City council mulls future local funding for Bloomington Transit investments, as 2020 budget relies on feds for electric buses, shared-ride microtransit

Possible federal grants are a key part of the Bloomington Transit 2020 budget presented to the city council on Tuesday by the public transit agency’s general manager, Lew May. Councilmembers appeared receptive to the planned $4 million in capital expenditures to acquire four more alternative-fuel buses.

BT is also applying for a federal grant to fund a shared-ride microtransit pilot program to take up the slack on certain routes after fixed-route service ends for the day.

Council president Dave Rollo suggested looking beyond traditional federal funding sources. Among the local funding sources he suggested were tax increment finance funds and local income taxes.

A budget increase of $87,000 to cover an outside contract to add a security officer at BT’s downtown transit station drew scrutiny from councilmembers.

As it did on Monday, which was the first day of a week’s worth of departmental budget hearings, climate change drove a lot of the council’s commentary. Councilmembers wanted BT to consider adding solar panels to a new roof for the BT facility on Grimes Lane, which is currently budgeted for $363,250.

Before the unanimous straw vote was taken by councilmembers in support of the proposed budget, Dave Rollo said, “We are running out of time. And we need to direct capital to Bloomington Transit, if we’re going to be serious about climate—it’s got to be part of the strategy.”

The council’s vote to adopt the budget is scheduled for Oct. 10 after getting a first reading on Sept. 25.

Grants for Electric Buses and Microtransit

In 2020 Bloomington Transit hopes to multiply by four a recent success winning federal and state grant awards. This year’s awards covered 80 percent of the cost of a battery-electric bus, expected to be delivered in late 2020 or early 2021.

Four battery-electric buses, which will be purchased only if BT wins grant awards for them, are in the 2020 proposed budget. The grants this year came from the Federal Transit Administration’s 5339 and “Low or No Emissions” programs.  One reason the electric buses might not be purchased, May said at the Aug. 13 meeting of the BT board, is related to a mayoral initiative to explore the feasibility of generating natural gas for city fleet vehicles at the city’s waste water treatment plant.

As part of the 2020 budget, BT also hopes to win a $650 million operations grant to fund a one-year pilot microtransit program. Unlike fixed-route service, which is provided on regular routes with 40-foot long buses, microtransit provides service much like Uber and Lyft do—with the key difference that other riders can be picked up along the way.

The idea is to complement an initial recommendation from a route optimization study—which will likely be implemented in August 2020—to end fixed-route service at 7 p.m. Indiana University is a partner in BT’s grant application.

At $1 million apiece, the four electric buses, when added to the other regular capital expenses in BT’s 2020 budget, bring the capital budget to $4.8 million. That’s just slightly less than the capital outlays for the last three years combined ($5.1 million). It makes BT’s total budget 32 percent bigger than last year.

Electric vs. CNG Buses

One battery-electric bus was already in the 2019 budget. The city council will consider the necessary appropriation ordinance for the second electric bus at its meeting next week.

The two electric buses this year, plus the four in the 2020 budget would make a half dozen electric buses in the 40-bus fixed route fleet. The electric buses will replace existing hybrid electric vehicles, including the first one purchased by BT in 2006.

At BT’s board meeting on Aug. 13, May told the board that the choice between electric and compressed natural gas (CNG) for all future buses was not settled, because of a current initiative the city’s mayor, John Hamilton. The city council heard the same message on Tuesday night.

Hamilton has directed a task force to evaluate whether the city’s wastewater plant can be converted to an anaerobic digestion process, which could yield a source for compressed natural gas (CNG) to power Bloomington’s public vehicles. So BT might wind up switching gears from electric to CNG buses.

The mayor has talked about potential natural gas generation in a couple of speeches—his state of the city address for 2019, and his budget address delivered on Monday.

Campus Fleet

At Tuesday’s council session, May mentioned that most people are familiar with the fact that alternative-fuel buses are too tall to fit under the railroad bridge at 10th Street.

Cropped 08.12.2019 bus and dunn - 2
A Bloomington Transit bus (diesel) navigates its way south under the railroad bridge at 10th Street.

So only diesel buses are used for Indiana University campus routes. Of the 40 buses in the fleet, 15 are earmarked as campus route vehicles.

A possible reconfiguration of streets so that buses would not need to drive under the 10th Street railroad bridge would solve the tall-bus problem.

One of those possibilities is included in the Indiana University master plan. The plan was revised in 2018 to show an extension of Law Lane eastward, with a roundabout at a Law Lane-10th Street intersection, a bit north of the railroad bridge.

Reserves

May said at the BT board meeting on Aug. 13 that the 2020 budget requires using $899,845 from BT’s reserves. Of that amount, $800,000 is for the 20-percent local match that would required if BT wins federal funding for the four electric buses.

May said that’s “by far the biggest use of reserve for many a year.” May put the level of reserves currently at $8 million, so the 2020 budget would potentially tap 1/10 of the reserves.

At the city council’s Tuesday session, Dorothy Granger wanted to know what the balance of operating reserves is. May told her it is now $8.1 million and by the end of the year it would be $6 million.

The reserve is used for a variety of payments, May said, like the 20-percent local funding match for federal grant. The reserve serves to mitigate against uneven cash flow due to the intermittent nature of property tax and federal grant revenues, he said.

A reserve also helps buffer against volatile expense items, like fuel. Fuel hasn’t been very volatile recently, May said, but in 2008, when diesel fuel costs increased to around $4 a gallon, it required the use of about $500,000 of the reserve, May said.

Microtransit

Funding for the shared-rider version of an Uber/Lyft-style service, called microtransit, would come from the Federal Transit Administration’s Integrated Mobility Innovation program,  May said at the BT board’s Aug. 13 meeting that there’s $8 million available nationally, and BT is asking for $650,000.

May thinks BT has an advantage because up to now such grants have primarily been awarded to large urban areas. He’s not aware of any small areas the size of Bloomington that have received this type of grant, so he thinks that’s in BT’s favor.

May said the idea is to start such a service in conjunction with the service changes that go into effect in August 2020. The study that’s guiding the service changes recommends several routes to end fixed route service at 7 p.m. The ideas would be to replace the fixed route service after 7 p.m. with a one-year demonstration of micro transit service.

Partnering on the grant application, May said, is IU Campus Bus, which is interested in replacing its night-owl service with microtransit for a one-year demonstration.

Asked by a board member how BT’s microtransit would compete on cost, May said fares would be the same as for fixed-route service. Passes—like those for IU affiliates—would also be recognized, he said.

Transit Center Security Officer

BT’s 2020 budget includes a $87,000 to contract for a security guard at the downtown transit center. In the five years or so since the downtown transit center has been open, May said, staff and drivers have made a “strong suggestion” that BT needs to have a full-time security presence there—preferably in the form of a police officer or sheriff’s deputy.

May said he hopes that BT will be able to contract with a Bloomington Police Department, or possibly someone else, to provide full-time police presence in the downtown transit center.

At Tuesday’s city council session Susan Sandberg asked what kind of issues at the downtown transit center required a security officer. May said there had been several incidents involving intoxicated and disorderly passengers, fights between passengers, suspected drug dealing and a few robberies.

May told Sandberg he’d talked to Bloomington’s police chief, Mike Diekhoff who suggested hiring off-duty police officers.

The suggestion to hire off-duty police officers drew the attention of Isabel Piedmont-Smith, because the council had earlier in the evening expressed their concern to Diekhoff about officers working too much overtime and the impact they thought it might have on morale and retention.

Piedmont-Smith asked May if Diekhoff had expressed any hesitation given the amount of overtime that officers already work. May told Piedmont-Smith that Diekhoff felt like there were officers who were willing to do it. “Interesting,” replied Piedmont-Smith.

Grimes Lane Facility Roof

Reacting to the planned expenditure of $363,250 for a roof replacement on the Grimes Lane facility, Isabel Piedmont-Smith told May, “Whenever a new roof has to go in on any city facility, I think about solar…Has that been considered by the board?” May said that BT’s board members had considered solar panels for the Grimes facility roof, characterizing their interest as “mild.”

May pointed out that the downtown transit center has solar panels on all its canopies and that they was operational starting last November. So BT has less than a full year of experience with the panels. What BT wants to do is get some additional analysis of the panels to make sure it’s a good investment from a business perspective, May said.

Piedmont-Smith encouraged BT to choose materials for the new roof that would allow solar panels to be added later.

Steve Volan asked why BT wouldn’t automatically plan to install solar panels on a new roof. May said BT was weighing the credits they were seeing against the initial investment.

Volan put the question in “the context of a climate crisis.” Volan said based on his back-of-the-napkin calculations, it would be possible to power an electric bus fleet with solar panels at BT’s facility.

The city’s controller, Jeff Underwood, weighed in on the topic of net metering, which Volan had believed still held some possibilities for BT. After Underwood spoke, Volan said, “I despair for the future of our state. Thank you.”

Two extra busses for Route 6L 

This year, BT’s budget includes about half of the extra $186,000 that Indiana University is paying BT, to add two busses to Route 6L. The university wants to make sure that students who were relocated—from residence halls that are being rehabilitated to Park on Morton, Smallwood on College and Reserve on Third—are served with transit.

Automatic Passenger Counting

May told the city council that the $200,000 budgeted in 2020 for automatic passenger counting (APC) devices would allow precise analysis of all routes, measuring the number of passengers who get on and off at each stop, by time of day.

Ridership

At the BT board meeting on Aug. 13, monthly ridership for July was reported up 5 percent compared last July, but year-to-date for 2019, ridership is still down 4 to 5 percent.

Bloomington Transit Ridership Trend by Year Feb 2019 stacked test

That continues a slide that began in 2015 and accelerated from 2017 to 2018, when ridership fell from 3.3 to 3.1 million.

At Tuesday’s city council session, Dave Rollo said he thought the peak in ridership in 2014 could be attributed to higher fuel prices, which then fell. May confirmed that generally transit sees increased ridership when fuel prices increase, but that works as a double-edged sword, because fuel costs for a public transit agency also rise.

Revenue

Among the several future challenges May described for the city, some involved funding sources. IU contributes around $1 million each year to BT to cover the rides of the students, faculty and staff who make up about 70 percent of BT’s ridership. At Tuesday’s city council session, May said for the last three years, that amount had been flat. For 2020 a 2-percent increase had been negotiated, May said.

Federal gas taxes have not change since 1993, May said. JARC (Job Access Reverse Commute), which has provided BT some funding in the past, will no longer be available after 2019. May cited a lack of growth in Indiana’s PMTF (Public Mass Transportation Fund) and the fact that the governor has not reverted unspent PMTF funding back to the fund.

May said that future annexations of land into the city, which are stalled for the moment by the state legislature, provide an opportunity for additional property tax revenue. (Bloomington filed suit over the legislature’s action, won in a lower court and is now opposing the state’s appeal in the Indiana Supreme Court.)

May mentioned some legislation that had not gotten support in this year’s session, which would have created some additional opportunities for transit funding. SB 285 would have allowed counties to impose an additional local income tax rate to fund the operations of a public transportation corporation. It passed 28–21 in the state senate. But it did not get a hearing in the state house.

May said he’d had a conversation with Mayor Hamilton recently about the city and county using the available room under the limit for Monroe County’s existing local income tax as way of supplementing transit funding.

May gave the council a grim outlook about additional sources of operation funds for transit. “As we look to the horizon, it’s hard to imagine new sources of operating funds,” May said.

“So, that speaks to the need to do it locally,” Dave Rollo replied.

Given the importance of transportation in its contribution to green house gas emissions, Rollo said, he wanted to see a “palette of options” for increasing funding. Among the possibilities Rollo wanted to see analyzed were: tax increment financing; Bloomington’s Downtown CRED (Community Redevelopment Economic Districts); the existing local income tax; and the general fund.

Common Theme: Increased Capital Outlays

Bloomington Transit’s budget is not a part of the “core budget” of 13 departments that was presented to the city council on Monday by Bloomington’s mayor, John Hamilton. The city’s core budget of $98.6 million was 36 percent bigger than the last one proposed by his predecessor four years ago.

Single Bar Barchart of City Budget

What the core budget and BT’s budget have in common this year is an increase in capital outlays compared to previous years.

Of the four basic categories in the core budget—personnel, supplies, other services, and capital outlays—the biggest difference between the proposed 2020 budget and the one adopted in 2016 is in capital outlays. The $8.6 million for capital outlays in 2020 is almost three and a half times the $2.5 million in 2016.

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