Transportation Systems Casebook/Governance of Washington DC Metro

Summary

In 2001, the Washington Metropolitan Area Transit Authority (WMATA) celebrated an important milestone in its history when the final portion of the initial 103 mile Metrorail system was opened for operations. After 32 years of construction and 25 years of operations, the system was complete. WMATA was on top of the world, having been awarded the American Public Transportation Association's Outstanding Achievement Award twice in 1987 and 1997. Following the completion of the system in 2001, the Government Accountability Office (GAO) praised WMATA for their "sound policies, programs and practices."

This would all change though during the next decade. Accidents, near misses and constant reports of mismanagement and dysfunction changed the public perception of WMATA. Its governance structure received special attention. Even the GAO, the same office that praised WMATA in 2001, released a report entitled "Washington Metro Could Benefit from Clarified Board Roles and Responsibilities, Improved Strategic Planning" in 2011, criticizing the current governance structure of WMATA and called for changes. Since then, the calls for changes have only increased as it has become apparent that WMATA's governance structure must change.

However, there is disagreement amongst various parties to the cause of the current situation. This case study will investigate some of these causes, including the problems of; managing a multi-jurisdictional organization such as WMATA; the structural nature of transit system that WMATA has built, maintains and operates; the lack of funding for WMATA; the policies and bylaws of the WMATA Board of Directors; and the constraints and limitations imposed by the WMATA Compact. This case study will first describe the current actors involved in the case, followed by a timeline of important events. Maps and organizational charts will be provided here as needed. The narrative of the case will be described before the policy issues presented above will be discussed. The case study will finish with its conclusion and the posing of discussion questions for the group.

Annotated List of Actors

Washington Metropolitan Area Transit Authority (WMATA)

An interstate compact agency that currently provides heavy rail, bus and paratransit services inside the Washington Metropolitan Area Transit Zone (Zone). The Zone includes the District of Columbia (DC), the Virginia cities of Alexandria, Fairfax and Falls Church, the Virginia counties of Arlington, Fairfax and Loudoun and the Maryland counties of Montgomery and Prince George's. WMATA operates the nation's second largest heavy rail system, sixth largest bus system and fifth largest paratransit system.

• Board of Directors (Board)- The governing body of WMATA. Comprised of eight voting members and eight alternate members, for a total of 16 members. DC, the Commonwealth of Virginia (Virginia), the State of Maryland (Maryland) and the General Services Administration (GSA) may appoint two voting and alternative members each. The Board selects from amongst these members their own Board Chairman and Vice Chairman and can hold meetings as frequently or infrequently as they deem appropriate. The Board Members are not compensated for their services, but can be reimbursed for necessary expenses. The Board has many powers including appointing and dismissing the WMATA General Manager and other offices at their pleasure and has final approval on specific issues, including bus route changes, capital project spending and fare increases. As of October 25, 2015, all eight full member and alternate member spots are occupied.
• General Manager (GM)- The GM is the "chief administrative office of the Authority" and "shall be responsible for all activities of the Authority." The GM is appointed by, serves at the pleasure of the Board, can be removed by the Board and shall perform all duties and functions as specified by the Board. The GM oversees most of the day-to-day operations of WMATA and its staff.
• WMATA Staff- The staff that is managed by the GM. Under the GM there are 11 departments and 70 sub-departments. The size of the total workforce is more than 12,600 men and women.

States

There are two states, the State of Maryland and the Commonwealth of Virginia, and one district, the District of Columbia, that are involved in WMATA. The appropriate actors for each one are presented below.

State of Maryland (Maryland)

• Washington Suburban Transit Commission (WSTC)- The body that appoints the two voting and two alternates to the WMATA Board for the State of Maryland. The Maryland WMATA Board voting and alternate members must be members of the WSTC. The WSTC has seven members, with three appointed by the Governor of Maryland, two appointed by the Executive of Montgomery County and two appointed by the Executive of Prince George's County. Traditionally, Maryland's two voting members to the WMATA Board are selected from the Governor's appointees to the WSTC and the alternate members are split between one member each from Montgomery and Prince George's Counties. In addition to its role in selecting the Maryland members of the WMATA Board, the WSTC is charged with paying the local share of WMATA funding for Montgomery and Prince George's Counties. This is done through annual appropriations made by the Maryland General Assembly from the Maryland Transportation Trust Fund to the WSTC, who pay it to WMATA.
• Governor of Maryland- The chief executive for Maryland and is responsible for appointing three members to the WSTC and by tradition the two voting members for Maryland on the WMATA Board.
• General Assembly of Maryland- The legislature of Maryland. They are responsible for appropriating Montgomery and Prince George's Counties' share of WMATA funding through the Maryland Transportation Trust Fund. Their approval, along with the approval of the General Assembly of Virginia, the Council of the District of Columbia and the Congress of the United States, is necessary for amending the WMATA Compact.
• Montgomery County- A county located in suburban Washington, DC that is located within the Zone. By tradition, the County Executive appoints one of the alternate members for Maryland to the WMATA Board. They are required to provide funding for WMATA. Their portion is covered by payments made to the WSTC from the Maryland Transportation Trust Fund.
• Prince George's County- A county located in suburban Washington, DC that is located in the Zone. By tradition, the County Executive appoints one of the alternate members for Maryland to the WMATA Board. They are required to provide funding for WMATA. Their portion is covered by payments made to the WSTC from the Maryland Transportation Trust Fund.

Commonwealth of Virginia (Virginia)

• Northern Virginia Transportation Commission(NVTC)- The body that appoints the two voting and two alternate members to the WMATA Board for Virginia. The Virginia WMATA Board members and alternates must be members of the NVTC. The NVTC has twenty members, who are elected officials. Five members are appointed by Fairfax County, three from Arlington County, two from the City of Alexandria and one member each from Loudoun County, the City of Fairfax and the City of Falls Church. The Chairman of the Commonwealth Transportation Board is a member, as well as four members from the House of Delegates and two members from the Virginia Senate. The county members are appointed by their respective counties, the CTB Chairman by the Governor, the House members by the Speaker of the House and the Senate by the Senate Rules Committee. Traditionally, Virginia's two voting members to the WMATA Board are selected from Fairfax and Arlington County appointees and the two alternates are selected from Fairfax County and Alexandria City appointees. In addition to appointing the Virginia members of the WMATA Board, the NVTC is responsible for paying for the Virginia localities' share of local funding to WMATA from state and local sources.
• Governor of Virginia- The chief executive of Virginia and is responsible for appointing the Chairman of the Commonwealth Transportation Board, who is a member of the NVTC.
• Virginia General Assembly- The legislature of Virginia. Responsible for paying for two-thirds of the Virginia localities' share of local funding to WMATA through the NVTC. The sources of this funding includes a two cent gas tax collected in the Northern Virginia localities located in the Zone and other state revenues. Their approval, along with the approval of the General Assembly of Maryland, the Council of the District of Columbia and the Congress of the United States, is necessary for amending the WMATA Compact.
• Arlington County- A county located in suburban Washington, DC that is located in the Zone. By tradition, the one of its three members on the NVTC is one of Virginia's full WMATA Board Members. Pays the remaining one-third of their share of local funding for WMATA from general revenues.
• Loudoun County- A county located in suburban Washington, DC that is located in the Zone. Notable for being the only locality in the Zone to have no Metrorail service and pays no local funding to WMATA. This will end following the completion of the Silver Line.
• Fairfax County- A county located in suburban Washington, DC that is located in the Zone. By tradition, the one of its five members on the NVTC is one of Virginia's voting members on the WMATA Board Members. Another Fairfax County member is, by tradition, one of the alternate members. Required to pay the remaining one-third of their share of local funding for WMATA from general revenues.
• City of Alexandria- A city located in suburban Washington, DC that is located in the Zone. By tradition, one of its two members on the NVTC is one of Virginia's alternate WMATA Board Members. Required to pay the remaining one-third of their share of local funding for WMATA from general revenues.
• City of Fairfax- A city located in suburban Washington, DC that is located in the Zone. Required to pay the remaining one-third of their share of local funding for WMATA from general revenues.
• City of Falls Church- A city located in suburban Washington, DC that is located in the Zone. Required to pay the remaining one-third of their share of local funding for WMATA from general revenues.

District of Columbia (DC)

• Council of the District of Columbia (DC Council)- The legislature for DC and responsible for appointing the two voting and two alternate members from the District of Columbia to the WMATA Board. Traditionally, one voting member and one alternate member is selected by the DC Council from among its 13 members. The other voting and alternate members are chosen from the Mayor of the District of Columbia's administration by the DC Council.
• Mayor of the District of Columbia- Executive of the District of Columbia and selects, through the DC Council, a voting and alternate member for the WMATA Board from their administration.
• District Department of Transportation (DCDOT)- The department of transportation for DC and the entity responsible for providing funding from the District of Columbia to WMATA. Payments are made every quarter, with funds for operations coming from the general fund and funds for capital projects coming from general obligation bonds.

Federal Government

The Federal Government has played a large role in the construction and operations of WMATA since its inception in 1967. They were responsible for up to 60 percent of the funding for the construction of the Metrorail system and continue to provide funds to them today.

• Congress of the United States of America (Congress)- The legislature of the United States and responsible for consenting to any changes made to the WMATA compact once Maryland, DC and Virginia have passed the necessary legislation to amend it. Can also pass legislation compelling DC, Maryland and Virginia to amend the compact, as was done in 2009. Congress appropriates Federal funding to WMATA for operations and capital costs.
• General Services Administration (GSA)- Agency responsible for appointing the two voting and two alternate members from the Federal Government to the WMATA board. The Administer of General Services makes the appointment decisions based on consultations with local stakeholders such as local transportation boards, Federal agencies and local members of Congress. Unlike the other appointing bodies, the GSA is required by the WMATA Compact to have one of its appointed members be a regular passenger or user of WMATA's rail and/or bus services.
• Federal Transit Administration (FTA)- Agency inside the Department of Transportation responsible for directing Federal Government funding to WMATA and, through its State Safety Oversight Agency program, overseeing the system's safety, along with the Tri-State Oversight Commission. Recent decisions by Congress have given the FTA the sole authority for safety oversight of the WMATA Metrorail system.

Timeline of Important Events

• February 20, 1967- Birth of WMATA.
• 1969- Construction of Metrorail by WMATA begins.
• January 14, 1973- Following the failing of the private bus operators, WMATA assumes operations and maintenance of the region's bus services. Metrobus is created.
• March 27, 1976- Metrorail begins operations following the opening of the first portion of the Red Line between Brookland and Farragut North stations.
• January 13, 1982- First major accident involving passengers on Metrorail when train crashes at Federal Triangle Station. Occurs on same day as Air Florida Flight 90 Crash on the 14th Street Bridges.
• 1994- Metroaccess, a paratransit service provided by WMATA, begins operations.
• January 6, 1996- Heavy snowstorm causes crash of Red Line train at Shady Grove.
• 1997- Tri-State Oversight Commission is established by a Memorandum of Understanding between DC, Maryland and Virginia to oversee safety on Metrorail.
• April 20, 2000- Train catches fire between Farragut West and Foggy Bottom.
• January 13, 2001- Green Line opened from Anacostia Metrorail station to Branch Avenue Metrorail station. The initial 103 mile Metrorail system is complete after 32 years of construction.
• 2004- First expansions of the Metrorail system are completed and opened to the public. The Blue Line is extended to Largo Town Center and an infill station at New York Avenue is constructed on the Red Line.
• November 4, 2004- Two trains crash into each other on the Red Line at Woodley Park-Zoo Station with 20 injuries.
• March 2009- Construction on Silver Line to Tysons Corner, Dulles International Airport and Loudoun County begins.
• June 2, 2009- Two Red Line trains crash into each other at the Fort Totten Station. 8 passenger and one crew member are killed and over 80 individuals are injured.
• March 2010- Richard Sarles, is selected to be the Interim General Manager for WMATA by the WMATA Board.
• January 2011- Richard Sarles is promoted from Interim General Manager to General Manager.
• July 26, 2014- Phase I of the Silver Line is completed connecting Tysons Corner to the Metrorail system.
• September 24, 2014- WMATA General Manager Richard Sarles announces he will retire from his position effective January 16, 2015.
• January 12, 2015- Smoke incident at L'Efant Plaza Metrorail station caused by faulty electrical equipment and other issues kills one passenger and injures 95 other individuals.
• January 16, 2015- Richard Sarles retires from WMATA. Jack Requa becomes new Interim General Manager pending the selection of a permanent General Manager by the WMATA Board.
• February 14–15, 2015- WMATA Board comes close to selecting Grace Crunican, former manager of the Bay Area Rapid Transit (BART) system in San Francisco, as the new General Manager for WMATA. Under pressure from DC and Maryland officials prevents the WMATA Board from making a decision and the effort collapses.
• October 9, 2015- Following investigations into the response of WMATA to the L'Efant Plaza Metrorail station smoke incident, safety oversight for the WMATA Metrorail system is transferred from the Tri-State Oversight Committee to the Federal Transit Administration.
• October 28, 2015- News is leaked that former aerospace executive Neal Cohen has been selected as the new WMATA General Manager.
• November 2, 2015- Neal Cohen withdraws his candidacy for the new WMATA General Manager position.
• November 5, 2015- Paul Wiederfeld is chosen by the WMATA Board to be the new General Manager. He is the former administrator of the Maryland Transit Administration and the former executive of Baltimore-Washington International Airport.

Narrative of the Case

The Washington Metropolitan Area Transit Administration (WMATA) is a unique system providing transit services to two states and one district. Conceived in the 1960s, construction began on the Metrorail system in 1969 and the first section opened in 1976. The entire system was completed in 2001 and expansion began shortly thereafter. WMATA began to provide bus service in 1973 and para-transit, Metroaccess, services in 1994. Today, WMATA's rail service, Metrorail, operates on over 106 miles of track and serves 86 stations. Their bus service, Metrobus, operates on over 325 routes using 1,500 individual buses. These services means that WMATA now currently operates the country's second largest heavy rail transit system, sixth largest bus transit system and fifth largest para-transit system over a service area of 1,500 square miles containing five million individuals. With a total daily ridership of 1.2 million individuals, 20 percent of which are Federal government employees, the Washington, D.C. area could not operate today without WMATA's vital services. It is no wonder that because of this, some have referred to WMATA as "America's Transit System."

Unfortunately, throughout its history, WMATA has been plagued by issues that have impacted its governance. The unique governance system, necessitated by being the only transit system in the country to serve three separate state level jurisdictions, has created problems. The threat of jurisdictional veto is a constant threat as is the lack of clear delineation of responsibility between the General Manager and the WMATA Board. Although WMATA has suffered from accidents throughout its history, the responses to the most recent fatal accident in January 2015 have caused some to question WMATA's ability to provide a safe service. Funding woes has caused maintenance issues, most notably the continued presence of out of service escalators and elevators throughout the system. Finally, WMATA's many duties, including providing what is in essence commuter services for outer jurisdictions, subway services for DC and the inner suburbs and local bus services for DC, have caused problems as WMATA has to balance each of these competing priorities.

2015 has so far appeared to be the year when all of these issues have come to the forefront. Since the retirement of Richard Sarles as WMATA General Manager this past January, WMATA has been without a permanent General Manager until early November. This delay has been attributed to infighting and disagreement among WMATA Board members and the three jurisdictions on what qualities the new General Manager should have. The fatal accident at L'Efant Plaza Metrorail station made passengers, elected officials and the Federal government question the safety of the Metrorail system. This has led to the Metrorail system being placed under federal oversight for safety since October, 2015. Finally, throughout the year, ridership on the system has been declining, hurting WMATA greatly.

Policy Issues

Multi-Jurisdictional Issues

WMATA is the only heavy rail mass transit system in the nation that serves three, distinct state level entities. WMATA's governance structure and the problems that it faces today are very much a reflection of this unique and special characteristic and go back to the founding of WMATA. During the early planning stages of Metrorail, DC, Maryland and Virginia feared that if they did not work out a multi-jurisdictional compact to plan and operate the proposed Metrorail system for themselves, the Federal government would do it for them, without their input. Although they came together, disagreements and arguments between the states and localities continue to cause problems for WMATA. Several times in its history, one locality or state has threatened to withhold or withdraw funding for WMATA until their specific grievances are met. The WMATA Compact contains the jurisdictional veto requiring that all Board of Directors decisions be passed by a majority of the members and include at least one member from each jurisdiction. The only exceptions are when the Board is adopting a finance plan or is adopting or amending the mass transit plan. The best recent example of this inter-jurisdictional tendency to disagree would be the arguments made between the Governors of Virginia and Maryland and the Mayor of the District of Columbia on what skill set the new WMATA General Manager should have following the retirement of former General Manager Richard Sarles in January 2015. After months of debate, discussion and the sudden withdraw of the WMATA Board's first choice, Paul J. Weidefeld, former head of the Maryland Transit Administration and Baltimore-Washington International Airport, was selected as WMATA's new GM on November 5, 2015.

It is not clear how multi-jurisdictional issues could be addressed due to the geographic nature of the region. There are two potential options that may alleviate some of the problem. In their recent report, Report on Governance of the Washington Metropolitan Area Transit Authority, the WMATA Riders' Advisory Council (RAC) states their belief that these issues could be alleviated if the Board of Directors started to operate more as a legislature with more transparency and public officials on it that would represent the interests of the system's riders. In contrast, Cadwalader, Wickersham & Taft, LLP in their report to the WMATA Board, Recommendations to the WMATA Board Concerning Governance and the Code of Ethics, state that while the RAC's proposal is one option, another option is to take the opposite track and "take steps to free its Board Members from jurisdictional conflict by reducing their direct accountability to their appointing jurisdiction." Instead of being like a legislature, the Board under this proposal would act more like a regional body and function in a way similar to a corporate board. While the two proposals do offer potential for how to reduce the inter-jurisdictional conflicts that cause headaches for the WMATA Board, they will never be fully removed as long as the current situation of having two states and one special district sharing the Capital region exists.

Structural Issues of WMATA's Transit System

WMATA officially provides three vital services to the Washington D.C. metropolitan area. These are Metrorail, Metrobus and Metroacces, a para-transit service. However, it could be argued that WMATA really provides four services as the Metrorail system is in some ways a hybrid commuter rail/subway system. Inside DC and the inner suburbs, the Metrorail system runs underground through tunnels between stations that are located near each other. In the outer suburbs of Fairfax, Montgomery and Prince George's counties, the Metrorail runs at grade or in elevated structures in a manner similar to traditional commuter rail services like those provided by the Virginia Railway Express and Maryland Area Regional Commuter trains. The Metrobus service also shows a similar hybrid nature with multiple local services inside DC with longer distance commuter services spreading into the surrounding counties. Therefore, it is best to think of WMATA has providing limited commuter rail service, subway service, commuter bus service and local bus service.

Prioritizing which of these services is most important has always been a problem for WMATA. Traditionally, the outer suburbs view WMATA's commuter oriented rail and bus services as the most important, while the inner suburbs and DC have wanted WMATA to prioritize the more traditional subway services. Finally, Metrobus is the primary provider of local bus services for DC. Until 2005 when the DC Circulator service was inaugurated, it was the only provider of local bus service for DC. Consequently, DC places a higher priority on the local bus services provided by WMATA than the other jurisdictions as shown by them paying the highest share of the WMATA operating subsidy.

WMATA has tried to balance all of these competing service priorities with mixed success. To better understand how this situation could be improved, it is necessary to look at other transit providers that are either similar to WMATA and/or provide a similar range of services. The Bay Area Rapid Transit (BART) rail system have been called Metrorail's cousins since they were conceived and built at roughly the same time and employed the same hybrid commuter rail/subway system as Metrorail. In the case of BART, only rail service is provided. Local and commuter bus and transit services are provided by the individual localities located within the BART service areas. In this way, BART operates in a manner similar to how WMATA was initially planning to operate. Two other transit agencies that provider commuter rail, subway, commuter bus and local bus/transit services are the Massachusetts Bay Transportation Authority (MBTA) and Southeastern Pennsylvania Transportation Authority (SEPTA). While both systems provide services similar to WMATA and do extend into neighboring states such as Rhode Island, New Hampshire, Delaware and New Jersey, these states play either a limited or no role in the governance of the authorities. In the case of the MBTA, all MBTA Board of Directors members are appointed by the Governor of Massachusetts, and all Board of Directors members at SEPTA come from localities located within the Commonwealth of Pennsylvania.

While reforming the WMATA governance structure to make it similar to the governance structures of both the SEPTA and the MBTA would make the coordination and prioritization of providing conflicting services a simpler endeavor than it currently is, the reality is that such an action is impossible as it would require either DC, Maryland, Virginia or the Federal government to surrender its powers to one of the partners. Abandoning the provision of commuter and local bus services, while feasible, would leave DC and Prince George's county in a lurch, as they depend heavily on these services for their local populations. These two localities between them have two voting members and three alternate members on the WMATA Board and the DC WMATA Board members would certainly use their jurisdictional veto to block any such moves as described above.

Funding Issues

Since its birth, WMATA has always depended on government support to provide its services to the people of the Washington Metro region. Table 1, presented below, shows the total amount of funding received by WMATA in fiscal year 2015, the funding sources, the percentage of funding received from these sources and how much and what percentage was spend on operational and capital expenses.

Source of Funding	Amount ($Million)	Amount (Percentage)	Operational/Capital Spending Split (Amount)	Operational/Capital Spending Split (Percentage)
All Sources	$3,243.8	100%	N/A	N/A
Federal Funding	$471.9	16%	$0/$471.9	0%/100%
Local and State Funding	$1.157	40.7%	$778.1/$379.7	67%/33%
All Other Revenues	$1614.9	43.3%	N/A	N/A

As per the WMATA Compact, each locality served by WMATA is required to pay a portion of the operating subsidy, of which totaled $778.1 million in fiscal year 2015, annually. The distribution among the eight localities is presented below in table 2.

Locality	Percentage of Operating Subsidy Paid by Locality
District of Columbia	37.4%
Prince George's County	21.4%
Montgomery County	16.7%
Fairfax County	13.4%
Arlington County	6.7%
City of Alexandria	6.7%
City of Falls Church	0.3%
City of Fairfax	0.2%

Each state has a designated entity which will make the payments to WMATA for the localities. For Maryland, the WSTC makes the full payments for Montgomery and Prince Georges Counties and receives its funding from appropriations from the Maryland Transportation Trust Fund (MDTTF), the depository for the Maryland state gas tax, as well as other vehicle taxes and fees. For Virginia, the NVTC is the entity responsible for making payments on behalf of the Northern Virginia localities to WMATA. Two-thirds of the localities WMATA payments are paid by the NVTC directly and comes from a two percent retail tax collected on gasoline in the NVTC localities as well as other transit funding given to the NVTC by the Commonwealth. Statute requires that monies collected from the two percent gas tax must be used by the NVTC to pay for the two-thirds share of WMATA funding paid by Northern Virginia localities by the NVTC and cannot be used for other purposes. The remaining one-third of the Northern Virginian localities share must be paid by the localities themselves to WMATA through the NVTA. The District of Columbia Department of Transportation is the entity responsible for making the operations subsidy payment to WMATA for DC. The payments are made every quarter and the operations subsidy is paid for by DC general fund revenues, which include such sources as the gas tax, parking meter fees, traffic fines, car fees, restaurant taxes and hotel taxes.

Despite all of these sources of funding, it is important to note that, with the exception of the 2 percent gas tax that is collected in Northern Virginia, none of the operating subsidy that is paid to WMATA from the localities are from dedicated sources. The result is that each year there is no guarantee for WMATA that the localities will pay their share of the operating subsidy. In 2009 the Federal government tried to change this with the most recent amendment to the WMATA Compact. The amendment inserted sections d(1) and d(2) to clause 18 and was brought about when in 2008, Congress authorized $1.5 billion to be given to WMATA over the next decade for capital improvements. The localities were required to match this new Federal funding and the 2009 amendments required that any local matching funds come from "a dedicated funding source."

The localities have responded to this in different ways. The Maryland localities have stated that their share already comes from a dedicated funding source, the MDTTF. Virginia gave instructions to their localities stating that the remaining one-third that they are responsible for should come from local sources that are not subject to appropriations. DC stated that they would use sources that are "earmarked or required under the law of the signatory [DC] to be used to match such federal appropriations." This was deemed satisfactory and the first $150 million payment was made to WMATA from the Federal government in 2010.

Despite this advance the majority of funding that WMATA receives from all levels of government comes from non-dedicated sources. While WMATA was authorized to receive $1.5 billion over 10 years in 2008, each payment of $150 million must be appropriated annually. The MDTTF is also subject to annual appropriations as it is the funding source for transportation projects throughout the state. Finally, sections d(1) and d(2) only apply to those funds authorized under that law and does not apply to other funds provided by the localities. The funding source that is the closest to a dedicated funding source, the two percent gas tax in Northern Virginia, is too small to make a difference. In 2005, it was estimated that this tax paid for only 13.2% of the Northern Virginia localities share of the operating subsidy.

This lack of a dedicated funding source for WMATA does impact how the organization is governed. Without certainty that future funding it is difficult for leadership to plan for the future and manage a large and complicated organization. WMATA has done a good job with fare box recovery, recovering about 53.9% of their total costs through fare revenues alone, it is not enough for fund an organization whose budget in 2003 was roughly the size of the budget for the State of Wyoming. Between 2003 and the end of fiscal year 2015, the budget has since more than doubled, from $1.23 billion to $2.84 billion. While funding may not be the primary cause of the current governance issues facing WMATA, it does appear to exacerbate them and therefore should be considered when discussing how to solve WMATA's governance issues.

WMATA Board Procedures and Bylaws Issues

In addition to the WMATA Compact, the WMATA Board is governed by procedures and bylaws that they themselves have the power to make and amend as they please. As of July 24, 2014, the Bylaws of the Washington Metropolitan Area Transit Area Board of Directors (WMATA Board Bylaws) contained 17 articles and 27 sub-articles. As of February 26, 2015, the Procedures of the Washington Metropolitan Area Transit Authority Board of Directors (WMATA Board Procedures) contained 10 articles and 16 sub-articles. Both the WMATA Board Bylaws and the WMATA Board Procedures can be amended by the WMATA Board by a majority vote and without legislative action from DC, Maryland, Virginia and Congress.

In their 2011 report, the Government Accountability Office criticized the WMATA Board for their policies and procedures and a lack of permanent and amendable bylaws. In response to these criticism, the then chair of the WMATA Board, Catherine Hudgins, sent a letter to David Wise at the GAO and dated for June 24, 2011. The letter was later included in the final GAO report. The letter highlighted the changes that had been made by the WMATA Board since November 2010 and the schedule for pending changes to the WMATA Board Procedures and draft WMATA Board Bylaws. A comparison between the latest versions of the WMATA Board Procedures and Bylaws shows that of the 17 changes outlined in the letter, 12 have been adopted since 2011. While the changing of the WMATA Board Procedures and Bylaws may be able to help WMATA with its governance issues, it appears that it can only do so on the perimeter of the issues due to their subordination to the WMATA Compact.

WMATA Compact Issues

The Washington Metropolitan Area Transit Authority Compact (WMATA Compact) is the founding document for WMATA and outlines the roles, responsibilities and powers of the major actors. However, the language in the Compact is unclear and has over the years caused confusion over which responsibilities belong to whom with most confusion being the division of responsibilities between the WMATA Board of Directors (WMATA Board) and the General Manager (GM). The WMATA Compact states that the "General Manager shall be the chief administrative officer of the Authority and, subject to policy direction of the Board, shall be responsible for all activities of the Authority." Beyond this single clause, the Compact does not discuss the role and responsibility of the General Manager in great detail. As it currently stands the WMATA Compact includes the phrase "the Board" over 150 times, while the phrase "General Manager" is included less than 10 times. The WMATA Compact gives the Board of Directors many powers including appointing and dismissing the General Manager at the Board's pleasure, developing and adopting a long range transit plan, capital budgets, current expense budgets, authorizing bond sales, labor policies and, most importantly, the setting of fares and rates as well as service routes. This last power is "subject to the sole and exclusive jurisdiction of the Board."

The document itself has not changed much since it went into effect in 1967 when it went into effect for the construction and operation of the future Metrorail system. In 1973, WMATA took over the privately provided local bus services in the region and began to operate Metrobus, a task it was not originally planned for. This was a major expansion of WMATA's responsibilities, but no changes on how the authority would be governed were made. The only major change to WMATA's governance structure came in 2009, when two voting and alternate members were added to the WMATA Board representing the Federal government.

Why the WMATA Compact was written as it was requires an understanding how it got enacted in the 1960s. During the preliminary planning for what would become Metrorail, there was debate over if the system should be planned, built and funded by a multi-jurisdictional authority or by a Federal authority. One group, the Joint Transportation Commission (JTC), supported the multi-jurisdictional approach and another, the National Capital Transit Agency (NCTA), supported the Federal approach. Both were competing against each other to ensure that their vision would become the reality. The JTC won the competition, but in order to get the compact quickly approved by Maryland, DC (at the time controlled by Congress) and Virginia, the WMATA Compact had to be as inoffensive and uncontroversial as possible. The result was that the Compact was heavily based off a previous regulatory compact, the Washington Metropolitan Area Transit Commission (WMATC), which was established in 1961 to regulate the private local bus companies in the region. The compacts for two other multi-state authorities, the Port Authority of New York and New Jersey and the Port Authority of the Delaware River Basin, were also used as a basis. The results of this rushed process survive with us to this day.

In the aftermath of the 2009 Red Line Crash five reports were released between 2010 and 2012 that investigated WMATA's governance, its problems, and possible solutions. While the reports differed in their conclusions, some commonality emerged on the impact of the WMATA Compact has on the current governance issues plaguing WMATA. Two reports found that the ambiguity and vagueness of the Compact had resulted in a lack of a clear delineation of the responsibilities of the WMATA Board and the General Manager. Another report analyzed the WMATA Compact and how it set up WMATA's governance and stated that it resembled more a regulated utility board than a corporate board, with major limitations on the actions of the General Manager when it came specifically to route selection and rate setting. The Riders Advisory Council's (RAC) report found that although the General Manager is usually referred to as the CEO of WMATA, the Compact makes no mention of this and that it should be corrected. The alternate board members established by the Compact came under scrutiny as well, with one report finding that no other transit agency or authority having similar positions. They were also confused by these positions as they are allowed to vote in Board committees and subcommittees, but not allowed to vote at Board meetings, unless their designated voting member is absent. The same report took issue with the current procedure for how Board members are appointed to the Board of Directors. Currently each jurisdiction has discretion on how their specified appointing body will select their WMATA Board Members with no coordination or communication on how each jurisdiction selects their appointed members. This results in a Board that is uneven in the necessary knowledge and experience of overseeing a large transit provider. Finally, the jurisdictional veto included in the Compact was found by one report to be unique to WMATA.

It appears likely that a good part of WMATA's governance troubles do stem from the WMATA Compact. Unfortunately, in order to overcome these issues, it would be necessary to amend the WMATA Compact itself as it have been done nine times before. The reason for this is because in order to amend the WMATA Compact, the amendments must be approved by all three jurisdictions before being consented to by Congress. Both the Maryland and Virginia General Assemblies are part-time legislatures and meet only at specific times of the year and for a limited period, thereby limiting the timing window for the amendment process. Additionally, the recent gridlock in Congress makes the obtaining of Congressional consent unlikely at best.

Conclusion and Policy Suggestions

After reviewing the evidence presented in this case study, it can be determined that the policy issues discussed above do play a role in the current governance issues plaguing WMATA and its transit system. Some of these policy issues do seem to have either resolved themselves or, due to the underlying issues in them, are impossible to resolve. The issues caused by the WMATA Board Procedures and Bylaws appears to have potentially resolved themselves, though the recentness of the changes made to them means that any long term effect of the changes is unknown at this time. The issues caused by WMATA being a multi-jurisdictional entity, while being a prominent source of WMATA's current troubles, appears to be impossible to resolve at this time due to the underlying geographical nature of the Washington, D.C. metropolitan area. Geography is destiny and therefore in order to provide transit service throughout the entire region, geography ensures that it is WMATA's destiny to be a multi-jurisdictional entity.

Other policy issues discussed in the above sections can be addressed through changes of policy and therefore the following policy actions should be taken by the appropriate authorities to improve and alleviate the governance issues of WMATA. First, the structural issues of WMATA's transit system must be addressed. It is clear that trying to provide all services to all customers while being beholden to multiple masters is untenable and therefore the services provided by WMATA should be streamlined. This would most likely require the transfer of the provision of local bus service from WMATA to the local jurisdictions where it currently provides such services. While this would hurt DC and Prince George's County the most, it will allow WMATA to focus on the task it was created for, the construction, operation and maintenance of a heavy rail system for the Washington, D.C. metropolitan area. In order to bring this about, a committee should be established that would include all stakeholders to determine which routes are appropriate for transfer. Second, a dedicated funding source must be found for WMATA to ensure that the new streamlined services provided by WMATA are sustainable in the long run and that the problems created by lack of funding and delayed maintenance are fixed. One potential dedicated funding source would be for DC and Maryland to create a gas tax that is similar, or ideally identical, to the one that is currently collected in the Northern Virginia localities served by WMATA. Other appropriate sources of a dedicated revenue source includes a regional sales tax.

The third and final policy change that could improve WMATA's governance issue would be the review and reform of the WMATA Compact to make it appropriate for today's environment. The WMATA Compact was based on the experience of the day, namely compacts designed to regulate privately operated transit and commuter bus services and those for port authorities. Unfortunately, while this may have been appropriate for the time, the fact remains that today WMATA is a transit operator and provider, not a transit regulator and is not responsible for port facilities. The intervening decades have seen other regional compacts formed, inspired by the success of WMATA in its first decades. These compacts should be reviewed and used to determine what reforms are necessary to make the WMATA Compact suitable for WMATA's current role. In order to do this, a conference should be held to discuss potential reforms and be attended by high level officials of all stakeholders, specifically the governors/mayors and legislatures/councils of DC, Virginia and Maryland as well as Congressional and Executive branch representatives, along with other interested parties. This conference will allow for all stakeholders to determine what sort of changes and reforms to the WMATA Compact are required. Following this conference a working group made of stakeholder representatives should be established to draft the necessary amendments to the WMATA Compact and guide them through the necessary legislative processes required by the WMATA Compact. This is a long term goal and will not be met for some time meaning that it is vital that the process begin as soon as it is feasible.

Discussion Questions

1. How much of WMATA's governance issues are a result of WMATA being a multi-jurisdictional entity?
2. How much of WMATA's governance issues are a result of WMATA's structural issues in regards to its transit system?
3. How much of WMATA's governance issues are a result of WMATA's funding issues?
4. How much of WMATA's governance issues are a result of the WMATA Board Procedures and Bylaws?
5. How much of WMATA's governance issues are a result of the WMATA Compact?
6. What are your opinions on the policy changes suggested in the case study report, the effectiveness of the suggested policy changes and their feasibility?
7. What other policy changes could be made to alleviate the governance issues plaguing WMATA?

Additional Readings

Washington Metropolitan Area Transit Authority (WMATA): Issues and Options for Congress- Congressional Research Service Report

Washington Metro Could Benefit from Clarified Board Roles and Responsibilities, Improved Strategic Planning- Government Accountability Office Report

Moving Metro Forward: Report of the Joint WMATA Governance Review Task Force

Report on Governance of the Washington Metropolitan Area Transit Authority- WMATA Riders Advocacy Council

Recommendations to the WMATA Boar Concerning Governance and the Code of Ethics- Cadwalader, Wickersham & Taft, LLP

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