HomeMy WebLinkAbout1993-02-09 - AGENDA REPORTS - TRANSIT FARES RATE INCREASE (2)AGENDA REPORT
City Manager Approva
Item to be presented
Jeff Kolin
CONSENT CALENDAR
DATE: February 9, 1993
SUBJECT: TRANSIT FARES RATE INCREASE
DEPARTMENT: Public Works
BACKGROUND
This is to establish a March 9, 1993, public hearing for the increase of transit fares. As part
of the mid -year budget, Public Works staff has submitted a decision package (see attachment)
to increase fares.
The intent of thisdecisionpackage is to improve farebox recovery and the percentage of
operating cost paid directly by, the riding customer. Of the two options on the proposal (see
attachment), Option One calls for a higher cash fare increase for both cash fares and passes,
and is the one recommended.
RECOMMENDATION
Set a March 9, 1993, public hearing date to adjust transit fares.
ATTACHMENTS
Fare Proposals
tmincm.agn.md
APPROVED
3 9-93
Agenda item:
FARE PROPOS - LONG TERM STRATE Y
The succeeding three pages outline options for increasing fares on each of the three types of
transit service Santa Clarity 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.
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FARE CATEGORY
CURRENT FARE
OP71ON 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 111 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 I % 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. I -a
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 faros are higher than commuter bus fares there should be no loss
of revenue to Santa Clarita Transit. It isnot anticipated that this arrangement would create
overload problems on commuter buses, however should unanticipated overloading occur a
trial period is warranted.
Option #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 #2 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.
DIAIrA-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 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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