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Forget the race wars and Bible verses, let’s talk numbers.

May 25, 2011
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To me there is a huge disconnect between what people understand about MARTA, transit, and the budget and what the situation really is. Last week, following the public hearings on the fare increases and current budget crisis, I asked for the script that was presented to share here, in case you missed the hearings, couldn’t stomach the hearings, or just like reading budget scripts. The more you know! (swish! shooting star animation) (imaginations, people, cause I’m not going to post one. Just think lame PSAs). I actually found it to be real written and informative.

Look for a ham dinger of a funding post tomorrow. I know you’re excited.

The MARTA budget script, in it’s entirety:

OVER THE PAST SEVERAL YEARS, MARTA HAS BROUGHT THE MESSAGE TO THE COMMUNITY THAT TRANSIT IN THE ATLANTA REGION IS AT A CROSSROADS. DESPITE SOME POSITIVE STEPS IN THE PAST YEAR, MARTA’S FISCAL CHALLENGES REMAIN VERY REAL. THIS YEARS’ BUDGET REFLECTS THOSE CONTINUED CHALLENGES.

WITH THE PASSAGE OF THE TRANSPORTATION INVESTMENT ACT OF 2010 BY THE GENERAL ASSEMBLY, A MECHANISM HAS BEEN PUT IN PLACE WHEREBY THE ENTIRE TEN-COUNTY ATLANTA REGION CAN BEGIN TO HAVE A FINANCIAL INVESTMENT IN TRANSIT. ALTHOUGH SOME RESTRICTIONS ON MARTA IN THE ACT WILL HOPEFULLY BE REMOVED, THE REFERENDUM BEFORE VOTERS IN JULY 2012 HAS THE POTENTIAL TO GREATLY ASSIST MARTA’S LONG-TERM PROSPECTS FOR FINANCIAL SUSTAINABILITY. IT SHOULD BE STATED, HOWEVER, THAT NO MATTER THE RESULTS OF THE REFERENDUM, THE CURRENT FINANCIAL MODEL FOR MARTA AND TRANSIT IN THIS REGION REMAINS UNSUSTAINABLE FOR ALL.

THE ACT ALLOWED MARTA SOME LIMITED SHORT TERM ADDITIONAL MANAGERIAL FLEXIBILITY OVER ITS OWN FUNDS FOR A PERIOD OF 3 YEARS – WHICH CONTINUES THROUGH JUNE 2013 – WHICH WHEN COUPLED WITH THE RECENT MODEST UPTICK IN OUR LOCAL SALES TAX FORECASTS AND SIGNIFICANT INTERNAL COST CUTTING AND CONTAINMENT MEASURES— HAS BEEN HELPFUL.

HOWEVER, IT REMAINS FAR SHORT OF THE FUNDING NEEDED TO SIMPLY SUSTAIN CURRENT OPERATING LEVELS; AND THE REFERENDUM FOR NEW TRANSPORTATION FUNDING WILL NOT OCCUR UNTIL JULY 2012…..OVER A YEAR FROM NOW. IN THE INTERIM, IT IS THE GOAL OF THE MARTA BOARD OF DIRECTORS TO MAINTAIN EXISTING TRANSIT SERVICE LEVELS – WHICH HAVE ALREADY BEEN REDUCED SUSBSTANTIALLY IN THE PAST TWO YEARS. IN ORDER TO ACCOMPLISH THIS GOAL, AND DUE TO THE UNCERTAINTY OF THE CIRCUMSTANCES SURROUNDING THE REFERENDUM—AS WELL AS THE FUTURE AND CURRENT LEVEL OF FEDERAL ASSISTANCE—IT IS NECESSARY TO INCREASE THE SHARE THAT CUSTOMERS CURRENTLY PAY FOR TRANSIT SERVICES PROVIDED TODAY. SIMPLY STATED, MARTA FARES ARE PROPOSED TO BE INCREASED EFFECTIVE 10/2/11.

LIKE OUR STATE AND LOCAL GOVERNMENTS, SINCE THE SEVERE INTERNATIONAL ECONOMIC DOWNTURN IN 2008, MARTA HAS BEEN GRAPPLING WITH THE WORST FINANCIAL CHALLENGES IT HAS EXPERIENCED SINCE ITS INCEPTION.

IN FY 2010, WE WERE FORTUNATE TO HAVE BEEN ABLE TO USE $45 MILLION IN ONE-TIME FEDERAL STIMULUS FUNDS TO HELP PLUG A $100 MILLION-PLUS OPERATING SHORTFALL.

IN FY 2011, WE WERE ABLE TO FLEX A GREATER PORTION OF OUR RESERVES TO THE OPERATING BUDGET IN ORDER TO PLUG THE CONTINUED BUDGET SHORTFALL, BY UTILIZING THE TRANSPORTATION INVESTMENT ACT’S PROVISION ALLOWING MARTA WITH TEMPORARY RELAXATION OF THE 50-50 RESTRICTION ON THE ASSIGNMENT OF SALES TAX REVENUES BETWEEN CAPITAL AND OPERATING EXPENSES. UNDER THE ORIGINAL PROVISIONS OF THE ACT, THIS CAPS THE AMOUNT OF SALES TAX REVENUES MARTA IS ALLOWED TO ALLOCATE AND SPEND ON OPERATING AND CAPITAL EXPENSES TO 50% EACH. THIS RESTRICTION WAS REMOVED FOR THREE YEARS BY THE ACT.

ALSO IN FY 2011, MARTA TIGHTENED ITS FINANCIAL BELT BY ELIMINATING 743 POSITIONS, WHICH INCLUDED 392 ACTUAL EMPLOYEE LAYOFFS. DESPITE THESE, AND A HOST OF OTHER COST CUTTING MEASURES, MARTA STILL WAS FORCED TO USE A SIGNIFICANT PORTION OF RESERVES TO MEET ITS FY 2011 OPERATING BUDGET NEEDS.
THESE FINANCIAL CHALLENGES CONTINUE FOR THE BUDGET WE ARE PRESENTING TO YOU TODAY. GIVEN THE UNCERTAINTIES REGARDING THE NEXT TWO YEARS —FROM BOTH A REGIONAL AND FEDERAL FUNDING STANDPOINT—MARTA CANNOT AFFORD TO DELAY MAKING CRITICAL DECISIONS ABOUT ITS FINANCIAL FUTURE.

AT THIS POINT, IT IS NECESSARY FOR MARTA TO INCREASE FARES FOR SEVERAL REASONS……..

RAISING FARES IS THE MOST EFFECTIVE WAY TO MAINTAIN CURRENT TRANSIT SERVICE LEVELS WHILE ENABLING THE AUTHORITY TO MAKE SOME POSITIVE SERVICE MODIFICATIONS ON A NUMBER OF BUS ROUTES;

SHORING UP RAPIDLY DWINDLING RESERVE ACCOUNTS WILL PROVIDE MARTA WITH A BUFFER IN CASE OF ANOTHER ECONOMIC DOWNTURN;

CONTENDING WITH HIGHER COSTS FOR GOODS AND MATERIALS – SUCH AS FUEL AND POWER EXPENSES THAT ARE LARGELY BEYOND MARTA’S CONTROL – HAVE HAD AND WILL CONTINUE TO HAVE A SIGNIFICANT NEGATIVE IMPACT ON THE BUDGET; AND

NEW CAPITAL PROJECTS IN WHICH MARTA MUST INVEST, SUCH AS AN AUTOMATIC TRAIN CONTROL SYSTEM THAT WILL ENHANCE RAIL SYSTEM SAFETY, WILL REQUIRE ADDITIONAL FUNDING IN THE OPERATING BUDGET OVER THE NEXT SEVERAL YEARS.

AT THIS POINT, I WILL SHARE HIGHLIGHTS OF MARTA’S FY 2012 OPERATING & CAPITAL BUDGET PROPOSALS.

I WANT TO START BY THANKING THE GENERAL PUBLIC AND ALL OF OUR CUSTOMERS FOR THEIR INPUT AND HELP THROUGHOUT THIS EXTREMELY DIFFICULT BUDGETING PROCESS.THE FY 2012 BUDGET REPRESENTS THE CONTINUED COMMITMENT OF STAFF TO IMPROVE SERVICE QUALITY AND RESPOND TO CUSTOMER NEEDS WHILE CONTAINING COSTS. THE OPERATING COMPONENT CONSISTS OF $413.8 MILLION IN NET TRANSIT OPERATING EXPENDITURES TO SUPPORT THE CONTINUED COMMITMENT OF STAFF TO IMPROVE THE QUALITY OF SERVICE IN A FISCALLY PRUDENT MANNER. IMPROVEMENT INITIATIVES INCLUDE ADDITIONAL INVESTMENT IN MARTA MOBILITY PARATRANSIT SERVICES TO IMPROVE THE QUALITY OF SERVICE DELIVERY.

ADDITIONALLY, RESOURCES FOR IMPROVED SECURITY, SAFETY AND QUALITY ASSURANCE, AS WELL AS A CONTINUED FOCUS ON KEEPING THE SYSTEM IN A “STATE OF GOOD REPAIR”, ARE THE TYPE OF PRIORITIES INCLUDED WITHIN THE PROPOSED BUDGET. THE ESTIMATED AVAILABLE FUNDING SOURCES TO SUPPORT THE NET OPERATING EXPENDITURES TOTALS $562.4 MILLION, WHICH WILL EXCEED THE NET OPERATING EXPENDITURES BY $148.6 MILLION. THE AVAILABLE FUNDING SOURCES INCLUDE PRIOR YEAR SALES TAX CARRYOVER RESERVES, WHICH IS PROJECTED AT $167.8 MILLION AT THE END OF FISCAL YEAR 2011.

A FARE INCREASE IS PROGRAMMED IN FISCAL YEAR 2012. AT THE PRESENT TIME, MARTA IS ADVANCING A FARE INCREASE OF 50 CENTS TO THE BASE FARE, RAISING IT FROM $2.00 TO $2.50. ADDITIONALLY, MARTA FURTHER PROPOSES TO INCREASE THE PASS “MULTIPLE” FROM 34 IN FY 2011 TO 38 IN FY 2012. THEREFORE, THE CURRENT MONTHLY PASS WILL INCREASE FROM $68.00 TO $95.00. THE WEEKLY PASS WILL INCREASE FROM $17.00 TO $23.75, WHICH REPRESENTS A MULTIPLE OF 9.5.

FURTHERMORE, THE MOBILITY MONTHLY PASS IS PROPOSED TO INCREASE FROM $115.00 TO $122.00, WITH THE MOBILITY BASE FARE INCREASING FROM $3.60 TO $3.80. THIS MODEST INCREASE IS BASED ON MARTA’S PRIOR YEAR PLEDGE TO CONTINUE ADVANCING A “STAGGERED” APPROACH IN IMPLEMENTING THE EFFECTS OF FARE INCREASES FROM FY 2010 AND 2011 OVER THE NEXT SEVERAL YEARS. IT SHOULD BE NOTED THAT SENIOR AND DISABLED RIDERS WILL NOT BE IMPACTED IN FY 2012 WITH THESE NEWLY PROPOSED FARE CHANGES.
OTHER FY 2012 MAJOR FACTORS IMPACTING THE OPERATING BUDGET INCLUDE:

ADDITIONAL SALES TAX REVENUES AVAILABLE FOR OPERATING EXPENSES THROUGH THE TEMPORARY LIFTING OF THE 50-50 RESTRICTION;

THE CONTINUED ELIMINATION OF NON-REPRESENTED EMPLOYEE MERIT INCREASES AND REPRESENTED EMPLOYEE BASE WAGE INCREASES;
THE RELIEF FROM A TEN (10) DAY FURLOUGH FOR NON-REPRESENTED EMPLOYEES;

AN INCREASE IN THE COSTS ASSOCIATED WITH FUEL FOR BUSES, PROPULSION POWER/ELECTRICITY FOR RAIL CARS AND STATION LIGHTING

OTHER EFFICIENCY & OPTIMIZATION INITIATIVES AIMED AT REDUCING COSTS & IMPROVING INTERNAL PRODUCTIVITY

AN IMPROVEMENT IN EMPLOYEE AVAILABILITY/ATTENDANCE

CONTINUED PURSUIT OF INNOVATIVE AND NEW REVENUE SOURCES, SUCH AS VENDING OPPORTUNITIES AND STATION CONCESSIONS

SAFETY AND SECURITY INITIATIVES AIMED AT IMPROVING THE OVERALL TRANSIT EXPERIENCE OF OUR CUSTOMERS;

IN THE PROPOSED BUDGET FOR FY 2012, MARTA’S FIXED ROUTE BUS SYSTEM WILL CONSIST OF 92 ROUTES AND WILL PROVIDE APPROXIMATELY 27M MILES OF TRANSIT BUS SERVICES.

DEMAND RESPONSIVE LIFT VAN PARATRANSIT SERVICE COVERAGE HAS BEEN AUGMENTED AGAIN FOR FY 2012, AND WILL PROVIDE APPROXIMATELY 445 THOUSAND HOURS OF MOBILITY REVENUE SERVICE DURING THE YEAR.

IN FY 2012, THE RAIL SERVICE LEVEL IS ESTIMATED TO OPERATE SOME 19.6 MILLION RAIL CAR MILES OF SERVICE IN ACCOMMODATING THE NEEDS OF OUR RAIL SYSTEM CUSTOMERS.

THE RAIL SYSTEM CURRENTLY OPERATES OVER SOME 47.6 MILES OF TRACK AND PROVIDES RAPID TRANSIT SERVICES AT 38 RAIL STATIONS.
AS TO REVENUES, THE AUTHORITY PROPOSES TO ALLOCATE $184.4 MILLION OF THE PROJECTED $347.3 M IN FY 2012 SALES TAX RECEIPTS TO THE OPERATING BUDGET. THE REMAINING TOTAL OF $162.9M WILL BE ALLOCATED TO THE CAPITAL IMPROVEMENT PROGRAM TO MEET THE DEMANDS OF THE FY 2012 CAPITAL BUDGET.

A TOTAL OF $3.2 MILLION, OF THE $184.4 MILLION FOR OPERATIONS, WILL BE ALLOCATED TO THE RESERVES, WITH THE REMAINING $181.2 MILLION USED AS REVENUES FOR FY 2012.

A FLEX OF $20 MILLION IN SALES TAX FROM EXISTING CAPITAL RESERVES IS PROGRAMMED FOR FY 2012. ALSO, $43.0 MILLION IN FEDERAL ASSISTANCE FOR PREVENTIVE MAINTENANCE AND $1.8 MILLION FOR BRT – CMAQ FUNDING IS ALSO PROGRAMMED. FURTHERMORE, A REVERSAL ADJUSTMENT OF $7.1 MILLION FROM THE FLEX OF ARC FEDERAL HIGHWAY FUNDING THAT WAS RECEIVED IN FY11 IS PROJECTED TO OCCUR IN FY 2012.

ANOTHER $12.4 MILLION IS FROM OTHER TRANSIT RELATED REVENUES, WHICH INCLUDE STATION PARKING, ALTERNATIVE FUEL TAX CREDITS, ADVERTISING REVENUES AND INVESTMENT INCOME. LEASE AND RENTAL INCOMES (INCLUDING TOD) TOTAL $6.3 MILLION.

A TOTAL OF $110.0 MILLION IS BUDGETED AS PASSENGER REVENUE, WITH AN ADDITIONAL $20.5M EXPECTED TO BE GENERATED AS A RESULT OF THE PROPOSED FARE INCREASE IN FY 2012.

INCOME FROM THE AMORTIZATION OF LEASE-TO-SERVICE IS $3.2 MILLION. THIS RESULTS IN A TOTAL FY 2012 OPERATING REVENUE BUDGET OF $391.3 MILLION. THE RESERVES CARRYOVER BALANCE OF $167.8 MILLION IS PROJECTED FROM FY11.

I WILL NOW SUMMARIZE THE PROPOSED CAPITAL FUNDS BUDGET.
MARTA’S RECOMMENDED FY 2012 CAPITAL BUDGET PROVIDES FOR TOTAL CAPITAL EXPENDITURES OF $185.5 MILLION AND $143.7 MILLION IN CAPITAL DEBT SERVICE.

FUNDS ARE ALLOCATED FOR THE CAPITAL IMPROVEMENT PROGRAM FOR THE REPLACEMENT AND REHABILITATION OF FACILITIES AND EQUIPMENT REQUIRED TO SUPPORT TRANSIT OPERATIONS IN A SAFE, EFFECTIVE, AND RELIABLE MANNER. FUNDS ARE ALSO ALLOCATED TO SUPPORT THE AUTHORITY’S PLANNING PROGRAM. OTHER ACTIVITIES MAY BE TAKEN ON AS DIRECTED BY THE BOARD OF DIRECTORS.

AVAILABLE FUNDING TOTALING $330.6 MILLION TO MEET THESE EXPENDITURES AND WILL BE GENERATED FROM THE FOLLOWING SOURCES:

THE CAPITAL PORTION OF THE SALES TAX IS PROJECTED TO BE $162.9 MILLION.

FEDERAL CAPITAL ASSISTANCE AND STATE GRANTS/INVESTMENT INCOME ARE BUDGETED AT $74.2 AND $3.6 MILLION, RESPECTIVELY, FOR THE CONTINUED MAINTENANCE AND UPKEEP OF THE PHYSICAL ASSETS AND INFRASTRUCTURE THAT SUPPORTS MARTA’S BUS, RAIL AND MOBILITY SYSTEMS.

APPROXIMATELY $9.0 MILLION WILL BE SECURED THROUGH A FINANCING PROGRAM THAT CONSISTS OF COMMERCIAL PAPER.

A PRIOR YEAR’S CAPITAL FUND CARRYOVER OF $80.9 MILLION IS PROJECTED TO BE AVAILABLE TO FUND A PORTION OF THE FY 2012 CAPITAL PROGRAM BUDGET.

THIS CONCLUDES MY REMARKS ON THE FISCAL YEAR 2012 PROPOSED BUDGETS.

MARTA is taking public comment through May 27th, submitted online by visiting http://itsmarta.com/webcomments.aspx, by calling 404.848.5299 or by writing to 2424 Piedmont Road, NE Atlanta, Georgia 30324-3330.

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