SUBJECT: APPROVE FOR PUBLIC 05-036b Set...Ayes: Directors Hayashi, Jaquez, Kaplan, Bischofberger, Peeples, Vice President Harper, President Wallace - 7 Noes: None - 0 Abstain: None

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  • ACTION MEMO

    AC TRANSIT DISTRICT

    Board of Directors

    Executive Summary

    Committees:

    Planning Committee

    External Affairs Committee

    Board of Directors

    D

    GM Memo No. 05-036b

    Meeting Date: March 16, 2005

    Finance Committee

    Operations Committee

    Financing Corporation

    D

    D

    SUBJECT: APPROVE FOR PUBLIC CONSIDERATION A PROPOSED FARE

    RESTRUCTURE AND SET THE PUBLIC HEARING ON PROPOSED FARE

    RESTRUCTURE AT A DATE, TIME AND LOCATION TO BE DETERMINED BY THE

    BOARD.

    RECOMMENDED ACTION:

    D Information Only Briefing Item Recommended Motion

    Adopt a motion establishing the proposed fare restructure and setting the public hearing

    at a date, time and location to be determined by the Board.

    BOARD ACTION: Approved as Recommended [x]

    Approved with Modification(s) [ ]

    Other

    MOTION: HAYASHI/JAQUEZ to set a public hearing on Proposals 1 through 5 - proposed fare

    restructure, on May 18, 2005 at 3:00 p.m. and 6:00 p.m. at a location to be determined by staff and

    consider placing a parcel tax measure on the ballot in November 2005 (7-0-0-0).

    a. Proposed fare restructure

    Proposal 1: Buck-a-Ride and the elimination of all discount fare media.

    Proposal 2: Raise base fare to $1.75 with corresponding increases in fare structure, transfer $0.50

    and 1 use.

    Proposal 3: Raise base fare to $2.00, transfer is free with 2 uses.

    Proposal 4: Keep current fare structure and add a $20.00 weekly adult pass.

    Proposal 5: Buck-a-Ride with continuance of youth and senior/disabled passes.

    b. Consider parcel tax measure on ballot in November 2005.

    Ayes: Directors Hayashi, Jaquez, Kaplan, Bischofberger, Peeples, Vice President

    Harper, President Wallace - 7

    Noes: None - 0

    Abstain: None - 0

    Absent: None - 0

    The above order was passed on

    March 16, 2005.

    Rose Martinez, District Secretary

    By

  • GM Memo No. 05-036b Subject: APPROVE FOR PUBLIC CONSIDERATION A PROPOSED FARE RESTRUCTURE

    AND SET THE PUBLIC HEARING ON PROPOSED FARE RESTRUCTURE AT A DATE, TIME

    AND LOCATION TO BE DETERMINED BY THE BOARD.

    Date: March 16, 2005

    Page 2 of 8

    Fiscal Impact: Potential additional fare revenue estimated at $8.0 million annually.

    Additionally, there would be administrative savings of approximately $500K annually.

    Background/Discussion:

    Existing Fare Structure

    AC Transit currently accepts cash aboard all buses, but also offers multiple fare media

    including: 1) 10-ride and 31-day passes, 2) "eco-pass" programs with the University of

    California (students and faculty) and the City of Berkeley (employees only), 3) Translink

    and 4) transfers. Transfers are sold to all passengers for $0.25 and discounts are

    available for senior and/or disabled passengers, as well as youth. The District's existing

    fare structure and current prices are shown in Attachment 1.

    Justification For Proposed Fare Structure

    It has been almost three years since the District's fares have been adjusted. During

    this time the local, state and national economies have continued to be mired in a

    prolonged recession. The District has declared two fiscal emergencies (fiscal years

    2003-2004 and 2004-2005), reduced service, reduced personnel, depleted its reserve

    accounts and taken other actions to address revenue shortfalls. While there are signs

    that the recession may be ending, projections for the East Bay continue to be less rosy.

    The passage of Measure BB by the voters helped to reduce, but did not eliminate, the

    revenue shortfalls the District continues to project. To deal with these shortfalls for the

    2005-2006 fiscal year it is recommended that the District Board consider a restructuring

    of the District's fare structure.

    Proposed New Fare Structure

    Staff is proposing that the District implement a pilot program to determine the impact of reducing cash fares and simplifying the fare structure. The pilot program would last no

    longer than 4 months, but could be terminated prior to that date if fare collection data

    indicates that the program is either not working or is working successfully and should be

    established as the District's fare structure. If the pilot is not successful, the District

    would return to a mixed media structure based on a base fare increase identified as

    Proposal 2 in Attachment 1 (raising the base fare to $1.75 and $0.85 for

    youth/senior/disabled, with corresponding increases in the offered magnetic fare

    media). However, if the pilot is successful, staff recommends either extending the

    program or adopting the fare re-structure as permanent. In any event, staff

    recommends providing periodic reviews for one year while keeping Proposal 2 as the

    back-up fare structure during this time while staff closely monitors the pilot program.

    Proposal 2 would sunset after one year of implementation of the pilot program.

  • GM Memo No. 05-036b

    Subject: APPROVE FOR PUBLIC CONSIDERATION A PROPOSED FARE RESTRUCTURE

    AND SET THE PUBLIC HEARING ON PROPOSED FARE RESTRUCTURE AT A DATE, TIME

    AND LOCATION TO BE DETERMINED BY THE BOARD.

    Date: March 16, 2005

    Page 3 of 8

    Under the proposed pilot program, the cash fare for adults would be reduced to $1.00

    and $0.50 for senior/disabled and youth passengers. Discounts would be eliminated for

    multiple rides (making the system more similar to BARTs pay-as-you-go system) and

    payment would be required with each boarding (eliminating transfers). All existing non-

    cash fare media, including transfers, would be discontinued, except for BART-to-Bus

    transfers, selected 1-ride magnetic passes for use by social service agencies and

    commuter check users. The BART-to-Bus transfer would be honored for a $0.25 credit

    on the purchase of a full fare (making the fare $0.75 for adults and $0.25 for

    youth/senior/disabled). While the primary impetus for this proposal is financial (staff

    projections show that the proposal could net the District of over $8.0 million based on

    conservative estimates) the proposal also addresses a number of issues as outlined

    below. If accurate, this could significantly reduce, or even eliminate, the need to reduce

    service in the next fiscal year.

    Under the proposed new structure, the District expects to see the following benefits:

    Increase in fare revenue

    Decrease in fare evasion

    Decrease in administrative and production costs related to current fare media

    Reduction in driver/passenger conflicts related to fare issues

    Better ridership and fare elasticity data

    Increase in ridership

    Marketing potential related to a simplified fare structure

    Ease of transition to Translink

    Passengers who currently use cash will see a significant reduction in their fares when

    compared with Proposal 2. Additionally, based on a 180-day school year and 2 bus

    trips per school day, youth patrons would spend $15 a month, the same as the current

    Youth 31-Day pass (180 x $0.50 x 2 = $180). Senior/Disabled patrons, currently paying

    $20 per month, would be able to take 40 trips per month before any increase is

    realized.

    Attachment 3 details the fiscal impact on both cash and 31-day pass patrons.

    Attachment 2 details the potential annual revenue increase anticipated by the pilot

    program. Actual receipts will depend on when the program is started. Ridership

    numbers use actual figures from the National Transit Database (NTC) report for fiscal

    year ending June 2004. Additionally, 7.8 million rides categorized as "daily UC pass"

    and "daily other" have not been incorporated into the projections although staff believes

    that these rides exist. Based on the proposal, these conservative estimates project

    $49.5 million in farebox receipts, an increase of $8.0 million. Additional variances are

    calculated for comparison purposes.

    Pass production costs and commission discounts paid to external vendors total over

    $500K annually. These costs would be eliminated in the proposed program.

  • GM Memo No. 05-036b

    Subject: APPROVE FOR PUBLIC CONSIDERATION A PROPOSED FARE RESTRUCTURE

    AND SET THE PUBLIC HEARING ON PROPOSED FARE RESTRUCTURE AT A DATE, TIME

    AND LOCATION TO BE DETERMINED BY THE BOARD.

    Date: March 16, 2005

    Page 4 of 8

    Additionally, the costs to stock, distribute and account for pass and ticket sales would

    be greatly reduced.

    At the Board Workshop of February 16, 2005 some questions were raised regarding the

    proposed fare re-structure including:

    How will disabled persons, unable to handle cash, manage in the new fare structure?

    (Long-term, the implementation of Translink and issuance of Translink cards solves

    this. For the pilot, suggestions include keeping the Senior/Disabled monthly sticker as

    a fare instrument.)

    What about Title VI issue regarding multiple ride passengers? (Staff is fully aware of

    Title VI and strives to address all aspects of this legislation in all fare proposals. Long-

    term, Translink will provide options in delivering discounts to frequent users.)

    What's the impact on Paratransit base fare? (The paratransit base fare is a blended

    fare with a number of variables. Staff is currently evalutating the affects of the fare re

    structure on this form