Reprinted from: Lexington Herald-Leader

JULY 19, 2008 | SATURDAY | METRO FINAL EDITION

 

LexTran officials say they don't want to sound like alarmists by trotting out the dreaded words ”tax increase,“ but in a couple of years they could be asking taxpayers to dip into their wallets once again to help keep the local bus system afloat.

”It's not a foregone conclusion that that's where we'll end up,“ LexTran board member Ann Render said. But, she said, ”I think we'll have to look at it. ... You never close the door to any option.“

In short, in a couple of years or so, LexTran will not be able to continue offering its current level of services without a boost in funding, officials of the bus system said.

Four years ago, Lexington residents voted 53 percent to 47 percent in favor of a tax levy of 6 cents per $100 of assessed property value to fund LexTran. The tax is expected to generate more than $15 million this fiscal year.

When the property tax was instituted, the Lexington-Fayette Urban County Government discontinued giving LexTran a yearly subsidy of several million dollars.

After the new tax money started rolling in, LexTran restored services that were cut before the referendum and added services.

But fuel prices have gone up faster and higher than LexTran leaders anticipated. And more people are turning to LexTran because they can no longer afford to gas up their own vehicles.

The property tax money makes up 79 percent of the revenue in LexTran's operating budget, LexTran officials said.

LexTran general manager Rocky Burke said that bus fares could be raised, but if they go up too much, people will stop riding.

Fares make up only seven percent of the revenue in LexTran's operating budget

”If we raise fares 50 cents, it generates about a half-million (dollars) for us,“ Burke said, adding that that would not be nearly enough money to keep the system operating as it is now.

”The thing that's hurt us so much this year is the price of diesel fuel,“ Burke said.

LexTran leaders budgeted for diesel fuel based on a price of $2.75 a gallon for fiscal year 2007-2008. The figure proved much too low. For this fiscal year, which started July 1, they figured diesel at $4.25 a gallon.

LexTran buses, which get, on average, 5 miles per gallon of fuel, used 410,878 gallons of diesel fuel in the 2005-2006 fiscal year. Buses are expected to use 600,000 gallons this fiscal year.

Meanwhile, LexTran has outgrown its Vine Street transit center, and it still needs $4.5 million to complete a three-phase building and renovation project now estimated to cost a total of $8.5 million, according to bus system officials. Although the building and renovation project has been financed thus far largely with federal funds, there's no guarantee those funds will keep coming in, they said.

And many commuters want 15-minute, instead of 30-minute, bus service; bus stops closer to their homes; and more bus shelters.

”Every idea has an associated price tag to it,“ said Ed Kasarskis, who recently became chairman of LexTran's board.

LexTran is good shape for the remainder of this fiscal year, according to Burke.

”We'll have a surplus at the end of this year,“ he said.

But the following year, he said, he'll have to take some budget-stretching measures. One such measure Burke said he has suggested is adjusting LexTran's capital budget program so that bus purchases could be more spread out.

Beyond the next two years, LexTran's financial picture is ”very, very fuzzy,“ Kasarskis said.

LexTran leaders told Lexington city officials and business leaders four years ago, when they were making a pitch for a property tax dedicated to LexTran, that such a tax would not cure all of the ills of the bus system, which at the time was on the verge of collapse. LexTran leaders told them that, even if voters agreed to the tax, the issue of funding for the bus system would have to be revisited in five years or so, said Render, who was chairwoman of the LexTran board at the time.

”In 2004 we knew that we would have to take it (funding) up again,“ Render said. But, she said, that doesn't mean LexTran will be asking for a tax hike next year or three years from now.

”It just means we'd better figure it out.“

How much money LexTran will need to operate in the coming years will depend on what the public wants from its local mass transit system, LexTran officials said.

Citizens will be able to voice their opinions about that in the coming months when another comprehensive operating analysis of LexTran is done by consultants. Consultants will take a look at all aspects of the bus system and seek public input about LexTran, among other things.

”This is a very good time for LexTran to re-evaluate what we're doing, re-evaluate what the public needs are,“ Kasarskis said.

One thing the analysis will have to do is lay out different cost scenarios for LexTran, he said.

But, he said, ”The thing we absolutely cannot plan for is fuel prices.“


Reach Jennifer Hewlett at  (859) 231-3308  or  1-800-950-6397, Ext. 3308.