In August 2024, the Office of the State Auditor deemed the Regional Transportation District to be in good financial standing. “State audit finds RTD’s financial health stronger than many of its peers,” an RTD news release headline declared. “RTD met all financial health ratios with no warning indicators,” the former board chairman, Erik Davidson, told state lawmakers at the time. “Health ratios” were good, “cost efficiency metrics” were strong, and RTD declared itself “good stewards of taxpayers’ money.”
After such effusive declarations of financial stability, leave it to RTD to be in complete crisis barely a year later.
Despite a record high budget of $1.5 billion, RTD is facing a mind-boggling deficit somewhere between $100 million and $400 million, and is considering dreaded service cuts.
Such a sudden and staggering deficit might leave you wondering, how could a public agency stumble from the picture of financial health to sounding the klaxon and planning to cut service? Apparently, higher-than-anticipated maintenance and repair costs and falling sales tax revenues (which fund 70% of RTD’s spending).
RTD director and general manager Debra Johnson compared the agency’s apparently unexpected infrastructure maintenance needs to that of an old house.
“This is par for the course. If you lived in a home for 30 years, do you think you wouldn’t have to make some repairs?” Johnson told The Denver Post.
But as any homeowner knows — and as lawmakers rightfully pointed out — you don’t just sit idly by and watch your house deteriorate for 30 years, then suddenly start rushing around trying to fix everything. Upkeep is an ongoing process that you budget for each and every year.
A year ago, when the agency was not-so-humbly proclaiming itself a good steward of taxpayer dollars, was there really no forward thinking? No anticipation of hard times? It’s not like sales tax revenues were soaring last year — they were, in fact, declining, following a trend that has continued since 2022.
Sadly, it seems apparent that we shouldn’t expect common sense to reign at RTD. After all, it’s been more than 20 years since Boulder County citizens voted for FasTracks — and we’re still waiting on our train.
Which brings us to the crux of this issue. RTD has always been something of a shambolic agency, so their new budget woes aren’t really surprising. But a few line items in the budget have raised some serious questions.
For starters, while RTD is in a budget crunch, the agency is still sitting on about $1 billion in reserves. And a year ago, it had $1.12 billion in reserves. Reserves are important — especially now as the agency faces a deficit. But for an agency with a $1.5 billion budget, $1 billion in reserves feels like a lot of money to just be sitting on — especially for a taxpayer-funded agency responsible for providing services to the citizens of the Front Range.
For context, the City of Denver, which has a slightly larger budget of $1.66 billion, only has $180 million in reserves. The state of Colorado, with a budget of $47.9 billion, has just $2.1 billion in reserves. So while the state of Colorado sits on 4% in reserves, RTD has 66% squirreled away.
And here’s the rub, RTD estimates that the cost of completing the construction of Northwest Rail Peak Service — which would provide train service from Denver to Boulder and on to Longmont — would be approximately $650 million. Even adding on finishing the North Metro corridor, which would run from Denver to Thornton, would push the total cost to around $1 billion.
Of course, even though RTD has an excessively high ratio of reserves compared to its budget, we don’t want to imply that the agency should spend every last penny on finishing the northern portion of FasTracks. That would be irresponsible. (And impossible, as some of the reserve funds are dedicated to other expenditures.)
But the implication here should be clear. From the outside, it sure looks like RTD should have been able to make a lot more progress on the promises it made to Boulder County voters.
Especially once we add on the fact that RTD is planning to borrow $539 million to buy new diesel buses, a move that totally throws the agency’s supposed commitment to Colorado’s climate goals out the window.
Sure, sales tax revenue is falling and ridership has never really recovered to pre-pandemic levels. But an agency with $1 billion in reserves shouldn’t be considering cutting services a year after being in complete financial health — unless something is seriously wrong in management.
If RTD does start cutting services, things are likely to only get worse for the agency. While primarily funded through sales tax, if ridership declines due to cuts and people can no longer rely on buses and trains, that will not only hit the agency’s bottom line, it will also harm support for the agency when it comes to other sources of funding.
If people can’t ride public transit, why would they vote to fund it?
In the past, we have advocated on behalf of fully funding RTD because we believe in the mission of the agency. And it is true that we must do our part to ensure RTD is financially situated to meet our needs. But it is getting harder and harder to trust an agency that keeps failing to live up to its promises.
This is all the more frustrating when you consider how imperative RTD is to our efforts to lower emissions and meet Colorado’s aspirational climate goals. As we negotiate our way toward a future of limited carbon emissions, RTD must be a daily commuting option for as many people as possible. This means we need increased ridership, expanded services and investments in new technologies.
Instead, we have half a billion spent on new diesel buses, reneging on promises of train services and potential cuts to services.
Next year, six seats on RTD’s board, including those representing Boulder and Longmont, will be up for election. And as it looks now, that board is in dire need of a shake-up to reinvigorate leadership and actually see to it that our transit agency meets the needs of our communities.
We do not want service cuts. We do not need diesel buses. We want the Northwest Rail Service FasTracks promised. And we need fully funded, fully functioning mass transit for all — and we need it today. We can’t afford to wait.
—Gary Garrison for the Camera Editorial Board
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