[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]




 
  KEEPING METRO ON TRACK: THE FEDERAL GOVERNMENT'S ROLE IN BALANCING 
     INVESTMENT WITH ACCOUNTABILITY AT WASHINGTON'S TRANSIT AGENCY

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 28, 2005

                               __________

                           Serial No. 109-65

                               __________

       Printed for the use of the Committee on Government Reform


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

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 28, 2005....................................     1
Statement of:
    Siggerud, Katherine, Director, Physical Infrastructure 
      Issues, Government Accountability Office; Dana Kauffman, 
      chairman of the board, Washington Metropolitan Area Transit 
      Authority; Richard White, chief executive officer, 
      Washington Metropolitan Area Transit Authority; William 
      Millar, president, American Public Transportation 
      Association; Robert Puentes, fellow, Metropolitan Policy 
      Program, the Brookings Institution; and Pauline Schneider, 
      partner, Hunton and Williams, member, Federal City Council.    16
        Kauffman, Dana...........................................    51
        Millar, William..........................................   107
        Puentes, Robert..........................................   156
        Schneider, Pauline.......................................   166
        Siggerud, Katherine......................................    16
        White, Richard...........................................    60
Letters, statements, etc., submitted for the record by:
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............   198
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Kauffman, Dana, chairman of the board, Washington 
      Metropolitan Area Transit Authority, prepared statement of.    54
    Millar, William, president, American Public Transportation 
      Association:
        Prepared statement of....................................   149
        Transite Cooperative Research Program Report 85..........   108
    Norton, Hon. Eleanor Holmes, a Delegate in Congress from the 
      District of Columbia, prepared statement of................     8
    Puentes, Robert, fellow, Metropolitan Policy Program, the 
      Brookings Institution, prepared statement of...............   158
    Schneider, Pauline, partner, Hunton and Williams, member, 
      Federal City Council, prepared statement of................   168
    Siggerud, Katherine, Director, Physical Infrastructure 
      Issues, Government Accountability Office, prepared 
      statement of...............................................    19
    Watson, Hon. Diane E., a Representative in Congress from the 
      State of California, prepared statement of.................   195
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................   192
    White, Richard, chief executive officer, Washington 
      Metropolitan Area Transit Authority, prepared statement of.    63
    Wolf, Hon. Frank R., a Representative in Congress from the 
      State of Virginia, prepared statement of...................    11


  KEEPING METRO ON TRACK: THE FEDERAL GOVERNMENT'S ROLE IN BALANCING 
     INVESTMENT WITH ACCOUNTABILITY AT WASHINGTON'S TRANSIT AGENCY

                              ----------                              


                        THURSDAY, JULY 28, 2005

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:03 a.m., in 
room 2154, Rayburn House Office Building, Hon. Tom Davis 
(chairman of the committee) presiding.
    Present: Representatives Tom Davis of Virginia, Gutknecht, 
Foxx, Cummings, Watson, Van Hollen, Ruppersberger, and Norton.
    Also present: Representatives Wolf, Moran of Virginia, and 
Wynn.
    Staff present: Melissa Wojciak, staff director; David 
Marin, deputy staff director/communications director; Keith 
Ausbrook, chief counsel; Mason Alinger, deputy legislative 
director; Rob White, press secretary; Drew Crockett, deputy 
director of communications; Shalley Kim, professional staff 
member; Teresa Austin, chief clerk; Todd Greenwood, legislative 
correspondent; Bill Womack, legislative director; Phil Barnett, 
minority staff director/chief counsel; Kristin Amerling, 
minority general counsel; Michelle Ash, minority chief 
legislative counsel; Rosalind Parker, minority counsel; Earley 
Green, minority chief clerk; and Jean Gosa, minority assistant 
clerk.
    Chairman Tom Davis. The committee will come to order.
    I want to thank everybody for coming today. The purpose of 
today's hearing is to highlight the vital role the Washington 
Metropolitan Area Transit Authority plays in supporting the 
Federal Government and to begin discussing the need for a 
reinvigorated Federal commitment to the Metro system, one that 
helps ensure Metro has what it needs to accommodate current and 
future ridership growth.
    The Federal Government's dependence on the Metro system is 
undeniable. Hundreds of thousands of Federal employees and 
contractors rely on the bus and the rail service of WMATA that 
it provides everyday to get to and from work. In fact, half of 
Metro's peak riders are Federal employees and contractors. More 
than 50 Federal agencies are located adjacent to Metro 
stations. As we know all too well, when Metro shuts down, the 
Federal Government shuts down.
    In addition to Federal employees, every day thousands of 
visitors from around the world travel to Washington, DC, and 
rely on the Metro system to transport them to the many sights 
and landmarks of our Nation's Capital.
    Unlike other transportation systems in the country, the 
Washington Metro system is a national asset. Congress has 
recognized this fact three times in recent decades by 
authorizing and appropriating funds for construction and 
capital improvements to the Metro system. As Congress has 
recognized in the past, Metro is an entity in which all 
American taxpayers have an interest.
    It is time to recognize that shared national interest, even 
if we are to protect past investments and prevent the system 
from collapsing. It is time again for Congress to recognize 
Metro's importance to Federal operations and commit to a long-
term partnership with WMATA and its member jurisdictions.
    To help begin the dialog on the need for a renewed Federal 
investment in Metro, today I have introduced legislation that 
reaffirms our symbiotic relationship. This legislation amends 
the National Capital Transportation Act of 1969--which marked 
the Federal Government's first long-term investment in the 
Metro system--to authorize $150 million annually over 10 years 
for capital improvements and critical maintenance needs.
    Recognizing that the Federal Government is not the only 
interested or duty-bound stakeholder in WMATA's long-term 
health, the legislation stipulates that the Federal investment 
will be matched by State and local contributions. Specifically, 
the legislation would require the jurisdictions making up the 
``WMATA Compact''--Virginia, Maryland, and the District of 
Columbia--to come up with a true dedicated funding stream to 
pay for their share of Metro's costs before the Federal funding 
is authorized.
    This is good policy and I think, frankly, it is good 
politics. We can't get consensus behind a $1.5 billion Federal 
commitment unless we are absolutely certain that WMATA is not 
going to continue reeling from year to year, tin cup in hand, 
jurisdiction to jurisdiction. The current requirement of 
``stable and reliable'' relief is, in reality, anything but. 
Subjecting the local match to annual appropriations processes 
rather than having a dedicated stream set in stone is not the 
wisest way to run a railroad.
    In addition to requiring a commitment from State and local 
governments before the Federal contribution to Metro kicks in, 
the legislation also recognizes that the well publicized 
management challenges WMATA has faced in recent years have 
prompted calls for enhanced oversight and accountability. 
Acknowledging the need to balance new money with strengthened 
oversight, the legislation would establish an inspector general 
to oversee the affairs of the transit system and would require 
Federal representation on the WMATA board, to be named by the 
General Services Administration.
    These oversight and accountability mechanisms are critical 
if we are to credibly move forward with the much-needed 
authorization of funds.
    Finally, the bill includes language dealing with the 
proposed sale or lease of Metro properties in Vienna, Takoma 
Park, and Largo. These provisions reflect concerns that I, Mr. 
Van Hollen, and Mr. Wynn have about the wisdom of these 
proposed sales, especially at a time when we all agree better 
accountability and oversight are needed.
    I, for one, have yet to see a compelling fiscal case for 
the sale of the parcel in Vienna, and I have to ask if Metro is 
getting the best bang for its riders' buck. It is hard for me 
to make a case for a renewed Federal investment in Metro if 
property is so easily disposed.
    In the Vienna case, WMATA's own project manager has 
acknowledged that the development would result in significant 
lost parking that would seriously restrain the Vienna station. 
I think I have a responsibility to ask if Metro's capabilities 
and limitations are being properly considered in regional land 
use planning, and whether Metro has been complicit in illogical 
land use decisions. I am hopeful, though, that we will be able 
to work that out. We have had conversations with members of the 
board and the other stakeholders in that area.
    In closing, this is the first inning of a nine inning ball 
game. Persuading the Federal Government to take on a new long-
term relationship with the Washington Metropolitan Area Transit 
Authority will itself be a long-term investment. But I am 
committed, as are my colleagues, to invest the time and energy 
it takes to make it happen, as are other co-sponsors of the 
legislation. As we work to build support in Congress, I am 
optimistic that regional jurisdictions will do what needs to be 
done on their end to establish a dedicated funding stream for a 
transit system we all so heavily rely on.
    I welcome today's witnesses and I look forward to their 
testimony.
    [The prepared statement of Chairman Tom Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T3269.001
    
    [GRAPHIC] [TIFF OMITTED] T3269.002
    
    Chairman Tom Davis. I now recognize Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    I begin by thanking you, Mr. Chairman, for calling this 
hearing and allowing my participation in witness selection. 
More important, today I thank you for your work in leading us 
in fashioning a major bill that takes our committee beyond 
hearings to the stage of acting on what our prior hearings and 
investigations have revealed.
    This committee's many hearings on WMATA have revealed a 
tangled web of management and financial problems. However, we 
have spent most of our time and effort investigating the 
system's management and operational problems. That, of course, 
is what legislators do. We have held hearings on problems from 
faulty escalators that Metro seemed unable to fix, to 
derailments, to costly design flaws in cars Metro never caught 
that may have contributed to these accidents.
    We have commissioned GAO reports on Metro's problems that 
have faulted management and recommended changes. Hearings and 
official investigations of such problems can provide fodder for 
endless hearings, fed by press reports of mishaps, crowding and 
delays, not to mention phone calls, e-mails and letters from 
our own constituents.
    Today's hearing is something of a departure from hearings 
that mostly chastise management and workers, and that, frankly, 
most please the public because people believe that they have 
been heard and that we have been responsive. You can depend on 
elected officials to continue today and in the future to put 
the people in charge of WMATA on the hot seat. Remember, that 
is what we do. However, today we focus as well on issues of 
Metro's deteriorating infrastructure that inevitably come with 
age and use, and the seldom investigated problem of a system 
overwhelmed by the inadequate funding from the regional 
partners, the riding public, and the Federal Government.
    Today we face the reality that it is no longer possible to 
neatly separate Metro's management and funding problems into 
separate columns, because our own investigations and reports 
show that operations and funding have become inextricably 
linked. Today we call the question on our own local 
jurisdictions whose costly parochialism has kept them from 
finding a dedicated source of funding, as most large systems 
have done.
    And today we turn the table on ourselves, with a bill that 
would authorize money from the Federal Government--which helped 
fund the construction of the system initially--not as a gift, 
but because of the growing regional Federal workforce--now half 
of all Metro riders--and costly and insufferable road 
congestion and air pollution that made a new system an 
imperative.
    The Federal Government, of course, has become ever more 
dependent on Metro, so much so that it has provided valuable 
progressive incentives to Federal workers to take Metro instead 
of cars. Ironically, these excellent subsidies to Federal 
employees, rather than to Metro, may be the chief cause of 
today's overcrowded cars and for demand that overtaxes the 
aging system's capacity.
    The bill we introduce today is a classic win-win that could 
mean Federal funding that the region and the system have long 
sought. However, it will be a lose-lose situation if any of us 
hang back. This is a step I have worked to achieve for the 15 
years I have been a Member of Congress, and it is so important 
to the District and the region that I am co-sponsoring the bill 
despite a misgiving about unrelated language that may leave the 
impression that Congress is intervening into local zoning and 
housing matters.
    I do not have objections to the provisions requiring 
negotiations with local officials, which is always appropriate, 
but as is my custom, I do take issue with Federal mandates that 
appear to be designed to overrule local negotiations or 
democratically achieved decisions, and particularly where 
affordable housing is involved in one of the priciest regions 
in the country. However, Chairman Davis has assured me that any 
such language is not intended to set a precedent and that he 
expects resolution before the final bill.
    Nothing must take our eye off the ball that has been stuck 
in hearings, investigations and constituent complaints. Now is 
the time to clear the field for action. The bill we introduce 
today takes a step toward the most significant action for 
transportation in this region since WMATA was established 40 
years ago. I am pleased to join Chairman Davis and my regional 
colleagues in pressing a bill that could revitalize public 
transportation in the National Capital Region. I welcome 
today's witnesses, whose insights can be invaluable to us as we 
make improvements in the bill and head toward voting on the 
bill in this committee.
    Thank you again, Mr. Chairman.
    [The prepared statement of Hon. Eleanor Holmes Norton 
follows:]

[GRAPHIC] [TIFF OMITTED] T3269.003

[GRAPHIC] [TIFF OMITTED] T3269.004

    Chairman Tom Davis. Thank you.
    Mr. Wolf.
    Mr. Wolf. Thank you, Mr. Chairman. Although I don't serve 
on this committee, I do appreciate your giving me this 
opportunity. And I also want to publicly, at the outset, thank 
you for your leadership on this issue.
    As you know, WMATA operates the Washington region's transit 
system, including the 108-mile Metrorail system, which is vital 
to the mobility in the Nation's Capital and the greater 
Washington area.
    I have been pleased, since coming to Congress in 1981, to 
support WMATA and the Metro system. The regional bipartisan 
congressional delegation over the years has worked to ensure 
that the original 103-mile system was built and worked to keep 
the system operating and to expand the system to meet the 
growing needs.
    As the former chairman of the House Transportation 
Appropriations Subcommittee, I was pleased to play a role in 
obtaining Federal funding to complete the construction of the 
originally designed Metrorail system. Through that work, I know 
first-hand the delicate balancing of funding necessary to keep 
the funding there, and I think that is why you should be 
congratulated for this bill.
    The Metro system has been called ``America's subway,'' and 
it truly is. Not only do our constituents in the greater 
Washington area rely on Metro as a commuter system to get to 
and from work, but it serves hundreds of thousands of visitors. 
Just stop and look today, as you get on the Metro, at the 
different people from all over the Nation.
    Can you imagine the area without the Metro? If we think we 
have near gridlock conditions today on our highways here, where 
would we be without Metro? And clearly we do have gridlock 
conditions on our highways today in the entire region.
    As America's subway, Metro is a unique transit system which 
operates as a true Federal, State and local partnership. Every 
level of government benefits from the system and every level 
has a responsibility to ensure that the system continues to run 
efficiently.
    Sadly, the system is not healthy. A recent four-part series 
in the Washington Post pointed out the obstacles facing Metro, 
which I won't elaborate on today. A blue ribbon panel and a 
Heritage Foundation report have both concluded it is vital for 
Metro to find a dedicated funding source to keep the system 
viable.
    Again, I want to thank you for the leadership, and I am 
pleased to support this legislation. I yield back.
    [The prepared statement of Hon. Frank R. Wolf follows:]

    [GRAPHIC] [TIFF OMITTED] T3269.005
    
    [GRAPHIC] [TIFF OMITTED] T3269.006
    
    Chairman Tom Davis. Mr. Wolf, thank you. And thanks for all 
the work you have done through the years in getting funding for 
this system as well.
    Mr. Moran.
    Mr. Moran. Thank you very much, Mr. Chairman. I thank my 
colleagues for being on the panel. I appreciate your inviting 
me to share this hearing with you, because I know that we are 
all equally proud of the fact that we have the privilege of 
representing the National Capital Region in the U.S. Congress, 
as well as the most efficient and effective Federal workforce 
that any nation can boast of, and, of course, the seat of the 
world's greatest democracy.
    Metro is the linchpin that literally binds all of those 
entities and interests together. But Metro is confronting a 
crisis. Some may be of its own making; years of deferred 
maintenance and a patchwork of cobbled together State and local 
funding. But that is understandable when you consider the fact 
that Metro is the only transit system in the country without a 
dedicated source of revenue.
    Most of its problems are in response to development beyond 
its control, immense demands on regional growth, proposed 
expansion of the core system--which I think is absolutely 
necessary--and a surge in new ridership, for which they are to 
be congratulated. But all have contributed to inconveniencing 
riders with service disruptions and raising doubts about 
Metro's future success.
    I know my colleague and friend has crafted legislation to 
re-establish a new Federal commitment that we desperately need 
to keep Metro on track. And, in fact, your legislation, Mr. 
Chairman, goes even further than the recommendations of the 
recent blue ribbon panel. It will provide incentives to create 
a dedicated local source of revenue, which I absolutely believe 
is essential.
    But the Federal funds it authorizes will have eight car 
trains on the system during peak hours of ridership, something 
that my constituents on the crowded Orange Line know will be 
very welcome relief. And if this legislation comes with a 
greater Federal say on Metro's board, I think that is 
appropriate. If the Federal Government is going to continue to 
be expected to foot half of the capital costs, then there 
should be Federal representation. And I think a Federal 
perspective might help in bringing about the kind of consensus 
that is necessary among sometimes competing parochial 
interests.
    Mr. Chairman, Metrorail is an indispensable part of the 
solution to our problems in the National Capital Region. 
Certain key road systems should be built, obviously. But we 
cannot pave our way out of our congestion problems. We estimate 
that there is going to be a need for 800,000 more residential 
units over the next decade. And that comes from Steve Foler. 
And we may well see that just in northern Virginia. It is Metro 
that presents the only way to deal with that massive expansion.
    But as you know, Mr. Chairman, from our discussions over 
the past week--and I understand from Ms. Norton you have had 
similar discussions with Ms. Norton--I have been reticent to go 
on this bill. I went on because I agree with 95 percent of what 
is in the bill. It is a good bill. But the 5 percent I take 
exception to.
    We have worked together on so many issues, and I could give 
a long list of them. Lorton comes to mind and any number of 
others. But, as you know, I think you are wrong on terms of the 
legislation that restricts Metro from being able to sell its 
property and restricts Fairfax County from being able to 
determine its land use and zoning decisions. It is not in my 
district, I understand that, but it sets a precedent that I 
think is an unfortunate land use precedent.
    The only way, as Ms. Norton suggested, that we can provide 
affordable housing for our workforce, never mind low-income 
people, for our workforce, we have to go up. There is no more 
land. And if we are going to go up and still enable people to 
get to work and to shop, etc., we have to have public transit 
where they live, so that they can live, they can shop, they can 
work without having to get into an automobile. And the only way 
to do that is to have much higher density around our Metro 
stations.
    The jurisdictions that are not willing to do that, they 
have to be subsidized by those who are, and ultimately it will 
be D.C. and Arlington and, to some extent, Maryland suburbs who 
do that subsidization. I think that is wrong. I do think we 
ought to be focusing our development around Metro stations with 
as high a density as we can accommodate. And I don't think the 
decision that you have made with regard to the Vienna Metro is 
consistent with that objective. You know that, but I have to 
say it on the record.
    Chairman Tom Davis. Well, I have to say on the record I am 
sure your constituents in Reston will be very happy with the 
fact that you have come out for much higher densities along 
that corridor as well, that is going to be the price. We are 
losing 650 parking places in Vienna under the proposed rule at 
this point at the terminus of Metro. It is not in your 
district.
    And, you know, this isn't a precedent. You and I worked 
together in the Lorton area for a land transfer down there. We 
got into the land use issues. And, frankly, this is staying in 
the bill until my concerns are addressed. I hope that they will 
be addressed. But you brought it up, so I am going to just tell 
you that is the price of poker here.
    Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman and colleagues. 
First of all, let me thank you, Mr. Chairman, for your 
leadership in putting together the authorization legislation 
and reaching out to members of the region on a bipartisan 
basis.
    I think we all understand the critical role that Metro pays 
in the economic health of this region as part of the strategy 
to reduce congestion and also, at the same time, to try and 
keep our air clean. We have been through very hot days 
recently. We know the impact of smog. And obviously to the 
extent we can get cars off the street and people onto Metro, we 
both reduce congestion and also can help our air quality in 
this region.
    It is obviously an important lifeline to the Federal 
Government, given the number of Federal employees that use the 
Metro system and are a part of working everyday for the people 
of our country through their service in the Federal Government. 
And it is essential in so many other ways to this region.
    So I want to thank WMATA for its efforts over many, many 
years. It has faced tremendous challenges and tremendous 
growth, and we have seen the impact of those challenges, I 
think, recently in a number of the stories that we saw in the 
Washington Post and other areas that has overwhelmed in many 
ways our capacity to deal with the system on a daily basis.
    This bill contains two major components, and they are tied 
together: one is resources; the other is accountability. On the 
resources front, I think we all understand that Metro, given 
its growth and anticipated growth in the future, is going to 
require additional resources. The dedicated funding provisions 
in this bill will hopefully provide a predictable and reliable 
source of revenue. And the Federal component is essential, and 
I think it is warranted given the fact that the Metro system is 
essential to the operations of the Federal Government, and we 
are, of course, in our Nation's Capital here.
    That Federal commitment I think can only be justified, 
however, if we ensure Federal taxpayers that there is the 
accountability piece to it, No. 1; and, No. 2, that they have 
some participation on the board. And this bill deals with both 
those issues: on the accountability side through the creation 
of the inspector general, and on the board side by allowing 
Federal representatives.
    So I think it is a good package. We face increasing 
challenges and also threats. In the aftermath of the Madrid and 
London bombings, we are going to have to obviously be more 
vigilant than ever, and that is going to require additional 
resources in the system. I know that we will have a continued 
oversight over the progress Metro is making in that area and 
making sure that we provide for the safety of the riders on 
Metro.
    Let me just briefly mention one of the local provisions in 
this bill that deals with Takoma Park. And I want to make it 
clear that the provision in this bill does not do anything to 
stop the development at the Takoma Park Metro station. It is 
not the intent to stop the development at the Takoma Park Metro 
station. It is designed entirely to ensure that the community 
is given a fair opportunity to provide input into that effort 
and to make sure that a number of concerns are addressed in a 
fair way.
    And I want to thank WMATA representatives for some of their 
early meetings that have already been had with members of the 
community, but we want to make sure that we have full and fair 
participation of the community in that process to make sure 
that the project is the very best project it can be and meet 
the interests of everybody in the community.
    So with that, Mr. Chairman, I thank you and I look forward 
to the hearing and the work on the legislation.
    Chairman Tom Davis. Thank you very much.
    I might add our provisions don't stop any development. That 
is not our goal. Counties make land use. All we can look at is 
protecting Metro's interests in this as well.
    Mr. Wynn, would you care to make an opening statement?
    Mr. Wynn. Thank you, Mr. Chairman. At this time I am going 
to defer, but I do want to take a moment to thank you for 
calling this hearing and for your initiative with regard to the 
Metro system. I certainly appreciate it and look forward to the 
hearing. And I will have some comments perhaps later on. Thank 
you.
    Chairman Tom Davis. Thank you very much. It has been a long 
time since we have had this kind of Federal commitment for 
funding Metro, and hopefully, working together with our local 
partners, we can keep our investment in the system solid and 
keep this a great system.
    We will have our first panel. Members will have 7 days to 
submit opening statements for the record. Our witness panel: 
Katherine Siggerud, who is the Director of Physical 
Infrastructure Issues at the Government Accountability Office; 
Dana Kauffman, a board chairman for the Washington Metropolitan 
Area Transit Authority, no stranger to us; and Richard White, 
the chief executive officer, Washington Metropolitan Area 
Transit Authority.
    And thank you, Dana, for being here.
    I might add Dana serves on the County Board in Fairfax and 
served under Joe Alexander, who is also a former chair. Thanks 
for being here, Dana.
    William Millar, the president of the American Public 
Transportation Association. Thank you for being here.
    Robert Puentes, who is a fellow at the Metropolitan Policy, 
Brookings Institute; and Pauline Schneider, who is a partner at 
Hunton and Williams, and a member of the Federal City Council.
    It is our policy we swear witnesses in before we testify, 
so just rise and raise your right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you very much.
    Ms. Siggerud, you have done a lot of work on this. Why 
don't you start, and then we will move right down the line. 
Your entire testimony is part of the record and questions will 
be based on the entire testimony.
    Ms. Siggerud, thank you for being with us.

     STATEMENTS OF KATHERINE SIGGERUD, DIRECTOR, PHYSICAL 
 INFRASTRUCTURE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE; DANA 
 KAUFFMAN, CHAIRMAN OF THE BOARD, WASHINGTON METROPOLITAN AREA 
  TRANSIT AUTHORITY; RICHARD WHITE, CHIEF EXECUTIVE OFFICER, 
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; WILLIAM MILLAR, 
 PRESIDENT, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION; ROBERT 
  PUENTES, FELLOW, METROPOLITAN POLICY PROGRAM, THE BROOKINGS 
    INSTITUTION; AND PAULINE SCHNEIDER, PARTNER, HUNTON AND 
             WILLIAMS, MEMBER, FEDERAL CITY COUNCIL

                STATEMENT OF KATHERINE SIGGERUD

    Ms. Siggerud. Mr. Chairman, members of the committee, and 
members of the Washington area delegation, I am pleased to 
testify before you today on issues related to the Washington 
Metropolitan Area Transit Authority [WMATA].
    Recently, a regional panel reviewed WMATA's funding and 
found that it faces substantial financial and budgetary 
challenges. Last month, the Washington Post series article also 
outlined operational issues that affect the reliability of its 
transit services.
    At the same time, ridership is at an all-time high, making 
WMATA the second largest rail system and the fifth largest bus 
system in the country. It is imperative that WMATA remain an 
adequately funded and well managed organization because it 
provides an indispensable transit option for hundreds of 
thousands of Washington area commuters, including Federal 
Government employees; also for tourists and others who travel 
in the region every day.
    My statement today is based on the interim results of work 
that you requested that GAO undertake. I will discuss first 
WMATA's responsibilities for serving the interest of the 
Federal Government and the Washington region; second, the 
current funding challenges facing WMATA and options proposed; 
and, third, options in providing safeguards and oversight of 
any additional Federal assistance provided to WMATA should 
Congress decide to do so.
    Turning now to my first topic. Using data from WMATA's 2002 
passenger survey, a significant portion of Metrorail riders 
were Federal employees at that time. Estimates for the peak 
period times were that 41 percent of the riders are Federal 
employees and 37 percent in the afternoon peak period. Looking 
at this issue another way, about 40 percent of Federal 
employees use Metrorail.
    Federal agencies specifically rely on WMATA's services. OPM 
considers Metro's operating status as to be key to the 
decisions about closing the Federal Government in times of 
emergency. The General Services Administration and the National 
Capital Planning Commission instruct Federal agencies to locate 
near transit stops as part of an effort to reduce congestion 
and improve air quality.
    WMATA also plays an important role in transporting people 
to special events that occur because Washington is the Nation's 
Capital. These include rallies, celebrations on the Mall, and 
inaugurations.
    WMATA has also taken on significant responsibility with 
regard to security of its passengers and facilities. WMATA 
trains first-responders in emergency management techniques at 
its facility in Landover. The Metrorail system is the first in 
the country to equip selected rail stations with chemical early 
warning systems. WMATA has stepped up police presence in 
response to heightened terrorist alerts and incurred 
significant overtime costs as a result. The Federal Government 
has paid for a portion of these security-related costs.
    With regard to funding, WMATA's challenges are most acute 
for its capital projects. WMATA is to be commended for the 
capital planning effort it undertook, in part in response to 
our 2001 recommendation. Nevertheless, this plan demonstrated 
that the costs of maintaining and enhancing the system exceed 
available resources.
    A regional panel convened last September and estimated that 
WMATA would have a total budgetary shortfall of $2.4 billion 
through fiscal year 2015 if it went forward with the projects 
in its capital improvement plan. We believe that the budgetary 
shortfall may be even greater because the estimate did not 
include the costs of providing paratransit services, as 
required under the Americans With Disabilities Act, these costs 
are significant. In fact, the panel estimated these services 
could result in an additional shortfall for WMATA of about $1.1 
billion.
    In dealing with its funding challenges, WMATA, unlike other 
major transit systems, does not have a dedicated source of 
revenue. We have noted this as the limiting factor for WMATA in 
reports dated all the way back to 1979. As a result, the 
regional panel concluded that the Washington region does need 
such a source. The panel also concluded that the Federal 
Government should help to address the budgetary shortfall, 
particularly for capital maintenance and system enhancement, 
citing specifically the benefits WMATA provides to the 
Washington region and to the Federal Government. We would note 
that any decision to provide additional Federal support should 
be balanced against competing claims on Federal resources and 
consider the Federal fiscal constraints.
    To the extent that this committee and the Congress as a 
whole decide to provide additional funding, Congress should 
also have reasonable assurances that it will be spent 
efficiently and effectively. Congress has long recognized the 
benefits of spending safeguards, especially for high-cost 
transportation infrastructure projects, and of management 
oversight for the local agencies that receive the funding.
    I am pleased to say that, according to my discussions with 
your staff, several of the safeguards we identified are under 
consideration. Examples include, first, matching requirements 
for capital projects. Federal law has historically controlled 
the use of Federal transportation funds, including instituting 
matching requirements to ensure local contributions.
    Second, Federal oversight through the Federal Transit 
Administration. This project management oversight program run 
by FTA reviews transit projects to determine whether they are 
on time and on budget. This oversight has been useful in 
monitoring several recent WMATA projects. Third, congressional 
oversight. This would include specifying the types of eligible 
projects and also requiring periodic reporting to Congress on 
plans for using Federal funds and the results of the 
investment.
    Finally, Congress could institute additional oversight for 
WMATA. Our ongoing work shows that WMATA already has multiple 
oversight entities, including the FTA program, the Office of 
Auditor General, and an external auditor to review the 
financial statements. It has also recently sought reviews from 
the American Public Transportation Association.
    Nevertheless, should the Congress decide that a different 
approach to oversight is necessary, we hope it would be 
structured in a way to complement and integrate the existing 
current oversight and to inform WMATA management and its board 
of overall management and operational challenges.
    This concludes my statements. I am happy to take questions.
    [The prepared statement of Ms. Siggerud follows:]

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    Chairman Tom Davis. Thank you very much.
    Chairman Kauffman, thanks for being with us.

                   STATEMENT OF DANA KAUFFMAN

    Mr. Kauffman. Thank you. Good morning, Mr. Chairman, 
members of the committee, and my Congressman and friend, Jim 
Moran. I am pleased to discuss the policy issues you have 
raised, as well as the fundamental reforms we, as the Metro 
Board, are working to implement to help improve the service to 
our customers.
    Before I do that, however, I would like to personally thank 
you, Mr. Chairman, for your draft bill. It is the first 
substantive proposal for transit funding that the Washington 
region has seen in more than a generation, and I look forward 
to working with you to make it happen, while keeping local land 
use decisionmaking local.
    In your invitation, you asked why Congress should again 
authorize funding for Metro and why its needs are dissimilar to 
those of other transit systems. When Congress enacted the 
National Capital Transportation Act in 1960, it recognized the 
necessity to create a unique Federal financial support, 
declaring, ``the creation of certain major transportation 
facilities are beyond the financial capability of local 
governments in the region.'' Forty-five years later, Mr. 
Chairman, this still holds true.
    WMATA is unique among transit systems across the Nation in 
serving two States, the District of Columbia, and the Federal 
enclave. No other transit system in the Nation has the Federal 
Government as the primary employer in its service area. Not 
only is the Federal Government the dominant consumer of Metro 
daily service, it imposes a multitude of special demands for 
extraordinarily large events on the National Mall and security 
needs.
    Metro, in fact, was vital in getting people home with our 
Nation was attacked on September 11th. This unique importance 
was affirmed in the recent blue ribbon panel report which 
found, ``Over the past 50 years, every administration has 
supported Metro because of its essential nature to the Federal 
operations in the National Capital region.''
    Your second question asked why it is necessary to have 
State and local dedicated funding and why it doesn't exist. The 
1980 Stark-Harris bill, authorizing Federal construction funds 
for Metro, included a requirement for ``stable and reliable'' 
non-Federal funding to meet Metro's ongoing operating and 
maintenance costs. The blue ribbon panel found that the 
implementation of ``stable and reliable'' has fallen short of 
expectations.
    While funding has regularly flowed to Metro, it is subject 
to the annual budget and appropriations process of two States, 
the District of Columbia, five local jurisdictions in Virginia, 
and the Federal Government. Frankly, it is like passing the hat 
to keep the doors of the Washington Monument open; it is 
funding by lowest common denominator.
    As you well know, this is perhaps the most politically 
complex region in the country, and devising an equitable 
approach to dedicated funding has been and continues to be a 
daunting task. It is now time to bring the region together to 
reach consensus on a new State-local-Federal partnership with 
permanent, stable, predictable, dedicated funding sources so 
Metro does not have to reel from one funding crisis to another.
    Your next question was about the Board's review of the 
Metro budget. There are multiple layers of budget review. The 
Board's Budget Committee reviews the budget in great detail, 
followed by extensive review by local government staff, formal 
comment by Maryland, the District, and State and local 
governments in Virginia. The Board's Budget Committee receives 
and discusses monthly reports on the execution of the budget, 
approves all significant contracting actions, and retains 
authority of all programming funds it incurs after budget 
adoption.
    All that being said, Mr. Chairman, we can do better. For 
the fiscal year 2007 budget, Budget Chairman Committee Gladys 
Mack and I are working on adding performance measures and 
longer term strategic reviews. Our Riders' Advisory Council is 
also expected to weigh in on Metro's budget.
    You posed the question does the Board composition leave it 
vulnerable to political pressures. Well, anybody that 
represents the sometimes divergent needs of Maryland, Virginia, 
and the District, as well as two counties and three cities in 
Virginia, two counties in Maryland, inevitably will face 
political tugs and pulls. The range of opinions, backgrounds, 
and experiences among the stakeholders can make consensus 
difficult, but, frankly, it is one of our biggest strengths.
    The political pressures on our Board are not necessarily 
vulnerability, but, rather, they ensure that we are sensitive 
and accountable to the public and the consumers we serve. Also 
to further ensure our accountability to our riders, we will 
have in place by the end of this year a Riders' Advisory 
Council to give the Board real time feedback on the service to 
our customers.
    You asked, with additional Federal funding, would it be 
appropriate to add Federal representation to the Board. Given 
the strong Federal investment and interest in maintaining a 
healthy Metro, many of my colleagues and I would be open to a 
stronger partnership with the Federal Government, including a 
seat on the WMATA Board, if that participation is clearly 
linked to the appropriation of significant additional Federal 
funds.
    Your final question was whether there is adequate oversight 
and my opinion on the concept of adding an inspector general. 
WMATA's Office of the Auditor General is robust, with a staff 
of 27 that provides independent appraisals of WMATA operations 
and business practices, and monitors compliance with laws and 
regulations. This group, which unearthed many of the concerns 
highlighted in recent Post stories, has been given greater 
procedural authority to ensure action when future concerns are 
raised.
    Also, in the past 4 years, Metro has been subject to 10 FDA 
reviews, 3 GAO reviews, 2 outside audits, and 2 peer reviews. 
Finally, the Board, at my request, is currently considering 
options for even more effective oversight, including the 
possibility of having an audit function or inspector general 
reporting directly to the Board.
    I would like to close by extending my appreciation on 
behalf of the Board for the thoughtful and rigorous process you 
are undertaking to examine Metro's needs and organizational 
effectiveness, and to advance the discussion of stable funding 
and new Federal funding. Like Metro or not, support its 
expansion or not, even our harshest critics must acknowledge 
that Metrorail and bus system is integral to any effort to keep 
this region moving.
    This February, when I made my first remarks as Metro 
chairman, I said the following: ``I don't underestimate the 
enormous challenge all our stakeholders will face to establish 
the stable and reliable funding we need to keep America's 
subway in good repair. However, we have been talking about this 
since 1979. Now we must test to see if anybody is listening.''
    Thank you, Mr. Chairman, for listening and acting.
    [The prepared statement of Mr. Kauffman follows:]

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    Chairman Tom Davis. Thank you very much, Chairman Kauffman.
    Mr. White.

                   STATEMENT OF RICHARD WHITE

    Mr. White. Good morning, Mr. Chairman and members of the 
committee. Thank you for the opportunity to testify this 
morning, and thank you for your longstanding support of Metro, 
all of you.
    My name is Richard White, and I am the general manager and 
chief executive officer of the Washington Metropolitan Area 
Transit Authority. I request that my full statement be inserted 
for the record, along with several attachments, including the 
answers to the six questions posed in your invitation letter.
    More than 50 years ago, the Federal Government in its 
region forged a unique and vital partnership to pursue a grand 
vision to design and build a rapid transit system that would 
serve the Federal Government and be worthy of the Nation's 
Capital. Over 30 years ago, the responsibility for operating 
and maintaining a regional bus system was also transferred to 
Metro.
    By any measure, Metro has succeeded beyond anyone's 
expectations in meeting Congress's goals. In fiscal year 2005, 
WMATA carried 344 million passenger trips on rail and bus. The 
original 103-mile Metrorail regional system cost $10 billion to 
construct, 69 percent of which was paid for by the Federal 
Government. The value of this asset represents $24 billion in 
today's dollars.
    I would like to submit for the record a chart that shows 
how Metro's fiscal year 2006 totaled $1.6 billion operating and 
capital budgets, which are funded with a combination of $832 
million, or 53 percent, in non-Federal funds; $579 million, or 
36 percent, in fares and other non-passenger revenues; and $179 
million, or 11 percent, in Federal funds. Metro provides an 
excellent return on this investment, particularly to the 
Federal Government.
    What makes the Metro system unique among transit systems is 
that Metro was built primarily to serve the Federal workforce 
and to serve the National Capital area, and it has done so 
admirably for decades. But Metro is now a mature system and it 
faces a new set of challenges. Our infrastructure is aging; 60 
percent of our Metrorail system is more than 20 years old and 
the average age of our bus fleet is 9.91 years. And daily 
ridership has grown by 33 percent in the last 8 years.
    The cost of operations, maintenance, and rehabilitation 
have outstripped the funding ability of our State and local 
funding partners. We need the Federal Government to help keep 
the system healthy if we are going to continue to serve the 
Federal Government reliably.
    Since the Federal Government has limited its transit 
support to capital funding in recent years, I will focus my 
remarks on our capital funding needs.
    Our State and local funding partners stepped up to the 
plate last fall and signed the Metro Matters Funding Agreement, 
substantially increasing their funding commitments to provide 
$3.3 billion in capital funds through the year 2010. Over the 
life of the Metro Matters agreement, $1.7 billion, or 51 
percent, is planned to come from non-Federal funds and $1.6 
billion, or 49 percent, from Federal funds. The agreement 
envisions both continuing Federal transit formula funds and 
$260 million in new discretionary Federal funding.
    But the Metro Matters agreement is a short-term interim fix 
through the year 2010. New agreements will need to be 
negotiated and implemented by the year 2008 in order to allow 
lead time for new long-term capital projects.
    After an exhaustive review, the report of the Metro Funding 
Panel, sponsored by the Metropolitan Washington Council of 
Governments, the Greater Washington Board of Trade, and the 
Federal City Council was completed in January of this year and 
found that, even after accounting for periodic future fare 
increases and inflationary adjustments to existing State and 
local subsidies, Metro faces a $2.4 billion shortfall, 
comprised of $1.88 billion in capital funds and $500 million in 
operating funds, over the next 10 years, excluding a $1.1 
billion projected shortfall associated with paratransit costs. 
The panel recommended the Federal Government defray 50 percent 
of Metro's projected shortfall, or $940 million of the capital 
shortfall, based on the Federal Government's dependence on 
Metro.
    Added to the $260 million in new Federal funding 
anticipated in the Metro Matters Funding Agreement, the capital 
shortfall is envisioned to be $1.2 billion for the Federal 
Government. This amount of funding will enable Metro to 
continue our ongoing infrastructure renewal program, equip 75 
percent of rush hour trains with eight-car trains, purchase 275 
buses, make improvements on 140 miles of bus routes, and 
provide other passenger amenities. It does not include funding 
for fixed guideway expansion.
    At the same time, we are advocating a continuing 
partnership with the Federal Government in keeping the Metro 
system in a state of good repair. We are also seeking State and 
local dedicated funding. In fact, WMATA is the only major 
public transportation system in the country without a dedicated 
funding source to pay for operations and capital requirements.
    The need to address this shortcoming is becoming more and 
more urgent. The June 2004 report by the Brookings Institution, 
revealingly titled ``Washington's Metro: Deficits by Design,'' 
concluded that WMATA receives less than 2 percent of its 
capital and operating funding from dedicated sources, as 
compared to a national average of 34.7 percent.
    Mr. Kauffman's and my extended testimony describe a number 
of organizational improvements designed to make our service 
more reliable and our agency more accountable and responsive to 
the public. I don't deny that we have our challenges. We 
recognize that we need to change the way we manage our 
challenges, and many of these changes are well underway and are 
producing positive results. Our railcar reliability has 
improved 42 percent between December of last year and May of 
this year, and is expected to improve even further by the end 
of this year due to recently implemented organizational changes 
and contract management changes.
    Overall, the availability of our 588 escalators has 
improved 3 percent over the past 5 years. As a result, 93 
percent of the time passengers can find a working escalator, 
and they can find a working elevator 97 percent of the time.
    We have been working with the disabled community to develop 
a new, more rigorous and effective contract for paratransit 
service. We are currently evaluating proposals and expect to 
award a new contract this coming fall. In addition, in the 
interim, we have added improved safeguards to our existing 
contract.
    We have established a strict protocol for making and 
enforcing audit and safety recommendations. The policy 
establishes procedures for resolving areas of dispute and for 
ensuring implementation of recommended actions. For a complete 
list of procedures for the safety intervention program, please 
refer to attachment 3 of my testimony.
    Our message today is that the Federal Government and the 
region have made a substantial investment in an extremely 
valuable asset that is designed to serve the Federal workforce 
and the National Capital Region. We must act expeditiously to 
protect that substantial public investment. Now is the time to 
recommit to the original Federal-State-local partnership and 
put Metro on a stable funding course to avoid slipping into 
serious disruption.
    I commit to you that we recognize and we are facing up to 
our need for improvement. We look forward to working with you 
and the entire National Capital Region to address this urgent 
matter and to move forward with your important and timely 
funding initiative.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. White follows:]

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    Chairman Tom Davis. Thank you very much, Mr. White.
    Mr. Millar.

                  STATEMENT OF WILLIAM MILLAR

    Mr. Millar. Mr. Chairman, good morning, and thank you for 
having me back. I will be speaking specifically about how 
transit systems around the country are--generally, oversight 
occurs in several different ways. Certainly, the citizen 
members and elected officials who serve on transit boards is a 
significant way; reports that are required by Federal, State, 
and local governments and the audits thereto; and many transit 
systems have strong internal audit departments which review 
various aspects of the operation. There has also been a recent 
trend to the appointment of inspectors general, and I will 
speak specifically to those major properties who have those 
points.
    Starting with the first point here, the transit boards 
around the country, recently, a report done through the Transit 
Cooperative Research Program was completed a couple years ago, 
Special Report No. 85--and I would submit that for the record 
with my testimony.
    Chairman Tom Davis. Without objection, it will be placed 
into the record.
    [The information referred to follows:]

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    Mr. Millar. Thank you.
    It surveyed a number of transit boards and chief executive 
officers around the country about the issues of oversight and 
accountability. Generally speaking, it found the transit boards 
are charged to serve as the policymakers of the transit system. 
Transit governance includes usually strategic guidance, legal 
and fiduciary oversight, and customer representation. Boards 
frequently engage outside experts to assist them in these 
tasks. For example, it is very normal for boards to hire 
independent external auditors to review the accuracy of their 
financial accounting, but also to review internal controls and 
related issues.
    While each transit system's local enabling legislation 
provides the board authority to govern, it generally fails to 
provide specific details on the process of that governance. And 
given that lack of specificity, in some instances there may be 
a lack of clarity between what belongs to the board versus the 
day-to-day responsibilities of the CEO and staff. Thus, 
frequently, in the best-run transit systems, effort is put in 
by both parties to make sure that line is clear and 
appropriate.
    Because of this, APTA's Transit Board Member Committee has 
developed guidance for its board members in the form of a 
handbook. The handbook points out various issues and discusses 
the board's policymaking function and defines the general rules 
and principles that seem to apply.
    Obviously, as I said before, different boards are governed 
by different statutes, so it is difficult to generalize, but in 
the areas of strategic interest, budget, fiduciary matters are 
the main areas where they work. Management, on the other hand, 
is involved in the day-to-day operation of the system.
    Interestingly enough, the report points out the importance 
of the strong and solid working relationship between the CEO of 
the organization and the board. And, again, the most successful 
organizations work hard on that relationship.
    With regard to the issue of Federal oversight of transit 
agencies, I believe that both Ms. Siggerud's testimony and Mr. 
White's testimony spoke to the many, many different ways that 
the Federal Government is involved in the oversight, whether it 
is specific audits that are required to receive Federal funds, 
such as under OMB Circular A-133, or the Triennial Audits that 
the Federal Transit Administration is required to produce, or 
specific audits for specific compliance areas, such as Buy 
America regulations, things of that sort. There are also audits 
related to post and pre-award of certain types of procurements 
that are involved. So it is a very extensive oversight required 
by the Federal regulations.
    Most transit systems also employ an internal audit 
function. The internal auditing is intended to be an 
independent objective assurance that the activities that are 
carried out, usually by the staff, add value and improve the 
organization's operations. It also usually includes a review of 
organizational objectives and how the activities of the staff 
help to meet those objectives.
    Generally speaking, the audit staff has full and 
unrestricted access to all activities, records, data files, 
personnel and physical properties that allow them to perform 
their internal audits. They typically would audit things such 
as fare collection practices, capital assets and the use and 
protection thereof, personnel performance, ethics issues 
involving allegations of fraud and waste. Sometimes this audit 
function is a separate department within the transit agency; 
sometimes it reports to the CEO, sometimes it reports to the 
board, and sometimes it reports to both the CEO and the board.
    You asked specifically about the use of inspectors general 
for oversight, and I would say this is a growing trend, 
particularly among the largest transit systems. Several transit 
systems, including the New York Metropolitan Transportation 
Authority, the Nation's largest, the Chicago Transit Authority, 
the Nation's second largest, and the Los Angeles County 
Metropolitan Transportation Authority, the third largest, each 
employ the inspector general approach. In each case the 
inspector general is independent and reports to the transit 
board or some outside entity.
    The inspectors general and their staffs generally, as with 
the audits before, have full and free and unrestricted access 
to transit property records, reports, audits, reviews, and 
other information. Usually, the inspector general prepares 
reports and audits of information. That information is normally 
made available to the public. The inspectors general will also 
review adopted performance measures, those adopted by the board 
or required of legislatures, and also review the performance 
against those. They will then typically publicize that.
    My full testimony contains additional information, and at 
the right time I would be pleased to answer any questions about 
it. Again, thank you, Mr. Chairman. It is my pleasure to be 
with you today.
    [The prepared statement of Mr. Millar follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Puentes, thank you for being with us.

                  STATEMENT OF ROBERT PUENTES

    Mr. Puentes. Thank you, Mr. Chairman, members of the 
committee. I appreciate being invited to testify today on the 
unique funding challenges of the Washington Metropolitan Area 
Transit Authority.
    I am Robert Puentes, a fellow with the Metropolitan Policy 
Program at the Brookings Institution.
    As Mr. White mentioned, in June 2004, Brookings released a 
paper entitled ``Washington Metro: Deficits by Design.'' This 
research examined the unusual financial structure of WMATA and 
found that the agency's serious budgetary challenges owe in 
large part to its problematic revenue base.
    I will focus my comments this morning on key elements of 
that research, including the importance of a stable and 
dedicated revenue source for WMATA and the issue of increased 
oversight and accountability.
    As has been discussed this morning, because of the lack of 
a stable and dedicated revenue stream, WMATA must rely 
excessively on general fund revenues from its partners just to 
keep the system functioning. This is, of course, a difficult 
problem for any transit agency, but for the fourth largest 
agency in the country such an over-reliance is extraordinary 
and problematic for several reasons.
    First, it has long been understood that the lack of a 
dedicated revenue source is both unique and challenging for 
WMATA. As has been mentioned this morning, a 1979 GAO report 
stated that competition for local revenues and the increasing 
burdens of property taxes made a new and dedicated source for 
WMATA almost mandatory.
    Another GAO report in 1983 noted that the Stark-Harris Act, 
which authorized $1.7 billion in Federal money for construction 
expenses, required the local governments to establish a stable 
and reliable source of revenue. According to the GAO, the 
purpose of this requirement was to ensure that, once the rail 
system was built, there would be sufficient revenues available 
to maintain and operate it. We are feeling the effects of that 
today.
    Next, WMATA's financial arrangement differs sharply from 
how virtually all transit agencies throughout the country are 
funded. You have heard that this morning as well. In terms of 
capital expenses, 21 percent of WMATA's funds come from local 
general revenue sources in 2002, compared to less than 5 
percent nationally.
    On the operating side, WMATA's 15 percent local revenue 
figure compares to only about 8 percent nationally. Therefore, 
a significant component of WMATA's annual funding is vulnerable 
to competition with other pressing local priorities and WMATA 
must compete each year with other basic local expenditures, 
such as police, schools, and parks, as well as other 
transportation services.
    This over-reliance on local funds puts tremendous strains 
on the annual budget process. For one thing, as was mentioned, 
although the local partners have reaffirmed their commitment to 
WMATA over and over again, concerns that one or more partners 
may balk at their annual bill are ever-present.
    In addition, the general lack of year-to-year assurance in 
the budget process makes it more challenging for WMATA to plan 
for large capital projects. As many projects extend and must be 
financed well over single-year budget cycles, a stable and 
dedicated source of revenue would provide WMATA the ability to 
more carefully and efficiently plan and finance such projects.
    Finally, a lack of stable and dedicated source of revenue 
also threatens the agency's creditworthiness. Moody's Rating 
Service recently pointed out that as a multi-jurisdictional 
entity without a dedicated funding source to support operations 
and capital needs, WMATA is vulnerable to some degree of 
appropriations risk. Among other things, this risk makes it 
potentially difficult and more expensive for WMATA to borrow 
funds and issue bonds for capital investments.
    Mr. Chairman, for all these reasons, the need for a 
dedicated source of revenue for WMATA is clear. Now, some have 
argued that dedicated revenue sources could be generated and 
administered in the District, Virginia, and Maryland 
independently according to their particular preferences and 
traditions. However, given that WMATA is often cited as one of 
the few truly regional collaborations in this metropolitan area 
and the wide distribution of benefits received from the 
service, a revenue source enacted at the regional level would 
certainly be preferable to patchwork of separate local sources.
    Last, it is true that the oversight and attention that the 
local and State governments give to WMATA is intense, and there 
is no reason to assume that this scrutiny would not continue. 
We heard this morning of the many ways that the oversight is 
continuing anyway. Nevertheless, some measure of increased 
oversight and accountability should be made a condition 
associated with any dedicated revenue source.
    It is important to point out, though, that although 
increased oversight and accountability is largely common for 
transit agencies, as Mr. Millar pointed out, it is largely 
unprecedented when considered in the context with other Federal 
policy initiatives related to surface transportation. The 
starkest example is the $287 billion transportation bill that 
Congress will send to the President this week. Although it is 
wholly related, that bill is utterly lacking in accountability, 
despite the much larger price tag and ultimately much larger 
impact on the Nation's transportation system.
    As my comments and research have tried to illustrate, the 
challenges WMATA faces are very complex and unique. WMATA does 
need a stable, reliable, and dedicated source of revenue to 
better maintain and operate the existing system, take the 
pressure off the region's local governments, and ensure better 
long-term planning and ultimately better land use.
    Certainly, pitfalls do exist. Implementation is certainly 
not easy. And yet, Mr Chairman, the Washington metropolitan 
area cannot afford to have a transit system that is hampered 
from operating at its fullest and most efficient potential.
    Thank you very much for the opportunity to appear before 
you today.
    [The prepared statement of Mr. Puentes follows:]

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    Chairman Tom Davis. Thank you very much.
    Ms. Schneider, thanks for being last, but not least. We 
appreciate your being here.

                 STATEMENT OF PAULINE SCHNEIDER

    Ms. Schneider. Thank you, Chairman Davis and members of the 
committee. My name is Pauline Schneider. I am a partner at 
Hunton and Williams, and I come here today as a member of the 
blue ribbon task force that was responsible for preparing the 
Metro funding report that was issued in January of this year. 
As a follow-on to my service on that task force, I have agreed 
to serve as vice chair of the Business Transportation Action 
Coalition [BTRAC], which was formed by the Greater Washington 
Board of Trade, the Federal City Council, and the Downtown 
Business Improvement District to educate the public at large 
and advocate for a balanced solution to generate support for a 
dedicated, long-term, stable source of funding for Metro. I 
applaud you this morning for introduction of your legislation 
that the panel is discussing.
    BTRAC's founding members, sponsors, and participating 
organizations all agree on one fundamental premise: we must 
secure a long-term, stable, dedicated funding source for Metro 
to meet the current and future needs.
    The task force report indicated that there was a gap of 
approximately $2.4 billion needed during the next 10 years to 
finance Metro's operating and capital needs. The report also 
emphasizes that the Metropolitan Washington Transit Authority 
is unique among major transit systems in the United States in 
that it has no major source of dedicated funds. Unfortunately, 
WMATA must annually appeal to two States, the District of 
Columbia, eight local jurisdictions, and the Federal Government 
for funding and support.
    Without the additional $2.4 billion identified, Metro will 
be unable to pay for the maintenance and capital improvements 
necessary to counter inevitable effects of the aging system or 
to purchase the railcars and buses necessary to accommodate 
increasing demands of expanding ridership.
    Three additional points need to be made about this $2.4 
billion. This level of funding assumes: one, paratransit costs 
are addressed separately; two, State and local government 
contributions will increase to 5.3 percent annually, as opposed 
to the current annual increases of 3\1/2\ percent; and, three, 
there will continue to be modest fare increases.
    As we noted, the Metro system here gets a greater amount of 
its support from the fare box than any other major transit 
system in the United States. However, if State and local 
contributions were frozen at the current levels, the Metro 
panel estimated that we would need an additional $460 million 
per year from the supporting jurisdictions.
    The business community is very concerned about the 
implications and potential adverse effects on the system of a 
current lack of a dedicated source. We are not insensitive to 
the management and safety issues plaguing Metro. But we feel 
confident that the steps are being taken to address some of the 
operational problems that were highlighted in the recent Post 
articles. Constant diligence on cost containment and 
organizational efficiencies are required from Metro's 
management.
    Notwithstanding these concerns, we do not want our transit 
system to experience a repeat of the deterioration, the 
physical and operational decay that nearly destroyed the New 
York transit system in the early 1970's. Such a downward spiral 
would negatively affect our region's mobility, economic 
prosperity, emergency preparedness, as well as our image as a 
world-class destination location.
    Since this is the third most congested region in the 
country, Metro is critical in providing an alternative to our 
increasingly clogged roadways, since it carries the equivalent 
of 1,400 lane miles of highway everyday. In addition, Metro 
provides the spine around which additional new transit-oriented 
development can help accommodate the 2 million new residents 
forecasted to locate in our region over the next 25 years.
    Some would argue that the Federal Government has made 
substantial contributions--and we agree--in the past and should 
not be expected to continue those contributions. We have a 
different perspective. Of the 700,000 daily users of Metro, the 
largest single beneficiary is the Federal Government, with more 
than 40 percent of peak hour riders being members of the 
Federal Government employees. Most Metro stations have been 
purposefully located adjacent to or in very close proximity to 
Federal buildings, so the enormous benefits to the Federal 
Government continue. Your legislation obviously recognizes this 
fact.
    In view of these considerations, we urge you to provide the 
maximum Federal support necessary to help close this funding 
gap and to put our Metro system back on track as it needs to 
be. Thank you for the opportunity to comment, and I would be 
happy to answer any questions.
    [The prepared statement of Ms. Schneider follows:]

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    Chairman Tom Davis. Well, thank you very much.
    Let me start by saying, as we drafted this, we basically 
took the GAO report, we took some of the recommendations from 
some of the other groups and moved the stable and reliable 
source of revenue, which has been anything but stable and 
reliable through the years, and tried to move this to something 
more definite.
    The theory here is that by holding out a good chunk of 
money, that the localities and the States involved will be able 
to come up with something that is dedicated. It doesn't 
necessarily mean a new tax. It can take existing revenue 
sources, but just dedicate them year-to-year.
    Let me start. The first question is as Metro does its 
budget--and I will start, Mr. White, with you--what has stable 
and reliable meant? Do you know what to count on each year, or 
are there years that you would like to get a certain amount, 
but it becomes something that is driven by the jurisdictions 
deciding what they want to give you?
    Mr. White. In years past, the way the process has worked is 
that we generally try to identify a target through the board's 
adoption of policy guidance to the staff and how to build a 
budget. It has largely been a year-to-year budget, so one of 
the limitations is really the inability to pretty much plan 
beyond the first year, certainly from an operations point of 
view. On the capital side we did get some accommodations 
recently with the Metro Matters Funding Agreement, which sort 
of does give us some 6-year planning predictability, but it 
sort of ends at the end of that period.
    Now, what has happened historically, Mr. Chairman, are 
there times when one funding partner or more than one funding 
partner is sort of unable to kind of meet its responsible 
share, which is determined by a very complex set of formulas, 
and generally what happens is our budget guidance changes, even 
after the budget has been developed, and we are asked to cut 
some more money or come up with alternative ways of trying to 
fit in to the new affordability definition.
    Chairman Tom Davis. That is no way to run a railroad.
    Mr. White. No. It's the lowest common denominator, 
budgeting and policymaking, is really what it amounts to.
    Chairman Tom Davis. Mr. Kauffman, do you concur with that, 
having sat on the board?
    Mr. Kauffman. Yes, Mr. Chairman, I do. I don't think the 
challenge we face is a lack of information; it is a lack of 
stability and the challenges of a timeframe. We are having to 
whip around a budget within the constraints of State budget 
timing, local budget timing. And with your bill, that would 
give us more of the stability to think longer term and to put 
things in place our customers need to have.
    Chairman Tom Davis. Mr. Puentes, should a dedicated funding 
stream cover both operating and capital expenses?
    Mr. Puentes. The primary burden, I think, on the budgetary 
process now is on the operating side. I think it is incumbent 
upon WMATA to decide what would serve them best. But it does 
seem to be that the operating subsidy--which, again, comes from 
local general revenue funds, for the most part--is really where 
some of the more contentious problems are, because those funds 
are competing with other highly competitive local needs--parks, 
schools, open space; these issues that we talk about every day.
    So on the operating side it seems to be where a lot of the 
attention is. But in terms of longer range planning, then I 
think WMATA would argue for more of a diversity.
    Chairman Tom Davis. One of the points the GAO argues is 
that the oversight has really not been what it should have 
been. Is that fair, Ms. Siggerud? And my concern is if you 
start getting a dedicated funding stream, does that decrease 
oversight? If it becomes an automatic, does that decrease it or 
does the inclusion of an IG and maybe a more active board, do 
these kind of things make up for that? Any thoughts on that? I 
will ask you and Mr. Millar and anybody who would like to 
address that.
    Mr. Millar. In general, packages that I am familiar with 
around the country, when new revenues come in, usually there is 
additional oversight that is brought about, either by the kinds 
of suggestions that your bill would include--in Pennsylvania, 
for example, there was a requirement for publicly adopted, 
publicly reported upon performance measures, for example. So 
generally both happen.
    Chairman Tom Davis. I understand. We are trying to do that. 
But I am just saying right now you have to go back to each 
jurisdiction every year. And I am sure when Mr. Kauffman goes 
back to his board and other members go back to their board, 
they say how is it doing? Gee, we don't think they are doing so 
well. And they give it a scrutiny before they spend that money, 
because that money is competing with schools, it is competing 
with public safety and other areas.
    Now, all of a sudden there is a dedicated funding stream 
that goes automatically. We are putting some additional 
safeguards in, but is the tendency then, with the money 
automatically coming in, to take one's eye off the ball? That 
is my question.
    Mr. Millar. That has not been my experience.
    Chairman Tom Davis. OK. That is my question.
    Mr. Millar. That has not been my experience.
    Mr. Kauffman. If I could jump in, Mr. Chairman. I look at 
financial oversight for an organization like WMATA as being 
three parts. First is the classic following the money, the 
second is balancing priorities and strategic thinking, and the 
third is responsiveness to the customers' interest.
    For following the money, Mr. Chairman, we have the FTA and 
the GAO that are going to be lovingly at my side all the time, 
just as they are this morning. Balancing priorities, local 
policymakers on this board will ensure that the balance is 
there. The dedicated funding will make strategic thinking real.
    And, last, as far as responsiveness to the customer 
interest, we try to do that as members of the board. We could 
do better, and that is why we need that rider's advisory 
counsel.
    Chairman Tom Davis. And if the new Federal seat is created, 
you would not have a problem if that seat were reserved for a 
Metro rider, for example?
    Mr. Millar. No. I think that might also make the process of 
amending the compact easier, because, frankly, how big of a 
board do you have to have to make things work as far as 
representation? If we have this giant phalanx, future chairmen 
of the board may have an even tougher job of herding cats than 
I do from time to time. But if you keep it as a reasonable 
number to ensure representation and that representative members 
include the dollars on the table, it makes sense.
    Chairman Tom Davis. OK. All right.
    Did you want to answer that too, Mr. Puentes? Did you want 
to make any comment?
    Mr. Puentes. Just to quickly chime in. Given the history of 
the local governments' involvement in WMATA over the years, and 
given that, based on our experience of looking at transit 
agencies and their local government relationships all across 
the country, it does seem to be hard to believe that there 
would be any less scrutiny from the local governments on WMATA, 
given the bill that you have presented here today.
    There are a few agencies, I think, a few metropolitan areas 
in the country where the local governments recognize the 
importance of the transit system and take advantage of that as 
well as the local governments have here in this region. So that 
certainly does exist.
    But all that being said--and this is not an indictment on 
WMATA--there does seem to be a need for increased oversight and 
accountability for transportation systems all throughout the 
country, transit, highways, what have you. So for the most 
part, any kind of increased oversight and accountability is 
generally welcome, and from our experience is wholly necessary. 
Again, not an indictment of WMATA, but, for the most part, any 
kind of increased accountability is certainly appropriate.
    Chairman Tom Davis. Thank you very much.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    I would like to get to the root of this dedicated funding 
notion, first by asking this question. As we look at the 
difficulty we have had in this region getting anywhere on 
dedicated funding, first let me ask this question. Of those 
systems that have dedicated funding, are any of the systems 
structured like our system across State lines or across county 
lines? Is one of the chief obstacles here that we are dealing 
with such vastly different jurisdictions, and is this 
comparison entirely fair if that is the case?
    I don't know what the answer is, but if we keep comparing 
it as if everybody else is exactly like us and yet they have 
done it, then we look kind of stupid. Is there more to it than 
that; if not multi-jurisdiction, something else perhaps? I 
would welcome whoever wants to start on that one.
    Mr. Puentes. Again, based on the research that we did 
particularly on this issue, your comments are very well taken. 
There is absolutely no agency in the country that works under a 
government structure as complex as the one here in this region. 
I don't believe there is also another agency that operates 
multi-State. I think the agencies in New Jersey do, but, for 
the most part, most of the agencies operate within single 
States.
    So your point is very well taken. Probably the reason we 
are in this State today is because of the very complex 
government structure that does exist, the Federal oversight, 
the three States, etc. That being said, it does make the point 
even more important, that because we have these complex 
arrangements, it probably argues that a regional source of 
revenue is more necessary in this region than it is in some 
other places.
    Mr. Millar. There are some systems that operate in at least 
two States and are funded by those jurisdictions. I think of 
the St. Louis Metro system. They have one form of dedicated 
funding on the Missouri side of the river, another form of 
dedicated funding on the Illinois side of the river. Kansas 
City's system is another example. Parts of the New York system 
operate in three States; however, they do so under a 
contractual arrangement with the other States, so I am not sure 
that is exactly comparable to what we see here.
    Ms. Norton. Somebody needs to look closely at how Missouri 
got two different jurisdictions to do what they do so we don't 
keep making these comparisons without getting to the 
complexity. Easy comparisons confuse rather than illuminate the 
problem-solving I think we must do. So I find what you have 
said very important, and I will attempt to find out, at least 
about Missouri.
    One of the reasons that you find these three jurisdictions 
unwilling to do dedicated funding at least two of them don't 
want to tax you for what they do in their own jurisdiction, 
much less for something that will go perhaps to the entire 
region, God forbid. Therefore, it does seem to me that we need 
to be far more explicit on what dedicated funding would do for 
the public. I mean, they look at the council, at the county 
governments, every year. They have to pay their dues in some 
form or fashion.
    You could argue--let me be the devil's advocate--that, OK, 
Metro and Metro board, you know that you are going to get your 
dues; ``approximately what they are going to be,'' so why don't 
you do planning based on that? Since no jurisdiction could 
default entirely, why do you need a ``dedicated source of 
funding?'' What would it mean to the problems Metro has? What 
would it mean to the average rider?
    Mr. Kauffman. Ms. Norton, if I could begin responding to 
that. Both Mr. White and I used that term ``lowest common 
denominator,'' and to try to make that real is the challenge on 
a year-to-year basis of making the funding real to be able to 
serve our customer, whatever jurisdiction has been the most 
fiscally strained sets the pattern for what the funding will 
be.
    Ms. Norton. The absolute number, are you saying?
    Mr. Kauffman. Yes.
    Ms. Norton. Because it is a percentage that the formula 
attributes each to. What kind of variations are there in the 
amount you would expect? I mean, are there really large 
fluctuations between what you would expect in a given year and 
what you get in a given year?
    Mr. Kauffman. I can't give you an exact percentage, but I 
know, going back, when the District of Columbia was working 
through its fiscal crisis to the great situation they are in 
now, that set the bar. Maryland today is certainly looking at 
how to husband all of their resources. That sets the bar.
    But what this legislation that you are proposing today, 
that you all are working on today, it fundamentally changes the 
argument. I look at it this way: trying to set the argument on 
a jurisdiction-by-jurisdiction basis of, gosh, we have to step 
up and fund Metro. Well, then we get into balancing all the 
competing priorities, etc.
    But by putting this legislation on the table, it says, look 
folks, if we don't come to consensus, if we don't stand and 
respond to this, then the money goes away. So it fundamentally 
changes the decisionmaking dynamics for the political leaders 
who have to make it happen for the riders.
    Chairman Tom Davis. Would the gentlelady yield?
    Ms. Norton. I will yield.
    Chairman Tom Davis. Let me just followup on that, Mr. 
Kauffman. If we were to tie funding that, in fact, if you 
didn't reach that consensus, the money goes away at a certain 
date--for example, tie this--I will just pick a date, 2007. 
That if this wasn't in place in dedicated funding, that $150 
million went away, would that, you think, be more of an 
incentive to localities, that if they didn't enact this, they 
lose that money, as opposed to just having an authorization 
bill that would be for 10 years, whenever they get around to 
it?
    Mr. Kauffman. Well, it is unusual for a politician to ask 
to have a sword tied over his or her head, but I----
    Chairman Tom Davis. I am not asking you to endorse it, I am 
just asking the practical effect.
    Mr. Kauffman. But I would ask, as a practical effect, I 
would welcome that, because it forces us to get, yes, there may 
be fine points with which we disagree, but let us come to an 
agreement and come to an agreement now, while the money is 
here. It has to be a clear and present risk of loss of funding 
to ensure that we will come together. And I would, frankly, 
welcome that.
    Chairman Tom Davis. Thank you.
    OK, I am going to go with Mr. Moran first, then Mr. Van 
Hollen. We will all get a shot.
    Mr. Moran. Thank you, Mr. Davis. And, again, thank you for 
having the hearing and the legislation, Mr. Chairman.
    In my opening remarks I spoke about finding ways to 
encourage jurisdictions to allow greater densities at existing 
and future Metrorail stations. In the case of Arlington, the 
county committed to concentrate mixed use commercial office and 
high-density residential development within a quarter mile of 
its two Metrorail corridors. A lot of people didn't like the 
high density, but with that density they were able to 
concentrate on just 11 percent of its land, preserving the 
balance for low-density single-family residential housing, 
garden style apartments, retail, and green space.
    Those two rail corridors today boast more office space than 
Dallas, Denver, or Pittsburgh, but have nowhere near the same 
city's traffic congestion. Thirty-nine percent of those who 
live in the Metro corridor take transit to work and 10 percent 
walk. So half of the people that live there don't get into an 
automobile to clog up our congested roads.
    More than half of the county's tax revenue is generated 
from the businesses around Metro. This steady source of revenue 
has enabled the county to maintain its public services and the 
lowest property tax rates in the region.
    What I want to ask you is have you considered any possible 
legislative language that would encourage other jurisdictions 
to follow Arlington's model? I mean, have you considered taking 
the initiative in terms of planning in a way that would be 
proactive?
    Mr. Kauffman. Mr. Moran, I will try to begin the response 
to that. One of the things that we have tried to recognize as a 
Metro board is that the primacy of land use remains a local 
decisionmaking issue. We certainly have worked to encourage, 
foster what is defined as smart growth, and we try to ensure 
that elements of that are evaluated for the benefit of the 
Metro system. But ultimately, when it comes to what takes place 
on a given piece of ground in a given jurisdiction, we rely on 
that being a wise decision made in the best interest of the 
locality.
    Mr. Moran. Well, we are good friends, Dana, but that was 
sort of a predictable response.
    Mr. Kauffman. But what we have done--I will augment that.
    Mr. Moran. Let me go on, because I am not going to put you 
guys on the spot. Just think about it in the future.
    Mr. Chairman, I want to share this with you because it does 
impact a great deal on the money that we are going to be 
fighting to get for the Dulles rail corridor. It was always 
going to be that we were going to be paddling uphill to be able 
to get the kind of money that was originally projected to pay 
for the Dulles rail corridor. Now we are going upstream against 
a current, when we are told that the cost is going to be $2.4 
billion.
    I am going to say for the record, when I look at the land 
use planning around the four current Metro stations that are 
planned for Dulles rail, I think it is deficient, it is 
insufficient, and I don't think it justifies the kind of cost 
that is going to be necessitated to pay for those four Metro 
stations.
    And as Mr. White knows, I take serious issue with the 
assumptions that they are going to generate enough people using 
those Metro stations to justify that capital investment at 
Tysons. We need high-rise residential buildings at the Metro 
station. To think that we are going to attract people to come 
to Metro, walk across, for example, Route 123 to go shopping, 
and then lug two arms full of products that they purchased at 
Tysons back to the Metro station and then go on to their place 
of residence is not going to happen. We need residential high 
rises built into those Metro stations, and we need to provide 
housing for the people that are working at Tysons.
    I think that the planning at Tysons is deficient. And, yet, 
Metro stands back and really says that it can say nothing or do 
nothing about it, and yet you have to advocate to get that kind 
of funding. And it is going to affect our ability to extend 
Metro where it needs to get to, which is to Dulles rail through 
Reston. So this is a very serious issue, and I want to see if 
either of you have any ideas as to how we can lower that cost 
attributed to the four Metro stations at Tysons Corner.
    Mr. White. I think you are asking two questions, Mr. Moran: 
the issues associated with lowering the cost and, the second, 
the land use.
    Mr. Moran. I would be happy if you respond to even one of 
them.
    Mr. White. I will do my best to try to answer the two as 
best I can. And I think the issue of land use I would probably 
like to defer to Mr. Kauffman on.
    We understand that we do have a challenge on our hands. As 
you know, this is a project that is under the leadership of the 
State Department of Rail and Public Transportation, so in this 
particular instance Metro is really one of the local partners 
who is a technical agent for the project working under the 
leadership direction of the State on implementing this project.
    We do know that there is considerable work that needs to be 
done to lower the cost of this proposal that has come in under 
the public-private transportation act partnership with the 
Dulles transit partners----
    Mr. Moran. I am going to interrupt you, not because I don't 
take particular umbrage at your answer. You are going to give 
me the answer I could have predicted. But yes or no, do you 
have any plans currently under consideration that would 
significantly reduce the cost at Dulles?
    Mr. White. Yes, sir. Yes, sir.
    Mr. Moran. At Tysons for the Dulles rail? You do?
    Mr. White. Yes. We are working together with the State to 
make an August submittal to the Federal Transit Administration 
to lower that cost into an acceptable range, and we are very 
focused on trying to achieve that.
    Mr. Moran. OK. I will be anxious to see those.
    I don't want to monopolize the time. I have one other quick 
question, though, before Chris gets an opportunity to ask it, 
and it is of Mr. Kauffman.
    We are going to add 18,500 more workers at Fort Belvoir, 
probably at the engineer proving ground. What is the cost of 
extending public transit, whether it is Metrorail or a shuttle 
bus or whatever, using the Springfield station? What do you 
estimate is going to be the cost to serve that vastly expanded 
population of workers and the contractors that will accompany 
them?
    Mr. Kauffman. First and foremost, I want to say on the 
record that I welcome the opportunities that the base closure 
realignment could bring to the Richmond Highway corridor and to 
central Springfield. I have to look at the costs. We have done 
some estimates, both in 1999 and again revisited in late 2004. 
They are orders of magnitude figures, Congressman Moran, and 
they vary from $600,000 on up--excuse me, $600 million. I am 
sorry, $600 million on up.
    And the challenge is not only looking at it in terms of 
what governments can provide, but I have already raised with 
some folks how about a PPTA type of arrangement for extending a 
light rail from Franconia-Springfield on to serve the area. So 
certainly we would want to see some Federal seed money that 
could perhaps fund the PPTA, just as we are discussing for rail 
to Dulles.
    The other thing I just would like to answer, Mr. Moran, 
going back to your last question on Tysons and whether or not 
it is a prudent investment of dollars. Demographically and as a 
job center of Fairfax County is an urban area, but is somewhat 
kicking and screaming that we are working with our citizens to 
help them realize that we are in fact an urban area.
    When it comes to where Tysons will be, as we speak there is 
a visioning process going on. We pulled the plans for Tysons 
out of our normal area plan review process and, frankly, 
looking at what does Tysons as a designated key town center--
not town center, but urban center for Fairfax County, what will 
it look like? And I think, Mr. Moran, by the time it is done, 
you will see something that is on a par with Arlington. I have 
no doubt about that. And would more than justify the rail 
service to it.
    Mr. Moran. Well, thank you, Mr. Kauffman. I don't have any 
time left, clearly, but I do want to thank Mr. White for his 
leadership. I think he is a true professional and a very 
responsive and responsible one. And I thank you for all the 
time you have dedicated and your great leadership as well, 
Dana.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much, Mr. Moran.
    Mr. Van Hollen.
    Mr. Van Hollen. Thank you, Mr. Chairman. I want to thank 
all the witnesses for their testimony this morning. Just a 
couple points and then a question.
    First, I just want to underscore what Chairman Davis talked 
about with respect to having the Federal representative to the 
board also play the role of a representative of the Metro 
riders, a consumer of the Metro services. I think that is 
important. I applaud the creation of the advisory committee, 
17-member, I believe, advisory committee. But I do think it is 
also important to have, among the key criteria for selecting 
the Federal representatives, the question that they reflect the 
ridership and the concerns of the ridership as well.
    Second, I just wanted to mention that as part of the 
transportation authorization bill, which I hope will pass the 
House and the Congress soon, includes a number of new start 
designations in the Washington area, the Maryland part of the 
Washington area, including the corridor city's transit way, 
which would extend the Metro line by not necessarily Metro, but 
transit services beyond Shady Grove, which, as you know, is one 
of the most crossed and used terminuses on the Metro system, up 
beyond Shady Grove to Clarksburg, and the goal is eventually 
toward Frederick. And I look forward to working with you as we 
do that to relieve the congestion on I-270, which very quickly 
gets filled up; and having that extension I think would help 
relieve a lot of that congestion.
    With respect to the funding goals that you have outlined 
here this morning and the projections of shortfalls in the 
future and how this bill and the Federal contribution can help 
address those, my question is are the future security needs of 
the Metro system, including our responses to the terrorist 
threats, are those funds included in the numbers that you have 
provided us this morning? That is one question. And the other 
question relates to what measures are you taking now throughout 
the Metro system with respect to the threat of terrorist 
attacks?
    As I am sure you know, there have been a number of both 
letters to the editors and articles in the Washington Post 
about riders responding to Metro's call for people to report 
suspicious activity, to report whether or not they see 
unattended bags and backpacks on the Metro. And at least 
according to the press reports, the response from the Metro 
system has not been what it should be in terms of quickly 
responding to those requests. So if you could please address 
those questions.
    Mr. White. Yes. Thank you, Congressman, for those 
questions.
    On the security funding, in our Metro Matters Funding 
Agreement there are proposed investments that have come out of 
two separate vulnerability assessments that have been conducted 
by the Federal Government, one by the Department of 
Transportation and the second one by the Department of Homeland 
Security. So they are not in the bill that the chairman has 
introduced; they are separate from that under the funding 
agreements that have already been executed.
    However, there is one major caveat and proviso: it is 
assumed that those projects are 100 percent federally funded, 
and thus far there have been obviously limits to the amount of 
investments that the Federal Government has made on transit 
security. We did receive $6.5 million coming out of the $250 
million that was approved for transit security. There is an 
allocation that we are awaiting, it is release of another $12 
million. So there are sums of money, but they are still quite a 
bit short of the need that has been identified of about $143 
million.
    So the direct answer to your question is no, there is 
nothing in this bill related to the security side; it is under 
a separate set of assumptions that we are working on pursuing 
the appropriation and authorization actions of the Congress 
with respect to transit funding under the Department of 
Homeland Security. We know there are a number of things that 
are not investment-intensive that we can and should be doing. 
We do know that this money has some target hardening that we 
think is very important to do, and we believe very strongly we 
need to get this capital investment money.
    And, in the interim, we are continuing to work with our 
10,000 employees and with our 1.2 million passenger trips each 
day to try to help supplement them and have them be our eyes 
and ears to look out for suspicious actions. Obviously there 
was one issue that you reported just the other day that was in 
the newspaper that spoke to one of the responses by one of our 
train operators, which sort of drew into question how well they 
responded. In that particular instance, it was determined that 
this was really an unattended package, it didn't really fit the 
definition of what our people have been trained to look for.
    However, what the train operator should have done when they 
went to that railcar to investigate that is, they should have 
taken that package and done something with it, either brought 
it over to a station manager or took it with them to their 
train operator compartment. That train operator did not do 
that; he left the package behind, creating some questions in 
the minds of customers and some concerns in the minds of 
customers. So clearly that was not a good execution action by 
that train operator, and we are completing our investigation 
work on that and there will obviously be a level of discipline 
that will have to be done in conjunction with that less than 
perfect response.
    As it pertains to just general threat responses, our chief 
is very, very aggressive and proactive in her outreach and her 
review of best practices across the country and the world. We 
are attempting to do every kind of procedure that has sort of 
been known and used elsewhere in the country and the world to 
keep our customers and our employees safe.
    We are examining the issue of random searches. We have not 
implemented that measure. We would want to have a public 
discussion around that before we were to move in that 
direction, unless circumstances absolutely dictated that we do 
it. She has also done a considerable amount of outreach with 
the Federal family and State and local family of law 
enforcement, and we really see a higher presence of officers 
who are non-Metro officers than we have ever seen before as 
they are now more recognizing of the risk to our transit 
environment and more of a willingness on their part to help 
assume the risks of law enforcement.
    So this partnership has really expanded the presence of 
enforcement, and we will continue to try and do that as we 
pursue other options, such as whether it makes sense to do 
inspections.
    Mr. Van Hollen. Mr. Chairman, if I could just briefly 
followup on that.
    Chairman Tom Davis. Sure.
    Mr. Van Hollen. First of all, I am not advocating the 
random searches. I think you are right, you should go through a 
thorough process, an open process before you make any decisions 
in that regard.
    Let me just make sure I understand your answer to the 
funding response, though. My understanding is that you are 
about $143 million short, as of today, with respect to funds to 
meet some of the security requirements that you are budgeting, 
is that right?
    Mr. White. That is correct, Congressman.
    Mr. Van Hollen. All right. I look forward to working with 
you and the chairman on those issues. I want to also thank you, 
Mr. White, and the others at Metro for your responsiveness to 
the questions that I know my office has raised and many others 
have raised. So thank you very much.
    Chairman Tom Davis. Mr. White, I have a couple questions I 
just want to ask. On this alternative discipline policy, we 
note that two bus drivers who caused injuries to people after a 
Metro bus lost their control in 2000, a driver fell asleep at 
the wheel and hit a pole, another one which sent six passengers 
to the hospital; and they switched the driver's job and made 
her a subway station manager.
    In another case a driver hit a pedestrian, Patricia Ann 
Skinner, a 35-year-old editor at a newsletter publishing 
company. The driver had seen Skinner, honked the horn 
repeatedly, waved her arms, but never applied the brakes. 
According to the accident investigation, it said Skinner's life 
changed forever that day because she lost a leg from the hip 
down. Metro paid her millions in an undisclosed settlement, 
according to the Washington Post. And the driver became a 
subway station manager.
    This isn't how you get managers, is it?
    A couple other questions. The agency continued to forge 
ahead with a pilot program introduced last year called 
Alternative Discipline instead of suspending and docking the 
pay of people who violate safety rules. Managers put a letter 
in their files and allowed the workers to stay on the job. This 
has undergone some criticism. Is this still in operation? I 
would just get your reaction to what is going on.
    And then I would ask Mr. Millar, is this commonplace and 
how is it working? Because that has been a common criticism and 
I have to raise it.
    Mr. White. No. I appreciate the question, Mr. Chairman.
    Ironically, this concept came as a cost containment 
measure. We spoke about the various pressures that the 
Authority is under and the various thought processes that have 
driven us in different directions, and the board commissioned 
an independent review to come up with what are the various 
ideas that we can do to contain our costs.
    One of the areas was the use of overtime. As you know, if 
we have an employee who is disciplined and is now off the 
clock, if you will, serving a suspension, what we have to do is 
we have to backfill that job and pay time and a half, usually 
through overtime, to someone to make up for that suspension. So 
the thought was that what you would do would be have the person 
still serve and work for the Authority without the need for the 
Authority to backfill that position on overtime, but also to 
have the discipline entered into their record so it is the 
progressive discipline and ultimately is treated with 
seriousness. And if there is a pattern of inappropriate 
behavior, it can lead up to suspensions or dismissals from the 
Authority.
    So I think the theory was a good theory. It sort of was 
considered one of the more progressive labor management 
approaches in terms of how management works in a collective 
bargaining environment. Sometimes it has unintended 
consequences.
    And what we have done, Mr. Chairman, is two things: we have 
carved out safety and security actions, inappropriate actions 
that are defined as safety and security issues are now carved 
out of this alternative discipline program that can lead to 
immediate suspensions or immediate dismissals; and, No. 2, it 
is a pilot only, and it will continue as a pilot. We have the 
right to re-evaluate that together with our union and to move 
off of alternative discipline.
    Chairman Tom Davis. Thank you.
    Mr. Kauffman. Mr. Davis.
    Chairman Tom Davis. Yes, please, Mr. Kauffman.
    Mr. Kauffman. If I could piggy-back on that, perhaps using 
a more recent example that was also brought up earlier, this 
issue of a bag being left behind and the lack of a perceived 
response. As you can imagine, we as a board were embarrassed by 
that and jumped into it, quite frankly, with both feet.
    And we insisted to know, first, is there standard operating 
procedure; do we have something in place? You know, we have 
asked our riders to step up. What are we doing to step up to 
ensure that we are there for our riders? We got the information 
back; it made sense.
    Then we insisted that management is out there and the word 
got down that this is not a forgivable type of thing. We want 
this done, we want it exactly enforced; we want the spot 
management checks and we want disciplinary action taken, 
because, again, if we are to ask our riders to be more vigilant 
in a time of crisis, then we need to be also delivering top-
quality service to our riders, and we expect the most of our 
employees.
    Chairman Tom Davis. OK. Thank you.
    I am going to allow Members, if they want, to stay and ask 
other questions. Would you like some questions? You have just 
come in here.
    Mr. Cummings. Yes, Mr. Chairman. I just have a few 
questions.
    Chairman Tom Davis. Sure.
    Mr. Cummings. Thank you.
    I was just wondering, this Post report, Mr. White, which 
says investigation also found that the agency ignored safety 
warnings--and this is what I am concerned about--and failed to 
effectively manage its program to transport the disabled. What 
is that about?
    Let me tell you why I ask you that. As a member of the 
Transportation Committee in Baltimore, one of our biggest 
complaints is coming from the disabled, and considering we are 
celebrating now the 15th anniversary of ADA, I am just 
wondering why do we have those problems in this day and in this 
age?
    Mr. White. Yes, Congressman Cummings. I think you have two 
questions: one is on the safety side and how the management and 
staff respond to that; and, second, how we are managing our 
disabled services, our paratransit disabled services. I think 
what the review found was that in some cases we have a 
checkered record of how quickly management responds to internal 
audit reviews and findings, safety and quality assurance 
reviews and findings, all of which result in a report, a set of 
findings and recommendations, and a set of recommended 
corrective actions for that particular manager or that 
particular department to implement.
    We are not proud to say that there have been instances 
where some of the management response has been much slower than 
it should have been or in some cases were ignoring the kinds of 
recommendations that came out of these internal audit findings. 
That is not an acceptable situation.
    What we have now implemented recently is what I call an 
intervention process, where there will be clearly a system of 
internal reviews that will, if necessary, bucket all the way up 
into my office to ensure that the corrective actions are taken. 
The audit department will track these. If, working 
cooperatively with the management of the organization, it is 
determined that someone is not acting appropriately or quickly, 
there will be an intervention process, there will be 
consequences for that manager for not moving forward with that, 
and we will ensure that the necessary intervention takes place.
    We have a lot of good internal checks and procedures, and I 
think we got all the kinds of things that a big complex agency 
needs to have, but we just don't always have perfect execution 
everyday, and we have to make sure that we reduce the frequency 
with which that happens. So that is my answer, Congressman, to 
the issue of the responses on safety and internal audit 
findings.
    On the disabled service, this is a very difficult problem 
that challenges WMATA and every transit agency across the 
country, to meet its responsibilities under the Americans With 
Disabilities Act to provide a complementary set of paratransit 
services. You speak to the problems that have happened in 
Baltimore. I think every system across the country has 
struggled with providing quality service that meets the 
responsibilities of the ADA for disabled people who are 
absolutely dependent upon that service for their quality of 
life, and trying to ensure that service is done in a way that 
is also affordable. We cannot deny trips to eligible people who 
have a need to make those trips, and we are also trying to 
reconcile that against all these competitive budget pressures 
that we are trying to manage.
    In our case, Congressman Cummings, we are seeing 20 to 25 
percent annual growth rates under this paratransit contract. It 
started at about $10 million 7 or 8 years ago; it is over $50 
million now. So it is an extraordinary unfunded mandate that is 
very difficult for local transit agencies to respond to. We had 
an independent review done of this, Congressman, different 
ways.
    We have looked at the Baltimore model. I know they have 
come up with some new ways of implementing that service. We 
have a new request for proposals on the street. We have a whole 
new way we are going to try and deliver that service and step 
up Metro's internal capabilities to ensure that the contractor 
is performing successfully.
    So I think we have recognized the kinds of things that need 
to be done to make the service better than it is today. We 
certainly pledge to you, to the members of this committee, to 
our disabled community that we are very focused on making sure 
that we fulfill our responsibilities of meeting that 
requirement.
    Mr. Cummings. Let me ask you this very quickly, two things. 
Your research, did they discover why it is that, I mean, that 
is quite a bit, five times, I think, the increase, why that is, 
as far as the need for disabled services?
    And the other thing that I am concerned about is just the 
general idea of service to those who ride. Sometimes, you know, 
there comes a point when you have to fire people, Mr. White, 
sadly. And I am just wondering when I read this piece in the 
Post, that supervisors who exercised poor judgment or were 
involved in safety incidents were reassigned rather than fired.
    And I know that it is hard to come by jobs and all that, 
and I sympathize with people in getting jobs. But, I tell you, 
I think that we owe the public excellence, and sometimes I 
think that they don't always get the excellence that they 
deserve. And if there is any other kind of business that people 
are not presented with the kind of service, you go out of 
business. I practiced law for a number of years, and if I 
didn't do the job, and do it well, I was out of business.
    So, I mean, I know what you said a moment ago about the 
buck possibly having to stop at your office. I would hope that 
it doesn't have to go that far. But the word has to go out that 
the public deserves to have excellent service.
    Mr. White. Yes, sir. Your point is well taken. We accept 
your comment. I will take the second question first and then 
kind of finish back up on the paratransit side.
    Absolutely, we need more management accountability. There 
are people who have been dismissed from the Authority over the 
last several months, at least a half a dozen very senior 
managers who have been asked to leave the Authority or who have 
been encouraged to take early retirement. We recognize that we 
need to be more active in dealing with some of the 
inconsistencies of management performance. I pledge to you, 
sir, that we are going to be much more aggressive than we have 
been in the past to make sure that management is on top of its 
game and it is accountable for its performance and for its 
behavior.
    We have designated a higher number of people who have at-
will employment status. I serve at the pleasure of the board of 
directors and I am an at-will employee to my 12-member board, 
and we have to have more of our managers recognize that they 
also have the same degree of performance requirement and 
insecurity around, if they have a track record of 
nonperformance, then, as an at-will employee, they may face the 
dismissal call. And they have to be prepared to face that and 
recognize that their job status is now in at-will.
    That I think has shaken up a number of people in the 
organization who can't fall into the comfort of a personnel and 
disciplinary system that allows people to sort of skate for a 
while until a compelling record can be made against a 
management performance that would lead to dismissal. When you 
are at-will, you are in an entirely different ball game, and I 
think that has gotten the attention that it was intended to get 
inside of the organization.
    On the paratransit side, the increase I think has been 
driven by a number of things. We do have a very active 
lifestyle of disabled people in our community, and they really 
have, ironically, as the service got better, they found it to 
be more desirable to do and increased the utilization of the 
service. And then when more demand gets put on the system, it 
makes it tougher to keep the reliability up, and then the 
reliability seems to drop down while the demand increases until 
we can get that whole thing corrected.
    Another thing is that we want to make sure that only people 
who are the intended users of the service, we have tightened 
down on eligibility certifications to make sure that only those 
people who meet the definitions of disability under ADA are 
qualified. And if anybody has an individual pattern of abuse in 
the use of the service, like they chronically, habitually 
cancel their service at the last second or they don't show for 
their service call, that there are consequences, including 
their being removed and suspended from the service.
    So we have attempted to take some proactive steps to make 
sure that the people use the service properly, only those 
people who are eligible to use the service do use it, and we 
are trying to encourage people financially, by offering free 
fares, to move on to the regular service, the accessible 
Metrorail and Metro bus service, including allowing their 
companion to ride for free. So we have tried to do a set of 
actions that I think are designed to try and make the system 
perform better.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Chairman Tom Davis. Thank you for your questions.
    I have to get some questions on the record. I have to talk, 
Ms. Siggerud, to you.
    How essential do you think Metro is to the Federal 
Government's operations? Can you provide any examples of 
Metro's unique contributions to those operations?
    Ms. Siggerud. I think it is clear from what you have heard 
today that Metro is very essential to the Federal Government's 
operations. There are a number of Federal policies that have 
led directly to that result. The siting of Federal agencies at 
or near transit stops and the increase in the number of 
benefits that Federal employees have had available to them to 
encourage them to use transit has led to I believe the 
statistic is about 40 percent of Federal employees using 
Metrorail at some point. So it is clear that the Federal 
Government relies on Metro. If we look at, for example, the 
case of Hurricane Isabel a few years ago, OPM decided to close 
the Federal Government because Metrorail was unable to operate 
above ground during those winds.
    There are also a couple of unique contributions I might 
talk about, some security issues. The Metro Police are full 
partners with the Secret Service and the Capitol Police in 
terms of providing explosive detection and other kinds of 
security whenever the President, the Vice President, or a 
foreign dignitary needs that kind of service.
    Chairman Tom Davis. What would be the effect on the 
Government's operations if Metro weren't viable?
    Ms. Siggerud. Well, I think we have heard a clear case that 
the Federal Government does need a well functioning and well 
managed system. If the Metro transit service were not 
available, clearly those 40 percent of employees who ride Metro 
would either be using other transit services or, more likely, 
using our roads. We know that Washington, DC, is in fact the 
second or the third--I believe the third--most congested area 
in the country.
    Chairman Tom Davis. OPM claims that it does not rely on 
Metro, surprisingly, in part because Federal employees could 
telework instead of coming to work. Now, that really, in my 
opinion, doesn't jive with the anemic telecommunicating rates 
that I have seen coming out of the Federal Government. Any 
comment on that?
    Ms. Siggerud. Sure.
    Chairman Tom Davis. It seems to be missing.
    Ms. Siggerud. Yes. I know that you have been a very big 
supporter of telework and getting more Federal agencies to make 
that available to their employees. But I think the reality of 
the situation is that telework is appropriate for some 
employees and on a part-time basis, it is not a full-time 
solution to the mobility problems that face our region.
    Office of Personnel Management also encourages car-pooling. 
That is another option to using transit. However, the Hurricane 
Isabel example that I mentioned, along with the various weather 
situations that hit us in the winter here, make it clear that 
OPM makes decisions about the operating status of the 
Government that is very clearly reliant on Metro's operating 
status.
    Chairman Tom Davis. Mr. White, how are Metro's operations 
affected by these special events: inaugurations, protests? Now 
you have the Nationals games, which I guess is helping 
ridership and some of those areas.
    Mr. White. Well, those are good problems to have when we 
provide an essential service to the community and the kinds of 
things that people come to the National Capital Region to 
enjoy. Some of those that happen every year, like the 4th of 
July types of events; the inauguration, which takes place every 
4 years. Some of the occasional events such as the President 
Reagan state funeral and other things like that, when we find 
those major events that take place, obviously the Federal 
response, there is a fair amount of shutting down of the road 
and perimeter systems, there is a lot of perimeter security 
that has taken place when hundreds of thousands of people are 
coming to the downtown area to try to enjoy the festivities and 
the celebrations. And everybody is told and recommended to take 
Metro to do that.
    So we are a workhorse every day; we are like a Clydesdale 
when it comes to these kinds of special events in terms of the 
burden that is put on Metro. Virtually every person that can 
work is working that particular day. We run the wheels off of 
every train we have and most of the buses that we have to 
support those events.
    So it is something we sort of built into our culture of the 
organization in terms of how we do that--and we are probably 
best when it comes to these special events--but clearly it 
places a big burden on the organization in terms of how we use 
our manpower and the costs associated with it. We like to have 
that burden, but it is a challenge to us nevertheless.
    Chairman Tom Davis. The main thrust of the system has been 
moving people out from the suburbs into the city to places of 
work. How much are we getting that is now counter to that, 
people moving from the city to employment places in the 
suburbs? And shouldn't that be an object of Metro, to try to 
enhance that?
    Mr. White. Absolutely, Mr. Chairman. When the people 
deigned the system some 40 years ago, it was based upon the 
predicted growth patterns that were going to take place. And 
certainly on the rail side, we are a radial rail system. Our 
job is to bring people from the suburbs to the central city 
through major radial corridors of travel. And the whole layout 
of the Metrorail system was based upon those predicted travel 
points of origin and destination, population and employment. 
And I think that has been the case.
    But over the last decade, I think we have seen that we have 
what we call clusters of employment centers. The District of 
Columbia will always be the largest single job center. I don't 
think anybody is predicting that not to be the case. But there 
is an explosion of activity centers in the suburban areas that 
are their own employment and trip generation centers that makes 
this travel pattern in the metropolitan area now a spider Web 
travel pattern; it is no longer radial.
    Chairman Tom Davis. Unfortunately, a lot of that is not 
around Metro stations.
    Mr. White. And a lot of that is not around Metro. This is 
where the bus system needs to play a bigger part. A rubber tire 
system is much more versatile than a heavy rail fixed 
investment.
    Chairman Tom Davis. But are you seeing much going out on 
the blue line, the orange line? Do you see an increase now of 
people coming out to the suburbs?
    Mr. White. There is tremendous reverse commute travel, 
which is, of course, great for public transportation because it 
makes a more effective use of our capacity for two-way use, 
rather than one-way.
    Chairman Tom Davis. To the extent that is enhanced, that 
helps the system, right, because the trains are going there 
anyway?
    Mr. White. It absolutely does. For example, the Tysons 
investment that we talked about, that is a 30 percent reverse 
commute corridor. That is extremely high reverse commute, and a 
good example of an area that is not served by public 
transportation today that, when it is served, is much more 
effective two-way travel.
    Chairman Tom Davis. Of course. That makes sense.
    Ms. Norton.
    Ms. Norton. Just a couple more questions, Mr Chairman.
    Let me raise a very tricky question, but I think it has to 
be raised for the public record. My understanding is there has 
been no fare increase for 8 years. Is that true? If that is 
true--this is my question, and here I want to raise a 
disclaimer to my constituents: I am not here advocating a fare 
increase. Hear me, hear me.
    Nevertheless, I wonder if we are doing anybody any favor. I 
remember WASA, the chairman will remember when we had to reform 
WASA altogether. It had a similarly long period of no fare 
increase, and then we were going to reform it, some of the 
money is going to have to come from rate payers and, of course, 
then everybody screams and yells.
    So the real question is, do you want to take the screaming 
and yelling little by little or what is the theory behind 
keeping fares unchanged for 8 years? Are you sending the 
message that you really don't intend to raise fares? And isn't 
it fair for the public to believe that is the message they 
have? If that is not the message, what is it that you intend to 
do?
    Mr. Kauffman. Ms. Norton, if I could start, and I am sure 
others may wish to weigh in. Certainly what the customer pays 
is a part of covering the total cost of the ride. Only you were 
gracious enough to remember that we went 8 years without a fare 
increase. What most of our riders remember is the last 2 years 
they have gotten fare increases. The challenge is how to find a 
predictable increase, frankly, that would be tied to a 
defendable indicator, whether some sort of a measure, whether 
it is cost of living----
    Ms. Norton. Is that so hard to do?
    Mr. Kauffman. It is to get agreement on what that is.
    Ms. Norton. Has anybody tried on your board?
    Mr. Kauffman. We have tried actually on the board to do 
either a 2-year budget or to tie it to a regular indicator. The 
challenge, Ms. Norton, has been what this committee is talking 
about today: in the absence of having a level table so we know 
what the total funding pie is going to be, getting into what 
that fixed percentage is on the rider is put up in the air.
    What I would certainly have to acknowledge is that today 
there is a great disparity on the percent of the cost of the 
ride borne by our rail versus the cost of the ride borne by our 
bus customer. Right now, on a regular basis, over three-
quarters of the cost of providing service to our rail customer 
is paid for by the customer; whereas, somewhat less than a 
third is paid on the bus side. So trying to determine what is a 
fair predictable increase is also at bar.
    Ms. Norton. Well, again, I happen not to think that is 
rocket science. It is interesting you say it is linked to 
dedicated funding or anything else. I do think that, again, it 
would help us on this side to see some at least skull work 
being done by Metro on this very troublesome issue.
    Mr. Kauffman. Well, it is, but let me just, again, be very 
frank. My colleagues from Maryland would probably just as soon 
have it all borne by the customer. So we have to strike the 
balances of jurisdiction.
    Ms. Norton. And I have real concern when fares apply across 
the board, you know, if you are low-income or high-income, 
which leads to my next question. Is there any other system 
which has subsidized fares? Some of our people can actually get 
away with paying, if they work for the Federal Government, 
virtually no fares or at least a subsidized fare. Is that found 
anywhere else in the United States?
    Mr. Millar. Perhaps I should lead the comment on that. It 
is not uncommon at all to have employer subsidy, such as has 
been discussed today with the Federal Government, to WMATA. 
They go under various names: transit check is one very common 
one, and things of that sort. So that is a pretty typical and 
common way that fares are subsidized around the country.
    Ms. Norton. I am sorry, I was distracted.
    Mr. Millar. OK. I am sorry.
    Ms. Norton. A typical way is what?
    Mr. Millar. The subsidization of transit fares by employers 
is fairly common around the country. It certainly happens more 
here than other places.
    Ms. Norton. Well, it happens more here because we have the 
granddaddy of all employers. What I want to know, and this is 
what I would ask Ms. Schneider, is whether or not there are any 
businesses in this region that have followed the leadership, 
the very ample and, I must say, generous leadership, on this 
score, it seems to me, the Federal Government has stepped up to 
the plate. Are there any employers who have done that? Does the 
Board of Trade, Chamber of Commerce, Federal City Council have 
any recommendation to employers along that score? Do you think 
they should?
    Ms. Schneider. There are significant numbers of businesses 
that provide support for their employees who use public 
transit. I don't have the exact number, but we can get that 
number for you. But it is comparable to what the Federal 
Government provides.
    Mr. White. Ms. Norton, in our transit benefit program that 
we are speaking of right now, there is approximately 150,000 
Federal employees that are enrolled, taking advantage of that 
benefit that the Federal Government provides to them. And I 
believe the number is around 60,000 to 70,000 members who are 
private sector members who also take advantage of that benefit 
that is offered by their private sector employer, be it a pre-
tax benefit or the full kind of benefit that the Federal 
Government offers.
    Ms. Norton. That is very, very important; it is an example 
of where the Federal Government takes leadership. And, in a 
real sense, private employers have to do it. You may have 
worked for a Federal employer or you may work for a Federal 
employer, and then the private employer wants you and you say, 
oh my goodness, I get this very good subsidy from the Federal 
Government and, increasingly, everybody understands what they 
have to do in order to compete with one another.
    This is a final question. I was struck, Ms. Siggerud, by 
your analysis of what happened when the New York City Transit 
Agency tied funding to oversight. And then you outlined how the 
oversight was done; it looks like it was fairly effective. And 
here I am referring to the part of your testimony that says, 
again, tied to oversight. For example, the mean distance 
between failures has increased from less than 7,000 miles in 
1981 to nearly 140,000 miles in 2003.
    This is a system that already had dedicated funding, I take 
it, at the time. So my question is whether you think it is the 
oversight that matters most, given, I take it, that in 1981 New 
York already had some dedicated funding. They must have been 
talking about increased funding to the system.
    Ms. Siggerud. I haven't done the analysis to know whether 
the funding or the oversight was more important, but I think 
that what is important is that they go hand in hand. What the 
MTA oversight felt was that if we are going to make additional 
revenue available to the New York City subway and transit 
system, that we ought to have some accountability. And as my 
statement said, there was a capital board set up, along with, I 
believe, don't quote me, but I believe there was also an 
inspector general set up for that organization.
    Ms. Norton. Inspector general capital program oversight?
    Ms. Siggerud. Right.
    Ms. Norton. And transportation capital review board? All 
three were there?
    Ms. Siggerud. Correct. All those were established, and they 
report variously, but mostly to the Governor of the State of 
New York. And Mr. Millar also has some information on that.
    But what I think is important with regard to Metro here is 
we noted that there are a variety of levels and types of 
oversight that occur. You have the Federal oversight that 
relates to compliance with Federal law and with the use of 
Federal capital funds; you have an auditor general and a 
variety of other organizations. I think the key here is to ask 
the question whether, when you put all of that together, we 
answer the sorts of questions that we can identify the major 
operating and managing challenges that are facing WMATA.
    And in creating an inspector general, should this 
legislation go forth, it needs to be charged with really 
complimenting and integrating the existing oversight and 
reporting to the board on the performance concepts. I believe 
Mr. Millar mentioned looking at the performance of the system 
and understanding the components of it are very important. The 
inspector general should be charged with those sorts of high-
level tasks, in addition to integrating all of the other 
oversight that occurs.
    Ms. Norton. Ms. Siggerud, you, faithful to GAO's sense of 
the Federal deficit, indicated that the Federal Government 
would have to make sure that whatever was done for Metro met 
its competing priorities. And I just want to say for the record 
the breakdown of this system 1 day is billions of dollars that 
the Federal Government could never recover, and the chairman's 
job and my job is to make people understand that.
    In terms of competing priorities, you have 200,000 people. 
You try putting them out of commission by what happens to Metro 
in 1 day, and you will figure out what your competing 
priorities ought to be. I am very concerned----
    Chairman Tom Davis. It would make Tractor Man look like 
nothing.
    Ms. Norton. Tractor Man is a very good example. At least 
that was when people were at work and were going home.
    Finally, let me say I am very concerned. As a member of the 
Homeland Security Committee, I sat in a hearing with Ms. 
Hanson, your chief, and learned that Metro has gotten $15 
million since September 11th for security that is dedicated 
funding; whereas, before September 11th, for safety it had 
gotten $50 million for security.
    I know you are ahead of many other systems, but I am 
concerned that your blue ribbon panel costs do not include and 
could not include security. I am not sure how much real 
preventative maintenance it includes. It is one thing to step 
up and fund the system. It is another thing to kind of keep 
that going so that you don't fall back and don't have to, 
therefore, do it all over again.
    Anyway, we are going to try, but I must say that those of 
you at the table representing the business community, 
representing Metro and its board and, therefore, our region, 
really have to step up first. Once you step up, it seems to me 
it gives the chairman and the regional delegation what it takes 
to move forward, put something on the table for the Federal 
Government and say ``your move.''
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    I want to thank all of you for being here. This is an 
important first hearing for us. We will do more, but this is a 
draft. The legislation that we have put forward is kind of our 
opening. There will be a lot of give and take as we move 
forward, and I look forward to working with all of you as we 
try to perfect this, move it out of committee and to the House 
floor.
    The hearing is adjourned.
    [Whereupon, at 12:12 p.m., the committee was adjourned.]
    [The prepared statements of Hon. Henry A. Waxman, Hon. 
Diane E. Watson, and Hon. Elijah E. Cummings follow:]

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