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Virginia Railway Express (VRE) officials are holding public hearings this month to solicit opinions on a proposed 4 percent fare increase for fiscal-year 2014.

The fare hike is part of the agency's proposed FY2014 budget, which begins July 1. The increase is necessary primarily because of contractual cost increases based on fixed escalation rates or indexed rates based on consumer-price index adjustments, VRE officials said in a statement posted on the agency's website.

For example, access agreements with Norfolk Southern Railway and CSX Transportation each have a fixed 4 percent escalator clause, they said. Amtrak access fees include an indexed escalator estimated in 2012 to be 5 percent, while a Keolis contract has an indexed escalator that was estimated at about 2 percent.

In addition, higher fuel prices, insurance costs and expenses associated with recent capacity improvements contributed to a budget shortfall, which necessitates a fare hike, VRE officials said.

The FY2014 budget would assume daily ridership of 20,100; maintain current service at 32 trains and defer an additional 10-car Fredericksburg Line train until FY2015; maintain a level jurisdictional subsidy of $16.4 million; include the opening of Spotsylvania Station in January 2014; and fund high-priority capital improvements, such as positive train control and new rail cars.