HomeMy WebLinkAbout06-16-2015 PH1B Transit Enterprise Fund ReveiwCity of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
FROM: Daryl Grigsby, Public Works Director
Prepared By: Timothy Bochum, Deputy Director of Public Works
Gamaliel Anguiano, Transit Manager
Ryan Betz, Administrative Analyst
SUBJECT: 2015-17 TRANSIT ENTERPRISE FUND REVIEW
RECOMMENDATION:
1. Review and accept the 2015 Transit Enterprise Fund Review;
2. Conceptually approve the 2015-16 Transit Enterprise Fund budget, with final action on
June 23, 2015 with the adoption of the 2015-17 Financial Plan;
REPORT IN BRIEF
This report presents the annual Transit Enterprise Fund review as well as identifies key issues
that may have an effect on the overall health of the fund. The report also reviews changes in state
and federal funding levels and addresses the upcoming Short-Range Transit Plan. The Report
also highlights four key activities in the upcoming Financial Plan period. These being: the
renegotiation of the Cal Poly subsidy agreement where we anticipate a 5-7% increase in subsidy
for the first year and 3% thereafter, the rebidding a new transit service contract where we
anticipate a 5-7% increase in costs the first year and 3% after; and the issue that State funding is
lower by as much as 27% for FY 15-16 and this deficit will need to be addressed by use of prior
year, unspent funds. The final key issue is the development of the Short Range Transit plan
update and the likelihood that service changes will occur subject to financial conditions. A need
for rate review as part of adoption of the Short Range Transit Plan, acceptance of a new
operations & maintenance contract, and discussion with Cal Poly will be necessary. There is no
rate increase necessary as part of the 15-17 Financial Plan adoption at this time.
DISCUSSION
Overall, the Transit Fund is forecasted to end 2015-16 with a modest year-end working capital
amount to assist with operations and minor capital expenditure projects. The Transit Fund is
able to maintain the minimum 20% reserve level in working capital in accordance with the City
Financial Management policies. In addition, the Fund supports the proposed capital improvement
program projects and significant program operating changes contained in this report as noted in
the attached fund analysis. Finally, the City of San Luis Obispo’s Transit Fund continues to
provide a viable mobility option for residents and visitors. A wide range of users continue to
receive services, including commuters, transit-dependent riders, students, disabled, and elderly.
June 16, 2015
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2015-17 Transit Fund Review Page 2
FY 2015-16 Transit Enterprise Fund Analysis Report
The FY 2015-16 Transit Enterprise Fund Analysis Report (Attachment 1) includes changes in
financial position, analysis assumptions, an update on major activities and programs, and shows
the anticipated five year capital improvement projects for the fund.
In recognition of the transit industry’s dependency on State and Federal funding, the Transit
Fund program is moving forward with caution and conservative estimates. Both the Cal Poly
Subsidy agreement and the Operations and Maintenance Contract with First Transit expire at the
end of FY 15-16. Therefore, FY 15-16 will see significant efforts in procuring a new contract for
transit services and negotiating a new subsidy agreement with Cal Poly. The Cal Poly subsidy
agreement includes a 3% annual increase for 2015-16 while the First Transit contract calls for a
2.8% increase for FY 2015-16.
State transit funding, particularly the Local Transit Fund (LTF) which is generated through a
component of the state’s sales tax rate, is expected to have a significant decrease for FY 15-16
and beyond due to cessation of one-time only revenues into the account. Overall LTF revenues
are expected to be about 23% lower for the City. In addition, after accounting for RTA funding
needs, remaining LTF funds for City use will be down by approximately 27.9%. Fortunately, the
Transit Fund has a modest working capital reserve and unspent revenue from prior years due to
the one-time only increases in the LTF. These amounts will help address the reduced LTF
revenues in the next two year plan.
The City of San Luis Obispo and the San Luis Obispo Regional Transit Authority are conducting
a joint update to each entity’s Short Range Transit Plan. This document will make
recommendations for service changes and identify opportunities for growth and improved
coordination between the two agencies. The Fund predicts the ability to increase some transit
services based upon recommendations from the new SRTP. The extent, however, of these service
changes will be tempered with reduced LTF revenues, currently a primary funding source. The
SRTP will analyze the need for any rate changes to address structural deficiencies in the Fund
and will make recommendations for rate changes to the Council as part of the Plan adoption. For
the five year forecast, a minimum 10% fare increase has been assumed in FY 2016-17 to help
offset potential service changes resulting from the SRTP update and the reduction in LTF
revenues.
Fuel prices for FY 14-15 have been lower than expected and industry forecasts predict that they
will return to historic levels in FY 15-16. The Transit Fund forecast continues to program fuel
costs in a conservative manner due to the extreme volatility of prices that have been
experienced.
Overall, funding continues to be lean and highly dependent upon Federal and State grants and
their final budget appropriations. The forecast funding, along with the Cal Poly agreement and
farebox recovery, allow SLO Transit to continue its existing level of service. Capital
expenditures will be limited to projects that can be funded from grant revenues, keeping the local
match required to a minimum and preserving as much for operating expenses as possible.
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2015-17 Transit Fund Review Page 3
2015-17 Financial Plan: FY 2015-16 Budget
1. General Assumptions for the Fund
The Transit Enterprise Fund will commit all available transit funding to SLO Transit and will
carryover any unused funding for use in subsequent years.
A. Anticipated Fare Adjustment in the second year (FY 16-17) for a minimum overall
10% increase in base fares
B. The Short Range Transit Plan update will make recommendations for increase transit
services
2. Revenues
Overall revenues are projected to be down in FY 2015-16. As mentioned above, after accounting
for RTA funding needs, remaining LTF funds for City use will be down by approximately 27.9%
from FY 2015 levels. Fortunately, the Transit Fund has a modest working capital reserve and
unspent revenue from prior years due to the one-time only increases in the LTF. Current
estimates forecast the fund should end 2014-15 with a minimum of $413,000 in unspent revenue
which will be carried into the future. This amount, coupled with existing fund balance and
previously deferred revenues will help address the reduced LTF revenues in the next two year
period. Other State funding such as STA is anticipated to be flat for the foreseeable future so a
modest 3% increase has been assumed in each year of the forecast.
Federal funding is expected have a small increase over FY 2015 levels (5%) with almost all
funding going for operating assistance and preventive maintenance. A 3% increase in Federal
funding has been assumed each year after FY 2016.
The Cal Poly Subsidy agreement is in its final year and will need to be renegotiated in FY 2015-
16. A 3% annual increase has been estimated for future years however this amount could be
significantly different depending upon available funding available to the university and farebox
recovery needs.
Fare Revenue has been steady since the last adopted fare increase, last done in April of 2009.
The fund analysis assumes an overall 10% fare increase in 2016-17 to help cover costs of
services. This is due in part to the reduced amount of State assistance, an expected increase in
operating costs from rebidding the Operations Contract (currently held by First Transit LLC) and
if the City wishes to pursue any route changes that come as a result of the Short Range Transit
Plan. Council is not being asked to approve this increase at this time. Rather, final
recommendations for any rate changes will be brought forward as part of the SRTP update and
after the Operations contract has been rebid.
3. Operating Program Expenses
The contract with First Transit LLC is due to expire in 2016. The City will need to rebid the
Operations and Maintenance contract. Staff assumes a 5-7% increase in Purchased
Transportation costs during the first year of the new contract and a 3% increase in subsequent
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2015-17 Transit Fund Review Page 4
years thereafter. Final costs obtained as part of a bidding of service could be substantial different
than these assumptions.
Fuel costs continue to be volatile and are difficult to predict. While fuel costs were significantly
down early this year, they appear to be returning to “normal” levels. Staff has adjusted the rise
of operating fuel cost down only slightly but is cognoscente that outside market influences make
this assumption difficult to predict.
4. Capital Improvement Plan
The City’s 2015-20 five-year Transit Capital Improvement Plan (CIP) identifies approximately
$3.5 million per year in projects that will maintain and replace the City’s transit system. These
projects include continued improvements to bus stops and shelters, completing the Transit
Facility remodel project, miscellaneous technology improvement projects and replacing three
buses and the trolley in FY 2019, 2020. A summary of the projects can be found on page 8 of
Attachment 1 and detailed project descriptions are included in the 2013-15 Financial Plan (CIP).
Capital funding will be highly competitive in future years and the final timing of capital projects
and their final funding source make up could be different than assumed in the five year forecast.
The Fund analysis does not anticipate use of CMAQ at this time but will seek funding assistance
from this fund (particularly for vehicle replacement) if it is available in future years.
5. Significant Operating Program Changes
Historical transit funding, particularly during the “Great Recession”, has severely limited
marketing and advertising for SLO Transit. As a result, marketing and advertising to build
ridership and promote services has been very limited. The recent economic recovery has
increased transit funding, particularly in State Transportation Development Act (TDA) funding.
Staff is recommending an increase to the marketing and advertising budget by $30,000 to help
build choice riders and promote support and use of the transit system.
The City of San Luis Obispo and SLO RTA are conducting a joint update to each entity’s Short
Range Transit Plan. This document will make recommendations for service changes, identify
opportunities for growth and improved coordination between the two agencies. Service changes
are anticipated to be up to an amount of $250,000. This request, however, is a placeholder for
those anticipated service change recommendations that will result as part of the City’s SRTP
update.
To provide core transportation services such as operations, safety, and fulfilling local, State, and
Federal regulatory requirements, staff is requesting to convert a part-time temporary position to a
regular, full-time Transportation Assistant position. Due to the existing temporary staffing
funding, the cost for the new position will be $57,800 annually.
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Transit Accomplishments in 2014-15
Although the Transit Fund Review primarily reports on financial and budgetary information, it is
important to reflect on the accomplishments that have occurred during the past fiscal year.
Council approval of the Transit Fund budget allows SLO Transit to provide continued services
and support. The following is a list of highlights that SLO Transit has been able to accomplish
in the 2014-15 fiscal year.
1. Forecast to conduct over 1,000,000 riders again
2. Performed all services and programs within budget and without a rate increase
3. Negotiated a fund exchange with RTA that accelerated the replacement of 3 transit buses
and brought a net $1,250,000 in new CMAQ funding to the City
4. Began design on the Transit Facility Remodel Project
5. Began the update to the SRTP joint study with RTA
6. Worked with Transportation and Community Development to update the Circulation
Element and improve Multi-Modal goals and objectives
7. Transit Manager received the Innovation Challenge Award from the American Public
Transit Association (APTA) for suggesting improved braking notification systems for
public vehicles.
FISCAL IMPACT
Attached to this report is a detailed analysis of the Transit Fund revenues, expenditures, and
changes in financial position. The 2015 Transit Fund Analysis includes the key assumptions used
in preparing Fund projections. Consistent with the analysis presented to Council in this report
and in the Preliminary 2015-17 Financial Plan, there are sufficient funds to support operations,
and capital project needs of the Transit Fund.
ALTERNATIVES
Modify the Fund Analysis. The City Council could choose to accept all or part of the 2015
Transit Fund Review analysis as presented and direct staff to seek additional funding sources,
defer capital projects or provide transit operating cost reductions. Staff does not recommend this
option as the proposed fiscal forecast provides the best "snapshot" of funding at this time based
upon the current and the latest information provided by the State and Federal government. Staff
will continue to update the fiscal forecast and information on funding sources as received, with
an intention to defer capital projects if grant funds are not realized.
ATTACHMENT
1. 2015-17 Transit Fund Analysis Report
t:\council agenda reports\2015\2015-06-16\budget 15-17 enterprise fund reviews)\transit\fund review - transit - car.docx
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ATTACHMENT 1
Transit Enterprise Fund
2015-17 Financial Plan
Transit Enterprise Fund
2015 Fund Analysis
May 6th, 2015
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Attachment 1
Page 2
2015 Transit Fund
TABLE OF CONTENTS
I. Contents
I. OVERVIEW ........................................................................................................................... 3
II. 2015-17 FINANCIAL PLAN ................................................................................................. 4
1. Summary of Operating Programs ................................................................................. 4
2. Capital Improvement Program ..................................................................................... 4
3. Revenues, Subventions and Grants .............................................................................. 5
III. ASSUMPTIONS .................................................................................................................. 6
1. General Government Assumptions ............................................................................... 6
2. Revenue Assumptions .................................................................................................. 6
3. Transportation Operating Expenses.............................................................................. 7
4. Capital Improvement Program (CIP) Expenses ........................................................... 8
5. Ridership Assumptions ................................................................................................. 8
6. Other Unknowns ........................................................................................................... 9
IV. EXHIBIT A – Changes in Financial Position .................................................................... 10
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Attachment 1
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2015 Transit Fund Report
I. OVERVIEW
This report presents the financial position of the Transit Enterprise Fund and recommends
operating program and capital project requests to address the identified needs in the Transit
Services program for the FY 15-17 Financial Plan.
In recognition of the transit industry’s dependency on State and Federal funding, the Transit
Fund program is moving forward with caution and conservative estimates. Both the Cal Poly
Subsidy agreement and the Operations and Maintenance Contract with First Transit expire at the
end of FY 15-16. Therefore, FY 15-16 will see significant efforts in procuring a new contract for
transit services and negotiating a new subsidy agreement with Cal Poly. The Cal Poly subsidy
agreement includes a 3% annual increase for 2015-16 while the First Transit contract calls for a
2.8% increase.
State transit funding, particularly the Local Transit Fund (LTF), is expected to have a significant
decrease for FY 15-16 and beyond due to cessation of one-time only revenues into the account.
Overall LTF revenues are expected to be about 23% lower for the City. In addition, after
accounting for RTA funding needs, remaining LTF funds for City use will be down by
approximately 27.9% for FY 15-16. Fortunately, the Transit Fund has a modest working capital
reserve and unspent revenue from prior years due to the one-time only increases in the LTF from
prior years. These amounts will help address the reduced LTF revenues in the next two year
plan.
The City of San Luis Obispo and the San Luis Obispo Regional Transit Authority (RTA) are
conducting a joint update to each entity’s Short Range Transit Plan (SRTP). This document will
make recommendations for service changes and identify opportunities for growth and improved
coordination between the two agencies. The Fund predicts the ability to increase some transit
services based upon recommendations from the new SRTP. The extent, however, of these
service changes will be tempered with reduced LTF revenues, currently a primary funding
source. The Fund Analysis forecasts a 10% minimum rate increase for FY 2016-17 to coincide
with potential service changes that may result from the SRTP update. The SRTP will analyze the
need for any rate changes to address structural deficiencies in the Fund and will make final
recommendations for Council consideration in early 2016.
Fuel prices for FY 14-15 have been lower than expected and industry forecasts predict that they
will return to historic levels in FY 15-16. The Transit Fund programs fuel costs in a conservative
manner due to the extreme volatility of prices that have been experienced.
Overall, funding continues to be lean and highly dependent upon Federal and State grants and
their final budget appropriations. The currently forecast funding, along with the Cal Poly
City of
San Luis Obispo
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Attachment 1
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agreement and farebox recovery, allow SLO Transit to continue its existing level of
service. Capital expenditures will be limited to projects that can be funded from grant revenues,
keeping the local match required to a minimum and preserving as much for operating expenses
as possible.
II. 2015-17 FINANCIAL PLAN
1. Summary of Operating Programs
Below is the summary of the 2015-17 Financial Plan operating budget projections for the Transit
Services Enterprise Fund.
2014-152015-162016-172017-182018-192019-20
Revised BudgetBudget ProjectedProjectedProjected
Staffing 227,800 249,241 255,841 271,153 287,224 302,935
Contract Services 2,287,843 2,292,215 2,388,294 2,457,813 2,529,058 2,602,456
Other Operating Expenses 493,700 500,700 499,200 504,192 509,234 514,326
SOPC - Marketing - 30,000 30,000 30,000 30,000 30,000
SOPC - SRTP Service Changes - 250,000 250,000 250,000 250,000 250,000
SOPC - Transp. Program Asst.57,800 57,800 57,800 57,800 57,800
Minor Capital - - - - - -
Operating Budget 3,009,343 3,379,956 3,481,135 3,570,958 3,663,316 3,757,517
General Government 290,742 277,329 277,329 277,329 277,329 277,329
Total Transit Operating3,300,085 3,657,285 3,758,464 3,848,287 3,940,645 4,034,846
The Fund Analysis includes three significant operating program changes (SOPC). One SOPC
recommendation is to increase operating funding by $250,000 in anticipation of the
recommendations from the Short Range Transit Plan. This is merely a placeholder for potential
service changes in the future and may be greater or smaller depending upon recommendations
and available funding and Farebox revenues. The next two SOPC are recommendations to
increase .25 FTE Transportation Programs Assistant employee position to a whole FTE position
for Transit and increase the marketing budget an additional $30,000.
2. Capital Improvement Program
Below is the summary of the 2015-17 Financial Plan capital project budget projections for the
Transit Enterprise Fund.
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2015-162016-172017-182018-192019-20
BudgetBudget ProjectedProjectedProjected
Bus Stop Equipment Signage & Cameras 31,300$ 31,300$ 31,300$ 31,300$ 31,300$
Bus Stop Shelter Replacements 92,000$ 92,000$ 92,000$ 92,000$ 92,000$
Transit Facility Remodel 180,000$ -$ -$ -$
SLO Transit Bus Replacements (#0861,0824,
0912,0913)1,124,264$ 1,158,000$
Trolley Replacement (#0911)-$ -$ -$ 240,000$
UPS Battery Replacement 1,001$ -$ -$ 1,001$ -$
VM Infrastructure 4,751$ -$ -$ 4,751$
Server Operating System 982$ -$ -$ -$
VoIP Phone System -$ 1,247$ -$ -$
Radio Handhelds -$ 52,299$ -$ -$
Tait Radio System 52,299$
Firewall Replacement 2,035$
Network Switch Replacement -$ -$ 7,432$
Finance System Replace 62,500$
Microsoft Office Replacement 2,455$
Total Capital Program Expenditures304,301$ 129,033$ 176,846$ 1,300,864$ 1,600,473$
Transit Capital Program
There is a three year period where vehicle replacements are not necessary for the fund. However,
beginning in FY 2018-19 the Fund will again need to start programming vehicle replacements to
retire vehicle beyond their useful life. The fund assumes participation of Federal capital funding
a ratio of 80/20 for all vehicle replacements.
3. Revenues, Subventions and Grants
Federal revenues, which comprise 50% of operating costs, are expected to be about the same as
previous year’s allocation. However, State transit funding is predicted to decrease for this fiscal
year 2015-16 as a result of the lower than expected sales/gas tax/excise tax revenues in the Local
Transportation Fund (LTF) by as much as 27%. There is some hope that this decrease in State
funds is only true of this budget cycle and will recover to normal levels in outlying years
however State transportation funding –particularly gas tax relates funds – are on the decline and
major new legislation is anticipated that could affect funding level for the Fund. assistance
modest working reserve along with unspent prior year revenues help mitigate the reduced LTF
funding amounts for the Transit Fund. While staff does not project any service-level reductions
for SLO Transit at this time, the projected revenue forecasts give very little capacity for funding
variations.
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III. ASSUMPTIONS
The following assumptions have been used to forecast the Transit Enterprise Fund analysis. The
discussion below provides detail for the key assumptions used to generate the changes in
financial position as provided as Exhibit A. It is important to note the proposed budget is a
“snapshot” of current funding and expenditure projections as of May 2015. The following
discussion focuses on major issues that could have an affect the Transit Enterprise Fund next
fiscal year. These assumptions have been incorporated into the 2015-17 budget projections.
1. General Government Assumptions
Minimum working capital (reserve) should equal at least 20% of the total Operating Program
expenditures according to the City's fiscal policy. Based upon this policy, the minimum reserve
level should be approximately $600,000 to $700,000. The year-end working capital meets the
minimum reserve policy levels however it will be spent down over time along with unspent prior
year revenues to address LTF reductions.
General Assumptions include:
A. Because of rate implications, no savings in Staffing or non-staffing costs but
rather a similar savings to historic levels
B. Anticipated Fare Adjustment in the second year (FY 16-17) for a minimum
overall 10% increase in base fares
C. The Short Range Transit Plan update will make recommendations for increase
transit services
The Transit Enterprise Fund will commit all available transit funding to SLO Transit and will
carryover any unused funding for use in subsequent years and to maintain an adequate year-end
fund balance (reserve) and help weather budget uncertainties.
2. Revenue Assumptions
Federal Transit Administration
Federal Transit Assistance (FTA) funding is formula-based upon population and service level
categories. In addition, the SLO Central Urbanized Area receives addition FTA funding for
performing above industry standards. Indications are that the final transit apportionments will
2013-142014-152015-162016-172017-182018-192019-20
Revenues
Investment and Property Revenues 6,1295,8005,8005,8005,8005,8005,800
FTA-5307 - Operating 1,101,0121,150,0001,189,1401,224,8141,243,7251,243,7251,243,725
FTA-5307 - Capital 36,861 0 30,00030,00030,000929,4121,147,600
FTA-5307 - Prevent Maint 160,000160,000169,740169,740171,437173,152174,883
FTA-5317 - New Freedom Grant 2,34010,000
CMAQ 1,125,000
TDA- LTF Deferred Revenue 305,641625,728
TDA - LTF Current 1,012,9891,676,4211,326,2871,366,0741,407,0581,407,0581,492,748
TDA - STA 38,72433,30435,37236,43337,52637,52639,811
TDA - STA Discretionary 143,574142,833152,575157,152161,867161,867171,725
State Grants (I.e. Prop 1B, Cal/EMA)48,948100,68815,00015,00015,00015,00015,000
Local Revenues 664,069669,500693,596724,849741,051757,022773,424
Other Revenue 21,0674,0004,6004,6004,6004,6004,600
TOTAL REVENUES:3,235,7135,077,5463,622,1103,734,4633,818,0645,040,8025,695,044
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remain similar to current levels. The Fund Analysis projects FTA funding of $1,388,588 in 2015-
16 and $1,424,554 in 2016-17. FY 15-16 amounts have already been programmed by SLOCOG.
This Federal funding will be used for operating assistance of SLO Transit services and various
capital projects such as bus shelter replacements, transit facility expansion and bus replacements.
Transportation Development Act
The Transportation Development Act (TDA) is comprised of two sources of funding for
transportation programs, Local Transportation Funds (LTF) and State Transportation Assistance
(STA) funding. LTF is derived from ¼ cent collected in retail sales taxes. STA is derived from
the statewide sales tax on diesel fuel. Both of these funds are distributed to the regions by the
State.
With the recent decrease in fuel prices, along with some other factors, LTF funds are lower than
anticipated. While some “normalization” in the volatile fuel market has occurred, the “benefits”
of aren’t certain yet. The County Auditor LTF projections are lower than originally estimated
with approximately $513,643 (-27.9%) in 2015-16 from the previous year which benefited from
one-time higher than anticipated increases. Fortunately, the Transit Fund has a modest working
capital reserve and unspent revenue from prior years due to the one-time only increases in the
LTF. These amounts will help address the reduced LTF revenues in the next two year plan.
Fare Revenue
Fare Revenue has been steady since the last adopted fare increase, last done in April of 2009.
The fund analysis assumes an overall 10% fare increase in 2016-17 to help cover costs of
services. This is due in part to the reduced amount of State assistance, an expected increase in
operating costs from rebidding the Operations Contract (currently held by First Transit LLC) and
if the City wishes to pursue any route changes that come as a result of the Short Range Transit
Plan and which have an associated cost increase with them Mandated 20% farebox recovery will
need to be achieved for any change in services or increase in costs.
Cal Poly Subsidy
The current five-year Subsidy Agreement with Cal Poly is coming to a close in FY 2016. A new
subsidy agreement will be necessary to continue the free fare program for University students,
employees and faculty. The fund analysis assumes an annual 3% increase in each year to the
agreement but may be different depending upon final operations contract cost increase, SRTP
service changes or other operating cost increases. If the State budget significantly affects Cal
Poly's ability to fund the Subsidy Agreement, the City and the University will undertake
discussions on potential program modifications.
Trolley Operations
Trolley operations were reduced in FY 2012-13 in response to the loss of Tourism Business
Improvement District (TBID) support and declining ridership. Since then, Trolley ridership has
improved and the operation is now better supported with the 25¢ fare collected for each ride.
3. Transportation Operating Expenses
Contract Services
The contract with First Transit LLC is due to expire in 2016. The City will need to rebid the
Operations and Maintenance contract. Staff assumes a 3-7% increase in Purchased
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Transportation costs during the first year of the new contract and a 3% increase in subsequent
years thereafter. Final costs obtained as part of a bidding of service could be substantial different
than these assumptions.
Fuel
Fuel costs continue to be volatile and are difficult to predict. While fuel costs were significantly
down early this year, they appear to be returning to “normal” levels. Staff has adjusted the rise
of operating fuel cost down only slightly but is cognoscente that outside market influences make
this assumption difficult to control. Should fuel prices increase significantly above staff
projections for fuel prices per gallon, staff will return to Council with identified service-level
reductions or possible use of Transit Fund working capital reserves. Conversely if fuel prices
come in significantly lower than anticipated, remaining funds can be used to compensate for
funding shortages and/or cost increases.
General Government
The newly revised Cost Allocation Plan resulted in a slight reduction of approximately 4.6% for
FY 2015-16 over the current year. This reduction is attributed to the change in methodology for
how the City calculates direct and indirect charges for Enterprise Funds that receive General
Fund program support. The Cost Allocation Plan, which also affects the performance of farebox
ratio, is considered a Central Service plan by the FTA and does not require FTA review or
certification.
Short Range Transit Plan
The first ever “joint” Short Range Transit Plan between SLO Transit and the Regional Transit
Authority (RTA) is underway. The SRTP process performs a thorough analysis of both systems
and then makes recommendations for improvements. Both angencies are seaking to coordinate
where mutually beneficial. Considering the uncertainty of the scale of impact from reduced
State funding, the consultant will make recommendations that A) maintain status quo service
levels B) reflect a moderate increase in service levels or C) a possible reduction in transit
services that are reflective of new funding levels.
4. Capital Improvement Program (CIP) Expenses
The Transit Fund analysis anticipates a conservative level of Federal funding apportionment for
in the 2015-16 fiscal years. Capital expenditures will be limited to projects that can be funded
from grant revenues, keeping the local match required to a minimum and preserving as much for
operating expenses as possible. There is a three year period where vehicle replacement is not
necessary for the fund. However, beginning in FY 2018-19 the Fund will again need to start
programming vehicle replacements to retire vehicle beyond their useful life. The fund assumes
participation of Federal capital fund in a ratio of 80/20 for all vehicle replacements. In 2014 the
County became eligible to receive Congestion Mitigation and Air Quality (CMAQ) federal
funding. This funding is a discretionary fund and can be used for capital assistance. The Fund
analysis does not anticipate use of CMAQ at this time but will seek funding assistance from this
fund (particularly for vehicle replacement) if it is available in future years.
5. Ridership Assumptions
FY 2013-14 set all time record ridership with 1,142,748 trips provided during this period. .
Transit ridership is cyclical with consecutive years of regular increases followed by years of slow
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decline. Based upon year to date ridership, FY 14-15 appears to be trailing slightly behind last
year’s historic numbers with a forecast of being slightly above the 1,000,000 ridership threshold.
6. Other Unknowns
Volatile Fuel Prices
Staff continues to exercise prudent judgment in projecting budgets for fuel needed for the SLO
Transit system. Volatile fuel prices continue to pose challenges in balancing the budget. Staff
will continue to analyze fuel trends and make budget adjustments as necessary.
Regional Transit Authority Participation
The fund analysis assumes modest increase to City funding of RTA services. Depending upon
RTA need, state funding available for use by SLO Transit could be less if RTA requires
increased funding beyond amounts assumed in the fund forecast.
California Air Resource Board – Zero Emission Goal
The Air Resource Board, California’s air quality regulatory body, has started with the
development of its Zero Emission fleet goal for heavy duty vehicles. In this goal, they are
proposing that all heavy duty vehicles (buses included) move to electric powered vehicles by
2030, in order to meet their air quality attainment standards. The current price of an EV vehicle
is still well over $1 million per vehicle so the ability to adopt this goal is still out of reach for
most transit agencies. However, considering the twelve year life of a vehicle, transit agencies
across the State will need to consider procuring EV vehicles come 2018 if this goal is adopted.
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Attachment 1
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IV. EXHIBIT A – Changes in Financial Position
2015-17 TRANSIT FUND
FINANCIAL SCHEDULES
PH1B - 16
2013-142014-152015-162016-172017-182018-192019-20
Revenues
Investment and Property Revenues 6,1295,8005,8005,8005,8005,8005,800
FTA-5307 - Operating 1,101,0121,150,0001,189,1401,224,8141,243,7251,243,7251,243,725
FTA-5307 - Capital 36,861 0 30,00030,00030,000929,4121,147,600
FTA-5307 - Prevent Maint 160,000160,000169,740169,740171,437173,152174,883
FTA-5317 - New Freedom Grant 2,34010,000
CMAQ 1,125,000
TDA- LTF Deferred Revenue 305,641625,728
TDA - LTF Current 1,012,9891,676,4211,326,2871,366,0741,407,0581,407,0581,492,748
TDA - STA 38,72433,30435,37236,43337,52637,52639,811
TDA - STA Discretionary 143,574142,833152,575157,152161,867161,867171,725
State Grants (I.e. Prop 1B, Cal/EMA)48,948100,68815,00015,00015,00015,00015,000
Local Revenues 664,069669,500693,596724,849741,051757,022773,424
Other Revenue 21,0674,0004,6004,6004,6004,6004,600
TOTAL REVENUES:3,235,7135,077,5463,622,1103,734,4633,818,0645,040,8025,695,044
Expenditures
Operating Programs
Transportation 2,827,0813,009,3433,042,1563,143,3353,233,1583,325,5163,419,717
Proposed SOPC
1) Marketing Advertising Aug.30,00030,00030,00030,00030,000
2) SRTP Service Changes 250,000250,000250,000250,000250,000
3) Transp. Program Asst.57,80057,80057,80057,80057,800
General Government 320,400290,742277,329277,329277,329277,329277,329
Total Operating Programs 3,147,4813,300,0853,657,2853,758,4643,848,2873,940,6454,034,846
Capital Improvement Plan Projects 88,2311,777,577304,301129,033176,8461,300,8641,600,473
TOTAL EXPENDITURES:3,235,7125,077,6623,961,5863,887,4974,025,1335,241,5095,635,319
Other Sources (Uses)
Cashflow adjustment for working capital
Operating Transfers Out (1,400)
Other Sources (7,784)
Expenditures Savings 9,300
TOTAL OTHER SOURCES:0 116 0 0 000
Revenues and Other Sources
(Over/Under) 1 0 (339,476)(153,034)(207,069)(200,707)59,725
Working Capital, Beginning of Year 1,042,3501,042,3501,042,350702,874549,840342,771142,064
Deferred Revenue (TDA-LTF Prior)0 0 1,105,3071,105,3071,105,307799,666173,938
Working Capital, End of Year Fund 1,042,3501,042,350702,874549,840342,771142,064201,789
CHANGES IN FINANCIAL POSITION - TRANSIT FUND
PH1B - 17
Preliminary Budget Review
City Council Workshop #3
2015-17 Financial Plan
June 16, 2015
Presented By: Gamaliel Anguiano, Transit Manager
Ryan Betz, Administrative Analyst
Transit Fund Review
Major FY14-15 Accomplishments
2015-17 Strategic Budget Direction 3
1.Achieved a Healthy Budget, balanced
2.On par to transport over 1 million riders
- 4th consecutive year, strong support
3.Acquired $1.2 Million in Congestion Mitigation
Air Quality (CMAQ) – Funds for the
replacement of 3 fixed-route vehicles
4.Purchased a 28 passenger cut-away from RTA
for $1 – Anticipated use as a tripper service
5.Established new outreach program to the San
Luis Coastal School District
6.Started new initiative for economic
development, built around the trolley
7.First in the nation to introduce hand-sanitizers
onto fleet, addition to Wi-Fi amenity
8.Commenced Short Range Transit Plan
2015-17 Revenue Projections - $3.6 Million
2015-17 Strategic Budget Direction 4
FTA
38%
TDA
42%
State Grants &
Other
Revenues
1%
Local
Revenues
19%
2015-17 Expenditure Projections $4.0 Million
2015-17 Strategic Budget Direction 5
Staffing
8%
Contract
Services
62%
Operating
14%
General
Govt.
8% CIPs
8%
•Miles/Trip
•Trips/Hr
•Hrs/Day
•Days/Year
•Driver $
•Admin $
•Maintenance Costs
•Fuel
•Marketing
•Materials
•Supplies
•Other Contracts
•IT/ Finance
•Admin
•Etc.
FY15-17 Major Assumptions
2015-17 Strategic Budget Direction 6
1.Funding Levels:
A.Federal – Consistent
B.State STA – Consistent
C.Local Farebox – Consistent
D.State LTF - Down
a)Plan to offset this with Prior Year unallocated
funds
2.Operations Expenses: Up (5-7%)
A.Operations & Maintenance contract is up for rebid
3.CalPoly Subsidy Revenue: Up (3%)
4.SRTP: Likely to recommend service increases
A.Fare increases may need to be considered
LTF Historical
2015-17 Strategic Budget Direction 7
2015-17 Timeline & Major Milestones
8
Adoption of Budget
Adoption of SRTP
O&M Contract
CalPoly Subsidy
Implement
SRTP
July 2015
Spring 2016
July 2016
July 2016
September
2016
We Are Here
Mid-Year
Supplement
Mid-Year
Proposed Significant Operation Program Changes
(SOPCs) & Capital Improvement Projects (CIPs)
9
SOPCs
1.Transit Program Assistant –$58k
2.Short Range Transit Plan –$250k for potential services changes
3.Transit Marketing –$30k for enhanced marketing services
CIPs
1.Bus Stop Equipment - $31k
2.Bus Stop Shelter Replacements - $92k
3.Transit Facility Remodel - $180k
4.SLO Transit Bus Replacements
(2018-2020) - $2.5M
Summary of 2015-17 Transit Fund
10
2013-14 2014-15 2015-16 2016-17
TOTAL REVENUES:3,235,713 5,077,546 3,622,110 3,734,463
Total Operating Programs 3,147,481 3,300,085 3,657,285 3,758,464
Capital Improvement Plan Projects 88,231 1,777,577 304,301 129,033
TOTAL EXPENDITURES:3,235,712 5,077,662 3,961,586 3,887,497
TOTAL OTHER SOURCES:0 116 6,908 70,725
Revenues and Other Sources
(Over/Under) 1 0 (346,384)(223,760)
Working Capital, Beginning of Year 1,042,350 1,042,350 1,042,350 695,966
Deferred Revenue (TDA-LTF Prior)0 0 1,105,307 1,105,307
Working Capital, End of Year Fund 1,042,350 1,042,350 695,966 472,207
CHANGES IN FINANCIAL POSITION - TRANSIT FUND
Recommendations
2015-17 Strategic Budget Direction 11
1.Review and accept the 2015 Transit Enterprise
Fund Review;
2.Conceptually approve the 2015-16 Transit
Enterprise Fund budget, with final action on June
23, 2015 with the adoption of the 2015-17 Financial
Plan;
Questions?
12
LTF – SLOCOG Report 4-2015
2015-17 Strategic Budget Direction 13
LTF
2015-17 Strategic Budget Direction 14
15