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It's not free, it's fareless.
Our transit system is paid for by a few different funding sources: there is money from the federal transit authorities (usually used for capital costs, such as buying new buses), the university pays a chunk so that students can ride and so that the transit system will operate a night bus, a local employer pays so that buses serve their campus directly, the school district pays so that the system operates circulator buses between the two high schools, and then there is a fee attached to everyone's water bill in the city (approx. $4/mo) to fund the rest and make the system fareless. Given the high rate of housing being rental housing here (we're a college town, after all), most people don't actually pay that fee directly.
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If I am not better, at least I am different. --Jean-Jacques Rousseau
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