The Capital Area Transit System board of directors approved a $24 million budget for 2014 on Tuesday afternoon, up 28 percent over this year’s budget of $18.9 million.
Next year will be the first year in which the embattled bus system will be able to enjoy the full extent of its dedicated property tax. The 10.6-mill property tax was passed in April 2012, and CATS started collecting it in January.
But the agency had to reserve $6 million of the funds for nonrecurring expenses. Half went to pay off a $3 million loan taken out in 2012 to prevent the agency from being shuttered; and another $3 million was used to create a reserve fund.
The influx of operational funds comes just in time for CATS to roll out its service expansion, as promised in the tax election. The agency this year plans to add 10 more bus routes, increasing frequency while decreasing wait times. It is also building 100 bus bench shelters.
CATS has promised to have the additional service in place by the end of March 2014. It will also be working this year with MV Transportation, a worldwide transit management firm, for guidance at a cost of $1.4 million.
CATS has budgeted for significant revenue increases generated from fares and service contracts. Agency officials say they have had unprecedented success with its game day service routes from downtown to LSU and circulating Southern University. The game day services generated $95,000 in total.
The budget also assumes CATS will generate $2.1 million in fares for the year, an increase of 26 percent over last year. CEO Bob Mirabito called it a conservative estimate based on the 10 new routes being added. Each route is expected to generate 135 new passengers per day, he said.
Funds dedicated to operations in 2014 will increase $2.6 million, or 35 percent, to $9.9 million.
Administrative costs are nearly doubling, to $3.3 million, because of the addition of at least seven new administrators expected to be hired, including Chief Operations Officer Bill DeVille, who is contracted through MV Transportation.
The maintenance budget will increase by 35 percent to $4.4 million.
One hiccup in the budgeting process came up when Board President Marston Fowler questioned whether CATS has paid back a 2011 loan to the Mortgage Finance Authority. In 2011, the group came to CATS’ rescue by helping fill a budget shortfall with a $500,000 loan.
But neither CEO Bob Mirabito or Chief Financial Officer Conner Burns had ever heard of the loan.
“This is the first I’ve heard of it,” Mirabito said.
Mirabito was hired about six months ago, and Burns was hired in recent weeks.