The Oakland, Calif.-based AC Transit board of directors adopted a new 10-year fare policy that automatically raises fares at regular intervals. The first change will take effect in August with a 10-cent increase in the basic adult fare and a five-cent fare increase for youth, seniors and the disabled.

In what the directors called a "tough decision," the board voted 5 to one — with one abstention — to implement the changes largely because they felt they had no choice.

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

The changes, effecting both AC Transit and Dumbarton Express riders, are intended to lead to more logical and equitable fares and pass prices, predictable fare increases over a 10-year period and creation of a seven-day bus pass. Primarily, now the agency will be better able to plan its budget by better knowing when and how much revenue to expect from fares.

"We're left with few other choices given the volatility of current funding sources," said Interim GM Mary King. "We have to consider fare increases, and the new fare structure will result in at least one source of predictable revenue for AC Transit."

The new 10-year policy raises fares by .25 cents every five years at two-year and three-year intervals. A re-evaluation of the agency's finances is mandated before any of the scheduled increases take effect.

The first fare increase in August is expected to boost the agency's annual revenues by $2.4 million, which roughly equates to 29,000 more hours of bus service.

Currently, the agency is facing a $14.9 million shortfall in working capital for the fiscal year ending on June 30, 2012. The agency is continuing to seek other revenue sources.