are not attracted back. Some of the things that can be done to improve bus service are not all that expensive, either.

My response to that section would be that they not immediately go to the premise that overall bus ridership decreases are an acceptable outcome of the plan. Instead they should focus the reset on improving unit costs (or boardings per hour or other sort of measure of productivity) by re-deploying service-hours to the most productive routes, and re-drawing routes as necessary to make them more productive, with a willingness to drop low-performing routes. Provisions for local governments to “buy” additional increments of service would also be a good feature.

Likely, a merit-based reset would cause a reduction of service in the outer jurisdictions where the local jurisdictions have chosen to enable a land use pattern that is hard to serve with transit. If those jurisdictions want more service than their “market” (a function of their land use) would justify, make provisions for them to pay for it.

Metro planners have already done some analyses around standardizing a basic level of bus service, and then potentially letting jurisdictions "buy" add-on services if they so choose.

Bus priority is #1

The biggest opportunities to improve bus service and save money come from reducing delays. Buses spend time in traffic, waiting at lights, waiting for people to pay their fares one by one, and so on. If the buses, especially the high-ridership ones, had dedicated lanes through congested areas, ways to pay before boarding so people can get on quickly, and signal priority to get more green lights, buses could finish their routes faster, saving money, and also offer better — not worse — service.

There's no need to recommend cutting bus service and reducing riders to save money. It's possible to improve service AND save money. Doing so just takes political will, which LaHood's report was supposed to aid with.

Overall reactions

While reporters and commentators praised some specific elements of the report, the overall grade was not so high:

In response to a question, "Will this make a difference?"

This is a leaked draft of the report, which should be formally released later this month. Perhaps LaHood can improve some of the holes in his report between now and then.

David Alpert is Founder and President of Greater Greater Washington and Executive Director of DC Sustainable Transportation (DCST). He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He lives with his wife and two children in Dupont Circle. Unless otherwise noted, opinions in his GGWash posts are his and not the official views of GGWash or DCST.