Revenue slump looms over Sound Transit 2011 budget; fee to ride downtown Tacoma Link proposed

Sound Transit announced this week revenues currently expected through 2023 are $3.9 billion, or 25 percent, lower than forecasted in 2008, requiring “difficult choices” during the 2011 budget process. On Thursday, Sound Transit CEO Joni Earl presented the Sound Transit Board with her proposed agency budget for 2011 and recommended steps to address the revenue shortfall.

One of those difficult choices involves a proposal to begin charging for Link light rail service in downtown Tacoma. The 1.6 mile line is currently free for passengers. According to the proposed 2011 Budget and staff presentation summarizing the proposed project and service adjustments (available online at http://www.soundtransit.org/Documents/pdf/about/financial/2010/Proposed2011Budget.pdf — see pages 38 to 41), the Tacoma Link budget for next year shows an increase from $4.19 million in 2010 to $4.23 million in 2011 (excluding depreciation). The largest driver of increased cost is the assumption that Tacoma Link will begin charging fares in June 2011. This results in new fare collection and enforcement costs. The report adds that there is an “assumption that the [Sound Transit] Board will approve fare collection on [Tacoma's Link light rail] — a previously fare-free service.”

“Last year when our forecast was down $3.1 billion, or 20 percent, we remained cautiously optimistic that strict cost controls and strong project management could enable us to deliver the full Sound Transit Two program by 2023,” Earl said. “While we are well positioned to make major transit investments in the years ahead, it is no longer possible to complete the entire program in 15 years.”

Sound Transit receives the bulk of its funding through sales tax revenues and a smaller percentage from the Motor Vehicle Excise Tax (MVET) and car rental tax within the Sound Transit District, which covers the urban areas of King, Pierce and Snohomish Counties. Sound Transit’s revenues have been impacted to the same degree as every other agency that relies on sales taxes. The cumulative impact is large for a multi-year program like Sound Transit 2 because it is projected to take a long time for annual revenues to return to previously assumed levels, according to Earl.

Under Sound Transit’s subarea equity framework, each of Sound Transit’s five geographic subareas faces a different financial picture. Revenues collected within each area’s boundaries must be used for projects that have been identified to benefit that subarea’s residents. The recession impacts are worst in the South King County subarea, where forecasted revenues are down about 31 percent. Projected revenues are down 26 percent in East King County, 28 percent in Snohomish County, 26 percent in Pierce County and 16 percent in north King County, which includes Seattle.

“No organization can confront an expected 25 percent reduction in revenues without asking — and answering — hard questions about priorities,” said Sound Transit Board Chair and Snohomish County Executive Aaron Reardon. “It is important that we address these issues now and continue to move forward with expanding the region’s mass transit system as rapidly as we can.”

On Sept. 30 the Board will conduct a budget workshop to begin shaping priorities for 2011 and beyond. The workshop will also include discussion of public meetings that will take place in October. A final 2011 budget is scheduled for adoption in December, along with a Transportation Improvement Program and Service Implementation Plan that guide investments beyond 2011.

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Tacoma Link Light Rail | 2011 Proposed Budget Detail

http://www.soundtransit.org/Documents/pdf/about/financial/2010/Proposed2011Budget.pdf

pgs. 38 – 41

– SERVICE DESCRIPTION –

Tacoma Link service, a 1.6-mile light rail passenger system that runs through the heart of downtown Tacoma, began in August 2003. From the Tacoma Dome Station on South 25th Street to the Theater District on Commerce Street, there are five unique stations complete with artwork that reflect the history and community of Tacoma. Two trains operate Monday through Friday with one train beginning at 5:20 a.m. and a second train added at 7:00 a.m. A two-train operation continues until 8:10 p.m. when one train is removed and the remaining train continues to operate until 10:20 p.m. On Saturday two trains provide service from 8:00 a.m. to 10:00 p.m. and on Sunday Tacoma Link runs a one-train operation from 10:00 a.m. to 6:00 p.m. A third train is available as a spare when maintenance is required. All vehicles, services, and facilities are Americans with Disabilities Act (ADA) compliant. In 2011, average weekday ridership is projected to exceed the Sound Move projection of 2,000 passengers per weekday. Ridership now averages about 3,000 per weekday. In 2011, more than 9,500 service hours will be delivered. The 2011 target for ridership is 756,319 total boardings and 2,525 per weekday. This is a reduction from the 2010 Forecast due primarily to the assumption that the Board will approve fare collection on a previously fare-free service. Additional service and performance data is provided in Performance Statistics at the end of this section.

– OPERATIONS OVERVIEW –

Sound Transit operates Tacoma Link light rail out of the Operations and Maintenance (O&M) facility in Tacoma. The staffing plan currently consists of 18 employees, including one manager, one assistant manager, four operations supervisors, one maintenance supervisor, seven full-time light rail vehicle operators, three system technicians, and one support staff. The fleet consists of three single-car trains. Staff performs routine maintenance work 12 hours per day, 6 days per week out of the maintenance workshops located at the Tacoma facility. Maintenance for track work, signals, landscaping, and janitorial work is primarily contracted out.

– BUDGET –

The Proposed Tacoma Link budget shows an increase from $4.19 million in 2010 to $4.23 million in 2011 (excluding depreciation). The largest driver of increased cost is the assumption that Tacoma Link will begin charging fares in June 2011. This results in new fare collection and enforcement costs, including a share of the Transit Systems Division that manage the maintenance of TVMs. Fare revenues are expected to exceed the costs of fare collection. Another key change in the Proposed 2011 Budget includes a decrease in insurance costs. As described above, insurance costs are allocated on the basis of total ridership and, with the inclusion of Central Link to the rail operations insurance program, the relative proportion of ridership associated with Tacoma Link has fallen.