Cost-containing measures have left Metro with a $28 million operating surplus for the fiscal year that ended June 30, the organization announced Monday.
Fiscal controls included a successful health care audit and fuel hedging, which locked in a favorable rate for fuel that saved the authority money, it says.
The fiscal year ended one day before Metro raised fares for riders and increased taxpayer subsidies to meet a projected shortfall in the budget.
“I am pleased to report that we ended the year with a surplus and we continue to identify cost savings opportunities to ensure we are operating efficiently,” Metro General Manager and CEO Richard Sarles sais in a statement. “We anticipate applying the surplus to offset budget challenges we foresee in the coming fiscal year.”
It was the second year in a row Metro ended the year with a large surplus. In a recent report, the agency said it had a $46 million surplus in the previous fiscal year.
The combined $74 million is much larger than the estimated $56 million the agency expects to raise with the fare increase that went into effect July 1.
Riders now pay as much as 28 percent more per trip an even when using the discount-providing SmarTrip cards and local jurisdictions are paying 7.6 percent more for a total of $669 million of the $1.6 billion operating budget.
Metro had known it probably would have a surplus before finalizing the fare increases and higher subsidies, the Washington Examiner reports. But Chief Financial Officer Carol Dillon Kissal told the Examiner she couldn't use the savings then because it was only a forecast.
Metro will make a financial outlook report to its Board on Thursday, where it will say it is working to reduce the early forecast for additional funding for FY2014 from $76 million to $25-$30 million.
As part of the Authority’s business planning efforts, management is focused on continuing safety initiatives and addressing fatigue management, the organization says.
Next year’s budget will continue the expanded rail and bus services started in FY2012 such as Rush+ and Better Bus, and, of course, the opening of the Silver Line through Tysons Corner to Reston.
While Metro’s report says further management actions to curb costs are planned to save $14 million, the Authority’s Chief Financial Officer is expected to cite a number of cost drivers and risks, including human capital costs – noting that Metro’s pension expense is the largest growth area by dollar ($29 million). Other risks include potential ridership and operating revenue risk and loss of capital funding related to Federal Sequestration.
