Despite a looming fare increase, SouthWest Metro Transit hasn’t received a lot of feedback on the issue at this point, notes Len Simich, SouthWest’s chief executive officer.

“It’s still a pretty good value even with a fare increase of 25 to 50 cents, and I think the majority of our customers understand that,” he said.

In August, the Metropolitan Council, which controls fares in the region, will be voting on a 25 cent fare increase for bus and light rail routes and a 50 cent increase for Metro Mobility service. If approved, the increase would go into effect in October. A second fare increase “up to an additional 50 cents” could also come into play in 2009. The Metro Council will take public comment on the issue through July 25.

The fare increase comes in the wake of a projected $15 million shortfall for Metropolitan Transportation Division in 2009. The shortfall is projected to grow to $42 million in 2010.

The need for a fare increase comes down to two factors, higher fuel prices and fewer people buying cars.

According to the Metropolitan Council, the gross cost of fuel increased 65 percent from May 2007 to May 2008.

Transit gets the bulk of its revenue from fares and the Motor Vehicle Sales Tax. With fewer people buying new cars, that means less money coming in, just as demand for service is growing.

“We’re bringing in less, we’re paying more,” notes Simich.

He said the only ways to make up some of these differences are through service reductions and price increases, and in SouthWest Transit’s case, they’re doing a little bit of both, he said.

 “We’re trying to make sure that we can balance this thing out.”

Impacts

On Monday, the Metropolitan Council held a public meeting on the issue at the Eden Prairie City Center, one of eight such hearings that were held throughout the metro this month. A handful of people showed up to the Monday meeting, including Minneapolis resident David Greene, who spoke against the possible fare increase.

Greene is involved with a church coalition called ISAIAH, and has been an advocate for more transit funding.

The proposed fare increase is “very distressing,” he said, adding that it would decrease ridership.

“Clearly there are funding options other than fare increases,” he said.

Greene is in support of using the transit reserve funds instead of a fare increase this year.

“More of this fund can be tapped to keep operations going until the next legislative session, at which point the public can engage in a broad conversation about how we should fund our transit needs.”

During the meeting, Metro Transit’s Finance Director Ed Petrie addressed the issue of tapping the reserve fund.

“It’s not a rainy day fund as some have been calling it,” he said. “It is money that we are using to manage our day-to-day cash flow.”

In an interview, Simich had a similar take on the use of reserve funds.

With the fluctuating funding transit receives from the Motor Vehicle Sales Tax, reserve funds are used for cash flow purposes, according to Simich.

“The amount of reserves are not as great as people may think or that they may appear,” he said.

The other problem with a plan to tap the reserve fund is, he said, what happens if you go into reserves to fund this year but the Legislature takes no action to increase transit funding next year?

“All you’ve really done is put a Band-aid on a gushing wound.”

Petrie said that the fare increase they are talking about “is only one part of the solution to resolve the projected shortfall.”

He said the fare increase would cover about $7 million of the annual shortfall. In addition they would tap into a reserve that they use to cover bills when MVST sales are down, he noted.

Bjarne Henderson, the rider representative on the SouthWest Transit Commission offered his personal opinion on a fare increase. Henderson, an Eden Prairie resident rides SouthWest Transit to work. Even at the higher cost, the service provides a very good value, he said, noting that it costs less than $10 a day for him to commute via bus. If he drove, parking alone would be $11 a day.

All said and done, the bus service provided by SouthWest and elsewhere “is a good value and a good deal,” Henderson said.

During Monday’s meeting, Eden Prairie resident Jeff Strate raised one concern related to the impact of the transit increase for those with low incomes.

 “I want to know if it’s going to scare people away.”

Possible changes to fare prices

The bulk of SouthWest Transit riders use the express routes: Under the proposed increase, express routes would cost $2.25 for a ride during off-peak hours, $3 for a ride during peak hours.

* Local routes would go from $1.50 to $1.75 for off-peak, $2 to $2.25 for peak.

* Metro Mobility fares would go from $3 to $4 for peak hours, $2.50 to $3 for off-peak hours.

* Limited mobility fares would go from 50 cents to 75 cents.

 Still time to comment

The Metropolitan Council will take comments until 5 p.m. on July 25. You can comment by e-mailing the Regional Data Center at data.center@metc.state.mn.us. You can mail comments to the Data Center at: 390 N. Robert St., St. Paul, MN 55101, or fax comments to 651-602-1464. Call 651-602-1500 to leave a message or visit www.metrocouncil.org for more information.