City budget faces gap between transit revenue, expenses

a move to boost transit ridership, the Jefferson City Council recently weighed pros and cons of temporarily suspending the $1 fare for city buses, making fixed-routes completely free.

Those in favor said it could increase ridership, and the bill’s sponsor, Councilman Jack Deeken, said “if nothing else, it was something nice to do for our citizens.”

A temporary suspension was projected to forfeit about $39,000 in fare income, and some council members, for example, Councilman Mike Lester, said it should come with a detailed marketing plan for how to promote it.

There were plenty of council members who raised concern over suspending fares. The Public Transit Advisory Committee opposed it, too, stating fees were an important factor to supporting the service. In fact, the committee led discussions on the possible benefits for increasing the fare rate to $1.25 or $1.50.

“I also know and recognize

that there are a lot of people who utilize the transit system and that may become a financial burden for them,” said Angela Hirsch, chairwoman of the Public Transit Advisory Committee.

Finally, council members held a vote Aug. 1 on whether to enact a fare suspension for six months. After a 4-5 tally, the bill failed. Council members Jon Hensley, Derrick Spicer, Deeken and Scott Spencer voted for the suspension, and council members David Kemna, Lester, Mark Schreiber, Erin Wiseman, Ron Fizwater voted against it. Council member Laura Ward was absent during the meeting.

Discussion and further decision regarding the local public service JeffTran and para-transit service Handiwheels is far from over. As the City Council begins work to review, revise and finalize the fiscal 2023 budget, aspects of transit will once again be raised.

During two previous budget cycles, the city used money provided from the federal government through the CARES Act to subsidize transit, which significantly reduced what the city typically pays for it. The city subsidy is paid from the general fund each year to fund operations. Instead of paying $1 million-$1.2 million each year as the city has paid in past city subsidies, about $579,700 was paid in FY2021 and about $187,000 in FY2022.

Since one-time CARES funds were used completely, about $1.2 million would need to be directed to the transit division in the new fiscal year, according to a draft of the budget presented by the mayor in July.

During the Aug. 1 meeting, Hirsch urged the council to reconsider their mindset when it comes to transit.

“Well, now that that money is going away, the city needs to step up again and support its transit system,” she said.

Hirsch said transit is vital to the community because it provides a service for people who do not have personal transportation. She said it should also be prioritized as an opportunity for economic growth and community vitality.

“It increases access to employment for all the community citizens, which leads to a higher tax bracket, tax base. So all of those things lead to greater economic development and a more robust and thriving economy for the local community,” Hirsch said.

She said it’s fundamental in transporting people to work.

“If we lose our transit system, in a city this size with a population this big … you’re gonna lose your service industry, because so many members of the service industry depend on transit for their employment,” she said.

Transit Director Mark Mehmert said the division has not recently inquired into whether riders are using the service to get to work. Mehmert said a dated study in 2006 found about 51 percent of riders used the service for that purpose.

“Based on uniforms we see on buses, we believe most employed riders are in the leisure and hospitality industry. Leisure and hospitality is the fifth largest industry in Cole County in employment terms, but ranks 14th (last) in wages,” Mehmert said, citing information from the U.S. Bureau of Labor Statistics.

Councilman Ron Fitzwater, who is chairman of the public works and planning committee, said he sees the value in a “legitimate service that we can afford, but we also can’t afford to continue to lose million dollars plus.”

He said lowering the gap between revenue and expenses is going to be a challenge in the upcoming budget.

“We can do the same thing (to transit) in 2023 we did prior to that, but we are also sitting watching our roads crumble,” Fitzwater said. “And the people that don’t ride the bus want to spend that money on better roads and keeping them in better shape. We’ve got a parking garage that’s in very poor shape, and we’re going to need money there.”

Fitzwater added: “We have to make cuts and where they’ve come in the past has been from infrastructure, and now we’re paying the price.”

Deeken said he sees the need for a transit system, but the council will need to consider how it fits into the budget.

“This is my first budget cycle, and I’m really new to what goes in and comes out of transit so much of it is subsidized by the federal government,” he said. “And we really have to look at how it can function within our budget.”

Lester said he understands there is concern in the coming budget about a larger city subsidy but for some people, it is a lifeline.

“I do agree with what Angela Hirsch has stated,” Lester said. “It is important as an economic aspect in the city because there are plenty of workers who use transit to get to work. It’s important for those people who ride it.”

The first budget meeting is scheduled for 5:30 p.m. Aug. 11 at City Hall. At that meeting, the mayor and council will provide an overview of the budget as a whole.