Public Information

For Immediate Release

Release Date: 07/25/2011

Mayor Holden, officials unveil plan to fund CATS’ budget shortfall

Mayor-President Melvin L. “Kip” Holden today joined officials from the state Office of Community Development and the East Baton Rouge Mortgage Finance Authority in unveiling details of his plan to fund the the Capital Area Transit System’s projected $1.29-million budget deficit this year.

Without the funding arranged by Holden, CATS would have been forced to terminate bus service in October. In January, CATS officials and the CATS board had proposed cuts in the bus service to eliminate the deficit, but those changes were rejected by the Metro Council.

“We have secured the funding needed to prevent the anticipated shut-down of public transit services this year,” said Mayor Holden, “but we must continue to work to secure a permanent funding model to serve East Baton Rouge Parish.

“I have pursued local, state and federal resources since the Metro Council did not approve the CATS administration’s plan and it became obvious they were running out of options to keep the buses rolling. I am very appreciative that the state Office of Community Development and the East Baton Rouge Parish Mortgage Finance Authority worked with us to help CATS address their shortfall. Successful cities have successful public transit systems and it’s critical that we provide service for working people, senior citizens and riders who simply prefer to use public transit.”

CATS Chief Executive Officer Brian Marshall noted that Mayor Holden has no legal responsibility for CATS, but helped find the money to keep the bus system in operation as part of his commitment to good quality of life for all citizens in the parish.

“If the funding had not come through, thousands of citizens in the parish would not have been able to go to work, school, or the hospital” Marshall said. “In addition, 150 CATS employees would be unemployed.”

Pat Forbes, executive director of the state Office of Community Development, announced at today’s press conference that CATS will receive $500,000 from his office’s Disaster Recovery Unit to help keep the CATS buses rolling through the end of the year. Forbes said the funds are from OCD’s Local Government Infrastructure program, which uses Community Development Block Grant dollars provided by the U.S. Department of Housing and Urban Development to help local municipalities recover from hurricanes Katrina and Rita.

Plans call for $382,006 of the funding provided by the OCD’s Disaster Recovery Unit to be used for fuel, with the remainder earmarked to lease transit vehicles

“Baton Rouge is now home to many Katrina evacuees who rely on the buses to access their jobs and other basic services,” Forbes said. “We are pleased to join together with East Baton Rouge Parish, CATS and the EBR Mortgage Finance Authority to ensure that the city’s public transportation system continues to operate for all of its residents.”
Last week, CATS’ governing board accepted a $500,000 grant from the East Baton Rouge Mortgage Finance Authority, whose primary function is provide affordable housing and to help fund economic development projects. The money from the EBRMFA will be considered a loan in the event that CATS start receiving a dedicated revenue source, and would have to be paid off in seven years.
"The MFA Board is very pleased to be able to assist CATS in this time of financial emergency, said Astrid Clements, chairwoman of the East Baton Rouge Mortgage Finance Authority. “We believe our funds will help to insure that many of our citizens will have transportation to get to their jobs and thereby maintain housing and other necessities for their families.

“Because this is a one-time funding from the MFA, our Board strongly endorses all efforts to secure a new and adequate source of permanent funding for CATS,” Clements added.” The MFA Board also thanks Mayor Holden for his leadership on this very important initiative."

The combined $1 million from both grants will be used as a local match to obtain for federal grants that will provide additional money to erase CATS deficit for the remainder of 2011, according to CATS Chief Financial Officer Gary Owens.

Owens said the grants are aimed at low-income and disabled workers who are reliant on public transit, and will require CATS to extend the Goodwood Boulevard and the Harding Boulevard route to serve more disabled and low-income riders.

Owens said CATS had initially projected its budget deficit at $1.29 million, but later revised it upward to $1.5 million due to rising fuel costs. However, in recent weeks, fuel prices have declined, prompting CATS officials to revert their projected shortfall back to the original $1.29 million.

In an effort to come up with a long-term solution for CATS, Holden appointed a Blue Ribbon Commission on Transit earlier this year that is proposing a package of new taxes and route expansions aimed at increasing bus ridership. The proposed package is tentatively slated to go before East Baton Rouge voters in the fall of 2012.

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