TRANSIT REVENUE AND FUNDING UPDATE Robert Dunlavey – Director Transit & Parking

1. TRANSIT REVENUE AND FUNDING UPDATE Robert Dunlavey – Director Transit & Parking Joanne Parker – Transit Planner March 10, 2009

2. Agenda Overview of Transit Revenue Sources Overview of Transit Revenue Uses Recent Developments in Transit Funding FY08/09 and FY 09/10 Transit Budgets FY09/10 Uncertainties FY10/11 and Beyond Funding Strategies

3. Overview of Transit Revenue Sources • Federal • Federal Transit Administration Formula Funds • State • Transportation Development Account IV • State Transit Assistance • Proposition 1B (capital only) • Regional • Air District’s Transportation Fund for Clean Air • Local • Sonoma County Transportation Authority’s Measure M • Fares

4. Overview of Transit Revenue Uses • Federal • Preventative Maintenance, capital replacement, operating (historically), competitive grants for capital expansion • State • TDA IV – operating or capital • STA – operating or capital • Proposition 1B – capital only • Regional • TFCA – competitive smaller grants, both capital and operating • Local • Measure M – operating or capital • Fares – operating or capital

5. Recent Developments in Transit Funding • Federal • Passage of American Recovery and Reinvestment Act (ARRA) • Reauthorization of Federal Transportation Legislation 2009/10 • State • Dropping sales tax collection equates to lower TDA revenues • State Budget reduced FY08/09 STA payments and eliminates STA funds for 5 years • Proposition 1B Funds supported by State’s ability to sell bonds, currently frozen until further notice (September 2009?) • Regional • TFCA funds backed by shrinking Vehicle License Fees • Local • Dropping sales tax means lower Measure M revenues • Ridership higher, recent fare increases, fare revenue up

6. Developments in Transit Funding • Federal • ARRA adds $3.6m for preventative maintenance for 18 months • State • FY08/09 TDA reduced $437,851 (9% less) • FY08/09 STA reduced $514,639 (47% less) • FY08/09 Prop. 1B funds frozen $2.1m (Hybrid Bus Purchase) • Local • FY08/09 Measure M reduced $44,068 (7% less) • FY08/09 fare revenue up $93,000 (up 9%)

7. FY08/09 Transit Operating Budget Original Revenues Revised Revenues • TDA IV $ 4,743,436 • STA $ 1,100,000 • Measure M $ 620,671 • Other* $ 4,937,506 • TOTAL $11,401,613 • TDA IV $ 4,305,585 • STA $ 585,361 • Measure M $ 576,603 • Other* $ 4,937,506 • Reserves $ 996,558 • TOTAL $11,401,613 *Other includes fares (15% of budget), federal formula funds, and misc. smaller grants. Beginning FY08/09 TDA-IV reserve $3.5 million; ending FY08/09 $2.5 million.

8. FY09/10 Transit Operating Budget Original Revenue Estimate Revised Revenue Estimate • TDA IV $4,582,915 • STA $1,762,000 • Measure M $ 620,671 • Other* $3,834,414 • TOTAL $10,800,000 • TDA IV $ 4,310,541 • STA $ 0 • Measure M $ 518,943 • Other* $ 3,834,414 • Reserves $ 2,136,102 • TOTAL $10,800,000 *Other includes fares (15% of budget), federal formula funds, and misc. smaller grants. Beginning FY09/10 TDA-IV reserve $2.5 million; ending FY09/10 $363,898.

9. FY08/09 – FY09/10 Budget Summary • FY08/09 total loss of revenues is 9% • FY09/10 and forward STA revenue is zero • STA revenues were 16% of FY09/10 budget • FY08/09 to FY09/10 budgeted expenses down 5.3% • TDA-IV reserves of $3.5 million enables transit service levels to remain “as is” through FY09/10

10. FY09/10 Operating Budget Uncertainties • Continuing decline in sales tax revenues • Projected 7-10% decline for FY08/09 could grow • Fuel price expense volatility • Last 7 years ave. 25% increase every year • Department reorganization costs to transit • Currently estimated at $300,000 • Economic crisis impact to transit ridership?

11. FY10/11 Forward Funding Strategies • FY09/10 Transit Budget reduced 5.3% without reduction to service • Includes increases to fuel, overhead and retirement • ARRA preventative maintenance funds will end after FY09/10 • Sales tax projected to not recover until 2014 • TDA-IV reserves sufficient to maintain service levels through FY09/10 • Without increases in revenue, service cuts will be required for FY10/11 • Projected 20% revenue shortfall for FY10/11

12. FY10/11 Forward Funding Strategies • Structural revenue problem will result in 20% service cuts after FY09/10 • Maintenance of current service levels critical to continued support of increasing ridership • Transit service expansion (particularly increased frequency) required to meet all local and state greenhouse gas reduction goals • Revenue/funding from all levels (federal, state, regional and local) necessary to maintain current transit service and/or reach greenhouse gas reduction goals

13. FY10/11 Forward Funding Strategies • Federal • Advocate for operating expenses to be eligible use of federal funds • Advocate for increased share of federal transportation funding to flow towards transit service • State • Encourage State to backfill the elimination of the STA revenues by creating a reliable source for operating funds • Advocate for transit to be an eligible carbon credit market fund recipient

14. FY10/11 Forward Funding Strategies • Regional • Support any efforts the MTC takes towards regional funding solutions (gas tax, doubling of the ¼ cent sales tax for TDA-IV) • Local • Encourage any possible flexing of current Measure M funds to support transit operations • Additional transit fare increases • fare increased in August 2007 & August 2008 • Utilize City parking district funds or redevelopment funds to support the maintenance or expansion of transit service levels