The Town of Penetanguishene is set to receive $88,149 through the provincial gas tax fund this year.
Council was happy enough to give its approval for staff to enter into this agreement with the Ministry of Transporation.
"It's used to offset our operating costs for the transit system," public works director Bryan Murray said in a conversation with MidlandToday. "We usually put it into a reserve and at the end of the year, we put it towards the operating cost. Typically, it would go towards the actual operation of the transit system."
He said the money can also go towards expansion of the transit system or anything that's related to its operation such as a purchase or infrastructure support that pertains to the transit system.
The amount the town will be receiving is $8,000 higher than what staff had budgeted for 2020, according to Murray's report presented to council at its recent virtual meeting.
The money will be paid out with an initial installment of $66,112, which will be paid once the letters of agreement and related bylaw have been passed. The balance will be paid out later, says the report.
Murray said the money only goes towards operational costs, and isn't used to subsidize ride fares.
"For instance, any invoices we get from the town of Midland, who is our transit provider," he said.
Right now, Murray noted both towns are providing free transit for their residents, but it's a reduction in revenue.
"We're actually continuing to count ridership, even though it isn't being charged," he said, adding that is needed for the gas tax funding formula, which uses both a municipality's population and ridership numbers.
Hence, Murray said the amount of money Penetanguishene should receive next year under the program should remain the same.
As for how the pandemic has affected ridership numbers or revenue, he said that information is not yet available. However, staff is tracking it to be able to report back to council.
Murray said Penetanguishene started receiving the funding the same year it initiated its transit service in 2016.
"The amount has increased since we started, based on our ridership, which when we first started was low," he said. "Over time, it has increased and the cost associated with the operation (has also increased)."
