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99–581 PDF 2005

THE CAPITAL REGION’S CRITICAL LINK: ENSURING

METRORAIL’S FUTURE AS A SAFE, RELIABLE,

AND AFFORDABLE TRANSPORTATION OPTION

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

FEBRUARY 18, 2005

Serial No. 109–2

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

GINNY BROWN-WAITE, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

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C O N T E N T S

Page

Hearing held on February 18, 2005 ....................................................................... 1

Statement of:

Corbett, John J., Jr., co-founder, Metroriders.org ......................................... 115

Downey, Mortimer L., chairman of the board, PB Consult, Inc. .................. 103

Kauffman, Dana, chairman of the board, Washington Metropolitan Area

Transit Authority .......................................................................................... 011

Millar, William, president, American Public Transportation Association ... 93

White, Richard A., chief executive officer, Washington Metropolitan Area

Transit Authority .......................................................................................... 20

Letters, statements, etc., submitted for the record by:

Corbett, John J., Jr., co-founder, Metroriders.org, prepared statement

of ..................................................................................................................... 117

Davis, Chairman Tom, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 4

Downey, Mortimer L., chairman of the board, PB Consult, Inc., prepared

statement of ................................................................................................... 105

Kauffman, Dana, chairman of the board, Washington Metropolitan Area

Transit Authority, prepared statement of .................................................. 14

Millar, William, president, American Public Transportation Association,

prepared statement of ................................................................................... 97

White, Richard A., chief executive officer, Washington Metropolitan Area

Transit Authority, prepared statement of .................................................. 22

(1)

THE CAPITAL REGION’S CRITICAL LINK: ENSURING METRORAIL’S FUTURE AS A SAFE,

RELIABLE, AND AFFORDABLE TRANSPORTATION OPTION

FRIDAY, FEBRUARY 18, 2005

HOUSE OF REPRESENTATIVES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 10:07 a.m., in room

2154, Rayburn House Office Building, Hon. Tom Davis (chairman

of the committee) presiding.

Present: Representatives Tom Davis, Cummings, Van Hollen and

Norton.

Staff present: Melissa Wojciak, staff director; David Marin, deputy staff director/communications director; Keith Ausbrook, chief

counsel; Bill Womack, legislative director; Rob White, press secretary; Drew Crockett, deputy director of communications; Shalley

Kim, professional staff member; Teresa Austin, chief clerk; Sarah

D’Orsie, deputy clerk; Earley Green, minority chief clerk; Rosalind

Parker, minority counsel; and Jean Gosa, minority assistant clerk.

Chairman TOM DAVIS. Well, good morning. The committee will

come to order, and I want to thank everybody for coming this

morning.

The Washington Metro system has become a vital part of everyday life in the Nation’s Capital, providing an indispensable commuting option for hundreds of thousands of the area’s workers and

out-of-town visitors each day. A significant segment of the Federal

work force also relies on the system, making it an integral component of the government’s ability to function. It is also the primary

means of transportation for those attending events of national significance, such as the Presidential Inauguration, the annual 4th of

July celebration, and the Cherry Blossom Festival. Metro, in short,

possesses a national significance.

Metro was constructed to be a world-class system. As WMATA

CEO Dick White will note in his testimony today, Metro boasts tile

and granite platforms and vaulted ceilings. Its cars have a modern

look to them and contain more seats for passengers than do cars

on many other transit systems. It is also a system befitting the

capital of the free world and one in which we should all take pride.

Past administrations and Congresses have recognized the national significance of Metro, and the Federal Government has long

played an appropriate significant role in the system’s evolution. I

have asked the Government Accountability Office to prepare a reVerDate 11-MAY-2000 09:37 Apr 11, 2005 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\99581.TXT HGOVREF1 PsN: HGOVREF1
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port detailing the role of Federal Government has played, and that

report is available here today.

The National Capital Transportation Act of 1969 and subsequent

amendments in 1979 and 1990 originated in the House Committee

on the District of Columbia, since incorporated into this committee.

This remains the committee of jurisdiction over Metro. As Metro

begins to show the inevitable effects of age and ever-increasing demand, it is incumbent upon this committee to once again play a

leading role.

In recent years, Metro’s management has issued dire warnings

that the system is in need of significant reinvestment. Metro’s ridership has grown by 20 percent in the last 5 years, and it is expected to double by 2025. As any Orange Line passenger will tell

you, additional rail cars are already urgently needed to meet peak

hour demand. In addition to new rail cars and buses, Metro has requested significant dollars to maintain its existing infrastructure

and make necessary expansions to reflect the growing metropolitan

D.C. area.

In 2002, Metro published a $12.2 billion, 10-year Capital Improvement Plan. This plan includes all of the necessary maintenance, increased capacity and service expansions Metro believes

necessary for the original 103-mile system.

Recognizing the fiscal constraints and political realities of the

Federal, State, and local governments that fund the system, Metro’s management subsequently developed a package of bare bones,

must-have items that reflect the most urgent needs. This package,

called the Metro Matters Program, consists of $3.3 billion for new

rail cars and buses needed to relieve unmanageable congestion for

another 10 years. It also contains other measures intended to keep

up with demand and maintain an acceptable level of service.

In my opinion, Metro Matters is not a pie-in-the-sky, Cadillac of

a plan. It is more like a Yugo, a lean, mean proposal to keep the

system moving, accommodate ridership growth and allow the Federal Government to operate effectively. It is a program that recognizes that Metro is unique, that Metro is a key partner to the Federal Government and a vital national security asset. When Metro

shuts down, the government shuts down.

Adding to these capital needs are the aggravating factors of increased post-September 11 security requirements and the growing

MetroAccess paratransit program. Both represent significant obligations to Metro’s budget.

The recent report of the Metro Funding Panel describes

MetroAccess as a social service rather than a transit issue and did

not take costs associated with the program into account when making its projections and recommendations. Call it what you will; it

is a serious matter. In his testimony, Mr. White calls for a similar

blue ribbon panel to consider MetroAccess, and I echo that call.

Metro has sought to make the case for significant additional investment at the Federal, State, and local levels. We hope to examine, if not validate, their request today. That said, one can’t

credibly make these requests without also taking a close look at

Metro’s management and operational performance.

Metro suffered a series of embarrassments and problems in recent years. For example, Metro’s unveiling of the Metro Matters

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campaign coincided with the revelations that millions of dollars in

parking revenues had gone missing. Last November saw an actual

train wreck at the Woodley Park station, causing 20 casualties and

disrupting service in the Red Line. Metro’s implementation of its

SmartTrip card program has been fraught with difficulties, causing

frustration for its customers.

We have done and will continue doing the management oversight

we are responsible for, but that will not distract us from addressing

our larger duty: Ensuring a renewed Federal Government commitment to the Metro system. After all, even with these high-profile

incidents, Metro has been described as one of the better-managed

transit systems in the country.

Metro recovers 57 percent of its costs through the fare box and

other revenue, one of the highest cost recovery ratios in the country. But does this figure truly represent an efficiently run system?

From our witnesses today, we will attempt to derive objective

measures to determine where Metro stands. We will also hear from

Mr. White and Mr. Dana Kauffman regarding steps they are taking

to tighten Metro’s ship and improve performance.

There is a great deal at stake in maintaining the investment we

have made in Metro. More than just keeping the proverbial trains

running on time, Metro does serve a vital role in the day-to-day operations of the Federal Government. If there are looming problems,

we need to address them before a crisis sets in. Today’s hearing

marks the starting point in that endeavor.

I welcome all the witnesses to today’s hearing. I look forward to

their testimony.

[The prepared statement of Chairman Tom Davis follows:]

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Chairman TOM DAVIS. I now recognize the distinguished ranking

member, Ms. Norton—you are ranking member today—for her

opening statement.

Ms. NORTON. Thank you very much, Mr. Chairman.

I know the entire region appreciates that you have called this

important and timely hearing, and called it early in the appropriations season, I might add, a hearing on Metro’s system that we are

very proud of in this region, as indispensable as any system in the

region, a system that delivers gas and electricity, all the rest of

them.

The region, yes, and the Federal Government, as you said, Mr.

Chairman, collapses without the Metro system. But I am not sure

that we have been hard enough on ourselves or, for that matter,

on the Federal Government in recognizing the problems that I

think we all have to take responsibility for.

Metro’s growing problems are the responsibility essentially of

two large actors, the regional governments and the Federal Government, their failure of will to take responsibility for the funding

needs of a system that the Federal Government gave everyone a

head start on and expected us all to act responsibly. Part of this

comes from the region’s refusal to accept its identity as a coherent

region, both for roads and for Metro. And that, as a coherent region, what we do with roads and Metro must reflect that regional

identity.

We see on the roads the most serious congestion at the same

time that we have mounting Metro problems, but Metro was supposed to relieve congestion on the roads. We have one of the most

congested areas on the roads, even though people are clamoring to

get on Metro. That ought to tell us a great deal about what we

have failed to do and what we need to do.

I remember when we urged people over and over again to take

the Metro. Guess what? We got what we wished for, and we are

embarrassed by our success. The crowding may be the chief complaint of riders on the Metro, but, ironically, the Metro is unable

to run its full complement of existing cars. At the same time, it

needs more cars. Without any reliable capital funding source to

purchase them, the region is going to end up paying more for them

and considerably more for them again because of funding shortfalls

for which we must take responsibility.

Who is to be held accountable? Let us move first to the region,

because I don’t believe in going to the Federal Government and

hopping over ourselves as if this were not our system as well.

The region, all three jurisdictions, Virginia, Maryland, and the

District, demand that Metro act like and perform like a regional

transportation system without a regional funding source. I don’t

think it is fair to criticize Metro for not doing what other systems

do with such a funding source.

The region has no problems holding Metro accountable with freeflowing criticism, while refusing to alter the archaic funding source

and formula that is at the root of Metro’s problems. Metro is forced

to live from paycheck to paycheck, almost entirely at the whims of

local and State annual budgets.

Now, face this irony. None of these jurisdictions have the alternative of not funding Metro. So why not designate a reliable source

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of funding if you have to come up with the money anyway? What

are we saving ourselves? Well, we are costing ourselves. And I am

sure we will hear today how not having a reliable source, living

from paycheck to paycheck costs riders, costs the system, and keeps

Metro from reducing additional costs that it is now carrying.

I congratulate Metro for not raising fares for 7 or 8 years. Although I must say that when you do raise fares, everybody is going

to scream and holler. I don’t even believe in that way of dealing

with the problems of consumers. I think that, to the extent that the

regional governments don’t want to step up and do their part, unless you begin to raise fares gradually, over time, instead of letting

it pile up and raising it at one time, there is no pressure on the

regional governments to do their part. They could be screaming

right along with the consumers when Metro decides to raise its

fares, not to mention what a reliable funding source would do for

improved management and maintenance of a system that is now in

middle age.

The continuing dependence on the present formula and funding

source raises the most serious problems for one partner in particular, and that is the District of Columbia. The Metro serves only

part of Maryland and Virginia, but Maryland and Virginia are not

crazy. They fund—Maryland funds the Metro payment, the State

of Maryland, entirely, and Virginia pays half of it. That leaves

D.C., a city without a State, paying the largest share to bring huge

numbers, increasing numbers of suburbanites into the District of

Columbia. There is something wrong with that, ladies and gentlemen, where those with the smallest ridership, those who are least

dependent because we have people who get around with buses and

not only through the more costly Metro system are paying the largest shares as if this were 1967 rather than 2005.

That is unsustainable for the District of Columbia to continue to

do as Metro’s costs rise, and I put everybody on notice now, we cannot sustain the present cost the present formula forces on us. The

Revitalization Act, with the indispensable help of the chairman,

took some costly State functions and left us with a whole lot of others, including the Metro payment. As Federal funding for mass

transit has been reduced, States have stepped up and increased

their funding. What is the District of Columbia, without a State,

to do in that situation? The Metro payment is a leading cause of

the District’s structural imbalance. Unsustainable.

A primary cost of Metro’s major funding problem, however, is the

region’s major employer, the Federal Government. The Federal

Government helped build the system, but not as a gift to the region. Not then, not now, and not ever does the Federal Government

just go out handing out money. It did the same kind of quid pro

quo that every other major employer does. It funded Metro more

than it funded other systems because the Federal Government

could no longer do without Metro.

By the 1967 opening of Metro, we were already very late in opening a system. There had been no room for some time in D.C. for

many Federal agencies. We had proliferated the Federal Government into the region. The Federal Government was by then a

major regional employer. It needed Metro a whole lot more than

the District of Columbia needed Metro.

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The continuing dependence of the Federal Government on the

Metro system is seen by the subsidy that all of us support for riders to encourage the use of Metro. It makes good sense. The result,

however, is intolerable crowding, traceable directly to the Federal

Government and its employees, who are almost half of the ridership.

The region has no alternative but to look to the Federal Government for a subsidy greater than that provided for other systems

under TEA 21 because this system is indispensable to the daily

functioning of the Federal Government itself.

All of us have to do our part, and we all recognize that. Because

everything we do in this region depends upon the Metro, beginning

of course with our major employer, the Federal Government, including most especially today Homeland Security for the region in

the post-September 11 era.

Without Metro, there is no safe passage in the event of a terrorist occurrence. The region is a mecca for tourism and for national

events. This implicates each and every Member of the House and

the Senate, whose constituents come here to the tune of $20 million

per year. We have scandalous environmental or clean air problems

and remain stuck on stupid on that, perhaps about to lose some of

our Federal funding. Metro is our best hope for further reducing air

pollution.

There are many problems—Chairman Davis mentioned them—

for which management alone must be answerable. For example,

when there is an accident at the Woodley Park station—I don’t

care how poor your capital funding is. I don’t care how deteriorated

the subways become. I spent a good part of my life in New York

riding on the New York subways, and they were in deplorable condition, but they knew one thing: You had better get people there

safely, no matter what the funding problems were.

So there is no question that Metro has to be held accountable,

even as the Federal Government and the regional governments

don’t do their part.

At the same time, I have to say that I think Metro’s Board and

its management and its employees deserve credit, even gratitude,

for doing their job a lot better than the Federal Government and

regional founders and funders have done their job. We have

shirked our financial and planning responsibilities for making sure

that a world-class system remain world-class.

I am pleased that Metro has a 10-year plan for improving and

preserving the system that has been considered one of the best in

the country. I applaud you for opening yourselves to consumer

scrutiny, even for matters that you may not be able to entirely control, to your advisory committee notes and your town meetings,

your Board meetings. All of that feedback is important for a system

like your own. I am sorry it didn’t exist all along. I welcome that

you have opened your Board meetings as well to consumers, and

I especially welcome today’s witnesses for any advice and counsel

they can give us on how we can get the Federal Government and

the regional governments to move to do their part.

Thank you very much, Mr. Chairman.

Chairman TOM DAVIS. Thank you very much.

Mr. Van Hollen.

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Mr. VAN HOLLEN. Well, thank you, Mr. Chairman; and I will be

brief, because I am looking forward to the testimony of our witnesses. But I do want to thank you for holding this hearing on a

very important issue to our region.

As we all know, people who are out there in traffic or in Metro

every day in this region know and, as has been said, we are clearly,

from a transportation point of view, one of the most congested

areas in the country. And modernizing and upgrading and I believe

eventually expanding Metro is going to be an essential part of the

strategy for reducing that congestion or, at the very least, at least

not getting worse.

The danger is, given the projected growth, if we don’t do something on both Metro and other parts of our transportation system,

it is not that we are going to improve congestion. We are going to

go from a crawl to a dead stop if we don’t do something and don’t

do something about it now.

Now, Metro has been a win-win for this area. It is obviously a

win for people who use Metro. It is a great benefit to people who

are driving, because those are people taking Metro who are, obviously, not on the roads with the drivers. It is also an essential part

of trying to meet the clean air standards in this region, which is

something that is always a struggle for this particular area. So I

think it is essential the Federal Government do its part in this

area.

Metro has been, in many ways, a victim of its own success. Its

ridership has doubled, as we heard; and it is projected to increase

substantially. I was a regular workday Metro rider for many years,

for about 12 years, and I could see over that period of time that

it was getting more and more crowded, especially during rush

hours. Sometimes a train would come, and you just couldn’t get on.

It was packed.

So it is essential that we provide the revenue to expand the capacity so we get more cars on the rails, that we get more buses to

provide people the transportation links that are essential. Because,

if we don’t, it is going to hurt our economy, it is going to hurt our

quality of life, and this region is going to become a place that is

not nearly the kind of place to live that it is today even under the

difficult congestion we have today.

So I am really pleased that Metro has come up with a plan. I

think the Federal Government has to come up with its part of the

$1.5 billion and its share of the $3.4 billion, larger number, and I

look forward to working with my colleagues to accomplish that.

Thank you, Mr. Chairman.

Chairman TOM DAVIS. Thank you.

You have heard from us. We are ready to hear from our very distinguished panel, our witnesses today.

We have Dana Kauffman, who is the new chairman of the Board

of the Washington Metropolitan Area Transit Authority.

Let me just say, on a personal basis, I have great confidence in

Dana. I knew him as an aide to a young supervisor, Joe Alexander

in Fairfax County, whose name was Metro Joe. Joe was also chairman of the Metro Board. We have named one of our transportation

centers after him. But, Dana, we are just happy to have you here

in your initial appearance before this committee; and, just from a

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personal basis, I am just proud to have you there. I am very confident of your abilities to lead, and look forward to you.

Mr. KAUFFMAN. Thank you, sir.

Chairman TOM DAVIS. We also have Richard White, the general

manager and chief executive officer of the Washington Metropolitan Area Transit Authority. I have seen Dick work in the subways.

He takes the subway in every day to work, so he is a rider and is

running the whole operation. William Millar, who is the president

of the American Public Transit Association, thank you for being

here. Mr. Mortimer Downey, very highly regarded. He is the chairman of the board of PB Consult, Inc. And John J. Corbett, Jr., the

co-founder of Metroriders.org.

Thank you all for being here.

I am going to start with Chairman Kauffman and move on down

the line.

Dana, we have buttons there. Your entire statement is in the

record, so it is all there. Questions will be based on that.

But the light will turn green when you start, it turns orange

after 4 minutes, red after 5. If you need to take a little bit more

to sum up, I don’t want to limit you, but that is kind of—we would

like to keep it to close to 5 minutes for everybody. But this is your

maiden speech here. We want to make sure you get all your points

in. This is an important issue. So thanks for being with us. You

are on.

STATEMENT OF DANA KAUFFMAN, CHAIRMAN OF THE BOARD,

WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY

Mr. KAUFFMAN. I appreciate it. I hope it doesn’t violate the formal protocol here, but I would like to begin by saying ditto to your

comments, very much captured my concerns. Also, Ms. Norton, I

appreciate on behalf of all the Metro employees your recognizing

their hard work. Oftentimes, the success has been extremely painful, and we are working our way through it.

Good morning, Mr. Chairman and members of this committee.

Thank you very much for inviting me today to testify. As stated,

my name is Dana Kauffman, and I am a Fairfax County Board

member and currently serve as the chair of the Washington Metropolitan Area Transit Authority. I am pleased to have the opportunity to answer your questions and tell you about some of the fundamental reforms and initiatives that the WMATA Board is implementing to improve accountability at WMATA. And that key word,

‘‘accountability’’, is certainly going to resonate throughout all of our

testimony.

I will address your specific questions momentarily. First, I want

to acknowledge some recent good news about Metro. Although

WMATA’s Board and senior staff have just come through a year of

tough challenges, many of which are subject to questions from this

committee, it is important to note that we added 10,000 new daily

riders in December, a strong sign that we are doing something

right.

I am also heartened to see the major article in last Sunday’s

Washington Post reporting the results of recent commuter surveys

that present more positive news about Metro. For example, of those

who ride Metro, 88 percent rate our service good or excellent in

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terms of reliability, and 77 percent rate Metro good or excellent in

terms of value for the money. These are encouraging numbers, and

we look forward to working to increase these ratings even further.

Now to your specific questions. You asked about the challenges

posed by Metro’s reliance on multiple funding partners, including

the Federal Government. This structure has indeed tested

WMATA’s Board through the years. When Congress enacted the

National Capital Transportation Act in 1960 authorizing Maryland,

Virginia, and the District to negotiate an Interstate Compact, it

recognized the necessity of continuing Federal financial support,

declaring that the creation of certain major transportation facilities

are beyond the financial capacity of local governments in this region. That still holds true. WMATA is unique, and I would again

emphasize unique, among Interstate Compact agencies in serving

two States, the District of Columbia, and the Federal enclave.

The WMATA Compact specifies how the 12 members of our

Board are appointed, how we are financed, and how we procure

goods and services and the jurisdiction of our police. As to whether

the Compact should cover additional areas, no obvious or geographic expansions are necessary at this time.

Various amendments have refined and clarified Compact provisions as needed. For example, in 1997, a Compact amendment

brought WMATA into conformity with Federal procurement practices. In 1997, the Compact was expanded geographically to include

Loudoun County, even though it does not contribute financially to

WMATA because we do not yet provide services there. In addition,

WMATA occasionally goes beyond its jurisdictional boundaries

through specific contract-for-service arrangements, such as when

we won competitively bid-for contracts to provide bus service in

Prince William County, VA, and Montgomery County, MD.

The Board meets regularly, sometimes we think all too often,

both as a full Board and in smaller committees to consider budget,

policy, safety, operations, audit, planning, and development matters. We work closely with Maryland, Virginia, and the District of

Columbia, and also with two counties and three cities in Virginia

and two counties and numerous municipalities in Maryland and

the Federal Government. The range of opinions, backgrounds and

experience among these stakeholders sometimes makes consensus

difficult. Moreover, since inception, the Board’s governance has included a jurisdictional veto, that is, that no proposal can pass without at least one supporting vote from each signatory.

You asked, does this represent the best governance structure?

Maybe not. Like democracy, it isn’t perfect, but it is better than the

alternatives. Given the substantial Federal financial contributions

to WMATA, perhaps there is a role for the Federal Government at

the table. If that would help to forge a stronger partnership, the

Board would be happy to discuss the idea.

You ask what steps the Metro Board has taken to improve oversight. The Board has an active Audit Committee that meets publicly each quarter. In the second quarter of 2004, the Board received 42 internal audits from WMATA’s general auditor, and recently we began to share these audit reports publicly to increase

accountability.

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In addition, an Ernst and Young audit of WMATA’s fiscal year

2000 to 2004 operating costs recommended several areas of improvement, and we have worked to make those happen.

Yesterday, I announced my intention, as Board Chair, to promote

new openness and accountability in the way Metro operates. Specifically, we again are establishing a riders committee, making our

public comments added to our Board meetings, continuing to hold

town hall meetings, and improving access to our records and operations.

Again, this is a key issue when it comes to funding. We have to

show that we are real about this.

In the Washington Post poll I mentioned, nearly 58 percent of

the region favors establishing a new way to fund Metro. My Board

of colleagues and I believe now is the time for action on the Metro

Funding Panel’s recommendations. We want to make sure the region’s policymakers make this blue ribbon panel real, and we look

forward to your counsel and support as we embark on that task.

It is key that the Federal Government remain a full partner in this

effort, just as it was 50 years ago when we established what is

today known as ‘‘America’s Subway.’’

I thank you for the opportunity to be testifying here today.

Chairman TOM DAVIS. Thank you very much, Dana.

[The prepared statement of Mr. Kauffman follows:]

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Chairman TOM DAVIS. Mr. White. Thank you.

STATEMENT OF RICHARD A. WHITE, CHIEF EXECUTIVE OFFICER, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY

Mr. WHITE. Thank you.

Good morning, Mr. Chairman and members of the committee.

Thank you for the thoughtfulness of your opening remarks and also

for the opportunity to testify before you this morning.

My name is Richard White, and I am the general manager and

chief executive officer of the Washington Metropolitan Area Transit

Authority. I request that my full statement be inserted for the

record, along with the several attachments to my testimony, including the answers to the six questions posed in your invitation letter,

a 2004 report by the Brookings Institution, and a report issued in

January 2005, by the Metro Funding Panel.

More than 50 years ago, the Federal Government in this region

forged a vital partnership to pursue a grand vision to design and

build a rapid transit system that would serve the Federal Government and be worthy of the Nation’s Capital. Along the way, and

approximately 30 years ago, responsibility for operating and maintaining a regional bus system was also transferred to Metro.

By any measure, Metro has succeeded beyond anyone’s expectations in meeting the goals that Congress set. Last year, Metro provided 336 million passenger trips on rail and bus. Metro rail is the

second most heavily used rapid transit system in the Nation, and

it does carry on a daily basis the equivalent of the combined subway ridership of BART, MARTA, and the SEPTA subway systems,

and Metro bus is the fifth most heavily used bus system. The 103 mile adopted regional Metro rail system cost $10 billion

to construct, approximately two-thirds of which was paid by the

Federal Government. The value of this asset today represents $24

billion in current dollars. Metro has provided an excellent return

on this investment, particularly to the Federal Government. Designed specifically to serve Federal facilities, Metro serves more

than 300 Federal agencies today, and 47 percent of Metro’s rush

hour riders are Federal employees. What makes the Metro system

undeniably unique is that Metro was built primarily to serve the

Federal work force and to serve the national capital area, and it

has done so admirably for decades.

But Metro is now a mature system, and it faces a new set of

challenges. Our infrastructure is aging. Sixty percent of our rail

system is now more than 20 years old, and daily ridership has

grown by 33 percent in the last 8 years. The cost of operations,

maintenance, and rehabilitation have outstripped the ability of our

State and local funding partners to pay. In fact, Metro is the only

public transportation system in the country without a dedicated

funding source to pay for its operating and capital funding requirements. The need to address this shortcoming is becoming more and

more urgent.

The June 2004, report by the Brookings Institution, revealingly

entitled, ‘‘Washington’s Metro: Deficits by Design,’’ concluded that

WMATA receives less than 2 percent of its capital and operating

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tional average of 34.7 percent. In addition, it called WMATA an institutional orphan, with no clear funding ownership and a funding

structure that creates recurring financial crises. It predicts that

these funding shortcomings threaten to undo more than a quarter

century of success.

Mr. Kauffman’s and my extended testimony describe a number

of organizational improvements designed to make our service more

reliable, responsive and accountable to the public; and I would be

very happy to expand on these in response to your questions. But

taking necessary and appropriate management and policy actions

can achieve only so much. At some point, we need more resources.

We must reinvest substantially in the system to avoid deteriorating

service and unmanageable crowding.

Our State and local funding partners stepped up to the plate last

fall and signed the Metro Matters funding agreement, substantially

increasing their funding requirements through the year 2010. This

is a $3.3 billion 6-year funding plan to address a backlog of deferred capital investments and to help relieve system overcrowding.

There are some charts which we have provided to the committee

and which are posted over there which show historically how the

system has been funded both from 1975 to 2003, a current snapshot of our 2005 budget, and what it would be if the Metro Funding

Panel’s recommendations were to be implemented for the years

2008 to 2015. I think they are quite revealing.

An independent Metro Funding Panel validated the Brookings

Report in January 2005. After an exhaustive review, the panel

found that, even after accounting for periodic future fare increases

and inflationary adjustments to existing State and local subsidies,

Metro faces a $2.4 billion shortfall during the period of 2008 to

2015, and that excludes a $1.1 billion projected shortfall associated

with paratransit costs. The panel recommended meeting the shortfall through a combination of dedicated regional funding and a

commitment of $1.2 billion in new Federal funds beyond the surface transportation funding that we receive today.

Our message today is that the Federal Government and the region have made a substantial investment in an extremely valuable

asset and one that is designed to serve the Federal work force in

the national capital region. We must act expeditiously to protect

that substantial investment. Now is the time to recommit to the

original Federal, State, and local partnership and to put Metro on

a stable funding course to avoid it slipping into serious disruption.

I commit to you that we recognize and are facing up to our need

for improvement. However, a healthy dose of funding is required to

ensure that the national capital region continues to have a reliable

transit system that Congress mandated a half a century ago.

We look forward to working with you, Mr. Chairman, and the

committee and the entire national capital region to address this urgent matter. Thank you.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. White follows:]

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Chairman TOM DAVIS. Mr. Millar, thanks for being with us.

STATEMENT OF WILLIAM MILLAR, PRESIDENT, AMERICAN

PUBLIC TRANSPORTATION ASSOCIATION

Mr. MILLAR. Mr. Chairman, it is my pleasure to be here with you

today and with my colleagues, and I appreciate the invitation. As

president of the American Public Transportation Association, our

association is the Nation’s largest trade organization that represents both the providers of public transportation, such as Washington Metro and New York City subways and so many others, as

well as the private sector companies that supply our industry.

Also, I am here because I am a regular Orange Line rider. This

week I used Metro for my regular business, and this week I happened to ride all five of the Metro rainbow colors. Orange, blue,

red, yellow and green. So I am really pleased for the interest you

are taking in this.

Chairman TOM DAVIS. It looks like the recovery ratios are going

up this week.

Mr. MILLAR. Hey, listen, you made money on me this week. For

sure.

Anyway, you asked me to comment on three particular areas,

and I will be happy to do that, and then, at the appropriate time,

expand on those or get into other areas you might prefer.

First, related to measuring and benchmarking transit system

performance. Let me be clear, each community that our members

operate in is different. Each has unique characteristics. APTA itself

does not rank its members in terms of their performance. However,

we do encourage our members to set goals and then set appropriate

performance measures for their situation and then to benchmark

against those performance measures. In that regard, we also collect

and publish a great deal of data that allows our members to make

some of these comparisons.

We encourage effectiveness and efficiency. We believe these are

essential elements to good customer service. And we encourage our

members to work with our local and State governments, with business and community groups to assess how well the system is performing.

In this regard, I think the activity of the blue ribbon panel that

has already been referred to in testimony today as well as the work

of the Brookings Institution last year are clear examples of a good

performance measurement and benchmarking activities. I have reviewed this material. I find it to be of highest professional standing, very good work, and I very much support the conclusions that

are contained in both those reports. In short, the reports say, and

I believe this to be true, that Metro is effectively managed and operated, but it is going to need help financially if it is going to meet

the future growth of this region.

I did take a chance to look at some additional material, though,

outside those reports; and one area that constantly comes to everyone’s attention is how well is the labor force being used, how are

labor costs being managed.

In an organization such as Metro, labor costs are typically the

largest portion of the costs of a system with good reason: It is a

service provided by people.

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Since 1996, some numbers that I reviewed from a recent study

that an APTA member did show that real wages in the public transit industry as a whole since 1996 have been growing at a rate

much slower than those in the private sector. So then I took that

general industry look, and I said, well, how does it apply to Metro?

In reviewing multi-year labor settlements last year in our industry, there were 57 of them, including WMATA’s; and what I found

was that WMATA’s increase of labor cost was the 12th lowest of

the 57. When you look at that, it represented only about 57 percent

of the average of that group. Clearly, Metro is doing what it can

to keep its costs and its largest single cost in reasonable shape on

this and, more than reasonable, below certainly the averages we

would expect. So I think that says a lot about performance.

Turning to the issue of the second question you asked, which is

best practices by public transit systems for implementing capital

and funding capital improvement programs. Again, there are many

different ways that transit programs are funded, but, in my experience, a couple of characteristics are essential to the most successful

ones.

First, we need an—obviously—source that is big enough to do the

job. Second, it must grow with the needs of the system. Third, it

must be dedicated so that long-range planning is real, so that good

plans can be made and carried out over time.

I wanted to bring to the committee’s attention and with your permission would put in the record a survey of State funding for public transportation. We worked with the U.S. Department of Transportation, Bureau of Planning Statistics and other organizations to

put that together.

Chairman TOM DAVIS. Without objection, it will be put in the

record.

Mr. MILLAR. Thank you, sir. I believe there is a wealth of information in there that may be useful as the committee considers its

future option.

[NOTE.—The information is on file with the committee.]

Mr. MILLAR. The idea of guaranteeing funding is very important

in dedicating funding, and we see examples at many levels of government where the benefit of this is clear. For example, at the Federal level, you all passed, and I commend you for it, in 1998 the

TEA 21 Act that guaranteed for the first time funding for public

transit. Well, what have we seen? We have seen that the money

the transit systems were promised actually came, that the plans

they promised the public they were able to implement, and a great

deal of uncertainty has vanished from the system.

A similar experience in States that do this and localities that do

this. It guarantees to the public that they will get what they paid

for.

It also helps in other ways. By having a guaranteed source of

funding, it makes it much easier to attract private financing to

public transportation, because, as we know, the private industry

has this strange notion they would like to be paid back when they

actually invest in things. So certainly having good, dedicated, stable and growing funding enables us to do this.

Now, to get a dedicated funding source, the lesson we have

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port for this; and you can’t look at just what you need today, you

must look what you need over the next 20, 30 years or more. We

know—others have already referred to it in this testimony—our

area is going to grow and with it congestion. We already know how

much congestion there is in this area. We need to make the case

to people, too, that it is not just people like me who ride the system

who benefit from this. It is indeed the entire region and the States

that are involved and the District of Columbia in total that benefit

from this.

I brought along another report that again I would like to suggest

we put in the record. It is entitled, ‘‘How Transit Benefits People

Who Do Not Ride It: A Conservative Inquiry.’’ It is by Paul

Weyrich and Bill Lind. Mr. Weyrich, as you may know, is the

founder of the Heritage Foundation, certainly great conservative

credentials.

Chairman TOM DAVIS. Without objection, that will be put in the

record as well. Thank you.

Mr. MILLAR. Thank you very much.

[NOTE.—The information is on file with the committee.]

Mr. MILLAR. One of the things Mr. Weyrich points out is the benefits for people who do not ride include such things as the overall

economic growth of the region, the growth in tax values of the region and that helps in many, many ways.

The third area you asked me to address was to try to shed some

light on the lessons learned around the country related to paratransit services and the providing of paratransit services.

Paratransit service, particularly for persons with disabilities, has

been one of the most important outcomes of the Americans With

Disabilities Act. It has allowed an unprecedented level of mobility

for persons that, quite frankly, were left out of our society in many

ways over a long period of time.

Now this increase in mobility, where we have seen this service

offered in paratransit in the last 10 years go up by over 100 percent around the country, this increase in mobility has certainly

been beneficial to the persons with disabilities and very beneficial

to the communities in which they travel, but it has also had an obvious impact on transit agency capital budget costs and operating

costs. For example, in the last 10 years we have seen capital costs

for paratransit rise nationally by 163 percent and the operating

costs rise by over 200 percent in that same time period.

By way of example, in 2003, the last year for which I have com- plete statistics, transit agencies spent some $2.3 billion, about 8.8

percent of their operating budgets, to provide complimentary paratransit services, to provide service to almost 111 million riders. So

its benefit can’t be argued. It has been very beneficial. But the cost

effect on transit systems, and particularly on systems such as

Metro that do not have a reliable and growing source of funding,

is equally undeniable. We do believe additional funding is needed

in this area.

We do think there are other things that can be done. We do want

to encourage the Federal Government to encourage the coordination of social service transportation costs. We note a 1999 GAO report that found there was some 62 different Federal human service

transportation programs in the Federal Government, that the

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spending, depending on how you counted it, ranged from $4 to $7

billion a year. That is almost as much as the Federal Government

invests in all of public transportation every year. Certainly better

coordination of the spending of that money to make sure it is done

as efficiently as possible is very important.

We certainly applaud the work of the Federal Transit Administration and other Federal agencies who are trying to get their act

together, so to speak, through something they call United We Ride.

And certainly we in the public transit industry pledge to encourage

that and work them in any way we can.

In conclusion, Mr. Chair, from the perspective of one who has 33

years of experience in the public transit industry as well as is a

regular Metro rider, as I have already said, I find the Metro system

to be a well-run transit system. It faces many constraints, which

I am sure the committee is well aware of. But within those constraints it is certainly one of the finest systems and one of the bestrun systems that I know about anywhere in the world.

I look forward to your questions and expanding on these points.

Chairman TOM DAVIS. Thank you very much.

[The prepared statement of Mr. Millar follows:]

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Chairman Tom DAVIS. Mr. Downey, you have had a lot of experience with systems in New York and elsewhere; thanks for being

with us this morning.

STATEMENT OF MORTIMER L. DOWNEY, CHAIRMAN OF THE

BOARD, PB CONSULT, INC.

Mr. DOWNEY. Thank you, Mr. Chairman, Ms. Norton, and members of the committee, for holding this hearing—it is very timely—

and for inviting me to testify.

My name is Mortimer Downey, currently chairman of P.B. Consult, but I have also served as Deputy Secretary, U.S. Department

of Transportation, and for many years, at the MTA in New York.

And like my two colleagues, I am a daily rider on the Orange Line

from Vienna.

I also recently had the opportunity to serve as the staff director

of the Blue Ribbon Panel, it has been referred to today. I know you

have its report, and I certainly commend it to you, not only for its

unanimous recommendations as to Metro’s needs, but also for the

data it provides on the operations system, on how it compares with

others around the country, and on where Metro should be going.

When I look at that issue from the perspective of having been in

New York, I can tell you that is a place you do not want to go—

New York is fine, but the condition of its transportation system,

when I joined it in 1981, was deplorable; it was deplorable as a

function of lack of reinvestment and lack of funding for the system’s needs. It was below the standard of service, almost below the

standard of safety; that is not where we want to see the system go.

It took us years to turn that system around; the job isn’t complete

yet, but they have made enormous progress. They made that

progress because elected officials, local and Federal, made a commitment to investment, made funding available on a dedicated

basis, made the funding available, and held us at the MTA accountable for achieving results.

That is what needs to happen here if we don’t want to see a

Metro future like the New York past. The recently adopted Metro

Matters capital program is a good first step, but it needs to be followed by more permanent solutions.

The panel, the Blue Ribbon Panel, made up of bipartisan citizens

from around the region, strongly endorsed that principle of reinvestment, as well as the importance of Metro services, in meeting

the transportation and economic needs of the region.

Chairman Penner of the panel, Rudy Penner, in his transmittal

letter, stressed the primary conclusions of the report, the fact that

there will be a shortfall of revenues—we are comfortable with the

fact that had to be dealt with—and that two partners have to deal

with those shortfalls, the Federal Government should be a significant participant, particularly for capital maintenance and system

enhancement, and the jurisdictions in Maryland, Virginia and the

District of Columbia, in the panel’s view, should mutually create

and implement a single regional dedicated revenue source. The

panel recommended the sales tax, but that is a choice the region

and the jurisdictions need to make.

The charts show, particularly the one on the right, that partnership has been the watch word for Metro’s success over the years.

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The center chart is what the panel recommends going forward.

Again, a partnership enclosing the increment needs of the system

through a sharing of local jurisdictions, the Federal Government

and the riders.

Metro has been successful over 30 years, holding together its new

construction program largely by the power of that regional Compact. It is a truly amazing feat when you look back. But there is

no comparable partnership for ongoing operations and support.

Metro has to go back to its partners every year, it would be like

recapitalizing your business each year, it is not a way to really

focus on the important issues of management.

So each of the beneficiaries of Metro service, in our view, should

be a contributor, the riders, who today, in fact, pay fares above the

national average and contribute more than the average to the support of the system, but that reflects the level of service and the nature of their options. The region’s governments are interested parties and beneficiaries in keeping the economy strong, in meeting

environmental goals and supporting a truly regional set of solutions. But I think the Federal Government also belongs at that

table. Metro service, carrying a significant portion of the government’s workers, is essential to day-to-day operations, and critical in

the event of national emergencies.

Other countries do recognize the special needs of their national

capital in terms of transit investment. I have been working over

the past year in London on the rebuilding of that system. There is

now a partnership in place, $20 billion to be spent over the next

5 years, about two-thirds of it from the national government, onethird of it raised by debt from the system, but it recognizes the

need of that region and the special responsibility that their national government has. Our Federal Government can do the same;

not in lieu of local effort, but as a partnership to generate workable

solutions.

Again, I commend the committee for timely inquiry into this important topic, and I would be happy to answer any questions now

or for the record, as well as to work with you in developing the

long-term solutions.

Chairman Tom DAVIS. Thank you very much.

[The prepared statement of Mr. Downey follows:]

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Chairman TOM DAVIS. Mr. Corbett, thanks for being with us.

STATEMENT OF JOHN J. CORBETT, JR., CO-FOUNDER,

METRORIDERS.ORG

Mr. CORBETT. Thank you, Mr. Chairman, and members of the

committee.

MetroRiders.org is the recently established transit users group to

help improve public transit services in the Washington Metro area.

We appreciate the invitation to present our views on the current

problems and the future needs of WMATA.

MetroRiders.org was formed primarily because transit riders

want a safe, more reliable Metro system, efficient management,

and better coordination with the other bus and train systems serving our area.

Whether or not you personally use the Metro system—and I am

sure you cannot beat the percentage participation of our panel

today—you have heard from your staffs that many Metro trains are

chronically overcrowded, escalators and elevators often don’t work,

rail cars and busses too often break down, causing riders to be late

for work or getting home. A lot of worried looking congressional

staffers have to hurry up the escalator at the Capitol South station

when Metro problems lengthen their commute.

Conversations with Capitol Hill staffers about Metro too often

are discussions only about Metrorail. To our transit riders, Metro

also means bus service and the Metro Access Paratransit system

as well.

The committee’s invitation indicates interest in the results of the

survey we have conducted on our Web site. In short, some 1,500

respondents rated Metro’s overall service quality as barely fair, two

on a scale of four; the results are summarized in the first attachment. Mr. Chairman, I compared those somewhat negative results

with the results of the Washington Post survey this past Sunday,

and the survey reports in the Post are for people who have used

the Metro system as least once; the people who respond to our Web

site are daily dedicated Metro users. Even though they have expressed dissatisfaction with Metro’s operations, our organization’s

objective is a positive one.

Attached to our testimony is a list of our organization’s shortterm objectives. As you may notice, we believe everyone needs to

do a better job, and that includes passengers.

Help from WMATA is needed from Congress as well. Today’s

hearing highlights the effort needed from the Maryland and congressional delegations, and from the District of Columbia’s delegate

to help fund WMATA’s capital needs. You know these better than

I, the surface transportation bill is being marked up this month.

There is an opportunity there for large—high levels of formula

funds for WMATA for both rail and bus. I am sure you will be

maximizing your discussions with those authorizes.

On the appropriations side, the Department of Transportation

Treasury bill generally provides an opportunity for earmarks for

WMATA to help acquire additional rail and bus systems. We hope

you will be active again this year, as will we and the riders, to try

to maximize earmarks for the WMATA system.

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Security is a very difficult issue, as you know. You know the situation that occurred in Madrid. Even though the Department of

Homeland Security Appropriations Committees generally don’t do

any earmarking, we hope you will communicate the needs of the

WMATA staff for high levels of security funding in the 2006 process.

Although WMATA may now be open to setting up a Riders Advisory Committee, our organization is convinced that this step, however well-intentioned, is too timid a response for Metro’s users

needs for input into WMATA decisionmaking. In recent months

transit riders were angered to read how few WMATA board members actually use the bus and rail systems whose funding, whose

operation and whose culture they control. Only with the addition

of a new board member specifically to represent Metro system

users will our needs truly be heard.

WMATA’s structure and organization is determined by the Interstate Compact involving Maryland, Virginia and the District of Columbia. A new WMATA board member cannot be added without

the adoption of substantially similar legislation by the three jurisdictions, followed by an approval from Congress. Frankly, only

amending the U.S. Constitution seems a more complex process

than modifying WMATA’s structure to add one board member. We

hope Congress will help facilitate an amendment to this Interstate

Compact to add a rider representative to the WMATA board. The

New York City Transit System has a board member appointed solely to represent riders, transit riders here deserve no less.

Finally, Mr. Chairman, you have discussed the Metro Funding

Panel report. Upon its release, unnamed officials in some jurisdictions intimated in the press that ‘‘This isn’t the year for increasing

taxes.’’ The issue has been stalled ever since. I understand that a

committee of the Virginia legislature early this week just voted

against any favorable consideration of any funding for Metro this

year.

Mr. Chairman, we are fearful that without some congressional

leadership, there never will be a good year to solve WMATA’s

chronic funding problem. We hope you will consider calling another

Metro oversight hearing later this spring to receive testimony from

Governors Erlich and Warner, Mayor Williams and the chief executives of the other contributing jurisdictions.

If you were to seek their reactions to the Metro Funding Panel’s

report, and whether they would commit to meeting on a date certain with the other involved jurisdictions, your intervention could

offer a tremendous lift to this unresolved important issue.

Again, our organization is grateful to the committee for having

scheduled today’s hearing, and for the opportunity to present our

views. Thank you.

[The prepared statement of Mr. Corbett follows:]

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Chairman Tom DAVIS. Thank you. This won’t be the only hearing

we do on this. If we are serious about an authorization bill, we

have to lay appropriate groundwork, bring the States into this as

well, and some of the other localities, and we will coordinate with

you in terms of how we do this and how we orchestrate it.

Mr. Corbett, let me just start—you had an interesting suggestion

about adding a rider to the Metro board; how is that selected in

New York?

Mr. CORBETT. Maybe Mort can give us more detail, but my understanding is there are nominations made; I think the Governor

of New York selects a person to represent the riders on a panel,

and that person changes over a period of time. But that person, as

I understand it, has the function of representing the rider to make

sure the board is sensitized to people who have daily experience

with the system. We are having internal discussions; maybe Ms.

Norton could give us advice as to whether it should have a voting

representative or a non-voting representative.

Chairman Tom DAVIS. Well, I mean, I think the membership of

Metro is something we need—I have no idea where we go with this,

thinking out loud is dangerous, but to play with it is something

that we might need to look at.

And I think, Mr. Kauffman, your comments, you just said let’s

talk about it, so I don’t want to have a formal discussion here. I

know you do have a number of Metro board members that ride the

subway now—I know Mr. White rides it every day; Dana, you ride

it, other people—so you have other board members, but they are

not there as Metro reps, they represent taxpayers and community

interests and everything else. So I think that is something I think

we look at as we move forward, and we will try to continue the dialog on that.

Mr. White, why should the Federal Government fund Metro in

ways it does not fund other subway systems in the country? This

is our dilemma. We would love to be able to get into the TEA LU—

or whatever the new transportation bill is called, and I know Senator Sarbanes is trying to do that; but the practical effect of that,

because we have asked for additional money for Dulles rail and

other areas out of this, the practical side of that is we are going

into a grab bag where we are going to be limited in our ability to

get it done.

I mean, certainly, Mr. Van Hollen will support it, and I will support it and Ms. Norton, who is on the committee, will support it—

she won’t be able to vote with us on the floor, unfortunately. We

are working on that. But the fact is that is unlikely to happen. And

if you look at traditionally how Metro has been funded, it has been

a completely separate pot, feeling that the Nation’s Capital and the

work force here basically deserve a separate consideration. And if

you look at the three previous Metro authorizations, that is how it

is done.

So, I mean, I will take the money from wherever we can find it,

but I think we are going to need additional authorization that is

going to need some administration buy-in, but we are certainly

going to push it because it is needed; and if we don’t, we are not

even protecting the current investment. But am I missing anything.

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Mr. WHITE. No, Mr. Chairman, I think you put your finger right

on it because it was recognized that we needed a system to serve

the Federal work force in the national capital region. The Congress,

in that recognition, funded specially—outside of any Surface Transportation program—the construction of the system, and actually invested over $6 billion to that end through three separate authorizations of the Congress, independent of the Surface Transportation

program.

So I think the question is, now that the system has matured and

requires reinvestment, is the time appropriate for this separate

view of this from the Congress, in its recommitment with State and

local government, to help keep this investment in a state of good

repair so it can serve the Federal work force and the national capital region in the future, and perhaps outside of the Surface Transportation program.

Chairman Tom DAVIS. Let me ask Mr. Downey, you have had experience in the New York system. If a system gets into a high level

of disrepair, the costs at that point become really astronomical,

don’t they?

Mr. DOWNEY. Just like your house, if you don’t do anything with

it for years, what you then have to do with it is enormous. So the

downward spiral of lack of investment, lack of ridership, safety

issues is clearly a point of a place not to go.

Chairman Tom DAVIS. Well, let me ask you, Mr. Millar, with

your knowledge around the country, are you aware of any instances

where the lack of reinvestment has gone on and they have actually

had to close stations and have undergone that kind of problem?

Mr. MILLAR. Yes, sir, that has occurred. Certainly New York is

an example, Philadelphia is another example; Pittsburgh has a line

that was closed after years of neglect. And certainly, I would second Mr. Downey’s statement, in our experience rehabilitation after

a certain point is just very, very expensive, better to keep up with

it as you go along.

Chairman TOM DAVIS. OK. Thank you.

Mr. Kauffman, let me ask you, in January, the Metro Funding

Panel called for a regional sales tax, deserves a dedicated roll.

Would it be fair to have Federal representation in the WMATA

board if the Federal Government came in with an infusion of cash?

Is that open for discussion, do you think, with the jurisdictions?

Mr. KAUFFMAN. I think it is definitively open for discussion because certainly—looking, for example, Mr. Corbett’s issue of rider

representation, who would that rider be, would that be a D.C.

rider, Maryland, Virginia——

Chairman Tom DAVIS. I think a Virginia rider——

Mr. KAUFFMAN. I would think—who happens to be a Federal employee who is very concerned about parking.

But essentially, Mr. Chairman, wedded to a recognition of a significant and ongoing Federal contribution, I think that a place at

the table would definitely be open for discussion.

Chairman Tom DAVIS. I mean, I think we are going to have to

strategize how we can get this—how we can sell such an authorization, and then how we reach—how the State and locals have to

match, something we have been through before.

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Mr. Downey, let me ask you; should any additional Federal funding be tied to the WMATA signatories’ ability to come up with a

dedicated funding source?

Mr. DOWNEY. That has been tried before, but not successful; I

think it is still worth pursuing.

In the first of the special reauthorizations for WMATA, the Stark

Harris bill of 1977—and I represented the then administration on

putting that together—Congress called for the creation of stable

and reliable funding to match what the Federal Government would

do. It didn’t come to fruition——

Chairman Tom DAVIS. I remember.

Mr. DOWNEY. Virginia did pass one tax, it kind of fell apart in

other places and was later forgotten; but it is not an idea that

should be left——

Chairman Tom DAVIS. Maybe we just need better leverage if we

do. I mean, Mr. Kauffman and I still have the wounds from supporting the last transportation for sales tax when we were overwhelmingly rejected by our constituents. But I think that may have

to be part of this as we move forward. These are just ideas under

discussion, we have a long way to go. This hearing today really lays

a groundwork for where we want to go.

I think we will do another round of questions, but I want to give

the other panel members an opportunity, Ms. Norton, and then Mr.

Van Hollen.

Ms. NORTON. Thank you very much, Mr. Chairman. I appreciate

the testimony we received today.

The chairman just discussed the difficulties of getting tax increases for anything in his jurisdiction, that is the case throughout,

of course, the region. One of the problems, I think, is the jargon

of ‘‘dedicated funding.’’ It doesn’t really mean anything to the average rider or the average person. If I could ask, perhaps, Mr. White

or Mr. Kauffman—Mr. White may be more in touch with the operations or with the capital spending.

If you had a—everybody knows that we pay for Metro anyway,

so everybody knows that the money comes from Maryland, Virginia

and D.C., so what difference would a ‘‘dedicated funding’’ source

mean? In real terms, that people who say don’t raise my taxes can

understand, for example, what would it do for a rider, what evidence would they see of improvement in the system or maintenance

of the system that would make them think that whatever that

dedicated source took from them, directly or indirectly, was worth

it? Can you break down the benefits of dedicated funding over the

kind of funding we already give every year which comes out of our

pockets?

Mr. KAUFFMAN. If I could, Ms. Norton, start at the 30,000 foot

level policy, but also incorporating the rider’s perspective, and then

shift for details to Mr. White.

The real impact of being able to rely on stable and reliable service could be most readily captured by the struggles the District of

Columbia went through not that many years ago when there were

serious funding challenges facing the District and they had to pull

back and then sometimes stop the regular payments, and the painful real impact to riders is in order to maintain funding at the level

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that could be afforded, that a third of the District’s bus service was

cut, discretionary bus service was cut. So by having a——

Ms. NORTON. But what does that have to do with dedicated funding?

Mr. KAUFFMAN. What I am leading to is by having a dedicated

and reliable stream of funds that we can rely on with a new Federal partnership, then the ups and downs of the support we have

seen from municipalities would be flattened out, that impact would

be flattened out because today we are really dependent on the lowest common denominator member contribution and erratic fare increases. By this group acting, it would seriously stabilize the impact for riders in the region.

Ms. NORTON. In other words, you are saying that you can’t count

on any specific amount of money, and that it changes from year to

year?

Mr. KAUFFMAN. It is subject to annual appropriation by member

jurisdictions——

Ms. NORTON. Yes. But is there a formula that says that everybody has to come up with a certain amount of money every year?

Mr. KAUFFMAN. There is an extremely Byzantine formula that allocated both the operating and the capital dollars, and that is—unfortunately, as we focus on that from time to time, that has proven

to be a zero sum game with jurisdictional vetoes at bar. I think at

least three times in recent history, we have tried to readjust the

Rail Funding formula, and we ended up seriously bloodying each

other on the Metro board and did not come to closure.

But I recognize, quite frankly, that there needs to be more parity

with some of the funds the District puts on the table, and perhaps

one of the best ways to address that is in concert with this new

Federal partnership coming forward; and then wedding the two, we

can make some, you know, very painful experiences for our District

funding partners a thing of the past.

Ms. NORTON. Yes, Mr. White.

Mr. WHITE. Ms. Norton, I think you, yourself, almost said it best

in your opening remarks when you said our funding arrangement

is like living from paycheck to paycheck. I think all of us understand in our own personal life what that means when we are living

from paycheck to paycheck; it means you can’t really plan on anything, you can’t plan on anything outside of that which you know

you can absolutely afford and fit into your baseline budget.

I think the second descriptor that is one that is understood in

terms of the analogy of a businessman is what Mr. Downey said,

you know, the arrangement is like having to recapitalize your business every year. If you can’t count on a multiyear set of funding

commitments that you know are going to come your way, how can

you do capital planning? How can you make sure that your physical plan is in a state of good repair and buses are replaced when

they are supposed to be replaced?

Ms. NORTON. Mr. White, they know the money is going to come.

It is going to come. So it is the specific amount of the money? I

mean, it is not going to convince anybody who rides the Metro that

1 day somebody may not, in fact, come—Virginia may not come forward with this amount, even the District of Columbia. You have to

help us out. People have to understand the relationship between

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‘‘dedicated funding,’’ which has absolutely no meaning to the average person, and something they would see at Metro that they don’t

see today.

I am still not sure of what it is that they could see, because you

certainly can’t say—you can talk about being more stable and all

the rest of it, but they know good and well the jurisdictions are

going to come up with a certain amount of money. I do not know

if you are telling me that the amount fluctuates, that the formula

is such that you don’t even know the ballpark amount that each

jurisdiction will give you. I am just not sure——

Chairman Tom DAVIS. Will the gentlelady yield for just a second?

Let me also ask, without dedicating funding, what happens to capital bonds? That did make that part of the question.

Mr. WHITE. I think that is probably one of the most important

parts of the finding from the Metro Funding Panel, which is to say

that you really can’t go out and engage in any thoughtful capital

planning program and one that the market would underwrite without a guarantee and the knowledge that there is going to be an income stream that is going to come in and pay those bills. And obviously, the risk associated with it is the less certain the assignment

of the money, the higher the risk, and therefore, of course, the

more of the debt that one has to pay to do that.

But I think in further answer to Ms. Norton’s question, it really

gets down to—what we are dealing with is deferred investment and

deferred capitalization; but how the rider sees it is the reliability

of the system and the age of the asset that they have. But our

funding arrangement, quite frankly, is getting down on our hands

and knees every year and going to about seven or eight funding

partners and literally begging them for a certain dollar amount.

And if any one of those eight or nine funding partners say, you

know, I have to put my money into schools this year, or public safety, or health and human systems, and I can’t meet your number,

in Mr. Kauffman’s terms, it is a game of lowest-common-denominator policymaking.

In our history over the last decade or so we have had different

jurisdictions who have had different pressures on their budgets at

different points in time, and it is not just one jurisdiction; so the

cycle is at one point the District has a problem, at another point

Virginia has a problem, and a third point Maryland has a problem.

Nobody makes up for the funding partners’ problems that they may

have for those 2 or 3 years, everybody rolls down to the lower level,

which means that we do less.

Ms. NORTON. I will come back.

Chairman Tom DAVIS. Thank you very much.

Mr. Van Hollen.

Mr. VAN HOLLEN. Well, thank you, Mr. Chairman.

I mean, I want to pursue some of these ideas that have been

raised already with respect to how you would structure a dedicated

revenue stream, and also to address the issues Ms. Norton has

been raising with respect to the reliability of the current income

stream.

First, as I gather, the main idea on the table is some kind of regional sales tax, surcharge that would go into a pool. Has any more

thought been given how that would be structured so that the relVerDate 11-MAY-2000 09:37 Apr 11, 2005 Jkt 000000 PO 00000 Frm 00127 Fmt 6633 Sfmt 6633 D:\DOCS\99581.TXT HGOVREF1 PsN: HGOVREF1
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ative contributions that would—the current burdens that are, you

know, today provided to the relative jurisdictions for their contribution to the use of Metro would somehow be reflected in the contributions from the different jurisdictions through a sales tax? I

just do not know to what extent this idea has been flushed out.

Mr. KAUFFMAN. If, perhaps, I could start, and then refer to Mr.

Downey.

Certainly the Blue Ribbon Panel, as was mentioned earlier, mentioned as a key option a regional sales tax; it also offered a litany

of other revenue instruments. One of the things that, on the one

hand, is seen as very valuable is to have the same instrument applied across the region, the other is recognizing that each locality,

each member has a different or best case way of raising some of

those dollars.

I would say that yesterday I specifically asked, along with members of the Federal—the Board of Trade, the Greater Washington

Board of Trade and the Federal City Council, that we should take

that Blue Ribbon Panel and call the regions and the Federal-elected leadership together for a summit this summer to basically begin

acting on those items.

A menu is prepared, and now we are calling folks to the banquet.

Mr. DOWNEY. If I could just add to that.

In the Blue Ribbon Panel report, there are analyses of where the

needs are and where the funds might come from under different assumptions.

The Panel’s overriding view was, though, that Metro service, bus

and rail, is a regional asset. And it is very hard to say that someone who lives in Virginia, works in the District and occasionally

shops in Maryland is paying in only one place for that. So the

premise of our thinking was regionalize it as much as possible. It

isn’t perfect. The numbers show that the burden would shift a little

bit; that could be ameliorated in a variety of ways, but we thought

dedication for the resources that have been described, particularly

for the ability to plan and finance capital, and regionalization really reflected the nature of the service and the nature of the agency.

Mr. VAN HOLLEN. Just to followup on Ms. Norton’s questions

with respect to the reliability to which—with the contributions to

the different jurisdictions have been made over a period of time. I

mean, do you have any—a chart that would show these fluctuations just as part of an argument for why we would have to have

a dedicated income stream? I mean, you were very creative, I

guess, in this latest effort to modernize, where you went to the jurisdictions and you got them to agree to sign—binding contracts to

make their contributions, and the extent to which they are going

to be paying depends on the extent to which the Federal Government makes its contribution.

I guess one issue that obviously arises with respect to the need

for dedicated income stream—because, I mean, look, it is going to

be complicated getting all these different regions and jurisdictions

together to agree on something—is the extent to which the current

system is broken and not working, or whether, after at the end of

the day, people are really coming through with their funding requirements.

Mr. WHITE. Yes. I will try to shed some more light on this.

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I think the biggest effect of what we have had today is all of our

assets have been identified—normal replacement cycles have been

identified for this $10 billion investment that is now worth $24 billion, and there is a road map of what you need to do to keep your

assets in a state of good repair——

Mr. VAN HOLLEN. Right.

Mr. WHITE [continuing]. So that we don’t slip into the scenario

that Mr. Downey explained occurred back in New York in the early

1980’s.

And what has happened thus far is everybody says, that is impossible for us to fund, so we are deferring capital investments.

And we have deferred more than $300 million of things that should

have been done to date, and that number would go over a half a

billion in the next couple of years were it not for this funding

agreement. And quite frankly, it required some sort of forcing function to make this funding agreement happen. Everybody looked at

one another, said we can’t do it, our share is too big, the Federal

Government should be doing more, and we kind of kept on drawing

ourselves into the ground until we have literally said, we have this

rail car contract, it has these options in it, these options expire on

this date, the pricing is enormously attractive if we don’t exercise

these options, and by the way, we can guarantee you that if we

don’t meet this option date it will be too late and our rail cars will

become so crowded that we can guarantee the service will fail.

And it was only that forcing, literally, that gun to people’s heads

that at the last second did people say, all right, well, I have to do

this, and I will do this with great trepidation. And it bought us

about 3 or 4 years of time, and we will be back in the same situation 3 or 4 years from now, looking for the same forcing function

to make something happen.

And I think that is the dilemma that we are facing. The operating side sort of resolves itself, sometimes you raise fares, sometimes you tweak the service, depending upon what people can and

cannot afford on the operating side, but the biggest impact is on

the capital side measured in system deferrals, which catch up to

you and have a huge impact on service reliability.

Mr. VAN HOLLEN. I think you make a very good case for it. And

as we think about this, I think it is also important to find a mechanism maybe for the Federal Government to continue to be a player

going forward. I mean, the question is, after you have this income

stream where the Federal Government says well, you have taken

care of the problem and we no longer have any obligation ourselves, despite the fact the Federal Government should, in my

view, for the reasons you stated, it is a unique system where the

Federal Government has a unique interest in it compared to other

Metro systems. Thank you.

Chairman TOM DAVIS. Thank you. We will do one more round,

I think, of questions.

I have a question—Dana, I will start with you, but anybody can

answer it and step in.

The Brookings report, ‘‘Washington Metro, Deficits By Design,’’

points to the increasing Metro ridership from outlying jurisdictions.

Should we not, therefore, look at expanding the area covered by the

Metro Compact? These same areas want to be included in the defiVerDate 11-MAY-2000 09:37 Apr 11, 2005 Jkt 000000 PO 00000 Frm 00129 Fmt 6633 Sfmt 6633 D:\DOCS\99581.TXT HGOVREF1 PsN: HGOVREF1
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nition of national capital area for DHS funding. If they are going

to compete for these funds, doesn’t it make sense, maybe to expand

the Metro region and share the burden?

Mr. KAUFFMAN. I would not close the door, Mr. Chairman, but,

for instance, we have had a similar discussion with the Virginia

Railway Express board, and time and again, we have seen—particularly with our Fredericksburg line—that far and away, the majority of folks coming there are outside of Fredericksburg, coming

in from even further outlying communities, and many folks are

willing to have the opportunity to get on board that system, but

few are willing to pay. And I guess the real issue is expanded membership could be a fine thing, but membership would have its price.

Chairman TOM DAVIS. I think many will come, but few will pay.

And the outlying jurisdictions are the most reluctant to pay. It was

just on the bond referendum where the transportation money

would have gone in the outlying jurisdictions, and they were the

ones that voted most overwhelming. That is, of course, what drives

a lot of people to move further out is the tax burden.

Mr. KAUFFMAN. And one of the things, also, if I could just add

to that, Mr. Chairman, was certainly the gas tax revenue issues;

that was one of the captured items that prompted a lot of the interest on the part of some of the outlying counties with VRE. I do not

know how, again, any tax instrument would be viewed since any

form of tax instrument is often viewed as anathema the further out

you go.

Chairman TOM DAVIS. That’s right. On the other hand, they are

asking Fairfax to pump a lot of money into the system and provide

parking places for commuters from other counties that are coming

in here; and you get taxed to the max, I mean, it is just—OK.

Any other comments on that? Dick, I do not know if you have

any comments. I guess you would probably like as many payers as

you can get, wouldn’t you? It is an easy shot for Dana on this because he is from Fairfax; I have Prince William in my district, too,

so I was very careful how I word it.

But I think we have to understand here that it is affecting—a

lot of people are using this from outside of the jurisdictions that

are paying for it.

Mr. WHITE. And it is getting bigger and bigger as the commutes

go longer and longer. I mean, the Washington Post story recently

has clearly vividly illustrated that people in this region seem to

have a tolerance twice as much as the rest of the citizens of our

country to live further away from their jobs and to spend more

time commuting to those jobs, which means, in our case, we are

getting more and more of our ridership coming from outside of our

Compact jurisdictions, which means that all of our Compact jurisdictions are subsidizing, to some extent, the citizens that live in

other counties outside of the Compact; and there is no current way

of capturing that other than through the fare revenue itself, but

there is no subsidy way to capture that phenomenon which is growing.

Chairman TOM DAVIS. And, in fact, your fare revenue capture is

one of the highest in the country, isn’t it, in terms of recovery rest?

Mr. WHITE. We are the second highest to New York City, yes.

Chairman TOM DAVIS. Mr. Millar, any comment on that?

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Mr. MILLAR. If I may make a couple of comments on this.

First, the experience around the country is the larger the taxing

area gets, you get some unintended consequences, they are logical,

but unintended. The argument today I understand certainly, people

come from there, they get on here, they go there, they ought to be

taxed there. Well, everybody else who lives there and doesn’t make

that trip then says well, if I am paying that tax, I ought to get

some additional amount of service. And we have many examples

where the regional transit systems have outrun their tax base,

when originally it was all done for the best of intentions of including everybody in it. So we certainly need to be very careful about

how that goes.

The other thing one might think about is the States and the role

of the States in this. If truly the commuters’ shed grows at least

as far as it is from my understanding—which is very, very far now

from the core counties and the District—many places have looked

at what the States might do in that regard and have the States act

as a surrogate, in essence, for these other outlying—so you get

combinations where the State puts in an amount of money, the core

counties put in an amount of money, and you do it in that fashion.

Chairman TOM DAVIS. Right. Well, that is a problem our State

legislators are going to have to face up to.

Let me ask you this, Mr. Millar, too: You talked about the Americans With Disabilities Act requirements for paratransit. What is

that costing the system? Is there a more effective way to do it? And

are there any ongoing Federal efforts to coordinate transportation

services offered by Human Service programs?

Mr. MILLAR. The cost of complimentary paratransit is usually the

fastest growing part of a major transit system’s budget over the

last 10 or 15 years. I had some statistics in my testimony. In general, now we are spending over 8 percent of the operating cost nationwide on that service; very important service for the people who

use it and the communities in which they live, to be sure, but a

nightmare for the public transit budget. When you take it and you

begin to look down at what is going on with individual transit systems, you see costs that have been rising in excess of 100 percent.

Well, there is simply no tax base of—no local tax base, no way that

kind of cost can overrun a budget. Now, yes, we are in the early

years of that, so we are probably on a steeper slope than we will

be, say, if we were having this discussion 5 years from now, but

still, it is a major and growing part of the budgets.

Chairman Tom DAVIS. My last question: Does ADA require curbto-curb service?

Mr. MILLAR. Yes, sir, it does.

Chairman TOM DAVIS. So that is basically an unfunded mandate.

Mr. MILLAR. Yes, sir, it is; absolutely.

Chairman TOM DAVIS. So we have to look at ourselves on that.

That is also this jurisdiction, though, as we look at that, and that

is also an issue.

OK. Thank you. I think you have clarified it.

Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman.

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I want to quickly get through a set of questions. The reason I

pressed the—I got only one question last time because I am interested in solving a problem.

Don’t expect elected officials to solve the problem of dedicated

funding, they are born cowards, they are not going to get up and

say raise anybody’s taxes. So we have to get at ways—and I have

looked at some of what you have recently done; for example, it was

either in your testimony or I may have read it before I came here,

that 58 percent—that is almost 60 percent of the people in this region—say we need a ‘‘new way to raise funds for Metro.’’ I take

that as we are part of the way there.

You haven’t done a fare increase in a long time. I am going to

say to you, Mr. Corbett, the only problem I have with an actual

voting—I am not sure what that does, one person—but the only

problem I have with that—and this may sound strange coming

from me—is if anything, this system needs a regional constituency

for hard issues. And it is easy enough to represent the riders—I

love to throw eggs, you know, at the system; and it seems to me

that person, for example, if the notion of a fare increase came up,

hey, this guy or woman would try all they could to say don’t do

that, you haven’t done it for 8 years, or whatever.

Please don’t take me to say I believe in fare increases, the poorest people in the region live here and would be hurt most. But I

know this much, if you do what PEPCO is now doing, an 18 percent rise, because we have not had a rise in PEPCO for so many

years, you don’t help the poor people in my region.

So I have an open mind on that. I like what they have done, have

you come and speak at the board meetings. I am not sure what

more harangue on the board would do with a—I am in the Congress of the United States, and I see what people who operate from

the narrows of constituency, I see what they get us. Tom Davis and

I try, in the way we approach issues, to step back and say—sometimes one of us has to give up and the other one not; so I just put

that on the record.

Let me cite to you a poll that came forward, reported in the

Washington Post, that most people prefer tolls to taxes. You know

what? The Washington Post gave them a choice; this had to do

with roads, and it said tolls or taxes. If you had said do you want

tolls, 98 percent of course not; if you had said to taxes—so we are

not framing the issue well.

Has, for example, Metro ever done a survey to find out whether

or not people would prefer tax increases—fare increases, rather, to

fund more cars or further delays? I mean, you have to put the real

alternatives before people. Or have you ever asked in any survey

whether you would prefer a dedicated sales tax or further delays?

I mean, have you done any surveys? You are going to have your

public coming in one way or the other, what surveys have you done

to indicate that people have preferences one way or the other, the

way we now know they have preferences for tolls over taxes when

it comes to roads?

Mr. WHITE. Ms. Norton, I don’t think the Metro organization

itself has done those kind of surveys, I mean, we certainly do a lot

of surveys in terms of customer satisfaction, measurements and

things of that measure, but we have not—certainly historically—

129

taken the step to kind of present those kinds of choices because

Metro does not have its own funding source, we are a product of

the State and local governments that fund us——

Ms. NORTON. I understand; I understand, Mr. White; I realized

that the answer was probably no.

You hear me giving you a suggestion. This does not have to do

with funding, this has to do with grooming the public fairly to understand what their alternatives are, and I have to tell you, I don’t

think the public has any idea. We are going to try to do our job,

so are you. I am going to have to try to quickly get through this

set of questions, unless somebody else has something to add there.

Mr. WHITE. Mr. Millar, I think, has a good national perspective

on it.

Mr. MILLAR. Yes. To your point about people understanding what

their choices are, I think there are lessons to be learned from other

parts of the country.

On November 2nd, when we were re-electing the President, when

many folks were arriving in the Congress on a no-tax general view

of life, voters around the country approved 24 of 31 ballot initiatives that were presented to raise their own tax to fund public

transportation systems. So we have learned some lessons about designing good programs, about bringing the public into that design,

about helping, educationally, for the public to understand what the

benefits are, and now delivering to the public those benefits. One

of the key parts of the dedicated funding is the ability to actually

follow through on the promises that are made. So I would be happy

to work with them on that.

Ms. NORTON. All I can say, Mr. Kauffman and Mr. White, is you

need to have somebody do a serious analysis of how they were able

to do what nobody in this region—it may have something to do

with the fact that we are a multi-state region, I don’t know if that

contributes to it, I won’t dwell on that—but we need to understand

how come that happened across the country, particularly in this atmosphere, no-tax atmosphere.

And again, I go back to the notion that nobody understands what

you use the money for. Now they know how to complain, Mr.

Corbett can tell you, about elevators that don’t run, escalators that

break down, too much crowding; we love that. And you deserve it

if you don’t come back at people with some way for them to understand why that occurs.

Could I ask, what is the percentage of Federal funding that is

now in—goes to Metro, approximately? How much Federal funding

already goes to Metro as a result of simply the TEA 21—I guess

it would be—type funding.

Mr. WHITE. I will try and answer that question, Ms. Norton, in

a few different ways by referring to the charts there.

In our current budget, capital and offering in the Federal contribution is 13 percent, and that is largely because the Federal

Government does not participate in weighing in the average

jurisdiction——

Ms. NORTON. Is that more or less what the contribution would

be in the average jurisdiction?

Mr. WHITE. No.

Mr. MILLAR. No.

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Ms. NORTON. Mr. Millar.

Mr. MILLAR. In my experience, the customers here pay a much

higher percentage than is normal, I would say, in that regard.

Ms. NORTON. I am asking about Federal funding.

Mr. MILLAR. In Federal funding, in the large systems there is

very little Federal funding for operations, there is a great deal of

funding for capital expenditure; and again, it varies all over the lot,

depending on where they are in their cycle.

Ms. NORTON. Mr. White, what percentage of the passengers for

Metro originate in D.C.?

Mr. WHITE. The chief financial officer has given me a note, and

it says 45 percent of our bus and rail riders are D.C. residents; and

that is largely because we have a very extensive bus network; and

of course, the District doesn’t even have a school bus system, so we

provide some of those services for the District residents; but 45 percent in combination.

Ms. NORTON. We are very proud of the New York Avenue subway. I was able to get some funding here in the Federal Government, and D.C. stepped right up to the plate, and the private sector

recognized the benefit. Does this model have any future elsewhere

in this region?

Mr. WHITE. I hope so, Ms. Norton, because I agree with you, I

mean, it was very, very innovative and very, very successful. In

this instance, there was a partnership that came together that recognized there is a special benefit to be made by putting that infill

station in there to help that land realize its potential and the community to realize its potential. The landowners were willing to tax

themselves through an assessment, about one-third of the cost of

that station, recognizing they are going to benefit from having a

Metrorail station put down there. The District of Columbia contributed another third share, and a special appropriation of the Congress contributed another third share, at least those were the original shares initially.

So this motion here, I think it is a notion of value capture, and

I think it is something that needs to be talked about more in the

future, is that there are certain people in our metropolitan area

who benefit from a large scale capital investment, and perhaps

there needs to be some more value capture around that. And another notion of that, and one that has been talked about a little bit,

is maybe those employers who have—who are in office buildings

that are within proximity of Metrorail stations, maybe there should

be some additional incremental assessment recognizing the extraordinary benefit that they receive for being located that close to a

Metro station.

So the notion of value capture and private benefit I think is

something that needs to be explored more in the future, and is

something that came out of the New York Avenue station.

Ms. NORTON. Finally—I do not have any other questions—I note

that in Mr. Kauffman’s testimony, he said there were no obvious

substantive or geographical expansions that are necessary at this

time. I mean, when you hear about all the congestion on the road,

what you are saying is you can’t even begin to think about bringing

some of those folks in by Metro; you certainly can’t mean that they

are not necessary, with people hanging on the roads forever.

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And finally let me just say, in terms of how—I have mentioned

the Metro, the New York Avenue subway, and I am not sure—obviously that works for expansion, but I want us to think about it

even as to whether or not it has some application for the system

as it is now operated. And I do not know what the win-win there,

but I wish we would think about that model, using our powers of

analogy, see if there is some way to do something similar. The Federal Government, I mean, we were clear to the Federal Government, you need this stop because you need this land nearby. If we

are not expanding, we need to think of how Tom and I could

present this to the Federal Government so that they would understand, as they did with the New York Avenue Metro subway, that

they were getting something out of it.

And let me tell you what I think the real model in how to operate

really is. The District of Columbia, in building this subway stop,

contributed $2.1 billion, more than any other part of the jurisdiction. How did they do it? It transferred interstate highway funds

in order to do it, and that meant that it was making a larger contribution than Maryland or Virginia toward the construction of the

Metro rail system. We knew what we had to gain, it was absolutely

clear to us, we knew that highways should not be the wave of the

future, particularly in the District of Columbia.

They have become the wave of the future since 1967, so we have

to somehow figure out what to do with the arrangement of funds

and how to keep this competition for funds between highways and

Metro from continuing so that people really do do what they want

to do, which is to take Metro if they can only find a way, one, to

get Metro out there, and two, to get on a Metro car, even if they

were within the Metro area.

Thank you very much, Mr. Chairman.

Chairman TOM DAVIS. Mr. Van Hollen.

Mr. VAN HOLLEN. Well, thank you, Mr. Chairman, again; thank

all of you for your testimony today.

As I understand what you are saying, compared to other Metro

systems in the country, in the WMATA system, riders generally are

paying more. The Federal Government is paying more for the reasons we have stated historically. So the one component in the equation that is paying less relative to other Metro systems is the local

jurisdictions; is that right, in terms of their input?

Mr. WHITE. I don’t know if I would go quite that far, Mr. Van

Hollen.

In terms of—I think the distinction here is the extent to which

State and local governments empower their transit system—in our

case, Metro—to get the first dibs on money without having to put

it in competition with other needs assessments that State and local

governments do through their annual appropriations process. That

is where we come up short. And we are shorter than anybody else

in the country, and that is a major limitation. But the extent to

which we do get contributions from State and local government,

they are pretty sizable, and actually over the last set of years, are

higher than what their historical proportion has been to the funding shares of the system.

Mr. VAN HOLLEN. Right. I understand. I am just trying to compare it relative to other systems in the country, not historically

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within this system. If the riders here are paying relatively more

and the Federal Government is paying more, it just seems to me

that the other systems—somehow the local jurisdictions are paying

less compared to other regions—as a percentage, not that they are

not paying a lot.

Let me get on to the issue of funding and look at alternatives to

dedicated funding source; and I think the proposal you floated is

a very good starting point. But as you know, it is also complicated

by the fact that we are talking about multi jurisdictions and a

number of other issues.

Is there any way to essentially get the different jurisdictions to

make a legally binding commitment to the WMATA system for a

particular share of capital costs going into the future that you

could hold them to legally, despite their annual appropriations

process, and let the jurisdictions then figure out on their own how

they go about funding it? Maybe they will fund it out of their existing allocation, maybe they will fund it out of, you know, additional

dedicated revenue source they find, maybe they will add it out of

general revenue; but is there a way to do that so that you can hold

them legally to that commitment? And then you get everybody together and say, OK, we are on board.

Mr. WHITE. We did find that way recently in the form of the

Metro Matters funding agreement, where we have a legally binding

6-year commitment where everybody has a share, without there

being a specific identification of how each jurisdiction is going to

come up with its share, but they put their signature to a legally

binding agreement that is subject to the annual appropriation process. So yes, Mr. Van Hollen, that is an option.

I think the Blue Ribbon Panel—and Mr. Downey might want to

comment on this—they recognize it as certainly not the most preferred option. The most preferred option, and the one that they believe has the greatest opportunity for success, is some sort of regionally implemented funding mechanism that gets applied and

raises money regionally, but they are also quick to identify there

are other options to that, including the one that you said, sir,

which would be some sort of subregional allocation, and then left

up to each of those jurisdictions to figure out how to honor that.

Mr. DOWNEY. I would only add to that that the panel also felt

whatever was committed to regionally ought to be matched federally.

Mr. VAN HOLLEN. All right. Thank you.

Mr. Chairman, I don’t have any more questions. Thank you.

Chairman TOM DAVIS. Well, thank you very much. Let me just

thank this panel. I think we have laid an important groundwork

today as we move forward with what I hope will be an authorization bill we can present. We hope to be able to call on you for your

guidance and further information as we move forward. This has

been an important hearing——

Ms. NORTON. Mr. Chairman, could I——

Chairman TOM DAVIS. Yes, Ms. Norton.

Ms. NORTON. There was one question I didn’t ask. You and I are

on the Homeland Security Committee. I wondered how much additional money has had to be put in the system for homeland security.

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And Mr. Chairman, I think that one option for us particularly,

since homeland security money is used largely for capital funding,

may be to make—to draw to a higher level of the Federal Government not only the money that is being spent because of post-September 11 problems, but the money that simply must be spent on

security, capital funding security matters for Metro for the foreseeable future. But anyway, what is the number, if you have one?

Mr. WHITE. You make a good point, Ms. Norton; and I will give

the local perspective, I know Mr. Millar might be able to add in,

weigh in a bit on the national side as well.

We did have some good success initially, immediately in the

aftermath of September 11 where we were able to receive a—special appropriations of the Congress through several separate committees of $39 million, and then the administration released $10

million of finding that was under its control for a $49 million investment that helped us to shore up some of the areas of vulnerability that we had in the system. However, the income stream

that has come out of the Department of—that was before there was

a Department of Homeland Security, and when the Congress created the Department of Homeland Security, since then the funding

sources that have come out have been extremely small in terms of

the amount of money that finds its way into transit. Metro has only

received about $7 million of homeland security funding over the

first two appropriations cycles.

So clearly, transit has been taking a seat nationally—taken a

back seat nationally as a matter of priority as to how the Federal

Government makes its investment into transportation security; and

there is clearly a lot more that needs to be done. We have a whole

lot of identified needs. The need for our capacity, I think as implied

in your question, Ms. Norton, is related to homeland security.

Chairman TOM DAVIS. I mean, the problem with homeland security, too, is that the high-target areas really don’t get the appropriate amount of money; this money is spread out and it becomes

a congressional grab bag. So, you know, Bullfrog Corner will say

we need money for our first responders here where it’s—probably

terrorists have never heard of it, and some of the other areas suffer. But that is what happens with congressional funding formulas,

as you know.

Mr. WHITE. And the money that the Congress has appropriated,

largely it has been left to the discretion of the Department of

Homeland Security to kind of allocate it out, at least the transportation component or the transit component of it. And thus far it

has gone out on a formula, and it has had the—the consequence

of what you say, Mr. Chairman, is it kind of goes out to everybody

and it is not really risk-based. And clearly everybody needs a baseline of support; all of our transit systems across the country have

to have some minimum baseline of support and capability, but

there are systems that have higher risk, and so far that hasn’t

been reflected in funding decisions.

Chairman TOM DAVIS. Let me just end with this question I will

ask you, Mr. White, but if anybody wants to answer it.

I mean, ultimately to be successful in getting additional money,

the taxpayers have to say, what assurances can we get that the

money is going to be well-spent? That is ultimately the burden that

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we have whenever we go out to our voters and taxpayers and ask

them for additional money.

In this case, in going to Congress for additional money, they are

going to say what additional steps have we taken. We have talked

about the representation issue, in fact we may have some presidentially appointed, Federal members aboard, it could be riders or

whatever; but ultimately, that is the question you are going to have

to be able to assure Members of Congress and voters, who will both

be participating in this.

Mr. WHITE. I understand, Mr. Chairman; it is the right question

for people to ask. There is an issue of accountability that we must

be able to demonstrate that Mr. Kauffman, in his opening remarks,

I think really stressed that issue. Both he and I covered in our testimony the litany of things that we are doing to respond to, quite

frankly, a very tough year for us last year, I think we are—at the

table here, those in our organization, we are the first ones to admit

we did not have a good year last year, and there were things that

happened that draw questions to the service we are providing to

our customers. I think it has stabilized and become better lately;

we certainly hope that is a byproduct of the corrective action plans

we are putting in.

Certainly when it comes to money and the extent to which anybody is considering making extraordinary allocations of money,

there needs to be a contract associated with that, there has to be

a contract of accountability so that it should be absolutely clear

what the money is going to buy. And that was one of, I think, the

power of the Blue Ribbon Panel’s report is it was very specific, I

mean, it was very specific about what an investment would get,

and it identified over what period of time that investment would

be delivered.

So I think we, in the Metro organization, would be the first ones

to salute the extent to which anybody is willing to put additional

funding on the table to make it very—as a part of a contract, this

is what we are going to deliver to the citizens, this is what people

can expect to get so there is no over-expectation or under-expectation of what that investment is going to bring.

Chairman TOM DAVIS. Well, thank you all very much. Mr.

Corbett, thanks for your perspective on this. Mr. Downey, you

bring a wealth of knowledge with you, as you do, too, Mr. Millar.

Mr. White, it is good to see you back. And Dana, good accounting

for yourself in your first appearance, and we hope to see you again.

Mr. Corbett wants to get the last word here.

Mr. CORBETT. And it will be a brief one.

We very much, as a panel, appreciate this hearing. In watching

Mr. Kauffman and all his predecessors, they are absolutely lucid on

the need for a funding source for Metro. This panel of witnesses

cannot provide the solution to you, and that is why we think we

need a bigger room with different players, and we encourage your

participation in that process.

Chairman TOM DAVIS. Thank you very much. We will give you

the last word. The hearing is adjourned.

[Whereupon, at 12:01 p.m., the committee was adjourned.]

[Additional information submitted for the hearing record follows:]

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