1. 1 Transit Efficiency & Effectiveness: Is There Another Way to Skin the Cat? Commission Workshop Steve Heminger May 25, 2006

2. 2 Why should MTC care?

3. 3 Four Areas to Consider 1. Performance Standards 2. Service Rationalization 3. Consolidation 4. Funding

4. 4 1.Performance Standards: Is a Carrot Just a Stick Painted Orange?

5. 5 Carrots 1.Incentive-based funding allocations 2.Reward operators that meet certain performance thresholds with regional discretionary funds 3.Transit example: FTA capital funds (10% based on ridership) 4.Other example: Housing Incentive Program (HIP)

6. 6 Sticks 1.Phase out exceptions from TDA 20% and AB 1107 33% fare box recovery standards 2.Impose new, higher standards on all operators with regular reporting and funding at stake 3.Transit example: RM1 standard for the Harbor Bay Ferry 4.Other example: Transit-Oriented Development (TOD) Policy

7. 7 Risks 1.Carrots: concerns about favoritism, self-fulfilling prophecies 2.Sticks: operators fail to meet standards; cycle of extensions and exceptions begins

8. 8 2.Service Rationalization: Can there be too much of a good thing?

9. 9 Bay Area Discount Fare Policies Transit Operator Senior/ DisabledYouthChild AC Transit50% 50% (5-17 yrs.) 4 and under free (limit 2) BART75% 75% (5-12 yrs.) 4 and under free Caltrain50% 50% (5-11 yrs.) 4 and under free (limit 1) County Connection66%Same as adultUnder 6 free Golden Gate Transit50% 25% (6-18 yrs.) 5 and under free (limit 2) SamTrans52% 40% (5-17 yrs.) 4 and under free (limit 1) San Francisco Muni72% 72% (5-17 yrs.) Under 5 free Santa Clara VTA57% 14% (5-17 yrs.) Under 5 free WestCAT50%Same as adultUnder 6 free (limit 2)

10. 10 Overlapping Routes & Services Examples: Transbay (AC, BART, ferries) Peninsula (BART, Caltrain, SamTrans) East Bay Suburban Marin/Sonoma

11. 11 Possible New Directions 1. Fare Integration Study (RM 2) 2. Route Duplication Analysis 3. Consolidated Call Center (Real 511 Operators) 4. Consolidated Procurement: vehicles, fuel, etc.

12. 12 Risks 1. Redundancy has its advantages 2. Rider complaints (every route has a customer) 3. Expansion into areas beyond MTC expertise (e.g., procurement) 4. Potential transit employee impacts

13. 13 3.Consolidation: Less is More?

14. 14 Types of Consolidation 1.Functional – see prior item 2.Geographic – Napa example; next stop Solano & Sonoma? 3.Modal – RM2 Regional Rail Plan: Caltrain, Capitols, ACE, Dumbarton Rail 4.Service Area – BART (trunk line) and AC Transit (feeder)

15. 15 Cost Comparison Cost/RVHRVH Total Cost/ Separate Rates Total Cost @ CCCTA RatesAdded Costs CCCTA $ 79.72284,000$ 22,640,480 - LAVTA $ 75.94123,000$ 9,340,620$ 9,805,560$464,940 Combined 407,000$ 31,981,100$ 32,446,040$ 464,940 Source:FY2003/04 figures; Statistical Summary of Bay Area Transit Operators County Connection/LAVTA Consolidation Potential Savings: CCCTA access to maintenance facilities in LAVTA service area could reduce deadhead costs up to $180,000/year. Service costs could be reduced with changes in route structure/service rationalization under single operation, but could be offset by labor agreement provisions related to service changes. Administration costs could be reduced by eliminating some duplication, but could be offset by costs associated with managing a larger transit system.

16. 16 Other Benefits 1.Streamline administration & overhead 2.More rational service planning & resource allocation 3.Improved hub connectivity (external connections become internal transfers) 4.Less costly regional coordination efforts

17. 17 Risks 1. Political friction with local transit boards and legislative patrons 2. Potential for higher labor costs 3. Increased employee leverage for work stoppages

18. 18 4. Funding: STA Rides to the Rescue?

19. 19 STA Background and History Proposition 111 approved in 1990 Shifted the % shares of statewide STA between a “revenue based” formula and a “population based” formula Revenue-based and Population-based funds were distributed 30%/70% -- Prop. 111 changed to 50%/50% statewide Due to significant transit ridership and dedicated local support to transit, the Bay Area receives a much larger amount of STA revenue-based funds than the region’s share of statewide population. Consequently, Prop. 111 resulted in a 51% increase in combined STA funds to the Bay Area.

20. 20 STA: Bay Area’s Share over Time Before and After Prop. 111 Population-Based  $9.2 million to $8.0 million: Decreased 13% Revenue-Based  $11.2 million to $22.8 million: Increased 104% Combined Change: Increased 51% Revenue-Based Funds - 10 20 30 40 50 PastProp. 111 $ in Millions Population-Based Funds - 10 20 30 40 50 PastProp. 111 $ in Millions Statewide Bay Area Statewide Bay Area

21. 21 STA Policy in Response To address the change in state law, MTC “shared” its population based funds with the small operators, with the adoption of Resolution No. 2310 in 1991. Funds distributed as follows:  Northern counties  Small operators and Vallejo  ADA paratransit  Balance goes to MTC Regional Coordination Program Original intent was to provide small operators chance to grow, since Prop. 111 created big bump for larger operators

22. 22 Small Operators Growth – At a Glance Assumed feeder service from BART and expanded into express bus operations Strong overall growth in operating budgets due to growth in economy and gas prices (sources of TDA/STA funds) Considerable carry-over balances in TDA and STA for some operators

23. 23 STA: Bay Area’s Share Today Today - FY 2007 Fund Estimate Population-Based  $15.6 million Revenue-Based  $44.5 million Outcome: Revenue-based formula structure directs more $ to operators with larger budgets and more riders  7 largest operators in the region make up 97% of STA revenue-generated funds to the region  13 smaller operators generate 3% of STA revenue funds to the region

24. 24 STA Policy – Stay the Course for Base Consideration given to changed policy for base STA Population-Based funds: Simplifying process More flexibility: consolidate categories Standardizing growth over time to CPI Providing additional increment of funding for transit coordination/consolidation efforts Negative feedback from operators on any change, especially CPI growth standard Staff has withdrawn proposal

25. 25 STA Policy – Proposition 42 Increment Proposition 42 dedicated the sales tax on gasoline for transportation purposes. It generated new revenue for the STA program statewide, including $280 million in population-based funds for Bay Area over 25 years. Commission responded to this new revenue by adopting a different policy for the Prop. 42 increment in Transportation 2030. $104 million goes to build/operate TransLink® program and remaining $176 million is dedicated to Lifeline Program.

26. 26 STA Policy – Infrastructure Bond Potential infusion of STA capital revenue: $987 million in Revenue-Based funds $347 million in Population-Based funds Capital only Current policy does not address I-Bond generated funds

27. 27 Potential Options for Infrastructure Bond STA funding ($347 million region-wide) Augment Existing Programs 1.Lifeline- increase Transportation 2030 commitments Operations (swap required for operating costs) Capital 2.Transit Capital shortfall AB 664 federal match supplement 3.Resolution 3434: regional funding augmentation for transit extensions 4.TOD/TLC capital or planning funds 5.Regional Express Bus augmentation Supporting capital facilities

28. 28 Potential Options for Infrastructure Bond STA funding ($347 million region-wide) New Initiatives 1.Transit consolidation incentives Operations costs associated with change — e.g. 13(c) labor agreements (swap required) Capital reward 2.Start-up costs for integrated transit fare (swap required) 3.Transit Air Quality initiatives Zero emission buses 4.Reserve for emergency capital needs (earthquake, service interruptions, etc.)