In response to an expected $18 million loss in state funds for Fiscal Year (FY) 2009, the Sacramento Regional Transit District (RT) will continue the public hearings held on July 28, 2008, to discuss proposed fare increases and service reductions.  The public hearings will be held on Monday, August 25, 2008, at 6 p.m. in the RT Auditorium located at 1400 29th Street (at N Street).  RT staff will continue to receive public comments on proposed fare increases and service reductions, and will present a recommendation to the RT Board of Directors for approval.

RT’s preliminary FY 2009 (July 1, 2008 through June 30, 2009) operating budget of $151 million, adopted on June 9, 2008, reflects a $7 million loss of state funds based on Governor Arnold Schwarzenegger’s proposed state budget released in January 2008.  RT absorbed this projected loss through cost-cutting measures and a 5 percent service reduction in January 2008.  Governor Schwarzenegger’s revised proposed state budget released in May 2008 includes an additional $11.3 loss of state funds to RT.  Depending on the final outcome of the state budget, the RT budget shortfall ranges from $4.8 million to $11.3 million, which must be absorbed through further RT budget cuts.

Due to the uncertainty of the state budget, which has yet to be passed, RT staff will recommend a prioritized list of re-balancing strategies for the Board’s consideration.  RT staff will seek Board approval to delegate authority to the General Manager/CEO to implement budget re-balancing measures in the order and magnitude as necessary to equal the revenue shortfall in the RT budget upon the approval of the state budget.

1.  Adjust fare revenue projections:  During the last three months of FY 2008, RT experienced record ridership increases.  Original fare revenue projections were understated based on the latest data available.  An upward adjustment in fare revenue represents an increase of slightly more than $2.3 million.

2.  Reduce staffing levels:  RT staff is evaluating the fiscal and operational effects of reducing staffing levels district-wide for all positions not currently in recruitment for FY 2009.  Initial indications are that as much as $1.5 million in labor costs could be saved through this option.

3.  Increase pension amortization levels to 30 years:  The unfunded portion of RT’s employee pension plans is currently amortized over 30 years, with 20 years remaining until it is fully funded.  Increasing the amortization to 30 years would drop expenditures by an estimated $1.3 million.

4.  Renegotiate transfer agreements with connecting transit agencies:  RT staff is evaluating the potential of renegotiating all existing fare and transfer agreements with the following transit agencies:  Amador Regional Transit System, El Dorado County Transit Authority, City of Elk Grove, City of Folsom, Placer County Transit, City of Roseville, and Yolo County Transit Authority.  If RT renegotiates the existing transfer agreements so that each agreement is revenue neutral, it is estimated that RT could potentially save up to $300,000 annually.

5.  Eliminate Paratransit Group Pass:  RT staff recommends the elimination of the Paratransit Group Pass.  Passengers who qualify for complementary paratransit demand-response service and possess a Paratransit, Inc. photo ID card are allowed to ride the RT bus and light rail system at no cost.  The Paratransit Group Pass was intended to encourage Paratransit riders and their Personal Care Attendants to utilize RT’s fixed-route system for some trips.  With the elimination of the Paratransit Group Pass, passengers who qualify for complementary paratransit service are eligible to ride RT’s fixed-route system at the discount fare.  Initial estimates indicate ridership levels within this group would generate approximately $2 million in annual revenue at the discounted fare rate.

6.  Implement parking fee at park-and-ride lots:  Initial analysis indicates that charging for parking at RT’s 18 park-and-ride lots would yield approximately $0.8 to $1.8 million annually, after initial start-up costs.  The proposed cost for a daily parking pass is $2 and the proposed cost for a monthly parking pass is $30.

7.  Phased increase of Paratransit monthly pass:  The cost of a monthly pass to ride Paratransit has increased once since 1990, with a 25 percent increase in 2003 from $80 to $100 per month.  RT staff proposes to increase the Paratransit monthly pass to $200.  To minimize the impact to Paratransit passengers, it is recommended to implement the increase in phases:  $150 effective January 2009; $175 effective January 2010; and $200 effective January 2011.  RT staff estimates that this will generate an additional $177,350 in annual fare revenue.

8.  Increase fares to recommended level (6-month impact):  RT staff recommends a fare increase for all basic and discount fares, including transfers.  The estimated increase in revenue on an annual basis is approximately $3,952,167.  If implemented in January 2009 as proposed, the 6-month impact is approximately $2,176,084.

9.  Implement combination of service reductions in order to net $3.2 million in annual savings:  To balance the budget, it may be necessary to implement service reductions.  The first recommendation is to reduce service on 33 bus routes with the lowest ridership/productivity and then to adjust span of service on 30 bus routes.  If implemented in January 2009 as proposed, the annual impact is approximately $3.2 million.

A.  Eliminate Service Based on Productivity:  If service reductions are necessary to balance the budget, RT staff recommends discontinuing varying levels of service on the following bus routes that operate at less than 70 percent productivity compared to the routes in its category:  1, 8, 9, 10, 16, 20, 22, 23, 25, 28, 30, 31, 33, 34, 36, 37, 47, 50E, 51, 54, 61, 65, 73, 74, 75, 82, 89, 101, 104, 107, 140, 141 and 142.

B.  Reduce Service Day:  If service reductions are necessary to balance the budget, RT staff recommends reducing the hours of service to 6 a.m. to 8 p.m. on the following bus routes:  1, 2, 8, 13, 14, 15, 19, 21, 22, 23, 28, 30, 38, 50E, 51, 56, 61, 62, 67, 68, 72, 80, 81, 82, 84, 86, 87, 88, 93 and 100.

“It is extremely unfortunate that the state of California is attempting to balance the state budget on the backs of transit riders,” Mike Wiley, General Manager/CEO, stated.  “Consequently, the RT Board of Directors may be forced to implement fare increases and service reductions. This is the wrong time to cut transit funding.”