RTD proposes record high budget but faces deficit; service cuts possible

Sixteen months ago RTD leaders declared metro Denver s masses transit agency financially robust with no warning signs but the latest records show RTD has fallen into the red which may force cuts in routes and the frequency of buses and trains The agency s elected directors met Tuesday to vote on a record-high operating budget of billion a increase over this year Their million deep hole increasing in to million is due to a combination of higher-than-anticipated maintenance and repair costs and falling sales tax revenues which fund of RTD s spending The deficit spending directors announced will force a rapid drawdown of RTD reserves that were earmarked for amenity expansion This came as a surprise to all of us Director Karen Benker explained calling the situation sad and adding she was shocked after decades of work on state regime budgets that never hit such trouble Once we determined out how deep the deficit was the board and finance committee did not get a chance to go into any real depth because the budget came out so late We had only a scant weeks to see it and ask questions Benker revealed Over the past six weeks RTD managers discussions with the directors revealed the troubling financial predicament with hundreds of millions in unanticipated costs of deferred maintenance and repair largely along RTD s rail lines Those costs are on top of the overhauls launched in including the million downtown track reconstruction and crisis fixes to deal with widespread deterioration of RTD s miles of tracks RTD s descent into debt means transit leaders will be hard-pressed to move forward with planned function expansions to reverse the declines in RTD s ridership which has decreased from around million in to a projected million this year RTD directors are contemplating unspecified operation cuts starting in In the long term we don t have enough money to pay for utility increases RTD director and board secretary Chris Nicholson announced Tuesday ahead of the vote RTD is facing a long-term structural deficit of hundreds of millions of dollars a year in perpetuity if we don t take action that either cuts the budget massively or raises new revenues he declared The agency s exceptionally high reserves in current years had enticed speculation that RTD could afford to expand routes Looking at our deficits now we are going to be using those reserves rather swiftly Benker announced You have got to pay your bills An agency analysis issued last summer estimated the cost of completing FasTRacks to Boulder at billion RTD s reserves this week totalled about billion including million in restricted funds such as million in internal savings for FasTracks leaders announced in response to a Denver Post request The reserves are meant to cover operating expenses for three months The total has decreased by from billion at the end of personnel revealed RTD reserves in the past have stayed high compared with Denver s city authorities reserves of million with an annual budget of billion city administrators announced Colorado s state authorities maintains reserves of billion with a budget of billion state administrators announced RTD chief executive and general manager Debra Johnson stands by a fare validator west of Denver's Union Station as transit representatives launched a long-planned credit card tap payment system on Tuesday Nov Photo by RJ Sangosti The Denver Post The agency s rail and bus systems are more than years old and maintenance is needed RTD director and general manager Debra Johnson reported This is par for the program If you lived in a home for years do you think you wouldn t have to make chosen repairs It s not going to be in the same condition as when the builder completed it This is exactly where we are right now In August a state audit deemed RTD financially healthy Former board chairman Erik Davidson with Johnson notified state lawmakers that RTD met all financial robustness ratios with no warning indicators The turnaround has ignited frustration among state lawmakers charged with overseeing RTD reported state Rep Meg Froelich a Democrat representing Englewood who chairs the House Transportation Housing and Local Governing body Committee Among her questions for RTD directors Why has your comprehensive maintenance plan for the past years been so inept Froelich stated emphasizing the need for superior citizens transit to sustain state-backed high-density transit-oriented growth Colorado State House Representative Meg Froelich works at the Colorado State Capitol on Feb in Denver Photo by RJ Sangosti The Denver Post We are going backwards she declared questioning whether agency managers can be trusted Now are they going to find another million hole Froelich also challenged the assertion that deficits were unavoidable due to maintenance and repair imperatives for the equivalent of a -year-old house So you didn t know that in year your boiler was years old and you were going to need a new boiler And that if there were a hail event you might need a new roof You didn t plan for this stuff The Greater Denver Transit advocacy group is deeply concerned about RTD s troubling financial position especially seeing how their story changed so drastically between s apparent near-term stability and in the current era s emerging predicament reported GDT co-founder James Flattum who also serves on a state oversight committee It is one thing for the agency s light rail division to have known about repair costs where earlier management irresponsibly advised them to wait for decades Flattum revealed It is another issue entirely for the light rail department to have missed hundreds of millions of dollars in repairs for years to the point the hole grew so deep that RTD will have to start cutting its already skeletal post-pandemic bus services as soon as This is mismanagement On Tuesday night agency directors were also to vote on a pay raise for Johnson a lump sum payment on Dec adding to her base salary of after a board assessment revealed she met expectations under her five-year contract that ends this year In latest months RTD staffers informed directors that instead of carrying out a planned shift of the -bus fleet from diesel to cleaner quieter electric vehicles agency bureaucrats were planning to take on million in new debt over the next five years to replace aging diesel buses with new diesel buses Directors also learned that RTD managers did not apply for a share of the billion in federal regime grants for new buses that were doled out in the days before Thanksgiving Other Colorado transit agencies received a total of million for bus replacement projects Sens Michael Bennet and John Hickenlooper disclosed Related Articles Fuel tanker crash disrupts RTD light rail operation in southeast corridor RTD bus and train riders can now pay by tapping their credit cards Copper wire theft disrupts expedition on RTD s A Line to Denver International Airport In RTD experiment temporary Holiday Train will run from I- through downtown Denver to Five Points Denver light rail stations reopen after crash causes power outage A Nov email from Johnson to board members approved that RTD did not apply because it was not eligible for the funds due to a ratio of backup spare buses to buses in provision too high for federal grant specifications The budget problems could also put at peril hopes RTD will helop pay for intercity rail amenity linking Denver to Boulder Longmont Loveland Fort Collins and other northern Front Range cities RTD leaders had approved a joint institution collaborative approach But RTD board chairman Julien Bouquet commented any RTD aid for that project must make sense for the agency I understand the frustration when it comes to lawmakers The RTD has done the best we can with the information we have We are looking into the options Bouquet reported We knew there would be the probable for financial hard times We are preparing for that and protecting the core of our business We re going to be making sure we can protect our system and protect our operators Get more Colorado news by signing up for our Mile High Roundup email newsletter