Issues Being Faced by the Washington Metropolitan Area Transit Authority

Gao ID: CED-79-52 April 10, 1979

The Washington Metropolitan Area Transit Authority is contructing and operating the planned 101-mile national capital area's rapid-rail transit system and has operated the region's regular route bus service since 1973. The review of the Authority's policies and procedures for providing these services reported on several aspects of the Authority's operation and financing.

Metro attributes almost one-half of the increased costs to schedule delays and cost escalation but has not identified what portion of the increase is due only to inflation. Not included in the Authority's 6.8 billion estimate are the estimated $3 billion of financing costs associated with the $1 billion in revenue bonds sold during 1972 to 1975. Accounting principles do not require the Authority to include financing as part of project costs. Future interest costs should be considered part of operating expenses rather than as project costs. There are five main issues facing the Authority and local jurisdictions: whether costs should be paid through rider fares or area taxes; the effect of Federal funding being less than Metro says it needs; the need for a revenue source dedicated to pay the costs of mass transportation; the issue surrounding parking at rail stations and subsidized employee parking; and handicapped accessibility. A construction schedule and financial plan endorsed by all groups would make the total rail system operational in 1987. However, the Department of Transportation has told the Authority that it can only provide $275 million annually of the $400 million the project needs. Jurisdictional officials say they intend to ask Congress for the funding.

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