(March 8, 2013) Despite heavy subsidies from state and federal grants – and having a much more fiscally efficient operation than other jurisdictions in the state – Ocean City’s transportation system will still need a $1.85 million boost from the town’s general fund for fiscal year 2014, the City Council heard this week.
The system’s overall operating budget, not including capital purchases and improvements, is projected at $5,546,343, according to city Public Works Director Hal Adkins, who conducted the budget hearing this week as a requirement of the Maryland Transit Authority. The MTA largely funds and oversees the city’s public transit structure via federal mandate.
Adkins pointed out, however, that Ocean City is also projected to bring in $2,443,618 in fare revenue, meaning that ridership pays for 46 percent of the operation. This ratio, known as the farebox recovery ratio, is generally seen as a gauge of how effective a public transportation system is.
“One of the major indicators, when studying the performance of a transportation system, is farebox recovery ratio,” Adkins said. “It is considered to be a success if you have a farebox ratio that exceeds 25 percent.”
He noted that Ocean City is the state’s fourth-largest public transportation network, behind the City of Baltimore and Montgomery and Prince George’s counties. However, those systems have farebox recovery ratios of 36, 20, and 10 percent, respectively.
This high recovery ratio, combined with revenue from advertising and service contracts, means that the city’s bus system is able to pay for about $2.9 million of its operations. Roughly $825,000 of federal, state, and Americans with Disabilities Act fund grants close the gap to the $1,850,774 that the city itself provides. This is $77,223 less than last year’s contribution, Adkins said.
The city will also likely need to provide a further $344,900 for its share of capital improvements and purchases – 10 percent of the $3,449,000 worth of capital that Adkins expects the MTA to approve. State and federal sources will take on the other 90 percent of the cost.
Although the city’s capital request provides for 29 new buses for the city’s aging fleet, Adkins has been told that the MTA is likely to approve six. Capital allotments for minor facility renovations and maintenance are also included.
City Councilman and former City Manager Dennis Dare said resort government may be able to secure more outside funding if it could be classified as an urban, instead of rural, public transportation provider under state and federal budget guidelines.
“The definition is tied to your census population,” Adkins said. “If your census population is less than 50,000 people, you fall into the ‘rural’ box.”
Dare suggested that Mayor Rick Meehan bring the issue up in Annapolis, although changing the city’s status may require alterations all the way up to the federal level.
“We’re really in our own category,” Adkins said. “You’re not going to find another provider where the population swing goes from 7,000 in the winter to 300,000 in the summer.”