#05 Authorize Administration to increase special fare token capJANESVILLE TRANSIT SYSTEM MEMORANDUM
April 22, 2011
TO: City Manager
Director of Neighborhood Services
FROM: Transit Director
Proposal to Increase Ceiling on Special Fare Token Distribution.
SUBJECT:
Executive Summary:
On May 11, 2009, the City Council adopted Ordinance 2009-433, establishing a
program that allows certain private non-profit agencies in the community to purchase
Janesville Transit System bus tokens at a discount for redistribution to low income
citizens. The general parameters of the program are as follows:
1.
The total number of tokens available for sale at the reduced rate would not exceed
5,000 on an annual basis; or as adjusted by the City as part of the annual budget
process.
2.
The cost, on a per token basis, would be not less than one half of the prevailing cash
fare, or the amount established by the Transit System for those customers qualifying
for transportation at “half fare”.
3.
Agencies purchasing tokens at the reduced rate would enter into an agreement with
the Transit System to purchase a minimum amount of tokens at full price during a
calendar year, which would allow them to qualify for the reduced rate program.
Once the reduced fare program was established, it became apparent that the need for
low fare transportation existed beyond the programs administered by these private non-
profit agencies; and specifically with certain students in the Janesville Public Schools.
To further explore this issue, a meeting was held between the City Manager, Director of
Neighborhood Services, Transit Director and School District officials on June 17, 2010.
As a result, the School District requested that the City extend the reduced fare token
program to disadvantaged students who did not qualify for other forms of transportation
assistance from the School District for transportation to and from school. The Adminis-
tration believed that this request was in the broad best interest of the community, and
on September 13, 2010, the City Council adopted Ordinance 2010-460, extending the
reduced fare token program to certain public agencies, and specifically the School Dis-
trict of Janesville. Special fare tokens were made available for purchase by the School
District beginning in October, 2010.
In establishing the reduced fare token program, the Administration placed a limit of
5,000 tokens to be distributed annually under the program to protect the City’s revenue
stream from passenger fares. In the first 12 months of the program’s existence, (June,
2009 through May 2010) 3,500 tokens were distributed to the three participating private
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non-profit agencies in the program, leaving a theoretical “headroom” of 1,500 tokens
able to be distributed before reaching the 5,000 token limit. From January 1 through
August 31, 2010, 2,000 tokens were distributed, leaving “headroom” of 3,000 tokens for
distribution to all agencies for the remainder of the calendar year prior to the School
District entering the program. During that period, 1,934 rides were taken using reduced
fare tokens. At that point, the 5,000 token distribution ceiling still seemed to be a valid
policy.
Once the School District entered the program in September, 2010 however, both token
distribution and ridership escalated rapidly. The School District alone purchased 3,000
tokens in just over 3 months; bringing the total number of Special Fare tokens
distributed in 2010 to the 5,000 token limit for the program. For the year, a total of
4,397 rides were taken using Special Fare tokens, with 2,367 of these rides being taken
from September 1 – December 31, 2010.
This situation has continued to accelerate in 2011, with 4,000 Special Fare tokens dis-
tributed to agencies and 4,030 rides taken using Special Fare tokens from January 1
through mid-April. The entry of the School District into the program last fall has clearly
been the primary factor in increasing Special fare token usage. Of the 4,000 tokens
distributed in 2011, 3,500 have gone to the School District, with 500 being purchased by
ECHO. If the School District continues to purchase an average 1,000 tokens per
month, only during the months when regular classes are in session, (not including
summer school), total token distribution for the year would reach the 5,000 token
maximum without an further purchases by ECHO or the two other agencies enrolled in
the program by the end of May. The outcome of this situation would likely be that
unless the cap on Special Fare token distribution is raised substantially, the Transit
System would need to restrict token distribution to all agencies at a time when usage is
growing and additional needs are being identified.
Recommendation:
The Transit System recommends that the cap on the number of tokens distributed an-
nually under the Special Fare Token Program be increased from an annual distribution
of 5,000 tokens to 12,000 tokens, effective immediately. This is necessary to ensure
that sufficient tokens are available for distribution to meet the needs of disadvantaged
citizens for essential transportation to jobs, job training, education, medical and social
service appointments for the balance of 2011. While the original policy called for any
adjustments in the number of tokens to be made during the annual budget process;
waiting until the 2012 budget is presented in October to make this decision will cause
the Transit System to begin token rationing almost immediately in order to ensure an
adequate supply when school resumes in the fall.
City Manager Recommendation:
The City Manager supports the staff recommendation. This program was created not
too long after I became City Manager. At the time it was initiated by two Council
members, and I believe it has been a successful program.
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Suggested Motion:
This request does not require an Ordinance change so a motion to modify the Ordin-
ance is not required. The 5,000 token ceiling is a policy contained in the program in-
structions, but not in the Ordinances (2009-443 and 2010-460) which established the
program. However, since the Council established the program with the understanding
that the 5,000 token cap was in place, the Administration believes that it is proper to in-
form the Council and allow for input before increasing the cap.
Request:
This request for raising the cap on the number of reduced fare tokens was received
from Dr. Yolanda Cargile, Director of programs for disadvantaged youth for the School
District of Janesville earlier this year. After reviewing the program results in the first two
months of 2011, the Transit Director and the Director of Neighborhood Services concur
with this request. The City Manager has requested that the request be forwarded to the
Council for information and review if it chooses.
Analysis:
a. Compatibility with Program Goals:
The original intent of establishing a re-
duced fare token program was to increase the availability of transportation to dis-
advantaged citizens, increase ridership on the Transit System, and protect the
City’s revenue stream from bus fares. As fielded, the program established sev-
eral parameters for those citizens receiving the reduced fare tokens through the
agencies. These included:
1. Economic Hardship:
Recipients shall be those citizens whose individual or family
income is less than the federally-recognized “Very Low Income” level (defined as
50% or less of the median income for Rock County, Wisconsin) as established by
the United States Department of Housing and Urban Development as of March 1 of
each year.
2. Trip Purpose:
Usage of reduced-fare tokens shall be restricted to the following trip
purposes:
Access to employment (jobs, job interviews or job training.)
Access to health care (medical, dental, vision and mental health care.)
Education (elementary, secondary, post-secondary.)
Access to support programs for children and/or families.
There are no proposed changes to the program goals. The proposed increase in the
number of tokens to be distributed annually will make the program available to a greater
than originally anticipated number of riders each year.
b. Token Distribution and Ridership:
In the first 6(+) months of the Reduced Fare
Token program in 2009, 1,500 tokens were distributed to three private, non-profit agen-
cies; ECHO, the Salvation Army and the House of Mercy. To qualify for the purchase of
these reduced fare tokens, the three agencies purchased 500 regular fare “Max 10” to-
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kens during the same period. During the same period, 789 reduced fare tokens were
deposited as fare on JTS buses. During the first six months of 2010, ECHO purchased
an additional 500 Reduced Fare and 500 regular fare tokens. During January-June
2010, 1,650 Reduced Fare tokens were returned for fare. With the passage of Ordin-
ance 2010-460 in September 2010 allowing public agencies to participate in the pro-
gram, allowing the addition of the School District of Janesville to the program, the use of
Reduced fare Tokens accelerated considerably; with 4,500 tokens distributed between
July and December, reaching the program maximum distribution of 5,000 tokens by
years’ end. From July-December 2010, 2,747 Reduced Fare tokens were returned for
fare, for an annual total of 4,397 rides under the program during the year. A total of
4,950 regular fare “Max 10” tokens were purchased during this time frame.
With the continuing economic distress in the community, and particularly the need to
transport increasing numbers of students to school to avoid increased truancy rates as
a result of lack of transportation, Reduced Fare token distribution has maintained a brisk
pace in the first calendar quarter of 2011. As of this writing, a total of 4,000 Reduced
Fare and 3,500 regular fare tokens have been sold to the agencies, with 3,500 of the
total of Reduced Fare tokens going to the School District. As of mid-April, 4,030
Reduced Fare tokens have been returned for fare. At this rate, we estimate that the
entire allotment of 5,000 Reduced Fare tokens for calendar year 2011 could be
distributed in the first five months of the year; leaving none for distribution later in the
year.
Financial Results:
At the time that the Reduced Fare token program was established, Transit System
management expressed concern that institution of this program would lead to a reduc-
tion in revenues to the system, resulting in the need for additional assistance from the
City’s General Fund to cover operating costs. After 21 month’s experience with the
program, however, our original fears of revenue loss do not seem to be justified. With
the requirement that agencies purchase a like number of regular fare “Max-10” token
packs to qualify to purchase a lot of 500 Special Fare tokens, regular fare token sales
have shown increased revenue. During 2010, the transit system realized $84,976 in
revenue from Max-10 token sales compared to a budget estimate of $77,000. During
the same period, $3,409 in Special Fare tokens were sold to the various agencies,
compared to an admittedly low budget estimate of $1,000. These results demonstrate
that contrary to eroding revenue from Regular tokens, this program actually enhanced
that revenue while adding additional revenues from the sale of the Special Fare tokens.
As such the Transit System does not believe that the increase in the cap of Special
Fare token distribution will harm Transit System revenues for 2011; and should assist in
meeting the program goal of increasing transit system ridership.
cc: Eric Levitt, City Manager
Jay Winzenz, Director of Administration
Jennifer Petruzzello, Director of Neighborhood Services
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