HART Board of Directors Meeting June 5, 2017 Budget Overview HART Board of Directors Meeting June 5, 2017

Budgetary Pressures for FY2018 Continued increases in personnel fringes and liability costs Balanced FY2018 Budget Cash Flow and Fund Balance Bargaining Agreements Decrease in Ridership Increases in Cost of Doing Business Decrease in Fund Balance since 2014 of $10,400,000 As the decline in ridership nationwide continues, our impact has been a decrease of 11% since 2014 3 year total impact of $4,971,766 for wages and benefits (FY16-FY18)

Tentative FY2018 Operating Revenue Revenue Highlights Ridership decrease of 1,200 results in less Fare/Pass revenue 8.29% increase in preliminary property valuation of $3,062,434 Increase in ad valorem dropped to Fund Balance 5307 decrease due to shifts in formula calculation and more directed to Capital projects

Tentative FY2018 Operating Expenses Expenditure Highlights Salaries include $1.9 million Collective Bargaining increase and a $160,000 “pool” for NB Fringes reflect additional $4,000,000 for Healthcare claims Contract service increase for Taxi Voucher program Fuel and oil decrease due to further shifting of Fleet to CNG Marketing and Printing being adjusted to accommodate impact of JonesWorley contract Other administrative expenses reduction result of “scrubbing” of overhead

Tentative FY2018 Operating Budget Deficit Original deficit prior to ZBB work was $13,000,000 Reduced to $8,500,000 per May Committee Currently at $6,282,229 Does not include any adjustments based on service model changes (e.g COA or TDP) Does not include $3,000,000 ad valorem increase Does include elimination of non-critical vacant FTEs Does include adjustments to budget due to proposed outsourcing of several support functions Elimination of several accounting adjustments which historically have been budgeted (FRS, OPEB liabilities)

Upcoming Budget Related Events July 17 HART Board Meeting Setting of Not-to-Exceed Millage Rate August 7 HART Board Meeting Proposed FY2018 Budget presented September Public Hearings (TBD) Adoption of FY2018 Operating and Capital Budgets