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Opinion >  Column

Getting There: STA says it can navigate $126 million shortfall without stopping service expansion or projects

UPDATED: Thu., Sept. 3, 2020

Riders catch an STA bus at the corner of Sprague Avenue and Helena Street on April 2, 2019.  (DAN PELLE)
Riders catch an STA bus at the corner of Sprague Avenue and Helena Street on April 2, 2019. (DAN PELLE)

The Spokane Transit Authority has spent the past five months doing its best just to keep going, despite the onset of a global pandemic.

Now the agency is trying to figure out how it will get where it’s been heading: to the end of its ambitious 10-year, taxpayer- funded, voter-approved Moving Forward plan for expanding service.

When COVID-19 began its spread in Washington and social distancing mandates took effect, STA found itself in a major bind: tasked with operating a system of buses and vans that are most efficient when they are most full, while trying to reduce the odds passengers and drivers pass the novel coronavirus between one another.

STA did what it could to maintain what’s an essential service for so many, without endangering them. But it wasn’t cheap.

The agency spent more on cleaning while taking in far less in fares as everyone was ordered to stay home for all but the most essential reasons. Then STA dropped fares altogether in an effort to protect drivers from the flow of passengers boarding by their buses’ front doors and lingering as they paid for their ride.

While bus service was temporarily reduced for a time, the buses and vans kept running through what planners can only hope was the worst period of what’s bound to be a prolonged disruption to life as we knew it.

So now what?

STA has been looking backward, at the losses it has already incurred, and forward, at the staggering losses that will likely linger for years, and trying to figure out what it will all add up to.

The short answer is $126.3 million.

That’s the total revenue shortfall STA will most likely face from 2021 to 2026, according to the number-crunching of Monique Liard, STA’s chief financial officer, and her colleagues.

That’s not the worst-case scenario, nor is it the best. It’s assuming the economy takes six years to recover from the sharp downturn the pandemic has caused, as the International Monetary Fund anticipated in April.

The goal, says Brandon Rapez-Betty, STA’s communications and customer service director, is “to foresee what might happen and be prepared for it,” even if, he acknowledges, “we’re getting new information all the time.”

The transit agency is surprisingly well prepared for it.

As a zero-debt agency that saves for future expenditures instead of borrowing to pay for them, STA has a sizable cushion waiting in the wings: $106 million.

A bit more than $23 million of that has been designated for operations, right-of-way acquisition and insurance, Rapez-Betty said in an email.

The remaining $82.5 million, he wrote, “represents the estimated amount of money that will be used between 2021 and 2026 to offset the projected loss in revenue.”

When combined with $23.4 million in funding from the federal Coronavirus Aid, Relief, and Economic Security, or CARES, Act, Rapez-Betty said it should be enough for STA to not only maintain current service levels but also continue to expand service and complete projects within the 10-year time frame set by the STA Moving Forward plan that voters approved in 2016.

Not only that, Rapez-Betty wrote, but when 2026 does arrive and the economy has hopefully rebounded, STA projects it will have a cash balance of $46 million for operations and future projects.

Rapez-Betty said STA’s expected ability to ride out the effects of a global pandemic is “because we have been good stewards of public resources and we have had a conservative approach to how we use revenue.”

While optimistic that remaining Moving Forward projects will be completed by 2026, Rapez-Betty said some remaining projects might shift their timing within that timeline.

He said how exactly projects will be moved around and potentially delayed hasn’t been decided, though he did note the agency’s board has “affirmed” its intention to move forward with the bus rapid transit City Line as planned, with an expected opening date in early 2022.

One lingering question – besides the looming one of whether STA’s predictions will prove correct – concerns fares.

STA’s objective is to collect 20% of its operating budget from the money people pay to ride its buses, vans and paratransit vehicles. Currently, however, only about 11% of the budget comes from fares.

To bring that ratio up, STA will have to either increase the number of paying customers, increase the cost to existing customers, or some combination of the two.

STA brought fares up to their current $2 a bus ride, with free transfers within a two-hour window, in 2017 and 2018, when the cost went up by a quarter each year. Another hike was supposed to take place this year, but it was deferred, likely to 2023.

Whether that happens and if so, by how much, is “a whole part of the discussion” taking place now, Rapez-Betty said.

Two members of STA’s board who also happen to be city councilwomen, Kate Burke and Karen Stratton, say they hope that discussion will focus on the effect higher fares will have on low-income riders who rely on STA.

“If we have to raise fares, I think the discussion will be how do we do that and remain vigilant with the lower income families and individuals whose livelihood depends on getting to work on a bus, those kinds of things,” Stratton said.

Burke said she’s “just not interested in” increasing costs for riders and potential riders, some of whom “can’t afford to ride the bus now.”

Instead, she said, she’d like to see STA sell advertising on buses or form partnerships with local governments and businesses to fund transit so that it stays affordable. That, she said, will be especially important during the impending economic downturn, when putting money back in peoples’ pockets can be an engine for economic recovery.

“We need to figure out how to make it easier for people to get on buses,” Burke said, not more costly.

As STA prepares to navigate the bumpy road ahead, Rapez-Betty said riders and the rest of the public will have opportunities to chime in about the direction the agency goes. In September, for example, the board of directors will host a public hearing regarding its six-year transit development plan. And if changes are made to the STA Moving Forward timeline, the agency will conduct public outreach to solicit input.

Meanwhile, the agency and its board members will be watching how accurate its projections turn out to be.

“I’ve just learned, everyday something changes,” Stratton said.

Work to watch for

The city of Spokane Street Department will begin work Monday on a grind-and-overlay project on Wall Street between Garland and Wellesley avenues. The work is expected to cause backups and delays, so motorists are asked to detour to Monroe or Division streets during the two-week project.

Work on the city’s Hamilton Street corridor safety improvement project continues this week, when crews at Hamilton’s intersections with Mission and Desmet avenues will move to the west side of those intersections and traffic will be moved to the east side of Hamilton Street. As a result, Hamilton Street will have no left turns onto Mission through this month.

The Washington State Department of Transportation will close the the southbound on-ramp from S.R. 26 to U.S. 395 on Monday from 7 a.m. to 5 p.m. while crews pave the ramp. During this time, S.R. 26 will also be reduced to one lane with two-way flagged operations, allowing crews to pave the eastbound lane of S.R. 26.

On Tuesday, crews will switch to the other side and close the southbound off-ramp from U.S. 395 to S.R. 26, allowing crews to pave the off-ramp between 7 a.m. and 5 p.m. Southbound drivers needing to access S.R. 26 will need to find alternate routes. During the off-ramp closure, crews will also be paving the westbound lane of S.R. 26. Drivers can expect S.R. 26 to be reduced to one lane, with two-way flagged operations.

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