Gunnison Valley Transportation Authority
Frequently Asked Questions and Answers
Q. What is the RTA?
A. The RTA is a special district with its own boundaries and its own taxing authority. It was created by the voters in 2002 and it was reauthorized by voters in 2008 with about 80% of the voters voting yes. The district boundaries include all of Gunnison County except, Marble, Pitkin, and Ohio City. The RTA was founded with the mission to provide and improve air transportation to and from the Gunnison-Crested Butte Regional Airport on a year-round basis, and to develop a long term and energy efficient public ground transportation system within Gunnison County.
Q. How is the RTA funded?
A. The primary funding source for the RTA is a sales tax collected in the district. The sales tax is not collected on groceries or energy. The tax is 3.5 cents on a $10.00 sale in the City of Gunnison and 6 cents on a $10.00 sale in the rest of the district. Depending upon the economic activity in the district, this generates anywhere between $900,000 and $1.2 million. The RTA also applies for and receives grants for buses and bus operations. The RTA receives federal dollars each year from CDOT to help with the operation of the buses. In 2013, we will receive $148,000 which represents approximately one-third of the cost of running the buses. The 4 buses were purchased in 2007 with a $980,000 grant from the State of Colorado. This grant was the first state grant ever given for transit and the RTA was one of a handful of agencies to be awarded the grant. The RTA also receives capital grants from the federal government which can only be used to fund capital projects.
Q. Who is in charge of the RTA?
A. The RTA has a board of directors that is made up of 8 elected officials. Each municipality appoints two council members and the county appoints two county commissioners to be RTA board members. The board elects its own chairperson and makes all policy decisions for the RTA.
The board of directors hires an executive director and an airline consultant to perform the majority of the RTA tasks. The executive director is Scott Truex and he is responsible for the day to day operations of the RTA and carrying out the decisions of the board of directors. Kent Myers is the airline consultant and he is responsible for negotiating contracts with the airlines to fly into the Gunnison – Crested Butte Regional Airport. He is also responsible for reporting back to the board and keeping them informed regarding the performance of the air program.
The RTA also has a citizen advisory committee which meets to give advice to the board of directors. The chair of the committee is Jeff Moffett.
Q. How does the RTA air program work?
A. The RTA works in cooperation with CBMR to identify and negotiate specific flights into the Gunnison – Crested Butte Regional Airport (GUC). With the exception of United service from Denver, the airlines will not fly to our airport without contracts that guarantee that they will make a certain amount of revenue. These contracts are called Minimum Revenue Guarantee (MRG) contracts.
Negotiating MRG contracts is complex because the contracts have to take into account the opportunity cost for the airline to fly to GUC. The airlines want to use their limited number of aircraft in a way as to maximize profits. They know exactly what they can expect in revenues by flying to major markets. In order to entice them to fly to GUC, we have to be able to ensure them that they will make at least that much revenue. The airlines come up with a figure as to how much revenue they need to make to fly into Gunnison. This number includes the costs associated with flight crew, ground crew, airport space leases, landing fees, overhead, and most importantly, fuel. Once the cost is determined, then a maximum amount is negotiated to determine the highest amount of liability the community will be exposed to. This number is called the guarantee cap. The cap is the amount that the RTA and its partners must budget to pay if the revenue numbers are not met.
For instance, a 757 aircraft with 188 seats might cost $30,000 to fly round trip from a hub airport. If we are going to fly this aircraft daily for 100 days, the MRG contract would guarantee the airline would make $3 million dollars on the service. (100 days X $30,000 per day = $3 million.) The cap amount in this situation might be $600,000. So, if revenue from the tickets sold totaled over $3 million, then the RTA would pay nothing. If the revenue totaled between $2.4 million and $3 million, then the RTA would make up the difference so that the airline would make their $3 million. If the revenue totaled less than $2.4 million, then the RTA would pay the cap amount of $600,000 and the airline would take a loss.
Q. How is the air program marketed?
A. The RTA is not specifically tasked with marketing the flights. In fact, RTA sales tax revenues cannot be used for marketing and must be used for transportation. Therefore, it is very important that the RTA work closely with our partners who do market the programs. The two largest marketers of the valley are CBMR and the Gunnison – Crested Butte Tourism Association (TA). CBMR contributes to the MRG contracts and is also tasked with marketing the flights. The TA markets our air service program year-round and works closely with the RTA and CBMR. Our air service consultant Kent Myers has a background in ski area marketing and his expertise is shared with our marketing partners.
Q. How does the bus program work?
A. In 2007, the RTA received a grant from the State of Colorado to pay for 80% of the cost to purchase the four RTA buses which travel the route between Gunnison and Mt. Crested Butte. We also receive annual operating grants which pay for about one-third of the operating costs associated with the buses. By accepting these funds, the RTA agrees to comply with many federal and state regulations. The buses are all ADA accessible and the RTA provides a deviated fixed route service to meet ADA requirements.
The route includes a loop through the city of Gunnison which includes the Rec. Center, the High School, Hwy 50 at Safeway, WSC, High Country Station, and the WalMart / City Market stops. The bus heads north on Hwy 135 with flag stops at the Tall Texan, Almont, Cement Creek and Brush Creek before stopping at the 4-Way stop in Crested Butte and the Mountaineer Square in Mt. Crested Butte. The same stops are covered on the southbound leg. Route and schedule information can be found at www.gunnisonvalleyrta.org
Q. Why has the bus been free and will the RTA charge in the future?
A. The bus has been free for many reasons. The primary goal of the RTA bus program is to transport as many people as possible as safely as possible. The RTA bus program has been immensely successful and has carried as many as 87,000 passengers in a year. Charging a fare would slow down the buses because passengers would be able to board only on the front door and the driver would have to ensure that the proper fare has been collected. Slowing down the schedule costs money because the system becomes less efficient and more buses are needed to run the same schedule. The revenues collected also come with administrative costs. These costs can be relatively high since there is currently no system in place to collect, account for, and audit the revenues. Ultimately, charging a fare cannot cover the costs of running a public bus system. If it could be profitable to run a bus system, a private company would jump in and do it.
At this time, the RTA board has no plans to charge fares on the RTA buses.
Q. How does the Denver Bus work?
The bus runs both directions every day and a ticket costs just over $30 each way. In Gunnison, the bus stops at the WSC bus stop and at the PowerStop. In Denver, the bus goes to Union Station and to the Greyhound Station. To purchase tickets and get specific route and schedule information, go to www.blackhillsstagelines.com
A. The RTA is the coordinating entity that works with CDOT to ensure that the Denver bus service is in place. For the first few years of service, the RTA collected funds from municipalities and counties along the Gunnison – Denver corridor which were used as a local match for a CDOT grant which made the route possible. The route has become more successful and at this point, CDOT subsidizes the route without local financial contributions.