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Home My WebLink About05/25/1999, 4 - TRANSIT FUND REVIEW council s zs g j agenda REpont 4 CITY OF SAN LUIS OBISPO FROM: Michael D.McCluskey, Public Wor, Director Prepared By: David Elliott, Administrative Anal yS SUBJECT: Transit Fund Review CAO RECOMMENDATIONS 1. Review and discuss the worksheet"Changes in Working Capital -Transit Fund" 2. Approve three minor adjustments to the preliminary budget for Transit DISCUSSION The attached worksheet, "Changes in Working Capital-Transit Fund",projects sources of revenue and uses of revenue for the transit fund over the next five years. Worksheet projections are based on the following assumptions: • State Transportation Development Act(TDA) grant apportionments will increase about three percent each year. • Federal Transit Administration (FTA) grants apportionments will increase at levels approved in federal legislation adopted in fall 1998. • Transit fares will not increase. • Revenue from cash fares and pass sales will not increase. This is an extremely conservative assumption in light of plans to expand service by 35 percent in September 1999,but it reflects the difficulty in estimating how much ridership will actually increase and when the increases will occur. • The annual contribution from Cal Poly will be$182,000 in 1999-00 and$187,800 based on Cal Poly's contractual obligation to pay those amounts. From the worksheet Public Works has concluded that current transit fares plus anticipated FTA and TDA apportionments will cover all planned operating expenses and capital outlays from 1999-00 through 2003-04, including the planned service expansion and replacement of six buses. For the past three years, the revenue source Cal Poly uses to pay its annual contribution has fallen short of the amount needed. Each year,some campus group like ASI or the Cal Poly Foundation has provided the money needed to close the gap and allow continuation of free rides for students, faculty, and staff members. Because there appears to be no bailout forthcoming this year,Cal Poly has applied for a grant from the State Air Pollution Control District. If that grant is not approved, starting in January 2000 Cal Poly will sell transit passes to close the$57,000 gap between the money available and its contract obligation to the City. In effect there will be no more free rides. 4-1 Council Agenda Report Transit Fund Review Page 2 The Mass Transportation Committee and Public Works believe that eliminating free rides would reduce Cal Poly ridership by 60 percent--reversing the increase seen in 1985 when free rides were first offered. Public Works estimates that 226,000 more automobile trips to Cal Poly would occur each year. This estimate is based on the 60 percent reduction of Cal Poly ridership and the assumption that 66 percent of those no longer riding the bus would drive automobiles, following the modal splits established in the General Plan Circulation Element. Public Works is exploring potential financial mechanisms which would allow continuation of free rides. FISCAL IMPACT As the preliminary budget was being prepared, three minor items were overlooked. Public Works is recommending the following adjustments to correct these oversights: • The level of FTA grants should be increased from$618,300 to $660,300 in 1999-00 and from $1,373,200 to$1,416,600 in 2000-01. The existing numbers were inadvertently taken from earlier projections which have since been superseded. • A project called"Capital Bus Maintenance"must be included in the Capital Improvement Plan at an ongoing annual cost of$50,000. The current Federal Transportation Improvement Plan(FTIP) includes this project, and the City's transit budget must conform to the FTIP to maintain eligibility for FTA grants. The purpose of this project is to shift a portion of the operations contract payment from operating cost to capital outlay. This is simply an accounting procedure; the payment to the operations contractor does not change. Since 1997- 98 the FTA has allowed a calculated portion of contract bus service cost to be considered capital maintenance. The rationale is that when an operations contractor replaces a large bus component,like a compressor or a transmission, the cost should be capitalized because such a replacement extends the bus's service life. The practical benefit is that calculated operating cost is reduced,and certain required performance measures (like the fare revenue to operating cost ratio and the operating cost per hour)are easier to attain. • A project called"Bus Stop Maintenance"must be included in the Capital Improvement Plan at a one-time cost of$40,000 in 1999-00. This project will install benches, signs, shelters, and lights at various bus stops where warranted,particularly new stops created with the planned service expansion. Again, the current FTIP includes this project, and the transit budget must conform to the FTIP. ATTACHMENT Changes in Working Capital -Transit Fund Transit Ftmd Review 99-00 4-2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o S o 0 0 0 0 d r v o en v o v o v v o v j N H N O e` <•i N en �D r en O Pi ••: ': .0 one v m mveninm v v ,p .O m %O N00 to N 00 00 p !NV O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O Rl y �D V'f Ol O m O �o v N �o O %0 N %6 N e•i m O m W cn en N O of O h en qtr e, e- Y7 IT O 'C m e— r- N V) N r- m %O N 0 0 0 0 0 0 0 0 0 0 0 cc 0 0 0 0 0 0 0 o O o 0 0 0 0 0 0 0 0 o g N y m en O en N cn O en _ cr en O r_ O N en N c'n V1 C en O� p N O n D\ eh N hr.. 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