Sep 11, 2007 - 10:39 AM
By Erin Hatfield
DURHAM-- The local transit system is facing a potential deficit of $2 million and if things don’t turn around it could mean cutbacks.
“The size of this deficit was a surprise to me and a wake up to all of us on (Regional) council about trying to expand programs after the budget in which we haven’t budgeted for that expansion,” said Scugog Mayor Marilyn Pearce, the chairwoman of the Region’s finance and administration committee.
Durham Region Transit (DRT) launched in January of 2006 and operates on a budget of $27.5 million. The deficit is being blamed on changes in ridership, less than anticipated growth and the access pass for Ontario Disability Support Program (ODSP) recipients, which became available in November 2006 and cost $300,000, The access past is a $37 monthly pass offered to recipients of ODSP.
“I knew there were going to be repercussions of additional costs for the ODSP (access pass) and I was kind of expecting that $300,000 to come back at us,” she said. “But that is only $300,000 of $2 million.”
Another contributor is the local DRT/GO co-fare agreement, more successful than anticipated, that resulted in a $500,000 increase in costs. The co-fare agreement allows customers travelling on DRT buses to board GO Transit buses with a pre-paid DRT ticket, pass or transfer. DRT then pays GO Transit the fare difference.
“The co-fare we have to get our head around it,” Mayor Pearce said. “People started to use GO during the (DRT) strike and haven’t come back to us.”
Adding to the problem is higher than budgeted gas and oil costs of about $240,000 and higher bus material and service costs of $550,000.
Another big contributor to the deficit is a $1-million revenue shortfall.
Mayor Pearce said riding local transit in the end is cheaper for taxpayers and DRT needs to get that message out.
“We are going to closely monitor the situation over the next four months and hopefully new routes on major corridors will perform well,” Mayor Pearce said. “As we come closer to the end of the year we are going to have to give serious thought to routes and the (DRT/GO) co-fare. We may have to make some tough decisions.”
She said no one wants to deal with under-performing routes, but they may just have to. Alternately, if the Region wants to maintain that level of service it to pay for it, she added.
DRT’s general manager, Ted Galinis, said the potential $2-million deficit is a worst-case scenario and measures are being taken to curb it.
“We are doing some spending cuts, hiring freeze, looking at routes to see if we can save some money,” he said.
Mr. Galinis said bringing the potential deficit forward now is a form of due diligence so there are no surprises come budget time.
“If this really is a problem we have to address it for 2008 so we can institute it in 2008 to get a full-year recovery,” he said.
Recommend :