In a budget update, DRT is predicting a $250,000-to-$450,000 budget deficit for 2008, driven largely by the rising cost of diesel.
According to a report presented to the Region's transit executive committee, if fuel stabilizes at the March price of $1.12 per litre, DRT will be about $440,000 above its fuel budget and will run an overall deficit of $490,000 in its maintenance and equipment program. The additional $50,000 is attributed to harsh winter conditions and a large amount of snow.
However, the report cautions that increasing fuel prices may add another $200,000 to the tab. In April, fuel prices had risen to $1.16 per litre.
"What we're saying is if we do go over budget, it's almost entirely related to the cost of fuel," said Neil Killens, DRT deputy general manager of support services.
DRT's budget is based on diesel costing $1.03 per litre. The fuel comes through a Regional tender, so the transit system doesn't pay the same price as consumers do. Mr. Killens said earlier this year DRT was paying less than $1 per litre.
"Diesel fuel tends to be more stable in terms of cost fluctuation. You don't have the same price increases that you have at the pumps, nevertheless there's a steady increase."
DRT is doing what it can to reduce fuel consumption, including reducing idling times and keeping vehicles well-maintained.
"We're also moving towards more fuel-efficient vehicles and newer vehicles, which is a big part of reducing costs," said Mr. Killens.
Meanwhile, the transit system is expecting savings in some areas, such as $140,000 in the administration department.
Earlier this year, DRT implemented a series of route cuts after posting a $2-million deficit since its inception in January 2006. However, Mr. Killens said it's too soon to tell if more will be required.
"I would think the fall would be the time to look at whether or not to do anything," he said, adding the report's purpose was to flag potentially serious issues.
If DRT does run a deficit, taxpayers ultimately pick up the tab as Durham's municipalities will pay the difference based on their level of service.
