News Release

COG study calls Metro essential to region's prosperity

Oct 26, 2016
Metrorail_ShawnClover

(Shawn Clover/Flickr)

Washington, D.C.– A major technical analysis of Metro, the region’s transit system, concludes that the system is essential to metropolitan Washington’s prosperity, and provides a robust analytical framework and preliminary analysis of the transit organization’s funding needs, identifies performance metrics and quantifies economic value to the region.  

The interim report, produced by a panel of the Metropolitan Washington Council of Governments’(COG) Chief Administrative Officers committee, says the area’s economy benefits from property tax revenues of about $3.1 billion annually for assets located within a half mile of Metrorail stations, but also suffers significant productivity losses when there are delays on Metro.

The report is the result of COG’s intense focus – in collaboration with other regional partners -on issues surrounding the safety, reliability and financial stability of the Metrorail system during the last two years. When completed in early 2017, the report is expected to provide the foundational analysis and direction for restoring Metro to a safe, reliable transit system in a sustained state of good repair.  The final report will also outline a path for long-term funding alternatives.

The new technical report also presents existing metrics on Metro’s performance in the areas of safety, on-time reliability and customer experience. The Panel will collaborate with Metro to further refine performance expectations that are integral to the regional strategy supporting long-term dedicated funding.    

“Ensuring that Metro once again becomes a world-class transit system is a collective responsibility of Metro’s board and general manager and the region’s elected leaders at every level,” said Roger Berliner, COG Board Chair. “While there is no doubt that Metro needs major improvement in operational effectiveness and financial management, it is also clear that Metro’s funding partners must do their part by providing a solid financial foundation to enable Metro’s long term success.

”The bottom line is: Metro’s failure is not an option,” he added.

Early this year, COG made analyzing Metro’s financial and performance needs its priority for the year. Beginning in 2015, COG’s Fire Chiefs Committee worked to improve safety and communications within Metrorail tunnels. COG’s staff also began work then with D.C., Maryland and Virginia to establish a new Metro safety oversight body.  This year, COG sponsored public forums on improving the rail system in partnership with the Greater Washington Board of Trade.

The report presents preliminary estimates of Metro’s operating and capital needs is based on a financial model developed by the District of Columbia’s chief financial officer and uses existing data from the Washington Metropolitan Area Transit Authority (WMATA) to estimate funding needs over a ten-year period. The technical panel endorsed the financial model as a robust analytical tool; it expects to reach a consensus on its report when WMATA completes the transit system’s FY 2018 operating budget and estimates of future operating costs and capital needs.

The model includes detailed assumptions about Metro’s operating and capital funding for the next decade from local, state and federal governments; assumptions about farebox recovery and other revenues; and similarly detailed assumptions about operating costs and capital project needs.  It further has the capacity to project the benefits of using debt vs. pay-go financing to spread the capital costs over the life of the assets thereby sharing Metro’s costs among current and future users of the system.

The report uses several studies done in recent years as well as the new analysis by the District CFO to quantify Metro’s economic value to the region and the very real negative impacts should the pattern of underinvestment in Metro’s infrastructure not change.  The panel members concurred with the District CFO’s financial analysis which said Metro’s overall health is “absolutely imperative to accommodate business and population growth” across the region.

The measure of productivity losses - from a very conservative estimate of $50 - $60 million per year in inefficient commutes resulting from delays during the morning commute on Metrorail -  support the conclusion that Metro delays impose an economic cost on the region. In addition to the estimate of tax revenues from properties near Metrorail stations, the report says those properties command a premium ranging from 6 to 9 percent for commercial and multi-family properties.  An additional $50 billion in new construction is anticipated near Metrorail stations in the future that depends on a safe and reliable and well-maintained Metro system.  

“Our member governments’ elected leaders and top executives, are using COG’s expertise and tradition of collaboration to address the region’s most pressing infrastructure problem,” said Chuck Bean, COG’s executive director.  “This work is what regional consensus-building looks like."      

MORE: COG Board Focus: Restoring Metrorail

Contact: Jeanne Saddler
Phone: (202) 962-3250

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