City of Spruce Grove 2016 Transit Fare Review Prepared by: Patrick Inglis Senior Sustainability Advisor Planning & Infrastructure Table of Contents Introduction ......................................................................................................................................2 Current Fare Structure .......................................................................................................................5 Review of Other Fares ........................................................................................................................8 Analysis of Fare Structure ................................................................................................................. 11 The Universal Transit Pass (U-Pass) ................................................................................................... 15 Seniors and Low Income Fares .......................................................................................................... 17 Proposed Fare Structure and Rationale ............................................................................................. 18 1 | P a g e Introduction The primary purpose of collecting transit fares is to have the users pay a portion of the cost of operating and providing the service. The key phrase is “paying a portion”, because very few transit systems achieve full cost recovery from transit fares (Figure 1); costs of capital equipment and operations exceed the recovery of revenue from transit riders. It is also universally agreed by governments who fund and provide the service, that providing transit services is in the greater public good. Transit helps students get to school, employees get to work and it keeps infrastructure costs for roads down. Transit is part of the Economic Development engine, as it helps to facilitate business growth. Figure 1 Transit Cost Recovery – 2014 Selected Transit Systems1 The following are some select cost recovery rates for Alberta: Less than 50,000 populations (Canadian Average) = 33% 50,000 to 150,000 population (Canadian Average) = 38% Airdrie = 44% (includes commuter service with 100% cost recovery) Calgary = 51% Edmonton = 45% Grande Prairie = 17% Leduc = 24% Lethbridge = 28% Red Deer= 34% Spruce Grove = 39% St. Albert = 37% Strathcona County = 31% Wood Buffalo= 8% (2013) Besides cost recovery, fare setting has a number of secondary purposes that are very important to a transit system2. These include: Attracting, generating and retaining transit customers Encouraging the use of underutilized capacity Support of education in the community Support to seniors Supporting social services Ensuring equity 1 CUTA (Canadian Urban Transit Association) 2014 Fact book 2 Transit Fare Strategy – Final Report, Strathcona County Transit Department, June 2015; ISL Consulting and DanTec Associates. P.7 2 | P a g e In setting a transit fare policy a number of issues need to be considered. These issues are common to many transit systems. They include: Balancing equity between the fares paid by the users of the system and community support with subsides generated from tax sources Ensuring all residents can afford transit Encouraging youth to use transit more frequently Increasing customer convenience Adopting tired pricing for fares Review and encouraging discussion for a reciprocity with neighbouring transit systems Streamlining fare structure by consolidating similar fares The City of Spruce Grove has operated a transit system since 1996 under a contractual agreement with Edmonton Transit. In that period, fares have always been set by the City of Spruce Grove. The current fare prices have been in place since September 2014. In a recent meeting of the Canadian Urban Transit Association, Prairie and Territories Chapter, members were asked if given the current economic climate, they have or were planning to increase transit rates. With the exception of a small number of transit systems, there are plans underway to raise transit fares. The widespread comment is that wages, capital costs and eventually fuel costs will escalate. Most municipalities did indicate their fare increase would be very modest, being tied to inflation, or would increase only as a result of a major system review (Strathcona County and the Regional Municipality of Wood Buffalo). A few municipalities indicated that their strategy was to tie transit fares to major service changes – opening of new routes or increased service. With consideration of fiscal responsibility and providing an important social service, the challenge in fare setting is further complicated by the challenger to public transit – the private automobile. In Canada, based upon a 2011 Statistics Canada survey, public transit commute times are 81% longer than cars. This is because buses share the same roads as cars and most stop many times along the route to load and unload. The challenge is that the cost of operating a car, although considerably higher, are not obvious to most households or are acceptable living costs. Figure 2, illustrates the cost comparison of car ownership and transit costs. 3 | P a g e Figure 2 Comparison of Automobile Ownership vs. Public Transit3 Class – Crossover Class – Pickup Class- SUV Class – Compact Vehicle: Toyota Vehicle: Ford Vehicle: Chev Vehicle: Honda Venza F150 Equinox Civic Fuel $1,831 $3,165 $2,616 $1,906 Insurance $1,659 $1,775 $1,692 $1,684 License & $101 $101 $101 $101 Registration Depreciation & $6,950 $8,762 $8,269 $5,325 Maintenance Cost per Km $0.52 $0.69 $0.63 $0.45 Annual Total Cost (Based on 20,000 $10,439 $13,702 $12,577 $8,914 Km/yr.) Environmental Impact – CO2e 16,987 27,219 23,127 17,608 Kilograms/year Fuel Economy 7.32 L/ 100 Km 12.66 L/100 Km 10.46 L/ 100 Km 7.62L/ 100 Km Not: Does not include finance charges Transit Alberta Average $3.20 Single Fare $67.96 Monthly Pass $743.60 Year * Spruce Grove Adult $6.00 Single Fare $130.00 Monthly Pass $1,320.00 Year * Based on 10 monthly passes plus 20 days’ cash. Does not account for federal tax allowance on transit passes. 3 Canadian Automobile Association – Driving Costs Calculator – Accessed April 17, 2016 http://caa.ca/car_costs/ 4 | P a g e Current Fare Structure The fare structure established for the City of Spruce Grove was last adjusted in September 2014 with the introduction of an integrated fare product that combined a Spruce Grove Adult Pass with an Edmonton Transit Pass at a single cost (discounted to be cheaper than purchasing both individually). Also in 2014 the student pass was introduced at a cost of $95, 27% less than the full adult pass. To be eligible to receive either the integrated or the student pass, the customer is required to provide proof of residency in Spruce Grove. Cash fares were set at $6.00. In 2015, the City of Spruce Grove introduced tickets in strips of 10 for $48.00 which is a savings of 20% from the cash fare. There has been no change in transit fare rates since 2014. One change that is affecting and warrants the need for review of fares, is the increased cost of the ETS monthly adult fare in February 2016 from $89.00 to $91.50. The integrated fare product should keep the price in pace with ETS fares otherwise the level of discount will continue to increase. Figure 3 is a summary of all of the current fares. Figure 3 Current Spruce Grove Transit Fares Commuter Rates (Spruce Grove – Edmonton) Commuter pass $130/month Integrated Transit Pass $165/month (Spruce Grove Residents Only) Student Pass $95/month (Spruce Grove Residents Only) Adult Commuter Tickets $48/strip of 10 tickets Cash fare (1 way) $6.00 Local Rates (within Spruce Grove) Adult $2.00 Youth (age 6 – 17) $1.75 Senior $1.75 Currently in Spruce Grove, the sales of fare products are through a number of vendors and each offers a different set of fare products. This creates confusion to transit customers, especially new users of transit. There is concern for some vendors selling ETS products, a lack of desire on the part of vendors to carry and manage products like tickets. Attempts to encourage current vendors to handle all products has been met with resistance, largely due to labour costs to handle the product. Offering a vendor commission might encourage sales of all fare products. Currently vendors sell the products without a commission, on the basis that it drives customers to stores, compelling other sales in that venue. Despite this, the relationship with vendors is excellent and a very valuable part of the Spruce Grove Transit System. Figure 4 lists the various vendors and the products sold. 5 | P a g e Figure 4 Transit Sales Outlets Vendor Transit Products sold City Hall Regular Commuter Transit Pass (Hours 8:30 am – 4:30 pm) Integrated Transit Pass (Spruce Grove residents only) Student Pass (Spruce Grove residents only) Adult Commuter Tickets Shoppers Drug Mart (two Spruce Grove Regular Commuter Transit Pass locations) Integrated Transit Pass (Spruce Grove Century Crossing (#100, 131 Century residents only) Crossing Rd.), open Monday - Sunday, 8 Student Pass (Spruce Grove residents a.m. to 10 p.m. only) Westland Market Mall (70 McLeod Ave., Hwy. 16A), open Monday - Sunday, 9 a.m. to 11 p.m. Mac's (three Spruce Grove locations) Open 24 Regular Commuter Transit Pass Hours 624 King Street, 98 McLeod Avenue Unit 100, #3 McLeod Ave Spruce Grove’s transit boarding’s between 2012 and 2015 are presented in figure 5. Transit boarding’s increased between 2014 and 2015 by 4.4%. Growth was supported by promoting transit, free ride day and a rider appreciation