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REGULAR MEETING September 25, 2017
<br /> to the new Four Winds casino location. When you look at our budget, almost ninety percent
<br /> (90%) of it we have absolutely no control over. When it comes to wages, benefits, fuel
<br /> expenses—those are all really fixed costs. We do have a bargaining agreement with our bus
<br /> operators and our mechanics that expires at the end of October. We actually head to the
<br /> bargaining table next week. That really takes up a lot of our budget. When you look at our
<br /> benefits: we joined the St. Joseph County Health Plan this year. We saved over$300,000 just by
<br /> moving our employees over to a plan that's essentially a full-funded plan on a self-insured
<br /> model. So, we're able to provide better health benefits to our employees, while being mindful of
<br /> taxpayer dollars. As we continue the conversion to compressed natural gas and moving off the
<br /> diesel fleet, you can see our fuel expenses have gone down. The difference between diesel and
<br /> CNG is about a dollar ($1) a gallon.
<br /> Mr. Cangany continued, When you look at our revenue, we are about eighty-five percent (85%)
<br /> tax-funded and the taxes come from different areas. Thirty-two percent (32%) comes from local
<br /> tax revenue, and that's the property taxes that we collect and the County option income tax that
<br /> we collect as well. All those amounts are determined by the Department of Local Government
<br /> Finance when they come in and visit. The State assistance is what is known as the Public Mass
<br /> Transit Fund. It's a fund that's a general line item in the State budget that the legislature
<br /> appropriates. Right now, it's about$46,000,000 that's spread throughout sixty-seven (67) of the
<br /> transit agencies in the State of Indiana. One (1)thing that is a little unfortunate: some of our
<br /> federal money—instead of using it to buy capital equipment, such as buses and bus shelters and
<br /> all those great things that are amenities to our passengers and make our service more reliable and
<br /> a much better service, we are actually having to convert that money over to maintain our system
<br /> by converting it and changing it and cashing it in for eighty cents ($0.80)to fifty cents ($0.50) on
<br /> the dollar to pay for the type of service that we fund. So, that's about seventeen percent (17%) of
<br /> our budget. We do capitalize our preventative maintenance. Passenger fare accounts for about
<br /> fourteen (14%). The target in our industry is between twenty(20%) and thirty percent (30%). So,
<br /> for a smaller system it's a little common to see it low, but fourteen percent(14%), I will be
<br /> candid, is rather low. Lease revenues for our South Street station lease space that is currently
<br /> occupied that will become vacant in the first quarter of 2018 and then the advertisement on our
<br /> buses, interest on money that is in money market accounts and things like that, all account for
<br /> about one percent(1%) of our total budget.
<br /> Mr. Cangany continued, As you can,with the increase in the Notre Dame contracts and the
<br /> future, how we look at reevaluating our fare structure, we do think that we will be able to get
<br /> $200,000 more out of the fare box, when we looked at our total collections there. Property taxes
<br /> are up for 2018. We are preparing for the property tax caps that will take place in 2019 and 2020.
<br /> We have been working with Umbaugh &Associates to determine what those projections will
<br /> look like. As you can see,there's a slight uptick, as I mentioned, in the PMTF—the federal
<br /> operating assistance. We are not using as much as we actually have to, to try to keep it for other
<br /> technological needs, but we are still using the federal operating assistance. Really, our challenge
<br /> is our continued effort to replace our bus fleet. As I mentioned a couple of weeks ago, we had
<br /> just taken a delivery of three (3) brand new buses for a total price tag of$1,500,000—$500,000 a
<br /> bus. However, we did not have the local match to pay for that, so we went to 1St Source Bank and
<br /> we borrowed$300,000 for the local match. As we continue to plan and budget for the years
<br /> forward, we then have a bus loan payment that has to be paid off, as well. It's not sustaining, but
<br /> it's how we are able to keep service on the street. As I mentioned the uncertainty of the federal
<br /> funding and the State funding, we continue to look for ways to reduce operating expenses—new
<br /> technology, compressed natural gas, electric vehicles, and then we are preparing for the property
<br /> tax caps.
<br /> Mr. Cangany continued, In 2018, we will probably continue to explore ways to expand our
<br /> contract opportunities with local universities and educational institutions.Notre Dame and Saint
<br /> Mary's, but then also IUSB and other institutions. Last week, I sent out another email to Dr.
<br /> Spells and Ms. Coney with the South Bend Community School Corporation as a way that I think
<br /> TRANSPO can really help provide some relief to the School Corporation with their
<br /> transportation challenges. I look forward to hearing back from them and sitting down at the table
<br /> and utilizing TRANSPO's existing services to help meet some of their needs. We're looking at
<br /> workforce development partnerships, whether it's with institutions like Ivy Tech—bringing those
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