RTD officials say the transit agency may have to consider a fuel-surcharge fare increase to help offset skyrocketing diesel costs and declining sales-tax revenues.
At a recent Regional Transportation District workshop on the 2009 budget, directors were briefed on diesel costs that could add $25 million to the agency’s fuel budget next year, and sales-tax collections this year that could be about $18.6 million less than previously forecast.
“Everything is on the table,” RTD director Bill McMullen said of measures to solve the financial crisis.
Denver is not alone in struggling to fund its transit system. Riders in the Salt Lake City area will pay fuel surcharges on fares beginning July 1. And riders in Portland, Ore., could pay similar fees beginning in September.
“I’m open to it,” director Wally Pulliam said of a possible surcharge to fares on the Denver system. “Ridership is going up, fuel is off the roof, fares are not making it and sales taxes are way down.”
The agency budgeted $2.62 a gallon for diesel fuel in 2008, but “locked in” at $3.20 a gallon earlier in the year as prices began to rise.
“This means we will be about $6 million over budget for the year,” said RTD spokesman Scott Reed, noting the 2008 fuel budget was about $30.9 million. “The ‘good’ news is that had we waited until today to lock, we would be paying over $3.70 a gallon.”
RTD’s fuel bill covers the operation of its own buses and those of private contractors that work for the agency.
Next year’s forecast for diesel, between $4.19 and $5.38 a gallon, could add up to $25 million to RTD’s 2009 fuel bill, according to an analysis prepared for directors.
RTD raised fares Jan. 1, saying higher fuel costs were one of the reasons for implementing the increase a year sooner than planned.
Since the start of this year, however, oil prices — and the related cost of diesel fuel — have risen much higher, leading transit agencies to consider surcharges.
Utah Transit Authority’s surcharge means riders pay 25 cents more a ride if the average quarterly price of diesel fuel is between $3 and $3.99.
The surcharge could go to 50 cents a ride beginning Oct. 1 if the average price of diesel stays between $4 and $4.99, as it is now for UTA, said Carrie Bohnsack-Ware, spokeswoman for the transit system.
Those paying reduced fares, including elderly and some low-income riders, will pay 15 cents more instead of 25 cents and another 15 cents if the average price is between $4 and $4.99, Bohnsack-Ware said.
“We had quite a few low-income advocates protesting this,” she said, referring to the surcharge, but some low-income riders that use state-issued cards to buy discounted monthly transit passes will be exempt from the surcharges.
“Every transit agency in the country is going through this,” RTD assistant general manager Phil Washington said.
He stressed that RTD has not decided whether to implement a fuel surcharge. To save money, the agency proposes to eliminate “unproductive routes” and install “strict hiring controls,” Washington said.
RTD also will look at boosting revenue by wrapping more buses with advertising, he said. The agency has considered selling naming rights for transit stations and promoting more station advertising.
RTD should also consider adjusting the prices of transit passes, including the Eco Pass, director Pulliam said. “The Eco Pass is very inequitable and is not carrying its fair share,” he said.
Jeffrey Leib: 303-954-1645 or jleib@denverpost.com
