File #: 2024-0319    Version:
Type: Ordinance Status: Passed
File created: 10/1/2024 In control: Budget and Fiscal Management Committee
On agenda: Final action: 11/19/2024
Enactment date: Enactment #: 19863
Title: AN ORDINANCE adopting 2024 Fund Management Policies for the Public Transportation Fund; and repealing Ordinance 18321, Section 2, and Attachment A to Ordinance 18321.
Sponsors: Girmay Zahilay
Indexes: Funds, Public Transportation
Attachments: 1. A. Fund Management Policies for the Public Transportation Fund, Updated November 19, 2024, 2. A. Fund Management Policies for the Public Transportation Fund, 3. 2024-0319 Transmittal Letter, 4. 2024-0319 Fiscal Note, 5. 2024-0319 Legislative Review Form, 6. 2024-0319_SR_MetroFundMgt 10-30-24, 7. 2024-0319_SR_MetroFundMgt-11-13-24, 8. 2023-0319_ATT2_AMD1_Farebox-11-05-24, 9. 2024-0319_ATT2A_AMD1_AttA-Fund-Mgt-Upd 11-05-24
Staff: Bourguignon, Mary

Title

AN ORDINANCE adopting 2024 Fund Management Policies for the Public Transportation Fund; and repealing Ordinance 18321, Section 2, and Attachment A to Ordinance 18321.

Body

STATEMENT OF FACTS:

1.  Adopted transit fund management policies provide a framework to ensure the financial health and viability of the public transportation fund.

2.  In July 2016, following recommendations from a staff work group and review by a special committee on transit, the 2016 Fund Management Policies for the Public Transportation Fund were adopted through Ordinance 18321.

3.  The 2016 Fund Management Policies for the Public Transportation Fund set general financial practices and a fund structure for the public transportation fund, as well as policies and targets for financial and capital planning, expenditures, revenues, and reserves.

4.  King County government has experienced significant operational and fiscal impacts due to the Covid-19 pandemic. Though the impacts have lessened since the height of the pandemic, many remain and are expected to continue beyond the 2023-2024 biennium, including reduced fare revenue for the public transportation fund.

5.  In September 2020, the Metro transit department director informed the council that, during the 2021-2022 biennium, the Metro transit department anticipated not meeting either the farebox recovery target of thirty percent of passenger related operating costs or the farebox recovery ratio of at least twenty-five percent of passenger related operating costs set by the 2016 Fund Management Policies for the Public Transportation Fund. The council suspended those sections of the fund management policies via Ordinance 19206.

6.  In October 2022, the Metro transit department director informed the council that, during the 2023-2024 biennium, the Metro transit department anticipated not meeting either the farebox recovery target of thirty percent of passenger related operating costs or the farebox recovery ratio of at least twenty-five percent of passenger related operating costs set by the 2016 Fund Management Policies for the Public Transportation Fund. The council extended the suspension of those sections of the fund management policies via Ordinance 19531.

7.  Ridership and fare revenue have increased since the height of the pandemic but remain below 2019 levels. The Metro transit department’s actual farebox recovery ratio was seven percent in 2021, nine percent in 2022, and the department estimates the ratio will be nine percent for 2023 and 2024.

8.  The council also adopted fare policy changes to increase transit accessibility and affordability, including adoption of a free youth transit fare in 2022, implementing a fully subsidized annual transit pass for low-income riders who participate in certain social service programs, and piloting a reduction of the ORCA LIFT fare for low-income riders from $1.50 to $1.00 per ride. Those changes impact the Metro transit department’s farebox recovery by reducing fare revenues from those categories.

9.  Ridership and work patterns will continue to shift and change as the region recovers from the Covid-19 pandemic. The Metro transit department will continue to monitor how riders use transit to restore and grow service to meet these changing ridership needs.

10.  For the 2023-2024 biennium, the Metro transit department updated fare revenue projections based on data about ridership and fare payment. In alignment with the department’s current financial plan, these projections assume an increase to the department’s adult bus fare in 2025, followed by periodic increases every three years. Based on those projections, the department expects its farebox recovery rate to remain below fifteen percent throughout the next decade. Given that, the department will not be able to comply with the general financial practices and farebox recovery ratio sections of the 2016 Fund Management Policies for the Public Transportation Fund for the foreseeable future. The department requests an update to the farebox recovery section of the 2016 fund management policies.

                     BE IT ORDAINED BY THE COUNCIL OF KING COUNTY:

                     SECTION 1.  The following are hereby repealed:

                     A.  Ordinance 18321, Section 2; and

                     B.  Attachment A to Ordinance 18321.

                     SECTION 2.  The 2024 Fund Management Policies for the Public Transportation Fund, Attachment A to this ordinance are hereby approved.