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Costs High for Northern Transit Agency

By Kiera Hay
Copyright © 2011 Albuquerque Journal
Journal Staff Writer

          The agency that runs transit programs in much of northern New Mexico spent 78 cents on administrative costs for every dollar that went for direct transportation services last year from its allocation of statewide rural transportation dollars.
        Expenses include an executive director's salary that has increased 33 percent to nearly $96,000 over the past five years.
        While the North Central Regional Transit District's administrative costs are among the highest in the state, the district did show improvement in fiscal 2010.
        The previous year, the district's administrative cost to operating ratio was even higher, at $1.09 in administrative costs for every dollar of service paid for with a combination of federal and local rural transit funds.
        The district also ranked highest in the state in cost per passenger trips from the same funding source, with expenses of about $34.55. The state average was $10.48 per trip, while Rio Metro Regional Transit District clocked in at $21.20 and the Southwest Regional Transit District at $6.11.
        The district was established in 2004, formally began operations in May 2005 and has been providing and funding transit service since 2007. More than half its annual budget comes from revenue generated by a gross receipts tax increase approved by voters in Santa Fe, Rio Arriba, Taos and Los Alamos counties in 2008 to help fund operations of the Rail Runner Express commuter train and related transportation.
        The district's members include the four counties plus several cities and pueblos. The organization is governed by a board of elected officials and staff members from participating governments.
        Nearly since its inception, the transportation district has been wrestling with questions about its effectiveness and administrative costs. Officials say the district is a new, unique organization, and that it has been working — successfully — to smooth out the financial issues.
        "I think as they're moving forward, they've taken steps to improve those issues, and I think they've been straightforward that they want to improve and have hired staff to move in that direction," said Santa Fe County Commissioner Robert Anaya, a recent appointee to the NCRTD board.
        Funding sources
        The district's total annual revenue, from the transit tax, grants and other funding, are estimated at almost $10.4 million.
        Much of the money is funneled to outside entities: About $1.7 million goes toward Rail Runner operating expenses, while Los Alamos and Santa Fe Counties get $1.6 million and $952,000, respectively, for providing transit services.
        For the current fiscal year, the agency's overall administrative expenses are projected at about $1.44 million, compared with $2.2 million in operating costs. Its budget also allocates $2.3 million for capital expenses.
        For the past couple of years, the district has ranked at or near the bottom among the state's transit agencies in criteria used by the state Department of Transportation to administer rural transit funds.
        The district's ratio of administrative costs to direct services in fiscal 2010 — 78 cents in administrative costs for every dollar on service —was the second-highest among 23 agencies. Out of about $1.69 million the NCTRD received in Section 5311 transit funding, more than $741,000 went for administrative costs.
        That ratio was much higher than either the Rio Metro district, centered around Albuquerque, with 23 administrative cents for every dollar of service, or the Southwest district, headquartered in Deming, which spent 42 cents for every dollar of transportation services. The state average was 43 administrative cents for every dollar of service.
        The NCRTD ranked ninth among 23 transit agencies in ridership, carrying about 44,632 passengers in fiscal year 2009, the last year numbers were available.
        NCRTD officials say their costs are higher because the district is a young, stand-alone organization that provides transportation over a wide distance.
        Comparisons with other transit agencies aren't really fair, according to executive director Josette Lucero. "We pay for all our finance. We pay for all our legal. We pay for all our marketing. Everything that's involved with running operations, our costs are 100 percent, where other systems have the benefit of being in city departments and have all those activities run for them," Lucero said.
        The Rio Metro Regional Transit District is under the administrative umbrella of the Mid-Region Council of Governments, and the Southwest Regional Transit District to a degree uses one of its counties as an administrative agent, according to Dave Harris, transit manager for the DOT's Transit and Rail Division.
        Lucero said the district's numbers are improving. When the agency first began running buses, its cost per passenger trip was more than $50; that number will drop to $9.94 in next year's ratings, she said. Ridership is also increasing.
        Pay raises
        Santa Fe City Councilor and NCRTD board chairwoman Rosemary Romero said it's only "a few individuals" raising questions about the transit district. "All the questions that have been asked over and over, they're getting their questions answered," Romero said.
        But Santa Fe County Commissioner Liz Stefanics, who served on the NCRTD board in 2009 and 2010, said questions have been raised by board members about overhead costs. She noted that "while I was there, I did not see any administrative cuts."
        "When almost every government is cutting back, I saw increases in certain lines and I had to query why," Stefanics said.
        "I think they have accomplished a great deal. Can they become sharper and better? Probably. The longer you're in the business, hopefully, the better you can get and learn from others," Stefanics said.
        The district's costs have included high raises for those at the top of the organization.
        Lucero earned an annual salary of $70,000 when she joined the NCRTD in 2005. Over the past five years, her earnings have increased by more than $25,000 — more than 33 percent — and the NCRTD board is set to review another raise for Lucero this spring.
        Lucero, who now makes almost $96,000 a year, is eligible for retirement in April.
        Transit Projects Manager Jack Valencia, the NCRTD's second-highest paid employee, has seen his salary increase from $60,000 when he joined the NCRTD in late 2007 to his current salary of over $79,000.
        Romero said Lucero's original salary was "never based on a sound study." The board determined, after hiring an outside company to do a salary analysis, that Lucero should be paid more and adjusted accordingly last year.
        Also, Lucero "has hustled with staff to get grants. She's raised her salary," Romero said. "I think we're right in line. I don't think what's occurred for her is anything special or unusual," Romero said.
        Stefanics said she voted against management raises last year but supported pay increases for operational staff, such as drivers, many of whom make less than $13 an hour.
        The NCRTD board approved 3 percent performance raises for other employees this fiscal year, in spite of projections that revenue would be slightly down.
       



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