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If I read the article right, people will pay $1.50 to ride on the street car, but it will cost the taxpayers $15.00 to provide the services.
Tucson streetcar's first-year subsidy projected to be $4 million Study: City on hook for over half; fares to cover 6-7% of costs October 09, 2012 12:00 am • Becky Pallack Arizona Daily Star In its first full year of operation, city officials expect the new Sun Link Streetcar system to bring in $306,000 in rider fares - and require nearly $4 million in local government subsidies. Fares will cover only 6 to 7 percent of the system's annual operating cost, according to a draft five-year Strategic Transit Plan. By comparison, fares pay for 24 percent of Sun Tran bus system operations. The Regional Transportation Authority and the University of Arizona will pay a portion of the annual streetcar operating subsidy. But most of the streetcar operating money will come from the city's general fund, 56 percent in the first full year, or about $2.4 million. By the fifth year city taxpayers will be picking up 66 percent, or about $3.7 million. Streetcar project manager Shellie Ginn said the fare revenue projections are based on very conservative ridership estimates. Plus, the projections don't count riders who pay the full $1.50 fare to ride the bus and then transfer to the streetcar for free or riders using a university pass. Although city projections show the streetcar will generate between 550 and 650 original trips a day, Ginn said about 5,000 people are expected to ride the streetcar each day when you include transfer passengers or university students with discount passes. The just-released transit plan includes some of the first public information about the cost of operating the streetcar, which is supposed to be up and running a year from now. The mayor and City Council are expected to discuss the transit plan on Oct. 23. Streetcar operating expenses will include salaries and benefits for workers, a management and maintenance contract, insurance and utilities, according to the strategic plan. The budget projections assume a 5 percent increase in streetcar ridership each year, similar to the 6 percent annual increase projected for Sun Tran buses. City Manager Richard Miranda said once people see the advantages of riding the streetcar, he believes more will start using it and annual ridership increases will be higher. The RTA subsidy is expected to be $1 million a year, plus a one-time deposit of $1 million into a liability reserve fund, according to the transit plan. At $1 million a year, the RTA will be paying for 18 to 23 percent of streetcar operations each year. A total of about $11 million in RTA funding for the streetcar has been set aside to help fund the first five years of operations, Miranda said. The city also is counting on a $600,000 a year subsidy from the University of Arizona, although no signed agreement is yet in place. No deals yet with UA, PCC It's always been part of the plan for the UA to help pay for streetcar operations, Ginn said. The city wants the UA to pay for its fair share of the riders, she said, and the city is in discussions with the UA about it. Federal grant applications projected that 47 percent of streetcar rides will be UA-related, but the transit plan budget shows the UA could pay for 11 to 14 percent of operations. The city also wants a subsidy from Pima Community College, Miranda said, but again, has no agreement. Footnotes in the transit plan say the Sun Link budget is "extremely preliminary." "Efforts are under way to develop alternative funding sources to replace or reduce the need for general fund investment," according to the plan. The Rail Activation and Operations Committee - which meets behind closed doors - is working on ways to lower the general fund subsidies through naming rights, business improvement districts and other ideas, according to the plan. A lot of strategies are being considered now, far in advance of the end of RTA support, Miranda said. Business improvement districts, which are areas where businesses pay extra taxes to fund improvement projects in their areas, still have to be vetted by the mayor and council, Ginn said. The exact budget figures also depend on final contracts. City procurement officials are currently evaluating bids for a contract to manage, operate and maintain the streetcar system. The city should make a decision on the contract in about a month. Streetcar operating budget FY 2014 (partial year) $3.5 million FY 2015 $4.3 million FY 2016 $5.1 million FY 2017 $4.8 million FY 2018 $5.7 million Contact reporter Becky Pallack at bpallack@azstarnet.com or 573-4346. On Twitter @BeckyPallack.
Tucson's streetcar system requires subsidies October 09, 2012 6:50 am Tucson's new streetcar system is expected to generate more than $300,000 in fares and require nearly $4 million in government subsidies in its first full year of operation. The Arizona Daily Star reports (http://tiny.cc/c0wwlw) that the city's draft five-year transit plan says fares from the Sun Link Streetcar system will cover 6 to 7 percent of the system's annual operating cost. By comparison, fares pay for 24 percent of Sun Tran bus system operations. The Regional Transportation Authority and the University of Arizona will pay a portion of the annual streetcar operating subsidy. But most of the streetcar operating money will come from the city's budget _ about $2.4 million in the first full year and about $3.7 million by the fifth year. |