City concerned about Everett Transit’s financial future
EVERETT - Everett Transit’s projected plan to dip into its cash reserves is raising concern among council members.
On paper, the agency will eat up $5.9 million of its reserves by 2018. The agency is using conservative revenue figures to gauge the future, agency finance manager Mary Lamb said during a City Council presentation in August.
The projected picture could change significantly after the state and federal governments pass transportation budgets that usually include transit service grants. Gov. Jay Inslee is pressing lawmakers to pass a transportation budget later this year after they failed to pass one in July.
Everett Transit has about $7.6 million on-hand for operations. Under August’s projections, the agency’s five-year plan leaves it with $3 million by 2018.
The agency’s five-year plan is reported to the state, which uses each transit agency’s report to gauge transportation grant needs. The City Council approved the agency’s five-year plan last week.
Mayor Ray Stephanson warned more service cuts may be coming in 12 to 18 months if Everett Transit can’t balance its budget better.
The city bus system relies on its own revenue stream and receives no city funding. The mayor is its chief operating officer.
Councilman Scott Murphy and others did not like the budget forecast.
“I don’t think I’m too interested in spending $5.9 million more than we take in over five years and put the transit system in jeopardy potentially.”
The mayor and the city’s chief financial officer Debra Bryant said they wouldn’t let the agency run aground.
Increasing wages and a lack of state grants this year also impacted the bottom line, Stephanson said.
Councilman Ron Gipson said the city could cut its payments to Community Transit’s Swift rapid transit line that runs from Everett to Shoreline. Everett Transit pays Community Transit 1/12th of its sales tax revenue for Swift operations and maintenance. The contribution equals more than $1.2 million a year.
Everett Transit runs on a $21 million operating budget and collected $15 million in sales tax revenue last year.
“If we can’t afford something, we’ll have to cut it,” Gipson said, adding, “We have to take a look at these monies going out.”
About 50,000 riders use Swift within Everett city limits and 100,000 riders depart from Everett on Swift, Community Transit manager Roland Behee said.
Dropping the Swift contract was first brought up as a cost-saving topic last year when Everett Transit’s union argued dropping the contract is favorable to making in-city service cuts.
Community Transit responded by saying the payment cut would likely mean Swift wouldn’t serve Everett.
The Everett Transit’s core funding source is sales tax revenue, which plummeted during the Great Recession and remains stagnant.
Until last year, the bus system avoided service cuts by eating into its cash reserves while expenses continued to increase. Everett Transit capitulated last year and implemented a 15 percent service cut that equaled about $1.5 million in expenses.
The agency couldn’t continue eating into its reserves, transit director Tom Hingson said when announcing service cuts last year.
According to the latest forecast, by 2018 Everett Transit hopes to restore almost half of the bus service hours it cut this year.
The agency looks at its budget before increasing service, transit services manager George Baxter said. This year, Everett Transit implemented minor schedule adjustments Aug. 26 and ran a special summertime bus to the waterfront.
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