Transcript Preliminary 2005 Budget and Financial Plan

MTA 2009
Preliminary Budget
July Financial Plan 2009 – 2012
DJC
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
1
Process and Timetable
• Four-year financial planning process kicks off in July
• The process encourages public discourse and
culminates in Board approval of the 2009 Budget in
December
• No Board action today
• Balanced budget required “based on reasonable
assumptions and methods of estimation…”
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
2
February Financial Plan
Closing Cash Balance
($ in millions)
$400
$300
$200
$368
$100
$0
-$100
($216)
-$200
($335)
($416)
2010
2011
-$300
-$400
-$500
2008
2009
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
3
Update on Major Risks
July 2007
•
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•
Metropolitan Transportation Authority
July 2008
Real Estate Market is Very Soft
Regional Economy is Weak
Huge Energy Price Increases due
to Global Market Forces
Growth in Controllable Expenses
Consistent with Budget Forecasts
July 2008 Financial Plan 2009-2012
4
Significant Changes from February Plan
(2008-2009)
•Fuel and Energy Costs:
($208 million)
•Impact of Economic Downturn on Tax Revenues
Real Estate Tax Revenues:
State Tax Revenues:
Metropolitan Transportation Authority
($443 million)
($60 million)
July 2008 Financial Plan 2009-2012
5
Energy Expense Growth
2007-2009
($ in millions)
$800
$678
$624
9%
28%
$600
$487
$331
$311
$400
$193
6%
62%
$200
$313
$294
$347
6%
11%
$0
2007
Traction & Propulsion Power
Metropolitan Transportation Authority
2008
2009
Fuel for Buses & Trains
July 2008 Financial Plan 2009-2012
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Real Estate Transaction Taxes
Actual Collections and July 2008 Plan
($ in millions)
$1,800
$1,600
$1,400
$1,200
MRT-1
Started
6/1979
0.25%
Urban Tax
Started
5/1982
RPTT: 1.0%
MRT: 0.625%
MRT-2
Started
6/1987
0.25%
MRT-1
Rate
Increase
7/2005
0.30%
$1,000
$800
$600
$400
$200
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$0
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
7
Real Estate Transaction Tax Receipts
Concern for More Than A Year
April 2007 Finance Committee: Real Estate Transaction Taxes, What If …
$700
Adjusted for: Inflation, MRT-2 Implementation
Date & MRT-1 Rate Increase($ in millions)
$1,800
Actual Collections and July 2007 Financial
Plan ($ in millions)
Inflation Adjustment: 1982 – 1984 = 100.0
$600
$1,500
$500
$400
Reflects increase in projection, in real dollars
Reflects decrease in projection, in real dollars
$1,200
Reflects increase in projection
Reflects decrease in projection
$900
$300
$600
$200
$300
$100
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0
$0
$0
July 2007 Financial Plan:
“If 2008 receipts are identical to 2004 receipts, then $1,167 million drops out of the plan through 2011 ($309 million in 2008)”
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
8
Changes from the February Financial Plan
($ in millions)
2008
2009
2010
2011
$368
($216)
($335)
($416)
($524)
($368)
($35)
($129)
($1,096)
($1,251)
($191)
($712)
($1,432)
($1,668)
($81)
($127)
($66)
($60)
($201)
($242)
($282)
($305)
($41)
($19)
($84)
($121)
MTA Bus Subsidy Timing
$60
$0
$0
$0
Debt Service Changes
$16
($23)
$11
$50
Other
$92
($18)
($29)
$35
Total Changes
($155)
($431)
($450)
($400)
July Baseline Cash Balance
MTA Gap Closing Actions
Cash Carryover
July Plan Net Cash Balance after Carryover & Gap Closing
($345)
$194
$495
$344
($1,143)
$813
$344
$15
($1,882)
$1,618
$15
($250)
($2,068)
$1,785
$0
($283)
February Closing Cash Balance
Cash Carryover
MTA Policy & Gap Closing Actions
February Cash Balance before Carryover and Policy & Gap Closing
Fuel and Energy Increases
Real Estate Tax Revenue Reductions
State Tax Changes
Metropolitan Transportation Authority
$0
$0
July 2008 Financial Plan 2009-2012
9
July Financial Plan
With Gap Closing Actions
($ in millions)
2008
July Plan Baseline before Prior-Year Carry-Over
($345)
2009
($1,143)
2010
($1,882)
2011
($2,068)
2012
($2,334)
Internal Actions
$155
$310
$411
$225
$361
External Actions
$40
$302
$801
$873
$955
$0
$202
$405
$687
$699
$194
$813
$1,618
$1,785
$2,016
$495
$344
$15
$0
$0
$344
$15
Fare / Toll Yield Changes
Gap Closing Actions
Prior Year Carry-Overs
July Plan Closing Cash Balance
Metropolitan Transportation Authority
($250)
($283)
($318)
July 2008 Financial Plan 2009-2012
10
Gap Closing: Internal Actions
($ in millions)
2008
$16
2009
$82
2010
$80
2011
$88
2012
$79
Post-2009 Agency Program to Eliminate the Gap
$0
$0
$97
$174
$275
Business Service Center (Exclusive of Capital)
$0
($7)
($10)
($14)
$29
New Contracts Labor Contribution
$0
$53
$82
$85
$86
MTA Reorganization
$0
$3
$13
$13
$13
Reduce Subsidy to LIB
$0
$4
$4
$4
$4
$120
$0
$0
$0
$0
Other Administrative Reductions
$15
$30
$0
$0
$0
Eliminate E-Z Pass Forgiveness
$3
$10
$10
$10
$10
Inter-Agency Loan
$0
$135
$135
($135)
($135)
$155
$310
$411
$225
$361
2009 Agency Program to Eliminate the Gap
2006 Surplus Recovery
Total
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
11
Gap Closing:
Internal Actions Already Taken
•Agency-wide Service Enhancements Cancelled
•Administrative Cost Reductions:
– Hiring Delays
– Travel Restrictions
– Vehicle Usage Reductions
•Business Development
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
12
Gap-Closing:
Internal Actions to be Taken
Recurring Actions
•2009 & Post-2009 Agency-wide Reductions
•New Contracts Labor Contribution
•Business Service Center
•MTA Reorganization
•Reduce Subsidy LI Bus
•Eliminate E-ZPass Forgiveness
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
13
Gap-Closing:
Internal Actions to be Taken
One-Time Opportunities
• Inter-Agency Loan
• Recover Uncommitted Spending From Prior Year
Surplus
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
14
Year-to-Year Changes in Expenses
15.0%
Total Expense Growth
Uncontrollable Expenses
Controllable Expenses
11.3%
10.0%
9.7%
7.9%
6.5%
5.8%
5.8%
5.0%
4.4%
3.6%
2.6%
2.6%
2.2%
1.7%
2008
2009
2010
0.0%
1.0%
0.4%
0.0%
2011
2012
Uncontrollable Operating Expenses include Paratransit Service Contracts, Fuel for Buses & Trains, Traction & Propulsion Power, OPEB Current Payment,
Health & Welfare, Pensions (see note below), and Insurance.
Controllable Operating Expenses include Payroll, Overtime, Claims, Other-Fringe Benefits, Reimbursable Overhead, Maintenance & Other Operating
Contracts, Professional Service Contracts, and Materials & Supplies, Other Business Expenses, Other Expense Adjustments, and Gap Closing Actions.
Total Expense Growth includes the General Reserve and the impact of the Gap Closing Actions but excludes Debt Service.
2008 Pensions exclude a one-time payment to NYCERS and MaBSTOA for refunds associated with the 55/25 retirement program.
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
15
Gap Closing: External Actions
($ in millions)
2008
$0
2009
$15
2010
$62
2011
$63
2012
$66
School/Senior Citizen Fare Reimbursement
$0
$104
$104
$104
$104
City Reimbursement to Paratransit
$0
$113
$138
$164
$205
$40
$19
$84
$121
$152
State Legislative Actions - Tax Statute Revisions
$0
$50
$50
$50
$50
New Governmental Aid
$0
$0
$364
$371
$379
$40
$302
$801
$873
$955
Federal Legislative Actions
State Tax Restoration
Total
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
16
Gap Closing: Fare & Toll Yield Changes
($ in millions)
Fare/Toll Yields on 7/1/09: 8.0%
2008
$0
2009
$202
2010
$405
2011
$414
2012
$418
Fare/Toll Yields on 1/1/11: 5.0%
$0
$0
$0
$272
$281
Total
$0
$202
$405
$687
$699
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
17
July Financial Plan
Closing Cash Balance
($ in millions)
$400
$300
$200
$344
$100
$15
$0
-$100
($250)
($283)
($318)
2011
2012
-$200
-$300
-$400
-$500
2008
2009
Metropolitan Transportation Authority
2010
July 2008 Financial Plan 2009-2012
18
If External Actions Fail & No New
Revenue Streams are Identified
($ in millions)
2008
2009
July Plan after Gap Closing Actions
$344
$15
External Actions Do Not Take Place
($40)
($341)
Resulting Surplus/(Gap)
$305
($327)
Additional Actions within MTA Control Needed to Balance:
For Each Additional 1% Fare/Toll Yield Increase
For Each 1% Cut in Service
Metropolitan Transportation Authority
2009
$25 ($51 annualized)
$30 ($60 annualized)
July 2008 Financial Plan 2009-2012
19
Next Steps
•August to November: Public discourse on Preliminary Budget
•Late November: Final Proposed Budget presented to MTA Board
•Early December: Ravitch Commission issues report
•Late December: MTA Board adopts Budget and schedules public
hearings for changes in fares and tolls and for service reductions, if
necessary
Metropolitan Transportation Authority
July 2008 Financial Plan 2009-2012
20