For an agency already under fire for fatal safety lapses and revelations of financial mismanagement, the latest developments indicate more turmoil.
Metro has abruptly ground to a halt in addressing the authority’s future executive leadership. The agency also might use new rail cars to replace older ones rather than to expand the subway’s capacity.
Meanwhile, Washington Mayor Muriel Bowser moved to oust one of city’s representatives on the Metro board and replace him with someone who shares her view of the kind of leadership the agency needs.
In another surprise Thursday, the transportation chiefs for Washington, Maryland and Virginia agreed in principle to allow Metro to exercise purchase options for 220 new rail cars, according to Virginia Transportation Secretary Aubrey Layne.
The agreement, first reported by radio station WAMU, would add to the 528 new rail cars for which funding has already been approved.
Separately, in a sign of Metro’s continuing financial difficulties, officials said Thursday that the agency has yet to submit paperwork to the federal government to be reimbursed for $400 million that it spent in previous years to upgrade the system. Metro was years late in applying for the federal grants and is still playing catch-up in accounting for its spending in order to collect the money.
The agency’s board chairman, Mortimer Downey, also criticized Metro’s past financial managers for the troubles.
“Don’t ask me why the people at WMATA never sent those [grant] applications in,” Downey said. If he had done the same when he was chief financial officer of the New York transit agency, Downey said, “I would have been either fired or executed on the spot.”
As for the rail car purchase, Metro wants to acquire the total of 728 new, technologically advanced rail cars over the next several years to eliminate six-car trains during rush hours, replacing them with all eight-car trains.
The transit agency wants Maryland, Virginia and Washington to pay $1.47 billion for the eight-car rail plan — $614 million for the 220 additional and $856 million for infrastructure upgrades to accommodate more trains. What apparently remains to be decided is whether the new cars will be used to replace old cars or used to increase capacity, and whether the jurisdictions will spend $856 million for related infrastructure improvements.
Metro’s purchase options for the cars expires in July, Downey said.
“We’ve been asked to produce an analysis of how many cars should we buy out of the option program, what should they be used for, what ancillary investments will be immediately necessary or long-term necessary,” he said.
The $1.47 billion rail-car plan is part of a broader, $7 billion list of hoped-for capital improvements — a plan dubbed Metro 2025 — for which the agency had been seeking funding approval this spring.
However, after a discussion with Maryland, Virginia and Washington officials about Metro’s financial condition, Downey said, the agency has agreed not to seek funding for most of the Metro 2025 plan until next year. The only piece that will remain on the table is the rail-car acquisition, because the purchase options are due to expire.
Regarding the Metro board’s membership, District of Columbia Council member Jack Evans, D-Ward 2, who represents the city on the panel, said he will ask the council to pass legislation that would remove Tom Downs, a Metro board member since 2011. Downs, whose term on the Metro board doesn’t expire until 2018, is a longtime transit executive and a former Amtrak chairman.
The move appears related to a disagreement over the type of general manager Metro should hire, with Bowser and other Washington officials favoring a financial turnaround specialist. Downs was in the camp that favored a more traditional transit executive, Metro officials have said.
The disagreement boiled over last month, just as a majority of the board seemed ready to appoint a new top manager from a field of three finalists. Amid the turmoil, the three finalists withdrew from consideration, pushing the transit agency back to square one in its search for new executive leadership.
Now the search has been suspended until Bowser’s chosen appointee joins the board, and until Maryland, under new Republican Gov. Larry Hogan, fills one of its two voting seats on the transit authority. One of Maryland’s voting representatives resigned last year.
Metro officials have said that Hogan shares Bowser’s view that Metro, given its money woes, should hire a financial turnaround specialist as general manager.
As for the board shake-up, Bowser would replace Downs with Corbett Price, a health-care financial consultant. The legislation also would remove one of the District’s alternate board members, Matthew Brown, and appoint Leif A. Dormsjo to his seat. Dormsjo is acting head of the District of Columbia’s Department of Transportation.
Evans and Bowser generally see eye-to-eye on Metro matters. By replacing Downs with a second voting member who also shares her views, the mayor would greatly enhance her ability to steer the transit agency in the direction she wants.
Asked about his impending ouster, Downs said: “The mayor’s office told me of her intention last week. I told the mayor when I met with her the first time after the election that I understand and support any mayor’s need to have their own people in that position.”
Downs said: “There are differing opinions still, even within the District government, on a lot of the Metro stuff. Different views on both the finance and the safety stuff, and the board member stuff. . . . My view doesn’t count anymore, since this is my last board meeting.”
News that Bowser wants to remove Downs came on the same day that Metro budget officials told the board that they plan to borrow $220 million to make repayments on lines of credit that are due in July. The agency has been scrambling to pay its bills for capital projects after the Federal Transit Administration restricted Metro’s ability to draw grant funds. That action came after last summer’s highly critical FTA audit report.
Metro faces cash-flow pressure because the FTA has slowed payments to it because of past financial mismanagement.
“It’s a liquidity problem, from not doing business in the appropriate way,” Downey said.
The troubles should ease when Metro accounts for the $400 million in past spending and is reimbursed for it, but Metro said it didn’t expect to complete that process until sometime next year.
“We’ve got about five years of paperwork we’ve got to get done,” Downey said.
Partly because Metro was so late applying for the federal grants, it had to wait until this year for most of them to be awarded. The award makes it possible for Metro to be reimbursed, after it accounts for the spending.
In the past, Metro borrowed money and spent it in anticipation of eventually collecting on the grants.
“If I had gone to my board and said, ‘I haven’t applied for the federal grants for the last couple of years, but trust me, I’ll borrow the money and we’ll fix it,’ I would not have stayed in that job very long,” Downey said.
Downey demurred when asked if he thought Metro managers deserved to be fired.
“Obviously we’ve got to do a better job,” he said.
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Washington Post staff writer Lori Aratani contributed to this report.