Washington Metro Getting Ready for Bankruptcy?

As I noted last week, Los Angeles is not the only region experiencing declining transit ridership. Another is Washington, DC, where a recent report from the Washington Metropolitan Area Transit Authority (WMATA aka Metro) revealed that ridership has fallen to the lowest level since 2004. Ominously, the agency's financial situation is so bad that it has hired a bankruptcy attorney to help it deal with its problems and is reshuffling its top management, forcing at least one executive to retire.

As detailed in the actual report to the agency's board, rail revenues and ridership in the first half of F.Y. 2016 are both down by 7 percent from the same period in F.Y. 2015. Metrorail ridership peaked in 2009, and if the second half of F.Y. 2016 is as bad as the first, annual ridership will be down as much as 30 percent from that peak despite a 15 percent increase in the region's population. Bus ridership and revenue in 2016 is also down but by only about 3 percent below 2015.

Metro rail's ridership declines, continued the report, are due to declining service reliability. Median travel times, the unpredictability of travel times, and the frequency of major service delays have all increased.

The report doesn't say so, but a large part of the problem can be attributed to the construction of the Silver Line in Virginia. Since the Silver and Blue lines share the same tracks in DC and the Blue Line was already operating at full capacity, opening the Silver Line forced the agency to reduce service on the Blue Line, which quite possibly lost it more Blue Line customers than it gained on the Silver Line. The cost of operating the Silver Line also diverted resources away from needed maintenance of the older lines. The decline in bus ridership probably represents people who rode both train and bus who gave up transit due to these problems.

Anecdotal evidence provided by comments and tweets on WMATA news reports suggests that a lot of DC-area residents have permanently given up on transit. "Eliminating WMATA from my day is the best decision I could have made for improving quality of life," says one. "I stopped riding and started driving in June," says another. "Parking costs more but there were huge delays weekly on metro, no reliability." "The decision to avoid WMATA is simple," observes a third. "It's cheaper and over twice as fast for me to drive vs taking the new silver line."

To make matters worse, a train operator ran a red light last week and almost collided with a train going in the opposite direction. Metro train used to be run partly by computer, but since the fatal 2009 crash that resulted from computer failure, Metro hasn't trusted the computer system and relied instead on human operators controlling speeds and braking. But an FTA report last December found that train operators have run at least 47 red lights in the past four years.

The reliability problems have led WMATA's deputy general manager, Rob Troup, to resign in disgrace and the agency is reshuffling its top management. Troup is not the first WMATA executive to resign due to failure to fix the system's problems, and he probably won't be the last.

Since the trains bring in nearly three-fourths of the agency's fares, the decline in revenues seriously impacts WMATA's budget. This may be one reason why WMATA has hired Kevyn Orr, the bankruptcy lawyer who guided Detroit through its bankruptcy. One of the things Orr will need to do is help WMATA deal with its $2.5 billion unfunded pension and health care liability, which will add considerably to its woes in the near future.

WMATA's troubles will soon be replicated in many other cities. Many transit agencies, including those in Boston, Buffalo, New York, Pittsburgh, and Portland, have even more unfunded obligations (when measured as a share of operating revenues) than Washington's. Few transit agencies that built rail lines since the 1980s have budgeted enough money for maintenance. Back in 2010, the FTA found that America's rail transit systems suffer from a $60 billion maintenance backlog, a number that has probably greatly increased as agencies aren't spending enough money to keep up with deterioration, much less reverse the problem.