FAIR: In The Red Two Years Running, RFTA Wants $100 Million To Ramp Up

October 14th, 2008 at 01:57pm Post Staff 43

[Editor's Note: This news coverage has been underwritten by Factual Aspen Investigative Reporting (FAIR). FAIR has been formed and organized in Aspen, Colorado, as a nonprofit corporation to conduct investigative journalism in the public interest, and to provide accurate, meaningful, and non-biased news coverage based on correct factual information.]

ASPEN, COLORADO (Post Time News)—Despite operating at a loss totaling nearly $2.8 million for the last two years, the Roaring Fork Transportation Authority (RFTA) is anxious to pass a November 2008 referendum in Pitkin County that would pump an additional $44.555 million into the system and propel RFTA from its roots in Aspen as a municipal bus system into a regional force to be reckoned with.

The referendum calls for a maximum bond repayment of just under $100 million.

Nearly half the bond, some $20.34 million, would go to a new Glenwood Springs station, an upgrade of Ruby Park in Aspen, and new parking throughout the system. Some $3.51 million has also been set aside for contingencies.

RFTA chief executive officer Dan Blankenship told Post Time News that were RFTA to operate in the red after the passage of Referendum 4A, the transportation authority would contemplate raising the rates for riders and other measures to make up the difference—including a return trip to voters to ask for more money.

“There are always discrepancies in budgets,” Blankenship said. “Most government agencies operate with deficits or figures that change. If we can’t meet our operating costs there are a number of things we could do. We could raise fares. We also have contracts with the skiing companies and are always looking for grants. We could shift as an organization. We also may add more areas to the routes. We are looking at Garfield, Rifle, Silt, and Parachute that would add about $2 million [in annual revenue].”

RFTA’s operating costs for 2008 were just under $34.9 million with revenues just over $34.2 million, leaving a shortfall of $870,482. The revenue for 2007 was $35.8 million but costs were nearly $37.8 million, a deficit of nearly $2 million. Critics of the bonding measure question whether a transportation authority already operating in the red has the management
skills to expand so aggressively in an uncertain economy. RFTA ridership leaped 162 percent from 1.67 million in 1987 to 4.4 million in 2007.

“The big problem with the referendum,” Jeffrey Evans of the Common Sense Alliance told Post Time News, “is that they don’t know what the economics are going to be, and they’re not sure how they’re going to manage their operating costs.”

RFTA members are Aspen, Snowmass, Basalt, Carbondale, Glenwood Springs, New Castle—and Eagle County and Pitkin County. Referendum 4A would also levy a 0.4 percent sales tax in RFTA territories—and a 0.3 percent sales tax on Carbondale to help pay off the bond. RFTA became a regional authority in 2000 after beginning in Aspen as a municipal bus service in 1983.

“The numbers don’t always work,” said Aspen City Council Member Dwayne Romero, “but RFTA has done a good job and this referendum will meet the demands of the people.”

Of the $44.555 million bond issue, some $4.16 million will be used for debt service and $445,550 will be used to pay the bond underwriter. The rest of the $39.94 million will be used to finance upgrades and improvements at RFTA. The biggest chunks would go to a new RFTA station in Glenwood Springs, with sites under consideration near the court house, at a cost of
$10.25 million; and another $1.82 million to upgrade Ruby Park in Aspen, the hub in the RFTA system. New parking in Ruby Park, Buttermilk, Basalt, Willits, El Jebel, Carbondale, and Glenwood would require another $8.27 million.

In addition, RFTA would use the new funding to buy 15 buses at a cost of $7.37 million—with another $5.5 million spent on a computer dispatch system, real-time automatic locater, and a digital signage system indicating the whereabouts of the buses. Another $2.54 million is targeted for so-called Transit Priority for construction to make roads easier to navigate.

Referendum 4A also includes the $3.51 million contingency plan.

"This really is a great referendum,” Sara Fisher, the Eagle County representative to RFTA, told Post Time News. “Of course the operating costs are going to go up and this might have us ask for more money down the
line. But this is something that really needs to be done. I mean who can predict gas prices, the amount of tourists that will come. All of this effects the money `RFTA makes. Even if we lose money on this it still needs to get done to meet the needs of the people.”

Blankenship told Post Time News the organization is estimating annual revenues just under $41.286 million and costs of some $40.8 million. In this roseate scenario, RFTA would generate $477,957 in positive cash flow in 2014.

But RFTA also faces the real specter of escalating costs—including the cost of gasoline that drives the buses in the system. Blankenship told Post Time News that from 1987 the overall cost per passenger mile for fuel, including labor, jumped from 2.58 cents to 5.24 cents, a 103 percent increase. Through 2014, the authority is forecasting a 5.4 percent growth in operating costs—about a 4 percent increase for operational costs, and 6 percent for labor.

“Why don’t they have two referendums?” Jeffrey Evans said. “One that addresses fuel costs and more people riding the buses, and the other addressing all the other things they want to add to RFTA that I feel are unnecessary.”

Blankenship also believes the sales tax could raise $6.2 million in 2009 to help with the operating cost and the funding expansion.

“I sat in on the numbers and they work,” said Aspen City Council Member Steve Skadron, “That is why I am supporting this referendum. I am also supporting it because I want us to get federal funding.”

If the referendum passes there is also the possibility RFTA would get $21.3 million in federal funding and this would grow funds available for expansion to $61.24 million including the bond on the ballot.

RFTA has not always operated in the red. In 2006 their revenue was $28.67 million and expenses were $26.76 million, leaving them a surplus of $1.91 million. In 2005 revenues were $28.1 million and costs were at $24.81 million for a surplus of $4.05 million. In 2004 RFTA revenue was $17.91 million and costs were $16.25 million for a $1.67 million surplus.

“Look,” Blankenship said, “the estimates we made for this referendum were conservative. We know there might be higher operating costs and we know this is a long-term thing and might require us to go back to the people for money, but we think that it is worth it. We originally had a $180-$190 million plan but phased that back and put forth a more realistic plan.”

“We need this referendum to pass to meet our needs,” said RFTA Board Member Dorothea Farris, the representative from Pitkin County. “Fuel prices are rising and more people will be taking the buses. There has also been an increase in ridership. This will help offset the operating costs for RFTA.”

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