7/23/2015

Therese McMillan, Acting Administrator
 Federal Transit Administration

WMATA BOARD COMMITTEE OF THE WHOLE
 Safety and Security Committee
 Thursday, July 23, 2015

Remarks as Prepared for Delivery

Introduction

Good morning Chair Goldman, Board Chair Downey, members of the board and WMATA officials. Thank you for your invitation to discuss the Federal Transit Administration’s views on several safety and financial management issues facing WMATA.

The safety of its operations and the soundness of its financial health are of critical importance to WMATA passengers, employees and the entire national capital region. FTA’s safety and financial oversight activities are intended to help you chart a path for a stronger, safer and more accountable WMATA.

Safety Management Inspection Report

The Safety Management Inspection report issued last month by FTA made a number of safety findings, but I will comment on three top level issues that I want to direct to your attention.

First, there is a lack of effective execution by WMATA to comply with the protocols and provisions of its own safety program.

Second, employees are not receiving adequate or timely safety training and certification needed to perform their daily work duties or to respond effectively to unusual or emergency situations.

And third, the time available to perform preventive track maintenance work has been shrinking during the past four years to meet demand for passenger service.

These are key areas where your ability as the board of directors to set policy and craft a budget that connects funding to safety priorities can make a difference.

In particular, you play a critical role in helping WMATA achieve the right balance between safety and service. Service levels are important, but less track access is resulting in a growing backlog of deferred maintenance which can lead to safety critical issues.

I strongly urge you to closely monitor and make time and resources available to the Metrorail operations and maintenance departments to conduct the needed safety critical inspections, testing, training, and repair activities.

In addition, let me add my voice to many others encouraging you to hire a qualified permanent General Manager as quickly as possible. Once on board, it is important that you give that person your strong support to tackle WMATA’s safety and financial challenges.

Safety Directive Required Actions

When we issued the safety report, we also issued a Safety Directive that listed required actions WMATA must take to address the report’s findings.

FTA received a preliminary response from WMATA on July 13 that indicated several corrective actions “are underway or will be initiated.” I appreciate the commitment to address these issues, but I want to underscore that the Safety Directive requires FTA approval of all corrective actions. FTA has not approved any of the actions listed by WMATA and therefore none are to be considered final.

FTA staff will meet with WMATA officials tomorrow to discuss the preliminary response and the steps needed to prepare a final plan for all 91 required actions. WMATA must submit its final plan for FTA approval by mid-September.

The Safety Directive requires that the final corrective action plan include a tracking matrix identifying the specific actions to be performed, milestone schedules, the person responsible for the action and a verification strategy to ensure completion of the required actions.

Beyond those specific details, FTA intends to take a hard look at two key elements before we will provide our approval.

First, WMATA must demonstrate how a particular corrective action directly addresses its associated finding from the FTA safety inspection report. This will be done for all 91 required actions.

It is not sufficient to simply assert that an action currently underway or soon to be initiated satisfies the requirements of the Safety Directive. In particular, corrective actions developed for other problems or implemented before the FTA safety report was even issued may not be an appropriate solution.

I want to note that WMATA has undertaken some important safety steps since the Fort Totten accident in 2009. Those improvements were noted in our report.

However, FTA is not approaching—and WMATA staff and leadership should not approach—development of the corrective action plan with the assumption that existing protocols and procedures are largely effective, and just have to be “tweaked” at the margin. Instead, addressing the numerous findings in this report should start with systematic questions challenging the existing protocols and practices to determine why the shortcomings uncovered in our report exist. Important questions to ask include:
•Are the findings the result of protocols that are lacking, or insufficient?
•Are existing protocols potentially sufficient, but not being effectively implemented and monitored?
•Are reasonable protocols in place and matched with commitments to carry them out, but hampered by lack of adequate resources?

I would submit that any one of these scenarios requires more than minor modification to “business as usual.”

Second, FTA will consider how WMATA chooses to prioritize the corrective actions—and risk must be a central determining factor. High probability, high consequence risk events need to take priority.

Not everything can, or should, be done first. Some things must be done before others based on risk. WMATA is well advised to use this ‘prioritize by risk’ approach as it puts together its corrective action plan.

It is really only after a final plan is approved by FTA that budget implications become clear. Prioritizing actions and aligning them to operating or capital accounts will bring focus to what resources are needed for implementation.

Identifying resources for safety priorities is the hard work you perform as the board of directors. Whether that comes from the current budget, a reallocation of existing budget line items or new revenue, how you make resources available for safety improvements sends a strong message to WMATA passengers and employees.

Tri-State Oversight Committee

Before I leave safety, I want to mention that FTA is working with the Tri-State Oversight Committee, or the TOC, to improve its safety oversight of Metrorail.

As you are aware, last week U.S. Secretary of Transportation Anthony Foxx met with the Governors of Virginia and Maryland and the Mayor of Washington, D.C., to emphasize their role in making TOC a more effective safety oversight agency. TOC is an organization that falls to their responsibility.

Bottom line is that TOC must come into compliance with the stronger safety oversight provisions required by federal law. That will be accomplished by aggressively preparing TOC to transition to the new Metro Safety Commission that will have greater authority and safety responsibilities, consistent with new requirements for all State Safety Oversight Agencies. This effort cannot wait and must be accelerated. Secretary Foxx was clear that the Governors and the Mayor need to make this transition a priority.

In addition, we intend to invite TOC to join us as an observer in FTA’s oversight of the WMATA corrective action plan. FTA has final authority to track compliance with our Safety Directive, but inviting TOC to participate will allow them to develop the necessary oversight capabilities until a stronger state safety oversight program is in place and functioning.

Financial Management

Turning to financial issues, WMATA has adequately responded to 35 out of the 38 findings and recommendations made in the FTA Financial Management Oversight report. WMATA submitted their responses for the final three findings on June 30 which FTA is now actively reviewing.

FTA shares your goal to remove WMATA from restricted drawdown. We want WMATA to be a federal grantee in good standing. The WMATA team, led by CFO Dennis Anosike, has been forthcoming and cooperative in addressing the FMO findings and recommendations. However, the restricted drawdown will remain in place until WMATA demonstrates, and FTA can verify, that its internal controls and processes support proper grant reimbursements.

I believe it is important to clarify and correct misunderstandings made in the media and elsewhere about how WMATA’s restricted drawdown status as it relates to ‘cash-flow’ challenges.

The controlling issue is that WMATA continues to have difficulty resolving problems with its financial management system. As a result, there is a very slow rate of submittal of federal grant reimbursement requests by WMATA to the Federal Transit Administration.

The inability of WMATA’s financial system to produce the necessary documentation to back up reimbursement requests is a major hurdle, slowing down cash disbursements against approved federal grants.

When WMATA does provide the needed documentation, FTA turns the reimbursement requests around quickly. Since the restricted drawdown has been in effect, FTA has reimbursed $374 million of $384 million submitted by WMATA to date.

We are also working to provide a “roadmap” of steps WMATA must take to be removed from restricted draw down status. However, there is no guaranteed timeline for removal at this juncture – that will occur at the point that effective implementation of WMATA’s financial corrective actions is verified.

Conclusion

I appreciate the opportunity to speak with you today. Improving safety for passengers and employees, and the financial soundness of WMATA are goals we both share.

Thank you and I look forward to our discussion, and continued cooperative efforts with the WMATA executive team and staff.