Budget woes force RTA to consider cutting services

Reductions in winter flights and bus service

Stagnant revenue, a declining cash reserve and a hefty payment to the airlines to make up for poor numbers this winter are leading the Gunnison Valley Rural Transportation Authority to make some serious cuts.

The RTA is looking to cut back on the number of free bus trips offered between Gunnison and Crested Butte next winter, or to reduce the number of flights coming into the airport during ski season—or more likely both—in order to keep its finances in check.
“It’s a no win situation,” said RTA chairman Jim Starr during the group’s meeting last Friday.
The RTA board has about one month to decide where to make cuts and they will be asking for public input.
Although the RTA’s 2010 budget will not be finalized until close to November, the board has to make a decision soon in order to finish negotiations with the airlines providing jet service next winter. The RTA, together with Crested Butte Mountain Resort (CBMR), offers financial guarantees to airlines serving the Gunnison/Crested Butte Regional Airport to provide financial security in case ticket sales and passenger loads on each flight are low. For air service during the past winter season the two groups split a guarantee of $1.4 million, with CBMR covering $600,000.
RTA director Scott Truex says over the last few years the RTA has had a larger fund balance, allowing them to safely budget for more expenses than revenues. But the fund balance is taking a hit in 2009, primarily because the RTA is expecting to pay its full share of $800,000 in performance guarantees to the airlines because of low airline ticket sales.
Last year airline ticket sales fared better and the RTA did not have to pay the full performance guarantee to the airlines, saving more than $100,000.
The RTA is also coping with unanticipated expenditures, such as $12,000 to buy a backup bus, and $9,000 in additional bus maintenance.
Tax revenues are diminishing too. The RTA collects a 0.6 percent sales tax in Crested Butte, Mt. Crested Butte and unincorporated areas of the Gunnison Valley (but not the entire county), and collects 0.3 percent in the city of Gunnison. Truex said January and February 2009 revenues were down 16 percent from 2008.
Altogether, the RTA will probably end 2009 with around $200,000 in the fund balance. They started the year with $635,000.
The RTA is expecting $1.27 million in revenues for 2010, providing that next year’s revenues are the same as the 2009 budget.
At Friday’s meeting Truex had prepared a set of five different budget scenarios for the board to consider, ranging from the current level of airline funding with no bus service, to diminished funding for airline guarantees and keeping the current level of bus service. “We have some tough decisions to make,” Truex said.
Starr said he did not want to make that decision without public input. “Whatever we do is going to be hurtful, so we need to take as much public input as we can,” Starr said.
 The first budget scenario is to eliminate bus service entirely and spend up to $882,000 on airline guarantees. By dropping slightly to an $800,000 guarantee, the RTA could provide bus service only in the winter and with fewer trips, but Truex said the RTA would probably lose its grant funding for the bus at that level of service.
Scenario three has the RTA offering six daily trips on the bus during the winter, and providing a $600,000 airline guarantee. Scenario four drops the guarantee to $500,000 and provides nine bus trips in the winter. In both scenarios the bus would have three trips a day during the rest of the year.
Scenario five provides a $400,000 guarantee to the airlines and keeps bus service at its current level—11 trips in the winter, and three trips the rest of the year, with potentially a few more during the summer.
The RTA’s airline consultant Kent Myers said he thought they could offer an air travel program comparable to the past winter for a million-dollar guarantee split with CBMR. Myers said such a program could include direct jet flights to nearly all of the same cities, but the number of flights would have to be reduced and the size of the aircraft would change. He said it would be about a 5 percent reduction from the total amount of seats that were guaranteed last season. The RTA and CBMR are currently in negotiations with the airlines for next winter’s air service, and Myers said they were pretty close to reaching that kind of an agreement.
Truex said regardless of what happened with the air service, bus service would have to be cut, too. (Later in the meeting the RTA decided to cut back the number of bus trips to be offered this summer, see story on page 7.
Crested Butte South Property Owners Association manager Chris Behan asked what the current operating deficit was on the free bus. The free bus service began in November 2007, replacing the old Gunnison/Crested Butte shuffle bus. Truex said the operating deficit for the bus was more than $300,000 a year.
Board member Kimberly Metsch said people in Gunnison would have a different opinion about whether bus service or air service was more important.
Board member and Gunnison city councilman Jonathan Houck agreed. “Some might say bus service is important, but then they might not understand the overall importance of air service as well,” he said.
Starr said if there were fewer people flying in during the wintertime, there probably would be fewer workers taking the bus.
Truex said 45 percent of the bus riders use the service five days a week or more.
Behan encouraged the RTA to get some more data concerning the benefits of the bus service versus the air service. He said there were no hard numbers that could correlate an $800,000 airline guarantee with incoming tax revenues. “I think that’s one of the things that needs a lot of consideration,” he said.
The RTA board directed Truex to find out how much tax revenue is generated from winter visitors who fly in.
The RTA will also be advertising its May 15 meeting and inviting the public to the RTA’s Citizens Advisory Committee meeting, but a date for that meeting has not been set.
The RTA board will make its budget decision during their May 15 meeting, in the Gunnison County Courthouse commissioners meeting room at 8 a.m.