In preliminary discussions, town officials said these savings in cost will lead to a lower compensation figure paid by DPS for service, said Rick Hannegan, assistant director for Chapel Hill Transportation.
"We've just reduced the cost of providing service," Hannegan said.
DPS expects the reduction in costs to help it solve the $2 million budget shortfall projected for the 2002-03 fiscal year, said DPS Director Derek Poarch.
Hannegan said Transportation Director Mary Lou Kuschatka started trimming off fat from the department's budget when she was hired a year and a half ago.
"It's something that she initiated when she came here," he said. "It's really a coincidence that this has come with the budget crisis at the same time."
The University is projected to pay $3.6 million in return for fare-free busing, which is up $1.1 million from this year but still $369,582 less than was expected, according to the department's proposed budget for the next fiscal year.
While the department's total costs are expected to increase, new cost-saving policies have helped the town reduce the price of hourly busing service from roughly $60 to $50.
The new policies include reducing the number of report drivers, who act as a reserve force should a driver who is scheduled to work a certain day call in sick or have to be relieved from work.
Hannegan said this new policy will not jeopardize the level of service Chapel Hill is accustomed to.
"It really shouldn't have any effect on service," Hannegan said. "The only problem we might have is if three to five people are sick. We almost always have someone qualified to drive a bus. It has made the system more efficient."
The department's total overhead cost also includes workers' wages and fringe benefits, diesel gasoline and cleaning costs. "The only thing that we'd really be concerned about is diesel fuel prices," Hannegan said. "We've budgeted for $1 a gallon, but we're not near that now."
The price tag for diesel fuel fluctuates but has remained under $1, he said.
Hannegan added that if there were additional costs incurred during the contracted year, DPS would not be required to pay extra.
While preliminary discussions between the town and DPS have begun, a final settlement has not been negotiated. "We have met with the (town)," Poarch said. "We've been told what the rate (of cost) will be. All of that is subject to town approval."
Hannegan said he believes an agreement can be hammered out easily. "We're fully optimistic that negotiations will be fairly smooth and productive."
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