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06/01/2010, B2 - TRANSIT ENTERPRISE FUND REVIEW 2010
counaL June 01,2010 j agcnaa nepont 'B CITY OF SAN LUIS OBISPO FROM: Jay D. Walter, Director of Public Works Prepared By: Timothy Scott Bochum, Deputy Director of Public Works John Webster, Sr.,Transit Manager SUBJECT: TRANSIT ENTERPRISE FUND REVIEW 2010 RECOMMENDATIONS 1. Review and accept the 2010 Transit Enterprise Fund review. 2. Approve the date set for a.Mass Transportation Committee public hearing for SLO Transit fare modifications. 3. Authorize the City Manager or her designee to negotiate and approve(consistent with the existing agreement) 2 one-year contract extensions with First Transit, Inc. to perform operations and maintenance for 2010-11 and 2011-12 FY. 4. Temporarily suspend Trolley service on Friday-Sunday effective September 1, 2010 until future revenues are found to re-establish service. 5. Conceptually approve the Transit Enterprise Fund budget for 2010-11, with final action on June 15, 2010 with the adoption of the 2010-11 Budget. REPORT-IN-BRIEF The City operates a fixed-route public transportation system, SLO Transit, within the City limits and to California Polytechnic State University (Cal Poly). The Transit Enterprise Fund review presents the financial condition of the Transit Fund,based on the 2009-11 Financial Plan operating program budgets, current funding limitations, and recommended program and capital requests to address the identified needs in the Transit Program. Staff was able to negotiate a service contract extension with First Transit for operation and maintenance that represents a two (2%) percent increase in 2010-11 and three(3%) percent increase in 2011-12. These modest increases are factors in helping to close the funding gap between revenues and expenditures in the transit budget. Overall, it is anticipated that revenues will not meet expenditures in 2010-11 and that ridership rates will remain flat or experience a small decrease. The current faze rates and revenues are not adequate to support current operations. Staff will be bringing fare modification recommendations (Attachment 2) made by the Mass Transportation Committee (MTC) at their public hearing of May 12, 2010 for the Council to consider at the July 20, 2010 Council meeting. Additional State budget takeaways, higher regional transit funding needs, and federal funding reductions could all have significant negative effects on balancing the transit budget for 2010-11 and beyond. Transit Enterprise Fund Review 2009 Page 2 There were several events that occurred during 2009-10 that have impacted the Transit Enterprise Fund budget. These included: a general fare increase effective June 1, 2009 to cover operating cost increases, and various grant funding opportunities. Proposition 113 funding was delayed due to lagging bond sales which required a revised Program of Projects (POP) to utilize Federal Transit Administration (FTA) 5307 funds for the double deck bus replacement. In addition, any future State transit funding take-aways as the State struggles to balance its budget will have an impact on the San Luis Obispo Regional Transit Authority(SLORTA) and SLO Transit by complicating the ability to establish and maintain a balanced budget. DISCUSSION Background The City of San Luis Obispo operates a fixed-route public transportation system within the City limits, surrounding County areas and to Cal Poly. Vehicle operations and vehicle maintenance are provided under contract by a private transportation company, First Transit, Inc. Non-vehicle-related support and administrative services are provided by City staff. The Transit fund is an enterprise fund of the City, created to account for the revenues received pursuant to the Transportation Development Act (TDA), State Transit Assistance(STA), FTA and other funding received for providing transit services described above. The Local Transportation Fund (LTF) and TDA revenues are derived from the '/ cent of each $8.75 collected in retail sales tax. The Governor recently signed a revised State Budget bill as it relates to transportation overturning his veto of a similar bill. The revised bill, reestablishes some funding for local transit that was previously removed for most of 2009-10. This report presents the financial condition of the Transit Fund, based on the 2009-11 Financial Plan operating program budgets, existing funding limitations, and recommended program and capital requests to address the identified needs in the Transit Program for next year. Attachment 1 includes the 2010-11 Transit Fund Analysis. Accomplishments Ridership and Evening Service In 2009-10, ridership per hour on SLO Transit (average=29.75 riders/hour) continued to be higher than average for similar systems nationwide. Evening service averaged approximately 17 riders per hour with 85% of the riders consisting of Cal Poly students and staff. The system carried 856,224 passengers from July 1, 2009 through April 30, 2010 while performing 28,781 system revenue hours. These passenger numbers are down slightly (-18,085) or approximately -2% from last year which totaled 874,309 passengers during the same period. Higher unemployment, lower gasoline costs, and the economy may be contributing factors to the decline in ridership. New Freedoms Grant In January 2009, City staff was awarded a $20,000 Section 5317 - New Freedom (NF) Grant by the California Department of Transportation (Caltrans) and the FTA. This grant award required a $5,000 local match funding component. On April 21, 2009, the City Council awarded a twenty-four month contract to Ridership Development Consultants (Fred Munroe) in the amount of$25,000 to administer the grant. This funding provides the ability to develop a plan for marketing, education, service goals and programs to improve access to county public transportation services and is intended to educate senior DI — Transit Enterprise Fund Review 2009 Page 3 and mobility challenged individuals about the availability of various transit use training materials and educational opportunities. The grant was executed in October 2009 and the contractor is currently working closely with stakeholders to develop materials and a volunteer base in connection with the project goals. Approximately 12%of the total funds have been expended for this project. Federal Stimulus Program The American Recovery and Reinvestment Act (ARRA) of 2009 provided one-time funding for many categories, including public transportation capital projects. These funds were directly allocated to the San Luis Obispo Urbanized Zone Area (SLO UZA), and candidate projects were submitted to the City Council and San Luis Obispo Council of Governments (SLOCOG) for approval in the same form as a Program of Projects (POP). The City's allocation of those funds was $1,023,660 and no local match funding was required for receipt of the ARRA grants. On April 21, 2009, the City Council approved three ARRA funded projects as follows: 1. Automatic Vehicle Locator (AVL)-Passenger Access System: This project will replace SLO Transit's Efficient Deployment of Advanced Public Transportation Systems (EDAPTS) as our bus information and locator system. 2. GFI Electronic Farebox upgrade: This project will fund an upgrade for SLO Transit vehicles with GFI Odyssey model validating fareboxes and will allow expanded fare media including smart cards. 3. Transit Facility Improvements: This project will include Transit facility improvements to equipment such as the existing bus wash, signs, parking lot, office furniture, computers and monitors. Also being evaluated is new equipment installation such as modifying maintenance bay height, installing new overhead doors, security cameras, alarms,and automatic gate These projects are nearing completion and approximately $82,000 (8%) of the original grant award remains unexpended. While there was a great deal of talk in January 2010 regarding a possible Federal Stimulus II with similar .funding levels, at this time is does not appear to be receiving active consideration at the Federal level due to the high Federal budget deficits. Accordingly staff has not programmed any similar ARRA style projects in the 2010-11 budget. Proposition IB During 2008-09, the City received approval for $500,700 in Proposition IB funding. This funding assistance was to be used to augment an existing FTA grant for vehicle replacement by $475,000 and the remaining $25,700 for bus stop improvements. Due to the State budget crisis this funding was initially delayed due to lagging bond sales. The full amount has now been confirmed by SLOCOG to be available to the City, although it will arrive early in the 2010-11 fiscal year. Since only a small pro-rata amount of$47,500 in Proposition 1B will be received during 2009-10, this funding will be used as a local match for the double deck bus project. Transit Vehicle Replacements After several years of finally being able to fund replacement vehicle purchases, SLO Transit has caught up to the vehicle replacement projects needed to meet the California Air Resources Board (CARE) requirements. The City Council's decision to approve an aggressive bus replacement program in April 2008 resulted in six (6) new buses being placed into service in January 2009. One additional vehicle replacement is slated for 2009-10 with the purchase of a new double deck bus (the first in the area) to Da 3 � O Transit Enterprise Fund Review 2009 Page 4 assist with peak time passenger loads. The double deck bus is currently under construction at the EI Dorado facility in Riverside, California, with delivery anticipated in July 2010. No further vehicle replacements are programmed for 2010-I1 unless funding becomes available that does not require a local match. Revenue Projections Transit funding, particularly at the State level, remains stagnant. Current TDA operating funding is at or below 2002 levels. Some additional assistance from the recent State Gas Tax swap may assist in reducing the 2010-11 shortfalls. However; SLOCOG has yet to establish final funding recommendations for the use of these monies for 2010-11 and it is unlikely that even with this revenue, the SLO Transit operating budget will be able to cover expenses. Fortunately, the SLO Transit budget has a modest"year end"working capital that will assist in the immediate budget shortfall. There remains a structural deficiency in the transit operating budget where annual operating expenses exceed operating revenue for the foreseeable future. While it appears the Transit fund may end the 2010- 11 FY with a positive position, the structural deficiency will eventually drain this working capital reserve. If revenues do not return to previous historic levels, the transit fund will go negative in the next few years. It is, therefore, critical the City review our current operating levels and determine service priorities for potential reductions in 2010-11 along with revenue enhancements that will ensure that critical services be maintained. Other factors that will affect future SLO Transit budgets include; entering into the final year of the Cal Poly operating subsidy agreement (that will need renegotiation to continue) and the next two option years for the First Transit, Inc. Purchased Transportation contract for bus operations and maintenance. Staff has projected a structural deficit of$127,200 in 2010-11. This deficit will grow to $153,100 in 2011-12 FY if only modest cost increases are experienced and the Cal Poly subsidy arrangement is similar to current contract amounts. The final number will depend on a number of factors including how much funding the Transit fund will have available to carry over into the next fiscal year and the final State funding available from the LTF. Table 1-SLO Transit Operating Revenue Deficiency Forecast FY 2009-10 FY 2010-11 FY 2011-12 Operating Structural Deficiency $142,200) ($127,200) ($153,100 Year End Working capital 1 $586,800 $459,600 $306,500 Table 2 represents the 2010 FY actual and 2011 FY estimated non Federal Transit funding available from Statewide TDA/LTF and STA programs. As a comparison, if the STA amount for State Funding estimates are not included for 2010-11 FY, the Transit fund will start the next fiscal year with $162,311 ($62,311 if included) less than what was expected to be received, a reduction of approximately 16%. In all likelihood, the stability of TDA, LTF and STA funding amounts and maintaining farebox ratios will be significant issues the Transit fund will continue to face for the foreseeable future. ba--q Transit Enterprise Fund Review 2009 Page 5 Table 2—Transit Funding Revenues on-Federal FY 2009-10 FY 2010-11 Transportation Development Act Funds ACTUAL Estimated LTF $ 1,389,902 $ 1,358,591 STA Projections $ 116,711 STA Projections(discretionary) $ - $ DA Capital $ 76,000 Other grants Cal Poly Apportionment TDA Subtotal $ 1,506,613 $ 1,358,591 Less SLORTA Contribution $ (389,650) $ (384,096) Less SLORTA Contribution(5311 reimb) $ (96,744) $ (102,298) Less performance audit $ - $ (14,916) Less bikeways $ (27,797.00) $ (27,170.00) TDA Available to Ci $ 992,422 $ 830,111 $ (162,311) TA estimated funding $ 100,000 $ (62,311) Grants Program of Projects (POP/Amended POP) The Council held a public hearing for the initial POP on October 26, 2009 and approved the list of programs as set forth in Resolution 10119 (2009 Series). The planning estimate for the current year apportionment for the SLO UZA was $1,843,246, plus an unused amount of $445,070 from the previous year,making$2,288,316 available for programming in 2009-10. Of this amount,the SLO UZA committee agreed to allocate to the City of San Luis Obispo the amount of$1,914,744 and to SLORTA the amount of$350,000 for a total POP of$2,264,744. A total of$23,572 was not programmed and left in reserve. The revised 2009-10 Program of Projects was published in the Tribune on March 6, 2010. SLOCOG approved the revised POP after a public hearing on April 7, 2010 and under FTA regulations the City did not need to hold another public hearing. The revised POP was approved by Council as a consent item on April 20, 2010. The San Luis Obispo funding allocation had been revised to $1,823,626 to include a recommendation by the FTA to include website development and marketing within the operations budget and to augment an existing grant for the double deck bus replacement due to the delay of the Proposition I B funding. A hybrid bus purchase approved in the initial POP will be deferred until the Proposition 1 B funds have been released at some future time. A revised total of$114,691 is not programmed and left in reserve for programming in 2010-11. The latest apportionments for FTA funding was posted in the Federal Register for 2010-11 on May 13, 2010 and approved $1,912,389, or an increase in $69,143, for SLO UZA which includes Small Transit Intensive Cities (STIC) funding. With the present carryover funding of $114,691, the total funding available for programming is$2,027,080. State Transit Assistance In 2006-07 the City was successful in receiving$205,000 in discretionary STA funding from SLOCOG to implement a pilot Evening Service Extension Program. That grant has been 100% expended and t3�-J Transit Enterprise Fund Review 2009 Page 6 evening service continues to operate using existing transit funding. The Governor recently signed a revised State Budget bill as it relates to transportation overturning his veto of a similar bill. The revised bill, reestablished some funding for local transit that was previously removed for most of 2009-10 with an estimated $1,400,000 for our region. The SLOCOG Board approved use of some of this money at its April 7, 2010 meeting and allocated $116,711 to SLO Transit to help offset prior LTF reductions (Table 2). In addition, SLOCOG placed in reserve additional STA funds to be used to offset any LTF reductions in 2010-11. The SLOCOG Board has yet to act on 2010-11 STA funding levels, but staff has assumed SLO Transit will receive approximately $100,000 of this funding to assist in operating costs. This amount may change prior to final City budget approval as the SLOCOG Board will take action on this issue at its June meeting. Fares & Farebox Ratios Transit fare increases were approved by the Council on May 5, 2009 and went into effect on June 1, 2009. There were three significant reasons for considering fare increases at that time: volatile fuel costs, funding reductions and mandated farebox recovery ratios. These factors continue to severely limit the City's ability to implement a higher level of service to its ridership in 2010-11 and beyond. First, while diesel fuel costs have decreased from the peak of$4.39 per gallon in July 2009, the future cost of fuel is expected to rise from the present cost of$2.85 per gallon, which will continue to put pressure on the transit budget. Second, State transit operating funding reductions have caused a significant budget shortfall for 2010-11. This reduction, if permanent, will severely limit the City's ability to implement a higher level of service to its ridership, as recommended in the Short Range Transit Plan (SRTP) update. Over time existing levels of service will have to be evaluated and may require adjustment. Finally, as operating costs have increased, the City's ability to meet the State mandated 20% farebox recovery ratio has become a challenge, leaving the City vulnerable to fines or loss of funding. Therefore, the challenge of the fare increases implemented in 2009 and those under evaluation for 2010 will be to determine how much to raise fares (while balancing the impact to ridership for those who cannot afford a fare increase), with the service levels that meet the needs of the community over the next several years. The farebox ratio is the proportion of the amount of revenue generated through passenger fares, pass sales and the Cal Poly revenue agreement as a fraction of the cost of the total transit operating expenses. As noted in the staff reports for the SRTP and Fare Modification, due to the increases in operational costs along with reductions in the ability to capitalize operating expenses, SLO Transit's farebox ratio continues to decline and is now at the borderline level of 20% minimum. This farebox ratio is a requirement as mandated by the State and, if not maintained, can endanger funding. The performance of the farebox ratio is the subject of audits that the Transit Program undergoes on a regular basis. If the farebox ratio is consistently below the 20% level, then the agency is subject to losing State funding. Staff contacted SLOCOG regarding this issue, and was told that because of SLO Transit's regular record of strong farebox performance, a single year slip below that level would have no adverse consequence to State funding. The 2008-09 audit shows that SLO Transit ended 2008-09 at just above the 20% farebox recovery level. The 2009 fare modifications approved by the City Council assisted by providing that additional revenue and from all indications additional fare modifications will need to be considered again early in 2010-11 in order to assist with staying above the 20%ratio. —(o I I Transit Enterprise Fund Review 2009 Page 7 MTC Advisory Body Recommendations At a special MTC meeting on April 28, 2010, staff briefed the MTC members on upcoming considerations of the 2010-11 Transit fund and associated issues regarding significantly reduced operating revenues; primarily due to state funding shortfalls. At its regular meeting on May 12, 2011, MTC members made specific recommendations as noted in the MTC draft minutes (Attachment 2) for budget balancing priorities in regard to service and fare structure modifications and have requested that Council set a date for a public hearing. Recommendations a, b, and c (below) will require a public hearing for consideration and approval. Recommendations d and e (below) are being recommended by staff as part of the 2010 Transit Fund review. The recommendations include the following: a) Raising the current transit base fare from $1.25 ( Senior fare @ 50% or $.60) to $1.50 (Senior fare @ 50%or$.75) for Council consideration in July 2011 b) Charge all cash fare riders$1.00 for Evening Service routes effective September 1, 2010 c) Eliminate free transfers on SLO Transit effective September 1,2010 d) Eliminate Trolley service on Friday-Sunday unless alternate funding is made available effective September 1, 2010 e) *Reduce 2010-11 operating line items for fuel, system advertising,printing, engine repair, and shelter cleaning * The fuel and engine repair reductions are best estimates given current trends but ultimately will depend on issues beyond our immediate control to provide the actual cost savings estimated. Existing Policy The City's SRTP was adopted on May 5, 2009. As part of that plan, a policy was adopted to guide the City's hearings for public comment on SLO Transit fare modifications (Reading file#1). More specifically,the Council will first be informed of the need for a public hearing(as done by this Agenda item) and a legal notice will be published 30 days prior to the hearing. MTC's Proposed Date for Public Hearing and Council.Approval City staff has projected shortfalls in transit funding in fiscal year 2011 and beyond, and will need to hold public hearings for comment on possible fare modifications. The purpose of this section is to notify Council of the need for this hearing and to formalize the hearing date. Thus, the MTC hearing is proposed for July 14, 2010 at 2:45 pm in the Council Hearing Room located at City Hall, 990 Palm Street. Consistent with City policy, a thirty(30) day public notification of this hearing will be issued in order to hold the scheduled public hearing. First Transit Contract On June 6, 2006 the City Council approved a three-year contract with First Transit, Inc. to provide Purchased Transportation for operations and maintenance services for SLO Transit for the period July 1, 2006 through June 30, 2009. This agreement included a possibility of seven one-year extensions and authorized the City Manager to execute the agreement. In May 2009, Council approved the first option year extension for the period July 1, 2009 to June 30, 2010. The City was not required to modify service levels at this time as there were no significant increases in the City's contribution to SLORTA. Transit Enterprise Fund Review 2009 Page 8 Fiscal Impact of Transit contract Staff is recommending that Council approve two extension years starting on July 1, 2010 through June 30, 2012. The First Transit proposal is an increase over the current year contract costs for transit services, and comes with the recognition by First Transit that it is aware of the current financial difficulty facing the City. A comparison of the rates for the two extension terms is provided in Table 3. The total actual cost increases from 2008-09 through 2011-12 would be 1.85%, due to the 3.06% cost reduction provided in the current fiscal year. As a comparison, when the City circulated the last Invitation for Bids (IFB) in 2005, the two other proposals received provided an overall cost increase of approximately 30%. Table 3—Annual Contract Costs Year Not to ExceedCost Rate Not to Exceed Cost Total % Administrative Per mi Per Mite Cost Increase -(Decrease) 2008-09 $886,646 $2.496. $965,437 $1,852,083 --- 2009-10 $8437600 $2.461 $951900 $197959500 3.06 2010-11 $860,452 $2.510 $970,903 $1,831,355 2.0 2011-12 $886,266 $2.585 $1,000,031 $1,886,297 3.0 2009-12 L85 Benefits of the First Transit, Inc. Proposal Overall, the City is very satisfied with the level of service and professionalism that First Transit has provided the City for the last nine years. First Transit has been a fair and responsive contractor as well as a safe operator of the City's bus fleet. The First Transit contract contains many innovative ideas that previously led them to be the consensus candidate contractor for SLO transit services. Highlights of these elements are: 1. Passenger Attitude and Service. The overwhelming philosophy in the current First Transit contract was that passengers come first. As First Transit professed in consideration for the City's current contract, First Transit puts quality first. 2. Driver Attitude and Service. First Transit recognizes the value of its experienced drivers. First Transit has innovative employee incentive programs that are designed to increase morale of the employees. First Transit will continue to proactively hire and train new drivers and also retain quality drivers that will perform the City's transit service. 3. Maintenance Tracking Software and Hardware. First Transit is an industry leader in the use of innovative techniques and information services to keep costs low. First Transit will continue to provide a maintenance software package that will monitor the preventative maintenance and overall health of each SLO Transit vehicle. This software tracks vehicle performance and helps optimize parts distribution and cost recovery. This information has helped the City to better schedule major vehicle rehabilitation and replacement. Transit Enterprise Fund Review 2009 Page 9 It is for these reasons and because of the modest cost increases being proposed that staff recommends Council approve the extension agreements. There is a high likelihood that if staff is required to rebid for the transit operating services that the costs will come in higher. Transit Issues 2011 and beyond Continued Volatility in Fuel Costs Fuel costs were very volatile in 2008-09 when the City saw the untaxed price of diesel fuel peak at $4.40 per gallon in July 2009. Prices over the last part of 2009-10 have dropped significantly but are starting to climb again and are expected to continue to rise over the next few years. The proposed transit budget anticipates this increase to a certain extent. However, if fuel costs soar, the transit budget may not be able to absorb all of the cost increase. Unknown State Budget Impacts Further complicating the SLO Transit budget for 2010-11 are the potential negative ramifications of the State budget deficit. The Public Transportation Account (PTA), which was funded by the sales tax on diesel fuel and a portion of sales tax on gasoline, was radically changed in the recent gas tax swap signed by the Governor in 2010. The net effect is while there will be funding made available for transit capital, there may not be enough funding for transit operating costs because of a corresponding decrease in fuel consumption due to higher costs. If the cost of fuel spikes again, many residents will tum to transit due to the increase of fuel costs for their personal vehicles. SLORTA SLO Transit is a member of the SLO UZA, and as a member, shares State TDA funding for transit with SLORTA. The 2010-11 SLORTA budget proposes that the San Luis Obispo contribution will not increase over the 2009-10 amount of$486,394 (Table 2). In April 2009, the SLORTA Board approved an "In House" operations model where they transitioned from a contractor operated service to one directly operated by SLORTA staff. If SLORTA experiences higher than anticipated operating costs, this could result in additional TDA funding being required of the City in future fiscal years if no other funding sources can be found; at this writing it is still too early to determine the overall effect on funding from this decision. SLORTA has been working very closely with the Joint Powers Authorities (JPA)jurisdictions on these issues and they have been tasked by the SLORTA Board to closely monitor the transition and identify potential funding issues as early as possible. Representatives from SLORTA, SLOCOG and the City will be working on options for funding that maximize transit service provision for each agency, with the goal of finding a solution that preserves the greatest amount of transit service within the region. Future Transit Coach Replacements Replacement of the four 1997 buses for SLO Transit in future fiscal years has been deferred primarily due to reduced State transit funding for operations. Vehicle replacements will continue to be one of the biggest issues affecting funding. The proposed budget anticipates that most of the future capital bus replacement funding will come from non-conventional sources such as Proposition 1 B and other grants such as Clean Cities, Department of Energy, California Air Resources Board or FTA Section 5309, which is a nationwide discretionary program. Because these are discretionary in nature with no guarantees, the two year budget does not assume these grant revenues at this time for vehicle replacements. However, staff will pursue these as funding sources and will amend budget accordingly if � � l i f Transit Enterprise Fund Review 20.09 Page 10 we are successful in being awarded funding. In order to balance operating costs, SLO Transit will need to utilize significant amounts of the urbanized area Federal FTA Section 5307 funding (the Federal Urbanized Area funding) for operating assistance to help pay for bus maintenance and transit operations. Trolley Reductions At the MTC meetings on April 28, 2010 and May 12, 2010, the advisory body members indicated that the Downtown Trolley should be the first area to receive service cuts since it is not considered essential lifeline transit service. Staff has reviewed this issue and concurs that the Trolley is not an essential service but does play an important role that produces an economic benefit to the City as well as provides basic transit service at peak demand times. The Trolley currently operates from Thursday-Sunday along "Hotel Row" on Monterey Street into the Downtown district and charges a $.25 fare per passenger. Trolley ridership is down for the current fiscal year by about 2,932 riders during the same July-April timeframe when compared to 2008-09 FY (17,052 versus 20,017 passengers) or approximately 14.65%. In addition, Trolley ridership on Friday through Sunday is significantly below other system performance measures with a high ridership on Saturday of 1.60 passengers per mile and 13.13 passengers per hour. This is below the lowest performing non evening fixed route service of 1.7 passengers per mile and 17.5 passengers per hour for Route 1. According to the SRTP as indicated on page 79, the City should evaluate and "significantly alter routes performing at less than 60% of the peer group average of 2.2 (1.32)passengers per mile and 24.8 (14.88)passengers per hour". City staff, along with MTC concurrence, is recommending that Trolley service be temporarily suspended on Friday-Saturday and Sunday effective September 1, 2010 unless alternate funding is available. Estimated gross cost savings would be approximately $26,249 with a net savings of approximate$23,412 when farebox is taken into consideration. (Tables 4-6 provide Trolley performance and cost data). City staff has engaged the Downtown Association, Chamber of Commerce and TBID Board in consultations regarding this issue and remains open to furtherdiscussion regarding alternate funding and service levels. Table 4-Fixed Routes JU"9 to FIXED ROUTE(Seven days per week)-Excludes Trolley EVENING Apr-10 R1 R2 R3 R4 R5 R6 R6A6/Sat R2E R3E R4AE R6ABE TOTAL PASSENGERS1 41,663 73,123 98,891 192,217 204,426 170,801 22,729 2,299 5,240 19,875 7,875 839,139 REV MILES 23,969 36,971 40,598 75,234 83,042 28,167 6,910 4,185 5,700 9,133 5,319 319,228 PASS REV MI 1.7 2.0 2.4 2.6 2.5 6.1 3.3 0.5 0.9 2.2 1.5 2.6 REV HOURS 2,378 3,501 3,447 5,708 6,244 3,356 952 310 353 752 685 27,686 PASS REV HR 17.5 20.9 28.7 33.7 32.7 50.9 23.9 7.4,, 14.84 26.4 i 11.5. 30.3 Table 5-Trolley Revenue Miles TROLLEY FY 2009 Jul -O March-2010 I I AV I AV I YTD AV REV MILES 9329 DAYS PASS REV MI REV HR PASSINII PASS/NR REV MILE COST GALLONS FUEL COST COST DAV COST ev mi COST Q-SZ--51 $ 23,416 43 THURS 7,212. 1,923 231 375 31.29 $ 4,826.73 481 $ 1,442 $ 6,269 $ 145.79 FUEL 4m 2,332 43 FRI 3,678 2921 353 i, 126 10.42 $ 7,331.71 730 $ 2,191 $ 9,522 $ 221.45 OST 3 e a $ 6,997 43 SAt 4,706 2,942 359 1.60 13.13 $ 7,384.42 -736 $ 2,207 $ 9,591 $ 223.04 TOTAL COST $ 30,413 43 SUN 1,360 2,006 233 0.68' S.85 $ 5,035.06 502 $ 1,505 $ 6,540 $ 152.08 172 16,956 9,792 1,175 1.73 14.4 $ 24,578 2448 $ 7,344 $ 31,922 $ 185.59 Uj, -�D Transit Enterprise Fund Review 2609 Page 11 Table 6—Trolley Cost per Da Set 1st-June 30 Av Cost Per Day Est Savin s THU 44 $ 145.79 $ - FRI 44 $ 221.45 $ 9,743.80 SAT 44 $ 223.04 $ 9,813.76 SUN 44 $ 152.08 $ 6,691.52 $ 26,249.08 Farebox Loss: 1 $ (2,837.00) Net Savings: 1 $ 23,412.08 Evening Service Evaluation In the 2006-07 fiscal year the STA available was significantly higher than in previous years. This increase was most notably due to the increase in sales tax generated by the significant cost increase for gasoline and diesel fuels. The net result was a one-time increase of approximately $1.4 million in STA that was made available for programming for transit services within San Luis Obispo County. STA is usually allocated to transit operators and other transportation entities directly for services. At its January 17t', 2007 meeting, the MTC reviewed the evening service application and determined that the application fit the call for projects criteria, could be implemented without significant schedule changes and did not need significant capital expansion (such as additional buses to perform additional service). The MTC recommended submission of the application to SLOCOG for consideration which was ultimately approved. The result was a two year pilot program using $205,000 in one time STA Discretionary funds to extend some SLO Transit Routes until after 10:00 PM to better serve the Downtown and Cal Poly. Routes 6A, 6B and Route 4 were extended until after 10:00 PM. As these routes were experiencing high ridership demands during the day and Route 6 was experiencing over 20 passengers per hour during evening service. Route 6a and 6b serve the heavily student populated area north of Hwy 101 between Patricia and the University. Route 4 serves the University, the Downtown and the Laguna Lake area via Madonna Road, Los Osos Valley Road and Foothill. Routes 2 and 3 were extended during the second year in an effort to serve riders from routes 7 & 8 that were eliminated in 2007. Although increased ridership on the routes was expected, gaining additional farebox for the services was identified to be a challenge since most of the evening riders would be students riding free under the Cal Poly subsidy program. Table 7 & 8 shows the estimated 2011 FY evening service costs based on 2009 FY data and the anticipated revenue for fare modifications. For this fiscal year, the evening service has carried 35,289 passengers through April 2010 of which 26,052 were Cal Poly riders or just approximately 74%. �a-� l Transit Enterprise Fund Review 2009 Page 12 Table 7 EVENING 2 1 3 1 4 6A16B TOTALS FY 2009 DATA REV MILES 4,970.00 6,779.00 10,546.00 6,123.00 28,418.00 COST $ 12,474.70 $ 17,015.29 $ 26,470.46 $ 15,368.73 $ 71,329.18 REV MILE COST FUEL GAL 1,242.50 1,694.75 2,636.50 1,530.75 7,104.50 GALLONS COST $ 3,727.50 $ 5,084.25 $ 7,909.50 $ 4,592.25 $ 21,313.50 FUEL COST TOTAL COST $ 16,202.20 $ 22,099.54 $ 34,379.96 $ 19,960.98 $ 92,642.68 Farebox Loss: $ (28,509.00) Net Savings: $ 64,133.68 Table 8 EVENING SERVICE Per I Per Month Annual REVISED FY-09 DATA FY-09 Month Fare Revenue Revenue REVENUE ADULT CASH RIDERS 4,367 364 $ 1.25 $ 455 $ 5,459 $ 1,092) SENIOR/DISABLED 469 39 $ 0.60 $ 23 $ 281 $ 117 CAL POLY 30,266 2,522 $ 1.00 $ 2,522 $ - $ 30,266 $ 5,740 $ 29,057 Elimination of Evening Service on September I"would result in a net savings of$64,133 (Table 7) after farebox revenue is reduced and would significantly address a majority of the structural deficiency in operating costs and revenues. However, evening service has become important to the community and student riders. A fare structure option recommended by MTC to be reviewed at a public hearing on July 14, 2010 would require all riders (including Cal Poly) begin to pay a base fare to ride the service. If a fare of$1.00 is established as an off-peak fare, giving the general riders cash payers a small break and yet receiving some fare from the Cal Poly riders it is anticipated to generate an additional gross revenue of$30,266 for the system minus a small reduction($1,210) in regular and senior/disabled cash fares due to the lower rate. This equates to a net revenue increase of$29,000 in farebox. While this option does not reduce the costs associated with the deficiency it reduces the effect of the deficiency over time and may allow continuation of these services until state revenues somewhat correct in later years. As noted in Table 4, Evening routes 2 & 3 are below SRTP passenger mile and hour performance levels with route 6A/13 not meeting the passenger per hour level. Since evening routes are considered essential lifeline transit service staff is recommending a delay in any evening service reductions until the issue of fare structure modifications have been reviewed as they could have a positive affect on SRTP performance factors by increasing ridership due to a lower cash fare structure. FISCAL IMPACT Transit Budget 2010-11 The SLO Transit budget CIWC for 2010-11 is included as part of the Fund Analysis attachment, Exhibit A. Overall, revenues are not projected to meet expenditures for 2010-11. Staff projects a2009-10 end- of-year working capital/reserve of approximately$586,800 which will help support the structural deficit for the immediate shortfall. However, depending on the amount of capital needed to fund local matches for bus replacements for grants yet to be secured, there may be a need to shift some of this reserve funding to capital during the next two years. This projection includes assumptions of revenues in key funding sources that have had significant reductions by State budget takeaways in the last three years. Rather than program all funding at this time based upon these projections, staff proposes to be very conservative at this time and maintain some working capital as a reserve for 2010-11. This request for a prudent reserve is two-fold. First, as identified above, fuel prices are anticipated to continue in an Transit Enterprise Fund Review 2009 Page 13 upward trend and may exceed budget assumptions. Second, the proposed outside funding sources for bus replacement capital may not be fully realized or funding sources could again be reduced dramatically because of State issues. Capital reserve and one-time funding will assist the Transit fund in meeting the budget needs for 2010-11. Retaining the modest working capital amount as reserve funding will allow for some flexibility and adjustments in critical components of the SLO Transit system if funding levels are below expectation. Cost Reduction Strategies Given various economic uncertainties and structural deficits identified in 2010-11, staff has taken a closer look at transit operations to identify further opportunities for cost savings. The budget for advertisement and printing/reproduction will make reductions of $24,500 in 2010-11. It is staffs assumption that a portion of the work lost through these cuts could be picked up by the Bicycle Programs Coordinator, which will be shared between the Transit Division and the Transportation Planning and Engineering Division. Table 9—Summary of Operating Budget Reductions Transit Enterprise Fund Operating Cost Reductions 2009710 Budget 2010-11 Budge Advertising - (15,000) Contract Services - (3,000) Training&Education - (1,000) Travel&Meetings - (1,000) Diesel Fuel (100,000) (74,400) Overhaul&Major Repairs (3,000) Printing&Reproductions 9;500 Total Operating Reductions 100,000 106,900 ALTERNATIVES 1. Set Alternate Public Hearing Date. The City Council could determine that it wants a different date than the July 14, 2010 date set by the MTC receive comments for fare modification to provide more time for comments and feedback. 2. Delay Contract Award The Council could decide to delay the award of a contract extension for the operations and maintenance of public transit fixed-route services and direct staff to issue an invitation for bids. This delay would result in not having an executed contract by July 1,2010 when the existing agreement expires. Staff is not recommending this option because it might result in higher costs and service interruptions. Staff supports the proposed contract extension with First Transit Inc 3. Trolley Service Council could determine not to reduce the trolley service levels at this time. Council could choose to provide direction for staff regarding alternate funding options. Transit Enterprise Fund Review 2009 Page 14 ATTACHMENTS 1. 2010-11 Transit Fund Analysis 2. MTC Meeting Minutes May 12, 2010 AVAILABLE IN THE COUNCIL READING FILE 1. Short Range Transit Plan Fare Policy 2. Contract Agreement,First Transit, Inc. T:\Council Agenda Reports\Public Works CARL010\Tramit\TRANSIT ENTERPRISE FUND REVIEW FY 2009-10\Transit CAR 2009-11 Transit Fund Review-DRAFT 06-01-2010.DOC ATTACHMENT 1 2009-11 Transit Fund Analysis san Luis OBISp0 transit June 01 , 2010 Prepared by the Public Works Department city of san WIS OBISPO T:\Council Agenda Reports\Public Works CAR\2010\Transit\TRANSIT ENTERPRISE FUND REVIEW FY 2009-10\TRANSIT fund DRAFT analysis 2009-10.DOC _ �a� 5 —' -- Attachment Page 2 City of San Luis Obispo 2009-11 Transit Fund TABLE OF CONTENTS I. OVERVIEW H. 2009-11 FINANCIAL PLAN A. Summary of Operating Programs B. Summary of Operating Cost Reductions C. Capital Improvement Projects III. ASSUMPTIONS A. General Assumptions B. Transportation and General Expenses C. Grants D. Ridership E. Vehicle Replacements F. Short Range Transit Plan IV. LOOKING TO THE FUTURE A. Fuel Costs B. Operations and Maintenance contract C. State and Regional Budget Impacts D. Vehicle Replacements V. EXHIBIT A—FINANCIAL SCHEDULES � � I Attachment 1 Page 3 city of san WIS OBISPO 2009- 11 Transit Fund Report I. OVERVIEW This report presents the financial condition of the Transit Fund, based on the 2009-11 Financial Plan operating program budgets, existing situation, and recommended program and capital requests to address the identified needs in the Transit Program. The current fare rates and revenues are not adequate to support current operations and expenditures. The balance is achieved through the use of one-time only grant sources that may not be available as a stop-gap measure in the near future. To maintain the current level of services in the 2010-11 fiscal year, the operating costs for the Purchased Transportation contract will need to be above 2009-10 FY levels and the amount of Transportation Development Act (TDA) and the San Luis Obispo Regional Transit Authority (SLORTA) funding must be consistent with current forecasts and funding required to meet obligations. Due to the need to program almost all available resources for support of operations, there will not be significant capital funding available from the conventional funding sources such as TDA and FTA. Instead, it is likely that the City will need to continue to rely heavily on one-time only grant sources (such as Proposition 113) to deliver needed vehicle replacements and other major capital expenses. These funds are discretionary under the purview of the San Luis Obispo Council of Governments (SLOCOG) and as such, have not been anticipated nor included as part of the budget forecasts. However, staff will continue to seek these grants when available to assist in meeting capital replacement needs. A significant area of concern is the City's ability to meet the State mandated 20% farebox recovery ratio that is required to meet TDA funding eligibility. The 2008-09 farebox recovery ratio was just above the 20% requirement. As operating costs increase, the City may experience difficulties in maintaining this ratio. The 2010-11 FY is currently forecast to be balanced if reserves are utilized. There are significant issues such as State and Federal transit funding levels, additional transit contract extension (or rebidding) cost increases and the needs of SLORTA that could effectively unbalance the future forecast. In addition, the Cal Poly subsidy contract is due to terminate in 2011. Future funding levels of this significant revenue source for transit service are unknown at this time. ICA ��- Attachment 1 Page 4 II. 2009-11 FINANCIAL PLAN A. Summary of Operating Programs TRANSIT FUND.SUMMARY 2009-10 201041 2011-12 Revised Budget _-_ Budget Summary of Revenues Investment and Property Revenues 5,600 5,000 5,000 Subventions and Grants 4,806,150 2,219,000 2,216,300 Service Charges 544,200 603,900 618,700 Other Revenues 11,000 4,500 4,500 Total Revenues 5,366,950 2,832,400 2,844,500 Summary of Operating Program Expenditures Operating Programs Transportation 2,552,500 2,527,900 2,625,800 General Government 350,200 357,200 364,300 Total Operating Programs 2,902,700 2,885,100 2,990,100 Other Sources(Uses) Potential MOA Adjustments -1,200 -7,500 (7,500) Savings 0 0 0 Other Sources(Uses). 0 0 0 Expenditure Savings 0 0 0 Total Other Sources Uses 1,200) (7,500) 7,500 B. Operating Cost Reductions Transit Enterprise Fund Operating Cost Reductions 2009=10 Budge 2010-11 Budget Advertising (14,300) Printing&Reproductions 6,500 - (20,800) Additional Operating Reductions Advertising" - (7,000) Contract Services - (3,000) Training&Education - (1,000) Travel&Meetings - (1,000) Diesel Fuel (100,000) (74,400) Overhaul&Major Repairs (3,000) Printing&Reproductions' 3,000 ]Total Operating Reductions100,000 92,400 "a Attachment 1 Page 5 C. Capital Improvement Projects I 2009-10 2010-11 2011-12 Budget Budget_ _ Budget Capital Improvement Projects Bus Stops 17,000 0 0 Particulate Trap Retrofit(90748) 3,100 0 0 Bus Maint Facility Exp 132,700 0 0 Double Deck Bus 850,000 67,000 0 Bus Stop lmpr 25,700 0 0 Forklift 30,000 0 0 Staff Vehicle Replcmnt 50,000 0 0 Buses&Trolly 475,000 0 0 Downtown Transit Center Coord Study 125,000 0 0 AVL System Upgrade 405,000 0 0 Farebox Upgrade 400,000 0 0 Transit Facility Improvements 68,700 0 0 FoxPro Replacement 23,000 0 0 Total Capital Improvement 2,605,200 67,000 0 Note*: Supporting documentation for capital improvement projects is provided in Appendix B of the 2009-11 Financial Plan and ARRA grant applications. III. ASSUMPTIONS The following assumptions have been programmed into the long-term forecast of the Transit Fund. The following provides more detail for the key assumptions in Exhibit Al of this report, the financial schedules showing the Transit Fund's changes in financial position and the listing of assumptions. A. General Assumptions Minimum working capital (reserve) should equal at least 20% of the total Operating Program expenditures according to the City's fiscal policy and Standard and Poor's rating criteria. The Transit Fund commits all available transit funding to transit and will carry over any unused funding for use in subsequent years. B. Transportation & General Government Expenses Fare Increase Fare increases adopted by the City Council in April 2009 are expected to raise revenue. However, based upon past experience and the effect of the Cal Poly Subsidy agreement, only a modest I% increase in general fares has been programmed for each year of the Financial Plan. A fare modification will be coming to Council in July 2010. The Cal Poly subsidy is due to terminate in 2011. Transit Purchased Transportation Contract An extension of the current Purchased Transportation contract for transit operations and maintenance provided by First Transit will be negotiated for a two-year extension for FY 2010-12. An additional contract extension agreement or circulation of a Request for Proposals (RFP) will be required for future years. The two-year extension is a modest increase of contract costs for these services at 2% for 2010-11 FY and 3% in 2011-12 FY. The total actual cost increases from 2008-09 through 2011-12 would be 1.85%, due to the 3.06% cost reduction provided in the current fiscal year. As a comparison, when the City I l Attachment 1 Page 6 circulated the last Invitation for Bids (IFB) in 2005, the two other proposals received provided an overall cost increase of approximately 30%. Temporary Staffing The Transit Fund will provide funding to support a shared temporary worker position with the Transportation Planning and Engineering division. The Bicycle Programs Coordinator will cost the Transit Fund $20,400 in 2009-10 and $20,400 in 2010-11. Operating Cost Reductions SLO Transit has reduced the operating budget by $100,000 in 2009-10 and by $106,900, in 2010-11 for a total of $206,900. This was accomplished by reducing contract services, training& education, travel &meetings, printing, major engine repairs and diesel fuel. C. Grants Local Transportation Funds (LTF) This funding is from the `/4 cent retail sales tax. This assumption includes a 16%reduction in estimated LTF 2009-10 totals as estimated by SLOCOG .. State Transit Assistance Program (STA) Although initially eliminated in 2009-10, STA was renewed under the State budget agreement and is expected to provide SLO Transit with annual funding. The City received $116,700 in STA funds in 2009-10 to back-fill a reduction in TDA funding. The Transit fund analysis includes an assumption of$100,000 estimated STA funding for 2010-11. Federal Transit Administration (FTA) Section 5307 1. FTA funding is a formula-based fund and is anticipated at a minimum of$1,343,246 each year over the next two fiscal years. Actual amounts may vary and will be determined by Council as part of the annual Program of Project(POP)process. 2. The revised POP approved by Council on April 20, 2010 augmented an existing FTA Section 5307 2007-08 FY grant by $475,000 in order to supplement the funding needed to purchase the double deck bus. FTA Section 5317 New Freedom Grant 1. The City of San Luis Obispo was awarded a $20,000 New Freedoms grant by the Department of Transportation (Caltrans), coupled with a local match of$5,000, to expand transportation services in San Luis Obispo over the next two years. 2. On April 21, 2009 the Council approved a twenty-four month, $25,000 contract with Ridership Development Consultants to educate senior and mobility challenged individuals about the availability of various transit use training materials and educational opportunities. American Recovery and Reinvestment Act (ARRA)FTA Section 5307 The American Recovery and Reinvestment Act (ARRA) of 2009 provided one-time funding for public transportation capital projects. The San Luis Obispo Urbanized Zone Area (SLOUZA) amount was $1,323,660 and the City's allocation of those funds was $1,023,660. SLO Transit utilized ARRA funding to develop the AVL system upgrade, farebox upgrade and various transit facility improvement projects. The three ARRA capital project are nearing completion and of the $1,023,660 awarded, there is currently $82,000 in funds remaining unexpended. Proposition IB 1. On April 8, 2009 SLOCOG approved $475,000 is discretionary Proposition 1B funds for SLO Transit to augment an existing FTA grant. 2. On April 21, 2009 Council approved using those funds for the purchase of a double deck style bus. 3. On April 20, 2010 Council approved augmenting the FTA 5307 grant by$475,000 due to 13x-01-0 I 1 Attachment 1 Page 7 delays in connection with the sale of Proposition 1 B bonds. 4. SLO Transit will also receive $25,700 in Proposition 113 funds annually to be used for projects such as bus stop improvements.. D. Ridership and Evening Service 1. Ridership is estimated to remain level or slightly below in 2010-11, if existing funding and service levels are maintained.. 2. Annual Pilot Evening Service is estimated at approximately 28,418 miles at an annual cost of$92,643. The pilot program has fully expended the initial discretionary STA grant of$205,000. The evening service does not deliver significant additional revenue to assist with farebox recovery ratios. 3. The Transit fund analysis does not include any assumptions in reducing evening service levels at this time. The current fare rates and revenues are not adequate to support current operations. Should revenue sources continue to decline, staff will return to Council with recommendations for service level reductions. E. Transit Vehicle Replacements 1. Council approved $475,000 FTA 5307 funds, which will be used to augment an existing FTA grant ($375,000) for the purchase of a double deck style bus. The bus will allow greater passenger loads without increased operating costs. A pro-rata share of$47,500 in Proposition IB funds will be used as the local match for this grant. There is also the possibility of$67,000 in Air Pollution Control District (APCD) funding in 2010-11 that would assist in the local match requirement. 2. The City will need to rely heavily on non-conventional grant sources, such as Proposition 113, to secure funding for vehicle replacements and other major capital items. $475,000 in Proposition 113, minus the local FTA 5307 match of$47,500, could be made available for a bus replacement project if these funds are made available in 2010-11. F. Short Range Transit Plan 1. On May 5, 2009 the City Council adopted the Short Range Transit Plan (SRTP) update that was prepared by Urbitran Associates, Inc. 2. Recommendations provided in the SRTP are not expected to be realized within the 2009- 11 Financial Plan. Recommendations will be implemented as funding is made available. VI. LOOKING TO THE FUTURE A. Fuel Costs The proposed transit budget anticipates an increase in fuel costs, estimating $3.35 per gallon.. However, the cost of fuel is subject to the changing economy. Should fuel costs soar as occurred in 2008-09, the transit budget may not be able to absorb all of the cost increase. B. Unknown State Budget Impacts and SLORTA Situation Further complicating the Transit Fund budget for 2010-11 are the potential negative ramifications of the State budget. The Public Transportation Account (PTA), which was funded by the sales tax on diesel fuel and a portion of sales tax on gasoline, was radically changed in the recent gas tax swap signed by the Governor in 2010. The net effect is while there will be money made available for transit capital project, there may not be Attachment 1 Page 8 enough funding for operating a public transit system at a time when the demand for public transit is high as residents may seek transit services due to the increased fuel costs. SLO Transit is a member of the SLO UZA, and as a member, shares State TDA funding for transit with SLORTA. The 2010-11 SLORTA budget proposes that the San Luis Obispo contribution will not increase over the 2009-10 amount of$486,394 (Table 2). In April 2009, the SLORTA Board approved an "In House" operations model where they transitioned from a contractor operated service to one directly operated by SLORTA staff. If SLORTA experiences higher than anticipated operating costs, this could result in additional TDA funding being required of the City in future fiscal years. SLORTA has been working very closely with the Joint Powers Authorities (JPA)jurisdictions on these issues and they have been tasked by the SLORTA Board to closely monitor the transition and identify potential funding issues as early as possible. Representatives from SLORTA, SLOCOG and the City will be working on options for funding that maximize transit service provision for each agency, with the goal of finding a solution that preserves the greatest amount of transit service within the region. It is still too early to determine the overall effect on funding from this decision. C. Transit Purchased Transportation Contract On June 6, 2006 the City Council approved a three-year contract with First Transit, Inc. to provide operations and maintenance services for SLO Transit for the period July I, 2006 through June 30, 2009, with the possibility of seven one-year extensions. In May 2009, Council approved the first option year extension for the period July 1, 2009 - June 30, 2010. Staff is recommending that the second and third-year contract extension starting on July 1, 2010 through June 30, 2012 also be approved. This two-year extension will keep contract costs for these services just above the 2008-09 FY levels. This modest increase assists in closing the transit operations budget gap. If a contract extension is not approved, City staff will need to prepare and circulate a RFP for maintenance and operational services. There is no guarantee that costs of services will be consistent, if not higher, than the current contract with First Transit. D. Vehicle Replacements Replacement of four 1997 buses for SLO Transit in the next two fiscal years will continue to be one of the largest issues affecting funding. The proposed budget anticipates that most of the future capital bus replacement funding will need to come from Proposition IB and other non-conventional funding grants such as Clean Cities, Department of Energy, California Air Resources Board or FTA Section 5309, which is a nationwide discretionary program. In order to balance operating costs, SLO Transit will need to utilize significant amounts of FTA Section 5301 funding (the Federal Urbanized Area funding) for operating assistance to provide support for operations and bus maintenance. Fa-aa -- —� Attachment 1 Page 9 EXHIBIT A 2009-11 TRANSIT FUND FINANCIAL SCHEDULES ��3 I f \ j1 ATTACHMENT 1 00 00 00 00 00 0 0 00 00 0 0 0 0 0 0 0 0 0 0 0 o d, .- N N L CO C O 0 0 0 0 0 0 000 O O 0^ 0 0 0 0 O O O e c. v 00 O\ T O M O N L a ° u � U 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 o o p p ? O _ Nvt � N V r N �C ppp� oy C\ N \O � V1 M � Q• N h 7 � O C ^ N N C L N E >` d A c A u F O O O YOj O y O O p O p Q 0 0 0 0 O O Iz O ^ 4. 0 0\ Mf N n N a N N Ngh O CO 7 O a � N Mi N ry N vi ` u d C rC � Y {•. O C Z Z E 0 0 0 0 0 0 0 0 0 0 0 0 o a u 0 0 0 0 0 0 0 0 N O 0 0 0 O0 c o 0 0 0 .y ? M h M O CO C\ M N n D\ r M °` N 7 Q C z � \O O wt � Z N � �• � r. .��, � d7T N � � w L [[1 TU p � � p Y m y O. = a ° a m Q C C � L m e Z ch wl Cr 4• O �' � Q tCC ani v' C CJ C. eCi % � 4yl OU= O = L �V F y � vC` v N5 w N� p X47 ¢ = .50 w ec y o Q v m Q L Q m to c Q > w Q N In o � OcFi. r � F �F C7F aF > j !^ � s •ao 0 aW' c c, 4c0 _ _ _ e Z u C nom. _ y .r-•' to L p cpt� r 9 U u ZL m .0. C N C '� O aN U ` aov, Oru ? C m L e W 3 00 Q u e e a� 0 - F: ra U � O O � O � m LL] al T o ;? s U N NFA V r_ co R s c � ❑ o P-' o ce = C O i 7 O b9 N C. N -Np aOJ C O O R 0 m p m •� V O N V N U O N c. C O V 'C V u _C � d H F O U bA U _3 C' Q C C !j cc L �02O u cc bOA 'c- u �. �n CO vs � N U V rn N. �- O N o C ❑ > V � C n O C: U � V an C+i rn M U T a0i o y i U 1V. y to L lu N 0 G M G fl o C c.Q y � O > � V C _ c � � � -o c c � cLC c cLC Cn00 o _ 0 0 o c .� o m V V = �„� O O N (Ir I yy d N CL U > M G U p C V C M y C LO G 0 U 0 -= C L C ca UO O Q: p0 O C y O 6 ca T O. , O N i.., U O N O C E OC in "O O Lcto 'O C L L •(A EH(21 Y C w CD W = Q N o o � F v TF 0 >, M Ocil c0. M O C.7 V t U V V L N > @ Goq 7 L cNC H a 6. CL N Or 6d yj H O y O c C 'O O .C- O O R O U O cu u UUP ti °L' U ; U i r c c a c > ¢ c c by c m 7 0 0 0 o o CLQ N o o > N R Cd R t m iC .� C N A L c6 > tC �:. r U r r y A L U r U / OF F Fv FF 'o F F i F >. o 0 0 0 oC) C. . o � 00000 � o v o 0 0 0 0 0 00 0 0 0 0 E o c o o e4 o CDsN N N N O N N N N N v❑ N rV. N N N O N Cz. Gr. Cz.. w O. ATTACHMENT#2 `� CITY OF SAN LUIS OBISPO MASS TRANSPORTATION COMMITTEE REGULAR MEETING COUNCIL HEARING ROOM 990 PALM ST. WEDNESDAY,MAY 129 2010 DRAFT MINUTES CALL TO ORDER: Chairperson Susan Rains called the meeting to order at 2:45 p.m. ROLL CALL Present: Susan Rains, Denise Martinez, Elizabeth Thyne, Stanley Yucikas, Art Apruzzese, Margaret Crockett and Jonathan Ellis Absent: Tracey Amundson and Louise Justice Staff: John Webster, Tim Bochum ANNOUNCEMENTS There were no announcements. PUBLIC COMMENTS There were no public comments. A. CONSENT ITEMS A-1. Approval.of March 10, 2010 Regular Meeting and April 28. 2010 Special Meeting Minutes Ms. Crockett moved to approve the March 10, 2010 meeting minutes as submitted. Ms. Thyne seconded the motion. The motion passed unanimously. Ms. Thyne moved to approve the April 28, 2010 special meeting minutes as submitted. Mr. Apruzzese seconded the motion. The motion passed unanimously. B. DISCUSSION ITEMS There were no items. 8a2 ATTACHMENT#2 C. ACTION ITEMS C-1. New Chair/Vice Chair election Ms. Rains nominated Ms. Thyne as Chair. Ms. Martinez seconded the motion. Ms. Thyne was elected Chair by unanimous vote. Ms. Martinez nominated Mr. Yucikas as Vice Chair. Mr. Apruzzese seconded the motion. Mr. Yucikas was elected Vice Chair by unanimous vote. C-2. Set Meeting Schedule ITY 2011 Mr. Yucikas moved to accept the meeting schedule as presented. Ms. Thyne seconded the motion. The motion passed unanimously. C-3. Review and Approve Potential Budget Balancing Priorities Mr. Bochum discussed the report in detail, outlining the SLOCOG and RTA specifics that would affect the dollar estimates and possible reserves. He also discussed the SLO Transit Operating Revenue Deficiency Forecast section in detail. Mr. Webster discussed the following report items: ■ Reductions of Trolley schedule ® Eliminating Trolley service on Fridays-Sundays ■ Modifications to evening service to either eliminate service or attach an off-peak fare to the service ■ General fare adjustments—discontinuing free transfers, increasing cash fares only Mr. Webster summarized the staff recommendations listed on page 14 of the staff report to be forwarded to Council for review. Ms. Thyne made a motion that Council review and consider the following staff recommendations: ® Raising the base fare to $1.50 and Senior/Disabled fare going to $.75 ■ Charging all riders $1.00 for evening service beginning September 1, 2010 ■ Eliminate free transfers on SLO Transit effective September 1, 2010 Ms. Martinez seconded the motion. Mr. Apruzzese noted the short range transit plan (SRTP) guidelines regarding fare increases and stated he did not favor increasing fares in any form if service levels were not also being increased, nor did he favor charging for transfers. However, he stated he did favor charging students for evening service, as it was a service increase factor and students were the primary beneficiaries. Mr. Yucikas suggested increasing the cash fare to a flat $2.00 fee instead of the proposed $1.50 to better facilitate efficiency in paying upon boarding. ATTACHMENT #2 ' The vote was called and the motion passed, with Mr. Apruzzese and Mr. Yucikas voting against. Mr. Yucikas made a motion that Council review and consider the following staff recommendations; ■ Eliminate Trolley service on Friday-Sunday unless alternate funding is made available, effective September 1, 2010 ® Reduce the FY 2009-10 operating line item for fuel by$100,00 ® Reduce FY 2010-11 operating line items for fuel, system advertising,printing, engine repair, and shelter cleaning Ms. Crockett:seconded the motion. The motion passed, with Mr. Apruzzese voting against. There was also member consensus that staff should explore opportunities for exterior bus and shelter advertizing and soliciting marketing participation for transit maps from private companies. Mr. Webster noted that the process in the (SRTP) was that Council will need to approve a date for MTC to hold a public hearing with a 30 day notice on fare modifications and any MTC recommendations would go back to Council for final review and approval at a public hearing. Mr. Webster stated that the staff report for the Transit Enterprise fund review on June 1, 2010 would seek Council approval to set the MTC public hearing date for fare modifications on July 14, 2010 which is the next regular MTC meeting date. Any recommendations from that meeting will be submitted to Council for review at a public hearing on July 20, 2010 with an effective date of September 1, 2010. D. INFORMATION ITEMS D-1. Transit Manager's Report D-2. Operating-Performance Reports Mr. Webster presented highlight discussion on the reports as presented that covered First Transit Manager replacements, system performance, capital projects including the new Double Deck bus replacement, State TDA/LTF/STA funding and the new transit website. MEMBER COMMENTS There were no comments. The meeting adjourned at 4:40 p.m.to the regular meeting July 14, 2010 at 2:45 p.m.. Respectfully submitted, Lisa Woske, Recording Secretary Ba -a$' � �IIIIIIIII����� II�IIIIIII�II�� council mcmoRAnbum __ �i1�G�Pr �—•�rpTi= DATE: May 28, 2010 L:rCOUNCIL D-CDD DIR E!'6A0C1 ryfirsa 1-FIN DIR TO: City Councila0AWe0'PIRE CHIEF ��TTORNEY V2� ?W DIR !.� C+LERK/ORI© 2-POLICE CHF VIA: Katie Lichtig, City Manager " ❑ DEPT HEADS 2--SEC DIR C?UTIL DIR FROM: Jay D. Walter, Deputy of Public Wor s 5-An pin�. SUBJECT: Transit Enterprise Fund Review—Council Meeting June 1, 2010 Councilman Carter has asked staff questions regarding the Transit Enterprise Fund review currently scheduled for Tuesday's Council meeting. Here are responses from staff on the questions. RED FILE Councilman Carter's Questions MEETING AGENDA Trolley PA &_ / /o ITEM # 8 Z 1) Has any thought been given to raising the trolley fare? Perhaps to 50c for adults/kids or 50c adults/25c kids? Yes, staff considered recommending raising the trolley fare and also having some other revenue pay for the trolley service such as private partnerships or subscription service. Unfortunately, even with a $1.00 or more fare and retention of our current annual riders will not bring in enough revenue to cover the costs of the service. We should end FY 2010 with about 20,000 trolley riders. Even at $1.00 per rider ($20,000) that is a little more than %z the mileage cost of the service and considerably less than the total costs once fuel and indirect costs are included. If we doubled the current fare for adult passengers to $.50 and charged children $.25 we would roughly double our current trolley farebox to approximately $10,000 annually. Again, this amount is substantially below the cost of the services. MTC considers the trolley a non-essential service and as such they recommend if subsidy for transit service must be spent that they City focus on baseline services such as Sunday and evening service before continuing the trolly subsidy. 2) What sort of analysis has been done on trolley ridership by day/time? For instance, I assume Sunday is slowest. Perhaps Sunday could be eliminated and in tandem with 1) a breakeven could be achieved. Or maybe the hours of service could be reduced if certain hours are particularly slow. Table 5 of the staff report indicates Trolley ridership for days of the week for the year-to-date FY 2010 operations. Table 5—Trolley Revenue Miles YTO I AV YROLLFYti O9 THLMS MZ 1,923 211 .... Ig 7� -- 73 S 214 EV 9329 DAYS FADS FMVM 106V NR P P OALLOMB LFL MUT DAY 0067 $ 145.79 3 S A 481 S. 1"2 me ctmy FUEL 4mpa z-33z 4a 2,921 343 RL 3 7,3 1.7 23 .45 ST 9*S"per QM4 I a 5 2,94Z 1.60 730 7N _3.207'6 L da A- 5,C6 02 3 152.09 TOTALM M,41% 43 SUN 1.360 2 5:0 * a &�a_9:'FV2-–TI-7-4 1.73 14,44 34 676 2446 S 7.144 8 31 923 S 193.69 Day of week ridership Sunday is indeed the lowest at about 19% of Thursday ridership however even Saturday is only 65% of the Thursday ridership amount. We did not investigate (or calculate) a breakeven point on this since the ridership amounts are low (Sunday is under 40 riders/day) and it would take a $3-5 fare to recover full cost. Cal Poly Where do things stand with not accepting invalid Cal Poly cards? As I recall from last year's presentation, there are lots of invalid cards. To me,this seems like a lost revenue opportunity. Switching riders from invalid cards to pay is entirely net extra revenue even if their ridership drops. There is positive news on this front although fully not yet resolved. When we upgraded our farebox in September 2009 (AVI system) it dramatically reduced the invalid card issue. We went from over 140,000 invalids in 2008-09 FY to 6,596 from July 2009-April 30, 2010. Now, when an invalid card registers in our farebox the driver hits a manual key that still captures the Cal Poly rider albeit and records it as invalid. Invalid cards do not represent lost revenue as there is no "Bad List" issued by Cal Poly and the university continues to request that we honor these cards until they can troubleshoot them from their end. This will likely be an issue as we move into our subsidy agreement renegotiation if numbers begin to rise again. Ideally, we would eventually be able to close the gap between questions ofinoperative Cal Poly cards versus expired cards that would fully resolve the issue. We are not yet there but have substantially reduced the number of invalid recordings. Evening Service 1) What is assumed fall-off in evening service if$1 surcharge is added? I would think fall- off would be significant,therefore net revenue gain would be in question. For budgeting purposes we assumed a "best case" scenario with no assumed fall-off in Cal Poly related fares. In a "worst case" scenario a 25%-50% initial drop in ridership could occur but we believe the lost riders will likely grow back in time as riders reacquaint themselves with the service. It is important to note that even if a low end amount of$15,000 (50% fall-off) is the net result of the fare establishment, this total amount is additional revenue to help pay for service by those currently riding for free. 2) What is Cal Poly admin and ASI response to this idea? The Cal Poly representative on MTC, Susan Rains (MTC Chair) voted in favor of the proposed recommendations. ASI has not yet been asked to comment on the proposal but will be included in the noticing for public hearings on the fare changes. ASI does not contribute to the subsidy agreement for student riders at this time. In consulting members of the MTC and student population, there was overwhelming consensus that rather than lose service levels for evening service they would rather pay something for it as farebox to keep the service in place. This led to the staff recommendations for the proposed fare change. Free.Transfers 1) Is the idea to eliminate all free transfers from one route to another? Yes, the proposal is to eliminate transfers which are currently no charge and are good between all SLO Transit routes. (SLORTA eliminated transfers in 2008). If the passenger were paying cash they will be paying full fare for the additional ride or take advantage of the full day pass which is currently $3.00. Under todays structure a two-way trip with transfers would be $2.50 while removing the free transfer and taking advantage of the full day pass would be a marginal increase of 50 cents. We anticipate passengers who are affected would be purchasing the pass. 2) What would be the planned transfer fee? They would pay the full fare for the transfer or more likely purchase the Full Day pass for$3.00. 3) What % of riders currently transfer? Approximately 2% (17,074 transfers issued out of 856,284 riders from July 1, 2009 thru April 30, 2010) Overall I'd like for you to show more data and analysis for the recommendations under consideration. The numbers you show make it clear why you've honed in on Evening Service and Trolley. But after that, there's little to go on. Staff will be ready to discuss the MTC recommendations and other issues in more detail if the Council desires on Tuesday night. ti . IIIIIIIIIIII�����IIIIIIaIII council MCMORAnaum DATE: June 1, 2010 _ D Copy 6*jv uI-- [�MOUNCIL GrCDD DIR TO: City Council ( CrCAO L FIN DIR ITACAO Z�FIRE CHIEF gg 2 ATTORNEY O'PW DIR VIA: Katie Lichtig, City Manager P 2TLERK/ORI3 Z POLICE CHF DEPT AEAD9 3 REC DIR P--�---�= FROM: Jay D. Walter, Director of Public Wo s ' �� 2-rJTILDIR uuE C�I'FIR DIR SUBJECT: Transit Enterprise Fund Review—Council Meeting June 1, 2010 �rllli ,L Lev.Ae Councilman Ashbaugh has asked staff questions regarding the Transit Enterprise Fund review currently scheduled for Tuesday's Council meeting. Here are responses from staff on the questions. RED FILE Councilman Ashbaugh's Questions MEETING AGENDA FTA Section 5317 Grant DA 6 n ITEM # b If we decrease our advertising budget by the proposed $15,000, will there still be enough left to implement the recommendations of the Fred Munroe study on ways to educate and inform our riders? Yes. The grant provides funding for advertizing supplies and materials and the most important goal is the creation of a core of volunteers to continue training new riders after the grant has been expended. Downtown Transit Center Study (FTA Brant funded) The CIP on p. 132-19 (Attachment 1) shows an item of$125,000 for the Downtown Transit Center Coordination Study. What is the status of that study? Will it result in any recommendations that will be brought to the Council? SLOCOG is the lead agency and is in the process of doing a scope of work and issuing an RFP for the study during the first quarter of 2010-11 FY. The timeline for a report is first quarter in 2011-12 FY. Any recommendation would go to MTC and ultimately to Council sometime in 2011-12 FY. MTC Recommendations and Advertizinp-Revenue The MTC at its meeting May 12 also recorded a "consensus that staff should explore opportunities for exterior bus and shelter advertizing (sic) and soliciting marketing participation for transit maps from private companies." I think the Council should discuss this recommendation as well,when it is timely. An appropriate time would beat the July 20, 2011 Fare modification public hearing. 1. Do we have even a ballpark estimate as to what revenue might be brought in from such an advertising campaign? Estimated $200 per bus side panel monthly revenue uses current SLORTA data but since they do not have any rear bus space due to the bike racks, they bring in about $45,000 annually. The side signs are 8' x 29' with rear signs generally worth a bit more. Staff recommends being more cautious until seeing an actual contract and estimates about$25,000 annually. There is also a possibility of selling shelter advertising but we do not have any local estimates as SLORTA does not have any ads in theirs. 2. I would be tentatively interested in such ads, provided that we established some reasonable guidelines for them. Could we get examples of how other cities regulate such transit ads? If we are to consider ads as a source of revenue, I'd like to encourage the MTC to consider balancing any commercial ads with a mix of public service ads and also public art. (BTW, Liz Maruska has informed me that her artwork on her "adopted" shelter at Ramona and Palomar has apparently deterred vandalism there, since it first went up a few months ago...) We will also be getting some Prop 113 funding for bus stop improvement and have a couple of locations in mind for more bus shelter murals such as the one mentioned at Ramona& Palomar. Staff will be ready to discuss the MTC recommendations and other issues in more detail if the Council desires on Tuesday night.