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MIN JULY 01 2003 (2) CITY OF BEAUMONT MUNICIPAL TRANSIT FUND STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE For the eight months ended May 31,2003 Favorable► FYE 2003 (Unfavorable) Current Actual Projected at Year End REVENUES Month Year To Date 05/31)03 Budget To Budget Service Charges $ 43,465 376,167 540,000 650,000 (110,000) Intergovernmental Revenue 184,197 1,968,417 2,755,000 1,600,700 1,154,300 Interest — 28 — — _ Miscellaneous Revenue 800 11,650 20,000 — 20,000 Transfer from General Fund 106,250 850,000 1,275,000 1,275,000 — TOTAL REVENUES 334,712 3,206,262 4,590,000 3,525,700 1,064,300 EXPENDITURE CATEGORY Contract Services 257,249 2,235,814 3,400,000 3,500,000 100,000 Capitallmprovernents 97,132 922,307 1,300,000 — (1,300,000) TOTAL EXPENDITURES 354,381 3,158,121 4,700,000 3,500,000 (1,200,000) EXCESS(DEFICIT)REVENUES OVER EXPENDITURES (19,669) 48,141 (110,000) 25,700 (135,700) FUND BALANCE Beginning Fund Balance 134,851 67,841 67,041 8,366 58,675 Ending Fund Balance $ 115,182 115,182 (42,959) 34,066 17 CITY OF BEAUMONT ...... PUBLIC WORKS : ML INTEROFFICE MEMORANDUM June 25, 2003 TO: Kyle Hayes, City Manager FROM: Tom Warner, Public Works Director SUBJECT: PROPOSED FISCAL YEAR 2004 TRANSIT BUDGET COMMENT: The Transportation Division has completed a preliminary FY 2004 Budget for Beaumont Municipal Transit(BMT). Although the proposed operating budget of$3.4 million is the same as the FY 2003 budget, a potential reduction in federal and state funding may occur. This would have a significant impact on the FY 2004 budget. As of this date, the amount of federal and state funding BMT will receive has not been determined. A summary of the FY 2003 and proposed FY 2004 funding,by source,is provided below: Projected Actual Projected Funding Source FY 2003 * FY 2003 FY 2004 Fare Box $ 650,000 $ 540,000 $ 536,800 Federal 1,264,400 1,393,000 1,393,000 State 313,000 313,000 313,000 Local 1,237,300 1,127,700 1,145,000 Planning 15,000 15,000 15,000 Charter 6,200 6,200 6,200 Advertising 14,100 14,100 Total $3,500,000 $3,409,000 $3,409,000 * The Projected FY 2003 federal and state funding was based on amounts from previous years. The exact funding was not known until after the City's budget had been adopted. To: Kyle Hayes From: Tom Warner RE: Proposed FY 2004 Transit Budget June 23, 2003 Page 2 of 4 The reduction in fare box revenue is contributed to the fare increase and the midday service reductions that occurred in November 2001. Current advertising revenue is generated by the bus "wraps." Existing contracts will expire at the end of the year and there has been no interest expressed for continuation or new wraps. In addition to the potential reduction in federal and state funding, a modification to the funding formula is currently under consideration by Congress. This funding allocation, identified as the High Intensity Transit Tier, would be established as a part of the Federal Transit Administration(FTA)formula program in the authorization bill being developed to replace TEA-21. The current FTA formula for small urbanized areas(serving populations between 50,000 and 200,000)only takes into consideration population and population density. The formula for larger jurisdictions(over 200,000)takes into consideration the level of transit service provided such as passengers per mile and passengers per hour. As a result, there are a number of communities that provide higher levels of service to more riders per capita than their larger counterparts and receive far fewer dollars simply because of their smaller overall populations. The High Intensity Transit Tier recognizes service levels as an important consideration in determining the amount of funding that a city should receive. Under the proposed funding formula, the City would receive an additional $320,000 of federal funding in FY 2004 increasing to$498,000 in FY 2009, if approved by Congress. It should be noted that the funding amounts were calculated based on 2001 ridership. The 2001 increase in fares and the service reductions resulted in a loss of approximately 296,000 riders. If the City was to obtain this additional funding in the amount projected, ridership would have to increase to approximately 2001 levels. A decision on the funding amounts that the City will receive for FY 2004 could occur as early as August 2003 or as late as next year. Even if the amounts were known in August 2003 that could be too late to incorporate them into the FY 2004 City budget process. Due to the uncertainty of the funding amounts, it is recommended that the following proposals be implemented to offset any reduction in funding. Proposal One In November 2001 the number of buses on the street during the midday hours was reduced from twelve to nine. The impact of this service reduction was a loss in ridership of approximately 296,000. This loss in ridership was reflected in a reduction in fare box revenue. Recommendation One The estimated cost to resume midday service is $196,600 with an To: Kyle Hayes From: Tom Warner RE: Proposed FY 2004 Transit Budget June 23, 2003 Page 3 of 4 estimated increase in revenue of $222,300, based on the current fare structure. The implementation of this recommendation would result in a net revenue increase of $24,700. It is not known at this time if ridership can be increased to 2001 levels. However, if only 85 percent of the ridership lost returned to use BMT, this would result in a breakeven proposal. • Proposal Two The cost to provide a reliable and efficient transit system has continued to increase while federal and state funding has decreased. The only alternative to replace this loss in revenue is to raise fares. Prior to the November 2001 fare increase, the last fare increase occurred in 1997. Recommendation Two The following fare schedule is recommended to become effective October 1, 2003. Current Proposed Fare Type Fare Fare Adult $ 1.00 $ 1.25 Youth 0.50 0.75 Monthly Pass 30.00 40.00 STS 2.00 2.50 STS (Fully NA 20.00 Allocated Cost)** Transfers Free 0.25 ** The City's interpretation of the Federal regulations allows a transit system to charge social service agencies the difference between the complementary STS fare and the full allocated cost of the trip. A local agency disagrees with this interpretation and the City has been unable to get a written opinion from the FTA. The difference between the fares is $17.50. This issue was previously considered during the FY 2002 Budget preparations. Enclosed is a memo explaining the issue in greater detail. The resumption of midday service and the implementation of the fare increase is anticipated to generate an additional revenue of$24,700 and$349,300, respectively. Of To: Kyle Hayes From: Tom Warner RE: Proposed FY 2004 Transit Budget June 23,2003 Page 4 of 4 the revenue generated from fare increases, $175,000 is from charging the fully allocated fare to social service agencies. It is anticipated that the revenue generated will be sufficient to offset the loss in federal and/or state revenue. However, if funding is reduced more than$370,000 service reductions such as elimination of late night service may have to be considered. Tom Warner TW:sk