On the same day that the federal Department of Transportation announced an $875 million construction loan for the Purple Line (green light), a federal judge suggested that Purple Line ridership numbers should be reevaluated to take account of Metro’s current safety and performance woes that have seen Metro use plummet (red light). Quite a day of whiplash for transit advocates and foes alike.
A federal judge said Wednesday that it would make “common sense” for the Maryland Transit Administration to consider Metro’s “extraordinary” maintenance problems and declining ridership before it builds a light-rail Purple Line that would connect to it.
In hearing oral arguments in a lawsuit opposing the light-rail project, U.S. District Judge Richard J. Leon floated the idea — in apparent agreement with the plaintiffs — of requiring the state to analyze the potential impact Metro’s safety lapses and falling ridership could have on Purple Line ridership. The ridership forecasts were part of the cost-benefit analysis that the state did before deciding in 2013 to build a 16-mile light-rail line instead of a less-expensive bus option.
“We’ve experienced here in the District of Columbia, in this metro area, in the last month and a half, safety issues that appear to be of epic proportion in the entire system that appear to have shown a long-term impact on ridership,” Leon said. “I would think these recent major developments, with all the possible impacts they could have on [Purple Line] ridership, would be something that might really be valuable to know and think through . . . especially before $900 million in [federal] taxpayer dollars are committed, don’t you think?”
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The judge’s apparent skepticism of government agencies’ arguments that Metro’s problems will have no effect on the Purple Line came two days before Maryland officials and a team of companies are set to financially close on a $5.6 billion contract to build, operate and maintain the line over 36 years. Pre-construction work, such as soil borings, began this spring, and state officials have said they expect major construction to begin this fall.
The judge called Metro’s safety and ridership issues “a dramatic change . . . of considerable proportion” that would seem to have a “likely correlation” with potential Purple Line ridership. He raised the idea of a “hypothetical” judicial order that would give the state up to six months to examine whether Metro’s safety problems and loss of passengers would have a “corrosive effect” on the state’s Purple Line ridership forecasts.
“It would be a critical piece of the analysis,” Leon said. “It’s kind of common sense, right?”
Maryland and federal lawyers were swift to condemn the idea.
Attorneys for the MTA and the Federal Transit Administration immediately objected to the idea of delaying the project by six months to do more ridership analysis. They stressed that a light-rail Purple Line will use different technology than Metro’s 40-year-old, heavy-rail subway system and will be operated and funded separately from it. The opponents are raising the issue, they said, as a way to try to stop a project they don’t like.
Linda Strozyk DeVuono, a lawyer for the MTA, said a six-month delay could jeopardize the state’s $5.6 billion public-private partnership on the project and allow the consortium of companies that won the contract to build and operate the line to back out of the deal. The state, she said, could then be forced to cover whatever costs the companies have incurred in designing the project.
Tyler L. Burgess, a lawyer for the Federal Transit Administration, said both federal and state transit officials have determined that any “short-term issues with Metro” would have no impact on Purple Line ridership. Three-fourths of the line’s ridership won’t depend on Metro, she said, and it’s “way too speculative” to suggest that Metro’s problems today will affect Purple Line ridership in 2040, the forecast year targeted in the environmental study.
Moreover, Burgess told the judge, Metro is making a “significant investment” in maintenance, referring to the nearly year-long SafeTrack program it recently began to speed repairs by closing sections of tracks and single-tracking trains around-the-clock in different areas.
“Any short-term problems the Washington Metro is experiencing, it’s demonstrating right now it’s committed to fixing,” Burgess said.
Burgess’s legal arguments didn’t include a key detail of the state’s 36-year contract, which requires the state to take the financial risk for how many people ride the line. To keep the line’s construction debt off the state books, the MTA has pledged to repay the private companies’ financing using only transit revenue rather than money out of the tax-supported transportation trust fund.
This last point is critical. Maryland Treasurer Nancy Kopp has signed off on the proposal to fund the Purple Line contract and not have the debt count against the state’s general obligations, but at least one bond rating agency, Standard & Poor’s, declined to go along with Kopp’s conclusion, and will count some portion of the Purple Line debt as “tax supported debt” subject to caps for purposes of Maryland’s bond rating. In simple terms, the more ridership on the Purple Line fails to meet expectations, the more debt S&P will consider to be “tax-supported,” thus endangering Maryland’s prized AAA bond rating.
A pretty big deal, as even a lawyer with no financial or accounting skills whatsoever can recognize. So let’s stay tuned.