Starving Transit?

CATCH News – November 22, 2010

Bus improvements and fare hikes on agenda

The new council will grapple with possible bus fare hikes and route changes before the end of the year. Fares were raised last January, but not as much as recommended by staff, and a provision of more monies to the HSR for service improvements is also up for debate.

The new council takes office on December 1 in a strictly ceremonial inaugural meeting, but will be asked to make several key decisions before Christmas – including raising water and sewer rates and other fees, and finalizing the transit budget before discussing other aspects of next year’s budget. The rush to raise fees is intended to ensure these can be collected as early as possible in 2011.

The transit budget is scheduled for debate on the morning of Tuesday, December 14, but actual proposals from staff won’t be made public before December 10. Ridership this year was higher than expected and bus repair costs were lower, but those revenue gains have already been shifted to reserves – leaving the overall 2010 budget at “a net zero position”.

HSR cash fares have climbed more than 20 percent since June 2007, while the price of adult monthly passes has jumped by a third and school-age passes have gone up 40 percent (see table below). But rising fuel prices and regular wage increases of transit employees could be used to argue for another fare hike for 2011.

Last year’s recommended increase was 20 cents a ride, but some councillors wanted less and a 15 cent increase was eventually adopted by a narrow 9-7 vote. Three of those who voted in favour aren’t part of the new council – Fred Eisenberger, Margaret McCarthy and Dave Mitchell – all of whom supported the 20 cent hike.

The seniors’ annual pass was left at the $205 level it’s been fixed at since 2003, but adult and student passes each climbed $8 a month to $87 and $71 respectively. That translated into $96 more per year for each regular rider – and much more for those with several family members using the transit system.
Council refused to consider the alternative of raising taxes to cover increased HSR expenditures. It also ignored commentary in the staff report that suggested that might be the best option:

“Ideally, transit program managers recommend fare increases to generate new revenue to fund service level increases stipulated in corporate strategic objectives,” stated the report. “Less desirably, in a challenged fiscal environment, fare increases are applied to meet fiscal goals for program budgets versus strategic goals. Finally, fare increases where the new revenue is used to offset increases to the general tax levy are detrimental to the sustainability of transit programs.”

In its final resolution, council directed staff to come up with a policy for automatically raising fares without a council debate, but that hasn’t happened yet. A second issue facing councillors is a proposal to use federal gas tax monies for transit.

The city receives $32 million a year in these payments, but so far has used none of it for bus services. Brian McHattie has been advocating that $3 million of that money be shifted to the HSR to pay for more bus service.

In August, council decided to put off that re-allocation to the 2011 transit budget, so that proposal will also be up for decision on December 14. Some councillors suggested this amount is “pie in the sky”, but it was strongly defended by transit director Don Hull who said the system really needs ten times that amount.

“$30 million is just what it would take over the next five years to keep moving towards the Transportation Master Plan,” he explained. “The $3 million that we’re asking for in alternative to the $30 million is simply what we feel we need in the very short term to prevent the public satisfaction with this program from deteriorating.”

Hamilton is one of only two municipalities that currently use none of their federal gas tax for transit. The other is Durham Region which plans to spend its entire share on a new incinerator. Hull’s August report indicated the extra monies could fund weekend service on the King, Stone Church and the B-Line routes and weekday expansion on the Delaware, Upper Kenilworth, Rymal, Locke, York and Aberdeen lines.

Flawed Transit Funding Process

Letter to Council: Flawed Transit Funding Process Needs Public Input, Accountability

In the absence of any meaningful process of engagement, and given how information is kept secret until the last minute, we have a sure recipe to breed conflict, confrontation, and poor transit decisions.

By Peter Hutton
Oct. 26, 2009

Commentary

To Mayor Fred Eisenberger and Members of Council

It is with great concern that we have followed the process that leads to the Committee of the Whole Meeting this week, which appears now to have been called simply to raise transit fares.

While we recognize the difficult financial times, it is not, we think, a situation that should surprise anyone. Little has been done to find solutions other than an increase that even your managers will tell you is in conflict with your strategic goals for building a transit system.

Our small effort has been to develop a Transit Vision survey independent from the HSR's work to get some ideas from the public about what to do. The interim results of that unscientific survey will hopefully be brought forward to council later this week.

While self-selected, it is the views of hundreds of Hamiltonians who care about transit, and represent the views of many more who are worried that our transit system, which is essential for the economic, environmental and social health of this city, is going downhill fast.

I write today to address process. Our group is deeply concerned that yet again, fares are going to be considered outside the context of the main budget.

An extra budget meeting to give Council some context has been set for Tuesday, which we noted only on the calendar this weekend. That was apparently announced after Thursday's meeting was first advertised.

In the absence of any meaningful process of engagement with riders and other Hamilton residents by the city in the past year and given how information is kept secret until the last minute, we have a sure recipe to breed conflict, confrontation, and poor, not broadly supported decisions.

TUG laments that the gas tax committee, for example, was never allowed the opportunity to morph into an ongoing advisory committee, thanks to staff inertia. It could have been a vehicle for mobilizing such public discussions.

It is our understanding that the HSR operational review, which has not yet been released, supports our view of the need for investment in transit beyond the status quo.

We see no need for delay for a staff report that further excludes the public. While the process of engagement on the review was hopelessly inadequate - two small focus groups - it was a start and we have to make a start in all of this somewhere. The status quo won't cut it for this or future budgets.

We recognize that a fare increase may be needed but it must be tied to a realistic plan to address the needs for service improvement in both quality and quantity.

We seem to be going nowhere fast. We call again on Council to develop some process of broader engagement and discussion to determine options for a consensus to move forward. Fare, taxes, service redeployment, different kinds of services, will all be a part of that community consensus.

Given that transit fares are considered to be a user fee; and given the fact that it seems Council has set aside three additional meetings to consider user fees; we call on council at a minimum to determine that no decision be made this Thursday, and that a final decision be made later in November after we take the month to have an open and honest debate around all transit issues.

http://www.raisethehammer.org/index.asp?id=968

transit votes

[suburban votes guarantee fare increase...]

City to hike bus fares, starting Jan. 1 TheSpec.com - Local - City to hike bus fares, starting Jan. 1

Basic fare jumps 15 cents to $2.55, but yearly seniors' passes won't take a hit

Emma Reilly, The Hamilton Spectator, (Nov 12, 2009)

Hamiltonians will pay 15 cents more for bus fares beginning Jan. 1.

An increase that will see fares climb from $2.40 to $2.55 passed with a narrow 9-7 vote at last night's city council meeting. Tickets will also go up 15 cents to $2 and monthly passes will climb to $86 from $79.

Yearly seniors' passes will remain the same price.

The hike is expected to bump revenue by $1.5 million, an amount that will offset the HSR's estimated $1.6-million loss this year and a predicted $3.4-million shortfall next year.

Council initially rejected both a 10-cent fare increase and a 20-cent increase at a special budget transit meeting in late October. Though most councillors supported a hike, their votes were split between a 10-cent or 20-cent increase.

The 15-cent hike was a "compromise," said Mayor Fred Eisenberger.

"In a perfect world, I would have liked to see 20 cents," he said. "Twenty cents is what's necessary, and 15 cents is a reasonable compromise."

The vote re-opened a long-running debate that "breeds an environment that's really conducive to hostility," said Councillor Sam Merulla. Councillor Brian McHattie, who voted against the increase, called it "an extremely unfortunate and wrongheaded move" and warned it will decrease ridership.

Councillors Terry Whitehead and Chad Collins both said they supported a 10-cent increase, but voted against the 15-cent hike.

"I can't support the 15 cents. I think it does go too far," Collins said.

"From my perspective, I think it's reasonable to expect an increase, and 10 cents for me works."

Still, the goal of keeping next year's property tax hike to two per cent or less ultimately convinced most council members to vote in favour of the increase.

"If we don't get it from the fare box, we certainly have to dip into the tax base," Eisenberger said. "The two per cent target is going to be a difficult one to achieve, and it will be even more difficult without this increase."

The hike comes into effect exactly two years after the last increase from $2.25 to $2.40.

Council also requested a report on automatically calculating future fare increases in time for next year's budget.

That formula could prevent the transit debate from resurfacing each year, Eisenberger said.

HOW THEY VOTED:

Yes: Brad Clark, Fred Eisenberger, Lloyd Ferguson, Tom Jackson, Margaret McCarthy, Dave Mitchell, Robert Pasuta, Maria Pearson, Russ Powers

No: Bob Bratina, Chad Collins, Scott Duvall, Brian McHattie, Sam Merulla, Bernie Morelli, Terry Whitehead

http://www.thespec.com/News/Local/article/671134

fare taxes

CATCH News – November 3, 2009

Higher bus fares versus higher taxes

It would cost the average Ancaster household less than $2.50 a year to avoid an HSR fare hike that would add over one hundred dollars to the expenses of a regular adult bus rider. Differential transit taxes mean a Hamilton home of similar value would pay just over $11 a year to keep bus fares at their current levels (see table).

The proposed twenty-cent-a-ride fare hike has sharply divided councillors. It is intended to raise $1.9 million which is about 4.2 percent of the $45 million in property taxes collected for HSR services this year.

An Ancaster home valued at $300,000 currently pays $58 a year for the HSR. A similar priced home in the former city of Hamilton pays $266 a year with households in the other former municipalities falling in between these two extremes – Waterdown $60, Dundas $65, Stoney Creek $85 and Glanbrook $114 (see table).

About 15 percent of households are rural and they neither receive HSR service nor pay any taxes towards its operations. All households receive DARTS service and share equally in its costs. The variable tax rates in the urban areas are a carryover from before amalgamation ten years ago when the former suburbs purchased transit service from Hamilton.

The proposed twenty cent HSR fare hike would raise the adult pass by $9 a month or $108 a year. Cash fares would rise to $2.60 a ride from the current $2.40.

Council has instructed city staff to limit increases in departmental budgets to no more than two percent, a directive made more difficult by already approved wage increases in the three percent range. The HSR faces the additional problem of a three percent drop in ridership that is expected to cut $1.3 million from its revenues this year and in 2010.

After squeezing other spending, the transit division is $1.9 million over the two percent target – an amount that it thinks can be recouped by the 20-cent-a-ride fare hike. However that could be optimistic because it assumes no drop in the number of passengers who will pay the higher fares to ride the bus.

The inconclusive outcome of last week’s debate on the HSR budget reflects the division between transit promotion and higher taxes, and largely pits suburban councillors against their colleagues in the former city of Hamilton. It’s further complicated by this being the last city budget before municipal elections next fall.

On October 29, five councillors endorsed a 20-cent fare hike – Dave Mitchell, Maria Pearson, Rob Pasuta, Russ Powers and Mayor Fred Eisenberger. That proposal went down to defeat 8 to 5 – the same fate that met an earlier move to raise fares by 10 cents that was supported by Mitchell, along with Chad Collins, Scott Duvall, Tom Jackson and Terry Whitehead.

Together that makes nine councillors supporting a fare hike. Four others voted against both proposed increases – Bob Bratina, Brian McHattie, Sam Merulla and Bernie Morelli – and three were absent – Brad Clark, Lloyd Ferguson and Margaret McCarthy.

A fare hike won’t entirely eliminate a rise in transit taxes, but it will lower the budget increase to the approved two percent increase. If there is no fare hike, the tax hit for the HSR will be 6.2% per household, or about $3.60 per household in Ancaster and $16.50 in old Hamilton.

The actual tax hike will also vary according to the assessed value of each house. A higher percentage of suburban residences exceed the $300,000 figure than the homes in the older parts of the city.

Much of last Thursday’s debate focused on whether or not to shift some capital dollars to the HSR operating budget, a move suggested by transit staff but not recommended by the finance department. That would have covered half of the budget overrun and reduced the fare hike to 10 cents per ride.

McHattie announced he’s pursuing an alternative option that would add $3 million to the HSR operating budget by shifting provincial gas tax monies from the capital budget to the operating side of the ledger and replacing the capital dollars with federal gas tax monies.

The latter monies were originally earmarked by the federal government for transit use only in cities over 500,000 population, but Hamilton fell below that threshold initially and the rules have subsequently been broadened to allow allocation to other capital expenditures. At this point, about half the annual subsidy of $79 million is being used for waste management facilities, with the remainder split between road construction and the renovations to city hall.

The fare hike is expected to be debated and voted on again at the November 11 city council meeting.

Taxes for HSR on a $300,000 home within the transit service area
and effect of avoiding a proposed 20 cent per ride fare hike

Area affected	Current HSR taxes per household	4.2% increase to avoid a fare hike	2% increase with fare hike	Total HSR tax increase with no fare hike
Ancaster	$58	$2.44	$1.16	$3.60
Dundas	$63	$2.65	$1.26	$3.91
Glanbrook	$114	$4.79	$2.28	$7.07
Hamilton	$266	$11.17	$5.32	$16.49
Stoney Creek	$85	$3.57	$1.70	$5.27
Waterdown	$60	$2.52	$1.20	$3.72
Rural areas	$00	$0.00	$0.00	$0.00

CATCH (Citizens at City Hall) updates use transcripts and/or public documents to highlight information about Hamilton civic affairs that is not generally available in the mass media. Detailed reports of City Hall meetings can be reviewed at www.hamiltoncatch.org. You can receive all CATCH free updates by sending an email to info@HamiltonCATCH.org.

fare debate

Transit fare headache? TheSpec.com - Opinions - Transit fare headache?

Howard Elliott
The Hamilton Spectator

(Oct 28, 2009)

Pass the Tylenol Extra Strength -- an HSR fare increase is back on the table.

Pretty much every year we go through this painful dance in which HSR staff recommends to city council that a fare increase is necessary to offset the rising cost of operations and to improve and expand service. If there's no increase, the system won't grow, will exhaust reserves, defer capital spending and possibly reduce service, the argument goes. And HSR fares are 10 to 15 per cent lower than other big city fares across Canada, so we're underpaying for the service.

And every year, transit, environmental and social justice advocates yell loud and long against fare increases. Fare hikes are guaranteed to reduce ridership, so higher fares are offset by fewer riders, and there's no real gain, they argue. Shrinking ridership also contradicts the city's sustainability master plan, Vision 2020. Because HSR ridership is largely students and people on limited or low income, fare hikes penalize the most vulnerable, and may be a disincentive for people to work rather than rely on social assistance, poverty activists add.

The thing is, all of this is true. There is convincing evidence on both sides. Little wonder the matter ended with a tie council vote last year, which resulted in a proposal for a 10 cent fare increase dying on the table.

Some other salient points:

This time around, the debate is likely to be even more contentious than last year. The city was staring at the prospect of a $15-million deficit, brought about in large part by the recession. Given the bleak state of provincial finances, there's a worry the province may not deliver entirely on its uploading commitment of about $15 million, which could make the shortfall as much as $31.5m. This may not be the year to put extra burden on the overall tax base by deferring any fare increase for a second consecutive year.

The recession has also made poverty an even bigger problem in the city, with many more families unemployed, using food banks, applying for social assistance, and, yes, using public transit because it's what they can afford. The price of a monthly pass has already increased 22 per cent since 2007. This may not be the year to put extra burden on the people living in poverty, including the working poor.

In the wake of last year's split decision on a fare increase, a disappointed Mayor Fred Eisenberger said: "These are tough times. It's a question of balance." That's as true this year as it was then.

Council needs to strike a balanced approach to the pressures on the overall city budget and all taxpayers and the pressures on the HSR and passengers. There needs to be more collaboration and communication with transit users than there has been to date. The results of an operational review of HSR need to be released and understood before a decision is taken on a fare increase. Council needs to hear from and listen to social justice and taxpayer advocates. That process begins at a Committee of the Whole meeting tomorrow. A transit fare increase may ultimately be necessary, but not before a great deal of sincere collaboration and creative thinking rule out other alternatives.

http://thespec.com/Opinions/article/661727

let me take you higher!

Higher fares and dirtier buses

City staff are calling for a 20 cent fare hike for the HSR and DARTS, and switching bus purchases to 40-foot diesel vehicles instead of a mix of 40 and 60 foot articulated hybrids. The proposals were released on Friday and go before councillors as part of the ‘transit day’ budget deliberations on October 29.

The 9:30 am meeting at the Sheraton Hotel was also expected to consider changes to HSR routes proposed by consultants. A presentation on those changes (not yet made public) is on the agenda, but transit staff want no action taken by councillors until staff have an opportunity to respond.

The fare hikes, on the other hand, are recommended for finalization by November 30 so they can be imposed at the start of next year.

“Foregone revenue from a delay in a fare increase beyond January 1, 2010 would be in the order of $100,000 per month,” warns the report.

Staff say their proposals respond to a council directive that limits spending increases to 2 percent for 2010 – equal to a little over $850,000 for transit. Staff say the division is facing $2.1 million in additional costs next year plus a $1.3 million drop in revenue because of fewer riders, and that the combined effect would be amount to an 8 percent hike in spending.

The report doesn’t specify the precise effect on ticket or pass prices, instead only referring to “a fare increase of an average of 20 cents per trip”. Applied across the board, the hike would translate into approximately $10 extra per month on the adult and student passes that currently sell for $79 and $63 respectively.

As recently as June 2007, these passes were $65 for adults and $50 for students. Cash fares are currently $2.40 with adult tickets costing $1.85. The seniors pass is now $205 a year. Any fare hikes approved will also apply to DARTS tickets.

The report says fare hikes “ideally” should be for the purpose of improving transit services, and not to keep down taxes.

“Less desirably, in a challenged fiscal environment, fare increases are applied to meet fiscal goals for program budgets versus strategic goals,” explains the report. “Fare increases where the new revenue is used to offset increases to the general tax levy are detrimental to the sustainability of transit programs.”

Transit taxes are area-rated and only apply to portions of the city that receive HSR service with the vast majority collected from residents of the former city of Hamilton. A $300,000 home there pays $266 a year on their tax bill, while similar valued homes in Ancaster pay $58, in Waterdown $60, Dundas $63 and Stoney Creek $85.

Other recommended measures include purchasing only low-floor ramp vehicles for DARTS rather than the lift-equipped high floor design. Staff are also calling for a delay to increases in the Taxi Scrip program that have been recommended by council’s Advisory Committee for Persons with Disabilities.

Dropping the policy of buying hybrid buses, including some large articulated vehicles, will save $200,000 explains the report, while abandoning the purchase of lift-equipped DARTS buses will conserve an additional $100,000. There is no discussion in the report on the implications of these moves for either air quality or transit services.
Changes to DARTS to meet new provincial human rights rules are to be discussed in a separate report that staff promises for “the near future” but say won’t affect next year’s transit budget.

“However, there will be substantive financial impacts on future budget years beyond 2010 to achieve compliance with the pending AODA legislation as it is currently contemplated,” the report warns.

At this point, no formal opportunities are being provided to allow transit users to comment on the proposed changes, although council committees usually accept individual requests to speak if made by noon on the day prior to the scheduled meeting.


CATCH (Citizens at City Hall) updates use transcripts and/or public documents to highlight information about Hamilton civic affairs that is not generally available in the mass media. Detailed reports of City Hall meetings can be reviewed at www.hamiltoncatch.org. You can receive all CATCH free updates by sending an email to info@HamiltonCATCH.org.

no hike!

It's official: No fare hike for transit riders TheSpec.com - Local - It's official: No fare hike for transit riders

Nicole Macintyre, The Hamilton Spectator, (Nov 27, 2008)

Transit riders won't need to dig for extra change in the new year.

Council rejected a recommended 10-cent fare increase last night. The decision locked on a tie vote, meaning the status quo prevails.

An attempted compromise to raise fares by only 5 cents failed 9-7.

"We're entering extraordinary times," said Councillor Terry Whitehead, who argued the city must ensure its transit system is affordable in the coming months. "This is the time that we have to show compassion."

For residents already turning to food banks, even a 10-cent increase is too much, argued Councillor Sam Merulla.

But councillors who supported the fare increase argued taxpayers also can't afford to pick up the extra costs of running the transit system.

"This is a fairness issue," said Councillor Maria Pearson. "We can't keep putting this burden on taxpayers."

The city transit system is funded 53 per cent by the fare box with the remainder coming from the general tax levy. A cash fare costs $2.40. Tickets are $1.85.

Councillor Margaret McCarthy accused some councillors of being hypocritical for rejecting a 10-cent increase because of the impact on riders when they supported a $400 tax increase for Flamborough residents last year.

Mayor Fred Eisenberger warned freezing fares will only make this year's budget increase, now close to 10 per cent, harder to reduce.

"These are tough economic times. It's a question of balance."

While rejecting a fare increase, councillors supported increasing service along Rymal Road. Council also approved two new initiatives, free rides for people over 80 and reduced passes for youth in the summer. Staff will report back on how to fund the programs.

The city is continuing a pilot project offering half price bus passes to the working poor.

http://www.thespec.com/News/Local/article/473052