My presentation will highlight these important considerations, programs and challenges. For the record, if I may, I will provide a more detailed presentation of the positive management efforts now underway, including Management Performance Measures and Indicators used, the background and current status of the Metro Design and Construction Schedule, our projection of operating and capital costs through Fiscal 1984, and a list of major management studies and other selected projects illustrative of the intensive effort being placed on management within the Authority. WMATA 1977 REORGANIZATION Major organizational and management improvements have been made over the past year to focus responsibility more clearly, establish effective managerial control, and reduce the previously unwieldly span of control. In recognition of these organizational deficiencies, the Board of Directors approved a reorganization which went into effect on May 7, 1977. This reorganization established four major departments: Design and Construction, Transit Services, Finance and Comptroller, and Administration. Each Department is under the direction of an Assistant General Manager, who also serves as an officer of the Authority. These, along with the other officers, General Counsel, and Secretary-Treasurer, provide the General Manager with an organization under strong leadership and with close effective control over each function. An Organization chart is attached. MANAGEMENT IMPROVEMENTS The development of a strong organization structure was a first step toward developing effective management. The Authority has moved forward in developing ways of improving operations to increase productivity and provide good service through application of management controls and techniques. These include strengthening such overall areas as the following: An organizational manual to delineate primary and specific responsibilities of -each office; A personnel manual to strengthen the personnel procedures and recruitment process, clarify the grievance process, and clarify roles and responsibilities; An affirmative action manual to develop a positive program; and A procedures manual to establish a formal means of issuing management memoranda, staff notices, and a codified procedural system. FINANCIAL CONTROLS Specifically, the management efforts have been directed toward strengthening financial controls. This includes the development of a strong budget operationusing such techniques as: (1) Modified zero-base budgeting, with involvement by the Board of Directors, local jurisdictional staff and all Authority Office Directors; (2) A strong budget execution with stringent quarterly budget allotments and personnel controls; and (3) Quantified performance measures and objectives. This effort resulted in a $26 million reduction in estimated spending requested by Authority directors for Fiscal 1979. These savings in costs have in turn permitted extension of service to Saturdays and evenings beginning in September 1978. For the past two years, effective fund control has enabled us to complete the fiscal year below the approved subsidy levels. In Fiscal 1978, the Authority has already absorbed $6 million of costs to reduce the operating subsidy level. On the construction side, we have instituted the SAVE Panel, which reviews designs, techniques, and materials aimed at reducing costs. Savings identified by this Panel have been in excess of $44 million in rail construction capital costs. A Management Analysis Branch has been established to improve managerial techniques, tighten internal controls, eliminate obsolete practices and streamline operations. These have included studies on improving rail system reliability, rail system logistics support, Metrobus maintenance reporting, increased use of word processing, automobile use, procurement and supply, establishment of a working capital fund, and development of an early warning system to forecast changing subsidy allocations. Overhead personnel needs have been reviewed and reduced annually. This has been an area of special interest to me. The Board Budget Com mittee during its extensive budget reviews has also directed a number of key studies, including relief from the Longshoremen's Act, CETA Employment, But Garage Requirements, and Energy Conservation. Many of these have been implemented. Management functions are constantly under review during the weekly Board of Directors meetings and scheduled internal meetings of the Assistant General Managers and the weekly Office Directors meetings. As previously noted, a list of extensive management programs recently undertaken is attached. A strong management program is in effect. Effective management control is an ongoing process. We have created an environment for change. We are continually in search of improved techniques and innovative programs which will provide metropolitan Washington with quality service at a reasonable price that can be expected from an efficient modern transit system. STATUS OF WMATA OPERATIONS In Fiscal 1979, we will be operating 30.8 revenue rail miles and 1,826 buses. Net annual operating costs will be $191 million, with the farebox recovering 49 percent of the cost and the jurisdiction funding the remainder less Section 5 Funds. The Authority will have over 6,400 employees. Of these, almost 70 percent are engaged in bus operations, 25 percent in rail and 5 percent in construction management. The 6,400 employees include almost 2,900 bus operators, over 1,500 maintenance personnel, and 300 rail train and station operators. On February 6, 1978, the Red Line was extended from Rhode Island Avenue Station in the District of Columbia to the Silver Spring Station in Maryland bringing into revenue operations at that time a total of 23 miles and 29 stations, The opening of this new section went very smoothly and today the rail system is completing better than 98 percent of the daily scheduled runs. Metrorail ridership quadrupled from about 35.00 a day in June 1977 to over 180,000 a day in May, and we expect to reach 200,000 by the end of this fiscal year. The construction program for the approved 100-mile regional system currently is estimated to cost $5.5 to $6.0 billion. Almost $4.0 billion has been funded through Fiscal 1978, with about $3.0 billion expended. As of March 1, 1978, as indicated above, 23 miles and 29 stations are in operation, 11.2 additional miles are substantially completed, an additional 18.6 miles are under construction and 27 miles are under final design. Funding for 60 miles is provided under the Interim Capital Contributions Agreement (ICCA). UMTA APPROVED 64-MILE SYSTEM The Federal Government (Urban Mass Transportation Administration) has endorsed a 64-mile system, extending operations four miles on the Branch Avenue (F) Route to Anacostia and on the L Route to the Pentagon. Additional interstate highway projects need to be withdrawn to provide the additional Federal funds required for a portion of the ICCA. Beyond this, the Authority must submit a financial plan by August 31, 1978 to the Secretary of Transportation to cover the funding of the operating and capital costs of the total system. An alternatives analysis study was required by the Congress and the Administration on the H (Springfield/Franconia) and F (Beyond Anacostia) Routes of the system. The E (Greenbelt) and K (Vienna) Routes were added by the jurisdictions. The B (Glenmont) Route required an engineering analysis directed by the Department of Transportation. The alternatives analysis process has now been completed with regional affirmation generally supporting the previously Adopted Regional System of some 100 miles. The Authority is now involved in developing a financial plan to address the full construction program and the associated operating costs. This plan will be critical to the financing of the system beyond the 60-mile Interim Capital Contributions Agreement that will permit construction to continue. COSTS As noted previously, the construction costs are now estimated at $5.5 billion to $6.0 billion. This reflects a recognition that items shown previously as an unfunded contingency, such as realistic rail vehicle needs, impact of delays, changed conditions and requirements, and parking facilities, will materialize. Thus, these costs have now been included in the construction costs. Also, the construction program reflects an update of the Board approved August 1976 Schedule, with the 100-mile system completion now forecasted for early 1975. This then moves us into the challenges for the future which you requested that I address. These include financing, increased parking, feeder bus systems, fare structures, farecard system, and marketing. FINANCING It is now apparent that there is a shortfall of Federal funds available from the Interstate Highway Transfer program. Based on current escalation factors and assuming the withdrawal of all candidate highway projects, Interstate Highway Transfer Funds will provide for a program totaling less than $4.9 billion. New Federal funding sources must this be identified to finance the remaining capital system costs above the $4.9 billion. The availability of local funds to continue construction is also a critical factor in Fiscal 1979 and the outyears. Bond referenda will be required in some Virginia jurisdictions before full Fiscal 1979 funding can be provided. The Maryland jurisdictions will need increased state authority and the District of Columbia will need increased Congressional authorization. The operating costs are another critical area. The size of the operating subsidy is, of course, dependent on the fare structure. Real estate taxes have reached a straining point. Regional alternative funding sources should thus be implemented. The WMATA Board has addressed this issue and adopted a resolution calling for the following: 1. Although the funding sources may vary by Signatory, transit is a regional service and the development of adequate financial support must be undertaken on a regional basis. 2. The selection, administration and level of assessment of a nonproperty tax transportation funding source should be determined by the local governments within the Transit District working with each appropriate legislative body. 3. The selected funding source in each Signatory should, as a minimal goal, provide revenues sufficient to fund all operating costs and any debt service on WMATA bonds not covered by system reevnues or state and Federal assistance. 4. The level of the funding source should be determined by the individual Signatories and could either be adjusted annually to provide only those funds needed for approved budgetary programs or could be set at a fixed rate with any funds not required for the Metro obligations available for other transit purposes. As part of the Fiscal Year 1977-1979 Budget process, the Authority has approved local participation in the funding of debt service at a 20 percent level. The Federal Government has concurred in this allocation through the provision of $12.2 million in the Fiscal 1977 appropriation and $29.4 million in the Fiscal 1978 appropriation. As part of a financial plan which must be submitted to UMTA in August 1978, this issue will be addressed. The Authority is currently looking at several options in regard to the funding of debt service, principal and interest, throughout the life of the bonds. PARKING In the area of parking, demand far exceeds the amount provided in the Metro program. Unconstrained parking demand developed in the 1974/75 Net Income Analysis Study for the Authority indicated a need for over 100,000 spaces. The alternatives analysis forecast just completed by the Joint Steering Committee indicated a similar parking demand. Thirty thousand spaces are currently programmed for the 10-mile system. Restraints on the program were: (1) available space at station sites, (2) access capability and (3) funding. It was assumed that additional bus service would be provided to bridge the gap between parking demand and supply. However, in view of the subsidy requirements, the likelihood of a greatly expanded bus program is remote. Therefore, a study of an increased parking program has been initiated and is now being reviewed by the local jurisdictions. It is recommended that the parking facilities at many key stations be increased. Considering the magnitude of the demand, it would be unrealistic to attempt to increase the supply to satisfy the unconstrained demand. However, about 20,000-30,000 additional spaces could be provided at an estimated cost of $60 million-$90 million. The WMATA Board of Directors will review the program when jurisdictions' comments are received. The cost of these facilities will be included in the new financial plan. FEEDER BUS SYSTEM The Metrobus system is gradually being changed from a radial system concentrating on trips to and from downtown to a feeder system providing service to Metro stations with increasing cross-town and cross-county service. WMATA policy has been to minimize duplicating bus-rail service where possible. To effectuate these goals, plans call for a gradual transformation of radial bus routes to a feeder bus system where most buses would be turned back at the rail stations and eliminate the slow, expensive, and duplicative downtown bus trips. As an example, prior to the opening of the Silver Spring Station, six routes in the Georgia Avenue corridor provided 100 peak express trip between Montgomery County and downtown. This has been replaced by all-day feeder service to the Silver Spring Metro Station. The combination of the feeder bus and rail allows the rider increased flexibility in making his trips. Several new cross-county routes have also been initiated thus increasing the overall transit service. Since initiatng Metrorail service, the Metrobus fleet has been reduced from 2,050 to 1,826 buses while increasing service overall. Previously, many express buses could only make one trip during each peak period. As a feeder to Metro, the same bus can make several trips during the same peak period. The turnbacks in certain cases created some adverse impacts on ridership due to higher fares and longer travel time resulting from forced intermodal trips (bus-rail transfers). These situations created some ridership resentment and did result in an initial loss of ridership. It is worth noting that ridership is increasing at a fairly steady and rapid pace. For example, Metrorail daily ridership averaged 105,000 in July 1977 with Phase II; 124,500 in September with the turnback: 131,000 in November; 136,000 in January 1978; and 180,000 in May 1978 due to growth, turnbacks and Phase IIA. FARE STRUCTURES While philosophies on fare increases vary among the localities, periodic increases are necessary as an alternative to continually funding increases in transit operating costs through general tax revenues. As part of the financial plan, the WMATA Board will address a fare policy. The views of the jurisdictions range from relatively stabilized fares in the District of Columbia, moderate fare increases in Maryland, and fare increases tracking the CPI in the Virginia jurisdictions. These varied goals made it difficult to maintain a relatively simple and uniform fare structure. The Authority has recently held public hearings on fare changes to be implemented at the start of fiscal 1979. To provide for improved convenience, a transit pass has been included in the fare change proposal planned for initiation on July 1, 1978. These passes will provide a convenient method of fare payment, promote off-peak bus travel, and are expected to be especially attractive to low income groups dependent on public transportation for their travel needs. AUTOMATIC FARE COLLECTION SYSTEM This system includes the farecard vendors, addfare machines, data acquisition, display systems, and fare gates. In view of the mileage based fare system, the Automatic Fare Collection System was adopted. The operation of the system has improved. There have been problems which included farecard transport jams, and coin and bill acceptor problems where the farecard vendors and addfare machines did not accept or retain the coins and currency. Engineering redesign has resolved many of these problems and continual research is underway. A modified farecard transport is under test within the Authority and preliminary assessment indicates reduced farecard jams. The coin and bill acceptor problems are currently under research and a solution is expected within six months to a year. MARKETING Finally, in the area of marketing, the Chairman will recall that he was one of the WMATA Board members who, in 1972, had the foresight to establish the first full-functioning transit marketing department in the United States. The idea caught hold thereafter and the great majority of transit properties across the country have since followed suit. WMATA's Office of Marketing prepares and pursues an annual work plan in an attempt to employ management-by-objectives to marketing our services. Considerable progress has been made in developing an automated information system which will become operational next fiscal year. The marketing system has stressed the need for telling people how to use the system, disseminated route and schedule information through such documents as the "Owners Manual." A work plan for 1978, containing a step-by-step program for marketing transit has been developed, which I will leave with you. Marketing has applied innovative concepts to increasing ridership, charter operations, advertising, and a responsive inquiry answering system. LISTING OF OFFICERS OF WMATA Theodore C. Lutz, General Manager; William A. Boleyn, Assistant General Manager for Finance and Comptroller; Howard W. Lyon, Acting Assistant General Manager for Design and Construction; John R. Kennedy, General Counsel; Eckhard Bennewitz, Director, Office of Budget and Management Analysis; William I. Herman, Director, Office of Financial and Policy Planning ; Mathew Platt, Director, Office of System and Service Planning; Donald O'Hearn, Director, Office of Program Control; David Q. Gaul, Director, Office of Equipment Design; John E. Warrington, Director, Office of Marketing; and |