Tight budget strains south metro buses

A budget squeeze could force the Minnesota Valley Transit Authority to park some of its buses by the end of 2010.

MVTA board members on Wednesday night reluctantly approved a $17.5 million 2010 operating budget that includes spending $3.6 million in reserve funds, but not before airing frustration with the Metropolitan Council for pushing suburban transit providers to spend down reserves to help fix a deficit in regional transit funding.

The budget approved by MVTA's board would leave the south-suburban bus service with $2.7 million in reserves by the end of 2010. That's less than two months worth of operating expenses, and it may not be enough to keep cash flowing and to maintain current levels of bus service, officials say.

"We've never had an experience that says we can operate at that level [of budget reserves]," Will Branning, a Dakota County Commissioner and MVTA board member, said. "It seems to me like that is an impossible task."

The board did not discuss the extent of specific cuts nor did it note which routes could be affected, but it directed MVTA staff members to monitor the budget closely and to report back throughout the year.

"We'll cross that bridge when we come to it," Burnsville Mayor Elizabeth Kautz, the MVTA board chairwoman, said.

It's a scenario that MVTA and other suburban transit providers predicted months ago when the Metropolitan Council, with the blessing of the Legislature, came up with a plan to fix a $62.4 million regional transit deficit over the next two years.

The metro planning agency had doled out that money -- generated by the motor vehicle sales tax -- to the suburban bus services. But the Met Council decided to keep a larger share of it, much of it to cover the losses of Metro Transit, which serves more urban areas.

Arlene McCarthy, Met Council's director of Metropolitan Transit Services, has said the move was necessary to even out budgets and reserve balances across the region. While some suburban agencies, such as Maple Grove Transit, held reserves equal to 200 percent of their operating budget, Metro Transit had reserves of just 2 to 3 percent of its budget.

In the case of MVTA, which serves Apple Valley, Burnsville, Eagan, Rosemount and Savage, the reserve fund will be down the equivalent of 1.8 months worth of expenses by 2011. That's contrary to MVTA policy of having a reserve that could cover four months of expenses.

The MVTA board made sure to note that on Wednesday, adding a line to the budget specifying that they'll need about $3 million -- from somewhere -- to follow its own policies and keep four months in reserve funds.

"We have worked too hard to make sure that we have quality service for our citizens to get penalized when we provide a cost effective and efficient service," Kautz said.