Mass Transit: Many Management Successes at WMATA, but Capital	 
Planning Could Be Enhanced (03-JUL-01, GAO-01-744).		 
								 
In recent years, the Washington Metropolitan Area Transit	 
Authority's (WMATA) public transit system has experienced	 
problems on the safety and reliability of its transit services,  
including equipment breakdowns, delays in scheduled service,	 
unprecedented crowding on trains, and some accidents and tunnel  
fires. At the same time, WMATA's ridership is at an all time high
and WMATA managers expect the number of passengers to double over
the next 25 years. This report reviews (1) the challenges WMATA  
faces in operating and maintaining its Metrorail system, (2)	 
efforts WMATA has made to establish and monitor safety and	 
security within its transit system, and (3) the extent to which  
WMATA follows established best practices in planning, selecting, 
and budgeting for its capital investments. GAO found that WMATA  
(1) is addressing significant challenges brought about by the	 
agency's aging equipment and infrastructure and its		 
ever-increasing ridership, (2) has established programs to	 
identify, evaluate, and minimize safety and security risks	 
throughout its rail and bus systems, and (3) has adopted several 
of the best capital practices used by leading public and private 
sector organizations, but it could benefit by establishing a more
formal, disciplined framework for its capital decision-making	 
process.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-744 					        
    ACCNO:   A01071						        
  TITLE:     Mass Transit: Many Management Successes at WMATA, but    
             Capital Planning Could Be Enhanced                               
     DATE:   07/03/2001 
  SUBJECT:   Decision making					 
	     Equipment maintenance				 
	     Facility maintenance				 
	     Future budget projections				 
	     Mass transit operations				 
	     Private sector practices				 
	     Strategic planning 				 
	     Transportation safety				 
	     District of Columbia				 
	     Maryland						 
	     Metrorail System (DC)				 
	     Virginia						 
	     WMATA Capital Improvement Program			 
	     WMATA Infrastructure Renewal Program		 
	     WMATA System Access and Capacity Program		 
	     WMATA System Expansion Program			 

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GAO-01-744
     
Report to the Committee on Government Reform, Subcommittee on the District
of Columbia, House of Representatives

United States General Accounting Office

GAO

July 2001 MASS TRANSIT Many Management Successes at WMATA, but Capital
Planning Could Be Enhanced

GAO- 01- 744

Page i GAO- 01- 744 Mass Transit Letter 1

Results in Brief 2 Background 3 WMATA Is Addressing Significant Metrorail
Operations and

Maintenance Challenges 6 WMATA Has Established Safety and Security Programs
9 WMATA Is Addressing its Major Capital Requirements but Could

Benefit From a More Formal Capital Planning Process 11 Conclusions 17
Recommendations for Executive Action 18 Agency Comments and Our Evaluation
19

Appendix I WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges 21

Appendix II WMATA Has Established Safety and Security Programs 31

Appendix III WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process 47

Appendix IV Scope and Methodology 62

Appendix V Comments From WMATA 64

Appendix VI GAO Contacts And Staff Acknowledgements 70

Tables

Table 1: Principles and Practices for Planning, Selecting, and Budgeting for
Capital Investments 13 Contents

Page ii GAO- 01- 744 Mass Transit

Table 2: Rail Injuries Reported by WMATA, Fiscal Years 1996 Through 2000 39
Table 3: Rail Collisions and Derailments Reported by WMATA,

Fiscal Years 1996 Through 2000 40 Table 4: Bus Passenger Injuries and
Collisions Reported by

WMATA, Fiscal Years 1996 Through 2000 41 Table 5: Total Crimes Reported by
WMATA, 1996 Through 2000 44 Table 6: Part I Crimes Reported by WMATA in its
Metrorail and

Metrobus Systems, 1996 Through 2000 45 Table 7: Location of Part I and Part
II Crimes Reported by WMATA,

1996 Through 2000 46

Figures

Figure 1: Impacts on Service from Smoke and Fire Incidents 38

Abbreviations

APTA American Public Transportation Association ATC Automatic Train Control
CIP Capital Improvement Program FHWA Federal Highway Administration FTA
Federal Transit Administration IRP Infrastructure Renewal Program NTSB
National Transportation Safety Board SAP System Access and Capacity Program
SEP System Expansion Program TEA- 21 Transportation Equity Act for the 21 st
Century TOC Tri- State Oversight Committee TIIF Transit Infrastructure
Investment Fund TPB Transportation Planning Board of the Metropolitan

Washington Council of Governments WMATA Washington Metropolitan Area Transit
Authority

Page 1 GAO- 01- 744 Mass Transit

July 2, 2001 The Honorable Constance A. Morella Chairman The Honorable
Eleanor Holmes Norton Ranking Minority Member Subcommittee on the District
of Columbia Committee on Government Reform House of Representatives

The Honorable Thomas M. Davis House of Representatives

In recent years, the Washington Metropolitan Area Transit Authority?s
(WMATA) public transit system has experienced problems related to the safety
and reliability of its transit services, including equipment breakdowns,
delays in scheduled service, unprecedented crowding on trains, and some
accidents and tunnel fires. At the same time, WMATA?s ridership is at an
all- time high and WMATA managers expect the number of passengers to double
over the next 25 years. As agreed with your offices, this report addresses
the following questions: (1) What challenges does WMATA face in operating
and maintaining its Metrorail system? (2) What efforts has WMATA made to
establish and monitor safety and security within its transit system? (3) To
what extent does WMATA follow established best practices in planning,
selecting, and budgeting for its capital investments?

In addressing the first two questions on operations and maintenance and
safety and security, we performed a broad review of a myriad of issues
facing WMATA by interviewing knowledgeable officials throughout WMATA and
other organizations that affect the agency and by reviewing pertinent
documentation. In addressing the third question on capital investment, we
compared WMATA?s practices with those of leading public and private
organizations that GAO studied in 1998, 1 assessing the extent to which
WMATA (1) integrates its organizational goals into the capital decision-
making process through structured strategic planning and needs determination
processes, (2) uses an investment approach to evaluate and

1 Executive Guide: Leading Practices in Capital Decision- Making (GAO/ AIMD-
99- 32, Dec. 1998).

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 744 Mass Transit

select capital assets, and (3) maintains budgetary control over its capital
investments. (See app. IV for more detailed information about our scope and
methodology). This letter summarizes our findings; more detailed responses
to each of these questions are presented in appendixes I through III.

In operating its Metrorail system, WMATA is addressing significant
challenges brought about by the agency?s aging equipment and infrastructure
and its ever- increasing ridership. WMATA is also examining ways to ease
crowding on the system?s rail cars and determining whether and how to expand
Metrorail?s maintenance and repair shop capacity as WMATA acquires nearly
200 new rail cars to help meet increasing ridership demands. After we
completed our audit work WMATA suffered a setback in late June 2001, when it
took steps to delay the delivery of the new rail cars. WMATA had hoped to
begin deploying some of these cars in the summer of 2001, but technical
problems have delayed WMATA?s acceptance of the cars from the contractor.
Nevertheless, WMATA has undertaken actions to address each of these
challenges, including establishing a comprehensive program for
infrastructure renewal, purchasing additional rail cars to ease overcrowding
on its trains, and assessing future needs for expanded repair shop capacity.
WMATA has also established programs to identify, evaluate, and minimize
safety and security risks throughout its rail and bus systems. WMATA?s
safety program has evolved since the mid- 1990s, when a series of accidents
and incidents led to several independent reviews citing the need for program
improvements. Since then, WMATA has updated its safety and security plans
and upgraded its internal safety organization. Despite a recent rise in the
number of rail and bus safety incidents, WMATA has experienced low rates of
injury and serious crimes over the years. WMATA monitors safety and crime
statistics and has a number of ongoing targeted efforts to reduce safety
incidents and deter specific types of crime on its transit systems.

WMATA has adopted several of the best capital practices used by leading
public and private sector organizations, but it could benefit by
establishing a more formal, disciplined framework for its capital decision-
making process. We note that although WMATA has articulated a goal of
doubling ridership by the year 2025, it has not fully developed a strategic
planning process that defines long- term, multiyear goals and objectives and
clearly links its capital projects to achieving them. We also note that
WMATA has incorporated some elements of an investment approach- that is, one
that builds upon an assessment of where an agency should invest its
resources Results in Brief

Page 3 GAO- 01- 744 Mass Transit

for the greatest long- term benefit- when evaluating and selecting its
capital improvement projects. However, it does not have a formal review and
approval framework for periodically reviewing, prioritizing, and deciding on
capital investments; and it has not developed a long- term capital plan that
defines its capital decisions. Finally, we point out that WMATA has used a
wide variety of innovative financing techniques for capital projects, but it
has not developed plans that describe how it would address large anticipated
shortfalls in its capital programs.

WMATA?s decisions are subject to final approval by representatives from
numerous state and local jurisdictions served by WMATA and other external
stakeholders in the Washington metropolitan region. Also, unlike most other
major urban transit systems, WMATA does not have a dedicated revenue source
to fund its capital programs, thus subjecting the agency to the
appropriations processes of the federal, state, and local governments that
fund its programs. Despite this challenging environment, we believe that
WMATA would benefit from an improved capital decisionmaking framework that
is more in line with best practices. Such a framework would provide
Congress, the state and local jurisdictions served by WMATA, and the public
with greater assurance that WMATA?s internal decisions are fully planned,
reviewed, and supported by sound analyses. Accordingly, our report contains
several recommendations designed to strengthen WMATA?s strategic and capital
planning processes.

We provided the Department of Transportation and WMATA with draft copies of
this report for their review and comment. The Department of Transportation
had no comments on the report. WMATA concurred with all of our major
recommendations aimed at improving the agency?s strategic planning and
capital investment practices and indicated that it has already taken steps
to begin implementing some of our recommendations. WMATA did not agree with
the subpart of our second recommendation that calls for developing
alternative capital funding strategies and project outcomes, depending on
the availability of funding from federal, state, and local sources. WMATA?s
comments and our response are located in appendix V.

WMATA was created in 1967 by an interstate compact that resulted from the
enactment of identical legislation by Virginia, Maryland, and the District
of Columbia, with the concurrence of the U. S. Congress. 2 Since

2 Washington Metropolitan Area Transit Authority Compact, Public Law No. 89-
774 (1966). Background

Page 4 GAO- 01- 744 Mass Transit

then, WMATA has been responsible for planning, financing, constructing, and
operating a comprehensive mass transit system for the Washington
metropolitan area. WMATA began building its Metrorail system in 1969,
acquired four regional bus systems in 1973, and began operating the first
phase of Metrorail operations in 1976. In January 2001, WMATA completed the
originally planned 103- mile Metrorail system that now includes 83 rail
stations on 5 rail lines. 3

WMATA operates in a complex environment, with many organizations influencing
its decision- making and funding and providing oversight. WMATA is governed
by a Board of Directors, which sets policies and oversees all of WMATA?s
activities, including budgeting, operations, development and expansion,
safety, procurement, and other activities. In addition, a number of local,
regional, and federal external organizations affect WMATA?s decision-
making, including: (1) state and local governments, which subject WMATA to a
range of laws and requirements; (2) the Tri- State Oversight Committee,
which oversees WMATA?s safety activities and conducts safety reviews; (3)
the National Capital Region Transportation Planning Board (TPB) of the
Metropolitan Washington Council of Governments, which develops the short-
and long- range plans that guide WMATA?s capital investments; (4) the
Federal Transit Administration (FTA), which provides oversight of WMATA in
many areas; and (5) the National Transportation Safety Board, which
investigates accidents on transit systems as well as other transportation
modes.

WMATA estimates that its combined rail and bus ridership will total 324.8
million passenger trips in fiscal year 2001, making it the second largest
heavy rail rapid transit system and the sixth largest bus system in the
United States, according to WMATA officials. WMATA?s proposed fiscal year
2002 budget totals nearly $1. 9 billion. Of the total amount, about 56
percent, or $1.06 billion, is for capital improvements; 42 percent, or
$796.6 million, is for operations and maintenance activities; and the
remaining 2 percent, or $37 million, is for debt service and other projects.

WMATA?s funding comes from a variety of federal, state, and local sources.
Unlike most other major urban transit systems, WMATA does not have dedicated
sources of revenues, such as local sales tax revenues, that are
automatically directed to the transit authority. WMATA receives grants from
the federal government and annual contributions by each of the local

3 WMATA operates five rail lines: red, blue, orange, green, and yellow.

Page 5 GAO- 01- 744 Mass Transit

jurisdictions that WMATA serves, including the District of Columbia and the
respective local jurisdictions in Maryland and Virginia. For example, in its
fiscal year 2002 proposed operating budget totaling $796.6 million (for
rail, bus, and paratransit 4 services), WMATA projects that approximately 55
percent of its revenues will come from passenger fares and other internally
generated revenues, and 45 percent will come from the local jurisdictions
served by WMATA. With regard to its capital program for infrastructure
renewal, WMATA projects that about 47 percent of its proposed 2002 budget
will come from federal government grants, 38 percent from federally
guaranteed financing, and 15 percent from the local jurisdictions and other
sources. WMATA has also received funding directly through the congressional
appropriations process over the past 30 years- totaling about $6.9 billion-
for construction of the originally planned subway system. WMATA did not have
to compete against other transit agencies for this funding, which ended in
fiscal year 1999.

Metrorail?s expenses and revenues represent the largest portion of WMATA?s
operating budget. For example, in fiscal year 2000- the latest year for
which final actual figures are available- Metrorail?s operating expenses
accounted for 56 percent, or $392.1 million, of WMATA?s overall operating
costs of $704.8 million. At the same time, Metrorail?s passenger fares and
other revenues accounted for about 76 percent, or $292. 5 million, of
WMATA?s overall internally generated revenues of $384.9 million. As a
measure of financial performance, Metrorail?s cost recovery ratio (revenues
divided by expenses) represents one of the highest of any rail transit
system in the nation, according to FTA. For example, during fiscal years
1996 through 2000, Metrorail recovered, on average, 73 cents for every
dollar that WMATA spent to operate and maintain the rail system.

With regard to capital investment issues, GAO issued a report in December
1998 5 that identified capital decision- making principles and practices
used by outstanding state and local governments and private sector
organizations. In order to evaluate the extent to which WMATA followed best
practices in planning, selecting, and budgeting for its capital investments,
we compared WMATA?s practices with those of leading

4 WMATA coordinates a regional paratransit system called ?MetroAccess? that
provides public transit services to individuals with disabilities who either
reside in or are visiting the WMATA service area.

5 GAO/ AIMD- 99- 32, Dec. 1998.

Page 6 GAO- 01- 744 Mass Transit

public and private organizations that we studied in 1998. Accordingly, in
this report, we assess the extent to which WMATA (1) integrates its
organizational goals into the capital decision- making process through
structured strategic planning and needs determination processes, (2) uses an
investment approach to evaluate and select capital assets, and (3) maintains
budgetary control over its capital investments.

One of the key operating challenges facing Metrorail has been the increasing
problems caused by the advancing age of its existing infrastructure.
Metrorail has experienced vehicle, escalator, elevator, and other system
equipment and infrastructure problems over the past several years. These
problems have resulted in, among other things, an increasing number of train
delays. For example, the number of train delays due to system problems
increased from 865 in fiscal year 1996 to 1,417 in fiscal year 2000, or by
about 64 percent. 6 WMATA attributes these problems primarily to its aging
rail equipment and infrastructure. Forty- five percent of Metrorail?s 103-
mile system is from 17 to 25 years old, and another 33 percent is from 9 to
16 years old. Similarly, 39 percent of Metrorail?s 762- car fleet has been
operating since 1976; another 48 percent went into service during the 1980s.
WMATA has estimated that the expected useful life of a rail car is 40 years
if a major renovation is performed at the midpoint of the car?s life cycle.

WMATA is addressing Metrorail?s equipment and infrastructure problems
through a number of projects in its capital- funded Infrastructure Renewal
Program (IRP), described in detail later in this letter. One key IRP
project- the Emergency Rail Rehabilitation Program- is focused on improving
Metrorail?s service reliability problems. Through this program, now in its
second year, WMATA has made significant progress in implementing many rail
system improvement projects. For example, by August 2000, WMATA had
completed almost all of the program?s accelerated car maintenance projects
on such critical components as brakes and doors on over 600 rail cars. In
addition, WMATA?s statistics show that for the period covering July 2000
through January 2001, the number of passenger offloads had decreased by 15
percent, compared with the same period in the previous year. In particular,
WMATA officials noted that offloads during the spring ?Cherry Blossom
Season? in the

6 According to WMATA officials, non- equipment- related train delays
accounted for about 14 percent of the delays in fiscal year 1996 and 18
percent in fiscal year 2000. Such delays increased by 108 percent, from 121
in fiscal year 1996 to 252 in fiscal year 2000. They attributed these delays
to an increase in ridership and rail fleet miles. WMATA Is Addressing

Significant Metrorail Operations and Maintenance Challenges

Page 7 GAO- 01- 744 Mass Transit

metropolitan Washington, D. C., area, decreased, on average, from 9 per
weekday in 1999 to 4.8 per weekday in 2001. Furthermore, by June 2000, work
was under way to maintain and rehabilitate 170 station escalators. IRP
includes other key projects, such as the rail car rehabilitation project,
which will enhance the reliability of 364 cars that were built in the 1980s.
These cars will be overhauled and rehabilitated under a 5- year contract
awarded in December 2000. WMATA expects to take delivery of the first
rehabilitated cars in August 2002.

Metrorail also faces another significant operating challenge brought about
by ever- increasing ridership. Metrorail is now operating at near capacity
during peak demand periods, causing some uncomfortably crowded trains.
WMATA?s recent studies on crowding found that demand has reached and, in
some cases, exceeded scheduled capacity- an average of 140 passengers per
car- during the peak morning and afternoon hours. For example, of the more
than 200 peak morning trips that WMATA observed over a recent 6- month
period, on average, 15 percent were considered

?uncomfortably crowded? (125 to 149 passengers per car), and 8 percent had
?crush loads? (150 or more passengers per car). Metrorail?s overcrowded
conditions are primarily the result of the substantial growth in ridership
it has experienced over the last several years, an insufficient number of
rail cars to operate more and longer trains on a regular basis, and system
and other constraints on expanding rush- hour trains from six cars to eight
cars- the maximum size that station platforms can accommodate.

WMATA has several actions under way to ease Metrorail?s overcrowded
conditions. Most notably, the agency ordered 192 new rail cars that it had
expected to begin deploying in the summer of 2001. We note, however, that
WMATA suffered a setback in June 2001 when it took action to delay delivery
of these cars until the rail car contractor corrects technical problems. As
of late June 2001, WMATA officials told us that they expect to begin phasing
the first new cars into service by the fall of 2001. Over the next year or
so, WMATA plans to deploy the majority of these cars where and when the
heaviest ridership is occurring, allowing for adjustments to train sizes.
For example, on some lines, the train size will change from four cars to six
cars. WMATA is also examining Metrorail?s core capacity needs to determine,
among other things, what improvements in capacity- cars and power, for
example- will be required to operate eight- car trains on a

Page 8 GAO- 01- 744 Mass Transit

regular basis during peak demand periods. 7 WMATA expects to complete this
study in the fall of 2001.

Finally, Metrorail?s maintenance and repair shop capacity could be
challenged as early as the fall of 2001 with the delivery of the first group
of new rail cars. Depending on the number of cars that can be repaired
outside of the shops, WMATA could need up to 126 repair shop spaces, or 12
more than the 114 spaces that would be available for scheduled maintenance
and unscheduled repairs at that time. Furthermore, Metrorail?s repair shop
capacity may be exhausted and could become even more of a problem after the
fall of 2002, when delivery of the remaining new cars is expected to be
completed. In addition, WMATA plans to acquire a total of at least 94
additional rail cars to accommodate new revenue service on the Largo
extension to the Blue Line in Maryland (which is currently under
construction); increased demand on the Orange Line in Virginia due to
service expansion; and service growth on other existing rail lines, thus
adding to the maintenance and repair shop capacity problem.

Although WMATA officials believe that the agency?s current shop capacity may
not be favorable for the expeditious turnaround of vehicles requiring
maintenance and repair, they pointed out that they are taking steps to ease
the capacity problem. For example, in the near term, WMATA has four

?blow down pits?- spaces in its largest shops used to clean the underside of
a car prior to its scheduled maintenance- that can also be used for
maintenance and repair. In addition, WMATA plans to open a new facility in
2002 that will expand its current shop capacity to accommodate 126 rail
cars. At the same time, however, WMATA recognizes that it currently does not
have the capacity to maintain and repair the additional cars for the Largo
extension. WMATA is taking two actions to address this problem. First, WMATA
is surveying its existing shops to determine whether their capacity can be
expanded. The agency expects to complete the survey in the fall of 2001,
possibly beginning expansion efforts as early as 2002. Second, WMATA plans
to build a new repair shop in the Dulles Corridor.

7 The overall goal of the core capacity study is to determine what
improvements or modifications will be required to Metrorail?s ?core?
capacity (stations, platforms, rail line capacity, etc.) to accommodate
WMATA?s goal of doubling ridership by the year 2025. Metrorail?s ?core?
consists of 29 stations located in downtown Washington, D. C., and some of
its immediate suburbs.

Page 9 GAO- 01- 744 Mass Transit

However, this facility would not be available until about 2010, when
construction of the Dulles Corridor extension is to be completed.

WMATA has established programs to address safety and security risks that
affect its rail and bus systems. WMATA?s safety program has evolved since
the mid- 1990s, when a series of rail accidents and incidents led to several
independent reviews that cited the need for program improvements. For
example, in 1997, FTA reported the results of a safety review it performed
of WMATA?s rail activities in response to several serious accidents and
incidents that occurred in 1996. The review concluded that WMATA had not
adequately maintained a planned approach to safety program tasks or
dedicated appropriate financial and personnel resources to accomplish these
tasks. In addition, FTA found that WMATA?s safety efforts had been weakened
by frequent changes in the organizational reporting level of its safety
department and a deemphasis of safety awareness in public and corporate
communications. The review also found that WMATA?s safety department had
been moved from place to place in the organization, making its work
difficult, its priorities uncertain, and its status marginal.

Under a newly formed state safety oversight program, the leadership of a new
General Manager, and a new bus transit safety program, WMATA has responded
to these criticisms by upgrading and enhancing its safety activities. For
example, the current General Manager made safety a priority by reviewing the
transit authority?s safety function and revising its system safety program
plan, which contains detailed protocols for identifying and assessing
hazards. WMATA?s safety plan also includes requirements for identifying,
evaluating, and minimizing safety risks throughout all elements of the WMATA
rail and bus systems. The plan also identifies management and technical
safety and fire protection activities to be performed during all phases of
bus and rail operations. In addition, WMATA?s current General Manager
delegated specific safety responsibilities to the transit agency?s Chief
Safety Officer who reports directly to the General Manager and is now
responsible for (1) managing system safety, occupational safety and health,
accident and incident investigation, and fire protection; (2) overseeing
construction safety and environmental protection; and (3) monitoring the
system safety program plan. By elevating its internal safety organization
and increasing its emphasis on safety activities, WMATA has given safety a
higher degree of attention and priority.

More recently, following a serious tunnel fire in 2000, WMATA created a
safety task force to review its operations control center?s handling of the
WMATA Has

Established Safety and Security Programs

Page 10 GAO- 01- 744 Mass Transit

incident. In addition, WMATA?s General Manager asked the American Public
Transportation Association (APTA) to conduct a comprehensive peer review of
the transit agency?s emergency procedures for handling tunnel fires. APTA?s
findings and recommendations, in several ways, confirmed the findings
identified in WMATA?s internal investigation. For instance, both
investigations supported the need for efforts to formalize and strengthen
training for operations control center personnel and ensure that emergency
procedures are addressed in the training and certification of operations
staff. The two reviews made 32 recommendations concerning, among other
things, communications policy and training. At the time of our review, WMATA
had taken actions to implement 30 of the 32 recommendations, including
providing training to its staff on communicating more effectively with fire
authorities and opening a fire training center for WMATA employees and local
firefighters. WMATA is in the process of addressing the other two
recommendations.

Despite a recent rise in the number of rail and bus safety incidents, which
WMATA attributes to the large increase in rail and bus ridership and the
recent hiring of many new bus drivers, APTA and FTA now believe that WMATA
has a ?very good? safety program as evidenced by the low injury rates on
both its rail and bus systems. For example, WMATA has experienced low injury
rates in its rail stations over the last 5 years- on average, only .37
injuries per 1 million passenger miles. Very few of these injuries were
serious or fatal. However, the absolute number of rail station injuries
increased from 366 in fiscal year 1999 to 474 in fiscal year 2000, and the
rail station injury rate increased from 0.34 to 0.43 for the same 2 years.
WMATA documents also show that about 50 percent of all rail injuries
occurred on escalators. According to WMATA?s Chief Safety Officer, the root
cause of the majority of these incidents is mainly human factors, not
equipment failure, employee performance, or unsafe conditions. In fiscal
years 1999 and 2000, for example, WMATA?s records show that no escalator
incidents were caused by electrical or mechanical failure or unsafe
conditions. WMATA is promoting escalator safety by conducting public
awareness campaigns and adding safety devices.

Similar to his initiatives affecting WMATA?s safety program and plan,
WMATA?s General Manager has delegated authority to WMATA?s Chief of Police
to plan, direct, coordinate, implement, and evaluate all police and security
activities for the transit agency. WMATA?s Chief of Police heads the Metro
Transit Police Department, which has an authorized strength of 320 sworn and
103 civilian personnel. The Department has jurisdiction and arrest powers on
WMATA property throughout the 1,500 square mile transit zone that includes
Maryland, Virginia, and the District of Columbia.

Page 11 GAO- 01- 744 Mass Transit

WMATA?s Metro Transit Police Department addresses security through its
system security program plan, participates in external security reviews, and
collects and evaluates crime statistics. To emphasize the importance of
system security, the Department established a set of comprehensive security
activities in its system security program plan. The plan is designed to
maximize the level of security experienced by passengers, employees, and
other individuals who come into contact with the transit system; to minimize
the cost associated with the intrusion of vandals and others into the
system; and to make the transit system more proactive in preventing and
mitigating security problems.

WMATA has also participated in FTA?s voluntary transit security audit
program, and FTA officials have concluded that WMATA?s overall security
program demonstrates a high level of attention to passenger and employee
security. WMATA statistics indicate that serious crimes such as homicide and
rape occur rarely on the transit system. During the period from 1996 through
2000, no rapes occurred, and there were two murders in the system. Most of
the crimes committed in the transit system are far less serious, such as
disorderly conduct and trespassing. More of the crimes are committed in the
system?s parking lots than on the rail and bus system, and more crimes are
committed on the rail system than on the buses. Some crimes, such as motor
vehicle theft and robbery, increased somewhat from 1999 to 2000. To address
those increases and the problem of crime in its parking lots, WMATA has
increased undercover patrols of parking lots and rail stations.

WMATA operates in a complex environment that makes capital decisionmaking
difficult. For example, unlike most other major urban transit systems, WMATA
does not have a dedicated revenue source to fund its capital programs, thus
subjecting the agency to the appropriations processes of the federal, state,
and local governments that fund its programs. In addition, WMATA?s General
Manager and staff must achieve consensus and obtain final approvals for the
agency?s capital projects from many organizations and government levels,
including its own Board of Directors; numerous local and state jurisdictions
within the District of Columbia, Maryland, and Virginia that the transit
agency serves; the TPB of the Metropolitan Washington Council of
Governments; the Federal Transit Administration; and the U. S. Congress,
which has provided WMATA with funding over the years to build its Metrorail
system. In spite of these challenges, WMATA has incorporated some of the
best capital investment practices followed by leading public and private
sector organizations. We believe that WMATA could benefit by building on
those WMATA Is Addressing

its Major Capital Requirements but Could Benefit From a More Formal Capital
Planning Process

Page 12 GAO- 01- 744 Mass Transit

practices by formalizing some aspects of its capital decision- making
process and expanding its strategic and capital planning efforts.

WMATA created a Capital Improvement Program in November 2000 to consolidate
its ongoing and planned capital improvement activities. This program has
three elements to address all aspects of the agency?s capital investments,
including (1) an Infrastructure Renewal Program (IRP) for system
rehabilitation and replacements, (2) a System Expansion Program (SEP), and
(3) a System Access and Capacity Program (SAP). First, IRP is designed to
rehabilitate or replace WMATA?s existing assets, including rail cars, buses,
maintenance facilities, tracks, and other structures and systems. IRP is
estimated to cost $9.8 billion over the next 25 years. Secondly, SEP is
designed to expand fixed guideway services, 8 selectively add stations and
entrances to the existing Metrorail system, and improve bus service levels
and expand service areas. WMATA has not yet estimated the total costs
associated with its planned SEP projects. Third, SAP- which is estimated to
cost about $2.5 billion over the next 25 years- was established to improve
access to and the capacity of the transit system by providing additional
rail cars and buses, parking facilities, and support activities to
accommodate ridership growth. It also includes the study to determine the
modifications needed to Metrorail?s core capacity to sustain current and
future ridership volumes. WMATA expects to complete this study in the fall
of 2001.

In our December 1998 report, 9 GAO identified capital decision- making
principles and practices used by outstanding state and local governments and
private sector organizations. In order to evaluate the extent to which WMATA
followed best practices in planning, selecting, and budgeting for its
capital investments, we compared WMATA?s practices with those of the leading
public and private organizations that we studied in 1998. Accordingly, in
this report, we assess the extent to which WMATA (1) integrates its
organizational goals into the capital decision- making process through
structured strategic planning and needs determination processes, (2) uses an
investment approach to evaluate and select capital assets, and (3) maintains
budgetary control over its capital investments. Table 1 describes the best
practices that were applied within each of these

8 Fixed guideway services use and occupy a separate right- of- way for the
exclusive use of public transportation services. They include fixed rail,
exclusive lanes for buses and other high- occupancy vehicles, and other
services.

9 GAO/ AIMD- 99- 32, Dec. 1998.

Page 13 GAO- 01- 744 Mass Transit

three areas, which the 1998 GAO report categorized as ?principles? used by
leading organizations to make capital investment decisions.

Table 1: Principles and Practices for Planning, Selecting, and Budgeting for
Capital Investments

Principles Practices

Integrate organizational goals into the capital decision- making process.
Conduct comprehensive assessment of

needs to meet results- oriented goals and objectives.

Identify current capabilities, including the use of an inventory of assets
and their condition, and determine if there is a gap between current and
needed capabilities.

Decide how best to meet the gap by identifying and evaluating alternative
approaches (including noncapital approaches). Evaluate and select capital
assets using an investment approach. Establish review and approval framework

supported by analyses. Rank and select projects on the basis of established
criteria.

Develop a long- term capital plan that defines capital asset decisions.
Maintain budgetary control over capital investments. Budget for projects in
useful segments.

Consider innovative approaches to full upfront funding.

Source: Executive Guide: Leading Practices in Capital Decision- Making (GAO/
AIMD- 99- 32, December 1998).

In our December 1998 report, we found that leading organizations begin their
capital decision- making process by defining their overall mission in
comprehensive terms and multiyear goals and objectives. This enables
managers to identify the resources needed to satisfy the organization?s
program requirements on the basis of the program?s goals and objectives. To
do this, an organization must have identified its mission and goals through
a strategic planning process. To assist with identifying any gap between an
organization?s resource needs and its existing capital capabilities, leading
organizations maintain systems that capture and report information on
existing assets and facilities. This information is frequently updated and
accessible to decisionmakers when needed. Leading organizations also
consider a full range of possible ways to Strategic Planning and

Needs Determination Processes

Page 14 GAO- 01- 744 Mass Transit

achieve the organization?s goals and objectives, including examining both
capital and noncapital alternatives.

WMATA has articulated an overall organizational mission statement and a goal
of doubling ridership by the year 2025 and is beginning to develop a
business planning process. It has not, however, fully developed a strategic
planning process that defines multiyear goals and objectives and clearly
links its project outcomes- including capital projects- to achieving those
goals and objectives. In particular, WMATA has not developed a formal
strategic plan that defines multiyear goals and objectives for the agency,
nor does it have annual performance plans that explain the specific ways in
which WMATA will attempt to achieve those goals and objectives.

WMATA has completed a comprehensive assessment of its infrastructure renewal
requirements, and it is in the process of assessing its system capacity
requirements. With regard to its System Expansion Program, however, it has
not conducted a comprehensive needs assessment, although it does consider
regional transportation needs, costs, and benefits before deciding to
support proposed expansion projects. For example, WMATA has established a
?Project Development Program? to develop conceptual designs, ?order of
magnitude? cost estimates, and other information on some of the proposed
projects contained in the expansion program.

WMATA plays a limited role in analyzing and evaluating alternatives for
meeting its system expansion needs. This limited role stems from its
relationships with (1) TPB, which plays a key role in developing,
coordinating, and approving plans for all regional transportation needs and
alternatives including transit, highways, and other transportation modes;
and (2) the state and local jurisdictions served by WMATA, which have the
lead role in identifying and evaluating transit expansion alternatives
within a specific ?corridor? or subarea of the Washington metropolitan area.

After leading organizations identify their strategic goals and objectives
and assess alternative ways of meeting their capital needs, they go through
a process of evaluating and selecting capital assets using an investment
approach. An investment approach builds on an organization?s assessment of
where it should invest its resources for the greatest benefit over the long
term. Establishing a decision- making framework that encourages the
appropriate levels of management review and approval is a critical factor in
making sound capital investment decisions. These decisions are Investment
Approach to

Evaluating and Selecting Capital Assets

Page 15 GAO- 01- 744 Mass Transit

supported by the proper financial, technical, and risk analyses. Leading
organizations not only establish a framework for reviewing and approving
capital decisions, they also have defined processes for ranking and
selecting projects. Furthermore, they also develop long- term capital plans
that are based on the long- range vision for the organization embodied in
its strategic plan.

WMATA has incorporated several elements of an investment approach to
evaluating and selecting capital improvement projects, but the agency could
benefit from a more formal, disciplined decision- making framework. With
regard to its program for infrastructure renewal, WMATA officials told us
that all appropriate managers were involved in deciding which projects
should be selected after a comprehensive needs assessment was performed in
March 1999. WMATA also performed a one- time ranking of those projects on
the basis of preestablished criteria, including asset function, condition,
and other factors. However, WMATA has not established a formal executive-
level review group within the agency for making decisions on capital
projects, nor does it have formal procedures or a standard decision package
for considering the relative merits of its capital projects each year. Also,
WMATA officials told us that they play a relatively small role in proposing,
evaluating, and selecting system expansion projects. They said that the
decisions on such projects are generally driven by the state and local
jurisdictions sponsoring the projects. WMATA has contacted state and local
transportation executives from Maryland, Virginia, and the District of
Columbia to explore ways to increase WMATA?s involvement in conducting
alternatives analyses for system expansion projects, thereby increasing its
influence on those decisions.

Furthermore, although WMATA has performed a comprehensive assessment of
infrastructure renewal requirements and has taken a first step in outlining
system expansion needs, it has not developed a comprehensive long- term
capital plan that defines and justifies its internal capital asset decisions
for all of the capital projects falling within WMATA?s Capital Improvement
Program. Such a plan would allow WMATA to define its strategy and
justification for selecting each capital project and would provide baseline
information on each project?s life- cycle costs and schedules, performance
requirements, benefits, and risks. A more formal long- term capital planning
process allows an organization to establish priorities and assist with
developing current and future budgets. A well- thought- out review and
approval framework can also mean that capital investment decisions are made
more efficiently and are supported by better information. Furthermore, were
WMATA to develop a more

Page 16 GAO- 01- 744 Mass Transit

disciplined decision- making framework- with documented support for the
alternatives that WMATA favors- the agency would potentially have more
influence with the federal government and state and local jurisdictions that
ultimately decide whether to provide funding for projects.

Finally, officials at leading organizations that GAO studied agreed that
good budgeting requires that the full life- cycle costs of a project be
considered when an organization is making decisions to provide resources.
This practice permits decisionmakers to compare the long- term costs of
spending alternatives and to better understand the budgetary and
programmatic impact of decisions. Most of those organizations make a
commitment to the full cost of a project up front and have developed
alternative methods for maintaining budgetary control while allowing
flexibility in funding. One strategy they use is to budget for and provide
advance funding sufficient to complete a useful segment of a project. A
useful segment is defined as a component that (1) provides information that
allows an agency to fully plan a capital project before proceeding to full
acquisition or (2) results in a useful asset for which the benefits exceed
the costs even if no further funding is appropriated. Another strategy used
by some leading organizations is to use innovative financing techniques that
provide new sources of funding or new methods of financial return.

WMATA uses many of the funding strategies followed by leading organizations.
For example, to comply with requirements imposed by FTA and its predecessor
agencies, WMATA completed its Metrorail system by negotiating for funding in
useful or ?operable? segments. Furthermore, the agency has used a wide
variety of innovative capital financing techniques to fund its Capital
Improvement Program (CIP) and operations activities and to leverage its
capital assets to generate additional income. However, WMATA faces a number
of uncertainties in obtaining the funding it believes it needs to meet its
capital requirements, and the agency has not developed plans that describe
how it would address large anticipated funding shortfalls in its programs
for infrastructure renewal and system capacity. For example, WMATA has not
developed alternate scenarios of how such funding shortfalls would be
absorbed by the various asset categories under the Infrastructure Renewal
Program or by the projects identified under the System Access and Capacity
Program. The funding shortfalls are anticipated to total $3. 7 billion over
the next 25 years and represent an average annual shortfall of about $150
million for both programs. Furthermore, the budget shortfall could
significantly increase Budgetary Control Over

Capital Investments

Page 17 GAO- 01- 744 Mass Transit

when WMATA completes its ongoing assessment of Metrorail?s core capacity in
the fall of 2001.

Our review showed that WMATA has identified the operational and safety
challenges it faces and has established sound policies, programs, and
practices to meet those challenges. We note that in the operations and
maintenance area, WMATA is in some ways a ?victim? of its own success in
that its challenges have largely resulted from ever- increasing passenger
ridership demands, along with the inevitable aging of its equipment and
infrastructure. In the safety and security area, WMATA has established
programs to identify, evaluate, and minimize risks throughout its bus and
rail systems; and it has upgraded its safety organization in recent years to
improve its internal management and oversight of safety problems. WMATA has
low incident rates of injury and serious crime on both its rail and bus
systems. As a result, WMATA is viewed by outside organizations, such as FTA
and APTA, as having very good safety and security programs.

To address its long- term capital needs, WMATA has established a Capital
Improvement Program that incorporates some of the best capital investment
practices followed by leading public and private sector organizations.
However, we believe that WMATA could benefit by building on those practices
by formalizing some aspects of its capital decisionmaking process and by
expanding its strategic and capital planning efforts. For example, by
developing a multiyear strategic plan and annual performance plans, WMATA
could more clearly define its vision, direction, strategies, and priorities-
not only for capital planning and decisionmaking, but for all aspects of its
activities. Also, WMATA could benefit from establishing a consolidated
capital plan that would allow the agency and its external stakeholders to
weigh and balance the need to maintain its existing capital assets against
the demand for new assets. A more active role for WMATA in capital planning
would provide better information for federal, state, and local
decisionmakers that fund WMATA?s projects and would increase WMATA?s
influence with them.

Similarly, a more formal internal review and approval process for making
capital decisions within WMATA- including formal procedures and standard
decision packages for considering the relative merits of various capital
projects each year- would help WMATA establish priorities, develop budgets,
and facilitate periodic reviews of all ongoing and proposed projects. It
would also provide greater assurance of continuity within the organization
if key managers move to other positions or leave the agency. In addition,
WMATA could provide valuable analysis and insights through a more active
role in identifying and evaluating Conclusions

Page 18 GAO- 01- 744 Mass Transit

alternatives for system expansion projects. Leading organizations consider
such alternatives analysis to be a critical factor in making sound capital
investment decisions. Because the state and local jurisdictions take the
lead in identifying and deciding on expansion projects, WMATA often does not
become involved in crucial early decisions about the most appropriate and
efficient ways to expand the system. WMATA is exploring ways to increase its
involvement in conducting alternatives analyses for system expansion
projects, thereby increasing its influence on those decisions. We support
WMATA?s efforts in this area.

Finally, WMATA has not fully planned how it will address large anticipated
funding shortfalls in its programs for infrastructure renewal and system
access and capacity. WMATA officials expressed concerns that developing such
plans could undermine their efforts to obtain what they believe is the
required funding amount for the two capital programs. In our view, however,
prudent management requires that the agency identify the steps needed to
address any anticipated shortfalls and develop alternate plans for carrying
out its capital activities, depending on the level of funding obtained from
federal, state, and local sources.

To improve the agency?s strategic planning and capital investment practices,
we recommend that WMATA?s General Manager and Board of Directors take the
following actions:

 Develop a long- term strategic plan and annual performance plans that
clearly define the agency?s multiyear goals and objectives and its specific
plans for achieving those goals and objectives.

 Develop a long- term capital plan that covers all three programs of its
newly formed consolidated Capital Improvement Program (Infrastructure
Renewal Program, System Expansion Program, and System Access and Capacity
Program). This plan should:

 document WMATA?s capital decision- making strategy and link it to the
agency?s overall goals and objectives;

 define each project?s justification and its baseline lifecycle costs,
schedule, performance requirements, benefits, and risks;

 include alternate funding strategies and project outcomes, depending on
the availability of funding from federal, state, and local sources; and

 be updated annually or biennially.

 Formalize WMATA?s capital decision- making process for the consolidated
Capital Improvement Program by establishing and documenting an
Recommendations for

Executive Action

Page 19 GAO- 01- 744 Mass Transit

internal review and approval framework and standard procedures and decision
packages for analyzing and deciding on projects.

 Develop a process and procedures- in consultation with the TPB and the
state and local jurisdictions served by WMATA- for taking a more active role
in (1) identifying, analyzing, and evaluating alternatives for expanding
WMATA?s transit system; and (2) proposing the most efficient and
costeffective projects for expanding the system.

We provided the Department of Transportation and WMATA with draft copies of
this report for their review and comment. The Department of Transportation
had no comments on the report. WMATA concurred with all of our major
recommendations aimed at improving the agency?s strategic planning and
capital investment practices and indicated that it has already taken steps
to begin implementing some of our recommendations. WMATA did not agree with
the subpart of our second recommendation that calls for developing
alternative capital funding strategies and project outcomes, depending on
the availability of funding from federal, state, and local sources. WMATA
cited its concern that developing contingency plans for addressing
anticipated budgetary shortfalls would encourage its funding agencies to
reduce the level of resources provided to WMATA. We continue to believe,
however, that prudent management requires WMATA to plan for such shortfalls,
which could be significant after WMATA completes its assessment of
Metrorail?s core capacity in the fall of 2001. WMATA?s comments and our
response are located in appendix V.

Our work was primarily performed at WMATA headquarters (see app. IV for a
detailed description of our scope and methodology.) We conducted our work
from September 2000 through June 2001 in accordance with generally accepted
government auditing standards.

As arranged with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days after the
date of this report. At that time, we will send copies of this report to the
General Manager, WMATA; the Honorable Norman Y. Mineta, Secretary of
Transportation; Hiram J. Walker, Acting Deputy Administrator, Federal
Transit Administration; and the Honorable Mitchell E. Daniels, Jr.,
Director, Office of Management and Budget. We will make copies available to
others on request. Agency Comments

and Our Evaluation

Page 20 GAO- 01- 744 Mass Transit

If you have any questions about this report, please call me at (202) 5122834
or Ronald E. Stouffer on (202) 512- 4416. GAO contacts and staff
acknowledgements are listed in appendix VI.

JayEtta Hecker Director Physical Infrastructure Issues

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 21 GAO- 01- 744 Mass Transit

The Washington Metropolitan Area Transit Authority (WMATA) operates and
maintains the second largest rail transit system in the United States, as
measured by the number of passengers carried per year. In fiscal year 2000
(July 1, 1999, through June 30, 2000), Metrorail carried about 163.3 million
passengers. For the 9- month period ending in the third quarter of fiscal
year 2001, ridership increased by almost 6 percent compared to the same
period in fiscal year 2000.

Metrorail?s operations and maintenance activities are extensive, including
all activities required to operate and maintain the equipment and entire
infrastructure that supports the movement of passengers. The Metrorail
system, consisting of 103 miles of track, 83 stations, and 5 separate rail
lines, operates 7 days a week, providing 18.5 hours of service each weekday
and 18 hours daily on weekends. System maintenance activities include such
things as cleaning, scheduled (preventive) maintenance, unscheduled repairs,
and some upgrades. These maintenance activities are performed on a broad
range of equipment and facilities that includes 762 rail cars; 103 miles of
subway, surface, and elevated track; 576 escalators; 180 station elevators;
1,937 fare collection machines; 6 maintenance facilities; and other elements
of the system?s infrastructure.

Metrorail?s revenues and expenses represent the largest portion of WMATA?s
overall operating budget. For example, in fiscal year 2000, Metrorail?s
operating expenses accounted for $392.1 million, or 56 percent of WMATA?s
overall operating expenses of $704.8 million. Furthermore, Metrorail brings
in the largest portion of WMATA?s internally generated operating revenues.
In fiscal year 2000, for example, Metrorail?s passenger fares and other
revenues accounted for about $292.5 million, or 76 percent of WMATA?s
overall internally generated revenues of $384.9 million. As a measure of
financial performance, Metrorail?s cost recovery ratio represents one of the
highest of any rail transit system in the nation, according to the Federal
Transit Administration (FTA). For example, during fiscal years 1996 through
2000, Metrorail recovered, on average, 73 cents for every dollar that WMATA
spent to operate and maintain the rail system. Appendix I: WMATA Is
Addressing Significant

Metrorail Operations and Maintenance Challenges

Metrorail?s Operations and Maintenance Activities Have a Broad Scope and
Represent a Major Portion of WMATA?s Overall Operating Budget

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 22 GAO- 01- 744 Mass Transit

Metrorail has experienced vehicle, escalator, elevator, and other system
equipment and infrastructure problems over the past several years. Data
provided by WMATA show that vehicle, track, system, and other problems have
resulted in, among other things, an increasing number of train delays and
passenger ?offloads.? 1 For example, the number of train delays due to such
problems increased from 865 in fiscal year 1996 to 1,417 in fiscal year
2000, or by about 64 percent. 2 At the same time, the number of passenger
offloads increased by about 55 percent- from 783 in fiscal year 1996 to
1,212 in fiscal year 2000.

WMATA attributes these problems primarily to its aging rail equipment and
infrastructure. Forty- five percent of Metrorail?s 103- mile system is from
17 to 25 years old. Another 33 percent is from 9 to 16 years old. Only 22
percent is relatively new- constructed within the past 8 years. Similarly,
39 percent of Metrorail?s 762 rail car fleet has been operating since 1976.
Another 48 percent went into service during the 1980s, and only 13 percent
is relatively new- placed into service in the mid- 1990s. Further, an
assessment of the condition of Metrorail?s equipment and infrastructure
performed in 1998 found that certain assets, such as stations and tunnels,
were in a ?degraded? condition, suffering from, among other things, deferred
maintenance and postponement of rehabilitation due to funding constraints.
The general effect of deferring maintenance is a lowering of overall system
quality; an increase in the cost of regular and corrective maintenance; and
an increase in the cost of rehabilitation work, when it is finally
performed.

WMATA is addressing Metrorail?s equipment and infrastructure problems
through a number of projects in its Infrastructure Renewal Program (IRP).
One key project being carried out under IRP is the Emergency Rail
Rehabilitation Program, which is focused on reducing the serious service
reliability problems- including problems with rail car equipment, train

?wayside relays,? 3 and customer communications- highlighted in the 1 WMATA
defines passenger offloads as the unscheduled removal of all passengers from
a train at a rail station when the train has either malfunctioned or must be
used for recovery purposes, e. g., to assist in removing an inoperative
train from service.

2 According to WMATA officials, non- equipment- related train delays
accounted for about 14 percent of the delays in fiscal year 1996 and 18
percent in fiscal year 2000. Such delays increased by 108 percent, from 121
in fiscal year 1996 to 252 in fiscal year 2000. They attributed these delays
to an increase in ridership and rail fleet miles.

3 Wayside relays control the spacing of trains, determine a train?s route,
and ensure safe speed limits. WMATA Is Addressing

Problems With Metrorail?s Equipment and Infrastructure Through IRP

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 23 GAO- 01- 744 Mass Transit

spring of 1999. Now in its second year, this program has a number of goals,
including reducing train delays and passenger offloads by 50 percent. To
achieve these goals, the program provides for, among other things,
accelerated maintenance projects to correct performance problems on the
fleet?s oldest rail cars, with all work scheduled to be completed by
November 2003. The program also provides for additional maintenance efforts
on station escalators and improvements in critical facilities and
communication equipment, including additional fare gates and upgraded
passenger announcement systems.

WMATA has made significant progress in carrying out many of the emergency
program?s rail system improvement projects. For example, by August 2000,
WMATA had completed almost 8 of 12 car maintenance projects on such critical
components as brakes and doors on 662 rail cars. Furthermore, WMATA?s
statistics show that for the period covering July 2000 through January 2001,
the number of passenger offloads had decreased by 15 percent, compared with
the same period in the previous year. In particular, WMATA officials noted
that offloads during the spring

?Cherry Blossom Season? in the metropolitan Washington, D. C., area
decreased, on average, from 9 per weekday in 1999 to 4.8 per weekday in
2001. Other examples of WMATA?s progress under the emergency program include
the award of a contract for maintenance and rehabilitation of 170 station
escalators; installation of rail system scanners at all station kiosks for
status monitoring by station managers, allowing them to respond to passenger
inquiries with real- time information on incidents and delays; installation
of electronic display signs on station platforms, showing train arrivals and
service delays; and installation of 44 additional fare gates.

In addition to the emergency rehabilitation program, IRP includes other key
projects that address Metrorail?s aging equipment and infrastructure
problems. One of these- the rail car rehabilitation project- will enhance
the reliability of 364 cars that were built in the 1980s. These cars will be
overhauled and rehabilitated under a contract awarded in December 2000. The
work, according to WMATA, will greatly reduce the cars? energy consumption
and maintenance costs and improve their overall reliability. WMATA expects
to take delivery of the first rehabilitated cars in August 2002. Work on all
of the cars is expected to be completed by summer 2005.

Another key IRP project addresses the water infiltration problem that has
occurred within the rail system?s tunnels and stations. This problem has
resulted in the degradation of critical wayside systems and equipment that
are housed in the tunnels and stations, including automatic train control,
communications, power equipment, cabling, and lighting. WMATA?s leak

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 24 GAO- 01- 744 Mass Transit

remediation project will control the infiltration of water while a related
project will provide drainage in locations with standing water or extreme
water infiltration. As of March 2001, approximately 3,700 leaks had been
repaired out of about 4,600 scheduled for repair by the end of June 2001. In
addition, WMATA has an ongoing multiyear contract to rehabilitate 14
drainage- pumping stations. By March 2001, the work on one pumping station
had been completed and work on two others was beginning.

Some of the other IRP projects directed at improving the rail system include
the following:

 Rail car enhancements: This project is designed to improve the
accessibility, safety, maintenance, appearance, and reliability of the rail
car fleet by retrofitting or replacing certain rail car equipment such as
intercar barriers.

 Station enhancements: This project includes the rehabilitation,
replacement, and installation of, among other things, concrete structures,
sidewalks, stairwells, stairways, and exterior lighting to maintain the
integrity of the stations? structures, prevent additional deterioration, and
provide a safe environment for passengers.

 Automatic train control (ATC) and power systems rehabilitation: This
project addresses the need to rehabilitate the ATC equipment and replace
worn- out, obsolete electrical systems with new components that use new
technology and save energy.

 Track and structures rehabilitation: This project is being carried out to
control the corrosion and deterioration of track, tunnels, and elevated
structures due to the effects of weather and water infiltration, among other
things.

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 25 GAO- 01- 744 Mass Transit

WMATA also faces operating challenges brought about by ever- increasing
ridership. Metrorail is now operating at near capacity during peak demand
periods, causing some uncomfortably crowded trains. WMATA has several
actions under way to ease Metrorail?s overcrowded conditions, including
adding new rail cars to the system, which will allow Metrorail to increase
the size of some trains.

Metrorail?s current passenger load standards allow for an average of 140
passengers per car on all trains and 155 passengers per car on any single
train during peak demand periods. 4 The current Metrorail fleet is composed
of two types of cars. One type- the Rohr car- has a full- load capacity of
175, including 80 seated and 95 standing passengers. The other model- the
Breda car- can also accommodate 175 passengers, but it has 12 fewer seats.
For planning purposes, WMATA considers scheduled capacity- number of trains,
cars per train, and intervals between trains- to be meeting ridership
demands if the number of passengers in a car during the peak half- hour is,
on average, 140 or fewer. 5 An average greater than 140 indicates that
demand is exceeding capacity. Demand is also considered exceeding capacity
when an individual trip exceeds an average of 155 passengers per car
consistently throughout a month.

For the purpose of assessing rail service levels during peak demand periods,
WMATA defines passenger loads and comfort levels as follows: (1) up to 99
passengers per car as ?seated with some standing,? (2) 100 to 124 passengers
as ?crowded but comfortable,? (3) 125 to 149 passengers as

?crowded and uncomfortable,? and (4) 150 or more passengers as ?crush

load.? In measuring Metrorail?s performance over the 6- month period ending
in January 2001, WMATA observed 233 trips during the peak morning hour (7:
45 to 8: 45); an average of 15 percent of the train cars were uncomfortably
crowded, and about 8 percent had crush loads. At the same time, WMATA found
that of the 225 trips observed during the peak afternoon hour (5: 00 to 6:
00), an average of 15 percent of the train cars were uncomfortably crowded,
and about 5 percent had crush loads.

4 WMATA defines ?passenger load standard? as the desired number of
passengers per car under maximum load conditions. The load standard affects
both passenger comfort and operating efficiency, each of which is important
in terms of quality of service. The load standard serves to determine (1) a
passenger?s ability to get on the first train going in the passenger?s
preferred direction of travel from any station, (2) the general probability
of a passenger getting a seat, and (3) the general proximity of standees to
other standees.

5 WMATA defines ?peak hour? as the 4 consecutive quarter hours when
ridership is heaviest. Peak hours may vary from month to month at any
station as shifts in demand occur. Metrorail?s Operating

Capacity Is Meeting Established Passenger Load Standards, But Standards
Allow for Uncomfortably Crowded Trains

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 26 GAO- 01- 744 Mass Transit

Metrorail?s overcrowded conditions are primarily the result of three
separate but related factors. First, WMATA?s records show that Metrorail
ridership has grown by about 10 percent over the past 4 years- from about
148 million passengers in fiscal year 1997 to 163.3 million in fiscal year
2000. According to WMATA, during fiscal year 2000, on average, 558,000
weekday trips were taken on Metrorail, with several months experiencing
daily average trips in the 580,000 to 590,000 range. The number of Metrorail
trips that occur in the peak periods has grown at an even greater rate.
Morning peak period ridership has increased 16 percent from fiscal year 1997
to fiscal year 2000. During the morning and afternoon peak periods, almost
200,000 people, on average, used the Metrorail system in 2000.

The second factor contributing to overcrowding is Metrorail?s lack of a
sufficient number of rail cars to operate more and longer trains on a
regular basis, without creating service and reliability problems. 6 For
example, in order to meet higher- than- expected ridership demands on the
Green Line?s new Branch Avenue extension, WMATA had to reduce by 6 the
number of cars required for its strategic ?gap trains? 7 and by 26 the
number of cars in its operating spares inventory. 8 Like gap trains, the
operating spares also contribute to service reliability. By reducing the
number of operating spares and gap trains, WMATA was able to increase the
number and size of the trains operating on the Green Line without reducing
service on its other four lines. However, in reducing the number of
operating spares and gap trains, WMATA recognizes that it also increased the
potential for service disruptions due to mechanical problems.

Finally, if Metrorail had a sufficient number of vehicles to expand its
rushhour trains from six cars to eight cars, the trains would have more room
to accommodate passengers, with the result that the most crowded trains
would become more comfortable. Although the Metrorail system was

6 The current fleet size allows Metrorail to operate only 4- and 6- car
trains during peak demand periods. 7 Gap trains, also known as ready reserve
trains, help to ensure reliability- that is, help to maintain the regular
schedule when a train is taken out of service because of a mechanical
malfunction or other operating problem. Metrorail?s current operating
schedule calls for a gap train at the end of each line, staffed by an
operator and ready to be placed into service on short notice.

8 Operating spares help to ensure that a sufficient number of cars will be
available for routine maintenance.

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 27 GAO- 01- 744 Mass Transit

originally designed to accommodate eight- car trains, until recently, WMATA
had been uncertain about whether longer trains could stop safely inside
stations and whether the system had enough electricity to power longer
trains on a regular basis. For example, all Metrorail cars are 75 feet long,
and all station platforms measure 600 feet in length. This means that an
eight- car train must stop precisely at the end of the platform for
passengers to exit and enter the cars safely.

To address concerns about whether the rail system can operate and
accommodate longer trains on a regular basis, Metrorail began testing eight-
car trains on each of its lines in December 2000. The results of these
tests, presented to the Operations Committee of the Board of Directors in
March 2001, indicate that eight- car trains could be operated in limited
service only if additional vehicles- besides those currently on order- are
purchased and improvements are made to the power system and automatic train
control equipment. Further use of eight- car trains would require an even
greater investment in these and other elements of the system, such as
maintenance and storage capacity. WMATA is examining Metrorail?s core
capacity needs to determine, among other things, what improvements in
capacity- cars and power, for example- will be required to operate eight-
car trains on a regular basis during peak demand periods. 9 WMATA expects to
complete this study in the fall of 2001.

WMATA has other actions under way to ease Metrorail?s overcrowded
conditions. Most notably, the agency has ordered 192 new rail cars that it
had planned to phase into service over the 12- month period beginning in the
summer of 2001. However, WMATA suffered a setback in June 2001 when it took
action to delay delivery of these cars until the rail car manufacturer
corrects technical problems. As of late June 2001, WMATA officials told us
that they now expect to begin phasing the first new cars into service by the
fall of 2001.

The majority of the new cars will be placed into service where the heaviest
ridership is occurring and will allow WMATA to adjust train sizes. 10 For

9 The overall purpose of the core capacity study is to determine what
improvements or modifications will be needed to Metrorail?s ?core?- defined
as 29 stations in downtown Washington, D. C., and some of its immediate
suburbs- in order to accommodate projected ridership increases and system
expansion requirements by the year 2025.

10 WMATA plans to use the remaining rail cars to support the Breda car
rehabilitation project, service the Branch Avenue extension, and provide
additional operating spares.

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 28 GAO- 01- 744 Mass Transit

example, on some lines, the train size will change from four cars to six
cars. WMATA does not anticipate that the additional cars will have a large
effect on passenger comfort levels, especially if ridership continues to
grow; however, it believes the new cars will reduce the percentage of trips
with crush loads. According to WMATA, the new cars were intended to address
a 1- percent per year growth in ridership, but Metrorail has been averaging
more than that. WMATA has also established goals for improving Metrorail?s
passenger load standards and therefore passenger comfort levels. Although no
time limit has been established for achieving these goals, they include
reducing the primary load standard from 140 to 105 passengers per car on all
trains- a 25- percent reduction- and reducing the secondary load standard
from 155 to 115 passengers per car on any single train- a 26- percent
reduction- during peak demand periods.

WMATA?s maintenance and repair shop capacity could be stretched to near
maximum levels as early as the fall of 2001 with the expected delivery of
the first group of the 192 new rail cars. Furthermore, Metrorail?s repair
shop capacity may be exhausted when delivery of the remaining rail cars is
completed by the fall of 2002. WMATA is determining whether and how its
current shop capacity could be expanded.

WMATA?s ability to regularly maintain and repair its rail fleet directly
affects the reliability and quality of Metrorail service. Currently, WMATA
has 6 facilities with a total capacity to maintain and repair 118 cars
daily. These facilities are located throughout the Metrorail system. The
oldest and largest shop, opened in 1974, is 1 of 2 facilities able to
service more than 20 cars each and perform heavy repairs and overhauls in
addition to scheduled maintenance and unscheduled repairs. Of the remaining
4 facilities, 3 have the capacity to service 20 cars each; 1 facility has
only 8 repair spaces. WMATA plans to open a new facility in 2002 that will
expand its current capacity to accommodate 126 cars. As of March 2001,
Metrorail?s total available fleet consisted of 762 cars.

Given that WMATA has shop spaces for 118 cars and that some cars can be
repaired outside of the shop, repair shop capacity in fiscal year 2000 was
sufficient, for planning purposes, to support Metrorail?s maintenance and
repair requirements. According to WMATA, the number of shop spaces required
for maintenance and repairs equals the number of cars needed for revenue
service, plus the number of spare cars (20 percent of the available fleet)
needed for fleet management, multiplied by a factor of 15 percent (the
typical number of cars held out of revenue service daily for maintenance and
repairs). WMATA also considers the fact that about 15 Delivery of 192 New

Rail Cars Could Stretch Metrorail?s Maintenance and Repair Shop Capacity to
the Limit

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 29 GAO- 01- 744 Mass Transit

percent of ?running repairs?- repairs to address problems that occur while
vehicles are in service- can be performed safely outside of the repair shop.
WMATA typically holds about 112 rail cars out of service daily for
maintenance and repair.

However, WMATA officials told us that they expect to receive about 80 of the
192 new rail cars by the end of the fall of 2001, which will increase the
available fleet size to 842 cars. Of the 80 new cars, 32 are required for
service on the Green Line?s Branch Avenue extension. The remainder will be
placed into revenue service where required. Thus, by the end of the fall of
2001, WMATA could need 126 repair shop spaces- 15 percent of the 842- car
fleet- or 8 more than capacity. Depending on the number of cars that can be
repaired outside of the repair shop, shop capacity could be inadequate to
meet requirements at that time. Further, because the new cars will require
acceptance testing before they are placed into service, WMATA will have to
relinquish four shop spaces to the manufacturer. Testing, which could
require at least 5 days for each car, will be done at one of the larger
facilities, where four shop spaces have been dedicated to the car
manufacturer.

As the balance of the new cars are delivered- 10 cars per month over 11
months following the initial delivery in the fall of 2001- repair shop
capacity could become even more of a problem by the fall of 2002. At that
time, WMATA will have 126 shop spaces and the number of cars required for
revenue service will have increased to 914 (762 existing cars, plus 192 new
cars, less the 40 cars scheduled for rehabilitation). Consequently, WMATA
could need 136 repair shop spaces- 15 percent of the 914- car fleet- or 10
more than capacity. Furthermore, WMATA plans to order a total of at least 94
additional vehicles to accommodate new revenue service on the Largo
extension to the Blue Line in Maryland (which is currently under
construction), increased demand on the Orange Line in Virginia due to
service expansion, and service growth on other existing rail lines. WMATA
plans to begin the process for procuring these cars in summer 2001 in order
to meet projected passenger demands on the Largo extension by early 2005.

Although WMATA officials believe that the agency?s current shop capacity may
not be favorable for the expeditious turnaround of vehicles requiring
maintenance and repair, they pointed out that they are taking steps to ease
the capacity problem. For example, in the near term, WMATA has four

?blow down pits?- spaces in its largest repair shops used to clean the
underside of a car prior to its scheduled maintenance- that can also be used
for maintenance and repair. At the same time, however, WMATA

Appendix I: WMATA Is Addressing Significant Metrorail Operations and
Maintenance Challenges

Page 30 GAO- 01- 744 Mass Transit

recognizes that it has no capacity to maintain and repair the 94 additional
cars. According to WMATA?s 1999 rail fleet management plan, the number of
cars requiring scheduled maintenance and unscheduled repairs is expected to
rise over the next 5 years. This increase in maintenance and repairs will
occur because (1) the newer Breda cars will be nearing their midlife; (2)
the renovation of the Rohr cars will be 10 years old and the cars will be
nearing the end of their service life; and (3) a total of 286 new rail cars
will have been added to the fleet, increasing the fleet size by about 37
percent.

WMATA is taking two actions to address the maintenance and repair shop
capacity problem. First, WMATA is surveying its existing shops to determine
whether their capacity can be expanded. The agency expects to complete the
survey in the fall of 2001, possibly beginning expansion efforts as early as
2002. The most likely shop to be expanded first is the smallest one, where
the number of shop spaces would be increased from 8 to 20. Second, WMATA
plans to build a new repair shop within the Dulles Corridor in Virginia.
However, this facility will not be available until about 2010, when the
Dulles Corridor rail line extension is expected to be completed.

Appendix II: WMATA Has Established Safety and Security Programs

Page 31 GAO- 01- 744 Mass Transit

At the direction of Congress, the federal government has delegated
responsibility for overseeing WMATA and other transit agencies? rail safety
activities to state agencies. 1 In December 1995, FTA issued a state safety
oversight rule for rail fixed guideway systems. However, there are no
similar federal rules that govern the safety of transit bus systems. In
2000, FTA initiated a voluntary transit bus safety program to promote a
better understanding of state safety regulations and disseminate assistance
to the industry.

In December 1995, FTA issued a state safety oversight rule (49 C. F. R. Part
659) requiring states to oversee the safety of rail fixed guideway systems.
2 According to FTA, the rule was designed to reduce all incidents that harm
passengers and employees, whether these incidents are the result of
unintentional occurrences (safety) or intentional acts (security). The state
safety oversight rule includes provisions for passenger and employee
security in recognition that safety and security risks are interrelated for
rail transit passengers and employees.

Under the rule, states are to designate an oversight agency (or agencies) to
oversee the safety of the rail transit systems operating within its borders.
3 When the rail system operates within only a single state, that entity must
be an agency of the state; when it operates in more than one state, the
affected states designate a single entity to oversee the system. The state
may not designate the rail transit system as the oversight agency.

In March 1997, transportation departments from Maryland, Virginia, and the
District of Columbia designated the Tri- State Oversight Committee (TOC) as
the state oversight agency for WMATA. As required by the rule,

1 The Intermodal Surface Transportation Efficiency Act of 1991 amended the
Federal Transit Act (49 U. S. C. 5330) to require FTA to issue a regulation
providing for state oversight of rail transit systems. This regulation was
intended to improve the safety of rail systems.

2 According to 49 C. F. R. 659.5, rail fixed guideway systems are any light,
heavy, or rapid rail system, monorail, inclined plane, funicular, trolley,
or automated guideway that is included in FTA?s calculation of fixed
guideway route miles or receives funding under FTA?s formula grant program
for urbanized areas and is not regulated by the Federal Railroad
Administration.

3 Currently, there are 35 rail fixed guideway systems operating in 21 states
and the District of Columbia. Twenty- two state oversight agencies have been
designated to implement the state safety oversight rule requirements.
Appendix II: WMATA Has Established Safety

and Security Programs Federal Government Has a Minimal Role Overseeing
WMATA?s Rail and Bus Safety

A Tri- State Oversight Committee Oversees WMATA?s Rail Safety Program

Appendix II: WMATA Has Established Safety and Security Programs

Page 32 GAO- 01- 744 Mass Transit

TOC developed a system safety program standard, a document that establishes
the relationship between the oversight and transit agencies and specifies
the procedures that the transit agency must follow. In addition, the
oversight agency requires WMATA to develop and implement system safety and
security program plans, report accidents and unacceptable hazard conditions,
and conduct safety reviews. WMATA has developed both system safety and
security plans to comply with the state safety oversight rule. The plans are
companion documents, which together act as a blueprint for providing safety
and security for WMATA.

Under the state safety oversight rule, FTA has the responsibility to monitor
and evaluate the states? compliance with the rule. In the fall of 1998, FTA
initiated a State Safety Oversight Audit Program to support monitoring
activities for the rule. Under this program, FTA audits determine whether
state oversight agencies are carrying out the program and examine ways in
which the overall program can be improved. In February 2000, FTA completed
an audit of TOC, during which FTA identified six deficiencies and three
areas of concern. FTA found, among other things, deficiencies in TOC?s (1)
process for reviewing the system safety program standard and program plan,
(2) hazardous condition investigations and corrective actions, (3) 3- year
safety reviews, and (4) oversight agency reporting and certification to FTA.
For example, FTA found that TOC had no formal procedures for approving and
tracking corrective actions. The purpose of the corrective action plan
management process is to document communication between the rail system and
the oversight agency regarding the resolution of identified hazards. In
response to this deficiency finding, TOC agreed to review and discuss with
WMATA its corrective action plans at regularly scheduled meetings, vote to
approve or disapprove those measures, and require that additional measures
be included in the action plan. According to an FTA official, the agency is
satisfied with TOC?s responses to all of its audit findings.

Appendix II: WMATA Has Established Safety and Security Programs

Page 33 GAO- 01- 744 Mass Transit

There is no overall federal regulation requiring oversight for transit bus
safety. 4 Under authority provided by the Motor Carrier Safety Act of 1984,
the Federal Highway Administration (FHWA) has exempted passenger carrier
operations that were part of federal, state, or quasi- public operations. 5
FHWA has no authority to perform any safety reviews or inspections of
transit bus operations.

In 1998, the National Transportation Safety Board (NTSB) reported that there
were substantial safety deficiencies in, and little federal or state
oversight of, the transit bus industry. According to NTSB, the federal
government was spending, at that time, over $6 billion to subsidize the
operation of transit agencies, yet the safety oversight of transit bus
operations was essentially nonexistent. FTA had a state safety oversight
program but, as described previously, it applied only to those agencies
conducting rail transit operations.

According to NTSB, FTA has traditionally looked either to state regulation,
if it exists, or to self- regulation by the transit industry to safeguard
the public?s use of transit systems. However, FTA has only a few methods for
assessing the safety of transit bus agencies that receive federal funding,
including (1) sharing safety information among transit agencies, (2)
performing triennial oversight reviews of all transit functions that may
include a few safety- related questions, and (3) conducting investigations
of safety hazards under 49 U. S. C. 5329. 6 According to NTSB, however, none
of these methods provide a comprehensive assessment of transit bus safety
throughout the country or a remedy for any of the problems that may exist.
Accordingly, the NTSB report recommended that DOT develop

4 FTA is in a unique position among Department of Transportation modal
authorities. Unlike the Federal Railroad Administration and the Federal
Aviation Administration, FTA does not have extensive safety regulatory
authority. Currently, FTA is limited to enforcement of three legislative
mandates, including investigation of conditions that may cause a serious
hazard of death or injury, substance abuse and management testing programs,
and state safety oversight of rail fixed guideway systems.

5 49 C. F. R. Part 390.3( f)( 2) exempts, with the exception of
recordkeeping requirements of Part 390. 15, transportation performed by the
federal government, a state or any political subdivision of a state, or an
agency established under a compact between states that has been approved by
the Congress.

6 Under 49 U. S. C. 5329, ?Investigation of Safety Hazards,? the Department
of Transportation may withhold funds from a transit agency if the Department
establishes that a condition causes a serious hazard of death or injury.
Little Federal or State

Oversight of Transit Bus Safety

Appendix II: WMATA Has Established Safety and Security Programs

Page 34 GAO- 01- 744 Mass Transit

and implement an oversight program to assess and ensure the safety of
transit bus operations that receive federal funding.

In November 2000, FTA?s Office of Safety and Security initiated a bus
transit safety program in response to concerns about the potential for
catastrophic bus accidents. According to FTA officials, the overall
objective of the program is to foster a better understanding of transit bus
safety and disseminate technical assistance to the industry. FTA identified
several program tasks, including developing a model transit bus safety
program. Ultimately, potential models for a national framework will be
presented that could provide transit bus safety practice guidance for bus
entities. According to FTA, the program is not intended to create a bus
oversight program that mirrors the rail fixed guideway safety oversight
program; rather, its purpose is to compare and contrast current approaches
to bus safety regulation and oversight in the country in hopes of
identifying best practices for large and small transit bus systems.
According to an FTA safety official, FTA will receive and incorporate
comments from industry groups like the American Public Transportation
Association (APTA) on program tasks and hopes to have all of the program
tasks completed by the summer of 2001.

WMATA?s primary mission is to provide safe and reliable public
transportation service. Thus, safety considerations encompass all aspects of
WMATA?s functions from planning and design to construction and operations.
According to WMATA, safety is a major consideration at every stage of all of
its rail and bus activities. WMATA addresses safety objectives through its
system safety program plan, but it has also responded to outside safety
reviews by FTA and others. In addition, the transit agency collects and
analyzes safety performance data to determine if safety performance meets
established safety objectives.

In 1983, WMATA?s Board of Directors approved a system safety policy
statement establishing the transit authority?s safety philosophy and
objectives. Among other things, the policy statement directed WMATA to
develop a comprehensive system safety program plan to eliminate or control
safety hazards and reduce accident rates. In response to the Board, WMATA
developed a plan that sets forth requirements for identifying, evaluating,
and minimizing safety risks through all elements of the Metrorail and
Metrobus systems. The plan identifies management and technical safety and
fire protection activities performed during all phases of bus and rail
operations. It also defines formal requirements for, among WMATA Has

Established Practices to Monitor Safety Conditions

WMATA?s Safety Plan Defines Requirements

Appendix II: WMATA Has Established Safety and Security Programs

Page 35 GAO- 01- 744 Mass Transit

other things, (1) the implementation of established safety and fire
protection criteria; (2) mechanisms for identifying and assessing safety
hazards; and (3) methods for conducting investigations of accidents,
incidents, or unsafe acts.

WMATA?s current General Manager has delegated specific safety
responsibilities to the transit agency?s Chief Safety Officer. The Chief
Safety Officer has a staff of 26 people and is responsible for managing
system safety, occupational safety and health, accident and incident
investigation, fire protection, oversight of construction safety and
environmental protection, and for monitoring the system safety program plan.
Safety personnel investigate accidents involving fatalities, serious
injuries, multiple hospitalizations, major fires, and derailments.

WMATA is subject to a variety of oversight reviews and audits by federal
agencies and private and regional associations, such as APTA, TOC, and FTA.
For example, several serious accidents and incidents occurring in the mid-
1990s in WMATA?s subway system raised concerns about safety and led to a
1997 report by FTA. Since then APTA has also conducted safetyrelated reviews
of WMATA?s operations.

In September 1997, FTA reported on its review of WMATA?s rail operations and
found serious deficiencies in WMATA?s safety- related operating practices.
FTA reviewed WMATA following a series of accidents and incidents at WMATA
that raised concerns about the transit authority?s commitment to safety as
its top priority. For example, in January 1996 a train operator was killed
at a station when his train slid on icy tracks into parked railcars. In
April of the same year, WMATA disconnected the operating mechanisms for the
midcar emergency doors on about 100 rail cars without informing the public.
Later that month, two workers were injured when their tools made contact
with a live electrical cable that should have been deactivated while tracks
were being repaired. In addition, a delayed response to a fire in May 1996
put firefighters and passengers at risk.

FTA?s review concluded that WMATA had not kept abreast of the formal
disciplines that constitute system safety, such as having a planned approach
to system safety program tasks, and had not provided appropriate financial
and personnel resources to accomplish tasks. In addition, FTA found that
WMATA?s safety efforts had been weakened by frequent changes in the
reporting level of the safety department, staff and budget reductions, and a
deemphasis of safety awareness in public and WMATA Responds to

Safety Reviews

Appendix II: WMATA Has Established Safety and Security Programs

Page 36 GAO- 01- 744 Mass Transit

corporate communications. For example, WMATA?s safety department had moved
several times within the organization, making its work difficult, its
priorities uncertain, and its status marginal. Also, from 1992 to 1996,
safety department staff was reduced from 17 to 12 positions, and only 8
positions were filled at the time of FTA?s review. Finally, as a result of
the safety department?s movement through the organization, it became
responsible for other functions, further reducing its ability to meet its
safety responsibilities. According to FTA, these limitations were reflected
in, among other things, the absence of strong public and employee safety
awareness programs.

FTA?s report found that these problems existed before the arrival of the
current management team in the fall of 1996 and concluded that WMATA had
taken important first steps to change the situation. For example, in 1996,
WMATA?s new General Manager made safety a priority and selected a new Chief
Safety Officer who would report directly to him. The General Manager also
directed a review of the transit authority?s safety function and revised its
system safety program plan, which now includes detailed protocols for
identifying and assessing hazards. According to an FTA safety official,
WMATA?s safety program is considered ?very good? compared to the safety
programs at other transit agencies.

Under FTA rules, state oversight agencies must conduct an on- site safety
review of the transit agency?s implementation of its system safety program
plan at least every 3 years. As WMATA?s state oversight agency, TOC used
APTA to conduct a safety review in September 1998. APTA?s audit addressed
policies, processes, and procedures as set out in WMATA?s system safety
program plan and included a review of supporting documentation, interviews
with agency personnel, and field observations. In its subsequent report,
APTA found 12 deficiencies in such areas as quality assurance programs,
plant maintenance, and engineering and technical support and operations.
According to APTA, since issuance of its report, WMATA has developed
corrective action plans for each of the deficiencies that demonstrate the
transit authority?s commitment to strengthening performance standards and
ensuring that the processes are effective and prevalent throughout the
agency. APTA also concluded that although it does not comparatively rate
transit systems as to how effective they are in managing and implementing
their safety programs, WMATA is regarded as one of the industry leaders in
transit system safety program development and implementation.

Appendix II: WMATA Has Established Safety and Security Programs

Page 37 GAO- 01- 744 Mass Transit

More recently, WMATA acted to address problems resulting from a tunnel fire
that occurred in April 2000. A power cable shorted out in a tunnel between
two subway stations, causing an electrical tunnel fire, extremely lengthy
delays in service, and the need to evacuate passengers from a subway train.
In response to the incident, WMATA created a safety task force to review its
operations control center?s handling of the incident. In addition, WMATA?s
General Manager asked APTA to conduct a comprehensive peer review of the
transit agency?s emergency procedures for handling tunnel fires.
Specifically, the General Manager asked APTA to review WMATA?s general
agency policies, procedures, rules and practices; coordination with
emergency responders; operations control center policies and practices; and
front- line employee response to fires. APTA?s findings and recommendations
were, in many ways, consistent with the findings of WMATA?s internal
investigation. For instance, APTA and WMATA?s recommendations supported the
need for efforts to formalize and strengthen training for operations control
center personnel and ensure that emergency procedures are addressed in the
training and certification of operations staff.

The 2 reviews made 32 recommendations affecting fire safety policy and
procedure, related equipment, communications, and training. At the time of
our review, WMATA had taken actions to implement 30 of the 32
recommendations. According to WMATA?s Chief Safety Officer, the agency
developed a list of corrective actions as a result of the fire, is training
its staff to communicate more effectively with fire authorities so everyone
understands incidents that are taking place, and plans to open a fire
training center to train WMATA employees and local firefighters.

According to the Chief Safety Officer, WMATA also started collecting
information on fire and smoke incidents in Metrorail and Metrobus operations
after the April 2000 tunnel fire. These incidents include cable fires, trash
fires, and smoke incidents. Figure 1 shows that 22 of the 47 fire and smoke
incidents occurring in the Metrorail system from April 20, 2000, to December
31, 2000, had no impact on service. However, other smoke and fire incidents
have caused delays in Metrorail service of as much as 2 hours. WMATA Is
Addressing the

Problem of Tunnel Fires

Appendix II: WMATA Has Established Safety and Security Programs

Page 38 GAO- 01- 744 Mass Transit

Figure 1: Impacts on Service from Smoke and Fire Incidents

Source: GAO presentation of data provided by WMATA.

WMATA collects and analyzes safety data to determine if safety performance
meets established safety objectives. Analysis of this systemspecific data
can be used to determine trends and patterns in system operation. WMATA
reports information, such as injuries, collisions, and derailments occurring
in its Metrobus and Metrorail systems, to its Board of Directors and others
on a quarterly and annual basis. Table 2 shows the number and injury rates
for rail station and rail on- board injuries for fiscal years 1996 through
2000. Rail station injuries include, among other things, elevator and
escalator injuries; injuries on platforms, mezzanines, and free areas; and
injuries occurring outside stations. Rail on- board injuries occur inside
trains due to doors, defective equipment, and boarding or alighting trains.
A WMATA safety official told us that most of these injuries were not
serious. WMATA Evaluates

Performance Indicators to Monitor Safety

Appendix II: WMATA Has Established Safety and Security Programs

Page 39 GAO- 01- 744 Mass Transit

Table 2: Rail Injuries Reported by WMATA, Fiscal Years 1996 Through 2000
Rail station injuries Rail on- board injuries Fiscal Year Injuries Injury
rate a Injuries Injury rate a

1996 391 .41 108 .11 1997 355 .37 128 .13 1998 321 .28 111 .10 1999 366 .34
89 .08 2000 474 .43 163 .15

Total injuries 1,907 599

Average injury rates .37 .11 a Based on injuries per 1 million passenger
miles.

Source: GAO presentation of data provided by WMATA.

Table 2 shows that WMATA has experienced low rail station injury rates over
the 5- year period- only 0.37 injuries per 1 million passenger miles.
However, the absolute number of rail station injuries increased from 366 in
fiscal year 1999 to 474 in fiscal year 2000, and the injury rate increased
from 0.34 to 0.43 for the same 2 years. WMATA officials attribute this
increase primarily to the crowding resulting from increased ridership.

WMATA documents show that over 50 percent of all rail station injuries have
occurred on escalators. According to WMATA?s Chief Safety Officer, the root
causes of the majority of these incidents are human factors, not equipment
failure, employee performance, or unsafe conditions. In fiscal years 1999
and 2000, for example, no escalator incidents were caused by electrical or
mechanical failure or unsafe conditions. WMATA is promoting escalator safety
by conducting public awareness campaigns (e. g., brochures and community
outreach) and adding safety devices, such as shut- off switches and glide
stops.

Table 2 shows that rail on- board injuries and injury rates have also been
low over the 5- year period. However, the number of injuries and the injury
rate almost doubled between fiscal years 1999 and 2000. WMATA documents show
that boarding and alighting trains has accounted for, on average, about 45
percent of all rail on- board injuries during the 5- year period.

Our review of WMATA documents also shows that rail collisions and
derailments occur infrequently. For example, as shown in table 3, WMATA has
experienced 18 rail collisions from fiscal year 1996 through fiscal year
2000, with only 1 occurring in fiscal year 2000. WMATA defines rail
collisions as collisions of trains in revenue service with other trains,

Appendix II: WMATA Has Established Safety and Security Programs

Page 40 GAO- 01- 744 Mass Transit

equipment, or objects on tracks that result in damage to equipment or
property. According to a WMATA safety official, none of these collisions
involved two trains; rather, most incidents involved a train hitting an
object that was on or near train tracks. None resulted in a fatality. In
addition, there have been only two train derailments involving trains in
revenue service that were transporting passengers during the 5- year period,
both occurring in fiscal year 1999. A WMATA safety official said that
neither of these incidents resulted in injuries. Table 3 shows rail
collisions and derailments occurring during fiscal years 1996 through 2000.

Table 3: Rail Collisions and Derailments Reported by WMATA, Fiscal Years
1996 Through 2000

Year Rail collisions Derailments

1996 4 0 1997 6 0 1998 4 0 1999 3 2 2000 1 0

Totals 18 2

Source: GAO presentation of data provided by WMATA.

Table 4 shows that bus passenger injury and bus collision incident rates
have remained stable during fiscal years 1996 through 2000, although both
total injuries and collisions increased over the last year. 7 According to
WMATA, it suspects increases in bus ridership as well as inexperienced
operators driving in increasingly congested traffic areas and on new and
extended routes as the cause for increased bus incidents. For example, WMATA
recently hired 766 new operators to cover retirements. Nevertheless, WMATA
considers more than 60 percent of these incidents to be nonpreventable.
WMATA has new and planned programs to reduce bus incidents, such as
recognition programs, spot checks, a mentor program, promotional programs,
route assessments, and new traffic warning signs to prevent rear- end
collisions.

7 Bus passenger injuries include injuries occurring from collisions with
vehicles, objects, or persons; personal casualties inside vehicles; injuries
while boarding and alighting vehicles; and injuries associated with wheel
chair lifts. Collisions include collisions with other vehicles, persons, or
objects resulting in injury or property damage.

Appendix II: WMATA Has Established Safety and Security Programs

Page 41 GAO- 01- 744 Mass Transit

Table 4: Bus Passenger Injuries and Collisions Reported by WMATA, Fiscal
Years 1996 Through 2000

Bus passenger injuries Bus collisions Year Injuries Injury rate a Collisions
Collision

rate b

1996 1,001 2.17 591 14.2 1997 986 2.17 568 14.0 1998 946 2.20 567 14.0 1999
921 2.20 526 12.2 2000 989 2.20 664 14.8

Totals 4, 843 2,916

Average injury and collision rates 2.19 13.8 a Based on injuries per 100,000
passenger miles.

b Based on collisions per 1 million vehicle miles. Source: GAO presentation
of data provided by WMATA.

During fiscal years 1996 through 2000, there were a total of 21 fatalities
in WMATA?s transit system- 11 fatalities in the Metrobus and 10 in the
Metrorail systems. Of the 11 bus fatalities, 5 involved bus collisions with
other vehicles, 4 involved persons being struck by a bus, 1 person died on
board a bus during an accident, and 1 person died while alighting a bus. Of
the 10 rail fatalities, 4 were suicides, 2 involved escalator entrapment, 2
occurred boarding or alighting trains, 1 was the WMATA employee killed in
the 1996 incident mentioned previously, and 1 was a person killed when
struck by a train.

WMATA?s Metro Transit Police Department is responsible for the system?s
transit security- which has been defined as freedom from intentional danger
for passengers, employees, and the transit system. The department has
jurisdiction and arrest powers on WMATA property throughout the 1,500 square
mile transit zone that includes Maryland, Virginia, and the District of
Columbia and has an authorized strength of 320 sworn and 103 civilian
personnel. According to WMATA, its police department, which is the only
nonfederal trijurisdictional police agency in the country, is responsible
for law enforcement, revenue protection, and security services. Similar to
his emphasis on safety issues, WMATA?s current General Manager has delegated
authority to the Chief of Police to plan, direct, coordinate, implement, and
evaluate all police and security activities for the transit agency. WMATA
has developed a systemwide security program plan, participates in external
security reviews, and collects and evaluates crime statistics. WMATA?s
Transit

Police Department Provides Security for Operations

Appendix II: WMATA Has Established Safety and Security Programs

Page 42 GAO- 01- 744 Mass Transit

To emphasize the importance of system security, WMATA?s Metro Transit Police
Department established a set of comprehensive security activities documented
in its system security program plan. The plan is designed to maximize the
level of security experienced by passengers, employees, and other
individuals who come into contact with the transit system and to minimize
the cost associated with the intrusion of vandals and others into the
system. As noted previously, the system security program plan is a companion
document to the system safety program plan.

One of the security plan?s objectives is to make the transit system more
proactive in preventing and mitigating security problems. Many proactive
security measures have been in place since the inception and design of the
transit system, including station lighting, recessed walls, closed circuit
televisions, and alarm systems. WMATA has also developed strategies to
reduce crime and provide a secure environment, including strict enforcement
of a ?zero tolerance? philosophy on crime, emphasis on prevention rather
than a response to crime, and crime prevention training for civilians and
WMATA employees.

The amount of serious transit- related crime has fallen nationwide over the
last few years. Nevertheless, according to FTA, the public?s perception
about the lack of security continues to have a significant impact on transit
ridership nationwide. To combat this perception, FTA initiated a voluntary
transit security audit program in 1996. The goal of the program is to assist
transit agencies in achieving the highest potential level of a safe and
secure transportation environment by encouraging transit systems to develop,
implement, and maintain a transit security system that will protect
passengers, employees, vehicles, revenue, and property. The program has four
objectives, including (1) providing assistance to transit agencies in
developing and initiating system security program plans; (2) evaluating the
level of preparedness of each system; (3) sharing best practices used by
transit police, security, and operations personnel to enhance security for
passengers and employees; and (4) evaluating the quality of security
provided by transit systems for passengers, employees, and system
facilities. Since the program started, FTA has completed two security audits
of WMATA.

In April 1997, FTA conducted its first on- site transit security audit of
WMATA. At that time, FTA officials stated that they were impressed with
efforts taken by WMATA transit police and the operating and maintenance
departments to comply with FTA?s security requirements. Furthermore, FTA
found that the comprehensive nature of WMATA?s security program WMATA?s
Security Plan Is

Proactive WMATA Participates In FTA?s Security Audit Program

Appendix II: WMATA Has Established Safety and Security Programs

Page 43 GAO- 01- 744 Mass Transit

demonstrates a high level of attention to passenger and employee security.
FTA recommended that the transit police play a greater role in the
development of agency operating procedures and training programs. It also
recommended the development of a technology plan to address police radio
communications, the crime records system, and the use of mobile data
terminals for filing police reports. In its October 1997 follow- up audit,
FTA stated that it was pleased with WMATA?s efforts to comply with FTA?s
previous recommendations and suggestions. In addition, FTA observed
exemplary security practices and found that WMATA?s transit police were very
committed and well supported by top management. The audit recommended, among
other things, that the transit police increase its involvement in developing
and distributing procedures for systemwide security- related issues. FTA
will conduct further security reviews of WMATA on a regular basis under its
security audit program.

In everyday practice, WMATA?s transit police and its security management
team are faced with the need to allocate and assign available security
personnel and other resources to best address crime and incidents and to
enhance the public?s perception of the transit system as being a safe
environment. WMATA collects and analyzes summary statistics to identify
trends in crime, assess performance, and design appropriate countermeasures.
WMATA?s reporting system groups crimes into two categories that are similar
to, but not entirely consistent with, the Federal Bureau of Investigation?s
Uniform Crime Reporting System. 8 Currently, WMATA?s Part I crimes include
eight crime categories such as arson, homicide, and robbery. Part II crimes
include other ?less serious? crimes, such as disorderly conduct,
drunkenness, and trespassing. WMATA plans to revise its crime categories by
January 2002 to be consistent with the Federal Bureau of Investigation?s
reporting system.

Part II crimes occur much more frequently than Part I crimes in WMATA?s
Metrorail and Metrobus systems. From 1996 through 2000, for example,

8 The categorization of offenses in the Federal Bureau of Investigation?s
reporting system is based on the amount of reporting required for each. For
example, both incidents and arrests are reported for Part I crimes. Only
arrests are reported for Part II offenses. The difference in reporting
recognizes the inherent qualities of offenses that dictate that some are
appropriate indicators of the dimensions and trends in crime on a national
scale. Offenses are categorized as Part I if they meet certain criteria,
such as the (1) seriousness or significance of the offense, (2) frequency or
volume of its occurrence, and (3) prevalence of the offense nationwide. All
crimes that are not Part I offenses are Part II offenses. WMATA Evaluates

Statistics on Efforts to Combat Crime

Appendix II: WMATA Has Established Safety and Security Programs

Page 44 GAO- 01- 744 Mass Transit

Part II crimes accounted for 72 percent (13,556 crimes) of the nearly 19,000
total crimes committed in the transit system. Part I crimes accounted for
only 28 percent (5, 401) of all crimes. Yearly total crime counts for the 5-
year period ranged from a high of 4,491 crimes in 1998 to a low of 3,510 in
1996. Table 5 shows Part I and Part II crimes committed in the transit
system for the 5- year period.

Table 5: Total Crimes Reported by WMATA, 1996 Through 2000 1996 1997 1998
1999 2000 Totals Total crimes

Percent of crimes Total

crimes Percent

of crimes Total

crimes Percent of crimes Total

crimes Percent

of crimes Total

crimes Percent

of crimes

Part I crime 1,229 35 1,018 29 1,116 25 967 26 1,071 29 5,401 28 Part II
crime 2,281 65 2,514 71 3,375 75 2,820 74 2,566 71 13,556 72

Totals 3, 510 100 3,532 100 4,491 100 3,787 100 3,637 100 18,957 100

Source: GAO presentation of data provided by WMATA.

As table 6 shows, Part I crimes are committed more often in the Metrorail
system than in the Metrobus system. From 1996 through 2000, for example,
Part I crimes were committed, on average, about 7 times per million riders
in the rail system. In contrast, Part I crimes occurred less than once per
million riders on the bus system. Larceny, motor vehicle theft, and robbery
accounted for the majority of all Part I crimes committed in WMATA?s entire
transit system. From 1996 through 2000, for example, those 3 crime
categories accounted for, on average, 93 percent (5,030 crimes) of all Part
I crimes. Of those 3 categories, larceny made up, on average, 51 percent of
all Part I crimes. Other Part I crimes, such as burglary, homicide, and
rape, occurred rarely. Table 6 shows Part I crimes committed in the transit
system from 1996 through 2000.

Appendix II: WMATA Has Established Safety and Security Programs

Page 45 GAO- 01- 744 Mass Transit

Table 6: Part I Crimes Reported by WMATA in its Metrorail and Metrobus
Systems, 1996 Through 2000 1996 1997 1998 1999 2000 Type of crime Number

Percentage distribution b Number

Percentage distribution Number

Percentage distribution Number

Percentage distribution Number

Percentage distribution

Agg. Assault

80 7 72 7 68 6 62 6 57 6 Arson 10001 00 030 Burglary 12 1 3 0 713000
Homicide 00000 0 1 010 Larceny 586 48 474 47 638 57 514 53 536 50 Motor
vehicle theft

245 20 219 .22 216 19 205 21 252 24 Rape 00000 00 000 Robbery 305 25 250 25
186 17 182 19 222 21

Totals 1, 229 101 1,018 101 1,116 100 967 99 1,071 100

Bus incident rate a

.50 .72 .55 .61 .37 Rail incident rate a

7.89 6.18 6.73 6.20 6.03 a Incident rates are based on Part I crime per
million riders. b Percentages may not add to 100 due to rounding.

Source: GAO presentation of data provided by WMATA.

WMATA?s crime statistics show that Part I crimes are committed much more
frequently in WMATA?s parking lots than on either its Metrobus or Metrorail
systems. Part II crimes, however, have been more evenly distributed between
parking lots and the Metrorail system over time. From 1996 through 2000, for
example, Part I crimes were committed, on average, 64 percent of the time in
parking lots and about 31 percent of the time in the Metrorail system. Over
the 5- year period, Part II crimes have been committed, on average, about 54
percent of the time in the Metrorail system and 40 percent of the time in
parking lots. To address the problem of parking lot crimes Metro recently
increased its undercover patrols of the system?s parking lots. Metrobus has
experienced only about 6 percent of all Part I and 6 percent of all Part II
crimes for the 5- year period. Table 7 shows crimes committed by location
from 1996 through 2000.

Appendix II: WMATA Has Established Safety and Security Programs

Page 46 GAO- 01- 744 Mass Transit

Table 7: Location of Part I and Part II Crimes Reported by WMATA, 1996
Through 2000 1996 1997 1998 1999 2000 Part I crime Number

Percentage distribution Number

Percentage distribution a Number

Percentage distribution Number

Percentage distribution Number

Percentage distribution

Metrobus 68 6 78 8 56 5 69 7 52 5 Metrorail 406 33 312 31 334 30 232 .24 333
31 Parking lots

755 61 628 62 726 65 666 69 686 64

Part I totals

1,229 100 1,018 101 1,116 100 967 100 1,071 100 1996 1997 1998 1999 2000
Part II crime Number

Percentage distribution Number

Percentage distribution Number

Percentage distribution Number

Percentage distribution Number

Percentage distribution

Metrobus 192 8 169 7 210 6 175 6 164 6 Metrorail 1, 109 49 1,221 49 1,712 51
1,292 46 1,383 54 Parking lots

980 43 1,124 45 1,453 43 1,353 48 1,019 40

Part II totals

2,281 100 2,514 101 3,375 100 2,820 100 2,566 101

a Percentages may not add to 100 due to rounding. Source: GAO presentation
of data provided by WMATA.

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 47 GAO- 01- 744 Mass Transit

In a December 1998 report, 1 GAO identified capital decision- making
principles and practices used by outstanding state and local governments and
private sector organizations. In this report, we describe WMATA?s Capital
Improvement Program and compare WMATA?s practices with those of leading
public and private organizations. In particular, we assessed the extent to
which WMATA (1) integrates its organizational goals into the capital
decision- making process through structured strategic planning and needs
determination processes, (2) uses an investment approach to evaluate and
select capital assets, and (3) maintains budgetary control over its capital
investments.

WMATA created a Capital Improvement Program (CIP) in November 2000 to
consolidate its ongoing and planned capital improvement activities. This
program contains three elements to address all aspects of the agency?s
capital investments, including (1) system rehabilitation and replacements,
(2) system expansion, and (3) system access and capacity.

Under CIP, WMATA?s Infrastructure Renewal Program (IRP)- created in March
1999- is designed to rehabilitate or replace WMATA?s existing assets,
including rail cars, buses, maintenance facilities, tracks, and other
structures and systems. This program currently includes 28 projects that are
estimated to cost $9.8 billion over a 25- year period from fiscal years 2001
through 2025. Also under CIP, WMATA has initiated programs to expand the
original transit system and enhance passengers? access to Metrorail. For
example, WMATA established what is now known as the System Expansion Program
(SEP) by issuing a plan in April 1999 2 to more closely join bus services,
rail services, and highway improvements to maximize the effectiveness and
efficiency of the regional transportation network. SEP has three major
objectives: (1) to expand fixed guideway services; 3 (2) to selectively add
stations and entrances to the existing Metrorail system; and (3) to improve
bus service levels and expand service areas. A fourth objective of the April
1999 plan- improving access to and capacity of the Metrorail system- is now
called the System

1 GAO/ AIMD- 99- 32, Dec. 1998. 2 Transit Service Expansion Plan, Washington
Metropolitan Area Transit Authority, April 1999. 3 Fixed guideway services
use and occupy a separate right- of- way for the exclusive use of public
transportation services. They include fixed rail, exclusive lanes for buses
and other high- occupancy vehicles, and other services. Appendix III: WMATA
Is Addressing its Major

Capital Requirements But Could Benefit From a More Formal Capital Planning
Process

WMATA Has Created A Consolidated Capital Improvement Program

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 48 GAO- 01- 744 Mass Transit

Access/ Capacity Program, as described below. SEP currently includes four
approved and proposed projects to expand various components of the rail
system. WMATA has not yet estimated the full lifecycle costs for all four
projects.

The third element of CIP is the System Access and Capacity Program (SAP),
formerly part of the April 1999 Transit Service Expansion Plan. SAP was
established as a separate program in November 2000 to provide additional
rail cars and buses, parking facilities, and support activities to
accommodate ridership growth. It also includes a study to determine the
modifications needed to the Metrorail system?s core capacity to sustain
current ridership volumes and increased passenger demands resulting from
future expansions. According to WMATA?s proposed fiscal year 2002 budget,
SAP currently includes 16 projects with a total expected cost of
approximately $2.5 billion over the next 25 years.

In successful organizations, strategic planning guides the decision- making
process for all spending, including capital spending. Strategic planning can
be defined as a structured process through which an organization translates
a vision and makes fundamental decisions that shape and guide what the
organization is and what it does. A strategic plan defines an organization?s
long- term goals and objectives and the strategies for achieving those goals
and objectives; annual performance plans describe in greater detail the
specific processes, technologies, and types of resources, including capital,
that are needed to achieve performance goals in a given year. Leading
organizations use their strategic planning process to link the expected
outcomes of projects, including capital projects, to the organization?s
overall strategic goals and objectives. Strategic planning provides the
underpinnings for agencies to develop comprehensive and effective plans for
all activities, including capital investments. It can also facilitate
communication within the agency itself as well as between the agency and its
external clients.

WMATA has articulated a mission statement for the agency and an

?organizational goal? of doubling transit ridership by the year 2025 to
maintain the existing transit market share, enhance mobility and
accessibility, improve air quality, reduce congestion, and support regional
growth and travel demands. WMATA officials have also told us that they are
creating a business planning process to address key areas, including (1)
ridership retention and growth, (2) customer satisfaction, (3) system WMATA
Has Not Fully

Integrated Organizational Goals Into its Capital Planning Process

WMATA Has Not Fully Developed a Strategic Planning Process For its Capital
Investment and Other Activities

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 49 GAO- 01- 744 Mass Transit

quality and safety, (4) service capacity and expansion, and (5) internal
capabilities and organizational development.

We support WMATA?s efforts in these areas, although they have not yet
resulted in plans that include the elements that leading organizations
consider essential to the strategic planning process. In particular, WMATA
has not developed a long- term strategic plan that defines multiyear goals
and objectives for the agency and its strategies for achieving those goals,
nor has it developed annual performance plans that explain the specific
processes, technologies, and types of resources, including capital, that
will be applied during a given year to address the performance goals and
objectives. WMATA also does not have a document that links the expected
outcomes of all of its capital projects- including IRP, SEP, and SAP
projects- to achieving the agency?s strategic goals and objectives.

Our 1998 report pointed out that conducting a comprehensive needs assessment
of program requirements is an important first step in an organization?s
capital decision- making process. A comprehensive needs assessment considers
an organization?s overall mission and identifies the resources needed to
fulfill both immediate requirements and anticipated future needs on the
basis of multiyear goals and objectives that flow from the organization?s
mission.

Again according to our 1998 report, to begin the needs assessment process,
leading organizations assess the extent to which stated goals and objectives
are aligned with the organization?s mission. Multiyear goals and objectives
outline how the organization intends to fulfill its mission. The goals
describe, in general terms, the organization?s policy intent and define its
direction; objectives serve to move the organization from broad general
goals to specific, quantifiable results and time- based statements of what
the organization expects to accomplish. The needs assessment is
resultsoriented in that it determines what is needed to obtain specific
outcomes. The focus placed on results drives the selection of alternative
ways to fulfill a program?s requirements.

When conducting a needs assessment, leading organizations assess internal
and external environments. They examine the organization?s primary role and
purpose, the strengths and weaknesses of its current organizational
structure, and its current activities and how they are accomplished. They
also examine external factors that affect or influence the organization?s
operations, such as existing or future mandates and the expectations of its
customer groups. Leading organizations also define the WMATA Has Determined

Requirements for Infrastructure Renewal, and Is Assessing Needs for System
Access and Capacity, but it Has Not Fully Assessed System Expansion Needs

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 50 GAO- 01- 744 Mass Transit

period of time a needs assessment should cover and how often it is to be
updated.

WMATA has performed a comprehensive assessment of capital requirements for
infrastructure renewal. The foundation for the current IRP was a needs
assessment completed by a contractor (Frederick R. Harris, Inc.) in March
1999 and additional assessments performed by WMATA staff to update and
expand the information provided by the Harris report. The overall objectives
of the assessments were to (1) develop a comprehensive understanding of the
transit system?s assets and their condition, (2) determine what is needed to
maintain the overall condition of WMATA?s infrastructure and support transit
service enhancements, (3) relate system needs to available funding through a
system for prioritizing projects and expenditures, and (4) support the
transition of the transit system from a ?start- up? to a renewal mode.
Through these reviews, WMATA obtained a comprehensive inventory of its
capital assets, an assessment of the condition of those assets, and
recommendations for proposed projects and estimated costs for addressing the
agency?s infrastructure renewal requirements over a 25- year period. By
comparing its resource needs information with data on its current asset
capabilities, WMATA was able to identify the gaps between what it needed to
maintain its current infrastructure in good repair and what resources it had
available to address infrastructure needs.

To improve system access and capacity, WMATA is in the process of
identifying current and needed capabilities to determine any performance
gaps between them. WMATA is currently assessing the Metrorail system?s core
capacity 4 to determine any modifications needed to accommodate current
ridership and increased passenger demand generated from future subway
expansions. The core capacity assessment is scheduled to be completed by the
fall of 2001. WMATA also developed its April 1999 Transit Service Expansion
Plan, which identified overall planned expansion efforts given WMATA?s goal
of doubling ridership over the next 25 years. The plan states that some of
the proposed projects fall into a time frame of 10 to 25 years, and others
fall beyond a 25- year horizon.

Although the expansion plan outlines a transit vision for the Washington
region and represents a positive first step in outlining expansion needs, it

4 The ?core? of the Metrorail system consists of 29 stations located in
downtown Washington, D. C., and some of its immediate suburbs.

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 51 GAO- 01- 744 Mass Transit

does not meet most of the requirements for a comprehensive needs assessment.
For example, the plan identifies three overall goals for the role of public
transit in the Washington metropolitan area and contains objectives, or
elements, to implement these goals. However, the objectives do not always
describe specific, quantifiable results or contain time- based statements of
what the organization expects to accomplish. Also, the plan does not explain
how the agency assessed needs to arrive at the specific proposed projects in
the plan, and it does not outline the purpose and scope of each proposed
project. Furthermore, it does not examine external factors that might affect
the agency?s ability to carry out the plan- such as the transit agency?s
lack of dedicated funding and the uncertainty caused by its dependence on
annual funding decisions by numerous state, local, and federal government
sources- nor does it specify how and when the plan will be updated. Finally,
with regard to considering the expectation of customer groups, a
representative of the Transportation Planning Board of the Metropolitan
Washington Council of Governments told us that WMATA did not fully
coordinate the plan with that group before it was published.

Although WMATA has not performed a comprehensive needs assessment for system
expansion, it does consider regional transportation needs, costs, and
benefits before deciding to support proposed expansion projects. For
example, WMATA has established a ?Project Development Program? to develop
conceptual designs for some of the proposed projects contained in the
Transit Service Expansion Plan. The goal of this program is to develop
initial planning and engineering information for proposed projects that can
lead to a more detailed alternatives analysis. Under this program, WMATA is
considering alternative ways of providing transit services within specific
corridors; developing ?order of magnitude? costs and preliminary ridership
estimates; and evaluating potential land use, economic development, and
other issues related to specific proposed projects.

Leading organizations consider a wide range of alternatives to satisfy their
needs, including noncapital alternatives, before choosing to purchase or
construct a capital asset or facility. When it is determined that capital is
needed, managers also consider repair and renovation of existing assets. For
its system expansion program, WMATA has a limited role in identifying and
evaluating alternatives before deciding to support specific expansion
projects. This limited role stems from WMATA?s relationship to other
organizations, including (1) the Transportation Planning Board WMATA Has a
Limited

Role in Analyzing and Evaluating Alternatives for System Expansion

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 52 GAO- 01- 744 Mass Transit

(TPB) of the Metropolitan Washington Council of Governments and (2) the
state and local jurisdictions served by WMATA. WMATA is beginning to
explore- with transportation officials in Virginia, Maryland, and the
District of Columbia- ways to increase its involvement in identifying and
evaluating alternatives before the state and local jurisdictions select
expansion projects for detailed planning, development, and implementation.
We support WMATA?s efforts in this area and believe that the agency could
provide valuable analysis and insights through a more active role in the
decision- making process for capital expansion projects.

With regard to assessing regional transportation needs and alternatives, TPB
plays the key role in determining the overall transportation needs of the
Washington region and identifying and evaluating alternatives (including
noncapital alternatives) to meet those needs. As the regional forum for
transportation planning, TPB prepares plans and programs that the federal
government must approve before federal aid transportation funds can flow to
the Washington region. TPB develops long- and shortrange plans that include
alternative transportation modes and methods in the region, including
highway projects, WMATA?s bus and rail services, bus services provided by
local jurisdictions in the region, ridesharing and telecommuting incentives,
bike and pedestrian paths, and pricing strategies to manage transportation
demands. WMATA?s General Manager is a member of TPB and provides input on
proposed transit projects for infrastructure renewal, system expansion, and
system access and capacity for TPB?s approval and inclusion in its long- and
short- range plans.

TPB has also prepared a draft planning document 5 -required by FTA and the
Federal Highway Administration- which includes projects for identifying and
evaluating transportation requirements and alternatives in the Washington,
D. C., metropolitan area, including transit- related projects. The document
contains projects to (1) survey workers about their travel patterns and
employer- sponsored commuting programs, (2) measure traffic volumes in local
jurisdictions, and (3) examine the potential for new and innovative bus
services in the Washington metropolitan area.

With regard to identifying and evaluating transit expansion alternatives
within specific parts of the metropolitan area known as ?corridors,? the
state and local jurisdictions served by WMATA have the lead role in

5 Draft Unified Planning Work Program for Transportation Planning for the
Washington Metropolitan Region, March, 2001.

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 53 GAO- 01- 744 Mass Transit

performing alternatives analyses and proposing projects for detailed
planning and federal funding, as required by FTA. According to WMATA
officials, the agency?s decisions about which system expansion projects to
support are driven by the state and local jurisdictions that sponsor the
project and secure a major segment of the proposed project?s funding. For
example, the decision to support the project extending Metrorail?s Blue Line
to Largo was largely made by the representatives of Maryland?s Department of
Transportation, which sponsored the project, and by the members of WMATA?s
Board of Directors who represent Maryland jurisdictions.

WMATA has had a limited role in identifying and analyzing the corridorlevel
alternatives required by FTA. After the state and local jurisdictions select
a specific expansion project to pursue, they take the lead in preparing the
corridor- level alternatives analysis, with limited technical input, if
necessary, from WMATA. These analyses range from a ?baseline

alternative? that may involve little or no investment to making significant
capital investments in constructing or expanding a transit system. FTA
requires that the alternatives analysis provide information on the benefits,
costs, and impacts of alternative strategies, ultimately leading to the
selection of a locally preferred alternative to the community?s mobility
needs. The alternatives analysis is considered complete when a locally
preferred alternative is selected by local and regional decisionmakers and
adopted by the metropolitan planning organization- in this case, TPB in its
financially constrained long- range plan.

In addition to SEP, we also reviewed the extent to which WMATA considers
alternatives on its two other capital improvement programs- IRP and SAP.
With regard to IRP, there are limited opportunities for the agency to
consider alternative approaches to meeting requirements, given that this
program addresses the WMATA assets that are needed to maintain current
transit service levels. Nonetheless, WMATA did consider alternatives for IRP
in some cases. For example, WMATA has evaluated the relative costs of
extending the useful life of its rail cars, buses, and escalators by
performing extensive mid- life overhauls versus purchasing new vehicles or
equipment at the end of the shorter expected service life. As a result,
WMATA decided to perform the overhauls and extend the life of its vehicles
and equipment, resulting in expected savings over time. With regard to SAP,
because WMATA is in the process of assessing its requirements, it is not yet
at the stage of its capital decision- making process where alternative
approaches have been fully identified and evaluated. WMATA expects to
identify its requirements in this area by the end of 2001.

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 54 GAO- 01- 744 Mass Transit

An investment approach builds upon an organization?s assessment of where it
should invest its resources for the greatest benefit over the longterm.
Establishing a decision- making framework which encourages the appropriate
levels of management review and approval is a critical factor in making
sound capital investment decisions. These decisions are supported by the
proper financial, technical, and risk analyses. Leading organizations not
only establish a framework for reviewing and approving capital decisions,
they also have defined processes for ranking and selecting projects.
Furthermore, they also develop long- term capital plans that are based on
the long- range vision for the organization embodied in the strategic plan.

WMATA has not established a formal executive- level review group within the
agency for making capital decisions, nor does it have formal procedures or a
standard decision package for considering the relative merits of various
capital projects each year. With regard to IRP, according to WMATA
officials, all appropriate mid- level and senior managers at WMATA were
involved in deciding which IRP projects should be established after the
March 1999 Harris study (and subsequent updates by WMATA staff). Also, a
committee of mid- level managers has been formed to review, among other
things, the small number of requests for new IRP projects that are generated
each year as part of the annual budget process. WMATA officials use briefing
slides and other underlying analyses to reach consensus within the agency on
IRP issues. In addition, WMATA?s management must obtain approval for IRP-
related issues and budgets from its Board of Directors, which has a formal
Budget Committee that issues guidance, holds periodic meetings to review IRP
and other budget issues, and documents its decisions and their rationale in
formal meeting minutes.

Although WMATA officials throughout the organization provide input into the
IRP decision- making process, a more formal process with standardized
procedures and documentation and periodic reviews of all ongoing and
proposed IRP projects would provide WMATA with a sound basis for clarifying,
justifying, and documenting its capital decisions. It would also provide
greater continuity within the organization if key managers move to other
positions or leave the agency. In response to our review, WMATA officials
told us that they plan to establish a new office within the agency that will
provide oversight of all established capital projects, including their
program scope, schedules, and costs. We view this as a positive step in
increasing WMATA?s control over its ongoing projects, and it could provide
the basis for a more formal executive review and approval process WMATA
Could Benefit

From a More Formal, Disciplined Capital Decision- making Framework

WMATA Has Not Established a Formal Internal Review and Approval Process for
Making Capital Decisions

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 55 GAO- 01- 744 Mass Transit

that promotes a continual evaluation of the merits of all ongoing and
proposed capital projects in WMATA?s Capital Improvement Program.

Within the System Expansion Program, WMATA officials told us that they play
a relatively small role in proposing, evaluating, and selecting projects.
According to WMATA officials, system expansion projects are first identified
by local jurisdictions, which are also responsible for securing full up-
front funding for their respective projects. These officials informed us
that WMATA becomes involved in the projects after they have been identified
and funding has been secured by the respective jurisdictions.

Although WMATA has established priorities for its system expansion program
on the basis of the broad need to serve regional travel patterns and sustain
the economic vitality of the region, WMATA has not taken the lead in
preparing financial, technical, and risk analyses for alternative expansion
projects and reviewing various proposed projects on the basis of such
analyses. Leading organizations consider this framework to be a critical
factor in making sound capital investment decisions. Given that the state
and local jurisdictions take the lead in identifying and deciding on
expansion projects, WMATA does not become involved in crucial early
decisions on pursuing the most appropriate and efficient ways to expand the
system and may therefore be limiting its influence on those decisions.
However, WMATA could influence those decisions were it to have a more
disciplined decision- making framework resulting in documented support for
the alternatives it favors.

Once jurisdictions have identified and secured funding for proposed
expansion projects, FTA guidelines require detailed documentation justifying
the projects and following them to completion. These documents include an
environmental impact statement and a long- range funding plan. However,
these documents are prepared only after the respective jurisdictions have
identified the projects. Established practices in capital decision- making
include the preparation of such documents as part of the overall capital
review and approval process, before the projects are ranked and funds are
committed to the projects themselves. The documents are used as supporting
documentation for decision or investment packages to justify capital project
requests. WMATA does not currently prepare such decision or investment
packages before deciding on system expansion projects.

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 56 GAO- 01- 744 Mass Transit

Our 1998 report points out that leading organizations have defined processes
for ranking and selecting projects. The selection of projects is based on
preestablished criteria and a relative ranking of investment proposals. The
organizations determine the right mix of projects by viewing all proposed
investments and existing assets as a portfolio. They generally find it
beneficial to rank projects because the number of requested projects exceeds
available funding. The criteria such organizations use in ranking projects
include linkage to strategic objectives, costs, benefits, risks, safety
concerns, customer service significance, and political implications. In
particular, it is important to clearly identify the risks of proposed
projects, assess the potential impact of the risks, and develop risk
mitigation strategies.

With regard to IRP, WMATA performed a one- time priority ranking of proposed
projects on the basis of preestablished criteria as part of the March 1999
study conducted by Frederick Harris, Inc. These criteria included how
critical the asset?s function was to delivering safe and reliable service;
the level of degradation associated with the asset?s current condition; and
other factors, such as the costs and benefits of the reinvestment, the
income- producing potential of the asset, and the policy implications of
various investments. According to WMATA officials, the agency has not
periodically updated or reassessed the priority ranking completed in March
1999 because most of the projects in IRP have remained intact, and their
priority does not change from year to year. They further noted that any
minor changes required in the program from year to year are incorporated
through the annual budget process. Although WMATA officials stated that the
priority ranking of IRP projects does not need to be periodically reassessed
over the years, leading organizations perform such periodic reassessments to
help ensure that the organization is fully considering the relative merits,
needs, and risks of all projects in light of changing conditions.

With regard to its projects for system expansion, access, and capacity,
WMATA has not formally ranked its proposed projects on the basis of
established criteria. The jurisdictions that WMATA serves identify future
expansion and access projects. In April 1999, WMATA established overall
priorities for system expansion projects on the basis of the need to serve
regional travel patterns and sustain the regional economy; however, WMATA
officials told us that individual proposed expansion projects are not in any
priority order. In our view, the criteria used by WMATA are not the types of
specific criteria that leading organizations use to rank projects. Leading
organizations use such criteria as linkage to WMATA Has Performed a

One- Time Priority Ranking of its Infrastructure Renewal Projects But Has
Not Formally Ranked or Prioritized its System Expansion or System Access
Projects

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 57 GAO- 01- 744 Mass Transit

organizational strategies, cost savings, market growth, and project risk to
rank capital projects.

Leading organizations develop long- term capital plans to guide
implementation of organizational goals and objectives and help
decisionmakers establish priorities over the long term. Although WMATA has
prepared some documents that could serve as the starting point for such a
plan, it has not developed a formal long- term capital plan that identifies
and justifies all of its capital projects, links those projects to long-
term strategic goals and objectives, and is periodically updated to reflect
changing circumstances.

With regard to IRP, the study conducted by Frederick Harris, Inc., in March
1999 contains many of the elements of a capital plan for infrastructure
renewal. For example, the study proposed a set of projects after a thorough
assessment of requirements. It also prioritized the proposed projects on the
basis of established criteria that included how critical the asset?s
function was to delivering safe and reliable service and information on the
asset?s current condition. The study also estimated the life- cycle costs of
carrying out each proposed project over a 20- year period.

Although it provides an excellent foundation for capital infrastructure
renewal planning, the Harris study does not fully meet the intent of an
agency capital plan because it does not contain the ultimate decisions
reached on which IRP projects are to be funded. Also, WMATA is not using the
proposed project ranking contained in the Harris study as the vehicle for
updating its capital decisions on the IRP program annually or biennially, as
would be expected with an agency capital plan. Instead, WMATA documents its
IRP decisions in a series of briefing slides that it uses to highlight IRP
issues and recommendations for the purpose of gaining approval within WMATA
and approval from WMATA?s Board of Directors.

WMATA has also not developed a long- term capital plan that defines capital
asset decisions for the system expansion and access programs. In April 1999,
WMATA developed its Transit Service Expansion Plan covering a 25- year
horizon. Although this plan represents a positive first step in identifying
potential capital projects, it does not define the agency?s capital
decision- making process or provide sufficient documentation on any of the
proposed projects? justifications, resource requirements, risks, or
priorities. Without such information, WMATA and its external WMATA Has Not

Developed a Comprehensive Long- Term Capital Plan

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 58 GAO- 01- 744 Mass Transit

stakeholders cannot make informed choices about managing the agency?s
capital resources.

Finally, WMATA could benefit from preparing a consolidated long- term
capital plan that incorporates all of the projects within its Capital
Improvement Program for infrastructure renewal, system expansion, and system
access and capacity. We recognize that WMATA?s capital funding sources are
earmarked for specific categories of capital projects and cannot be
interchanged (e. g., use IRP funding to pay for a system expansion project
or vice versa). However, establishing a consolidated capital plan would
nonetheless allow the agency to weigh and balance the need to maintain its
existing capital assets against the demand for new assets.

Officials at leading organizations that GAO studied agreed that good
budgeting requires that the full costs of a project be considered when
decisions are made to provide resources. Most of those organizations make a
commitment to the full cost of a project up front and have developed
alternative methods for maintaining budgetary control while allowing
flexibility in funding. One strategy they use is to budget for and provide
advance funding sufficient to complete a useful segment of a project. 6
Another strategy used by some leading organizations is to use innovative
financing techniques that provide new sources of funding or new methods of
financial return.

WMATA?s originally planned 103- mile Metrorail system was completed with
useful segments or, as WMATA refers to them, operable segments. The last
project to complete the system was designed to add 13.5 miles of heavy rail
line, 9 rail stations, and 110 new heavy rail vehicles and spare parts. The
project was broken down into four operable segments for which separate
financial agreements were negotiated with FTA. This practice of providing
separate funding for segments of Metrorail extensions was begun by WMATA?s
predecessor, the National Capital Transportation Agency. According to WMATA
officials, funding projects in

6 A useful segment is defined as a component that (1) provides information
that allows an agency to fully plan a capital project before proceeding to
full acquisition or (2) results in a useful asset for which the benefits
exceed the costs even if no further funding is appropriated. WMATA Has Used

Innovative Financing Techniques but Has Not Fully Planned How it Will
Address Funding Uncertainties for IRP and SAP

WMATA Budgets for System Expansion Projects in Useful Segments

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 59 GAO- 01- 744 Mass Transit

operable segments has worked well and will continue to be used to expand the
Metrorail system.

WMATA has used innovative financing techniques to fund its Capital
Improvement Program and operations activities. These techniques include
obtaining a loan guarantee to fund its program for infrastructure renewal,
sponsoring joint development projects with other organizations, establishing
a Transit Infrastructure Investment Fund (TIIF), and creating special
leasing programs to leverage some of its capital assets.

The major innovative financing technique WMATA used has been to seek and
receive a Transportation Infrastructure Finance and Innovation Act 7 loan
guarantee from the Department of Transportation for $600 million to fund its
program for infrastructure renewal. This guarantee allowed WMATA to show
that it had funding available and thereby initiate and accelerate its most
critical IRP projects. WMATA will soon have to seek a loan to pay for those
projects, and that loan will have to be repaid with revenues from the local
jurisdictions.

Through its Joint Development Program, WMATA seeks partners to foster
commercial and residential projects on WMATA- owned or controlled property
or on private properties adjacent to Metrorail stations for the purpose of
generating revenues for WMATA and the local jurisdictions it serves. WMATA
currently has 26 joint development projects earning about $6 million each
year. WMATA officials project that annual revenues from these projects will
eventually reach $10- 15 million as additional projects are completed.

WMATA has also engaged in leasing programs that allow it to leverage some of
its existing assets to generate additional revenue. For example, WMATA
entered into tax- advantaged leases of its 680 rail cars in fiscal year
1999. Under this program, WMATA leased its rail cars to equity investors who
obtained a tax benefit that they shared with WMATA. WMATA then
simultaneously subleased the rail cars from the investors. WMATA raised $80
million in one- time proceeds from this program and is earning interest on
those proceeds, resulting in additional income for the agency. In addition,
WMATA has a Fiber Optic Leasing Program through

7 This act, Subtitle E of P. L. 105- 178 (1998), was enacted as part of the
Transportation Equity Act for the 21st Century. WMATA Has Used

Innovative Techniques to Finance and Leverage its Capital Assets

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 60 GAO- 01- 744 Mass Transit

which it leases its excess capacity of fiber optics to corporations, along
with the right- of- way for installation of fiber optic cables. WMATA earns
about $7 million annually from this program.

Also, in August 2000, WMATA revised its ongoing TIIF program to allow the
agency to retain income and proceeds from the sale or long- term lease of
real estate transactions approved under its Joint Development Program. In
August 2000, WMATA?s Board of Directors adopted a resolution addressing,
among other matters, the use of funds deposited in TIIF. The first priority
is to ensure the complete funding of IRP and the anticipated need for
additional buses and rail cars to match ridership growth. The second
priority is to promote transit- oriented projects, such as those that
increase rail system access and ridership. As of February 2001, TIIF
contained about $1.6 million.

WMATA has estimated that over the 25- year period from fiscal year 2001
through 2025, it will need $9.8 billion to rehabilitate and replace its
existing assets under IRP and $2.5 billion to improve access to and capacity
of the existing bus and rail systems under SAP. However, the agency
anticipates that it will be able to fund only 88 percent, or $8.6 billion,
of the IRP requirements from federal and local funding sources, resulting in
a $1.2 billion budgetary shortfall over the 25- year period, or an average
annual shortfall of about $50 million. In addition, the agency had obtained
no funding commitments as of April 2001 to address its $2.5 billion in
estimated SAP needs.

WMATA faces a number of uncertainties in obtaining the full level of funding
that the agency believes it needs to meet IRP and SAP needs. First, although
WMATA?s Board of Directors has approved a long- range vision of funding
these programs at an amount ?not to exceed? WMATA?s estimated amounts, the
Board approves funding for only a 5- year period through an

?Interjurisdictional Funding Agreement,? and it firmly commits to funding
IRP projects only 1 year at a time through the budget process. WMATA?s
current Interjurisdictional Funding Agreement expires in 2003, so local
funding beyond that time is uncertain. Furthermore, WMATA?s estimate of SAP
requirements could significantly increase when it completes its assessment
of Metrorail?s core capacity in the fall of 2001. WMATA also faces the
uncertainty regarding federal funding that every other transit WMATA Faces
Budgetary

Uncertainties for IRP and SAP

Appendix III: WMATA Is Addressing its Major Capital Requirements But Could
Benefit From a More Formal Capital Planning Process

Page 61 GAO- 01- 744 Mass Transit

agency faces in light of the need for reauthorization of federal legislation
8 governing transit funding in 2003.

WMATA has not developed any plans for addressing the potential budgetary
shortfalls in IRP and SAP, nor has it developed alternate scenarios of how
funding reductions would be absorbed by the various asset categories under
IRP or by the projects identified under SAP. WMATA officials expressed
concerns that such plans and alternate scenarios could undermine their
efforts to obtain what they believe is the required funding amount for the
two capital programs. In our view, however, prudent management requires that
the agency identify the steps needed to address any anticipated shortfalls
and develop alternate plans for carrying out its capital activities,
depending on the level of funding obtained from local and federal sources.

8 The Transportation Equity Act for the 21st Century, P. L. 105- 178 (1998),
authorized federal funding for highway, transit, and other surface
transportation programs for fiscal years 1998 through 2003. Funding for
these programs will have to be reauthorized when it expires in 2003.

Appendix IV: Scope and Methodology Page 62 GAO- 01- 744 Mass Transit

Our overall approach in reviewing WMATA?s capital investment, operations and
maintenance, and safety and security activities was to determine (1) how
WMATA is organized and what policies, procedures, and practices the agency
uses to carry out the activities in each of the three areas; (2) the nature
and extent of any problems WMATA faces in each area, the factors that have
contributed to those problems, and the actions WMATA is taking to address
them; and (3) the role of other organizations in influencing WMATA?s
decision- making processes and providing oversight of WMATA actions in the
three areas.

To perform all of our work, we reviewed pertinent documentation, including
laws and regulations, and interviewed knowledgeable officials throughout
WMATA to document the agency?s policies, programs, and practices for
performing its operations and maintenance, safety and security, and capital
investment activities and to obtain views on the challenges the agency faces
in each of those areas. We also met with officials from WMATA?s Board of
Directors, the Transportation Planning Board of the Metropolitan Washington
Council of Governments, FTA, and the American Public Transportation
Association to determine their respective roles in influencing WMATA?s
decision- making processes and providing oversight of WMATA and to obtain
their views on key challenges facing the agency. We conducted our work from
September 2000 through June 2001 in accordance with generally accepted
government auditing standards.

In reviewing Metrorail?s operations and maintenance activities, we
interviewed WMATA?s Deputy General Manager of Operations, Chief Operating
Officer of Rail Service, and other officials responsible for planning,
directing, and assessing Metrorail?s operations. We also met with WMATA
officials responsible for Metrorail?s fleet and facilities maintenance
activities. We reviewed Metrorail?s fleet management plan and its operating
budget, as well as other key documents related to its operating processes
and procedures. In addition, we observed several meetings of the budget and
operations committees of WMATA?s Board of Directors, in which issues
pertaining to the proposed fiscal year 2002 budget and Metrorail?s ongoing
and planned operations were addressed.

In reviewing WMATA?s safety and security programs, we interviewed key safety
and security staff in WMATA and its oversight agencies and reviewed plans
and documents provided to us. In doing our work, we relied upon WMATA?s
safety and security statistics. We did not attempt to compare the safety or
security of WMATA with other transit systems. Currently, FTA?s National
Transit Database is the only comprehensive Appendix IV: Scope and
Methodology

Appendix IV: Scope and Methodology Page 63 GAO- 01- 744 Mass Transit

source of domestic safety and security transit data. According to an FTA
report issued in May 2000, however, the database is not adequately
comprehensive, timely, or accurate to appropriately assess the state of
industrywide or agency- level safety and security. FTA is in the process of
redesigning its National Transit Database to enhance its reporting of safety
and other data on transit agencies.

In reviewing WMATA?s capital investment activities, we compared WMATA?s
practices to those of leading public and private sector organizations. In
doing so, we assessed the extent to which WMATA (1) integrates its
organizational goals into the capital decision- making process, (2) uses an
investment approach to evaluate and select capital assets, and (3) maintains
budgetary control over its capital investments. Our criteria for established
best practices was drawn from GAO?s 1998 Executive Guide: Leading Practices
in Capital Decision- Making. 1

1 GAO/ AIMD- 99- 32, December 1998.

Appendix V: Comments From WMATA Page 64 GAO- 01- 744 Mass Transit

Appendix V: Comments From WMATA

Note: GAO comments supplementing those in the report text appear at the end
of this appendix.

See comment 1.

Appendix V: Comments From WMATA Page 65 GAO- 01- 744 Mass Transit

Appendix V: Comments From WMATA Page 66 GAO- 01- 744 Mass Transit

Appendix V: Comments From WMATA Page 67 GAO- 01- 744 Mass Transit

See comment 1.

Appendix V: Comments From WMATA Page 68 GAO- 01- 744 Mass Transit

Appendix V: Comments From WMATA Page 69 GAO- 01- 744 Mass Transit

The following are GAO?s comments on WMATA?s letter dated June 12, 2001.

1. WMATA did not agree with the subpart of our second recommendation that
calls for developing alternative capital funding strategies and project
outcomes, depending on the availability of funding from federal, state, and
local sources. WMATA states that to develop such contingency plans would
encourage its funding agencies to reduce WMATA?s resources, thereby becoming
a ?self- fulfilling prophecy?. We continue to believe, however, that prudent
management requires WMATA to plan for budgetary shortfalls that the agency
has publicly acknowledged are a major issue in protecting the public?s
investment in WMATA?s transit system. We are particularly concerned about
the near- term unfunded amounts for WMATA?s System Access and Capacity
Program, which could significantly increase when WMATA completes its
assessment of Metrorail?s core capacity in the fall of 2001. The TPB has
also expressed concerns about the adequacy of WMATA?s capital funding,
noting that the funding available from the state and local jurisdictions is
less than that requested by WMATA. Therefore, we did not change the report?s
recommendation. GAO comments

Appendix VI: GAO Contacts And Staff Acknowledgements

Page 70 GAO- 01- 744 Mass Transit

Ronald E. Stouffer (202) 512- 4416 Rita A. Grieco (202) 512- 9047

In addition to the individuals named above, John E. Bagnulo, Christine E.
Bonham, Carlos E. Hazera, Michael E. Horton, Susan Michal Smith, Carol A.
Ruchala, and Maria J. Santos made key contributions to this report. Appendix
VI: GAO Contacts And Staff

Acknowledgements GAO Contacts Acknowledgments

(348253)

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