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MEMORANDUM DATE: May19,2014

TO: HonorableEricGarcetti,Mayor

FROM: DarrylYipandJenniferWong,OfficeoftheMayor

ATTN: MartinWachs,UniversityofCalifornia,LosAngeles

RE: RecommendationsforMetroExpressLanes

As requested, this memorandum provides an assessment of the Metro ExpressLanes program,whichoperatescongestionpricingontheI-10andI-110freeways.ThismemodetailstheexistingandfutureapplicationofExpressLanes,aswellasitssocialequityimplications. I.OVERVIEW Inaneffort toexplorecongestionmanagementstrategies inLosAngelesCounty, theLosAngelesCounty Metropolitan Transportation Authority (Metro) has completed the one-year MetroExpressLanes demonstration program. The program comes at an opportune time as traditionalsources of transportation funding diminish at the same time transportation investments soar.Operation and maintenance of existing infrastructure and services face the same risk (Taylor,1995). Weapplaudyourenthusiasm for theMetroExpressLanesdemonstrationprogram. Inaddition toimprovingtravelflowandincreasingtransportationoptions,MetroExpressLaneshassuccessfullyfundedanumberof transit, active transportation,andhighway improvementprojects in justoneyear of demonstration. It has met financial sustainability by generating net revenue, minimumaveragetravelspeedof45milesperhouratleast90percentofthetime,anditsFasTrakadoptionrate goal of at least 100,000 transponders (LACMTA, 2014). In addition, a full EnvironmentalImpact Report (EIR) is already underway to disclose the environmental impacts of the program(LACMTA,2014). Werecommendthatyoucontinueandexpandthisprogram.However,wethinktheareasofpublicacceptanceandsocialequitycanbeimproved,especiallywhenconsideringadistributionofdirectandindirectbenefitstotheExpressLanesprogram:

1. First, we recommend that Metro staff continue a high level of public outreach towardexpansionoftheExpressLanesprogram.

2. Second,werecommendthatMetrocontinuestowaivethetranspondermaintenancefeeforusersenrolledintheEquityPlan(describedbelow)andrevisethefeefornon-EquityPlanlow-activityaccounts.

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II.PROGRAMFINANCE Facingpressuresregardingcongestionreliefanddecliningtransportationrevenuesources,Metroand the state transportation agency, Caltrans, applied and received a $210.6 federal CongestionReduction Demonstration (CRD) Grant from the U.S. Department of Transportation (USDOT) in2007totestthevariably-pricedmanagedlanesstrategy.Together,MetroandCaltranswereabletoimplementoneofsixCRDprojects(USDOT,2010).ThedemonstrationhasprovedtobeafinancialsuccessbecauseithasexceededMetro’sexpectationsbygeneratingannualnettollrevenueof$16-19million.1 Net toll revenue is directly reinvested into congestion-reductionmeasures on I-10 and I-110whilegeneratingindirectbenefitstoeveryone. Nettollrevenueisrequiredbystatelawtobereinvestedbackwhereitwasgeneratedfrom,insteadofbeingreinvestedelsewhere.ThispolicyensuresdirectbenefitstomanagingcongestiononI-10and I-110, and fundsprojects thatotherwisewouldnothavebeen funded. IfMetro staffwere topursuetheprojectswithoutusinganynettollrevenue,thentheywouldhavehadtofindalternativesourcesoffunding,suchasdrawingfromgeneralrevenues. MetroExpressLanesprovidebothdirectbenefits,includingtraveltimesavingsandreliability,andindirectbenefits,includingreinvestmentsintothesystem.Baselinetargetsforreinvestmentaresetbymode,with40percentofthetotalreinvestmentgoingtowardtransituses,40percenttowardsactive transportation and system connectivity, and 20 percent towards highway improvements(LACMTA,2014).AppendixCshowsamoredetailedsummaryoftheinvestmentsthatweremadeforsolodrivers,carpoolers,bicyclists,busriders,andrailriders.Insomecases,investmentswentaboveandbeyondwhatwasexpected.More than100newvanpoolswerecreated,exceeding thetarget.Ridershipon theSilverLine increasedbyanaverageof27percent afternewservicewasadded. Bus travel time improved by 1.5 minutes during the morning peak period, the mostcongestedtimeoftheday(LACMTA,2014). III.SOCIALEQUITY We affirm that social equity should be a continued prioritized focus. First, although Metroemphasizes the well-implemented Equity Plan, the Equity Plan may not equally support low-incomeuserswhodonothaveaccesstotransportationalternativesandmustdriveinstead.Second,althoughExpressLanescomewithmanybenefits, thedirectbenefits fromusingtheExpressLanesmaybeunequallydistributed(Downs,2004).

1AccordingtoMetro,thegrossannualizedrevenueisprojectedtobe$20millioncombinedforbothcorridors. The ExpressLanes operate on a $30million annual budget, with $11-14million goingtowards Metro overhead and transaction costs, Caltrans maintenance, and California HighwayPatrol(LACMTA,2014).

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The Equity Plan may not fully support low-income users who do not have access totransportationalternativesandmustdrive. To address equity concerns, Metro implemented an Equity Plan, which reduces the barriers toacquiringatransponderforlow-incomepeople.AsaresultoftheEquityPlan,Metroreportedthat82percentof the4,000EquityPlanuserswithin the firstyearobtaineda transponder(LACMTA,2014). However, the Equity Plan may not fully support low-income users who do not havetransportation alternatives and must drive, possibly because they cannot access their jobs bytransitortheyhavetomakechainedtripsthattransitislesssuitablefor. Basedonatieredthresholdof200percentofthefederalhouseholdpovertylevel(SeeAppendixD),theEquityPlanlowerstheupfrontcosttoacquireatransponder,butdoesnotreducefuturecosts.Apersonwhowantsaregulartranspondermustpayupfront$40intollcreditsandanadditional$40intollcreditseverytimecreditontheiraccountdropsbelow$10or25percentoftheiraveragemonthlyusage,whichever isgreater (MetroExpressLanes,2014).On theotherhand,EquityPlanusersgeta$25discountontransponderfees,whichcangotowardthepurchaseofthetransponderor toll credits, but they still have to pay regular tolls and the monthly maintenance fee (MetroExpressLanes,2014). The Equity Plan has been a success for those who enroll, but Metro must consider its broaderimplications.EquityPlanusersaremore likely tobediscretionaryusers.WhileEquityPlanusersmade1.2percentoftolledtrips,theymade3.8percentofcarpoolingtrips(LACMTA,2014),likelybecausecarpoolingusersdonothavetopayatoll.AlthoughtheEquityPlandoesnoteliminatethebarrier to use ExpressLanes, the option to use the ExpressLanes for infrequent trips or forcarpooling is made more attractive. Every effort to attract more users provides benefits to thesystem. DirectuserbenefitsofExpressLanesmaybeunequallydistributed. Direct benefits to those who use the ExpressLanes include decreased travel time and increasedtravel time reliability compared to taking the general lanes, but these direct benefits may beunequally distributed (Downs, 2004). In 2010, the U.S. Government Accountability Office (2010)conductedanEquityAnalysisofcongestionpricingandfoundthatalthoughdriversofallincomesusedHOT lanes, high-incomedrivers used themmore than low-incomedrivers. Given thatmorehigh-incomedriversuseHOTlanes,Metroshouldcontinuetostudydistributionofdirectbenefitsforallusers. InarecentstaffreporttotheMetroBoardofDirectors,traveltimesforgeneralpurposelaneshadmostlyfavorable,butsomeunfavorable,results.Intheory,high-incomepeopleswitchfromgeneraluse lanes toHOT lanes, freeingup thecapacityofgeneral lanesand improving traffic flow in theshortterm(Downs,2004),butthismaynotalwaysbethecase.Forexample,onI-10,traveltimesonthegeneralpurposelanesdecreasedinthemorningpeakperiod,themostcongestedtimeoftheday, but they increased in the afternoon peak period (LACMTA, 2014), possibly indicating the

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ExpressLanes programwas hurting traffic flow rather than improving it.While travel timeswilllikelyimproveaspeoplecontinuetoadjusttheirtravelbehavior,itisimportantforMetrotostudythe direct effects of the ExpressLanes on low-income people since fewer low-income driversregularlyusetheExpressLanes. IV.CONCLUSIONANDPOLICYRECOMMENDATIONS WecommendyourenthusiasmfortheMetroExpressLanesbecauseithasimprovedtravelflowandincreasedtransportationoptions.Asstated,wehavetworecommendations. 1.ExtendfullsupportforpermanentcontinuationandexpansionofExpressLanesprogram. ExpressLaneswerefirstgrantedpermissiontooperatebythefederalgovernment,givenapprovalfrom Caltrans. The passage of SB 1422 (Ridley-Thomas) fulfilled this requirement up to January2013,thenExpressLaneswasgrantedpermissiontooperatefortwomoreyearswiththepassageofAB1224 (Gress, 2010).Now,Metro isworkingon getting approval from state lawmakers for SB1298(Hernandez),whichwillremovethesunsetdatealtogether(Hymon,2014). Pendingstatelegislativeapproval,werecommendexpandingtheprogramtoothersitesthroughoutLosAngelesCounty.LosAngelesCountyalreadyhasthemostextensivesystemofHOVlanesinthenation with over 539 miles. However, the Federal Highway Administration noted that many ofthoselanesfellbelow45mphmorethan10percentofthetime(LACMTA,2014).ByexpandingtheExpressLanes,freewayusersofallbackgroundswillbenefitfromasystemthatoffersmoretraveloptionsandreliabletraveltimes.ExpandingtheExpressLanesprogramthroughtheconversionofHOV lanes toHOTwill alsomoredirectlymatch costsandbenefits tootherareasofLosAngelesCounty.CountysupervisorandMetroBoardSupervisorMichaelAntonovichisalreadyproposingastudyforI-405HOVlanes(currentlyinconstruction)tobeconvertedtoHOT.Hereasonsthatthetolling will directly associate freeway construction cost overruns with Valley and WestsidecommuterswhouseI-405morethanotherAngelenos(Newton,2013). 2.ContinuetowaivethemonthlymaintenancefeeforEquityPlanusersandrevisethefeefornon-EquityPlanlow-activityaccounts. Recently, Metro Board of Directors implemented a $1 maintenance fee for all users, while theypreviouslywaivedthe$3monthlymaintenancefeeforEquityPlanusers.ThroughpublichearingsandpubliccommentstotheMetroBoard,Metrodeterminedthisfeewouldhelprecoverthecostsofmaintaining a transponder. However, we consider this monthly maintenance fee may act as abarriertousageandrecommendcontinuingeliminatingthefeeforEquityPlanusers. Inan2010independentanalysisforMetro,NetworkPublicAffairsdeterminedthatlow-incomesolodriverswouldbeunlikelytouseExpressLanesonaregularbasis,buttherestillmightbesituationswherelow-incomesolodriverswouldpaythefulltoll(LACMTA,2010).Theyrecommendwaivingtheaccountsetupfeesandrevisingtheminimummonthlyusagechargesforlow-activity

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accountstomakeupforthecostsforEquityPlanusers(LACMTA,2010).Thisproposalcanhelpeliminatepartoftheburdenforinfrequentlow-incomeuserstobenefitfromtheExpressLanesaswell.

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BIBLIOGRAPHY Downs,Anthony.“PeakHourandOtherRoadPricing,”StillStuckinTraffic:CopingwithPeak-Hour

TrafficCongestion.Washington,D.C.:TheBrookingsInstitution,2004,pp.152–179. GovernmentAccountabilityOffice,TrafficCongestion:RoadPricingCanHelpReduceCongestion

butEquityConcernsMayGrow,ReportGAO-12-119,January2012. Gress,Jennifer.AB1224BillAnalysis.OfficialCaliforniaLegislativeInformation.(2010,April10).

RetrievedApril27,2014,fromhttp://www.leginfo.ca.gov/pub/09-10/bill/asm/ ab_1201-1250/ab_1224_cfa_20100611_093355_sen_comm.html

Hymon,Steve.ExpressLaneson10and110freewaystobecontinuedbeyondnextJanuary.The

Source.(2014,April24).RetrievedApril24,2014,fromhttp://thesource.metro.net/ 2014/04/24/expresslanes-on-10-and-110-freeways-to-be-continued-beyond-next-january

LosAngelesCountyMetropolitanTransportationAuthority.FutureofMetroExpressLanes.(2014,

April24).RetrievedApril24,2014,fromhttp://media.metro.net/board/Items/2014/ 04_april/20140424rbmitem34.pdf

LosAngelesCountyMetropolitanTransportationAuthority.MetroExpressLanes.(2014).Retrieved

April24,2014,fromhttps://www.metroexpresslanes.net/en/about/about.shtml

LosAngelesCountyMetropolitanTransportationAuthority.MetroExpressLanesNetTollRevenues GrantApplicationPackage.(2014,February19).RetrievedMay17,2014,from http://media.metro.net/board/Items/2014/02_february/20140227rbmitem7.pdf

LosAngelesCountyMetropolitanTransportationAuthority,MetroExpressLanesPerformance

Update,April30,2013. LosAngelesCountyMetropolitanTransportationAuthority,MetroExpressLanesProject:Draft

LowIncomeAssessment,March17,2010. Newton,Damien.ItMightbeHot,butAntonovichwantsitHOTterontheWestside.StreetsblogLos

Angeles.(2013,July1).RetrievedMay17,2014fromhttp://la.streetsblog.org/2013/ 07/01/it-might-be-hot-but-antonovich-wants-it-hotter-on-the-westside/

Taylor,Brian.(1995).PublicPerceptions,FiscalRealities,andFreewayPlanning:TheCalifornia

Case.JournaloftheAmericanPlanningAssociation,61:1,43-56. UnitedStatesDepartmentofTransportation.LosAngelesCountyCongestionReduction

DemonstrationNationalEvaluationPlan.(2010,January10).RetrievedMay17,2014,from http://www.upa.dot.gov/docs/fhwajpo10016/index.htm

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Wachs,M.“ImprovingEfficiencyandEquityinTransportationFinance,”Chapter4inBruceKatz andRobertPuentes,eds.,TakingtheHighRoad:AMetropolitanAgendaforTransportationReform.Washington:TheBrookingsInstitutionPress,2005,pp.77-100.

Wiggins,Stephanie.BoardMeetingAgendaItem24Handout.Metro.(2014,April24).Retrieved

April24,2014,fromhttp://media.metro.net/board/Items/2014/04_april/20140424 rbmitem34handout.pdf

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AppendixA:AboutMetroExpressLanes TheExpressLanesprograminvolvedconvertingasegmentofhigh-occupancyvehicle(HOV)lanes

on the I-10 and I-110 freeways to high-occupancy toll (HOT) lanes (Appendix A). Only carpools,

vanpools, buses, andmotorcycles are allowed to useHOV lanes, but after the conversion, single-

occupancyvehicles(SOV)mayuseHOTlanes.ThoseeligibleforHOVmaycontinuetousetheHOT

lanes at no charge and solo drivers now have the option to pay a toll to use the HOT lanes.

Dependingontheamountoftrafficonthefreeway,thetollvarybetween$0.25whencongestionis

lowestand$1.40whencongestionishighest(LACMTA,2014).Thetollschangeinordertomanage

thenumberofsolodriversandmaintainaminimumspeedof45milesperhourontheHOTlanes.

Regardlessof the amountpaid, all private vehiclesmustownanelectronicFasTrak transponder.

ThesuccessofExpressLanesismeasuredbytheamountofcongestionreduction,publicacceptance,

andsustainability(intermsofequity,finance,andgreenhousegasemissionsreduction)(LACMTA,

2014).

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AppendixB:MapofI-110andI-10ExpressLanesinLosAngelesCounty

Source:LosAngelesCountyMetropolitanTransportationAuthority,2014 https://www.metroexpresslanes.net/en/about/map.shtml

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AppendixC:InvestmentsmadeusingExpressLanesnettollrevenue(bymode)

Mode Investments

SoloDrivers ● LosAngelesExpressPark● HarborTransitwayPark&RideUpgrades

Carpoolers ● 100NewMetroVanpools● CarpoolLoyaltyProgram● HarborTransitwayPark&RideUpgrades

Bicyclists ● New bicycle lockers at the Harbor Gateway Transit Center &bicyclestationatElMonteStation

RailTransitRiders ● MetrolinkPomonaStationExpansion● NewTransitStationatPatsaourasPlaza● TransitRewardsProgram

BusTransitRiders ● 59newalternativefuelbusesandoperatingsubsidyforthedemoperiod(SilverLine,FoothillTransit,GardenaTransit,andTorranceTransit)

○ Silver Line’s ridership increased an average of 27percentafternewservicewasadded.

○ Bus travel time improved by 1.5minutes duringmorningpeakperiod,themostcongestedtimeoftheday

● ElMonteStationExpansion● NewTransitStationatPatsaourasPlaza● HarborTransitwayPark&RideUpgrades● TransitSignalPriorityExpandedinDowntownLA● TransitRewardsProgram

Source:LosAngelesCountyMetropolitanTransportationAuthority,2014 https://www.metroexpresslanes.net/en/about/about.shtml

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AppendixD:EquityPlanIncomeThreshold

Source:LosAngelesCountyMetropolitanTransportationAuthority,2014 https://www.metroexpresslanes.net/en/about/ExpressLanes_Factsheet_Toll_Credit_Program.pdf