sr-052510-9a~~
~;tYof City Council Report
Santa Monica
City Council Meeting: May 25, 2010
Agenda Item:
To: Mayor and City Council
From: Stephanie Negriff, Director of Transit Services
Subject: Big Blue Bus Fare Restructuring
Recommended Action
Staff recommends that the City Council:
1. Continue the public hearing from April 27, 2010; and
2. Approve changing the Big Blue Bus base fare from $0.75 to $1.25; changing
senior/disabled fares from $.25 to $.50; and other discounted fare adjustments
shown as Option 2 in Attachment B to be implemented on August 29, 2010; and
3. Authorize the City Manager to negotiate and execute an agreement with Los
Angeles County Metropolitan Transportation Authority (Metro) to participate in
the Rider Relief Transportation Program.
Executive Summary
The Big Blue Bus operating budget will have a structural deficit over the next five years
due to State and County transit subsidy reductions and increased operating costs. The
recommended fare proposal increases the base fare from $0.75 to $1.25, raises rates in
other discounted fare categories and introduces a 30-Day Pass, which will provide
greater mobility and simplify boarding. Participation in Metro's Rider Relief
Transportation Program will help reduce the impact of fare adjustments by providing
subsidies for passengers whose household income levels meet certain requirements.
The recommended fare structure will increase fare revenue by $2.5 million in FY10-11
and $3.4 million per year beginning in FY11-12 and is a consistent component of short-
term strategies to close the budget gap. Long-term corrective efforts are necessary to
successfully address a projected structural deficit.
Background
The Big Blue Bus (BBB) is required to maintain a balanced budget. Without the
implementation of short- and long-term strategies to reduce the structural deficit,
including increased fare revenue, use of one-time monies, allocation of new local return
funding, capitalization of labor costs, restoration of State funding, operational
efficiencies .and deferral of capital projects, BBB will have a negative fund balance
projected to range from $6.4M in FY10-11 to $18.2M in FY14-15 (Attachment A).
Discussion
The City Council conducted a public hearing on April 27, 2010 to consider
recommendations for restructuring Big Blue Bus fares. The public hearing was
continued until May 25, 2010, to allow staff to consider additional fare options and
provide Council with additional information.
The fare options now presented mitigate the impact of increased fares on
senior/disabled passengers and retain the Universal transfer.
Restructuring Passenger Fares
In response to comments from the public and Council members, Attachment B presents
the two new options and compares them to the existing and originally proposed fare
structure. Both options 1 and 2 retain the Universal transfer, which .can be used to
transfer to another BBB or another connecting transit system at $0.50 for regular fares
and $0.25 for Senior/Disabled/Medicare fares. These options reduce the proposed
Senior/Disabled/Medicare cash fare from the original proposal 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 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
2
student fare would be available only by using a 30-Day Student Pass 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 fare proposal shown as Option 2 in Attachment B is recommended as part of a
comprehensive deficit reduction strategy. Option 2 would reduce the structural deficit by
$2.5 million in FY10-11, a pro-rated amount, and $3.4 million per year thereafter and
make the Big Blue Bus' fares comparable to other large systems in Los Angeles County
including Metro. Additional revenues generated by Option 2, when combined with the
strategic use of one-time funds, provide the greatest potential to avoid significant
service reductions over the next three years. Option 2 additionally maximizes subsidy
allocation for BBB through the regional Formula Allocation Procedure (FAP). Therefore,
staff recommends changing- the Big Blue Bus base fare from $0.75 to $1.25 and
implementing the other discounted fare adjustments shown as Option 2 in Attachment B
beginning on August 29, 2010.
Fare Subsidy
To help reduce the financial burden of the proposed fare adjustments, BBB
recommends participating in Metro's Rider Relief Transportation Program (RRTP). 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. RRTP subsidy coupons are available to Los Angeles
County residents whose household income levels meet certain criteria. For example, a
one person annual household income of under $25,000 could be eligible to participate.
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Public Outreach
Pursuant to Federal Transportation Administration Circular 9030.1C, the City has
adopted a public comment process which requires public input and a formal public
hearing prior to fare modifications. Fare structure alternatives were presented at 17
community meetings including a series at:
• Palms Rancho Park Branch Library
• Santa Monica Main Library
• Fairview Branch Library, and
• Montana Branch Library
During the same period, the BBB presented fare structure proposals to meetings of the:
• City of Santa Monica Commission for Senior Community
• Santa Monica Chamber of Commerce
• City of Santa Monica Disabilities Commission
• Bayside District's Land & Asset Committee, and
• Pico Neighborhood Association
BBB promoted attendance at the community meetings by:
• A blast to BBB email subscribers
• An insert in all City water bills, and
• Information flyers at various locations such as several main libraries, City Hall,
and Ken Edwards Center
On the Internet, meeting information was posted on the:
• BBB website
• City's website, and
• Santa Monica Convention and Visitor's Bureau website
Financial Impacts & BudgetActions
The implementation of the recommended Option 2 rate increase would increase BBB
fare revenues by approximately $3.4 million per year beginning in FY11-12 based on a
price elasticity model for each fare category. If a fare increase is approved by Council
the projected increased FY10-11 revenue of $2.5 million will be included in the BBB's
FY 2010-11 Proposed Budget.
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Additional costs. associated with the proposed fare adjustments in this staff report are
unknown at this time. As experience is gained, staff will evaluate whether there are'
incremental costs associated with the additional cash collected and prepaid fare media
sold and address those costs in future budget cycles, if necessary.
Prepared by: Stephanie Negriff, Director of Transit Services
Approved:
~~ ~.~-
~ ~~,
Stenie Negriff '
Dir c or of Transit Services
Forwarded to Council:
~~~ ~
R d Gould
City Manager
Attachments: A -BBB Operating Structural Deficit Without Mitigation
B -Current and Proposed Fare Options
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* Includes STA funds
Attachment B
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
StudentCard{6-<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
$60 $60 $60
Regular; Non-Express 30-Day Pass NA ($Z/daY) ($z/daY) ($Z/daY)
$40 $40 $40
Student (6 - <19); Non-Express 30-Day Pass NA ($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
($1.33/day) .($1.33/day) ($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
NA $6 $6 $6
Dozen 46C/boardin
( g) 46</boardin
(. g)
(46C/boarding)