HomeMy WebLinkAboutIR 8424 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8424
T Date: August 8, 2002
To the Mayor and Members of the City Council
Page 1 of 1
+rays SUBJECT: Street Maintenance Funds from The T
On July 1,2002, the Executive Committee of the Fort Worth Transportation Authority(the T) voted
unanimously to approve a draft version of a FY2002-03 budget that eliminates street maintenance funds paid
to the City of Fort Worth. Next year, that amount would be $4,993,221. This is 42 percent of the total street
maintenance budget of$11,872,682 next year(the remaining funding comes from the City's General Fund).
That is approximately equivalent to 76 lane miles of asphalt overlay repairs to streets damaged by T buses in
the normal course of doing business.
In previous discussions with T staff,they indicated that only a partial reduction of this funding might be
requested because of slumping sales tax revenue, operational requirements of the Trinity Railway Express,
and setting aside $15 million toward the construction of a future light rail system in Fort Worth. In a May
2002 financial projection, T staff estimated that they might need to reduce the payment from 15 percent of
sales tax revenue received by the T (of its local-option '/z cent sales tax revenue) to approximately 9 percent,
but that figure would stay at that percentage into the future. As part of the joint federal application by the T
and the City for funding of the light rail project, the T made a similar projection. Consequently, the complete
mination of funding and consequent severance of the contractual relationship between the City and the T
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Le as a surprise to City staff and came without prior discussions or negotiations.
A review of the financial constraints at the T, while certainly related to a slumping economy, have less to do
with light rail development than an overly aggressive bus replacement plan and other capital enhancements
(including purchases of expensive new computer systems)that few other governmental entities can afford
during this economic slump. The T also commits in its proposed budget to reach new financial goals of an
operating reserve and an insurance reserve in FY2002-03. In the FTA application, these goals were
identified, but the projection in the application allowed for a long phase-in period.
It seems apparent that a more limited approach to capital spending and a phase-in period to reach fund
balance goals would allow the T to continue to fulfill its entire contractual partnership with the City, thus
ensuring that the full cost of providing bus service in Fort Worth is absorbed by the organization established
to provide this service.
The City of Fort Worth and other member cities received notification of these changes August 1. A one-
month comment period ends September 5 when the T Executive Committee is scheduled to adopt the budget.
If changes to the T's budget are needed, they will need to be made in August.
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ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS