July 3, 2008

Skyrocketing fuel costs prompt proposal to boost Metro Transit fares

Increase needed to preserve bus service to meet growing demand

With Metro Transit ridership and diesel fuel prices at record levels, King County Executive Ron Sims today announced he will preserve current service and continue delivering new service by proposing a 25-cent fare increase. Sims opted for the proposed increase rather than cut service to pay for fuel costs that have skyrocketed over 60 percent this year alone.

“This worldwide fuel crisis comes at a time of historic ridership growth for Metro Transit – and is the reason why residents are turning to transit in record numbers as their own budgets are squeezed,” Sims said. “But, the same rising fuel costs contributing to Metro’s popularity are making it more expensive to deliver service and maintain aggressive transit-growth plans.

“This fare increase will allow us to continue to move forward in an effort to meet the extraordinary demand for more transit, not slip backward at a time when these services are needed the most,” Sims said

Metro had budgeted $2.60 per gallon for diesel this year. Now, due to the dramatic spike in fuel costs, it anticipates paying an average of $3.86 per gallon in 2008. That cost difference will create a deficit of more than $14 million in 2008, despite a fare increase earlier this year to cushion the impact of rising operational costs.

Metro purchases about 12 million gallons of diesel fuel each year to power its fleet of more than 1,300 buses. Additional diesel fuel is used to operate the agency’s Access paratransit program.

"The sudden rise in the price of fuel has both increased transit demand and created the prospect of service cuts," said King County Councilmember Dow Constantine, chair of the council’s Transportation Committee. "This is clearly no time to cut transit service. We look forward to hearing from the commuting public as we review the Executive’s proposal."

If approved by the county council, one-zone peak transit fares would increase 25 cents beginning Oct. 1 to $2 for adults from the current $1.75 fare. One zone non-peak would increase to $1.75 from the current $1.50. Senior fares will remain at 50 cents and youth fares will stay at 75 cents. Increases are also proposed for Access fares, vanpools and FlexPasses.

Sims said the proposal is intended to keep transit an affordable alternative for residents, and allow Metro to continue expanding service while paying record high fuel costs.

In addition to fare increases, Metro is proposing additional steps to offset rising fuel costs. It’s asking the King County Council to reconsider its prohibition of wrapped advertising on Metro buses and is taking steps to develop a fuel-hedging program aimed at reducing fuel price volatility.

These proposed short-term actions are aimed at preserving existing service and delivering new service already on the way as part of Metro’s Transit Now program. The agency has made a commitment to expand its overall system by up to 20 percent by 2016 to help meet demand and projected population growth. In the past three years alone, ridership has grown by more than 18 percent.

“This September, residents from Seattle to the Snoqualmie Valley will see additional service improvements thanks to Transit Now,” Sims said. “This fare proposal will help us offset the rising cost of fuel so we can keep our promise of providing more transit to more places and keep our economy moving.”

The cost of fuel is impacting transit agencies all across the nation. In the Northwest, transit agencies such as Tri-Met in Portland, Snohomish County’s Community Transit and Kitsap Transit have recently adopted or proposed fare increases in the 25-cent to 75-cent range due to the rising cost of fuel. Metro believes its proposed 25-cent increase is low enough to maintain its system as an affordable alternative to driving.

The fare increases being proposed by Sims will significantly improve – but not solve the funding gap stemming from rising fuel prices. For nearly a decade Metro has taken a series of steps to control costs in order to preserve transit service. These rising business costs have forced Metro to cut $38 million from its budget. Reductions have targeted administrative and customer services and have prompted the agency to cancel planned and anticipated capital projects in order to avoid direct cuts in service.

Looking to 2009 and beyond, Metro estimates fuel prices may temporarily stabilize and then grow at the rate of inflation. Based on that projection, Metro is looking at $36 million in increased operating costs through 2009 alone. Metro will assess additional steps that will be required to address the shortfall as it develops its next biennial budget in 2009.

Sims is asking the Metropolitan King County Council for timely review of his transit proposals so they can take effect on Oct.1. For more information about Metro’s fare proposal, go to www.metrokc.gov/kcdot/metrofares. To contact Councilmember Constantine, call (206) 296-1008.

Related links

• Transmittal letter from King County Executive Ron Sims (596KB PDF)
• Proposed ordinance (29KB PDF)
• Q & A (31KB PDF)
• Rising fuel costs to increase bus fares, Seattle Post Intelligencer
• 25-cent Metro fare increase proposed, Seattle Times
• 25-cent fare hike for Metro Transit proposed, King 5