sr-052510-3aCity Council Meeting: May 25, 2010
Agenda Item:. ~°"-
To: Mayor and City Council
From: Stephanie Negriff, Director of Transit Services
Subject: Study Session on Issues Addressing the Big Blue Bus Structural Deficit
and Alternative Proposals to Generate Additional Transit Revenues
Recommended Action
Staff recommends that the City Council review and provide input on:
1. Issues related to the existing Big Blue Bus structural deficit and
alternatives for addressing the structural deficit through FY 2014-15
2. Alternative fare structure options and revenue impacts
Executive Summary
The City of Santa Monica's Big Blue Bus operates 19 transit routes within a 51-square
mile service area, including the City of Santa Monica, and carries an estimated 22
million passengers per year. The system, which is an enterprise fund of the City, relies
solely on dedicated transit revenues for its operating and capital programs.
The Big Blue Bus' (BBB) fund balance currently projects a structural deficit of $6.4M in
FY 2010-11 which is estimated to grow to $18.2M over the next five years. A fare
restructure proposal that increases passenger revenues is needed to mitigate a portion
of the structural deficit. These revenues, combined with operating efficiencies, strategic
use of BBB one time funds, and citywide labor negotiations of sustainable -labor
agreements may be used to minimize future reductions in service and riders.
Background
Big Blue Bus Svstem Overview
The City of Santa Monica's Big Blue Bus (BBB) has operated transit services within the
City of Santa Monica and throughout west Los Angeles County since 1928. Its service
covers a 51-square mile area including the City's eight-square mile area. The BBB
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connects with other regional and municipal transit operators including Culver CityBus,
Torrance Transit, LADOT and Metro, at major transit hubs such as Downtown Santa
Monica, UCLA, Pico/Rimpau Transit. Terminal, LAX Transit Terminal, Metro Rail Green
Line at Aviation Station, and Union Station in downtown Los Angeles. The system
operates primarily local, fixed-route bus service, but within the last decade has
implemented two bus rapid transit routes on Lincoln Blvd. and Pico Blvd., and Mini Blue
community transit service within Santa Monica. In FY 2008-09, BBB carried 22 million
annual passenger trips, 4.8% more riders than the previous year.
In 2007, 60% of trips made by BBB passengers began or ended in Santa Monica or
were entirely within Santa Monica. It is important to note that a significant number of the
remaining 40% of trips passed through Santa Monica and provided a transit alternative
for nonresidents who would otherwise have driven through the City.
Only two of BBB's 19 transit routes, Mini Blue Crosstown and Sunset Rides, operate
entirely within Santa Monica. Of the remaining 17 lines, 14 routes operate in Santa
Monica and connect the City with other municipalities, and three operate entirely outside
the City. Two of the three routes that operate entirely outside the City are much more
productive than the system average in terms of passengers per vehicle service hour
and provide Santa Monica residents with critical connecting service to UCLA and
Brentwood among other locations. The third route is apeak-period-only connector
service that operates between the Pico Rimpau Transit Terminal and Cheviot Hills in
West Los Angeles and does not enter Santa Monica.
The City owns and operates a transit fleet of 198 buses and began purchasing
alternate-fuel buses in FY 2001-02. Today, 50% of the fleet is fueled by liquefied natural
gas (LNG). In the last decade, the BBB has diversified its fleet, which previously had
consisted primarily of standard 40-foot transit coaches. This fiscal year, 15 hybrid
electric buses will replace the. current Mini Blue fleet and 16 60-foot articulated buses
fueled by compressed natural gas (CNG) will replace 16 standard diesel-powered
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buses. Articulated buses will be deployed on the system's most productive lines to
enhance seating capacity while streamlining operating costs by increasing the number
of passengers carried per vehicle.
Labor costs will comprise two-thirds of the Big Blue Bus $58M operating budget in FY
2010- 11. The BBB employs 412 FTE positions in six divisions consisting of Transit
Services, Transit Maintenance, Transit Programs and Business Services, Transit
Customer Services, Transit Safety and Security, and Transit Executive. The Transit
Services division, which includes 305 motor coach operators (MCOs), MCO training
coordinators and supervisors, represents 74% of all BBB employees. Transit
Maintenance is the next largest division with 80 employees (20%). The remaining
administrative divisions total 27 employees, comprising 6% of the employee base. The
total number of Department employees has been relatively stable in the past five years,
as no additional positions have been added to the operating budget since FY 2005-06.
Bip Blue Bus Budget Overview
The Big Blue Bus is an enterprise fund of the City and relies solely on dedicated transit
revenues for its operating and capital programs. To fund its operating budget, BBB uses
a combination of locally-generated, County-wide, and State transit revenues. Although
these sources are also eligible to fund capital projects, the transit Capital Improvement
Program is primarily financed with Federal transit formula and discretionary funds.
Local revenues fund approximately $17.5M of the operating budget and are derived
from passenger fares, leases and rental revenues, advertising, charter and other local
revenues. Passenger fares at $11.6M annually, comprise 67% of all local revenues.
Leases and rentals revenue is generated from commercial real estate and other parcels
purchased with BBB funds that are currently not in use for transit-related purposes.
Parcels adjacent to the BBB facility were purchased in anticipation of future bus yard
expansion. Other properties were acquired to support the development of Expo light rail
transit in Santa Monica. Annual lease revenues, based on existing contracts total
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$1.8M. Exterior and interior bus advertising sales generate an additional $1.6M per year
to offset operating expenditures. Other revenues, which total $1.8M per year, include
Tide development fees, Prop A Local Return and inter-departmental transfers of
revenues to fund BBB maintenance of Fire Department vehicles. Revenues from
incidental charter services are modest at $245,000 per year.
State and County funds are derived from the BBB's- participation in the regional Formula
Allocation Procedure (FAP) which distributes transit subsidies to 16 municipal transit
systems within Los Angeles County and Los Angeles Metro based on the level of
service miles operated and passenger fare revenue generated. Through the FAP, the
BBB receives a percentage share of funds from State Transportation Development Act
(TDA), State Transit Assistance Fund (STA), Proposition A (40%) Discretionary,
Measure R (20%) Operating and other discretionary programs established by Metro
using Proposition A and C funds. These non-local transit subsidies contributed $31.8M
to BBB's operating budget in FY 2009-10. When combined with local revenues, the total
FY 2009-10 subsidies of $49.OM fall below budgeted expenditures of $57.5M by $8.5M,
primarily due to a decline in sales tax revenues, resulting from the economic recession
and the State's diversion of STA funds. In FY 2009-10, the BBB operating budget was
balanced with the use of $5M of capital funds reprogrammed for operating purposes,
$2.6M of one-time reserve funds, operational reductions of $.8M and additional revenue
from natural gas purchases by Metro of $.1 M.
Capital funds available for operating purposes are primarily derived from savings from
completed capital projects. The financial scenarios evaluated as part of the proposed
fare restructuring do not assume delay of scheduled capital replacement projects, as
deferring capital programs result in increased operating costs. The receipt of
approximately $14M in transit capital funds in FY 2008-09 from the Federal American
Recovery and Reinvestment Act of 2009 allowed BBB to advance several capital
programs, including bus replacements that were scheduled in future years.
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As the majority of non-local transit operating subsidies is generated from sales taxes,
the economic recession has negatively impacted transit revenue streams. In FY 2009-
10, transit subsidies performed below Metro's funding estimates in all categories, except
for the new Measure R program, the one-half cent sales tax measure approved in 2008.
In order to maintain current budgeted subsidy levels, Metro allocated available
.discretionary funds through a midyear budget adjustment in March 2010. The necessity
of this midyear adjustment, however, has limited Metro's ability to enhance next year's
funding allocation with discretionary funds, should subsidies continue to decline:
Despite this declining trend in transit subsidies, BBB's operating expenditures which
assume no increase in service levels, are estimated to increase by .8% in FY 2010-11
and will continue to grow at a rate that exceeds revenue growth through FY 2014-15.
Increases in FY 2010-11 expenditures budget are primarily in labor categories,
specifically in workers' compensation at $.1M (+5.4%), medical at $.6M (13.4%) and
retirement costs at $.2M (+6.5%). The largest labor line item, employee- Salaries and
Wages,which comprises 67% of the operating expenditures, is budgeted to increase at
the rate of the consumer price index (CPI). An increase in passenger fare revenue is the
primary controllable source of operating revenue for the BBB and essential in the effort
to offset the opposing trends in revenues and expenditures.
The current BBB base fare of 75 cents is the lowest in the County. It is also lower than
other transit agencies operating in west Los Angeles County. The most recent change
to BBB fares was on April 10, 2007 when the City Council approved adjustments to BBB
student discount and transfer fares and added a new Day Pass fare category. The last
time local and express fare changes were approved was May 14, 2002.
Senior/Disabled/Medicare local fares have remained unchanged since 1983.
Attachment A shows how current and proposed Big Blue Bus cash fares compare with
those of other transit operators within Los Angeles County and the State. In addition,
Attachments B and C are presented to show similar price comparisons for the Day Pass
and the 30-day Pass.
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Discussion
Summary of Issues Impacting Big Blue Bus Operational Viability
This Study Session is intended to both inform and seek input and discussion from the
City Council on the following issues:
• Are assumptions for declining subsidies due to the economic recession
reasonable?
The pace in which transit subsidy funds are expected to return to pre-
recessionary levels remains uncertain, as most transit subsidies are derived from
sales tax receipts which continue to lag County-wide and throughout the State.
Although sales taxes have indicated growth in recent months, transit subsidies
are anticipated to remain relatively flat. The financial scenarios prepared
reasonably do not assume Metro's use of one-time funds which began in FY
2008-09 and continued through FY 2010-11. During this period, Metro allocated
reserved Prop A and C interest earnings to mitigate the significant reductions in
transit subsidies caused by the economic recession.
• What funding uncertainties exist, specifically regarding State funds, and how
should they be addressed in the context of the Big Blue Bus structural deficit?
The diversion of State transit funding to non-transit purposes over the past
decade has been a significant factor contributing to BBB's structural deficit.
Although varying amounts of funding ranging from $3.OM - $6.OM for BBB have
been diverted annually since FY 2001-02, in FY 2009-10, the State Transit
Assistance fund, which would have provided $3.5 M to BBB, was eliminated from
the State budget.
In March 2010, the State Legislature passed a bill that restored the State Transit
Assistance Fund. (STA) which will provide approximately $2.6M annually to BBB.
Despite this action, STA funds are not protected from future diversions. In
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addition, the recently enacted legislation
transportation law and eliminates billions
transportation funds.
restructures long-established
of dollars in other State-wide
Council adopted a resolution endorsing the Local Taxpayer, Public Safety, and
Transportation Protection Act of 2010, which if approved by voters, is intended to
restore the original State transportation funding programs and protect these
funds from further diversions of transit funds to non- transportation purposes. If
passed, it is expected that litigation will delay the actual restoration of transit
funding for several years.
The City's Five-Year Forecast does not predict the outcome of the State initiative,
although the impact of the measure's failure would leave the existing STA
program vulnerable to future reductions up to the full amount of $2.6M per year.
The loss of STA funds over the next five years would reduce projected operating
revenues and further increase the structural deficit.
• What would be the impact of not increasing the fares on the structural deficit?
Without the fare increase, service reductions are unavoidable. Preparations for
reductions would begin immediately and passengers would experience the first
cuts in February 2011. Attachment D shows that even with the strategic and
measured use of one-time funds, unless there is a fare increase, some services
would suffer reduced frequency and more limited hours of operation by 'the end
of the fiscal year 2010-11 with a service cut of 19,000 hours and a loss of
477,000 riders. The increasing deficit would necessitate additional service cuts in
each subsequent year accumulating a total of 147,000 service hours reduced
with a resulting loss ih passengers of 4.7 million in FY 2012-13. Service
reductions lower farebox revenue and negatively impact the regional FAP
funding allocated to BBB, as the FAP formula is based on farebox revenues
generated and service miles operated, thus increasing the structural deficit.
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• What can the City do to moderate cost increases within 888?
Big Blue Bus service levels have remained relatively stable within the last decade
while service hours have increased. In FY 2008-09, implementation of the Rapid
7 on Pico Blvd. for the SMC Any Line/Anytime program was achieved through
operating efficiencies which provided a 6% increase in service hours without
adding any additional staffing or operating budget enhancements.
The department was successful in achieving the FY 2008-09 improvements
through scheduling efficiencies made possible by the use of its new automated
scheduling system. Other technology improvements including automated
dispatching and operator timekeeping systems being implemented now and
traffic signal priority for buses in the planning stage are also expected to facilitate
cost containment once they are fully operational.
This year, as the BBB will complete its new maintenance facility yard redesign
project, maintenance operations will become more efficient. As bus storage and
employee parking are consolidated at one facility, after being dispersed to
temporary satellite locations within Santa Monica, the BBB should realize cost
savings in maintenance labor costs. Other capital projects funded with sources
that cannot be used for operating purposes will be coming on line within the next
12-18 months. These projects, including the bus stop redevelopment program,
website redesign and the addition of articulated buses to BBB's most congested
bus routes are all intended to continually improve the efficiency of BBB
operations and services and achieve cost savings.
The City will continue to pursue other local revenue options to support transit
operations including lease revenue enhancements through .Transit Oriented
Development on real estate purchased by the City with transit funds; developer
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fees dedicated to transit operations as a traffic mitigation strategy; exterior bus
advertising; and, increased employer subsidies of transit passes.
• How can the City Council be assured that B86 is operating at peak efficiency?
BBB's operating performance is routinely monitored through a variety of
methods. All recipients of transit. funds undergo separate triennial performance
audits by both the State and Federal governments. L. A. Metro also requires FAP
participants to conduct a triennial Line-by-Line Analysis, which is a
comprehensive operational analysis of transit system performance. Periodically,
the City solicits independent consultants to conduct a peer review analysis of
BBB. The most recent study was completed in 2008 and another study, to be
conducted by the American Public Transit Association, is planned for July 2010.
Recommendations and findings from these efforts are focused on maximizing
system performance and funding eligibility compliance.
Will BBB's role as a sub regional transit provider change in anticipation of the
Expo light rail transit extension to Santa Monica?
The extension of Expo light rail transit will undoubtedly influence travel patterns
and behavior in Santa Monica, as rail development has throughout the County.
As demonstrated with the County's first light rail line, Metro Blue line, the
existence of rail does not adversely impact the demand for bus transit service,
but supports and enhances it. Long Beach Transit continues as a viable and
thriving bus system two decades after the start of rail service to that community.
In anticipation of rail operations in Santa Monica, BBB has implemented Mini
Blue community transit which will also serve as the rail feeder system to Expo rail
stations in Santa Monica. As part of the triennial Line-by-Line Analysis now
underway, BBB is studying the north-south routes that currently carry standing
passenger loads at peak periods and that are anticipated to experience a
significant ridership increase once the Metro Expo Line is complete as there will
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be stations located adjacent to bus stops on these lines. Alternatives for
enhanced transit connections to Expo stations will be presented to the public and
Council in fall 2010.
• Would the proposed fare restructuring affect SMC and UCLA riders?
The fare restructuring would affect SMC and UCLA riders. Upon adoption of a
new fare structure, negotiations will begin immediately with both entities to gather
information on ridership in order to determine the appropriate blended fare rate
and terms for the new fare agreements. Over the next year, BBB and SMC staff
will work together to develop and implement identification card technology that
can be integrated with BBB's fare collection system to allow tracking of actual
boardings by valid SMC ID holders. As this technology currently exists at UCLA,
negotiations are expected to be completed within the coming year; however, the
extension granted to SMC to upgrade its technology will move its implementation
of a new fare agreement to FY 2011-12.
All of these issues must be considered in addressing the significance of maintaining a
fiscally viable transit operation and the actions necessary to ensure the BBB's projected
structural deficit is mitigated. Unless the issue is resolved, BBB operations will be
unable to respond sufficiently to the City's goals to increase transit ridership.
Alternative Fare Structure Scenarios
The fare restructure proposal presented to Council on April 27, 2010 offered a level of
additional passenger revenues from fares to mitigate approximately one-half of the FY
2010-11 projected structural deficit. In response to comments from the public and
Council members, staff is presenting two other fare options (Options 1 and 2). These
options reduce the proposed Senior/Disabled/Medicare cash fare from the original
proposal shown in Attachment E from 60 cents to 50 cents, decrease the price of the
Senior/Disabled/Medicare day pass from $2.00 to $1.50 and restore the Universal
transfer at its current full fare rate of 50 cents and an increased rate (+15 cents) of 25
cents for Senior/Disabled/Medicare riders. Option 1 shows the regular cash fare
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increased from 75 cents to $1.00 and Option 2 presents a $1.25 regular cash fare
proposal..
In Option 1, all single boarding fares would increase by 25 cents. The regular fare would
become $1.00 and the senior fare would rise to 50 cents. The cost of full fare transfers
would remain the same at 50 cents and increase to 25 cents for seniors/disabled. The
student fare would be available only by using a 30-Day Student Pass, priced at $40,
which would provide unlimited rides at $1.33 per day. This would generate an estimated
$1.6M in FY 2010-11 and $2.4M in additional annual fare revenue in FY 2011-12.
In Option 2, .the regular fare would become $1.25 while the discounted fares would be
the same as in Option 1. The cost of transfers would remain the same as Option 1. This
would generate an estimated $2.5M in FY 2010-11 and $3.4M of additional annual fare
revenue beginning in FY 2011-12.
The central feature of the proposed fare restructuring is the new 30-Day Pass, priced at
$60 for local routes only and $80 for local and express routes, good for unlimited
system-wide travel on BBB for 30 consecutive days starting from whenever the
passenger chooses to first use it. The 30-Day Passes have been priced to be the most
economical option for the 80% of riders who use the BBB system at least four times
each week without transferring or those who ride at least three times per week and
transfer. For instance, seniors and people with disabilities would be able to ride
everywhere on BBB, as often as they want, for 80 cents per day; every day over a 30-
day period using a $24 Senior/Disabled/Medicare 30-Day Pass. The 30-Day Pass
would also provide employers with an instrument to offer the Federal non-taxable transit
pass benefit to their employees, further incentivizing environmentally sustainable
transportation. Additionally, with a 30-Day Pass low income riders will be eligible to
participate in Metro's Rider Relief Program, which offers a $10 per month subsidy for
regular monthly passes and $6 off monthly passes for seniors and disabled riders.
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The Day Pass would be more economical for the less frequent rider who needs to make
several trips and have to transfer. Since the Day Pass is good for unlimited rides all day
from 4 a.m. until past midnight, many passengers are likely to concentrate their trips
and errands on the day that they use their pass. This increase in "trip chaining" by pass
holders would blunt ridership deflection caused by an increase in the one-way fare.
Finally, the new "Baker's Dozen" single boarding discount card is proposed for the
remaining three percent of passengers who are infrequent riders who don't need to
transfer.
The proposed fare structure will align BBB with the international model of fast, cashless
boarding. In this model, the significant operating cost of travel delay is reduced as a
simple swipe of a pass through the electronic farebox replaces the time consuming
process of paying at each boarding with coins and dollar bills. The shift to the pass also
addresses the problem of fare avoidance and the impracticality of requiring drivers to
stop the bus to request and verify proper identification with every passenger who claims
eligibility for a discounted student orsenior/disabilities fare.
Currently, BBB passes are available at local schools, Santa Monica branch libraries,
check cashing outlets, Santa Monica Visitor Center and Blue the Transit Store. BBB
staff is currently working with businesses, social service agencies, senior centers and
schools throughout the service area to increase the number of locations that sell BBB
passes. BBB's new website will also enable online sales of prepaid fare media.
In all fare structure scenarios, the price for the Day Passes would be $4.00 except for
the Senior Day Pass which is proposed at $1.50. The Baker's Dozen card would offer
thirteen boardings for the price of twelve, for both regular and
senioddisabilities/Medicare fare categories in all scenarios.
A price increase for any good or service always causes an initial consumer response to
decrease consumption of the item. Consumption typically rebounds after the
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psychological impact of the price increase dissipates and people learn how to
incorporate the new price in their overall household budget. If deflection were not a
temporary phenomenon, transit ridership today would be at an impossible negative
number after all the fare increases that have taken place since riding the bus cost a
nickel. Other factors that impact long-term ridership trends are the steady decrease in
the overall cost of automobile ownership, and the impact of increased traffic congestion
on buses that must be routed through major activity centers to provide bus stops within
easy walking distance of destinations.
The estimated temporary ridership deflection of 9% (2 million riders) for Option 1 and
17% (3.7 million riders) for Option 2 does not take into account the mitigating effect of
the new 30-day unlimited ride pass. Riders with a 30-Day Pass will have no
incremental cost for additional transit trips and will certainly go more places, more often
by bus. Increased use of day and 30-Day Passes will speed the recovery from ridership
declines estimated to occur in the first year of implementing the new fare. Attachments
F & G show ridership recovery in the years following the fare increase while Attachment
D shows continued ridership loss (4.7 million riders in FY 2012-13) as a result of service
cuts. In FY 2002-03, the 12% loss of ridership was slower to return due to the lack of
transit pass options and other factors including Metro work stoppages and other
economic factors, which negatively impacted regional transit ridership.
Alternative Financial Forecast Sceharios and Fare Option Trade-Offs
Mitigation strategies using two modified fare restructuring options previously described
have been developed (Attachments F and G). In both scenarios, deficits are shown
growing significantly in the out years primarily due to expenditure growth outpacing
revenue growth. Both scenarios present the Five-Year Projected Fund Balance
reflecting annual structural deficits ranging from $6.4M in FY 2010-11 to $18.2M in FY
2014-15. Both alternatives assume operational reductions totaling $2.2M from supplies
and expenses ($.3M) and increased capitalized labor ($1.9M). Additional revenue
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sources from increased natural gas purchases by Metro ($.2M) and the Federal fuel tax
credit on natural gas ($1.1 M) total $1.3M are also included in each year forecasted.
Each forecast scenario allocates the strategic use of $10.4M in available one-time funds
over three years to close the remaining structural deficit, until these funds have been
exhausted. As prudent fiscal policy discourages the use of one-time funds for ongoing
operating purposes or the immediate exhaustion of one-time funds, each forecast
scenario shows that one-time funds are used over time and only as a last resort to
balance the operating budget. More aggressive exhaustion of these funds would allow
BBB to maintain a balanced budget through FY 2011-12 but would then require a
service reduction of 147,000 hours, resulting in a ridership loss of 4.7M riders in FY
2012-13.
Attachment F presents the Five-Year Forecast assuming fare Option 1 is implemented.
Option 1 which offers $1.00 regular fare, will generate $1.6M in FY 2010-11 and $2.4M
annually thereafter. BBB also proposes to use one-time funds in the amounts of $1.3M
for FY 2010-11, $3.6M for FY 2011-12, and $5.5M for FY 2012-13 for a total amount of
$10.4M. With the above strategies and approval of the fare proposal, the Five-Year
Forecast shows FY 2010-11 and FY 2011-12 with balanced budgets, however starting
in FY 2012-13 and beyond service cuts on all routes ranging from 21,500-240,000 (4% -
48%) service hours will be necessary to balance the BBB's budget. This level of service
reduction would result in an annual loss of 538,000 passengers in FY 2012-13, 6.5
million in FY 2013-14 and 10.8 million in FY 2014-15 compared with the current year.
Attachment G presents the Five-Year Forecast assuming Option 2 is implemented.
Option 2 proposes a $1.25 regular fare, will generate $2.5M in FY 2010-11 and $3.4M
annually thereafter. BBB also proposes the allocation of one-time funds in the amounts
of $.5M for FY 2010-11, $2.6M for FY 2011-12, and $5.5M for FY 2012-13, 1.8M for FY
2013-14 for a total amount of $10.4M. With the above strategies and approval of the
fare proposal, the Five-Year Forecast shows FY 2010-11, FY 2011-12 and FY 2012-13
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with balanced budgets; however, starting in FY 2013-14 and beyond, service cuts on all
routes ranging from 131,000-220,000 (26% - 44%) service hours will be necessary to
balance the BBB budget. This level of service reduction would result in annual loss of
4.6 million passengers in FY 2013-14 and 8.8 million passengers in FY 2014-15
compared with the current year.
If service reductions were to become necessary, all services would experience cuts on
weekdays and on weekends. On weekdays during peak travel periods, half of the lines
would have reduced frequencies. All lines would have reduced off-peak frequencies and
operate hourly towards the end of the service day. Half of the lines would end service
earlier in the evening. On weekends, several lines would be reduced to hourly "lifeline"
services and evening service would be all but eliminated on most routes. .Route
segments with low ridership and where other transit service is available would be
truncated during off-peak periods on approximately one-fourth of all services, weekdays
and weekends.
To help mitigate the structural deficits, BBB has identified other potential funding
sources such as expanded advertising on transit vehicles, new development
agreements that incorporate transit passes and market rate leases for transit oriented
development, all of which will require Council input and approval. Staff will begin
working on next steps to advance these concepts for generating additional transit
revenues.
Prepared by: Stephanie Negriff, Director of Transit Services
Approved: Forwarded to Council:
Step, nie Negriff Rod Gould
Direbt r of Transit Services City Manager
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Attachments:
A -Comparative Cash Fares
B -Comparative Day Pass Rates
C -Comparative 30-Day Pass Rates
D -Five-Year Financial Forecast No Fare Increase Scenario with
Measured Use of One-Time Funds
E -Current and Proposed Fares
F -Five-Year Financial Forecast Option 1
G -Five-Year Financial Forecast Option 2
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Attachment A
Comparative Cash Fares
(as of August 2010)
$z.so ._.__.m_____.__._.____._.____.___.__.__ ._._.___._._..._-_-_-_.__~__.___~__m__.____.m_ _.____________~_____.__.___...._._...._._---- ----___
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Regular Senior/ Disabled Student
Culver City Foothill Transit, ~ Long Beach Transit Montebel lo Metro ®SF Munn ^~~ AC Transit
(Proposed)
Attachment B
Attachment C
Comparative 30 Day Pass Rates
(as of August 2010)
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$80
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Regular Senior/ Disabled Student
Foothill Transit Long Beach Transit Montebello ~ Metro ~; SF Muni ~? AC Transit
(Proposed) (Effective July 2010;
Student =College)
Attachment D
Big Blue Bus 5-Year Projected Fund Balance
No Fare Increase Scenario, Measured Use of One-Time Funds
Operating Revenues -including STA and Measure R Local Return
Less: Operating Expenditures
Operating Deficit
Growth Rate - Revenues
Growth Rate -Expenditures
Revised Proposed
Budget Budget
FY09-10 FY10-11
$48,983,963 $51,558,976
$57,529,939 $58,000 130
($8,545,976) ($6,441,154)
5.3
0.8%
$7,555,298 $2,000,000
Planned
Budget
FY71-12
$51,316,807
$60,783,637
($9,466,830)
-0.5%
4.8%
$3,800,000
Forecast
FY12-13
$52,193,873
$64,569 869
($12,375,995
1.7%
6.2°/a
$4,571,865
Forecast Forecast
FY13-14 FY14-15
Use of One-Time Capital Funds to be Converted to Operating
Operational Reductions
Supplies & Expense Reductions
Capitalized Labor
Potential Additional Revenue Sources
Reeenue (ram Metro's Fuel Purchases
Fuel Tax Credit Becomes Permanent
Total Additional Funtling Sources
$0 ($300,500) ($300,500) ($300,500)
($823,178) ($1,900,000) ($1,900,000) ($1,900,000)
$167,500 $167,500 $167,500 $167,500
$0 $1,100,000 $1,100,000 $1,100,000
$8,545,976 $5,468,000 $7,268,000 $8,039,869
$53,175,977 $54,267,978
$68,531,327 $72,458,500
($15,355,350) ($18,190,522)
1.9% 2.1%
6.1 % 5.7%
$0
($300,500) Q
($1.,900,000) ($1
$167,500 $1
$1,100,000 $1,1
$3,468,000 $3,4
Operating Income (Deficit) without Fare Increase $0 ($973,154) ($2,798,830) ($4,336,127) ($11,887,350) ($14,722,522)
Proposed Reduction in Service Hours to Mitigate Operating Deficit 19,081 43,114 85,022 233,085 288,677
Fare Revenue Lost Due to Senrice Cuts ($243,289) ~ ($659,649
($1,517,644) ($5,349,308) ($7,214,036)
Formula Allocation Procedure (FAP) Loss Due to Service Cuts ($837,376) ($2,282,903) ($4,827,130)
Ridership Loss Due to Service Cu[s (477,036) (7,293,429
(2,975,773) (10,488,838) (14,145,168)
Other Potential Funding Sources to Mitigate Future Deficits antl Additional Fare Increases/Service Reductions
Digital Ad Signs, Ads on Bus Slops, New Development Agreements, Market Rate Leases for Transit Oriented Development
s
Attachment E
CURRENT and PROPOSED FARES
Fare Type Current April 27th Option 1 Option 2
Proposal
Regular; Non-Express $0.75 $1.25 $1.00 $1.25
Student Card (5-<19); Non-Express $0.50 $0.75 NA NA
Senior, Disabilities/Medicare; Non-Express $0.25 $0.60 $0.50 $0.50
Regular; Express $1.75 $2.00 $2.00 $2.00
Senior, Disabilities/Medicare; Express $0.50 $1.00 $1.00 $1.00
Regular & Student (5 - <19); Interagency Transfer
$0.50
$0.50
$0.50
$0.50
(IAT)
Senior, Disabilities/Medicare; IAT $0.10 $0.25 $0.25 $0.25
Regular & Student (5 - <19); BBB to BBB Transfer $0.50 NA $0.50 $0.50
Senior, Disabilities/Medicare; BBB for BBB Transfer $0.10 NA $0.25 $0.25
Regular; Non-Express Day Pass $2.50 $4.00 $4.00 $4.00
Regular; Express Day Pass $3.50 $4.00 $4.00 $4.00
Senior, Disabilities/Medicare; Express Day Pass $1.25 $2.00 $1.50 $1.50
Regular; Non-Express 30-Day Pass NA $60 $60 $60
($2/daY) ($2/daY) ($Z/daY)
Student (5 - <19); Non-Express 30-Day Pass NA $40 $40 $40
($1.33/day) ($1.33/day) ($1.33/day)
Senior, Disabilities/Medicare; Non-Express 30-Day
NA
$30 ($1/day)
$24 ($.80/day)
$24 ($.80/day)
Pass
Regular; Express 30-Day Pass NA $80 $80 $80
($2.67/day) ($2.67/day) ($2.67/day)
Senior, Disabilities/Medicare; Express 30-Day Pass
NA $40 $40 $40
y)
($1.33/da ($ / y)
1.33 da ($1.33/day)
Regular; Non-Express Baker's Dozen NA $15 $15 $15
- ($1.15/boarding) ($1.15/boarding) ($1.15/boarding)
Senior, Disabilities/Medicare; Non-Express Baker's $6 $6 $6
Dozen NA (46C/boarding) (46C/boarding) (46</boarding)
Attachment F
Big Blue Bus 5-Year Projected Fund Balance
$1.00 Regular Fare/$.50 Senior/Disabled with Universal Transfer
Revisetl Proposed Planned
Budget eutlget Budget Forecast
FY09-10 FY10-11 FY11-12 FY12-13
Operating Revenues -including STA and Measure R L ocal Return $48,983,963 $51,558,976 $51,316,807 $52,193,873
Legs: Opemting Expenditures $57.529,939 $58,000130 $60,783,637 $64.569869
Operating Deficit ($8,545,976) ($6,441,154) ($9,466,830
)
($12,375,996)
Growth Rate-Revenues 5.3% -0.5% 1.7%
Growth Rate -Expenditures 0. go/ q.g% g 2%
Use of One-Time Capital Funtls to be Converted to Operafing
Operational Reductions
Supplies & Expense Reductions
Capitalized Labor
Potential Additional Revenue Sources
Revenue from Metro's Fuel Purchases
Fuel Tax Credit Becomes Permanent
Total Additional Funding Sources
Operating Income (Deficit) without Fare Increase
$7,555,298 $1,338,731 $3,622,295 $5,410,843
$0 ($300,500) ($300,500) ($300,500)
($823,178) ($1,900,000) ($1,900,000) ($1,900,000)
$167,500 $167.,500 $167,500
$0 $1,100,000 $1,100,000
$8,545,976 $4,806,731 $7,090,295
$0 ($1,634,423) ($2,376,535)
10 months of revenue
Fare Increase Total Change in Revenue ($1.00 Regular Fare/$.50.Senior/Disabletl with Universal Transfer) $0 $1,634,423 $2,376,535
Operating Income (Deficit) with Fare Increase $0 $0 $p
Proposetl Reduction in Service Hours to Mitigate Operating Deficit
Fare Revenue Lost Due to Service Cuts -
Formula Allocation Procedure (FAP) Loss Due to Sertice Cu[s
Ridership Loss Due to Service Cuts
Ridership Loss Due to Fare Increase Deflection (2,081,200)
Net Ridership loss (2,081,200)
Digital Atl Signs, Ads on Bus Stops, New Development Agreements, Market Rate Leases far Transit Oriented Development
$167,500
$1,100,000
$8,878,843
($3,497,153)
$2,400,300
($1,096,853)
21,507
($356,477)
(537,873)
(1,040,600)
(1,578,273)
Forecast Forecast
FY13-74 FY14-15
$53,175,977 $54,267,978
$68,531 327 $72,458,500
($15,355,350) ($18,190,522)
1.9% 2.1%
6.1% 5.7%
$0 $0~
($300,500) ($300,500)I
($1soo,ooo) ($1soo,ooo)
$167,500 $167,500
$1,100,000 $1,100,000
$3,468,000 $3,468,000
($11,887,350) ($14,722,522)
$2,424,303 $2,448,546
($9,463,047) ($12,273,976)
185,550 240,666
($4,305,686) ($7,180,276)
($1,179,923)
(6,asa,za6) (1o,6zss78)
(520,300) (41,624)
(7,014,548) (10,871,602)
Attachment G
Big Blue Bus 5-Year Projected Fund Balance
$1.25 Regular Fare/$.50 Senior/Disabled with Universal Transfer
Operating Revenues -including STA and Measure R Local Re[um
Less: Operating Expenditures
Operating Deficit
Growth Rate -Revenues
Growth Rate -Expenditures
Use of One-Time Capital Funds to be Converted to Operating
Operational Reductions
Supplies & Expense Retluctions
Capifalizetl Labor
Potential Additional Revenue Sources
Revenue from Metro's Fuel Purchases
Fuel Tax Credit Becomes Permanent
Total Additional Funding Sources
Operating Income (Deficit) without Fare Increase
Revised Proposed Planned
Budget Budget Budget Forecast Forecast Forecast
FY09-10 FY10-11 FY11-12 FY12-13 FY13-14 FY14-15
$48,983,963 $51,558,976 $51,316,807 $52,193,873 $53,175,977 $54,267,978
$57,529,939 $58,000 130 $60,783 637 $64,569 869 $68,531 327 $72,458 500
($8,545,976) ($6,441,154) ($9,466,830) ($12,375,996) ($15,355,350) ($18,190,522)
5.3% -0.5% 1.7% 1.9% 2.1%
0.8% 4.8% 6.2% 6.1% 5.7%
$7,555,298 $510,096 $2,617,989 $5,493,347 $1,750,437 $0
$0 ($300,500) ($300,500) ($300,500) ($300,500) ($300,500)
($823,178) ($1,900,000) ($1,900,000) ($1,900,000) ($1,900,000) ($1,900,000)
$167,500 $167,500 $167,500 $167,500 $167,500 $167,500
$0 $1,100,000 $1,100,000 $1,100,000 $1,100,000 $1,100,000
$8,545,976 $3,978,096 $6,085,989 $8,961,347 $5,218,437 $3,468,000
$0 ($2,463,058) ($3,380,841) ($3,414,649) ($10,136,913) ($14,722,522)
10 m onths of revenue
Fare Increase Total Change in Revenue, ($1.25 Regular Fare/$.50 Senior/Disabled with Universal Transfer) $0 $2,463,058 $3,380,841 $3,414,649
Operating Income (Deficit) with Fare Increase $0 $0
($0) $0
Proposed Reduction in Service Hours to Mitigate Operating Deficit
Fare Revenue Lost Due to Service Cuts
Ridership Loss Due to Sennce Cuts
Ridership Loss Due to Fare Increase Deflection (3,726,800) (1,863,400)
Net Ridership loss (3,726,800) (1,863,400)
Other Potential Funding Sources to Mitigate Future Deficits and Additional Fare Increases/Service Reductions
Digital Ad Signs, Atls on Bus Slops, New Development Agreements, Markel Rate Leases for Transit Oriented Development
$3,448,796 $3,483,284
($6,688,117) ($11,239,238).
131,140 220,377
($3,160,135) ($6,069,189)
(4,589,885) (8,815,089)
(931,700) (74,536)
(5,521,585) (8,889,625)