1. TRANSIT REVENUE AND FUNDING UPDATE Robert Dunlavey – Director Transit & Parking Joanne Parker – Transit Planner March 10, 2009

2. Agenda –Overview of Transit Revenue Sources –Overview of Transit Revenue Uses –Recent Developments in Transit Funding –FY08/09 and FY 09/10 Transit Budgets –FY09/10 Uncertainties –FY10/11 and Beyond Funding Strategies

3. FederalFederal –Federal Transit Administration Formula Funds StateState –Transportation Development Account IV –State Transit Assistance –Proposition 1B (capital only) RegionalRegional –Air District’s Transportation Fund for Clean Air LocalLocal –Sonoma County Transportation Authority’s Measure M –Fares Overview of Transit Revenue Sources

4. FederalFederal –Preventative Maintenance, capital replacement, operating (historically), competitive grants for capital expansion StateState –TDA IV – operating or capital –STA – operating or capital –Proposition 1B – capital only RegionalRegional –TFCA – competitive smaller grants, both capital and operating LocalLocal –Measure M – operating or capital –Fares – operating or capital Overview of Transit Revenue Uses

5. FederalFederal –Passage of American Recovery and Reinvestment Act (ARRA) –Reauthorization of Federal Transportation Legislation 2009/10 StateState –Dropping sales tax collection equates to lower TDA revenues –State Budget reduced FY08/09 STA payments and eliminates STA funds for 5 years –Proposition 1B Funds supported by State’s ability to sell bonds, currently frozen until further notice (September 2009?) RegionalRegional –TFCA funds backed by shrinking Vehicle License Fees LocalLocal –Dropping sales tax means lower Measure M revenues –Ridership higher, recent fare increases, fare revenue up Recent Developments in Transit Funding

6. FederalFederal –ARRA adds $3.6m for preventative maintenance for 18 months StateState –FY08/09 TDA reduced $437,851 (9% less) –FY08/09 STA reduced $514,639 (47% less) –FY08/09 Prop. 1B funds frozen $2.1m (Hybrid Bus Purchase) LocalLocal –FY08/09 Measure M reduced $44,068 (7% less) –FY08/09 fare revenue up $93,000 (up 9%) Developments in Transit Funding

7. TDA IV $ 4,743,436TDA IV $ 4,743,436 STA$ 1,100,000STA$ 1,100,000 Measure M$ 620,671Measure M$ 620,671 Other*$ 4,937,506Other*$ 4,937,506 TOTAL$11,401,613TOTAL$11,401,613 FY08/09 Transit Operating Budget Original RevenuesRevised Revenues TDA IV$ 4,305,585TDA IV$ 4,305,585 STA$ 585,361STA$ 585,361 Measure M$ 576,603Measure M$ 576,603 Other*$ 4,937,506Other*$ 4,937,506 Reserves$ 996,558 TOTAL $11,401,613TOTAL $11,401,613 *Other includes fares (15% of budget), federal formula funds, and misc. smaller grants. Beginning FY08/09 TDA-IV reserve $3.5 million; ending FY08/09 $2.5 million.

8. TDA IV $4,582,915TDA IV $4,582,915 STA$1,762,000STA$1,762,000 Measure M$ 620,671Measure M$ 620,671 Other*$3,834,414Other*$3,834,414 TOTAL$10,800,000TOTAL$10,800,000 FY09/10 Transit Operating Budget Original Revenue Estimate Revised Revenue Estimate TDA IV$ 4,310,541TDA IV$ 4,310,541 STA$ 0STA$ 0 Measure M$ 518,943Measure M$ 518,943 Other*$ 3,834,414Other*$ 3,834,414 Reserves$ 2,136,102 TOTAL$10,800,000TOTAL$10,800,000 *Other includes fares (15% of budget), federal formula funds, and misc. smaller grants. Beginning FY09/10 TDA-IV reserve $2.5 million; ending FY09/10 $363,898.

9. FY08/09 total loss of revenues is 9%FY08/09 total loss of revenues is 9% FY09/10 and forward STA revenue is zeroFY09/10 and forward STA revenue is zero –STA revenues were 16% of FY09/10 budget FY08/09 to FY09/10 budgeted expenses down 5.3%FY08/09 to FY09/10 budgeted expenses down 5.3% TDA-IV reserves of $3.5 million enables transit service levels to remain “as is” through FY09/10TDA-IV reserves of $3.5 million enables transit service levels to remain “as is” through FY09/10 FY08/09 – FY09/10 Budget Summary

10. Continuing decline in sales tax revenuesContinuing decline in sales tax revenues –Projected 7-10% decline for FY08/09 could grow Fuel price expense volatilityFuel price expense volatility –Last 7 years ave. 25% increase every year Department reorganization costs to transitDepartment reorganization costs to transit –Currently estimated at $300,000 Economic crisis impact to transit ridership?Economic crisis impact to transit ridership? FY09/10 Operating Budget Uncertainties

11. FY09/10 Transit Budget reduced 5.3% without reduction to serviceFY09/10 Transit Budget reduced 5.3% without reduction to service –Includes increases to fuel, overhead and retirement ARRA preventative maintenance funds will end after FY09/10ARRA preventative maintenance funds will end after FY09/10 Sales tax projected to not recover until 2014Sales tax projected to not recover until 2014 TDA-IV reserves sufficient to maintain service levels through FY09/10TDA-IV reserves sufficient to maintain service levels through FY09/10 Without increases in revenue, service cuts will be required for FY10/11Without increases in revenue, service cuts will be required for FY10/11 –Projected 20% revenue shortfall for FY10/11 FY10/11 Forward Funding Strategies

12. Structural revenue problem will result in 20% service cuts after FY09/10Structural revenue problem will result in 20% service cuts after FY09/10 Maintenance of current service levels critical to continued support of increasing ridershipMaintenance of current service levels critical to continued support of increasing ridership Transit service expansion (particularly increased frequency) required to meet all local and state greenhouse gas reduction goalsTransit service expansion (particularly increased frequency) required to meet all local and state greenhouse gas reduction goals Revenue/funding from all levels (federal, state, regional and local) necessary to maintain current transit service and/or reach greenhouse gas reduction goalsRevenue/funding from all levels (federal, state, regional and local) necessary to maintain current transit service and/or reach greenhouse gas reduction goals FY10/11 Forward Funding Strategies

13. FederalFederal –Advocate for operating expenses to be eligible use of federal funds –Advocate for increased share of federal transportation funding to flow towards transit service StateState –Encourage State to backfill the elimination of the STA revenues by creating a reliable source for operating funds –Advocate for transit to be an eligible carbon credit market fund recipient FY10/11 Forward Funding Strategies

14. RegionalRegional –Support any efforts the MTC takes towards regional funding solutions (gas tax, doubling of the ¼ cent sales tax for TDA-IV) LocalLocal –Encourage any possible flexing of current Measure M funds to support transit operations –Additional transit fare increases –fare increased in August 2007 & August 2008 –Utilize City parking district funds or redevelopment funds to support the maintenance or expansion of transit service levels FY10/11 Forward Funding Strategies