Buses will run in Willmar, Minn ... at least for a while
WILLMAR -- Transit buses will keep rolling in Kandiyohi County even if the state shuts down next month.
The Kandiyohi Area Transit joint powers board agreed Friday it had enough reserve funds to keep operating its existing routes with existing staff, but said cutbacks may be considered if a state budget stalemate drags on.
In a letter from Mike Schadauer, transit director in the Minnesota Department of Transportation, KAT was warned its contract payments from the state will not be sent during a shutdown.
"In the absence of legislation specifically appropriating funds for the continuing operations of the agency for the next biennium, we will have no authority to expend or release funds ... after June 30, 2011," wrote Schadauer.
That means payments to KAT and other transit systems would be delayed until a budget is approved.
Fortunately, KAT has already received its first- and second-quarter contract payments from the state. The third-quarter payments are expected July 31, but the money won't be sent if the shutdown is still ongoing.
KAT Transit Director Tiffany Collins said she's confident current revenues will allow KAT to keep operating a month, or even two months, without making any changes to routes or reducing hours for staff.
She said some transit systems in the state only have enough reserve funds to operate for a week.
The board said, however, that if the shutdown occurs, they want to review KAT's financial situation two weeks later. If it appeared a state budget resolution was still far off at that point, they would consider prioritizing bus routes and reducing hours of service.
It's not a step the board is eager to make.
Cutting routes would reduce ridership that may not be recovered, Board Chairman Kevin Crowley said. "It would be hard to get that back and it'll ruin our reputation," he said.
Ridership on KAT routes has been steady or growing with an average daily ridership of around 485 this year.
Collins said she believes KAT will be reimbursed for providing services during a shutdown, but said there's been no "concrete answer" if those reimbursements will actually be made.
County Commissioner Dean Shuck, a member of the KAT board, said it would be difficult to use reserve funds to provide services that may not be reimbursed by the state.
Meanwhile, Collins said threats of reduced funding from state and federal sources are expected to become reality next year. That would mean the local share of transit will have to be increased or services decreased.
Currently, state and federal funding pay for 80 percent of the cost of new buses, and local entities make up 20 percent.
Local systems will likely be expected to pay a larger share in the future, Collins said.
For the last several years, transit systems have delayed the purchase of new buses. That means buses are being used longer and maintenance expenses have been increasing. KAT just spent $14,000 to replace an engine on one bus.
In the past, buses were sold when they reached 150,000 miles and replaced with a new one. Now they have to run for 200,000 miles before they can be replaced, she said.
KAT will be getting two new buses this year, but none next year.
KAT has been trying to be creative in finding new revenue, including selling advertising on its buses. But in a recent change, new money that's raised locally is offset with a reduction in state grants.