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Plan For Metro Retirement Benefits Stymied By Board Reps

A plan to fund retirement benefits for Metro employees has been voted down by Maryland representatives on the transit agency's board.
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A plan to fund retirement benefits for Metro employees has been voted down by Maryland representatives on the transit agency's board.

In a move that signals deepening political divisions on Metro's governing body, Maryland's voting contingent on the transit authority's board of directors exercised its jurisdictional veto, killing a proposal to fund a trust for employees' retirement benefits, known as the OPEB trust.

The veto cancelled the majority 6-2 vote in favor of funding OPEB to deal with a $1.5 billion unfunded benefits liability looming over Metro as its older employees head for retirement. Maryland's principle directors on Metro's board, attorneys Michael Goldman and Keturah Harley, voted against the plan.

The vote touched off unusual public condemnations between board members, with D.C. representative Corbett Price, a business executive recently appointed by Mayor Muriel Bowser, calling the use of the jurisdictional veto "the most outrageous" move he's witnessed in decades of serving on a variety of boards.

"It's the most irresponsible thing I've seen in the past 30 years because it is nonsensical. The monies are there and can't be used for anything else. Why not go ahead and fund?" Price said in remarks to reporters following Metro's board meeting on Thursday.

Establishing the trust would have committed Metro to contributing millions annually to cover future retirement benefits for roughly 12,000 employees. The first contribution of $4 million was earmarked solely for the OPEB trust, and was supported by Metro management, including Chief Financial Officer Dennis Anosike.

About 9,000 Metro workers live in Maryland, a fact that did not escape D.C. board member Jack Evans, who questioned why Maryland Gov. Larry Hogan would support funding retirement benefits for his state's workers but not at the transit authority. His comment implied that Goldman and Harley are following Hogan's orders.

"It makes no sense to me," said Evans, a D.C. Council member.

When asked why Hogan would take such a stance, Evans responded, "I am only speculating now. The governor came in very much opposed to public transportation. I hope this is not a first action to say, 'We don't support Metro.'"

Maryland's Goldman defended the use of the veto, saying Metro has more pressing priorities than setting aside funds for future retirement benefits.

"WMATA should be focused on safety and reliability issues and this is somewhat of a diversion. This is not an issue that has to be addressed at this particular time. It sat around for six years. It can wait six months until we have a new GM," Goldman said.

Metro is expected to hire a new general manager in the next few weeks to succeed interim leader Jack Requa, who has held his post since January.

The first move to establish the OPEB trust took place in 2009, but in recent months D.C.'s contingent on Metro's board has made a priority of funding it. Evans pointed to examples across the region where local governments established trusts to address looming expenses that would otherwise bankrupt them.

But Goldman was not convinced Metro should make such a commitment now when faced with safety concerns that will require large sums to rectify.

"It's not the $4 million we are concerned about," Goldman said, referring to the initial contribution. "It is the $11 million that was voted for this fiscal year and it's another $10 or $15 million that is going to be voted on in the 2017 fiscal year. The board would be making an obligation for the next 10 years and we are just not comfortable with that obligation."

Harley refused to answer a reporter's questions as she exited Metro headquarters.

Metro's board of directors, once criticized for a too-friendly consensus, has been riven by political differences throughout the year. The initial attempt to hire a new general manager was primarily derailed by Maryland's representatives last winter. They pushed for the job description to be redrawn to include candidates without transit experience who have excelled at turning around dysfunctional organizations.

More recently, Evans and Price, acting as D.C.'s voting members, have threatened to use the jurisdictional veto to stop any proposal to raise fares next year. Metro's 2017 fiscal year begins July 1, 2016, but pressure already is building to raise fares to help close a projected budget gap.

It is unclear when the OPEB trust will come before the board again, but Price said the veto sends the message that Maryland is not interested in supporting thousands of its residents.

"We have set this up for retirees. We made a promise to fund this, but yet we are reneging on this," Price said. "What message does that send to the current workforce? I am outraged by the whole thing."

The original version of this article inaccurately said that the Metro board voted down a plan to fund pensions for WMATA employees. The vote applied to healthcare-related retirement benefits.

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