WMATA Strategic Alliances and Risk Assessment
Washington, D.C.

Background

Within 45-days of appointment, PB Consult developed a comprehensive financial strategy to close the $1.5 billion funding gap in WMATA’s capital program.

The Washington Metropolitan Transportation Authority has envisioned a program of short term capital needs, commonly known as “Metro Matters.”   Some of the short-term needs include investment in basic infrastructure; purchasing 120 new rail cars and buying 185 more buses. The short-term needs also include critical security enhancements, which will require additional federal funding to implement.  To execute this 6-year $3.3 billion program, WMATA engaged PB Consult to develop a strategic financial plan that would close the $1.5 billion gap in the capital program, and negotiate a complex regional funding agreement.

PB Consult Services

PB Consult began by documenting the current operational costs of the existing system, conducting a cost-benefit analysis, reviewing current WMATA responsibilities and functions of the various aspects of fare collection, and reviewing the potential costs of unwinding existing contractual agreements. 

From a strategic perspective, PB Consult worked with regional transit entities seeking to participate in cost sharing and commit to an alliance program. Moving from the institutional advisory role to organizational strategy, PB Consult made recommendations for a revised organization plan for how these functions would be outsourced and managed. 
One of the components of this project involved an analysis of possible fare collection strategies WMATA could use, including the SmarTrip contactless card.  Additionally, several alternatives were outlined to determine those which could add value and be compared to the baseline, including technology options, corporate alliances strategies, financial partnership strategies, institutional strategies, and organizational strategies.  Together, these alternatives were narrowed to the option that best suits WMATA’s needs, and that would assist them in a cost-effective strategy to reduce their existing funding gap.

Current Status

Within 45-days of appointment, PB Consult developed a comprehensive financial strategy to close a $1.5 billion funding gap in the program. The plan includes converting WMATA’s capital budget from an obligation to an expenditure basis secured by commercial credit facilities, achieving $300 million in new funding from local and state partners, pursuing new sources of federal funding, and developing new debt finance strategies backed by a sound debt policy.