Transit Fare Hike Gets Nod

The Washington Metropolitan Area Transit Authority voted on Thursday to increase all fares by 10 cents and to tap its reserve fund to close a $40.1 million revenue shortfall for fiscal 2010.

The fare increase will raise about $9.6 million, and it prevents service and maintenance cuts. The authority still faces a $189 million budget deficit for fiscal 2011. It also expects to withdraw $5.6 million from its reserve fund.

Continuing to draw down the rainy-day fund to balance the budget could have rating implications, John Ceffalio, the lead analyst on WMATA for Moody’s Investors Service, said Thursday.

“Raising a recurring source of revenue as opposed to tapping reserves is generally viewed positively,” he said. In May, Moody’s rated the authority A1 and upgraded some subordinate Series 2003 refunding bonds to A1 from A2.

Ceffalio said the rating reflects the credit strength of WMATA’s participating local governments. The authority receives about 50% of its revenue from fares and advertising, and the rest from the local governments it services, primarily the District of Columbia.

Board members, who represent the localities, have called for participating jurisdictions to contribute more funds.

The board is also searching for a new general manager. John Catoe, the authority’s current general manager, has announced his retirement effective April 2.

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Transportation industry
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