Brian Lima, P.Eng. Director, Public Works and Engineering. THAT Council receive the Middlesex Centre Transit Services Report as outlined.

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1 November 29, 2017 Page 1 of 12 Report No.: PWE Meeting Date: November 29, 2017 Submitted by: Subject: Brian Lima, P.Eng. Director, Public Works and Engineering Middlesex Centre Transit Services Recommendation: THAT Council receive the Middlesex Centre Transit Services Report as outlined. FURTHER THAT should Municipal Council wish to proceed with implementation of a Middlesex Centre Transit Service, a transit feasibility study in concert with public and stakeholder consultations should be requested of Administration staff to be undertaken first, followed by implementation of a pilot program. Purpose: To inform Council of potential transit service options available to Middlesex Centre residents. Background: As a Municipality, we face numerous challenges in connecting our settlement communities. This includes lower population densities, a wide geographic area, and limited capital resources. As the population continues to grow, the Municipality aims to dramatically improve quality of life, showcase the Municipality s diversity and appeal, and make sure businesses can excel. In line with these 2017 Departmental objectives, Administration staff is considering the options for transit in Middlesex Centre. The provision of some form of transit service has been suggested to address such connectivity challenge. Amidst significant technological advancements and innovations in the transportation industry, there is an existing number of potential options which include but is not limited to selfdriving vehicles which is anticipated to grow significantly by the end of the decade, partnerships with demand-responsive service providers like Uber, traditional bus rapid transit, etc. Middlesex Centre continues to be a progressive and forward-thinking municipality that is not afraid to do things differently. Municipality Administration and Council have strived to embrace a culture of innovation and always seek ways to tackle issues and challenges outside of traditional municipal models. Analysis: Context for Transit in Middlesex Centre 1

2 November 29, 2017 Page 2 of 12 The Municipality of Middlesex Centre is a growing municipality within Middlesex County that has developed a vision as a Community of diverse citizens, rooted in rural and urban traditions, united through involvement, cooperation, and mutual respect. Traditionally a rural municipality with a number of small settlement communities, the Municipality is expected to grow from about 17,262 people in 2016 to about 23,607 by As the population grows, the Municipality is aiming to dramatically improve quality of life, showcase Middlesex Centre s diversity and appeal, and make sure businesses can excel. A specific objective includes: improving transportation networks to unite residents, businesses and communities. Official Plan 2018 Subject to Council approval of the 2018 Budget, the Municipality will be updating the Municipality s Official Plan (OP) through a comprehensive process. The Municipality is not only looking to check the boxes for a legislated Official Plan update, but to identify and articulate the policy elements that achieve place making and strengthen emotional connections between residents and the Municipality of Middlesex Centre. The OP update process will have updated planning principles and policies to guide how the Municipality grows and develops over the next 20 years. Such plan aims to improve the quality of life experienced by all residents, while transforming Middlesex Centre as a more balanced and complete community that provides greater opportunities to live, work, shop and play. The following theme is being considered as part of OP update which is relevant to public transit in Middlesex Centre: Healthy Communities: Middlesex Centre s current Official Plan has strong complete community policies that encourage the efficient use of land and infrastructure, a pedestrian scale environment, an interconnected active transportation and transit network, and diverse and mixed communities. An Official Plan update process will ensure these policies arestrengthened. With the trend toward intensification and increased density, Middlesex Centre can expect an increased market for public transit in the coming years. Demographics, Land Use and Growth The Municipality of Middlesex Centre has experienced notable population growth in the last ten years. Between 2006 and 2016, the population increased by 9.7%, from 15,589 to 17,262 based on Census data. The total number of private dwellings has increased at a similar rate over the past ten years, from almost 5,235 to almost 6,139. Population density for the Municipality as a whole has increased from 26.5 persons/km 2 to 29.4 persons/km 2. However, there is significant variation in population density in different parts of the Municipality. Why Transit in a Small Municipality such as Middlesex Centre? A potential Middlesex Centre transit service would provide many benefits, now and in the future as the Municipality grows and develops. These include the following: 2

3 November 29, 2017 Page 3 of 12 Mobility for seniors, youth, people with disabilities and other non-drivers. Seniors, youth and other residents without regular access to a vehicle currently struggle to get around Middlesex Centre. In the short term, they are among those who would benefit most from transit. Affordability of transportation. Vehicle ownership and use is very expensive. Transit provides an affordable transportation option for residents who struggle with the costs of vehicle ownership and use. This includes young people with student debt who are just entering the job market. Support for physical activity and public health. Studies indicate that public transit users obtain significant physical activity benefits solely from walking to and from transit. Public transit also supports the use of walking and cycling for transportation, increasing the number of destinations that can be accessed with active transportation. Increased use of other Municipality services. Transit can enhance the use of other Municipality services, by making it easier for residents to access facilities such as the community centres, arenas, and recreational centres. Resident attraction and retention. Transit would make Middlesex Centre a more appealing place to live for older adults who will eventually give up their drivers license, for parents who want their children to be able to travel independently, and for millennials and other people who simply prefer to walk, cycle and use transit. Business attraction and retention. For businesses, the availability of transit may make Middlesex Centre more attractive, as employees of all ages, abilities and socio-economic backgrounds can easily travel to work. Finally, transit advances Middlesex Centre s forward-thinking, inclusive and welcoming place where all people can live, work and play. Goals for Transit To maximize the benefits of transit in Middlesex Centre and fulfil such vision and mission, the transit service will need to be designed with the following goals and principles in mind: Clear target audience: The primary target audience for Middlesex Centre s transit service includes seniors, youth, people with disabilities, and residents without regular access to a vehicle. The service hours will likely need to focus on schedules for shopping, errands, recreation and other discretionary trips. Based on experiences in other municipalities, transit systems are most likely to be cost-effective when they are clear about their target audience. Convenience and customer focus: Regardless of service type, service levels or service hours, the transit service should have a strong customer focus. It should be easy to use; clean, safe and enjoyable; and customer service should ensure that riders feel respected and valued. The route(s) and schedule should be designed for efficient and convenient travel. Accessibility: This is a key consideration for those who experience mobility challenges as well as for the growing seniors population. The transit service will need to be designed to meet and/or exceed AODA requirements and will include supportive infrastructure e.g. customer service. 3

4 November 29, 2017 Page 4 of 12 Affordability: The service should be affordable for the Municipality and taxpayers and should leverage partnerships where possible to improve the value of the service. This means that service levels and operating expenses should be comparable or below those in other peer municipalities. All opportunities to build partnerships, reduce costs and explore creative revenue sources should be considered, while maintaining a customer focus and high standard of service. Fairness and efficiency: The costs and benefits of transit should be fairly distributed between the Municipality s communities and between riders and taxpayers. This may mean that households only pay for transit if they are within the transit service area; this model is used in many Ontario municipalities including Milton, Belleville, Greater Napanee and Loyalist Township. Made in Middlesex Centre approach: Middlesex Centre has a small urban core and a large rural area. Different alternatives should be considered that reflect the unique aspects of the built up areas of Middlesex Centre versus the rural areas. Phased implementation must also be considered to focus transit first in the Municipality s growth settlement areas that are most transit-supportive and where highest ridership is anticipated. Overview of Transit Service Models The majority of transit systems use a fixed route, fixed schedule service model. However, this is not the only service model used by Canadian municipalities. In municipalities with lower population densities, flexible transit service models can provide cost-effective alternatives to fixed route, fixed schedule transit. Flexible service models can also supplement fixed route, fixed schedule transit service in select areas. Transit service models can be divided into two categories: fixed schedule and on-demand. These categories and the variations within each category are discussed below. All of the transit service models discussed in this section can be offered by a range of vehicle sizes and types. 1. Fixed Schedule Transit Service Models Fixed schedule transit services depart from a set start/end point at designated times, regardless of whether passengers are on board. A scheduled number of service hours is provided each day and each week. Fixed schedule transit services can feature routes that are 100% fixed, or routes that deviate based on passenger requests. Fixed Schedule, Fixed Route This is the service model that most people are familiar with. A transit vehicle leaves from a designated location on a fixed schedule (e.g. each hour) and follows a specific route, picking up and dropping off passengers along the way. Fixed route, fixed schedule service works well in higher density areas with a variety of trip origins and destinations concentrated along major corridors. Service is generally provided 4

5 November 29, 2017 Page 5 of 12 along major roadways where destinations are located. Passengers do not need to plan ahead. They can board spontaneously along the route at the scheduled time. Fixed Schedule, Route Deviations With this variation on fixed route transit, transit vehicles still leave from key stops on a fixed schedule. However, the vehicle can deviate from its normal route to pick up or drop off passengers on demand at designated off-route locations. Passengers that board at scheduled stops do not need to make a reservation; they can request their drop-off point at the time of boarding. Only passengers wishing to board at request stops along the route deviation need to call in advance to make a reservation. Fixed schedule service with route deviations can increase transit s coverage, without requiring additional vehicles. Route deviations are particularly relevant to provide service to households in low-density areas that are located more than 800m from major roadways. 2. On-Demand Transit Service Models With on-demand transit service models, passengers make reservations in advance of their trips. Transit vehicles optimize their routes to pick up and drop off passengers at/near their origins and destinations. Transit vehicles only enter into service if a reservation has been made. On-demand (also called dial-aride ) transit service is most commonly used for specialized transit. However, it is also used by several Ontario and Quebec municipalities for conventional transit. On-demand transit service can work well as an alternative to fixed schedule transit in low-density areas where demand for transit is lower and destinations are more dispersed. It can also be used to connect passengers in lower density areas to fixed schedule transit hubs. On-demand transit systems may become increasingly common as technology evolves to support optimized routing and scheduling in real-time. Variations to on-demand transit service include the following: Vehicles can pick up and drop off passengers at designated stops; Vehicles can provide door-to-door service; and Vehicles can travel to and from a fixed start/end point only. Fixed Start/End Point On-demand service is most frequently offered to/from a fixed start/end point. This limitation on trip origins/destinations makes it more likely that multiple passengers can share a single vehicle. Designated Stops across the Municipality 5

6 November 29, 2017 Page 6 of 12 In Quebec, municipalities including Alma and Rimouski offer on-demand service between designated stops across the municipality. Some larger municipalities also create geographic zones for on-demand transit. Riders can travel within a zone for a lower fare, or they can travel between zones for a higher fare. Door-to-Door (Specialized) Transit Service Door-to-door transit service is generally only offered as specialized transit, for riders with disabilities that prevent them from using conventional transit. Under the requirements of the AODA Act (2005) and section 34(1) of the Integrated Accessibility Standard Regulation, transit service providers must either provide: door-to-door specialized transit service within the conventional transit service area; or an alternative accessible method of transportation if the conventional service cannot be used by a person with a disability because of his/her disability and if there is no specialized transportation service in the area. The most common model for specialized transit service is to establish a separate transit service with dedicated vehicles that only provide door-to-door service. A municipality also has the option of accommodating people with disabilities on its conventional transit service, with accessible vehicles making route deviations to pick up and drop off eligible riders who have made advance reservations within the service area. Finally Middlesex Centre has the option of connecting people with disabilities with accessible taxi service as an alternative accessible method of transportation. Transit Delivery Transit service delivery is not a one-size-fits-all approach. For some municipalities, contracting may be the most cost-effective way to provide service, because they can benefit from access to certain technologies or reduced labour, fuel, and insurance costs. For other municipalities, contracting may be impractical because of additional costs incurred from the bidding process and contractor oversight so in-house service delivery makes sense. It may also be feasible to only contract certain elements of a transit service (such as operations and maintenance or paratransit) and retain other functions in the municipality (such as asset ownership and management). Four potential service delivery models are available for future assessment if desired by Council: 1. Contract Service Delivery 2. Delegated Service Delivery Taxi 3. Municipal Partnership City of London via London Transit Commission 4. In-house Municipal Service Delivery Municipality of Middlesex Centre Each model is described in the following sections and its key differentiating characteristics are highlighted. The discussion does not detail the conflicting advantages and disadvantages of contracted (options 1, 2 and 4) and in-house (option 3) service delivery. Debates over the service 6

7 November 29, 2017 Page 7 of 12 quality, customer orientation, flexibility, control and accountability, risk and liability and safety attributes of contracted vs. in-house service delivery, to name a few, can be addressed equally well with thoughtful contract or organizational development. 1. Contracted Service Delivery Structured procurement and resulting contract with the successful proponent to operate and maintain a transit service. Contracted operation of transit service is very common in smaller municipalities and regions. Canadian Urban Transit Association (CUTA) statistics show that about one-third of its member transit systems have some or all of their service delivered by private companies. The contract scope of the private company can vary: OMV Operate, Maintain vehicle, Vehicle provision OM Operate, Maintain vehicle only (Vehicle owned by municipality) O Operate (Vehicle owned and maintained by municipality) The OM model for contracting is most typical. The vehicle type can range from a sedan (taxi) to a community bus/van to a full-size standard bus. When contracting transit service, the municipality maintains ownership of the service and authority over setting policies, such as fares and schedules Key distinguishing characteristics: Regulatory authority Operating authority is held by the municipality as fleet owner. Vehicle safety inspection, health & safety and environmental regulation responsibility is assigned to the contractor, with oversight and due diligence exercised by the municipality Asset ownership and management Municipal, eligible for senior government infrastructure funding. Asset ownership by the contract company is a less common option that can be considered on a short-term basis (fast-track start-up of a new transit service) or on a more permanent basis (supported by cost-benefit analysis) Competition, qualified firms A competitive environment with several qualified firms is beneficial to exploit the full potential of service contracting. There are a number of bus companies operating in the Middlesex/London area delivering transit, student and charter services. Operational cost-efficiency, Cost-effectiveness contracted bus companies are widely used to contain costs (compensation, work rules, IT innovation, performance management systems), but which incur contract administration expenses (procurement, oversight). Value-added services (access to contractor resources - performance management systems, IT, fleet, specialized training) private companies often offer specialized 7

8 November 29, 2017 Page 8 of 12 recruitment & training, performance management systems, supply chain management economies of scale (for larger companies), IT innovation to support efficiency and effectiveness. A fixed route / fixed schedule service and dedicated on-demand paratransit service, in the immediate term and long term, may be suitable candidates for contract service delivery assessment. 2. Delegated Service Delivery - Taxi Agreement with a taxi company(s) whom shall need to be licensed in the Municipality to deliver all or segments of the transit service. Taxis in Canada are most often used to deliver paratransit (specialized transit for persons with a mobility disability); integrated with a van-based paratransit service or as supplemental (user-side subsidy) service. The increasing numbers of accessible taxis, capable of transporting passengers with mobility devices, being introduced into Canadian taxi fleets are also providing market-based travel options to persons with a disability and to transit operators seeking accessible fleet options. Shared-ride taxi service is also an emerging transit service delivery option for the general population. These services are expanding in Canada with branding like Trans-Cab (Milton, ON), Taxi-to-Go (Bradford West Gwillimbury, ON) or taxi bus (Rimouski, QC). The services are varied, but generally serve areas where it is not feasible to establish a regular bus service. These latter services may also be more formally contracted, as in section (a) above. Key distinguishing characteristics: Regulatory authority Operating authority is the taxi license and associated tariff. Taxis may be used for transit under contract with a municipality or dispatched (on-demand or subscription) by a municipality or its designee, both under authority of the taxi company s license. The designee can be the larger transit bus contractor or a transit broker (nonprofit community organization). Vehicle safety inspection, health & safety and environmental regulation responsibility is held by the taxi company, with prudent, oversight and due diligence exercised by the municipality Asset ownership and management Taxi company (eliminating senior government infrastructure funding) Competition, qualified firms Problematic in areas with limited taxi service and due to industry challenges (standardized training and discipline, fraud mitigation). Operational cost-efficiency, Cost-effectiveness Taxis are widely used to contain costs for select, lower-volume services, offset by contract administration expenses (oversight). Value-added services (access to contractor resources - performance management systems, IT, fleet, specialized training) larger fleet to address spikes in passenger demand, longer hours of operation to support extended services approved by a 8

9 November 29, 2017 Page 9 of 12 Municipality, established call centre, dispatching IT. This option would have to be assessed for fit. It s worth emphasizing that this option is based on taxi license authority/tariff and not contract service delivery by a taxi company discussed above. In general terms, delegated service delivery by taxi is best suited to supplement core transit service. 3. Municipal Partnership City of London via London Transit Commission Inter-municipal services agreement with the City of London to extend London Transit Commission service to the Municipality of Middlesex Centre. London Transit Commission staff have been receptive to discussing service provision for Middlesex Centre under their contract. This type of inter-municipal service delivery arrangement offers benefits to the Municipality of Middlesex Centre related to Ontario Gas Tax funding, fare and service integration with the London Transit Commission. Other benefits include availability of standby vehicles and existing capacity and technology to meet AODA requirements. Similarly to delegated service delivery by a taxi company, regulatory authority would be retained by the City of London via the London Transit Commission. Key distinguishing characteristics: Regulatory authority This could be most directly structured so all authority is retained in the City of London via the London Transit Commission Asset ownership and management Municipal (City of London or Middlesex Centre) Competition, qualified firms n/a Operational cost-efficiency, Cost-effectiveness embedded in the City of London via the London Transit Commission and subject to negotiation of the terms and conditions of an inter-municipal services agreement Value-added services (access to resources - performance management systems, IT, fleet, specialized training) embedded in the City of London via the London Transit Commission A fixed route / fixed schedule service (with route deviation) and dedicated on-demand paratransit service, in the immediate term and long term, are suitable candidates for contract service delivery assessment. 4. In-house Municipal Service Delivery Municipality of Middlesex Centre Municipal department for operation and maintenance of the Middlesex Centre Transit Service. In-house operation of transit service is very common in larger municipalities and regions. Canadian Urban Transit Association (CUTA) statistics show that about two-thirds of its member 9

10 November 29, 2017 Page 10 of 12 transit systems have some or all of their service delivered by a municipality/transit agency, representing over 85% of transit service delivered in Canada (smaller transit systems predominantly contract for service delivery). Transit services in a municipality or region are usually organized in either a fully integrated transit department/utility/commission or a transit department with specialized, organization-wide centres of excellence support functions (HR, Supply Chain Management, etc.). In-house municipal transit service delivery includes conventional bus, community bus and paratransit. Key distinguishing characteristics: Regulatory authority Operating authority is held by the municipality as granted by legislation. Vehicle safety inspection, health & safety and environmental regulation responsibility is held by the municipality Asset ownership and management Municipal, eligible for senior government infrastructure funding Competition, qualified firms n/a Operational cost-efficiency, Cost-effectiveness Municipality employee compensation levels and work rules set basic operating costs, while the lack of economies of scale in a small municipality typically leads to higher cost. Value-added services (access to resources - performance management systems, IT, fleet, specialized training) sophisticated organizational support in a municipality (HR, LR, financial, supply chain management, safety, environmental systems, etc. A fixed route / fixed schedule service (with route deviation) and dedicated on-demand paratransit service, in the immediate term would likely not be suitable for in-house service delivery. Conclusion As a Municipality, we face numerous challenges in connecting our settlement communities. This includes lower but growing population densities, a wide geographic area, and limited capital resources. As the population continues to grow, the Municipality aims to dramatically improve quality of life, showcase the Municipality s diversity and appeal, and make sure businesses can excel. Municipal Council could elect to adopt the recommendations of this report and request staff to proceed with undertaking a transit feasibility study to determine an appropriate service delivery model through an examination of the potential users needs, best practices used in other municipalities and fiscal constraints. In successfully implementing such initiative, the Municipality will need to conduct significant marketing and community outreach to ensure that residents are aware of the service. In addition to raising awareness, these marketing activities will establish a positive brand and image for the 10

11 November 29, 2017 Page 11 of 12 Middlesex Centre transit service. Marketing materials should convey that transit can benefit a variety of users seniors, students, people with disabilities and general residents. Finally, these activities will provide residents with all of the information they need to use the service. A dedicated address (e.g. transit@middlesexcentre.on.ca) and phone number should also be established to answer residents questions about a new transit service. Financial Implications: Transit Funding The following funding sources may be available to help the Municipality of Middlesex Centre with the costs of a transit service: 1. Ontario Gas Tax Funding Ontario s Dedicated Gas Tax Funds for Public Transportation (Gas Tax) Program was launched in 2004 to provide a long-term, sustainable source of funding for Ontario municipalities that contribute towards a local public transit system. The purpose of the program is to increase municipal transit ridership through the expansion of public transportation capital infrastructure and levels of service. Ontario Gas Tax funding can be used by municipalities for either capital costs or operational costs. Gas Tax allocations are based on a formula of 70% ridership and 30% population. A municipality that is not currently providing public transportation services, but decides to begin providing such services, may be eligible for funding. Notification of the municipality s intent to provide public transportation services and specific commitment to annually fund such public transportation services is generally required prior to October 1, along with a municipal by-law indicating its intent to provide public transportation services. Gas Tax funds provided to each municipality cannot exceed 75% of municipal own spending on transit. Municipal own spending includes passenger revenues, donations if applicable, and municipal contributions to operating and capital expenses, and is derived from data reported to Canadian Urban Transit Association (CUTA). 2. Other Sources of Revenue Three other potential sources of revenue have been identified and are as follows: Development charges. In Ontario, development charges are charges imposed by municipalities on developers to pay for increased capital costs related to growth. Development charges provide municipalities with a tool to help fund the infrastructure needed to serve new growth. They help finance the growth-related capital costs of providing important services like roads, water and wastewater 11

12 November 29, 2017 Page 12 of 12 services, police, fire and transit. The Municipality may choose to increase municipal development charges to recover the capital costs of a transit service. Advertising. Several Ontario municipalities such as the City of Barrie and Bradford West Gwillimbury have successfully negotiated contracts with outdoor advertising companies for advertising space on transit vehicles and at bus stops. Often, advertising companies provide and maintain shelters and benches in return for the right to sell advertising space on these elements. The Municipality should investigate this opportunity, keeping in mind that administrative resources are required to manage advertising contracts. Advertising opportunities must be promoted, advertising agreements developed, advertisements printed on sturdy media, and advertisements installed on transit vehicles. Community and corporate sponsorship. At the appropriate time the Municipality of Middlesex Centre could elect to solicit sponsorship from local business and community organizations. In other municipalities, service clubs and community organizations have made financial donations to local transit systems. Local businesses have also made financial or in-kind donations (e.g. printing decals for the exterior of transit vehicles). Municipalities have recognized these sponsors by including their logos on the website, on marketing materials and on the exterior of transit vehicles. Sponsors receive visibility and are recognized for their contribution to the community, while the Municipality receives additional funding and support. Strategic Plan: Middlesex Centre`s Strategic Plan, identified three applicable strategic themes as Increase Customer Satisfaction, Promote Positive Image, and Optimize Partnerships. This report was prepared with assistance provided by Jake Straus, C.Tech. Transportation Engineering Technologist. 12