http://www.ocregister.com/articles/c...tic-funds.html
ARTIC needs funds that typically go to street improvements
June 11, 2015
BY ART MARROQUIN / STAFF WRITER
Anaheim’s new transit hub was to be financially self-sustaining but the station is now poised to rely on up to $4.3 million of countywide “fair-share” transportation funds that typically go toward street improvements, city and county officials said.
Of that, $2.1 million could be used to back-fill an operating deficit created when the Anaheim Regional Transportation Intermodal Center opened in December, said Debbie Moreno, the city’s finance director.
If the funding is approved by the City Council next Tuesday, then the rest of the money would be set aside in case Anaheim city officials can’t otherwise generate enough revenue to keep the facility open through the end of June 2016.
“The initial financial projections were wildly overstated for ARTIC,” said Mayor Tom Tait, who also sits on the Orange County Transportation Authority’s board.
City officials had initially considered transferring money from Anaheim’s General Fund to cover ARTIC’s financial shortfall, created by the city’s inability to secure funding through sufficient advertising and striking up a naming-rights deal with a corporate sponsor.
Instead, Moreno recommended that the deficit be covered by the bulk of the $5.78 million that the city is expected to receive July 1 from so called fair-share funds generated by Measure M2, the half-cent sales tax extended by county voters in 2009 for transportation improvements.
Some Measure M2 money is allocated to every city in the county based on population, street mileage and sales tax collected, said OCTA spokesman Joel Zlotnik.
The funds are usually reserved for street repairs, traffic and pedestrian safety near schools, traffic-signal priority for emergency vehicles and other transportation needs.
The OCTA paid for the bulk of ARTIC’s $185 million construction cost through Measure M funds, but responsibility for day-to-day costs of the city-owned station falls on Anaheim.
Jeff Lalloway, OCTA’s board chairman, said using M2 money on ARTIC’s operating costs is “out of the ordinary.”
“Although Anaheim (officials are) free to legally use fair-share funds for whatever purpose they desire, this use is concerning to me,” said Lalloway, who also serves as an Irvine councilman. “I would expect Anaheim to develop a long-term funding strategy, rather than using money that’s normally dedicated for streets and roads.”
City officials had initially estimated that it would cost $5.2 million to operate ARTIC for the 2015-16 fiscal year. Moreno said that the revised spending plan now stands at $3.8 million, reached through “across-the-board” cuts made in several areas, including janitorial and security services.
With $2.2 million of the city’s M2 funds earmarked to cover another potential shortfall, Moreno said that the city continues to seek other ways to raise money for ARTIC’s operating costs. For now, concession tenants and some advertising cover a small part of the station’s costs.
Officials have still not found a corporate sponsor willing to put its name on the transit center, and it was unclear whether the City Council will reconsider building an 84-foot-tall digital billboard facing the 57 freeway that could fetch about $800,000 annually in advertising revenue for ARTIC. The billboard was rejected because of concerns from neighboring Orange and because billboards are banned elsewhere in Anaheim.
Future revenue could also come from developing the city-owned property surrounding ARTIC for housing, retail or office space, officials said.
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