Minimum wage requirements are adding to All Points Transit’s financial pressures and the 40-year-old service could face some service cuts, although, if that happens, it would maintain its core dial-a-ride service and two of its public bus routes.
Under Amendment 70, passed in 2016, minimum wage increased incrementally to $12 per hour starting next year.
“At the time that it passed, our drivers were paid more than the minimum wage, but that increase over four years put us in a bind. By next year it will have forced a 35- to 40-percent increase in driver and dispatch wages,” All Points Transit Executive Director Sarah Curtis said.
That translates to a 9- to 11-percent increase in wages each of the four transition years, she said. “Wages in our budget, because we’re so operational, it’s 65 percent of our operating budget. When it was passed, we started doing our own internal estimate on budget impact. We immediately knew that it was going to be an issue and a big concern.”
One of APT’s first steps was to apply for a planning grant through the Colorado Department of Transportation, so it could assess regional transit needs and gather public input through surveys, stakeholders and passenger interviews, and use that information to prioritize services based on needs, including long-term needs, as well as to point the way to improve on existing services and scout around for additional funding sources.
The nonprofit used grant money to produce a new strategic operating plan, authored by consultancy firm Felsburg, Holt & Ullevig. Although that plan lists what Curtis called “some dream services,” such as connections between Montrose and Grand Junction; being approved to operate a shuttle service at Montrose Regional Airport and a new commuter vanpool service, the priority is sustainability for those who most need its services.
“We’re mission-driven. We’re all about maintaining and promoting independence for seniors and people with disabilities,” Curtis said.
The strategic plan includes a five-year fiscal review, which projects significant increase in expenses, but not an income that can keep pace, and APT is projected to start operating at a deficit next year, which will grow in the years following.
The plan therefore recommends cutting APT’s public bus route (Public Flex, established in 2010) from three to two routes and to decrease by 10 percent the dial-a-ride service in order to maintain a balanced budget without additional sources of revenue.
All Points conducted in-depth analysis of how the public uses existing stops on the flex routes to create a “skeleton system” that could be built back up again, Curtis said.
“This is based on highest usage of stops and making sure that we keep travel available on major arteries,” including Hillcrest Drive, Main Street and Townsend Avenue, she said.
“We want to really make sure the door-to-door service is available to people with disabilities and people in need. We’ll be doing everything in our power to make sure that stays intact.”
APT has already applied for a grant to help fund operations, she said, but the award, if any, won’t be announced before January.
“It would be very difficult changes for our organization and for our passengers. We want to make sure door-to-door is available to those who are most frail,” Curtis said.
“We’re going to do everything we can to make sure we don’t lose services. It’s all interconnected. You take off service on this public route, and you’re going to have people who want door to door service,” she added — even though people who are able to access a flex route are better served by not having to set a schedule for dial-a-ride.
The service cuts are strategies All Points could implement in order to stay in the black and continue providing some service.
“It’s not that this is definitely happening. That’s something we’re really wanting to get out in the community. It’s that this is an option and we’re working hard to come up with additional funds,” Curtis said.
All Points Transit operates at a lower cost per trip for both its flex and dial-a-ride services than the national rural median. For the public flex routes, APT’s cost per one-way trip is $7.72, compared to the national median of $12.75. For the dial-a-ride service, its cost is about $23 per trip, compared to the rural paratransit average of $26.22.
“We actually are more efficient than other operators throughout the country,” Curtis said.
The minimum wage increase is among the biggest driving factors of All Points’ rising operational costs, she said.
Generally, operational costs are a large expense for any business and some yearly increase is to be expected she said.
Another driving force in costs is rising insurance — not because All Points drivers have had more accidents, but because of costs within the insurance industry.
“But certainly, minimum wage is the biggest (factor),” Curtis said.
Strategic plan highlights
The strategic plan also looked at transit dependency in All Points’ service area. According to the plan’s data, residents of Montrose and Olathe area have a moderate to high transit dependency, based on the percent of households of people age 65 or older; percent of households below poverty and percent of households without a vehicle.
“We know that people need the service, because we get all the calls. This puts some data behind it, Curtis said.
Rider surveys showed a desire for weekend flex route services and more regional service connections.
Those kinds of increased services are unlikely to occur in the near future, given All Points’ financial situation.
The wish list for All Points includes a mobility app flex route travelers could use to obtain travel times and route information on their phones; the nonprofit recently received a technology grant that could help.
The strategic plan acknowledges All Points needs a new transit facility and administration space to replace the cramped quarters on South Second Street, where workers and volunteers share office space and where Curtis’ own office doubles as the conference room.
The plan further recommended that All Points Transit expand its volunteer driver program, in which volunteers sign up to provide door-to-door service using a car All Points provides. This helps fill in the gaps for dial-a-ride.
“There’s things that we can do, even though it’s unlikely we’ll get four routes in Montrose anytime in the near future,” Curtis said.
All Points intends to continue strengthening its partnerships with local governments and to apply for more grants. Its board has already increased passenger fares and contract rates for partners and implemented a “last stop shuttle” model on the flex route to decrease overall service hours. The organization was also opened up to charter services to generate more income.
As a nonprofit, All Points Transit also accepts donations.
“We have kind of hit this place of, even though support is increasing, our expenses have increased to such a point that services could change in 2020,” Curtis said.
Annual ridership: 85,483
Total annual operating budget, $1.39 million
Public flex route ridership, 43,464; cost per one-way trip, $7.72 (national rural median cost per trip is $12.75)
Dial-a-ride ridership, 41,576; cost per trip, $22.98 (rural average cost per trip, $26.22)
Medical shuttle ridership, 433; cost per trip, $46.72
— From the All Points Transit Strategic Operation Plan, by Felsburg, Holt & Ullevig.