Pedestrians walk across Fourth Street as a Big Blue Bus goes east on Santa Monica Boulevard on Friday afternoon. The City Council is looking at ways to increase revenue for the bus company, including more advertisements like the one seen here. (photo by Brandon Wise)

CITY HALL — With the Big Blue Bus fare increase that took effect in August, Santa Monica’s transit system is projected to remain solvent through mid 2013; after that, new revenue is needed to prevent cuts to service, city officials said.

During a brainstorming session on the topic this week, the City Council considered a range of proposals, from increasing parking citation fees, to building “transit oriented development” on sites owned by the BBB, to tacking new fees onto development projects to lobbying the state government to allow the installation of digital advertising on the sides of buses.

Perhaps the most radical idea came from Councilman Kevin McKeown.

Seeing an opportunity in the funding crisis, McKeown proposed requiring developers to pay for bus passes for each and every Santa Monica resident.

The move would have one distinct advantage over requiring cash payments from developers, McKeown said: By mandating payments in the form of transit passes, the money would be counted as “fare box revenue,” which is eligible to receive a matching contribution from the federal government, in effect leveraging its impact on local transit operations.

The idea got mixed reviews on the dais, but garnered enough support to make it into the council’s official recommendation to staff for further consideration.

Councilman Richard Bloom questioned whether it makes sense to use City Hall resources to provide bus passes to residents, most of whom can easily afford to pay their own bus fares.

McKeown countered that the free passes could reduce traffic congestion, often cited as Santa Monica’s most intractable problem.

“This isn’t about saving residents money, it’s about encouraging residents to use the bus instead of drive,” he said.

Another proposal that won the council’s praise was a plan to further explore adding digital billboards to the sides of some buses.

The idea would require a change to California’s vehicle code but has the potential to bring in an additional $4 to $6 million per year, according BBB Director Stephanie Negriff.

The proposal is to place the digital ads on 25 buses, about one eighth of the total fleet.

Negriff also recommended further studying whether to charge developers additional fees that could be directed to cover BBB operations.

With the expected arrival of light rail in Santa Monica by 2015, she said fewer parking spaces will be required at future commercial developments.

“Developers could be required to pay a congestion mitigation fee equivalent to the amount that they would have had to pay to build and maintain the number of parking spaces that would no longer be required,” a City Hall report stated.

The council also voiced its support for looking into options to develop several sites owned by the BBB that are located close to future light rail stops. Potential sites that could be offered as locations for “transit oriented development” include a portion of the BBB’s headquarters on Colorado Avenue between Sixth and Seventh streets, land attached to the future site of the Expo Bergamot Station and a possible site attached to the Expo line’s terminus at Fourth Street and Colorado.

Though it could raise an additional $1.6 million a year for the BBB, staff urged the council not to increase parking citations 10 percent.

“The general purpose of citation fines is not to raise revenue, but rather to influence driver behavior to ensure that adequate parking is available,” a City Hall report noted.

The majority on the council seemed to agree, though Councilman Terry O’Day argued more expensive parking citations would be the fastest way to bring in new revenue for public transit.

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