CHAIR & MEMBERS VICTORIA REGIONAL TRANSIT COMMISSION #8 August 13, 2019 ______

SUBJECT: FARE-FREE TRANSIT FOR GREATER VICTORIA YOUTH

PURPOSE This report provides supporting information for the consideration of a pilot project in the 2020/21 budget to eliminate transit fares for youth under 18 years of age in the region. This report is presented to the Victoria Regional Transit Commission (the “Commission”) for INFORMATION. BACKGROUD At the June 2019 meeting, the Commission requested additional information on the anticipated impacts of the removal of transit fares for youth under the age of 18 in the Victoria Regional Transit System (the “VRTS”). This request followed the Commission’s approval of a U-PASS program for youth residing in the City of Victoria that grants them unlimited access within the VRTS for an annual fee to be paid by the City.

The topic of fare-free youth transit has recently become a more prevalent conversation in British Columbia. In March 2019, BC Transit presented the expected outcomes of fare- free youth transit in the Squamish Transit System to the District of Squamish Council, which, after consideration, voted to not proceed with the fare-free youth initiative. The following month, TransLink’s Mayors’ Council voted to retain fares for youth and low- income residents in response to motions to remove them from some of its municipal partners.

In June 2018, BC Transit presented a report to the Commission that outlined examples of fare-free youth transit in other jurisdictions. Of particular relevance to this report are the examples provided in Kingston, Ontario and Seattle, Washington. In both examples, fare- free youth transit was made available after significant investment in service capacity and amenities. Of special note, the Kingston system implemented a 50 per cent increase in service hours alongside the staged introduction of fare-free youth transit. To fund these programs, the System partnered with local school districts and the City of Seattle partnered with its local transit authority, King County Metro. In both examples, the benefit of fare-free transit is restricted to youth attending local schools and is administered through the provision of a personalized bus pass.

DISCUSSION Revenue In fiscal 2018/19, fare revenue from youth in the VRTS totaled $4.07 million, which accounted for 11 per cent of total fare revenue. The amount of fare revenue foregone through a fare-free youth transit program can be expected to be slightly above or below this amount depending on how it is chosen to be administered. Should the program be only made available to residents and administered through personalized bus passes, the foregone revenue amount would be lessened, as fares would still be collected by youth that use transit while visiting the region. Conversely, should the initiative be made available to all youth and provided on the basis of them being able to board the bus without showing a fare product, the potential exists for greater losses in fare revenue through transit users who are 18 years or older boarding without paying the required fare.

Service To forecast the expected increase in youth transit ridership, current transit mode share figures were taken from the 2017 Capital Regional District Origin Destination Household Travel Survey and future mode share percentages were based on the observed levels of established U-PASS programs. For the purposes of this analysis, only youth in grades 6 to 12 were considered given that the expected ridership from youth in grades 5 and below is assumed to be minimal. The current mode share for this age group is 15 per cent as determined by the Origin Destination Travel survey. To quantify the ridership impact on the existing system, peak service allocation is used to identify the number of existing available seats during the times that youth would be expected to use the service and the potential number of additional seats required. It is anticipated that the highest volume of youth transit use would occur around school bell and dismissal times, when the existing transit system is already highly utilized. The table below shows a range of expected outcomes in order to account for potential variance in the uptake of a fare-free program.

Table 1: Forecasted Number of Youth Transit Riders by Expected Mode Share Current 25% 30% 35% (15%)

5,834 7,002 8,169 Number of youth transit riders 3,500 (+2,334) (+3,502) (+4,669)

It is important to note that the ridership numbers listed represent an end state, with the expectation that ridership will gradually increase over a period of time to these numbers, allowing for changes in service to be phased in to accommodate the increases. However, the rate at which ridership will increase is unpredictable. As it relates to service levels, there are two approaches that could be taken when introducing a fare-free youth transit initiative. The first of these would be to maintain the current level of service with the expectation that the increase in ridership can be accommodated within existing capacity (e.g. during off-peak hours and on routes with spare capacity). Should the ridership quickly increase beyond the current capacity, service hours could be allocated strategically to match demand on key routes. This could be done using previously-approved expansion hours, such as those for September 2020, or by removing service from some low- performing routes and reallocating them to higher demand ones. Without additional investment, it is likely that overcrowding and pass-ups would become more regular. This option would likely some current (paying) transit users through not having space available on the bus or through removing service that is currently used. The second alternative to introducing a fare-free youth transit program would be to accompany it with the necessary levels of service hours and vehicle investment to accommodate the anticipated growth in ridership. As stated above, this investment would likely be able to be staged as uptake of the program increases. Given the forecasted increases in peak service ridership outlined in Table 1, the following annual requirements for service investment could be expected:

Table 2: Forecasted Increase in Service Hours and Buses MODE SHARE

15% (Current) 25% 30% 35%

School-oriented service 35,340 +15,200 +43,776 +70,224 hours

School-oriented buses 57 +23 +58 +92

Service hours cost impact - +$2,280,000 +$6,566,400 +$10,533,600

Bus lease fee cost impact - +$1,571,544 +$3,279,744 +$6,286,176

Total annual cost impact* - +$3,851,544 +$9,864,144 +$16,819,776

*Total cost to be shared by municipal and provincial contributions

To understand the full scope of the impact, the total cost increases above should be considered in addition to the $4.07 million of foregone fare revenue through the removal of youth fares. It is also important to note that service capacity in the VRTS conventional fleet is constrained until a new facility can be constructed. There is limited ability to add a few buses to the Langford Transit Facility, but that will require a comprehensive review of parking and reconfiguration of maintenance bays. Funding The local share of funding for the VRTS comes from property tax, gas tax and transit fare revenues. As demonstrated by other communities who have successfully implemented fare- free youth transit projects, alternative sources of revenue or partnerships play a key role. In Kingston, this is in the form of financial contributions from local school districts to offset the lost revenue through providing free transit for youth. In Seattle, the City of Seattle served as a major funding partner; a similar arrangement to the recently approved U-PASS program for youth in the City of Victoria. To gauge the potential for similar partnerships in the VRTS, BC Transit sent letters to School Districts #61 (Greater Victoria), #62 (Sooke) and #63 (Saanich), as well as to organizations that expressed support for fare-free youth transit, namely the Federation of Independent School Associations in BC (FISABC) and the Greater Victoria Teachers’ Association (GVTA). At the time of this report, no responses had been received from any of the school districts or FISABC, with the GVTA responding that it would be willing to partner with the Commission to advocate for additional funding from higher levels of government to support fare-free youth transit.

SUMMARY Removing the requirement for youth in the region to pay a fare to access the transit system has direct and indirect considerations. The direct loss of revenue totals approximately $4 million per year. The indirect consequences include the expectation for increased service to accommodate the anticipated additional demand. This increased service could cost between $4 million to $17 million per year. The increased service requires further investment in transit facilities and/or acceleration of parking and maintenance bay reconfiguration, depending on the level of service required.

RECOMMENDATION It is recommended that the Commission receive this report as INFORMATION in support of its deliberations.

Respectfully,

Ryan Dennis Manager, Sales and Revenue