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FOR IMMEDIATE RELEASE
June 16, 2009

RECESSION, CITY TAX REVENUE SHORTFALL WILL AFFECT METRO
Unprecedented declines in funding could mean less service.

CINCINNATI –Metro is bracing for extremely difficult decisions in the coming months due to the recession. Revenue to operate the transit system is projected to be $6 million less in 2009 and at least $8 million less in 2010, as several factors converge to put critical pressure on Metro’s tax-supported budget:

• City earnings tax: $2 million to $3 million less
  Based on City of Cincinnati’s projected earnings tax shortfall, Metro is expected to receive less from the city earnings tax. The exact decrease is not yet known, but Metro is working with the city on alternatives. Based on the city’s public statements about its own budget, Metro anticipates a reduction of $2 million to $3 million by 2010.
  
  Metro receives 3/10 of 1% of the earnings tax collected by the city. Almost half of Metro’s $94.6 million operating budget -- $44.1 million -- is budgeted to come from the earnings tax.
  
  
• Fare revenue: $3 million to $5 million less
  Most Metro rides are related to employment or personal business. With unemployment around 10% and budgets tight, ridership is down and, therefore, fare revenue is projected to be significantly lower than budget.
  
  Earlier this year, Cincinnati City Council approved a $0.25 fare increase and the removal of a $5 monthly pass discount for Zone 2 (Hamilton County) riders. City Council did not approve the removal of the $5 pass discount for Zone 1 (City) monthly passes or a requested $0.10 increase in the transfer charge, which together represent a $600,000 loss in revenue.
  
  
• County Access non-ADA funding: $233,000 less
  Hamilton County has notified Metro that it is unable to provide 2009 general fund dollars for Access service for people with disabilities that goes beyond what the Americans with Disabilities Act requires. The county has provided funding support for this “non-ADA” service for the past decade.
  
  
• State funding: $137,000 less
  The State of Ohio has reduced the 2009 amount Metro receives for elderly and disabled fare subsidy.

“For many years Metro has struggled to provide more service than it can afford,” said Metro’s CEO Marilyn Shazor. “We’ve cut costs behind the scenes, increased fares, and improved service efficiency. We’ve dipped into our reserves and deferred critical capital projects like bus replacement. These steps bought us time, but we can’t overcome the additional losses in revenue. We must reassess the level of service that we can reasonably provide within the new budget reality.”

Metro will spend the summer analyzing options and talking with customers, employees and other affected constituents to help Metro make decisions for the remainder of 2009 and for the 2010 budget.

So far this year, Metro has cut 3% of service through surgical changes, removing unproductive trips and adjusting bus schedules to bridge the gap. These reductions originally helped balance the 2009 budget, but won’t offset the new losses in earnings tax, fare revenue, or county non-ADA funding. Additional service reductions will affect core Metro service and also impact Access service.

“The frustration is that we know that the community wants more transit service, not less. We’re being forced to make decisions that are not in the best interest of the people we serve,” Shazor continued. “But the financial model is broken. We can’t continue to provide more service than we can afford. We must right-size Metro and provide the very best service we can within the resources we have.”

Bus replacement remains an issue: In addition to the pressure on Metro’s operating budget, Metro continues to struggle with inadequate capital funding to replace buses beyond their useful 12-year life and other critical capital needs. Even with stimulus dollars awarded this year for capital projects, in 2010 Metro will not have enough money to replace 69 old buses that are beyond their useful life.

A national perspective: Metro is not alone in facing difficult budget decisions due to the economic downturn. Transit systems in Dayton, Cleveland, Atlanta, St. Louis, San Francisco, Portland, Boston, Charlotte, Louisville, Phoenix, Minneapolis, New York, Chicago, and most key markets are either considering or have already implemented service reductions, fare increases or both to address budget deficits due to the recession since last fall.

Metro background: Metro is a non-profit, tax-supported public service of the Southwest Ohio Regional Transit Authority, which is a political subdivision of the State of Ohio overseen by a 13-member board of trustees. Half of Metro’s operating funds come from a contract with the City of Cincinnati, which provides 3/10 of 1% of the city earnings tax that is designated for transit.

Metro provides about 22 million rides per year in Greater Cincinnati, with most service in the City of Cincinnati and Hamilton County. Metro also operates limited commuter and job-access service in Butler, Clermont and Warren counties.

Metro has about 925 employees, most of whom are directly related to the provision of transit service (transit operations and maintenance). Metro has 385 fixed-route buses, which currently travel about 13 million miles per year. Metro’s current 2009 budget is $94.6 million.

Access background: Access serves eligible individuals whose disabilities make riding Metro impossible. Under the Americans with Disabilities Act, Access provides ADA service within ¾-mile of any Metro non-express route at the time Metro is operating in that area. Access provides about 240,000 rides per year, using 53 vehicles. Access is operated by a private contractor, MV Transportation, with oversight by Metro staff. Access’ budget is about $7.8 million of Metro’s budget.

Access also provides about 15,000 “non-ADA” rides per year to grandfathered customers who were eligible for Access before 2004. This service goes beyond what the ADA requires in terms of service area and hours. The non-ADA service is not available to new Access customers. This service is basically within the I-275 loop east of Miami Township during limited hours.

For the past 10 years, funding for the Access non-ADA service has come from three partners: Hamilton County Board of MRDD ($105,000), the Council on Aging tax levy ($98,265), and Hamilton County’s general fund (remainder). Hamilton County recently notified Metro that it cannot fund its general fund share in 2009 ($233,000). The total cost of the non-ADA service in 2009 is just over $436,000.

Links
Special 2009 Budget Report page
Frequently Asked Questions about Metro’s budget