GTA Losing Even More Money
Greensboro Transit Authority (GTA) is projecting a $2 million operating deficit for the 2014-2015 fiscal year and considering fare increases and large cuts in service to deal with the decline in revenue.
The $2 million projected deficit is beyond the normal gap the GTA has between its revenues and its expenses. That gap is usually closed by a mixture of property tax revenue, state and federal funding and money from a $1.5 million annual settlement from Duke Energy, the former operator of the city bus service.
The GTA has been running $1 million operating deficits, but has balanced its budgets with that money flowing into its reserve fund.
According to Greensboro Public Transportation Division Manager Libby James, the deficit is expected to be caused by a reduction in a federal subsidy for riders of the 10-county PART regional transportation service.
James said the ridership of financially troubled PART has decreased, resulting in a reduction in the amount the federal government pays the GTA for PART riders transported within the Greensboro city limits. She said the GTA also has increased operating costs.
“For the first time in the history of GTA, we are facing some significant financial and budget issues,” James said. “This year, for the first time, we experienced a million-dollar reduction in our federal funding. In the past, 21 percent of GTA’s program was supported with federal funding. This year, because of a decline in ridership in our partner PART, we suffered a million dollar decline in federal subsidies.”
The GTA is not designed to make money. James said it spends $3.50 per passenger per trip for its fixed-route services. The fare for those trips is now $1.50.
As a result of a 1988 referendum, Greensboro can use up to 3.5 cents of its property tax rate to support transportation. James said the amount the GTA get is less. Greensboro didn’t take over operation of the bus service until 1990.
James said that the property tax subsidy for the 2013-2014 fiscal year is projected to be $8.2 million, or 37 percent of the GTA’s 2013-2014 budget.
Greensboro Mayor Nancy Vaughan, at the Greensboro City Council’s Jan. 16 work session, said, “‘there is a very large shortfall.”
As a result, the GTA is considering fare increases and large cuts in service.
James said, “In terms of a fare increase, we’re looking at possibly going from $1.50 base fare to $1.75.”
James described the service cuts being considered as “pretty significant,” and may include the elimination of service to businesses near Piedmont Triad International Airport.
“One option looks at a 15 to 20 percent reduction in current services,” she said. “That’s over $1 million. We’re looking at possibly transferring our career express service to the regional provider because that’s outside our service area.”
Vaughan hit the same theme, citing a Jan. 16 email from James to the City Council. In that email, James said the GTA had created a steering committee to decide on rate increases and service cuts.
Vaughan said, “That going out to the public is going to frighten them a little bit.”
The GTA has submitted four potential service cut packages to its board.
The packages were prepared by Dan Boyle and Associates Inc. According to the estimates, Package 1 would save $5.3 million. It would save $1.81 million by combining Route 4 (Benbow Road/Willow Road) and Route 5 (Gorell Street). Both routes serve the Vance Chavis Branch of the Greensboro Public Library.
Route 4 also serves Kindred Hospital and the Guilford Health Care Center. Route 5 also serves Bennett College and the Windsor Recreation Center.
Package 1 would also save an estimated $800,000 by going to hourly services on eight routes during the middle of the day, leaving half-hour service on only five routes. It would also save an estimated $236,000 by discontinuing the last hour of service on weekdays.
Package 2 would be the same as Package 1, except for reducing weekday service only from 10 a.m. to 2 p.m. It would save an estimated $4.9 million.
Package 3 would save about $2.3 million. It, too, would merge Routes 4 and 5. It would also reduce the city’s 15 evening routes to 10 and reduce weekend services. According to the estimate, some areas of the city would lose service under Package 3.
Package 4 would be the same but would reduce weekend service less.
In addition to the rate increase to $1.75 that James mentioned, the GTA has considered increasing the rate to $2, with varying levels of increases in bus passes.
At the GTA Board’s Dec. 4 meeting, James presented the finding of a triennial review of the GTA’s operations. The review found deficiencies in 12 of 18 compliance areas, including legal, financial management and capacity, technical capacity, maintenance, procurement and safety. GTA staff said that nine of the 12 areas were minor paperwork issues, but that three were major: financial management, financial capacity and procurement.
“During the review, the reviewers noted that the reserves are projected to be fully depleted by 2016,” the minutes of the meeting state. “It was the opinion of the contracting reviewer that the city does not have a plan in place to address budget deficits once the reserves are expended by 2016, and this could result in service reductions or staff layoffs unless additional revenues are identified. It was also noted that the city does not have a formal process in place to monitor actual expenditures against budgeted activities.”
BY Paul C. Clark
January 23, 2014
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