Operations Committee, June 6, 2013
C-Tran Fare Increases and Public Participation Process (PL13-022)
Consideration of initiating a public participation process to gather feedback from citizens and passengers on proposed fare increases for C-Tran fixed route and door-to-door services
Speaker: Ray Boylston
From: Jeffery G. Ulma, AICP, Planning Director
Prepared by: Ray S. Boylston, Transit Services Administrator
Approved by: Benjamin T. Shivar, Town Manager
Approved by: Michael J. Bajorek, Assistant Town Manager
Executive Summary: Town staff, in consultation with all other transit systems in the region, is proposing fixed route fare and discounted pass increases to offset system operating expenses. In addition, staff is recommending a more equitable fare structure for door-to-door services that also includes fare increases to offset expenses. Staff recommends Council authorize staff to proceed with a public participation process in July/August to gather needed feedback from citizens and passengers of C-Tran on the proposed fare increases described herein.
Background: The transit system directors within the region have recently discussed the need for fare increases for their respective systems to offset the rising costs of fuel, parts, and services. It has been over seven years since any system has implemented increased fixed route fares for their passengers. All systems strongly believe that it would be advantageous for these proposed fare increases to be implemented at the same time so as to minimize confusion among transit passengers who use multiple providers for their regional transit trips. No fare increases have been implemented on C-Tran fixed route services since its inception in December 2005, and no fare increases have been initiated on door-to-door services since July 2008.
Fixed Route Fares: Based on a peer comparison of transit systems in the U.S., the majority of systems charge passengers $1.50 per one-way trip. Within our region, fares are currently $1.00 with the exception of Triangle Transit which charges $2.00 per one way trip. While there is a need to increase fares to offset rising costs, staff believes that increasing our current $1.00 fare to $1.50 would be too much of an adjustment at one time for our customers, nearly half of whom have household incomes of less than $40,000. Instead, the regional systems recommend an incremental approach whereby systems would increase the fare from $1.00 to $1.25 effective January 2014 and then from $1.25 to $1.50 in January 2015. The cost of transit passes (example: day passes, 7-day passes, and other passes) will also be increased and is shown in the fixed route fare increase proposal. In addition, due to the growing senior population in Town, C-Tran staff, along with all other regional systems, is recommending the elimination of the free rides for seniors 65 and older, but still allow a half-price discount for this group. Thus, beginning in January 2014, seniors would pay $.60 for a one-way fare and $1.25 for a day pass. [Regular rates would be $1.25 for a one-way fare and $2.50 for a C-Tran day pass.]
The fixed route elasticity model is provided to illustrate the detail on the impact on ridership for this increase as well as an estimate of the resulting additional revenues that could be generated on an annual basis. A study paid for by the City of Raleigh and Triangle Transit will evaluate the impact of this type of fare increase on low-income citizens in the region. The results and findings of this study and feedback we receive from our passengers and citizens will be presented to Council in October following Town staff-initiated public participation forums.
Staff recommends Scenario One that will generate an additional $14,905 in the first twelve months after implementation (January 2014) and $38,254 after the additional increase to advance to our peer averages for fares and passes in January 2015. Ridership is not expected to decrease overall with either of these fare changes due to overall projected increases in ridership that we have sustained since the inception of the C-Tran fixed route system in December, 2005. Fixed route ridership has increased annually about 25%.
Town transit staff, along with the staffs of other systems within the region, have committed to meet annually to discuss fare structure and policies to determine when and if future adjustments are needed. A coordinated approach across the region benefits all customers in the region to ensure that fares and passes are as consistent as possible. Durham Area Transit Authority (DATA) is the only system in the Triangle area that is moving ahead of other transit agencies in the region for possible increases in July 2013.
Door to Door Fares: To meet future increased demands for our Door to Door services and the need for a more sustainable and equitable revenue formula, staff recommends a fundamental change in our fare structure that would consist of a boarding fee and a per mile charge for our Tier II (anywhere within the Town limits) and Tier III (out of town medical trips for seniors/disabled and employment trips only for persons with disabilities). From the Door to Door fare options, staff is recommending Option One. Information on current fare structure along with a lower cost Option Two is presented as well. In addition, staff recommends eliminating the 10 a.m. to 3 p.m. discount fare for Tier I or Tier II service. This discount fare began when the Door to Door service was initiated in 2001 as a way to fully utilize vehicles during mid-day. Given the current demand, staff believes that this initial reasoning for discounted fares mid-day is no longer justified. Staff was only able to identify three systems in the U.S. that provided this premium level Door to Door service. The majority of transit systems that provided this level of service in the past have since pared back their services to provide only Americans with Disabilities Act (ADA) required service for trips that begin or end wholly with three-quarters of a mile of existing fixed route service.
The staff recommendation for Option One is expected to generate approximately $83,895 in additional annual revenue as shown in the Door to Door Fare Options Table (based on FY12 costs and ridership). Although ridership may drop initially (approximately 1%) if Option One is approved by Council, overall average annual growth in ridership has been close to 5% over the past ten years. Based on staff research, demand response services typically only decrease 0.02% for every 1% in fare increases. Option Two is estimated to generate an increase in annually revenues of $70,507.
Staff’s recommendation to shift to a new fare structure on our Door to Door transit services that requires a boarding fee and a per mile rate creates an improved and more equitable framework for ensuring that Tier II and Tier III customers pay in accordance with the actual length of their trip. Tier I trips under this recommended option would increase from $2 per one-way trip to $2.50 per one-way trip with no discount fare during off-peak hours. The $2.50 cost for this standard ADA trip is consistent with ADA requirements that state that the cost of the ¾ mile service cannot be any greater than twice the peak hour rate on fixed route services which we have calculated to be twice the recommended January 2015 peak hour rate of $1.25. In January 2015, staff also recommends that this Tier I rate stay consistent with this approach and subsequently would increase to $3 for Tier I and increase the boarding fee to $3 for Tier II and Tier III accordingly. Staff does not intend to increase the per mile rate of $.50 for Tier II or Tier III in the next two years.
The following example illustrates the current inequities in our fare structure: Currently, if Passenger A boards a C-Tran Door to Door vehicle and travels four miles from a Cary address to medical provider in Apex, then this passenger pays the Tier III rate of $6 per one-way trip. If Passenger B travels 18 miles from their residence in Cary to a medical provider in Durham, then the passenger pays the same $6 per one-way trip Tier III rate even though the contract costs to the Town for that trip is four times that of Passenger A.
Option One has some financial impact on Tier I and Tier II passengers and the greatest impact on Tier III (out of town trips) passengers. The greatest impact on Tier I and Tier II passengers would be the elimination of the off-peak discount rate currently at $1.00 and increasing the regular peak fare of $2.00 to $2.50. The average out of town trip cost (at about 13 miles in length) will go from $6 per one-way trip to $9 per one-way trip. On average, this same trip, if provided by a taxi cab, would cost the passenger about $39.00. Therefore, although the increase is just over a third more for our Tier III passengers, it is still considerably less than any other pay-for-services option.
Given the fact that our senior population in Cary continues to grow and exceeds the statewide average in growth, staff believes that the Door to Door recommendation is sound in terms of a cost containment strategy and providing a more equitable approach by ensuring that passengers are paying commensurate with the level of service that they receive, particularly for the longer distance and more costly Tier III out of town trips. In addition, this framework allows the Town to make adjustments, if Council deems necessary, to the boarding fare for Door to Door services simultaneously with all future fixed route fare adjustments.
Proposed Public Participation Process: To ensure our passengers and citizens are given the opportunity to provide staff with feedback on the proposed new fare structures for Door to Door and Fixed Route services, staff will hold at least three public forums at locations and times convenient for them. These forums will be scheduled in July and August. All comments will be documented and summarized in the final staff report that will be presented to Council in October 2013. Per FTA requirements, a public hearing will also be required as part of the October 2013 Council Meeting.
Fiscal Impact: If the fixed route fare and pass increases are approved by Council, the Town would realize an increase in passenger revenues by $14,905 annually. If Council approves Option One on the proposed Door to Door fare increases, then passenger revenues would increase by $83,895 annually. Funding is available within the FY14 Transit Fund to absorb any costs associated with ticket and pass fare card stock changes.
Staff Recommendation: Staff recommends Council approve moving forward with a public participation process to gather feedback from citizens and passengers about the fixed route fare increases for January 2014 and January 2015 and the Door to Door Option One fare increase presented in this staff report. Furthermore, staff recommends that Council approve a holding a public hearing at their October 10, 2013 Meeting when staff presents the final recommendation for Council approval.