BART Presents Its Preliminary Operating Budget for 2003; $28 Million Shortfall.News Editors OAKLAND, Calif.--(BUSINESS WIRE)--May 9, 2002 BART today presented a Preliminary Operating Budget Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. of $438.9 million for fiscal year 2003, which has a shortfall of $28.1 million. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. BART General Manager Thomas E. Margro, who presented the preliminary budget to the system's Board of Directors, the District's projected revenue for fiscal year 2003 is $410.8 million, presenting a gap that must be closed to balance the FY 03 budget. He said that BART's overall revenue is projected to be down by $40.5 million compared with the current year's adopted budget, while operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. are expected to increase by $17 million, plus a $2.2 million increase in debt service for a total budget shortfall of $59.7 million. However, the preliminary budget incorporates a $31.6 million in expense reductions: $15.3 million through a series of cost-cutting measures taken last January and being carried into the 2003 budget period, combined with a $16.3 million reduction in allocations to the Capital Improvement and System Renovation Programs, leaving a deficit of $28.1 million. "Like many other agencies, including transit, there is no question that the slowed economy has had the most significant impact on our budget projections for the coming year. We project $40.5 million lower than expected revenues from our two primary revenue sources, the farebox, and sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. receipts, which account for 90 percent of the District's operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. sources," Margro said. He said that the system has seen its biggest ridership rid·er·ship n. The number of passengers who ride a public transport system. loss in 22 years, down about 10 percent this March compared with March of last year. The decline in ridership is expected to result in a nine percent farebox revenue loss or $19.4 million. Also, sales tax receipts, of which, BART receives three-quarters of one-half percent, are also projected to be nine percent less than last year, that translates into a revenue decrease of $18.2 million in the coming fiscal year less than last year. In addition to the projected operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. the budget will also allocate $59.2 million for debt service and $10 million to capital expenditures both of which fund the physical renovation of the system. Margro said that he believed it was critical to carry out the long-term reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. in the system, uninterrupted. BART's Ten-year Renovation Program, to add many more years of life to the system's infrastructure and original fleet of transit cars, began about seven years ago and is now 80 percent complete. He said that there are several options, which must be considered to balance next year's budget. They include further cost savings, which in turn would result in layoffs, and finding ways to enhance revenue. "Our budget decisions will be guided by a commitment to maintaining safety and reliability of service. We will continue to try and avoid any cuts that would significantly impact our customers; however, cleanliness Cleanliness See also Orderliness. Cleverness (See CUNNING.) Berchta unkempt herself, demands cleanliness from others, especially children. [Ger. Folklore: Leach, 137] cat continually “washes” itself. and customer information would be impacted by this budget," Margro said. We have some very tough challenges ahead, not only to adopt a prudent budget for fiscal year 2003, but to ensure quality service for the long-term financial health, as well." With the transit system's new fiscal year beginning on July 1, the BART Board is expected to adopt the new budget on June 27. |
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