TO: AC Transit Board of Directors
FROM: Salvador Llamas, General Manager/Chief Executive Officer
SUBJECT: Fare Planning Update
BRIEFING ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider receiving a report on a plan for determining future fare increases.
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Fare revenue is the largest revenue source within the District's control. Ensuring the District has a clear plan for determining future fare increases is key to the District's future financial stability.
BUDGETARY/FISCAL IMPACT:
While fares are an integral part of the District's revenues, there is no fiscal impact from this report.
BACKGROUND/RATIONALE:
With the successful implementation of a fare increase on July 1, 2025 and the planned increase of local fare for July 1, 2026, the District will complete all the previously approved fare increases. The Board requested that staff develop and present a plan for future fare changes. Board Policy 333 - Fare Policy Goals and Methodology lays out seven goals that apply to "fares, the fare structure, and fare payment methods". Staff must balance these goals when planning for fare increases.
Having a multi-year plan for fare increases has many advantages. It allows staff to incorporate any revenue increases into financial projections, and it allows riders to understand what their future costs will be. The process of approving a fare increase, which requires a fare equity analysis and a public hearing, requires significant staff resources thus repeating the process every couple years is not ideal.
Having a multi-year fare increase plan also goes along with the District's multi-year financial planning. The primary purpose of charging fares is to raise revenue to provide service. The District is now spending reserves to fill the budget deficit, the...
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