METRO BOARD OF DIRECTORS STRATEGIC PLANNING COMMITTEE MEETING OCTOBER 15, :30 AM BRIEFING ITEMS

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1 METRO BOARD OF DIRECTORS STRATEGIC PLANNING COMMITTEE MEETING OCTOBER 15, :30 AM BRIEFING ITEMS 1. Service Outside of METRO Service Area K. Luhrsen

2 BOARD BRIEFING SUMMARY SUBJECT: AGENDA ITEM #: Service Outside of METRO Service Area AGENDA DATE: DEPARTMENT: Planning PRESENTER: Kurt Luhrsen SUMMARY: METRO has several interlocal agreements for the provision of contractual bus service and has had discussions with several other agencies regarding possible contractual service arrangements. There are inconsistencies in these interlocal agreements. The purpose of this briefing is to provide the Committee with information regarding existing contracts, receive feedback regarding continuing and/or expanding service beyond METRO's service area, and proposing a consistent cost structure for future interlocal agreements.

3 SERVICE OUTSIDE THE SERVICE AREA Board of Directors Strategic Planning Committee October 2013

4 Background METRO has several interlocal agreements for the provision of contractual bus service Energy Corridor District for the 75 Eldridge The Downtown Mgmt. District for Greenlink Galena Park for trips on the 30 Clinton Harris County for the Baytown P&R Various discussions with other agencies Brazos Transit District re: Woodlands Express 2

5 Current Practice: 75 Eldridge Inside of METRO Service Area Average variable cost per hour of service METRO provides the vehicles but charges no vehicle fee Subtract out anticipated fare revenue CHALLENGE: Current reimbursement rate Does not reflect actual costs 3

6 Current Practice: Greenlink Inside of METRO Service Area Downtown Mgmt District provides the buses and pays for fuel budget neutral for METRO Average variable cost per hour of service, plus allowance for extra supervision, etc. No fare revenue since service is free CHALLENGE: Not consistent with other agreements 4

7 Current Practice: Galena Park Outside of METRO Service Area Uses a cost for service not updated since 1987 METRO provides the vehicle needed to extend the 30 Clinton but charges no vehicle fee No accounting for fare revenue CHALLENGE: Arrangement is out of date and inconsistent with other agreements 5

8 Current Practice: Baytown P&R Outside of METRO Service Area Average variable cost per hour of service Fee based upon peak buses needed Out of Service Area fee Subtract out anticipated fare revenue Harris County provides P&R and security CHALLENGE: Current reimbursement rate does not account for higher cost of P&R service; six month extension expires in March

9 Inconsistencies with Current Practice The four existing interlocal agreements were negotiated at different times and are internally inconsistent Recommend standardizing a METRO policy, including a rate structure that accounts for differences in: Service inside of METRO s service area Service outside of METRO s service area Utilizes METRO vehicles/facilities or not Type of METRO vehicle, if provided 7

10 First Policy Discussion Point Should METRO defer consideration of operating bus service outside of its service area, until all the transit needs are met in the service area? METRO has a relatively fixed number of buses to provide service. Operating service outside the service area means vehicles are not available to serve our members. Should this policy differentiate between agencies that might provide vehicles? 8

11 9 Proposal for New Policy Does METRO provide the vehicles? Variable Cost 60 Articulated Bus 45 Commuter Coach 40 Transit Bus No 27 ARBOC 60 Articulated Bus Yes Service is inside METRO service area Service is outside METRO service area Variable Cost Fully Allocated Cost 45 Commuter Coach 40 Transit Bus 27 ARBOC 60 Articulated Bus 45 Commuter Coach 40 Transit Bus 27 ARBOC

12 Second Policy Discussion Point How should METRO deal with jurisdictions outside the Service Area who want service but cannot contribute a 1% sales tax to METRO? These areas do not have the 1% taxing capacity available to join because they have allocated it to other uses 10

13 11 Example from DART (Dallas, TX) DART has developed a model to make joining easier for these jurisdictions: DART will sign an Interlocal Agreement to provide service outside its area for a maximum of 48 months Jurisdiction must have a vote on joining DART during that time If 1% sales tax not available, jurisdiction must assign remaining taxing capacity until the full 1% is available when other taxes expire

14 Next Steps/Board Discussion 1. Answer Board questions and clarifications 2. Incorporate Board comments and develop a pricing sheet for the different service types described based on most recent audited financials 3. Develop draft policy for Board review and approval 12

15 DART Fixed-Route Service Beyond Service Area Boundary DATE ISSUED: April 25, 1995 Resolution No Amended by Resolution: , , , Policy No. III.07 (Operations) Section 1. Except for Charter and Special Events services as authorized by separate policy and other services as described in this policy, DART transit service will not extend beyond the boundaries of the DART Service Area. For the purposes of this policy, D/FW Airport is considered to be part of the DART Service Area. Section 2. Existing bus routes may be extended to service any publicly-funded, post-secondary educational institution whose campus is contiguous to the DART service area when the extension does not involve operation over the streets of a non-member jurisdiction and the institution enters into an interlocal agreement to pay DART the fully allocated cost of such service. Section DART shall consider providing rail, bus or paratransit service outside the DART Service Area under one or more service agreements A service agreement under this section must be approved by the DART Board of Directors, shall not adversely impact or delay any transit service that is included in the then-current Transit System Plan and Twenty Year Financial Plan and shall not be inconsistent with any DART policy or program for paid parking at DART facilities. A service agreement under this section shall include the following elements: a. Funding for the service shall be sufficient to pay for the fully burdened operating and capital cost of the service being provided for the duration of the contract. b. The agreement shall require payment of an access fee reflecting the value of the connecting service consumed by the non-resident patrons as approved by the DART Board of Directors. c. The agreement shall require payment of an impact fee if the contracted service causes DART to incur additional direct operating or capital costs to accommodate patrons who live outside of the DART Service Area 3.03 A service agreement between DART and a municipality or county under this section may continue as specified in the service agreement, but for no longer than 48 months except as specified in this Policy. After execution of this agreement, the municipality or county shall not encumber available funds beyond 48 months and if such an encumbrance takes place, such agreement shall terminate. Operations III.07

16 DART Fixed-Route Service Beyond Service Area Boundary 3.04 Within the first 36 months of a service agreement between DART and a municipality or county, DART shall prepare a transit system plan and a supporting financial plan for the municipality or county; The municipality or the county shall provide ½ of the funding for such transit system plan and supporting financial plan with payment of ¼ of the estimated cost to be paid upon commencement of the work and the remaining balance of ½ of actual expense upon completion of the work. In the event that a municipality or county fails or refuses to provide all or portion of the funding for the development of a transit system plan and twenty year financial plan, the service agreement shall terminate within thirty (30) days and DART shall cease service in the municipality or county being provided under the agreement Service under a service agreement with a municipality or county shall not continue beyond 48 months unless the governing body of municipality or county calls and holds within such 48-month period an election to add its territory to the DART Service Area. Such election shall dedicate the excess of special sales and use tax revenues as specified in Section Texas Transportation Code over current commitments, not enter into any further encumbrance of special sales and use taxes, and as any contractual obligations and indebtedness supported by such special sales and use taxes are paid off, dedicate such funds to DART with the ultimate goal that a full one cent shall be dedicated to DART. the jurisdiction, including the eventual addition of the jurisdiction to the DART Service Area. Voting representation on the DART Board of Directors shall be specified in the service agreement in compliance with applicable laws. b. If a majority of votes cast in such an election do not favor the proposition or no vote takes place within the time specified in the service agreement, the service being provided under a service agreement shall terminate within thirty days Service under a service agreement with a municipality or county may continue beyond 48 months provided that the governing body of municipality or county dedicates funding for the service through a sales tax or other source that is equivalent to or grows at an equivalent rate to a one cent sales taxes through an election or other means. Such service may be provided directly by DART or through a DART local government corporation in compliance with the transit system plan and twenty year financial plan prepared for the municipality or county. a. If a majority of votes cast in such an election favor the proposition, and in compliance with provisions of law regarding addition of territory to the DART Service Area, DART may enter into such agreements with the jurisdiction as may be necessary to implement permanent transit service in Operations III.07