Metro officials balance 2011 budget, spare riders fare increases and service cuts

Metro officials have announced that fares will not rise, and service will not be reduced in 2011.  The news comes as the transit agency faces declining ridership, and many feared that more fare increases or service cuts would be on the way.

In August, Metro restored service to a portion of Lower Price Hill that had previously fallen victim to an earlier round of service cuts.  Now, the transit agency says that they have been able to balance their upcoming $86.5 million budget thanks to newly announced funding from the Ohio Department of Transportation (ODOT) that is programmed to help with capital costs.

“Currently, Metro’s 2011 budget is balanced by using capital funding to help pay for operating expenses,” said Thomas Hock, Interim CEO & General Manager of Metro.  “The new funding from ODOT will allow us to shift those capital dollars back to their intended use for critical capital projects, with no negative impact on service.”

The $4M funding allocation from ODOT came through the department’s 21st Century Transit Partnerships for Ohio’s Next Generation which distributed $50 million in 2011 to transit systems across the state.

Metro officials warn that even though the 2011 budget appears to be in order, that future fares and service structures will continue to face pressure.  Leadership says that while fares have stabilized, insufficient funds exist for capital projects like the replacement of buses beyond their 12-year useful life.

“We have examined every expense and tightened spending for the coming year to preserve service for our customers and keep fares at their current level,” Hock explained.

The proposed 2011 budget will go before Cincinnati’s City Council who would provide approximately 45 percent of Metro’s 2011 budget through the city’s earnings tax revenue.

The One for Fun:
Metro officials have also announced that Hollywood Casino Lawrenceburg will sponsor the new Route 1 bus service.  The partnership will include naming rights to the route in addition to typical bus advertising including promotions for Hollywood Casino on the back of each of the four, 30-foot hybrid buses on the route.

“As a tax-funded organization, this type of partnership is important to help Metro better serve the community,” said Dave Etienne, Metro’s Marketing Director.  Meanwhile, leaders at Hollywood Casino see the partnership as one that will help benefit their bottom line.

“As part of the Cincinnati business community, Hollywood sees this partnership with Metro as an opportunity to connect residents and visitors to some of Cincinnati’s best attractions,” said Tony Rodio, Hollywood Casino Lawrenceburg General Manager.  “We’re among the top attractions in the metropolitan region, so we realize the importance of just getting people out there, actively supporting the businesses that are there for them – this effort achieves that goal – and through a simple bus ride.”

  • Zachary Schunn

    This is surely good news. I just wish it would last…

    Ironically, in my experience (taking the bus and talking to fellow riders), previous rate increases and service cuts are what has caused such a drastic decrease in ridership in the first place. People can blame the recession, but for many people bus ridership is still cheaper than driving. They drive instead because it is so much more convenient.

    I take the Metro because I support public transportation, but to be honest it’s getting tougher and tougher to convince myself it’s worth it. In the past 2+ years I have seen numerous rate hikes (I recall the fare being just $1 less than four years ago), service cuts, and in general just poorer attitudes from drivers and passengers. (I am personally getting really sick of listening to drivers incessantly yell at passengers, barely managing to stand up when the driver takes a hard right turn, etc.)

    For most businesses, when they struggle, they look to rate cuts, marketing gimmicks, customer service improvements, and–when necessary–restructuring, to improve. Metro is still popular along the major routes (take the 17 bus at 9 am and tell me it’s not); it just needs some fresh thought put into how to increase ridership in other areas.

    And I can tell you now, cutting costs isn’t going to convince people to ride.

  • It’s a tough situation to be in. While other businesses often lower prices and increase marketing when times are tough, they are able to do so because they control their own finances. As you know, roughly half of Metro’s funding comes from Cincinnati’s earnings tax which is something that can and does change on an annual basis.

    A dedicated transit tax for the Cincinnati region would seem to allow greater flexibility when it comes to these decisions, but right now the funding structure has really limited the way in which things can operate.

    I think Metro does a very good job with the very limited resources they receive. Improved frequencies, a modernized fare collection system, real-time arrival, and modified system operations would seem to really do wonders for Metro and its riders. I also expect the addition of rail transit and carsharing to help bus ridership in Cincinnati as it has done in every other city.

  • Zachary Schunn

    Randy,

    You’re right; my comparison to “normal businesses” is somewhat tongue-in-cheek. Metro has less control over its revenues, making it tougher to balance its budget especially in poor times. Finding money to invest is tougher, and I’m not even saying it’s the proper solution. I just wanted to post the reminder that, with ordinary supply and demand, increase in price or decrease in service will cut use. Can I say for sure that it will affect bottom line? No, because (I’ll admit) I have very little knowledge of their revenues and expenses vs. elasticity of the market. I am only going off gut feelings from experience riding the bus.

    I personally would like to see Metro take more creative approaches. For example, in my (very biased) opinion the greatest untapped market is young adults. Why not renegotiate the contracts with UC and Xavier to allow those students to ride for free? (This was the case for UC just 3 years ago; I am not sure what the case is with Xavier. There is no cost associated with this for Metro, because the colleges would cover costs.) Why not create a low-cost phone App with bus routes? They could utilize Google to do this. (I’m sure you’ve seen other similar examples.) They could offer different rates for students and adults (after all, adults generally have higher incomes, so this makes sense). Or utilize Facebook and other viral marketing tools. Those are just a few suggestions.

    Of course, I could be wrong; I’m just offering ideas at this point.

  • Zack

    I don’t believe the colleges can just “cover the cost” for some 30K students at UC, especially when probably only 5K ride the bust regularly.

    And while embracing new technology is good, there has to be plan with a purpose, more so that just make an app and create a facebook page. Too many businesses think Facebook will drive customers to them, when its far more complicated. As for the app, It can be done for free. Heck, just uploading the pdf files to a server would be a start. But that alone wont bring in more riders.

    The bus has to figure out a way to appear (or actually be) more convenient or cheaper than driving. For example, and I dont know if this is legal or not, the buses on 71 drive in the left shoulder in the daily rush.

    Thats just one example mind you.

  • Zachary Schunn

    Zack,

    Believe it or not, UC used to subsidize all costs for students. (http://www.uc.edu/News/NR.aspx?ID=5709) Costs are still partially subsidized by the university, and with the increase in funding for UC Sustainability and efforts to decrease the campus’ carbon footprint, there’s a possibility of the costs again being fully subsidized. (I’ve sat in on meetings where it was contemplated; I’ll try to re-ruffle the feathers.) Like I said, I don’t know about Xavier, though XU does have fewer budget issues than UC does. And while it may not capture all 45000-50000 students at the two schools, it’s a start.

    I generally agree with your other points (and, yes, buses can drive in the shoulder). A new marketing strategy isn’t an end-all solution (public transport in Cincinnati will not match that in other cities until the attitudes of citizens change), though I do think it’s a good start…

  • Patrick

    We’re still waiting for Metro to get that google transit hookup. Then hopefully with some successful grant writing they will have real-time bus location, so that people can find out when the next bus is coming on their iPhones or whatever else they use. That will increase ridership among the 18-35 age group really fast.

  • Thank you for all the thoughtful comments. I work for Metro and I want to let you know that most of your suggestions are already in place or are in the works. For example:
    – We are working with UC and Cincinnati State right now (talking with Xavier also)
    – We’ve been working with Google for a while and hope to have Google Transit up and running soon (we have some problems to work out due to the structure of our routes)
    – We have a Facebook page and Twitter account (used for news/route changes/detours/promotions/events) Please “Like” Metro on Facebook: http://www.facebook.com/GoMetro
    – We have received federal funds to purchase a new CAD/AVL communications system on our entire fleet – once that is in place it will open the door to creating apps

    Internally we are working through our challenges and trying to come up with solutions on a daily basis. Increasing ridership is certainly our goal and we strive to do it with limited resources. Again, thanks for your feedback, and feel free to reach out to us if you can help.

  • Zachary Schunn

    Jill,

    Thank you for the information! I offered a few of the suggestions while silently wondering if they had already been considered, were in the works, or had even been unveiled but I just hadn’t seen them publicized. I suppose I should give Metro more credit and keep in mind how long it takes to see certain things accomplished.

    Thanks,
    Zach