Sec. 975.18. Deferred reduction in formula earnings - hold harmless provision

Under certain circumstances where an unspecified public transportation system reduces the number of vehicle miles of service, the Department of Transportation may approve (for one year) the deferral of any corresponding reductions in service payments. In order for the Department of Transportation to approve, with the concurrence of the Director of the Budget, such a deferred reduction in service payments, the following conditions must be met:

(a) hold harmless eligibility criteria defined:

(1) The public transportation system must be a county, or city. (Services contracted directly by the Department of Transportation are not eligible.)

(2) The city or county must contribute an enhanced cash match as described below, toward covering the operating expenses incurred by the public transportation system. A cash match contributed by a private transportation provider to the city or county and returned by the public transportation system to the private transportation provider for the purpose of meeting the cash match requirement will not be considered an eligible cash match for the purposes of this provision.

(b) Procedure defined:

(1) The public transportation system must submit to the Department of Transportation a service and fare policy plan. This plan is required in order that the Department can assess whether the service reductions are fair and equitable and whether essential services are being maintained. In order to accomplish these objectives, the plan should contain the following information.

(i) a description of the services provided prior to the service reductions;

(ii) a description of the service reductions;

(iii) an explanation of the process and/or criteria used to identify the particular service reductions selected;

(iv) where an entire route is being eliminated, a discussion of the transit alternatives remaining for the affected riders;

(v) a budget for the year following the service reductions showing estimates of passengers, vehicle miles, operating cost, fare levels, operating revenue, and anticipated local, State, and Federal subsidy levels;

(vi) documentation of the sponsoring agency's contribution of the required cash match as described in 975.18(a) (2) above.

(2) The service and fare policy plan must be approved by the Commissioner of the Department of Transportation.

(c) Payment calculation process: In carrying out this provision for deferred reductions in service payments, the Department intends to follow the procedures described below:

(1) Once the Commissioner has approved a service and fare policy plan, each of the following four service payments would then be based on the preceding year's equivalent quarter passenger and vehicle mile statistics. (As an example, the October-December 1987 payment would normally be based on the July-September 1987 statistics. If an approved service and fare policy plan were in effect, the July-September 1986 statistics would determine the October-December 1987 payment level.) Subsequent service payments will be based in the usual way on the passenger and vehicle mile statistics of the immediately-preceding quarter.

(2) The actual cash match required each quarter from the sponsoring agency will consist of two components: (1) the 18-b cash match required by the State service payment generated by the statistics of the quarter occurring one year prior to the most recent quarter, plus; (2) the difference between the total State service payment generated by the passenger and vehicle miles statistics of the quarter occurring one year prior to the most recent quarter and the total State service payment that would normally have been generated by the passenger and vehicle mile statistics of the most recent quarter, less the difference between the 18-b match required by the State service payment generated by the statistics of the quarter occurring one year prior to the most recent quarter and the 18-b match that would normally have been required by the passenger and vehicle mile statistics of the most recent quarter.

(3) For any public transportation system contracting with more than one transit operator that chooses to take advantage of this provision, the Department will compute the additional amount of service payments earned under this provision and the required local cash match for the entire system not for individual transit operators. In such cases, the public transportation system's service and fare policy plan must address the service of all of the sponsored operators and must also propose a method for allocating service payments.