Agency sees increase in ridership, transparency

The picture of Capital Metro in 2013 is quite different from just three years ago.

In 2010, Capital Metro was running on $7 million in its operating reserves and struggling with its public image. It had seven new members on its board of directors and a new president and CEO, Linda Watson.

The Sunset Advisory Commission, which is made up of state Senate and House of Representatives members and reviews state government agencies to identify waste, duplication and inefficiencies—had also just released its recommendations on changes Capital Metro needed to make, including an overhaul of its labor structure. The report also detailed how the agency mishandled $200 million in its reserves and rushed through implementing the MetroRail project.

In 2012, the agency outsourced all its bus operators and maintenance workers to third-party contractors. Capital Metro data shows ridership also jumped 4.7 percent in 2012 compared to a national average increase of 2.6 percent. MetroRail ridership has tripled since launching in March 2010, much of which is attributed to Capital Metro expanding the hours to include Friday night and Saturday service in 2012. The agency is also close to having two months of operating expenses in its reserves, one of the recommendations from the Sunset review, as well as creating five-year capital and financial plans.

"We put a lot of discipline in the organization: holding our employees accountable, new business practices and processes where we looked very critically at everything," Watson said. "All of that together led us to make some decisions that have sort of righted the ship, if you will, on the finances."

Righting the ship

One of the changes Watson implemented was including public participation and performance measures during the budgeting process. Interim Chief Financial Officer Billy Hamilton said the board and Watson also constantly review the agency's finances and how to do a better job with its resources.

"Linda came in and really took the attitude that we have to look at [the budget] from top to bottom," he said. "I can remember a lot of meetings on the budget where a lot of hard decisions were made [asking], 'Can we get by without this?'"

As part of the Sunset recommendations, the agency had to adopt a five-year capital improvement plan, a balanced budget each year and a five-year strategic plan that drives the budget.

"You can make what seems like reasonable decisions now that can have massive implications 10 years down the road," Hamilton said. "The one thing I've learned with transit is you have to look both at the near term and over the horizon."

In August, Capital Metro outsourced its bus operators and mechanics to third-party contractors. The workers previously were under StarTran, which was a nonprofit arm of Capital Metro and cost the agency too much money, according to the Sunset report. Using third-party contractors will save the agency $34 million over seven years after one-time expenses of $2.1 million in fiscal year 2012, mainly for legal fees and sick and vacation leave payouts, staff reported.

State Sen. Kirk Watson, D-Austin, who wrote the bill that put Capital Metro under Sunset review, said he is pleased with the work the agency has done in taking the Sunset recommendations seriously.

"They have also gone beyond the recommendations in some areas such as transparency, becoming in 2010 the first transit agency in Texas to earn the comptroller's Gold Circle designation for measures such as posting the agency checkbook online," he said via email.

Regional transit plans

A few years ago, Linda Watson said, Capital Metro was not included in urban rail discussions. Now the agency is spearheading Project Connect, a regional transportation plan that includes urban and commuter rail and bus-rapid transit. The Transit Working Group, which the Capital Area Metropolitan Planning Organization created to provide input on regional high-capacity transit plans in Central Texas, is still meeting to discuss financing the plan. Representatives from Capital Metro, the City of Austin and Lone Star Rail District are members of TWG.

"Now it's weekly, multiple meetings. The relationships between Capital Metro, the City of Austin and Lone Star Rail are dramatically improved," she said.

Kirk Watson said the agency has become a serious player in regional transportation discussions.

"The agency must be an integral part of any team that's working on transportation solutions," he said. "Our future is bleak if [public] transit isn't an integral part of the picture."

In 2014, Capital Metro will roll out the first leg of Project Connect with MetroRapid, its bus-rapid transit system that will run on North Lamar Boulevard to South Congress Avenue and on Burnet Road to South Lamar Boulevard. As part of Project Connect, Lone Star Rail is planning a commuter rail from San Antonio to Georgetown. Mike Martinez, Capital Metro board of directors chairman who also sits on City Council, said Capital Metro plans to hire a regional rail coordinator to be a liaison among transportation partners to get the next phase of rail on the ballot for voters.

"That is something I think is a high, high priority," he said.

Rebuilding an image

Celia Israel, outgoing president of the nonprofit Alliance for Public Transportation, which promotes public transportation in Central Texas, said that considering all the scrutiny and stress Capital Metro has undergone, its staff is doing a great job.

"I'm more hopeful than I ever have been that they'll be able to help regional transit," Israel said.

Martinez said staff and board members are not done improving Capital Metro because the region deserves a world-class transportation agency.

"Trust has increased, but Capital Metro still carries this negative connotation because for decades it has been beat around as an agency in trouble and spending past [its] tax dollars," he said. "We're trying to rebrand and create a different vision around the agency, but it's not easy."