VTA Connections

Budget Update

Dear Friends,

Last night the VTA Board of Directors adopted the FY10/FY11 Budget.  This budget calls for changes that will be painful, however, it achieves our goal of minimizing service impacts and advances VTA’s capital program at a critical time, allowing VTA to benefit from the current competitive bidding environment, as well as stimulating the economy through the continuation of key infrastructure projects. 

This year’s precipitous decline in sales tax revenues, combined with the elimination of State Transportation Assistance (STA) funding has presented VTA and other California transit agencies with an extraordinarily difficult challenge.   As a result of the prolonged recession, third quarter sales tax receipts have declined by an astonishing 18%. 

When the budget process started six months ago, VTA projected a budget deficit in excess of $70 million over the next two years.  Since that time, we have received federal stimulus funds that will be used for preventive maintenance, reducing the operating deficit.  VTA has implemented numerous cost cutting strategies and we are pursuing options for generating revenue, including expanded advertising on light rail vehicles.  The budget adopted last night includes authorization for a fare increase that will apply to both fixed route and paratransit service, starting in January 2010.  Eco Pass rates will also go up 20%, after no increase in over 5 years.  These steps have significantly reduced our projected operating deficit, however, there is more that we must do in the weeks ahead.

Approximately 70% of VTA’s operating budget is attributable to labor; consequently, labor savings must be part of the plan to balance our budget.  VTA recently reached agreement for labor concessions with two unions, TAEA and AFSCME, which are consistent with what was announced last month for non-represented executive management and their support staff; a two-year wage freeze, and up to 12 days unpaid furlough a year.  The Board of Directors also approved a 20% cut to their monthly stipend, as part of the biennial budget; a sign of their solidarity and support.  Although VTA has not reached agreement on how it will achieve labor savings with the remaining unions, SEIU and ATU, discussions are on-going, and we are hopeful that agreements will be reached quickly.  In the event that these discussions are not successful, VTA is preparing for the necessary service reductions and associated layoffs of staff.

VTA recognizes that the decisions we make today will impact our community for years to come, and we do not take this responsibility lightly. It is absolutely essential that we work together, with our partners, labor, and our customers, to get through these extremely difficult months.  Details about the adopted budget, including the fare increase, are available on line at www.vta.org.   As always, I welcome your input and appreciate your support as we move forward.

Michael T. Burns
General Manager

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About VTA
Santa Clara Valley Transportation Authority (VTA) is an independent special district responsible for bus, light rail and paratransit operations; congestion management; specific highway improvement projects; and countywide transportation planning. As such, VTA is both an accessible transit provider and multi-modal transportation planning organization involved with transit, highways and roadways, bikeways and pedestrian facilities.