The Denton County Transportation Authority formally adopted its fiscal year 2021 budget and reached a consensus on the refinancing of its $28.2 million total debt during its monthly board meeting this week.
Through the past months, DCTA has managed both the current and upcoming year’s budgets in the midst of the COVID-19 pandemic. Ridership volume has been massively affected by the outbreak. During the August meeting, when the public hearing on the upcoming budget was held, the agency revealed it’s projecting 53% less ridership on buses and 41% less for rail for 2021.
Thursday’s information report showed ridership did increase from July to August, with the Connect bus service seeing an 82% increase and an 8% increase for the A-train, but ridership numbers remain substantially lower than in pre-pandemic months. From June 2019 to February, average monthly A-train ridership was 31,768. Since March, that number has plummeted to an average of 8,539.
Changes have been made to both the current year’s working budget and the upcoming year’s budget since last month’s public hearing. The dollar differences between the two have lessened, largely due to amendments to the current budget. The new budget will take effect Oct. 1 when fiscal year 2021 begins.
DCTA’s total operating revenue is set to decrease from $4.2 million to $4 million, mostly stemming from a nearly $200,000 decrease in rail revenue. Total non-operating revenue is slated to increase from $42.5 million to $48.5 million due to a projected increase in federal grants and reimbursements for the third consecutive year.
Total operating expenses — including costs for the DCTA-established North Texas Mobility Corp., which runs DCTA’s buses — are projected to increase slightly from $42.8 million to $43 million. Salaries, wages and benefits are projected to decrease from $12.3 million to $11.6 million, partially due to pandemic-induced layoffs, while the cost for materials and supplies, which includes sanitation supplies and equipment, will increase from $2.5 million to $2.9 million.
Board members also revisited last month’s discussion on refinancing options for its $28.2 million total debt, led by Hilltop Securities representative Laura Alexander. Though restructured slightly, the two previously discussed options remain: a level savings option that would save $1.8 million, completing payments in 2031, and a future capacity option that would save $1.2 million and complete payments in 2032.
In one important difference, the future capacity option would allow for over three times as much additional debt capacity, $9.9 million, as the level savings option, $2.9 million. At last month’s meeting, the board did not commit to either option, advising that both continue to be explored.
During Thursday’s meeting, Chief Financial Officer Marisa Perry recommended moving forward with the future capacity option due to the financial flexibility it would offer, as she said the authority currently does not have much capacity at all for additional debt. Board members obliged, including Denton Mayor Chris Watts, who had previously voiced concerns over the option saving less overall.
“What we’re trying to do with this is lower our costs so that DCTA is more financially efficient,” Watts said. “Last time I was preferring Option 1 but I think I’m good with Option 2 — it’s a good financial decision.”
Alexander said the refinancing bids will be received from banks shortly before next month’s board meeting, when the board can approve one of them.