Metro Board adopts $4.5 billion budget for fiscal year that begins July 1

Metro Board of Directors adopted the budget for fiscal year 2013. It is Item 54 on the consent calendar of Board meeting underway.
Here is the news release:

Metro Adopts Fiscal Year 2013 Budget

Metro’s Board of Directors today adopted a $4.5 billion budget for the fiscal year beginning July 1, 2012 at the board meeting held May 24 at Metro headquarters.

Metro’s FY 2013 budget, which is balanced with no shortfall, does not propose raising fares, which already rank among the lowest in the nation. Metro’s farebox recovery will stay at 28 percent, again near the bottom of any major operator, and passenger loads also will be low compared to other transportation agencies in the same range.

The FY 2013 budget includes the following: $1.467 billion for transit operations, $278.5 million for deferred maintenance of Metro’s rolling stock of buses and trains, $1.084 billion for construction of Measure R transit projects, $134.5 million for other capital improvements, such as bus maintenance facilities, $236.5 million for a robust highway program; $339.5 million for debt service obligations and $974.7 million in subsidies distributed by Metro to fund Metrolink, regional operations and transit projects throughout Los Angeles County.

Against the backdrop of high gas prices, Metro will be offering commuters and others viable public transit alternatives with new light rail service on the Expo Line connecting downtownLos AngelesandCulver Cityand the Metro Orange Line busway extension to the Metrolink/Amtrak station in Chatsworth. Metro also will bolster express bus service on the Harbor Transitway and the I-10 between downtown andEl Monteas the ExpressLanes congestion pricing demonstration project debuts

Highway projects include the I-405 Sepulveda Pass Improvements Project, the High Desert Corridor, the SR-710 north gap closure and the widening or other enhancements on various stretches of the I-5, I-605, I-710 south, and SR-138. Efforts will continue to construct sound walls and implement Metro’s freeway beautification program.

Metro CEO Art Leahy stressed a renewed focus on customer service with a strong emphasis on reliability, cleanliness and courtesy. Metro is purchasing hundreds of new buses and rail cars and catching up on years of deferred maintenance for Metro’s rolling stock. Stations will be cleaner, safer, and there will be better signage so that customers who speak a multitude of languages can better navigate the Metro system.

The budget restricts hiring new employees except to fill positions needed to deliver Measure R projects and operate new services. Moreover, Metro has set in motion a program to recruit and train the next generation of managers and operations employees to allow for a smoother generational transition.

Metro funding comes largely from local transportation sales tax revenue along with transit assistance and grants from the state and federal governments, farebox revenue, and other revenue sources such as advertising, land leases and commercial filming.

The FY 13 budget is $337.3 million or 8.1 percent more than the current $4.178 billion Metro budget. This reflects a significant expansion of the Measure R program in the next fiscal year. In the new fiscal year Metro will be spending $1.560 billion on Measure R projects and programs compared to expenditures of $1.278 billion this fiscal year. In addition, Metro will be spending $35.2 million to operate the new Expo light rail line in FY 13.

Thanks to Measure R, the half-cent sales tax approved by voters in 2008, Metro is overseeing the largest public works programAmericahas seen in decades. Projects underway and about to start construction are designed to stabilize and downsize the region’s worst traffic to manageable levels while generating hundreds of thousands of direct and indirect jobs, stimulating the economy, and improving air quality.

However, the reality is that Measure R does not include enough funds to support operations for all the new rail projects in the pipeline. A reduction in state or federal funding, or a dip in the local economy or ridership will endanger the balanced budget presented.

In terms of the budget, Leahy said it’s prudent to flag these risks now so that Metro’s Board can avoid future roadblocks that could detour crucial progress in this decade. In that sense, FY 13 will be a pivotal period for Metro andLos AngelesCountyin more ways than one.

Metro-089

14 replies

  1. I cannot fathom why Metro thinks “it’s alright” to have a farebox recovery ratio of 28% with the rest being funded with tax dollars.

    What plans does Metro have to do a better job of fixing this problem? As the system expands with newer projects, this is eventually going to become a big problem that hurts taxpayers in Los Angeles for a long time.

  2. “Metro’s farebox recovery will stay at 28 percent, again near the bottom of any major operator, and passenger loads also will be low compared to other transportation agencies in the same range.”

    Read: We are perfectly fine with these pitiful figures. There’s no need to fix this problem because we can just ask taxpayers to fork over more of their ever diminishing paychecks. It’s much more easier to burden Los Angeles with even more debt for generations to come by extending Measure R with no set expiration date.

    “Against the backdrop of high gas prices, Metro will be offering commuters and others viable public transit alternatives with new light rail service on the Expo Line connecting downtownLos AngelesandCulver Cityand the Metro Orange Line busway extension to the Metrolink/Amtrak station in Chatsworth.”

    Read: OTOH, we will still not provide any practical solution for people with shorter commutes or shorter distance needs to persuade them to take Metro. We know that it’s still cheaper to get around with a car for shorter distances, but we don’t care about tapping into or gaining ridership from this market. Why bother trying to figure out how to do distance based fares to make transit costs cheaper for shorter distances even though it’s just as simple as calling the transit folks in Asia? We can just ask taxpayers for more money if they don’t want higher fares. And yes, we don’t care that people who has a need for short distances are taxpayers too.

    “Highway projects include the…”

    Read: We will continue to waste tax dollars on pork-barrel highway improvement projects even though said funds can be redirected to mass transit projects or investing in new echnologies that improves the efficiency of Metro operations and reducing labor costs. Unfortunately, politics and the ticket to re-election are more important than rationale thinking.

    “Metro CEO Art Leahy stressed a renewed focus on customer service with a strong emphasis on reliability, cleanliness and courtesy. Metro is purchasing hundreds of new buses and rail cars and catching up on years of deferred maintenance for Metro’s rolling stock. Stations will be cleaner, safer, and there will be better signage so that customers who speak a multitude of languages can better navigate the Metro system.”

    OTOH, we will still not fix TAP as making TAP more efficient means we need to layoff Metro employees. We only invest in things that creates more jobs for Metro courtesy of your tax dollars, neverminding that things can be done much more efficiently with lower labor cost with better technologies. We’d rather keep TAP as half-baked as it is right now because having these minor irritations like expiration dates, the inability to purchase a TAP card without a pass loaded onto it, or the inability to transfer funds to a new TAP card online will just end up make Metro employees lose their jobs. We’d rather have people call our TAP customer service, paid courtesy of your tax dollars, to do menial tasks despite that it’s a simple programming fix which people can do it online by themselves.

    “The budget restricts hiring new employees except to fill positions needed to deliver Measure R projects and operate new services. Moreover, Metro has set in motion a program to recruit and train the next generation of managers and operations employees to allow for a smoother generational transition.”

    Read: We will protect the seniority and the job security of Metro employees by not hiring new employees or investing in newer technologies that can do their job with lower pay or with better efficiency. We will continue to give promotions and higher rates of salary to our Metro employees because it’s simple as making taxpayers in Los Angeles pay more. The option of pay cuts and salary reductions for Metro employees to reduce taxpayer burden is not on the table.

    “Metro funding comes largely from local transportation sales tax revenue along with transit assistance and grants from the state and federal governments, farebox revenue, and other revenue sources such as advertising, land leases and commercial filming.”

    Read: Basically, it’s taxes. But we can hide that fact by using words like “assistance” and “grants” to make it sound good. And we haven’t given any real serious thought about leasing land space on our stations or converting free park-and-ride lots to paid lots.

    “However, the reality is that Measure R does not include enough funds to support operations for all the new rail projects in the pipeline. A reduction in state or federal funding, or a dip in the local economy or ridership will endanger the balanced budget presented.”

    Read: So please, we implore the taxpayers of Los Angeles to give us more of your tax dollars. And the paychecks that your kids, grand kids, great-grand kids and great-great-grand kids will receive in the future.

    • Hi Frank;

      Please try to keep future comments shorter. We appreciate your views and I think more concise comments will lead to a wider audience for your views.

      Steve Hymon
      Editor, The Source

  3. Steven P, it is not the agency that is at fault. Metro senior staff have long spoken of the need to address the rather low farebox recovery compared to peer agencies. But the issue gets little traction among the Metro Board members. Leadership on this is sorely lacking.

  4. Hi Steve,

    I’m curious about the characterization of the 710 North project. On the one hand, Metro goes into communities saying that all options are on the table, including various alignments and multimodal approaches. On the other hand, you’ve described a “highway gap closure” project, which really narrows the scope and potential options. I don’t want to use assume any motives on the part of Metro staff, but it’s easy to see why local communities feel the current process is a charade. Does the agency truly have an open mind on the project?

    • Hi Eric;

      As far as I know, Metro staff intends to comply with all relevant environmental law and study a variety of options for the project.

      As for the name, I use it because I believe it best describes what the project is about: improving or providing alternatives to traffic caused by the gap in the 710 freeway between Pasadena and Alhambra.

      Obviously, everyone is entitled to their opinion about whether the studies are legitimate. I believe they are. As to my own opinion, I believe it’s undeniable that the gap has caused congestion on city commercial and residential streets. As to the solution, I’ll leave that to Metro staff.

      Steve Hymon
      Editor, The Source

  5. @Dana

    Of course it doesn’t because Metro board members are politicians. When they’re up for re-election, they are there to kiss babies and make candy talk for their constituents. What Metro’s senior staff needs to do is learn politics. Learn how to sweet talk to politicians.

    I’ve said it before. No politician is going to risk throwing away their re-election when they hear “distance based fares = higher fares for longer rides.” But politicians would start listening if they hear “distance based fares = cheaper fares for shorter rides.”

    Start telling them that it’ll be good for their constituents, it’ll solve the issue of the low farebox recovery ratio, and the low ridership numbers by implementing a distance based plan which will lower fares for shorter distances, but keep the maximum fare at $1.50, or even a monthly cap of $75 which is the same as the current price of a monthly pass.

    Majority of the districts all across the city have a need for short distance trips. Majority of those districts are held by LA County Supervisors and former LA city councilmen/women whom serve as Metro Board Members. That alone will catch the attention of politicians wanting re-election and get distance based fares moving along.

    Residents and businesses near LAX is one example. Lots of people that work near or at LAX, live in the neighborhoods near LAX. Why should they have to pay $75 a month for a monthly pass when they rarely have a need to go beyond a 10 mile radius? If the LAX Connector is built, is it fair to subject the residents living near there to fork over $75 a month for a one or two station commute to LAX? Why should they pay the same price as those who commute from the Valley to Downtown LA?

    Or how about the constituents along the Blue Line? Majority of the people there living near the stations still drive and carpool to work to the factories in Vernon because it’s not worth it to pay $75 a month for a three station commute.

    A lot more things can be done under a distance based fare model. Load up the TAP card with $100, start off with fares that have a base fare of $0.50. Tack on $0.10 per mile thereafter and caps off $5.00 per day which is the current price of a day pass.

    Or do a cap off at $75 each month so that no matter how far you ride it under a distance based model, it won’t deduct more than $75 until the end of the month. This alone will serve the needs of serving and attracting riders from both long distance and short distance ridership market. This will lead to a substantial increase in farebox revenue and ridership figures, as well as making politicians happy guaranteeing their ticket to re-election for figuring out a solution that works for all.

    But you need to implement distance based fares to do those things. And if the board is controlled by baby kissing politicians, you need to know the right angles how to approach them with the right idea.

  6. The budget does include a return of the day pass back to $6. So it’s not like fares stay the same as present.

  7. My problem with turnstiles is the technology. If there are going to be locked gates, why did they not use the sort of opening/closing gates that are used in London with the Tube and in the San Francisco Bay Area with BART?

  8. @IT Guy in Irvine

    Board member John Fasana (from the San Gabriel valley city of Duarte) has long pushed distance based fares. But to no seeming enthusiasm from his fellow Board members. The low sticker price of the base fare for politcians has a lot more appeal than a complicated “distance based fares = cheaper fares for shorter rides” argument. These folks are not rocket scientists or steeped in transportation theory. Your idea is DOA. Sorry.

  9. Matt,

    And that was over 25 years ago in the age when we didn’t have the technological capability to do so for cheap, nevermind the fact that countries in Asia figured out a way to run distance based fares without using computer technology since the 1950s.

    It was also the time when gas was cheap so mass transit was looked at more of a public good for the poor to get around. Totally different times and background so you can’t compare the judgment of Angelinos 25 years ago to what it is today.

    What you’re saying is why waste all that money in building a bullet train between LA and San Francisco when we looked at that option and we gave it up as wasteless spending back in the 1980s. Flash forward three decades later, we’re now paying the price for it.

  10. Frank M. said

    “And that was over 25 years ago in the age when we didn’t have the technological capability to do so for cheap, nevermind the fact that countries in Asia figured out a way to run distance based fares without using computer technology since the 1950s.”

    1994 was 18 years ago.

    I simply posted the article as background and I think there would be an outcry on some for a change like this. The city hasn’t changed as much as you think from the mid 90s.