Board members with the Hillsborough Area Regional Transit Authority (HART) received some rough news Monday when they were informed that the agency is staring at a budget deficit of more than $8.5 million going into the 2018 fiscal year.
There are a number of factors behind that number including a continuing decline in ridership, a national phenomenon that has been reduced by more than 11 percent at HART since 2014, amounting to more than $2.5 million in lost revenue since that time.
“We do have to absorb those costs, and we have to figure out how to do that in FY18, ” said Jeff Seward, HART’s CFO.
The agency is looking at health care costs tentatively rising by $4 million, and another $1 million increase in general liability claims.
HART’s Human Resources manager, Brooke Basquit, told board members that she has reached out to officials with the city of Tampa and Hillsborough County about possibly combining their work forces together on a health care plan, but says those talks didn’t go too far. “We did talk to the city of Tampa and they said they were not interested at this time.”
The response did not please Tampa City Council member Mike Suarez, who had made the suggestion. “I’m a lot disappointed that they gave you that quick of an answer.”
Basquit then told Hillsborough County Commission and HART Chairman Les Miller that it would cost the agency $3.5 million to sign onto the county’s health care system. “That was shocking also,” she said.
Basquit said that HART has also been in discussion with PSTA and the Hillsborough County School Board about possibly teaming up with to reduce health care costs. HART CEO Katharine Eagan said that the odds are good that a health care deal could be worked out with PSTA, as well as consolidating on some procurement issues.
One place where the agency won’t look at to cut the deficit is by raising fares.
Adding to board members anxiety is a proposed constitutional amendment in 2018 that the Florida Legislature may approve this week that would expand the homestead exemption valued at more than $100,000. The measure would reduce property tax revenues that fund HART to the tune of $4 or $5 million dollars annually.
“That is a budget buster,” lamented Miller, adding that it was a “good sound bite” for lawmakers running for governor or U.S. Senate next year.”If that passes, then we in local government – be it at the county commission, city council or HART – are going to have to make some serious, serious adjustments,” he said.
“It’s going to be a very, very harsh reality if it comes to be,” added Hillsborough Commissioner Pat Kemp.
Seward repeated several times during his presentation that the projected $8.5 million deficit was a “soft number” because the agency is still refining the costs of various programs, and in fact right now is around $6.2 million.
“Over the last two weeks, staff has been able to whittle those numbers down a little bit more,” Sewart said, adding, “however, we’ve whittled as far as we possibly can with internal admin overhead.”