Online Forum, August 26, 2008
Al Harf from PRTC asks, Welcome to PRTC’s inaugural online forum with Executive Director Alfred Harf. Today’s forum will be dedicated to questions about PRTC’s proposed fare increase and fare indexing policy. I will answer as many as I can during this session. Any questions that are not answered during the forum will be answered and distributed by our Rider Express e-mail system. Questions unrelated to the proposed fare increase can be sent to our Customer Service department at Omni@OmniRide.com. Now, let’s get started!
PRTC Admin Post
Les from Dale City asks, I think it's a great idea to raise the fares we need to help keep these buses running and running well and with gas and service and paying drivers, money gets tight. I just have one question, why don't you raise it up an even $2 I think people would be cool with that and then maybe that would help cover more costs, the amount you've proposed to raise fares seems kind of low to me in the grand scheme of things.
You’ve said you think the increase is justified but you go on to observe that the size of the proposed increase is less than you think is warranted, questioning why we sized it as we did.
Because our OmniRide and Metro-Direct riders fall into two distinct groups – those that get Metrochek benefits and those that don’t – pricing the services is a policy challenge inasmuch as the interests of both groups have to be taken into account. Consequently, the fare increases we’re proposing seek to strike a middle ground as we think we must, in order to generate a specific magnitude of additional revenue that our plan requires riders to bear. The policy challenge in formulating any fare increase proposal is to balance the sometimes competing objectives of increasing ridership and increasing revenue. That’s what we’ve tried to do and that’s why our proposal envisions a modest ridership loss but a more substantial revenue gain.
Dawn from Woodbridge asks, I wouldn't object to a small increase, but this is too much. W/more riders, you're making a lot more money now per trip & gas prices have gone down since you released the proposal. Greater increases for people who use cash are unfair; that rate should go up proportionately with the SmarTrip rate. More people might use SmarTrip if you had a machine outside the Transit Center (& other places, if possible) to add fare without being restricted to the Center's business hours. You've forced us to use this option without properly preparing. Going to a metro station is not always convenient.
OmniRide fare increases have consistently lagged behin CPI increases, meaning that expenses have been rising more rapidly than fares. PRTC has proposed an increase of this magnitude only after carefully examining expenses, fare revenue, and fare pricing history as well as the bus fares being charged by neighboring transit systems in the region operating similar types of service (e.g., Loudoun Transit; Martz, Quick’s).
You also asked about machines to add value to SmartTrip cards. PRTC recognizes that the ticket vending machines present at Metrorail stations are not convenient for all PRTC riders, and has plans to supplement those machines with locally placed point-of-sale (POS) machines throughout the PRTC service area located in business establishments(and at PRTC) where customers will be able to add value to their cards. In the longer term, there are also plans to permit customers to arrange for automatic withdrawals from credit cards and bank accounts so that adding value can be done completely electronically.
Warren Rolle from Woodbridge, VA asks, What effect does the recent downward spiral of fuel prcing have on this proposal?
We will finalize our fare increase recommendation based on public comments received and an updated projection of fuel prices right before the PRTC Board is asked to approve the recommendation. Once that fare increase is enacted, it will remain in effect even if fuel prices go down but will temper the amount of the next fare adjustment. If the fare indexing policy is approved, the next scheduled adjustment would be proposed in FY 2011. To manage costs, if the FY 09 proposed fare increase is approved, it will be implemented at the same time as the next scheduled service change.
Ed from Woodbridge asks, When the bus is full and people must stand, why do we have to pay full price, or better yet, why do we have to pay at all?
Buses are sometimes compelled to carry more riders than seats for a variety of reasons many of which PRTC does not control (e.g. accidents, traffic back-ups, inclement weather, etc.). While our preference is to provide seating for all riders, when circumstances arise that require standees, the service is being provided and PRTC is bearing a cost for that service that the riders have to help defray. Some trips run less than full and others run more than full with the fares consistent across the board. As a practical matter, this is as it must be.
Linette from DC asks, If we have A FARE INCREASE, DOES THAT MEAN WE WILL HAVE MORE BUSES AT MORE TIMES ON THE SCHEDULE, OR IS THIS JUST IN RESPONSE TO GAS PRICES?
While its principally a response to fuel prices, it is also a response to overcrowding.
Adding service requires more hours to be budgeted and sometimes but not always requires more buses. PRTC's proposed plan budgets more hours and expedites the delivery of four new buses that are expected within a few months. Prior to the delivery of those new buses, our capability to add buses is limited to three retirement age buses in our so called "contingency fleet". Those retirement age buses are roadworthy though they can't match the quality of the buses in the active fleet. So, PRTC will be adding service as warranted, limited by the budgeted hours and by the fleet limitations described here. Trips that are most prone to overcrowding will be accorded a priority.
Joe from Lake Ridge asks, Is a fare increase the sole way PRTC plans to finance its increased expenses?
To cover the $1.5 million in additional expenses in FY 09, PRTC has conceived a plan that has three elements: (1) a fare increase; (2) deferral of noncritical budgeted expenses; and (3) a supplemental appropriation from Prince William County, the City of Manassas and the City of Manassas Park. This three-pronged plan relies on riders, PRTC’s bus-sponsoring local governments, and PRTC management to solve the problem in tandem, sustaining a long-standing tradition of balancing what riders pay and what the taxpayers at-large pay for transit services.
Ken from Montclair asks, The increased revenues resulting from the continued increase in ridership should be sufficient to cover additional fuel expenses. Why increase fares?
There is a PowerPoint presentation accessible via the Public Hearing page on PRTC's web-site that explains the reasons for the proposed fare increase. The presentation highlights the fact that while the run-up on fuel prices has prompted increased ridership, the revenue gain from this increased ridership pales in comparison to the increased cost PRTC is bearing for fuel, let alone the increased cost of scheduling additional service in an effort to curb overcrowding. Stated in simple terms, PRTC will be spending $1.5 million more than budgeted in the current fiscal year (our FY 2009) for fuel and service hours, after accounting for the ridership increase. That $1.5 million "hole" must be plugged, and PRTC management has proposed to do so with a three-part plan: (1) a fare increase; (2) deferral of non-mission critical budgeted expenses to free up resources for fuel and service hour essentials; and (3) a supplemental appropriation. Stated differently, the proposed plan calls for riders, local government sponsors, and management to be part of the solution.
Samantha from Dale City asks, What about alternative fuel sources; could that reduce PRTC's fuel expense?
Maybe someday, but not today. Buses powered by wholly different fuels cost more to purchase than the low-sulfur diesel fueled buses that comprise PRTC's fleet. Also, there are indications that alternative fuel vehicles, particularly those using compressed natural gas, are more prone to break downs. Such buses also require the construction of new fueling facilities that cost millions of dollars. Another alternative – biodiesel – has also been examined, but the economics of biodiesel are not favorable at the present time. Of course, nothing is forever so we will reexamine this issue as alternative fueled vehicles become more mainstream.
George from Manassas asks, Don't you think a fare increase will defeat its own purpose and riders will leave the system?
Data does show that when transit fares increase, a certain percentage of riders will leave the system. However, PRTC believes that the reduction in ridership will be sufficiently small that the fare increase will result in a revenue gain. The fare increase as currently proposed has been carefully conceived to balance PRTC’s need for additional revenue with area residents’ need for transportation services.
By PRTC management’s estimate, ridership will be lowered by approximately 4% and passenger revenue increased by 11.4% if the fare increase is enacted as proposed.
Al Harf from PRTC asks, While this question has not been asked during the forum, PRTC management has been asked in comments received before the forum about enlisting business support for discounting passenger fares in order to lower the out-of-pocket costs to riders and increase ridership.
Responding to this question, PRTC management advised that PRTC (in conjunction with the regional Council of Governments [COG] organization Commuter Connections) are actively promoting business sponsored fare discounting (or pre-tax payroll deductions for fare payments). Sponsorship is high among governmental agencies and lower among private businesses, though the incidence of sponsorship is rising. Each business has to decide for itself whether there is a compelling business case for offering such a benefit (e.g., as a recruitment device), so there will always be those that do and those that don’t.
PRTC Admin Post
Al Harf from PRTC asks, Another question asked before the forum was whether budget cuts have been considered to address the fuel and service problem.
Reducing budgeted expenses is part of PRTC’s 3-pronged plan to find an extra $1.5 million for the FY 2009 budget. Under this proposal, items in the current budget that are not critical to our mission for the year would be reduced. Targeted reductions are in the areas of overtime, fringe benefits, conference attendance, “professional services” support, and certain “facility maintenance” initiatives that are deferrable.
PRTC Admin Post
Bobby from Woodbridge asks, In a response from Joe from Lake Ridge, you mentioned a NOW $1.5M in additional expenses for FY09; what's the real figure? What other efficiencies do you plan on implementing within PRTC to help with your shotfall? i.e. the phones are an issue and it's hard to get through to PRTC, on one ocassion, my call wasn't even returned. Other than hiring more people, what are you doing to be more customer service oriented?
The real figure is $1.5M based on the latest available estimate of fuel costs and additional hours of service that need to be budgeted. That figure will be revisited before we finalize our recommendation. The plan to address this $1.5M problem has three pieces. A fare increase expected to yield $367,000, a supplemental appropriation amounting to $535,000 with a balance being a combination of expense reductions and higher than budgeted state grant revenue.
You also asked about the phones. Accessing customer service is an issue that is being actively worked on -- two of three vacant customer service positions have been filled and we are actively recruiting to fill the third, and we are in the process of implementing a full-fledged interactive voice response system (IVR).
Al Harf from PRTC asks, Another question asked before the forum that PRTC has answered is "why are the proposed fare increases so different for OmniRide, MetroDirect, and OmniLink? Why not raise fares by the same percentage across the board?"
The increases as proposed have been sized to account for riders’ ability to pay, rider choices, and the probable effects of the fare increases on ridership levels. PRTC has a keen understanding of the demographics of its riders by service type, and the likely effects of a fare increase on each ridership group is based on survey data and empirical evidence.
Al Harf from PRTC asks, Thanks to everyone who participated in PRTC’s inaugural online forum. I hope you found it informative and that you’ll join us again for future forums. A transcript of today’s discussion will be posted on this page so you can refer back to it as needed. Unanswered questions will be answered and distributed through the Rider Express email service. Thanks again, and have a wonderful afternoon.
|
