IndyGo seeks budget hike while revenues, ridership slump


IndyGo is seeking $117 million, a 5.6% increase over this year’s spending plan, in its 2021 budget.

During IndyGo’s July board of directors meeting, Chief Financial Officer Bart Brown painted a dismal financial picture based on slumping revenues and ridership numbers while forecasting rising costs in the years ahead.

Along the Red Line, rolled out last September and beset by start-up woes, on-again/off-again fare holidays, electric buses that don’t deliver the mileage as promised and a faulty ticketing system, ridership dropped from a high of 138,980 in January to 59,642 in June.

“We have to get people back on the bus,” said IndyGo Spokeswoman Lesley Gordon. “We have to get people back to work. There are a lot of companies who haven’t asked their employees to come back until next year or beyond.”

Fare revenues are predicted to drop 40% all across the system next year to $6.4 million and not reach this year’s projected level of $10.6 million until after 2025.

“Our ridership, while it’s come up in the past few months, it’s still much lower than pre-COVID,” said Gordon.

The local transit income tax, approved by Marion County voters in 2016, provided $40 million toward this year’s operating budget, a figure that is expected to dip below $29 million by 2023.

“With fewer people working and unemployment’s really high, we would have to anticipate that being a lower amount,” said Gordon.

The budget slump means IndyGo will delay full rollout of the Marion County Transit Plan, which would have unveiled a grid system for service last month while adding more buses running more often for riders.

“That transit plan that increases service and frequency also increases staff and resources,” said Gordon, “so we’re making sure that we’re balancing that and looking forward to what it takes to sustain that over the next few years while we have some question marks in the air that are important.”

Gordon said some bus stop modifications will go on as scheduled.

The 30 Red Line electric buses IndyGo bought from bus maker BYD have proven a big disappointment, delivering far less than the estimated 250 miles between recharging as first promised by the Chinese manufacturer.

“I’m pretty sure they’re below 200, but there are days when they hit 200,” said Gordon.

As a result, the IndyGo board has voted to buy the former Key Bank location at 6410 North College Avenue for $985,000 and property at 8925 South Madison Avenue, appraised at $2.3 million, to build charging stations so that buses can recharge at both ends of the Red Line without returning to the central garage on West Washington Street.

BYD is financially responsible for building the charging station infrastructure.

Gordon said IndyGo hasn’t decided if it will buy more BYD buses to run the anticipated Purple Line from Lawrence or if property will need to be purchased on the northeast side to build similar charging stations if the next generation of electric buses can’t deliver on the 250 mile per charge promise.

“Currently, right now we’re working with them because the buses they provided have not met that requirement, so until they get to that point, the future is something that is still up for negotiation.”

The board approved the issuance of a $25.8 million bond offer in order to purchase 27 hybrid buses from Gillig, an American bus manufacturer, to replace standard diesel-powered buses that have aged out of IndyGo’s current fleet that service the majority of the system’s 29 lines.

The Gillig buses are diesel fueled but power internal electric batteries, permitting IndyGo to claim it remains committed to a zero emissions fleet in the future.

IndyGo has received $970,000 in federal Personal Protection Equipment funds to offset $1.6 million in COVID-19 mitigation spending.

The transit corporation is counting on nearly $38 million in CARES Act funding through the end of the 2021 budget to compensate for financial losses due to the coronavirus emergency.

Before the pandemic, IndyGo promised that fares would remain constant and not be raised to pay for additional service or the Red, Purple and Blue bus rapid transit lines.

Gordon said additional property purchases to relocate staff from the IndyGo headquarters have been put on hold due to the projected budget shortfall, but potential fare increases, while not currently planned, are not necessarily out of the question.

“There’s still some room to figure out what that looks like, and we’ve been maintaining service through all of this and, again, that’s the goal, and what that service looks like is definitely something that’s on leadership’s mind.

“Is it the 40-foot bus? Is it some different opportunities? Do we use some partners? There’s some options on the table but everything’s being looked at.”

IndyGo delivers its proposed budget to City County Councilors September 14.

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