marta fiscal challenge: fy2009 and beyond

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MARTA Fiscal Challenge: FY2009 and Beyond January 2009

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MARTA Fiscal Challenge: FY2009 and Beyond. January 2009. Realizing the Vision…. Greater investment in transit is necessary to “the cultural, social, and economic well-being of the people in the metropolitan area and the development of the educational, commercial, and industrial resources.” - PowerPoint PPT Presentation

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Page 1: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA Fiscal Challenge:FY2009 and Beyond

January 2009

Page 2: MARTA Fiscal Challenge: FY2009 and Beyond

Realizing the Vision…

Greater investment in transit is necessary to “the cultural, social, and economic well-being of the

people in the metropolitan area and the development of the educational, commercial,

and industrial resources.”---Sec. 3, The MARTA Act of 1965

Page 3: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA at a Glance9th largest transit system in the nation

36 years of experience (transit planning, design, constructionand operations) Service area: Fulton and DeKalb Counties; the City of Atlanta; Clayton County operator

500,000 + daily boardings

5,118 employees

FY09 Adopted Budget– Operating - $395.46M– Capital - $535.34M

Page 4: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA at a GlanceRAIL SYSTEM

• 38 stations;48 miles of track (double track)• 3 rail yards (Avondale, South and Armour)• 338 rail cars• Automatic Train Control and

SCADA System • Traction Power Substations

BUS SYSTEM • 609 large bus, 15 small bus• 131 bus routes • 3 bus garages (Laredo, Perry and Hamilton)• 1 heavy maintenance facility (Brownsmill)

MOBILTY (Paratransit)• 175 L-Vans • 1 garage (Brady Facility)

POLICE PRECINCTS• 5 precincts (Lindbergh, College Park,

Kensington, Five Points, Dunwoody)

Page 5: MARTA Fiscal Challenge: FY2009 and Beyond

Fulton & DeKalb County Residents 87%

Work trips* 54%School trips 10%

No alternative transportation 46%

Male 51%

16-34 years of age 53%

High school diploma or some college 63%

Household income less than $30,000 63%

*C-Tran work trips – 61% Source: 2008 Quality of Service Survey

Who Do We Serve?Who Do We Serve?

Page 6: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA TodayRidership - Up

Fleet Reliability - Up

On-time Performance - Up

Safety Performance - Up

Security - Enhanced

Customer Satisfaction - Up

Financial Performance - Better Than FY2008 Budget

Page 7: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Funding Needs

Page 8: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA Financial Overview

Sales Tax$183.24M52.10%

Passenger Revenue$103.35M29.38%

Lease Income$5.80M1.65%

Other Transit Related$17.54M4.99%

Preventive Maintenance

Rev.$41.79M11.88%

WHERE DOES IT COME FROM?

FY09 Adopted Operating Revenues($351.72M)

Page 9: MARTA Fiscal Challenge: FY2009 and Beyond

Salaries and Benefits$305.62M77.28%

Contractual Services$20.55M

5.20%

Materials and Supplies$39.89M10.09%

Other Non-Labor$29.40M7.43%

WHERE DOES IT GO?

FY09 Adopted Net Operating Expenditures($395.46M)

MARTA Financial Overview

Page 10: MARTA Fiscal Challenge: FY2009 and Beyond

FY09 Budget – Revenue Allocation($Million)

Budget FY09 % of Total

50% Sales Tax 183.24 52.1%Passenger Revenues 103.35 29.4%Sales Tax & Passenger Rev. 286.59 81.5%

Other Transit Related Revenues 11.45 3.3%Interest on Capital Reserves 2.23 0.6%Lease Income 1.57 0.4%Transit Oriented Developmt. Revenue 4.23 1.2%Preventive Maintenance Revenue 41.79 11.9%Lease-to-Service Amoritzed Income 3.86 1.1%Other Revenue 65.13 18.5%

Current Year Operating Revenues 351.72 100.0%

Adopted

Page 11: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA FY09 Capital Program

Prior Year Carryover$94.94M(17.18% )

Sales Tax$174.08M(31.50% )

Interest/ State/Private$3.34M(0.60% )

Federal Grants$110.21M(19.95% )

Financing$170.00M(30.77% )

WHERE DOES IT COME FROM? Capital Revenue by Source

FY09 Adopted Capital Budget($552.57M)

Page 12: MARTA Fiscal Challenge: FY2009 and Beyond

WHERE DOES IT GO?Capital Expenditures by Type FY09 Adopted Capital Budget

($532.22M)

Debt Service$145.7627.38%

Planning$12.39M2.33%

Service Enhancements

$46.13M8.67%

System Expansion$10.73M2.02% Regulatory

Requirements$6.12M1.15%

State of Good Repair$311.09M58.45%

MARTA FY09 Capital Program

Page 13: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA Financial OverviewOriginal Budget Projection

(as of June 2007 – FY07 Un-audited)

Page 14: MARTA Fiscal Challenge: FY2009 and Beyond

Revised Sales Tax Forecast - A

Source: Georgia State University Economic Forecasting Center (GSUEFC)

Page 15: MARTA Fiscal Challenge: FY2009 and Beyond

Operating Budget Projections(FY08 – FY11 Revised – “AS IS”) *

($Million)

FY09/FY10 Reduction Target* Georgia State University Economic Forecasting Center Report

(September 2008)

Page 16: MARTA Fiscal Challenge: FY2009 and Beyond

Revised Sales Tax Forecast - B

Source: Georgia State University Economic Forecasting Center (GSUEFC)

Page 17: MARTA Fiscal Challenge: FY2009 and Beyond

Operating Budget Projections(FY08 – FY11 Revised – “AS IS”) *

($Million)

* Georgia State University Economic Forecasting Center Report (December 2008)

Actual Adopted Preliminary

Forecast ProjectionFY08 FY09 FY09 FY10 FY11

Current Year Operating Revenues 357.11 351.72 333.02 323.18 322.13

% Increase/Decrease 4.4% -1.5% -6.7% -3.0% -0.3%

Net Operating Expenditures 363.99 395.46 400.26 417.84 436.32% Increase/Decrease 11.6% 8.6% 10.0% 4.4% 4.4%

Impact on Reserves (6.88) (43.74) (67.24) (94.66) (114.18)

Sales Tax Carryover 136.87 102.29 77.80 (16.86) (131.04)

MARTA Act Reserves (34.19) (35.71) (35.71) (33.30) (32.32)

Available Reserves 102.68 66.58 42.09 (50.16) (163.36)

Page 18: MARTA Fiscal Challenge: FY2009 and Beyond

Major Challenges: FY2009 and Beyond

Severe Economic Downturn – Local Sales Tax Receipts Down (52% of MARTA Operating Revenues)

Inadequate State, Regional/Local Transit Funding

Federal Transportation Funds Depleted– SAFETEA-LU expires 9/30/2009

Regional Transit Expansion Plan Unfunded

Page 19: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Deficit Reduction Strategies

Internal Productivityand

Cost Containment

Fare Changes

Reduce TransitService LevelsNew Revenue Sources

Page 20: MARTA Fiscal Challenge: FY2009 and Beyond

Average Cost Per Trip

Average Cost Farebox Recovery (%)

Subsidy(%)

Average Cost Per Trip

$ 2.53 27.3 72.7

Bus 2.69 27.3 72.7

Rail 2.21 29.4 71.6

Paratransit 39.99 3.5 96.5

Page 21: MARTA Fiscal Challenge: FY2009 and Beyond

Potential Deficit Reduction Impacts

System-wide Transit Fare Increase

Increase Parking Fees

Severe Transit Service Cuts

Employee Layoffs/Furloughs

Jeopardize Future Federal Transit Funding─ Ability to operate and maintain existing services─ Adequate project contingency and reserves ─ Demonstrate “technical capacity”

Page 22: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA Fare Change History

 Date Base FarePasses  Paratransit

FareMonthly Weekly

May 1980 $0.25 $10   $0.50 July 1980 $0.50 $17 $4 $1.00 July 1981 $0.60 $21 $5 $1.20July 1985 $0.60 $25 $6 $1.20June 1987 $0.75 $28 $7 * $1.50July 1988 $0.85 $32 $8 * $1.70July 1990 $1.00 $35 $9 * $2.00June 1992 $1.25 $43 $11 * $2.50July 1995 $1.50 $45 $12 * $3.00

March 1997 $1.50 $45 $12 * $3.00Jan 2001 $1.75 $52.50 $13 * $3.50

Today $1.75 $52.50 $13 * $3.50

* Paratransit was outsourced to DAVE Transportation from 1987 until 1997

Page 23: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price Changes

Note: Pass prices based on the pass multiple “X” (i.e., X times the base fare).

Transit Fares 

•MARTA is considering increasing it’s base fare by 25¢ from $1.75 to $2.00 per trip.

•The fare change will also result in increases to the prices of multi-trip and time-based passes purchased on Breeze Cards and Breeze Tickets.

•Three fare change scenarios – A, B, and C – are being considered.

Page 24: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price ChangesTransit Fares - Scenario A

 •Base fare increases by 25¢ from $1.75 to $2.00 per trip.

•7-Day/Calendar Weekly Pass increases from $13.00 to $15.00.

•30-Day/Calendar Monthly Pass increases from $52.50 to $60.00.

•Estimated annual net revenue generated by the fare change is approximately $6.4 million.

•Estimated loss of approximately 12.7 million annual passenger boardings*.

*Monetary loss based on predicted decrease in ridership due to fare increase and historical forecasted indicators such as unemployment, inflation and service levels.

Page 25: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price Changes

Transit Fares - Scenario B 

•Base fare increases by 25¢ from $1.75 to $2.00 per trip.

•7-Day/Calendar Weekly Pass increases from $13.00 to $15.00.

•30-Day/Calendar Monthly Pass increases from $52.50 to $64.00.

•Estimated annual net revenue generated by the fare change is approximately $7.1 million.

•Estimated loss of approximately 14.4 million annual passenger boardings*.

*Monetary loss based on predicted decrease in ridership due to fare increase and historical forecasted indicators such as unemployment, inflation and service levels.

Page 26: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price Changes

Transit Fares - Scenario C 

•Base fare increases by 25¢ from $1.75 to $2.00 per trip.

•7-Day/Calendar Weekly Pass increases from $13.00 to $17.00.

•30-Day/Calendar Monthly Pass increases from $52.50 to $68.00.

•Estimated annual net revenue generated by the fare change is approximately $9.4 million.

•Estimated loss of approximately 20.9 million annual passenger boardings*.

*Monetary loss based on predicted decrease in ridership due to fare increase and historical forecasted indicators such as unemployment, inflation and service levels.

Page 27: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price Changes

Parking Fees - Scenario A 

•Daily parking rates increase from $1.00 to $5.00, Monday through Sunday (7 days per week).

•Long-term parking rates increase from $1.00 to $5.00, Monday through Sunday, (7 days per week).

•Estimated annual net revenue generated @ a 50% occupancy level and a parking fee of $1.00 is approximately $2 million.

Page 28: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price Changes

Parking Fees – Scenario B 

•Daily parking rates increase from $1.00 to $5.00, Monday through Friday (5 days per week).

•Long-term parking rates increase to $4.00 for Inner Stations and $7.00 for End of Line Stations, Monday through Sunday (7 days per week).

•Estimated annual net revenue generated @ a 50% occupancy level and a parking fee of $1.00 is approximately $2.2 million.

Page 29: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price Changes

Parking Fees – Scenario C 

•Daily parking rates increase from $1.00 to $5.00, Monday through Sunday (7 days per week).

•Long-term parking rates increase to $4.00 for Inner Stations and $7.00 for End of Line Stations, Monday through Sunday (7 days per week).

•Estimated annual net revenue generated @ a 50% occupancy level and a parking fee of $1.00 is approximately $3.4 million.

Page 30: MARTA Fiscal Challenge: FY2009 and Beyond

Transit Service and Price ChangesParking Fees

•Currently, daily parking is free and long-term parking costs between $4.00 and $7.00 per day at MARTA rail stations.

•MARTA is considering changing its parking fee structure and increasing the rates charged per day.

•Three scenarios – A, B, and C – are being considered.

•Within each scenario, the daily parking fee options being considered range from $1.00 to $5.00 per day.

Page 31: MARTA Fiscal Challenge: FY2009 and Beyond

• Unproductive Service

• Preservation of service on all identified “Lifeline” routes. Routes can be modified to maintain minimum service.

• Adjustment to hours of service based on ridership

• Low-performing segments of routes (maintain service in critical areas.

• Duplicative routes and segments

• Reduce weekday service to peak-only where off-peak service productivity is low.

• Saturday and/or Sunday service on routes with low performance when compared to similar services.

Transit Service and Price ChangesService Considerations

Page 32: MARTA Fiscal Challenge: FY2009 and Beyond

MARTA 2009 Legislative Agenda

The original intent of this provision was to ensure that capital funds would be available to build the system at the outset. Additionally, at the time this was enacted public transit organizations received significant annual federal operating assistance, which is no longer the case for large and mid-size transit systems like MARTA.

Eliminate 50% capital and 50% operations sales tax split requirement

Permit interest income from capital reserves to be used for operations

Amend “Zero Tolerance” provision (permit food and drink in MARTA rail andintermodal facilities) - - not on board trains or buses

MARTA has been in the past authorized to use interest earnings on its capital reserve accounts for the Authority’s operating expenses, with the General Assembly authorizing such use in 1989, 1991, 1994, 1996, 2000, 2003 and 2006. The 2006 legislation allowed such use only through June 30, 2008.

Page 33: MARTA Fiscal Challenge: FY2009 and Beyond

Major Opportunities: FY2009 and Beyond

Transportation Infrastructure Investment Key to Economic Stimulus

Linkage of Transportation, Environmental and Energy Policies ─ Jobs Creation and Economic Competitiveness ─ Environmental Sustainability─ Energy Independence and Homeland Security─ Quality of Life (Healthy Communities and Lifestyles)

The Public “Gets It”!– Transit Ridership Growth– State, Regional & Local Polls– National Transit Referenda

The State of Georgia and Atlanta Region Must Move Now!

Page 34: MARTA Fiscal Challenge: FY2009 and Beyond

Timeframe Event(s) December 2008 – MARTA implements cost containment measures; Board approves State

Legislative “Financial Relief” Package; directs FY 2010 Budget Deficit Reduction (i.e., possible fare increases, parking changes, service cuts) as

last resort– Stakeholder Organization Briefing– Media Briefing

 January 2009 – 1st Community Forum/Listening Sessions; Employee Meeting; Expanded

EDAAC Meeting– MARTA Community Survey

  – State Legislative Session Commences (1/12/09) – MARTA Legislative requests; various transportation funding bills (“Get Georgia Moving”

Coalition) January 29, 2009 – MARTA Board Business Management Committee (FY 2010 Budget

Development Work Plan) February 11, 2009 – Annual “State of MARTA” General Assembly Presentation  February - March 2009 – MARTA staff attend local community/stakeholder meetings 

Decision-Making Timeline

Page 35: MARTA Fiscal Challenge: FY2009 and Beyond

February 23, 2009 – MARTA Board Business Management Committee (FY 2010 Budget Development Update)

 March 30, 2009 – MARTA Board Business Management Committee (FY 2010 Budget

Development Update) March - April 2009 – 2nd Round Community Meetings (State Legislation Status; Results of

Community Meetings & Survey Input; Update Financial Status; ID Preliminary Findings & FY 2010 Budget Recommendations

April 6, 2009 – MARTA Staff Presents FY 2010 Budget Proposal to MARTA Board

April 28, 2009 – MARTA Board Business Management Committee (FY 2010 Budget Proposed Budget)

May 11-12, 2009 – MARTA Board Holds FY 2010 Budget Public Hearings

May 27, 2009 – MARTA Board Business Management Committee (FY 2010 Recommended Budget)

June 8, 2009 – MARTA Board Adopts FY 2010 Budget

Decision-Making Timeline

Timeframe Event(s)

Page 36: MARTA Fiscal Challenge: FY2009 and Beyond

Contact Us

Community Hotline404-848-5026

or

Websitewww.itsmarta.com

Page 37: MARTA Fiscal Challenge: FY2009 and Beyond

We Value Your Input andNeed Your Help!

Thank You.