Archive for Thursday, February 28, 2008

KU on Wheels in red $320K

February 28, 2008

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Student senate helps KU's bus budget

KU's bus system still has a budget deficit, however a decision by the student senate on Wednesday night reduced the red ink. Enlarge video

Kansas University's bus system operating budget is in the red, to the tune of nearly $320,000.

At Wednesday night's Student Senate meeting, senators approved legislation that would allow the KU on Wheels bus system to transfer $3 per student from the bus acquisition fee to the bus operation fee. Students pay $36 per semester to KU on Wheels - $16 for operations and $20 for new bus purchases.

While the fee change will not affect the amount students pay, it will reduce this year's operating deficit by about $141,000.

"It's so we can continue to have the same levels of service you've had all year," transportation coordinator May Davis told senators.

When combined with profits from last year's operations, reallocating the $3 allows the bus system to reduce the deficit to $62,000. Danny Kaiser, associate director of parking and transit at KU, said the bus system must pay off the deficit this year.

"If there's nothing else, we can go in to the transit reserve fund," Kaiser said.

The reserve fund currently has $400,000 in it, though it is already lower than Kaiser would like. Kaiser said the bus system, which generated a profit last year, was hit with budget problems this year because it is the first year of a new contract.

The bus system originally expected to pay in the neighborhood of $1.5 million to operate this year; however, the bid from MV Transportation came in at $2 million. MV Transportation provides bus service to the city of Lawrence and began providing KU's bus service this year.

"Whenever we're in the first year of a new contract, we're shooting blind," Kaiser said. "Fuel prices also keep going up and we're feeling that."

So while revenue has increased about $280,000 this year, higher prices quickly eliminated the extra revenue.

While the budget deficit will be paid off this year, the red ink will remain next year unless more money is raised or operating expenses are reduced.

"The options are look for more economies, look for other sources of revenue or reduce service," Kaiser said. "Those options are what we'll be looking at the rest of the spring semester."

Kaiser said there's already a nearly $3 increase in the student transportation fee planned for next year.

He also said that the city and university have asked for joint transportation proposals beginning Jan. 1, 2009, which he hopes will reduce the costs both entities have to pay. While the systems will still operate separately, the provider would be able to share management, operations and other expenses. Kaiser also said the new contract would be for five years, allowing better revenue and expense planning.

The proposal approved Wednesday night does come with drawbacks. KU on Wheels will have to slow down the rate at which it purchases new buses. While KU did get "new" buses this year, all were previously used, some for more than 20 years.

Kaiser said the fee transfer would slow down the rate of new bus purchases, but ultimately the bus system would catch up and complete purchasing of new buses as scheduled.

Comments

compmd 7 years, 6 months ago

With the cost of rising fuel, I'm reminded of the biodiesel experiment the university did with buses a few years ago. What ever happened with that? Couild they bring the operational costs down with an alternative fuel?

toefungus 7 years, 6 months ago

Step one, raid the reserve, step two, raise rates, step three, raise hell.

Sean Livingstone 7 years, 6 months ago

Dolly,

No one will use the system if it's too expensive. There is a threshold on how much individual wishes to pay before he/she will start to drive. And then when more people drive, more headaches on the road. So going back to public transportation again.

50YearResident 7 years, 6 months ago

Drive by the Bus Parking lot at 31st and Haskell Ave and look at all the KU Buses. I lost count at about 25. It's no wonder they can't stay in their budget.

d_prowess 7 years, 6 months ago

Could the reason they think we need to add more buses be due to apartment complexes developing farther and farther from campus? The farther out they are, the longer a single route would need to be, and the more buses would be needed to make schedules timely.
Right now it only looks like we have a couple routes that really stray far from campus, but perhaps they have plans to expand in order to serve more students.

grimpeur 7 years, 6 months ago

KS: incorrect. The fact is that motorist gas taxes and license revenue fund only about one third of KDOT's $1B+ annual budget. If motorists were to pay their own way, gas, along with registration taxes and licenses, would be much, much, much more expensive.

Motorists, like the oil companies who depend on them, are among the most heavily subsidized users on the planet.

lawrencian 7 years, 6 months ago

The people who use the KU buses are paying for it -- it all comes from student fees, bus passes and $1 per ride!

MyName 7 years, 6 months ago

Why don't the people that use the bus pay for it?

Why don't you read the article? Did you not notice the part where it says revenues for the system are up $280K? People are paying for the buses, and paying more than they did last year, the problem is that gasoline prices have risen by more than the difference.

Do they have a class in reading comprehension Dolly? Maybe "Hooked on Phonics"?

KS 7 years, 6 months ago

$1 per ride? That probably does not even meet cost. If you want the service, you gotta pay. It's pretty simple. The only other recourse is to have someone else pay, ie: the taxpayer, which is generally the acceptable standard around liberal Lawrence.

LogicMan 7 years, 6 months ago

It's probably just the increased fuel costs that's doing it, but ...

Am I remembering correctly that there was an embezzling case at the KU bus service a couple of decades ago? An external audit of its finances, now, would likely be wise anyway.

akuna 7 years, 6 months ago

KS says... "If you want the service, you gotta pay."

This sentiment could be applied to all services: fire, medical, sewage, corporations, electricity, ROADS... All of these services are subsidized by our tax money. Where is the cutoff? At a service you don't like?

Stop blaming liberals for providing services they think are good and start helping solve problems - use mass transit, walk, or ride a bike. This would save on TAX money that goes to supporting a huge drain on our economy, which is roads.

BTW - I am being a bit facetious here, but I am tired of blind blaming of one party/ideology over another. Our problems are common problems and WE have to figure out what is best for the community and our nation. And mass transit is much more sustainable than single driver cars.

Godot 7 years, 6 months ago

I am impressed that they are recognizing that there is a problem and are taking steps to get solvent. This shows real fiscal responsibility.

Why is it KU on Wheels buys 20 year old used buses, while the City of Lawrence is planning to replace their buses that are less than 10 years old?

Richard Heckler 7 years, 6 months ago

By Milton Couplous

Is $3 gasoline expensive? Only when compared to its former price. Taxpayers -- nondrivers included -- subsidize gasoline purchases in a huge way.

When he isolated the hidden costs of Middle Eastern crude in particular, the price jumped to $11. This included a war premium that swelled the Pentagon's spending to protect all Persian Gulf oil to $137 billion a year.

The National Defense Council Foundation--a right-of-center Washington think tank-- spent 18 solid months poring over hundreds of thousands of pages of government documents, toiling to fix a price tag on America's addiction to global crude. He parsed oil-related defense spending in the Middle East. He calculated U.S. jobs and investments lost to steep crude prices. He even factored in the lifelong medical bills of some 18,000 U.S. troops wounded in Iraq as of March. (About $1.5 million each.) And his exhaustive findings flabbergasted the Senate Foreign Relations Committee this spring.

* Improve or change vehicle technology
* Change how we use our vehicles
* Reduce the size of our vehicles
* Use different fuels

Nowhere was the option of driving less promoted. The article did hint that there is a connection between land use patterns and driving habits, or mention the enormous energy savings that comes from subways, light rail and buses, all of which become feasible at urban residential densities. At best, the article's second option, "change how we use our vehicles," obliquely gets at the concept of reducing vehicle use (without using the "R" word), but this option wasn't really discussed, execpt to note that VW is developing some kind of "urban" car that does better in city driving. An accompanying article on efficiency (also behind a paywall), does highlight the importance of efficient design, but fails to mention basic facts, including that apartment buildings are inherently much more efficient than detached single family houses.

Reducing energy use needs to be part of any discussion about how we end our oil addiction, and the best way to do that is to build transit-oriented, residentially dense places (i.e., rebuild our cities). As David Owen noted in his October 2004 New Yorker article "Green Manhattan," if New York City were a state, it would be ranked 51st in energy use. If more places were like New York City, the many problems the Chicago Tribune describes in so much detail would not exist.

The whole story: http://www.streetsblog.org/2006/08/23/what-to-do-about-energy/

grimpeur 7 years, 6 months ago

akuna gets the cigar!

KU should be providing free bus service--instead of parking spaces--to the entire city as its share of road upkeep. Yes, that would be a pretty large subsidy from KU to the city, but given the impact of KU's customers' and employees' cars on the streets of Lawrence and on traffic pressures on all routes in the region, it makes sense, and it's still more than fair for KU. Proceed with the fee increases as planned, keep the $1 fare, tweak the routes to serve employees who have kids and weird schedules, increase frequency, give faculty and staff bus passes, place a moratorium on new parking facilities on campus, use that money for new fleet, maintenance, and establishment of bike facilities on west campus from Kasold to Irving Hill Rd. (it's nearly dead flat from dorms to Jayhawk Blvd via Crescent Rd., and just a gradual uphill from 15th/Naismith to Stauffer-Flint via Hoch Aud and Wescoe Dr.).

Sean Livingstone 7 years, 6 months ago

I think people need to understand why bus is in the red.

Driver's wages and benefits: Most likely $18/hr (with benefits), so multiply that by 8 hours day, should be in the range of $160/day, just for one driver to drive a bus.

Gas: $3.50/gallon, and most likely the bus will consume 20 gallon a day, that will work out to $70 per day.

Let's assume the other variable costs: Maybe we need 1/4 technician, and some other facilities, probably $400/bus per day.

Ok, that has not included the cost of the bus itself, and of course, are all assumptions. What's the cost? They should be higher. $730 per day per bus.

So how many people take the bus in one day? Let's say 100, and let's say everyone on the bus pay $2 per day, and maybe chip in $1 from other fees etc. How much is it? $300. Simply using some assumptions, you can clearly see that there is a shortfall of $430 per bus per day. If we have 10 buses, and operate 365 days, wow.... nice figures.... figure that out, your $1.00 is really nothing.

shawn1040 7 years, 6 months ago

"Gas: $3.50/gallon, and most likely the bus will consume 20 gallon a day, that will work out to $70 per day."

Are you kidding me?? A bus consumes A LOT more than 20 gallons a day - the tanks on those things are AT LEAST 100 gallons (or more)!

Also, buses don't use gas - they use diesel.. ;-)

rdave13 7 years, 6 months ago

Sen. Tim Huelskamp: please look into this for us.

Thanks:

Sean Livingstone 7 years, 6 months ago

shawn1040,

Shawn, cool down. I thought I did mention that those are my assumptions, and only assumptions? My assumptions are pretty low, I know they're a lot more higher. So, that is the reason why all buses are making losses.... I think we need to tell the city to realize that we are funding buses through tax monies, which is fine with me. There is no way we can make them make profit. I also wonder if they only account for the operation costs.... I know somehow the cost of the bus isn't included in the calculation, if not the red mark is much higher. But then, we should account for the amount of traffic that we have substantially reduced, due to the public transport.

Paul Geisler 7 years, 6 months ago

Compmd and others

You should go back and read some of the other articles about KU On Wheels. ALL KU BUSES ARE CURRENTLY RUNNING ON BIODIESEL!

Paul Geisler 7 years, 6 months ago

OK, I'll admit that this is not nearly as good as I had hoped it would be. Currently KU buses are running a blend of 5% Biodiesel and 95% #2 diesel.
And I agree with the idea that having a few extra buses allows them to pull them off of a route for required servicing without having to interrupt the route! And without waiting for them to breakdown while they are on a route!

I copied this from the KU on Wheels FAQs:

What kind of fuel do the buses run on?

B5 Biodiesel- 5% Bio-diesel and 95% #2 diesel fuel.

How many buses does KU on Wheels run?

We've purchased 33 used buses this year, and we will buy new buses (3-5 per year is the goal) to replace them. That way we don't end up with a whole fleet 30 year old buses again! You'll see the first 5 brand new buses sometime in 2008! There are 19 buses on our regular 13 routes, and we use 6 buses for SafeBus. Having so many more buses then gives us enough extra to perform regular maintenance and also serve the Visitor's Center.

yellatex1 7 years, 6 months ago

Akuna...I think you need some Matata!

penguin 7 years, 6 months ago

wow I love how misinformed this article is about the history of KU on Wheels and then others just join right in on making claims without any idea of how the system works. If you would look back through the history of KU on Wheels financial info...you might find that red is a common color. Ok, it is true this debt is higher than usual. However, even when gas prices were low, it did not ensure huge profits for KU on Wheels. It is a transit system designed with students in mind...not profits.

Also if you read the article, one might notice that they are not even going for a fee increase. I think the city should take note of this. They are merely transferring fee money they have already been allocated and making it work. Again the city could take note.

Yes, they have new buses...but they needed them. Ah what a short memory people have when it comes to the old LBC buses. Those rolling dinosaurs had long since passed their prime. So, they took the proactive step of devising a plan to purchase buses over a number of years to replace a new (but used) fleet. Again the city could take note on the way to purchase buses.

Finally, yes there was an embezzlement scandal with the student coordinator for KU on Wheels back in the early to mid 1980's. As a result, a number of checks were put in place to ensure this could not occur again. However, some of the info behind this incident is pretty interesting.

KS 7 years, 6 months ago

made in China says - "Roads are another good example; the gas tax is inadequate to maintain the system; just ask the folks who unexpectedly went swimming in Minnesota last year."

If road/gas taxes were only used for that purpose, the roads would/could be in very good condition. The problem is that most states use the road taxes to fund other programs. It is going into general funds versus being used for roads. That is why the State of Kansas does not want you to car pool. Less tax revenue.

Sean Livingstone 7 years, 6 months ago

offtotheright (Anonymous) says:

"livingstone:are you serious? $18 an hour plus benefits to drive a bus? Get real!

My 'guess' is they don't make over $8 an hour."

Yes, they get $8/hr or $12/hr... but I think they do get benefits, so those benefits will be included as cost of workers, and not what they take home....

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