PROPOSED GOLDEN GATE TRANSIT FARE INCREASE

On Thursday, April 22, 2004, the Board of Directors' Finance and Auditing Committee of the Golden Gate Bridge, Highway and Transportation Distinct will vote on a proposed Golden Gate Transit fare increase. If the Committee approves the proposal, it will be forwarded to the Board of Directors on Friday, April 23 for action. A public hearing was held on this matter Friday, April 9. 2004.

Proposed Transit Fares (PDF)

Proposed Ride Value Discount Ticket Fares (PDF)

Proposed Marin Youth Fares (PDF)

The District is facing a projected $131 million shortfall for the coming five years. Strategies are currently being developed to both reduce costs and increase revenues and a new financial plan is forthcoming. It is anticipated that since Bridge tolls and transit fares represent the majority of District revenues (72%, 58% from tolls and14% from fares) both will be components of the new financial plan.

It is being proposed that the past practice of annually increasing transit fares to meet operating expenses be continued and that bus, ferry, and paratransit fares be increased 10% effective July 1, 2004, and that local Marin fares be increased by MCTD from $1.80 to $2.00. The increases would result in bus fares increasing from 20 cents to 65 cents and ferry fares rising from 30 to 55 cents. For example, the adult cash bus fare for travel between Sausalito and San Francisco would rise from $2.80 to $3.10, or an increase of 30 cents and the adult cash bus fare for travel between Santa Rosa and San Francisco would rise from $6.60 to $7.25, or an increase of 65 cents.

With more than 50% of GGT bus ridership is local Marin trips, District staff considers a local fare increase from $1.80 to $2.00 to be essential for system revenue generation. The proposed 10% fare increase is estimated to generate about $1.2 million added revenue, of which over $200,000 would come from local Marin riders including those on local MCTD bus routes. A 2% to 4% patronage loss could result from the fare increase and has been factored into the revenue generation estimate

A 10% increase is proposed in light of the following factors:

1. Financial Need: current estimate of next years (FY 2005) budget shortfall is $14 million, $131 million over 5 years.
2. Higher Transit Costs: operating costs are rising with inflation each year.
3. Low Fare Recovery: transit ridership is still depressed due to continuing economic downturn that has delayed job formation and reduced overall travel. The bus service reductions implemented in November 2003 did result in decreased bus ridership, as projected. Current transit fare recovery is at 25% (21% for bus and 38% for ferry) and will fall further next year without a fare adjustment.
   

It was planned that a Comprehensive Transit Fare Program would be developed for July 2004 to improve customer convenience and reduce administrative costs with the anticipation of TransLink implementation scheduled for 20045 on the ferry system and 2005 on the bus system. However, sufficient work is not completed and therefore a comprehensive program will continue to be developed for next year.

In 1998, the District began the practice of annual increasing transit fares in small increments. A five-year annual fare increase program was adopted for 1998-2002, during which time the annual fare increases averaged 4.5% and in 2003, bus fares were increase 5% and ferry fares were increase at higher percentage to bring ferry fares in line with other ferry operators.

Additional Background Information

Current Budget FY 04, ending June 30, 2004

                    
What is the five-year shortfall for FY 2005 though FY 09?
New financial projections for the District were calculated in December and January for the five-year period starting this July 1, 2004 and running through June 30, 2009. The five-year shortfall now stands at $131 million for FY 05 through FY 09. There has been a 71% reduction in the five-year shortfall accomplished in 2002 and 2003 when it was reduced from $454 million to $131 million. The Board of Directors is now in the process updating the financial plan to bring the remaining $131 million five-year shortfall into balance.

Why is the shortfall so large?
In brief, the District is facing a significant shortfall. In the period leading up to this problem, the Bridge toll remained at $3 for 11 years, transit fares were raised in small annual increments, and costs were climbing slowly. In 2001, many things changed. With the economic recession, traffic and ridership fell sharply. At the same time, costs rose at an exceptionally higher rate, and revenues decreased due to the lower ridership and traffic (see figures below in #4).
Cost increased dramatically beginning in 2001 and continuing to rise for items including security, insurance, benefits, workers comp. For example the cost of fringe benefits (medical, retirement, etc.) increased about 20% and cost of Insurance increased by about 70%. These factors coupled with the necessity to now perform more than $330 million of capital improvements on the 66-year Bridge and the continued downturn in traffic and ridership, bring us to this very difficult financial crisis. Bridge projects needed to be undertaken include Seismic Retrofit Phase III, Main Cable Recoating, Fort Point Arch paint rehabilitation, Floorbeam and Bracing Replacement and Rehabilitation.

What are the Ridership trends?
Today, transit ridership remains depressed due to continuing problems with the economy that has delayed job formation and reduced overall travel. The November 2003, bus service reductions of 22% of service hours did resulted in decreased bus ridership and the reductions is in keeping with what was projected, a loss of about 14%.

Bus Ridership was down 11.1% cumulatively FY 2001-2003, the lowest since 1990.
Ferry Ridership was down 13.3% cumulatively FY 2001-2003, the lowest since 1998.
Bridge Traffic was down 8.5% cumulatively FY 2001-2003, the lowest since 1984.

Bus Ridership Projections
FY 05 is 7.4 million
FY 04 is 7.7 million

Bus Actual Ridership
FY 03 was 8.5 million
FY 02 was 8.9 million
FY 01 was 9.5 million
FY 00 was 9.5 million

Ferry Ridership Projections
FY 05 is 1.4 million
FY 04 is 1.4 million plus

Ferry Actual Ridership
FY 03 was 1.6 million minus
FY 02 was 1.6 million plus
FY 01 was 1.9 million
FY 00 was 1.9 million

Compared to FY00 and 01, FY02 ridership declined sharply and is continuing to drop. ABAG attributes slow recovery in Bay Area to continuing weak economy and job formation.