A year after warning that it would soon blow through its reserves and might not be able to keep up with passenger demands without raising fares, the company that operates the Regional Transit Authority’s buses and streetcars said this week that it expects to close 2015 with an operating surplus.
In a $90.8 million spending plan presented Tuesday to a New Orleans City Council committee, TransDev, formerly Veolia Transportation Services Inc., said it expects to close the year $572,000 in the black.
That’s a marked change from the gloomy picture the company painted last year, when Transdev Vice President Justin Augustine told the council that the RTA would need to spend nearly half of its reserves to cover shortfalls in 2015 and would exhaust its reserves in the years to follow if fares weren’t raised.
The RTA has not had a fare increase since 1999.
But Augustine told the council Tuesday that the company has benefited both from cost-cutting measures and from an increase in the city’s sales tax collections. Sales tax revenue to the RTA, the largest source of funding for the transit operator, is expected to total $60.4 million in 2015. Transdev also generates revenue from passenger fares, charters and advertising. The company has projected total revenue of $91.4 million for 2015.
The Transdev contract with the RTA is worth $65 million a year.
The transportation company’s budget presentation came nearly two months after the council’s annual budget hearings. Transdev’s presentation was deferred, Augustine said, because the company was in the middle of contract negotiations with the RTA when it was originally scheduled to present.
Council Transportation Committee Chairman Jared Brossett had asked the company on Friday to make its presentation at Tuesday’s meeting.
The late notice rankled Councilwoman Susan Guidry, who said she learned of the meeting Monday and only received a copy of the budget Tuesday, not far enough in advance to properly review it.
Guidry also expressed concern that citizens who otherwise would have attended the presentation weren’t given sufficient notice that the transportation company would be presenting at Tuesday’s meeting.
The RTA is in the middle of a $3.5 billion, long-term spending program that includes more than 33 miles of new streetcar lines.
It is set to begin work this month on the main phase of construction on a streetcar line running along North Rampart Street and St. Claude Avenue from Canal Street to Elysian Fields Avenue. The project will take about two years to complete.