SR-1000-001-02 (7)
qA
BBB:S.N:DF\~RANS\ADMIN\COUNCIL\fareadjustmentpublichearin~.doc. MAY 1" 'ttIMl
Council Meeting: May 14, 2002 Santa MOnica, California "' WI&
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Public Hearing and Adoption of Big Blue Bus Fare Adjustments
I ntrod uction
At its February 26, 2002 meeting, the City Council set a public hearing for May
14, 2002 to consider a proposed adjustment to the fares of Santa Monica's Big
Blue Bus, The report recommends that the City Council approve specified
adjustments to the Big Blue Bus' fares.
BackQround
Pursuant to Federal Transportation Administration Circular 9030,1 C, the City has
adopted a public comment process which requires public input and a formal
public hearing prior to fare modifications, As a result, the evaluation of fare
structure alternatives was presented at a series of seven community meetings
conducted between January 25, 2002 and February 7, 2002 at locations
throughout the Big Blue Bus' service area, Public feedback on the proposed
changes was favorable.
Staff presented the fare alternatives to the City Council on February 26, 2002
Attachment 1 provides responses to City Council questions raised at the
meeting.
1
qA
MAY 11t 2882
The public hearing has been publicized by public notice in the Los Anqeles
Times and La Opinion on April 14 and 28 and May 12, 2002. Cards announcing
the hearing, in both English and Spanish, were posted on all Big Blue Buses, In
addition, press releases have been sent to the local media.
History of Fare And Service Increases
The City Council last adopted a base fare increase for the Big Blue Bus on June
21, 1983, almost 19 years ago. The last adjustment to the Big Blue Bus fare
structure was an increase in freeway express, student, senior, disabled, and
interagency transfer fares in 1991
In 1997, the City adopted its first Big Blue Bus Service Improvement Program
The SIP showed a tremendous demand for expanded Big Blue Bus
services. New lines were added and service levels on existing routes were
improved to relieve overcrowding on the system. Also, adjustments were made
to meet the demands of increased traffic congestion found throughout the Big
Bus service area, The improvements have resulted in a 46% increase in the
number of system service hours to customers. Based on recommendations in the
current SIP, service may grow by an additional 12% by the end of FY2003-04.
The cost of providing transit service has steadily increased since the last fare
adjustments. Since 1983, the average cost per passenger has increased from
$.66 to $1.49, more than doubling in 19 years, without an increase in cost to the
rider. Attachment 2 shows the average cost per passenger with the proposed
fare adjustment. If the $.50 local cash fare had merely been adjusted for inflation
it would be at $,86 today.
The Big Blue Bus is required to meet a 38% requirement local contribution for
transit operating expenditures, Local operating revenues that may be used to
meet this requirement include passenger fares, advertising revenues, lease
revenues, Getty Center reimbursement, operating interest earnings and
Proposition A Local Return, None of the non-farebox revenue sources mentioned
is anticipated to significantly increase over the short term, to help meet the 38%
requirement. If farebox revenues do not increase it is uncertain that the Big Blue
Bus will be able to sustain a 38% operating return ratio in FY2002-03 and
beyond
Fare Alternatives
At the February 26, 2002 study session, the City Council askl3d staff to examine
the possibility of implementing development or impact fees as a way to generate
additional local revenue, Staff has investigated the possibility iQf using either type
of fee as a transit subsidy to avoid or offset the proposed fare increase. Fees
could be assessed to mitigate the demand for transit service created by the new
development. Such assessments would be sporadic, varyingl with development
activity, and therefore would not assure the steady revenue stream necessary to
fund ongoing operations. The Big Blue Bus needs a stable source of funds to
meet its farebox recovery ratio expectations and the City's remaining
development opportunities are relatively limited
3
Staff examined six fare alternatives using a price elasticity model which
calculates the proportional relationship between fare changes and ridership,
Alternative 1 would increase the base fare from $.50 to $,60 and increase the
different fare categories by a proportional amount. Alternative 2 would increase
the base fare from $,50 to $.75 and increase the different fare categories by a
proportional amount. Alternative 3 would charge $,10 for a local transfer.
Alternative 4 would charge $,25 for a local transfer. Alternative 5 would eliminate
free local transfers, thus requiring passengers wishing to transfer to a second
bus to pay and additional $.50, Alternative 6 would eliminate free local transfers
and introduce a $2 day pass for regular adult fares, The financial effectiveness of
each of the different funding options in relationship to the 38% local revenue ratio
for the next five years can be found on Attachment 3. The chart shows that only
Alternative 2 would keep the Big Blue Bus above the 38% ratio for at least a five-
year period. The proposed change in each fare category is presented in
Attachment 4.
With proposed Alternative 2 the Big Blue Bus base fare will continue to be among
the lowest in the region, The three other largest operators in Los Angeles County
charge $.90 or more base fare with the regional operator, the LACMTA, at $1.35.
The Big Blue Bus also remains competitive with agencies that operate express
service, This proposal will also make it possible to maintain and improve upon
the high level of customer service provided by the BBB while meeting financial
obligations. The most recent line-by-line analysis showed our customer
satisfaction rate at 98%.
4
BudqetlFinanciallmpact
An appropriate revenue amount will be included in the FY 02/03 budget.
Recommendation
Subject to the comments received at the public hearing, staff recommends that
the City Council adopt adjusted fares for Santa Monica's Big Blue Bus effective
July 1, 2002
Prepared by:
Attachment 1:
Attachment 2:
Attachment 3:
Attachment 4:
Stephanie Negriff, Interim Director of Transit Services
David Feinberg, Acting Deputy Director of Transit Services
Responses to City Council Questions From Study Session on Big
Blue Bus Proposed Fare Modifications
Big Blue Bus Cost Per Passenger 1984 to Present
Projected Local Revenue of Funding Alternatives
Current and Proposed Fares
5
ATTACHMENT 1
TO: Mayor and Council members
FROM: City Staff
SUBJECT: Responses to City Council Questions From Study Session on Big
Blue Bus Proposed Fare Modifications
Introduction
At its February 26, 2002 meeting, the City Council asked staff to respond to a
variety of questions that arose from its study session discussion regarding fare
alternatives and funding of the Big Blue Bus. This memorandum will answer the
questions raised at the study session,
Discussion
ALTERNATIVE FARE PROJECTIONS
There was confusion at the study session regarding a chart (Attachment A)
showing how much each fare alternative would generate in FY 2003. The results
of the chart show that Alternative 2, which raises the base fare to $.75, would
generate the most farebox revenues for the Big Blue Bus. There were also
questions regarding a spreadsheet slide (Attachment B), which shows the
anticipated revenue shortfall below the 38% ratio unless fares are adjusted
Raising the base fare to $.75 would cover the shortfall for the entire five-year
period,
1
An impact fee would be applied to new development and must be related to the
cost of service needed to accommodate the development. Factors that will
influence the revenue generation potential include the land uses and type of
development subjected to the fee, the amount of development projected, and the
cost of the services that will be spread across the development.
As the fee would be used for Big Blue Bus ongoing operations, the reliability and
stability of the impact fee must also be considered. Generally, reliable and stable
revenue streams are desired to minimize financial uncertainties for ongoing
operations. The one-time payment of impact fees will follow the pace of
development in the City and will be subject to the development climate. Most
development occurs in cycles, therefore, the revenue stream is not likely to be
consistent from one year to another. Development activity in Santa Monica is
apparently declining at present.
The costs of establishing and administering an impact fee program for Santa
Monica have not been quantified, However, based on the experience of San
Francisco and others, the costs to establish the program (studies to estimate
development, cost impact studies, rational nexus studies, fee schedule analysis,
public outreach and hearings, and legal support) could be in excess of $1 million
and ongoing administration costs are difficult to estimate.
An effective impact fee program will take at least two years to phase into the
development cycle. The technical studies required to establish the program and
3
rollrde
ncre
table tr' sit pe tin
if1\{ 1n preve thl ecom!II€f1aedi fa:re
:FFORT TO MAINTAIN THI 50 LOCAL CA;H AR
adoption 1 83 taff na mad Ir"'inlP,nrltln~ ffons to lai th
$,5f) Inr:r11 ca.sh fare The ig Bit Bu '<,'mkmg with A:--Igl Ie ClJ'Jllty
Metropollitan T spi)rtatio ^uthmHy 'MT A, creal'fMl tl1 P po itio A
Ibsidy Program. U!'iing the r:rltflr1 eveloped with MT staff. the Big: 131
wa bl 10 modify tn~ cailculatio of ho"!: the Iocr,;! 'evem.Je ecovery mount is
determ ned ~hO\l'm Attachment Thi r::ranq9 lowed the iq BI to
mea the 38% requi 9Hlent without is. ng 50 lOCal cash far.s:
the City Ct)UrlCII opted th. nceme ts to most arec:ategories except
the local C:8sr iB'Sd serHor bled laca tri K-'
stu.dents coUege R;tUr! tAl reeway €!l<press rili
to
fF~~'JJ~Y P.Yp ~!'; !';eruor
thes cat9goriA~ Alped
ea ,h fare
riflers
Id nter:::lq~ncy tra nsfers
Cf8as~nq feres
del in
taU
ad s~m
Staff
\fJor'.-:Rd
Hil'='! policy lev~1 to
Wh:e thl MT ^
Ih local
reased th
en rs'::::cr
raUO at
10/0
th ;::Itif7
lio f(l)fll '%) In 3B%
h; ld pI FI@d to in rease thl Iffihe
part tn legl~lat ih created
4(}O/o In
xt tile
re: 'iew 'lid A<;
IIOC3 te
thR
level
MT A, the MUI ic=ip;j:1 Ope to were ah~ to
five-yea Cr~elJB in ;All fund ng rOQ
~ffectrvel fmirJ'3.ting
AnfiiHintl1e
one transit system to reach their destinations. It would also create dissatisfaction
among those riders who most rely on public transit for essential transportation
needs, by requiring them to pay a full fare at each boarding.
Restructuring existing fares does not preclude the Big Blue Bus from offering a
day pass, however, it would be prudent to monitor the effectiveness of the new
regional pass program scheduled for implementation on September 1, 2002
before considering other viable, convenience fare options. If both a regional and
a local program were implemented concurrently, it would be difficult to promote
and monitor impacts appropriately. The Big Blue Bus may wish to consider
implementing a day pass in the future, based on the experience of the regional
program and status of other advanced fare technology efforts.
COMPARISON OF COSTS: 1983 VERSUS 2002
A request was made by the City Council to compare the costs of Big Blue Bus
operations in 1983 versus today. July 1, 1983 was the last time the Big Blue Bus
raised its local cash fare. Since that time, the cost of operating service has
increased across the board. The chart below looks at comparable operating and
capital items.
7
<(
c
Q)
E
.c
(..)
co
~
en
1'-'
en
~
'-~
m
s::
ct
Q,)
-
ea
LL ~
Q;,l
Q,) ~
> t::
""
11_; -'i;/;;!'
.......' 1;1')
m ~
t:CL
Ii-
Q,)
.....,
~
crt
en, 't:l
::I, ~
m ~
.~
OJ' e
::;:In.
-
m
C)
11_,
[CII
1j,
i:
~
':<1
crJ
00
11
(Xl
M
e
>-
LL
r::
CIl
III
III
Z ~
<( C.J
...J r::
ll. CIl
D:: ....
VJ<(~
:J~O
CO "'i
wffio
:3 I- 'j;;
coLLIlI
C)O;
- I- ,e;.
coOv#
::J:'E
VJ CIl
~ ~
Z >
VJ e
c..
.s
CIl
C.J
~
CIl
VJ
-
r::
Q)
E
~
C.J
ro
~
l"'-
e
>-
LL
LC)
o
U)
e
>-
LL
"I
0)
LC)
o
>-
LL
....
..q-
..q-
e
>-
LL
-
ooo-.:too
....000....
....('I)('I)..q-
Oco..oa:i
LC)LC)O)O)
LC)OOCOO)
ai-N..o
('I) ('I)
M
e
>-
LL
00
I"'-
N
e
>-
LL
OOLOLC)
00 CO ('I)
NLC)('I)('I)
a:iNNri
CO..q--.:tOO
0000-.:tLC)
~-N'''''-
('I) ('I)
....
e
>-
LL
('1)(0"1('1)
COLC) ('I) I"'-
LC)CO('l)LC)
ri..ol"'-O
LC)O)LC)O
....1"'-('1)0
ai-NeO
"I -"I
>.
"0
III '00
ClQ).c
r:: III :J
fiir::CJ)
.... Q) Q)
Q) c. ....
c.xro
OQ)LL
I <Dc:(
III t c.
~ ~ e
,EUCl.
"0 en enro
r::Q) en en _
Q) Q) 0
~-l-ll-
W
LC)..q-0)
I"'-I"'-..q-
"100....
..0 eO "I
00....0
I"'-OOCO
airiri
1"'-"10)
00000
..q-OON
ri..oai
0)('1)"1
LC)CON
airiri
......q-LC)
OCOCO
('1)1"'-0
ll'i~o
0000)
..q-..q-OO
airiN'
....
('1)0)"1
000)00
0000)
oaiai
NLC)I"'-
N('I)LC)
airiN'
....
..q-O)('I)
('I)O..q-
N..q-CO
eOr--:-ri
COOl"'-
00. ..q-. "I.
00('1)"1
....
O..q-..q-
0"1"1
..q-('I)I"'-
~r--:-""-
COI"'-..q-
..q-('I)OO
a:i~N'
....
....('I)-.:t
00"10
LC)..q-0
~ai~
('I)LC)O)
('I) .... ..q-.
OO..q-N
....
Cl
r:: en
fii ~
<D 55 ~
c.>:J
OQ)a5
I 0::: >
en x Q)
Q)OO:::
:J.c
r::Q)~ro
~rooo
Q)LL...JI-
0:::
<fl-~
......q-
0) N
MM
"1M
<fl-~
Noc)
~~
..q-M
"1M
<fl-~
.... OC)
qN
LC).,j.
"1M
<fl-~
.... lt)
C!:?Q)
LC).,j.
"1M
<fl-~
01"'-
"IN
crieD
"1M
?fl.';1.
ou)
00 U)
COO
N..q-
<fl-~
COlt)
qq
Noc)
('I)..q-
o
+-
III
D::
~
CIl
o >
:;::; 0
ro C.J
0::: CIl
~~
Q) III
> C.J
o 0
lfi...J
0::: +
x ><
o 0
.c,g
Q) CIl
.... ....
ro III
LL.LL
CO -
"II"'-
"II"'-
.0
"I -
LC)O
LC)LC)
.0)
LC) .
........
~-
1"'--
0000
0)0)
.CO
CO .
"II'-
0)0)
.CO
..q- -
......-
~-
....-
I"'-CO
"?g
~ai
<'!.~
..q- .
.... ..-
~-
gp:::-
('1)"-
ai -.:t.
1"'-0)
"?~
('I) .
......-
~-
~LO
LC)('I)
o 0).
COCO
oo.:g
"1-
....
~
1'-1'-
COLC)
CO. 0
00
o..q-
N'OO
....
~
00 CO
....00
"I_I"'-
gri
~co
EfiN'
-l
-l
CJ) c:(
W LL
::> I-
Z 0:::
w 0
> I
W ~
0::: ....
-l 0
c:( <fl-
U 00
o ('I)
-l~....
+ &, ~
x ('I) 0
O"OQ)
(Xl~:J
W '5 55
0::: CT >
~~~
f".I
~
Q
~
"""
10
I.Il
Q
"""
~
f".I
10
1.0
(Q
0)
cli
f'\jJ
I.Il
~
r--
If$
",.,.
10
f".I
~
~
"fo
'<:t
"f""Io
CI)
..;
10
"fo
.1--.
OJ
.0:.
;aQ
~
"""
~
o
::t.
w
u
.~
(j,I
tI;,I
I-
Z
w
rx;:
0..
o
I-
~
eo
Cl)
-
c::
E
.c
I,.)
I;lJ
~
Ct::
'"
z
w
rn
Cf)
<(
a.
~
0..
l-
t.?
o
l)
:J
a::lI
::)
..J
!II
~
m
Q)
""'-
nl
u..
..c:::
In
nl
U
8
o
-:l
::;:;l
0
N
0-
g
N
:;n
:n
;;:n
r:o
;;:n
:;J}
m
;:;n
(0
~
::n
~n
0':,
:;n
-.,,:-
;;;n
O'l
l;0
G'l
Q)
N li:
m
m
;;:n
o:l
0
rn
0"':1
m
CD
Q)
a;;"
a;;,
m
co
m
CD
00
;j)
I.f)
ro
01
'<t
:0
:;;D
I;'.!
1500
I'-
0
0
~
lJ..
fn
CI)
>
.-
...
C'O
c:
....
CI)
... CD
<C 0
0
C) ~
c: lJ..
.-
"C
c:
::s
LL
~
(\') 0
- CI)
c:
Q) ::s L!)
E 0
..c: c: 0
u CI) C\l
$ >-
<( > lJ..
CI)
D:::
-
C'O
(.)
0
..J
"C
CI) '<t
... 0
(.) 0
C\l
CI) >-
.- lJ..
0
....
D..
if;- (\J
" U') q;)
C")
o
o
~
lJ..
~
o
1.0
'<t
~
o
1.0
(\')
~
o
o
(\')
~
o
1.0
C\l
~
o
1.0
.....
eft
o
.....
~
o
o
~
o
1.0
~
o
o
C\l
~
o
o
'<t
Attachment 4
CURRENT AND PROPOSED FARES
Fare Type
Current
Proposed
Local Cash Fare $.50 $.75
Tokens (1 O)/Little Blue Card $.45 $.70
Student/Little Blue Card (K-
12) $,25 $.35
Senior & Disabled (local) $.25 $.35
College Student Card $.40 $.60
Line 10 Express Regular $1.25 $1.75
Line 10 Express Senior &
Medicare Card $.60, $.75
Line 10 Express Disabled $.25 $.35
Interagency Transfer $.25 $.2~..
Big Blue Bus Local Transfer Free Free