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HomeMy WebLinkAbout1993-03-09 - AGENDA REPORTS - TRANS FARE ADJUSTMENTS (2)19MV_9 SUBJECT: BACKGROUND March 9, 1993 Proposed Transit Fare Adjustments Public Works City Manager Apprc Item to be presented Most of the revenue dedicated to support transit operations is tied to various sales taxes. Due to the decline in the economy these revenue sources are shrinking. Combine this factor with increasing costs due to inflation and demands for new service, and it has become necessary to raise the amount of revenue paid directly by the customer of transit services. The alternative could be a reduction of transit service. The fare options presented on the attached pages were designed to minimize any loss of passengers. Another factor that these fare proposals address are problems relating to the current fare structure that need to be corrected. For example eligibility to use dial -a -ride services for seniors is age 60, however the senior discount fare on all services applies only to individuals 62 years of age and older. The proposed options change this eligibility to age 60 for consistency. Another issue needing resolution is the definition of who is eligible for student/youth fares. Up to this point there has been no written policy. The proposed options provide such a definition. The attachment lays out a proposed long -tern fare strategy for.Santa Clarita Transit. In the future it is proposed that either cash fares or pass prices be raised but not both at one time. For this fare adjustment staff is recommending adjustments to both payment methods due to very low fares currently in existence and to develop a reasonable base for future fare adjustments. Concerns have been raised about the impact these fare changes would have on seniors using the dial -a -ride services and students of College of the Canyons. Staff has contacted the Santa Clarita Senior Center and College of the Canyons to discuss alternatives that could reduce fares paid by COC students and low income seniors. Agenda Item: Council Report - Fare Adjustments March 9, 1993 Page 2 Approve fare option #1 for implementation on April 1, 1993. Direct staff to continue negotiations with the Santa Clarita Senior Center and College of the Canyons to develop discount programs for their constituents. ATTACHMENTS Long Term Strategy Local Fixed Route Fare Proposals Commuter Fare Proposal Dial -A -Ride Fare Proposal fareccmm.agn CITY OF SANTA CLARITA NOTICE OF PUBLIC HEARING FARE ADJUSTMENTS FOR LOCAL, COMMUTER AND DIAL -A -RIDE SERVICES OPERATED BY SANTA CLARITA TRANSIT PUBLIC NOTICE IS HEREBY GIVEN: A Public Hearing on adjustments to fares charged on local, commuter and dial -a -ride services. operated by Santa Clarita Transit will be heard by the City Council.Two options have been proposed which could raise cash 'fares for adults (anyone age 18 through 59 except full time high school students and disabled individuals), to $.75' on local buses,' $3.00 on commuter buses and $.75 on dial-a=ride. Youth cash fares (anyone age 5 through 17 plus full time high school students) could be $.50 local, $1.50 commuter and $.75 dial -a -ride. Senior cash fares could be $.25 local, $1.50 commuter and $.75 dial -a -ride. Monthly pass fares could be $20.00 Adult local', $10.00 youth, senior and disabled local, $100.00 Adult commuter and $50.00 youth, senior and disabled commuter. The City Council could choose to adopt either of the options proposed or any options or variation of fare changes provided no class of passenger. would be charged a fee higher than the highest fee. identified above. Also it is proposed that the definition of. senior be changed from 62 and older to 60 and older and the definition of youth be changed to exclude college students. The hearing will be held by the City Council in the City Hall Council Chambers, 23920 Valencia Blvd., 1st Floor, Santa Clarita, the 9th day of March, 1993, at or after 6:30 p.m. to consider fare changes on Santa Clarita Transit. Proponents, opponents, and any interested persons may appear and be heard on this matter at ,that time. Further information may be obtained by contacting the City Clerk's office, .Santa Clarita City Hall, 23920 Valencia Blvd., 3rd Floor, Santa Clarita. If you wish to challenge this order in court, you may be limited to .raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council, at, or prior to the public hearing. Date: February 11, 1993 Donna M. Grindey, CMC City Clerk Publish Date: February 16, 1993 FARE PROPOSALS - LONG TERM STRATEGY The succeeding three pages outline options for increasing fares on each of the three types of transit service Santa Clarita provides. The intent of these proposals is to improve farebox recovery, the percentage of operating costs paid directly by the riding customer. Several considerations were used in developing the options. Research has shown transit systems that raise fares infrequently but dramatically experience large ridership losses, whereas transit systems that raise fares frequently but by small amounts rarely experience such losses. This was particularly true in the late 1970's when transit systems utilized growing transit subsidies to keep fares low, then were forced to raise fares dramatically when subsidies shrunk in the 1980's. This presents a dilemma. Frequent, small increases in fares implies nickel increases every 12 to 18 months.However that would result in fares such as 60 or 65 cents, which mean the customer must carry several different denominations of change. (Transit systems do not make change to prevent robberies and avoid delays resulting from making change.) The most user friendly fare would be any multiple of 25 cents. Obviously it is not practical to raise fares by 25 cents every year. The alternative is to raise cash fares by 25 cents and not raise pass prices. This results in deep discounting of passes and softens the blow to those who may find a 25 cent fare increase a hardship. In subsequent years pass prices are raised by small increments until the pass price breaks even with the cash fare. In the following year the cash fare is raised by another 25 cents and the process is repeated. The concept of deep discounting has produced very positive results at transit systems employing it, by preventing ridership losses and often generating better than anticipated revenue growth. The options presented here do call for increasing both cash fares and passes. This is due to the very low average fare and subsequent farebox recovery on Santa Clarita.Transit services. For example the average fare for users of student or senior/disabled passes is 9 cents a ride. These proposals are an attempt to establish a more realistic "floor" for both cash and pass prices. In subsequent years the pattern described above would be used for fare adjustments. The farebox recovery rate does not improve dramatically under any of the options presented. The only way to dramatically increase farebox recovery is to dramatically increase ridership. Frequency of service, span of service (how early or late service is available), directness of service and ease of access are the most important factors to the transit customer. In fact price takes back seat to most service quality measures. However if the service is priced too high, customers will be driven away. On the other hand if it is priced low and the service is inadequate, customers will be driven away also. farestrt;rjk LOCAL F KED ROUTE FARE PROPOSALS FARE CATEGORY CURRENT FARE OPTION 1 OPTION 2 Adult $ ..50 $ .75 $ .50 Youth $ .20 $ .50 $ .25 Senior/Disabled $ .20 $ .25 $ .25 Children under 5 FREE FREE FREE Transfer FREE FREE FREE Adult Monthly Pass $18.00 $20.00 $20.00 Youth Monthly Pass $ 4.00 $10.00 $10.00 Senior/Disabled Monthly Pass $ 4.00 $10.00 $10.00 Youth would be redefined to include anyone aged 5 through 17 inclusive plus full time high school students over the age of 17. College students would have to pay the adult fares. (Currently College students pay youth fare.) Typically transit systems charge adult fares to anyone 18 and older, however some systems have deep discount passes exclusively for students of a particular college partially subsidized by the college. Senior would be redefined to anyone aged 60 and older. Currently it is 62 and older. This change would make the senior fare consistent with dial -a -ride eligibility. Option #1 should generate $39,000 of additional revenue per year and raise farebox recovery from 10% to 12%. If implemented in April 1993, an additional $9,000 in revenue would be generated in FY 1992-93: Option #2 should generate $13,000 of additional revenue annually and $3,000 in FY 92-93. These estimates are very conservative. The Simpson -Curtin fare model was used to estimate revenue impacts. Its thesis is for every 1 % increase in fare there is a .3 % decrease in ridership. The deep discounting of passes should result in a shift from cash fares to pass use for many passengers rather than a loss of these customers that the model assumes. Plans to develop more pass sales outlets, encourage employers to subsidize passes utilizing new provisions in tax law, and a major promotion campaign are three projects to be undertaken in early 1993 that should increase ridership even with the fare increase. This could result in more revenue growth than estimated above. COMMUTER FARE PROPOSAL FARE CATEGORY CURRENT FARE OPTION 1 OPT1ON 2 Adult $ 2.25 $ 3.00 $ 2.75 Youth $ 1.00 $ 1.50 $ 1.25 Senior/Disabled $ 1.00 $ 1.50 $ 1.25 Children under 5 FREE FREE FREE Transfer to Santa Clarita local/DAR FREE FREE FREE Transfer to RTD $ .25 $ .25 $ .25 20 -Ride Punch Ticket $ 45.00 $ 60.00 $ 55.00 Adult Monthly Pass $ 85.00 $100.00 $100.00 Youth Monthly Pass $ 27.00 $ 50.00 $ 50.00 Senior/Disabled Monthly Pass $ 27.00 $ 50.00 1 $ 50.00 Definitions of Youth and Seniors would be the same as with the local network. Passengers boarding in Santa Clarita with a transfer or local pass would pay the difference between the prevailing cash fare on the local network and prevailing cash fare on the commuter buses. Passengers. boarding in Los Angeles with a RTD(MTA) transfer would pay the difference between the prevailing RTDOvITA) base cash fare and the prevailing commuter bus fare. Santa Clarita commuter buses should honor Metrolink fare media as a courtesy on a 90 day trial basis. Since Metrolink fares are higher than commuter bus fares there should be no loss of revenue to Santa Clarity Transit. It is not anticipated that this arrangement would create overload problems on commuter buses, however should unanticipated overloading occur a trial period is warranted. Option 111 should yield $39,000 additional revenue per year or $10,000 additional revenue in FY92-93 if implemented ion April 1, 1993. Farebox recovery would improve from 28 % to 34%. Option 112 should generate $33,000 in additional revenue annually, $8,000 in FY 1992- 93. Farebox recovery would improve to 33 %. These figures were calculated in the same manner as local service and the same qualifiers apply. DIAI,A-RIDE FARE PROPOSAL Current fares are $1.00 for adults and $ .50 for youth, seniors and disabled. Since adults are now limited to using the system in the evening hours when local fixed routes are not operating, it is proposed to simplify :the fare to $ .75 for all riders except escorts who would continue to ride free. Transfers to local fixed route and commuter buses would be issued free. Passengers boarding with local transfers or passes would pay the difference between the prevailing cash fare on local buses and dial -a -ride. Passengers boarding with adult local passes, commuter passes or transfers would ride free. This increase should generate $12,000 of additional revenue per year or $4,000 in FY 1992- 93 if implemented on April 1,1993. At this point it is hard to calculate the change in farebox recovery because the reduction in unproductive hours will actually have a greater impact. fareprop;rjk City of .Santa Clarita Jan Heidt Mayor George Pederson Mayor Pro -Tem Carl Boyer Councilmember Jo Anne Darcy Councilmember Jill Klajic Councrimember 23920 Valencia Blvd. Suite 300 City of Santa Clarita California 91355 3 February 25, 1993 Phone (805)259-2489 Fax (805) 259-8125 RECEIVED FEB 2 5 1993 PUBLIC WORKS DEPARTMENT CITY OF SANTA CIARITA Mr. Brad Berens SANTA CLARITA VALLEY SENIOR CENTER 22900 Market Street Santa Clarita, CA 91321 Dear Mr. Berens: As you are aware, the City of Santa Clarita is holding a public hearing on proposed transit fare increase on March 9; 1993. One area of. concern that you raised in your newspaper article and was also raised by Council members at a City Council meeting, is the impact of raising Dial -A -Ride fares on low income seniors. I would like to propose an alternative to help mitigate the impact of these fare changes. . First I want to present some background why the,fare increase is being proposed. The poor state of the local economy is resulting in a reduction of revenue dedicated to transit while inflation is increasing costs. Even though we have one of the lowest cost structures in the state, we still must consider increasing fares to avoid being forced to cut services. The proposed cash fare retains the current practice -of charging senior and disabled Dial -A -Ride customers the adult cash farecharged on local fixed route buses. The rationale for charging higher fares on Dial -A -Ride is the higher cost of transporting customers on Dial -A -Ride services. The proposed fare is lower than many of the peer Dial -A -Ride systems we reviewed, the highest fare is Antelope Valley which charges seniors and disabled $1.50. We did not feel our proposed fare would place an undo burden on most customers. We do acknowledge some seniors may have difficulty paying the higher fare. Therefore I suggest that the Cit and Senior Center develop a program that low mcome semors can a 1 for assistance at cou uce the c FrUnsoortation even helnw&zistin fares. I realize you conveyed concerns to Jeff Kolin that such a program would stigmatize those seeking assistance, however I think a program can be designed that can minimize any embarrassment or stigmatizing. For example, if the proposed fare adopted by the City Council, regular adult monthly nasses couldbi assistance could be given these passes Mr. Brad Berens February 25, 1993 Page 2 for use on both fixed route and Dial -A -Ride at a greatly reduced price, therefore no one would know that an individual was low income (non -eligible seniors may choose to purchase adult monthly passes at face value for use in Dial -A -Ride because of the discount it would provide frequent users). Determining eligibility and distributing passes could be handled discreetly and confidentially by the Senior Center. Funding would come through next fiscal . year's MOU agreement. I would like to discuss with you at your earliest convenience or any other alternative that can help mitigate the impact of the proposed fare increases on seniors. I look forward to hearing from you. Sincerely, Manager Pq . u.4 berens.bus City of Santa Clarita Jan Heidt Mayor George Pederson Mayor Pro -Tem Carl Boyer Councilmember ,Jo Anne Darcy Councilmember Jill Klalic Councilmember 23920 Valencia Blvd. Suite 300 City of Santa Clarita California 91355 February 25, 1993 Phone (805)259-2489 Fax (805)259-8125 Dr. Dianne G. Van Hook Superintendent - President COLLEGE OF THE CANYONS 26455 North Rockwell Canyon Road Santa Clarita, CA 91355 Dear Dr. Van Hook: As you may know, the City of Santa Clarita is holding a public hearing on proposed fare increases on March 9, 1993. When the City Council set the public hearing concerns were raised regarding the impact of fare increases on students of College of the Canyons. Besides increasing the basic adult cash fare from $.50 to $.75 and adult monthly passes from $18 to $20, it is also proposed to clarify the eligibility of youth fares.. Currently some College of the Canyon students are purchasing youth passes at $4 per month. In order to mitigate the impact of higher fares to students and also to encourage more transit usage to COC, I would like to propose a concept successfully in effect at many other colleges. Under this proposal, students could purchase a sticker on campus that could be affixed to their student body card that would allow them unlimited use of the local transit system for the semester. These stickers could be deep discounted with the College and Santa Clarita Transit splitting the difference between the full value of the pass and the deep discount. The value of the deep discount, the contribution of the College and other details can all be negotiated. However, one scenario could be as follows. If a semester spans all or part of four months, the sticker would be good for unlimited travel in all four months. The value of a sticker, assuming the new fare structure is adopted, is $80. The sticker could be sold for $40, a 50% discount equal in value to the new youth pass, with COC paying $20 per sticker. If 100 stickers are sold per semester, the cost to COC would be $2,000 per semester. Dr. Van Hook February 25, 1993 Page 2 I realize budgets are very tight at this time. Certainly wemay not be proposing to increase fares at this time if other revenues weren't being reduced. If you are interested in pursuing a deep discount semester pass or some other special arrangement, please contact me at 294-2505. I look forward to your response. Sincerely, Ro ' yne . Transportation Manager cc: Jeff Kolin Bob Murphy RK:rd vanhook.bus