OH: RTA doesn’t plan for layoffs, service cuts until 2026, thanks to federal stimulus funds
The RTA expects federal stimulus dollars to offset losses suffered amid the coronavirus pandemic, resulting in a promising financial forecast with no layoffs, time off, or service cuts through 2026.
Marvin Fong (TNS)
CLEVELAND, Ohio – The Greater Cleveland Regional Transit Authority expects federal stimulus dollars to offset losses amid the coronavirus pandemic, resulting in a promising financial forecast with no layoffs, time off, or service cuts until 2026.
Secretary-Treasurer and Deputy Chief Financial Officer Rajan Gautam told RTA’s board on Tuesday that the infusion of $ 315 million from the federal government had helped the transit company avoid “a deficit situation. – including a deficit of $ 20 million from 2020 and $ 50.2 million. deficit for 2021.
Instead, the RTA general fund had a positive balance in 2020 of $ 133.6 million and is expected to end 2021 with $ 158.8 million.
The RTA, which received $ 112 million in funding under the CARES Act last year, expects an additional $ 67.4 million this summer from the Coronavirus Response and Relief Supplemental Appropriations Act and about $ 136 million from the American Rescue Plan over the next two years, Gautam said.
Here’s how RTA spends its stimulus money:
$ 98.8 million (31%) for the operating budget
This money will stabilize operations until at least 2026 and “create an emergency reserve to mitigate economic risks,” Gautam said.
“We anticipate that we will have no layoffs or time off for staff, no reduction in service and this will reduce reliance on preventive maintenance,” Gautam said.
$ 156.2 million (50%) for unfunded capital budgets
This funding is expected to go to some of the capital projects identified in CRT’s 10-year strategic plan approved by the board last year. Gautam said the RTA is reviewing these potential projects to identify those that would have the greatest impact on the community.
The RTA has about $ 344 million in unfunded capital projects, so the $ 156.2 million in stimulus funds “will go a long way,” Gautam said.
$ 60 million (19%) for debt reduction
The CRJ will spend $ 60 million this year on debt reduction services, which are expected to generate $ 3.1 million annually through 2026.
“The average debt service varies from year to year depending on the maturity dates of the bonds, but not having debt service during those nine years using an annual debt service of about $ 14 million would save $ 126 million, which is substantial, ”Gautam said. . “These savings will then reduce future expenses for capital or operating purposes.”
Gautam plans to seek board approval on the debt reduction measure in June.