Wichita’s financially embattled transit system will be insolvent in early 2015, and the price to save the buses is going to come out of taxpayers’ pockets.
Yet the city’s latest looming financial crisis has slipped off the radar, officials say, as other money problems – general fund budget shortfalls, water shortages, billions in needed water and sewer system work – have risen to the forefront.
It’s time for the community to plot the long-term future – and funding – of the debt-plagued transit system, city officials say.
“This is a tremendously important discussion coming up,” said council member Janet Miller, who led the latest council drive to bail out the transit system in 2012.
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“This is a core service the city offers that should be provided to citizens. We absolutely have to find a way to fund it.”
City Manager Robert Layton said the long-term goal is a viable regional transit system, which first requires a financially and operationally stable transit system in Wichita.
And it won’t be simple to pay for transit, with state and federal grant possibilities dwindling, Layton said. It will ultimately be up to Wichita voters to approve some form of a tax increase.
“We’re going to have to have a solid transit system inside our boundaries. We have to get there first,” Layton said. “We’re taking a lot of steps right now – reviewing routes, considering some tweaks in west side service, taking a look at a lot of steps to make sure we’re shored up in our maintenance operations. It starts there.”
Transit director Steve Spade has launched an internal efficiency review, including quality of service, accuracy of schedules and vehicle maintenance.
“If you’ve got dirty buses that run behind schedule and break down all the time, it’s hard to ask people for the resources to do more,” Spade said. “And there’s a ton more we could be doing.”
2 million riders a year
City officials are finalizing work on a “white paper,” a position statement on what the transit system should be in the future. Once that statement is rolled out in about a month, Layton wants a community discussion:
What do Wichita residents want from a transit system?
And what are they willing to do to pay for it? Are they willing to devote more property tax to transit, a move that would mean significant cuts in other city services in the current “no new taxes” environment? Do they want to vote on a sales tax to stabilize and possibly expand transit, an idea endorsed in 2012 by the city’s transit advisory board?
And where does a strengthened Wichita system go regionally? Spade said there’s already demand for bus routes into Newton in Harvey County.
“What I’ve said all along is that this is about much more than just firming up our business operations,” the city manager said. “We need to have a more permanent financing plan.
“The most obvious is the property tax, and people need to understand what that means in the current climate. We’re required by policy to reduce something else. And then, there’s an tax initiative to the voters.”
The transit system has averaged about 2 million riders a year over the last couple of years, according to city figures.
“Two million riders,” Miller said. “I don’t know what other city services 2 million people use. That is a message that transit is of critical importance to our city.”
Funding public transit
The transit system is in debt to the city itself. According to city finance officials, the city has committed a little more than $1.8 million to the transit system through early 2015. Meanwhile, once-available state and federal grants are being swallowed up by budget cuts, although some grant money will finance any tweaks in west-side routes, Layton said.
Most municipal transit systems are not self-supporting through ridership rates because of high capital costs for buses, personnel and maintenance. Many require subsidies through “the three-legged stool of state, federal and local funding,” Spade said.
“And when two of those legs are gone, you’ve got a problem,” he said.
Part of the debt is due to questionable maintenance practices in past years that have produced more breakdowns, Spade said.
“We definitely have a problem with the condition of the fleet,” he said. “That results in more service calls and that goes back to cost.”
Take turbos in bus engines, for example: The city spent $5,000 for each of several engine turbos that failed in a bad summer and fall of 2012, Spade said. Big numbers, and a big blow to the transit budget.
“So, we’ve gone to changing the oil every 3,000 miles instead of every 6,000 and we’ve lost two turbos this year,” he said. “Big difference.”
As for the debt, Mark Manning, the city’s budget officer, said Thursday that $785,000 has been transferred from the city’s contingency reserve fund to transit to date, essentially a bailout of an over-budget city service. Another $1,036,484 has been budgeted in planned loans through early 2015 to keep the system afloat, he said.
Future city budgets loan an additional $430,000 in both 2013 and 2014, and a final $136,484 in 2015. However, to date in 2013 none of that has been loaned, Manning said.
The transit system’s financial problems first rose to the forefront in late 2011, when a rate increase decimated ridership. Last year, the City Council had to trim more than $500,000 in other city programs to keep the bus system on the street to serve those 2 million riders.
“Just think,” Miller said. “If there are that many people using a bad bus system, think about how many people would use a better system.”