Interestingly, Hampton Roads Transit seems to be having the same kinds of financing problems as WMATA
Hampton Roads Transit is the transit agency serving the Hampton Roads (Norfolk, Virginia Beach, other cities) area in Southeast Virginia. It is the state's second largest metropolitan area with very large military bases and shipbuilding operations.
A few years ago the agency got a lot of positive press within the industry for its opening of a small light rail line. More recently, expansion of the line to Virginia Beach was scuttled by controversial referenda, although planning for expansion of the line in Norfolk continues ("Light rail choices should be about the future," Norfolk Virginian-Pilot).
The Tide Light Rail at Monticello Station in Norfolk, Virginia.
Sadly, the line is minimally used with fewer than 7,000 daily riders. But if the line is extended to major employment centers, ridership would increase.
Simultaneously there is a toll program for the Elizabeth River Tunnel--the river is a transportation barrier--to fund the construction of another tunnel. The tolling program has stirred a great deal of animus because unlike "High Occupancy Toll" lanes payment is not optional ("Philip Shucet is new CEO of Elizabeth River Crossings," NVP).
Separately from the toll contract with the State of Virginia, the Elizabeth River Crossings organization pays Hampton Roads Transit to provide enhanced transit services through the tunnels. Otherwise, no part of toll revenues are designated to help fund regional transit.
The agency also has a ferry service ("More people are using the Portsmouth-Norfolk ferry and now there's a new boat in the water," NVP).
Funding. HRT is funded the same way as WMATA, with appropriations from participating jurisdictions complemented by fare revenues and other sources (usually state and federal).
Both agencies have structural financing shortfalls ("HRT budget outlook predicts declining ridership, and cities may have to pick up more of the tab," Norfolk Virginian-Pilot), problems with financial management (HRT's problems are more recent, while WMATA has mostly corrected theirs), need governance reform, and are asking for the creation of a regularized revenue stream, such as an incremental addition to sales taxes, which can then be used to support long term bond-based financing. From the NVP article "Hampton Roads Transit demotes CFO after another $1.3 million budget error":
Harrell [the agency director] said the change and the addition of a monthly budget committee are steps in the right direction, but said HRT will continue to struggle unless it gets a dedicated, steady stream of funding. It currently relies on cities to choose the amount of service they want and money they pay. HRT is lobbying for a more stable revenue source from the state.With WMATA, Virginia and DC are on board with such a change, while Maryland is not ("Is Dedicated Funding Dead For Metro In 2018? Business Leaders Shift Focus To Governance Reform," WAMU-FM/NPR).
In Hampton Roads, local jurisdictions haven't developed a consensus on funding either, and are more focused on financial management problems especially because the agency isn't set up to allow for the creation and maintenance of a reserve fund for use in exigent circumstances. From "Creating a modern HRT with an antiquated business model":
HRT’s budget has a true-up provision in which money is either refunded to member cities or additional funding is requested. Since HRT’s inception in 1999, money has been refunded nine times.Instead, the agency has to make mid-year cuts and/or the jurisdictions have to come up with new monies when problems alight ("Hampton Roads Transit blows budget by $5M, and 6 cities will pick up the tab" and "Hampton Roads Transit lays off 16 employees, eliminates 17 other positions after reporting cost overruns").
(WMATA has a reserve fund but in the past, some boards have voted to instead return "revenue overages" to the jurisdictions.)
Hampton Roads Transit bus system improvement proposal. In the midst of its financial problems, the agency has a separate proposal for significant improvements to the bus system, moving towards the creation of a high frequency sub-network with service on 20 lines moving to every 15 minutes, from a current service profile of buses every 30 to 60 minutes ("Hampton Roads Transit wants to overhaul bus services but the price tag could be a problem," NVP). From the article:
New technology would create a “seamless experience” – real-time-arrival digital signs at stops and a mobile app that would keep people informed with GPS-enabled buses. You could pay with your phone instead of cash only across the whole system.According to the article, the jurisdictions are leery because of the cost but also because the system's managerial and funding issues. From the article:
Branded buses and stops with benches and shelter would signal to users that these routes are improved.
“This would turn us into a modern system,” says Ray Amoruso, planning director for HRT. “It also addresses all our underlying, what’s broken in our system.”
The plan improves 18 of the most-used routes, 13 in South Hampton Roads, five on the Peninsula and adds two new routes in South Hampton Roads. Most would get simplified, straighter routes, and the frequency and reliability improvements create a new “backbone” for the transit network, Amoruso said.
It would connect transit services to 267,000 people, 141,000 jobs, 10 colleges and universities, nine hospitals, eight business districts and 22 attractions within a quarter-mile of stops. The change would “unleash the region’s potential,” according to the presentation.
But that $45 million annual price tag would be nearly a 47 percent increase to HRT’s $96 million budget.
But Thelma Drake, assistant director for transportation for Norfolk and a former congresswoman, said lawmakers need to see improvements from HRT, which recently went $5 million over its budget earlier this year. HRT is seeking dedicated funding instead of getting money piecemeal from individual cities.Why didn't the agency do this simultaneously with the inauguration of The Tide light rail program? The Tide functions well, even if the ridership isn't high, and the ferry program has growing ridership. During Norfolk's big Harborfest in June, the system experienced a fair amount of ridership on all three modes--light rail, bus, and ferry ("Nearly 50,000 Transit Trips for Harborfest 2017").
“What are we doing to be more efficient, more accountable?” she said. “We can’t come out and say we need more money without showing results.”
While it's probably true that the system needs to do a kind of reboot to improve its efficacy and achieve greater ridership, I don't understand why such a reboot wasn't done in conjunction with the light rail program. It would have boosted ridership overall and for the light rail program, especially when the system was on a high from the adoption of a new mode.
This is an example of building from success, rather than trying to build and improve a program during crisis. The latter can happen, but it's extremely rare.
In any case, like how I suggested that a complementary transit network improvements program should be created in association with the recently approved Purple Line light rail program in Suburban Maryland ("Setting the stage for the Purple Line light rail line to be an overwhelming success: Part 2 | proposed parallel improvements across the transit network") and how it should have been done in association with the first and second phases of the Silver Line Metrorail extension ("Using the Silver Line as the priming event, what would a transit network improvement program look like for NoVA?"), Hampton Roads Transit is another example of why/how complementary transit network improvement programs should be created in association with major network improvements like light and heavy rail development and expansion programs.
Creating regularized financing streams for transit works best in flush and successful times too. The same goes for financing. When transit agencies are up the creek financially, the same is usually true for area jurisdictions. (Similarly, sales and property tax revenue streams are no panacea as they drop during recessionary times, as most of the nation's transit agencies relying on such funding found out in the period of the recent Great Recession.)
If a regularized funding stream wasn't already set up at the onset of the agency (e.g., that was done for the San Francisco Bay Area and Atlanta for their heavy rail systems, and for the Puget Sound's light rail program--counties that voted against participation aren't included in the respective systems), for long term economic health, it's best to create one.
But do it when your system is successful and everyone wants to be part of the "party." (Also see "Creativity Helps Rochester's Transit System Turn a Profit," New York Times, about the transit agency in Rochester, New York.) Although financial exigency will drive agencies to pursue such a course when they're desperate, why not plan ahead and do this when you're successful?
WMATA should have done this in the 1970s or at the latest in the early to mid-1980s when the system was launched, growing, and successful. HRT should have done this up to or immediately after the launch of The Tide, both for financing and improvements to the bus transit system.
Probably, by building that kind of momentum and building on that momentum, Virginia Beach would have joined the light rail program instead of repeatedly rejecting it.
Specific lessons for the State of Virginia. The financial issues facing transit agencies tend to be structural, not specific to specific agencies. Overarching solutions are required.
Specific lessons for transit agencies and transportation planning. Create complementary transit network improvement programs alongside substantive infrastructure improvements such as new light rail, streetcar, heavy rail, or commuter railroad programs.
Leverage the planning and development of the new infrastructure to improve the entire system.