VRE plans to raise fares

Virginia Railway Express executives are seeking two fare increases in the coming months, with the first 4-to-7-percent increase proposed for January and the second 3 percent raise set for July.

The numbers are preliminary estimates only and come as a possible solution to offsetting higher fuels costs, increased service demand, projected contract fee increases and lost funding from the recent Northern Virginia Transportation Alliance court ruling that has left million-dollar holes in fiscal 2009 and 2010 budgets. In September, the executive director will present VRE Operations Board members with updated scenarios that could fill in some of the shortfalls — and therefore, could change the level of recommended fare increases.

“There’s two options,” said John Jenkins, chairman of the VRE Operations Board, and a Prince William County supervisor, D-Neabsco. “Local jurisdictions would increase the subsidies they pay, or there could be a fare increase for the people who ride the system.”

With tight budgets all around, increased subsidies are not a viable option, Jenkins said. So at last week’s meeting, Jenkins said board members gave approval for executive director Dale Zehner to advertise a public hearing for a fare increase of up to 7 percent to cover the estimated $3 million shortfall in the current fiscal year budget, 2009. At the same time, the board also requested Zehner to look for other ways of covering the projected fiscal 2010 budget shortfall of roughly $10 million, Jenkins said. The 2010 fiscal budget begins July 1.

One way of lowering the shortfall amount could be to pursue different line contractors, Jenkins said.

Amtrak is the current operator, but the contract expires on June 30, 2010, according to background documents presented the board.

“We’re looking at a proposal to see if someone else is interested in picking up the contract,” Jenkins said. “There’s about 10 to 12 companies in the U.S. that operate transportation.”

Contract negotiations could lead to savings up to $4.7 million, he said.

Another possible savings avenue would be to petition the commonwealth to loosen insurance mandates.

“They insist we keep a $10 million insurance reserve,” Jenkins said. “That is something we’ll be negotiating … and what we’re trying to do is ask the state to be a little more lenient.”

So far, the reserve sits at about $8.5 million. Should the state agree, the other $2.5 million could instead go toward VRE expenses.

The VRE fare increase is in discussion stages only. Board members only gave approval for an advertisement of public hearing, and for additional budget analysis for a Sept. 19 presentation. Before any fare increase could take effect, the proposal also has to receive the approval of each participating jurisdiction, the Potomac and Rappahannock Transportation Commission and the Northern Virginia Transportation Commission.