CATS unveils budget plan

The Capital Area Transit System unveiled a draft version of a $17.7 million operating budget for 2013 on Tuesday that could cut wait times for buses from 75 minutes to 20 minutes during peak hours.

The 2013 budget, which includes funding for 40 new positions, is about 23 percent bigger than this year’s budget thanks to the 10.6-mill property tax approved by Baton Rouge and Baker voters in April.

However, the budget is still significantly smaller than it will be in 2014 and beyond because CATS plans to use $6 million for some one-time purposes. The property tax is expected to generate $15.3 million, but only $9.2 million of that tax money will be applied to CATS’ operating budget.

This year CATS had to take out a $3 million loan to stay open until the end of the year because of a budget shortfall caused by losses of state and federal dollars. CATS will use tax revenue to pay off that loan next year. Another $3 million of the tax revenue will be held as a reserve fund for emergencies.

Chief Financial Officer Gary Owens said CATS has never been able to afford to maintain a reserve fund in the past, although that is a regular budgeting principle of almost all public agencies.

Jared Loftus, board president, said the cushion is necessary for unexpected increases in costs “like oil prices and maintenance costs.”

CATS won’t have to set aside as large of an amount to contribute to the reserve fund after the first year, Loftus said. He said CATS can create the reserve pot next year without affecting its ability to deliver its service promises for 2014, which was its self-imposed deadline.

After 2013, Loftus said, CATS expects to have a more significant budget that will include the additional $6 million in tax revenue, as well as increases from fares, advertising and state revenue.

CATS could receive as much as $850,000 extra in state revenue beginning in 2014 because the state’s funding formula favors parishes that have dedicated tax revenue, Owens said. He said the state won’t take CATS’ new tax into account until a year after it’s been in place.

Owens told the CATS board the goal of crafting the budget was to reduce wait times at peak hours of service from about 75 minutes to 20 minutes. He said CATS can accomplish this by adding 40,000 additional hours of bus service next year, by putting more buses on more routes.

Brian Marshall, CATS chief executive officer, said next year’s budget will fund about 40 new positions, of which only three will be administrative. He said more administrative positions could be added including a human resources director and chief operations officer.

Commissioner Montrell McCaleb made a motion to consider a moratorium on administrative hires until the board can assure that it delivers on service goals. But there was an objection to the motion by Commissioner Dalton Honoré, so the item won’t be considered until next month.

Loftus noted the city-parish did not provide a $3 million contribution as it has in recent years, and he said CATS will make no argument to the Metro Council to restore the funds.

“We need to stop the narrative of CATS having its hand out for more money,” Loftus said.

CATS came under fire in recent weeks because Owens said the agency would likely be able to deliver only two out of eight express routes that were promised ahead of the tax election. He cited the loss of anticipated revenue sources such as the city-parish allocation.

Owens made the statements in a court hearing for a lawsuit alleging the tax is unconstitutional.

CATS officials have since said they will be able to provide seven out of eight routes.

The final budget will be voted on by the CATS board in December.