Agenda - 04-18-1989 - Laserfiche WebLink

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9 III. Financial Capacity Chapel Hill Transit is operated through a department within the Town of Chapel Hill. Funds used by the transit system are segregated and accounted for as a seperate fund from the general operating fund of the Town. The Town's FY 1988 financial audit shows that the Transportation fund is in good financial condition. The balance sheet, (Attachment 1) shows a strong cash position, high working capital ratios and low long term debt. current assests of $1,233,472 exceed current liabilities of $124,032 by $1,109,440. Overall, the Town of Chapel Hill has a strong financial position and has experienced significant growth in its tax base over the past ten years. Chapel Hill Transit relies on a combination of operating and non-operating revenue to fund transit operations. Operating revenue from farebox and pass sales has increased approximately 90% during the period from 1981-82 to 1987-88, from $643,687 to $1,035,708. Non-operating,revenue include ad-valorem taxes dedicated to transit service in Chapel Hill and Carrboro, funds from the University of North Carolina and federal transit operating assistance. Attachment 2 compares the transit system's expenditures and revenues over the past several years and provides the revenue cost ratio between total expenditures and operating revenue. In FY 1987-88 the Town recovered 34% of expenditures from operating revenues. In the past two years there has been an upturn in the revenue cost ratio. This increase has been the result of expanded ridership and increased revenues from special events park and ride service. At this time fare prices are expected to remain at current levels. There is strong local support for the Chapel Hill Transit system. The Town's local share comes from a special ad-valorem property tax, approved in 1974, which allows up to $.10/$100 valuation of property for suppport of transit operations. The current levy is 3.0 cents, although this assessment could be raised to the full 10 cents if conditions warranted. There is no expiration on this taxing aurthority. In FY 1986/87 an additional 1.5 cents levy was used to collect funds for a transit reserve account to provide for future capital needs and as a cushion against operating deficits. Additionally, the Transportation Fund had a undesignated fund balance which has increased over the past several years, amounting to $501,159 for the year ending June 30, 1988. This will be used as local match for future capital grants. It also provides a cash-flow reserve for routine operating costs. The University of North Carolina and Town of Carrboro also provide local funds for the operation of the transit system.