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THE WASHINGTON METROPOLITAN AREA

TRANSIT AUTHORITY

HEARING

BEFORE THE

SUBCOMMITTEE ON FEDERAL WORKFORCE,

POSTAL SERVICE, AND THE DISTRICT

OF COLUMBIA

OF THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

FIRST SESSION

APRIL 29, 2009

Serial No. 111–2

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

EDOLPHUS TOWNS, New York, Chairman

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERRY E. CONNOLLY, Virginia

ELEANOR HOLMES NORTON, District of

Columbia

PATRICK J. KENNEDY, Rhode Island

DANNY K. DAVIS, Illinois

CHRIS VAN HOLLEN, Maryland

HENRY CUELLAR, Texas

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

PETER WELCH, Vermont

BILL FOSTER, Illinois

JACKIE SPEIER, California

STEVE DRIEHAUS, Ohio

——— ———

——— ———

——— ———

DARRELL E. ISSA, California

DAN BURTON, Indiana

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

TODD RUSSELL PLATTS, Pennsylvania

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

BRIAN P. BILBRAY, California

JIM JORDAN, Ohio

JEFF FLAKE, Arizona

JEFF FORTENBERRY, Nebraska

JASON CHAFFETZ, Utah

AARON SCHOCK, Illinois

RON STROMAN, Staff Director

MICHAEL MCCARTHY, Deputy Staff Director

CARLA HULTBERG, Chief Clerk

LARRY BRADY, Minority Staff Director

SUBCOMMITTEE ON FEDERAL WORKFORCE, POSTAL SERVICE, AND THE DISTRICT OF

COLUMBIA

STEPHEN F. LYNCH, Massachusetts

ELEANOR HOLMES NORTON, District of

Columbia

DANNY K. DAVIS, Illinois

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio, Chairman

WM. LACY CLAY, Missouri

GERRY CONNOLLY, Virginia

JASON CHAFFETZ, Utah

JOHN M. MCHUGH, NEW YORK

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

BRIAN P. BILBRAY, California

WILLIAM MILES, Staff Director

(III)

C O N T E N T S

Page

Hearing held on April 29, 2009 .............................................................................. 1

Statement of:

Graham, Jim, chairman of the Board of Directors, Washington Area

Metropolitan Transit Authority; and John B. Catoe, Jr., general manager, Washington MeTropolitan Area Transit Authority .......................... 9

Catoe, John B., Jr. ..................................................................................... 14

Graham, Jim .............................................................................................. 9

Lew, Helen, inspector general, Washington Metropolitan Area Transit

Authority; and Matthew J. Welbes, Acting Deputy Administrator, Federal Transit Administration ......................................................................... 46

Lew, Helen ................................................................................................. 46

Welbes, Matthew J. ................................................................................... 56

Simpson, Craig, representative Amalgamated Transit Union [ATU] Local

689; Diana Zinkl, Chair, Riders’ Advisory Council, Washington Metropolitan Area Transit Authority; and Benjamin Ross, president, Action

Committee for Transit .................................................................................. 75

Ross, Benjamin .......................................................................................... 119

Simpson, Craig .......................................................................................... 75

Zinkl, Diana ............................................................................................... 88

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

Catoe, John B., Jr., general manager, Washington MeTropolitan Area

Transit Authority, prepared statement of .................................................. 16

Graham, Jim, chairman of the Board of Directors, Washington Area

Metropolitan Transit Authority, prepared statement of ............................ 11

Lew, Helen, inspector general, Washington Metropolitan Area Transit

Authority, prepared statement of ................................................................ 48

Lynch, Hon. Stephen F., a Representative in Congress from the State

of Massachusetts, prepared statement of ................................................... 4

Ross, Benjamin, president, Action Committee for Transit, prepared statement of ........................................................................................................... 121

Simpson, Craig, representative Amalgamated Transit Union [ATU] Local

689, prepared statement of .......................................................................... 78

Welbes, Matthew J., Acting Deputy Administrator, Federal Transit Administration, prepared statement of ........................................................... 58

Zinkl, Diana, Chair, Riders’ Advisory Council, Washington Metropolitan

Area Transit Authority, prepared statement of ......................................... 90

(1)

THE WASHINGTON METROPOLITAN AREA

TRANSIT AUTHORITY

WEDNESDAY, APRIL 29, 2009

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON FEDERAL WORKFORCE, POSTAL

SERVICE, AND THE DISTRICT OF COLUMBIA, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m. in room

2154, Rayburn House Office Building, Hon. Stephen F. Lynch

(chairman of the subcommittee) presiding.

Present: Representatives Lynch, Bilbray, Clay, Connolly,

Kucinich, Norton, and Van Hollen.

Staff present: William Miles, staff director; Marcus A. Williams,

clerk/press secretary; Jill Henderson, detailee; Tyler Pride, intern;

Dan Blankenburg, minority director of outreach and senior advisor;

Adam Fromm, minority chief clerk and Member liaison; Howard

Denis, minority senior counsel; Daniel Epstein and Johnathan

Skladany, minority counsels; and Alex Cooper, minority professional staff member.

Mr. LYNCH. Good morning. The Subcommittee on Federal Workforce, Postal Service, and the District of Columbia oversight hearing will now come to order.

I want to welcome Ms. Holmes Norton and Mr. Kucinich, members of the subcommittee, hearing witnesses and all those in attendance.

The purpose of today’s hearing is to examine the Authority’s current financial condition and internal controls, proposed operational

and service changes, safety and security initiatives, and to update

the subcommittee on pending capital improvements at WMATA

and all related funding.

The Chair, the ranking member and the subcommittee members

will each have 5 minutes to make openings statements, and all

Members will have 3 days to submit statements for the record.

Hearing no objection, it is so ordered.

Ladies and gentlemen, again let me welcome you to the subcommittee’s first District of Columbia-related oversight hearing of

the 111th Congress. As mentioned earlier, the purpose of today’s

hearing is to explore and examine a host of issues currently confronting the Washington Metropolitan Area Transit Authority in its

effort to efficiently operate its Metrorail, Metrobus and Metro Access transit services.

It has been a little over 4 years since we on this committee have

had a Washington Metropolitan Area Transit Authority-focused

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hearing, and while much has improved for what is known as America’s transit system, a few systemic challenges continue to remain,

and we will try to address those today.

Although today’s hearing won’t bring a final resolution to many

of the Transit Authority’s core questions of pressing concern, the

hearing is intended to continue and in some respects renew the dialog between WMATA and regional partners and the Federal Government. As the primary provider of mass transit throughout the

Nation’s Capital and surrounding area, WMATA’s operations are

intricately intertwined and linked to the continual functionality of

the Federal Government.

As many of you are aware, Metrorail and Metrobus are responsible for the transportation of nearly 70 percent of the area’s Federal workers to and from work on a daily basis. The transit system

plays a critical role in our emergency preparedness efforts, and it

is often heavily relied upon by the Federal Government for publicly

supported events such as the recent inauguration of our new President or other National Mall celebrations.

In fact, the mere creation of WMATA by way of the 1967 Interstate Compact was in many ways based upon the rationale that the

large presence of Federal Government activities and the attraction

of the Nation’s Capital as a premier tourist destination required

the need for the development of a reliable public transit system for

the Nation’s Capital and its region.

Fast forwarding to today, WMATA has blossomed into a robust

and leading transit agency in charge of operating the second largest rail system and the fifth largest bus network in the country,

covering about a 1,500 square mile area. WMATA now operates a

fleet of some 1,500 buses serving over 330 routes and provides Metrorail services to 86 stations on 5 rail lines and 106 miles of track,

much of which has been constructed using Federal dollars.

While these facts and the regions continued reliability on Metrorail and bus and its paratransit service points to the access of 30

plus years old transit system, WMATA continues to face serious financial, operational and now post-September 11th security challenges. To that end, it is my hope that today’s hearing will provide

the subcommittee with the most current development’s in

WMATA’s operations, finance, safety initiatives, and infrastructure

improvement efforts.

Whether it is a frank conversation on the remaining facets of

WMATA’s dedicated funding effort or on management’s proposed

Metrobus service cuts and route adjustments, today’s oversight proceedings are purely meant to provide us as the national capital

area stakeholders, and the opportunity to discuss and explore common solutions to a common asset, the Washington Metropolitan

Area Transit Authority.

I would like to thank those who have agreed to testify today, and

I understand some of our witnesses obviously didn’t take the Metro

because they are not here yet. I look forward to a productive, but

not necessarily lengthy hearing, as the subcommittee has been

made aware of your various afternoon commitments of our witnesses.

And also I am sure most are aware there is a special joint Republican-Democratic caucus regarding the ongoing swine flu epiVerDate 11-MAY-2000 15:11 Jul 08, 2009 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 U:\DOCS\50349.TXT KATIE PsN: KATIE
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demic that all Members have been asked to attend. So when that

begins, obviously the attendance here will decline. But necessarily,

we will push on and try to address all of the issues that we would

like to address in this hearing.

Again, I thank you. Normally, I would yield to the ranking member, Mr. Chaffetz from Utah, for his opening remarks. He is also

a member of three other committees that are currently meeting as

well, but he has been kind enough to allow us to waive his statement and to press forward with testimony.

At this point, I think it might best serve us because Mr. Graham

is not here, and he is on our first panel, if I might defer to my colleagues for their opening statements. It might be a good use of our

time.

I would first like to recognize Ms. Eleanor Holmes Norton, who

was one of the driving forces to have this hearing so early in our

proceedings, and who has been an outspoken advocate for her constituents in their reliance on the Metrorail service and bus service.

So I now recognize Ms. Eleanor Holmes Norton for 5 minutes.

[The prepared statement of Hon. Stephen F. Lynch follows:]

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

for your early hearing on WMATA because it signifies the recognition of the subcommittee and the full committee of how dependent

we are as a Federal Government on WMATA and on hearing of its

concerns in a time when all facilities of every kind are stretched.

I want to congratulate Mr. Catoe to his face again because Mr.

Catoe, you and your employees performed magnificently during the

inauguration. Not only did you provide services at unheard of

hours, but when I asked you to even go beyond the call of duty

when you had stretched as far as you could go, you and your employees did so. The entire country—we saw 2 million people come

here—could not have had this inauguration at all without you, and

we are very proud of the work you have done, sir.

The bill that we strove so hard for, the Passenger Rail Improve- ment Act I think we called it, for $1.5 billion over 10 years for

WMATA seems to me has been vindicated by your performance,

even without a penny of that money flowing, with huge strain on

its facilities. At one point, Mr. Catoe thought he simply couldn’t go

much further in keeping hours beyond the expected hours simply

because of the strain on capital facilities, because none of that

money has flowed, and even when it flows it will have to flow a

long time before it makes up for what has been denied.

Mr. Chairman, I am also a member of the Homeland Security

Committee, and I must say that quite apart from the daily activities of the Federal Government, we now have an additional reason

why we cannot do without WMATA. If nothing else is running, as

we learned when the FEMA shut down downtown a few years ago,

WMATA simply has to be running. And we at Homeland Security

pay special attention to WMATA as well.

Now that you have shown, Mr. Catoe, what you can do, a lot of us are trying to get that first installment in the $1.5 billion, $150

million due year by year. Somebody tried to hold us up, I think,

saying that if you don’t do something, we won’t do something. Hey,

we don’t have to do anything.

And what Members had to do to get this bill in the first place,

and what we are going to have to do even if the President puts it

in his budget, to keep it in there, I don’t even think you want to

know about. I just hope that we are able during these hard times

to get that first $150 million.

I am very concerned, as I am sure the entire region is, and while

this is seen as a service here in the Nation’s Capital, it stretches

far and wide into the region. I am concerned about the layoffs and

the bus service issues that have arisen, notwithstanding the Recovery Act funds. And I will be most concerned to see why those Recovery Act funds have not been more helpful in that regard.

Again, I can’t thank you enough, Mr. Chairman, for the way in

which you have moved forward early so that we can make sure

that not only the trains keep running on time, but that the Federal

Government keeps running because the trains are running on time.

I thank you very much, Mr. Chairman.

Mr. LYNCH. Thank you very much.

The Chair will now recognize the gentleman from northern Virginia, Mr. Connolly, who also his constituents as well, he has a

long history of dealing with these issues on behalf of the families

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of northern Virginia and is extremely familiar with all the issues

confronting WMATA going forward. So I recognize the gentleman

from Virginia for 5 minutes.

Mr. CONNOLLY. Thank you. And I can’t thank you enough, Chairman Lynch, for holding these hearings on the Washington Metropolitan Area Transit Authority.

Though many may not be familiar with the acronym WMATA, it

is absolutely essential to the operations of the Federal Government.

On average, 120,000 Federal employees commute to work on metro,

representing 40 percent of peak ridership. Fifty-six thousand of

those employees live in my district, many of whom commute into

the Pentagon or Washington, DC, on the Orange, Blue and Yellow

lines of Metrorail.

This transit service is essential, Mr. Chairman, to the quality of

life of suburban residents in our region. If not for WMATA’s transit

system, it would be necessary to construct an additional 1,400 lane

miles of highway and 160,000 parking spaces to serve commuters

who otherwise now use Metro.

This transit service is also essential to protect regional air quality and reduce greenhouse gas emissions. Without transit service

provided by WMATA, it would be impossible to meet Federal clean

air standards in this region, which would result in the region losing

transportation funding. The decline in ground level ozone that we

have achieved in the region has been enabled by the ability of area

residents to avail themselves of rail or bus transit and by

WMATA’s investment in compressed natural gas, ultra-low sulfur

diesel and hybrid electric technologies to reduce smog-creating pollutants from buses.

With respect to climate change, Metro eliminates 1 million tons

of greenhouse gas emissions annually by eliminating vehicle trips,

the equivalent of saving 75,000 gallons of gasoline.

When the region embarked on construction of the 106-mile Metro

system, the Federal Government, as you indicated, Mr. Chairman,

paid 80 percent of the construction cost. For the extension of the

Silver line, however, to Dulles Airport, the premier airport for the

national capital region, the Federal Government will only pay 16

percent of those project costs. The rest of it is borne by the State

and local governments.

It is scandalous that the Federal Government provides a pittance

for transit service to the national capital region. Extension of transit service is essential not only for the continued operation of the

Federal Government, including provision of transportation options

for federally employed commuters, but also for the region’s continued economic prosperity.

For the past 8 years, we have had to work with an administration that appeared to be ideologically opposed to funding extensions

to transit systems. This ideologically driven obstruction has been

harmful to our region and others. With a new administration and

a pending transportation authorization bill, I believe that we can

jump start extensions to transit service here in the national capital

region and around the country, with the Federal Government contributing its fair share.

I greatly appreciate the work of my predecessor and my colleagues, including Ms. Norton, in passing Title VI of the Passenger

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Rail Investment and Improvement Act, which provided $150 million in dedicated funding for Metro, being matched by Virginia,

Maryland and the District of Columbia. Metro is the only major

transit system in the United States without a dedicated source of

funding.

In addition to increasing funding for transit, we need to examine

ways to eliminate bureaucratic obstacles to new starts. During the

process of approving the rail to Dulles project, we encountered numerous nonsensical requirements the proposed project had to meet

by the Federal Government. These requirements delay project approval and construction, adding billions literally of cost to the final

project cost.

We also need to understand how we can move to extend Metrorail service in our region. Since Metrorail began operations in 1976,

our region has grown far beyond the outer Metrorail stations. Residents and communities in suburban Virginia and Maryland should

have the option of rail transit. I have introduced legislation, Mr.

Chairman, to authorize transit extensions in the Orange, Blue, Yellow and Purple line corridors, and I look forward to hearing Mr.

Catoe’s response to that legislation.

I hope this hearing provides the committee with insight on how

to expedite these and other extensions.

Again, I want to thank you, Mr. Chairman, for holding a hearing

on this very important topic to the national capital region and look

forward to working with you and my colleagues as we move forward.

I thank you.

Mr. LYNCH. Thank you, Mr. Connolly.

As my Republican colleagues arrive, we will obviously extend

them the courtesy of making any opening statements that they

wish to make.

It is the custom in this committee to ask witnesses to be sworn.

I please ask you to rise and raise your right hands.

[Witnesses sworn.]

Mr. LYNCH. Thank you. Let the record show that each of the witnesses has answered in the affirmative.

To begin, your written statements will be accepted into the

record without objection. The way the hearing works is that little

box in front of you will flash various colors. The green light indicates that you have 5 minutes to summarize your written statement and verbalize the contents to the committee. A yellow light

means that you have 1 minute remaining, and then a red light indicates that your allotted time has expired.

For the benefit of the Members who are here, let me just do a

brief introduction of our first panel of witnesses.

Council Member Jim Graham became chairman of the Metro

Board in January 1999. Mr. Graham currently serves on the Council of the District of Columbia representing ward I. He also chairs

the Council’s Committee on Public Works and Transportation. Mr.

Graham served as executive director of the Whitman-Walker Clinic

from 1984 to 1998. Previously, Mr. Graham served as staff counsel

for Senator Abe Ribicoff, Democrat of Connecticut, and clerked to

Chief Justice Earl Warren, now retired.

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Mr. John B. Catoe is the general manager for Washington Metropolitan Area Transit Authority. Mr. Catoe has more than 30 years

of experience in public transportation. As general manager of the

Washington Metropolitan Area Transit Authority, he oversees the

second-largest rail transit system and the fifth largest bus network

in the United States, with more than 10,000 employees, a $1.3 billion operating budget, and a $3.1 billion 5-year capital improvement program.

With that, we welcome each of our witnesses.

And Mr. Graham, I welcome you to offer your opening statement.

STATEMENTS OF JIM GRAHAM, CHAIRMAN OF THE BOARD OF

DIRECTORS, WASHINGTON AREA METROPOLITAN TRANSIT

AUTHORITY; AND JOHN B. CATOE, JR., GENERAL MANAGER,

WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY

STATEMENT OF JIM GRAHAM

Mr. GRAHAM. Thank you very much, Chairman Lynch. Excuse

my voice. I am laboring under the Washington, DC, allergies, but

I am going to do my best.

I want to do my best here on behalf of the system. As you pointed out, I am the chairman of the Metro WMATA Board. I had previously held this position in 2003, which was a very different time

than today. But it is all the same a time of great excitement for

the Metropolitan Washington Area Transit Authority.

I want to say a special hello to Congressman Connolly. This is

the first time I have seen you since your ascendancy to this great

body. I congratulate you. And to my Congressional Representative

Eleanor Holmes Norton, it is always a great pleasure to see you.

We saw each other yesterday at a very, very happy event, and I

hope this one today is every bit as happy and satisfying.

Let me just note that the Metro means more than anything else

mobility. Metrorail and Metrobus serve a population of over 3.5

million within a 15,000 square miles area. And average weekday

passenger trips on the two systems total nearly 1.3 billion—excuse

me, 1.3 million. MetroAccess, which is our service to people living

with disabilities, provides 4,900 passenger trips on an average

weekday.

No neighborhood or community within the District of Columbia

is more than two blocks from Metrobus services. Metro also stimulates regional economic development. And Mr. Chairman, I don’t

need to read about that because I know in ward I in Columbia

Heights and U Street, on Georgia Avenue, the presence of a subway station has been the absolute catalyst to the economic revival

of those neighborhoods. We have much to thank for Metro in that

regard.

Metro is not only essential to the efficient functioning of this region, but it is also essential to the daily operations of the Federal

Government, which gives the Federal Government a most decided

stake in terms of the success of this system. The Federal Government relies on Metro for daily transportation of visitors to the Capitol and national events. You have already, I believe, Congresswoman Norton, mentioned the great role that Metro played in the

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recent inauguration. And we Are extremely proud of our general

manager, who has served with distinction here and elsewhere.

Metro is a critical component for ensuring continuity of Federal

Government operations during an emergency. And 9/11 is another

example of how Metro really made the key difference in terms of

keeping our system open.

Let me say a word about dedicated funding. At this point in time,

as a member of the Council of the District of Columbia and chairman of the Committee on Public Works and Transportation, we are

going to make certain that this opportunity for dedicated funding

is not lost, nor will it be hindered. And I will introduce legislation

in the Council on an emergency basis on May 5th to have identical

legislation to that which was passed in Virginia and Maryland so

that we will be ready, Mr. Chairman, to present to this Congress

compact amendments which are identical and will pave the way

hopefully in this year for a Federal appropriation.

We are extremely pleased with the great step that was taken by

the Congress last year in passing an authorization which could

lead to $3 billion into the system over a 10-year period. And we

want to make certain that happens.

When I became chairman of the Metro Board this past February,

I expressed my determination that this funding would go forward

in so far as anything we could do to make it happen. We are anxiously awaiting news as to whether or not the President has included the first payment, which we hope will amount to $150 million in the President’s budget. If the President has not included it

in the budget, we want to rely on our many good friends in Congress to make sure that the $150 million is added.

And I do want to acknowledge most particularly the efforts of the

Majority Leader, Congressman Steny Hoyer, who has played such

a key role in this regard. So this $300 million new funds on an annual basis, $150 million

from the Congress of the United States, $50 million each from the

three jurisdictions, is going to make a critical difference in the stability of Metro because at present what we need to do is to assemble a patchwork quilt every year with our budget, and this will instead give us the ability for a coherent, stable budget proposal.

Thank you very much.

[The prepared statement of Mr. Graham follows:]

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Mr. LYNCH. Thank you, Mr. Graham.

Mr. Catoe, you are recognized for 5 minutes for your opening

statement.

STATEMENT OF JOHN B. CATOE, JR.

Mr. CATOE. Thank you, Mr. Chairman.

As stated, I am John Catoe, the general manager of the Washington Metropolitan Area Transit Authority [WMATA] or Metro.

Joining me is Michael Taborn, who is the chief of the Metro Transit

Police Department, who is available to answer questions on our security initiatives.

First, I would like to begin by thanking you, as well as the members of this full committee, for your efforts on the dedicated funding legislation. The funding authorized by that bill is the key to

Metro’s ability to continue to meet the mobility needs of the Federal Government in this region.

I have submitted more detailed testimony for the record, so let

me address a few key points that I would be happy to take questions on.

As Chairman Graham said, the Federal Government relies on

Metro every day. It bears repeating that 40 percent of Metro’s peak

ridership is made up of Federal employees. Many others ride our

systems so they can petition the Congress, visit the National Mall,

and our national museums and galleries, and also to witness historic events like the inauguration. You can hear it in our station

names: Federal Triangle, Capitol South, Smithsonian, Pentagon,

and the list goes on.

The Federal Government’s dependence on Metro is something

that distinguishes us from other transit agencies. It is not surprising that Metro is often referred to as America’s subway.

I would like to now turn to some of our current challenges. While

we have been in fairly good financial shape for this budget year of

2009, this is a very difficult time for Metro, as it is for transit agencies across the country, with many facing layoffs and severe service

cuts.

Recognizing the pressure that local governments and individuals

are facing in this economic downturn, we began building our fiscal

year 2010 budget without indicating any increases from local government or their contributions or raising fares. This required very

difficult actions. In recent months, I have made some very tough

decisions, including the elimination of 313 positions, and we have

reduced our budget gap from $154 million, we reduced that by 80

percent, down to $29 million, and with the jurisdictions after various options, have reduced that even further.

After considering many options for closing the remaining gap,

our board ultimately decided to increase, as I mentioned, local contributions, and we have submitted bus services adjustments for

public considerations. We have just completed a series of six hearings on these service adjustments, and tomorrow the Board of Directors will make decisions on what actions they will take in order

to close the budget gap.

In my written testimony, I also go into detail about another financial challenge that affects Metro, and a number of other transit

agencies who entered into sell-leaseback transactions back when

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the Federal Government was promoting them as innovative financing techniques. As a result of changes to Federal law and of the

worldwide economic crisis, Metro and other agencies are at risk of

a technical default on these agreements. Despite having made payments, we potentially face millions of dollars in termination fees.

However, all is not grim and we need to look toward the future.

Let me turn now from Metro’s current financial challenges to talk

a little bit about what I see coming in Metro’s future. This system

is essential to mobility in the Nation’s Capital and the national

capital region, as shown on inauguration day. Millions came to

Washington to see the new President, and Metro’s job was to provide them with transportation. We did so safely and efficiently.

When you look toward the future, the future is what we saw on

that day, over 1.5 million riders on our system on a daily basis. As

we move toward the future, there is a need for increased funding

for an expansion of the system on the Orange, Blue, Yellow lines,

and in fact a new portal coming in from northern Virginia. As we

look at our capital needs, we have identified $11.3 billion between

2011 and 2020, and this number does not include any moneys for

the expansion that I mentioned.

We are now working to prioritize this, and we will have that list

completed over the next week.

Again, you will find more details in my testimony in front of you

in the written testimony, and I thank you for this opportunity to

testify in front of the subcommittee.

[The prepared statement of Mr. Catoe follows:]

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Mr. LYNCH. Thank you, Mr. Catoe.

In the interest of time and efficiency, we are going to dispense

with any further opening statements here. But I would like to ask,

since both of you have been at this for such a long time, Mr.

Graham, the reconciling language on the part of the District of Columbia to match the legislation previously passed by Virginia and

Maryland, where are we in that process? I know there has been

some good signals sent, but legislatively where are we?

Mr. GRAHAM. Thank you, Mr. Chairman.

The legislature in Virginia and the legislature in Maryland have

now passed, and just recently passed, identical legislation for the

compact amendments. On May 5th, I will introduce in the Council

as emergency legislation the identical legislation, which means that

certainly in the month of May we are going to be ready to present

to Congress the compact amendments that are required by the authorization act.

Mr. LYNCH. Great. Well, that is perfect. The sooner the better,

obviously. I wouldn’t want to give any reason for the President’s

budget team to see an obstacle there and to send the wrong signals

that that money is not prepared to be used or that there are any

obstructions there. So if we could get that wrapped up, that would

be enormously helpful. I just don’t want to leave any obstacle in

the way.

Mr. Catoe, I am actually part of the Rail Security Caucus here

in Congress and spend a lot of time. I think the numbers are that

in this country we have about five times as many people who travel

by rail as do by airplane. We have spent a lot of money on security

in airports. I don’t think we have spent nearly what we need to in

terms of rail security.

You are part of a system, this Northeast Corridor, that handles

a huge portion of our rail passengers every day. And because of all

of the things you have mentioned today about this being our Nation’s Capital, moving so many Federal employees, being the heart

of our Federal Government, being the Nation’s Capital so we have

extremely large celebrations, historic moments here in the capital.

The inauguration is a perfect example.

You know, I think as someone who had their family down for

those festivities, the Metro really delivered very, very well. I wish

all the parts of our system worked as well as Metro did.

But what is being done to coordinate the larger, I would say terrorist-centric dimension of rail security with the D.C. Metro? I

mean, how is that working out? Do we have good coordination? I

know you have the chief behind you. He probably can answer. I

don’t want to put him on the spot, but how is that going?

Mr. CATOE. Our relationship with TSA, the Department of Homeland Security and the Federal Transit Administration, I would rate

it as excellent. I have had meetings with all three agencies to talk

about coordination of security, not only in Washington, but across

the United States. They have been helpful. Could we use more

moneys in security? Absolutely. But given the resources that we

have, we have maximized those resources. We have had great support from the TSA, as well as the Federal Transit Administration.

So from a coordination standpoint, given the resources that we

have, it is a very good relationship and it is excellent coordination.

35

Mr. LYNCH. OK. Let me ask, I just came back from Mumbai. You

know, we have done a lot of coordination with different jurisdictions that have been affected. We had a rail summit with the cooperation of the folks in London. It seems to me that the greatest

value has come from training rail workers to actually handle that

situation. And some folks think they have a plan, but if the employees don’t know the plan, we don’t have a plan. The rail crews

that are on those trains that in the event, God forbid, we have a

disaster on the Northeast Corridor or on the Metro, those folks

have to know what they need to do.

That has been deficient in a lot of other jurisdictions. How is that

piece going with your employees?

Mr. CATOE. It is going very well. Our chief of police, he worked

with us, and then he worked for the Federal Transit Administration. We had a national responsibility for developing training programs on safety, as well as on security issues. He brought that experience back to us, and as a result not only do we have written

publications that have been given to each employee, but we also

have training for all employees and constant reminders of the importance of being the eyes and the ears of security.

And also, we are taking it a step further. We do periodic announcements to our customers, as well as provide information to

this region, asking them to support us in providing security for the

system.

Mr. LYNCH. Great. I see my time has expired.

At this point, I would like to yield 5 minutes to the gentleman

from California, Mr. Bilbray.

Mr. BILBRAY. Thank you, Mr. Chairman.

First of all, I want to apologize for my tardiness. Those of us in

California don’t function with rain very well, so you just understand that we were all looking up saying, what is that wet stuff?

Let me first, Mr. Graham, congratulate you on your chairmanship. I come from where you are coming from. I served as chairman

of the San Diego Trolley Board. In fact, I was on the board that

built the light rail system when everybody said no one is ever going

to have rail transit in southern California.

But there is a whole lot of challenges we get into it. And this,

Mr. Catoe, works, came out of BART, right?

Mr. CATOE. The Los Angeles system, sir.

Mr. BILBRAY. OK. Yes. In fact, I will tell you we had some runins with our insurance companies over the problems you ran there,

trying to build two systems simultaneously.

Mr. CATOE. Yes.

Mr. BILBRAY. I guess we left a bad example for you. You looked

at our success and figured it was easy, but you learned real quick

how tough it was.

But Mr. Graham, my biggest concern coming from local government, I was chairman of a county of 3 million. I served as chairman of the Transit Board. And the disconnect between local land

use and local policymakers and mass transit. I think that one thing

we can say, probably only two things that we can point to for the

American people that really work well in this community, and that

is the meter maids and the transit system. I apologize to the DeleVerDate 11-MAY-2000 15:11 Jul 08, 2009 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 U:\DOCS\50349.TXT KATIE PsN: KATIE
36

gate, but as a local government guy, the frustration of always we

don’t do enough in local government.

One of the studies, Mr. Graham, that we really looked at when

I was serving on the Air Resources Board in California was the

huge benefit in air pollution and reduction in fuel consumption if

the locals will coordinate development patterns to reflect the market demands for transit. I think too often, especially, it is one of

my frustrations in southern California, they say why don’t we have

more. And I say, well, there is no market there. We haven’t developed in a pattern of market.

Though D.C. probably as well as any community has tried to respond to opportunities created by the Metro, how aggressive are we

in our local land use patterns in this region of actually not only allowing, but mandating intensification of development around these

transit centers? Not just after they are constructed, but a good example is the proposal out to the airport. How much pressure is

being put on the local people to re-think, re-engineer, and re-zone

even in opposition to local community concerns, based on the fact

that this transit system needs to have that kind of support?

And I say that with the former chairman of Fairfax out there.

We need to put that pressure on. And I say that from an environmental point of view, that I just had a community abandon its density around a transit center. And I understand. I came from a

small city. But is there anybody there doing the pushback to look

at the big picture and try to counter that not in my backyard so

that we address these things properly, both from the environmental and to make Metro more economically viable?

Mr. CONNOLLY. Would the gentleman yield?

Mr. BILBRAY. Yes.

Mr. CONNOLLY. Just because you did invoke my jurisdiction, I am

pleased to assure my colleague, in the Dulles corridor, which is

23.1 miles, we completely re-did the re-zoning at high end density

so that it will be a transit-oriented development corridor along all

of the planned stations, a very dramatic change in land use pattern. It was not without some controversy, but we did it.

Mr. BILBRAY. Yes, in fact, I will just say, Mr. Graham flat out,

as somebody coming from the air side, I believe that the Clean Air

Act should be amended to require it so that it helps local people

to do the right thing, because the politics pushes the other way, as

you know, and as the former chairman knows. But as a local government guy, I would like your comments about that whole issue.

And I know it is not something we talk about because this is long

term, but it does matter. Go ahead.

Mr. GRAHAM. Well, Congressman, you have already referenced

the fact that you have one of the leading experts on this issue, a

member of your very panel here, and that is Congressman

Connolly, who has spent a lot of time making these things happen

in northern Virginia.

Let me just speak for the District of Columbia. I mean, we have

truly embraced the whole concept of restore the core, you know,

and do the joint development program at Metro-WMATA. And you

can see virtually all of our stations in the District of Columbia have

benefited from the joint development efforts.

37

And there is example after example. In fact, I think in some

ways, with all due respect to my fellow, my colleagues on the Metro

Board, I mean D.C. has led the way, you know, Columbia Heights,

U Street, Georgia Avenue, Downtown, Gallery Place. If you look at

our living downtown, so much of this is traceable right back to

Metro’s abilities to develop the land near its stations.

And so I think it is really a huge success story. I occasionally

chide our distinguished general manager that I think we should do

a far more flamboyant job of saying how well we are doing in this

regard because it has made an absolutely critical difference in the

District of Columbia.

Mr. BILBRAY. OK. And just to be balanced on this, a lot of this

is not the community opposition. A lot of times intensification development is the property owner, the land developer will not be

looking 20, 30 years ahead. He is looking for what is marketable

today, and not worrying about the big picture.

And I think this issue of siting of transit centers in a community

is a responsibility that the community has to reflect that part of

having the privilege of having these lines come in, is that they

need to accommodate them to where they are economically viable.

And you have developers sometimes who do not want to develop

out to the density. And I have told them flat out, I would rather

have an empty lot that someday will be dense, rather than average

out and allow you to respond to an existing market today, rather

than looking to the future.

Thank you very much. I yield back, Mr. Chairman.

Mr. LYNCH. Thank you.

The Chair now recognizes the gentlelady from the District of Columbia, Ms. Holmes Norton, for 5 minutes.

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

I congratulate the District as the first to put up its share initially

when we were going for these funds, and it helped our advocacy.

I don’t know, Mr. Bilbray, I like to ascribe Mr. Catoe’s success

to the fact that he is a native Washingtonian, but I guess I will

let that go.

Let me ask you both this, WMATA has recently listed its use of

recovery funds. Will those be obligated? You know, we are tracking

these funds, and there is another committee I am on, Transportation and Infrastructure, has a use it or lose it rule. What assurance can you give us that those funds will be obligated within those

90 and I guess 120-day timeframes?

Mr. CATOE. Congresswoman, absolute assurance. In fact, the

communications I have given to the Federal Transit Administration

has been WMATA will spend their dollars on capital programs

that, again, help the operation of the system before the time line

indicated in the legislation.

Ms. NORTON. Do you have any idea how many jobs will be created?

Mr. CATOE. Yes. Over 4,800 jobs will be created.

Ms. NORTON. I was amazed to note that you apparently have had

some trouble getting bus drivers, or at least that was what was

said when there was a bus driver who was caught in some kind of

malfeasance, and he turned out to have been recently released from

prison. We like the fact in this committee that ex-offenders can get

38

jobs of that kind. He seemed to have been rather recently released.

A spokesman said, spoke of the difficulty in getting bus drivers.

Here are good union high-paying jobs. Could you explain what

the difficulty has been?

Mr. CATOE. Well, we have not had difficulties in the recent years,

recent 2 years. There have been peaks and valleys if you go back

and look over the past 10 years of the availability of individuals for

that work force. But recently, when we had a job fair, we had hundreds and hundreds of applications, in fact over 1,000.

The issue comes when we go through the screening process, that

number drops significantly. Out of 1,000 applicants, 100 might

make it through the screening.

Ms. NORTON. Apparently, you could have a felony, and I am not

arguing against that. It seems to me it has to be job-related in

order for somebody to be disqualified because he has been in prison.

So what is it? Because people have not—I mean, you train drivers, don’t you?

Mr. CATOE. Yes, we do. We train drivers.

Ms. NORTON. So the numbers drop, and I say this man was recently released from prison, and could become a driver. I am wondering what it is. Certainly having a record isn’t the reason it

drops. What is the reason that the numbers drop so precipitously?

Mr. CATOE. Primarily, you know, it is the skill set. It is the hours

that we work once people get into the interview process. Often it

is a felony record. We require that employee not have had a felony

or major one in the last 2 to 4 years. This was an anomaly in our

process. It was something that occurred. The felony occurred 10

years before. Unfortunately, we didn’t take into effect that he was

in prison during that 10 years. We have corrected our processes

since then. I can assure you that will not occur again.

But in fairness, of the employees that we have hired to happen

to have had some felony, and we have several of those, they have

been outstanding operators, outstanding employees.

Ms. NORTON. And we would certainly encourage that. That was

unfortunate.

A great priority of mine and of the Congress, of the administration, is alterative fuels. I don’t know if the hybrid buses—I know

the natural gas buses. When you buy new equipment such as

buses, are you focusing on greening WMATA?

Mr. CATOE. Yes, yes we are. Every vehicle that we purchase now,

every bus will be either a hybrid or compressed natural gas, and

that decision was made by our Board of Directors several years

ago.

Ms. NORTON. That is just exceptional news. Some of us fought up

here for WMATA to buy natural gas buses during the last goround. It was quite a fight. I know that there is some difference

in cost, but we found and came to understand those differences are

very important.

The Amalgamated Transit Union has written a letter that we

have received that we allow the use of Federal transit funds for operating assistance purposes. I think they were concerned with the

layoffs that have been so decried in this region. Would this help

solve your dilemma? Can any of those funds be used to help thwart

39

the layoffs? Is there any flexibility on this issue that you have or

would suggest?

Mr. CATOE. There is some flexibility under the preventative

maintenance. For the upcoming budget, we did transfer additional

preventative maintenance dollars. It relieves your operating side,

but when you take from one side to the other, you are creating a

larger problem on your capital side, and that’s where we have the

largest need. But any funding that we receive, of course, helps us

provide the services that we need in this region, but we can’t take

all of our capital dollars and turn them into operating expenses.

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

Mr. LYNCH. Thank you.

The Chair now recognizes the gentleman from Virginia, Mr.

Connolly, for 5 minutes.

Mr. CONNOLLY. I thank the Chair.

And let me welcome both Chairman Graham and Manager John

Catoe to the subcommittee hearing.

Mr. Graham, I want to thank you for your willingness to introduce emergency legislation. Quite candidly, I wish you didn’t have

to because I actually think the D.C. approach is the correct approach, because the big sticking point is whether we have permanent Federal membership on the Metro board or not. My view is

we should have Federal voting representation so long as Federal

funds are flowing.

And while I understand the necessity, and I completely agree

with the chairman, we don’t want any impediment or any excuses

for that $150 million matching Federal funds. I do believe that we

are going to come to regret some day in the future having two Federal members who are going to be voting on how localities should

be spending their money. I just think, you know, and then you are

going to have to amend the compact at some future date, wondering how did this happen. But unfortunately, we didn’t win that battle, but I think you were right in the first place.

I recently introduced a bill that authorized extensions of Metrorail’s Orange, Blue, Yellow and Purple lines in northern Virginia.

Mr. Catoe, I just wonder if you might comment on how that

might help or hurt Metro, and what your attitude is about future

extensions?

Mr. CATOE. Well, it is going to be critical as we move forward to

the future to have extensions. And with those extensions, not only

the extension of the line, but looking at another portal coming into

our main service area. So your legislation, it is timely. We are

reaching capacity very quickly on our route system, and this legislation begins the process of taking that into consideration for future expansion.

Mr. CONNOLLY. The Federal Government process for funding

transit is quite different than the Federal Government funding of

roads and bridges. Could you comment on that a little bit? And any

ideas based on your experience, especially with most recently rail

to Dulles, but in any expansions of the Metro system, any suggestions about how we might streamline the Federal process?

Mr. CATOE. Absolutely. The suggestion is to make the transit

funding process very similar to the highway process. It is more

complex. It requires a cost-benefit analysis. The process to go

40

through takes longer, as you are very aware of with the Dulles extension. And I have had discussions with the Federal Transit Administration. They are aware of it. It will take some action on the

part of, I believe, Congress to change the legislation. You will have

that opportunity with the reauthorization bill that is coming up

this year.

Mr. CONNOLLY. I look forward to working with Chairman Oberstar in trying to do that, and you as well. Mr. Graham made reference to the economic benefits, and I think rightfully so, say D.C.,

and the inner suburbs, Arlington and inner suburbs of Maryland,

clearly show the transformative value of the transit investment.

I was here. I lived in Washington, DC, in 1972 through 1977, so

I saw pre-Metro Washington and post-Metro Washington, and it

has been nothing short of transformative. And I think Mr. Bilbray

is right in raising that issue of the land use relationship, but also

what is the return on investment.

Have we got some methodology for calculating what the return

on the investment in Metro has been for the national capital region?

Mr. CATOE. The latest numbers, in fact I had them updated today, show that an investment of $25 billion, but when we updated that number, we found that really the investment has been

$40 billion in the District of Columbia only.

Mr. CONNOLLY. You mean the economic investment?

Mr. CATOE. The economic benefits of the Metro system.

Mr. CONNOLLY. Wow.

Mr. CATOE. And it is much larger when you take it regional.

Mr. CONNOLLY. And what was the original Federal investment?

Mr. CATOE. I don’t recall—$6 billion?

Mr. CONNOLLY. A pretty good return on investment.

Final question, because I am going to run out of time. We don’t

yet, but hopefully as Mr. Lynch said we will soon, have a dedicated

source of funding through this legislation. How do other transit

systems do it in terms of dedicated funding sources?

Mr. CATOE. Generally, most transit agencies have a local sales

tax or it is specified in their State legislation that a portion of the

State revenues will go to public transit. We are unique, the only

large transit property in the United States that does not have a

sales tax funding source.

Mr. GRAHAM. Could I just add, because we are right in the middle of doing our D.C. budget, and I just want to add that the District of Columbia will be sending more than $300 million in our

subsidy and other financial contributions in fiscal year 2010 to give

you some idea of the magnitude of the local support that the District of Columbia is providing to the system.

Mr. CONNOLLY. I know my time is up, Mr. Chairman, but I can’t

help but observe on the tragedy of 9/11, I remember very well there

was, thank goodness, an abortive event to close Metro. Had we in

fact closed Metro that day, I think we would still be in gridlock in

this region. But thanks to Metro, a situation that could have been

much, much worse was not, and it just underscored just the importance of the Metro system in getting workers, especially Federal

workers, to and from their homes.

Thank you, Mr. Chairman.

41

Mr. LYNCH. Thank you.

I know that we have two Members that are trying to get here

for this panel. Why don’t I do this. I know we don’t exhaust all of

the issues in our questioning. How about, you know, Mr. Graham

and Mr. Catoe, if you have any issues that we haven’t touched

upon that you think are keenly important to the system and to our

work, I would like to give you each, say, 5 minutes to address the

issues that are on your mind most prominently, and if any of that

embraced the issues that you might have. I read the audit report

from 2008. I noticed a pretty good spike in utilization of workers

compensation, a pretty good spike or gap in funding on the pension

side. If you might have information on those couple of issues, we

would like to hear that. And hopefully by the time you are finished

addressing those, the Members might be here. I don’t want to keep

you longer. You have been very generous with your time, but

please.

Mr. GRAHAM. Well, I will gladly take this opportunity, Mr. Chairman. As I was making my presentation, I went through a few

pages because of time running out. But again, as mentioned, the

Metro system is beginning to feel its age. An analogy I like to

make, it is like a house that is over 32 years old, and we need to

go beyond the spring cleaning or paint job. We need some major

work done, with a wet basement, rusty pipes, and old wiring and

other issues.

And so from the standpoint as we look toward the new transportation bill, the reauthorization, we in the industry like to talk

about this authorization as ensuring that sufficient funds are there

to keep major transit agencies in a state of good repair. The Federal Government has made a tremendous investment in this system, and that investment needs to be kept in a state that we can

continue to move people as we do today, and also to expand that.

So that is a point as you look forward.

From the standpoint of workers compensation, when I arrived

here just over 2 years and 4 months ago, we had major issues from

a safety standpoint for our employees and our customers. We have

come a long way. We have had recently, and it was communicated

to the board, decreases in the number of work-related injuries, 10,

20, 30 percent of injuries over the past 21⁄2 years. That still isn’t

good enough, and we are working to reduce that even more so.

From the standpoint of issues with our customers, our operators

have been performing at a much higher rate of safety. We have

moved from a situation of the nightmare of five fatalities my first

year in 2007, and pedestrian fatalities to zero last year. And knocking on wood, zero hopefully for the next decades and decades

ahead. I attribute that to our safety program and the attention of

our senior operators.

We are working very hard again on the workers comp. We have

hired a new risk manager who began 2 weeks ago. We have the

claims down. Now, we are really managing those claims far better

than what we had before. And so we are in a transition as an organization that is focusing on safety, and you will see major improvements both financially as well as in the number of injuries.

From a pension standpoint, like every organization around the

country and every Federal and private agency, we have been hit

42

tremendously by the downturn of the stock market, and as a result

we will be looking at—we still will make our contributions. We are

committed. They’re sufficiently funded, but in order to make up

that difference, it is going to take a longer period of time.

Mr. LYNCH. Very good. I understand.

We have one of our Members just trying to get in. In the meantime, I would like to offer Ms. Holmes Norton a chance to expound

on an earlier question.

Ms. NORTON. Thank you, Mr. Chairman.

I didn’t get to ask a couple of questions.

First, let me ask when was the last fare increase for WMATA?

Mr. CATOE. One year ago January there was a fare increase that

was in place.

Ms. NORTON. My impression is that what you are trying to do

today you, of course, have to do. The notion of fares going up, my

impressions is that WMATA has withheld fare increases over long

periods of time, and then had to raise fares. And I wonder if you

have given thought to, or if other transit systems, simply put off

the day of reckoning and then have to make a larger fare increase

than would otherwise be necessary, just because they hate it and

the public hates it. So they’re going to hate it, but they may hate

it more if you have to make up for lost time.

Mr. GRAHAM. Well, if I may respond to that, Congresswoman.

Ms. NORTON. Yes, sir, Mr. Graham.

Mr. GRAHAM. What we were ending up with when we started

talking about a fare increase was a very tiny amount of money in

the scheme of things. We were talking about a remaining budget

gap of $29 million. And as we were able to demonstrate, the jurisdictions rapidly came up with more than half of that in additional

subsidy payments, including the District of Columbia, Fairfax

County, and elsewhere.

Ms. NORTON. Well this time, Mr. Graham, I understand. I was,

and you have been, on the WMATA board before. Actually, because

I don’t see how you could have raised fares with a straight face.

But I am wondering whether or not transit authorities have any

policy on whether or not it is best to wait for a long period of time.

You just raised one, so it would have been terrible to raise another.

Let the needs buildup, because the public hates it so bad, or that

is just you have to, you just have to do that almost politically and

decide when you can do it and when you can’t.

Mr. GRAHAM. Well, I can express my own personal philosophy in

this regard.

Ms. NORTON. Thank you.

Mr. GRAHAM. I have generally not favored fare increases except

when it was absolutely necessary. And we did it a year ago January, as Mr. Catoe pointed out. At that time, we held the bus riders

harmless in terms of any increase on the theory that they were the

least able to pay. But we did manage to raise the revenues that we

needed all the same. And I think having just raised the fares, you

know, I don’t think we want to go back to that well when we don’t

need to. And the fact of the matter is this $29 million remaining

budget gap was rapidly filled within a few days by the jurisdictions.

43

Ms. NORTON. You know, when people saw that what they faced

was——

Mr. GRAHAM. That tells the tale.

Ms. NORTON. Yes, raising fares, they quickly came over.

Could I just ask Mr. Catoe perhaps to get this back to me.

WMATA may have to take the lead on this. I have been getting

money in the transportation bill because WMATA needs the First

Street tunnel where Amtrak or Union Station is located, because

of the need to improve access to VRE, MARC, to the NOVA section

of D.C.

And in order to continue to get those funds, somebody is going

to have to take the lead. It seems to me that between Amtrak and

WMATA, and WMATA has the most to gain, we all need to meet.

I have had pretty good luck, but there is a reauthorization coming

up, so that is when you have the best luck.

I wonder if you have any views on that or any plans, given the

fact that these are really regional trains, rapid rail and the like

coming in to Union Station and redoing where they can go to accommodate more such transit.

Mr. CATOE. Absolutely. In fact, we are participating, but I have

directed my staff to work with the entire region in taking a leadership role in the coordination of rail services to ensure that we are

using similar technology and also to ensure the connectability of

the system.

So we will be getting back to the committee with the latest update on this very shortly, but we are actively involved and I can

assure you we will stay involved and take whatever role that is

necessary.

Ms. NORTON. Thank you very much.

Mr. LYNCH. Thank you.

The Chair now seeks unanimous consent to allow Mr. Van

Hollen, the gentleman from Maryland, to proffer questions to the

witnesses.

Hearing no objection, the gentleman from Maryland is now recognized for 5 minutes.

Mr. VAN HOLLEN. Thank you, Mr. Chairman. I thank you for

holding this hearing, and I want to thank you for your support for

what is often described as the Nation’s Metro system, because it

does carry so many Federal employees to work every day that do

the work of our country here in Washington.

And I want to thank both the gentlemen for their testimony.

Council Member Graham, I commend you for the legislation that

you have introduced. I think when you complete action on that, it

will mean Maryland, Virginia and the District of Columbia have all

passed the required legislation to conform with the requirements

for the additional Federal funds for Metro. So we look forward to

continuing to work with you on that effort.

Mr. Catoe, congratulations on a good strong start. I know it has

been a little while now, but things seem to be going well, although

I do have a couple of concerns that I want to raise. And this is in

the context, first, let me ask you about the stimulus dollars, the

economic recovery plan dollars. If you could just provide some real

detail on exactly what additional funds the Metro system expects

44

to receive as a result of the economic recovery plan, and what exactly that means with respect to WMATA operations.

Mr. CATOE. We will receive approximately $202 million as part

of the economic stimulus package, some for buses, transit vehicles,

fixing platforms, rail work, and heavy equipment for the rail system. To date, we have 40 of those contracts on the street, so we

are ready to move forward to spend the moneys, and we have sent

our necessary paperwork to the Federal Transit Administration.

That process is moving very smoothly.

Mr. VAN HOLLEN. Now, do you expect to receive that $202 million in this fiscal year over what period of time?

Mr. CATOE. We expect to commit 80 percent of the dollars by

September, and the remaining 20 percent by the end of the calendar year.

Mr. VAN HOLLEN. OK. And so by the end of the calendar year,

you will expect all of the contracts to have been let? Is that correct?

Mr. CATOE. Yes.

Mr. VAN HOLLEN. OK. I do have a concern. I know you hopefully

have received a letter that Steny Hoyer and I and Donna Edwards

sent to you and your team about the cuts that have been made in

Metrobus in the suburban Maryland area, in both Prince George’s

and Montgomery County. I mean, we are very concerned about the

impact. More people obviously rely on public transit during a period of economic downturn. Our hope had been that these stimulus

dollars, these additional stimulus dollars would allow you to continue to operate these kind of lines. And so a lot of people are wondering, you know, where did that money go? How come we can’t

use some of that money to make sure that people can continue to

get to work?

Mr. CATOE. Well, some of those moneys can be used for preventative maintenance, which would offset some of the cost. We just had

a series of hearing, five of those. Tomorrow the Board of Directors

will consider what it needs to do to close the gap, which is just

slightly over $13 million. Capital dollars or stimulus dollars can be

used to close the gap or other reserve moneys that we have, or we

can make the service cuts. Those discussions will occur tomorrow.

I might like to mention that Chairman Graham did propose that

at one time that we use stimulus dollars. That, again, decision will

be discussed tomorrow.

Mr. VAN HOLLEN. Well, I encourage you, and Mr. Chairman,

thank you for proposing that we use stimulus dollars to keep some

of these lines and services operational because again, as we said,

more and more people are turning to Metro in these economic

times, and we of course want to encourage people whether times

or tough or times are good to use our public transit system. So I

hope we wouldn’t be cutting those services.

If I could just ask one other question, Mr. Chairman, with respect to where Metro stands now on the issue that arose last year

with respect to the lease-back payments that were then essentially

guaranteed through AIG and the credit default swaps. There was

the threatened litigation. I think we all worked together to try and

mitigate the impact. If you could just give us an update on where

things stand.

Mr. CATOE. OK. Thank you very much.

45

We had 16 lease-back transitions, 3 which we resolved and

closed; 1 through the court process we came to a settlement. We

have 12 remaining. Again, they are no longer any AAA-rated insurers, which technically put us in default, which would expose millions of taxpayers’ dollars. They are still at risk in spite of the fact

we are making all the payments. And so we are hoping that there

will be some legislative solution or an administrative solution from

the Treasury Department. Thus far, no other banks have notified

us that they are going to declare us in default, but technically they

could do that any day.

Mr. VAN HOLLEN. All right. Well, we look forward to continuing

to monitor that situation.

And again, I hope tomorrow we will not make those service cuts.

Thank you, Mr. Chairman.

Mr. CONNOLLY. Mr. Chairman.

Mr. LYNCH. Yes?

Mr. CONNOLLY. Just real briefly. Mr. Catoe just mentioned that

there are no AAA insurers left, and that is a problem for all municipalities issuing bonds in the United States. I have some legislation that is before the House Finance Committee. We are going to

have hearings in May on that legislation that would address that

situation.

Mr. LYNCH. Thank you.

Well, we want to thank the witnesses for being so free and candid and generous with your time. We are sure that there will be

other hearings where we will have to call you again for your opinions and recommendations, but thank you for attending this hearing and we bid you good day.

Mr. CATOE. Thank you, Mr. Chairman.

Mr. LYNCH. I would like to call forward the second panel.

Welcome. Thank you for appearing for this subcommittee to help

us with our work. It is the custom in the subcommittee to ask all

witnesses to be sworn. Would you please stand and raise your right

hands?

[Witnesses sworn.]

Mr. LYNCH. OK, let the record show that each of the witnesses

has answered in the affirmative. Your entire statement will be entered into the record.

Let me first offer a couple of brief introductions of our witnesses

for the benefit of Members present.

Ms. Helen Lew is the first inspector general to be appointed by

the Board of Directors of the Washington Metropolitan Area Transit Authority. She began her tenure in May 2007. As the inspector

general, she conducts audits, investigations and evaluations relating to WMATA activities to prevent and detect fraud, waste and

abuse, and to promote economy and efficiency.

Mr. Matthew Welbes is the Executive Director and Acting Deputy Administrator of the Federal Transit Administration. Mr.

Welbes directs the daily operation of the agency in support of public transportation services in communities across the United States.

He supports the FTA Administrator in providing leadership and establishing direction on public transportation policies, budgets and

strategic priorities. He also guides the management of the agency’s

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$10 billion annual budget and the 500 people who serve FTA’s customers.

As you can hear, we are being summoned to the floor for votes.

I think, however, we could probably put a good dent into opening

statements, and then recess briefly, and then come back for the

questioning portion, if you don’t mind. OK? All right.

Ms. Lew, you are recognized for 5 minutes for your opening

statement.

STATEMENTS OF HELEN LEW, INSPECTOR GENERAL, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; AND

MATTHEW J. WELBES, ACTING DEPUTY ADMINISTRATOR,

FEDERAL TRANSIT ADMINISTRATION

STATEMENT OF HELEN LEW

Ms. LEW. Mr. Chairman and members of the subcommittee, I

would like to thank you for the opportunity to testify today about

our work at WMATA.

I am the first WMATA inspector general. Our office was authorized by resolution of the Board of Directors in 2006 and I began

my tenure in May 2007. I report to the board, and as such I am

independent of management. We conduct audits, investigations,

and evaluations of WMATA activities to prevent and detect fraud,

waste and abuse, and promote economy, efficiency and effectiveness.

We also oversee the annual financial statement audit and the

single audit of major Federal programs that are performed by an

external audit firm.

I will highlight our work and that of our external auditor in two

of the four subject areas for this subcommittee hearing.

Internal controls and capital improvement projects. In our audit

of fare media sales, we found that the point of sale system maintained by a contractor lacked proper internal controls and management oversight. For example, log-on identification codes and passwords used by clerks and supervisors were not unique or confidential. There was no analysis of system logs, exception reports, and

edit checks. There was no in-house oversight of the day to day operation of the system. Management concurred in our findings about

the system and is working to improve oversight and internal controls.

Our audit of WMATA’s accounting of capital expenditures from

Federal funds, we found incidents totaling $314,000 where

WMATA did not use grant funds in accordance with the grant

agreement. For example, a $264,000 expense for computer was improperly charged to a grant for bus purchases. A $47,000 expense

for motorcycles was improperly charged to a grant for rail maintenance. Management has since applied the expenditures to alternative funding sources, as well as reorganized its grant management process to improve oversight and internal controls.

Our external auditor identified issued an unqualified opinion on

WMATA’s financial statements as of January 30, 2008. This type

of opinion means that the financial statements were fairly presented in all material respects. Nevertheless, the external auditor

identified 11 significant deficiencies. The most notable of these

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were inadequate information technology controls, such as user access not promptly revoked upon employee termination and the lack

of a disaster recovery plan.

The external auditor also identified one incidence of noncompliance with Federal regulations relating to safeguarding a bus equipment purchase with Federal funds. These deficiencies are still

open.

Our work in the area of capital improvement projects takes the

form of contract attestations and contract performance audits. In

contract attestations, we look at a contractor’s proposed or claimed

price and cost data and recommend adjustments, if any, for consideration in contract negotiations. Since May 2007, we have reviewed

over $124 million in contractors’ proposed and claimed costs and

recommend reductions of over $26.3 million. Our contract performance audits focus on whether a contractor is meeting the terms of

a contract.

A case in point is our audit of WMATA’s contract to upgrade bus

fare boxes and SmarTrip cards and fare collection equipment. We

found that the contractor missed deadlines primarily because of its

untimely decision not to support the original software and

WMATA’s delay in deciding to implement upgrades to the software.

We recommended measures to mitigate the effect of future delays

and reduce the risk of obsolete technology. Management agreed.

In summary, we have accomplished much in the 2-years since

our office came into existence. Management has been responsive to

our performance audit recommendations, concurring with and implementing corrective action to address the vast majority of them.

As we go forward, we expect that our contract attestation and

our contract performance audits in particular will play a valuable

role in maximizing the efficient use of funds for capital projects

under the American Recovery and Reinvestment Act.

We look forward to continuing to fulfill our independent oversight role, working with the WMATA board and the general manager.

Mr. Chairman, this concludes my prepared testimony. I will be

pleased to respond to questions from you or other members of the

subcommittee.

[The prepared statement of Ms. Lew follows:]

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Mr. LYNCH. Thank you very much.

Mr. Welbes, you are now recognized for 5 minutes. Thank you.

STATEMENT OF MATTHEW J. WELBES

Mr. WELBES. Thank you, Mr. Chairman and members of the subcommittee.

I appreciate this opportunity to testify today on behalf of the

Federal Transit Administration. My testimony will focus today on

FTA’s financial assistance and oversight of the Washington Metropolitan Area Transit Authority.

Across the United States right now, public transportation is experiencing its greatest success in decades. Ridership is growing.

Many transit systems have improved their operating efficiencies

and there is widespread community support for all types of bus and

rail and paratransit service.

WMATA exemplifies this success right now with ridership at

record-breaking levels. WMATA’s growth reflects in part the longstanding Federal, State and local public transportation partnership

which in fiscal year 2008 FTA delivered $237 million in funding for

WMATA for capital investments, which is equivalent to 35 percent

of WMATA’s total capital expenditures for the year.

Most recently, on March 10th, FTA was pleased to host the signing of a full funding grant agreement for the Metrorail extension

to Wiehle Avenue in northern Virginia, which is the largest Metrorail expansion since the original 103-mile system’s construction.

Moreover, the American Recovery and Reinvestment Act brings some vital resources to the national capital region, providing $214

million in public transportation funds for capital improvements.

WMATA will receive $202 million of this ARRA formula funding,

and FTA is working closely right now with WMATA to ensure that

the critical milestones are met for the use of these funds. As the

money begin flowing, we expect the commuters in the region are

going to see much-needed improvements to public transportation.

But like much of the transit industry in the country right now,

WMATA faces some serious challenges as well. The success of

growing ridership has put strains on equipment, rolling stock, and

facilities. And the system is now in its fourth decade of operations

and reinvestment is needed. Securing the resources to ensure that

WMATA can continue to meet demand, operate safely and maintain its infrastructure is an evident need.

FTA has completed and is soon going to release a rail modernization study that was requested by the Congress. The study examines

the seven largest U.S. rail transit agencies, including WMATA, and

the study finds that more than one-third of the seven agencies’ assets are in either marginal or poor condition. In addition, the study

estimates that there is a backlog of unmet recapitalization needs

of about $50 billion at those seven agencies.

And FTA recognizes that WMATA’s capital needs inventory covering the period from 2011 to 2020 is an important step. This

inventory’s identification of a total of $11.3 billion for performance,

capacity and customer experience improvements is very important.

It is also important to note, and was noted earlier, that WMATA

is the largest transit system in the country without a dedicated

local funding source at this time.

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In an effort to address that need for dedicated local funding, this committee initiated the recently enacted authorization of $1.5 billion over 10 years for Federal grants to WMATA. FTA is closely

monitoring the actions by the District, Maryland and Virginia

which are required to establish the dedicated local matching funds

to qualify for that Federal appropriation.

The upcoming reauthorization of the Nation’s surface transportation law is going to provide an additional opportunity for considering ways to improve mobility. And Secretary LaHood has noted

that the important element of reauthorization is going to be livability, and that means fostering pedestrian and bike friendly communities, providing more transportation choices, and offering better

access to jobs and housing. And the Federal investment in

WMATA’s bus and rail systems has supported transit-oriented

mixed-use development that contributes significantly to the clustering of regional activity centers near public transportation.

Finally, I do want to note that based on FTA’s recent oversight

reviews, WMATA is in general compliance with FTA’s statutory

and regulatory requirements. WMATA received nearly one-quarter

of a billion dollars per year from the Federal Transit Administration. And as a result, FTA conducts a series of oversight reviews

on a regular basis. We have conducted 10 oversight reviews in a

variety of areas since 2004.

In general terms, WMATA’s principal 2008 oversight review by

the FTA identified findings in the areas of tracking vehicle maintenance, asset management, and grants management, some areas

that Inspector General Lew also noted. FTA is providing direct

technical assistance to WMATA to help address and close these

findings.

In conclusion, the partnership between FTA and WMATA has

provided significant transportation benefits to the national capital

region over many decades. And I thank the subcommittee for the

opportunity to discuss FTA’s role in this important Federal investment.

Mr. Chairman, this concludes my testimony. I would welcome

any questions.

[The prepared statement of Mr. Welbes follows:]

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Mr. LYNCH. Thank you, Mr. Welbes.

At this point, I would like to recognize the gentlelady from the

District of Columbia and ask her to please chair the hearing.

Ms. NORTON. Mr. Chairman, I cannot.

Mr. LYNCH. You cannot.

Ms. NORTON. I cannot because I am due to open at another hearing.

Mr. LYNCH. OK. All right. We are going to recess. I was going

to use 5 minutes of questioning time, but I think what we will

do——

Ms. NORTON. You mean while you were on recess, because I

think, wait a minute.

Mr. LYNCH. I was going to give you 5 minutes to ask questions

while we were gone.

Ms. NORTON. I do not have any questions.

Mr. LYNCH. Oh, OK. All right. So we will recess. I apologize. This

is one of the occupational hazards of these hearings.

Thank you and we will be right back, I would say—how many

votes?

OK. Probably a half hour anyway. Thank you.

[Recess.]

Mr. LYNCH. We will reconvene this hearing. I apologize again for

the interruption.

We had just concluded the opening statements of our witnesses,

and I would like to begin the questioning.

Ms. Lew, in your opening remarks and in your written statement

as well, you talked about the list of deficiencies that you found in

your investigation. And there seemed to be somewhat of a laundry

list of issues that you highlighted. Have we made progress on any

of those items that you have outlined, whether it is the use of

grants, the compliance with the specifications of certain appropriations, the information technology insecurities that you highlighted?

Have any of those been addressed in a meaningful way?

Ms. LEW. Yes, they have, Mr. Chairman. In my testimony I mentioned that the management has been very responsive in concurring with our recommendations. They concur a little over 95 percent of the recommendations we made on performance audit. They

have concurred. They have implemented corrective action on close

to 75 percent of our recommendations.

As far as the report we issued on capital projects, we identified

a small number of incidents where I think about $314,000 in funds

were charged to the wrong grant agreement. That has been corrected. They have charged it to other alternative sources. And more

importantly, they have reorganized their whole grant management

process.

Mr. LYNCH. Yes. Having dealt with the whole grant management

process from this end, it is fairly complicated. I guess I am encouraged that even though some budget matters were extended to areas

that weren’t necessarily covered, in other words, vehicles, motorcycles for security teams, as opposed to core infrastructure expenditures, it wasn’t so far out of line that you could say it was irresponsible or irrelevant.

So it seemed to be a mismatch in terms of what the grant required and what the need of the agency was. So I am encouraged

65

in that respect. I think those are probably honest mistakes that

were made.

Mr. Welbes, you remark as well in your statement about capital

deficiencies in where we are right now. You sort of, at least in the

remarks that I focused on, lump them all together. And I wonder

if you can help break it out a little bit. When you talked about the

deterioration of assets, are we talking about train sets? Are we

talking about signaling systems? Are we talking about bridges? Or

are we talking about all of that? And is there some majority of

these deficiencies that you find in any one category as opposed to

the others?

Mr. WELBES. Yes, Mr. Chairman. There are a number of different asset categories that a system like Metro operates. We find

the aging of the infrastructure, particularly on the rail system, to

be notable. And so there are track structure issues. There are

power supply issues that WMATA is facing as it prepares to run

eight-car trains to take advantage of platforms that were designed

decades ago to handle eight-car vehicles, and now needs to upgrade

the power supply—this is an illustrative example—to deliver service with eight-car trains.

So we have worked with WMATA. The report that I referred to

that will be issued shortly to the Congress investigated the assets

at all seven of the largest transit rail operators n the Nation.

WMATA is among them. And in that process we looked at the discrete asset classes and identified some of the recapitalization

needs.

And so WMATA’s first step right now between 2011 and 2020 is that they have identified $11.3 billion in recapitalization activities.

Part of that is for recapitalization activities, and so we think that

is an important step, but we have a state of good repair initiative

at FTA. WMATA is an active participant in that effort. They are

actually going to host our first roundtable on that topic this summer, but the recapitalization needs are notable.

Mr. LYNCH. Just so I am straight on this, the $11.3 billion—is

that what you said?

Mr. WELBES. Yes.

Mr. LYNCH. None of that anticipates any expenditures on this

new—that is all recapitalization. We are not talking about anything going out to Dulles?

Mr. WELBES. As I understand it, the $11.3 billion includes a

number of elements. And of that, $7.1 billion of the $11.3 billion

would be to improve the existing system through, for instance, replacing or rebuilding some of the existing vehicles, rehabilitating or

replacing certain track elements, and improving some of the station

platforms.

Mr. LYNCH. You know, I am more familiar, at least organizationally and structurally, with the MBTA system, the Mass Bay Transit Authority in Boston, which is the oldest transit system in the

country. And ironically, though, I spend more time on the Metro.

I don’t have a car here so I use the Metro a lot. And I am a little

envious. You know, I hear you saying that the system is deteriorating, but when you have a system like we do that started in the

early 1900’s, when I look at structural problems in an old city like

Boston, I see greater concern there.

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Do you have—and I know the system is only about 40 years old,

is that what it is? And I am also an ironworker. For about 20

years, I went out there. I was a welder and ran construction jobs.

Are you having major issues already with structural components,

bridges? Those are very expensive items. Is that part of what we

are talking about here?

Mr. WELBES. That is what we are talking about, Mr. Chairman.

And there are two eras when there has been a lot of rail transit

building in this Nation, one a century ago when the T was built,

and one more recently when systems like WMATA’s rail system

were constructed. What we are seeing for that latter group of systems in San Francisco, in Atlanta and here in Washington, DC, is

that they are starting to experience some of the same recapitalization needs that have occurred in those older systems.

And so they are starting to look more like their century-old peers

than the new systems that have come online in the last 5 or 10

years.

Mr. LYNCH. I know that I have abused my 5-minute limit, but

let me ask my colleague, Ms. Eleanor Holmes Norton, if she would

like to take 5 minutes to question the panel.

Ms. NORTON. Yes, Mr. Chairman. I have had an opportunity to

look at the testimony, and I do have some questions for Ms. Lew.

The stimulus funds are calculated to get out fast, produce jobs

immediately, and of course to get the work done the Federal Government needs to have done in the States and in the Federal Government. We have already had an audit of not the stimulus funds,

but some of the large amounts of money, some of the TARP funds,

etc., and a pretty negative report about capacity for all kinds of

waste and fraud when you get out such amounts of money.

You know, those funds didn’t even go out in the way these are

going out, at breakneck speed. I am concerned that very often the

really indispensable work that the IGs perform are performed after

the fact. I don’t know if the right word is performance audit. I call

it pre-auditing. But it would be such a tragedy if we had a series

of audits that because we were trying to get jobs for Americans as

quickly as possible that the prediction that nobody can get money

out that quick without having disproportionate issues to arise, it

would be too bad if that occurred.

Now, there will always be some issues and, I don’t know, maybe

some Ph.D. scholar has figured out what are the minimum number

of issues you should have whenever Federal money goes out, and

maybe you would have that plus X if you put out a lot of money

fast. But it occurs to me that we funded the IGs especially for the

stimulus funds, not simply to come back as a must and tell us what

we have done wrong, but with the hope that the IG would work

with the agencies to keep them from making mistakes that might

otherwise be inevitable, given the speed, the breakneck speed that

they have been ordered to proceed.

Could you tell us how you are proceeding? In what way are you

working with, even given your auditing function—it is not unheard

of for the auditors to look before something goes out. It happens all

the time in one of my other committees.

How are you operating so as to minimize the issues that arise

when you get out funds this quickly?

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Ms. LEW. I will be glad to, Congresswoman Norton.

In my testimony, I mentioned the work we do on our contract attestations. In contract attestations, we look at the contract proposals or claims submitted by contractors, and we look at the pricing

of that to make sure that the pricing they have is supported and

reasonable.

Ms. NORTON. You, of course, are working with WMATA.

Ms. LEW. Yes.

Ms. NORTON. Is WMATA the only agency you are working with?

Ms. LEW. Yes. I am the WMATA IG.

Ms. NORTON. Well, you are in better shape than some of our IGs

who are working with lots of different kinds of money going out at

the same time to different parts.

Are you able before the fact to look at the contracting dollars and

other proposed ways of operating, given the timeframe they are

under?

Ms. LEW. We currently do that now. I think in my testimony I

mentioned that since I have been there in May 2007, we have reviewed contracts——

Ms. NORTON. Yes, the problem we have here is a move it or lose

it problem. So this is not like what you usually have. If this money

isn’t used and if I were running an agency, I would try to get that

stuff out there as quickly as I could, rather than have it move

away. So what I am trying to ascertain is whether we have something different from what we have had before where the government did not put this type of timeframe on local agencies in the

past. Perhaps we should have, but we did not.

So what have you done that is different about people who are

under orders, as it were, to get this out and make jobs now? Do

you have the staff to do it?

Ms. LEW. I certainly could use more resources to do it.

Ms. NORTON. Well, you are not going to get more resources, so

I want to know, given the fact that these people are under a breakneck—after 120 days, it is gone. Given the staff you have and the

fact that this money runs out within a year and a half, the issue

is obligation.

Ms. LEW. Yes.

Ms. NORTON. That is what the issue is. Within a competitive system which means that we said go shovel-ready, are you finding

that WMATA is going with projects that have already gone through

sufficient clearances so they are ready to go into the ground except

for letting the contract?

Ms. LEW. WMATA has identified the capital projects that they

would like to fund using the stimulus money. We have that schedule. We have also sat down with the director of procurement at

WMATA and we informed him that as soon as you are ready, let

us know so that we can do the necessary contract attestations. We

will give those our highest priority.

We also do contract attestations.

Ms. NORTON. Have any of those occurred yet?

Ms. LEW. We have not received any as of yesterday. I informed

him.

Ms. NORTON. Has the money been released?

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Ms. LEW. No, I don’t think the money has been released. They

have advertised——

Ms. NORTON. So the money for WMATA, the stimulus money for

WMATA is not in hand?

Ms. LEW. I don’t think they have awarded contracts yet.

Ms. NORTON. No. I am just asking if we the Federal Government

have dumped it on WMATA yet?

Mr. WELBES. WMATA has applied to the Federal Transit Administration. There are two grants that FTA will award to WMATA

with our funds, Congresswoman Norton. And one of the grants has

been submitted to FTA. It is complete. The other one is in process

right now.

Ms. NORTON. So wait a minute. So we are going to count it from

when?

Mr. WELBES. The test is for Federal Transit funds, 50 percent of

the funds in the D.C. urbanized area have to be obligated, awarded

in a grant from FTA to Metro by September 1, 2009. It is a different test than for Federal highway funds.

My understanding is that WMATA plans to have 80 percent of

its Federal Transit economic recovery funds obligated by that September 1st deadline.

Ms. NORTON. Now, wait a minute. So you have to make a decision first?

Mr. WELBES. These are formula funds, and WMATA has put together a list of activities it plans to apply for, and has submitted

that information to FTA.

Ms. NORTON. So the time begins to run from?

Mr. WELBES. Well, the clock began running when the law was

enacted, and the law said by September 1, 2009 that 50 percent of

the funds have to be obligated.

Ms. NORTON. I guess that is the nature of the beast here.

Mr. WELBES. That is correct.

Ms. NORTON. It is a little different from highways.

Mr. WELBES. Yes. And so WMATA has to turn in information to

FTA.

Ms. NORTON. What kinds of things do they have to obligate for

under this?

Mr. WELBES. WMATA has a number of activities that they are

going to use their ARRA funds for, which include new bus purchases. They are going to replace some of the platforms at MetroRail stations which are crumbling. They plan to purchase some

paratransit vehicles. There is some track maintenance equipment.

Ms. NORTON. There is a lot of difference among those things.

Mr. WELBES. Indeed.

Ms. NORTON. Some of those things, it seems to me that they

could be already in operation, like repairing the stations. That is

an ordinary highway job.

Mr. WELBES. The economic recovery funds approximately double

the Federal funding for WMATA during this period, during 2009

for example.

Ms. NORTON. But apparently none of it is yet out. Does it all go

out at one time? I mean, the whole point was to make jobs, make

them now. Some of those we have to contract to buy buses.

Mr. WELBES. Yes.

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Ms. NORTON. That is a long time line. Where you have to take

a station and where the passengers’ stand is crumbling, why

couldn’t that kind of work be already underway?

Mr. WELBES. For certain activities that WMATA plans to undertake with its economic recovery funds, they have what is called

pre-award authority where the activity is eligible for Federal reimbursement, and WMATA can go forth and undertake certain work.

And at a later date, we will award the grant and obligate it.

Ms. NORTON. So they don’t have to come to you first? They could

go and start that?

Mr. WELBES. For certain undertakings, they can start now. They

can create and sustain jobs immediately.

Ms. NORTON. But Ms. Lew doesn’t indicate that there is any such

project that she is performance auditing or pre-auditing. And that

is what I don’t understand because how long has it been since

these funds were—we passed this February——

Mr. WELBES. February 17th the law was enacted.

Ms. NORTON. February 17th.

Mr. WELBES. And on March 5th, the Federal Transit Administration issued a notice to our grantees that the funds were available

for grants.

Ms. NORTON. I see. Well, maybe I am overly anxious, but it does

seem to me that some of that work—we are coming on into May—

could have been started and I am a little concerned, even though

you have until September. I am sure that WMATA is like a system

with many different kinds of infrastructure. And I take it those

grants are grant by grant, not in one fell swoop?

Mr. WELBES. In fact, Congresswoman Norton, we understand

there will probably be two grants. There are two formula programs

under economic recovery law.

Ms. NORTON. And basically all they need to do is to show you

that they can do the job. They are not competing with other transit

systems, are they, for this money?

Mr. WELBES. No, they are not. These are formula funds that flow

to the Washington, DC, region and $202 million of the $214 million

in transit funds are directed to WMATA.

Ms. NORTON. Well, do you think all of this is going in a timely

fashion?

Mr. WELBES. From what I observe for WMATA at this time,

things are moving in a timely fashion so that they will meet the

deadlines for obligating funds.

Ms. NORTON. And what is the deadline for obligating funds?

Mr. WELBES. The deadline for obligating half of the funds is September 1, 2009 and 100 percent of the funds must be obligated by

March 5, 2010. At this moment, WMATA is on schedule.

Ms. NORTON. You have no idea how many funds are obligated as

of now?

Mr. WELBES. At this moment, a very small percentage nationwide. There is $8.4 billion in Federal transit funding from the economic recovery law, and of that $8.4 billion, about $100 million has

been awarded. However, about 20 percent of it, or 25 percent of it,

more than $1.5 billion, is in process right now. Federal transit

grants, the grants we are discussing, require a Department of

Labor certification process with the labor unions that are associVerDate 11-MAY-2000 15:11 Jul 08, 2009 Jkt 000000 PO 00000 Frm 00073 Fmt 6633 Sfmt 6633 U:\DOCS\50349.TXT KATIE PsN: KATIE
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ated with the transit agencies. That process can take between 2

weeks and 60 days. So we have accounted for that.

One reason the highway deadline and the transit deadline differ

is because we wanted to take into account and the Congress wanted to take into account that Labor certification process. So at this

moment, WMATA is on schedule to meet the obligation deadlines.

Ms. NORTON. I just hope that the internal bureaucracy does not

become responsible for any of the delays.

Thank you very much, Mr. Chairman.

Mr. LYNCH. Thank you.

Let me followup on an earlier line of questioning that Ms.

Holmes Norton put forward.

Ms. Lew, you know, being on this oversight committee, one of the

problems I have seen, and I even saw it before I was on this committee, is the ability or the lack of ability for oversight to keep up

when large blocks of money for construction go forward. I will give

you a couple of examples.

With the big dig, the project in Boston where we had a very

small oversight community trying to keep up with a huge project.

They were just completely out-matched by the contractor community and a lot of money was wasted. I saw it as well being part of

this committee. We did 11 oversight visits to Iraq, reviewing construction projects in Iraq, same thing with Afghanistan. A lot of

money spent in a very short amount of time with not enough oversight, we had problems.

Now, we have the dedicated funding issue, which might bring a

lot of money, or expect to bring a lot of money into the system.

There will be numerous projects going forward, according to

WMATA. And you have the stimulus, over $200 million.

You said you could always use more people, and I think you are

going to need more people and we can’t just roll this money out

here without proper oversight.

What do you think? Give me your opinions on what you need and

what you foresee in terms of a bunch of projects going on. You have

to have inspectors, investigators, auditors, because some of the

stuff is in-house and it is contractual in nature, not to mention the

physical monitoring and inspection that needs to go on.

How is this all going to happen? Reassure me, please.

Ms. LEW. You raise a very good question. I definitely could use more resources. I currently have a budget of about $3.7 million. I

have 23 people on board and I am authorized 29.

Mr. LYNCH. What is the breakdown of the folks you have on

board? What are they?

Ms. LEW. I have 18 auditors and 3 investigators and my secretary and myself. That would be a total of 23 right now. We hope

to bring in three entry-level individuals sometime in the June-July

timeframe.

But you are right. We have a huge influx of Federal funds coming in now with the potential of $150 million in the dedicated funding, and then you have the $202 million in the Recovery Act funds.

And my experience in the Federal Government has been—I am a

retired Federal employee that the potential fraud, waste and abuse

is very great. It is heightened when you have a new influx of

money.

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You know, you saw what happened in Iraq. You saw what happened with Hurricane Katrina. So I am concerned as to whether

I have sufficient resources to address the audit needs, as well as

the investigative needs.

As I told Congresswoman Norton, we give the highest priority to

the stimulus money that we will be getting. And we do do these

contrast attestations, and these contract attestations is our front

end work, where we go through these proposals and look at their

pricing, look at the costs on claims, and see if that is a reasonable

amount as opposed to them bleeding the government.

We also have a role in terms of all sole source procurements. We

do that contract attestation. We also, the Recovery Act encourages

buy American, but there might be things where there is no American manufacturer and we have to go foreign. We have a role to do

pre-award certifications to make sure that there is a certain

amount of domestic input in putting together the final product.

And our office does do that.

But when it comes to contracts, we try to do select contracts to

make sure that the terms of the contract are being met and we are

getting what we paid for.

Mr. LYNCH. Not to interrupt you, but that requires folks to go out

on the job.

Ms. LEW. Yes.

Mr. LYNCH. You can only do so much auditing. It is sort of what

the defense contracting audit agency had a problem with, where

they were auditing the construction in Iraq from Alexandria, VA.

And we didn’t have auditors on the ground for the longest time, the

first couple of years in Iraq, and it was a mess.

So I just am very concerned about, having worked on job sites

for about 20 years, your ability to be out there on the ground. It

doesn’t sound like you are set up for it now.

Ms. LEW. That is very true. We don’t audit from our desks. We

have to get out to the field. When you do this contract attestation

work, you have to do that. I have a team of two that is going out

to Manitoba, Canada next week to do the post-delivery certification

on the buy America to see if they met buy America requirements

because the buses are being purchased by New Flyer, which is a

Canadian firm. It is being assembled in Minnesota. And so our

audit team is going to be going to Minnesota as well.

But it takes resources to do the travel and also having the resources to go out there and it takes time to do that type of work.

Mr. LYNCH. I understand. Well, we need to stay in the loop. If

you need more people, this is an important part of this. You are

going to save us money by doing your job. And you also know that

the appetite for expenditures and appetite for appropriations is

going to diminish greatly if we start to see waste, fraud and abuse.

I mean, you know, it is just leaving yourself wide open for criticism. We don’t want that to happen.

Ms. LEW. I just want to make one point, Mr. Chairman.

Mr. LYNCH. Absolutely.

Ms. LEW. Unlike my counterparts in the Federal IG community,

we at the State and local level did not get any money to do our audits and do our investigations relating to the Recovery Act funds.

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Mr. LYNCH. Well, that’s a terrible lapse on our part. I wish I had

known that up front. I certainly appreciate the value of your service and I want you to be able to do your job. You are going to be

the first one in line for criticism when things go wrong, so I think

it behooves us to give you—well, you might not be first. We might

be first. You will be right behind us, and we will have folks up here

blaming you.

Mr. Welbes, let me shift to you just for a second. You offer a

great perspective nationally because you are dealing with a number

of these larger transit authorities. So you have a sense that I don’t

of how in Washington, DC, we compare with other systems of relatively the same size.

What is your assessment on how we are doing here in terms of

preparing for this sizable increase in expenditures, increase in the

number of projects, the complexity of this stuff? How are we sizing

up here?

Mr. WELBES. I think the region and WMATA have taken some

important actions. At the Federal Transit Administration, we have

put together really a risk strategy and an oversight strategy associated with the ARRA funds. And we have in place, of the $8.4 billion in ARRA funds for transit, about 99 percent of it flows into existing FTA programs where we have an oversight system in place.

So we do financial management oversight reviews for our

projects. For the large capital projects when they are under construction, we have project management oversight engineers who

are boots on the ground who visit with the grantees, visit the

projects, and make sure the project is on schedule and on budget.

And we have in fact a meeting with WMATA next week, our quarterly meeting, to talk about among other things those major capital

projects.

So WMATA’s history of managing major capital projects has

fared relatively well. The most recent significant project, the Largo

Metrorail extension, was brought in on time and on budget. And

there are other large projects such as the Wiehle Avenue Metrorail

extension, which we now have underway. The Airport Authority is

constructing that project. WMATA will be the owner and operator

ultimately, but Metro has a sound track record in that regard.

There are certain reviews we have done recently where we do

have open findings that we are working with Metro to close out.

Many of them parallel those that Inspector General Lew has identified, but we are working to address those findings.

Mr. LYNCH. Ms. Holmes Norton, do you have any followup questions?

Ms. NORTON. No further questions, Mr. Chairman.

Mr. LYNCH. OK.

Let me ask you, I offered the same opportunity to the previous

panel. Are there aspects of your situation now going forward, overseeing WMATA, that we haven’t touched upon here that you think

is important for the committee to hear?

Ms. Lew.

Ms. LEW. We certainly are supportive of the dedicated funding

bill that would give us statutory authority within the compact jurisdiction. I think that will strengthen our ability to deal with any

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challenges that we get from the people that we audit, both internal

and external.

Mr. LYNCH. Just to sort of amplify a point I want to make, this

is an oversight committee. You are both doing oversight work.

There is a natural alliance here that we have. We want to see the

work done efficiently. We want to see the taxpayer money used efficiently, effectively. But if we don’t know the problems you are encountering, and it looks like we missed an opportunity to fortify the

oversight apparatus in this case. You know, I am going to look for

an opportunity to correct that. I think there will be vehicles where

we can do that.

But we have to have the oversight in place. Otherwise, we are

going to have a mess on our hands. And you know, I appreciate,

the rail system, FTA does have a better oversight protocol in place.

I have seen that over and over again, work out better than my

heavy highway projects where we don’t nearly have the oversight

that is necessary. So that is encouraging.

But still, I think that the drastic increase that we are going to

see here in activity there needs to be a sizable increase, a commensurate increase in oversight ability here, and I don’t think we have

it.

So it is just a red flag from me, and I want to try to address that

at some point. But it is going to require communications between

both of you and the committee, the subcommittee especially. OK?

Thank you.

Mr. Welbes, do you want to address anything that you haven’t

addressed so far?

Mr. WELBES. I think I would just amplify two points. One is, as

you have noted, with the economic recovery funds, by doubling the

resources, the Federal resources that will flow to WMATA in the

coming year, there is an increased risk. And the risk for our large

grantees involves taking on multiple projects that would have been

spread out over a longer period of time, simultaneously.

So the capacity constraint that you have described with regard

to our oversight resources certainly applies to the resources of our

grantees like WMATA in implementing multiple projects simultaneously. The engineer or financial expert who usually would handle

X number of projects will be handling X plus Y number of projects.

That is an area that we are going to be focused on going forward.

We are enhancing some of our oversight tools to include additional

scrutiny of the economic recovery resources in particular. We are

structuring some of our project management oversight and financial management oversight to account for that increased flow of

funds.

And then the second point is one that we have discussed already,

but it is sort of the state of good repair needs at systems like

WMATA. Over time, that caseload, that reinvestment need only

grows. And so it is important to start making headway on it sooner

rather than later. There are risks that increase as that reinvestment need grows.

I know in the reauthorization of SAFETEA, we will be paying attention to that and there is a discussion about how state of good

repair can be addressed, but it has parallel oversight implications

as well.

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Mr. LYNCH. Well you know, you invite a question. I understand

Ms. Lew’s statement that we in Congress did not adequately fund

or fund at all the enhanced oversight that is necessary for her and

her team to do their job. What about FTA? Did we do any enhancement there?

Mr. WELBES. For FTA’s regular statutory program, there are

take-downs that are 0.075 percent or 1 percent for large capital

projects, and that provides us with a resource that we can apply

to the ARRA funds as well. Congress did include in the statute a

setaside for FTA oversight equivalent to about 0.033 percent. So it

is really about one-third of what we would usually see for our oversight resources for this size funding. So for the $8.4 billion, we

would usually see additional resources compared to what was in

ARRA for our usual program. And you know, we are where we are.

We are working to maximize our efficiency using that resource

right now.

Mr. LYNCH. OK. And again, the subcommittee and the committee

welcomes your assessment as we go forward. I think you will be

able to sense whether or not one-third of 1 percent is going to be

nearly adequate. OK?

Seeing no further questions, I want to thank you both for your

willingness to come before the committee and help us with our

work. I thought it was very helpful, very enlightening especially for

me to understand what you are dealing with. I am encouraged, but

like I said, I have some red flags out there I am a little concerned

with. But I want to thank you for your testimony here and I bid

you good day.

Ms. LEW. Thank you.

Mr. WELBES. Thank you, Mr. Chairman.

Mr. LYNCH. If we could have the next panel.

I invite you to please rise and raise your right hands.

[Witnesses sworn.]

Mr. LYNCH. OK. Let the record indicate that the witnesses have

all, each of the three have answered in the affirmative.

Your witness testimony as written will be submitted into the

record, without objection, so you don’t have to worry about reciting

every bit of it. We ask you to summarize your testimony within the

5-minute limitation.

Before I begin with witness testimony, I am going to just do a

brief introduction of our three panelists.

Mr. Craig Simpson is a representative of the Amalgamated Transit Union [ATU] Local 689. Mr. Simpson served as a bus operator

for WMATA in 1974. He was elected ATU Local 689 shop steward

of the Northern Bus Division in 1983 and was appointed assistant

business agent for ATU Local 689 in 1989.

In 1993, Mr. Simpson was appointed to fill an unexpired term of

Secretary-Treasurer of the Union and later was elected to two full

terms. He subsequently engaged in contract work for Progressive

Maryland Metropolitan Washington Council AFL–CIO and ATU

Local 689. His current contract with ATU Local 689 as political

and legislative representative began in February 2009.

Ms. Diana Zinkl is chair for the Riders’ Advisory Council for

Washington Metropolitan Area Transit Authority. She presides

over WMATA board and staff on issues affecting riders and proVerDate 11-MAY-2000 15:11 Jul 08, 2009 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6633 U:\DOCS\50349.TXT KATIE PsN: KATIE
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vides recommendations to the board and the Authority on how to

improve operations. Ms. Zinkl also serves as an analyst for the

Government Accountability Office. Her engagements at GAO include a wide variety of issues, including intercity passenger rail restructuring.

Mr. Ben Ross serves as president of the Action Committee for

Transit, which advocates for public transit and transit-oriented

land use in Montgomery County, MD. There, he helped build a 30-

member group into a significant force in county affairs, with over

600 paid members and nearly 100 active volunteers. Mr. Ross is

also the chair of the Transit First Group, a coalition of transit riders, environmental and labor groups organized to oppose cuts in

WMATA funding and service.

I welcome each of you, and I thank you in advance for your willingness to offer testimony before the committee. I will begin with

the customary 5 minutes, and please be aware of the little box in

front of you with the lights. I am sure you were able to observe the

previous panel.

Mr. Simpson, you are recognized for 5 minutes.

STATEMENTS OF CRAIG SIMPSON, REPRESENTATIVE AMALGAMATED TRANSIT UNION [ATU] LOCAL 689; DIANA ZINKL,

CHAIR, RIDERS’ ADVISORY COUNCIL, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; AND BENJAMIN ROSS,

PRESIDENT, ACTION COMMITTEE FOR TRANSIT

STATEMENT OF CRAIG SIMPSON

Mr. SIMPSON. Thank you, Mr. Chairman.

I am going to skip over a lot of my testimony and really get to

the heart of an issue that has been before the subcommittee before,

and that is the way that WMATA is funded. And I believe the way

that it is funded drives some of the problems at WMATA. It has

up until at least fairly recently largely been obligation-based,

where each local jurisdiction says that they will pay its share of the

WMATA costs out of their general funds. There are some exceptions, that is generally the way it is funded.

And with a multitude of jurisdictions, you have the State of

Maryland, the District of Columbia, and northern Virginia in the

transit zone. There are a number of local jurisdictions that actually

fund WMATA, counties and cities. So each one of them facing different tax bases, different budget priorities, have different interests

in funding WMATA at any given time, and different abilities at

any given time. And I believe that drives some of the problems.

One of the topics of this hearing was its affect on existing operations. And my criticism of the WMATA board is its parochialism

in this instance. When they realized that they had a budget problem, the way they dealt with it was not to look at it from a regional

perspective. They left the rail untouched, not saying that is a bad

decision, but they left it untouched. Now, what they said was we

are going to look at the bus service, including regional bus service,

lines that have been designated as regionally important that fall

within our individual jurisdictions, and we are going to make a decision on what of those to cut.

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So the cuts fell very unevenly. Some jurisdictions came up with

the money to cover their share of the deficits. Others came up with

some money. Maryland, where the most severe cuts are made, of

the $13.6 million or so in remaining deficit, almost $10 million of

the bus cuts are in Maryland, including many on major regional

routes that serve Federal facilities.

The decisionmaking there I think is what I fault as much as the

financing, but I think it is not driven by any individual board member. My criticism is not of them as an individual, but as the underlying funding mechanism I think drives that decision.

So that is manifested in a number of different ways. There has

been a devolution of kind of WMATA as the regional planner for

transportation in the area. Most of, in fact all of the new proposed

rail projects are really locally driven projects without any, well, I

mean, there is a Regional Transportation Planning Board that acts,

in my opinion, more as a clearinghouse than an actual planning

board, and where WMATA’s role previously had been to plan these

projects, they are being driven by local decisions, some of which

may or may not be true regional priorities.

Improving bus service, the same thing has happened. It is continually put on the back burner, and yet we could make existing improvements in regional bus service if we weren’t driven by local decisionmaking. And that is also true in under-capitalization of rail,

under-capitalization of the bus system, and with MetroAccess.

None of these things are really adequately funded, mostly because

of I believe the situation we discussed before.

I think that there is a model going forward when we talk about

dedicated funding. It is very difficult to impose. There has been the

idea of imposing a region-wide sales tax. It is very difficult to do

with the local jurisdictions because it impacts them differently. So

acting in their own individual interest, some will favor it and some

will oppose it. The same is true with other region-wide taxes that

could potentially be looked at.

But I think both the Metro Matters financing agreement and the

current proposal that hopefully the District of Columbia will take

care of its compact amendments and hopefully Congress will appropriate the funds, I think those type of financing agreements may

provide the model for stabilizing financing of WMATA where you

have a specified financial target and the local jurisdictions dedicate

funds that they choose to meet that financing goal. And that may

be a more practical way to stabilize WMATA’s financing over time.

Now, the agreements that I have referenced only apply to capital

funding currently and not all capital funding. But certainly, it may

provide a model for extending that to operating funds. So I just

want to, as a long-term solution, put that forth.

I think the Federal role, and I guess I differ somewhat than

some other people, in that I welcome a Federal role on the WMATA

board. I think it will provide a good counter-balance to the local jurisdictions’ interests. The Federal Government has a regional interest with facilities throughout the area. It has an interest in making

sure that there is adequate transportation to those facilities. And

I think in partnership with the local jurisdictions, it can help to

strengthen the regional system. So I welcome the Federal participation and look forward to that taking place.

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I hope that over time, that partnership can be expanded further.

I think that this is a critical system for the Federal Government

and I think the investment in it will ultimately be worthwhile. The

Federal Government does have a special relationship obviously

with the District of Columbia, which it is ultimately responsible

for, and also with this being the Nation’s Capital, it has major Federal facilities located in the suburban areas as well.

So with that, I will conclude my testimony and open it for any

questions afterward.

[The prepared statement of Mr. Simpson follows:]

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Mr. LYNCH. Thank you.

Ms. Zinkl, you are recognized for 5 minutes.

STATEMENT OF DIANA ZINKL

Ms. ZINKL. Thank you, Chairman Lynch for inviting me to testify

today.

My name is Diana Zinkl and I am the 2009 chair of the WMATA

Riders’ Advisory Council. It is an honor for me to be here today

representing the RAC and riders of public transit throughout the

national capital region.

A list of the names and jurisdictional affiliations of the other

members of the RAC is included at the end of my written statement.

The board of WMATA authorized the RAC in 2005 following public requests to create a citizens advisory group to serve as an institutionalized voice for riders within the Authority. All of us are volunteers and actually several RAC members were here earlier

today. Dr. Kelsi Bracmort, who is actually an employee of the Congressional Research Service; my jurisdictional vice chair from

Maryland, Patrick Sheehan, who is also chair of WMATA’s Accessibility Advisory Committee; and Carl Seip, a student right now at

American University and he had to get to class. So they did make

an effort to stop in and I was very glad to get a chance to see them

today. We only meet once a month, so you know, we don’t get to

see each other too often.

All of the RAC members are committed transit riders, some of us

by choice, some of us because driving is not an option for us. Six

of us are car-free. We use bus, rail and MetroAccess. We walk and

we bike. I myself have never owned a car. I have used transit my

whole life, in large part because my own mother cannot hold a driver’s license. She was transit-dependent, and when my dad was at

work, that means we were too. We weren’t the only ones. Lots of

folks in my home town of Green Bay, WI used and needed the bus,

and many of those bus routes that I used to take back in the 1970’s

and 1980’s actually are still there today in Green Bay exactly

where they were.

Another community actually with excellent bus service is Honolulu, which is where my mother went to high school. And when we

used to visit my grandparents in the 1980’s and the 1990’s, a lot

of the buses that she took in the 1950’s were still there.

So I learned how to live a transit-oriented life from my mom, and

I find it reward to experience my community by foot, by bike, by

bus and rail, and all RAC members feel the same.

There are four points I would like to make today in my oral

statement. First, WMATA provides basic transportation to residents of the national capital region. It is central to how many residents of the region live, work and play. It also serves visitors from

all over the Nation and the world.

For transit-dependent individuals, WMATA is a lifeline to jobs,

medical appointments, religious services and groceries. It prevents

drunk and tired driving and keeps the region moving in inclement

weather.

Two, RAC members are very supportive of recent and anticipated

changes to improve buses. For instance, the new hybrid buses,

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SmarTrip readers on all buses, the NextBus program, and the Bus

Priority Corridor Network. And let me just take a moment to say

what an honor it was I think for everyone involved in WMATA to

have the vice president visit the bus facility in Landover, MD last

week, acknowledging WMATA’s new bus programs.

We hope this type of support signals renewed commitment to existing expanded bus service. This is the type of commitment that

is needed to support reliance on bus service and generate development around bus lines similar to the development that you see

around rail lines, and you do see that kind of support in some communities for bus service.

My third point today is that RAC members are a bit concerned

that the pace of some of the recent operational changes at WMATA

may be too fast for some riders, particularly transit-dependent vulnerable populations. We feel that WMATA and the public would

benefit from earlier and more meaningful opportunity for public

input into such changes.

For example, the elimination of paper transfers is one example.

This was done through a budget process with little opportunity for

public input before the decision was made. WMATA came to us, the

RAC, to ask how to best publicize the elimination of paper transfers, but we really were not afforded an opportunity, nor was the

general public afforded an opportunity to have input into that decision.

Similarly, we are also concerned at the RAC about the fate or

weekly passes. Weekly bus passes are something that many bus

riders rely on quite a bit. When I lived in Boston, I would have my

monthly rail or bus pass every month and it gave me a lot of freedom and really helped my budget at a time when I was young and

just starting out and not making very much money working in the

public sector.

My fourth point is that RAC members would like to see WMATA

achieve a stable funding situation, both from a capital and operational standpoint.

In conclusion, I was very glad to hear just a few minutes ago

that you are a regular rider of both Metro and the T. I was always

a big fan of the T when I lived in Boston, as I just said. And I

would say that further information about the RAC, including meeting minutes, handouts and bylaws, can be found on our Web page

on the WMATA Web site.

I would also like to thank all the members of the RAC, everyone

at WMATA, my family, my co-workers at GAO who have been very

tolerant for the past few weeks, and all my friends and neighbors

for their advice and support.

And finally, I would like to thank the subcommittee for this opportunity to speak, and I am happy to answer any questions you

may have.

[The prepared statement of Ms. Zinkl follows:]

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Mr. LYNCH. Thank you, Ms. Zinkl.

Mr. Ross, you are recognized for 5 minutes.

STATEMENT OF BENJAMIN ROSS

Mr. ROSS. Thank you very much, Mr. Chairman. I am very

happy to have this opportunity to give you a rider’s view of Metro.

I am going to focus on the root causes, try to focus on the root

causes of these financial problems that we have been talking about

this morning. And I will start off with a take-home message. There

is a conventional wisdom out there that says that highway projects

are supported by user fees, while transit is subsidized.

And that is really no longer true. In my written testimony, I

compared Metro’s funding to the total——

Mr. LYNCH. I am sorry. Mr. Ross, I missed that. I missed that.

Repeat that point again.

Mr. ROSS. Yes. There is a conventional wisdom that highway

projects are supported by user fees, while transit is subsidized.

Mr. LYNCH. Yes?

Mr. ROSS. And I don’t think that is true anymore.

Mr. LYNCH. OK.

Mr. ROSS. And I did an analysis in my written testimony comparing Metro’s funding sources with the total of all of Maryland State

highway programs. What I found was that riders are paying 32

percent of Metro costs. That is capital plus operating and including

the Dulles rail project. And that drivers are paying for only 20 percent of the highway program.

Now, this is a deeply rooted trend. It is not just in Maryland. I

am sure if I looked at other States, I would get similar numbers.

And at the Federal level, you see the highway trust fund that used

to be flush with money is now borrowing from the general fund.

And the State and Federal transportation budgets are being

squeezed by this decline in revenue from road users. And Metro is

caught in that squeeze and I think that is really the underlying

reason that we are threatened with loss of service.

I think people have been talking at hearings and this morning

about the hardships that are going to be caused by some of these

cuts. It is especially true in Washington, well it is the same in Boston, that housing is very expensive and you can really do bad

things to a family budget if you are forced to buy a car when you

didn’t need one.

Now, as people have also said, these cuts are coming at a time

when more people are riding transit. Metro ridership is up 42 percent in 10 years. In the last few months, it is still going up, even

though the price of gas has come back down and we have a bad

economy. That is happening, and I think Congressman Bilbray had

some very good things to say about that, which is that Metro has

become a way to live, not just to commute.

The ridership is growing fastest for non-work travel. In a period

of 8 years, the morning rush hour travel was up 33 percent, but

Saturday ridership was up 47 percent and 57 percent on Sundays.

And you see all these new communities, U Street, Columbia

Heights, Clarendon, Silver Spring, Hyattsville. One thing that

struck me was that at Columbia Heights, Metro ridership went up

70 percent in just 4 years.

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Now, the spending priorities at all levels of government have not

kept up with the shift in public preferences. In this area, we have

less driving, and yet we have had a series of big road construction

projects on both sides of the Potomac, while rail to Dulles is just

getting started, and the new purple line in Maryland is still being

planned.

And this I think is the root cause of Metro’s funding problems.

People are no longer so taken with driving. You know, we still

drive a lot, but it is just a way to get where we want to go. It is

not something we are excited about. Years ago, they were building

parkways for something called pleasure driving, and nobody today

would say driving on the beltway is a pleasure.

And the effect of this change in public attitudes is a loss of willingness to pay taxes for driving. In this area, the gas tax has not

gone up since 1992. And that is squeezing the entire transportation

budget at all levels, and the net effect is, after a series of passthroughs, that Metro riders are being hit for money to fill the gaps

that are caused by lack of willingness to pay for roads.

And really, the public has spoken for a shift in priorities from

roads to transit. Really, it has spoken twice, once with its feet by

riding, and once with its votes by not wanting to pay for gas taxes.

And the political system really needs to start to listen and reassess

our priorities and put transit first.

Thank you very much.

[The prepared statement of Mr. Ross follows:]

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Mr. LYNCH. Thank you.

Let me ask a question, repeat a question that Mr. Simpson

raised, and I want to ask Ms. Zinkl and Mr. Ross to respond to it.

Mr. Simpson made the point that in this recent restructuring and

cost cutting exercise that rail was basically held harmless and bus

ridership—well, the bus routes took the hit. Is that a fair statement of what you said?

I suspect, and look, I am no expert. That is why we have you

here. But I would think that with the fixed system, transit system,

it is tougher to squeeze savings out of rail than it is to, well, look

at it this way. There is no replacement for the rail, for the trains,

principally, but if the bus isn’t there, I suppose you could take a

car and go to a rail station, and so there is somewhat of a replacement there, easier than, say, an alternative to the train.

The train is probably a lot more attractive. I know most people

where I come from love the train, hate the bus, because buses unfortunately have to travel in traffic unless there is a really good

dedicated bus route that they can use.

What do you think, Ms. Zinkl? In terms of have the bus routes

taken the hit? What are you hearing from your members about the

proposed cuts in services of these bus lines, a lot of them in Montgomery County, MD and elsewhere, as Mr. Van Hollen was stating

earlier today. What is your read on that?

Ms. ZINKL. Well, our members did have some personal experience

with some of the bus routes that have been proposed for either

elimination or reduction in frequency. We also attended, that was

at least one RAC member at every one of the recent public hearings. We have also gotten some public comments.

These bus routes are very important to the people who live near

them. And while there are indications that some of the routes may

not have as much ridership as we would like to see, we have also

gotten some qualitative feedback that some of the quantitative information that those decisions were based on may not have been

as accurate as one may have liked. Part of what came out of the

public hearing process I think is that some of these routes may be

a little bit more heavily used than we had actually believed.

And certainly, the RAC understands that essentially WMATA

has to have a balanced budget, and that some reduction in service

may be necessary in order to balance the budget. We may not be

able to come up with a completely blind set of reductions from the

view of the public, some that is seamless. However, what we would

like to see is reduction in frequencies, headway lengthenings.

If it is absolutely necessary to make changes in service, make

cuts that result in less frequent service as opposed to complete

elimination of routes. When you completely eliminate a route, you

are taking a lifeline away from folks who may not have any other

alternative. And unfortunately, many of the eliminations were in

places where that was really, these aren’t routes in central D.C.

They are out on more of the urban fringe in Prince George’s County, out in Arlington, and you don’t have the density of routes in

those areas that you do here actually inside the beltway. And we

are very concerned about any route elimination.

Mr. LYNCH. OK.

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Mr. Ross, do you have anything you want to add before I go back

to Mr. Simpson and allow him to rebut?

Mr. ROSS. Yes. I think that the process which was naturally political and should be, that came up with these proposals reflects the

reality that the rail system has tremendous, enormous support

from the public. And that is because it is something that serves all

income levels. It is like Social Security is always people have resisted cuts in Congress, where programs that are means tested get

cut.

I think that it is a sign that when you put in a good quality of

transit, it gets an enormous level of public support. And bus service

is an essential part of transit and the hope has to be that as you

upgrade the bus service, you make it attractive to more people, it

will attract more public support, and that making it a higher quality of service will actually benefit all income levels because you

have something that has that public support and maintains its political strength.

Mr. LYNCH. Great.

Mr. Simpson, just let me preface this by saying I think you had

very thoughtful testimony. I think you are right. I think the easiest

thing, the path of least resistance, was looking at the bus routes.

But a couple of things that you mentioned in your testimony, one

is that some of these bus routes actually serve some pretty vital

Federal facilities, which concerns me from an operational aspect for

our government.

And also, as I have been able to travel around the District and

northern Virginia and Maryland, we have had a pattern of development of public housing. I grew up in public housing. I lived there

for 15 years, and I notice that unlike in the city of Boston, the public housing developments are right downtown, in the inner city. So

all of the inner city neighborhoods, you have some struggling

neighborhoods, heavy minority populations there, who nevertheless

are by the T connected to the jobs.

Here, the connector and the feeder for folks living in these developments that are not out in the, well, to me they seem like they

are out in the boonies. But here, it is just sort of how you get a

lot of farmland here and there is an abundance of land, so some

of these major housing developments have been located outside the

city center.

And so you have to serve those minority neighborhoods. You

know, those families need to be connected to the job base. And the

feeder system to get those folks connected to the jobs is really in

large part the bus system, to feed them into the rail.

So how do we tackle that issue? And I know part of it, look, you

are a union rep. I was a union president with the ironworkers. My

job was to put my people to work. That was my job. And I am sure

that you are looking at this, in part, as a reduction in the number

of members your local is going to need in terms of driving buses.

And that is a valid concern. That is a valid concern. That is a real

concern and one that I respect.

How do we look at this whole need for greater efficiency and

maybe, as Ms. Zinkl suggested, not eliminating the route, but

maybe it is the frequency and timing of the buses coming into the

station, the hours of service that we operate. Can we gain greater

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efficiencies in those variables, as opposed to eliminating the whole

route and then leaving those folks stranded, basically without public transportation and eliminating your members’ jobs? What is

your thinking on that?

Mr. SIMPSON. Well, I think that there are a lot of opportunities

for bus efficiencies. It is in fact one of the proposals we made to

WMATA was to essentially put some money, accelerate their bus

priority, and BRT-like proposals to increase bus feeds and you actually save costs.

Just a simple example of that is in my testimony where if you

are running a bus, if you have a 35-minute from one end of the line

to the other, you need four buses to maintain a 10-minute headway. If congestion increases to the point where you have 5 minutes

more running time, you have to add a bus into that in order to

maintain that 10-minute headway. And adding that one bus, that

is a 25 percent increase in cost.

I think you can by using bus priority measures and by equalization, in other words using limited stop service or express service

to equalize the load across the line, actually reduce costs, and by

taking a bus off the line, but providing the same level of service.

Even though that may seem like it costs a job, it makes us more

productive. It makes the service better and attracts increased ridership, and ultimately leads to service expansion. So I am not opposed to that. I actually favor that. I think that is one of the ways

that WMATA could address this.

Their proposal, just to clarify, the heart of a lot of their proposals

to reduce service aren’t on—there are some fringe lines that are included, but if you look at the amounts of money, where they are

saving the money, it is on the heaviest-hauling lines that they are

proposing to reduce service. And they are in primarily, as you indicated, minority and working class neighborhoods.

Just two examples. The C–4 on University Boulevard in suburban Maryland, that is the heart of the Latino community. These

same people that live in that area use the Q–2 on Viers Mill Road

to access downtown Rockville. Those are the two heaviest-hauling

lines in Maryland. Those are proposed for truncation and reduction

of service. And on those types of lines, you can gain those types of

savings just by reordering your service.

Mr. LYNCH. I have to confess, I have not been to any of the meetings or hearings that they have had on cessation of service and

eliminating these bus lines. Has the analysis that you described in

terms of spreading out the time maybe, instead of 5 minutes, every

10 minutes or 7.5 minutes, whatever it is, has that analysis been

part of the process up to now? Or are we just looking at, I know

they are trying to get rid of a lot of overhead so they are using

broad strokes here, but I just don’t know if they have been listening closely enough.

Mr. SIMPSON. No. The proposal was mainly monetary-driven. It

was not driven by any plan. And that is part of what I argue.

There are some funds that WMATA could use to bridge the gap

until you had time to really examine these lines to find out how

to structure it so you could get the savings. The use of Federal

stimulus money is obviously one way that they could bridge the

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current gap. There are others. They have an operating reserve that

they could use.

The jurisdictions have new projects. My view is that you should

protect your existing services and projects first before you build

new things. I am not saying you don’t build new things, but you

could certainly slow down that and transfer moneys to protect your

existing services.

So there are at least three immediate ways that WMATA could

bridge this gap while they begin to look at more efficient ways to

provide bus service.

Mr. LYNCH. As you probably heard, they are calling me for votes

again, I believe. I think we are close enough to the end, and I could

throw my running shoes on so we could spend a little bit of time

here, at least 10 more minutes, 10 to 15 more minutes before I

have to run out.

But as with the other two panels, I am sure my questioning was

not exhaustive or nearly adequate to cover all the issues that we

have in front of us. So what I would like to do is, starting with Ms.

Zinkl, are there issues that you would like to bring to the attention

of the committee that have not been asked of you? Or is there some

earlier point that you really want to amplify in terms of making

sure we understand the feelings of the members of your organization?

Ms. ZINKL. I would say first of all, if it was not apparent from

my earlier statement, we are very supportive of improvements to

bus service. WMATA has experienced considerable improvements

in recent years to the rail service, and we believe that has benefited everyone in the region. And we are very much looking forward

to seeing similar types of improvement to bus service.

What is a bit disheartening is that we are seeing the current bus

system adjusted through a budget process right now. Not necessarily because these routes aren’t soliciting the level of ridership

needed to warrant having a bus, but simply because a combination

of budgeting issues means that there is a shortfall and jurisdictions

weren’t necessarily willing to put the money on the table to meet

that shortfall.

In addition, as I have said in many fora before and I am sure

everyone is getting tired of hearing me say this, but I will reemphasize in terms of the process we went through this year with the

2010 budget. The public did not have a budget document as we

have normally had in the past. And that has limited the ability for

the public to participate in the WMATA budget process. Of course,

as a citizens advisory group, our primary message has to be that

public participation is really the key to making WMATA the best

ride in the Nation, and keeping it the best ride in the Nation. So

I would hope that perhaps we have learned some lessons through

this process and we can continue to engage the public or increase

engagement by the general public in WMATA decisionmaking in

the future, especially early public input.

Mr. LYNCH. Thank you.

And I did hear Mr. Simpson, your criticism of the balkanized system—no offense intended to the Balkans. Now that we are going

to have some Federal presence on these boards, maybe it will stop

some of the parochial stuff. With the dedicated resources here that

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have been projected, maybe that does address some of the issues.

But I think there is still a need to make sure that there is some

equity in this whole process. It is not just a budget exercise to the

detriment of some of the poorer communities and some of the working class communities that really need the service.

Mr. Ross.

Mr. ROSS. Yes. I make two points. One is I would like to agree

with Mr. Simpson about the division. And you can see the effect

very clearly. Maryland, the bus service used to be funded separately by Montgomery and Prince George’s Counties, and there was

only one bus route that connected the two counties. Since the State

took over the funding in both counties 15 years ago, we have had

three cross-county bus routes added and they have all been very

successful.

The second point is something that Mr. Catoe talked about, that

is the coming need to do something about overcrowding of the

downtown Metro system, the core capacity as it fills up, and eightcar trains aren’t enough. That, again, is a regional problem because

you need capacity in downtown to handle the people coming in

from Maryland and Virginia.

And it is also a big financial problem, and I think it is really important that we get on top of these system preservation funding

issues quickly because there is going to be a large demand for funding coming down the pike, first for the purple line in Maryland and

then even bigger for the core capacity.

Mr. LYNCH. Those are very astute observations.

Mr. Simpson, I am going to allow you to close.

Mr. SIMPSON. Thank you, Mr. Chairman.

I did want to make one other point, and it is more of a long-term

point, and that is hopefully that the Federal role will be able to see

this better and your committee will be able to oversee it as well.

The Federal Government, as well as jurisdictions, have put a lot

of money into building up the infrastructure of WMATA. And what

is happening now with rail expansion projects is they are essentially locally driven. They will probably, in fact they will make application for Federal funds, but the way that these projects are

moving forward, they are not being looked at from a regional perspective, and they are not really looking at how do they integrate

with the existing WMATA system.

And not to belabor the point, but I think that the Federal role

could be crucial, both in utilizing the existing funds that you have

put into it. WMATA has two heavy overhaul shops and a third one

that is currently not utilized. I am not saying you should automatically merge the systems, but at least the discussions ought to take

place on how to capitalize on what we have already done to lower

the costs on any of these expansion projects.

So I would once again welcome a Federal role, both through your

committee and through the WMATA board, in examining those

types of regional expansion issues.

Thank you.

Mr. LYNCH. Thank you.

In closing, I just want to say we have an open dialog here. So

we appreciate the valuable perspectives that you each have, because it reflects the workers and the people who use the system.

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And so it would help the committee greatly I think if before we see

something bad happen, we get some information in and maybe we

can prevent that. We can have greater scrutiny on some of these

decisions that might be being made in a vacuum without due consideration to the communities that are affected, to the workers that

are affected, and just the overall health of the system and how it

works.

So feel free. We have an open door here. We hear your concerns

and would like to, to the degree possible, impact some of these

changes so that those concerns are addressed. OK?

Again, I thank you for your willingness to come here and to help

the committee with its work, and I bid you good day.

Thank you.

[Whereupon, at 1:38 p.m. the subcommittee was adjourned.]

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