There is a certain happiness sighted when your bus comes along. It is of course a small specialized form of happiness and will never be a great thing.

-Richard Brautigan, The Old Bus

Thursday, August 21, 2008

Balancing RT's budget

The Sacramento Regional Transit directors will consider a cafeteria plan for dealing with the expected cuts in state transportation funding when they meet Monday, Aug. 25, at 6 p.m. at RT headquarters at 29th and N streets.

The board will be asked to give General Manager Mike Wiley authority "to implement revenue enhancements including fare changes and/or cost reduction measures including service reductions determined to be necessary and in the order approved to balance the [fiscal year] 2009 operating budget based on the level of reduced transportation funding in the adopted state budget for [fiscal year] 2008-2009."

The state budget proposal back in January included a $7 million reduction in RT's state transit funds. In June, RT adopted a preliminary operating budget of $151 million, absorbing that $7 million loss. But then the governor proposed cutting RT's state funding an additional $11.5 million. A compromise suggested by Assembly and Senate negotiators would restore some of those funds, but it would still leave RT with a $4.8 million hole in its preliminary budget.

Here's Wiley prioritized budget solution. If the budget compromise holds, the loss could be covered without a direct impact on service:

  • An estimated $2.3 million of the shortfall will be covered by the fare revenue brought in with the ridership increases between April and the end of the fiscal year in June.
  • By not filling current vacancies in RT's staff, the disctict estimates it could save $1.5 million in labor costs.
  • Changing how RT amortizes its pension obligations could save the disctrict between $800,000 and $1.3 million.
But if the district has to make up more than $5.1 million, then Wiley proposes:
  • Renegotiating fare and transfer agreements with surrounding transit providers could save $300,000.
  • Elimination of free rides for Paratransit-qualified riders -- making them pay the same discounted fare as seniors and students -- would raise approximately $2 million in new fare revenue.
  • Charging $2 to use district park-and-ride lots, with a $30 monthly parking pass available for frequent commuters. After taking into account the startup and administrative costs, RT expects to get $1.1 million in the 2009 fiscal year and $2.2 million in subsequent years.
These steps would cover a state cut of $7.9 million. But if the bottom falls out, Wiley wants to:
  • Double the Paratransit monthly pass from $100 a month to $200 in $25 steps between 2009 and 2011. RT staff say the higher price will still represent a 50 percent saving for the most frequent users of the Paratransit monthly passes. The $25 increase will generate around $100,000 the first year and $200,000 in subsequent years.
  • Increase basic fare to $2.25, the daily pass to $6 and a monthly pass to $100. (Since the Paratransit fare is set at twice the basic fare, it would increase to $4.50.) Increasing fares would raise $2.2 million in the first six months of 2009 and nearly $4 million in subsequent years.
Only if the district needs to find more than $10.2 million will service reductions be considered. Bus routes that operate at "less than 70 percent of passengers per revenue hour" would be eligible for elimination. As an alternative, bus and rail service could be eliminated before 6 a.m. and after 8 p.m. Or the frequency of bus service could be adjusted so that no bus route or train ran more often than every 30 minutes during peak hours. Open for discussion is the idea of ending weekend service.

Clearly Wiley and his staff have correctly prioritized how they will respond to state cuts. What transit riders must do is contact their state representatives to ensure that transit service is not damaged in the process of balancing the state budget.

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