HomeMy WebLinkAbout05/31/2007, - TRANSIT FUND REVIEW FOR 2007-09 C
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May 31,2007
agenda Report 1�Nu�hw
C I T Y OF SAN LU IS OBISPO
FROM: Jay D. Walter,Director of Public Works
Prepared By: Timothy Scott Bochum,Deputy Director of Public Works
John Webster, Sr.,Transit Manager
SUBJECT: TRANSIT FUND REVIEW FOR 2007-09
CAO RECOMMENDATION
1. Review and accept the 2007-09 Transit Enterprise Fund Review
2. Conceptually approve the proposed operating program changes and capital improvement plan
requests contained in the preliminary 2007-09 Financial Plan, pending the June 19, 2007, final
budget review and adoption
DISCUSSION
Attachment 1 includes the 2007 Transit Fund Analysis for the City's transit budget for FY 2007-09.
Overall, it is anticipated that revenues will meet expenditures for the next two year period and that
ridership rates will remain consistent with current trends.
The current fare rates and revenues are adequate to support current operations for 2007-09 if the
amount of Transportation Development Act (TDA) monies available to the City remains at current
levels and funding for additional services on the Regional Transit Authority (RTA) system does not
increase dramatically. On May 2nd, 2007 the SLORTA Board adopted their proposed FY 2007-08
operating budget. As part of that adoption, the TDA required from the City for RTA services was
consistent with prior year requirements.
Transit Milestones 2006-07
1. The City was successful in hiring a new Transit Manager after the departure of Austin O'Dell in
December 2006.
2. Transit fares have been able to remain the same even though operating costs have risen;
primarily due to a significant increase in fuel costs.
3. For the nine month period so far in FY 2006-07, ridership per hour on SLO Transit (average=
28 riders/hour)continues to be higher than average for similar systems nationwide.
4. Ridership in October 2006 was the highest ever recorded for a single month period at 112,747
riders.
5. Total ridership for FY 2006-07 is projected to be at or above 900,000 passengers per year.
6. Route 5 was adjusted to help improve on-time performance due to significant ridership demand
and delays in boarding and unboarding of the buses.
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2007-08 Transit Fund Review Page 2
7. The City has placed orders for two buses to replace older buses that are inoperable and help
meet California Air Resources Board(CARB)emission reduction requirements.
8. The City was successful in receiving discretionary State Transit Assistance (STA) monies from
SLOCOG to implement a pilot Evening Extension Program for Routes 4, 6 and possibly Routes
7and 8.
9. The first phase of the pilot program was implemented on April 2, 2007 when Route 4 was
extended 2.5 hours in the evening Mon-Fri. Initial ridership indicates this extension is
experiencing heavy ridership.
Transit Issues 2007-08 and beyond
There are several significant challenges San Luis Obispo Transit will be facing in the next few
years.
First, fuel costs continue to be volatile and are expected to continue to rise in the next few years.
The proposed transit budget anticipates this increase to a certain extent ($3:35/gallon for diesel for
FY 2007-08) however, if fuel costs soar, the transit budget may not be able to absorb all of the cost
increase.
This issue is partially offset by increased transit revenue due to the sales tax increase on fuel that is
dedicated to public transit, however, that funding usually takes some time to materialize and
normally is received in future fiscal .years. Complicating this further is the Governor's proposed
budget. As it currently is proposed, the budget transfers approximately $1.5 billion from the Public
Transportation Account (PTA) to school districts for school bus replacement. The "backfilling" of
these funds is proposed to be from Proposition 1B funding approved by the voters in November
2006. The net effect is while there will be money made available for transit capital, there may not
be significant new funding to help public transportation at a time when the public may be opting for
transit due to the increase in fuel costs.
Secondly, while the FY 2007-08 RTA budget appears to hold San Luis Obispo funding
requirements at current levels, it is unknown if increases in funding requests may occur in future
years. RTA is currently rebidding their operational contracts and if they experience higher
contracting costs, this may result in additional TDA funding requested of the City in future fiscal
years. RTA has been working very closely with the JPA jurisdictions in the County on these issues
and their provision of advance notice of potential funding request changes has improved
dramatically.
Finally, capital replacement of buses for SLO Transit will continue to be one of the biggest issues
affecting funding. The proposed budget anticipates that most of the future capital bus replacement
funding will come from Proposition 1B and non-conventional funding sources such as FTA Section
5309, which is a nationwide discretionary program. In order to balance operating costs, SLO Transit
will need to utilize significant amounts of FTA Section 5307 funding (the Federal Urbanized Area
funding) for operating assistance and capital cost of recovery to help pay for bus maintenance
through our operations contract.
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2007-08 Transit Fund Review J Page 3
Transit Budeet FY 2007-09
Table 1 shows the SLO Transit budget for the 2007-09. Overall, revenues will meet expenditures
although depending on the amount of annual capital needed to fund bus replacements, the annual
expenditure may exceed annual revenues received.
2005.06 2006-07 2007-08 2008-09 2009-10 2010.11
__Actual Projected Projected. Projected Prdjected Projected
Revenues -
Total Revenues 2,343,200 3,915,600 4,139,700 3.525.400 3,713,200 3,979,200
Expenditures
Operating Programs
Total Operating Programs 2,155,900 2,352,000 2,312,300 2;330,600 2,412,600 2,454,500
Capital Improvement Plan Projects 198.500 1.976.000 1,792,800 1,225,000. _ _.1,300,500 1.656.300.
Total Expenditures 2,354,400 4,328,000 4,105,100 3,555,600 3,713,100 4,110,800
Other Sources(Uses)
Potential MOA Adjustments 0 -6;300 -6,500 -6,700 -6,900 -6,900
Savings 0 0
Other Sources(Uses)
Total Other Sources(Uses) 0 -6,300 -6,500 -6,700 -6,900 -6.900
Revenues and Other Sources Over(Under)
Expenditures and Other Uses -11.200 418,700 28,100 -36,900 -6,800 -138,500
Working Capital,Beginning of Year 625,800 _ 614,600 195.900 224.000 187.100 180.300
Working Capital,End of Year 614,600 195.900 224,000 187,100 180.300 41,800
Fare/CostRatio 20.9% 21.7% 22.5% 23.1% 23.2% 23.6%
Assumptions:
Table 1.—Proposed SLO Transit Budget FY 2007-08
The proposed budget indicates that there may be modest working capital remaining at the end of
each year for the years 2008 to 2010. While this might indicate that there may be sufficient monies
to increase service, staff is proposing to leave this working capital as a reserve for FY 2007-08 at
this point in time. This is due to two issues. First, as identified above fuel prices may continue in an
upward trend and may exceed budget assumptions. Second, the proposed outside funding sources
for bus replacement capital may not be fully realized. Keeping the modest working capital amount
will allow for some adjustments in these two critical components of the SLO Transit system if
funding levels are below expectations.
FISCAL IMPACTS
There are no direct fiscal impacts to the General Fund due to the recommendations in this report.
Attachment 1: 2007-08 Transit Fund Analysis
G:\Staff-Reports-Agendas-Minutes\_CAR\2007\Trampo=don\Transit\fy 2007-08 Transit Fund Review-Draft\Transit CAR 2008-10 Transit Fund
Review-DRAFT.DOC
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ATTACHMENT 1
2007-08 Transit Fund Analysis
slit Lus omp0 transit
May 31 , 2007
Prepared by the
Public Works Department
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Attachment 1
Page 2
City of San Luis Obispo
2007- 09 Transit Fund
TABLE OF CONTENTS
I. OVERVIEW
H. 2007-08 FINANCIAL PLAN
A. Summary of Revenues
B. Summary of Operating Programs
C. Significant Operating Program Change Requests
D. Capital Improvement Projects
III. ASSUMPTIONS
IV. LOOKING TO THE FUTURE
A. Fleet Replacement
B. Short Range Transit Plan
V. EXHIBIT A—FINANCIAL SCHEDULES
1. Status Quo Scenario
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Attachment 1
Page 3
city of
0%;4 san Luis oBIspo
2007- 09 Transit Fund Report
I. OVERVIEW
This report presents the financial condition of the Transit Fund, based on the 2007-09 Financial
Plan operating program budgets, existing situation, and recommended program and capital
requests to address the identified needs in the Transit Program.
II. 2007-09 FINANCIAL PLAN
A. Summary of Revenues
2007-08 2008-09
BUDGET BUDGET
Investment $ 4,800 $ 4,900
Grants $ 3,612,500 $ 2,399,000
Service Charges $ 520,300 $ 539,400
Other Revenue $ 2,000 $ 582,000
Total Revenues $ 4,139,600 $ 3,525,300
B. Summary of Operating Program
2007-08 2008-09
BUDGET BUDGET
Transportation $ 2,007,000 $ 2,016,100
General Government $ 305,300 $ 314,500
Total Transit Services $ 2,312,300 $ 2,330,600
An operating program description is provided on pages D-79 and 80 of the Preliminary Financial Plan.
C. Significant Operating Program Change Requests
None
- Attachment 1
Page 4
D.Capital Improvement Projects
2006-07 2007-08 2008-09 2009-10 2010-11
BUDGET BUDGET BUDGET BUDGET BUDGET
Capital Cost of Contracting 150,000 400,000 500,000 550,000 605,000
Bus Stop Improvements 148,000
Fleet Replacement-Transit 1,628,000 1,050,000 725,000 750,000 1,050,000
Fleet Expansion-Transit 0
Short Range Transit Plan 50,000
Bus Barn Improvements 180,000
Diesel Aftertreatment Devices 158,800
Information Technology Projects Share 4,000 500 1,300
$ 1,976,000 $ 1,792,800 $ 1,225,000 $ 1,300,500 $ 1,656,300
Supporting documentation for these capital improvement projects is provided in Appendix B of the 2007-09
Financial Plan.
Appendix B of the 2007-09 Financial Plan contains a proposed CIP for the purchase of a new
transit vehicle in FY 2011 for use in serving the Margarita expansion area when the housing
tracts are occupied. However, since the printing of that document it has been determined that the
purchase of a new vehicle may not be necessary in the next few years if existing vehicle
replacements can be accelerated using new Proposition 1B or other discretionary funding. This
issue will be considered as part of the SRTP update project currently underway and staff will
return with recommendations for fleet expansion, if necessary, at a future time.
III. ASSUMPTIONS
The following provides more detail for the key assumptions in Exhibits Al this report, the
financial schedules showing the Transit Fund's changes in financial position and the listing of
assumptions.
1. Fare Revenue grows at a modest 3%
2. Cal Poly contribution @ $322,452 for FY 07-08. Grows at 3%.
3. Margarita Expansion or Cal Poly Canyon Service increase will take place no sooner that
FY 09-10
4. Pilot Evening Service will begin in Fall 2007 and continue until Discretionary Grant runs
out ($205,000)
5. Estimate fuel costs in 2007-08 of$3.35/gallon.
6. SLORTA Contributions were estimated on 05-2007 Board adopted budget. Any increase
in RTA TDA request will drawdown available funding for SLO Transit
7. Federal Transit Administration (FTA) grant apportionments will be at levels consistent to
the City's award of funds from the 2007 Program of Projects
8. Significant increases in FTA operating assistance and capital cost of contracting (within
FTA apportionments) to help meet operating cost increases..
9. Budget Assumes most of the bus replacement capital costs FY 08-09 and beyond will be
from Prop 1B and FTA 5309 funding
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� Attachment 1
Page 5
10. FY 07-08 include a one time only $110,000 expenditure for Costco Mitigation (paid in FY
2007) for bus replacement assistance
VI. LOOKING TO THE FUTURE
A. Fleet Replacement and Expansion
The City will be embarking on an aggressive fleet replacement program to comply with
the emission mandates of the California Air Resources Board. The proposed FY 2007-09
Financial Plan relies heavily of funding from discretionary grant sources to accomplish
bus replacement in future years. It is unknown at the time of this report what levels of
funding will be made available from the recently approved Proposition lb, however,
SLOCOG has estimated as much as $15 million made be made available countywide for
transit capital as part of the Proposition lb program.
B. Short Range Transit Plan
The City will be updating the Short Range Transit Plan in FY 2007-08. This plan will
include an origin/destination survey to evaluate ridership patterns, review the operating
and financial health of the service, and make recommendations to improve productivity
and service to the community.
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