CATS asks council for help

Agency hopes to fill $2.1 million shortfall, or services will be cut 46%

By REBEKAH ALLEN, Advocate staff writer, November 30, 2011

The frequently cash-strapped bus system for East Baton Rouge Parish does not anticipate finding a revenue source to fill its projected $2.1 million budget gap next year, CATS officials told several Metro Council members on Tuesday evening.

“We’ve looked under every rock and stone,” said Capital Area Transit System board member Jared Loftus at the latest budget hearings for the council before members approve the final $746 million city-parish budget for 2012 on Dec. 14.

Unless the council decides to move money in Mayor-President Kip Holden’s proposed city-parish budget, CATS officials said they will be forced to cut service by 46 percent to balance the agency’s budget or shut down by the beginning of July.

A cut of 46 percent of its service means that CATS will eliminate weekend and holiday service and cut several routes, said CEO Brian Marshall.

CATS had hoped to receive private support to help it through 2012 from businesses and area organizations, but Marshall told the council its discussions with the groups have not been fruitful.

This year, CATS faced a $1.4 million budget deficit that would have closed the bus system in October, but it was saved by a $500,000 loan from the East Baton Rouge Parish Mortgage Finance Authority and some federal grants that were identified at the last minute.

Gary Owens, CATS chief financial officer, said before Tuesday’s meeting that CATS had approached the Mortgage Finance Authority for another loan, but the authority indicated it “was not inclined to do any more than they already have.”

Loftus, a Baton Rouge entrepreneur, told the council he joined the board more than two years ago because he thought CATS was being mismanaged and he could help get it on the right track.

He said he’s since learned that the root of CATS’ inadequacy is that it’s significantly underfunded, especially compared to its peer institutions.

Loftus cited data from a 2009 National Transit Database that shows that CATS spends $32 per capita which is significantly less than per capita spending in other peer cities.

For example, New Orleans bus system spends $215 per capita; Houston spends $138; Austin, Texas spends $162; Memphis, Tenn. spends $59; and Little Rock, Ark. spends $84 per capita.

Loftus also noted that CATS is more reliant on bus fares than bus systems in peer cities.

“We are doing more with less,” he said. “For what we have, we’re doing a good job.”

Owens explained to the council that the budget deficit stems from the loss of the LSU contract in 2009 which CATS relied on for fixed income.

After Hurricane Katrina in 2005, CATS received a $1.1 million annual federal award to accommodate an increase in disabled riders who require an expensive door-to-door service, Owens said. But the federal government discontinued the funding this year despite East Baton Rouge Parish’s high number of disabled riders, he said.

“CATS’ problem is a loss of revenue, and not increasing costs,” Owens said.

CATS officials also have previously cited rising fuel costs and maintenances costs as part of the reason for the system’s financial woes.

CATS officials said they hoped this would be the last time they had to come before the Metro Council for help because they are pursuing a dedicated tax — a combination of proposed sales and property taxes — in fall 2012 that would expand, improve and fully fund the bus system. The bus system currently operates on federal, state and local funding that fluctuates.

CATS asked for $5.4 million in the 2012 city-parish budget but received $2.9 million, the same amount the agency has received from the city-parish in recent years. CATS budget for 2012 is projected to be $12.6 million.

Loftus said helping CATS through 2012 would better position them to ask voters for a dedicated tax and finally attain financial independence.

“2012 will be our bridge to the future,” he said. “But we have to give the public confidence so they’ll support this dedicated revenue piece.”

Several council members said they were frustrated to see CATS officials back before them in the same financial predicament they faced this year.

“I still believe that even though you operate mean and lean, there are things you can do now to improve the way you operate,” said Councilwoman Ronnie Edwards, adding that many residents have a poor perception of the bus system.

Councilwoman Donna Collins-Lewis, who is also a CATS board member, said CATS officials have been searching for answers to 2012’s expected budget shortfall all year.

“We have diligently searched to find the money,” she said. “It’s not like this organization has been sitting on its hands for the past year.”

Marshall, who has only been in charge of CATS for 27 months, said CATS has been steadily improving itself despite the lack of funds.

He noted the creation of Trolley Rouge, a bus route aimed at tourists who frequent landmarks and retail outlets, and the Touchdown Express, a route that brings LSU fans to campus from downtown on game days.

Marshall also said CATS’ on-time performance for bus routes is at 60 percent now, which is up from 20 percent in 2009.

“In three years to make that change is extraordinary,” he said. “I wish we could do more, we just don’t have the dollars.”

If no money is found to plug the deficit, CATS is expected to return to the Metro Council in January to ask members to approve service cuts that would allow CATS to balance its budget.

Several council members on Tuesday night said they would vote against 46 percent service cuts, which means CATS could be shuttered in July.