WASHINGTON – Metro is projected to overspend its capital budget for fiscal year 2019 by $154 million due to capital projects progressing faster than planned, the directors of management and budget told a Board of Directors committee meeting on Jan. 10.
The Metro Board of Directors Finance and Capital Committee asked questions of Chief Financial Officer Dennis Anosike and Chief of Capital Planning and Program Management Tom Webster, upon learning that the organization is likely to exceed its budget by $154 million.
“This was a shock to me,” said Committee Member Michael Goldman, who represents Montgomery County.
“Nine months ago, when the board adopted the FY19 capital budget, we expected to invest in projects that were well underway; the total was just under $1.3 billion,” Webster said. “Because of the continuing ramp-up of project delivery, and some key opportunities to accelerate projects and programs, we are now forecasting to exceed that amount [for the] fiscal year. Our current forecast totals just over $1.4 billion, and investment could go as high as $1.5 billion.”
Goldman added that the projected overspending is more than 10 percent of the capital budget.
Webster said the projected overspending would mostly result from spending more money than planned on some capital projects, as well as spending pertaining to the future Metro Headquarters.
Board members asked when Metro first knew about the overspending. Webster said Metro management first discussed the possibility in November.
Metro General Manager Paul Wiedefeld told reporters after the meeting that management did not mention the overspending concern to the board back in December because Metro staff updates the committee about the budget on a quarterly basis, and last year’s final board meeting occurred before the quarter ended on Dec. 31.
Board member Steve McMillan, who represents the federal government, asked if the projected $154 million overspending was a “timing issue.” Anosike said yes and the projected overspending will be fixed, without having to ask funding jurisdictions D.C., Maryland and Virginia for additional money for the current fiscal year.
“I think the expectation was you’d stick to that budget,” Goldman said to management during the meeting.
Wiedefeld said that his responsibility is making sure that the jobs get done, not that the money is kept within budget.
After the committee meeting, Wiedefeld said he is not worried about the projected overspending because the work is being completed and the work is less expensive than if it would be if it were behind schedule.
“We’re delivering the program that we’ve been asked to deliver, and we’re delivering it at a quicker pace, which, over the long haul, saves you money, because anything that’s delayed is, into the future, [it] costs you more by time,” Wiedefeld said. “The more we get done or the quicker we get done, typically we save more money.”
Committee Member Goldman and Committee Chairperson Christian Dorsey, who represents Virginia, said before the meeting they were concerned about the budget projection and were eager to find out the reason for the projected overspending, however, they will have to wait until the next update on the budget.
Webster said he and Anosike will return to the board committee in the spring – next quarter – to propose budget amendments to fix the projected overspending. The committee will also receive details about the contributing factors of the projected overspending in the spring.
Metro Spokesperson Dan Stessel said the Board committee receives updates on the budget quarterly, so the next update will likely occur in April.