Transit Consolidation for Sustainability (2018 LGAA)

City of Poughkeepsie (Winner)
County: Dutchess County
Population: 10,001 to 50,000
City Hall: (845) 451-4200

The City of Poughkeepsie Transit System had been experiencing declining ridership for a number of years, requiring subsidies from the City’s general fund of between $300,000-$500,000 annually. The City also faced increasing difficulty maintaining compliance, which would eventually lead to a loss of critical funding. Dutchess County transit also operated bus routes which included areas of the City.

It was decided that consolidation between the two bus systems would not only have a significant positive fiscal impact on the City, which has been wrestling with a large general fund deficit, but would also increase County ridership and allow for the elimination of routes/stops which had previously been served by both systems. After successful negotiations with Dutchess County, the City discontinued its bus service effective July 1, 2017. City transit assets were transferred to the County under a licensing agreement, which allows them to remain in "transit service," thereby avoiding potential Federal recapture of up to $1.9 million.

City residents have benefitted from this consolidation because they now have a sustainable system which is stable for the long-term. Also, after the consolidation occurred, the County continued its public outreach and community engagement, leading to two significant route changes, which further enhanced local service in response to concerns expressed by residents. The system as it exists today is far superior to what the City offered in its heyday, as residents now have Sunday service which they did not have previously, and regular weekday service has been extended later in the evening. The consolidation also gave Dutchess County Transit the opportunity to enhance its own system, by switching to a more modern "spoke-and-hub" system which improved their own efficiencies. Devising an innovative licensing agreement between the two levels of government allowed the city busses to remain in service within the community, and at the same time fulfilled the Federal Transit Administration requirement so that the grant recapture was avoided. After the effective date, the city offered free 60-day bus passes for all resident senior citizens and persons with disabilities, in order to afford them time to become familiar with the new system.

The expenses associated with this consolidation were funded by a $750,000 grant from the NYS Financial Restructuring Board for this initiative. The City's exit from transit is expected to save the City more than $2 million over five years. As many of the City’s busses were nearing the end of their useful lives, the City is now able to avoid its share of the cost of replacement, which was expected to have been more than $1 million over five years.

Interestingly, the program has been well-received by stakeholders and the City’s rating agency, which in July noted "a return to structural balance" in the City's financial condition. Because of the program's favorable effect on the general fund, it will play a role in the City regaining its investment grade quality bond rating which, in turn, will lead to significant savings in debt-service costs over many years.

Cities and counties with overlapping transit service could use this consolidation as a model, particularly as relates to the process involving the Federal Transit Administration, which is complex. Although the discontinuance of the city bus system was initially controversial, once implemented there was soon consensus that it was the best path forward for City residents, as those involved recognized that the City system would have eventually failed completely as ridership continued its steady decline.