Metro buses
Metro buses at 3rd and Cedar. Photo by LB Bryce.

Monday afternoon, the County Council voted to table an ordinance incorporating the February 2015 Metro cuts recently proposed by an ad hoc committee of County Executive Dow Constantine and a few Councilmembers.  The Council’s decision has the effect of postponing the 2015 cuts indefinitely.  Without further action, Metro will continue to operate the same network it operates today, with this week’s cuts remaining in place.

The Council’s action was surprising because it approved the February cuts in principle just two months ago.  That resulted from a compromise between a Council faction led by Councilmember Rod Dembowski, who sought in June to postpone all of the cuts except for this week’s, and Constantine, who doggedly insisted that all but a few of the cuts remained necessary despite higher forecast revenues.

A couple of things have changed since July, though.  First, King County’s Office of Economic and Financial Analysis (OEFA), which is independent of either the Executive or the Council, released a new forecast with a significant increase in projected sales-tax revenue.  Second, Constantine released his 2015-16 proposed budget, which substantially reduced the number of hours that needed to be cut — although it continued to treat the February cuts, along with another small future round of cuts, as necessary.

Yesterday afternoon, I caught up with both Dembowski and Metro General Manager Kevin Desmond by phone.  Each was gracious, knowledgeable, and willing to talk about the situation in substantive detail.  Their answers revealed a real philosophical divide about how to manage potential risks to the Metro system, and helped clarify a situation which those who follow Metro (including all STB staffers) have found very confusing.  I’ll present a summary of each view below the jump.

First, though, I should provide a bit of background that’s necessary to understand either one.  Twice before, Metro has been affected by funding crises at times when it had promised to expand.  In 2000, the combined effect of Tim Eyman’s Initiative 695, which eliminated Metro’s permanent motor-vehicle excise tax (MVET) funding, and that year’s “dot-com” recession resulted in a failure to implement 400,000 hours of new service which had been promised to riders in the late 1990s.  Again in 2006, Metro promised nearly 600,000 hours of new service through the voter-approved “Transit Now” sales-tax increase, and again Metro found itself using the revenue to backfill existing service instead when the Great Recession hit.

Buffeted by those experiences, which resulted in a lot of ill will from the public, both Metro and the Council worked together to pass new Fund Management Policies in November 2011 as part of that year’s Strategic Plan process.  The Fund Management Policies provide that Metro has the following four commitments, “in this priority order,” for use of funds:

  1. Debt service
  2. “Operation of the current transit system level”
  3. “Capital needs of the current system level,” with first priority to fleet replacement
  4. Operating and capital funding for expansion

The policies provided for a new “Revenue Stabilization Reserve” (RSR) which was intended “to moderate future fare increases and to mitigate the impact of cost increases and revenue declines.”  Further, they provided that the “Revenue Fleet Replacement Fund” (RFRF, cutely pronounced “riff-raff”), which funds regular bus replacements, must maintain a balance of 30% of the projected fleet replacement costs for the entire fleet, based on FTA useful lives of 12 years for diesel coaches and 15 years for trolley coaches.

Both Dembowski and Desmond justified their positions on the basis of these policies, but in very different ways.

Councilmember Dembowski saw maintenance of current service levels as his most important goal, both because he believes adopted policies require it and because he thinks it is good on a policy level.  He believes that the Executive’s proposed budget, which builds the RSR substantially (under current financial forecasts) while cutting service, is “inconsistent” with the Fund Management Policies, which he sees as requiring that Metro fund current service first.  He pointed to a page in the budget which shows the RSR growing to $365 million in 2019 under current forecasts, and argued that such an amount — which represents roughly 50% of annual sales tax revenue — is far higher than maintained by peer agencies.  It makes no sense, he said, to cut service that is taking people to work and school in order to put hundreds of millions into the reserve fund, which, he said, would then be larger than that of any peer agency he is aware of in the country.  He also mentioned a recent APTA report (thanks to Mike Lindblom of the Times for putting the report online) on Metro, which suggested cutting the mandated RFRF balance to 20% of projected fleet replacement costs; that would free up some tax revenue currently flowing into the RFRF for use on service, and some peer agencies are using the 20% level.

Councilmember Dembowski protested what he described as a lack of transparency in the process behind the Executive’s office budget numbers, saying that both operating and, particularly, capital budgets were substantially different from what had previously been proposed to the Council, and he did not understand the reasons driving the changed numbers.  He also complained that he was “troubled” by what he saw as Desmond undermining OEFA’s work, by publicly speculating on the possibility and consequences of a recession not forecasted by OEFA.

General Manager Desmond indeed worried during our conversation about the risk of another recession notwithstanding relatively sunny OEFA forecasts, and frankly admitted that it is very difficult to predict when one might arise.  Beyond the economic environment, he also saw financial uncertainty lurking for Metro in several other places: the current contract process with ATU Local 587, which is headed to binding arbitration over which Metro has no control; in the price of diesel fuel; and in highly volatile and unpredictable pension costs that may lag years behind investment returns.  He pointed out the volatility of sales tax as a revenue source, saying twice that Metro had been “burned” by it in 2000 and 2008, and explained that Metro needed larger reserves than peer agencies because its primary funding source is more volatile.  Desmond saw the Fund Management Policies as requiring him to develop a sustainable financial plan for the agency over the long term, and pointed out that the policies were developed and passed by the Council specifically in response to Metro having been unable to meet its commitments in past recessions.  Desmond saw a potential reduction of the RFRF requirement to 20% as not having any real positive effect on Metro’s finances, as the local tax receipts that would be freed up would be offset by a need to use more of the agency’s federal grant funding on fleet replacement.

I asked Desmond whether he was “cutting now just to avoid cuts later.”  He agreed that the question was a good one, but contrasted a relatively modest amount of cuts in the February 2015 package with an unknown and much larger amount of cuts the agency could have to make if it entered another recession without substantial reserves.  He expressed a willingness to reevaluate the numbers in one year and possibly eliminate the scheduled 2016 cuts if the revenue picture continued to improve.

In the end, both Dembowski and Desmond agreed that their debate is a legitimate policy debate that should be settled during the upcoming budget process.  I think each saw the other as having a different philosophy with respect to managing Metro’s risks going forward.  I tend to share Desmond’s view, mostly because I agree that Metro funding is extremely volatile and I see building reserves in good economic times as prudent fiscal management.  But, given the much more positive forecasts contained in OEFA’s latest analysis and Constantine’s proposed budget, Dembowski’s view is no longer as unreasonable as I found it in June.  Avoiding service cuts has always been a compelling rationale, and doing so today is not quite the leap into the abyss that it recently seemed.

65 Replies to “To Cut, Or Not To Cut, That Is The Question”

  1. So, the first thing that transit advocates need to have an answer for: What is the answer to the perception that Metro, the King County Council, and the Seattle City Council have all been crying wolf to secure a tax increase?

    I still want Seattle Prop 1, arguably now more than I did 48 hours ago because it lets Seattle buy lots of new service and make lots of new improvements. Then again, is there a compelling reason to vote for it that can be put out there quickly enough and can it be offset by the “distrust” that some (Danny Westneat, for example) argue we should feel?

    Most readers here will get that projections are just that and they are subject to revision but after the big push for now _two_ Prop 1s on the basis of massive, painful cuts, I feel like this discussion is worth having.

    1. I have been thinking about this for a while, and there is a case that infusing more money into the transit system can be used to make Metro more efficient and less costly. Some (relatively) simple improvements to the city with this money could make this a world class transit system.

      1) Signal optimization: The On Board Systems of the bus’s radio unit is able to send a signal to traffic lights that have been updated so that they recognize a bus coming and will keep a light green a little longer to allow it to clear the intersection. This means that buses will spend less time at red lights and will improve both on time service and reliability. The OBS system has some spiffy tech in it, it’s time we start deploying it fully and to the most efficiency.

      2) Bus only lanes: There are many places in the city that just need to have bus corridors that… well… are abysmal that just cause so many backups that slow down reliability. This is a core part of the BRT program that allows buses to move faster and more reliably then general traffic, encouraging people to ride. And most importantly they need to be enforced. If putting cops on the scene is too much, maybe some photo enforcement?

      3) Targeted bus planning: Seattle is buying bus service, and I am pretty sure that Metro will work with the city to provide targeted bus routes (as Seattle is paying for it and as long as the areas are able to run buses [turns, road weight limits, ect]). Need more service from the U-District to Ballard? Need a bus that will take you from X neighborhood to Y neighborhood that currently doesn’t exist? Want to add another bus to Z route to make it more reliable?

      If we want Metro to be better, we need to build upon a base that is transit oriented.

      1. Thanks for most pertinent comment so far, Kelly. But measures you’re proposing also seem to be of the kind that our transit system seems to find the most impossible.

        1. The number of officials and agencies that need to cooperate stalls progress- not because these people can’t, but because “separate agencies is a two-word excuse for every single one to avoid work.

        Who was the TV character who always used to say “Is not my job!” ? Latin American (I think) accent was not only demeaning and racist, but inaccurate. Correct Seattle dialect is same as one for saying “Mistakes were made…”

        2. Next, the necessary leadership means being personally willing to make and stand by a decision- which governing and managing circles here consider consider really bad manners.

        3. And trickiest of all, while the types of measures you suggest don’t involve either major capital costs or more workers, people already behind desks, train controllers or steering wheels, and signal controls will all have to learn more and much work harder than they do now.

        4. Check name below and you can skip this paragraph, but Downtown Seattle Transit Tunnel, the one part of our system that is completely under our control, is an excellent place to start.

        End of on-board bus fare collection should more than free up enough wasted operating hours to cover the improved coordination and training. Which will then both reduce costs and increase passenger loads.

        And one odious old comeback remark will join its TV show in the grave.

        Mark Dublin

    2. Anybody who says they’re crying wolf either doesn’t understand how budget forecasting works or is intentionally distorting the facts on an anti-government crusade. When the weatherman says there’s a 90% chance of rain tomorrow and then it doesn’t rain, you don’t say the weatherman was crying wolf or lying. Instead you say that weather is unpredictable or the indications were ambiguous. Likewise, the worst the council may have done was made a mistake, but even that is doubtful because it’s impossible to predict future economic changes. The prudent thing to do is when it gets close to the edge, put a buffer in, which is what the two Prop 1’s are. There’s also the 6-month lag to put something on the ballot: everything can change during that time. But if you don’t put the measure on the ballot and then the economy goes down, the result is even larger cuts. Ultimately the problem is the volatile nature of the sales tax and the lack of an automatic stabilizer during downturns. But until the legislature addresses these fundamental issues (with Bailo’s property tax, for instance), we have to make due with band-aid buffers.

      1. If you’re a True Believer in transit, then property tax makes sense from many angles.

        Take the homeowner. Having transit increases the value of his property. Yes, he’s “paying taxes” but ultimately, he’s reinvesting in his own property.

        He should want to have fairly valued property and fairly assessed taxes going to projects that help grow or maintain his property’s worth.

    3. People can harbor whatever feelings they like about Dow Constantine and Kevin Desmond. The question is whether they’d prefer more bus service hours, $60 a year in their pockets, or possibly some other transportation priority.

      People vote for stupid reasons all the time, but we should encourage them to address the question at hand rather than decide policy based on spite.

    4. Since when did true Seattlelites think it was okay for some citizens to have faster, better service at the expense of their fellow citizens? It used to be okay for everyone to wait for a bus as long as everyone had access to transportation. Where did all these selfish people come from? Just remember, today they came for me, tomorrow they come for you…..

      1. So are you saying that Skykomish should have the same level of transit service as Seattle?

        That really makes no sense as the demand for service is much higher in Seattle.

        What exactly is wrong with Seattle taxing itself to have better transit service than the rest of the county?

      2. Chris, I said “it used to be okay for everyone to wait for a bus as long as everyone has access to transportation”. Access being the focus, not demand. Please read the text of the Initiative in conjunction with the Seattle Transit Master Plan and Metro’s Transit Master Plan, then share with me where it states any monies raised in this Proposition will be used to provide Seattle taxpayer’s with “better transit than the rest of the County?”. Please stop drinking the Kool Aid and do more research

  2. No matter the cause, this turn of events is severely damaging to Metro’s credibility when going to voters. If you say “we have to cut 17% of service if you vote no,” then you cut a much smaller percentage in real life — this will train voters to think you are overstating things. IT also imperils the Seattle prop vote.

    It would have been better if the council had engaged on this *before* the vote and reprioritized things as they are doing now — and say “listen voters, we’re doing everything we can, but if you vote no, there will be a 5% reduction.” That would have been more accurate and not damaged Metro’s credibility going forward.

    1. Not exactly – transit agencies across the country use a similar tactic when it comes to fare increases. They usually give the absolute worst case projection, but rarely implement it & that is what Metro is doing here with the cutting of service hours. I only know of a few cases where a transit agency actually followed through on such a doomsday scenario & Metro isn’t close to that by any stretch of the imagination.

    2. “Everything we can” is never enough. No matter how much they do, people will say it’s too little. Only privatizing Metro, charging $6 fares, or banishing the union and paying drivers minimum wage would satisfy them.

      1. You have to divide the “them” into those who will be satisfied with above measures until they personally experience results of privatization- and the ones who, since they never ride transit, will be satisfied if their corporation gets the contract.

        MD

      2. Mike’s completely right. People are way too quick to give all kinds of sophistication to voters they don’t deserve. The vast majority of voters are either pro or anti transit, and they’ll interpret the news of the day accordingly.

    1. OK, he was right about what happened, but was he guessing or did he have forecast data that none of the rest of us had? I’m perfectly willing to give him credit for reading the data correctly but not if he “had a hunch.”

      1. I continue to believe that in June he was going beyond the data (i.e. “guessing based on hope”), unless he had forecast information that no one else did. His position is far easier to support with the data we have today, including the August OEFA forecast and the budget, than it was in June.

        “Flynn” is a sock puppet for a banned commenter. I’m leaving his posts here only because I think your replies should be part of the conversation.

  3. Stepping back a bit from specific language of the financial policies, there are 2 questions to answer:
    1. What ongoing level of service is sustainable over the long term with (long-term) forecast revenue, and does this answer meet the current level of service?
    2. If current revenues are (on an annual basis) lower than required to maintain current service, are reserve funds adequate to make up the difference, AND would long-term forecast revenues then be enough to re-build the reserve funds to target levels within a reasonable time (eg 5 years)?

    If the answer to both questions is yes, then cuts are NOT necessary, and preventing such cuts seems exactly what reserve funds are intended to do.

    On the other hand, if Mr. Dembowski is depending on a one-time benefit by reducing the RFRF requirement from 30% to 20%, that still leaves open Question 1.

    Neither the financial policies nor the APTA report (as linked) seem to address the question of how and when reserve funds are to be drawn down, except for a mention that the council should be informed / decide on such use.

    1. As I see it based on my conversations with them, this is the core disagreement between Dembowski and Desmond. Desmond feels that if we continue with the current level of service then we will not be able to build up a reserve adequate to maintain current service in the event of a typical recession. Dembowski feels that the reserve levels Desmond wants are higher than necessary and do not justify cutting service to reach them. Of course it is virtually impossible to know who is right because sales tax receipts are so volatile and unpredictable. But there is some weight of history on Desmond’s side of the debate, particularly if you think another long recession like the one that started in 2008 is a possibility.

      1. David,
        Hard to settle the issue without numbers. Any pointers to supporting numbers on one or both sides? I’ll go look but if you’ve already narrowed the search in the haystack that would be helpful…

        As to the volatility of forecasts – true, but we still have to make decisions. It’s always possible to build larger reserves. We still need to get out spreadsheets to decide whether that’s the best use of the money.

        In any event, thanks for the great reporting.

      2. The available numbers are hard to interpret, which is one reason this issue is so confusing (even for STB staffers). In the end it is now a question of future reserves rather than immediate cash needs in 2016, which wasn’t clear a few months ago. Dembowski and Desmond, who are both extremely well informed, were very helpful in providing context that helped me make sense of the latest numbers. I think the best place to start is the Executive’s proposed budget; focus particularly on the RSR and RFRF lines over time as a percentage of overall revenue. The OEFA forecasts are also helpful.

      3. David, while I think that this country’s economic downturns are a hundred percent political, I also think transit would do best to look at them pretty much like earthquakes:

        Whatever severity, first line of defense is a system of equipment in first-rate repair and operating order, and workers trained and motivated to keep it running.

        And more than anything else, the practiced habit of correct response in an emergency, individually and together- without orders if chain of command goes down. Best example:US air traffic controllers’ response to the 9-11 attack.

        However much I hate the fear-based budgeting over terrorism, I suspect our delegation would have easiest time getting Homeland Security funds if our application said “terrorism”.

        And I know the machines, drills, and training would work equally well in very likely disasters, like a mile-long oil tanker train blowing up under the length of Downtown Seattle, or a major quake- which is inevitable.

        Is a short olive-drab spade still called an “entrenching tool?” Read that in WWI, German infantry figured out that sharpened one worked better than a bayonet, and was less likely to get stuck in its target.

        While still working just fine for its original function. Which is my point here.

        Mark Dublin

  4. This is very troubling and prop 1 has a lot of work to do.

    1. Exactly what is going to be expanded in Seattle if it passes?

    2. What assurances do Seattle voters have that our money will not just be used to bolster the rainy day fund and bail out the county on capital spending?

    1. Answers: “bus service,” and “so what if it does?” Asking for an “exactly” isn’t available just yet because Metro hasn’t been asked that question, but the study materials lie in the Seattle Transit Master Plan.

      As for “so what if it does,” Seattle taxpayers are the largest customer segment of Metro. If half the cash goes to making Metro more stable, that directly benefits Seattle taxpayers because we don’t see routes like the 47 go away.

    2. The Seattle Times article yesterday already mentioned the possibility of repositioning Prop 1 II as an expansion measure. But it’s probably too late to change the ballot language. The #1 priority is to ease overcrowding and lateness. That will have to go behind restoring cuts, although I’m not sure whether that provision applies to the September cuts. I guess the city should announce some general priorities in agreement with Metro, but I don’t think it should promise specific routes because there’s not enough time to deliberate properly, and there’s a danger of knee-jerk promises to the loudest activists. “Let’s make the evening 2 and 12 frequent now that we’ve saved them!”

      Some promises would be safe, like more service on the C, D, E, 120, 71/72/73X and 41 because they’re obviously overcrowded. Second priority is filling in frequent evenings/Sundays on the 5, 8, 10, 40, etc. That would go a long way toward making Seattle’s transit more full-time usable like San Francisco and Chicago. And I’d like some general support for consolidations, or at least no vow to prevent them.

      1. Prop 1 does *not* require restoring the September cuts. If Seattle chooses to do so, in part or in full, it will be as a result of pressure from neighborhood activists. Those in Leschi have been particularly vocal about the cut to the 27.

    3. Prop 1 has some contradictory provisions. It requires that its money be spent consistently with Metro’s service guidelines, but also has a special provision saying that preventing the proposed February restructure (which was developed using the guidelines) is first priority.

      If you look at the 2013 Service Guidelines Report, there are investments it prioritizes, if resources are available, to reduce crowding and improve reliability. I have to think those investments would be likely to come first if Prop 1 passes. In Seattle, they are the following:

      – New trips to reduce crowding on these routes: 8, 9, 11, 15X, 17X, 26, 28X, 40, 66, 67, 68, 71, 73, 74, 75, 128
      – Reliability improvement (likely through more recovery time) on these routes: 1/14, 7, 8, 10, 11, 16, 17X, 18X, 21, 24/124, 26/131, 27/33, 28/132, 31, 32, 40, 41, 48, 56X/57, 60, 71, 72, 73, 74, 76, 77, 120, 128

      1. Love this discussion, but head is spinning a bit: 66 was doomed to be deleted, and now it is mentioned as a route for new trips due to overcrowding.

      2. Routes proposed for deletion are not necessarily poor performers if the deletion is part of a restructure. The reason the 66 was proposed for deletion is because it was going to be consolidated into a far more frequent 73 covering most of the same territory, not because it’s a badly-performing route. At peak hour it has overcrowding problems, and if it’s left in place it needs more peak service.

    4. Restoring the 27 is the least objectionable and most likely. Although they should consider keeping the First Hill reroute. Either way, the 27 is a relief valve for the slow 3/4 and 14, and Leschi is a steep hill away from other bus service.

    5. 2. The assurance is that Seattle would buy service hours direct from Metro. If you pay for 40,000 service hours, you get 40,000 service hours, similar to how the City currently buys some service through the Bridging the Gap program. The risk is that Metro could come up with a “plan for cuts” that disproportionately falls on Seattle, and Seattle Prop 1 money is used to “save” the service. Hopefully those at the City watching the funds will be able to spot and prevent this ruse.

      1. The risk is that Metro could come up with a “plan for cuts” that disproportionately falls on Seattle

        I think (someone correct me if I’m wrong) that would be explicitly prohibited by the service revision guidelines currently in place.

      2. The concern that I have, is not that “Metro” (in the form of Kevin Desmond, Victor Obeso, etc.) would do what Chad describes, but that “Metro” (in the form of the suburban-dominated County Council) would do so, by either effectively negating or by actually changing the service guidelines – which they ultimately control. Especially since they started to negate the guidelines (or at least came extremely close to it) in the service-cuts ordinance that Dow Constantine vetoed.

      3. I think the likelihood of a change in the Service Guidelines is very low. All of the current suburban members of the Council agreed to them with the full knowledge that they favored city service much more than the planning formulas they replaced. What is more likely is further attempts to circumvent them for the sake of specific pet projects or corridors, like we saw from Kathy Lambert in June. The suburban councilmembers vary widely in the degree to which they have a holistic view of the system.

    6. The “plan for cuts” was already published. The county’s offer to all the cities (not just Seattle) was to buy back hours based on that. If Metro then revised the cuts to make most of them in Seattle, it would be widely viewed as acting in bad faith, and the council and Dow himself would undoubtedly veto it. Plus it would be unlike Metro, who has long tried to keep “service hours in the district”. Earlier 40/40/20 shifted Seattle hours to the Eastside, and now Metro has the freedom to shift them back, but is not doing so except maybe a bit at a time, and shifting hours out of Seattle is not likely at all. The idea that Metro would/might do that is in the realm of conspiracy theories.

  5. “speculating on the possibility and consequences of a recession not forecasted by OEFA”

    If OEFA does not foresee at least a possible recession, then OEFA is wrong. The banks are still too big to fail and are getting back into their reckless gambling and subprime mortgages. They’re sitting on the money we’re giving them instead of lending it out and granting relief to underwater mortgages like they were supposed to. The euro zone is still being held together by band-aids and many countries are in recession. Oil supply is exactly at demand, meaning a small imbalance would have large impacts. A regional mideast war a la ISIS would create a large imbalance. There’s also climate change we’ve done little to prepare for. Congress is twiddling its thumbs while critical issues are unaddressed.

    1. Desmond said in my conversation with him: “We are not going to repeal the business cycle.”

    2. An oil price spike could easily trigger a recession as could one of the various international crisis blowing up into something larger.

      1. Question, Chris, and for several other commenters: “Trigger” a recession? Clip should be empty and the barrel burned out by now. Guess we’re so used to being at the bottom of a Depression that we think we’re in a, what? Recovery?

        Read somewhere that around the Crash of ’29, real was fear was about either a Panic or- a recession, meaning an economic reversal. So attempting to comfort the public, officials claimed that we were only looking at a mild dip in the road. Just sort of a depression…

        Also, has anybody else noticed that from nationwide to local, there’s always enough money to do what those currently in control want to do- while things they don’t are said to threaten “The Budget?”

        Sorry, Kevin. Over the last thirty years of so, a huge amount of transit improvement really has been treated as if the Business Cycle was repealed with Prohibition.

        MD

      2. OK trigger a panic if you prefer. My point was more that it has been argued that one of the triggering events for what happened in the last half of the previous decade was the run up in energy prices just prior to everything going sideways. Of course once the downturn started and the margin calls started we found out what a house of cards the Ponzi scheme known as our financial system was.

    3. If Councilmember Dembowski thinks it is meaningful that OEFA isn’t forecasting a recession, he needs OEFA to explain economic forecasts to him. Economic forecasts NEVER forecast a recession except if it’s imminent and obvious.

      As a practical matter, macroeconomic models do not predict recessions well. It’s not that macroeconomists don’t believe these things happen. Just that the timing of a turning point in the economy is inherently impossible to forecast.

      Once you get past the very short run, an economic forecasting model turns into a long-run trend growth model. On average, it’ll be correct. Most years, the economy grows, and the revenue numbers come in a little above forecast. In a few years, there’s a recession, and the revenues come in way below forecast.

      The only useful way to think about recessions is as a risk to the forecast. It doesn’t make sense to put a recession in the forecast because it’s an unlikely event in any given year. But cumulatively, it’s unlikely that we’ll never see another one and that’s why we reserve.

    4. I was going to mention that. Most forecasts did not predict the crash or the dotcom recession. Metro, Seattle, and the state were all wise to build up rainy day funds during the boom.

  6. Metro pulls a Pierce Transit.

    So they have been able to eek out more efficiency that translates to saved bus service. This is what is fueling the people that campaign against ballot measures. Metro said they NEED more tax revenue because they CANNOT get any more efficient. Then things like this happen.

    I understand that some cuts have been made, and the future of the cuts are indefinite. Right. Exact same thing happened to Pierce Transit. They did cut a little (it was so small most people don’t even notice), then they suddenly postponed the service cuts indefinitely. Now they are actually adding new service. The cuts? Not a word in almost a year. My opinion? They will never happen. I think Pierce Transit is alright, and they are sweeping the cuts under the rug (of course, when they needed money, the slated cuts were 57%). A small amount of Metro’s cuts just happened. Now the later cuts are delayed indefinitely. I’m not ready to say that they won’t happen, I honestly think they will, but the path so far is very similar to Pierce Transit’s.

    At this point, I guess there really is no way to see if they are being honest I guess. I would always vote yes, but I cannot say the same for people that see public transit agencies as entities that lie to their voters when more funding is on the table.

    Best of luck for Prop 1 in Seattle this fall. If it fails, it will be interesting to see what happens. If 57% cuts can turn into 3%, who knows what will happen.

    1. Pierce Transit and Metro were saved by rising sales-tax revenue due to a successful economy. The “efficiencies” (including future potential efficiencies) aren’t enough money to compensate for these levels of cuts (or conversely, these increases in service levels).

      1. If further cuts can be postponed until 2016, is there a potential for further efficiencies from U-Link restructures that could push out the timeline for sustainable service a little farther?

    2. Correction: Dembowskii pulls a Pierce Transit. Metro management is resistant to Dembowski’s unsustainable and unwise maneuver policy choice. Cuts are still on the table in the horizon–and likely once Dembowski realizes that he’s wrong. If Metro were actually in charge of its own management, cuts would be a certainty right now. I can’t understand why Dembowski is engaging in transit terrorism.

      1. Simple, he has to get reelected. Saying “I saved you from the Metro bus cuts!” is a good way to gain in the polls.

      2. But given his district is he likely to face a serious challenger any time soon, and more importantly one where that would be a valid election issue?

        Personally I’m not much impressed with Dembowski and really miss Fergeson.

    3. I’m not worried about recent developments imperiling the passage of Prop 1. The bigger issues are ensuring adequate financial reserves and support for Metro and transit outside of Seattle.

  7. To me an important question is whether, for the 2015-16 biennium, Metro can afford to maintain current levels of service, without dipping into the RSR or failing to fund the RFRF. If so, lets maintain current service levels, and put less into the RSR than would have been otherwise possible if cuts were made.

    If not, then service cuts are necessary and prudent, unless additional revenue sources can be found. We shouldn’t be drawing down the RSR at this point in an economic cycle.

    The minimum balance in the RFRF is less important than the annual fund transfer rate. If the target average fleet life is 13 years, then Metro needs to add 1/13th (7.7%) of the total replacement cost into the fund each year (minus any reliable federal contributions). Run the cash flows of fund additions and bus purchase expenses out 13 years, and ensure the balance never goes negative. OK, now I see a purpose of the minimum balance requirements: at 30%, you could chose not to add to the RFRF for 3.9 years (due to a funding crisis, etc.) and still avoid going negative IF you allow the balance to drop below the minimum 30% during recession/crisis years. In this case, the minimum balance in the RFRF is another rainy day fund. I would be OK with lowering the minimum to 20%, if the RFRF was managing rigourously/responsibly.

    1. The Executive’s budget (incorporating the cuts) shows a negative balance for the RSR at the end of 2014, a substantial contribution to it in 2015, and then another dip into it in 2016. I’m not sure why.

    2. A lot of what Metro did was draw down that fund to keep bus service running. What they then said was “If we have to cut service [Sept 27], that means we do not need to replace as many buses [ie, less are running].” I do not always agree with Desmond, but in this case it was a fairly wise judgement. The 30% buffer gives Metro more breathing room in case things start going wrong.

  8. So if Prop 1 II passes, the first priority will probably be the underservice in Metro’s 2013 performance report that David Lawson lists above. Second would be some September restoration, probably the 27 and maybe the 30. (G*d hopes not the 61.) Then what? Would there be enough left over for an all-day route or a consolidation-with-expansion? If so, and if Metro and the city have balls, we could get on with the Queen Anne and CD and Fremont reorganizations with enough frequent evening service to mollify at least some of the opposition. (Some of the opposition won’t be mollified in any case, of course.)

    Then, on to the TMP… What first? What, in a bus sense, not a streetcar sense. Preferably in a trolleybus sense.

      1. That’s a good question. It’s an arbitrary result to have the September cuts stay without some of the later ones — for instance, the now-gone 47, or the midday trips on the 27, performed better than the 25. That’s one of many reasons I hope the city encourages Metro to go through with at least some of the restructures planned as part of the later cut packages, just this time with levels of service that make them attractive rather than distasteful.

  9. Kevin is right to be worried about the next recession and fuel costs. Those of us who study peak oil see it coming sometime during the latter part of this decade.

    1. I used to be feverish about Peak Oil about 15 years ago, then fracking and shale/tar sands came online. With greatly efficient engines, solar/wind, etc, it’ll be a long time till peak oil.

  10. Messrs. Dembowski and Desmond should trade jobs. If that works out, Mr. Dembowski can run for Executive. If not, then Mr. Desmond can send Mr. Dembowski to the dustbin of history, where he belongs.

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