A SW Metro Transit
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Southwest Metro Transit Commission
Preliminary 2001 Budget Discussion
-...
G.............MErRO>RANSn
2001 Bude:et Process
· April - May: Budget requests submitted by service areas.
· June:
Cities notify Commissioner of Revenue and
Metropolitan Council their intent for the transit
levy.
· June - July: Budget developed and submitted to the SMTC Budget
and Personnel Committee.
· August: Proposed budget adopted by SMTC and submitted to
the cities.
· September: Proposed budget adopted by the cities.
· November: Proposed tax statements sent out.
· December: - Truth-in-Taxation public hearing held.
- Cities adopt their budgets (including transit).
- Tax Levy certified with the Counties.
GSOUTHWEST UErROTRAN....
MEMORANDUM
TO: Members of the Southwest Metro Transit Commission
FROM: Len Simich, Executive Director, Southwest Metro Transit
DATE: August 24, 2000
SUBJECT: Property Tax Levy & Preliminary Budget 2001
BACKGROUND
In 1997, the State Legislature provided the opt-out communities an option oflevying their own
transit taxes in lieu of having the Metropolitan Council levy the transit tax for them. In 1997 &
1998, all three Southwest Metro Transit cities levied the maximum for transit that would not
impact city levy limits. Minnesota Department of Revenue certified the tax amount.
Beginning with the 1999 budget, each of the three Southwest Metro Transit cities began levying
the transit tax differently. Instead of certifYing the amount proposed by the Minnesota
Department of Revenue (regional transit tax determined statutorily by formula), each city tied the
amount levied for transit to the percentage levy increase of their City budget. The nef result
given both levy limits and the approach undertaken by each city in 1999 has reduced the
available Southwest Metro Transit funding by $928,386 between 1998-2000.
Besides less funding available for transit operation and capital, this approach has posed some
problems for Southwest Metro Transit in terms of equity between what each city pays versus the
service it receives. Another major concern is how we will be able to handle the demand for
transit services if the cities do not levy up or close to the maximum allowable. This is a major
concerns since our system is at maximum capacity during the peak (peak ridership/vehicles), and
any future growth will involve purchasing vehicles, expanding our bus garage, and hiring
additional staff (drivers, mechanics, dispatchers, street supervisors).
Each of these issues, as well as other factors impacting our 200 I budget are discussed further:
EQuity of Services: With all three of our cities being taxed at the same level, it was easy for the
agency to operate as if it had no boundaries when making service and financial decisions. Now
that each of the cities has chosen to do something different, decisions as to how service is
allocated may need to be re-evaluated.
Levy/Budget 2001
August 24, 2000
Page 2
Growth: Southwest Metro Transit has seen peak hour growth in excess of25% over the last two
years. If the regions plan for addressing transportation demand in light of the projected increases
in both population and employment holds true, transit will need to more than double its ridership
within the next 20 years to maintain the levels of service currently being experienced on the
freeway and other principal arterials located within the metropolitan area.
Cost of Labor and Labor Shorta!!e: Another issue facing SMTC in terms of meeting current
and future demand is what we pay for labor. Until recently, SMTC has been paying less for
labor and benefits than other transit properties in the region. With the economy going strong, the
labor pool we draw from getting smaller and smaller, and our competitors increasing both wages
and benefits, attracting and retaining employees is becoming more and more difficult.
Parkin!! Deck: Although SMTC was successful at receiving $6.8 million to construct a 600 car
parking facility, the latest cost estimates for the project (including soil correction, construction
costs, architectural and engineering fees) is approximately $7,535,000. This leaves a gap of
$735,000, which needs to be covered by SMTC.
TemDorarv/Additional Parkin!!:: Additional parking needs to be constructed on both the east
and west Southwest Station sites. This parking is needed to fulfil our contractual requirements
with the Pickled Parrot, to meet our growing demand, and to replace spaces that will be taken
while the deck is under construction. The estimated cost to construct the additional parking
(both temporary and permanent) is $200,000
Sewer and Water Line ReDairs: The total cost of repairing/replacing the water and sewer lines
are approximately $1,000,000. This includes all costs (legal, design, excavating, materials,
testing, and construction). It is anticipated that some if not the majority of these costs will be
recovered. However, just how much will be recovered and when it will be reimbursed remains a
question. In the mean time, SMTC will need to carry all costs related to the utility system repair.
ODeratin!! EXDenses at both the Gara!!e and Hub: Operating expenses were anticipated but
they have had an impact on the amount of funding we have been able to put away in reserves. It
was anticipated that revenue generated from development proceeds would be used to offset some
of these expenses.
Bondinl!!CaDital Funds Awarded at a Lower Amount than ReQuested: Although we were
fortunate enough to receive capital funding totaling an amount in excess of $14 million over the
next five years. The total capital funding needed to cover routine maintenance, service
expansion (vehicles), parking additions, communication equipment, and to finish the
improvements/additions to our bus garage were not funded at the level requested ($27,000,000
needed/requested). Much if not all of this gap will need to be paid off using the armual transit tax
(operating budget).
Levy/Budget 2001
August 24, 2000
Page 3
Preventive Maintenance Pro!!:ram: Implementation of our aggressive preventive maintenance
program is going to become more expensive as our fleet ages. Although our preventive
maintenance program is costly, with our emphasis on providing premium service reliability is a
must. The results from the preventive actions put in place to date have shown a positive impact
on our operation (road calls per mile have consistently been lower/better than the national
average).
Security: Southwest Metro Transit is not immune to the problems other transit agencies are
dealing with. While the extent of the problems has been considerably less than Metro Transit,
we do deal with vandalism, unstable/threating passengers, and accusations against drivers. We
also have operational situations that we need to ensure the safety and well being of staff are
accounted for (handling money, selling fare cards, early and late work shifts, DAR operations i.e.
transporting one on one). Equipment such as cameras and panic alerts are being considered to
better protect our employees and customers.
Gas Prices: The price of gas continues to climb. To date we are paying approximately 45%
more per gallon than we had budgeted. Industry experts thought prices would go down this
summer, but so far no end is in sight. If prices remain the same throughout 2001, it could cost us
in excess of$IOO,OOO more for fuel.
Market Analvsis/Lon!! Ran!!:e Plannin!!: To get a better understanding of what our future
ridership demand may be, additional plarming should be undertaken. Included in this plarming
would be market studies, travel demandlbehaviors inventory (generators/attractors), employment
projections-needs-travel patterns, and market segmentation analysis (express, seniors, youth). It
is anticipated that we will need outside assistance performing some of these tasks.
PRELIMINARY 2001 BUDGET
G SOUTHWESTM...RO........T
2001 Bude:et Objectives
· Maintaining current levels of service (service that operates
efficiently).
· Provide funding for key capital needs not funded by regional and/or
federal grants (vehicles, maintenance, facility up-keep, P&R lots, and
signage ).
· Add service to meet growing demand on existing routes (overloads,
denials).
· Continue efforts to develop land surrounding Southwest Station.
· Maintain high level of customer service, training, customer service,
vehicle and facility upkeep and appearance - all things related to
being a premier system.
· Continue to set-aside funds for future needs and emergencies (build
reserve account up to the amount specified by auditor to cover
risk/need).
· Ensure we remain competitive to the market in terms of pay and
benefits.
Preliminary 2001 BUDGET/2
SYSTEM REVENUE
Budget % of change to
2000 Budget 2001 2001 budget
Farebox & System Røvenue
Acct. .
2010 Farebox Revenues 807,520.00 998.287.00 23.82%
2015 Contract & Leasing Revenue 42,600.00 497,170.00 1067.07%
2020 Interest Revenue 45,000.00 45.000.00 0.00%
2030 Advertising Revenue 0.00 0.00 0.00%
2035 Vending Revenue 0.00 0.00 0.00%
Total Farebox & System 895,120.00 1,540,457.00 72.10%
Fundln9
211 0 Property Tax Revenue Requested 3.939,889.00 4,215,681.00 7.00%
Total Funding 3.939.889.00 4.215.681.00 7.00%
TOTAL REVENUE 4,835,009.00 5,756,138.00 19.05%
ABATEMENTS FOR 2001
(Represents 4% of Property
Tax Collections)
8/24/00
SYSTEM EXPENSES
Acct. #
Admin. Personnel
1 01 0 Compensation
1020 Benefits
1030 Cola/Merit
Total Personnel
AdmlnløtratlvB
1110 Agency Vehicles
111 5 Equipment
1120 Equipment Maintenance
1125 Insurance
1130 Interest Expense
1135 Leases & Rentals
1140 Marketing & Community Information
1145 Misc. Adminlstratlv.8
1150 Office Supplies
1155 Prof. Development & Training
1180 Professional SelVices
1165 STA Charges
1170 Subscriptions & Memberships
Total Administrative
Facilities
Southwest Station
1 21 0 Building Supplies
121 5 BuildIng Repair & Maintenance
1220 Cleaning Costs
1225 Electric. Plumbing & HVAC Costs
1230 Elevator Contract
1235 Exterminating
1240 Ground Maintenance
1245 Insurance
1255 Parking rot Maintenance
1260 Security Costs
1265 Snow Plowing
1270 Trash Removal
1275 Utilities
1280 Lease Finance - Water/Sewer & Deck
Total Transit Hub
Garage
1 310 Building Supplies
1 315 BuildIng Repair & Maintenance
1320 Cleaning Costs
1325 Electric, Plumbing & HVAC Costs
1335 ExtermInating
1340 Ground Maintenance
1345 Insurance
1350 Interest Expense
1355 Parking lot Maintenance
1360 Security Costs
1365 Snow Plowing
1370 Trash Removal
1375 Utilities
Total Garage
Park & Rides
1410 Supplies/Equipment
1 415 BuildIng Repair & Maintenance
1440 Ground Maintenance
1445 Insurance & Leases
1465 Snow PlowIng
1470 Trash Removal
1475 Utilities
Total Park & Rides
Total Facilities
Total Administration Expenses
Budget
2000
276.766.00
67.076.00
13.800.00
357,642.00
4,580.00
10.000.00
19,210.00
8,766.00
0.00
9,297.00
121.250.00
16,660.00
20,540.00
20.000.00
112,200.00
16.048.00
6.532.00
365,083.00
4.755.00
525.00
21,435.00
1,860.00
560.00
435.00
13,000.00
5,136.00
4,000.00
500.00
25,000.00
1,154.00
51,239.00
0.00
129,599.00
300.00
5,000.00
7,669.00
5.000.00
560.00
6,407.00
4,809.00
269,163.00
1,000.00
511.00
7,000.00
2,070.00
69.987.00
379,476.00
500.00
1,350.00
5,284.00
7.383.00
12,000.00
1.028.00
3.720.00
31,265.00
540,340.00
1,263,065.00
Budget 2001
307.000.00
98.240.00
15.350.00
420,590.00
7.740.00
10.000.00
20,317.00
9,200.00
0.00
9.232.00
85.800.00
16,600.00
23,200.00
25.000.00
127,150.00
16,048.00
6.419.00
356,706.00
3,555.00
1,525.00
21,435.00
5,000.00
560.00
1,000.00
13,000.00
5,435.00
4,000.00
36,000.00
25.000.00
1,214.00
54,025.00
200.000.00
371,749.00
700.00
25,000.00
6,600.00
20,000.00
600.00
2,500.00
4,820.00
132.908.00
350.00
511.00
7,000.00
2.876.00
89.190.00
292,955.00
3,000.00
1,350.00
1,500.00
7,550.00
12.000.00
1,082.00
3.680.00
30,162.00
694;866.00
1,472,162.00
% of change to
2001 budget
10.92%
46.46%
11.23%
17.60%
69.00%
0.00%
5.76%
4.95%
0.00%
.0.70%
-29.24%
~0.36%
12.95%
25.00%
13.32%
0.00%
-1.73%
-2.29%
-25.24%
190.48%
0.00%
168.82%
0.00%
129.89%
0.00%
5.82%
0.00%
7100.00%
0.00%
5.20%
5.44%
0.00%
186.85%
133.33%
400.00%
-13.94%
300.00%
7.14%
~60.98%
0.23%
~50.66%
~65.00%
0.00%
0.00%
38.94%
27.44%
~22.80%
500.00%
0.00%
-71.61%
2.26%
0.00%
5.25%
-1.08%
-3.53%
28.60%
16.55%
8/24/00
Budget % of change to
2000 Budget 2001 2001 budget
Ooerattons PArsonnA.
1540 Compensation 275,771.00 558.532.00 102.53%
1550 Benefits 155.844.00 187.580.00 7.52%
1560 Cola/Mertt 103.095.00 26.960.00 ·73.85%
Total Opa Personnel 534,710.00 753.052.00 40.83%
ODArstlonRlSsrvloA
1 51 0 Contracted Transit Service 2.053.208.00 2,618,325.00 27.52%
1530 Service Enhancements 0.00 0.00 0.00%
1570 Employment Advertising 30.000.00 30.000.00 0.00%
1580 Vehicle Insurance 200.000.00 162.500.00 -18.75%
1585 Street Supervisor Vehicle 0.00 400.00 0.00%
1590 Radio Equipment 12,600.00 12.000.00 -4.76%
1 61 0 Fuel & Lubricants 187.200.00 202.650.00 21.20%
1615 Tires 0.00 0.00 0.00%
1620 Vehic!es Parts 275,000.00 282.333.00 2.67%
1 621 Outside Repairs 66.744.00 69.960.00 4.82%
1 622 SupplleslMisc 39.000.00 46.756.00 19.89%
1625 Service Incentives 40.000.00 90.000.00 125.00%
1630 Uniforms 16.000.00 16.000.00 0.00%
Total Operations/Service 2.899.752.00 3.530.924.00 21.77%
Total Operations 3.434.462.00 4.283,976.00 24.73%
TOTAL EXPENSES 4.697.527.00 5,756.138.00 22.54%
RAServs Funds
3070 Administrative/Operations 68,741.00 0.00 -100.00%
3080 Capi1a1 Reserve 68.741.00 0.00 -100.000/0
Total Reserve 137,482.00 0.00 -100.00%
TOTAL SYSTEM EXPENSES 4,835,009.00 5.756.138.00 19.05%
Deficit
8/24/00
PROPOSED 2001 BUDGET
Major Differences from the 2000 Budget:
Revenue
2010 Farebox Revenue - projected increase in farebox revenue due to additional van pool &
shuttle service purchased through the CMAQ grant.
2015 Contract Revenue - increased contract revenue primarily related to the CMAQ grant.
Revenue used to pay salaries related to the project, services, space, and equipment.
2110 Property Tax Revenue - request a 7% increase in the property tax levied for transit.
Average increase has been approximately 5% the past two years. 7% is needed to balance
the budget. Even with 7% no significant service increase will occur, some of the capital
purchases (hus wash) will not happen, and funding to make up the difference for the deck
construction is suspect.
EXDenses
1010 Administrative personnel included six full time positions: Executive Director, Finance
1020 Director, Administration Manager, Marketing Coordinator, Business Liaison, and Staff
1030 Accountant. The total administrative personnel compliment is the same (6) as in 2000.
However, the positions have changed. Major changes include: replacing the Deputy
Director with a Finance Director, creating the new position of Administration Manager
which will oversee all planning, marketing, and customer service, and having the
Business Liaison position on-board for a full year (6 months in 2000).
Two other important impacts to note include: funding $185,000 worth of salaries/benefits
from the CMAQ grant (25% ED, 25% FD, 25% AM, 50% MC, 75% SA, and 100% BL),
and eliminating the Operations Manager position in this category (for 2001, the
Operations Manager position is included in the Administrative category).
Net difference to the year 2000 staff compliment is I position. Total positions funded
through the CMAQ grant - 3.
1155 Professional Development and Training increased $5,000 due to additional staff and
needs (includes all staff, Admin, Operations, Maintenance, and Commission).
1215 Building Maintenance - routine maintenance as building ages.
1225 Plumbing & HV AC - 2001 budget more reflective of what's happing (now that we have
been in the facility two years).
1226 1235 Exterminating - budget more reflective of what's happing (now that we have been
in the facility two years).
1260 Security Equipment (Camera's). The need has been discussed at prior Commission
meetings. Capital funding was applied for through the Metropolitan Council, but was not
made available. Total cost to equip Southwest Station - $35,000 (est.).
1280 Lease Financing - Budget reflects $400,000 for payments to be made to pay-off lease
finance fee's related to borrowing $1.5 million for the purpose of funding the water and
sewer reconstruction, and to fund the difference between what we have available
(through grants) to construct the deck, to what it is projected to cost.
1315 Garage/Building Repair - Costs reflect door repairs/replacements.
1325 Electric, Plumbing & HV AC - Cost reflect heating and infra red heat replacement.
1375 Garage Utilities - Cost reflects current use and rates.
1410 Supplies/Equipment - Cost reflects additional signage.
1510 Contract Service - L TS is currently in negotiations with the Union. While no contract
has been reached, it appears likely that we could see anywhere from a 5%-10% increase
in wages per year, and a 25%-30% increase in benefits. Line item 1510 reflects what we
think we be the maximum impact. Line item 1510 also includes $123,000 needed to
match the CMAQ grant (20%).
1540 Operations Personnel- Costs reflect full staffing of all positions. Positions include:
1550 Operations Manager, Maintenance Manager, 6 Mechanics, 2 Utility staff, Facility-Utility
1560 SupervisortTrainer,6 full time and I part time Customer Service/Dispatchers. The 2001
Budget includes 3 additional positions in this category. However, I (Operations
Manager) had previously been budgeted under a different category (Administrative
Personnel). The net increase in positions is 2 - one Customer Service Representative
(hired), and I Mechanic (not hired). It should be noted that the full staff complement in
the Customer Service division (with the recent hire) is at the same level it had previously
. been last December (1999).
1610 Fuel - reflects anticipated prices.
1625 Service Incentives - reflects bonus programs in effect for drivers (merit, safety,
chargeable accidents, and absenteeism). Programs in effect during 2000.
What's missinl!!not included?
1530 Service EnhancementlNew Service - no funding (outside of the CMAQ $) has been
allocated for new service. The system remains the same.
3070 Reserves - no funding has been set aside for reserves. Current reserves (2 mil) are being
3080 used for cash flow purposes (see attached graph). Cash flow needs in 2001 questionable.
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System Expense 2000
Facilities
11%
Reserves
3%
Administration
8%
Personnel
7%
Operations / Service
71%
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System Revenue 2000
Contract & Interest Revenue
2%
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Farebox Revenue
17%
Chanhassen
14%
Chaska
8%
Eden Prairie
59%
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Eden Prairie
74%
Eden Prairie
Chanhassen
Chaska
2000 Tax Revenue
Chanhassen
17%
$2,918,722
$ 672,990
$ 348,177
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$3,939,889
Chaska
9%
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Eden Prairie
71%
System Capacity
Chanhassen
22%
Chaska
7%
All but 4 Express routes originate or stop in Eden Prairie
Eden Prairie has the garage, Southwest Station, and 3 other park & ride facilities
Eden Prairie has 100% of all Reverse Commute Routes
Eden Prairie has 50% of the Dial-A-Ride service
All U ofM service originates in Eden Prairie
Eden Prairie has 66% of the Van Pool service
Een Prairie has 71 % of the Express service capacity
Eden Prairie has 30 a.m. Express routes
Eden Prairie has 37 p.m. Express routes
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System Capacity
Chanhassen has 1 park & ride facility
Chanhassen has 22% of the Express service capacity
Chanhassen has 33% of the Van Pool service
Chanhassen has 30% ofthe Dia1-A-Ride service
Chanhassen has 10 a.m. Express routes
Chanhassen has 14 p.m. Express Routes
Chaska has 2 park & ride facilities
Chaska has 7% of the Express service capacity
Chaska has 20% ofthe Dia1-A-Ride service
Chaska has 10 a.m. Express routes
Chaska has 9 p.m. Express routes
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GSOUTHWEOTM................
1999/2000 Financial Milestones
· Express revenue increased 15%; express ridership grew 13%.
· Reverse Commute revenue increased 18%; ridership grew 26%.
· Agency secured $3 million to buy-out bus garage.
· Agency was awarded $14 million in federal and regional
capital/bond funding.
· Metropolitan Council forgave $180,000 repayment of prior
working capital funding.
· Closed first land sale at Southwest Station. Sale generated
approximately $550,000 (net $300,000 after Mn/DOT).
· Generated approximately $100,000 in contract revenue.