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The Washington Metropolitan Area Transit Authority (WMATA) will hold a public hearing on Jan. 27 to obtain feedback on several proposals aimed at closing a $40 million budget gap in fiscal-year 2010 caused by lower-than-expected ridership and revenue.

The agency already has identified a number of cost-saving measures, such as departmental reductions that would save $2.2 million, using $6 million in insurance recovery funds from the June 2009 Red Line accident, tapping a $5.6 million reserve fund and applying as much as $10 million in American Recovery and Reinvestment Act funds from project budget balances toward preventive maintenance.

The latest proposals call for taking between $6.4 million and $16 million from the capital budget to pay for bus and train parts; increasing rail and bus fares by 5 cents or 10 cents to generate $4.8 million to $9.6 million in revenue; and reducing Metrorail and Metrobus service to save $4 million.

Fare hikes or service reductions would take effect on or about March 1 and only apply through June 30, the end of WMATA’s fiscal year.