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Budget Challenges
The economic downturn is continuing to have far-reaching implications for the City, the State of Ohio, Cuyahoga County, and the nation, as well as RTA.
The economic recession is related to:
- Underperformance in Sales Tax revenue
- Cuts in State Transit Funding
- Employment-related loss of ridership and fare revenue
Combined, these factors require that RTA examine all available options to fulfill our mission "to provide the maximum amount of high-quality service to our customers, with the revenue we receive"
The purpose of this web page is to keep RTA customers, employees and the public in general informed of financial challenges and the ways that the GCRTA is attempting to meet those challenges.
This information will be updated on a regular basis. If you have any questions that you would like us to respond to, or have any suggestions or comments that you would like to share with us, please contact us at public-comment@gcrta.org.
What were the reasons for RTA's 2001-2009 budget challenges?
The reason for RTA's 2001-2009 budget challenge was a significant drop in revenues and investments in public transit.
RTA's revenues come from three primary sources:
- Sales Tax
- Government Subsidies and Grants
- Passenger Fares
- Sales Tax
- RTA receives a 1% Sales Tax on goods sold in Cuyahoga County.
- This is RTA's largest source of revenue, representing 60-70 percent of RTA's operating budget.
- Sales Tax is directly impacted by the local economy. Between 1990 and 2001, when the economy was stronger than it is today, the annual increase in the sales tax averaged approximately 5.6%. This was RTA's expansion period when the Waterfront Line was built, and when the Community Circulator and suburban Park-N-Ride Services were started.
- Since 2001, the local economy has weakened. Between 2001 and 2009, the annual increase in the sales tax averaged only 0.34 percent.
- In 2009, unemployment, the tightening of the credit market, and the falling of consumer confidence caused by the national recession, have significantly impacted receipts from the Sales Tax.
- For the 12 months of 2009, Sales Tax receipts to RTA dropped $18,982,598 (11 percent) less than the amount received in 2008.
- Depending upon the speed of our economic recovery, it could take several years for the Sales Tax to once again reach the level collected in 2008.
- Sales Tax receipts for 2010, and thus far in 2011, have been better than anticipated due to a legislative change that applied sales tax to senior healthcare and managed care services.
- Calendar 2010 collections of $163.2 million represented a significant increase over 2009, but still fell over $10 million short of the 2008 level. Although the first 6 months of 2011 sales tax receipts are tracking 4.2% above budget, they still are projected to end the year $4 million less than 2008 collections.
- Sales tax receipts have increased in both 2010 and 2011 primarily attributable to a change in collections to include managed care expenses.
- The 2012 proposed budget projects that 2012 sales tax receipts will rise to the level of 2008.
- During this extended period, although sales tax receipts have been far from ideal, other related costs have continued to rise.
- Government Subsidies and Grants
Federal Government - In the early years of this program, the Federal Government provided Capital Grants to assist in the purchasing of capital goods. This included buses, trains, train stations, transit centers, etc., and Operating Assistance to assist with expenses associated with operator and mechanic labor, health and retirement benefits, as well as fuel and utilities.
A change in the Federal Program in 1993 eliminated Operating Assistance to transit agencies. Because this change was so significant, it was phased in between 1993 and 1998.
The Capital Grant portion of the Federal Program continues and provides funds by a formula to each qualifying transit system in the nation, based upon factors such as population and population density. For qualifying purchases, these grants can typically be used to pay for up to 80% of the cost of the Capital good.
Over the years, the definition of Capital has been expanded and now includes labor costs expended to maintain capital goods purchased under the program.
Although declines in population experienced in the Greater Cleveland area have impacted the relative amount of Federal funds allocated to RTA, by and large, this program has kept pace with inflation.
Due to issues surrounding the recession and the national debt, discussions on a new re-authorization of the Surface Transportation Bill are now two years behind schedule. The most recent information out of the House of Representatives is preparing the highway and transit industries for a 30% cut from current levels. This would mean a reduction to RTA of $15 million annually. The Senate has stated that it would like to find the revenue to stabilize programs at current levels. The fund outcome is yet to be determined.
State of Ohio Funding - The State of Ohio has never been an aggressive partner in funding public transportation when compared to other states. The typical state in the United States provides approximately 23% of the operating costs of its transit systems. For comparison, Ohio provides less than 3%.
The State of Ohio invests 99.23% of its resources on highways, but only 0.77% of the total transportation spending on public transit, putting it 40th out of the 50 states in the nation. All the states in the nation that spend less on transit than Ohio are more rural states, with an average population of only 20% of the population of Ohio.
In 2002, Ohio provided $43 million to the transit systems in Ohio. By 2007, that number dropped 63% to $16.3 million. In the 2010/2011 approved State of Ohio budget, funding was cut another 33% to $10.6 million. This represents a 75% cut in State of Ohio funding since 2002.
In October 2010, ODOT announced a new three-year program ($50 million per year) to preserve existing transit services and allow the targeted implementation of new services. In February 2011, although the initial year of the above funding was awarded, RTA was notifiedthat a significant amount of funds were eing rescinded.
Now that the final State of Ohio budget has been signed by the Governor, funding for public transit stands at a level of approximately $25 million per year for the next two years. As of January 2012, the distribution of these funds has not yet been finalized.
We urge all interested parties to contact their State of Ohio elected representatives to request sufficient funding for public transit. E-mails can be easily sent at fundohiotransitnow.org.
- Passenger Fares
Passenger fares cover approximately 20 - 25% of the operating cost of RTA's service. Over the past few years, RTA has increased fares several times in attempts to achieve a balanced budget, and preserve needed services for our customers.
Passenger fares were increased again on September 1, 2009 to a base fare of $2.25. Each 25¢ increase represents approximately $4.5 million annually in revenue to RTA. If fares were not increased, more critical service would haved needed to be eliminated.
The current recession and the resulting drop in ridership resulted in passenger fares being approximately $5 million under budget by 2009's year end.
It is important to note that although the one way cash fare is $2.25, the average per ride fare collected by RTA is approximately $1.10, due to discounts provided to senior citizens, persons with disabilities, and to customers purchasing and using multi-ride passes such as the all-day pass and the monthly pass.
The good news is that although passenger revenues were down approximately $5 million in 2010, they are making rebound in 2011 as a result of higher gas prices and an improvement in the economy and jobs.
Is this just an RTA issue?
The answer is no. A recent study conducted by the American Public Transportation Association concluded that 9 of 10 transit systems in the United States either have recently or are in the process of reducing service and/or raising fares.
Since transit systems are typically funded through sources such as a Sales Tax, Payroll Tax or Property Tax, the recession is impacting almost everyone.
On May 22, 2010, a Rally was held in Public Square in downtown Cleveland to highlight the national nature of this crisis. Transit workers from throughout North American and Canada spoke of massive transit cuts and layoffs in their cities resulting from this recession. Reverend Jesse Jackson was the keynote speaker at the event.
On September 20, 2011, RTA and the ATU jointly participated in a Rally on Public Square in downtown Cleveland asking the fedaral Goverment not to "X-Out" transit.
2012 Tax Budget Process Begins
On July 12, 2011, a public hearing was held and the RTA Board of Trustees was presented the 2012 RTA Tax Budget. This tax budget preparation and submittal, which is a requirement for most municipal governments, is not a legal requirement of RTA, but an important process we go through to show the transparency in the budget process.
The 2012 Budget Presented
The 2012 Budget was presented to the Board of Trustees in October. Public Hearings on the budget were held on Nov. 15 and Dec. 6, so that interested parties could comment.
This budget not only accomplished the goal of no service cuts, no layoffs and no fare increases, but calls for modest increases in service and staffing to address overcrowding on several RTA routes and services as a result of increased ridership.
This increases in staffing by approximately 50 positions needed to deliver an increase in service levels by approximately 4%, will result in 2012 expenses being higher than 2012 anticipated revenues. This is made financially possible due to funds carried over from 2011 that will be spent in 2012. The 2012 budget was adopted on December 6, 2011 by the RTA Board of Trustees.
This budget requires no fare increases and no layoffs. The budget does authorize an increase total transit service by over 4% in the region, and the hiring of 50 additional staff to allow implementation of this increased service.
The budget does expend more dollars in expenses than are anticipated in revenues. This allows the needed increase in transit service to address overcrowding on buses and trains, and to address on-time performance issues that are being caused by overloads.
The additional dollars needed to implement the budget will come from the 2010 ending balance, causing the projected ending balance of 2012 to be less than the actual ending balance of 2011.
A significant unknown in this budget will be the level of Federal Funding for public transit. There is discussion of a potential 30% reduction in funding as is being proposed by the U.S. House of Representatives, which will significantly challenge our goals to maintain service and employment levels into the future. Such a reduction would result in an approximate $15 million loss to RTA annually. The 2012 adopted budget assumes that such cuts will not be made, and the budget will need to be adjusted if they are.
2011 Tax Budget
On July 13, 2010, the RTA Board of Trustees approved the 2011 RTA Tax Budget, which, if no action was taken, was projected to be in the red by approximately $7.8 million.
As in the past, our goal was to do everything in our power to avoid any additional service cuts and layoffs in 2011. The assistance and dedication of every RTA employee and customer towards this goal is crucial in determining our success.
We know our major challenge would be in 2012 when nearly $10 million in limited duration grants programmed for 2010 and 2011 would not be eligible for renewal. It was imperative that as we developed strategies to address the 2011 budget, we also kept our eyes on this bigger issue for 2012. If we can’t address this problem, additional cuts and layoffs seem unavoidable.
How did RTA address the 2011 budget?
The staff continued to explore strategies with its two unions in the hope to develop ways to reduce the cost of service delivery so that existing services and employment levels can be retained.
The staff worked with elected officials, ODOT and NOACA on strategies to increase transit funding.
- The staff prepared a comprehensive plan that identified that the following annual cost savings by temporarily closing one of the three existing bus districts:
- Closing Harvard District - Savings of approximately $4 million
- Closing Triskett District - Savings of approximately $3 million
- Closing Hayden District - Savings of approximately $1 million
This step to reduce costs has been implemented, and August 22, 2010 was the last day of full operation at the Harvard District. This downsizing and reduction of overhead expenses saved significant money, and did not impact any transit service to the public. This consolidation of RTA’s facilities resulted in the elimination of 50 positions at RTA.
RTA 2011 Budget Approved
The initial presentation of the proposed 2011 budget was made to the Finance Committee of the Board of Trustees on November 9, 2010. Additional budget meetings were held on November 16 and December 7, 2010.
On December 7, 2010, the RTA Board of Trustees approved the RTA budget for 2011. Due to reduced costs, primarily from the closing of the Harvard District, and the infusion of additional State of Ohio dollars, our goal of no additional service cuts, no layoffs and no fare increases for 2011 was made possible.
What is the status of the 2011 Budget?
We are in the close out process of the budget. Revenues were up and expenses were down. It is anticipated that final numbers will show a balanced budget.
This budget performance allowed RTA to submit a 2012 budget with the goal to:
- preserve existing service levels
- have no fare increases
- have no layoffs.
What steps were taken in developing the RTA budget for 2010?
- November 9, 2009 - The staff presented their proposed 2010 budget at Board of Trustees Finance Committee Meetings.
- November 17, 2009 - RTA proposed Service Plan for 2010 was presented to a joint Finance and Operations Committee meeting.
- December 1, 2009 - RTA proposed capital Improvement Plan for 2010 was presented to a joint Finance and Planning and Development Committee meeting. Also, a Public Hearing on the budget was held at the RTA offices.
- December 15, 2009 - A second Public Hearing on the budget was held at the RTA offices.
- On December 15, 2009, The Board of Trustees rejected the staff recommendation to approve a 2010 budget due to future uncertainties. These uncertainties are the worsening of the economy, outstanding labor issues, and the future input from the public at the scheduled public hearings in early January. As an alternative, the Board of Trustees passed a short-term temporary budget allowing RTA to operate through March 31, 2010.
- The RTA Board of Trustees held a public meeting on the 2010 budget and approved the budget for the last 9 months of 2010, and voted to maintain the current $2.25 base fare structure, at the February 16 meeting. This adopted budget, with reduced revenues, necessitated the implementation of service cuts in April 2010.
What services were under consideration to be eliminated in 2010?
- Sunday/Holiday Service – which would reduce expenses by approximately $5 million annually, and reduce staffing by 66 positions.
- Saturday Service – which would reduce expenses by approximately $7 million annually, and reduce staffing by 93 positions.
- Elimination of Saturday and Sunday/Holiday Service – which would reduce expenses by approximately $12 million annually, and reduce staffing by 159 positions.
- Low ridership routes.
- Routes that may be in close proximity to other RTA routes.
The specifics of the staff proposal presented to the RTA Board of Trustees on November 17 are posted on this website.
What were the steps taken in implementing the RTA 2010 Service Plan?
- The staff worked diligently on integrating information learned at the Public Hearings and received via mail and email into a final service plan proposal.
- The service changes were implemented on April 4, 2010.
- A comprehensive list of these proposed changes can be found here.
2010 Fare and Service Level Proposal
The second piece of the RTA staff proposal was to maintain the existing $2.25 base fare throughout 2010. This fare was scheduled to roll-back to $1.75 on April 1 based upon resolutions previously adopted. Maintaining the current fare would result in significantly less services being reduced.
A series of ten Public Hearings were held in January 2010 so that comments and suggestions could be received from the public on both service levels and fares. The schedule of these public hearings can be found below:
What were the projections for the 2010 budget?
Based upon the Tax Budget approved by the RTA Board of Trustees in July 2009 and submitted to Cuyahoga County, the deficit for 2010 could have been $29 million.
The actions taken in 2009 by RTA, in the form of the fare increase on September 1, 2009, and the Service Cut on September 20, 2009, reduced the amount of that projected deficit to approximately $17.4 million.
Balancing the 2010 budget required additional actions, in terms of reducing expenses and maximizing revenues.
A service cut was implemented on April 4, 2010 that was designed to allow RTA to balance the 2010 budget. This cut eliminated 12% of RTA’s service hours, and cut 185 RTA positions.
Additional information on these actions is contained in other sections of this document.
Was the 2010 Budget balanced?
Yes. The close-out of the 2010 budget is now complete. While revenues were at budget levels, expenses were well controlled as a result of the aggressive steps that were taken by RTA, which included the maintenance of the $2.25 fare, the service cuts in April and the Closing of the Harvard District in August. The ending balance of approximately $15 million was carried over to 2011, and represented an approximate one month operating reserve consistent with Board Policy.
Was RTA’s Budget Balanced for 2009?
Yes. The many steps taken to balance the budget were implemented, and the year ended with a positive balance of $2.88 million. This represents a slim 2 to 3 days of operating reserves.
What additional actions were needed to balance the 2009 Budget?
When the RTA Board of Trustees passed the 2009 budget in December 2008, financial challenges were already a reality. For that purpose, the approved budget said that, if additional funding was not received, fares would be increased and services cut in September 2009. This plan was implemented.
- Effective September 1, 2009, an increase of 25¢ in the base fare was imposed, generating an additional $1.5 million in revenue by 2009 year end.
- Effective September 20, 2009, all 12 Community Circulator routes were eliminated, and service was also cut on 15 big bus routes. These service cuts saved approximately $1.6 million by 2009 year end.
These steps alone did not balance the 2009 budget, but got RTA close.
As of December 1, 2009, it was evident that awarded Federal Grant revenue would not be received in time to balance the 2009 budget. For that reason, the Board of Trustees approved a resolution authorizing the short term borrowing of approximately $8 million, on or around December 21, 2009, in order to end 2009 with a positive ending balance.
Historical Perspective
Because revenues have dropped, what steps has RTA taken to attempt to achieve a balanced budget?
RTA Has Reduced Expenses
- RTA began, in 2002, to aggressively reduce overhead expenses. Consolidating 7 operating facilities to just 3, successfully accomplished this and reduced expenses by several million dollars.
- At the end of 2008, RTA eliminated 5% of all salaried positions, and informed the salaried staff that there will be a wage freeze for 2009.
- Restrictions were put on overtime and travel, and a hiring freeze was imposed on all non-critical positions, savings millions of dollars over the previous year.
- After getting the Ohio Law changed to allow for Energy Price Risk Management, RTA began to purchase futures contracts in 2009 for 2010 fuel at very favorable prices. As a result, RTA reduced its 2010 expenditures for diesel to less than $8 million, nearly $9.5 million below 2009 costs. RTA has all of the 2011 fuel hedged and is currently $450,000 under budget at a time when fuel prices have risen by about 80 cents per gallon from last year. We have 87% of our 2012 fuel requirements hedged and 26% of 2013 fuel hedged.
- With the impact of the recession being worse than anticipated, RTA went one step further in May 2009 than the wage freeze for the salaried staff, by reducing salaries of the non-union salaried staff by a minimum of 3% effective June 1, 2009 through December 31, 2010.
- In July 2009, RTA announced an additional elimination of staff positions by 3%, to be implemented by the end of 2009.
- RTA even deferred the issuance of the last paycheck of 2009 until January 1, 2010, for non-union salaried staff, to assist in balancing the 2009 budget.
- RTA furloughed over 100 support employees, on a voluntary basis, to reduce payroll costs during the period from December 21 through December 31, 2009.
- In the end, with no new revenues forthcoming and no cost cutting strategies agreed to by our unions, the only way for RTA to realistically balance its budget for 2010 was to implement the April 4, 2010 service cuts.
- RTA is currently working closely with its two unions on strategies to reduce costs, retain positions and minimize service cuts.
- Our contract with the Amalgamated Transit Union (ATU) expired on July 31, 2009, and both sides are actively negotiating.
- RTA’s contract with the Fraternal Order of Police (FOP) expired on February 28, 2010. A new agreement was signed in June 2011 that froze wages for 18 months (through September 2011) and then ties increases in 2011, 2012 and 2013 to RTA’s revenues and ability to pay.
Identified New Funding Sources
- RTA worked aggressively to identify supplemental funding to help balance the 2009 budget, and with some success:
- RTA was able to get funding to pay for the operating costs of the Downtown Trolleys for 2009 in the amount $783,000. (This funding was also made available for 2010 and 2011).
- RTA was able to use a portion of its ARRA Stimulus funds to assist the operating budget. The amount RTA can use for this purpose is $3.456 million for 2009. This is one-time funds and will not be available in 2010 or beyond.
- RTA was able to secure $3 million of CMAQ funds to help offset the operating costs associated with the HealthLine. (RTA also secured $6 million for this purpose in 2010 and 2011).
- RTA actively worked with ODOT and NOACA on other funding sources to help balance the 2010 and 2011 budgets.
How has the weak local economy impacted RTA staffing?
The weak local economic has dramatically impacted RTA staffing.
- In 2000, RTA had 3,086 employees
- As of June 30, 2009, RTA had 2,475 employees
- At 2009 year’s end, RTA had approximately 2,375 employees.
- At the end of the first quarter of 2010, 2,293 positions were filled.
- At the end of the second quarter of 2010, 2,148 positions were filled.
- The RTA budget for 2011 sets the maximum employment level at 2,232, a reduction of 245 positions from the 2,477 authorized in the 2010 budget.
As a rule of thumb, the cost for each position at RTA is approximately $75,000, which includes salary, fringe benefits, retirement costs and payroll taxes. That means, to address a $7.5 million deficit, it would require the elimination of 100 employees. To address a $15 million deficit would require the elimination of 200 employees.
Is population loss a factor in RTA’s future?
The simple answer is “yes”.
According to the recently published 2010 U. S. Census figures, between 2000 and 2010, the City of Cleveland experienced a 17% decline in population and Cuyahoga County experienced an 8% loss in population. Unfortunately, these were among some of the highest population declines in Ohio.
Why is this important?
- Population is a major factor in the development of federal funding formulas.
- If there are less people, there are less people for RTA to serve
- If there are less people, there are less people to support RTA with their contribution to the countywide Sales Tax.
How does RTA compare to other transit systems in Ohio?
RTA is, by far, the largest transit system in Ohio. RTA serves more customers than the transit systems in Columbus, Cincinnati, Dayton and Toledo combined.
The following is a comparison of ridership and transit miles operated in 2008 by the four largest transit systems in Ohio:
| |
Total Passengers |
Total Miles of Service |
| Cleveland RTA |
62,391,000 |
24,729,000 |
| Cincinnati Metro |
21,617,000 |
12,805,000 |
| Columbus (COTA) |
16,539,000 |
10,430,000 |
| Dayton RTA |
10,564,000 |
7,367,000 |
Is the Recession Impacting RTA Ridership and Passenger Revenues?
Yes. While RTA experienced six consecutive years of ridership growth between 2003 and 2008, ridership was down in 2009 and 2010. This reduction in ridership significantly impacted fare revenues. In the second and third quarter of 2011, ridership increased.
In addition to traditional unemployment impacting ridership, the fact that many entities are furloughing employees on a regular basis means a reduction in the number of work trips and therefore ridership.
Commonly Asked Questions
If RTA had not built the Waterfront Line, would RTA still have these financial challenges?
Yes. The financial issues related to the drop in sales tax, population and funding from the State of Ohio, and not the construction and operation of the Waterfront Line.
The decision to build the Waterfront Line was made 15 years ago in the early 1990’s, with an opening date in 1996. The State of Ohio was a major contributor towards the construction. RTA issued approximately $50 million in capital bonds to pay for the balance of the project, the majority of which were retired in 2002. These bonds, which were for “Capital” purposes, are not available to cover operating costs, such as operator salaries and fuel for the Community Circulators.
The Waterfront Line serves major community venues such as the Rock Hall, Science Center, the Flats, Voinovich Park and Brown’s Stadium. Although this service was very successful in the early years as the Flats were a major destination for Clevelanders, due to low ridership as a result of the issues in the Flats, the Waterfront Line service level has been reduced, and now operates on weekdays only during commuting hours. This has significantly reduced RTA’s costs to provide the service. The direct cost to operate the Waterfront Line in 2009 was approximately $100,000, which is much less than the cost to operate the Community Circulator service, which was approximately $5 million.
In the future, when plans are realized to revitalize the Flats and the Waterfront, this service will be expanded to serve these new venues.
If RTA had not built the HealthLine on Euclid Avenue, would RTA still have these financial challenges?
Yes. The financial issues are related to the drop in sales tax, population and funding from the State of Ohio, and not the construction and operation of the HealthLine.
As a matter of fact, an independent study by a professional financial management firm hired by the Federal Transit Administration concluded that RTA would be much stronger financially with the project than without the project.
Most of the funds used for the HealthLine were from special federal transportation grants that could only be used to build this project. If RTA turned down the grants, the funds would have been re-allocated to a competing project in another state.
RTA sold capital bonds to pay for a required local share on the project in the amount of approximately $20 million, which is about the same amount as was spent for the vehicles alone and represent only about 10% of the total project investment.
Because RTA is able to operate the HealthLine more efficiently than it could the service it replaced (the #6 bus line), RTA was able to secure some level of CMAQ operating grants, and was able to sell the naming rights under a 25-year agreement. The HealthLine is a real financial winner for RTA and is actually helping to balance our budget. This project brought jobs and economic development investment to the region that will benefit RTA, its customers and the taxpayers for years to come.
Through a special grant program, The HealthLine was deemed eligible for offsetting federal operating funding for a three year period. RTA was granted $3 million in 2009, and is seeking $6 million in 2010 for this purpose. These funds are directly benefiting RTA’s financial picture in a very positive way.
The following is the text of a memo distributed to all RTA employees on November 12, 2009:
I am writing to update all employees on the status of the RTA 2010 budget, which I know is of much interest to you, our customers, and which will certainly attract much media attention over the next several weeks.
Based upon 3rd quarter 2009 results, it is now anticipated that RTA will end 2009 with a positive balance of approximately $879,000. Although far less than our goal of an ending balance equivalent to one month's operating expenses, which would be approximately $20 million, it certainly represents an improvement over previous projections.
This projected positive balance was only achieved through:
- An 8% reduction of salaried staff positions
- A 3% reduction of salaries for non-union employees
- An additional 25-cent fare increase implemented on September 1, and
- A 6% service cut, which included the elimination of the Community Circulators on September 20, 2009, eliminating 85 positions at RTA.
Unfortunately, there is still a chance that certain grants will not be approved in a timely manner, which will result in a negative balance. We are working diligently with the FTA to avoid this situation.
As previously communicated, the national recession has caused RTA's largest source of revenues, Cuyahoga County sales tax, to generate a projected $18.5 million less in 2009 than 2008 levels. Furthermore, the State of Ohio reduced its funding for public transportation by 33% in the recently approved budget for 2010 and 2011. This situation is certainly not unique to RTA but one that is common to 9 out of 10 transit systems in the nation.
Detailed information about this budget crisis can be found on our website: RideRTA.com, by going to the "Budget Challenges" link that can be found on the main page. This document also includes a 6-Step Plan to preserve transit service and transit jobs in 2010, which we are following, to try to address this crisis.
As a result of these financial challenges, the only way RTA can develop a balanced budget for 2010, will be through a combination of:
- Cost savings strategies
- New revenues from the State of Ohio
- Increases in fares, and
- Additional service reductions and layoffs.
The budget proposal presented on November 9, 2009, to the RTA Board of Trustees contains the following assumptions in order to achieve a balanced budget:
- A reduction in bus and train service, equal to an annual 12% cut, which will eliminate 150 to 200 RTA positions.
- The continuation of fares at the current level of $2.25 base fare, which represents a 50-cent increase to our customers over the base of $1.75, implemented as a two step fuel surcharge in August 2008.
The reduction of 12% of our service will be the same as eliminating one out of every 8 current trips. If fares fall back to the $1.75 base fare level, it would necessitate an approximate 21% service reduction, which would be the same as eliminating one out of every 5 current trips.
The 2010 budget process will continue on November 17, December 1, and on December 15, 2009, with public input encouraged at the December 1 and December 15 meetings. It is anticipated that the RTA Board of Trustees will discuss and approve a budget on December 15, 2009.
The specifics of the staff proposal for major changes to bus and train service, as well as any change to fares, will be discussed at several Public Hearings anticipated to be held in January 2010. Following the Public Hearings, final decisions will be made, and changes implemented on April 4, 2010.
Let me assure you that RTA has and continues to take advantage of all possible government subsidies to preserve service. We were, for example, able to use approximately $6 million of the Federal ARRA Stimulus Funding to assist our budget in 2009. However, this one-time money will not be available in 2010. The balance of the Stimulus funding cannot, by law, be used to add or preserve jobs but only for major capital projects. Already included in the 2010 budget, is the anticipated use of an approximate $8 million grant awarded by NOACA.
I again solicit your input into this process, and encourage you to share the importance of adequate funding for public transit with your customers and with elected officials who make decisions on the amount of funds they approve for public transportation. While the typical state in the nation invests 23% of the cost of public transit in their state, Ohio provides less than 3%.
Please be assured that we will take great efforts to minimize the reduction of service and to preserve as many positions as possible.
We will also strive to keep you informed of our progress. Any suggestions or ideas that you may have to save jobs at RTA can be communicated to us at gm@gcrta.org.
RTA's 6-Step Plan to Preserve Transit Service and Transit Jobs in 2010
November 11, 2009
RTA has taken steps to balance the 2009 budget, but is facing a $17.4 million projected budget shortfall for 2010. If this shortfall cannot be addressed, it will lead to further cuts in transit service, including the possible elimination of weekend public transit service, and the layoffs of up to 200 additional employees at RTA.
RTA's goal is to preserve transit service and to preserve transit jobs to the greatest extent possible. Following is a proposed "6-Step Plan" - involving the State of Ohio, NOACA, RTA Personnel and RTA customers - through which RTA seeks to achieve this important goal:
State of Ohio and NOACA
1. RTA is requesting that the State of Ohio work with NOACA to provide $8 million of grant funding for operations, and $3.456M of grant funding for ADA/Paratransit for 2010 and 2011. Of this amount, $6.2 million is already programmed for 2010, with the balance pending.
RTA Personnel
2. Reduction of personnel costs through reduction of positions, payroll and fringe benefits:
- December 2008: RTA reduced salaried positions by 5% (complete)
- September 2009: Layoff of 53 bargaining unit employees (85 total positions) as a result of elimination of Community Circulator service (complete)
- November 2009: RTA reduced salaried positions by an additional 3% (complete)
3. Reduce aggregate payroll costs of RTA personnel:
- January 2009: Salaries of RTA's salaried staff were frozen (complete)
- June 2009: Salaries of RTA's salaried staff were reduced by 3% (complete)
- Deferral of last pay in 2009 to early 2010 for salaried staff (in process)
- RTA has proposed to achieve significant labor cost reductions through collective bargaining with unions representing its bargaining unit employees (pending)
4. Achieve cost savings through changes to RTA health insurance program:
- RTA has proposed to achieve health care cost savings through collective bargaining with unions representing its bargaining unit employees (pending)
5. Achieve cost savings by changing or deferring certain employment benefits:
- RTA has proposed to cost savings through collective bargaining with unions representing its bargaining unit employees (pending)
RTA Customers
6. The RTA staff proposes to maintain current fares ($2.25 base) for 2010 and 2011 (pending). Public Hearings on this proposal took place in early 2010. This will generate an additional $8.4 million in revenue for RTA to fund important services.
Customers who have specific questions or suggestions can email us at public-comment@gcrta.org.
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