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Rising costs
may prompt higher
bus fares

Additional services and higher
prices for parts and diesel fuel
may bring a $5 million shortfall

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By Gordon Y.K. Pang
Star-Bulletin

Operators of TheBus are warning city officials that they anticipate a $5 million shortfall by June 30, which could force them to reduce services.

City Council Chairman Jon Yoshimura, calling the situation "a fiscal emergency," said he wants to push out a fare increase to cover TheBus' budget.

While Yoshimura did not specify figures, the Council has been discussing a raise for adult fares to $1.25 from the current $1. Some have estimated that would bring an additional $3 million to $4 million a year.

But at least one colleague, Transportation Chairman Duke Bainum, said the Council should pass a supplemental budget to deal with the shortfall and save the debate over increasing rates for next year's budget.

James Cowen, president of Oahu Transit Services, which operates TheBus, told Council members in October that additional services introduced by Mayor Jeremy Harris will cost the city $1.5 million more than anticipated for the year.

Cowen yesterday, however, said the situation has now compounded.

His fiscal officers are now telling him escalating diesel fuel prices will add an anticipated $2.55 million more in annual operating costs.

Equipment part costs are also up, and will add $970,000 more.

The city allocated about $112 million initially for operation of TheBus and Handi-Van for the fiscal year that runs from July 1, 2000, to June 30, 2001.

He acknowledged that the budget he submitted to the Transportation Services Department was higher than $112 million, but he declined to lay blame on the administration.

"There have been some extraordinary expenses which are of no secret to anybody," Cowen said.

The estimated $1.5 million excess in wages and benefits, due to Harris' hub-and-spoke, CityExpress! and CountryExpress! routes, also remains, Cowen said.

Yoshimura said one thing that can help deal with the anticipated shortfall is to push out a long-stalled rate increase bill now in the Council Budget Committee.

"I want it in place as soon as possible because we've got an emergency," Yoshimura said. "I don't think the administration wants to raise bus fares, and I don't want to raise bus fares, but when you look at the financial stability of the city as a whole, it's the right thing to do."

No one from the Harris administration returned calls on the issue.

Yoshimura declined to discuss possible numbers, adding that any increases cannot by itself meet the shortfall.

Instead, he said, it would need to work in concert with cost-saving measures such as delaying equipment purchases.

"Politically, it's very difficult for elected officials to support any kind of increase, be it admissions to the zoo, driver licensing or bus fares," Yoshimura said.

"But in this case, if we don't increase bus fares to a reasonable level, then it will be our taxpayers who will be paying for the shortfalls in our bus system. I don't think that's right."

Yoshimura said he wants Budget Chairwoman Rene Mansho, whose committee next meets Feb. 27, to place the issue on her agenda immediately.

Bainum said Yoshimura is placing a long-term solution on a short-term problem and that the Council should instead consider a supplemental budget request.

"This is what supplemental budgets are for, to meet unforeseen events such as spiraling diesel prices," Bainum said.

Discussion on rate increases should be concentrated on how much revenue should be brought in from fares next year, Bainum said.

He noted that the Council earlier this month approved a policy that calls for fares to pay for between 27 percent and 32 percent of actual cost of operations.

Bainum said he does not think a rate increase could be approved and put into effect in time to meet the $5 million needed.

Yoshimura said the time needed for a supplemental budget bill to pass would take too long. He said he also believes making all taxpayers pay for the unanticipated costs is unfair to those who do not ride TheBus.

The Council last raised fares in 1995, when they went to $1 from 85 cents.