AGENDA #4B(3)

BUDGET WORKING PAPER

TO:                  W. Calvin Horton, Town Manager

FROM:            R. Scott McClellan, Interim Transportation Director

SUBJECT:       Transportation Budget Comparisons

DATE:             April 12, 2000

I have attached a table that provides detail on several of the major issues that could affect the Transportation Department’s fiscal year 2000-01 budget.

The table:

• Summarizes departmental expenditures by division
• Shows major sources of revenues
• Calculates the system net cost, and
• Shows how these net costs would be distributed between Chapel Hill, Carrboro, and the University.

This information is presented for fiscal year 1998-99 actuals, fiscal year1999-00 budget and estimated actuals, as well as for fiscal year 2000-01 using the terms of the current Memorandum of Understanding formula and using an optional Fare Free Proposal.

Key items in this table that should be noted, included:

• Total expenditures for fiscal year 2000-01 are projected to be 11% higher than in the 1999-2000 budget.  This is due in large part to the recommended pay and classification plan, increases in the cost of fuel, and increases in operations division payroll for part-time and overtime wages.

• State funding for the current year is significantly higher than our original budget and the new-year budget.  The general assembly approved an Urban Transit Program for the current year that was higher than expected and resulted in Chapel Hill’s allocation increasing by $600,000.  This increase in funding, however, was not included in the second year of the biennial budget.

• The formula used to distribute net cost among the partners is based on population. The source of population figures for the towns is the latest annual statistics published by the North Carolina Office of State Planning.  The population figures for the University include all graduate and undergraduate students included in the fall student “headcount” as compiled by the University Registrar, plus the total of all permanent full-time and part-time faculty and staff for the University and UNC Hospitals as compiled by the University’s Department of Human Resources and the UNC Hospital’s Data Center services, as of the first payday in September. The table shows the shift in population percentages between those used for 1999-00 and those being used for 2000-01. Both UNC and Chapel Hill’s proportion of population dropped while Carrboro’s has increased.

• The net cost assignments for the 2000-01 Current Memorandum of Understanding column are calculated using the same population based formula used for several years.  The net cost assignments for the 2000-01 Fare Free option use a formula that assigns all net cost for UNC requested service to the University, and distributes the balance of net cost between the partners using the population formula.  In this scenario, the operating revenue figure is $1,579,000 lower than the Current Memorandum of Understanding option and represents income from our Tarheel Express service only.