RTA forced to make cuts to air and bus programs

“We’re taking an optimistic path”

The number of jet flights into the local airport will be reduced next winter, along with the number of trips on the free RTA bus, in an effort to keep the Gunnison Valley Rural Transportation Authority’s (RTA) budget in check.

The RTA decided on Friday, May 15 to cut back on both air and ground transportation services in response to a drop in revenues and a dwindling cash reserve. The cuts equate to about $300,000 in savings, but should allow the RTA to provide a level of transportation services similar to the past ski season.
RTA board member Skip Berkshire says, “All in all it was the best of a bad situation.”
The RTA plans on allocating $600,000 in the 2010 budget to provide financial guarantees to the airlines that will serve the Gunnison/Crested Butte Regional Airport next winter. Crested Butte Mountain Resort (CBMR) is matching the RTA’s contribution, bringing the total amount of guarantees to $1.2 million. The guarantees are necessary to entice airlines to serve the local airport in the event ticket sales are low.
Last year the RTA contributed an additional $200,000, and the total guarantee was $1.4 million. The large guarantee was offered last year to get the airlines to provide direct flights to several new hub cities.
Due to low ticket sales on each flight, the RTA and CBMR must pay the full $1.4 million to the airlines. However, CBMR chief operating officer Ken Stone says the expanded air program last winter did result in an additional 2,000 tickets sold over the 2007/2008 ski season.
RTA director Scott Truex says the lower guarantee cap this year should still allow air service to continue to all of the new hubs. “We’re making every effort to continue to fly to every market we started last year,” he says. In order to do this, the RTA is negotiating with the airlines to reduce the frequency of flights and the size of the aircraft flying into the airport.
Stone says he’s pleased the RTA and CBMR were able to work together to provide a strong air program for the 2009/2010 ski season. “We know the current economy has certainly had an impact on air programs in every mountain community.”
“I think the cooperation between the RTA and the ski area was really important to continue to build on some of the momentum we’ve seen,” Stone says.
The RTA is also directing $484,000 to provide nine round-trips a day on the free Gunnison to Crested Butte RTA bus for the upcoming ski season, and at least three trips a day for the rest of the year. The free RTA bus made 11 round trips a day last winter, and will offer six round trips a day this summer.
Combined, the RTA plans on spending $1.08 million between the air program and the free bus. “That will pretty much require some additional funding to succeed,” says Truex. The move theoretically could put the RTA $40,000 in the red at the end of 2010, Truex says, but bus service would likely be shut off before the money entirely ran out.
“We’re taking an optimistic path that we can make it work,” Berkshire says.
The budget deficit is based on the assumption that the RTA’s revenues will continue to be 15 percent down during 2009, as they have been the first two months of the year. If the economy picks up next ski season, the RTA should have some financial relief, Berkshire says.
Truex says the RTA’s bus operating grant from the Colorado Department of Transportation could increase in 2010, making the deficit smaller—but the grant could just as likely decrease. The RTA board is also considering charging a fare for the bus service, which could raise additional funds but may lead to a decrease in ridership.
Truex says the board has also identified several potential funding sources to support either the air or ground transportation services, but he did not wish to discuss those further until things get finalized.
He says the purpose of the meeting was not to iron out the RTA’s 2010 budget, but to put a number on the board’s commitment to next winter’s air program in order to finalize negotiations with the airlines. Truex says the 2010 budget estimates used in the board’s discussion last week were very preliminary, and very conservative. The RTA won’t begin discussing the details of the 2010 budget until this October. “By then we’ll have a much better feel where we stand financially… We’ve got some time to figure stuff out,” he says.
Public Input
The RTA board first started discussing the 2010 budget situation and airline funding back in April.
At the time Truex presented the board with five different funding scenarios, ranging from eliminating the bus service entirely to keeping the bus service at its current level. The amount of financial guarantees for the airlines varied from $300,000 to $775,000, based on the level of bus service.
Cutting the bus service entirely or significantly reducing the number of trips did not necessarily provide immediate savings to the RTA. The RTA gets a $128,000 grant from CDOT that could be lost if the bus service is cut too much.
The RTA scheduled a citizens advisory committee meeting on Thursday, May 14 to get public input on the issue before making a final decision on May 15. The RTA also received several letters with public comments.
Between the letters received and the two public meetings, there was no clear distinction between a public preference for air or ground transportation services. Those in favor of maximizing the air service said airlines were essential to keeping the economy healthy and bringing tourists to the valley. Airline supporters also made the claim that without the economic boost provided by airline tourism, there would not be a need for the free RTA bus, as many bus users had jobs directly related to the tourism industry.
 Those in favor of keeping as much bus service as possible said the RTA bus was a critical service that not only helped people get to their jobs, but was an incentive to living in the valley.
During Thursday’s advisory meeting, some people asked if adding a fare to the bus would help the revenue situation. Truex said collecting a fare probably wouldn’t help revenues very much, but would certainly reduce ridership. However, with more people trying to get on fewer buses, he said it might be necessary to reduce ridership. “There are valid reasons to do it, but it might not be for revenue,” Truex said.
Stone suggested looking for additional funding sources. He said CBMR would like to see the air program mature enough and funding increase to the point where CBMR could re-direct its financial guarantees back into marketing efforts. He said CBMR has a $3.2 million marketing budget, from which the financial guarantees for the air program are drawn.
Stone suggested asking the town of Mt. Crested Butte to allocate more of its admission tax funds to support the air program, or asking the Gunnison Valley Tourism Association for airline funding.
Mt. Crested Butte town manager Joe Fitzpatrick said the admissions tax revenues went into a restricted fund that is split between advertising programs and funding the Mountain Express bus service. Fitzpatrick said the advertising funds couldn’t be re-directed for the airline guarantees. However, he said, the tax will be up for renewal this fall, at which time the restrictions could be changed.
On a similar vein, Crested Butte/Mt. Crested Butte Chamber of Commerce executive director Richard Bond said the RTA should look for an additional funding source for the free bus. “My view is we ought to be looking at ways we can generate additional, sustainable funding sources for the bus service. That may mean a greater role by the county or different kinds of government organizations that taxpayers would have to approve,” he said. Bond also said the RTA should consider charging a fare for the bus.
Former RTA member Chris Morgan recognized the importance of the air program, but asked the RTA to keep the bus service as a priority. “I know you’re going to have to cut both programs, but I would encourage to you consider the value and success of the bus service and to try to reduce that service as little as possible,” Morgan said. He said cutting the bus to three or four trips a day would seriously reduce its effectiveness for most people.
Mountain Express operations manager Bill Quiggle said he supported the bus service, but the air program was more important. “If we don’t have air service there will be no need for the bus service. That sounds harsh and I am a big fan of the bus.”
During the regular meeting on Friday, May 15, Crested Butte business owner Eric Ross asked if the airport got funding for each plane that lands, and if reducing the number of flights would impact the airport’s revenue. Gunnison County manager Matthew Birnie said additional flights did lead to increased revenues, but also more expenses.
Ross said he was in support of a better air program. “Anything we can do to encourage people or make it easier for people to get here is imperative,” Ross said.
RTA board member Jonathan Houck said of the five options Truex presented, he only saw two realistic choices. He agreed that providing the current level of bus service would not be possible in 2010, but cutting bus service drastically was also not a good idea. “There has to be an equal rationing,” he said.