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Originally published Thursday, October 20, 2005 at 12:00 AM

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High fuel costs strain mass-transit systems

Mass-transit systems nationwide are considering cutting service, laying off staff, raising fares and delaying capital spending to meet rising...

The Associated Press

ALBANY, N.Y. — Mass-transit systems nationwide are considering cutting service, laying off staff, raising fares and delaying capital spending to meet rising diesel-fuel prices. The spike at the pumps could cost public-transportation systems as much as $750 million more a year.

While most public-transit authorities are not raising fares yet, they have explored ways to cut costs. Some have eliminated routes or run them less often, ended overtime, reduced travel expenses and cut other parts of their budgets, said William Millar, president of the American Public Transportation Association.

If prices remain high, the Capital District Transit Authority, based in Albany, will spend about $900,000 more than anticipated for fuel by the end of its fiscal year, officials said. The Denver Regional Transportation Authority is considering a 25-cent fare increase on local routes. In Salt Lake City, the Utah Transit Authority is proposing a 25-cent-per-ride fuel surcharge.

"Fuel prices have more than doubled, and we're anticipating a $6 million shortfall in the 2006 budget year," UTA spokesman Justin Jones said.

The Utah authority is spending $2.65 a gallon for diesel fuel — $1.44 more per gallon than it had expected to spend. The surcharge, to be voted on by the authority's board, will help make up $2 million of the shortfall.

"Going back to 1970, we usually budget around 91 cents a gallon," Jones said. "We added an extra 30 cents per gallon, but even then it simply wasn't enough. We didn't anticipate the prices would be this high."

It is a familiar story around the country.

Denver RTA spokesman Scott Reed said his authority in 2004 spent an average of $1.11 per gallon. As of last week, it was paying $2.44. That will leave the Denver RTA about $11 million over budget for the year.

Charles Seaton, a spokesman for the New York City Transit Authority, said that over the summer the authority was paying about $1.81 per gallon of ultra low-sulphur diesel fuel. Now it's paying about $2.44.

The authority, with 4,600 buses, burns through 900,000 gallons a week.

The average U.S. retail diesel fuel price was $3.15 a gallon on Monday, according to the federal Energy Information Administration. That's up 97 cents a gallon from a year ago and more than double the price in October 2003.

Public-transportation authorities pay less per gallon because they are exempt from taxes. But unlike private businesses, transit systems cannot simply change their routes and fares on a dime. Instead, authorities have to let the public and local governments weigh in on any decisions.

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Authorities also fear raising fares will drive away business and cost them more in the long run. Transit authorities around the country have reported increased ridership with the record-high gasoline prices.

Brian Shaughnessy, a spokesman for the New York Public Transit Association, said some transportation authorities earlier this year thought the high fuel prices would fall and waited to sign fuel-buying contracts. Instead, they were forced to pay even higher prices.

Near Los Angeles, Foothill Transit says it is sending its compressed-natural-gas buses on its longer routes. The authority has 192 CNG vehicles in its 306-bus fleet.

Foothill pays about $1.50 for the gasoline equivalent in natural gas, saving as much as $1.50 a gallon in the Southern California market, executive director Doran Barnes said. But even estimating fuel costs of $1.90, Barnes said his authority will bust its budget.

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