Mountain Express makes cuts to smooth out cash flow issue

New bus barn

While not all the potholes have been eliminated, the local bus system is feeling better about a smooth ride this winter. With the help of some budget trimming and operational cutbacks, the Mountain Express board feels the budget is a bit less bumpy than their projections just a few weeks ago, and they feel confident about building their new bus barn without going into major debt.

 

 

“We think we are making good progress,” said Mountain Express board member Gary Keiser. “It looked pretty bleak a couple of months ago but we have taken some good steps, and while it is still tight, we think everything should fall into place.”
The bus system has always had a cash-flow crunch at the start of ski seasons. Given the fact that most of the bus system revenue comes from sales tax in Crested Butte and Mt. Crested Butte, the system incurs large costs in November and December when the ski area opens and the Mountain Express gears up for the ski season.
But the revenues from that period don’t flow into their coffers for at least two months. This leaves a cash-flow gap that has always been buffered by a fund balance. However this year, that fund balance is being spent on the system’s share of paying for the construction of a new bus barn, so it was initially projected that Mountain Express would run in the red between December and April.
“Because of several changes we made to the budget, including getting the Town of Crested Butte to defer $43,000 in building fees for the new building, we now show a positive cash flow for the budget,” explained Keiser. “It looks like we won’t need to go to the towns for a cash infusion and we are in the process of setting up a line of credit with the bank, but we hope we won’t need to use it.”
Keiser said the latest budget makes some sales tax projections. Mountain Express is counting on and also assumes the new building will not go over budget. He said they went over the construction budget with a fine-toothed comb and found some ways to cut costs and increase revenue. “We want to act like a real grown-up business instead of just relying on the towns,” he said. “That’s where we think we ought to be going.”
This winter the Mountain Express will have fewer buses on stand-by. There will be back-up buses ready to go during traditional busy times such as Christmas week and spring break but there won’t necessarily be such buses during the weekdays for most of the ski season. “Eliminating some of those buses will save us a good amount of money,” explained Keiser.
He also said the Mountain Express will now charge organizers of events who ask for extended bus service. “For example, the Crested Butte Land Trust last week asked us to have extra buses for their events, which was probably a good idea since there were a lot of people tasting wine,” he said. “This time however, we charged them and they were fine with it. Like everyone, we are scrambling for every dollar. Fuel costs are way up.”
Other belt-tightening measures include paying the bus company’s liability insurance quarterly, instead of the whole bill in January, to defer some costs. They nailed down hard costs for the building instead of relying on estimates; Keiser said that should save the company $100,000. Some building amenities will also be deferred. “We’re still pretty tight but we are feeling better,” said Keiser.
Mountain Express director Chris Larsen agrees. “We should be okay with the finances but now we need people here,” he said.
Larsen said construction on the new building should start this week with the laying of a new water line. Dirt work will begin next week. “The steel for the building is here on site and we are moving forward,” he said. “Hopefully we will have the new building up sometime in December.”
The new building will be owned by the town of Crested Butte since it will be located on town property. The new five-bay building will be slightly larger than the current Mountain Express space. Kaiser said both the town and bus barn have agreed to terms of the lease and it will be signed by mid-August. The majority of the $1.1 million cost is being picked up by a grant, but the Mountain Express must pay approximately $220,000.

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