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RTA seeks modest budget bump as new buses hit streets [1]
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Date: 2024-10-31
With 26 new buses on the road and a plan to increase service frequency, the New Orleans Regional Transit Authority asked the New Orleans City Council Wednesday (Oct. 30) to allocate $140 million for the agency’s 2025 budget – a $3 million bump from the last approved budget.
Following a summer where aging buses frequently broke down and burdened transit riders with lengthy wait times in record high temperatures in 2023, the RTA reduced its service in January 2024 in hopes of improving reliability while it waited for two shipments of new vehicles.
Buses, about half of which are hybrid electric-diesel, began arriving in June and agency executives say the RTA is moving toward boosting frequency and the number of vehicles on the road to match the pre-summer 2023 schedule.
“We had some challenges early on with our fleet so we were not able to run full peak service,” the agency’s Chief Financial Officer Gizelle Johnson-Banks said at Wednesday’s budget hearing. “Now that our fleet’s coming in, we’re starting to inch towards that peak service delivery.”
Johnson-Banks said expenses will increase as the agency hires more operators to manage the increased number of buses on the road and bumps wages to meet the cost of living.
The RTA is expecting an additional three buses to arrive by January 2025.
Most of the RTA’s operating budget is drawn from sales taxes, though the agency is also sustained by funds from passenger fares and federal grants, among other sources. But this year, the RTA is also asking the council for $7 million to fund the Canal Street-Algiers Point ferry, CEO Lona Hankins said in response to questions from Councilmember Freddie King III about avoiding a financial crisis like the $3 million shortfall it experienced in December 2023.
That deficit caused the agency to announce it would significantly reduce ferry service hours until Mayor LaToya Cantrell stepped in and said the city would fill the gap from money in its general fund.
For more than two decades, funding for the ferry came from a percentage of state tolls taken on the Crescent City Connection, which connects the West Bank of New Orleans to downtown. Part of those tolls also went toward paying off bonds taken out to pay for a second portion of the bridge. The tolls were removed in 2013 once those bonds were paid off and the ferry lost its funding, operating on a deficit until the RTA switched from being privately run to becoming a fully public agency.
At a breakfast hosted by transit advocacy nonprofit Ride New Orleans on Tuesday (Oct. 29), Hankins told attendees that in recent years the RTA has used COVID-19 relief money to fund the Canal Street-Algiers Point ferry.
“We are out of those funds,” Hankins said. “We need a sustainable funding source for the ferries.”
The RTA’s $7 million ask to keep ferries afloat was met with frustration from some council members on Wednesday.
“The fact that I’ve been here three years and there hasn’t been an identified revenue stream means the ball is being dropped,” Councilmember JP Morrell said. “The reality is you can’t just count on the council person in District C every year to beg, borrow and steal and find $7 million for the ferry because the reality is every council in that district has different things that are priorities to them.”
Freddie King III, council member for District C, called the ferry an important service that he and his family use at least three times per week. He said he would like to get creative in looking for ways to “take the burden” of funding the ferry off of the city.
The RTA receives much of its operational funding from a one-cent city sales tax. Hankins suggested a tax on hotel stays and hospitality services in the city’s tourism district. Morrell said the agency would need industry buy-in in order to do that. He suggested that the RTA settle some of the lawsuits that it is entangled in to free up some cash.
“For a lot of these litigations when government is suing government, it’s like the only person winning is a lawyer,” Morrell said. “Maybe you take less than what you think you can get to get the cash.”
In an interview after the meeting Hankins said Morrell might be referring to a case in which the RTA’s board of commissioners decided in 2019 to stop paying millions of dollars in sales tax revenue each year to the Ernest N. Morial New Orleans Convention Center. The Convention Center in 2021 filed suit against the agency, and the case has been tied up in litigation ever since. Hankins said the agency has been setting aside the money it would have given to the Convention Center, but those funds can’t be used until the matter is settled.
In an interview in October, Sundiata Haley, attorney for the RTA board, said attorneys were still in the discovery phase of that lawsuit.
Commissioners usually discuss lawsuits during executive sessions of board meetings. But meetings have not been held for nearly three months – the second stall in RTA board business this year – because of a lack of quorum. That follows membership requirements set by new laws stemming from a board shakeup in February, after a contracting scandal led four board members to abruptly resign.
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