Transit Action Network (TAN)

Advocates for Improved and Expanded Transit in the Kansas City Region.

Posts Tagged ‘KCMO2013-2014budget’

KCMO Relationship With KCATA Under Review

Posted by Transit Action Network on June 12, 2013


kcmo_big_logoKansas City Missouri (KCMO) is KCATA’s biggest “client,” and therefore their relationship has a huge impact on transit service in the region. Two important events are shaping this relationship. In the short-term, budget decisions this year by the Kansas City Council have forced KCATA to take a 10% loss on the transit service it provides to the City and continue to use its emergency reserve fund to cover this loss. According to KCATA the $46 million budget is $5 million short of the approximate $51 million cost of the current level of service. In the mid/long-term, a new ordinance created a “KCATA Funding Review Committee” which will determine the ongoing relationship between the two entities.METRO ogo

The short-term: The KCATA Board of Commissioners has approved the new $46 million contract, even though they know it is affecting the agency’s ability to respond to emergencies in the future.  KCATA expects to use $5 million of its reserve fund to prop up the city’s transit service, despite the fact that the ½ cent Transportation Sales Tax had an additional $9 million available to budget for the bus service. Instead, the city decided to spend the money on Public Works and the streetcar. Some of this money should have been used to eliminate the difference between the cost of the service level and the budget. KCATA used $3.5 million of its reserve fund last year to prop up this service level. KCMO has not fully paid for its transit service out of the budget since 2008.

To understand why KCATA would continue to use its emergency reserve fund after the economic emergency is over and the KCMO sales tax receipts are budgeted to be the highest ever, you need to know that the reserve fund came from the KCMO 3/8 cent Transit Sales Tax  (more about this later) and understand KCMO’s impact on KCATA’s business. 62% of KCATA’s total budget comes from KCMO but if you omit federal funding and fares and such, and just look at the local funding part — then KCMO provides 92% of those funds. Although KCATA is an independent public transportation agency created by an act of Congress, it doesn’t have any taxing authority, and therefore relies on contracts with government entities to provide transit service. So if you have one client that contracts for 92% of your business, you try to make them happy.  Keeping that in mind, KCMO still purchases transit services as a client of KCATA, not an employer and not an owner.

kcmo_kcata_contractSo the mid-term and long-term relationship between these two separate entities has to be resolved since the current situation is unsustainable. No organization can continue to provide the city with more service than the city can (or will) fund.

That leads us to the mid-term outlook. Although during the budget process the city’s Finance committee deleted Section 2 of Ordinance 100951, which required KCMO to incrementally increase KCATA’s share of the ½ cent Transportation Sales Tax, it retained Section 1, which says KCATA will receive 95% of this sales tax (after TIF and an Administration fee) starting May 1, 2014. During the budget hearings City Manager, Troy Schulte, said he had made preparations to comply with Section 1 of the ordinance. That means that the use of this money for Public Works, which is $6 million for FY 2013-2014, would shrink to about $1-1.5 million for Transportation Planning and the Administrative fee in the next budget. If Section 1 of Ordinance 100951 is implemented and KCATA starts to receive the money that has been diverted to Public Works since 2003, then the current discrepancy between the budget and the cost of the service level will hopefully be eliminated and KCATA can stop depleting the reserve account in the mid-term.  Use of the reserve account in the long-term is a different matter.budget_discussion

The long-term situation. The city’s new “KCATA Funding Review Committee” has had two meetings with the KCATA. The committee has to present a recommendation to Mayor James by Aug 1, 2013 — in time for the next budget deliberations.

A new Ordinance, 130173, set up this committee to look at using the money from the ½ cent Transportation Sales Tax to create  “a multi-year financial plan for distribution of the transportation sales tax after reviewing the needs of the bus service and establishing a maximum allocation for development and expansion of a streetcar system”. Councilman Ed Ford chairs the committee. The other four council members are Dick Davis, Jan Marcason, John Sharp and Scott Wagner.

The first committee meeting mainly consisted of KCATA’s general manager, Mark Huffer, making a presentation he called “KCATA 101” to explain KCATA’s operations and funding situation. There are links to both the presentation and the meeting, with Huffer’s explanation of all the slides, at the end of this article.

The second committee meeting happened at the last KCATA Board of Commissioners meeting. KCATA addressed several concerns that were brought up at the first meeting, including the sustainability of this level of transit service and the use of the KCATA Reserve account.  There are several issues that have emerged.

Issue 1: How to maintain the current level of transit service. The city council is basing these talks on the unique prerequisite that the current level of transit should be maintained. To transit riders and transit advocates that sounds pretty good, except improving and expanding the service level would sound even better. However that has never been the way KCATA has provided service to the city. They have always provided the most service possible for the funding provided. Councilman Dick Davis (previous general manager of KCATA) told us how he used to adjust service levels all the time based on the money the city actually gave KCATA.  Service levels have never been fixed because the cost of service and the funding for the service always fluctuates.

Prior to 2009 KCMO fully paid for the transit service it received. Historically, if the city cut the budget, then KCATA either cut service or raised fares, so the city budget and the amount of transit service were always in agreement. When the recent recession hit, KCMO cut KCATA’s funding $9.5 million or 19.3 % between FY 2008-2009 and FY 2009-2010. The reason transit riders didn’t suffer more during the recession is because KCATA raised fares (by 20 percent or 25 cents) and cut service by only 9.5%. That didn’t fully cover the budget reduction, so KCATA used its reserve account to make up the cost difference and maintain the higher level of service. The decision to use the reserve account left KCMO and KCATA out of sync, with KCATA propping up the city’s transit service at a level higher than budgeted. This situation had never happened before and we doubt if a lot of people even know about it. Most people assume the service cuts and fare increase happened just like before and they matched the amount of the funding reduction. That is not the case.

KCATA acted like a real partner to the city when sales taxes took a nose-dive. The reserve money kept transit riders from having deeper service cuts and bigger fare increases, as happened in many other cities. KCATA used its reserve fund like it is supposed to be used:  for an emergency.

Now, KCATA is being told to maintain this level of service, even though the city isn’t budgeting for it. They are seriously looking at scenarios where the reserve account will be totally exhausted. So the KCATA reserve account is an important part of this discussion.

 Background: How did KCATA get this reserve account? Prior to 2003 KCATA did not have a reserve fund. The reserve money originally came from the 3/8-cent Transit Sales Tax. Although KCMO has control over how to spend the city’s ½ cent Transportation Sales Tax, it acts as a fiscal agent collecting and passing through to KCATA proceeds from the 3/8-cent Transit Sales Tax since language of that ballot measure specifically directed the money to KCATA. After the successful 2003 transit election, it took time to implement new services and get more buses. During that build up time KCATA used some of this money to create its first and only reserve fund for emergencies (it was 6 months of operating costs – which is not uncommon for a transit agency). The original concept for the reserve fund was to protect service levels in the event of unexpected fuel price spikes. This unique opportunity to build the reserve only existed once and KCATA has no way to replenish this money for future emergencies, since the contract with the city does not currently have a provision for funding a reserve account.  The reserve fund is already partially depleted. That is why forcing KCATA to use up this money when the city is flush with transportation funds was unnecessary and irresponsible on the part of the city, because it diminishes KCATA’s ability to respond to future contingencies.

KCATA having a reserve account is no different from anyone having a rainy-day fund. Coming out of the recent recession, people should understand how important it is to have some extra money tucked away. We hope that during the review process KCMO sees the wisdom of KCATA having a reserve account and incorporates this modern risk-management practice into the contract. Properly using a reserve account is good management. It should be used to maintain service levels when less revenue is collected than budgeted or when there are unexpected costs, and then re-filled when revenues go back up.

Without the KCATA reserve account, service cuts and fare increases worth the whole $9.5 million, or 19.3%, would have been necessary during the recession.

Issue 2: There is a serious long-term funding problem for KCMO, which will affect KCATA. The city may have to make drastic changes in many programs, not just transit, unless revenues start growing faster or costs are cut. Considering that sales tax revenue is projected to increase only 1%-1.5% annually, the city is on a collision course when costs will exceed revenue in multiple city endeavors, unless there are big changes. The city’s overall costs are projected to increase at 5%-6% annually.

KCATA is currently managing costs pretty well at a 2-3% yearly increase. If the cost of maintaining this level of transit service continues to grow faster that the sales tax revenue, then at some point, this level of transit service becomes unsustainable.rider_profile

One of the main goals of these meetings is to find a way to maintain this level of service and pay for it. The committee has to decide if that goal can be reached with the funding sources already available. As transit riders, constant fluctuations in service levels based on the city’s current year budget is a transit nightmare. KCATA surveys of riders show that 74% of the transit riders have household incomes less than $30,000 and 62% of the riders are transit dependent, yet 76% of the trips are for work, job seeking or school. The need for transit is well documented and no one wants to cut service or raise taxes, but reality can’t be ignored.

KCATA has been trying hard to cut costs. The goal of implementing the recommendations of the Comprehensive Service Analysis was to make the routes more efficient and eliminate duplications. KCATA negotiated an improved union contract and they plan to change the vehicle fleet to Compressed Natural Gas (CNG). They expect cost reductions from all of these efforts.

So the ball is in the City’s court. In Huffer’s presentation he suggested several ways for the city to deal with the potential collision course between costs and revenues as they affect the transit service.

INCREASE REVENUE

  • City 1/8-cent sales tax capacity
  • More use of ½-cent sales tax
  • State investment
  • Regional investment
  • County
  • Bi-State
  • Fare increases

Of course, KCMO only controls the revenue streams highlighted in red. Another possibility, not on the list, is the U.S. Congress giving state, county and local governments the ability to charge sales tax on Internet sales. If that happens, it will be a boon to government coffers all over the country and a boon to transit services funded by sales taxes. Any increase in the 3/8-cent Transit Sales Tax revenue would automatically go to KCATA, and depending on the decisions made regarding the ½ cent Transportation Sales Tax, KCATA could receive more money for transit.

DECREASE COSTS

  • Greater labor efficiencies
  • Focus only on core services
  • Services reductions/redesign
  • Limit Share-A-Fare to ADA requirements only
  • Alternate fuels/utility savings

Approximately 80% of the transit trips happen on 20% of the routes (core service), so KCTA could reduce the non-core routes. Twenty percent of the routes are about a dozen routes. For perspective, KCATA operates nearly two dozen routes on Sundays.

Currently a city ordinance allows able-bodied people over 65 with an annual income of no more than 150% of the current poverty level to use the Share-A-Fare service. There would be significant cost savings if the service were limited to the people with disabilities.

KCATA’s estimates did not include any cost savings from changing to CNG as a fuel, so that is an outstanding potential cost savings.

All of the above options to decrease costs are within the control of either KCATA or KCMO.

These first two issues, maintaining this level of transit service and the eventual situation where the service level becomes unsustainable due to slow revenue growth and potentially exhausting the reserve account, have been part of the discussions during these committee meetings.

At the second meeting, Mr. Huffer presented several scenarios looking at when the reserve account would be exhausted. The basic assumption is that KCMO doesn’t increase KCATA’s budget. Other scenarios include keeping the same budget but starting to make service reductions and the last scenario doesn’t make service reductions but increases the budget $5 million next year and then revenue only grows at 1% per year.

Of course, exhausting the emergency reserve fund to maintain basic operating levels is not a long-term funding strategy. Councilman Dick Davis, told us recently that he would be concerned if the reserve fund dipped below $10 million. We don’t believe the KCATA Board of Commissioners should let the reserve fund be totally depleted under these circumstances.  See Huffer’s Reserve Presentation at the end of the article.

Issue 3. Another wrinkle that hasn’t been resolved. In December 2010 when Ordinance 100951 was passed, the streetcar didn’t exist.  In the current budget the city allocated $2 million to the streetcar to cover the streetcar’s financial obligations. This amount of money will be needed for the duration of the streetcar bonds, which could be 25 years for a total of $50 million (this amount is equivalent to the cost of a whole year of KCATA transit service to KCMO). One of the questions for the committee is “Will the streetcar money continue to come from the ½ cent Transportation Sales Tax, or some other revenue source? “peer_cities

The streetcar is transit and this is a transportation tax so it fits legally. However, originally the Transportation Development District (TDD) was supposed to pay for the streetcar costs and there was no discussion about using the limited funds available for the bus system to help pay for the streetcar. The streetcar has to be paid for, but TAN would prefer the TDD exhaust its revenue sources before taking the easy way out and use the revenue stream used to pay for the bus system. If the TDD truly can’t pay for the streetcar, then of course revenue sources outside of the TDD have to be tapped.

If there is no other option and the streetcar money has to come out of the ½ cent Transportation Sales Tax, then Section 1 of Ordinance 100951, which currently gives KCATA 95% of the money, will have to be changed.  The city manager’s current plan is to take the streetcar money out first, like the TIF money, and give KCATA 95% of what is left, if that is still the percentage the review committee decides on.   Don’t be misled into thinking KCATA is getting 95% of the money if the city continues to take money out for other priorities first. Getting 95% of the leftovers is a much smaller amount of money. In fact, if money for the streetcar comes out of this fund, the city manager said the maximum percentage of the total amount available for KCATA would be reduced to 87%.

During the budget hearings the council made it very clear that they can do whatever they want with this sales tax regardless of promises to voters or ordinances. The point that the “council can change its mind any time it wants to” is an important one. For instance, even if a $2 million cap is placed on using the ½ cent Transportation Sales Tax money for this first streetcar, this council or a future one could just eliminate the cap and decide a precedent had been established for using these funds to pay for streetcars.

What lies ahead? What about new or improved services? Even though the city has not been fully budgeting for the transit service, KCATA continued with the implementation of several new projects including the Troost MAX in 2011 and the expansion of service to the airport this year. A Prospect MAX is a potential new service since it did well in the recent Jackson County US 71 Transit Study. How the city defines its on-going relationship with KCATA and how the city decides to fund basic transit service to the whole city will determine what improvements or expansions KCATA can make in the future.

The City’s “KCATA Funding Review Committee” has a lot of work to accomplish. So far the committee has been learning about the issues. We look forward to the meetings when they get down to dealing with the difficult questions. They only have June and July to come up with a plan.

Next “KCATA Funding Review Committee” meeting is Thursday June 13, 2013, at City Hall, 10th floor.

Links to the presentations and the video of the first meeting

Huffer to KCMO City Council – ATA 101 Final_20130425

Video of first KCMO City Council “KCATA Funding Review Committee”  (includes Mark Huffer’s explanation of the slide presentation)

KCATA BOC Reserve Fund Presentation  from the second meeting

For more background: TAN posted a series of articles related to the KCMO FY 2013-2014 budget process for funding KCATA. Start with Our Request to KCMO: Move Transit Funding Closer to Goal in Next Budget   and Action Alert! KCMO City Manager’s Budget Is Failing The Transit System  and read through to the last budget article Last Chance – Speak up for KCATA Budget at KCMO Finance Committee Meeting Mar 20  They all have the Tag: KCMO2013-2014budget

Soon: KCATA’s New Vision

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Last Chance – Speak up for KCATA Budget at KCMO Finance Committee Meeting Mar 20

Posted by Transit Action Network on March 19, 2013


METRO ogoThe city council is almost finished working on the FY 2013/2014 budget. Tomorrow may be your last chance to comment in front of the council on the Public Mass Transportation Fund (1/2-cent Transposition Sales Tax) budget.kcmo_big_logo

Finance, Governance & Ethics Committee
March 20, 2013 at 8:30 am
10th Floor Committee Room
City Hall
414 E. 12th Street
Kansas City, MO 64106
 

In your testimony about the budget for the 1/2 cent Transportation Sales Tax and Ordinance 130173:

  1. Encourage the committee to table the new ordinance, 130173, which is an attempt to deal with the transit issues we’ve have all been concerned about. The council hasn’t had sufficient time to thoroughly discuss the ordinance and determined how to get the best result. It is possible to complete this budget with the current ordinance.
  2. Even if the committee tables the new ordinance, which we hope it will, please ask them to comply with the existing ordinance relative to non-transit uses and restore funding to KCATA.
  3. Ask that $5 million, currently allocated to non-transit uses, be moved to KCATA:
    •  to comply with current ordinance 100951 to restore funding to KCATA.
    •  to eliminate KCATA’s need to use its emergency reserve account to maintain current transit service levels.
  4. Ask that the streetcar only uses this funding source for one year, while an alternative funding source is identified.

Currently the FY 2013/2014 budget for the  city’s use of the 1/2 sales tax money includes $6 million dollars allocated to non-transit projects, $2 million to the streetcar, and $600 thousand to administrative fees.

Based on Ordinance 100951, city non-transit uses were supposed to start shrinking in 2011 so the KCATA budget could rise to 95% of the available funds from the ½ cent Transportation Sales tax by 2014. KCATA would only be allocated 71% of the available funds in the new budget.

The 2003 and 2008 elections for a 3/8 cent sales tax were based on the assumption that the ½ sales tax would continue to go to the KCATA but here is what actually happened.

1_2_cent_comparison_2003_2014

Up until now the city has ignored its own ordinance and continued to spend money on other priorities.

Contrary to what most people think, KCATA has not been receiving 7/8 cents in sales taxes (sum of ½ cent and 3/8 cent sales taxes). In the proposed budget KCATA is budgeted LESS money from the ½ cent transportation sales tax than it received in 2003 although receipts have increased considerably.

In 2003/2004 the city was only using $1.3 million for non-transit uses from the ½ cent transportation sales tax.

Here’s what we propose:

  1. Table the new ordinance: it is not needed.
  2. Move $5 million from Public Works Capital Improvements to KCATA. That would move the budget closer to complying with the current ordinance and eliminate the need for KCATA to use up its emergency money. Based on the ordinance, KCATA should be receiving close to 88% of the 1/2 cent Transportation Sales Tax for the proposed budget.
  3. Due to the short time-frame, use $2 million from the Public Mass Transportation Fund  for the streetcar for this one-year only.
  4. Once the budgeting process is completed, begin working on alternative funding sources for the $2 million, preferably out of the TDD.  The city sold the idea of the streetcar being funded out of the TDD. Do this and provide long-term financial stability for the streetcar using those new funds.
  5. Convene the Transit Working Group that Councilwoman Circo proposed at the March 6 meeting of this committee, and let that group take some time to explore all of the transit-related issues involved.  There are a lot of issues, and decisions related to transit should not be made in a vacuum.
  6. Include Transit Action Network in that Transit Working Group, as we asked two weeks ago.

The council can work this out, but the time is running out. The budget has to be voted on next week.

Contact Kansas City Mayor and City Council

Mayor’s office 816-513-3500 email Mayor@kcmo.org

Council office 816-513-1368

Go to http://kcmo.org/CKCMO/CityOfficials/CityCouncilOffice/index.htm for phone numbers and emails for specific council members

TAN has been writing about this issue since January when the city manager released his proposed budget for FY 2013/2014.

See previous articles for more information.  KCATA and the KCMO Budget-Video of the March 6 hearing of the Finance, Governance and Ethics Committee

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KCATA and the KCMO Budget-Video of the March 6 hearing of the Finance, Governance and Ethics Committee

Posted by Transit Action Network on March 13, 2013


METRO ogoPeople are  speaking up about the failure of Kansas City’s proposed budget for FY2013-2014 to properly fund KCATA as required by Ordinance 100951 and expected by elections in both 2003 and 2008.

Watch the testimony: http://kansascity.granicus.com/MediaPlayer.php?view_id=2&clip_id=7223kcmo_big_logo

Testimony related to transit begins at 38:30 and ends about 1:41:30

  • Loretta Jackson-Cowans about 38:30
  • Councilman Ed Ford about 41:40
  • Councilwoman Marcason about 46:40
  • Mark Huffer of KCATA about 48:02
  • Councilwoman Cindy Circo about 1:05:08  – We need to create a working group…
  • Councilman Michael Brooks about 1:07:00
  • City Manager Troy Schulte about 1:07:12
  • Jonothan Walker of ATU about 1:19:22
  • Sheila Styron of The Whole Person about 1:23:25
  • Janet Rogers of Transit Action Network about 1:26:13
  • Ron McLinden of Transit Action Network about 1:33:02
  • Closing remarks by Council members about 1:39:10
  • End of transit testimony about 1:41:30

Lynn Horsley’s KC Star article about the meeting http://www.kansascity.com/2013/03/06/4103920/concern-about-kc-bus-money-going.html

Get more information:  Attend KCMO Finance Committee Meeting March 6 – – City Wants to Replace Ordinance That Restored Funding to KCATA

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Attend KCMO Finance Committee Meeting March 6 – – City Wants to Replace Ordinance That Restored Funding to KCATA

Posted by Transit Action Network on March 5, 2013


kcmo_big_logoPlease attend the Finance Committee meeting tomorrow to object to replacing Ordinance 100951, which restored funding to KCATA, with a different ordinance. Even if you don’t speak, your presence in support of transit is very valuable.  If you can’t make the meeting, continue to contact the Mayor and council members.

Finance, Governance & Ethics Committee
March 6, 2013 at 8:30 am
10th Floor Committee Room
City Hall
414 E. 12th Street
Kansas City, MO 64106

Since the City Manager released his budget for FY 2013-2014 Transit Action Network has been fighting against the city’s blatant violation of Ordinance 100951, which was passed in 2010 to restore funding to KCATA.

Instead of restoring funding to KCATA the city is unilaterally increasing money to non-transit projects. In 2003 only 5% of the money went to non-transit projects, but this budget has increased non-transit expenses to 18%. In 2010, when we exposed what the city was doing, the council passed Ordinance 100951 to restore funding to KCATA up to the 95% level by May 2014. In 2010 non-transit projects received  $4.5 million and the ordinance required them to start decreasing this amount in order to increase the KCATA amount. Instead they have purposely ignored the ordinance and raised the non-transit budget to $6 million in the proposed budget.  There is no excuse for this since we started reminding the mayor, council and the city manager about this ordinance last September.

So we spoke up again this year asking the council to

  1. Honor its commitment to voters and taxpayers
  2. Obey Ordinance 100951 – – the KCATA share should be close to 88% of the available money in this budget, instead of only 71%
  3. Support the bus system and fully pay the bill for bus service to KCATA instead of forcing KCATA to use $5 million of emergency funds to keep the buses rolling at this level.

Instead responses have included

1 So what if KCATA has to use up the emergency money.

2. So what if we made a promise to the voters-we make promises all the time we don’t keep.

3. We aren’t doing anything wrong because we aren’t cutting service (Does it occur to them that service will have to be cut when the emergency money runs out so this is not a sustainable plan for funding transit? Does it occur to them that it is coercive to force a congressionally chartered bi-state authority to use its emergency funds to provide their transit service?)

4. So what if we are violating the ordinance-we’ll just change it like we do all the time.

And changing the ordinance is exactly what they are planning on doing. Instead of moving in the direction to restore money to KCATA, they are working on a new ordinance to do exactly what they want instead of what voters wanted. I think people believed Mayor James when he commented on this issue BEFORE he was elected, so why is he taking the opposite position now?

Candidate James, February 2011: First, we must restore trust in City Hall and confidence that we are spending tax dollars wisely. As I mentioned before, I will make sure that money goes to the purpose specified by voters.  For example, I will make sure that the tax revenue voters devoted to the KCATA gets to the KCATA.  Withholding such devoted funds breeds the type of widespread distrust of City Hall that must be fixed.

Although the meeting is about the budget and this ordinance is about providing transit vs diverting that money to other uses, it is significant that this committee also reviews the city Ethics and Governance issues.

We would like to know how it is ethical to take tax money and then unilaterally decide to spend it somewhere else.  The deal made with voters was more contractual than just a casual promise.

1. TWICE the city made a well documented offer to voters – – if voters agreed to pay another 3/8-cent sales tax for transit, then the city would add the new money to the ½ cent transportation sales tax and KCATA would receive 7/8 cents in sales tax to provide a bigger, better bus system.

2. The voters accepted this offer by passing the new transit tax.

3. Millions of tax dollars are collected to pay for the bus service.

Instead there has been an increasing amount of money diverted to non-transit uses even after Ordinance 100951 was passed to correct this failure to fulfill the explicit contract.  If you made this type of deal with a business, then the failure to comply would be an obvious breach of contract. It is not ok to use your money for something other than what was agreed to in the contract. If nothing else, why isn’t this a serious ethics violation?

Governance is not just about passing laws, regulations and ordinances – it is about enforcing them. Why is the head administrator allowed to ignore direction from the elected officials and an important ordinance by diverting millions of dollars to projects of his choice instead of where both the voters and the council have directed him to spend the money?  Why is the response to this flagrant disrespect for the rule of law (which an ordinance is) allowed? Why, instead of making him change the budget, is the city considering changing the ordinance?

If KCATA has to severely cut service in a couple of years, you’ll be told that KCATA was given 7/8 cents in sales tax and they couldn’t live within their means. That explanation will be a serious distortion of what happened.

How does the streetcar fit in? Although the $2 million is small in comparison to the money being diverted to non-transit uses, it is significant over time. If they take $2 million for the 25 year length of the bonds, that is $50 million dollars being taken away from the bus service. That is about 20 years of operating the Troost MAX service. That $2 million could pay to operate a Prospect or North Oak MAX. The money they want to take for the streetcar isn’t excess money lying around. Using the money for roads and streetcars will have a negative impact on bus service levels in the foreseeable future.

Although the streetcar is a great addition to transit in the city it is not a game changer for the vast majority of riders and it doesn’t reduce the city’s responsibility to provide bus service throughout the city. They shouldn’t be taking any money from the bus funding until they have exhausted the funding mechanisms in the Transportation Development District (TDD), which they have not done.

Don’t be naive and think the streetcar is only going to take the $2 million. Don’t fall for the “it is all transit“ line. Once they start identifying this money for streetcars, then expect any additional streetcars to take even more money away from the bus system.  Although it may seem good to limit the streetcar amount to the $2 million they have in this budget, it still sets the precedent that this is streetcar money and they will just change the ordinance in the future if they want more.

If the city wants to use this money for the streetcar, then let it be from the 5%.  What we don’t want is to start carving away at this money, which is all the bus system has. We don’t want 5%-20% to Public Works, 6% to the first streetcar, 5%-17% hoarded in the ending balance, more streetcars, etc., etc.

Keep it simple – – 95% to KCATA for bus service and they can use the rest as they please for transportation. The 5% can be used for public works, streetcars or any ending balance in the account.

Below is the proposed ordinance as it stands. Of course, they may have filled in the blanks by Wednesday.

Ask for

The first blank:  95%

Second blank: providing bus service through KCATA.

This would keep the ordinance basically as it is.

ORDINANCE NO. 130173

Amending Chapter 68, Article VII, Code of Ordinances of Kansas City, Missouri entitled “Sales Taxes,” by repealing Section 68-472.1 and enacting in lieu thereof one new section of like number and subject matter which pertains to the distribution of the transportation tax.

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

Section 1. That Chapter 68, Article VII, Code of Ordinances of Kansas City, Missouri, entitled “Sales Taxes,” is hereby amended by repealing Section 68-472.1, and enacting in lieu thereof one new section to read as follows:

Sec. 68-472.1. Distribution of tax.

After deducting the City’s two percent cost of handling authorized by RSMo 92.418 and fulfilling any Tax Increment Financing obligations, at least __________ percent of the remaining sales tax for transportation imposed by Sec. 68-471 of this article and deposited in the City’s Public Mass Transportation Fund shall be used for ___________________.

See previous post: Public Budget Hearing Saturday Feb 23  Speak Up About the Millions Diverted From KCATA

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Public Budget Hearing Saturday Feb 23 Speak Up About the Millions Diverted From KCATA

Posted by Transit Action Network on February 22, 2013


kcmo_big_logoLast KCMO Public Budget Hearing for FY 2013-2014

Saturday, February 23
9am to 11am
KCPD South Patrol Division (main entrance)
9701 Marion Park Drive , KCMO 64137

In 2003 and again in 2008, Kansas City passed a 3/8-cent transit sales tax in order to build a bigger better bus system. It was a package deal: the 3/8-cent transit tax would add to the already existing ½ cent transportation sales tax (which previously had been the only source of funding for the Metro) to provide KCATA with the equivalent of 7/8 cents sales tax for operating the Metro.  That is NOT what happened.METRO ogo

In the City’s proposed budget for FY 2013-2014, KCATA is getting less than 6/8 cents in sales tax. The city is diverting nearly $10 million away from KCATA even though they are violating Ordinance 100951 to do so.

For the proposed FY2013-2014 budget, 1/8-cent sales tax generates a little over $8 million.

$10_million_shortIf the city was obeying the ordinance and started incrementally increasing the KCATA share of the ½ cent transportation sales tax in May 2011, then KCATA would be getting about $6 million more in the FY 2013-2014 budget. If KCATA only got $5 million more in this budget, they would not have to bleed out the reserve account to maintain service.

Saturday is the last public budget hearing to comment on the city diverting money away from KCATA despite the clear intention of voters that the full 7/8 cent of sales tax should support the bus system.  However, continue to contact the mayor and your council members though March until the budget is adopted.

Where is nearly $10 million going in the proposed budget instead of to KCATA?

  • $6 million to non-transit projects in public works – 18% of the money
  • $2 million to the streetcar – 6.1%
  • Almost $2 million is held back by the city  – 5.4%
    • The previous two years, the city hoarded over $5 million in the fund rather than pass the money on to the KCATA.

    At this point, KCATA is not going to get one more dollar than it did this year.

This diversion of tax money away from the KCATA is not new. This is why in 2010 we approached the city to pass an ordinance that required the city manager to give 95% of the ½ cent transportation sales tax to KCATA by May 2014, and to start incrementally increasing the KCATA share of the money in May 2011. This ordinance meant the city would comply with the promises made to voters in the two earlier elections. Instead the city has violated the ordinance every year. KCATA is getting a smaller share of the fund than it did in 2010. The KCATA share has gone from 74% down to 71%.

1_2_comparison_again

Voters should understand that legally the city could trash Ordinance 100951 and totally ignore the two elections and give all the ½-cent transportation fund to roads and streetcars. Voters never get to vote on this money since it is taxing authority given to the city from the State of Missouri. That is why we approached the council in 2010 and tried to protect the bus service from encroachments from other projects by passing the ordinance. Up to this point the city has chosen to flagrantly ignore that ordinance.

In fact, the city manager is already saying he wants the council to change the ordinance. One possibility for changing the ordinance being openly discussed is to allocate $2 million to the streetcar off the top and let KCATA have 95% (or less) of what is left.

No matter how great it is to have a streetcar and give more money to roads, the bus system still has to carry the heavy load of transporting nearly 55,000 people daily to work and home and all their other transit trips. And KCATA ridership is increasing. Kansas City is huge geographically and it takes a lot of money to transport people over all these miles.  Continue to shrink the money, expect to shrink the service area and service level.

For a change, we would prefer to see KCATA fully funded and get MAX systems added to Prospect and North Oak, instead of having to cut service in a couple of years. There are consequences to the city’s actions.

The city council still has time to fix all of this. Do they have the will? Some of the council members do, such as Ed Ford and John Sharp. Please contact the mayor and the city council and let them know what you think about taking all this money away from the Metro.

Previous posts:

Action Alert! KCMO City Manager’s Budget Is Failing The Transit System

Speak Up to Restore KCATA Funding and Listen to KKFI To Get the Scoop

Lynn Horsley’s column in the KC Star http://www.kansascity.com/2013/02/08/4056689/bus-backers-worry-about-funds.html

Listen to Janet Rogers, co-founder of Transit Action Network discuss this issue on KKFI radio’s TellSomebody, hosted by Tom Klammer on Feb 5, 2013

http://tellsomebody.libsyn.com/city-manager-schulte-reneges-on-transit-funding-obligation

Contact Kansas City Mayor and City Council

Mayor’s office 816-513-3500 email Mayor@kcmo.org

Council office 816-513-1368

Go to http://kcmo.org/CKCMO/CityOfficials/CityCouncilOffice/index.htm for phone numbers and emails for specific council members

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Speak Up to Restore KCATA Funding and Listen to KKFI To Get the Scoop

Posted by Transit Action Network on February 1, 2013


This Saturday tell your Council Members and the Mayor to restore funding to KCATA as intended by Ordinance 100951.METRO logo (Read our previous article for Ordinance details-see link below)

Saturday, February 2
9am to 11am
Robert J. Mohart Multi-Purpose Center (auditorium)
3200 Wayne, KCMO 64109

kcmo_big_logoThere are only three public budget hearings about the city manager’s proposed budget. Tell your Council Members and the Mayor that the failure to “incrementally increase” the KCATA budget toward 95% of the available money is unacceptable and against the wishes of the voters.

People depend on this service for all aspects of their lives including getting to work and school, buying groceries and medicines, and going to the doctor. The Kansas City Area Transportation Authority (KCATA) announced that 2012 Metro ridership exceeded 16.1 million trips, the second highest annual ridership in nearly two decades. The Metro is an essential service.

The city has not “incrementally increased” the percentage that KCATA is receiving despite what the ordinance instructs the city manager to do.  KCATA received 74% when the ordinance was passed in 2010. Funding for KCATA has to be at 95% by May 2014.  The city manager’s budget is only proposing 71% for KCATA, which is less than when the ordinance was passed. If the KCATA budget was “incrementally increased” after the ordinance, then it should receive close to 88% in this budget.

The beginning of 2011, right after the ordinance was passed, TAN held an on-line forum for the mayoral election. Before the ordinance was passed the city was diverting over $5 million to non-transit uses.  Here is Candidate Sly James’ comment about that situation:

“I’ve been a strong advocate for public transit and will continue to be as mayor.  However, we need to restore the public’s trust in City Hall before we ask for additional tax dollars.  The city’s plan to withhold $5.4 million in tax revenue intended for KCATA is simply unacceptable and represents a systemic problem with the way our city conducts business.  Withholding funds that have been allocated by voters for a specific purpose continues to breed the type of widespread distrust of City Hall that must be fixed.  Our budget must always reflect the priorities of the citizens of Kansas City, not simply the priorities of our bureaucracy.”

 Message to Mayor James – This proposed budget has increased the amount being diverted to non-transit uses to $6 million. KKFI 90.1 FM

If the city doesn’t follow the ordinance, KCATA will need to subsidize the city’s bus service $5 million this year to maintain this service level.  KCATA continues to provide more transit service than the city is paying for. KCATA is using up its emergency reserve account to pick up the difference. KCMO should stop dragging its feet and use the taxes the way the voters intended.

Listen to KKFI Community Radio 90.1 FM

To hear more about this issue, TAN advocate Janet Rogers will be a guest on two KKFI radio shows to talk about what is happening to KCATA funding and why the proposed budget needs to be changed.

Saturday February 2 – Sharon Lockhart’s Every Woman between 3-4 pm

Tuesday, February 5 – Tom Klammer’s Tell Somebody between 6-7 pm

Previous TAN article: Action Alert! KCMO City Manager’s Budget Is Failing The Transit System

Opportunities to speak up at 2013-14 Public Budget Hearings

Saturday, February 2
9am to 11am
Robert J. Mohart Multi-Purpose Center (auditorium)
3200 Wayne, KCMO 64109

Saturday, February 9
9am to 11am
Northland Neighborhoods Inc.
4420 NE Chouteau Trafficway, KCMO 64117

Saturday, February 23
9am to 11am
KCPD South Patrol Division (main entrance)
9701 Marion Park Drive , KCMO 64137

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Action Alert! KCMO City Manager’s Budget Is Failing The Transit System

Posted by Transit Action Network on January 25, 2013


kcmo_big_logoIn December of 2010, Transit Action Network lead an effort to get Ordinance 100951 passed to restore funding to KCATA  from the 1/2 cent transportation sales tax (officially the “Public Mass Transportation Fund”). Groups representing over 160,000 people, in addition to bus riders, spoke up in support of this ordinance.

Now the City Manger’s submitted budget for FY 2013-14 doesn’t abide by this Ordinance to restore funding to the Metro.

KCATA averages nearly 55,000 daily riders and 2012 ridership was the second highest in 20 years. The transit system is vital to people getting to work and looking for work, yet the City Manager’s budget appears to be ignoring this simple instruction regarding KCATA funding based on the ordinance:

Section 2. That the City Manager is directed to incrementally increase the current appropriation to 95%, beginning with the budget taking effect on May 1, 2011.

The 95% requirement to restore funding to KCATA has to be met by May 2014, yet KCATA is budgeted a smaller percentage (70.5%) in the proposed FY 2013-14 budget than when the ordinance was passed in December 2010 (73.8%).  The dollar amount budgeted for KCATA is the same for FY 2013-14 as FY 2012-13. The City Manager’s KCATA budget is going in the wrong direction! It isn’t fair and it doesn’t match the wishes of the voters or the ordinance passed by the City Council. Why do people have to fight the same battles with public officials over and over again?

1.   Call your council member or Mayor James to insist that Ordinance 100951 be followed and not ignored. Ask that the KCATA funding be moved close to  $29 million (88%) from the Public Mass Transportation Fund, which is appropriate for this step in implementation of the Ordinance, instead of the $23.5 million (70.5%) the City Manager has proposed.

Mayor’s office 816-513-3500 email Mayor@kcmo.org

Council office 816-513-1368

Go to http://kcmo.org/CKCMO/CityOfficials/CityCouncilOffice/index.htm

For phone numbers and emails for specific council members

Where is the incremental increase for KCATA?

Where is the incremental increase for KCATA?

2. Attend the budget hearings and insist that the ordinance be implemented correctly.

2013-14 Public Budget Hearings Currently Announced

Saturday, February 2
9am to 11am
Robert J. Mohart Multi-Purpose Center (auditorium)
3200 Wayne, KCMO 64109

Saturday, February 9
9am to 11am
Northland Neighborhoods Inc.
4420 NE Chouteau Trafficway, KCMO 64117

Saturday, February 23
9am to 11am
KCPD South Patrol Division (main entrance)
9701 Marion Park Drive, KCMO 64137

The non-transit uses were supposed to be reduced to allow the KCATA budget to increase. The 1/2 cent transportation sales tax was not supposed to be diverted to non-transit uses when the 3/8 cent transit sales tax was voted in. In fact, the non-transit uses have gone from $4.6 million in the year the ordinance was passed to $6 million for the proposed budget.

KCATA is providing more transit service than the city is paying for by using up its reserve account. Their other choice is to significantly cut service again and no one wants that. The reserve account was used to help out in the recent financial crisis, but this shouldn’t still be happening. There is a serious need for the Ordinance to be implemented and the city should stop dragging its feet, pay its bills and provide the essential transit service the voters want.

In addition, the city has taken the $2 million it committed for the streetcar from this fund. The $2 million for the streetcar is a long-term yearly commitment for the city.

TAN has alerted the City Auditor, Gary White, to this situation. Part of his job is to alert city officials to potential problems that could undermine the public’s trust in City government.” Not abiding by this ordinance certainly falls into that category.

==============================================================================

See our recent article. Our Request to KCMO: Move Transit Funding Closer to Goal in Next Budget  (This article was written using the previous budget numbers)

Links to two 2010 blog posts  A Great Victory For Transit and The Scoop on Kansas City Transit Funding

Public Mass Transportation Fund-Submitted FY 2013-14 Budget from the City Manager’s budget

The full Manager’s Budget can be found online in the City’s Open Data Catalog at http://data.kcmo.org.

Ordinance 100951

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Our Request to KCMO: Move Transit Funding Closer to Goal in Next Budget

Posted by Transit Action Network on November 16, 2012


In late 2010, Transit Action Network initiated and led a campaign to restore transit funding from the Public Mass Transportation Fund (1/2-cent city transportation sales tax).  We were successful in getting Ordinance 100951 passed. The Ordinance increases the share of revenue going to the Kansas City Area Transportation Authority back to the 95% level it received before voter approval of the 3/8-cent transit sales tax in 2003. Full implementation to 95% is due in the budget for FY 2014-2015, beginning May 2014.

In 2010,  KCATA was receiving only 74% of the ½ cent sales tax. The ordinance has three years to be fully implemented.  From 74% to 95% is a 21% increase. Over the three years of implementation, that would be 7% per year if increased in equal amounts.

One year has passed and KCATA currently receives only 4% more than in the pre-100951 budget. The city is working on the second budget (FY 2013-2014) and we would like to see KCATA receive closer to 88% of the Total Available Resources. That would be 14% higher than when the ordinance was enacted and would represent a more consistent phased increase.

We recently sent a letter to the Mayor, City Council and City Manager asking for the upcoming budget to move significantly closer to the May 2014 goal, in conformance with Ordinance 100951. (2012 Letter and copy of Ordinance to Mayor and Council)

KCATA Share of the Public Mass Transportation Fund

Graph based on Public Mass Transportation Fund budget page for FY 2012-2013

Percentage equals Pass Through Payments1 times 100 divided by Total Available Resources.

1This is the amount KCATA receives, see budget page.

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