Finance & Administration Committee

Action Item III-A

February 2, 2012

Continuation of Budget Discussions

TITLE:

GM/CEO Budget Discussion, FA Committee Feb 2, 2012

PURPOSE:

To provide additional information to the FA Committee regarding Board member requests.

DESCRIPTION:

During the FA Committee meeting held on January 12, 2012, the Board members made specific inquiries concerning the operating and capital proposed budgets for FY2013. This informational presentation is designed to answer those questions. There are four main focuses: the status of the FY2012 efficiencies, an outline of cost reductions since FY2009, the expense and revenue estimates for the Silver line, the operating budget's cost recovery, an outline of the staffing plan, and a status review of Metro's Capital investments.

FUNDING IMPACT:

No funding impact.

RECOMMENDATION:

This is for information purposes only; a recommendation is not applicable.

Washington Metropolitan Area Transit Authority

Board Action/Information Summary

Action Information MEAD Number: Resolution: Yes No

GM/CEO Budget Discussion Finance and Administration Committee February 2, 2012

Washington Metropolitan Area Transit Authority

FA Committee Requests

– FY2012 efficiencies

– Cost reductions

– Silver line preparation

– Modal Equity

– FY2013 staffing plan

– Capital program

Approved FY2012 Budget Reductions: Status

Health Verification Audit

$3 M budgeted, $2.5 M expected: Due to timing of the L689 audit

Reduction in support services

$3 M budgeted, $2 M expected: Due to adjustment in allocation of safety expenses between operating and capital

Reduction in parking contract

$1.6 M budgeted: Delays in parking contract, budgeted savings will not be fully realized until FY2013

Metro will realize $71 M of $74 M in FY2012 budget reductions

Cost Reductions FY2009 – FY2012

Over $200 Million in reductions since FY2009

• Sustainable

• One-time

• Cost restructuring

Cost Reductions FY2009 – FY2012

• Sustainable Initiatives $97 Million

– $23M: Service and other contract changes in multiple years

– $27M: Eliminated 313 positions in FY2010

– $10M: Departmental reductions in FY2011

– $ 9M: Paratransit contract savings in FY2011

– $28M: Other business operational changes in multiple years

Cost Reductions FY2009 - FY2012

• One-time Savings $77 Million

– $24M: Personnel savings FY2010, FY2012

– $20M: Reduced overtime in FY2009, FY2010

– $23M: Fuel and propulsion FY2011, FY2012

– $ 9M: Accounting adjustments (GASB-34)

• Cost Restructuring $63 Million

– $51M: Capitalizing Overhaul Shops, ELES, other adjustments

– $12M: Accounting adjustments FY2009, FY2010

Silver Line Phase I - Preparation

FY2013 • Hiring / Training

FY2014 • Q1 /Q2 Operations

training • Q3 Begin Revenue

Service

FY2015 • Full Operation

• FY13 and FY14 expenses include recruitment and training for daily operations − Rail Operators, Station Managers, Car Maintenance, Escalators,

System Maintenance, Track and Structure, MTPD Police, Human Resources, Information Technology and Communications

• 6 Months of revenue service in FY2014

Silver Line Phase I - Preparation

($ in Millions) FY2013 FY2014 FY2015Operating Expenses $20 $43 $44 Propulsion 2 3 Estimated Revenue - (16) (31)

Gross Total $20 $29 $16

Silver Line Cost Recovery 35% 66%Rail - Farebox Recovery (System-wide)

70% 70% 71%

• Estimated number of passenger trips *

* Passenger trips and revenue based on prior census, 2010 urbanized area population census data available 2013

Silver Line Phase I – Revenue Estimates

(Trips in Millions) FY2014 Average Estimate Fare Annual

New Passengers Trips 4.5 $3.00 9Current passengers who adjust their travel route

2.7 $0.75 5.4

Total Trips 7.2 14.4

FY11 Ridership Demographic Profile

MODE

TOTAL

ANNUAL TRIPS

%

MINORITY TRIPS

TOTAL

MINORITY TRIPS

% LOW INCOME TRIPS

TOTAL LOW

INCOME TRIPS

Rail 217 M 54% 117 M 14% 31 M

Bus 125 M 75% 94 M 42% 53 M

Access 2.3 M 74% 1.7 M 52% 1.2 M

System Total 345 M 213 M 85 M

• Source: 2007/2008 Rail and Bus Passenger Surveys, 2010 Census

• Metro has begun the Title VI Equity Analysis of the fare proposals on minority and low-income populations

Cost Recovery by Mode

Metrobus $154

Metrorail $713

Metro Access

$8

Gross Subsidy $704

Revenue by Mode ($1.6 B)

$ in Millions

($ Millions) FY2013 Budget Metrorail Metrobus MetroAccess

Revenue Budget $809 $654 $147 $8Fare Recommendations $66 $59 $7 $0.3

Total Revenue $875 $713 $154 $8

Operating Expenses $1,580 $897 $565 $118

Gross Subsidy $704 $183 $411 $110

Cost Recovery 55% 80% 27% 7%

Multi-year Staffing Plan 953 Positions

CATEGORY PROPOSED

HEADCOUNT

Capital Reconstruction 255

Silver Line 363

Maintaining the Baseline 194

System Investments 255

Contract Escalator/Elevator Maintenance

-60

GM/CEO’s Initiatives -54

Total Headcount Change 953

0

100

200

300

400

500

600

700

Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13 Q4 FY13

Hea

dcou

nt

Baseline

Reduce Vacancy & Increase Headcount

Q3 FY12

Q4 FY12

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13 Total

50 80 322 108 195 122 877 Increase Headcount*

150 120 20 50 50 50 440 Reduce Existing Vacancy Rate

300 300 300 300 300 300 1,800 Baseline Recruitment

RECRUITMENT MILESTONES:

M1: MTPD police, Fatigue Management, and System Investments

M2: Skilled job classes (Silver Line)

M3: MTPD support & continued ramp up for Silver line

M4: Infrastructure support staff for Silver line

M1

M2 M3

M4

FY2012-FY2013 Staffing Plan

* Does not include Q1 FY12 reconciliation of 76 positions that are part of the 953

Reconstructing the System

-100 -75 -50 -25

0 25 50 75

100 125 150 175 200 225 250 275

05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Tie

s in

Tho

usan

ds

Fiscal Year

FY2005 – 2019 Capital Investment Eliminating the Backlog

Backlog

Workplan

Good Ties

Steady State of Maintenance

12,000 Ties Annually

Appendix

Multi-year Staffing Plan 953 Positions

CATEGORY BUDGET

REQUEST PROPOSED

HEADCOUNT

Capital Reconstruction 255

Silver Line $20 Million 363

Maintaining the Baseline $20 Million 194

System Investments $35 Million 255

Contract for Escalator/Elevator Maintenance

-60

GM/CEO’s Initiatives ($5 Million) -54

Total Headcount Change 953

Capital Program - Rebuilding the System 255 positions

Escort Support, Systems Infrastructure and Construction Oversight for Joint and Adjacent Construction

73 16 Surface Finishers, 3 Craft Crew Supervisors, 6 AFCS Techs, 6 Low Voltage Mechanics, 2 Communication Shift Supervisors, 6 Engineers, 3 Survey Chiefs, 2 Architects, 5 Engineers, 5 Inspectors, 2 HR Staff, 17 Mechanic Escorts

Program Delivery

86 * 71 Engineering: 3 ATC, 8 Communications and Network Systems, 6 Power Systems, 53 in Program Management (including 19 Inspectors), 1 Technical Recruiter;15 positions in Systems Maintenance: 13 mechanics and 2 Supervisors in IRP Support

Headcount Reconciliation 70 * 12 ATC Mechanics, 12 High Voltage Mechanics, 9 Equipment Operators, 15 Track Repairers, 4 Machinists, 12 Laborers, 6 Supervisors

Capital Projects 110, 107, 108, 72, 73, 57

26 * 8 Structural Repair Mechanics, 8 Strategic Coordinators for Mobile Ops, 10 support staff for rail shutdowns

* Approved during Fiscal Year 2012

Silver Line $20.3 M Staffing Plan 363 positions

Systems Maintenance 79 64 Mechanics, 13 supervisors, and 2 managers (PWR and ATC)

Rail Car Maintenance 62 43 Railcar mechanics, 6 supervisors, 12 car cleaners, 1 admin assistant

Rail Transportation 59 12 Train operators, 23 station managers, 4 depot clerks, 1 div clerk, 1 superintendent and 18 supervisors for Silver Line

Track and Structures 52 10 Laborers, 6 equipment operators, 14 track repairers, 6 track walkers, 5 structure repairers, 2 welders, 6 supervisors, 2 track equipment maint workers, and 1 assistant superintendent

Plant 36 Mechanics, masons, plumbers, carpenters, gardeners, etc to service Silver line

MTPD 26 Police officers for Silver line

Elevator/Escalator 24 Additional ELES personnel to service stations on Silver Line

Information Technology 10 IT support for Silver Line

Storeroom Maintenance 5 3 Storeroom clerks, 1 inventory specialist and 1 supervisor

HR 5 HR staff

Vehicle Engineering 3 3 Vehicle engineers

Quality Assurance 2 2 Quality control inspectors

Silver Line Staffing Plan (continued) 363 positions

Maintaining the $20.3 M Baseline 194 positions

Maintain/Support New Facilities • Carmen Turner • Shepherd Parkway • Pennsy Drive • Parking Garage Maint - Rhode Island - Glenmont - Twinbrook - Dunn Loring

57 19 Janitors, 8 HVAC Mechanics, 7 Bus Supervisors, 5 General Equipment Mechanics, 5 Mechanic Helpers, 3 Mechanics (Low Voltage), 3 Fire Equipment Technicians, 1 Surface Finisher, 1 Metal Technician, 1 Custodial Supervisor, 1 Masonic Mechanic, 1 Mobile Lift Mechanic, 1 Bus Data Retrieval, 1 Mechanic Electrical

Train Car Maintenance

51 15 Electronic Mechanics, 5 HVAC Mechanics, 30 Mechanics, 1 Superintendent

Systems Infrastructure Renewal • ATC testing / maintenance • Cable Meggering

43 21 Mechanic Helpers (ATC), 5 Mechanic Helpers Communication, 17 ATC Supervisors

Maintaining the $20.3 M Baseline (continued) 194 positions

Transit Police 31 20 Anti-terrorism officers, 11 Special Police for revenue security

Other 25 2 Reliability Engineers for asset management, 5 mechanics to support CTF Communications Equipment, 12 to support Blue/Yellow re-alignment, 1 HR staff and 5 mechanics (headcount reconciliation *)

Technology Support 17 2 Sr. Enterprise Storage Engineers, 2 ROCS Application Systems Specialist, 1 Sr. Transit Application Systems Specialist, 8 Info Systems Security Officers, 2 IT Security Deputy Chiefs, 1 Server Admin and 1 Infrastructure Engineer

Reduce Reimbursable Positions -30 Reduced -20 MTPD (previously funded under federal grant) and -10 Operations positions

* Approved during Fiscal Year 2012

System Investments $35 Million 195 Positions

CATEGORY BUDGET PROPOSED

HEADCOUNT

Safety and Security $17.3M 146

System Improvements $5.0M 26

Maintenance $12.7M 83

Maintenance - Contract for escalator/elevator maintenance

-60

Total Request $35M 195

System Investments $17.3 M Safety and Security 146 positions

Fatigue Management 91 41 Mechanic Helper Power, 9 Supervisors Power, 28 Mechanic Helper ATC, 6 Equipment Operators, 7 Supervisors ATC

Police for Bus Security 32 32 Sworn Police Officers

Underground Safety Radio 12 12 Communication Mechanics

Rail Grinding 9 3 Laborers, 2 Equip Operators, 2 Track Repairers, 1 Track Equipment Mechanic and 1 Track Supervisor

Employee Background Checks

2 2 Safety Officers for Access Services

System Investments $5.1 M System Improvements 26 positions

Bus Priority Corridor 26 13 Bus Operators 13 Bus Mechanics

System Investments $12.7 M Maintenance 23 positions

Maintain Existing System • Ongoing support of 2K, 3K, and 6K • Support for 50% 8-Car deployment

10 10 Vehicle Engineers

Preserve Capital Invest • Methane Detection Systems • Cross Connection Program • Parking Garage Sprinkler and

Standpipe • Programmable Logic Control

13 4 Plumbers, 3 Fire Equip Techs, 2 Industrial Control Techs and 4 Mechanic Helpers General

Proposed FY2012 Operating Budget Reductions: Status

Rail - Greenbelt Annex & Brentwood

overhaul shops - capitalization - $9M

Bus - Bladensburg & Carmen Turner overhaul shops - capitalization - $21.5M

P Health Verification Audit - $3.3M • Due to timing of the L689 audit we

expect to be at $2.5M

MTPD better resource deployment - $1.5M

Fuel and Propulsion Reductions - $6.8M

× Savings in parking contract - $1.6M • Due to delays in the parking contract

savings will not be realized until FY13

P Reduction in support services - $3.4M • Due to timing of support services contracts,

we expect to be at $2.4M

Bus & Rail cost changes - $1.9M

Fringe benefit rate adjustment - $6.3M

MTPD grant funded positions - $1.9M

Track, Systems, Vehicle capital projects - $5M

P Overhead allocation and Other - $7.7M

Casualty and Liability - $3.3M

Planning functions to capital - $1.1M

: on schedule P : partial × : will not be realized in FY12

Of $74.3 M in budget reductions, we expect to achieve $70.9M