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

TriMet is a model of service delivery

• 24th largest metro; transit ridership is 7th 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

Where TriMet Stands

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
• n 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

(80) (60) (40) (20) 20 40 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 Thousands

Recession Ends June 2009 Recession Begins Dec 2007

Change in Tri-County Nonfarm Employment

(Not Seasonally Adjusted)

Recession Ends Nov Recession Begins Mar

Post-recession job growth is unusually slow and trending downward

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 Sound Transit Fares:p$2.00 to $2.75 Salt Lake UTA Fares:p$2.25 in May, $2.50 in 2 yrs Orange County 20% service cut, 20% fare increase NJ Path Fares:p$1.75 to $2.75 Atlanta MARTA Fares:p$2.00 to $2.50 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 – 4th 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
• ptions to balance budget
• Engage riders/stakeholders in public

process

• Front end to normal budget process

12

Questions

13