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HomeMy WebLinkAboutMinutes Corpus Christi Regional Transportation Authority - 10/27/2009 - Workshop ) REGIONAL TRANSPORTATION AUTHORITY C BOARD OF DIRECTORS' BUDGET WORKSHOP MEETING NUTES TUESDAY, OCTOBER 27, 2009 DEC 0 2009 SUMMARY OF ACTIONS C/7ySECAETAAY'S pFFI�E 1. Heard Presentation on Operations and Maintenance Departmen Budgets 2. Heard Presentation on Proposed 2010 Capital Budget 3. Held Discussion on 2010 Board Initiatives The Regional Transportation Authority Board of Directors met at 9:30 a.m. in the Regional Transportation Authority Facility located at 5658 Bear Lane, Corpus Christi, Texas. Board Members Present: Crystal Lyons (Board Chair), Angie Flores Granado, Gloria Perez, Connie Scott, Judy Telge Board Members Absent: Vangie Chapa, John Longoria, David Martinez, Ricardo Ramon, Mary Saenz, John Valls Staff Present: Eduardo Carrion (CEO), Ponch Carrillo, Jorge Cruz-Aedo, Terry Klinger, Sharon Montez, Twila Mouttet, Karina Paris, Ramon Sanchez, Gloria Smith, Lamont Taylor, Martin Trevino, Susan Vinson, Ruth Willey, Beth Vidaurri, Aubrey Winston Public Present: Rosie Aguiar, RTAEA Call to Order Ms. Lyons called the meeting to order at 9:35 a.m. Presentation on Operations and Maintenance Department Budgets Ms. Vinson reported that changes had been made to the original draft 2010 budget, primarily due to lower than anticipated sales tax. August 2009 sales tax revenue compared to August 2008 was down 18.3 percent compared to the projected 14.5 percent. Consequently,.the budgeted sales tax revenue had been reduced by about $140,000 for 2009 and by more than $900,000 for 2010. Ms. Lyons stated that she had read that sales tax revenue in 2010 was expected to have a double digit decrease. In response to Ms. Lyons, Ms. Vinson stated that sales tax revenue in 2010 was projected at about $516,000 (2.4 percent) higher than in 2009 but less than the adopted 2009 budget of $23.6 million. The projected 2009 decrease compared to revenue received in 2008 was about 14 SCANNED Transportation Authority Board of Directors' Budget Workshop Meeting Minutes October 27,2009 Page 2 percent below budget. In anticipation of the decrease in revenues, Ms. Vinson pointed out that the departments had reduced expenses. Also, preventive maintenance funding would be used to offset the deficit. She mentioned the necessity for using the grant funding in order to not negatively affect Agency operations. Mr. Cruz-Aedo reported that the State Comptroller's office had informed him that they were anticipating a slight recovery in sales tax revenue in 2010 in the Coastal Bend area. Referring to the budget binders, Ms. Vinson initiated her review by commenting on the comparative statements for FY 2008 through FY 2010. She said that the budgeted total operating revenue for FY 2010 was $1,705,708 which was less than the adopted FY 2009 budget of $1,738,495; total budgeted operating expenses for FY 2010 were $28,181,445 compared to $28,718,890 in FY 2009; sales tax revenue in FY 2010 was budgeted at $21,446,094 compared to $23,602,661 budgeted in FY 2009; and grant income budgeted in FY 2010 was $2,086,807 compared to the estimated income of$1,262,527 in FY 2009. A brief discussion ensued regarding the use of preventive maintenance funding to meet operating expenses. Mr. Carrion explained that as part of the formula funding allocation a certain percentage of the funds were set aside for preventative maintenance which could not only be used for capital expenditures but also for operating expenditures. He noted that the agency would prefer not to use this funding in the operating budget, but at the present time it was unavoidable. A general discussion on grant funding was held. Ms. Lyons inquired about the designation description for the $500,000 federal allocation under buses and bus facilities. Reviewing the operating expense detail, Ms. Vinson highlighted that the benefits line item was lower for FY 2010 compared to FY 2009 primarily due to projected lower cost in the pension line item; staff would be revising the incentive program in order to reduce expenses; the services line item had increased due primarily to contracted vehicle maintenance; the utilities line item was higher for FY 2010 due to an anticipated increase in electricity rates and usage after renovations to the maintenance facility were completed; insurance line item was expected to increase and could possibly be higher due to the renovated maintenance facility and anticipated rate increase; the health care line item had increased compared to the estimated FY 2009, but the increase had been kept to about $90,000 with the anticipation that employees would be paying a slightly higher share of their premium cost; R ,,(lal Transportation Authority Board of Directors' Budget Workshop Meeting Minutes October 27,2009 Page 3 A discussion on overtime wages was initiated by Ms. Telge. Mr. Carrion reported that with the operator positions being fully staffed, a reduction in overtime wages was being realized. Ms. Vinson provided thefollowing detail on the operation. and maintenance departments proposed 2010 budgets. Reviewing the Transportation budget, Ms. Vinson stated that the departmental budget would increase slightly primarily due to labor and fringe benefits costs. Reporting on the Purchased Transportation budget, Ms. Vinson pointed out that the departmental function had changed to regional mobility coordination and management of the purchased transportation contracts and also included the van pool program. She reviewed specific line items that were higher than in 2009; noting that the overall 2010 budget would be lower than the estimated 2009 budget. Reviewing the Vehicle Maintenance budget, Ms. Vinson explained that the major cost centers were fuel and parts. She noted that due to the purchase of buses, the parts line item in 2010 had been reduced. She reviewed the department's major projects for 2010. Ms. Vinson stated that this department had good justification for increasing personnel which would be considered at a later date when adequate funding would be available. Ms. Scott initiated a discussion on agency staffing levels and the budget shortfall. Ms. Willey explained how the new 2009 positions had been funded. Mr. Carrion informed that he had held employee budget forums and had discussed the current financial condition with employees along with the two identified cost- saving initiatives which were restructuring the incentive program to reduce costs and increasing the portion of health care premium paid by employees. He noted that currently the Agency paid about 96 percent of the health care premium. He also stated that consideration was being given to not filling current vacant positions. Ms. Lyons asked for identification of the positions being considered to remain vacant, how long these positions would be unfilled, and for the justification for not filling these positions. Ms. Telge commented that incentives should be tied to the Agency's goals such as increasing fixed route ridership. Providing an overview of the Facilities Maintenance department budget, Ms. Vinson cited the department's major projects for the upcoming year which included shelter refurbishment; that labor costs were anticipated to increase due C__a_snal Transportation Authority Board of Directors' Budget Workshop Meeting Minutes October 27,2009 Page 4 to expected full staffing levels; and that building maintenance costs were also expected to increase when the larger maintenance facility was completed. Ms. Telge questioned whether a cost analysis would be done between outsourcing or doing the shelter refurbishment in-house. Ms. Montez stated that the cost for refurbishing the shelters in-house was about $1,000 per shelter and that about fifteen had been completed. She said that a picture of a refurbished shelter would be included in the next board packet. Mr. Carrion explained that approximately fifty new shelters with solar lighting had been ordered. The original plan, to use the new shelters as replacement shelters, had been revised. Instead, the older shelters were being refurbished and the new shelters would be used as additional shelters. Reporting on the Materials Management budget, Ms. Vinson summarized that this department was primarily responsible for providing parts support to the Vehicle. Maintenance Department. She noted that overtime wages would be lower than the 2009 estimated and budgeted due to addition of a parts clerk position. Reviewing the Capital Projects budget, Ms. Vinson stated that the primary cost in this department was labor cost. Presentation on Proposed 2010 Capital Budget Ms. Vinson highlighted that the 2009 Capital budget had been $36,222,326 and the proposed 2010 budget was $33,205,743. The major changes were additions in the 2009 budget for projects funded by the ARRA in the amount of$6,326,792; $817,292 that would be moved to Preventive Maintenance; and a reduction of $8,526,083 for projects that would be completed in 2009. Approximately $24 million would be rolled forward into the 2010 Capital budget with about $5 million included for new projects which were identified in the budget binder. Ms. Vinson stated that the majority of the increase was for the purchase of new vehicles. Reviewing the long-range forecast, Ms. Vinson stated that one of the key assumptions was that the operating expenses would be held to the amount of available revenue every year starting in 2011. She explained that the target amount for cash flow was about $1.1 million to ensure meeting the capital share amount needed to continue with capital purchases. Failure to maintain this amount meant drawing down on funds for future years' capital improvements. Discussion and Possible Action on 2010 Board Initiatives Mr. Carrion, using a PowerPoint presentation, explained that with the sales tax revenue projected to decline in 2010, the amount of projected grant revenue had Transportation Authority Board of Directors' Budget Workshop Meeting Minutes October 27,2009 Page 5 been increased from 1 percent to 8 percent. He commented on the need to maintain services that could be funded in order to minimize the risk of having to make major adjustments to services and/or personnel. He cited the projected $1.1 million shortfall that would .be balanced with the use of Preventive Maintenance funds and savings from the prior year. Reviewing Board Goal 1 — Develop Board Policies that will Effectively Advance the Goal of ADA Compliance in Facilities and Practices, Mr. Carrion referenced the identified initiatives which would cost about $8,210,000. He pointed out that a priority item was the relocation of the. eligibility assessment and Customer Center. This project would be paid with reserve funds. After completion of site research, staff would be presenting this item for Board approval. Reporting on Board Goal 2 — Increase Mobility Options, Mr. Carrion referenced the identified initiatives with an approximate cost of $2,485,000. He stated that due to the cost of running a van pool program under the current contract, the feasibility of purchasing vehicles to be used as van pool vehicles was being researched. He noted that expanded Sunday service and implementing a Southside Express route was included in the 2010 budget. Detailing Board Goal 3 — Develop Sustainability Program, Mr. Carrion reported that the RTA had not been awarded funds under the solar energy grant. He stated that the Agency would continue to seek grant funding in an effort to implement the use of solar energy to reduce anticipated electricity costs. There was a brief discussion on alternative fuels, the environmental program which would be accomplished in-house; and transit oriented development (TOD). Ms. Lyons recommended hosting a session on Transit Oriented Development (TOD) presented by Mr. Barry Goodman for any Board Members interested in learning about TOD; thereby, enabling them to be ambassadors for the concept throughout the RTA service area. Mr. Carrion reported that talks had been initiated with the City of Corpus Christi about partnering with them to use some city-owned land on the Southside for park-and-ride locations in return for the Agency performing city-use development on the land also. Referring to a PowerPoint slide, Mr. Carrion briefly identified areas for Board. discussion and staff-identified options for such areas as organization priorities; transportation service realignments (near term); insurance and safety; rising health insurance cost; increasing paratransit costs; charter requests; pay practices and overtime; transit station security; staff travel and training; fund sources; and personnel structure and levels. 1....5—nal Transportation Authority Board of Directors' Budget Workshop Meeting Minutes October 27,2009 Page 6 Related to rising health care cost, Mr. Carrion stated that the proposal was to increase the monthly family coverage premiums by $25 and single coverage premiums by $10. A brief discussion ensued related to rising health insurance cost and the impact to employees and the Agency during the economic downturn. Mr. Carrion drew attention to the following proposed additions to the 2010 budget: 1) the Regional Marketing Plan (expanded budget); 2) repainting of 60 vehicles with new color scheme; 3) and consultant services for alternative fuels. He identified the fourth item as not filling the vacant Communication and Marketing Manager position. These initiatives would result in an additional. budgetary amount of$249,700 that would be included in the 2010 budget. A discussion ensued regarding the items presented for consideration. The timeframe that positions have been vacant; expansion of service on a regional level and the marketing outreach based on current economic conditions were discussed. It was recommended that the items discussed be reviewed about mid June 2010 at the same time that the revenue would be evaluated to determine which initiative or initiatives could be funded. The consensus was to not fund the four identified initiatives in the 2010 budget totaling $249,700. Ms. Lyons requested a list of all vacant positions that were under consideration for not being filled, the justification for doing so, and the consequences or impact for the Agency. Regarding eliminating the 3/4 mile service zone as a consideration for reducing paratransit costs, Ms. Lyons stated that this option should not be considered. There being no further business, the meeting was adjourned at 12:06 p.m. f� (9A-t ail, Mary loard Secretary bec to.ev 7 , Zoo') Date Submitted by: Beth Vidaurri