Thursday, July 27, 2023

PSTA HeadsTowards Fiscal Cliff Again As Big Pay Raises Funded with 1-time COVID Money & Escalating Operating Expenses Comes Home to Roost

Pinellas County Transit agency PSTA is heading towards insolvency. They used one-time COVID dollars to hand out large raises now baked into PSTA's budget. PSTA depleted almost $100M of COVID dollars over the last few years.

PSTA knew they were heading towards a fiscal cliff last year. The then governing PSTA board approved huge pay raises, implemented "free to the rider" SunRunner rides and did nothing to alleviate PSTA's fiscal hemorrhaging. 

PSTA's operating expenses increased over 33% between 2018 and 2022. From 2021 to 2022, PSTA's operating expenses increased 22%. 

PSTA projects 2023 operating expenses to be 113,276,130, an increase of 11% over 2022.  

PSTA's property tax revenues increased 35% from 2018 to 2022.

PSTA's property tax revenue increased almost 14% from 2022 to 2023 and is expected to increase almost 11% from 2023 to 2024.

Without a millage roll back, this is tax hikes to the property owners who pay the PSTA property tax, the vast majority never or rarely ever ride the bus. 

As we posted here in 2019, PSTA has been heading towards a fiscal cliff since before the pandemic. 

Before COVID, PSTA was dipping into their Reserves to fund their increasing operating expenses...even as their property tax revenues were increasing. They knew they would need a new revenue source to operate the SunRunner bus rapid transit (BRT) service.

The pandemic hit in 2020 and PSTA received almost $100M of one-time COVID relief dollars which kept PSTA above water for the last few years. 

Like HART transit agency in Hillsborough County, PSTA went on a wild spending spree burning through those millions with little to no oversight or forethought. 

Where did all that money go? To fund pay increases and pay for PSTA's increasing operating expenses....even as property tax revenues were increasing by double digits.

In 2022 PSTA handed out pay increases from 5.2 to 24% to their administrative staff, including a raise of 8.4% to its CEO Brad Miller. 

According to this report:

Debbie Leous, PSTA’s chief financial officer, said the $11 million needed for the administrative raises would come from money received from the federal government for COVID-19.

When the PSTA bus drivers protested the admin pay raises, PSTA handed them a pay increase between 6.7 and 10.3%. PSTA bus drivers are now the highest paid in the state. for a transit agency that is going insolvent.

The high cost of operating the SunRunner, the big pay raises funded by one-time dollars is coming home to roost for PSTA.

With the COVID funds now depleted, PSTA heads again towards a fiscal cliff. They must cut routes or they will go insolvent.

PSTA's CEO Miller told the Tampa Bay Business Journal last month "Now we're in a situation where we'll be in a deficit."

When PSTA submitted their Federal grant request to the Federal Transit Administration, they stated they expected a 44% fare box recovery from the SunRunner. 

PSTA's overall fare box recovery since 2013 has been declining. But the pay raises keep going. 

PSTA told the Feds and the public that the Central Avenue Trolley (CAT) that runs in the same corridor as the SunRunner would continue to operate. PSTA wanted the public to assume that SunRunner riders were "new" transit riders. 

PSTA's 2021 10 year Transportation Development Plan (TDP) estimated revenue from the SunRunner to be $1.9M in year 1and almost $3M in year 2. Instead PSTA to date has received ZERO revenue from the SunRunner and has LOST revenue as riders on other routes get their "free" rides.

PSTA was warned the SunRunner would simply siphon existing riders from the CAT.

The CAT riders who were paying for the theirs rides walked a block over and now ride the SunRunner for FREE courtesy of the taxpayers.

The CAT's ridership has declined almost 60% and is less than half of what it was a year ago before the SunRunner.

And Surprise! PSTA is considering eliminating or greatly reducing the length of the CAT route due to its tanking ridership.

PSTA Board members now admit the SunRunner has simply moved paying riders from other routes to the SunRunner. 

 PSTA is going insolvent but they continue handing out the free rides for the SunRunner. 

And in May PSTA approved buying 3 more SunRunner buses for $3 million. According to PSTA's Communications & Public Relations Manager Stephanie Rank, "SunRunner is very different than other routes that we have in service because its high ridership is on the weekends." 

PSTA admits the SunRunner is an entertainment amenity used to go to special events in downtown St. Petersburg and to Rays games on the weekends. These riders can afford to pay for their rides so why are taxpayers forced to pay their fares? 

With PSTA going insolvent, they should start charging for the SunRunner NOW!

To top things off, as PSTA heads toward a fiscal cliff and have no spare change to spend, they still plan to force more road diets in Pinellas County for more costly BRT's. 

PSTA plans to eliminate general vehicle lanes of traffic on 34th Street South for bus only lanes. That corridor has thousands of new apartments in new complexes with huge parking garages, and a new fast food restaurant with a drive through opens there almost every month.

While PSTA holds public hearings regarding any proposed route cuts, all the road diets are being implemented forced with NO public hearings. The general public is provided ZERO opportunity to speak directly in front of their peers and the decision makers to comment before any road diet is approved. That is unfair, unsound and simply wrong.

Handing out large pay raises - much higher than those in the private sector - with one-time funds is fiscally irresponsible. 

"Free" rides to all SunRunner riders is fiscally irresponsible. 

Implementing the costly SunRunner, that siphons riders from other routes, when SunRunner knew they needed new revenue to operate the SunRunner, is fiscally irresponsible.

PSTA has been fiscally mismanaged for years with Brad Miller at the helm. Fiscal negligence occurred on his tenure.

Brad Miller was caught misusing federal funds on PSTA's failed 2014 Greenlight Pinellas rail tax campaign. Miller was forced to return over $300K to the Feds 

Instead of getting rid of Miller, PSTA has given him pay raises ever since.

Time for the PSTA Board to rid of Brad Miller.

And if they don't, replace the PSTA Board with those who will.

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