Frequently Asked Questions about the budget

Why are these service cuts necessary?

MTS is facing an on-going revenue shortfall of up to $13 million. This is due to a significant drop in sales tax revenues, less revenue from fares and less revenue from other sources, including advertising. MTS will use a combination of one-time money sources (meaning that they are only available for this fiscal year) to help balance the budget. Unfortunately, MTS will still face a deficit of about $7 million. The only way to close that gap is to reduce expenses.

How are these service changes decided?

The MTS Planning Department makes service change proposals based on ridership and cost. MTS never wants to make service cuts, but when it does, the changes are designed to affect the fewest people. Many different alternatives are considered and presented first to internal committees and then the Budget Development Committee, which is made of members of the MTS Board of Directors. The recommendations of this committee are forwarded to the full MTS Board of Directors, which gives staff direction to advance service plans to the public. No major service adjustments (those affecting 25% or more of a route) are made without an opportunity for the public to make comments to the Board of Directors.

MTS will hold a Public Hearing on this proposal on Thursday, December 10, beginning at 9 a.m. at 1255 Imperial Ave., Suite 1000.

What other options did MTS consider before deciding to reduce Sunday services?

MTS considered deeper cuts to weekday and Saturday service. The rationale to reduce Sunday service included:
• Concentrating service cuts to Sunday allows MTS to retain almost all weekday and Saturday service, when most people are riding
• MTS can achieve a $7 million savings will maintaining Sunday in the corridors with the highest use
• Sunday has almost 50% less riders than the average weekday (145,000 vs. 274,000)
• Sunday has the highest percentage of discretionary trips
• Sunday service will maintain regional connectors to support network viability

What other ways has MTS tried to balance its budget?

To balance its budget, MTS over the last three years has reduced management staff by 20 percent, eliminated pay increases and benefits, renegotiated union contracts, consolidated contracts to run bus operations more efficiently, increased advertising and other non-fare revenues, raised fares and decreased service. All of the decisions have been painful, particularly for the customers of MTS. Unfortunately, the economic downturn has not shown any improvement and MTS is once again faced with a large deficit.

If budget cuts are looming, why are you buying new buses?

MTS has two budgets, a capital budget and an operating budget. Funds for the capital budget come from several sources including Transnet II, state bonds, and the American Recovery and Reinvestment Act (ARRA) stimulus money. These dollars are dedicated to specific improvement projects and in nearly all cases cannot be used for operations. The money goes to buy new vehicles and rebuild infrastructure so MTS can maintain the system. New buses cost less to operate and maintain, which gives us more money to run service.

What about the American Recovery and Reinvestment Act (ARRA)? Isn’t that supposed to help?

To help fill the budget gap for Fiscal Year 2010, MTS can use 10 percent, or about $5.9 million for operations. This is a one-time allocation, however, and that money will not be available for the FY11.

Will MTS raise fares?

There is no consideration at this time to raise fares for monthly passes or cash fares. The Budget Development Committee determined that MTS riders have done their share by absorbing three fare increases over the last two years to help make up for the loss of sales tax revenues.

How much of the MTS operating budget comes from my fare?

Fare revenue currently makes up for about 43 percent of the cost to operate the MTS system. About 50 percent of the operating budget is paid by various sales taxes. The remainder of the operating costs are paid from other miscellaneous sources, including advertising revenues (on buses, trolleys and bus shelters) and revenues derived from real estate assets.
When sales tax revenue goes up, and the economy gets better, will you restore service?
The goal of MTS is to provide the best-possible to service to as many people as possible. It will always maximize service to the extent its operating revenues make possible.

How can I give input on these suggestions?

Riders can send an email to mts.planning@sdmts.com or call the planning hotline at 619.557.4912. Comments made through email and phone will be compiled and sent to the MTS Board of Directors. Riders are also welcome to come to the public hearing and speak to the Board directly on Dec. 10 at 9 a.m. at 1255 Imperial Avenue San Diego, CA.