Million-Dollar Trolleys Roll in the Red

Last summer's trolley riders hop a free ride towards downtown Laguna Beach.

The city’s fast-growing fleet of 12 novelty trolley buses, which shuttled 582,000 riders around town during the summer art festival season last year, is anything but a free ride.

On Tuesday, the City Council agreed to “raid” the city’s parking fund, established to create new parking spaces, in order to lease six trolleys for $100,800 during the three-month peak tourist season, bringing the total number to 18. Last summer, the city added five leased trolleys to its fleet.  Leases, maintenance, fuel and drivers needed to operate the trolleys up and down Coast Highway and Laguna Canyon Road cost nearly $1 million a year.

“Right now, every year we’re raiding the parking fund for $800,000 or $900,000?” councilwoman Elizabeth Pearson queried City Manager John Pietig during a council discussion over allocating money to lease the trolleys.  “Instead of building parking spaces, all that $900,000 is going toward transit services?”

Pietig explained that the transit fund lacks enough money to cover trolley costs so money has been siphoned from the parking fund.  State and federal grants relied on to augment and expand bus services in the past have “dried up along with the economy,” he said.

The parking fund is replenished with income from parking meters, parking lot fees and shoppers’ permits, which averages $550,000 a year, Pietig said. The parking fund currently stands at $5.2 million. Traffic citation fees go to the city’s capital improvement fund.

Pearson pointed out the parking fund balance stood at $6.2 million in 2010, and subsidizing trolleys will continue to deplete it. “All that parking fund money will go and there will be no money for transit unless there’s other sources found,” she added.

“For years, I have been disappointed that parking fund monies have been used to balance the general fund operating budget and, more recently, to also offset costs for transit,” Pearson said after the meeting.

Over the next 12 years, $1.2 million will be needed from the parking fund to subsidize trolley costs, about $200,000 a year, unless state or federal money is found to offset losses, Pietig explained on Wednesday.

As part of the discussion, city staff recommended purchasing rather than leasing trolleys. Each customized trolley is made in Maine and costs about $267,000 or $1.6 million for six, a city report to the council says. The council has considered bus fares, voluntary and required, to offset costs.

Leased trolleys burn gasoline or diesel rather than the propane that fuels city-owned trolleys. Leased buses are also customized with decals, a GPS system and radios, which must be removed at an additional cost to the city before returning.  Purchased trolleys are in better condition and take two years to customize before delivery, the report says.

In 2010, four new trolleys were purchased for $963,000, with half of that price funded by a federal stimulus grant and the remainder by state air quality and transit grants. At the same time, the city also extended the southern summer trolley route to Three Arch Bay with a turn-around and stop at Crown Valley Parkway as well.

At peak times during the summer, the city adds to the trolley routes from its regular “blue line” buses, which carried 21,000 regular passengers. On its three regular, year-round routes, “blue line” buses ferried 86,000 passengers last year. Fares are 75 cents a ride, except for local employees who are eligible to ride free. Total bus ridership was 668,000 people last year, according to Public Works Director Steve May.

The free trolley shuttle runs from June 29 to Sept. 2.

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  1. The free trolley’s in the summer are a WONDERFUL thing. If the current council thinks building more ‘metered’ parking is more important then they should just take a hike.

  2. I say go with purchasing the trolleys. Why would they have to be customized? If they do, surely there are enough local people to hire from to do this, and that would help the local community.


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