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1 <br /> TRIANGLE TRANSIT AUTHORITY 9 <br /> M E M O R A N D U M <br /> TO: Board of Trustees <br /> FROM: Jim Ritchey <br /> General Man er <br /> DATE: August 8 , 1991 <br /> SUBJECT: Recommended Tax Rate <br /> The attached three charts compare our expenditures over the -next <br /> four years with anticipated revenues. They contrast tax rate <br /> levels of $5, $4, or $4 for the first year and $5 thereafter. <br /> In completing this analysis, I have assumed that the regional bus <br /> service will start in December, 1992; that we will lease/purchase- <br /> 20 buses and an operating facility; that for FY 1994 and FY 1995 <br /> the base level of bus service will increase ten percent each year; <br /> that city and county governments will- contribute $ 100 ,000 each <br /> year; that vehicle registrations grow by 2% each year; and that the <br /> required fund balance for operations is 10% of total annual <br /> expenses. <br /> The analysis demonstrates that a $4 tax rate will not generate <br /> suf f icient funds. The plan of having the tax rate of $4 in FY 1993 <br /> and $5 in later years provides adequate operating funds but the <br /> fund balance is approximately 6% of total expenses. The $4/$5 plan <br /> will reduce tax revenues in FY 1993 by $ 554,715. The $5 generates <br /> adequate funds and larger fund balance. Over the 1993-1995 period, <br /> the fund balance should average $ 800,000 or. approximately 20% of <br /> total expenses. <br /> I recommend the $5 tax rate. This recommendation is based upon the <br /> budget information and the uncertainty of actual cash collections. <br /> Our estimate of tax collections is based upon NCDOT registrations <br /> as of June, 1991; however, we are uncertain as to the number of <br /> vehicles which may be exempted because of public ownership or other <br /> provisions of the law. My tax recommendation is also based upon a <br /> concern for flexibility in allowing the ridesharing program and <br /> planning function to grow with demands. The budgets only provide <br /> for three ridesharing staff persons and one planner. If the <br /> ridesharing program grows as it should and we embark on planning a <br /> fixed guideway system, these staffing levels are far too low. <br /> I look forward to discussing this analysis with you. <br /> Suite 206,50 Park Offices <br /> P.O.Box 13787,Research Triangle Park,NC 27709 (919)549-9999 <br />