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SR-1000-001-01 (4) , {ODO- Ool-D II-C TD.JFH.HD.cb CouncIl 'feeting Santa Honlca, Cal1fornla },.]arch 13, 1984 MAR 1 3 J9lU TO' Mayor and CIty CounCIl FRm.1 : City Staff SUBJECT- SUBMISSION OF SHORT R~KGE TR~~SIT PLA~ IntroductIon ThIS report requests that the C1 ty CouncIl author12:e the C1 tv ~lanager to fIle a Short Range TransIt Plan (SRTP) 1.ith the Los Angeles County Transportation CommISSIon (L~CTC) and the Southern CalifornIa ASSocIatIon of Governments (SCAG) In order for the ~bnlclpal Bus L1nes to remaIn elIgible for Federal and State transit grant funds, The deadlIne for filIng this year's plan is March 15, 1984. Background The )mnlclpal Bus L1Iles 1S required each year by the Federal government to submIt a Short Range TranSIt Plan coverIng a flve year perIod. The plan examInes eXIstIng servIces, prOjects future needs for serVIce and equipment and presents a fIve-year fInancIal plan ThIS yearrs Short Range TranSIt Plan IS an update to last year's major reVIsion and covers fiscal years 1985-1989. WhIle the primary purpose of the SRTP 15 to prOVIde budget Information and JustIfication to the LACTC for use ln maklng allocatlons for FY 1984-85, the plan does proYIde a pro] ectlon of future years based on the best InformatIon avaIlable. However, fiscal years beyond 1985 WIll agaln be addressed In next year's verSIon of the Plan. The preparatIon of the document lS flnanced by the Urban ~mss TransportatIon ~dm1nIstratIon (80%) and by Transportat~on Development Act (20%) funds allo- cated for th1S purpose. The report this year was prepared by ~TE Management /I-C MAR 1 3 1984 TD:JFH:HD:cb CouncIl \leet~ng Harch 13, 1984 Santa Monica, Cal~forn~a and SerVIce Company under a contract approved by the City CouncIl, wIth sub- stantlal Input from the Transportatlon Department staff. The Short Range TranSIt Plan L5 prepared Lll accordance wIth gUIdelInes developed by ill.ITA, SCAG and LACTC In ILne w~th the SRTP guIdelInes, the document descrIbes and evaluates eXIstIng condItIons of Munlclpal Bus Llnes serVlce and facilItIes and then presents a fIve-year flnancial plan (Chapter 3), Including revenues by source, expendItures, mIles of serVlce to be operated and capltal proJects to be pursued. ATE notes In summarIzlng the eXlstlng condltions that Santa Monlca serVlce 15 characterlzed by hlgh productlvlty and efflclency, that 27% of all trips to downto~~ Santa ~onlca are made by bus, that on-tlme performance improved by 3%, and that the faclllty expansion now underway should alleviate problems relatIng to the lack of capaclty of the current maIntenance facilIty The report goes on to note that passengers WIll declIne through FY 1984-85 due to fare and serVlce com- petit10n wIth SCRTD and Culver City, but that passengers will r1se beginn1ng In FY 1985-86 as seRTD fares rise to a proJected 85~ level at the end of the Fare Reductlon program and ~fun1cIpal Bus LInes fares rema1n at 50~ through FY 1989. The LACTe requ~res that the plan Include 5-year operating and capItal f1nanclal prO]ectlons for FY 1985-1989 based upon assumptions It has developed. A pro- ]ectIon of proposed fares and fare revenues 1S also required. ~s part of developIng the flnancial projectIons for FY 1984-85, It 15 assumed that the MunIc1pal Bus Lines will continue Its partIclpation In the ProposItion A Fare ReductIon program. The recommended Plan proposes that the current fares -2- TD:JFH.HD:cb CouncIl MeetIng March 13, 1984 Santa MonIca, CalIfornIa remaIn 1n effect through FY 1989, when the base fare would be raIsed from 50~ to 65<1:. ThIS long perIod of fare stabIlity assumes that Santa ;\lonlca w1ll receIve 1ts faIr share of PrOpOSItIon A DiscretIonary funds when the Proposl- tIon ~ Fare ReductIon program ends on June 30, 1985. The LACTC will be con- slderlng possIbilItIes for the allocatIon of the DIscretIonary funds thIS year and WIll make a decIS10n In November 1984. At the request of LACTC, we have also Included a scenarlO for future year operatIons based an the assumptIon that none of the PropOSItIon A DIscretionary fundIng made avaIlable beg1nning In FY 1985-86 WIll be allocated to bus opera- tlons 1n the County, Under thIS pessim1stIc assumptIon, ~ronic1pa1 Bus LInes base fares would rise to 75~ in FY 1985-86 and to 90~ In FY 1987-88. For comparatlve purposes, It IS estimated that seRTD base fares In FY 1985-86 under th1S scenarIO would be as hIgh as Sl.30. In our opInIon, It IS extremely unlIkely that thIS SItuatIon WIll come to pass. It should be noted that the fInanCIal figures FY 1983-84 are based on the current year's budget. However, actual expenses are expected to be well belm\' budget. In VIew of Santa MonIca's poor experIence WIth the relIab1lity of advanced de- sign buses, the five-year capital program Includes the selectIve rehabIlItatIon of older BIg Blue Buses as well as the early replacement of 37 Grunman Flxlble buses purchased In 1979 and 1980. The program Involves the use of capItal reserve funds accumulated by the ~1uniclpal Bus LInes over the past several years for the replacement of 20 of these buses In FY 1984-85 and 17 In FY 1985-86. -3- TD:JFH'HD:cb Councl1 Meetlng ~hrch 13, 1984 Santa 1wnlca, Callfornia Flnanclal AnalYSIS The past year's legls1atlve sess~ons ln Sacramento and Washlngton, D. C. have materlally changed the flnanclal outlook for putIle transportatlon, partlcularly In terms of fundlng for transit operatIons A breakdown of the four major fundIng sources available to the \~nicIpal Bus LInes follows: o Federal Translt Opera~~n~ ASsIstance: The Reagan Admlnlstratlon has agaln announced ltS intention of reducing federal operatlng assistance through the FY 1984-85 federal budget process. If implemented, the change would fiean a 50% reduction in Eederal operatlng assistance for the Munlcipal Bus LInes, The Admlnlstratlon budget proposal is lnconslstent wlth the Congresslonal intent expressed in the Surface Transportation Act of 1982, wherein Federal transit operatIng aSSlstance was contlnued but capped at 80% of actual operatlng assistance allocations to each urbanIzed area In FY 1982 The resultIng transit operating allocation for Santa Monica should be $2.2 ffiIlllon annually through Flsca1 Year 1987-1988, The LACTC has advised us to use thIS projectlon In hopes that the continued Opposltlon of local government, the transit lndustry and the Congress will agalh preval1. o ~ransporta~~on Developmen\ .\ct (TDA) Artlcle 4 F~~~s TDA Artlcle 4 funds, WhlCh are derived from sales tax revenues, are available for translt operating and capital purposes. TDA funds have hIstorlcally ~ncreased concomItant WIth the rise In -4- TD:JFH.HO'cb CaunCll Heetmg f'.larch 13, 1984 Santa ~onica> California retall revenues. Los Angeles County Transportatlon Co~ission lS prO)ectlng that TD~ revenues for FY 1985 ~lll Y1Se conslderably from the FY 1984 estlrnated flgure as retal1 sales have lncreased wlth the econOID1C recovery. For Santa ~bnlca, the result1ng subSldy f1gure for FY 1985 15 S5.7 mllllon, r1s1ng 5% a year thereafter. o State Transit Ass1stance Fund (STAF): AB 2551 (Young) and SB 1335 (Foran), ~h1Ch were slgned by the Governor 1n 1982~ reauthorlzed the State Transit ~sslstance Fund and appropr1ated $90 mil110n statewlde for FY 1983 and Sl03 ffillllon for FY 1984. The bill, Khile authorlzing the program lnto perpetulty, contalned no approprlatlon for FY 1985. Slnce taklng offlce, Governor Deukme]lan has taken actlon to slgnlflcantly curtall translt fundlng from thIS source. The adopted budget for FY 1984 contalned a cut in the State TranSIt AS515tance Fund to SSg ill11110n and the proposed budget contains an appropriatlon fIgure of $79.8 mIlllon. The result for Santa ~bnlca, if thlS proposal 1S enacted, WIll be a STAF a11ocatlon of $74~,OOO in FY 1985 The LACTC has adv1sed us to use the $745,000 fIgure In OUT FY 1985 budget. o ~rOP?Slt1on ~ Local Return Fund!n&' Proposlt1on A sales tax revenues are up from offlc1a1 estlmates due to a strengthening of retall sales. The Los Angeles County -5- TD'JFH'HD'cb CouncIl Heetlng :.larch 13, 1984 Santa MonIca, CalIfornIa Transportatlon CommISSIon proJects that PropOSItion ~ sales tax funds will Increase by 5% In FY 1985 and 5% each year thereafter. For FY 1984 the City CounCIl allocated $165,000 from thIs source to the Transportation Department, The SRTP proJects fundIng from thIS source at only the mInl~um level of $185,000 required by the LACTC for partiCIpatIon In the PropOSItIon ~ Fare ReductIon Program, conSIstent WIth the Fare ReductIon Program ~emorandum of Understanding between L~CTC and the CIty of Santa Monica. The chart below depIcts probable fundIng levels for Santa MonIca for FY 1985 as co~pared to the comparable fIgures for FY 1984 for the three outSIde fundIng sources; FY 1984 FY 1985 Federal OperatIng ASSIstance TD~ Article 4 Funds State TranSIt Assistance Fund $2,232,000 $4,774,000 S 688,000 S2,232,000 $5,718,000 $ 745,000 The Short Range TranSIt Plan does not proJect any unfunded operatIng defICIts through F~scal Year 1989. ThIS IS due to two factors: The assumptIons for fundIng developed by the LACTC WhICh includes the contInued avaIlabIlIty of State and Federal operatIng funds and the assumption that the \funIcIpal Bus LInes WIll contInue to receIve a reasonable share of PropOSItIon A dIS- cretIonary funds from the LACTC after the expiration of the voter mandated Fare Reductlon Program In FY 1986. The LACTC IS presently conSIderIng alternatIve approaches for allocatIng these dIscretIonary funds, but the LACTC staff assumption IS that the entire amount will be used to subsidize -6- TD.JFH:HD"cb Council Meetlng March 13, 1984 Santa ~onlca, Californla bus operatlons, desplte the lncluSlon of the more pesslmistlc scenario discussed above. Recommendatlon Clty staff recommends that the Clty Council authorlze the CIty Manager to fIle the Short Range TransIt Plan wIth Southern CalIfornia AssocIation of Govern- ments and the Los Angeles County TransportatIon CommIssIon. Prepared by. J. F. Hutchlson, Dlrector of TransportatIon Hank Dittnar, Senior Admlnlstratlve Analyst -i-