Yesterday Metro announced a series of new savings that will reduce the overall service cut from 550,000 annual service hours to 400,000, or about 11%. Here is the bottom line for riders:

This month’s service cut (151,000 hours) moves forward as planned.

The February 2015 cuts (169,000 hours) will also occur as planned*, unless Seattle’s Prop 1 passes. In that case, those cuts will slide to June “to provide time for Seattle and other jurisdictions to enter into contracts for service.”

The third and fourth rounds of cuts, currently unspecified, shrink from 230,000 hours to 80,000. Metro will consolidate this into a single cut and delay it till March 2016.

How we got here, based on Metro’s handout and a conversation with Metro GM Kevin Desmond, is below the fold.

The improved short-term picture is due to new efficiency efforts, not changes in the revenue projection. This handout describes the measures. It amounts to about $10m per year in recurring savings, largely through non-wage labor costs (e.g. health care and workers’ compensation), automation, lower projected diesel prices, and reforms to Access. These savings restore many of the late-round cuts.

The big sum is a $90m one-time savings from tweaking schedules to require fewer bus purchases ($40m) and discounts on the remaining purchases ($50m). This additional cash flow is largely responsible for allowing the deferral to 2016, which has several advantages:

U-Link opening may create additional savings for Metro.

Labor arbitration will conclude well before the cuts. Desmond noted that the offer the union just rejected would have saved enough money to fund 80,000 service hours, eliminating the third cut entirely.

More time creates more opportunities for sales tax revenue to grow or someone to find a political solution.

Although short-term revenue projections haven’t changed since March, the long-run numbers continue to improve. Desmond said he would dedicate this money to a “stabilization fund” to avoid more agony the next time a recession kneecaps revenue.

As many of these documents point out, 400,000 is still a lot of hours and the opposite of what a growing and densifying region should be doing. Mayor Murray didn’t miss a beat on behalf of the Prop. 1 Seattle funding measure, saying, “We’re still facing deep cuts… fortunately, we now have the opportunity to not only prevent the cuts from happening, but also invest in making the bus system better in Seattle.”

Prop. 1 does have provisions for the City to direct any excess funds to address specific bus problems, though unfortunately only through additional service and not capital projects.

In an interesting side plot, King County will have to substantially revise Dow Constantine’s original four-phase cuts plan, though not the second phase that Councilmember Rod Dembowski sought to postpone. In a statement Mr. Dembowski said

It is great to see the plan that some of us on the County Council championed earlier this year, bearing fruit. I commend the County Executive and Metro Transit’s leadership for their work to identify cost savings. I’m also pleased that there is now consensus to delay further service cuts to allow the County Council to complete the King County Budget and for Seattle voters to act in November on Seattle’s Proposition 1. This is an approach that a majority of us on the County Council supported from the outset.

Executive Constantine’s office sent me the following statement:

What the Executive said then holds true today: Metro should not hang its hopes on the promise of higher revenues; decisions to save or cut service should follow the adopted service guidelines; and we could always add back service when we identify real savings. When Metro rolled out the four rounds of service reductions last November, he said it was better to plan ahead and then adapt to changing circumstances, than to base policy on speculation.

*The February cuts are through committee but not yet law.