The Regional Public Transportation Authority (RPTA) has completed the regional public hearings to gather input on a proposed fare increase of up to $1.00 in the base one-ride transit fare. Consistent with input from that regional effort and Phoenix community budget hearings, a lower base fare increase of $0.50 for bus and light rail service was included for the Transit 2000 (T2000) fund in the February 2, 2009 budget actions. Attachment A outlines the local, express, and paratransit one-ride and pass fares in place now and those amounts used to develop the 2009-10 budget. Additional steps are required to complete the regional and Phoenix transit fare changes.

OTHER INFORMATION

Similar to the General Fund, the T2000 fund is severely impacted by the unprecedented decline in sales tax revenue. The regional transportation tax is sales tax based and also faces revenue shortfalls that will be addressed in the upcoming RPTA budget process. At an October 28, 2008 Policy Session, the City Council received information on a forecasted $250 million deficit for the T2000 bus program. At that time, the Public Transit Department regrettably asked and received approval to temporarily suspend all bus service trips beginning prior to 5 a.m. and after 10 p.m. and reduce Saturday service to Sunday/holiday service levels as a first step to address the deficit. Staff was also directed to find a way to avoid further reductions and restore the suspended services.

In response, the City Manager requested that the RPTA begin a process to pursue a region-wide transit fare increase. Public Transit staff worked with the RPTA to craft new fare policy scenarios for public comment. The RPTA made a presentation about this regional process to the Phoenix City Council Transportation and Infrastructure Subcommittee on November 19, 2008. They outlined the fare scenarios of up to a $1.00 increase in the base, one-ride local fare and the planned public hearing process. At that meeting, subcommittee members expressed a desire to avoid further service reductions and restore the suspended services including raising farebox cost recovery target to as high as 35 percent and fare increases up to $1.00.

In January, the RPTA held seven regional public hearings that addressed fare increases for base one-ride and for all-day and multi-day transit fare passes as well as for East Valley and Phoenix Dial-A-Ride fares. RPTA also accepted comments on the fare proposals through e-mail, phone-in, and a webinar. Comments were received from 323 people throughout the region. Attachment B is an RPTA summary of the comments received.

Also, the Phoenix Trial Budget included and the community budget hearings were separately advertised by the Public Transit Department as opportunities to comment on proposed transit fares and service changes. Separate flyers about the proposed changes in transit service and fares were also made available in both English and Spanish at the community budget hearings.

PHOENIX FARE POLICY

The Public Transit Department’s initial estimate in October showed that as much as a $1.00 increase in the base, one-ride local transit fare was needed to maintain the T2000 bus program service levels and restore the December reductions. A change that increases the cost of an all-day pass to greater than the cost of two, one-trip rides essentially achieves an equivalent revenue impact while minimizing the base fare increase to $0.50. An RPTA survey of other transit agencies shows that all-day passes are typically priced at greater than the cost of two trips, which is our current practice.

As approved on February 2, 2009, the 2009-10 budget includes an increase in the base, one-ride fare from $1.25 to $1.75 and the all-day pass from $2.50 to $5.00 ($4.50 if purchased off the bus) along with changes to other passes.

NEXT STEPS

Due to the timing of our budget process, Phoenix approved a budget with a fare increase in advance of the region’s action on an increase. Using a consistent fare structure across the region is important to the overall regional transit system. The RPTA Board of Directors is expected to act on a fare increase in early March.

Public Transit staff has begun work to prepare the required ordinance to implement the fare changes for action by City Council on a future Formal meeting agenda. In addition, staff is beginning the preliminary steps to implement the new fare structure in the fare collection system. Reprogramming, testing, and loading to the fareboxes will take three to four months to complete and must begin now in order to meet the July 1 effective date. Concurrently, we will also be working with METRO on changes to the fare vending machines used at light rail stations. The RPTA will also be leading an effort to expand retail outlets where all-day and other multi-day passes may be purchased.

CONCLUSIONS

It is anticipated that the July 2009 fare increase will sustain the bus program in the short-term. However, sales taxes have continued to decline since the October 2008 forecast. Dependent on how much deeper and how much longer sales taxes continue to decline, a second fare increase may be needed as early as July 2010 to avoid more service reductions and/or to restore the suspended services.

Additionally, adoption of a smaller fare increase will preclude restoration of service cut in October 2008 and require additional cuts in service. No service expansions are anticipated for the life of the T2000 program as a result of the July 2009 fare increase.

This report requests City Council input and direction on the regional fare process and proposed fare increase.

Attachment A

Transit Fare Structure Included in the 2009-10 Budget

FARE TYPE	CURRENT	JULY 2009
Local (bus and light rail)
Cash	$1.25	$1.75
1-Day On-Board	$2.50	$5.00
1-Day Off-Board	$2.50	$4.50
3-Day	$7.50	$13.00
7-Day	$17.50	$30.50
31-Day	$45.00	$55.00
Express/RAPID
Cash	$1.75	$2.75
1-Day On-Board	$3.50	$7.00
1-Day Off-Board	$3.50	$6.50
31-Day	$68.00	$85.00
Reduced (bus and light rail)
Cash	$0.60	$0.85
1-Day On-Board	$1.25	$2.50
1-Day Off-Board	$1.25	$2.00
3-Day	$3.75	$6.50
7-Day	$8.75	$15.25
31-Day	$22.50	$27.00
Semester Pass
Spring, Fall	$160.00	$195.00
Reduced Spring, Fall	$80.00	$97.50
Summer	$105.00	$125.00
Reduced Summer	$52.50	$62.50
Dial-a-Ride
ADA Cash	$2.50	$3.50
Non-ADA	$3.00*	$5.00*
Non-ADA Each Zone	$1.00*	$3.00*
ADA Monthly Pass	$34.00	$65.00

* Reduced fares of 50% apply for seniors, persons with disabilities, and youth.

Attachment B

Valley Metro Fare Increase Public Hearing Comments

The RPTA received comments from 323 citizens at the public hearings, through e-mail and by phone and many offer several comments. Below is the breakdown of all of the comments.

No. of Comments	Type of Comment
100	Raising prices will reduce ridership/cheaper to drive
78	Raising cost will be difficult for transit dependent
81	Don’t raise the bus fare/tough economy
32	Fix the fareboxes
29	Look for other sources of revenue
26	More accepting of increase if service improved
26	Support small increase/keep it to a minimum
19	Wait to see how impact of light rail will be
16	Against the $1.00 increase/excessive
13	Focus on increasing ridership to keep costs down
10	Fare increase should be phased in gradually
10	Fare was just increased in 2007
10	Afraid state will stop fare subsidy
10	Decrease service/do not increase fares
6	Make the fare a whole dollar amount/no change
6	Support fare increase (general)

CITY COUNCIL REPORT
WORK STUDY SESSION AGENDA
TO:	Thomas E. Callow, P.E. Deputy City Manager	AGENDA DATE:		February 24, 2009
FROM:	Debbie Cotton Public Transit Director	ITEM:	2
SUBJECT:	REGIONAL FARE POLICY PROGRAM

Official Web Site of the City of Phoenix

Phoenix - All America City - 2009