Saturday, July 22, 2017

[Santa Cruz County] Report criticizes Santa Cruz Metro financials, long-term plans

SANTA CRUZ >> Despite efforts to cut costs, the Santa Cruz Metro is still struggling with long-term financial viability, according to the findings of a grand jury report.
The report, released June 29, takes aim at the transit district’s approach to sustaining itself financially.
Since the 2008 recession, the entity had regularly dug into its $25 million reserve to continue operation and stave off severe cuts to services. But that practice is not sustainable and the entity needs to focus on growing its ridership and community ties, according to the grand jury report.
“Current Metro Board actions and guidance to management do not address the need to grow income,” the grand jury wrote.
The Santa Cruz Civil Grand Jury investigates local governments, county facilities, special districts and schools.
Outlined in the report were five focal points for the body to address: funding, facilities maintenance, management, ridership experience and business development. But a chief theme throughout the 10-page report was the need to address long-term financial viability and growth.
While the grand jury commended the district for making attempts to cut costs through route reductions and decrease of stop frequencies, it cited the need for more grant writing and expanded partnerships throughout the county.
But Alex Clifford, CEO and general manager for Metro, says there is evidence that shows otherwise. The district had a great 2016 as far as grants. That list included a $3 million federal grant for three electric buses as well as grants from the state and the Santa Cruz County Regional Transportation Commission.
“How do you tell us that we’re not doing well in grants when we had an incredible year last year of receiving grants?” he said.
As is typical with grand jury reports, the entity in question must respond within a time frame. The transit district board has until Sept. 17 to respond while the CEO — Clifford — has until Aug. 28.
The board and Clifford plan to dispute much of the report, including the contention that the report omitted key facts and contained numerous errors.
While the report cited Metro’s projection that it would run into a deficit within two years — despite the body’s best efforts — Clifford said it failed to consider recent funding. The district is expecting funding from SB-1 and Measure D. He also added that the board recently adopted a five-year budget that eliminated the projected deficit.
“They’re just wrong and we’ll correct the record in our document that we present to the board in August and in September,” he said.
One point that Clifford and the grand jury do agree on is the recommendation that the district’s need for a marketing manager. While the role is open, it has remained unfulfilled because of budgetary issues.
The position could champion new methods of bringing in revenue, expand the number of partnerships and advocate for other programming that would grow metro.
“Currently these activities are disjointed and sporadic, and are constrained by a narrow definition of marketing. A business development manager would also examine the practices of similar and more financially robust transit systems to identify proven strategies,” the grand jury wrote.
The position has remained unfulfilled because of a lack of resources, Clifford said. Now that the board is in a better financial position, he said the position could be filled in the next few years.
Despite disagreeing with many of the findings, Clifford said he was pleased the body did not come back with issues concerning fraud, resource waste or abuse.
“Whenever you have any kind of audit or investigation, that’s one of the things you hope you’ll come through clean on,” he said.
July 8, 2017
Santa Cruz Sentinel
By Calvin Men

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