Amendment of FY 2003-04 and FY 2004-05 Operating and Capital Budgets and FY 2004-05 Fare Adjustment
Board Member Williams, Administration and Finance Committee Chairperson, provided a brief overview of the budget. Board Member Williams noted staff projections and stated that reserves will be approximately $32 million at the end of FY 2005. This reflects an issuance of $18 million of debt for FY 2005. He further stated that about $62 million will be available for use in FY 2006-07.
Board Member Williams briefly discussed the items in the operating revenue budget highlighting the reduction of Measure A Debt proceeds of $32 million for Operations in FY 2004 and $28 million in FY 2005, transfer of $22 million of Measure A Repayment for 2001 purchase of light rail vehicles from FY 2004 and FY 2005, and reduction of preventive maintenance by $3.2 million in FY 2004 with an increase of $5.2 million by FY 2005.
On the operating expense budget, Board Member Williams noted that wages and benefits were reduced by $7.5 million in FY 2004 and a net decrease of $3.9 million in FY 2005. Board Member Williams also noted the increase in fuel and the concerns raised regarding the Paratransit Services budget reduction.
Gerald Rosenquist, Acting Chief Financial Officer, reviewed the main changes in the Biennial Budget. Mr. Rosenquist reported that the overall financing revenue increased by $1 million. Mr. Rosenquist also noted that the cost of fuel increased by $2 million due to higherrates per gallon.
Peter M. Cipolla, General Manager, noted that the Board reviews the Biennial Budget every six months to evaluate impacts and make adjustments to the budget. Mr. Cipolla noted that this second revision of the budget made significant impacts on the operating and capital budget. Mr. Cipolla noted that the four elements of the Budget Amendment are: Operating Revenue Budget, Operating Expense Budget, Capital Project Budget, and Fare Modifications. Mr. Cipolla referred to the Fare Modification and noted that staff’s recommendation on fare increase for January 2005 is reflective of the Board adopted Fare Policy.
Board Member Williams inquired about the percentage increase for youth fares. Mr. Cipolla responded that discounts were great in previous years and a major adjustment is needed to align the fares to the adopted Fare Policy. Mr. Cipolla cited the December 2003 Board adoption of the Fare Policy and stated that the percentage relationship of youth fares to the base fare was increased to reduce the percentage relationship of senior and disabled fares. Mr. Cipolla noted that after this first adjustment is implemented, the increases would be aligned to a more consistent and less significant increase in the future.
Kevin Kittila, Interested Citizen, noted that the fare increase is unfair and stated that the people will not be able to afford the proposed fares.
Board Member Dando left her seat at 6:21 p.m.
Joseph Iwami, VTA Employee, commented that raising fares is punishing people who are in need. Mr. Iwami commended the Board for deferring the fare increase last year. Mr. Iwami suggested stopping shuttle services for private agencies and urged the Board to be more innovative and creative in solving problems.
Board Member Dando took her seat at 6:22 p.m.
Graham Clark, Fremont Union High School District, read a letter from the Superintendent. Mr. Clark highlighted that the cost of the proposed youth fare increase will cause greater financial shortfall to the school district’s budget and will inevitably force further cuts in staff and programs.
Chris Clark, Interested Citizen, expressed concern about the fare increase and noted that people would not be able to afford riding a bus.
Lupe Medrano, San Jose State University and Interested Citizen, inquired about the source of the statistics in the memo. Ms. Medrano noted that the fare increase causes undue hardship to people.
Chairperson Gage left his seat at 6:27 p.m.
Chairperson Gage took his seat at 6:28 p.m.
Mr. Bradley expressed disappointment on the proposed fare increase and service cuts. Mr. Bradley noted that cost of the new fares will cost the same as driving.
Alicia Shreffer, San Jose City College (SJCC) and Students for Justice (SFJ), distributed a copy of a resolution entitled Resolution in Support of Save our Transit: Phase II. She noted that transit fares should be affordable.
David Dias, American Lung Association of Santa Clara-San Benito Counties, commented that the youth should be encouraged to use transit.
Stuart Cohen, Transportation and Land Use Coalition, distributed a hand out entitled VTA’s Fare Hikes: Cruel and Unusual Punishment. Mr. Cohen commented that the Fare Policy should be looked at on a long-term basis and the farebox recovery ratio goal should be implemented within five years and not immediately.
Nathan Cardon, Grace Baptist Church, stated that fares should be reduced.
Board Member McLemore and Ex-Officio Board Member Beall left their seats at 6:35 p.m.
Latoria Williams, SJCC and SFJ, noted concern that service is declining while fares are increasing. Ms. Williams noted that the proposed fare increase will make transit more inaccessible; she further noted that increasing fares will not increase ridership.
Theresa Barnes, Transportation Coalition, noted that people cannot save money if there will be fare hikes.
Board Member Casas left his seat at 6:37 p.m.
Robert Carvalho, Interested Citizen, distributed a hand out entitled Farebox Recovery Ratio Analysis, VTA Compared to Local Peer Operators. Mr. Carvalho urged that the overhead costs be reduced.
Board Member Casas took his seat at 6:38 p.m.
Herman Schmitz-Salue, Interested Citizen, noted that there is a need for bus and that people should be encouraged to use public transportation. Given the economic situation, he stated that it is not the best time to increase fares and urged the Board to expand service and not to increase fares.
Board Member Gonzales left his seat at 6:40 p.m.
Ms. Okuzumi stated that the people will suffer if the fare increase is approved. Ms. Okuzumi noted that VTA should find other solutions other than increasing fares.
Donna Wallach, Justice for Palestinians, stated that increasing the already expensive bus fares is inappropriate. Ms. Wallach noted that the bus system is inefficient. Ms. Wallach suggested putting pressure on the federal government to stop the war and funnel the money back to counties and cities.
Board Members Gonzales and McLemore and Ex-Officio Board Member Beall took their seats at 6:42p.m.
Darlene Wallach, Justice for Palestinians, stated that the current bus system only serves the rich and not the poor. Ms. Wallach stated that VTA should start serving the community.
Tom Fink, Amalgated Transit Union Local 265, recognized the need to increase farebox recovery but cautioned that the proposed fare increases might decrease ridership.
Jenny Huang, Public Advocates Inc., commented that VTA ignored transit needs of the majority. Ms. Huang noted that the fare increase makes transit more unaffordable and inaccessible. Ms. Huang noted that VTA should identify other just alternatives in solving the problem.
Lowell Grattan, Interested Citizen, cited an excerpt about transit plan and fare increases. Mr. Grattan distributed a copy of a report entitled What to Expect in a Good Transit Plan and How to Critique a Poor One. Mr. Grattan noted that the people were promised a light rail that runs 60 miles per hour; he suggested pausing the light rail service and focusing on the buses.
Board Member Cortese left his seat at 6:47 p.m.
Marco Lopez, Services, Immigrant Rights and Education Network (SIREN), noted the need for public transportation and urged the Board to make decisions that are just and humane.
Board Member McHugh left his seat at 6:50 p.m.
Lindsey Leong, California for Justice (CFJ), La Raza Student Alliance SJCC, expressed concern that the Board does not listen to public comments. Ms. Leong stressed the need for public transportation.
Christopher Lepe, Transportation and Land Use Coalition (TALC), noted that the savings described in the memo should be used to augment fares instead of raising fares. Mr. Lepe stated that VTA should increase productiveness and not penalize bus riders by increasing fares.
Manuel Aparicio, Interested Citizen, urged the Board to consider the vulnerable people in their decision to increase fares. Mr. Aparicio stated that fares should be lowered to increase ridership.
Robin Anderson, VTA Riders Union, stated that fares should not be increased. Mr. Anderson stated that VTA should cut administration costs. Mr. Anderson noted that light rail should be stopped and service should be expanded.
Bruce Stevens, Interested Citizen, advised that there is not enough signage to let people know that they need to pay in order to ride the light rail.
Ricardo Rivas, Interested Citizen, expressed concern that the fare increase will affect the youth of Santa Clara County.
Yevgeniy Lysyy, Interested Citizen, suggested taking monies from Measure A for bus service. Mr. Lysyy stated that the bus service should be expanded. Mr. Lysyy noted that drivers should drive smart in order to save fuel.
Adiya Hines, SFJ, expressed concern that people might move out the County due to the higher cost of living.
Board Members Cortese and McHugh took their seats at 7:05 p.m.
Board Member Williams left his seat at 7:05 p.m.
Rose Deterding, Visionary Lions, recognized the need for a fare increase but noted that the proposed increase will make it harder for people with fixed income. She expressed her dislike of the light rail system.
Zak Cribari, Interested Citizen, expressed concern on mismanagement of money. Mr. Cribari noted that people do not deserve to suffer for the choices that the Board has made. Mr. Cribari urged the Board to take the public comments into consideration.
Jerry Grace, Interested Citizen, cautioned VTA that riders might not take the bus service anymore.
Board Member Gonzales left his seat at 7:10 p.m.
Alicia Dominguez, CFJ, expressed concern on fare increases and noted that VTA might lose riders if fares are increased.
Board Members Gonzales and Williams took their seats at 7:11 p.m.
Chairperson Gage noted that raising fares is a complicated and difficult decision. Chairperson Gage explained that 80 percent of VTA’s revenue comes from sales tax and noted that sales tax for the last ten quarters is low. Chairperson Gage stated that VTA charged lower fares compared to other transit agencies in the past, but has to start charging reasonable fares now to balance VTA’s finances.
Board Member Casas thanked staff for the report. Board Member Casas noted his support for a successful bus system but expressed opposition to the fare increase. He noted concern that the fare increase will negatively impact the community and stated he could not support the recommendation to increase fares.
Board Member Gonzales noted his support for the fare increase. He explained that since sales tax is the sole source of VTA revenue, there is no other way to maintain VTA’s long-term financial health except to raise fares. Board Member Gonzales stressed that ridership is impacted by employment and noted that employment levels in the County have not substantially improved. Board Member Gonzales reviewed the past fare rates and stated that VTA has significantly subsidized fares for a long time. Board Member Gonzales noted that the current financial situation cannot subsidize fares any longer and emphasized that the farebox recovery ratio must be improved as it is an important piece of moving to financial stability.
Board Member Cortese affirmed support for the fare increase. Board Member Cortese commented that the Ad-Hoc Financial Stability Committee met every week for nine months last year to create recommendations such as the Fare Policy. He noted that the effort of the Ad-Hoc Financial Stability Committee, including the various stakeholders involved in the nine-month discussions, should be respected.
Board Member McHugh referred to Page 19 and inquired how long after the fare increase will the ridership be back to normal. Mr. Cipolla responded that there is usually an incremental decline in ridership after a fare increase but ridership usually comes back after two to three months.
Board Member McHugh inquired about the increase for ECO Pass. Mr. Cipolla replied that based on the Fare Policy, staff will make recommendation on the ECO Pass rates next year based on the average revenue of this year.
Chairperson Gage suggested a minor change on the youth monthly pass that will change the amount from $52 to $49, noting that this amount is still consistent with the Board’s Fare Policy.
Board Member Williams expressed appreciation to the public for making their voices heard. Board Member Williams requested a status report on progress of the model and its relation to staff projections, and he further requested staff to continue looking for alternatives to minimize impacts. Board Member Williams noted that the fare increase is an important component to maintain the bus service. Board Member Williams requested the public to bear with the Board’s decision.
Board Member Pirzynski noted support of the fare increase. Board Member Pirzynski emphasized the need to establish credibility with the public. He noted that the policies adopted by the Board should be implemented to create financial stability.
Board Member McLemore complimented staff for their diligent work. Board Member McLemore expressed opposition to the fare increase and explained that it will cause extreme hardship to people.
M/S/C (Williams/Gonzales) on a vote of 9 ayes to 2 noes to 0 abstentions to: 1. Approve the amendment of FY 2003 –2004 and FY 2004 – 2005 biennial operating and capital budgets; 2. Adopt a finding that a fare increase is necessary to meet operating expenses, including employee wages and fringe benefits and purchasing or leasing supplies, equipment, or materials; 3. Invoke a Statutory Exemption under CEQA, P. R. C. �21080(b)(8) and CEQA Guidelines Section 15273(a) (Rates, Tolls, Fares and Charges) for the purpose of modifying and increasing fares; and 4. Adopt Resolution No. 04.06.11 establishing new rates and fares for VTA bus, light rail, and paratransit services effective January 1, 2005 with an amendment to change the youth monthly pass amount from $52 to $49. Board Members Casas and McLemore opposed.
Chairperson Gage thanked the public for participating in the Board Meeting.