As King County Metro Transit grapples with budget problems, the Metropolitan King County Council is considering capping the amount of money that Metro contributes annually toward South Lake Union streetcar service. The size of that capped contribution could decrease depending on how the county implements broad Metro service cuts that are set to unfold this fall and throughout next year.
Metro's annual payments toward streetcar service are governed by a cost-sharing agreement it maintains with the City of Seattle. Under an amended agreement the County Council's transportation committee is considering, Metro would contribute fixed amounts of money to pay for the streetcar line's operations and maintenance, regardless of whether those costs rise or fare revenues decline. Currently, fare revenues are applied to the line's operations and maintenance costs, and the uncovered costs are then divided between the county and the city on a percentage basis.
The county pays 75 percent and the city 25 percent of those costs. In 2013, the county contributed $1,444,959 and the city paid $481,653, according to a County Council staff report.
The current cost-sharing agreement has been in place since 2007 and expires at the end of the year. The new five-year agreement that is pending before the council would cap Metro's contribution at $1,350,000 in 2015 and bump that cap up by $50,000 annually through 2019. Based on the estimates in the staff report, the city's payment would increase to about $554,000 in 2015, roughly $72,000 more than it chipped in last year.
This new arrangement would mean that if, for some reason, the streetcar started running more frequently, labor costs went up, or ridership went down, Metro, which operates the streetcar, would be saved from shouldering additional costs.
"The main implication for the city is that [the cost of] any future service increases won't be borne by Metro," said Bill Bryant, manager of transit system development for the Seattle Department of Transportation.
The amount of money Metro puts toward the streetcar could also drop depending on how the county decides to carry out a series of systemwide transit cuts, which are slated to begin this September.
Metro has an ongoing budget gap of up to $75 million, and has recommended to the County Council that annual transit service be reduced by about 550,000 hours, or about 16 percent of operational hours. Metro has identified the streetcar as one of the lines ripe for service reductions. This is because it performs poorly on nights and weekends, based on one of the two ridership metrics the agency uses.
During peak, rush-hour time periods ridership is stronger.
Metro has not proposed cutting a specific number of hours from streetcar service, according to spokesperson Jeff Switzer. He added, however, that the agency has estimated that about one-third of the streetcar's service hours are low-performing compared to other routes.
The cost-sharing agreement allows Metro to reduce the size of its contribution to operations and maintenance funding by a proportion that is equal to the amount of low-performing hours. One-third of the 2015 figure of $1,350,000 in the proposed agreement would be about $445,500, reducing Metro's commitment to roughly $904,500 annually. That number is far from final. Concrete details about any potential streetcar funding reductions will not emerge until the County Council approves a package of systemwide service cuts.
The full County Council will consider a proposal on Monday that would authorize Metro to begin some of those cuts and would set up a new committee process for deciding how to make further reductions going forward.
"When the King County Council has adopted specific Metro service reductions, Metro and Seattle will do a final calculation," Switzer said in an email. "What, if any, hours are actually cut and where is up to the city to finalize."
SDOT's Bryant said that Amazon, which has offices in South Lake Union, agreed in 2012 to provide enough funding to allow service to run every 10 minutes between 7 a.m. to 7 p.m. on weekdays, for 10 years beginning in 2015.
"At some future point there could be a need for a further increase in service to meet demand," he wrote in an email. "But at this point we would not anticipate increasing frequency to less than 10 minutes."
The streetcar currently operates between 6 a.m. and 9 p.m. Monday through Thursday and until 11 p.m. on Friday and Saturday. Sunday service is from 10 a.m. to 7 p.m. During these times the streetcar runs in 15-minute intervals, except between 3 p.m. and 6 p.m. on weekdays, when Amazon, Fred Hutchinson Cancer Research Center, Group Health Cooperative and University of Washington Medicine have supported a pilot program that allows for service every 10 minutes.
The estimates included in the County Council staff report show South Lake Union streetcar fare revenues rising over time, which means that the city's contribution to operations and maintenance would gradually go down. The council staff report pegs the city's 2019 annual payment at $318,000. Annual ridership grew from 714,461 in 2011 to 760,933 in 2013, according to figures provided by Metro.
"We're making really good farebox return on the streetcar," SDOT's Bryant said. Farebox return, or recovery, refers to the amount of operating costs covered by fare revenue. This figure was about 28 percent for the South Lake Union streetcar in 2013, according to the council staff report, putting it slightly ahead of Metro's target for bus operations.
The Seattle City Council, acting as the city's Transportation Benefit District, will meet on Thursday to further discuss a proposal designed to enable Seattle to buy back most of the transit hours Metro has proposed cutting within the city limits. It would involve revenue from a voter-approved $60 vehicle licensing fee and either a 0.1 percent sales tax, or a per-employee "head tax" on businesses combined with a hike in the commercial parking tax.
The city's goal is to raise about $45 million. Some of that money could be used to buy back any streetcar cuts.
The South Lake Union streetcar line runs from Fairview Avenue North and Aloha Street, on the southeastern edge of Lake Union, to a Westlake Avenue stop near Stewart Street at the northern edge of Downtown.
Testing is scheduled to begin in September on the First Hill streetcar line, which will connect Capitol Hill and Pioneer Square. Operations and maintenance funding for that line will be paid for indefinitely with funds provided by Sound Transit, according to Bryant.
There is currently not an agreement in place to guide how operating costs would be covered on the proposed half-mile extension of the First Hill line up Broadway in Capitol Hill, or the so-called Center City Connector, which would run through parts of downtown. The County Council staff report says that the agreement under consideration "is silent on cost sharing of future streetcar lines."