OAKLAND (CBS SF) — AC Transit’s board of directors has adopted a 10-year policy that automatically raises fares at regular intervals.

The board’s vote, by a 5-1 margin, with one member abstaining, at its meeting Wednesday night means the first change will take effect Aug. 1, with a 10-cent increase in the basic adult fare and a 5-cent fare increase for youths, seniors and the disabled.

The vote will raise the basic bus fare from $2 to $2.10. The fare for seniors, youths and the disabled fare will rise from $1 to $1.05, and the monthly pass for youths will increase from $15 to $20.

The monthly pass for seniors and the disabled will remain at $20.

Board members said they approved the new policy and the fare hike because they felt they had no choice, as the agency that serves bus riders in Alameda and Contra Costa counties is facing a $14.9 million shortfall in working capital for the fiscal year ending June 30, 2012.

Board President Elsa Ortiz, said, “We cannot expect to continue to have low fares without having some impact on service. For that reason I am voting for it.”

Board members said the changes are intended to lead to more logical and equitable fares and pass prices, predictable fare increases during a 10-year period and the creation of a seven-day bus pass.

Bus agency officials said they will now be better able to plan their budget by knowing when and how much revenue to expect from fares.

The new 10-year policy raises fares by 25 cents every five years. But the agency’s finances must be re-evaluated before any of the scheduled increases take effect.

The first fare increase in August is expected to boost AC Transit’s annual revenue by $2.4 million, which roughly equates to 29,000 more hours of bus service.

AC Transit Interim General Manager Mary King said the bus agency didn’t have much choice except to implement the new policy of regularly raising fares “given the volatility of current funding sources.”

King said, “We have to consider fare increases, and the new fare structure will result in at least one source of predictable revenue for AC Transit.”

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