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Rail News Home Passenger Rail

7/1/2011



Rail News: Passenger Rail

Task force recommends options for Denver RTD's long-term viability


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A task force organized to explore possible solutions to the Regional Transportation District (RTD) of Denver’s financial challenges has recommended the agency take action to secure its long-term financial viability.

In its recent report to the RTD board, the task force said the agency is an “efficiently operated” organization that benefits from “a culture of continuous improvement.”

However, the panel also noted that more than half of RTD’s annual revenue is generated by a 0.6 percent sales tax, which goes up or down in connection with the area’s economic activity, and fares, which contribute only about 20 percent of total revenue.

“Presently, RTD costs exceed available revenue and the shortfall is being covered using previously set aside reserves,” the report stated. “This strategy is not sustainable. When the task force started its work, there was a projected shortfall in 2012 of about $35 million that will need to be covered by either revenue increases or expenditure reductions.”
 
While the panel’s report provides no “quick-fix schemes or an easy silver bullet solution,” it does offer a “comprehensive survey of creative solutions,” along with the panel’s judgment of the best course for RTD to follow, said John Tayer, the task force chairman, in the report’s cover letter.

Proposed revenue enhancement options included legislative action to address current sales exemptions; a tax on certain properties within a specific distance of light-rail stations; more efficient collection of sales tax revenue; an improved fare recovery ratio; parking fee charges; and the selling of naming rights.

Proposed expense reduction strategies included an energy audit to enhance energy efficiency; service optimization; and privatization “partnerships.”

The task force also recommended RTD adopt a formal fund balance policy that defines each fund’s use, such as separate funds for capital replacement and working capital.



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