The Washington Metropolitan Area Transit Authority’s indifferent management of overtime and pension costs stems from its board of directors lacking any vested interest in the organization’s financial health, a former Metro system official told The Examiner.

“It has always been that way because the board is appointed by politicians,” said Charles Deegan, who stepped down this month as chairman of Metro’s board of directors.

The Examiner reported last week that Metro records showed hundreds of employees — bus drivers, subway operators and transit police officers — making more than $100,000 a year through a generous overtime system that has cost taxpayers and passengers $70 million a year and is partially responsible for the giant system’s $116 million budget deficit. Since overtime is included in calculating an employee’s retirement, Metro pays extraordinarily high pensions and has a large pension liability.

WMATA was created in 1967 by an interstate compact and began operating its rail service in 1976, but did not complete building the existing system until 2001.

This story continues below
Advertisement

Metro’s bus service started in 1973 when WMATA acquired four private bus companies that had been serving the Washington area.

Deegan pointed out that one of the private operations, the D.C. Transit Company, had a history of being tough on employees.

Deegan said “at the beginning, board members had a tendency to get appointed and stay forever. Where was the incentive for them to be tough? No one paid attention to them.”

The union contract, for example, requires that overtime first be offered to the most senior (and well-paid) employees. The pact also calls for overtime payments to be included when an employee’s earnings are calculated for pension purposes.

Questions about Metro’s management policies surfaced well before the first trains started running. President Gerald Ford considered withholding critical funds for rail construction in 1975. He was upset about expensive concessions the authority made to the union representing its bus operators, according to “The Great Society Subway,” a book by George Mason University professor Zachary M. Schrag.

The problem extends beyond the board of directors, Deegan said, because top administrators — especially general managers — come and go without tackling tough issues. Many transit agencies have hefty overtime bills because their top management personnel starts looking for new jobs instead of correcting the agency’s problems, Deegan said.

“A lot of them move from one transit company to another and always make $50,000 more each time,” Deegan said. “You can’t continue at the pace they’re going,” he said of the overtime. “Somebody has to tackle that or it is going to be a constant drain on the jurisdictions for larger subsidies and the riders for higher fares. I know it cannot be completely changed overnight, but they have to start making strides.”

jrogalsky@dcexaminer.com