DEPARTMENT: Transportation & Capital Improvements
DEPARTMENT HEAD: Mike Frisbie, P.E.
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT:
Interlocal Funding and Service Agreement: City of San Antonio and VIA
SUMMARY:
An ordinance authorizing the execution of an Interlocal Agreement (ILA) between the City of San Antonio and VIA Metropolitan Transit (VIA) authorizing funding to VIA to be phased-in over a four year period with no funds in FY 2017, $2.2 million in FY 2018, $6.5 million in FY 2019 and $10 million in FY 2020 and beyond from future funding sources (other than the City’s ATD funds) to be identified during the annual budget process for bus frequency improvements on ten routes and travel times and capacity improvements on seven major corridors.
BACKGROUND INFORMATION:
In July 2015, Councilman Rey Saldana first raised the issue that the lack of adequate funding levels resulted in VIA providing bus service that is not meeting demand with regard to frequency. Councilman Saldana proposed that the City’s Advanced Transportation District (ATD) funding be re-allocated to VIA to improve bus service and requested the policy issue of how the City utilizes its ATD funding be discussed. Staff first presented this policy issue to the Transportation, Technology and Utilities (TTU) Council Committee on November 4, 2015 followed by full City Council at the November 18, 2015 City Council “B” session.
In January 2016, the ATD Ad Hoc Committee was established and charged to evaluate VIA’s funding model and determine if the City should allocate all or a portion of the City’s ATD funds to enhance VIA services. The committee was co-chaired by District 4 Councilman Rey Saldana and District 6 Councilman Ray Lopez Committee member included Alex Briseno, Victor Boyer, Patti Radle, James Lifshutz, Darryl Byrd and Sid Martinez. The Committee held six meetings between February and June 2016 that included an overview of ATD, City’s ATD Program, VIA’s ATD Program, VIA’s current and preferred level of service, and potential funding options.
At the final meeting held on June 29, 2016, the Committee recommended that the City transfer $10 million annually in ATD funds to VIA over a four year period with no funds in FY 2017, $2.2 million in FY 2018, $6.5 million in FY 2019, and $10 million in FY 2020 and beyond. The Committee’s recommendation also included that the City’s ATD Fund maintain at least $5 million annually toward sidewalk funding, that the City’s annual budget strive to maintain funding levels consistent with the FY 2016 levels at $15 million for sidewalks and that the proposed 2017 Bond Program have a substantial sidewalk program.
On August 10, 2016, the Transportation, Technology and Utilities Committee (TTU) was briefed on the ATD Ad Hoc Committee’s recommendation and the impact to the City’s ATD Program. The TTU Committee’s recommendation was to have staff explore funding options, beyond the City’s ATD, in order to provide $10 million in funding annually to VIA, phased-in over a four year period with no funds in FY 2017, $2.2 million in FY 2018, $6.5 million in FY 2019 and $10 million in FY 2020 and beyond.
VIA’s total revenue for FY 2016 is estimated at $230.67 million. VIA is primarily funded through a one-half cent sales tax (0.500%) approved by voters in 1977 via the Metropolitan Transit Authority (MTA) tax and through a one-half of one-quarter cent sales tax (0.250%) approved by voters in 2004 through the ATD. For FY 2016, the MTA will generate $143.0 million and the ATD will generate $32 million in revenue for VIA. The remaining $56 million is collected through fairs and grants.
Sales tax revenue VIA receives is less than other major cities. VIA needs an additional ½ cent to be comparable to other transit authorities.
|
City |
Rate |
Effective |
|
Austin MTA Sales and Use Tax |
1% |
July 1985 |
|
Dallas MTA Sales and Use Tax |
1% |
January 1984 |
|
Houston MTA Sales and Use Tax |
1% |
October 1978 |
|
San Antonio ATD Sales and Use Tax |
1/8% |
April 2005 |
|
San Antonio MTA Sales and Use Tax |
1/2% |
January 1978 |
The current sales tax rate for the City of San Antonio is 8.25%, the maximum allowed by State law. An increase above the current rate, to allow one full cent to VIA, would require Texas legislative action. The 0.125% for Pre-K 4 SA sales tax can be considered for renewal on March 31, 2021 and the 0.125% for Edwards Aquifer/Park Protection sales tax can be re-evaluated once $100 million is generated for Edwards Aquifer and $80 million is generated for Parks Protection which is estimated to be by the spring of 2021.
|
City of San Antonio |
1% |
|
Edwards Aquifer/Park Protection |
0.125% |
|
Pre-K 4 SA |
0.125% |
|
ATD |
0.250% |
|
VIA MTA |
0.500% |
|
State of Texas |
6.250% |
|
Total Sales Tax |
8.250% |
ISSUE:
This item considers an Ordinance authorizing the execution of an Interlocal Funding and Service Agreement with VIA Metropolitan Transit authorizing City of San Antonio funding to VIA phased-in over a four year period with no funds in FY 2017, $2.2 million in FY 2018, $6.5 million in FY 2019 and $10 million in FY 2020 and beyond from funding sources other than the City's Advanced Transportation District funds to be identified during the annual budget process for bus frequency improvements on ten routes and travel times and capacity improvements on seven major corridors.
VIA needs an additional ½ cent in sales tax revenues to be comparable to other transit authorities in Texas. An increase in revenue by ½ cent of sales tax for VIA would equate to an approximate increase of $140 million annually.
During the September 28, 2016 B Session, TCI briefed the full City Council on the recommendation by the TTU Council Committee to have staff explore funding options, beyond the City’s ATD, in order to provide $10 million in funding annually to VIA, phased-in over a four year period with no funds in FY 2017, $2.2 million in FY 2018, $6.5 million in FY 2019 and $10 million in FY 2020 and beyond. The $10 million in additional revenue results in a 4% increase to VIA’s total expenditure budget.
With the additional $10 million in revenue, VIA intends to fund annual operating costs to implement frequency improvements on ten routes and travel time and capacity improvements on seven major corridors, as listed below. VIA will provide the capital funds to purchase an additional 24 buses in FY 2017 that will be needed for these service improvements.
|
Frequency Improvements on 10 routes |
|
1. #26 Martin Luther King |
From 30 minutes to 20 minutes base |
|
2. #502 Thousand Oaks |
From 60 minutes to 30 minutes base |
|
3. #602 North Star/Med Center |
From 60 minutes to 30 minutes base |
|
4. #607 Med Center/Ingram |
From 60 minutes to 30 minutes peak |
|
5. #611 Valley Hi/Kel-Lac |
From 60 minutes to 30 minutes peak |
|
6. #613 Heritage NW/Kel-Lac |
From 60 minutes to 30 minutes base |
|
7. #615 Kel-Lac/Heritage Park |
From 60 minutes to 30 minutes base |
|
8. #616 Sky Harbour/Kel-Lac |
From 60 minutes to 30 minutes base |
|
9. #617 Kel-Lac/Rainbow Hills |
From 60 minutes to 30 minutes base |
|
10. #618 Ingram/Westlakes |
From 60 minutes to 30 minutes peak |
|
Travel times and capacity improvements on seven major corridors 12 minute service from 6:00 am to 6:00 pm, fewer stops and use of transit signal priority where available. These are high-use/high ridership corridors that are not already programmed for Primo-type services. |
|
1. San Pedro 2. W. Commerce |
|
3. Broadway 4. Pleasanton |
|
5. E. Houston Street |
|
6. New Braunfels Avenue |
|
7. Culebra Road |
ALTERNATIVES:
City Council could choose not to approve this Interlocal Agreement; however, doing so would require VIA to find an alternative funding source for potential improvements to its service routes.
FISCAL IMPACT:
This Ordinance authorizes an Interlocal Agreement (ILA) between the City of San Antonio and VIA Metropolitan Transit (VIA). Funding for the first year is available through a redirection of the Debt Service payment for the City’s Traffic Signal System Modernization (TSSM) program. The last debt payment on the TSSM in the amount of $3 million is in FY 2017. In FY 2018, $2.2 million of this debt payment will be reallocated to the Street Maintenance Program. This reallocation creates capacity within the General Fund to pay VIA the $2.2 million. The remaining $800,000 will be reserved to pay VIA in FY 2019.
In FY 2019, $3.8 million of the $6.5 million is available with the capacity in the General Fund created by redirecting the debt payment to the Street Program and the $800,000 that will be reserved in FY 2018. The City will need to identify $2.7 million in FY 2019 and $7.0 Million in FY 2020. The following table summarizes this financial impact.
|
|
FY 2017 |
FY 2018 |
FY 2019 |
FY 2020 |
|
Payment ($ in millions) |
$0 |
$2.2 |
$6.5 |
$10.0 |
|
Available funding from satisfied TSSM Debt Service Payment |
$0 |
$3.0 |
$3.8 |
$3.0 |
|
General Fund Resources needed |
$0 |
$0 |
$2.7 |
$7.0 |
There are several ways the City can close the funding gaps in FY 2019 and FY 2020. This includes identifying service delivery efficiencies or overhead efficiencies within the General Fund, reduce service delivery, identify increased or new revenues to this initiative, or a combination of all three. Other long-term funding strategies, such as local and state tax options, should be explored and coordinated with local and state partners. If City Council approves the ILA with VIA, beginning in FY 2020 the allocation to VIA will be $10 million annually and will not expire unless future action by City Council is taken.
RECOMMENDATION:
While City staff did not recommend City funding to VIA for service enhancements using ATD funds, City Council policy direction at the September 28, 2016 “B” Session was to bring an action item to City Council providing additional funding to VIA. This ordinance authorizes the execution of an Interlocal Agreement between the City of San Antonio and VIA Metropolitan Transit, authorizing funding to VIA to be phased-in over a four year period with no funds in FY 2017, $2.2 million in FY 2018, $6.5 million in FY 2019 and $10 million in FY 2020 and beyond, from future funding sources (other than the City’s ATD funds) to be identified during the annual budget process for bus frequency improvements on ten routes and travel times and capacity improvements on seven major corridors.
It is also recommended that local, state and federal funding strategies be explored and pursued as part of a joint effort with regional transportation partners for more financial resources for VIA services.