Op-Ed from Sunday’s Austin American-Statesman:
Watson: Capital Metro moving forward fiscally, transparently
Linda S. Watson, Local Contributor
Capital Metro is taking care of business and doing things differently these days. Some difficult but necessary budget decisions will put the organization on a stronger financial path for the future so we can continue to provide the high-quality service this community deserves.
Just like other public and private businesses and your family budget at home, we are facing tough economic times. But this is not the same Capital Metro that it was just a few years ago. We have raised the bar by strengthening our leadership, business practices and transparency. This progress is reflected in our proposed budget for the new fiscal year, which begins Oct. 1, and in the recent recognition of Capital Metro by the Texas comptroller of public accounts as a leader in local government transparency.
Through disciplined budget work, Capital Metro has reduced spending across the board by carefully scrutinizing every line item, delaying construction projects, leaving vacant positions unfilled and adjusting lower-performing bus routes.
This budget process was one of the most thorough and transparent in Capital Metro’s history. We started working on the budget much earlier and have provided our board and the public more comprehensive information and opportunities for feedback than ever before.
Make no mistake: This will be a difficult budget year, there are still many challenges ahead, and progress takes time. I can assure you that we will tackle all of these issues head-on. There already are positive signs.
Our bus ridership is up by nearly a million passengers from last year. While other transit systems are facing drastic service cuts, we are not proposing service level changes in the new fiscal year. MetroRail ridership has doubled since last fall, and we have standing-room-only trips during rush hour. Though we have met our initial ridership projections, many of our customers are asking for more rail service. But until there is additional revenue, we are taking a responsible approach in the new budget by proposing to operate the same level of rail service that is currently running.
Capital Metro has also made substantial progress in increasing its cash reserves. Two years ago, reserves were under $7 million. At the end of this fiscal year, they will be over $20 million. We have more work to do to get reserves where they need to be, but the progress so far should not be understated.
We have identified new opportunities to achieve cost savings and generate additional revenue next year, including the possibility of selling naming rights of some of our facilities or services, and refinancing to get a better rate on our rail car lease. However, the motto for the budget is, “no surprises,” so we will not put any of these proposed savings in the budget until the money is in hand.
With that said, there are still some significant “known unknowns” as we approach the new budget year. We are changing our labor structure to comply with a new state law that was passed to clear up a confusing labor arrangement and reduce costs. As a result, we are in the process of contracting our bus and paratransit services to private companies.
Recently, the Department of Labor clarified Capital Metro’s obligations under federal law when we transition to a private structure. As we have said from the beginning, Capital Metro will comply with all federal requirements. The financial impact of this transition, and the recent clarification, will be known when we see proposals later this year from prospective private contractors.
The bottom line is that Capital Metro is managing its business in a new, open, transparent and fiscally responsible manner, and we will continue to do so. That is what taxpayers, customers and employees expect, and that is exactly what we are going to deliver.
Watson is president/CEO of Capital Metro