TO:Andrew P. Powers, City Manager
FROM:Clifford G. Finley, Public Works Director
DATE:August 27, 2024
SUBJECT: Free Bus Fares Programs Reimbursement Agreement RECOMMENDATION:
1. Approve Reimbursement Agreement with the Ventura County Transportation Commission and other Transit Operators to continue City participation in the countywide Free Fare Program and authorize the City Manager to sign future amendments to the agreement.
2. Terminate previous Agreement No. 13137-2022 with Ventura County Transportation Commission and other Transit Operators for College and Youth Ride Free Reimbursement.
3. Find that this action is not a project as defined under the California Environmental Quality Act.
LEVINE ACT ITEM: No
FINANCIAL IMPACT:
No Additional Funding Requested. The Reimbursement Agreement adjusts the Bus Fare reimbursement rate from 100 to 75 percent for the Youth Ride Free, College Ride Free, and Free Fare Days Programs (Free Fare Programs). The approximate financial impact is $1,150 and $8,250 to the Adopted FY 2023-24 and FY 2024-25 Transportation Fund Budget respectively.
Approval of the Agreement impacts the Thousand Oaks Transit (TOT) farebox recovery ratio; however, Transportation Development Act (TDA) requirements for farebox recovery ratio are relieved through FY 2024-25 and therefore there will be no impact to City’s General Fund due to not meeting the farebox recovery ratio.
Free Bus Fares Programs Reimbursement Agreement
August 27, 2024
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BACKGROUND:
TOT was established in 1981 and provides fixed route, seasonal, and paratransit services (ADA and seniors) to residents and visitors of Thousand Oaks. TOT provides approximately 200,000 passenger trips annually in a service area of approximately 138 square miles, servicing a population of over 420,000. In addition, TOT provides fixed route, Senior Dial-A-Ride (DAR), Americans with Disabilities Act (ADA) paratransit services, a free local shuttle service called Kanan Shuttle, and vehicle maintenance services under contract to the City of Moorpark, DAR services to the City of Westlake Village, General DAR and special event bus services to the City of Agoura Hills, DAR, ADA, and shuttle bus services to the County of Ventura, and inter-city DAR and ADA service to the East County Transit Alliance (ECTA).
In 2018, the Ventura County Transportation Commission (VCTC) proposed an additional Free Fare Program for Ventura County college students on all Ventura County based bus systems. The College Ride Free Program is funded through the Low Carbon Transit Operations Program (LCTOP).
In 2019, City Council approved use of the City’s share of LCTOP funds and a revised reimbursement agreement. The City has contributed about $7,000 in LCTOP funds annually to this countywide program, which costs VCTC about $550,000 annually.
In 2022, the VCTC expanded the College Ride Free Program to include a Youth Ride Free Program that reimburses fares for all school-aged youth (grades K-12).
City Council approved the agreement and the additional use of the City’s share of LCTOP funds to support the expanded program.
In 2023, VCTC evaluated all the Free Fare Programs and concluded that an adjustment to the reimbursement rate was needed based on higher-than- anticipated participation in the College Ride Free Program, Youth Ride Free program, and additional Free Fare Days.
VCTC has determined that countywide Free Fare Programs will exceed the amount originally budgeted for FY 2023-24 and FY 2024-25 of $2,874,900 combined.
In April 2024, the VCTC requested all Bus Operators transfer balances of LCTOP funds from the College Ride and Free Fare Days programs into the Youth Ride Free Program. In addition, the VCTC began seeking other funding sources for the program, including SB-125 funds.
Free Bus Fares Programs Reimbursement Agreement
August 27, 2024
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DISCUSSION/ANALYSIS:
LCTOP is one of several programs that are part of the Transit, Affordable Housing, and Sustainable Communities Program established by the California Legislature in 2014 by Senate Bill 862 using funds from the Cap-and-Trade Program.
Free Fare Programs have helped increase public transit youth ridership countywide and are an attractive incentive to encourage young people to use public transit. The Free Fares Programs are credited with a large portion of the post-Covid-19 bus ridership recovery for transit operators in Ventura County. Free Fare Programs also provide financial relief for low- or no-income residents, with the popularity of the Youth Ride Free Program continuing to grow. Additionally, in 2023 the Free College Ride Program subsidized about 330,000 bus passengers.
The combined total for these two programs reached about 1.5 million bus passenger trips or 35 percent of the total number of bus passenger trips provided in Ventura County in 2023.
Due to the rapid success and growth of these programs, VCTC has determined there will not be sufficient funding to reimburse 100 percent of the fare price.
Therefore, in the new Agreement, VCTC is proposing to reduce the reimbursement rate from 100 to 75 percent of the operator’s full fare to continue offering the programs.
The operating costs for TOT’s fixed-route bus system will not be affected by this change to the reimbursement rate. The 25 percent loss of fare revenue for these rides is projected to cost TOT $1,150 in FY 2023-24 and $8,250 annually beginning in FY 2024-25. FY 2023-24 revenues are impacted because the reimbursement from VCTC occurs quarterly after the period closes. The effective date of the proposed agreement is April 1, 2024, and reimbursements for the fourth quarter of FY 2023-24 have been suspended while this agreement is being executed.
This new Agreement impacts the TOT farebox recovery ratio; however, TDA requirements for farebox recovery ratio are relieved through FY 2024-25. When the TDA farebox recovery ratio is not achieved, then City funds, such as the Air Quality Developer Fee Fund or General Fund, are required to make up the difference. Because that requirement is relieved through FY 2024-25, there will be no impact on the City’s Air Quality Developer Fee Fund or General Fund at present.
Staff cannot accurately predict how much ridership might decrease if the City chooses not to participate in the Free Fares Program. Not participating in the Free Fare Programs could negatively impact ridership, further lowering the TOT farebox recovery ratio.
Free Bus Fares Programs Reimbursement Agreement
August 27, 2024
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Staff recommends terminating the previous agreement and approving the new Reimbursement Agreement (Attachment #1) as part of the City’s ongoing efforts to increase participation in public transit and improve regional services.
This contract amendment meets City Council’s Top Ten Priorities #6.
Environmental Sustainability” and #7, Public Works + Infrastructure Investments.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Tyler Nestved, Assistant Transit Planner
Attachments:
Attachment #1 – Reimbursement Agreement
DPW: 940-10\tn\ev\Council\2024\0827\Free Fare Programs Reimbursement Agreement staff report.docx