I’m from the Government, and I’m Here to Help You

Editor’s note: This is one in a series of posts about the development of Capital Metro’s FY2012 budget. You can get involved with the process by voting on ideas and sharing your own on the icanmakeitbetter online forum, or checking out the resources available on capmetro.org.

One of Capital Metro’s most important funding sources is funding from the federal government which we receive in the form of grants, usually through the Federal Transit Administration.

One program, called the 5307 Urbanized Area Formula Program, provides us with an annual grant as part of a national program that distributes federal aid to transit agencies. The grant program is one of our largest and most consistent sources of funding. As the name implies, the funding is distributed to cities and surrounding areas based on a formula that weighs population and other factors. This year we’ll receive a little over $20 million under this grant, accounting for a little more than 10% of our operating budget.

Beyond its size, the 5307 grant is important because Cap Metro can use it both for capital projects, like buying and maintaining buses, and also for some specific operating costs like paying the companies we contract with to help provide our services. As I am sure you can imagine, since this is the federal government, a big part of the program is keeping up with the paperwork, and that task keeps our federal funding expert busy pretty much all of his work day. There always are reports to file and new grant applications to be completed.

Capital Metro also receives several other types of federal grants. In 2009, in the wake of the national recession, for example, many public agencies, including Cap Metro, received what has come to be known in the media as federal stimulus funding. Under the stimulus program, actually the American Recovery and Reinvestment Act (ARRA), the federal government made grants to state and local agencies for a wide range of capital projects—remember all the talk in the news about “shovel-ready” projects?

We received about $26 million in stimulus funds, which we mainly used to modernize our bus fleet; however, we also have used some of the funds for our “Rails with Trails” program. Most public agencies have now used up their ARRA funds, and we are no exception. We have about $1.8 million left for “Rails with Trails,” but we do have some very fine buses to show for our federal dollars.

Let me note one final point about federal funds. Our federal funding is subject to the federal budget gyrations you often hear about on the news. The federal government has its own financial issues, and so we closely monitor what’s going with transit programs, planning both for how to use the federal aid we receive and for what to do if it doesn’t come through. Hey, it’s Uncle Sam. It comes with the territory.

Let’s Make it Better!

Capital Metro has a new discussion tool for capturing our riders’ input in advance of finalizing a budget for FY2012 (Oct. 1, 2011 thru Sept. 30, 2012). The online forum asks, “How can you make it better?

It’s incredibly easy to use. After creating a username and password, you can vote on and discuss various ideas that have already been submitted, or you can add your own ideas to the mix. I like it because it provides an ongoing public commentary of what’s important to riders, and it’s sortable by type of idea.

The two main categories that we’re interested in are “Increasing Revenues” and “Reducing Expenses,” since we’re making use of the forum specifically to get public input as part of our budget development process. As part of that process, too, we just published a new video about Capital Metro revenue: the types of funding we get, where it comes from, etc. More on that from Interim Chief Financial Officer Billy Hamilton here.

This is the second video in a series about Capital Metro’s finances. Check out all the resources pertaining to the budget development process, including a timeline, meeting schedule, resource links and more, on our website.

Small print: The discussion forum may look familiar–it has the same format as the city’s Speak Up Austin forum, and basically that’s where we got the idea. (Thanks, Austin!)

A Penny Here and a Penny There, and Pretty Soon You’re Talking About Real Money

The sales tax is the tax most familiar to Texans. You pay a little tax on most of the things you buy and on many services. The little things add up. The sales tax is the most important tax for Texas state government, and it’s the most important source of Capital Metro’s funding.

The sales tax, in fact, is vitally important to Capital Metro. About 75% of our revenue comes from the tax, and that ties the authority’s fortunes directly to the economic performance of the Austin region.

Capital Metro receives about $145 million a year in sales tax. Other funding comes from federal grants, from fares and from miscellaneous sources like advertising. They’re all important, but the sales tax occupies center stage. Continue reading “A Penny Here and a Penny There, and Pretty Soon You’re Talking About Real Money”

FY2012 Budget Process Begins

Capital Metro is kicking off a public participation process to help us develop our Fiscal Year 2012 budget. Over the next few months, we’ll be delving deeper on some specific budget topics, and we invite you to learn more about where Capital Metro’s money comes from, how it is spent, and what we are planning for next year. We also want to hear your ideas on how we can improve our budget, and we’ll be posting opportunities for your involvement (webinars, open house, public hearing, surveys).

But first, here’s an overview of how the Capital Metro budget works. Take a look at the video and then take the quick survey to give us your initial thoughts.

Take the survey (takes less than 2 minutes).

The Long and Winding Road: the Capital Metro budget

Capital Metro’s budget process for 2012 is already underway, although it seems like 2011 has just begun. There’s a reason for that. Metro works on a fiscal year basis, and our “New Year” officially begins in October. There’s a lot of work to be done between now and then, and there’s a big part for you to play in the process.

Writing Capital Metro’s budget begins with each operating department making their requests to my department, Finance. That covers a lot of departments, ranging from Human Resources to the folks who operate our buses and trains. The Finance staff meets with each department to talk about their request and match it with our financial forecast for the year.

Right now, we are predicting a continued improvement in the sales tax, which accounts for 75% of our revenue. The rest of our funding comes mainly from federal grants and fares. We expect to have more revenue to work with in the coming year, but like a family, Capital Metro always has more needs than there are dollars.

In the coming months, we’ll be sorting out those needs. Metro staff led by President Linda Watson will be meeting internally for awhile working out the details, but this summer we’ll be asking the community for input. Look for a video as early as next week of Linda talking about Capital Metro’s budget. We are planning a budget “open house” that I promise will be more interesting than it sounds. We’ll also be holding an online community forum. We have other ideas for encouraging input that you’ll be hearing more about, too.

I can’t stress enough how important community input is to writing a sound budget. It’s going to be a challenge to meet our budget goals in coming years, which includes not only investment in our vehicles and facilities, but also in making sure Capital Metro remains on a sound financial footing. That means tough choices, and it’s important to us to understand what’s important to you. We can do all the planning in the world, but without public input, it could be off target.

In any case, once we have gone through our internal and public processes, Capital Metro’s board of directors will begin examining the budget in detail in August. This review process will go on for several weeks, and I can tell you based on last year, a lot of hard questions will be asked and changes made.

And then there’ll be another chance for the public to have a say. We plan a public hearing on the budget, based on the board’s input, for mid-September. Then the board will approve the budget based on public input and internal recommendations. The whole process will be done, we plan, by September 26, just ahead of our New Year’s day, October 1.

Then it is just a matter of keeping track of how the departments are doing against their budgets and starting to think about 2013—all before it’s even 2012 on the calendar.

Billy Hamilton is the interim chief financial officer for Capital Metro and a tax and fiscal policy consultant. In his 30+ years of professional experience, he’s worked on tax and fiscal policy issues from every angle. In 2006, Hamilton retired from Texas state government as chief deputy comptroller of public accounts of Texas. He writes a regular column on state tax issues for the national publication State Tax Notes, and he’ll be contributing a series of articles for Capital MetroBlog over the next several months about the development of Capital Metro’s FY12 budget.

Tough decisions, in their own words

Have you seen the agenda for Friday’s board meeting?  It’s packed!  Every board vote is important, but the three that have understandably generated the most feedback are the FY2011 budget, MetroAccess policy changes, and the January 2010 service changes.

Many people spoke very passionately at public hearings for all three issues in the last few days.  People expressed their worries about how these proposed changes and budget decisions will affect them.

Originally I was going to blog about how these are difficult decisions, etc.  But I think our board chair, Mayor Pro Tem Mike Martinez, summed it up really well at the end of yesterday’s budget public hearing, with an additional comment from Vice Chair John Langmore.  So here it is in their own words (with transcript pasted below the video clip along with additional comments from today’s Finance/Audit Committee meeting):

Continue reading “Tough decisions, in their own words”

Meetings, Meetings, Meetings

This week is an important one for Capital Metro riders, as several big transit decisions hang in the balance and will be discussed at public meetings this week. The topics at hand: January 2011 service changes, MetroAccess policy changes, and Capital Metro’s fiscal year 2011 budget. We had three meetings last night, and another eight scheduled the rest of this week and early next. Whew.

I know, you’ve told us before, the public meetings are lame. Who has time for another meeting during the day? In truth, we will likely always host a public meeting or two, plus of course a public hearing, on each major decision/issue, simply because it ensures equal public access.  But we’re trying some new things that we think are big improvements to the overall public outreach process for various transit decisions.

For example, this week we’re hosting our first ever online meeting about the FY2011 budget. It’s over the lunch hour on Thursday, and once you register for the meeting, all you need to do is login to the meeting from your computer. No hassles with travel to/from the meeting, parking, etc. I hope you’ll check it out and let us know if this is a format you’d like to see again.

Continue reading “Meetings, Meetings, Meetings”

Capital Metro’s FY2011 budget includes increased service, new P&R in Manor, and IVR replacement

Capital Metro’s proposed FY2011 budget is now available for public comment. The public hearing on the budget is Sept. 20, at noon, here at Capital Metro headquarters. The board will consider adoption of the budget on Sept. 24.

I’m jazzed about Capital Metro’s improved budgeting process, and this resulting budget. It reflects many of your priorities as shared with us through the budget survey this summer. It also reflects Capital Metro’s increased commitment to accountability, financial sustainability and transparency as we continue to implement recommendations from the Texas Sunset Advisory Commission (look for a community progress report on that in September).

New this year is a five-year Capital Improvement Plan (see appendix A) and a new policy to ensure our cash reserves are healthy and protected.

Here are some of the key components of this year’s operating and capital budget:

  • Adds $1.3 million to our cash reserves.
  • Increases bus and rail service. Improvements include more frequency on crosstown routes/better service in SE Austin, per ServicePlan2020, and possible midday and Fri. evening MetroRail service.
  • Increases fares and other revenue. The proposed budget includes a fare increase that would increase pass rates, MetroAccess fares and RideShare. Free fares would also be eliminated as recommended by the Texas Sunset Advisory Commission. Before any fares increase, Capital Metro will seek public input and host a public hearing concerning fares.
  • Continues improvements to bus stop accessibility. The budget allocates $2 million for bus stop accessibility. It also allocates $50,000 to install new and replacement bus stop benches and shelters.
  • Begins implementation of MetroRapid, using $10 million of federal funding and $2.5 million local funding.
  • Replaces the Interactive Voice Response (IVR) automated phone system. This should please many customers who have complained about the current automated system on the Go Line.
  • Constructs a 75-space Park & Ride in Manor.

NOTE: There are two known errors in the document that will be corrected.
1. Capital Metro proposes allocating $2 million (not $1 million as it’s incorrectly stated in the document currently posted) to improve bus stop accessibility in FY2011.
2. The IVR phone system will be replaced in FY2011 (not FY2012 as stated in the document).

A free $70 MetroPlus pass could be yours…

Crickets. That’s what we heard last night at our first public budget priorities meeting. No one showed. (Well, one gentleman stopped in to share his feedback about route #3, but he wasn’t there for the meeting and wasn’t interested in staying.)

Low attendance is a challenge faced by a lot of public entities when they are trying to engage the public on an issue. Recently I chatted about that very topic on the blog, and about the SNAPPatx project that is gathering community input and dialogue on transportation topics via social media.  As a community, we’re developing different models and strategies for effectively getting public participation, but there are pros and cons to each strategy, and community meetings will continue to be the foundation of the outreach for a while yet. For a topic as complex as a ~$200 million operating and capital budget, the community meeting model is necessary to really delve into the details in an understandable way.

Last night was a downer because we have been working for a few months with our board to develop a more interactive, more proactive, and more inclusive public outreach process for creating Capital Metro’s budget for next year, FY2011 (Oct. 1 – Sept. 30).

Some of the ways this approach is new for Capital Metro:

Continue reading “A free $70 MetroPlus pass could be yours…”