DART Fare Structure Programs

Transcription

1 DART Fare Structure Programs Budget & Finance Committee November 13, 2018 Joseph G. Costello Senior Vice President, Finance 0

2 Calendar Date Nov 13 Dec 11 Jan 22 Feb 26 Mar 26 Apr 23 May 28 Jun 18 Jul 18 Aug 13 Aug 27 Sep 17 Fare Structure Briefing Programs Subject Fare Structure Briefing Fare Change Cadence Possible Amendment to DART Policy or Financial Standards Regarding Fares FY 2018 Operating Financial Review / Annual Disclosure Statement FY 2019 Financial Outlook and Preliminary FY 2020 Financial Outlook Approval of Financial Standards for FY 2020 Budget and Financial Planning Process FY 2020 Capital Budget Overview FY 2020 Operating Budget Overview Proposed FY 2020 Annual Budget & Twenty-Year Financial Plan Approval to Distribute FY 2020 Annual Budget and Twenty-Year Financial Plan to Service Area Cities Budget & Finance Committee recommends approval of FY 2020 Annual Budget and Twenty-Year Financial Plan to the Committee-of-the-Whole Board Approval of FY 2020 Annual Budget and Twenty-Year Financial Plan 1

3 Presentation Outline DART ridership demographics & system usage DART programs and payment system features beneficial to lower income Means testing Potential approaches Administrative requirements Peer review Estimated revenue impact 2

4 Ridership Demographics 6.8% 3.1% Under % %

5 Ridership Demographics (cont.) Students = 16.5% of Ridership 3.1% College F/T 3.6% 9.5% College P/T K-12 4

6 Ridership Demographics (cont.) 5

7 Trip Purpose Drivers license: 67.5% have a valid driver s license Employment: 2/3 employed full-time 6

8 Number of Vehicles Used to Complete One-way Trip % 14% 2 28% 1 55% 7

9 Rider Gender / Ethnicity Asian, 2.5% Other, 1.7% 52.8% 47.2% Male Female Hispanic/Latino, 18.4% Black/African American, 52.7% White, 24.6% 8

10 Number of Working Vehicles in Household 9

11 Total Household Income 10

12 Employment 8.9% 10.0% 14.5% 66.6% Full-time Part-time Not Employed Not seeking work; Retired, Homemaker Not Employed - Seeking Work 11

13 Programs Reduced Fares are applicable on bus and rail for the following: a. Seniors and non-paratransit disabled with valid ID. b. DART Shuttle bus route. c. Children elementary through middle school. d. Students attending high schools within DART Service Area, with DART-issued student ID. Valid Monday through Friday only until March 2018, full week thereafter. e. Service area residents participating in a transitional program administered by an approved social agency, with a valid DART-issued ID. f. Discount fare with Lone Star TANF benefits Reduced fare passes are Regional passes. 12

14 Programs (Cont.) Discounted Day Pass vouchers available to government, alternative schools, and non-profit institutions to be issued to DART Service Area clients. Discounted at 40%. 13

15 Payment System Stored Value Take advantage of technology and new payment system Stored Value Best Value Fare Capping Lost card value protection 14

16 Means Testing 15

17 Potential Approaches Internally Administered Externally Administered Both 16

18 Peer Review Agencies Funding Sources Portland - July, 2018 State Payroll tax $5m/yr. (4.4%) Seattle - March, 2015 San Francisco - May, 2018 Denver Transit Agency - Operating budget $3m/yr. (3.2%) MPO for Admin. & 50% revenue less $21m/yr. (2.7%) Transit agency - Operating budget $3m/yr. (3.6%) New York New York city $212m/yr. (3.4%) LA Metro - January, 2018 Sales Taxes $3.6M/yr. (1.1%) Twin Cities Metro - October, 2017 Salt Lake City UTA Eliminate bonus for stored - value cards $3M/yr. (3.7%) Both Transit agency - Operating budget N/A Projected Rev. Loss Administration Eligibility Benefit Community Organizations 200% poverty 50% discount Social Service Organizations 200% poverty 50% discount Internally Administered 200% poverty 20% discount Internally Administered 185% poverty 40% discount Internally Administered 100% poverty 50% discount Internally Administered 200% poverty 24% discount 50% of area median income $1 fare Externally Administered SNAP Card 25% discount Madison WI Metro City of Madison N/A Both 150% poverty 57% discount 17

19 Peer Review (continued) Funding Source Projected Cost Projected Rev. Loss State Payroll tax $12m/yr. $5m/yr. (4.4%) Transit Agency - Operating budget $3.2m/yr. $3m/yr. (3.2%) MPO for Admin. & 50% revenue less $21m/yr. $21m/yr. (2.7%) Transit agency - Operating budget $1m/yr. $3m/yr. (3.6%) New York city $120m/yr. $212m/yr. (3.4%) Sales Taxes N/A $3.6M/yr. (1.1%) Eliminate bonus for stored - value cards N/A $3M/yr. (3.7%) Transit agency - Operating budget N/A N/A City of Madison N/A N/A 18

20 Peer Review (continued) Administration Eligibility Benefit Community Organizations 200% poverty 50% discount Social Service Organizations 200% poverty 50% discount Internally Administered 200% poverty 20% discount Internally Administered 185% poverty 40% discount Internally Administered 100% poverty 50% discount Internally Administered 200% poverty 24% discount Both 50% of area median income $1 fare Externally Administered SNAP Card 25% discount Both 150% poverty 57% discount 19

21 Administrative Requirements 1. Publicize Fare Program 2. Issue IDs 3. Train Fare Enforcement/Bus Operators Internally Administered: o Publish Eligibility Rules, Testing Procedure o Administer Procedure (Could be contracted) Externally Administered: o For Each Applicant, Verify that Submitted Forms of Eligibility are Valid Both: o Develop Testing Procedure (lower volume than fully internal) o Administer Means Tests 20

22 Estimated Revenue Impact DART Internal Analysis Minimum-Wage Household - ~4.7% Eligible Households - First Year Revenue Loss ~$1.6 - Annual average Loss of ~2.4% - 20 Year Impact to the FP (~ $70M) 21

23 Estimated Revenue Impact DART Internal Analysis Poverty Level Household, 50% Discount - ~6.7% Eligible Household - First Year Revenue Loss ~$2.3 - Average Annual Loss of ~3.4% - 20 Year Impact to the FP (~ $98M) 22

24 Estimated Revenue Impact DART Internal Analysis 150% Poverty-Level Household, 50% Discount - 9.7% Eligible Households - First Year Revenue Loss $3.2 - Annual average Loss of 4.8% - 20 Year Impact to the FP (~ $139M) 23

25 Estimated Revenue Impact Portland Analysis 200% Poverty Level Household, 50% Discount - First Year Revenue Loss ~$3.0 - Annual average Loss of ~4.4% - 20 Year Impact to the FP (~ $128M) 24

26 Estimated Revenue Impact Seattle Analysis 200% Poverty Level Household, 50% Discount - First Year Revenue Loss ~$2.2M - Annual average Loss of ~3.2% - 20 Year Impact to the FP (~ $93M) 25

27 Estimated Revenue Impact San Francisco Analysis 200% Poverty Level Household, 20% Discount - First Year Revenue Loss ~$1.8 - Annual average Loss of ~2.7% - 20 Year Impact to the FP (~ $78M) 26

28 Estimated Revenue Impact Denver Analysis 185% Poverty Level Household, 40% Discount - First Year Revenue Loss ~$2.4 - Annual average Loss of ~3.6% - 20 Year Impact to the FP (~ $104M) 27

29 Estimated Revenue Impact New York City Analysis 100% Poverty Level Household, 50% Discount - First Year Revenue Loss ~$2.3 - Annual average Loss of ~3.4% - 20 Year Impact to the FP (~ $98M) 28

30 Analysis Approach Externally Administered Criteria and eligibility already established by other government agencies Minimal cost impact Least complicated approach Suggested threshold Minimum Wage Smallest revenue and available cash impact of all scenarios 29

31 Recap DART already maintains multiple reduced fare programs for bus and rail riders. Fare loss impact for a low-income reduced fare program depends on: 1. The income threshold (% of poverty level) chosen 2. The discount to the full fare Cost of administering a low-income fare program is driven by the level of internal effort required accepting external agency eligibility determinations keeps administrative costs low A low-income fare program has a significant effect on the Financial Plan There is a strong trend toward offering a low-income fare program among DART s peers 30

32 Calendar Date Nov 13 Dec 11 Jan 22 Feb 26 Mar 26 Apr 23 May 28 Jun 18 Jul 18 Aug 13 Aug 27 Sep 17 Fare Structure Briefing Programs Subject Fare Structure Briefing Fare Change Cadence Possible Amendment to DART Policy or Financial Standards Regarding Fares FY 2018 Operating Financial Review / Annual Disclosure Statement FY 2019 Financial Outlook and Preliminary FY 2020 Financial Outlook Approval of Financial Standards for FY 2020 Budget and Financial Planning Process FY 2020 Capital Budget Overview FY 2020 Operating Budget Overview Proposed FY 2020 Annual Budget & Twenty-Year Financial Plan Approval to Distribute FY 2020 Annual Budget and Twenty-Year Financial Plan to Service Area Cities Budget & Finance Committee recommends approval of FY 2020 Annual Budget and Twenty-Year Financial Plan to the Committee-of-the-Whole Board Approval of FY 2020 Annual Budget and Twenty-Year Financial Plan 31