My First Priority Upon Re-Election as Your District H Director:
Take All Reasonable Steps to Ensure Fiscal Sustainability
First, some headlines, then some detail.
–Sales tax revenues are way down due to the pandemic.
–Farebox revenues are way down due to the pandemic.
–Ridership and service are way down due to the pandemic.
–Deficits for 2021 are projected to be as much as $215 Million.
–Deficits are projected to continue past 2021.
–Dramatic steps need to be taken now to keep even reduced service.
–My budgetary experience is helping us chart a course toward fiscal sustainability.
–By making some really hard decisions, we can achieve fiscal sustainability next year and going forward.
–As the economy strengthens and the pandemic subsides, we can restore service and maintain fiscal sustainability.
Now the details.
RTD faces a daunting financial shortfall for 2021 and beyond. If we took no action, we were advised that we are facing a budget shortfall of as much as $215 Million in the next calendar year. Our operating budget runs about $750 Million per year, so this is a huge portion of our budget and is a very large number no matter what the total budget is.
The reason for this unprecedented shortfall is really two-fold: a projected decline in sales tax revenues and a decline in farebox revenues. Let’s give you some detail.
Sales and use taxes collected throughout the almost 2,400 square mile District we oversee typically constitute something like 65% of our gross revenue. That sales tax is comprised of $.006 (6/10ths of a cent) for our “Base System” and $.004 (4/10ths of a cent) dedicated solely to FasTracks.
Farebox revenue (also called “farebox recovery”) makes up over 15% of our gross revenues. That includes the money you drop in the farebox on the bus, the tickets you buy at King Soopers or a ticket vending machine, the passes you buy at work, the MyRide cards you buy, and the money you load on your ticket app on your smartphone.
Our independent outside financial advisors (the Leeds School of Business at CU) advise that our sales tax revenue will continue to be depressed for several years while the economy slowly recovers from the pandemic-created recession. Financial projections change a lot and are never 100% accurate, but we must use something for planning purposes, and we believe the Leeds School is the best forecast available to us in the Denver Region. The only good news on this front is that sales tax revenues have been coming back more rapidly than originally projected at the onset of the pandemic, but they are still much lower than our pre-pandemic budget projections.
As for farebox recovery, we have experienced a 60% drop in ridership since the pandemic hit. We responded by instituting a Pandemic Service Plan, which reduced the total service we were providing by about 40% from pre-pandemic levels. So, it’s a double whammy: fewer people are riding the system out of safety concerns and there are fewer buses and trains for them to ride.
So we have suffered reduced revenues and we have reduced service to respond to reduced ridership, but we have maintained 100% of our staff: operators, mechanics, and administration. We must address that issue.
I, along with other Directors, have instructed our staff to address our shortfall within the construct of certain guiding principles that are set forth here.
#1 Keeping riders, employees and the region healthy and safe: We will strive to keep our communities connected and our riders, employees and region healthy and safe.
#2 Service reductions should not be our primary response. We’ll be creative: We will take a balanced approach to budget reductions and do so in such a way as to align with our mission. Accordingly, service reductions should be minimized to minimize the impact to our customers. We will strive for a well-rounded approach by incorporating reductions in overhead, breaking down silos and engaging partners, and seeking creative approaches to service delivery.
#3 We’ll prioritize mobility for people who most depend on transit during the pandemic: We will strive to maximize mobility during the pandemic for those customers who most depend upon our services to access essential jobs and other necessities, while also keeping our communities and activity centers appropriately connected.
#4 We will support and value all our employees. We acknowledge our frontline employees who directly promote our mission to the public and who have borne the brunt of mandating in the past. We also acknowledge those fulltime employees in the lower wage categories, because a humane work environment is valued by RTD.
#5 Being data-driven and informed by collective wisdom and expertise: We will use a thoughtful, responsible approach to decision-making for the COVID period, while planning for the midterm financial period and post-pandemic future, by incorporating the best available data, expertise, and wisdom, including through the Re-Imagine project, the accountability committee, and stakeholders.
#6 We’ll be actively transparent and seek input: We will take active measures to be transparent and seek input regarding our use of CARES Act money as well as in the decision-making process for measures we adopt to respond to ongoing COVID financial impacts.
I am pledged to ensuring fiscal sustainability in a reasonable and responsible manner that will continue to serve our core mission of moving people!
How I Addressed the RTD Operator Shortage Issue
One Problem Solved; One New Problem Encountered.
Prior to the pandemic, I had already worked collaboratively with the Board in crafting creative and effective solutions to address and eliminate the operator shortage, ensuring that we had enough operators to drive all of our buses and trains on all of their scheduled service. We had made great progress in this effort, cutting the shortage by more than half, with a fully staffed system in prospect for May of this year (2020). The number of “dropped runs” (buses or trains that did not operate because no operator was available) had been greatly reduced and was on its way to zero percent.
Then the pandemic hit.
Responding to a 60% loss in ridership from pre-pandemic levels, we reduced our scheduled service by 40%. The goal was to keep as much service going as we reasonably could, providing much-needed service to essential workers and others—people who needed to get to work, to medical appointments, to the grocery store, and more.
We did all of this without laying off any operators. The reduced service levels meant that we no longer had dropped runs. We had enough operators to staff all of the now-reduced scheduled service. In fact now, as a result of the service cuts, we actually have more operators than we can schedule for the available runs. And that is our new issue: addressing how to assist our frontline workers and avoid massive layoffs.
I am pledged to ensuring that we maintain as many workers as we can and provide assistance and placement for any workers that may be subject to layoffs while providing for an easy and immediate return to their RTD jobs as service levels ramp up.
How I Would Address COVID Revenue Loss:
Restore Lost Revenues from the Pandemic
I have already discussed much of this above in my comments regarding my first priority upon my re-election as Your District H Director. The goal is to increase ridership as soon as we reasonably and safely can. I have encouraged and supported all our efforts to guarantee that we have clean, safe, virus-free vehicles to move people. And we are doing that. That will address farebox recovery.
I am also leading the efforts for increased federal funding for transit agencies across the country, and especially for the RTD in the Denver Region. I serve as the Chair of the American Public Transportation Association’s Transit Board Members Legislative Committee, working directly with members of Congress and the US Department of Transportation to provide additional COVID relief funds through new legislation. We are making great efforts through our tireless communication, collaboration and cooperation.
I urge you to vote to re-elect Doug Tisdale as Your District H Director on the RTD Board so that I can continue all these efforts!