[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
           THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY

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

                                HEARING

                               before the

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

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 29, 2009

                               __________

                            Serial No. 111-2

                               __________

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


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



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN M. McHUGH, New York
DENNIS J. KUCINICH, Ohio             JOHN L. MICA, Florida
JOHN F. TIERNEY, Massachusetts       MARK E. SOUDER, Indiana
WM. LACY CLAY, Missouri              TODD RUSSELL PLATTS, Pennsylvania
DIANE E. WATSON, California          JOHN J. DUNCAN, Jr., Tennessee
STEPHEN F. LYNCH, Massachusetts      MICHAEL R. TURNER, Ohio
JIM COOPER, Tennessee                LYNN A. WESTMORELAND, Georgia
GERRY E. CONNOLLY, Virginia          PATRICK T. McHENRY, North Carolina
ELEANOR HOLMES NORTON, District of   BRIAN P. BILBRAY, California
    Columbia                         JIM JORDAN, Ohio
PATRICK J. KENNEDY, Rhode Island     JEFF FLAKE, Arizona
DANNY K. DAVIS, Illinois             JEFF FORTENBERRY, Nebraska
CHRIS VAN HOLLEN, Maryland           JASON CHAFFETZ, Utah
HENRY CUELLAR, Texas                 AARON SCHOCK, Illinois
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
PETER WELCH, Vermont
BILL FOSTER, Illinois
JACKIE SPEIER, California
STEVE DRIEHAUS, Ohio
------ ------
------ ------
------ ------

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

Subcommittee on Federal Workforce, Postal Service, and the District of 
                                Columbia

                    STEPHEN F. LYNCH, Massachusetts
ELEANOR HOLMES NORTON, District of   JASON CHAFFETZ, Utah
    Columbia                         JOHN M. McHUGH, New York
DANNY K. DAVIS, Illinois             JOHN L. MICA, Florida
ELIJAH E. CUMMINGS, Maryland         MARK E. SOUDER, Indiana
DENNIS J. KUCINICH, Ohio, Chairman   BRIAN P. BILBRAY, California
WM. LACY CLAY, Missouri
GERRY CONNOLLY, Virginia
                     William Miles, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 29, 2009...................................     1
Statement of:
    Graham, Jim, chairman of the Board of Directors, Washington 
      Area Metropolitan Transit Authority; and John B. Catoe, 
      Jr., general manager, Washington MeTropolitan Area Transit 
      Authority..................................................     9
        Catoe, John B., Jr.......................................    14
        Graham, Jim..............................................     9
    Lew, Helen, inspector general, Washington Metropolitan Area 
      Transit Authority; and Matthew J. Welbes, Acting Deputy 
      Administrator, Federal Transit Administration..............    46
        Lew, Helen...............................................    46
        Welbes, Matthew J........................................    56
    Simpson, Craig, representative Amalgamated Transit Union 
      [ATU] Local 689; Diana Zinkl, Chair, Riders' Advisory 
      Council, Washington Metropolitan Area Transit Authority; 
      and Benjamin Ross, president, Action Committee for Transit.    75
        Ross, Benjamin...........................................   119
        Simpson, Craig...........................................    75
        Zinkl, Diana.............................................    88
Letters, statements, etc., submitted for the record by:
    Catoe, John B., Jr., general manager, Washington MeTropolitan 
      Area Transit Authority, prepared statement of..............    16
    Graham, Jim, chairman of the Board of Directors, Washington 
      Area Metropolitan Transit Authority, prepared statement of.    11
    Lew, Helen, inspector general, Washington Metropolitan Area 
      Transit Authority, prepared statement of...................    48
    Lynch, Hon. Stephen F., a Representative in Congress from the 
      State of Massachusetts, prepared statement of..............     4
    Ross, Benjamin, president, Action Committee for Transit, 
      prepared statement of......................................   121
    Simpson, Craig, representative Amalgamated Transit Union 
      [ATU] Local 689, prepared statement of.....................    78
    Welbes, Matthew J., Acting Deputy Administrator, Federal 
      Transit Administration, prepared statement of..............    58
    Zinkl, Diana, Chair, Riders' Advisory Council, Washington 
      Metropolitan Area Transit Authority, prepared statement of.    90


           THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY

                              ----------                              


                       WEDNESDAY, APRIL 29, 2009

                  House of Representatives,
Subcommittee on Federal Workforce, Postal Service, 
                      and the District of Columbia,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m. in 
room 2154, Rayburn House Office Building, Hon. Stephen F. Lynch 
(chairman of the subcommittee) presiding.
    Present: Representatives Lynch, Bilbray, Clay, Connolly, 
Kucinich, Norton, and Van Hollen.
    Staff present: William Miles, staff director; Marcus A. 
Williams, clerk/press secretary; Jill Henderson, detailee; 
Tyler Pride, intern; Dan Blankenburg, minority director of 
outreach and senior advisor; Adam Fromm, minority chief clerk 
and Member liaison; Howard Denis, minority senior counsel; 
Daniel Epstein and Johnathan Skladany, minority counsels; and 
Alex Cooper, minority professional staff member.
    Mr. Lynch. Good morning. The Subcommittee on Federal 
Workforce, Postal Service, and the District of Columbia 
oversight hearing will now come to order.
    I want to welcome Ms. Holmes Norton and Mr. Kucinich, 
members of the subcommittee, hearing witnesses and all those in 
attendance.
    The purpose of today's hearing is to examine the 
Authority's current financial condition and internal controls, 
proposed operational and service changes, safety and security 
initiatives, and to update the subcommittee on pending capital 
improvements at WMATA and all related funding.
    The Chair, the ranking member and the subcommittee members 
will each have 5 minutes to make openings statements, and all 
Members will have 3 days to submit statements for the record.
    Hearing no objection, it is so ordered.
    Ladies and gentlemen, again let me welcome you to the 
subcommittee's first District of Columbia-related oversight 
hearing of the 111th Congress. As mentioned earlier, the 
purpose of today's hearing is to explore and examine a host of 
issues currently confronting the Washington Metropolitan Area 
Transit Authority in its effort to efficiently operate its 
Metrorail, Metrobus and Metro Access transit services.
    It has been a little over 4 years since we on this 
committee have had a Washington Metropolitan Area Transit 
Authority-focused hearing, and while much has improved for what 
is known as America's transit system, a few systemic challenges 
continue to remain, and we will try to address those today.
    Although today's hearing won't bring a final resolution to 
many of the Transit Authority's core questions of pressing 
concern, the hearing is intended to continue and in some 
respects renew the dialog between WMATA and regional partners 
and the Federal Government. As the primary provider of mass 
transit throughout the Nation's Capital and surrounding area, 
WMATA's operations are intricately intertwined and linked to 
the continual functionality of the Federal Government.
    As many of you are aware, Metrorail and Metrobus are 
responsible for the transportation of nearly 70 percent of the 
area's Federal workers to and from work on a daily basis. The 
transit system plays a critical role in our emergency 
preparedness efforts, and it is often heavily relied upon by 
the Federal Government for publicly supported events such as 
the recent inauguration of our new President or other National 
Mall celebrations.
    In fact, the mere creation of WMATA by way of the 1967 
Interstate Compact was in many ways based upon the rationale 
that the large presence of Federal Government activities and 
the attraction of the Nation's Capital as a premier tourist 
destination required the need for the development of a reliable 
public transit system for the Nation's Capital and its region.
    Fast forwarding to today, WMATA has blossomed into a robust 
and leading transit agency in charge of operating the second 
largest rail system and the fifth largest bus network in the 
country, covering about a 1,500 square mile area. WMATA now 
operates a fleet of some 1,500 buses serving over 330 routes 
and provides Metrorail services to 86 stations on 5 rail lines 
and 106 miles of track, much of which has been constructed 
using Federal dollars.
    While these facts and the regions continued reliability on 
Metrorail and bus and its paratransit service points to the 
access of 30 plus years old transit system, WMATA continues to 
face serious financial, operational and now post-September 11th 
security challenges. To that end, it is my hope that today's 
hearing will provide the subcommittee with the most current 
development's in WMATA's operations, finance, safety 
initiatives, and infrastructure improvement efforts.
    Whether it is a frank conversation on the remaining facets 
of WMATA's dedicated funding effort or on management's proposed 
Metrobus service cuts and route adjustments, today's oversight 
proceedings are purely meant to provide us as the national 
capital area stakeholders, and the opportunity to discuss and 
explore common solutions to a common asset, the Washington 
Metropolitan Area Transit Authority.
    I would like to thank those who have agreed to testify 
today, and I understand some of our witnesses obviously didn't 
take the Metro because they are not here yet. I look forward to 
a productive, but not necessarily lengthy hearing, as the 
subcommittee has been made aware of your various afternoon 
commitments of our witnesses.
    And also I am sure most are aware there is a special joint 
Republican-Democratic caucus regarding the ongoing swine flu 
epidemic that all Members have been asked to attend. So when 
that begins, obviously the attendance here will decline. But 
necessarily, we will push on and try to address all of the 
issues that we would like to address in this hearing.
    Again, I thank you. Normally, I would yield to the ranking 
member, Mr. Chaffetz from Utah, for his opening remarks. He is 
also a member of three other committees that are currently 
meeting as well, but he has been kind enough to allow us to 
waive his statement and to press forward with testimony.
    At this point, I think it might best serve us because Mr. 
Graham is not here, and he is on our first panel, if I might 
defer to my colleagues for their opening statements. It might 
be a good use of our time.
    I would first like to recognize Ms. Eleanor Holmes Norton, 
who was one of the driving forces to have this hearing so early 
in our proceedings, and who has been an outspoken advocate for 
her constituents in their reliance on the Metrorail service and 
bus service.
    So I now recognize Ms. Eleanor Holmes Norton for 5 minutes.
    [The prepared statement of Hon. Stephen F. Lynch follows:]

    [GRAPHIC] [TIFF OMITTED] T0349.001
    
    [GRAPHIC] [TIFF OMITTED] T0349.002
    
    Ms. Norton. Thank you very much, Mr. Chairman. I thank you 
for your early hearing on WMATA because it signifies the 
recognition of the subcommittee and the full committee of how 
dependent we are as a Federal Government on WMATA and on 
hearing of its concerns in a time when all facilities of every 
kind are stretched.
    I want to congratulate Mr. Catoe to his face again because 
Mr. Catoe, you and your employees performed magnificently 
during the inauguration. Not only did you provide services at 
unheard of hours, but when I asked you to even go beyond the 
call of duty when you had stretched as far as you could go, you 
and your employees did so. The entire country--we saw 2 million 
people come here--could not have had this inauguration at all 
without you, and we are very proud of the work you have done, 
sir.
    The bill that we strove so hard for, the Passenger Rail 
Improvement Act I think we called it, for $1.5 billion over 10 
years for WMATA seems to me has been vindicated by your 
performance, even without a penny of that money flowing, with 
huge strain on its facilities. At one point, Mr. Catoe thought 
he simply couldn't go much further in keeping hours beyond the 
expected hours simply because of the strain on capital 
facilities, because none of that money has flowed, and even 
when it flows it will have to flow a long time before it makes 
up for what has been denied.
    Mr. Chairman, I am also a member of the Homeland Security 
Committee, and I must say that quite apart from the daily 
activities of the Federal Government, we now have an additional 
reason why we cannot do without WMATA. If nothing else is 
running, as we learned when the FEMA shut down downtown a few 
years ago, WMATA simply has to be running. And we at Homeland 
Security pay special attention to WMATA as well.
    Now that you have shown, Mr. Catoe, what you can do, a lot 
of us are trying to get that first installment in the $1.5 
billion, $150 million due year by year. Somebody tried to hold 
us up, I think, saying that if you don't do something, we won't 
do something. Hey, we don't have to do anything.
    And what Members had to do to get this bill in the first 
place, and what we are going to have to do even if the 
President puts it in his budget, to keep it in there, I don't 
even think you want to know about. I just hope that we are able 
during these hard times to get that first $150 million.
    I am very concerned, as I am sure the entire region is, and 
while this is seen as a service here in the Nation's Capital, 
it stretches far and wide into the region. I am concerned about 
the layoffs and the bus service issues that have arisen, 
notwithstanding the Recovery Act funds. And I will be most 
concerned to see why those Recovery Act funds have not been 
more helpful in that regard.
    Again, I can't thank you enough, Mr. Chairman, for the way 
in which you have moved forward early so that we can make sure 
that not only the trains keep running on time, but that the 
Federal Government keeps running because the trains are running 
on time.
    I thank you very much, Mr. Chairman.
    Mr. Lynch. Thank you very much.
    The Chair will now recognize the gentleman from northern 
Virginia, Mr. Connolly, who also his constituents as well, he 
has a long history of dealing with these issues on behalf of 
the families of northern Virginia and is extremely familiar 
with all the issues confronting WMATA going forward. So I 
recognize the gentleman from Virginia for 5 minutes.
    Mr. Connolly. Thank you. And I can't thank you enough, 
Chairman Lynch, for holding these hearings on the Washington 
Metropolitan Area Transit Authority.
    Though many may not be familiar with the acronym WMATA, it 
is absolutely essential to the operations of the Federal 
Government. On average, 120,000 Federal employees commute to 
work on metro, representing 40 percent of peak ridership. 
Fifty-six thousand of those employees live in my district, many 
of whom commute into the Pentagon or Washington, DC, on the 
Orange, Blue and Yellow lines of Metrorail.
    This transit service is essential, Mr. Chairman, to the 
quality of life of suburban residents in our region. If not for 
WMATA's transit system, it would be necessary to construct an 
additional 1,400 lane miles of highway and 160,000 parking 
spaces to serve commuters who otherwise now use Metro.
    This transit service is also essential to protect regional 
air quality and reduce greenhouse gas emissions. Without 
transit service provided by WMATA, it would be impossible to 
meet Federal clean air standards in this region, which would 
result in the region losing transportation funding. The decline 
in ground level ozone that we have achieved in the region has 
been enabled by the ability of area residents to avail 
themselves of rail or bus transit and by WMATA's investment in 
compressed natural gas, ultra-low sulfur diesel and hybrid 
electric technologies to reduce smog-creating pollutants from 
buses.
    With respect to climate change, Metro eliminates 1 million 
tons of greenhouse gas emissions annually by eliminating 
vehicle trips, the equivalent of saving 75,000 gallons of 
gasoline.
    When the region embarked on construction of the 106-mile 
Metro system, the Federal Government, as you indicated, Mr. 
Chairman, paid 80 percent of the construction cost. For the 
extension of the Silver line, however, to Dulles Airport, the 
premier airport for the national capital region, the Federal 
Government will only pay 16 percent of those project costs. The 
rest of it is borne by the State and local governments.
    It is scandalous that the Federal Government provides a 
pittance for transit service to the national capital region. 
Extension of transit service is essential not only for the 
continued operation of the Federal Government, including 
provision of transportation options for federally employed 
commuters, but also for the region's continued economic 
prosperity.
    For the past 8 years, we have had to work with an 
administration that appeared to be ideologically opposed to 
funding extensions to transit systems. This ideologically 
driven obstruction has been harmful to our region and others. 
With a new administration and a pending transportation 
authorization bill, I believe that we can jump start extensions 
to transit service here in the national capital region and 
around the country, with the Federal Government contributing 
its fair share.
    I greatly appreciate the work of my predecessor and my 
colleagues, including Ms. Norton, in passing Title VI of the 
Passenger Rail Investment and Improvement Act, which provided 
$150 million in dedicated funding for Metro, being matched by 
Virginia, Maryland and the District of Columbia. Metro is the 
only major transit system in the United States without a 
dedicated source of funding.
    In addition to increasing funding for transit, we need to 
examine ways to eliminate bureaucratic obstacles to new starts. 
During the process of approving the rail to Dulles project, we 
encountered numerous nonsensical requirements the proposed 
project had to meet by the Federal Government. These 
requirements delay project approval and construction, adding 
billions literally of cost to the final project cost.
    We also need to understand how we can move to extend 
Metrorail service in our region. Since Metrorail began 
operations in 1976, our region has grown far beyond the outer 
Metrorail stations. Residents and communities in suburban 
Virginia and Maryland should have the option of rail transit. I 
have introduced legislation, Mr. Chairman, to authorize transit 
extensions in the Orange, Blue, Yellow and Purple line 
corridors, and I look forward to hearing Mr. Catoe's response 
to that legislation.
    I hope this hearing provides the committee with insight on 
how to expedite these and other extensions.
    Again, I want to thank you, Mr. Chairman, for holding a 
hearing on this very important topic to the national capital 
region and look forward to working with you and my colleagues 
as we move forward.
    I thank you.
    Mr. Lynch. Thank you, Mr. Connolly.
    As my Republican colleagues arrive, we will obviously 
extend them the courtesy of making any opening statements that 
they wish to make.
    It is the custom in this committee to ask witnesses to be 
sworn. I please ask you to rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Lynch. Thank you. Let the record show that each of the 
witnesses has answered in the affirmative.
    To begin, your written statements will be accepted into the 
record without objection. The way the hearing works is that 
little box in front of you will flash various colors. The green 
light indicates that you have 5 minutes to summarize your 
written statement and verbalize the contents to the committee. 
A yellow light means that you have 1 minute remaining, and then 
a red light indicates that your allotted time has expired.
    For the benefit of the Members who are here, let me just do 
a brief introduction of our first panel of witnesses.
    Council Member Jim Graham became chairman of the Metro 
Board in January 1999. Mr. Graham currently serves on the 
Council of the District of Columbia representing ward I. He 
also chairs the Council's Committee on Public Works and 
Transportation. Mr. Graham served as executive director of the 
Whitman-Walker Clinic from 1984 to 1998. Previously, Mr. Graham 
served as staff counsel for Senator Abe Ribicoff, Democrat of 
Connecticut, and clerked to Chief Justice Earl Warren, now 
retired.
    Mr. John B. Catoe is the general manager for Washington 
Metropolitan Area Transit Authority. Mr. Catoe has more than 30 
years of experience in public transportation. As general 
manager of the Washington Metropolitan Area Transit Authority, 
he oversees the second-largest rail transit system and the 
fifth largest bus network in the United States, with more than 
10,000 employees, a $1.3 billion operating budget, and a $3.1 
billion 5-year capital improvement program.
    With that, we welcome each of our witnesses.
    And Mr. Graham, I welcome you to offer your opening 
statement.

 STATEMENTS OF JIM GRAHAM, CHAIRMAN OF THE BOARD OF DIRECTORS, 
  WASHINGTON AREA METROPOLITAN TRANSIT AUTHORITY; AND JOHN B. 
   CATOE, JR., GENERAL MANAGER, WASHINGTON METROPOLITAN AREA 
                       TRANSIT AUTHORITY

                    STATEMENT OF JIM GRAHAM

    Mr. Graham. Thank you very much, Chairman Lynch. Excuse my 
voice. I am laboring under the Washington, DC, allergies, but I 
am going to do my best.
    I want to do my best here on behalf of the system. As you 
pointed out, I am the chairman of the Metro WMATA Board. I had 
previously held this position in 2003, which was a very 
different time than today. But it is all the same a time of 
great excitement for the Metropolitan Washington Area Transit 
Authority.
    I want to say a special hello to Congressman Connolly. This 
is the first time I have seen you since your ascendancy to this 
great body. I congratulate you. And to my Congressional 
Representative Eleanor Holmes Norton, it is always a great 
pleasure to see you. We saw each other yesterday at a very, 
very happy event, and I hope this one today is every bit as 
happy and satisfying.
    Let me just note that the Metro means more than anything 
else mobility. Metrorail and Metrobus serve a population of 
over 3.5 million within a 15,000 square miles area. And average 
weekday passenger trips on the two systems total nearly 1.3 
billion--excuse me, 1.3 million. MetroAccess, which is our 
service to people living with disabilities, provides 4,900 
passenger trips on an average weekday.
    No neighborhood or community within the District of 
Columbia is more than two blocks from Metrobus services. Metro 
also stimulates regional economic development. And Mr. 
Chairman, I don't need to read about that because I know in 
ward I in Columbia Heights and U Street, on Georgia Avenue, the 
presence of a subway station has been the absolute catalyst to 
the economic revival of those neighborhoods. We have much to 
thank for Metro in that regard.
    Metro is not only essential to the efficient functioning of 
this region, but it is also essential to the daily operations 
of the Federal Government, which gives the Federal Government a 
most decided stake in terms of the success of this system. The 
Federal Government relies on Metro for daily transportation of 
visitors to the Capitol and national events. You have already, 
I believe, Congresswoman Norton, mentioned the great role that 
Metro played in the recent inauguration. And we Are extremely 
proud of our general manager, who has served with distinction 
here and elsewhere.
    Metro is a critical component for ensuring continuity of 
Federal Government operations during an emergency. And 9/11 is 
another example of how Metro really made the key difference in 
terms of keeping our system open.
    Let me say a word about dedicated funding. At this point in 
time, as a member of the Council of the District of Columbia 
and chairman of the Committee on Public Works and 
Transportation, we are going to make certain that this 
opportunity for dedicated funding is not lost, nor will it be 
hindered. And I will introduce legislation in the Council on an 
emergency basis on May 5th to have identical legislation to 
that which was passed in Virginia and Maryland so that we will 
be ready, Mr. Chairman, to present to this Congress compact 
amendments which are identical and will pave the way hopefully 
in this year for a Federal appropriation.
    We are extremely pleased with the great step that was taken 
by the Congress last year in passing an authorization which 
could lead to $3 billion into the system over a 10-year period. 
And we want to make certain that happens.
    When I became chairman of the Metro Board this past 
February, I expressed my determination that this funding would 
go forward in so far as anything we could do to make it happen. 
We are anxiously awaiting news as to whether or not the 
President has included the first payment, which we hope will 
amount to $150 million in the President's budget. If the 
President has not included it in the budget, we want to rely on 
our many good friends in Congress to make sure that the $150 
million is added.
    And I do want to acknowledge most particularly the efforts 
of the Majority Leader, Congressman Steny Hoyer, who has played 
such a key role in this regard.
    So this $300 million new funds on an annual basis, $150 
million from the Congress of the United States, $50 million 
each from the three jurisdictions, is going to make a critical 
difference in the stability of Metro because at present what we 
need to do is to assemble a patchwork quilt every year with our 
budget, and this will instead give us the ability for a 
coherent, stable budget proposal.
    Thank you very much.
    [The prepared statement of Mr. Graham follows:]

    [GRAPHIC] [TIFF OMITTED] T0349.003
    
    [GRAPHIC] [TIFF OMITTED] T0349.004
    
    [GRAPHIC] [TIFF OMITTED] T0349.005
    
    Mr. Lynch. Thank you, Mr. Graham.
    Mr. Catoe, you are recognized for 5 minutes for your 
opening statement.

                STATEMENT OF JOHN B. CATOE, JR.

    Mr. Catoe. Thank you, Mr. Chairman.
    As stated, I am John Catoe, the general manager of the 
Washington Metropolitan Area Transit Authority [WMATA] or 
Metro. Joining me is Michael Taborn, who is the chief of the 
Metro Transit Police Department, who is available to answer 
questions on our security initiatives.
    First, I would like to begin by thanking you, as well as 
the members of this full committee, for your efforts on the 
dedicated funding legislation. The funding authorized by that 
bill is the key to Metro's ability to continue to meet the 
mobility needs of the Federal Government in this region.
    I have submitted more detailed testimony for the record, so 
let me address a few key points that I would be happy to take 
questions on.
    As Chairman Graham said, the Federal Government relies on 
Metro every day. It bears repeating that 40 percent of Metro's 
peak ridership is made up of Federal employees. Many others 
ride our systems so they can petition the Congress, visit the 
National Mall, and our national museums and galleries, and also 
to witness historic events like the inauguration. You can hear 
it in our station names: Federal Triangle, Capitol South, 
Smithsonian, Pentagon, and the list goes on.
    The Federal Government's dependence on Metro is something 
that distinguishes us from other transit agencies. It is not 
surprising that Metro is often referred to as America's subway.
    I would like to now turn to some of our current challenges. 
While we have been in fairly good financial shape for this 
budget year of 2009, this is a very difficult time for Metro, 
as it is for transit agencies across the country, with many 
facing layoffs and severe service cuts.
    Recognizing the pressure that local governments and 
individuals are facing in this economic downturn, we began 
building our fiscal year 2010 budget without indicating any 
increases from local government or their contributions or 
raising fares. This required very difficult actions. In recent 
months, I have made some very tough decisions, including the 
elimination of 313 positions, and we have reduced our budget 
gap from $154 million, we reduced that by 80 percent, down to 
$29 million, and with the jurisdictions after various options, 
have reduced that even further.
    After considering many options for closing the remaining 
gap, our board ultimately decided to increase, as I mentioned, 
local contributions, and we have submitted bus services 
adjustments for public considerations. We have just completed a 
series of six hearings on these service adjustments, and 
tomorrow the Board of Directors will make decisions on what 
actions they will take in order to close the budget gap.
    In my written testimony, I also go into detail about 
another financial challenge that affects Metro, and a number of 
other transit agencies who entered into sell-leaseback 
transactions back when the Federal Government was promoting 
them as innovative financing techniques. As a result of changes 
to Federal law and of the worldwide economic crisis, Metro and 
other agencies are at risk of a technical default on these 
agreements. Despite having made payments, we potentially face 
millions of dollars in termination fees.
    However, all is not grim and we need to look toward the 
future. Let me turn now from Metro's current financial 
challenges to talk a little bit about what I see coming in 
Metro's future. This system is essential to mobility in the 
Nation's Capital and the national capital region, as shown on 
inauguration day. Millions came to Washington to see the new 
President, and Metro's job was to provide them with 
transportation. We did so safely and efficiently.
    When you look toward the future, the future is what we saw 
on that day, over 1.5 million riders on our system on a daily 
basis. As we move toward the future, there is a need for 
increased funding for an expansion of the system on the Orange, 
Blue, Yellow lines, and in fact a new portal coming in from 
northern Virginia. As we look at our capital needs, we have 
identified $11.3 billion between 2011 and 2020, and this number 
does not include any moneys for the expansion that I mentioned.
    We are now working to prioritize this, and we will have 
that list completed over the next week.
    Again, you will find more details in my testimony in front 
of you in the written testimony, and I thank you for this 
opportunity to testify in front of the subcommittee.
    [The prepared statement of Mr. Catoe follows:]

    [GRAPHIC] [TIFF OMITTED] T0349.006
    
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    Mr. Lynch. Thank you, Mr. Catoe.
    In the interest of time and efficiency, we are going to 
dispense with any further opening statements here. But I would 
like to ask, since both of you have been at this for such a 
long time, Mr. Graham, the reconciling language on the part of 
the District of Columbia to match the legislation previously 
passed by Virginia and Maryland, where are we in that process? 
I know there has been some good signals sent, but legislatively 
where are we?
    Mr. Graham. Thank you, Mr. Chairman.
    The legislature in Virginia and the legislature in Maryland 
have now passed, and just recently passed, identical 
legislation for the compact amendments. On May 5th, I will 
introduce in the Council as emergency legislation the identical 
legislation, which means that certainly in the month of May we 
are going to be ready to present to Congress the compact 
amendments that are required by the authorization act.
    Mr. Lynch. Great. Well, that is perfect. The sooner the 
better, obviously. I wouldn't want to give any reason for the 
President's budget team to see an obstacle there and to send 
the wrong signals that that money is not prepared to be used or 
that there are any obstructions there. So if we could get that 
wrapped up, that would be enormously helpful. I just don't want 
to leave any obstacle in the way.
    Mr. Catoe, I am actually part of the Rail Security Caucus 
here in Congress and spend a lot of time. I think the numbers 
are that in this country we have about five times as many 
people who travel by rail as do by airplane. We have spent a 
lot of money on security in airports. I don't think we have 
spent nearly what we need to in terms of rail security.
    You are part of a system, this Northeast Corridor, that 
handles a huge portion of our rail passengers every day. And 
because of all of the things you have mentioned today about 
this being our Nation's Capital, moving so many Federal 
employees, being the heart of our Federal Government, being the 
Nation's Capital so we have extremely large celebrations, 
historic moments here in the capital. The inauguration is a 
perfect example.
    You know, I think as someone who had their family down for 
those festivities, the Metro really delivered very, very well. 
I wish all the parts of our system worked as well as Metro did.
    But what is being done to coordinate the larger, I would 
say terrorist-centric dimension of rail security with the D.C. 
Metro? I mean, how is that working out? Do we have good 
coordination? I know you have the chief behind you. He probably 
can answer. I don't want to put him on the spot, but how is 
that going?
    Mr. Catoe. Our relationship with TSA, the Department of 
Homeland Security and the Federal Transit Administration, I 
would rate it as excellent. I have had meetings with all three 
agencies to talk about coordination of security, not only in 
Washington, but across the United States. They have been 
helpful. Could we use more moneys in security? Absolutely. But 
given the resources that we have, we have maximized those 
resources. We have had great support from the TSA, as well as 
the Federal Transit Administration.
    So from a coordination standpoint, given the resources that 
we have, it is a very good relationship and it is excellent 
coordination.
    Mr. Lynch. OK. Let me ask, I just came back from Mumbai. 
You know, we have done a lot of coordination with different 
jurisdictions that have been affected. We had a rail summit 
with the cooperation of the folks in London. It seems to me 
that the greatest value has come from training rail workers to 
actually handle that situation. And some folks think they have 
a plan, but if the employees don't know the plan, we don't have 
a plan. The rail crews that are on those trains that in the 
event, God forbid, we have a disaster on the Northeast Corridor 
or on the Metro, those folks have to know what they need to do.
    That has been deficient in a lot of other jurisdictions. 
How is that piece going with your employees?
    Mr. Catoe. It is going very well. Our chief of police, he 
worked with us, and then he worked for the Federal Transit 
Administration. We had a national responsibility for developing 
training programs on safety, as well as on security issues. He 
brought that experience back to us, and as a result not only do 
we have written publications that have been given to each 
employee, but we also have training for all employees and 
constant reminders of the importance of being the eyes and the 
ears of security.
    And also, we are taking it a step further. We do periodic 
announcements to our customers, as well as provide information 
to this region, asking them to support us in providing security 
for the system.
    Mr. Lynch. Great. I see my time has expired.
    At this point, I would like to yield 5 minutes to the 
gentleman from California, Mr. Bilbray.
    Mr. Bilbray. Thank you, Mr. Chairman.
    First of all, I want to apologize for my tardiness. Those 
of us in California don't function with rain very well, so you 
just understand that we were all looking up saying, what is 
that wet stuff?
    Let me first, Mr. Graham, congratulate you on your 
chairmanship. I come from where you are coming from. I served 
as chairman of the San Diego Trolley Board. In fact, I was on 
the board that built the light rail system when everybody said 
no one is ever going to have rail transit in southern 
California.
    But there is a whole lot of challenges we get into it. And 
this, Mr. Catoe, works, came out of BART, right?
    Mr. Catoe. The Los Angeles system, sir.
    Mr. Bilbray. OK. Yes. In fact, I will tell you we had some 
run-ins with our insurance companies over the problems you ran 
there, trying to build two systems simultaneously.
    Mr. Catoe. Yes.
    Mr. Bilbray. I guess we left a bad example for you. You 
looked at our success and figured it was easy, but you learned 
real quick how tough it was.
    But Mr. Graham, my biggest concern coming from local 
government, I was chairman of a county of 3 million. I served 
as chairman of the Transit Board. And the disconnect between 
local land use and local policymakers and mass transit. I think 
that one thing we can say, probably only two things that we can 
point to for the American people that really work well in this 
community, and that is the meter maids and the transit system. 
I apologize to the Delegate, but as a local government guy, the 
frustration of always we don't do enough in local government.
    One of the studies, Mr. Graham, that we really looked at 
when I was serving on the Air Resources Board in California was 
the huge benefit in air pollution and reduction in fuel 
consumption if the locals will coordinate development patterns 
to reflect the market demands for transit. I think too often, 
especially, it is one of my frustrations in southern 
California, they say why don't we have more. And I say, well, 
there is no market there. We haven't developed in a pattern of 
market.
    Though D.C. probably as well as any community has tried to 
respond to opportunities created by the Metro, how aggressive 
are we in our local land use patterns in this region of 
actually not only allowing, but mandating intensification of 
development around these transit centers? Not just after they 
are constructed, but a good example is the proposal out to the 
airport. How much pressure is being put on the local people to 
re-think, re-engineer, and re-zone even in opposition to local 
community concerns, based on the fact that this transit system 
needs to have that kind of support?
    And I say that with the former chairman of Fairfax out 
there. We need to put that pressure on. And I say that from an 
environmental point of view, that I just had a community 
abandon its density around a transit center. And I understand. 
I came from a small city. But is there anybody there doing the 
pushback to look at the big picture and try to counter that not 
in my backyard so that we address these things properly, both 
from the environmental and to make Metro more economically 
viable?
    Mr. Connolly. Would the gentleman yield?
    Mr. Bilbray. Yes.
    Mr. Connolly. Just because you did invoke my jurisdiction, 
I am pleased to assure my colleague, in the Dulles corridor, 
which is 23.1 miles, we completely re-did the re-zoning at high 
end density so that it will be a transit-oriented development 
corridor along all of the planned stations, a very dramatic 
change in land use pattern. It was not without some 
controversy, but we did it.
    Mr. Bilbray. Yes, in fact, I will just say, Mr. Graham flat 
out, as somebody coming from the air side, I believe that the 
Clean Air Act should be amended to require it so that it helps 
local people to do the right thing, because the politics pushes 
the other way, as you know, and as the former chairman knows. 
But as a local government guy, I would like your comments about 
that whole issue. And I know it is not something we talk about 
because this is long term, but it does matter. Go ahead.
    Mr. Graham. Well, Congressman, you have already referenced 
the fact that you have one of the leading experts on this 
issue, a member of your very panel here, and that is 
Congressman Connolly, who has spent a lot of time making these 
things happen in northern Virginia.
    Let me just speak for the District of Columbia. I mean, we 
have truly embraced the whole concept of restore the core, you 
know, and do the joint development program at Metro-WMATA. And 
you can see virtually all of our stations in the District of 
Columbia have benefited from the joint development efforts.
    And there is example after example. In fact, I think in 
some ways, with all due respect to my fellow, my colleagues on 
the Metro Board, I mean D.C. has led the way, you know, 
Columbia Heights, U Street, Georgia Avenue, Downtown, Gallery 
Place. If you look at our living downtown, so much of this is 
traceable right back to Metro's abilities to develop the land 
near its stations.
    And so I think it is really a huge success story. I 
occasionally chide our distinguished general manager that I 
think we should do a far more flamboyant job of saying how well 
we are doing in this regard because it has made an absolutely 
critical difference in the District of Columbia.
    Mr. Bilbray. OK. And just to be balanced on this, a lot of 
this is not the community opposition. A lot of times 
intensification development is the property owner, the land 
developer will not be looking 20, 30 years ahead. He is looking 
for what is marketable today, and not worrying about the big 
picture.
    And I think this issue of siting of transit centers in a 
community is a responsibility that the community has to reflect 
that part of having the privilege of having these lines come 
in, is that they need to accommodate them to where they are 
economically viable. And you have developers sometimes who do 
not want to develop out to the density. And I have told them 
flat out, I would rather have an empty lot that someday will be 
dense, rather than average out and allow you to respond to an 
existing market today, rather than looking to the future.
    Thank you very much. I yield back, Mr. Chairman.
    Mr. Lynch. Thank you.
    The Chair now recognizes the gentlelady from the District 
of Columbia, Ms. Holmes Norton, for 5 minutes.
    Ms. Norton. Thank you very much, Mr. Chairman.
    I congratulate the District as the first to put up its 
share initially when we were going for these funds, and it 
helped our advocacy.
    I don't know, Mr. Bilbray, I like to ascribe Mr. Catoe's 
success to the fact that he is a native Washingtonian, but I 
guess I will let that go.
    Let me ask you both this, WMATA has recently listed its use 
of recovery funds. Will those be obligated? You know, we are 
tracking these funds, and there is another committee I am on, 
Transportation and Infrastructure, has a use it or lose it 
rule. What assurance can you give us that those funds will be 
obligated within those 90 and I guess 120-day timeframes?
    Mr. Catoe. Congresswoman, absolute assurance. In fact, the 
communications I have given to the Federal Transit 
Administration has been WMATA will spend their dollars on 
capital programs that, again, help the operation of the system 
before the time line indicated in the legislation.
    Ms. Norton. Do you have any idea how many jobs will be 
created?
    Mr. Catoe. Yes. Over 4,800 jobs will be created.
    Ms. Norton. I was amazed to note that you apparently have 
had some trouble getting bus drivers, or at least that was what 
was said when there was a bus driver who was caught in some 
kind of malfeasance, and he turned out to have been recently 
released from prison. We like the fact in this committee that 
ex-offenders can get jobs of that kind. He seemed to have been 
rather recently released. A spokesman said, spoke of the 
difficulty in getting bus drivers.
    Here are good union high-paying jobs. Could you explain 
what the difficulty has been?
    Mr. Catoe. Well, we have not had difficulties in the recent 
years, recent 2 years. There have been peaks and valleys if you 
go back and look over the past 10 years of the availability of 
individuals for that work force. But recently, when we had a 
job fair, we had hundreds and hundreds of applications, in fact 
over 1,000.
    The issue comes when we go through the screening process, 
that number drops significantly. Out of 1,000 applicants, 100 
might make it through the screening.
    Ms. Norton. Apparently, you could have a felony, and I am 
not arguing against that. It seems to me it has to be job-
related in order for somebody to be disqualified because he has 
been in prison.
    So what is it? Because people have not--I mean, you train 
drivers, don't you?
    Mr. Catoe. Yes, we do. We train drivers.
    Ms. Norton. So the numbers drop, and I say this man was 
recently released from prison, and could become a driver. I am 
wondering what it is. Certainly having a record isn't the 
reason it drops. What is the reason that the numbers drop so 
precipitously?
    Mr. Catoe. Primarily, you know, it is the skill set. It is 
the hours that we work once people get into the interview 
process. Often it is a felony record. We require that employee 
not have had a felony or major one in the last 2 to 4 years. 
This was an anomaly in our process. It was something that 
occurred. The felony occurred 10 years before. Unfortunately, 
we didn't take into effect that he was in prison during that 10 
years. We have corrected our processes since then. I can assure 
you that will not occur again.
    But in fairness, of the employees that we have hired to 
happen to have had some felony, and we have several of those, 
they have been outstanding operators, outstanding employees.
    Ms. Norton. And we would certainly encourage that. That was 
unfortunate.
    A great priority of mine and of the Congress, of the 
administration, is alterative fuels. I don't know if the hybrid 
buses--I know the natural gas buses. When you buy new equipment 
such as buses, are you focusing on greening WMATA?
    Mr. Catoe. Yes, yes we are. Every vehicle that we purchase 
now, every bus will be either a hybrid or compressed natural 
gas, and that decision was made by our Board of Directors 
several years ago.
    Ms. Norton. That is just exceptional news. Some of us 
fought up here for WMATA to buy natural gas buses during the 
last go-round. It was quite a fight. I know that there is some 
difference in cost, but we found and came to understand those 
differences are very important.
    The Amalgamated Transit Union has written a letter that we 
have received that we allow the use of Federal transit funds 
for operating assistance purposes. I think they were concerned 
with the layoffs that have been so decried in this region. 
Would this help solve your dilemma? Can any of those funds be 
used to help thwart the layoffs? Is there any flexibility on 
this issue that you have or would suggest?
    Mr. Catoe. There is some flexibility under the preventative 
maintenance. For the upcoming budget, we did transfer 
additional preventative maintenance dollars. It relieves your 
operating side, but when you take from one side to the other, 
you are creating a larger problem on your capital side, and 
that's where we have the largest need. But any funding that we 
receive, of course, helps us provide the services that we need 
in this region, but we can't take all of our capital dollars 
and turn them into operating expenses.
    Ms. Norton. Thank you very much, Mr. Chairman.
    Mr. Lynch. Thank you.
    The Chair now recognizes the gentleman from Virginia, Mr. 
Connolly, for 5 minutes.
    Mr. Connolly. I thank the Chair.
    And let me welcome both Chairman Graham and Manager John 
Catoe to the subcommittee hearing.
    Mr. Graham, I want to thank you for your willingness to 
introduce emergency legislation. Quite candidly, I wish you 
didn't have to because I actually think the D.C. approach is 
the correct approach, because the big sticking point is whether 
we have permanent Federal membership on the Metro board or not. 
My view is we should have Federal voting representation so long 
as Federal funds are flowing.
    And while I understand the necessity, and I completely 
agree with the chairman, we don't want any impediment or any 
excuses for that $150 million matching Federal funds. I do 
believe that we are going to come to regret some day in the 
future having two Federal members who are going to be voting on 
how localities should be spending their money. I just think, 
you know, and then you are going to have to amend the compact 
at some future date, wondering how did this happen. But 
unfortunately, we didn't win that battle, but I think you were 
right in the first place.
    I recently introduced a bill that authorized extensions of 
Metrorail's Orange, Blue, Yellow and Purple lines in northern 
Virginia.
    Mr. Catoe, I just wonder if you might comment on how that 
might help or hurt Metro, and what your attitude is about 
future extensions?
    Mr. Catoe. Well, it is going to be critical as we move 
forward to the future to have extensions. And with those 
extensions, not only the extension of the line, but looking at 
another portal coming into our main service area. So your 
legislation, it is timely. We are reaching capacity very 
quickly on our route system, and this legislation begins the 
process of taking that into consideration for future expansion.
    Mr. Connolly. The Federal Government process for funding 
transit is quite different than the Federal Government funding 
of roads and bridges. Could you comment on that a little bit? 
And any ideas based on your experience, especially with most 
recently rail to Dulles, but in any expansions of the Metro 
system, any suggestions about how we might streamline the 
Federal process?
    Mr. Catoe. Absolutely. The suggestion is to make the 
transit funding process very similar to the highway process. It 
is more complex. It requires a cost-benefit analysis. The 
process to go through takes longer, as you are very aware of 
with the Dulles extension. And I have had discussions with the 
Federal Transit Administration. They are aware of it. It will 
take some action on the part of, I believe, Congress to change 
the legislation. You will have that opportunity with the 
reauthorization bill that is coming up this year.
    Mr. Connolly. I look forward to working with Chairman 
Oberstar in trying to do that, and you as well. Mr. Graham made 
reference to the economic benefits, and I think rightfully so, 
say D.C., and the inner suburbs, Arlington and inner suburbs of 
Maryland, clearly show the transformative value of the transit 
investment.
    I was here. I lived in Washington, DC, in 1972 through 
1977, so I saw pre-Metro Washington and post-Metro Washington, 
and it has been nothing short of transformative. And I think 
Mr. Bilbray is right in raising that issue of the land use 
relationship, but also what is the return on investment.
    Have we got some methodology for calculating what the 
return on the investment in Metro has been for the national 
capital region?
    Mr. Catoe. The latest numbers, in fact I had them updated 
today, show that an investment of $25 billion, but when we 
updated that number, we found that really the investment has 
been $40 billion in the District of Columbia only.
    Mr. Connolly. You mean the economic investment?
    Mr. Catoe. The economic benefits of the Metro system.
    Mr. Connolly. Wow.
    Mr. Catoe. And it is much larger when you take it regional.
    Mr. Connolly. And what was the original Federal investment?
    Mr. Catoe. I don't recall--$6 billion?
    Mr. Connolly. A pretty good return on investment.
    Final question, because I am going to run out of time. We 
don't yet, but hopefully as Mr. Lynch said we will soon, have a 
dedicated source of funding through this legislation. How do 
other transit systems do it in terms of dedicated funding 
sources?
    Mr. Catoe. Generally, most transit agencies have a local 
sales tax or it is specified in their State legislation that a 
portion of the State revenues will go to public transit. We are 
unique, the only large transit property in the United States 
that does not have a sales tax funding source.
    Mr. Graham. Could I just add, because we are right in the 
middle of doing our D.C. budget, and I just want to add that 
the District of Columbia will be sending more than $300 million 
in our subsidy and other financial contributions in fiscal year 
2010 to give you some idea of the magnitude of the local 
support that the District of Columbia is providing to the 
system.
    Mr. Connolly. I know my time is up, Mr. Chairman, but I 
can't help but observe on the tragedy of 9/11, I remember very 
well there was, thank goodness, an abortive event to close 
Metro. Had we in fact closed Metro that day, I think we would 
still be in gridlock in this region. But thanks to Metro, a 
situation that could have been much, much worse was not, and it 
just underscored just the importance of the Metro system in 
getting workers, especially Federal workers, to and from their 
homes.
    Thank you, Mr. Chairman.
    Mr. Lynch. Thank you.
    I know that we have two Members that are trying to get here 
for this panel. Why don't I do this. I know we don't exhaust 
all of the issues in our questioning. How about, you know, Mr. 
Graham and Mr. Catoe, if you have any issues that we haven't 
touched upon that you think are keenly important to the system 
and to our work, I would like to give you each, say, 5 minutes 
to address the issues that are on your mind most prominently, 
and if any of that embraced the issues that you might have. I 
read the audit report from 2008. I noticed a pretty good spike 
in utilization of workers compensation, a pretty good spike or 
gap in funding on the pension side. If you might have 
information on those couple of issues, we would like to hear 
that. And hopefully by the time you are finished addressing 
those, the Members might be here. I don't want to keep you 
longer. You have been very generous with your time, but please.
    Mr. Graham. Well, I will gladly take this opportunity, Mr. 
Chairman. As I was making my presentation, I went through a few 
pages because of time running out. But again, as mentioned, the 
Metro system is beginning to feel its age. An analogy I like to 
make, it is like a house that is over 32 years old, and we need 
to go beyond the spring cleaning or paint job. We need some 
major work done, with a wet basement, rusty pipes, and old 
wiring and other issues.
    And so from the standpoint as we look toward the new 
transportation bill, the reauthorization, we in the industry 
like to talk about this authorization as ensuring that 
sufficient funds are there to keep major transit agencies in a 
state of good repair. The Federal Government has made a 
tremendous investment in this system, and that investment needs 
to be kept in a state that we can continue to move people as we 
do today, and also to expand that. So that is a point as you 
look forward.
    From the standpoint of workers compensation, when I arrived 
here just over 2 years and 4 months ago, we had major issues 
from a safety standpoint for our employees and our customers. 
We have come a long way. We have had recently, and it was 
communicated to the board, decreases in the number of work-
related injuries, 10, 20, 30 percent of injuries over the past 
2\1/2\ years. That still isn't good enough, and we are working 
to reduce that even more so.
    From the standpoint of issues with our customers, our 
operators have been performing at a much higher rate of safety. 
We have moved from a situation of the nightmare of five 
fatalities my first year in 2007, and pedestrian fatalities to 
zero last year. And knocking on wood, zero hopefully for the 
next decades and decades ahead. I attribute that to our safety 
program and the attention of our senior operators.
    We are working very hard again on the workers comp. We have 
hired a new risk manager who began 2 weeks ago. We have the 
claims down. Now, we are really managing those claims far 
better than what we had before. And so we are in a transition 
as an organization that is focusing on safety, and you will see 
major improvements both financially as well as in the number of 
injuries.
    From a pension standpoint, like every organization around 
the country and every Federal and private agency, we have been 
hit tremendously by the downturn of the stock market, and as a 
result we will be looking at--we still will make our 
contributions. We are committed. They're sufficiently funded, 
but in order to make up that difference, it is going to take a 
longer period of time.
    Mr. Lynch. Very good. I understand.
    We have one of our Members just trying to get in. In the 
meantime, I would like to offer Ms. Holmes Norton a chance to 
expound on an earlier question.
    Ms. Norton. Thank you, Mr. Chairman.
    I didn't get to ask a couple of questions.
    First, let me ask when was the last fare increase for 
WMATA?
    Mr. Catoe. One year ago January there was a fare increase 
that was in place.
    Ms. Norton. My impression is that what you are trying to do 
today you, of course, have to do. The notion of fares going up, 
my impressions is that WMATA has withheld fare increases over 
long periods of time, and then had to raise fares. And I wonder 
if you have given thought to, or if other transit systems, 
simply put off the day of reckoning and then have to make a 
larger fare increase than would otherwise be necessary, just 
because they hate it and the public hates it. So they're going 
to hate it, but they may hate it more if you have to make up 
for lost time.
    Mr. Graham. Well, if I may respond to that, Congresswoman.
    Ms. Norton. Yes, sir, Mr. Graham.
    Mr. Graham. What we were ending up with when we started 
talking about a fare increase was a very tiny amount of money 
in the scheme of things. We were talking about a remaining 
budget gap of $29 million. And as we were able to demonstrate, 
the jurisdictions rapidly came up with more than half of that 
in additional subsidy payments, including the District of 
Columbia, Fairfax County, and elsewhere.
    Ms. Norton. Well this time, Mr. Graham, I understand. I 
was, and you have been, on the WMATA board before. Actually, 
because I don't see how you could have raised fares with a 
straight face. But I am wondering whether or not transit 
authorities have any policy on whether or not it is best to 
wait for a long period of time. You just raised one, so it 
would have been terrible to raise another. Let the needs 
buildup, because the public hates it so bad, or that is just 
you have to, you just have to do that almost politically and 
decide when you can do it and when you can't.
    Mr. Graham. Well, I can express my own personal philosophy 
in this regard.
    Ms. Norton. Thank you.
    Mr. Graham. I have generally not favored fare increases 
except when it was absolutely necessary. And we did it a year 
ago January, as Mr. Catoe pointed out. At that time, we held 
the bus riders harmless in terms of any increase on the theory 
that they were the least able to pay. But we did manage to 
raise the revenues that we needed all the same. And I think 
having just raised the fares, you know, I don't think we want 
to go back to that well when we don't need to. And the fact of 
the matter is this $29 million remaining budget gap was rapidly 
filled within a few days by the jurisdictions.
    Ms. Norton. You know, when people saw that what they faced 
was----
    Mr. Graham. That tells the tale.
    Ms. Norton. Yes, raising fares, they quickly came over.
    Could I just ask Mr. Catoe perhaps to get this back to me. 
WMATA may have to take the lead on this. I have been getting 
money in the transportation bill because WMATA needs the First 
Street tunnel where Amtrak or Union Station is located, because 
of the need to improve access to VRE, MARC, to the NOVA section 
of D.C.
    And in order to continue to get those funds, somebody is 
going to have to take the lead. It seems to me that between 
Amtrak and WMATA, and WMATA has the most to gain, we all need 
to meet. I have had pretty good luck, but there is a 
reauthorization coming up, so that is when you have the best 
luck.
    I wonder if you have any views on that or any plans, given 
the fact that these are really regional trains, rapid rail and 
the like coming in to Union Station and redoing where they can 
go to accommodate more such transit.
    Mr. Catoe. Absolutely. In fact, we are participating, but I 
have directed my staff to work with the entire region in taking 
a leadership role in the coordination of rail services to 
ensure that we are using similar technology and also to ensure 
the connectability of the system.
    So we will be getting back to the committee with the latest 
update on this very shortly, but we are actively involved and I 
can assure you we will stay involved and take whatever role 
that is necessary.
    Ms. Norton. Thank you very much.
    Mr. Lynch. Thank you.
    The Chair now seeks unanimous consent to allow Mr. Van 
Hollen, the gentleman from Maryland, to proffer questions to 
the witnesses.
    Hearing no objection, the gentleman from Maryland is now 
recognized for 5 minutes.
    Mr. Van Hollen. Thank you, Mr. Chairman. I thank you for 
holding this hearing, and I want to thank you for your support 
for what is often described as the Nation's Metro system, 
because it does carry so many Federal employees to work every 
day that do the work of our country here in Washington.
    And I want to thank both the gentlemen for their testimony.
    Council Member Graham, I commend you for the legislation 
that you have introduced. I think when you complete action on 
that, it will mean Maryland, Virginia and the District of 
Columbia have all passed the required legislation to conform 
with the requirements for the additional Federal funds for 
Metro. So we look forward to continuing to work with you on 
that effort.
    Mr. Catoe, congratulations on a good strong start. I know 
it has been a little while now, but things seem to be going 
well, although I do have a couple of concerns that I want to 
raise. And this is in the context, first, let me ask you about 
the stimulus dollars, the economic recovery plan dollars. If 
you could just provide some real detail on exactly what 
additional funds the Metro system expects to receive as a 
result of the economic recovery plan, and what exactly that 
means with respect to WMATA operations.
    Mr. Catoe. We will receive approximately $202 million as 
part of the economic stimulus package, some for buses, transit 
vehicles, fixing platforms, rail work, and heavy equipment for 
the rail system. To date, we have 40 of those contracts on the 
street, so we are ready to move forward to spend the moneys, 
and we have sent our necessary paperwork to the Federal Transit 
Administration. That process is moving very smoothly.
    Mr. Van Hollen. Now, do you expect to receive that $202 
million in this fiscal year over what period of time?
    Mr. Catoe. We expect to commit 80 percent of the dollars by 
September, and the remaining 20 percent by the end of the 
calendar year.
    Mr. Van Hollen. OK. And so by the end of the calendar year, 
you will expect all of the contracts to have been let? Is that 
correct?
    Mr. Catoe. Yes.
    Mr. Van Hollen. OK. I do have a concern. I know you 
hopefully have received a letter that Steny Hoyer and I and 
Donna Edwards sent to you and your team about the cuts that 
have been made in Metrobus in the suburban Maryland area, in 
both Prince George's and Montgomery County. I mean, we are very 
concerned about the impact. More people obviously rely on 
public transit during a period of economic downturn. Our hope 
had been that these stimulus dollars, these additional stimulus 
dollars would allow you to continue to operate these kind of 
lines. And so a lot of people are wondering, you know, where 
did that money go? How come we can't use some of that money to 
make sure that people can continue to get to work?
    Mr. Catoe. Well, some of those moneys can be used for 
preventative maintenance, which would offset some of the cost. 
We just had a series of hearing, five of those. Tomorrow the 
Board of Directors will consider what it needs to do to close 
the gap, which is just slightly over $13 million. Capital 
dollars or stimulus dollars can be used to close the gap or 
other reserve moneys that we have, or we can make the service 
cuts. Those discussions will occur tomorrow.
    I might like to mention that Chairman Graham did propose 
that at one time that we use stimulus dollars. That, again, 
decision will be discussed tomorrow.
    Mr. Van Hollen. Well, I encourage you, and Mr. Chairman, 
thank you for proposing that we use stimulus dollars to keep 
some of these lines and services operational because again, as 
we said, more and more people are turning to Metro in these 
economic times, and we of course want to encourage people 
whether times or tough or times are good to use our public 
transit system. So I hope we wouldn't be cutting those 
services.
    If I could just ask one other question, Mr. Chairman, with 
respect to where Metro stands now on the issue that arose last 
year with respect to the lease-back payments that were then 
essentially guaranteed through AIG and the credit default 
swaps. There was the threatened litigation. I think we all 
worked together to try and mitigate the impact. If you could 
just give us an update on where things stand.
    Mr. Catoe. OK. Thank you very much.
    We had 16 lease-back transitions, 3 which we resolved and 
closed; 1 through the court process we came to a settlement. We 
have 12 remaining. Again, they are no longer any AAA-rated 
insurers, which technically put us in default, which would 
expose millions of taxpayers' dollars. They are still at risk 
in spite of the fact we are making all the payments. And so we 
are hoping that there will be some legislative solution or an 
administrative solution from the Treasury Department. Thus far, 
no other banks have notified us that they are going to declare 
us in default, but technically they could do that any day.
    Mr. Van Hollen. All right. Well, we look forward to 
continuing to monitor that situation.
    And again, I hope tomorrow we will not make those service 
cuts.
    Thank you, Mr. Chairman.
    Mr. Connolly. Mr. Chairman.
    Mr. Lynch. Yes?
    Mr. Connolly. Just real briefly. Mr. Catoe just mentioned 
that there are no AAA insurers left, and that is a problem for 
all municipalities issuing bonds in the United States. I have 
some legislation that is before the House Finance Committee. We 
are going to have hearings in May on that legislation that 
would address that situation.
    Mr. Lynch. Thank you.
    Well, we want to thank the witnesses for being so free and 
candid and generous with your time. We are sure that there will 
be other hearings where we will have to call you again for your 
opinions and recommendations, but thank you for attending this 
hearing and we bid you good day.
    Mr. Catoe. Thank you, Mr. Chairman.
    Mr. Lynch. I would like to call forward the second panel.
    Welcome. Thank you for appearing for this subcommittee to 
help us with our work. It is the custom in the subcommittee to 
ask all witnesses to be sworn. Would you please stand and raise 
your right hands?
    [Witnesses sworn.]
    Mr. Lynch. OK, let the record show that each of the 
witnesses has answered in the affirmative. Your entire 
statement will be entered into the record.
    Let me first offer a couple of brief introductions of our 
witnesses for the benefit of Members present.
    Ms. Helen Lew is the first inspector general to be 
appointed by the Board of Directors of the Washington 
Metropolitan Area Transit Authority. She began her tenure in 
May 2007. As the inspector general, she conducts audits, 
investigations and evaluations relating to WMATA activities to 
prevent and detect fraud, waste and abuse, and to promote 
economy and efficiency.
    Mr. Matthew Welbes is the Executive Director and Acting 
Deputy Administrator of the Federal Transit Administration. Mr. 
Welbes directs the daily operation of the agency in support of 
public transportation services in communities across the United 
States. He supports the FTA Administrator in providing 
leadership and establishing direction on public transportation 
policies, budgets and strategic priorities. He also guides the 
management of the agency's $10 billion annual budget and the 
500 people who serve FTA's customers.
    As you can hear, we are being summoned to the floor for 
votes. I think, however, we could probably put a good dent into 
opening statements, and then recess briefly, and then come back 
for the questioning portion, if you don't mind. OK? All right.
    Ms. Lew, you are recognized for 5 minutes for your opening 
statement.

    STATEMENTS OF HELEN LEW, INSPECTOR GENERAL, WASHINGTON 
  METROPOLITAN AREA TRANSIT AUTHORITY; AND MATTHEW J. WELBES, 
  ACTING DEPUTY ADMINISTRATOR, FEDERAL TRANSIT ADMINISTRATION

                     STATEMENT OF HELEN LEW

    Ms. Lew. Mr. Chairman and members of the subcommittee, I 
would like to thank you for the opportunity to testify today 
about our work at WMATA.
    I am the first WMATA inspector general. Our office was 
authorized by resolution of the Board of Directors in 2006 and 
I began my tenure in May 2007. I report to the board, and as 
such I am independent of management. We conduct audits, 
investigations, and evaluations of WMATA activities to prevent 
and detect fraud, waste and abuse, and promote economy, 
efficiency and effectiveness.
    We also oversee the annual financial statement audit and 
the single audit of major Federal programs that are performed 
by an external audit firm.
    I will highlight our work and that of our external auditor 
in two of the four subject areas for this subcommittee hearing.
    Internal controls and capital improvement projects. In our 
audit of fare media sales, we found that the point of sale 
system maintained by a contractor lacked proper internal 
controls and management oversight. For example, log-on 
identification codes and passwords used by clerks and 
supervisors were not unique or confidential. There was no 
analysis of system logs, exception reports, and edit checks. 
There was no in-house oversight of the day to day operation of 
the system. Management concurred in our findings about the 
system and is working to improve oversight and internal 
controls.
    Our audit of WMATA's accounting of capital expenditures 
from Federal funds, we found incidents totaling $314,000 where 
WMATA did not use grant funds in accordance with the grant 
agreement. For example, a $264,000 expense for computer was 
improperly charged to a grant for bus purchases. A $47,000 
expense for motorcycles was improperly charged to a grant for 
rail maintenance. Management has since applied the expenditures 
to alternative funding sources, as well as reorganized its 
grant management process to improve oversight and internal 
controls.
    Our external auditor identified issued an unqualified 
opinion on WMATA's financial statements as of January 30, 2008. 
This type of opinion means that the financial statements were 
fairly presented in all material respects. Nevertheless, the 
external auditor identified 11 significant deficiencies. The 
most notable of these were inadequate information technology 
controls, such as user access not promptly revoked upon 
employee termination and the lack of a disaster recovery plan.
    The external auditor also identified one incidence of 
noncompliance with Federal regulations relating to safeguarding 
a bus equipment purchase with Federal funds. These deficiencies 
are still open.
    Our work in the area of capital improvement projects takes 
the form of contract attestations and contract performance 
audits. In contract attestations, we look at a contractor's 
proposed or claimed price and cost data and recommend 
adjustments, if any, for consideration in contract 
negotiations. Since May 2007, we have reviewed over $124 
million in contractors' proposed and claimed costs and 
recommend reductions of over $26.3 million. Our contract 
performance audits focus on whether a contractor is meeting the 
terms of a contract.
    A case in point is our audit of WMATA's contract to upgrade 
bus fare boxes and SmarTrip cards and fare collection 
equipment. We found that the contractor missed deadlines 
primarily because of its untimely decision not to support the 
original software and WMATA's delay in deciding to implement 
upgrades to the software. We recommended measures to mitigate 
the effect of future delays and reduce the risk of obsolete 
technology. Management agreed.
    In summary, we have accomplished much in the 2-years since 
our office came into existence. Management has been responsive 
to our performance audit recommendations, concurring with and 
implementing corrective action to address the vast majority of 
them.
    As we go forward, we expect that our contract attestation 
and our contract performance audits in particular will play a 
valuable role in maximizing the efficient use of funds for 
capital projects under the American Recovery and Reinvestment 
Act.
    We look forward to continuing to fulfill our independent 
oversight role, working with the WMATA board and the general 
manager.
    Mr. Chairman, this concludes my prepared testimony. I will 
be pleased to respond to questions from you or other members of 
the subcommittee.
    [The prepared statement of Ms. Lew follows:]

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

                 STATEMENT OF MATTHEW J. WELBES

    Mr. Welbes. Thank you, Mr. Chairman and members of the 
subcommittee.
    I appreciate this opportunity to testify today on behalf of 
the Federal Transit Administration. My testimony will focus 
today on FTA's financial assistance and oversight of the 
Washington Metropolitan Area Transit Authority.
    Across the United States right now, public transportation 
is experiencing its greatest success in decades. Ridership is 
growing. Many transit systems have improved their operating 
efficiencies and there is widespread community support for all 
types of bus and rail and paratransit service.
    WMATA exemplifies this success right now with ridership at 
record-breaking levels. WMATA's growth reflects in part the 
longstanding Federal, State and local public transportation 
partnership which in fiscal year 2008 FTA delivered $237 
million in funding for WMATA for capital investments, which is 
equivalent to 35 percent of WMATA's total capital expenditures 
for the year.
    Most recently, on March 10th, FTA was pleased to host the 
signing of a full funding grant agreement for the Metrorail 
extension to Wiehle Avenue in northern Virginia, which is the 
largest Metrorail expansion since the original 103-mile 
system's construction.
    Moreover, the American Recovery and Reinvestment Act brings 
some vital resources to the national capital region, providing 
$214 million in public transportation funds for capital 
improvements. WMATA will receive $202 million of this ARRA 
formula funding, and FTA is working closely right now with 
WMATA to ensure that the critical milestones are met for the 
use of these funds. As the money begin flowing, we expect the 
commuters in the region are going to see much-needed 
improvements to public transportation.
    But like much of the transit industry in the country right 
now, WMATA faces some serious challenges as well. The success 
of growing ridership has put strains on equipment, rolling 
stock, and facilities. And the system is now in its fourth 
decade of operations and reinvestment is needed. Securing the 
resources to ensure that WMATA can continue to meet demand, 
operate safely and maintain its infrastructure is an evident 
need.
    FTA has completed and is soon going to release a rail 
modernization study that was requested by the Congress. The 
study examines the seven largest U.S. rail transit agencies, 
including WMATA, and the study finds that more than one-third 
of the seven agencies' assets are in either marginal or poor 
condition. In addition, the study estimates that there is a 
backlog of unmet recapitalization needs of about $50 billion at 
those seven agencies.
    And FTA recognizes that WMATA's capital needs inventory 
covering the period from 2011 to 2020 is an important step. 
This inventory's identification of a total of $11.3 billion for 
performance, capacity and customer experience improvements is 
very important. It is also important to note, and was noted 
earlier, that WMATA is the largest transit system in the 
country without a dedicated local funding source at this time.
    In an effort to address that need for dedicated local 
funding, this committee initiated the recently enacted 
authorization of $1.5 billion over 10 years for Federal grants 
to WMATA. FTA is closely monitoring the actions by the 
District, Maryland and Virginia which are required to establish 
the dedicated local matching funds to qualify for that Federal 
appropriation.
    The upcoming reauthorization of the Nation's surface 
transportation law is going to provide an additional 
opportunity for considering ways to improve mobility. And 
Secretary LaHood has noted that the important element of 
reauthorization is going to be livability, and that means 
fostering pedestrian and bike friendly communities, providing 
more transportation choices, and offering better access to jobs 
and housing. And the Federal investment in WMATA's bus and rail 
systems has supported transit-oriented mixed-use development 
that contributes significantly to the clustering of regional 
activity centers near public transportation.
    Finally, I do want to note that based on FTA's recent 
oversight reviews, WMATA is in general compliance with FTA's 
statutory and regulatory requirements. WMATA received nearly 
one-quarter of a billion dollars per year from the Federal 
Transit Administration. And as a result, FTA conducts a series 
of oversight reviews on a regular basis. We have conducted 10 
oversight reviews in a variety of areas since 2004.
    In general terms, WMATA's principal 2008 oversight review 
by the FTA identified findings in the areas of tracking vehicle 
maintenance, asset management, and grants management, some 
areas that Inspector General Lew also noted. FTA is providing 
direct technical assistance to WMATA to help address and close 
these findings.
    In conclusion, the partnership between FTA and WMATA has 
provided significant transportation benefits to the national 
capital region over many decades. And I thank the subcommittee 
for the opportunity to discuss FTA's role in this important 
Federal investment.
    Mr. Chairman, this concludes my testimony. I would welcome 
any questions.
    [The prepared statement of Mr. Welbes follows:]
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    Mr. Lynch. Thank you, Mr. Welbes.
    At this point, I would like to recognize the gentlelady 
from the District of Columbia and ask her to please chair the 
hearing.
    Ms. Norton. Mr. Chairman, I cannot.
    Mr. Lynch. You cannot.
    Ms. Norton. I cannot because I am due to open at another 
hearing.
    Mr. Lynch. OK. All right. We are going to recess. I was 
going to use 5 minutes of questioning time, but I think what we 
will do----
    Ms. Norton. You mean while you were on recess, because I 
think, wait a minute.
    Mr. Lynch. I was going to give you 5 minutes to ask 
questions while we were gone.
    Ms. Norton. I do not have any questions.
    Mr. Lynch. Oh, OK. All right. So we will recess. I 
apologize. This is one of the occupational hazards of these 
hearings.
    Thank you and we will be right back, I would say--how many 
votes?
    OK. Probably a half hour anyway. Thank you.
    [Recess.]
    Mr. Lynch. We will reconvene this hearing. I apologize 
again for the interruption.
    We had just concluded the opening statements of our 
witnesses, and I would like to begin the questioning.
    Ms. Lew, in your opening remarks and in your written 
statement as well, you talked about the list of deficiencies 
that you found in your investigation. And there seemed to be 
somewhat of a laundry list of issues that you highlighted. Have 
we made progress on any of those items that you have outlined, 
whether it is the use of grants, the compliance with the 
specifications of certain appropriations, the information 
technology insecurities that you highlighted? Have any of those 
been addressed in a meaningful way?
    Ms. Lew. Yes, they have, Mr. Chairman. In my testimony I 
mentioned that the management has been very responsive in 
concurring with our recommendations. They concur a little over 
95 percent of the recommendations we made on performance audit. 
They have concurred. They have implemented corrective action on 
close to 75 percent of our recommendations.
    As far as the report we issued on capital projects, we 
identified a small number of incidents where I think about 
$314,000 in funds were charged to the wrong grant agreement. 
That has been corrected. They have charged it to other 
alternative sources. And more importantly, they have 
reorganized their whole grant management process.
    Mr. Lynch. Yes. Having dealt with the whole grant 
management process from this end, it is fairly complicated. I 
guess I am encouraged that even though some budget matters were 
extended to areas that weren't necessarily covered, in other 
words, vehicles, motorcycles for security teams, as opposed to 
core infrastructure expenditures, it wasn't so far out of line 
that you could say it was irresponsible or irrelevant.
    So it seemed to be a mismatch in terms of what the grant 
required and what the need of the agency was. So I am 
encouraged in that respect. I think those are probably honest 
mistakes that were made.
    Mr. Welbes, you remark as well in your statement about 
capital deficiencies in where we are right now. You sort of, at 
least in the remarks that I focused on, lump them all together. 
And I wonder if you can help break it out a little bit. When 
you talked about the deterioration of assets, are we talking 
about train sets? Are we talking about signaling systems? Are 
we talking about bridges? Or are we talking about all of that? 
And is there some majority of these deficiencies that you find 
in any one category as opposed to the others?
    Mr. Welbes. Yes, Mr. Chairman. There are a number of 
different asset categories that a system like Metro operates. 
We find the aging of the infrastructure, particularly on the 
rail system, to be notable. And so there are track structure 
issues. There are power supply issues that WMATA is facing as 
it prepares to run eight-car trains to take advantage of 
platforms that were designed decades ago to handle eight-car 
vehicles, and now needs to upgrade the power supply--this is an 
illustrative example--to deliver service with eight-car trains.
    So we have worked with WMATA. The report that I referred to 
that will be issued shortly to the Congress investigated the 
assets at all seven of the largest transit rail operators n the 
Nation. WMATA is among them. And in that process we looked at 
the discrete asset classes and identified some of the 
recapitalization needs.
    And so WMATA's first step right now between 2011 and 2020 
is that they have identified $11.3 billion in recapitalization 
activities. Part of that is for recapitalization activities, 
and so we think that is an important step, but we have a state 
of good repair initiative at FTA. WMATA is an active 
participant in that effort. They are actually going to host our 
first roundtable on that topic this summer, but the 
recapitalization needs are notable.
    Mr. Lynch. Just so I am straight on this, the $11.3 
billion--is that what you said?
    Mr. Welbes. Yes.
    Mr. Lynch. None of that anticipates any expenditures on 
this new--that is all recapitalization. We are not talking 
about anything going out to Dulles?
    Mr. Welbes. As I understand it, the $11.3 billion includes 
a number of elements. And of that, $7.1 billion of the $11.3 
billion would be to improve the existing system through, for 
instance, replacing or rebuilding some of the existing 
vehicles, rehabilitating or replacing certain track elements, 
and improving some of the station platforms.
    Mr. Lynch. You know, I am more familiar, at least 
organizationally and structurally, with the MBTA system, the 
Mass Bay Transit Authority in Boston, which is the oldest 
transit system in the country. And ironically, though, I spend 
more time on the Metro. I don't have a car here so I use the 
Metro a lot. And I am a little envious. You know, I hear you 
saying that the system is deteriorating, but when you have a 
system like we do that started in the early 1900's, when I look 
at structural problems in an old city like Boston, I see 
greater concern there.
    Do you have--and I know the system is only about 40 years 
old, is that what it is? And I am also an ironworker. For about 
20 years, I went out there. I was a welder and ran construction 
jobs. Are you having major issues already with structural 
components, bridges? Those are very expensive items. Is that 
part of what we are talking about here?
    Mr. Welbes. That is what we are talking about, Mr. 
Chairman. And there are two eras when there has been a lot of 
rail transit building in this Nation, one a century ago when 
the T was built, and one more recently when systems like 
WMATA's rail system were constructed. What we are seeing for 
that latter group of systems in San Francisco, in Atlanta and 
here in Washington, DC, is that they are starting to experience 
some of the same recapitalization needs that have occurred in 
those older systems.
    And so they are starting to look more like their century-
old peers than the new systems that have come online in the 
last 5 or 10 years.
    Mr. Lynch. I know that I have abused my 5-minute limit, but 
let me ask my colleague, Ms. Eleanor Holmes Norton, if she 
would like to take 5 minutes to question the panel.
    Ms. Norton. Yes, Mr. Chairman. I have had an opportunity to 
look at the testimony, and I do have some questions for Ms. 
Lew.
    The stimulus funds are calculated to get out fast, produce 
jobs immediately, and of course to get the work done the 
Federal Government needs to have done in the States and in the 
Federal Government. We have already had an audit of not the 
stimulus funds, but some of the large amounts of money, some of 
the TARP funds, etc., and a pretty negative report about 
capacity for all kinds of waste and fraud when you get out such 
amounts of money.
    You know, those funds didn't even go out in the way these 
are going out, at breakneck speed. I am concerned that very 
often the really indispensable work that the IGs perform are 
performed after the fact. I don't know if the right word is 
performance audit. I call it pre-auditing. But it would be such 
a tragedy if we had a series of audits that because we were 
trying to get jobs for Americans as quickly as possible that 
the prediction that nobody can get money out that quick without 
having disproportionate issues to arise, it would be too bad if 
that occurred.
    Now, there will always be some issues and, I don't know, 
maybe some Ph.D. scholar has figured out what are the minimum 
number of issues you should have whenever Federal money goes 
out, and maybe you would have that plus X if you put out a lot 
of money fast. But it occurs to me that we funded the IGs 
especially for the stimulus funds, not simply to come back as a 
must and tell us what we have done wrong, but with the hope 
that the IG would work with the agencies to keep them from 
making mistakes that might otherwise be inevitable, given the 
speed, the breakneck speed that they have been ordered to 
proceed.
    Could you tell us how you are proceeding? In what way are 
you working with, even given your auditing function--it is not 
unheard of for the auditors to look before something goes out. 
It happens all the time in one of my other committees.
    How are you operating so as to minimize the issues that 
arise when you get out funds this quickly?
    Ms. Lew. I will be glad to, Congresswoman Norton.
    In my testimony, I mentioned the work we do on our contract 
attestations. In contract attestations, we look at the contract 
proposals or claims submitted by contractors, and we look at 
the pricing of that to make sure that the pricing they have is 
supported and reasonable.
    Ms. Norton. You, of course, are working with WMATA.
    Ms. Lew. Yes.
    Ms. Norton. Is WMATA the only agency you are working with?
    Ms. Lew. Yes. I am the WMATA IG.
    Ms. Norton. Well, you are in better shape than some of our 
IGs who are working with lots of different kinds of money going 
out at the same time to different parts.
    Are you able before the fact to look at the contracting 
dollars and other proposed ways of operating, given the 
timeframe they are under?
    Ms. Lew. We currently do that now. I think in my testimony 
I mentioned that since I have been there in May 2007, we have 
reviewed contracts----
    Ms. Norton. Yes, the problem we have here is a move it or 
lose it problem. So this is not like what you usually have. If 
this money isn't used and if I were running an agency, I would 
try to get that stuff out there as quickly as I could, rather 
than have it move away. So what I am trying to ascertain is 
whether we have something different from what we have had 
before where the government did not put this type of timeframe 
on local agencies in the past. Perhaps we should have, but we 
did not.
    So what have you done that is different about people who 
are under orders, as it were, to get this out and make jobs 
now? Do you have the staff to do it?
    Ms. Lew. I certainly could use more resources to do it.
    Ms. Norton. Well, you are not going to get more resources, 
so I want to know, given the fact that these people are under a 
breakneck--after 120 days, it is gone. Given the staff you have 
and the fact that this money runs out within a year and a half, 
the issue is obligation.
    Ms. Lew. Yes.
    Ms. Norton. That is what the issue is. Within a competitive 
system which means that we said go shovel-ready, are you 
finding that WMATA is going with projects that have already 
gone through sufficient clearances so they are ready to go into 
the ground except for letting the contract?
    Ms. Lew. WMATA has identified the capital projects that 
they would like to fund using the stimulus money. We have that 
schedule. We have also sat down with the director of 
procurement at WMATA and we informed him that as soon as you 
are ready, let us know so that we can do the necessary contract 
attestations. We will give those our highest priority.
    We also do contract attestations.
    Ms. Norton. Have any of those occurred yet?
    Ms. Lew. We have not received any as of yesterday. I 
informed him.
    Ms. Norton. Has the money been released?
    Ms. Lew. No, I don't think the money has been released. 
They have advertised----
    Ms. Norton. So the money for WMATA, the stimulus money for 
WMATA is not in hand?
    Ms. Lew. I don't think they have awarded contracts yet.
    Ms. Norton. No. I am just asking if we the Federal 
Government have dumped it on WMATA yet?
    Mr. Welbes. WMATA has applied to the Federal Transit 
Administration. There are two grants that FTA will award to 
WMATA with our funds, Congresswoman Norton. And one of the 
grants has been submitted to FTA. It is complete. The other one 
is in process right now.
    Ms. Norton. So wait a minute. So we are going to count it 
from when?
    Mr. Welbes. The test is for Federal Transit funds, 50 
percent of the funds in the D.C. urbanized area have to be 
obligated, awarded in a grant from FTA to Metro by September 1, 
2009. It is a different test than for Federal highway funds.
    My understanding is that WMATA plans to have 80 percent of 
its Federal Transit economic recovery funds obligated by that 
September 1st deadline.
    Ms. Norton. Now, wait a minute. So you have to make a 
decision first?
    Mr. Welbes. These are formula funds, and WMATA has put 
together a list of activities it plans to apply for, and has 
submitted that information to FTA.
    Ms. Norton. So the time begins to run from?
    Mr. Welbes. Well, the clock began running when the law was 
enacted, and the law said by September 1, 2009 that 50 percent 
of the funds have to be obligated.
    Ms. Norton. I guess that is the nature of the beast here.
    Mr. Welbes. That is correct.
    Ms. Norton. It is a little different from highways.
    Mr. Welbes. Yes. And so WMATA has to turn in information to 
FTA.
    Ms. Norton. What kinds of things do they have to obligate 
for under this?
    Mr. Welbes. WMATA has a number of activities that they are 
going to use their ARRA funds for, which include new bus 
purchases. They are going to replace some of the platforms at 
MetroRail stations which are crumbling. They plan to purchase 
some paratransit vehicles. There is some track maintenance 
equipment.
    Ms. Norton. There is a lot of difference among those 
things.
    Mr. Welbes. Indeed.
    Ms. Norton. Some of those things, it seems to me that they 
could be already in operation, like repairing the stations. 
That is an ordinary highway job.
    Mr. Welbes. The economic recovery funds approximately 
double the Federal funding for WMATA during this period, during 
2009 for example.
    Ms. Norton. But apparently none of it is yet out. Does it 
all go out at one time? I mean, the whole point was to make 
jobs, make them now. Some of those we have to contract to buy 
buses.
    Mr. Welbes. Yes.
    Ms. Norton. That is a long time line. Where you have to 
take a station and where the passengers' stand is crumbling, 
why couldn't that kind of work be already underway?
    Mr. Welbes. For certain activities that WMATA plans to 
undertake with its economic recovery funds, they have what is 
called pre-award authority where the activity is eligible for 
Federal reimbursement, and WMATA can go forth and undertake 
certain work. And at a later date, we will award the grant and 
obligate it.
    Ms. Norton. So they don't have to come to you first? They 
could go and start that?
    Mr. Welbes. For certain undertakings, they can start now. 
They can create and sustain jobs immediately.
    Ms. Norton. But Ms. Lew doesn't indicate that there is any 
such project that she is performance auditing or pre-auditing. 
And that is what I don't understand because how long has it 
been since these funds were--we passed this February----
    Mr. Welbes. February 17th the law was enacted.
    Ms. Norton. February 17th.
    Mr. Welbes. And on March 5th, the Federal Transit 
Administration issued a notice to our grantees that the funds 
were available for grants.
    Ms. Norton. I see. Well, maybe I am overly anxious, but it 
does seem to me that some of that work--we are coming on into 
May--could have been started and I am a little concerned, even 
though you have until September. I am sure that WMATA is like a 
system with many different kinds of infrastructure. And I take 
it those grants are grant by grant, not in one fell swoop?
    Mr. Welbes. In fact, Congresswoman Norton, we understand 
there will probably be two grants. There are two formula 
programs under economic recovery law.
    Ms. Norton. And basically all they need to do is to show 
you that they can do the job. They are not competing with other 
transit systems, are they, for this money?
    Mr. Welbes. No, they are not. These are formula funds that 
flow to the Washington, DC, region and $202 million of the $214 
million in transit funds are directed to WMATA.
    Ms. Norton. Well, do you think all of this is going in a 
timely fashion?
    Mr. Welbes. From what I observe for WMATA at this time, 
things are moving in a timely fashion so that they will meet 
the deadlines for obligating funds.
    Ms. Norton. And what is the deadline for obligating funds?
    Mr. Welbes. The deadline for obligating half of the funds 
is September 1, 2009 and 100 percent of the funds must be 
obligated by March 5, 2010. At this moment, WMATA is on 
schedule.
    Ms. Norton. You have no idea how many funds are obligated 
as of now?
    Mr. Welbes. At this moment, a very small percentage 
nationwide. There is $8.4 billion in Federal transit funding 
from the economic recovery law, and of that $8.4 billion, about 
$100 million has been awarded. However, about 20 percent of it, 
or 25 percent of it, more than $1.5 billion, is in process 
right now. Federal transit grants, the grants we are 
discussing, require a Department of Labor certification process 
with the labor unions that are associated with the transit 
agencies. That process can take between 2 weeks and 60 days. So 
we have accounted for that.
    One reason the highway deadline and the transit deadline 
differ is because we wanted to take into account and the 
Congress wanted to take into account that Labor certification 
process. So at this moment, WMATA is on schedule to meet the 
obligation deadlines.
    Ms. Norton. I just hope that the internal bureaucracy does 
not become responsible for any of the delays.
    Thank you very much, Mr. Chairman.
    Mr. Lynch. Thank you.
    Let me followup on an earlier line of questioning that Ms. 
Holmes Norton put forward.
    Ms. Lew, you know, being on this oversight committee, one 
of the problems I have seen, and I even saw it before I was on 
this committee, is the ability or the lack of ability for 
oversight to keep up when large blocks of money for 
construction go forward. I will give you a couple of examples.
    With the big dig, the project in Boston where we had a very 
small oversight community trying to keep up with a huge 
project. They were just completely out-matched by the 
contractor community and a lot of money was wasted. I saw it as 
well being part of this committee. We did 11 oversight visits 
to Iraq, reviewing construction projects in Iraq, same thing 
with Afghanistan. A lot of money spent in a very short amount 
of time with not enough oversight, we had problems.
    Now, we have the dedicated funding issue, which might bring 
a lot of money, or expect to bring a lot of money into the 
system. There will be numerous projects going forward, 
according to WMATA. And you have the stimulus, over $200 
million.
    You said you could always use more people, and I think you 
are going to need more people and we can't just roll this money 
out here without proper oversight.
    What do you think? Give me your opinions on what you need 
and what you foresee in terms of a bunch of projects going on. 
You have to have inspectors, investigators, auditors, because 
some of the stuff is in-house and it is contractual in nature, 
not to mention the physical monitoring and inspection that 
needs to go on.
    How is this all going to happen? Reassure me, please.
    Ms. Lew. You raise a very good question. I definitely could 
use more resources. I currently have a budget of about $3.7 
million. I have 23 people on board and I am authorized 29.
    Mr. Lynch. What is the breakdown of the folks you have on 
board? What are they?
    Ms. Lew. I have 18 auditors and 3 investigators and my 
secretary and myself. That would be a total of 23 right now. We 
hope to bring in three entry-level individuals sometime in the 
June-July timeframe.
    But you are right. We have a huge influx of Federal funds 
coming in now with the potential of $150 million in the 
dedicated funding, and then you have the $202 million in the 
Recovery Act funds. And my experience in the Federal Government 
has been--I am a retired Federal employee that the potential 
fraud, waste and abuse is very great. It is heightened when you 
have a new influx of money.
    You know, you saw what happened in Iraq. You saw what 
happened with Hurricane Katrina. So I am concerned as to 
whether I have sufficient resources to address the audit needs, 
as well as the investigative needs.
    As I told Congresswoman Norton, we give the highest 
priority to the stimulus money that we will be getting. And we 
do do these contrast attestations, and these contract 
attestations is our front end work, where we go through these 
proposals and look at their pricing, look at the costs on 
claims, and see if that is a reasonable amount as opposed to 
them bleeding the government.
    We also have a role in terms of all sole source 
procurements. We do that contract attestation. We also, the 
Recovery Act encourages buy American, but there might be things 
where there is no American manufacturer and we have to go 
foreign. We have a role to do pre-award certifications to make 
sure that there is a certain amount of domestic input in 
putting together the final product. And our office does do 
that.
    But when it comes to contracts, we try to do select 
contracts to make sure that the terms of the contract are being 
met and we are getting what we paid for.
    Mr. Lynch. Not to interrupt you, but that requires folks to 
go out on the job.
    Ms. Lew. Yes.
    Mr. Lynch. You can only do so much auditing. It is sort of 
what the defense contracting audit agency had a problem with, 
where they were auditing the construction in Iraq from 
Alexandria, VA. And we didn't have auditors on the ground for 
the longest time, the first couple of years in Iraq, and it was 
a mess.
    So I just am very concerned about, having worked on job 
sites for about 20 years, your ability to be out there on the 
ground. It doesn't sound like you are set up for it now.
    Ms. Lew. That is very true. We don't audit from our desks. 
We have to get out to the field. When you do this contract 
attestation work, you have to do that. I have a team of two 
that is going out to Manitoba, Canada next week to do the post-
delivery certification on the buy America to see if they met 
buy America requirements because the buses are being purchased 
by New Flyer, which is a Canadian firm. It is being assembled 
in Minnesota. And so our audit team is going to be going to 
Minnesota as well.
    But it takes resources to do the travel and also having the 
resources to go out there and it takes time to do that type of 
work.
    Mr. Lynch. I understand. Well, we need to stay in the loop. 
If you need more people, this is an important part of this. You 
are going to save us money by doing your job. And you also know 
that the appetite for expenditures and appetite for 
appropriations is going to diminish greatly if we start to see 
waste, fraud and abuse. I mean, you know, it is just leaving 
yourself wide open for criticism. We don't want that to happen.
    Ms. Lew. I just want to make one point, Mr. Chairman.
    Mr. Lynch. Absolutely.
    Ms. Lew. Unlike my counterparts in the Federal IG 
community, we at the State and local level did not get any 
money to do our audits and do our investigations relating to 
the Recovery Act funds.
    Mr. Lynch. Well, that's a terrible lapse on our part. I 
wish I had known that up front. I certainly appreciate the 
value of your service and I want you to be able to do your job. 
You are going to be the first one in line for criticism when 
things go wrong, so I think it behooves us to give you--well, 
you might not be first. We might be first. You will be right 
behind us, and we will have folks up here blaming you.
    Mr. Welbes, let me shift to you just for a second. You 
offer a great perspective nationally because you are dealing 
with a number of these larger transit authorities. So you have 
a sense that I don't of how in Washington, DC, we compare with 
other systems of relatively the same size.
    What is your assessment on how we are doing here in terms 
of preparing for this sizable increase in expenditures, 
increase in the number of projects, the complexity of this 
stuff? How are we sizing up here?
    Mr. Welbes. I think the region and WMATA have taken some 
important actions. At the Federal Transit Administration, we 
have put together really a risk strategy and an oversight 
strategy associated with the ARRA funds. And we have in place, 
of the $8.4 billion in ARRA funds for transit, about 99 percent 
of it flows into existing FTA programs where we have an 
oversight system in place.
    So we do financial management oversight reviews for our 
projects. For the large capital projects when they are under 
construction, we have project management oversight engineers 
who are boots on the ground who visit with the grantees, visit 
the projects, and make sure the project is on schedule and on 
budget. And we have in fact a meeting with WMATA next week, our 
quarterly meeting, to talk about among other things those major 
capital projects.
    So WMATA's history of managing major capital projects has 
fared relatively well. The most recent significant project, the 
Largo Metrorail extension, was brought in on time and on 
budget. And there are other large projects such as the Wiehle 
Avenue Metrorail extension, which we now have underway. The 
Airport Authority is constructing that project. WMATA will be 
the owner and operator ultimately, but Metro has a sound track 
record in that regard.
    There are certain reviews we have done recently where we do 
have open findings that we are working with Metro to close out. 
Many of them parallel those that Inspector General Lew has 
identified, but we are working to address those findings.
    Mr. Lynch. Ms. Holmes Norton, do you have any followup 
questions?
    Ms. Norton. No further questions, Mr. Chairman.
    Mr. Lynch. OK.
    Let me ask you, I offered the same opportunity to the 
previous panel. Are there aspects of your situation now going 
forward, overseeing WMATA, that we haven't touched upon here 
that you think is important for the committee to hear?
    Ms. Lew.
    Ms. Lew. We certainly are supportive of the dedicated 
funding bill that would give us statutory authority within the 
compact jurisdiction. I think that will strengthen our ability 
to deal with any challenges that we get from the people that we 
audit, both internal and external.
    Mr. Lynch. Just to sort of amplify a point I want to make, 
this is an oversight committee. You are both doing oversight 
work. There is a natural alliance here that we have. We want to 
see the work done efficiently. We want to see the taxpayer 
money used efficiently, effectively. But if we don't know the 
problems you are encountering, and it looks like we missed an 
opportunity to fortify the oversight apparatus in this case. 
You know, I am going to look for an opportunity to correct 
that. I think there will be vehicles where we can do that.
    But we have to have the oversight in place. Otherwise, we 
are going to have a mess on our hands. And you know, I 
appreciate, the rail system, FTA does have a better oversight 
protocol in place. I have seen that over and over again, work 
out better than my heavy highway projects where we don't nearly 
have the oversight that is necessary. So that is encouraging.
    But still, I think that the drastic increase that we are 
going to see here in activity there needs to be a sizable 
increase, a commensurate increase in oversight ability here, 
and I don't think we have it.
    So it is just a red flag from me, and I want to try to 
address that at some point. But it is going to require 
communications between both of you and the committee, the 
subcommittee especially. OK? Thank you.
    Mr. Welbes, do you want to address anything that you 
haven't addressed so far?
    Mr. Welbes. I think I would just amplify two points. One 
is, as you have noted, with the economic recovery funds, by 
doubling the resources, the Federal resources that will flow to 
WMATA in the coming year, there is an increased risk. And the 
risk for our large grantees involves taking on multiple 
projects that would have been spread out over a longer period 
of time, simultaneously.
    So the capacity constraint that you have described with 
regard to our oversight resources certainly applies to the 
resources of our grantees like WMATA in implementing multiple 
projects simultaneously. The engineer or financial expert who 
usually would handle X number of projects will be handling X 
plus Y number of projects. That is an area that we are going to 
be focused on going forward. We are enhancing some of our 
oversight tools to include additional scrutiny of the economic 
recovery resources in particular. We are structuring some of 
our project management oversight and financial management 
oversight to account for that increased flow of funds.
    And then the second point is one that we have discussed 
already, but it is sort of the state of good repair needs at 
systems like WMATA. Over time, that caseload, that reinvestment 
need only grows. And so it is important to start making headway 
on it sooner rather than later. There are risks that increase 
as that reinvestment need grows.
    I know in the reauthorization of SAFETEA, we will be paying 
attention to that and there is a discussion about how state of 
good repair can be addressed, but it has parallel oversight 
implications as well.
    Mr. Lynch. Well you know, you invite a question. I 
understand Ms. Lew's statement that we in Congress did not 
adequately fund or fund at all the enhanced oversight that is 
necessary for her and her team to do their job. What about FTA? 
Did we do any enhancement there?
    Mr. Welbes. For FTA's regular statutory program, there are 
take-downs that are 0.075 percent or 1 percent for large 
capital projects, and that provides us with a resource that we 
can apply to the ARRA funds as well. Congress did include in 
the statute a setaside for FTA oversight equivalent to about 
0.033 percent. So it is really about one-third of what we would 
usually see for our oversight resources for this size funding. 
So for the $8.4 billion, we would usually see additional 
resources compared to what was in ARRA for our usual program. 
And you know, we are where we are. We are working to maximize 
our efficiency using that resource right now.
    Mr. Lynch. OK. And again, the subcommittee and the 
committee welcomes your assessment as we go forward. I think 
you will be able to sense whether or not one-third of 1 percent 
is going to be nearly adequate. OK?
    Seeing no further questions, I want to thank you both for 
your willingness to come before the committee and help us with 
our work. I thought it was very helpful, very enlightening 
especially for me to understand what you are dealing with. I am 
encouraged, but like I said, I have some red flags out there I 
am a little concerned with. But I want to thank you for your 
testimony here and I bid you good day.
    Ms. Lew. Thank you.
    Mr. Welbes. Thank you, Mr. Chairman.
    Mr. Lynch. If we could have the next panel.
    I invite you to please rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Lynch. OK. Let the record indicate that the witnesses 
have all, each of the three have answered in the affirmative.
    Your witness testimony as written will be submitted into 
the record, without objection, so you don't have to worry about 
reciting every bit of it. We ask you to summarize your 
testimony within the 5-minute limitation.
    Before I begin with witness testimony, I am going to just 
do a brief introduction of our three panelists.
    Mr. Craig Simpson is a representative of the Amalgamated 
Transit Union [ATU] Local 689. Mr. Simpson served as a bus 
operator for WMATA in 1974. He was elected ATU Local 689 shop 
steward of the Northern Bus Division in 1983 and was appointed 
assistant business agent for ATU Local 689 in 1989.
    In 1993, Mr. Simpson was appointed to fill an unexpired 
term of Secretary-Treasurer of the Union and later was elected 
to two full terms. He subsequently engaged in contract work for 
Progressive Maryland Metropolitan Washington Council AFL-CIO 
and ATU Local 689. His current contract with ATU Local 689 as 
political and legislative representative began in February 
2009.
    Ms. Diana Zinkl is chair for the Riders' Advisory Council 
for Washington Metropolitan Area Transit Authority. She 
presides over WMATA board and staff on issues affecting riders 
and provides recommendations to the board and the Authority on 
how to improve operations. Ms. Zinkl also serves as an analyst 
for the Government Accountability Office. Her engagements at 
GAO include a wide variety of issues, including intercity 
passenger rail restructuring.
    Mr. Ben Ross serves as president of the Action Committee 
for Transit, which advocates for public transit and transit-
oriented land use in Montgomery County, MD. There, he helped 
build a 30-member group into a significant force in county 
affairs, with over 600 paid members and nearly 100 active 
volunteers. Mr. Ross is also the chair of the Transit First 
Group, a coalition of transit riders, environmental and labor 
groups organized to oppose cuts in WMATA funding and service.
    I welcome each of you, and I thank you in advance for your 
willingness to offer testimony before the committee. I will 
begin with the customary 5 minutes, and please be aware of the 
little box in front of you with the lights. I am sure you were 
able to observe the previous panel.
    Mr. Simpson, you are recognized for 5 minutes.

STATEMENTS OF CRAIG SIMPSON, REPRESENTATIVE AMALGAMATED TRANSIT 
  UNION [ATU] LOCAL 689; DIANA ZINKL, CHAIR, RIDERS' ADVISORY 
 COUNCIL, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY; AND 
     BENJAMIN ROSS, PRESIDENT, ACTION COMMITTEE FOR TRANSIT

                   STATEMENT OF CRAIG SIMPSON

    Mr. Simpson. Thank you, Mr. Chairman.
    I am going to skip over a lot of my testimony and really 
get to the heart of an issue that has been before the 
subcommittee before, and that is the way that WMATA is funded. 
And I believe the way that it is funded drives some of the 
problems at WMATA. It has up until at least fairly recently 
largely been obligation-based, where each local jurisdiction 
says that they will pay its share of the WMATA costs out of 
their general funds. There are some exceptions, that is 
generally the way it is funded.
    And with a multitude of jurisdictions, you have the State 
of Maryland, the District of Columbia, and northern Virginia in 
the transit zone. There are a number of local jurisdictions 
that actually fund WMATA, counties and cities. So each one of 
them facing different tax bases, different budget priorities, 
have different interests in funding WMATA at any given time, 
and different abilities at any given time. And I believe that 
drives some of the problems.
    One of the topics of this hearing was its affect on 
existing operations. And my criticism of the WMATA board is its 
parochialism in this instance. When they realized that they had 
a budget problem, the way they dealt with it was not to look at 
it from a regional perspective. They left the rail untouched, 
not saying that is a bad decision, but they left it untouched. 
Now, what they said was we are going to look at the bus 
service, including regional bus service, lines that have been 
designated as regionally important that fall within our 
individual jurisdictions, and we are going to make a decision 
on what of those to cut.
    So the cuts fell very unevenly. Some jurisdictions came up 
with the money to cover their share of the deficits. Others 
came up with some money. Maryland, where the most severe cuts 
are made, of the $13.6 million or so in remaining deficit, 
almost $10 million of the bus cuts are in Maryland, including 
many on major regional routes that serve Federal facilities.
    The decisionmaking there I think is what I fault as much as 
the financing, but I think it is not driven by any individual 
board member. My criticism is not of them as an individual, but 
as the underlying funding mechanism I think drives that 
decision.
    So that is manifested in a number of different ways. There 
has been a devolution of kind of WMATA as the regional planner 
for transportation in the area. Most of, in fact all of the new 
proposed rail projects are really locally driven projects 
without any, well, I mean, there is a Regional Transportation 
Planning Board that acts, in my opinion, more as a 
clearinghouse than an actual planning board, and where WMATA's 
role previously had been to plan these projects, they are being 
driven by local decisions, some of which may or may not be true 
regional priorities.
    Improving bus service, the same thing has happened. It is 
continually put on the back burner, and yet we could make 
existing improvements in regional bus service if we weren't 
driven by local decisionmaking. And that is also true in under-
capitalization of rail, under-capitalization of the bus system, 
and with MetroAccess. None of these things are really 
adequately funded, mostly because of I believe the situation we 
discussed before.
    I think that there is a model going forward when we talk 
about dedicated funding. It is very difficult to impose. There 
has been the idea of imposing a region-wide sales tax. It is 
very difficult to do with the local jurisdictions because it 
impacts them differently. So acting in their own individual 
interest, some will favor it and some will oppose it. The same 
is true with other region-wide taxes that could potentially be 
looked at.
    But I think both the Metro Matters financing agreement and 
the current proposal that hopefully the District of Columbia 
will take care of its compact amendments and hopefully Congress 
will appropriate the funds, I think those type of financing 
agreements may provide the model for stabilizing financing of 
WMATA where you have a specified financial target and the local 
jurisdictions dedicate funds that they choose to meet that 
financing goal. And that may be a more practical way to 
stabilize WMATA's financing over time.
    Now, the agreements that I have referenced only apply to 
capital funding currently and not all capital funding. But 
certainly, it may provide a model for extending that to 
operating funds. So I just want to, as a long-term solution, 
put that forth.
    I think the Federal role, and I guess I differ somewhat 
than some other people, in that I welcome a Federal role on the 
WMATA board. I think it will provide a good counter-balance to 
the local jurisdictions' interests. The Federal Government has 
a regional interest with facilities throughout the area. It has 
an interest in making sure that there is adequate 
transportation to those facilities. And I think in partnership 
with the local jurisdictions, it can help to strengthen the 
regional system. So I welcome the Federal participation and 
look forward to that taking place.
    I hope that over time, that partnership can be expanded 
further. I think that this is a critical system for the Federal 
Government and I think the investment in it will ultimately be 
worthwhile. The Federal Government does have a special 
relationship obviously with the District of Columbia, which it 
is ultimately responsible for, and also with this being the 
Nation's Capital, it has major Federal facilities located in 
the suburban areas as well.
    So with that, I will conclude my testimony and open it for 
any questions afterward.
    [The prepared statement of Mr. Simpson follows:]

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    Mr. Lynch. Thank you.
    Ms. Zinkl, you are recognized for 5 minutes.

                    STATEMENT OF DIANA ZINKL

    Ms. Zinkl. Thank you, Chairman Lynch for inviting me to 
testify today.
    My name is Diana Zinkl and I am the 2009 chair of the WMATA 
Riders' Advisory Council. It is an honor for me to be here 
today representing the RAC and riders of public transit 
throughout the national capital region.
    A list of the names and jurisdictional affiliations of the 
other members of the RAC is included at the end of my written 
statement.
    The board of WMATA authorized the RAC in 2005 following 
public requests to create a citizens advisory group to serve as 
an institutionalized voice for riders within the Authority. All 
of us are volunteers and actually several RAC members were here 
earlier today. Dr. Kelsi Bracmort, who is actually an employee 
of the Congressional Research Service; my jurisdictional vice 
chair from Maryland, Patrick Sheehan, who is also chair of 
WMATA's Accessibility Advisory Committee; and Carl Seip, a 
student right now at American University and he had to get to 
class. So they did make an effort to stop in and I was very 
glad to get a chance to see them today. We only meet once a 
month, so you know, we don't get to see each other too often.
    All of the RAC members are committed transit riders, some 
of us by choice, some of us because driving is not an option 
for us. Six of us are car-free. We use bus, rail and 
MetroAccess. We walk and we bike. I myself have never owned a 
car. I have used transit my whole life, in large part because 
my own mother cannot hold a driver's license. She was transit-
dependent, and when my dad was at work, that means we were too. 
We weren't the only ones. Lots of folks in my home town of 
Green Bay, WI used and needed the bus, and many of those bus 
routes that I used to take back in the 1970's and 1980's 
actually are still there today in Green Bay exactly where they 
were.
    Another community actually with excellent bus service is 
Honolulu, which is where my mother went to high school. And 
when we used to visit my grandparents in the 1980's and the 
1990's, a lot of the buses that she took in the 1950's were 
still there.
    So I learned how to live a transit-oriented life from my 
mom, and I find it reward to experience my community by foot, 
by bike, by bus and rail, and all RAC members feel the same.
    There are four points I would like to make today in my oral 
statement. First, WMATA provides basic transportation to 
residents of the national capital region. It is central to how 
many residents of the region live, work and play. It also 
serves visitors from all over the Nation and the world.
    For transit-dependent individuals, WMATA is a lifeline to 
jobs, medical appointments, religious services and groceries. 
It prevents drunk and tired driving and keeps the region moving 
in inclement weather.
    Two, RAC members are very supportive of recent and 
anticipated changes to improve buses. For instance, the new 
hybrid buses, SmarTrip readers on all buses, the NextBus 
program, and the Bus Priority Corridor Network. And let me just 
take a moment to say what an honor it was I think for everyone 
involved in WMATA to have the vice president visit the bus 
facility in Landover, MD last week, acknowledging WMATA's new 
bus programs.
    We hope this type of support signals renewed commitment to 
existing expanded bus service. This is the type of commitment 
that is needed to support reliance on bus service and generate 
development around bus lines similar to the development that 
you see around rail lines, and you do see that kind of support 
in some communities for bus service.
    My third point today is that RAC members are a bit 
concerned that the pace of some of the recent operational 
changes at WMATA may be too fast for some riders, particularly 
transit-dependent vulnerable populations. We feel that WMATA 
and the public would benefit from earlier and more meaningful 
opportunity for public input into such changes.
    For example, the elimination of paper transfers is one 
example. This was done through a budget process with little 
opportunity for public input before the decision was made. 
WMATA came to us, the RAC, to ask how to best publicize the 
elimination of paper transfers, but we really were not afforded 
an opportunity, nor was the general public afforded an 
opportunity to have input into that decision.
    Similarly, we are also concerned at the RAC about the fate 
or weekly passes. Weekly bus passes are something that many bus 
riders rely on quite a bit. When I lived in Boston, I would 
have my monthly rail or bus pass every month and it gave me a 
lot of freedom and really helped my budget at a time when I was 
young and just starting out and not making very much money 
working in the public sector.
    My fourth point is that RAC members would like to see WMATA 
achieve a stable funding situation, both from a capital and 
operational standpoint.
    In conclusion, I was very glad to hear just a few minutes 
ago that you are a regular rider of both Metro and the T. I was 
always a big fan of the T when I lived in Boston, as I just 
said. And I would say that further information about the RAC, 
including meeting minutes, handouts and bylaws, can be found on 
our Web page on the WMATA Web site.
    I would also like to thank all the members of the RAC, 
everyone at WMATA, my family, my co-workers at GAO who have 
been very tolerant for the past few weeks, and all my friends 
and neighbors for their advice and support.
    And finally, I would like to thank the subcommittee for 
this opportunity to speak, and I am happy to answer any 
questions you may have.
    [The prepared statement of Ms. Zinkl follows:]

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    Mr. Lynch. Thank you, Ms. Zinkl.
    Mr. Ross, you are recognized for 5 minutes.

                   STATEMENT OF BENJAMIN ROSS

    Mr. Ross. Thank you very much, Mr. Chairman. I am very 
happy to have this opportunity to give you a rider's view of 
Metro.
    I am going to focus on the root causes, try to focus on the 
root causes of these financial problems that we have been 
talking about this morning. And I will start off with a take-
home message. There is a conventional wisdom out there that 
says that highway projects are supported by user fees, while 
transit is subsidized.
    And that is really no longer true. In my written testimony, 
I compared Metro's funding to the total----
    Mr. Lynch. I am sorry. Mr. Ross, I missed that. I missed 
that. Repeat that point again.
    Mr. Ross. Yes. There is a conventional wisdom that highway 
projects are supported by user fees, while transit is 
subsidized.
    Mr. Lynch. Yes?
    Mr. Ross. And I don't think that is true anymore.
    Mr. Lynch. OK.
    Mr. Ross. And I did an analysis in my written testimony 
comparing Metro's funding sources with the total of all of 
Maryland State highway programs. What I found was that riders 
are paying 32 percent of Metro costs. That is capital plus 
operating and including the Dulles rail project. And that 
drivers are paying for only 20 percent of the highway program.
    Now, this is a deeply rooted trend. It is not just in 
Maryland. I am sure if I looked at other States, I would get 
similar numbers. And at the Federal level, you see the highway 
trust fund that used to be flush with money is now borrowing 
from the general fund.
    And the State and Federal transportation budgets are being 
squeezed by this decline in revenue from road users. And Metro 
is caught in that squeeze and I think that is really the 
underlying reason that we are threatened with loss of service.
    I think people have been talking at hearings and this 
morning about the hardships that are going to be caused by some 
of these cuts. It is especially true in Washington, well it is 
the same in Boston, that housing is very expensive and you can 
really do bad things to a family budget if you are forced to 
buy a car when you didn't need one.
    Now, as people have also said, these cuts are coming at a 
time when more people are riding transit. Metro ridership is up 
42 percent in 10 years. In the last few months, it is still 
going up, even though the price of gas has come back down and 
we have a bad economy. That is happening, and I think 
Congressman Bilbray had some very good things to say about 
that, which is that Metro has become a way to live, not just to 
commute.
    The ridership is growing fastest for non-work travel. In a 
period of 8 years, the morning rush hour travel was up 33 
percent, but Saturday ridership was up 47 percent and 57 
percent on Sundays. And you see all these new communities, U 
Street, Columbia Heights, Clarendon, Silver Spring, 
Hyattsville. One thing that struck me was that at Columbia 
Heights, Metro ridership went up 70 percent in just 4 years.
    Now, the spending priorities at all levels of government 
have not kept up with the shift in public preferences. In this 
area, we have less driving, and yet we have had a series of big 
road construction projects on both sides of the Potomac, while 
rail to Dulles is just getting started, and the new purple line 
in Maryland is still being planned.
    And this I think is the root cause of Metro's funding 
problems. People are no longer so taken with driving. You know, 
we still drive a lot, but it is just a way to get where we want 
to go. It is not something we are excited about. Years ago, 
they were building parkways for something called pleasure 
driving, and nobody today would say driving on the beltway is a 
pleasure.
    And the effect of this change in public attitudes is a loss 
of willingness to pay taxes for driving. In this area, the gas 
tax has not gone up since 1992. And that is squeezing the 
entire transportation budget at all levels, and the net effect 
is, after a series of pass-throughs, that Metro riders are 
being hit for money to fill the gaps that are caused by lack of 
willingness to pay for roads.
    And really, the public has spoken for a shift in priorities 
from roads to transit. Really, it has spoken twice, once with 
its feet by riding, and once with its votes by not wanting to 
pay for gas taxes. And the political system really needs to 
start to listen and reassess our priorities and put transit 
first.
    Thank you very much.
    [The prepared statement of Mr. Ross follows:]

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    Mr. Lynch. Thank you.
    Let me ask a question, repeat a question that Mr. Simpson 
raised, and I want to ask Ms. Zinkl and Mr. Ross to respond to 
it. Mr. Simpson made the point that in this recent 
restructuring and cost cutting exercise that rail was basically 
held harmless and bus ridership--well, the bus routes took the 
hit. Is that a fair statement of what you said?
    I suspect, and look, I am no expert. That is why we have 
you here. But I would think that with the fixed system, transit 
system, it is tougher to squeeze savings out of rail than it is 
to, well, look at it this way. There is no replacement for the 
rail, for the trains, principally, but if the bus isn't there, 
I suppose you could take a car and go to a rail station, and so 
there is somewhat of a replacement there, easier than, say, an 
alternative to the train.
    The train is probably a lot more attractive. I know most 
people where I come from love the train, hate the bus, because 
buses unfortunately have to travel in traffic unless there is a 
really good dedicated bus route that they can use.
    What do you think, Ms. Zinkl? In terms of have the bus 
routes taken the hit? What are you hearing from your members 
about the proposed cuts in services of these bus lines, a lot 
of them in Montgomery County, MD and elsewhere, as Mr. Van 
Hollen was stating earlier today. What is your read on that?
    Ms. Zinkl. Well, our members did have some personal 
experience with some of the bus routes that have been proposed 
for either elimination or reduction in frequency. We also 
attended, that was at least one RAC member at every one of the 
recent public hearings. We have also gotten some public 
comments.
    These bus routes are very important to the people who live 
near them. And while there are indications that some of the 
routes may not have as much ridership as we would like to see, 
we have also gotten some qualitative feedback that some of the 
quantitative information that those decisions were based on may 
not have been as accurate as one may have liked. Part of what 
came out of the public hearing process I think is that some of 
these routes may be a little bit more heavily used than we had 
actually believed.
    And certainly, the RAC understands that essentially WMATA 
has to have a balanced budget, and that some reduction in 
service may be necessary in order to balance the budget. We may 
not be able to come up with a completely blind set of 
reductions from the view of the public, some that is seamless. 
However, what we would like to see is reduction in frequencies, 
headway lengthenings.
    If it is absolutely necessary to make changes in service, 
make cuts that result in less frequent service as opposed to 
complete elimination of routes. When you completely eliminate a 
route, you are taking a lifeline away from folks who may not 
have any other alternative. And unfortunately, many of the 
eliminations were in places where that was really, these aren't 
routes in central D.C. They are out on more of the urban fringe 
in Prince George's County, out in Arlington, and you don't have 
the density of routes in those areas that you do here actually 
inside the beltway. And we are very concerned about any route 
elimination.
    Mr. Lynch. OK.
    Mr. Ross, do you have anything you want to add before I go 
back to Mr. Simpson and allow him to rebut?
    Mr. Ross. Yes. I think that the process which was naturally 
political and should be, that came up with these proposals 
reflects the reality that the rail system has tremendous, 
enormous support from the public. And that is because it is 
something that serves all income levels. It is like Social 
Security is always people have resisted cuts in Congress, where 
programs that are means tested get cut.
    I think that it is a sign that when you put in a good 
quality of transit, it gets an enormous level of public 
support. And bus service is an essential part of transit and 
the hope has to be that as you upgrade the bus service, you 
make it attractive to more people, it will attract more public 
support, and that making it a higher quality of service will 
actually benefit all income levels because you have something 
that has that public support and maintains its political 
strength.
    Mr. Lynch. Great.
    Mr. Simpson, just let me preface this by saying I think you 
had very thoughtful testimony. I think you are right. I think 
the easiest thing, the path of least resistance, was looking at 
the bus routes. But a couple of things that you mentioned in 
your testimony, one is that some of these bus routes actually 
serve some pretty vital Federal facilities, which concerns me 
from an operational aspect for our government.
    And also, as I have been able to travel around the District 
and northern Virginia and Maryland, we have had a pattern of 
development of public housing. I grew up in public housing. I 
lived there for 15 years, and I notice that unlike in the city 
of Boston, the public housing developments are right downtown, 
in the inner city. So all of the inner city neighborhoods, you 
have some struggling neighborhoods, heavy minority populations 
there, who nevertheless are by the T connected to the jobs.
    Here, the connector and the feeder for folks living in 
these developments that are not out in the, well, to me they 
seem like they are out in the boonies. But here, it is just 
sort of how you get a lot of farmland here and there is an 
abundance of land, so some of these major housing developments 
have been located outside the city center.
    And so you have to serve those minority neighborhoods. You 
know, those families need to be connected to the job base. And 
the feeder system to get those folks connected to the jobs is 
really in large part the bus system, to feed them into the 
rail.
    So how do we tackle that issue? And I know part of it, 
look, you are a union rep. I was a union president with the 
ironworkers. My job was to put my people to work. That was my 
job. And I am sure that you are looking at this, in part, as a 
reduction in the number of members your local is going to need 
in terms of driving buses. And that is a valid concern. That is 
a valid concern. That is a real concern and one that I respect.
    How do we look at this whole need for greater efficiency 
and maybe, as Ms. Zinkl suggested, not eliminating the route, 
but maybe it is the frequency and timing of the buses coming 
into the station, the hours of service that we operate. Can we 
gain greater efficiencies in those variables, as opposed to 
eliminating the whole route and then leaving those folks 
stranded, basically without public transportation and 
eliminating your members' jobs? What is your thinking on that?
    Mr. Simpson. Well, I think that there are a lot of 
opportunities for bus efficiencies. It is in fact one of the 
proposals we made to WMATA was to essentially put some money, 
accelerate their bus priority, and BRT-like proposals to 
increase bus feeds and you actually save costs.
    Just a simple example of that is in my testimony where if 
you are running a bus, if you have a 35-minute from one end of 
the line to the other, you need four buses to maintain a 10-
minute headway. If congestion increases to the point where you 
have 5 minutes more running time, you have to add a bus into 
that in order to maintain that 10-minute headway. And adding 
that one bus, that is a 25 percent increase in cost.
    I think you can by using bus priority measures and by 
equalization, in other words using limited stop service or 
express service to equalize the load across the line, actually 
reduce costs, and by taking a bus off the line, but providing 
the same level of service.
    Even though that may seem like it costs a job, it makes us 
more productive. It makes the service better and attracts 
increased ridership, and ultimately leads to service expansion. 
So I am not opposed to that. I actually favor that. I think 
that is one of the ways that WMATA could address this.
    Their proposal, just to clarify, the heart of a lot of 
their proposals to reduce service aren't on--there are some 
fringe lines that are included, but if you look at the amounts 
of money, where they are saving the money, it is on the 
heaviest-hauling lines that they are proposing to reduce 
service. And they are in primarily, as you indicated, minority 
and working class neighborhoods.
    Just two examples. The C-4 on University Boulevard in 
suburban Maryland, that is the heart of the Latino community. 
These same people that live in that area use the Q-2 on Viers 
Mill Road to access downtown Rockville. Those are the two 
heaviest-hauling lines in Maryland. Those are proposed for 
truncation and reduction of service. And on those types of 
lines, you can gain those types of savings just by reordering 
your service.
    Mr. Lynch. I have to confess, I have not been to any of the 
meetings or hearings that they have had on cessation of service 
and eliminating these bus lines. Has the analysis that you 
described in terms of spreading out the time maybe, instead of 
5 minutes, every 10 minutes or 7.5 minutes, whatever it is, has 
that analysis been part of the process up to now? Or are we 
just looking at, I know they are trying to get rid of a lot of 
overhead so they are using broad strokes here, but I just don't 
know if they have been listening closely enough.
    Mr. Simpson. No. The proposal was mainly monetary-driven. 
It was not driven by any plan. And that is part of what I 
argue. There are some funds that WMATA could use to bridge the 
gap until you had time to really examine these lines to find 
out how to structure it so you could get the savings. The use 
of Federal stimulus money is obviously one way that they could 
bridge the current gap. There are others. They have an 
operating reserve that they could use.
    The jurisdictions have new projects. My view is that you 
should protect your existing services and projects first before 
you build new things. I am not saying you don't build new 
things, but you could certainly slow down that and transfer 
moneys to protect your existing services.
    So there are at least three immediate ways that WMATA could 
bridge this gap while they begin to look at more efficient ways 
to provide bus service.
    Mr. Lynch. As you probably heard, they are calling me for 
votes again, I believe. I think we are close enough to the end, 
and I could throw my running shoes on so we could spend a 
little bit of time here, at least 10 more minutes, 10 to 15 
more minutes before I have to run out.
    But as with the other two panels, I am sure my questioning 
was not exhaustive or nearly adequate to cover all the issues 
that we have in front of us. So what I would like to do is, 
starting with Ms. Zinkl, are there issues that you would like 
to bring to the attention of the committee that have not been 
asked of you? Or is there some earlier point that you really 
want to amplify in terms of making sure we understand the 
feelings of the members of your organization?
    Ms. Zinkl. I would say first of all, if it was not apparent 
from my earlier statement, we are very supportive of 
improvements to bus service. WMATA has experienced considerable 
improvements in recent years to the rail service, and we 
believe that has benefited everyone in the region. And we are 
very much looking forward to seeing similar types of 
improvement to bus service.
    What is a bit disheartening is that we are seeing the 
current bus system adjusted through a budget process right now. 
Not necessarily because these routes aren't soliciting the 
level of ridership needed to warrant having a bus, but simply 
because a combination of budgeting issues means that there is a 
shortfall and jurisdictions weren't necessarily willing to put 
the money on the table to meet that shortfall.
    In addition, as I have said in many fora before and I am 
sure everyone is getting tired of hearing me say this, but I 
will reemphasize in terms of the process we went through this 
year with the 2010 budget. The public did not have a budget 
document as we have normally had in the past. And that has 
limited the ability for the public to participate in the WMATA 
budget process. Of course, as a citizens advisory group, our 
primary message has to be that public participation is really 
the key to making WMATA the best ride in the Nation, and 
keeping it the best ride in the Nation. So I would hope that 
perhaps we have learned some lessons through this process and 
we can continue to engage the public or increase engagement by 
the general public in WMATA decisionmaking in the future, 
especially early public input.
    Mr. Lynch. Thank you.
    And I did hear Mr. Simpson, your criticism of the 
balkanized system--no offense intended to the Balkans. Now that 
we are going to have some Federal presence on these boards, 
maybe it will stop some of the parochial stuff. With the 
dedicated resources here that have been projected, maybe that 
does address some of the issues. But I think there is still a 
need to make sure that there is some equity in this whole 
process. It is not just a budget exercise to the detriment of 
some of the poorer communities and some of the working class 
communities that really need the service.
    Mr. Ross.
    Mr. Ross. Yes. I make two points. One is I would like to 
agree with Mr. Simpson about the division. And you can see the 
effect very clearly. Maryland, the bus service used to be 
funded separately by Montgomery and Prince George's Counties, 
and there was only one bus route that connected the two 
counties. Since the State took over the funding in both 
counties 15 years ago, we have had three cross-county bus 
routes added and they have all been very successful.
    The second point is something that Mr. Catoe talked about, 
that is the coming need to do something about overcrowding of 
the downtown Metro system, the core capacity as it fills up, 
and eight-car trains aren't enough. That, again, is a regional 
problem because you need capacity in downtown to handle the 
people coming in from Maryland and Virginia.
    And it is also a big financial problem, and I think it is 
really important that we get on top of these system 
preservation funding issues quickly because there is going to 
be a large demand for funding coming down the pike, first for 
the purple line in Maryland and then even bigger for the core 
capacity.
    Mr. Lynch. Those are very astute observations.
    Mr. Simpson, I am going to allow you to close.
    Mr. Simpson. Thank you, Mr. Chairman.
    I did want to make one other point, and it is more of a 
long-term point, and that is hopefully that the Federal role 
will be able to see this better and your committee will be able 
to oversee it as well.
    The Federal Government, as well as jurisdictions, have put 
a lot of money into building up the infrastructure of WMATA. 
And what is happening now with rail expansion projects is they 
are essentially locally driven. They will probably, in fact 
they will make application for Federal funds, but the way that 
these projects are moving forward, they are not being looked at 
from a regional perspective, and they are not really looking at 
how do they integrate with the existing WMATA system.
    And not to belabor the point, but I think that the Federal 
role could be crucial, both in utilizing the existing funds 
that you have put into it. WMATA has two heavy overhaul shops 
and a third one that is currently not utilized. I am not saying 
you should automatically merge the systems, but at least the 
discussions ought to take place on how to capitalize on what we 
have already done to lower the costs on any of these expansion 
projects.
    So I would once again welcome a Federal role, both through 
your committee and through the WMATA board, in examining those 
types of regional expansion issues.
    Thank you.
    Mr. Lynch. Thank you.
    In closing, I just want to say we have an open dialog here. 
So we appreciate the valuable perspectives that you each have, 
because it reflects the workers and the people who use the 
system. And so it would help the committee greatly I think if 
before we see something bad happen, we get some information in 
and maybe we can prevent that. We can have greater scrutiny on 
some of these decisions that might be being made in a vacuum 
without due consideration to the communities that are affected, 
to the workers that are affected, and just the overall health 
of the system and how it works.
    So feel free. We have an open door here. We hear your 
concerns and would like to, to the degree possible, impact some 
of these changes so that those concerns are addressed. OK?
    Again, I thank you for your willingness to come here and to 
help the committee with its work, and I bid you good day.
    Thank you.
    [Whereupon, at 1:38 p.m. the subcommittee was adjourned.]

                                 
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