HomeMy WebLinkAbout1993-05-11 - AGENDA REPORTS - TRANSIT FARE INCREASES (2)AGENDA REPORT
UNFINISHED BUSINESS
DATE: May 11,1993
City Manager Apprc
Item to be presented
SUBJECT: Proposed Santa Clarita Transit Fare Increases
DEPARTMENT: Public Works
On March 9, 1993, The City Council conducted a public hearing on proposed fare increases
for Santa Clarita Transit services. Seven individuals spoke at this hearing, three generally
opposed raising fares, one was concerned about the impacts on low income seniors, and the
remaining comments related to service issues.
Following the hearing, the Council passed a motion asking staff to provide more details on
proposals to provide reduced rates to college students on fixed route service and low income
seniors on dial -a -ride.
College students could be entitled to paying the applicable youth cash fare or use the
appropriate youth monthly pass on local and commuter fixed route buses provided that they
display a valid student body card form the educational institution that they attend at time of
boarding. Otherwise they would be required to pay the full adult cash fare or use an adult
monthly pass. Staff originally proposed developing a special semester pass for College"of
the Canyons students. However since the Council expressed a desire to extend reduced fares
to college students attending any post high school educational institution, the suggested
approach is more feasible because the number of students attending any other particular
institution is minuscule.
A three tier fare structure has been developed dial -a -ride service. Very low income seniors
and persons with disabilities would be entitled to $.25 fare (currently they must pay $.50),
low income seniors and disabled would pay $.50 (the current fare) and all other seniors and
disabled would pay the proposed $.75 fare. The Santa Clarita Valley Senior Center would
administer the program, qualifying individuals for lower fares. They currently have a
process in place for qualifying individuals for other programs based on income and would
simply extend this process to include this program. Santa Clarita Transit would sell ten and
twenty ride punch tickets to the Senior Center, which would in turn sell to qualified
individuals.
Agenda Item;
APPROVED���,
Proposed fare increases
May 11, 1993
page 2
Background information on the original fare proposals is attached.
RECOMMENDATION
Approve implementation fare proposal Option #1 amended to include the proposed reduced
fares for college students and reduced dial -a -ride fares for low income seniors and persons
with disabilities as described above, to be effective July 1, 1993.
Attachment: Fare Proposals -Long Term Strategy. and Options.
fareccmm.2;r k
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 toimprove 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.
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LOCAL FIXED 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
OPTION 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
$ 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 RTD(MTA) 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 Clarita 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 t/1 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 N2 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.
DIAL•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.
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