MATERIAL SUBMITTED Analysis and recommendation on S. 1814. Arbitration provisions in agreement between D.C. Transit and Division Court of appeals brief, Payne v. Washington Metropolitan Area Transit 151 Letter, August 8, 1968, O. Roy Chalk, president and chairman of the board, Letter, July 13, 1967, James P. Gleason to O. Roy Chalk Maryland law as modified to meet District of Columbia situation.... Report of District of Columbia Citizens Council_ TABLES Accounts payable as of March 31, 1968, D.C. Transit.. D.C. Transit System, Inc., estimated subsidy requirements based on 5.2- Nonoperating properties, D.C. Transit System (District of Columbia) Pension and health funds, amounts owed to, April 28, 1969- 123 Subsidies and tax exemptions received by D.C. Transit and WMA.. Subsidy requirements based on 5.2-percent rate of return, estimated_ PUBLIC ASSISTANCE OR PUBLIC OWNERSHIP OF D.C. TRANSIT TUESDAY, APRIL 29, 1969 U.S. SENATE, SUBCOMMITTEE ON FISCAL AFFAIRS OF THE COMMITTEE ON THE DISTRICT OF COLUMBIA, Washington, D.C. The subcommittee met at 9:30 a.m., pursuant to call, in room 6226, New Senate Office Building, Senator Thomas F. Eagleton (chairman of the subcommittee) presiding. Present: Senators Eagleton and Spong. Also present: John T. McEvoy, staff director; James S. Medill, minority counsel; Jack W. Lewis, counsel; and Edith Moore, assistant chief clerk. Senator EAGLETON. The subcommittee will come to order. I have a brief statement that I will read for the record and then we will start with our series of witnesses, the first of which is Deputy Mayor Fletcher, if he wishes to come forward. We are holding hearings today on the financial situation of D.C. Transit System and on proposed solutions of the problem. There are two bills under consideration. S. 1813, which was drafted by the Washington Metropolitan Area Transit Commission, would reduce fares from 30 to 25 cents and make up the difference through a public subsidy to the present owner. S. 1814 authorizes the Washington Metropolitan Area Transit Authority to begin negotiating for the purchase of the company with an operating subsidy to be provided in the interim. In addition to these legislative proposals, there is a third option of meeting the problem through an increase in fares in the event that Congress takes no action on the bills before it. A viable mass transportation system is important to the life of any large urban community, but it is critical in the Nation's Capital where thousands of Federal and District employees depend upon buses to get to their work. The question before us today is viable at what price? A rate increase or what is more likely, a series of rate increaseswould fall hardest on those who are least able to pay and who have the least choice as to how they travel since a large number do not own automobiles. Those who do own autos have the option of using them instead of taking the bus at higher fares, and the history of rate increases indicates that large numbers will do just that. This would not only add to the traffic problems of the city, but it would mean a diminishing return to the company on the increased fares. (1) A subsidy may be the answer, but it raises the question of whether Congress shouldn't consider going a step farther and put the company under public ownership. D.C. Transit is the largest privately owned bus system in the country. But it may be asked what would be left of private enterprise when all element of risk is removed? The subsidy proposal before us would, in effect, underwrite the company's costs and guarantee the stockholders a 5.2-percent return on gross operating revenues. The other major test of private enterprise is the amount of investment and the committee will be inquiring into that subject as well. For its part, public ownership is no panacea. There would be the problem of obtaining funds to acquire the system and a subsidy might well be required to maintain reasonable fares in the face of high operating costs. The purpose of this hearing is to clarify the facts, and to hear all sides on this issue. We have a large number of witnesses to hear from, so I would appreciate it if those who testify would keep their statements and answers brief and to the point. Parenthetically, I might add, almost every witness has submitted his statement in advance. So I will ask each witness rather than read the entire prepared statement, some of which have been presented to the House committees going into these matters, that they capsulize it and speak extemporaneously. In connection with these hearings, for the record, I now submit (1) copies of S. 1813 and S. 1814 as introduced in the Senate; (2) copy of the staff memorandum; and (3) copy of the D.C. Transit franchise. (The documents follow :) 91ST CONGRESS 1ST SESSION S. 1813 IN THE SENATE OF THE UNITED STATES APRIL 15, 1969 Mr. TYDINGS (by request) introduced the following bill; which was read twice and referred to the Committee on the District of Columbia A BILL To provide public assistance to mass transit bus companies in 1 the District of Columbia, and for other purposes. Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That, whenever the Washington Metropolitan Area Transit 4 Commission (hereinafter the Commission) shall determine 5 that a just and reasonable fare for regular route transporta6 tion within the District of Columbia would exceed 25 cents, 7 the Commission shall certify to the Commissioner of the Dis8 trict of Columbia with respect to each calendar month com9 mencing with July 1969 and ending June 1972, all in10 clusive, an amount which is the difference between all fares 11 (including reduced-rate school fares) paid during such cal 3 1 Commission. The Commission may decline to make certifica2 tions for any carrier if, at any time, it finds that substantial 3 progress is not being made in the implementation of the plan 4 of that carrier. 5 SEC. 4. Section 2 of the Act entitled "An Act to pro6 vide for the regulation of fares for the transportation of 7 schoolchildren in the District of Columbia", approved Au8 gust 9, 1955 (D.C. Code, sec. 44-214a), as amended, is 9 repealed. |