TriMet FY13 Budget Challenges The Early Kickoff of TriMets Budget - PowerPoint PPT Presentation

TriMet FY13 Budget Challenges The Early Kickoff of TriMet’s Budget Process 1

Where TriMet Stands TriMet is a model of service delivery • 24 th largest metro; transit ridership is 7 th per capita in the nation • 100+ million boarding rides/year • More ridership than any city our size in the nation • Ridership growth outpaces population growth & daily vehicle miles traveled in last decade History of project success • On-time and on-budget delivery • Strong reputation with FTA and nationally Market views TriMet favorably • Payroll Tax Bond Ratings: AAA/Aa2 • Debt load is manageable • Capacity for additional debt within debt policy guidelines and market constraints 2

Budget Uncertainties Ahead • Stalled Economic Recovery • ATU Contract Uncertainty • Federal Operating Grant Uncertainty POTENTIAL FY13 BUDGET IMPACT: $12 - $17 million budget gap 3

Budget Process • FY12 Budget adopted in June 2011 • Begin FY13 budget process early – based on unfavorable trends and changes from June • Projected shortfall based on early projections of revenues and expenditures • Detailed budget will follow traditional schedule for June 2012 adoption 4

Budget Uncertainty: Economy • Employment & wage growth slowing • Local jobs grew less than 1% in FY11 • Job growth of 1% per year: employment will not return to pre-recession levels until 2018 • Total jobs in 3 counties in Sept 2011: the same as 1999 POTENTIAL FY13 BUDGET IMPACT: decreased revenue forecast for payroll taxes by $3m 5

Post-recession job growth is unusually slow and trending downward Change in Tri-County Nonfarm Employment (Not Seasonally Adjusted) 80 Thousands 60 40 Recession Recession Ends Ends Nov June 2009 20 0 (20) Recession Begins Recession Dec 2007 (40) Begins Mar (60) (80) Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 6

Budget Uncertainty : Union Contract • Board Directive: Bring growth of Union wages and healthcare costs in line with revenue growth to become fiscally sustainable • ERB decision eliminated potential wage and retiree benefits savings from current labor arbitration POTENTIAL FY13 BUDGET IMPACT: $5 - $10m higher costs 7

Ongoing Uncertainty: Federal Operating Funds • TriMet receives $40-$45 million of federal funding each year – available for growing preventative maintenance needs • Significant uncertainty about funding levels for all transit agencies POTENTIAL FY13 BUDGET IMPACT: $4m 8

We Are Not Alone • 80% of transit districts nationally have cut service and/or increased fares Fare/service changes this past year Fares: p $2.00 to $2.75 Sound Transit Fares: p $2.25 in May, $2.50 in 2 yrs Salt Lake UTA Orange County 20% service cut, 20% fare increase Fares: p $1.75 to $2.75 NJ Path Fares: p $2.00 to $2.50 Atlanta MARTA Chicago Metra 20% service cut, 20% fare increase 9

What We’ve Already Done • Budget cuts in FY10 & FY11: used $14m of stimulus funds & cut $46m over 2 years • Cut nearly every part of fixed route system - 13% of bus service -10% on MAX system - Increased fares • Workforce reduced by over 200 positions • Frozen management wages – 4 th year • Management employees & retirees: pay more for healthcare • Deferred capital investments 10

Tough Decisions Ahead Everything is up for consideration • Continued focus on internal efficiencies • Fare increases • Service cuts • Fixed route (MAX, Bus, Streetcar, WES) • LIFT service hours/boundaries • Layoffs 11

Kicking Off Budget Process • Create Budget Task Force • Focus on specific & immediate options to balance budget • Engage riders/stakeholders in public process • Front end to normal budget process 12

Questions 13