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Projected Cap Metro FY2011 budget shortfall could mean fare hikes

Monday, June 14, 2010 by Josh Rosenblatt

Capital Metro is facing a projected budget shortfall of $1.4 million for FY2011, and staff at the transit agency is currently in the process of soliciting and studying citizen input on how best to cut expenses and increase revenue without dramatically reducing service. Cap Metro staff is even looking into the possibility of instituting bus fares for disabled and senior riders and raising rates for MetroAccess service, two options that could prove controversial going forward.


At last weeks meeting of the Urban Transportation Commission, Cap Metro Community Involvement Coordinator Dinita Caldwell said that public forums and an online survey process are part of the transit agency’s first-ever attempt at seeking community input prior to drafting an annual budget.


The breakdown of that budget doesn’t look good, but higher-than-expected sales tax revenue is helping to make it look better than many assumed, considering the current state of the economy and the agency’s recent financial woes. The preliminary projected FY2011 revenue coming from sales tax is currently $140 million, or 60 percent of Cap Metro’s total projected revenue of $228.2 million.


Cap Metro’s FY11 expenses, meanwhile, are projected at $229.6 million, with 50 percent of that ($114.4 million) going toward operating the bus service.


Though sales taxes are higher than estimated, they are still down as a result of the current economic climate. In such cases, Caldwell told commissioners, transit agencies will generally raise fares to offset sales tax losses. Obviously, any talk of raising fares is going to inspire skepticism from riders, which is why Cap Metro decided to include citizens in the budget development process this year.


The goal, Caldwell said, is to “figure out the community’s priorities” because it is “unsustainable to have a budget shortfall.”


Working off the recommendations of the Texas Sunset Advisory Commission, which published a scathing report on Capital Metro’s fiscal situation in April and advised maintaining at least two months of operational funds in reserve, transit agency staff is asking the public how best to reduce costs and increase revenues.


Some of the suggestions staff asks survey participants to rank in order of preference include increasing base bus fare by $.25 and all passes proportionately; increasing cost of passes only; eliminating free fares (for seniors and persons with disabilities, for example); increasing MetroAccess fares to the amount allowed by the Americans With Disabilities Act (from $1.20-$2); and increasing fares for all UT and ACC students.


The issue of raising the fare for MetroAccess, the system’s door-to-door service for pre-approved persons with disabilities, is a particularly sensitive one for Cap Metro. The service currently accounts for approximately 2 per cent of ridership but nearly 20 per cent of the annual operations budget, or $32.4 million.


Cap Metro Executive Vice President of Finances Randy Hume told the commissioners that eliminating MetroAccess service for the 394 riders currently using the service but living outside the ADA-regulated service area (within three-quarters of a mile of a fixed bus route) would save the agency $1.7 million annually, or $300,000 more than the shortfall.


Meanwhile, charging half fares for disabled and senior citizens would also save Cap Metro approximately $1.7 million per year.


Whether Austinites go for such dramatic shifts in transit policy and community priorities remains to be seen. Results from the online survey, which will be open until June 20, and public forums won’t be presented to the Cap Metro board of directors until June 28. The board will get the proposed budget in August, followed by public hearing and final adoption of the budget in September.

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