Life on the fringes of U.S. suburbia becomes untenable with rising gas costs

[RiversideGator]

Lake:  How is the Nashville system doing in terms of ridership?

[thelakelander]

Its struggling with a $1.7 million annual deficit.  Problems include not figuring in some unanticipated expenses and selecting a route that attracts little ridership to save money on implementation costs.

Music City Star falls well shy of ridership, revenue targets



The Music City Star's money problems can be traced to its first year of operation, when passenger ticket sales came in $800,000 below projections and unanticipated costs, including high insurance premiums, drained its budget.

Now, as its parent agency scrambles to fill a $1.7 million hole in next year's budget, the U.S. government is watching intently.

The Federal Transit Administration, which invested more than $30 million in the 2006 startup of the Lebanon-to-Nashville commuter line, would demand its money back from the Regional Transportation Authority and the return of all assets if the Music City Star were to stop running, it wrote in a letter to local authorities this week.

Anxious riders are watching, too.

"Nashville has to look forward to the future of public transportation," said Joe George of Mt. Juliet, who ditched his car in February to cut down on gas cost and traffic frustrations. "There is going to be a need for more commuter rail or streetcars and express bus lanes as Nashville and the area continue to grow."

The scrutiny of the commuter train comes at time when Americans plagued with rising gas prices increasingly turn to public transportation. The next steps that the RTA board takes could mean the difference between success and failure of a vision that faced many skeptics and took 15 years to bring to fruition.

"The common thread is that everyone is vested in making this work," said Diane Thorne, who has been executive director of the Regional Transportation Authority since August. "We need to realize that unless everyone wants to continue to scramble every year, we need a dedicated, reliable funding source."

Refund may be sought

In a letter dated Tuesday, the regional administrator of the Federal Transit Administration told Thorne that the RTA would have to repay the government if "financial and operational issues" can't be solved.

"In the event that no adequate solution can be achieved and service is significantly reduced or halted, we remind you of your contractual obligation to protect the Federal interest in federally funded equipment and other assets," Yvette G. Taylor wrote.

The Music City Star made its first trip in September 2006, after nearly $42 million in startup costs had been invested to bring the 32-mile commuter rail to Middle Tennessee.

More than 10 years after initial talks about starting the rail line, 11 passenger rail vehicles â€" bought for $1 for from Chicago Metra â€" were up and running. Metra is Chicago's commuter rail service.

The train debuted as the least expensive commuter rail to be built in the United States, said Curtis Morgan, a project manager for the Texas Transportation Institute, a transportation research agency.

That was due in part to the decision to begin with the Wilson County corridor, which cost as little as one-tenth as much to bring online as others in the Nashville area.

Trains from Gallatin/Hendersonville or Murfreesboro might have provided more riders, but they would have run on tracks owned by rail giant CSX Corp. â€" and would have required extensive cooperation to schedule around major regional freight traffic. The Lebanon line belongs to the smaller, more flexible Nashville & Eastern Railroad.

"Nashville's Star has been an example," said Morgan, who is in the midst of studying commuter train in nontraditional rail communities, including Nashville. "They did a great job for the limited amount of funding they had."

Ridership falls short

Still, the startup road was much bumpier than projected.

In the first year, ridership fell considerably short of consultant projections of 1,479 daily trips. It's now averaging about half that number and recorded 938 trips on its best single day.

Thorne said she expects ridership to reach 1,000 by the end of the summer.

Fewer passengers in the beginning meant less in ticket sale revenues. The first year's operating budget in 2007 aimed to bring in $1.1 million in income from ticket sales. The RTA got about $360,000.

"There was nothing in Nashville to compare this with," said Paul Ballard, chief executive officer for the Metropolitan Transit Authority, who was involved in planning the commuter rail. "We looked at other projects around the country, but just as all politics are local, all public transit is local."

In year two, the RTA reduced the projection of ticket sales and will come close to making the forecasted $706,000 for 2008.

While income has gone down or remained steady, expenses have gone up, financial statements show. The insurance premium cost about $900,000, more than the $775,000 budgeted. Like a new driver, the RTA had no track record to prove it would not be a liability to the insurance agency.

In addition, an unanticipated $87,000 had to be spent on station security. Plus, marketing to get people on the train cost about $168,000 more than was budgeted. Fuel prices drained more money. A $400,000 budget for fuel in the summer of 2007 will increase to $662,000 or more next year.

As a result of all that, the agency ate up $2.25 million in federal funding, taking away $750,000 that RTA had hoped to put toward 2009.

The agency has created a task force to try to solve the train's immediate and recurring cash shortfall.

The Star's planners â€" and even some initial skeptics, such as Rob Shearer, former city manager of Mt. Juliet â€" stand by their decisions, including the one to start with Wilson County. Shearer said he wondered if it would truly work, but as gas prices rose and traffic congestion got worse, he changed his mind.

"There are expenses that we now see we're going to have that we didn't see 12 months ago," he said. "It wasn't because anyone hasn't been doing their job. It's just been a very difficult and challenging environment."

Morgan, of the Texas Transportation Institute, said while another route may have yielded more passengers and brought in more ticket income, another corridor would have been more expensive and may not have happened at all.

"I think it was a valiant attempt to put a commuter rail in place to show people what it could do," he said.

'It's a start'

Joe George, the Mt. Juliet train passenger, is glad the line that serves his town was chosen. "I know this eastern route may not be the most desirable for people," he said, "but it's a start."

George said riding the train meant he would not have to sit in Interstate 40 traffic in the mornings. "We're fortunate to have this open to us," George said. "There has been a steady increase in riders, and I am sure as fuel costs skyrocket, more people will use it."

But as the future stands, the Music City Star only has enough money to get through until Oct. 1, unless the task force of RTA board members and area government officials come up with additional income. The RTA could draw from its line of credit to finish out the year, but the Star would finish fiscal year 2009 with a $1.7 million shortfall.

"We need to be thinking outside the box and be creative to address the shortfall," said Ballard. "It is too important of a project to let it go on the way it is."

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