Innovation Helps Laketran With 2012 Budget

By Brandon Baker, News-Herald

A line of Laketran buses sat behind the agency’s Painesville Township headquarters Monday morning, but each vehicle was missing a key element.

Their scratched-off logos were representative of both the ongoing eBay auctions Laketran has been conducting and the lengths officials have gone to raise money for the fiscally recovering transit authority.

“We had people coming all the way from California. We’ve got these buses being sold to Africa, to Mexico, all around the world,” Laketran General Manager Ray Jurkowski said.

Laketran has been selling many of the buses for about $3,000 apiece, or 50 percent more than leaders think they would have gotten from holding a local public auction. Jurkowski estimates that Laketran has sold about 35 of them this year.

“In government, you have to reinvent new ways of doing things, and they’ve been very good with that, in terms of trying to just pursue our new revenue streams and this with eBay,” Laketran Board of Trustees President Kevin Malecek said of the agency’s administration.

“Innovation has paid off in where we are financially, we’re very stable right now.”

The web-based auctions have combined with service cutbacks, slowly recovering sales tax receipts, and various human and health service reimbursements to guide Laketran back to economic stability.

The upcoming budget proposal of about $12 million for 2012 would mark the fourth consecutive balanced budget for Laketran. That amount is also nearly $1 million less than last year’s budget.

Last week, Laketran buses began running until 10 p.m. on weeknights as a result of a board-approved operations extension for the holidays. The ruling also reinstituted Saturday service, from 9 a.m. to 9 p.m. The extensions will last through Jan. 14. Services had been curtailed since April 2009, when Jurkowski and the board believed changes were in order to have a fighting chance against the Great Recession.

Since then, Laketran saved about $1.6 million by using a mix of federal funding to acquire 51 new buses, enabling the sale of the old buses on eBay. The government doesn’t allow such funding to be used for operational usage, but the savings they afforded Laketran from its capital budget helped the agency’s overall rebound.

Jurkowski said Laketran opened a contingency reserve account this year, as it continues to lobby for state and federal legislation that would aid transportation systems in the way the government did about a decade ago. Aid has been on the steady decline since then. The agency made a few deposits totaling about $650,000 since July.

“We all felt that the financial recovery was working to the point that we can make a deposit like that,” Jurkowski said.

Laketran also remains locked into a gas contact through 2012 that gives its buses fuel at about $2.32 per gallon. These positive developments have occurred while Laketran received the Federal Transit Administration’s “Achievement of Excellence Certificate” for a perfect triennial review; an “Auditor of State Award with Distinction” from David Yost’s office; and the “Distinguished Budget Presentation Award” from the Government Finance Officers Association.

Does any of this give riders a better chance at seeing Laketran return to its pre-April ’09 level of service?

“There’s always been this desire on the part of the board to try to restore service, but do it (in a sustainable fashion),” Malecek said. “We can’t be in a situation that we’re going to put it back, and then in three months’ time, six months’ time, say, ‘Sorry, we’ve got to take it all back again.’

“My attitude is always, you can’t jerk the public around like that.”

The community likely won’t receive a more definitive answer until Laketran sees more sales-tax improvement. Each month has seen better receipts than the corresponding period of 2010. Still, Laketran’s $5.8 million year-to-date sales tax money is nearly $200,000 less than what it got from in-county purchases four years ago.

The agency is hoping for the passage of a U.S. Senate bill that would allow state governments to collect sales tax from e-commerce. Currently, states can only do so when a consumer purchases from a retailer that has a physical presence in the buyer’s state of residence. For example, a Lake County resident pays sales tax on a purchase from Macy’s website, but not when he or she buys a gift from Amazon.com. State and local governments have long estimated that they lose billions each year because of the loophole.

Similarly, Laketran is in a holding pattern regarding a bill introduced by U.S. Rep. Steven C. LaTourette, R-Bainbridge Township. It would give federal spending flexibility to agencies like Laketran that run fewer than 100 buses during peak hours while servicing an area with more than 200,000 residents.

“We live in an uncertain world with federal and state funding,” Jurkowski said. “Even though that funding is uncertain, I think the board’s top priority is to make a commitment — and I think we can do this because of the progress and success of the financial recovery plan — to keeping the existing levels of service we have now and the existing fare structure we have now for 2012 and 2013.”

 

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