The Auckland Regional Council voted yesterday to sign up to the Government’s new transport funding scheme, Patronage
Funding.
“We welcome the Government’s commitment to lift the cap on Government spending on passenger transport, which has been
needed for a long time,” said ARC Transport Committee Chairman Les Paterson. “An extra funding boost will assist us to
improve services over the short term.”
The Patronage Funding scheme is a new method by which Transfund, the Government’s funding body, will contribute to
funding of passenger transport. Under this scheme, councils will receive funding based on the patronage levels of their
services.
“The ARC has taken the prudent and fiscally responsible approach of carefully evaluating the Government’s new scheme in
terms of risk to the region. We have been fully involved in discussions with Transfund over the past few months to work
through details so that the scheme will work for the region,” said Mr Paterson.
Transfund has made several alterations to its Patronage Funding scheme based on council submissions. One significant
change is that there is now “Kick Start” funding available to assist the introduction of new services over the next
three years. From now until June 2001, the ARC will receive an 80% grant from Transfund to start new services, which
will drop to 60% in the 2001/2002 year, and to 40% in 2002/2003. Kick-start funding has been added to the patronage
funding scheme in recognition that councils have already budgeted for new services in the coming year and are not able
to start extra new services without significant funding assistance from Transfund.
The ARC is already poised to take advantage of the Kick Start funding with a boost to new trial services. “We already
had the ability to commit $640,000 to trial services this financial year. With Kick Start funding, we have the potential
to commit up to $1.6 million. We will be announcing a number of new trial services later this week,” said Mr Paterson.
The ARC has undertaken financial analysis and risk assessment to the region of Transfund’s Patronage Funding model,
reports ARC transport director Barry Mein.
“We have identified that the revenue we will receive from patronage funding is contingent on what baseline funding and
patronage levels we agree with Transfund when we sign up. The scheme rewards increases in patronage above the set
baseline levels. We are still negotiating with Transfund what Auckland’s base levels will be. Because patronage has
increased a lot in the last few months possibly due to factors beyond our control such as petrol price increases, we are
concerned not to set the baseline level too high and then risk not being able to increase patronage levels significantly
above that in the short term,” said Mr Mein.
“Our administration costs will also rise due to the extra passenger data collection and reporting obligations required
by the Patronage Funding model. We are working with other councils to identify the most cost-effective and efficient
approach to meet these requirements. The Patronage Funding scheme does offer increased financial assistance for
administration to offset these costs.”
The ARC’s risk assessment of the Patronage Funding scheme has shown that the scheme does place financial risk on
councils, should patronage numbers drop for any reason. For this reason, the Council has decided to undertake an annual
review of its commitment to the scheme.
“We need to keep tight reviews on payment rates, monitoring of changes in average trip length taken by passengers, and
careful planning around the risks of time delays over implementing new services to manage these risks,” said Mr
Paterson.
“We support Government lifting the cap on funding of services for passenger transport. It is a scheme that was devised
to fit within existing legislation and is a good start. We view Patronage Funding as a transition towards a broader
range of initiatives. We are also keen to see what Government will deliver on wider changes to legislation, to free up
funds for capital spending on public transport infrastructure. However, we are looking for a positive response from
Government in support of Auckland’s plans to build vastly better passenger transport infrastructure along dedicated
corridors, which is the only way we can lift patronage levels significantly throughout the region. There are only so
many people who will be willing to switch to improved bus services, when buses have to fight through the traffic.”
The Transport Committee agreed to sign up to a patronage payment rate based on numbers of passenger boarding services,
which will be $0.45 per current passenger (established by the baseline rate) and $3.00 per additional new passenger at
peak times or $0.70 at off-peak times.
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For further information please call: Les Paterson, Transport Committee Chairman ARC, phone 09 366 2000 x 7111
Or Barry Mein, ARC transport director, phone 09 366 2000 x 8061.