Turns out the Portland Streetcar — plagued by lower-than-expected revenues — is looking at something like a $1 million annual funding hole in coming years.

That news cropped up today in a city council work session, as commissioners questioned PBOT officials about the department’s budget.

“It looks like it’s a problem on the horizon,” Commissioner Nick Fish said in the session. “We have a year to think that through and see how we can avoid that.”

The program is stable in the short term. PBOT’s identified its share of the streetcar’s $8.9 million operating costs this year, as well as for the fiscal year that begins on July 1. It’s the following years that pose a problem, according to Spokesman Dan Anderson.

As the streetcar ramps up planned service and closes the southern end of the eastside loop, costs are set to increase. PBOT’s looking at an average of $1 million yearly deficit beginning in July 2014 and stretching at least to June 2018 — as far as the department has forecast.

That’s not how the city hoped it would work. The shortfalls take into consideration revenue from PBOT’s Central Eastside Parking Management Plan — which last year began charging for what had been free eastside parking.

Officials had planned to use money from the district — projected at $436,000 a year — to fund the city’s share of streetcar expenses, according to a recent audit.

“Until those parking revenues exceed the costs of parking district implementation and operation, streetcar operations will be subsidized with other discretionary transportation revenues,” the audit said.

According to PBOT’s forecasts, revenues will fall short for at least the next five years.

This all comes on the heels of another revelation.

Portland’s City Budget Office disclosed—in an analysis released March 11—the streetcar has taken in a little more than half of the money it expected since installing fare boxes in September.

That’s bad news, given PBOT’s already-tough financial straits. But it’s also a problem that’s more complicated than freeloaders or low ridership.

According to Chris Smith—who sits on the board of directors of the nonprofit that runs the service—part of the problem is how citizens are getting tickets to ride the streetcar.

“We’re seeing more of our ridership be pass-holders than expected,” Smith said at today’s meeting.

So, for instance, if a student from Portland State University rides the streetcar, she won’t be using a $1 fare box. Her student ID counts as a valid fare. And anyone holding a TriMet pass — be it for a daily trip or longer access — doesn’t need to worry about paying a fare for the street car.

“If TriMet handles the sales, they keep the money,” said Smith. ” “It’s not necessarily a fare collection problem or a ridership problem.”

In fact, Interim PBOT Director Toby Widmer estimated the streetcar has a 93 percent collection rate, even without cracking down.

“There has not been a ticket issued, as far as enforcement goes,” Widmer told council today. “I am concerned that future projections are probably going to be difficult to meet.”

I'm a news reporter for the Mercury. I've spent a lot of the last decade in journalism — covering tragedy and chicanery in the hills of southwest Missouri, politics in Washington, D.C., and other matters...

12 replies on “The Streetcar Has Funding Issues. Big Ones.”

  1. They are kidding themselves with the 93% figure – no way in hell are they getting much of a return so soon after going fareless.

  3. What a HUGE surprise! Maybe they can cut some more bus lines or hire some more six-figure managers to cover the costs of operating all their shiny new street car lines that hardly anybody needs or uses. Wait, I forgot to throw some fare increases into the mix. While we’re looking to drum up money to pay for the poor underfunded streetcar, perhaps a cadre of fare inspectors to harass commuters at MAX stations? Just spit-ballin’ here . . .

  5. Media really needs to stop writing “lower-than-expected” when it comes to street car revenue. They put out those projections knowing full well they were nowhere close to reality because it’s what you do when you want a bad idea to make it to market. Ask Dick Cheney and Don Rumsfeld.

  6. When can we get over the idea that transit should pay for itself? We don’t ask highways to do that and they cost orders of magnitude more.

  7. It’s faster for me to walk than to take the streetcar. I’m gonna say that as long as that’s the case, it’s gonna lose money. It was cute when it was free, but now that you’re supposed to pay for it? Yeah… Nope.

  8. Chris: Because highways are useful to a huge number of people. People don’t mind paying for things when they can use them regularly. When transit is as useful, people can live with it not breaking even. But useful the streetcar ain’t, and when the useful transit we do have (re: the bus and, to a lesser extent, lightrail) is already running out of cash, the problem is exacerbated exponentially.

  9. Chris, there’s one type of public transit that does pay for itself… Bike sharing. In DC, after just 1.5 years in operation, the system covers 100% of its operating costs through user fees.

  10. Chris, useful transit may be subsidized (but hopefully as little as possible). In Portland, that is the bus system and most MAX lines. Transit meant for postcards and tourists that no one actually uses should not be subsidized.

  11. Why does anyone think that streetcars are about moving people around??? There is a reason they aren’t under the umbrella of tri-met and that is that streetcars have nothing to do with mobility and everything to do with urban development. We trade safe streets to bike on for pearl district type development which increases property tax revenue. For better or worse that is the point, not moving people from one place to another, which is why it doesn’t matter that you can beat the streetcar by walking.

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