(April 11, 2014) Balancing the budget on an anticipated windfall increase in bus revenues has come back to bite City Hall, as council was told during last week’s budget sessions that the town would be down $979,000 due to false assumptions in the transportation fund.
“The current budget is structured around enhanced revenues of around $1.5 million in transportation, which is about $979,000 over what it should be,” said city Public Works Director Hal Adkins.
In response, the city will be cutting funds from street paving and canal dredging, hoping to back-fill those accounts later with extra revenues realized throughout the upcoming fiscal cycle.
In addition, council discussed a number of options over the past week to raise further revenues, including additional paid parking on city-owned lots and a tiered fee structure for the Fourth of July holiday.
When originally presented to council, the city’s transportation budget called for a mere $395,082 subsidy from the general fund, a drastic reduction from the $1.7 million cost last year.
This was due to $1,471,893 in additional bus revenue expected to be gained by eliminating the $1-per-ride option and having the $3 ride-all-day ticket be the only fare choice.
The model used to determine this number, supplied by the transportation department to the City Manager’s office, assumed that all $1 fares would now become $3 fares. City Budget Manager Jennie Knapp also noted that she estimated a 25 percent decrease in ridership due to the change.
However, when Adkins himself reviewed the numbers, he noted a serious logical error.
Apparently, it was not taken into account that nearly all $1 boardings were destination-driven, meaning a person was going from point “A” to point “B,” and then that same person was coming back from point “B” to point “A.”
If that person was forced to buy a $3 all-day pass instead of paying $1 on their first trip, they would then not be paying an additional $3 on their return trip. Thus, the number of $1 fares should be halved before being multiplied by three.
“Unfortunately, the error resulted in, essentially, calculating against double the number of riders,” Adkins said.
To close the gap, Knapp suggested the city reroute funds from street paving and canal dredging into the transportation fund. Since those projects will not begin until the latter half of the fiscal year, the city could add funding to them piecemeal as it hopefully realizes more revenues than anticipated in the draft budget.
“The first recommendation would be to take $570,000 out and then add back to street paving the way we did this current year, funding it as we get closer to the end of the fiscal year,” Knapp said.
This would reduce the street paving budget for 2014-2015 to around $1.3 million, short of the $2 million annual goal the city needs to keep pace with its aging roadways.
“We started with $1.4 million in 2013-2014, and were able to add $500,000 back in,” Knapp said. “We’re hoping we’ll be able to do that again this year.”
Additionally, although the city’s capital improvement plan calls for $500,000 in canal dredging, half of that work will not actually occur until the 2015-2016 fiscal cycle given the current rate of progress.
“Terry [City Engineer Terry McGean] does not feel the need to fund the whole $500,000, but more like $250,000,” Knapp said.
This would still leave the city with roughly $150,000 to close in on, several ideas for which council touched on this week and will continue to discuss before the budget is passed.
One likely move would be to charge for after-hours parking at the City Hall and Public Safety Building parking lots – a move attempted last year, but shot down when the city’s ordinance for new parking meters was petitioned to referendum.
However, nearly all of the objection last year was due to the desire to add meters to streets in front of homes and businesses, and less so to charging for city-owned lots.
“I think the ‘gimmes’ would be City Hall and the Public Safety Building,” said Mayor Rick Meehan. “I don’t want this to be misconstrued. We’ve only talked about city-owned parking lots, not streets.”
Adkins also noted that the overflow parking lot for the convention center, located to the southeast of the facility along Coastal Highway, could be metered.
“My observation was that the vast majority of that use was for the beach and the beach bar across the street,” Adkins said – but cautioning that allowances would have to be made for certain convention center functions.
The town could also realize additional revenue from tweaking its Fourth of July parking fees at the inlet lot. Last year, the city charged a $50 all-day flat fee for parking upon entry, and then closed the lot, assuming visitors would stay parked until after the evening fireworks.
Instead, a surprising number of cars left prematurely, leaving a number of open spaces that could’ve been re-sold in the evening.
“We have been discussing a multi-tier fee structure, possibly $50 for early entry and $25 after 3 p.m., or something to that effect,” Adkins suggested.
“It opens the door to allow more people to enjoy the fireworks and it gives us additional revenue,” Meehan agreed.