News & Updates: Newsroom

RTA News

 

March 1, 2006

 

RTA staff, Board begin talks on generating more revenue

 

CLEVELAND – The RTA Board began discussions Feb. 21 on ways to increase revenue to offset rising diesel fuel prices.

 

One way – a possible fare increase – will be discussed further at the Board’s March 21 meeting.

 

If the Board feels a possible fare increase would be a better alternative than cutting service, RTA would schedule 6-8 public hearings in late April and early May. If an increase is approved by the Board in late May, it could take effect around July 1.

 

The 2006 RTA budget is balanced, but unless additional revenue is generated, deficits are projected for 2007 and 2008, says CEO and General Manager Joe Calabrese. He noted that:

• RTA has not raised its fares in more than 13 years, since 1993.
• RTA has held the line on fare increases longer than any other major transit system in the nation. A transit expert recently talked with National Public Radio and called that feat “remarkable.” To listen to that interview, click here.
• In recent years, State funding for transit has been cut by more than 63 percent.

 

“Fuel prices are killing us,” Calabrese says. “If fuel prices were normal, we would not be having this discussion.”

• RTA uses 5.4 million gallons of diesel fuel each year.
• When diesel fuel prices increase by a penny a gallon, it costs RTA $54,000 a year.
• Diesel fuel was budgeted at $4 million in 2002, and $13.5 million in 2006.

 

Calabrese says RTA has done a great job on controlling other expenses and operating more efficiently. In fact, moves made over the past few years are now saving taxpayers more than $25 million a year. Those efforts include:

• The reduction of 366 positions, largely through attrition
• The consolidation of bus districts to reduce overhead expenses
• The elimination of 106 buses from the fleet, because of more efficient maintenance procedures
• The integration of bus service with Maple Heights and North Olmsted, saving more than $3 million annually
• The increasing use of new technology to greatly increase our efficiency

 

Calabrese says RTA’s has only two options to resolve future deficits.

 

“We must either reduce service frequency, or generate more revenue through a fare increase. Our customers have already told us that, after 13 years of stability, they would favor a fare increase over service cuts. Overall, they rated our service as very good, and our value as excellent.”

 

RTA is coming off three straight years of ridership increases, but that is not enough to offset the rising gas prices, Calabrese says.

 

Only 16 percent of RTA’s operating budget comes from fares, while 70 percent comes from a one percent countywide sales tax.

 

RTA receives capital funding from the Federal government, but that can only be used for large capital purchases, like buying buses and upgrading rail stations.

 

RTA recently has received special earmarked funding for Euclid Corridor work, and that can only be used for that specific project. None of those funds can be used to cover operating expenses – such as diesel fuel, employee wages or health-care benefits.

 

RTA is looking at other revenue-generating options, such as adding transit advertising to bus shelters, something that is common throughout the transit industry.

 

FOR MEDIA INQUIRIES ONLY:

Jerry Masek, 216-566-5211