Fuel cost savings doesn't equal fare decrease for bus riders

Friday, April 10, 2009

From a post on Mayor Dave's Blog:

A few weeks ago I asked city staff to go out for fuel bids for 2010. I didn't expect to decide to lock in, but I wanted to see where the market was at. As it turned out we got surprisingly strong bids, so I made a decision to lock in. The result is that the city will save about $2.6 million on fuel in 2010 as compared to what we're spending in 2009.

About $1.8 million of that savings will go to the Metro bus system, and so some have asked how that impacts the need for the fare increase that went into effect this week.

Of course, locking in on lower fuel prices next year is good on two fronts. It will allow us to plan better because our fuel budget won't be a wild card. And it will also make it more likely that I can make good on my determination not to raise fares or cut service next year.

But the good news on the fuel contract doesn't lessen the need for the fare increase now. For one thing, the new fuel contract doesn't kick in until next year, so it doesn't help with 2009 prices, which were locked in at a higher level. If we were to roll back the fare increase, we'd still be looking at a budget deficit in Metro of about $700,000.