Sales tax vote for public transit funding approaches

Kyle Phillips / The Transcript

Commuters ride on the Embark bus system in Norman on Friday.

Norman's newly acquired public transit system is about $2.2 million short in system coverage, but a potential sales tax could make up that difference.

The Nov. 12 vote for a city-wide one-eighth percent sales tax is only three weeks away for Norman residents. The sales tax would generate an estimated $2.5 million and comes from Cleveland County's one-quarter percent sales tax which is slated to end March 2020. The county is also holding an election for a one-eighth percent sales tax.

If the majority votes yes on both sales tax initiatives in November, the current one-quarter percent sales tax rate would effectively continue, but with half staying with the county and half going to the city. If the majority votes no on both, the one-quarter percent sales tax rate administered by the county would expire in March 2020.

"This is not going to be a tax increase, it is a new tax for a new purpose," Shawn O'Leary, Public Works director said.

If residents do not pass the sales tax, O'Leary said, he images the only solution for council would be to cut service. They don't know which services would be cut, but he said they are going to be $2.2 million short.

"Honestly I don't know, we certainly have those conversations around here trying to figure out what we would do, I think it would have to be a cut in services in both the fixed routes and the para transit," O'Leary said. "I think it's going to be a really difficult decision for the city council to have to cut the public transit system, which many believe today is already a bare bones program."

In the 2019 fiscal year, 300,861 rides were given on fixed route buses and 32,142 were given by para transit serves for elderly or disabled residents. There are five local city routes with 115 bus stops.

Bus changes

The city's tax would take effect at the same time the county's sales tax is expiring or continuing at a reduced rate, depending on what voters choose. If approved, the new Norman sales tax would fund the city's public transit system, which it inherited from the University of Oklahoma after the university dropped the service in July.

OU operated the bus system for 30 years until the transfer of service. The university surprised the city council in August 2018 with a letter stating it needed more money to address cost overages. Negotiations between the council, city staff and the university failed and OU transferred the system to the city.

The council unanimously approved contracts with Embark and OU July 30.

Embark now operates Norman's bus system. The company is a public trust of Oklahoma City and the provider of public transit services for Oklahoma City and Central Oklahoma.

Through the contract OU operated the entire system for an additional month in July, and in August Embark took over the fixed routes while OU ran the para transit until September. Embark took over para transit Oct. 1.

The university ended Saturday service before the transfer of service, and now it operates and collects fees for student routes only. The city inherited the rest of the university's fleet, and received maintenance training.

The council and city staff have said many times this a service they didn't want to take on, but are doing the best they can to run the system. O'Leary said if the vote passes and there is left over funds from the estimated $300,000 surplus that could go towards bringing back Saturday service.

"We are doing our best to keep the system running, but we have determined that it's a very costly operation," O'Leary said. "The city's budget was certainly never equip to handle that kind of additional cost."

System funding

The cost of the city's current system is about $5.3 million, and the financial breakdown for the 2020 fiscal year includes: $3.1 million for the city's operations contract with OU and Embark, $900,000 for maintenance of the 29 vehicles, $125,000 for city of Norman Public Transportation staff and $1.2 million for capital costs.

Taylor Johnson, the city's new public transit coordinator said they are watching costs and expenses closely and will know more about funding needs at the end of the fiscal year.

The $3.1 million encompasses all of the cost of operations that the city is paying primarily to Embark, and some to the University of Oklahoma for operations that both entities agreed to in their contracts. For Embark the funds heavily fund drivers, dispatchers supervisors and other Embark staff.

The system's major sources of funding are through an annual $2 million grant from the Federal Transit Administration, a $1.1 million contribution from the city's general fund and, if approved, the sales tax would generate $2.5 million. Right now there are no fares to ride an Embark bus, but the council will vote Tuesday on whether or not to implement Embark's fee structure or continue fee free. Embark charges $1.75 per trip in Oklahoma City.

The University North Park Tax Increment Finance District vote on the amended project plan has to come into the conversation too, O'Leary said. If the sales tax were to fail and the TIF sales tax allocation is not to be ended by the council the city would have a significant financial problem, he said.

Spreading the word

In anticipation of the vote, the city has received many calls from businesses and civic groups and clubs such as Rotary to come out and speak about the one-eighth percent sales tax. O'Leary said he and other Public Works and Mayor's office employees have gone to these speaking events, and another 30 or so planned.

There will also be presentations at every ward meeting prior to the vote.

"I have been at almost every single one of these events and we have been very favorably received," O'Leary said. "Not hearing a lot of opposition, hearing a lot of questions and I think what I have discovered is the average Norman resident knows either very little or nothing about the bus system."

Mayor Breea Clark said she is also seeing the sales tax being well received at each of her speaking events.

"I think it's an excellent opportunity to provide basic government service to the residents of the community that really depend on it, without seeing an increase in sales taxes for Norman residents," Clark said.

Prior to developing the ballot language, the City of Norman conducted a survey of 400 registered Norman voters through Cole Hargrave and Snodgrass & Associates in August that asked residents if the sales tax should go toward public transit. From the survey results, 36% said definitely yes, 18% said probably yes, 12% said probably no and 26% said definitely no, with 9% undecided.

There has been some opposition to the sales tax online. Those commenting are concerned about another tax or that there aren't many bus riders in Norman.

Jeremy Moses, a resident who lives in south Oklahoma City, uses Embark for medical appointments at the Norman Regional Health System rather frequently, and he is hopeful that the residents of Norman pass the sales tax. If public transit is cut in Norman, he said, that would impact his life significantly.

"I hope it passes I really do," Moses said, in regards to the vote. "When the Saturday service went away I thought that was a mistake, because that not only effected regular residents, but that effected people who use para transit down there."

Ben Houlette, Norman resident, said a lot of people in Norman don't want a sales tax, because they don't want to pay more when they go to the cash register. However, in the City of Norman, he said, there's a large group of low-income families and people that rely on bus services to get to work every day and they have to be taken care of.

"I honestly believe that it is vital that not only do we approve this tax increase, but we continue to do so that way we can continue to make Norman better," Houlette said.

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