Saskatoon Transit and Budget funny business

Recently during budget deliberations by Saskatoon City Council Mandy Chen made a presentation to City Council on behalf of Bus Riders of Saskatoon objecting to the proposed increase to transit fares.

While I have a few quibbles regarding the percentage of people who use transit, one of her arguments piqued my interest and my “spidey sense”. She pointed out that per the preliminary budget, the fare increase was expected to bring in an additional $226,000 and that even a small increase in ridership would easily equal or exceed this.

Since my “spidey sense” went off I decided to go back and have another look at the preliminary budget, and look back at previous ones. Interestingly in the 2014 budget, Saskatoon Transit budgeted for a increase in fare revenue of $400,000 from the 2014 fare increase and additional $350,000 from ridership growth.

The report to council included in the agenda to the budget meetings held December 2-3, 2014, Saskatoon Transit budgeted an increase to revenue from the proposed fare increase of $313,000 (more than what the preliminary budget says), and ZERO from ridership growth. Saskatoon Transit predicted a 0% increase in ridership for 2015 over 2014.

Now that may in fact be a reasonable prediction, but there is one small problem. It’s not consistent with prior years. As I’ve been collecting information and analyzing it, this is what I’ve come up with.

Based on ridership growth between 2009 and 2012 (the last year Transit produced an annual report), Saskatoon Transit was seeing ridership growth of about 3% annually. My projections indicate that increased revenue from ridership growth alone would be just shy of $400,000. So why did Saskatoon Transit project zero ridership growth for 2015? Something it does not appear they have ever done before?

Maybe they are expecting a drop in ridership, post lockout. They might be right. There may in fact be a drop off in ridership. But it would defy the trend. If ridership growth is even half of the 3% annual trend, the increased revenue in 2015 from ridership growth would been about the same as what Transit was expecting from the proposed fare increase. The other possibility is that Saskatoon Transit projected no increase to revenue from ridership growth in 2015 to justify a fare increase. Easier to sell Council on a fare increase if the only source of revenue increase is from an increase to fares. The assumption that there will be no increase to ridership in 2015 was contained in one sentence in hundreds of pages of budget documentation. Pretty easy to miss.

I’m a born cynic. Guess which possibility I consider the most likely.

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2 thoughts on “Saskatoon Transit and Budget funny business

  1. Pingback: Saskatoon Transit and the declining price of oil | yxesimonsays

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