The State of California has eliminated all State Transit Asistance funding to public transit agencies in California. To MTS, this is an annual loss of $14 million, forcing MTS to consider a series of service adjustments, a fare increase, new non-fare revenue sources, and internal reductions in order to balance its budget.

To determine potential service changes, MTS is guided by the four principles in Board Policy 42:

1) Customer Focused: Provide services that reflect the travel needs and priorities of our customers.

2) Competitive System: Provide services that are competitive with other travel options by meeting market segment expectations.

3) Develop an Integrated System: Develop transit services as part of an integrated network rather than a collection of individual routes.

4) Develop a Sustainable System: Provide appropriate types and levels of service that are consistent with market demands and are maintainable under current financial conditions.

Using these principles, MTS evaluated all routes, segments, and times on the basis of passengers per hour of service, subsidy required for every passenger carried, and the amount of costs covered by passenger fares. These objective rankings were adjusted due to field surveys, availability of alternatives, the number of passengers affected, and the number of passengers that would be lost.

Initially, MTS developed a list of service changes that would result in a $10.7 million reduction in the budget. This list was presented to the public at a series of 'open house' outreach events held in February 2009 at transit centers throughout the region. Several thousand passengers were contacted and over 500 written surveys were collected. This passenger input on the proposed service reductions (and a possible fare increase) led to the futher refining of proposals to present to the MTS Budget Committee.

Based on input from customers, the MTS Budget Committee directed MTS to amend its proposal to include only $4.7 million in service reductions, an increase in Monthly Pass prices ($72 for adults, $36 for youth and $18 for seniors/disabled/medicare), and efforts to reduce MTS overhead and increase non-fare revenue sources.

A public hearing will be held on March 12, 2009, to collect comments from passengers on the revised service reduction proposal, and a final vote of the MTS Board will take place on March 26, 2009. If approved by the MTS Board, the San Diego Association of Governments (SANDAG) will hold a public hearing on the fare and pass price increases.

Implementation of the service proposals would be mostly in June 2009, and the fare increases would take effect in July 2009.