Pace 2016 Budget Calls for $1 Million Service Expansion, 25-Cent Increase for Cash Fares

Pace 2016 Budget Calls for $1 Million Service Expansion, 25-Cent Increase for Cash Fares

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Pace has proposed some changes this year, including the good news of about $1 million in service expansion as well as a proposal to modestly raise fees for cash fares in an effort to encourage electronic payment. Meanwhile, its executive director is expressing concerns about an aging fleet and lack of capital to replace buses.

Pace announced via a press release that its cash fares could go up 25 cents on regular fares and 15 cents on reduced fares. The organization said the increase is not a revenue generator necessary to balance the budget, but instead would encourage electronic payment versus cash, very similar to the practice in place for several years at the CTA and Illinois Tollway.

Under the proposal, customers using Ventra would not be affected. The board took no action on the preliminary proposal, and staff may make modifications based upon board feedback prior to developing a proposed budget document released to the public in October.

Good news is that the agency’s Suburban Services operating budget, which combines fixed route bus, vanpool and non-ADA Dial-a-Ride services, includes a forecast that Pace will finish 2015 favorable to the current year budget by approximately $9 million — and that money can be redirected to capital expenses in future years.

Additionally, staff estimates that ridership in 2016 will grow by approximately 1.6 percent over the anticipated total for 2015. Expenses are estimated to rise by approximately 7.1 percent over 2015 to $227.9 million due mainly to service expansion, inflation, and fuel price growth. Specifics about the $1 million designated for service expansion have not yet been determined.

Just over 80 percent of rides taken on Pace are paid for using Ventra, so the majority of customers will see no change if the proposal is adopted, and cash-paying customers who begin using Ventra can avoid paying more, said Pace Executive Director T.J. Ross.

“Between Ventra’s website, toll-free phone number, vending machines, expansive retail network and the Ventra smartphone app that debuts later this year, Ventra is more convenient and accessible than ever, so we believe the time is right to incorporate a cash fare policy employed by other agencies to reduce our costs for handling cash,” Ross said.

Regional ADA Paratransit operations are expected to finish 2015 under budget and with ridership growth of 5.2 percent. In 2016, ridership is expected to grow again by 5.1 percent, contributing in part to expense growth of 7.1 percent versus 2015’s budget to $174.8 million

RTA funding marks for the ADA Paratransit budget include an $8.5 million grant from the state received in recent years that has been eliminated or reduced from some state budget proposals. If the grant is not received, a fare increase may be proposed at a later date if the revenue loss triggers a budget shortfall.

“We’re hopeful that this grant will be included in the state’s final budget and pledge to continue working with state leadership to illustrate how essential this service is to the region’s people with disabilities,” said Ross. “We will monitor the situation and prepare contingency plans should the funding not materialize. We are very concerned because a fare increase would be difficult for many riders to afford.”

The preliminary capital budget is set at $47.6 million with $38.5 million dedicated to rolling stock, including the purchase of 75 fixed route buses and 38 paratransit vehicles. Other capital expenditures are for stations and passenger facilities, technology and support facilities and equipment.

Staff raised concerns about a potential $216 million shortfall in projected available capital funding between 2016 and 2020 versus the agency’s needs for its fleet of buses and other vehicles. Funding for the replacement of existing fixed route buses is short by 260 vehicles, or $124 million, and funds are only identified to purchase three of the 125 buses needed to continue expanding service throughout the suburbs. Similar issues affect the purchase of vehicles for paratransit, vanpool and other Pace services.

“Without a new capital bill from both the state and federal governments, we are very concerned that all of the effort and resources we have invested in expanding service in recent years could effectively be undone by not having a sufficient number of buses with which to operate the service,” Ross said.

Pace staff plan to submit the budget proposal to the RTA by Sept. 30.

At the October Pace Board meeting, a proposed budget will be released to the public and public hearings are scheduled throughout the region during the last two weeks of October. The Pace Board will adopt a final budget at its November meeting, which will be submitted to the RTA for inclusion in the regional transit budget inclusive of the budgets of Pace, CTA, Metra and RTA to be adopted by the RTA Board at its December meeting.

SOURCE: Pace press release