Prepared by: Patrick Inglis Senior Sustainability Advisor Planning & Infrastructure. City of Spruce Grove 2016 Transit Fare Review

Transcription

1 Prepared by: Patrick Inglis Senior Sustainability Advisor Planning & Infrastructure City of Spruce Grove 2016 Transit Fare Review

2 Table of Contents Introduction...2 Current Fare Structure...5 Review of Other Fares...8 Analysis of Fare Structure The Universal Transit Pass (U-Pass) Seniors and Low Income Fares Proposed Fare Structure and Rationale P a g e

3 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 Systems 1 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 system 2. 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

4 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 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

5 Figure 2 Comparison of Automobile Ownership vs. Public Transit 3 Class Crossover Vehicle: Toyota Venza Class Pickup Vehicle: Ford F150 Class- SUV Vehicle: Chev Equinox Class Compact Vehicle: Honda Civic Fuel $1,831 $3,165 $2,616 $1,906 Insurance $1,659 $1,775 $1,692 $1,684 License & Registration $101 $101 $101 $101 Depreciation & Maintenance $6,950 $8,762 $8,269 $5,325 Cost per Km $0.52 $0.69 $0.63 $0.45 Annual Total Cost (Based on 20,000 Km/yr.) $10,439 $13,702 $12,577 $8,914 Environmental Impact CO2e Kilograms/year 16,987 27,219 23,127 17,608 Fuel Economy 7.32 L/ 100 Km L/100 Km L/ 100 Km 7.62L/ 100 Km Not: Does not include finance charges Transit Alberta Average $3.20 Single Fare $67.96 Monthly Pass $ Year * Spruce Grove Adult $6.00 Single Fare $ Monthly Pass $1, 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, P a g e

6 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 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 $ 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

7 Figure 4 Transit Sales Outlets Vendor City Hall (Hours 8:30 am 4:30 pm) Transit Products sold Regular Commuter Transit Pass Integrated Transit Pass (Spruce Grove residents only) Student Pass (Spruce Grove residents only) Adult Commuter Tickets Shoppers Drug Mart (two Spruce Grove locations) Century Crossing (#100, 131 Century Crossing Rd.), open Monday - Sunday, 8 a.m. to 10 p.m. 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 Hours 624 King Street, 98 McLeod Avenue Unit 100, #3 McLeod Ave Regular Commuter Transit Pass Integrated Transit Pass (Spruce Grove residents only) Student Pass (Spruce Grove residents only) Regular Commuter Transit Pass 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 day in partnership with Perks Coffee House. Figure 5 Transit Boardings to ,000 87,000 86,000 85,000 84,000 83,000 82,000 81,000 Spruce Grove Transit - Boardings 80, P a g e

8 To illustrate where the City of Spruce Grove sits among the smaller regional transit systems, the graph that follows (Figure 6) covers the period from 2004 to Spruce Grove s transit use has been very consistent since 2009, but overcrowding on one or two buses is limiting growth in ridership. Riders on these buses may move to other modes for their commuting needs. Despite the annual population growth of 6 to 7%, transit ridership has remained relatively flat. Figure 6 Regional Transit Ridership 7 P a g e

9 Review of Other Fares The next section will examine the price schedules of various transit systems in Alberta and across Canada; it is important to consider the level of development of the entire system. Although Spruce Grove has operated a transit system since 2006 it is still a very young system largely focused on commuter transit between Spruce Grove and Edmonton downtown. The comparison of transit systems illustrates the wide variety of fare products that are possible, however each product needs to be accounted for, reconciled and reported as sales. In early transit system development simple is most likely better. The following (Figure 7) is a comparison of fare products from across the Edmonton Capital Region, Alberta and PEI that are a mix of local and regional transit service. (Numbers) in Red are being proposed for September (Numbers) in Blue are proposed for February Figure 7 Comparison of fare product price Capital Region, Alberta and PEI Spruce Grove Edmonton Ft. Sask. Strathcona County Leduc St. Albert Airdrie Grand Prairie Charlottetown PEI Monthly $ $91.50 $96.00 $ $80.00 $ $ $54.00 $65.00 Adult Commuter Pass ($90.00) ($108.00) Cash Fare $6.00 $3.25 $3.50 ($5.00) $6.00 ($4.50) $5.00 $6.00 $9.00 $2.00 $2.25 Monthly Integrated Pass (with Edmonton) Monthly Integrated Pass (with Edmonton) Student/Se nior Commuter Ticket 10 Pack Student Pass $ N/A $ ($175.00) $ ($110) $48.00 $24.75 $33.50 ($40.00) $95.00 $83.50 $ ($110.00) N/A N/A N/A N/A N/A N/A $42.00 ($33.80) $93.00 ($81.00) $45.00 $41.25 $75.00 $17.00 $20.00 N/A $ $43.00 $45.00 U-Pass No Yes No Yes $1/trip Yes Yes Local Fare - $2.00 N/A $2.00 $3.25 $2.00 $3.25 $2.25 Adult ($2.25) ($2.33) Local Adult tickets 10 - Pack $20.00 ($20.00) $22.00 ($11.75) $24.00 Local Adult Monthly Pass Local Fare - Senior Local Senior Tickets 10 - Pack Local Senior/Stu dent N/A ($50.00) $1.75 N/A $1.00 ($1.50) $10.00 ($12.00) N/A ($20.00) $56.00 ($56.00) $3.26 ($1.75) $33.35 ($11.31) $54.00 ($42.00) $ P a g e

10 Monthly Pass Local Fare Child Youth Pass (Monthly) Day Pass (1 adult + up to 4 children unlimited) Senior +65 (monthly Pass) Senior Annual Pass Senior Annual Pass Low income AISH Monthly Pass Transfer to ETS required to go downtown at additional cost? Operated under contract by ETS Spruce Grove Edmonton Ft. Sask. Strathcona County $1.75 N/A Under 12 Free $71.00 $9.50 $9.00 ($11.25) $14.50 N/A ($19.60 in 2018) $ $ (N/A 2018) $55.75 $ (N/A 2018) Leduc St. Albert Airdrie Grand Prairie $35.00 $24.00 Free No N/A Yes No Yes Tickets/P asses valid on ETS/Strat hcona with $1 - $2 zone fee N/A N/A N/A Yes Yes No No No N/A Charlottetown PEI A number of transit systems are currently reviewing fares. Some in the Capital Region are realigning fares so that each product is in a stepped standard discount from the regular adult fare which is the base fare. Strathcona County is also attempting to align their fares with Edmonton to accommodate Smart Card Technology, which is planning to be introduced in In their case some fares are actually being reduced in price. It should be noted that Airdrie s monthly pass is significantly higher as the downtown Calgary parking rates are some of the highest in North America. The $200/month pass in comparison to a $550 to $750 monthly parking pass is a significant savings. 9 P a g e

11 Some observations on the fare data are: Average monthly commuter pass rates in the Capital Region are $ For the all sample transit systems - $ The average commuter cash fare in the Capital Region is $4.75. For the sample transit systems - $4.60 The per trip fare with an adult commuter pass based upon 40 trips (20 days round trip) for Spruce Grove is $3.25. The average for the Capital Region (not including Spruce Grove) is $2.41 (Per Trip Fare: Edmonton $2.29; Fort Saskatchewan $2.40; Strathcona Transit $2.57; Leduc $2.00; St. Albert $2.80) Other information Edmonton, St. Albert and Strathcona have fare integration (transfers are accepted on each other s system, with a $1 or $2 zone charge). Leduc, Ft. Saskatchewan and Spruce Grove have no transfer arrangements. Full ETS fare is required for customers transferring to ETS. Leduc and Fort Saskatchewan buses only travel to end of line LRT stations and not into the downtown core as the Spruce Grove service does. 10 P a g e

12 Analysis of Fare Structure There is no perfect system to set fares, however there are some practices utilized in the transit industry that help to coordinate fares and discounts so they are logical and make reasonable sense. One of the key messages at transit conferences are that the suite of fares is disproportionate from the adult fare to the senior fare. Other factors such as service quality, frequency and price can influence existing, occasional transit users and potential transit users. A fuel price increase or a parking rate change can all influence potential transit ridership. The central perspective to fare setting for decision makers are the transit objectives: Are you seeking cost recovery? Are you seeking to provide a valuable public service, often to a lower income portion of the population? Important points to consider: The retail price of motor fuel has been at the lowest in 18 months (February 2016), an absolute drop of 51% from the high of $1.19. The 18-month average retail fuel price drop has been 14%. Fuel prices influence transit use. (See Figure 8 18-month regular fuel price for Edmonton). 4 Increase of fares can create a negative elasticity of 0.4%. For each 1% of fare increase transit ridership may be reduced by 0.4%. 5 Transit dependent riders have lower elasticities than discretionary riders. Large cities tend to have a lower elasticity than small cities. Peak-hour travel is less elastic than off-peak. Parking pricing can also significantly increase transit travel. A modest increase of $1.00 or $2.00 often doubles transit commuting. Service quality can significantly increase transit ridership, which speaks to price increases that occur after a significant service improvement. For every 1% increase in transit service frequency, vehicle mileage or operating hours increases ridership by 0.5%. Most transit trips are made by lower-income household. Lower income riders represent 63% of riders in small transit systems, 51% in medium size transit systems and 41% of riders in large transit systems. 6 Edmonton transit is increasing fares on average 3% for the next three years. Alignment of fares could become an issue as smart card technology is being implemented in Spruce Grove s service could be considered a premium because the bus travels downtown and not to an LRT transfer point. Changing service to require an LRT transfer will require a major reduction in cost so that the full ETS cost makes the price equivalent to the current fare. In the last two surveys, stopping at an LRT station was very unfavorable to transit riders. 4 Gas Buddy.com 18-month Average regular fuel price Edmonton. Accessed April 25, Evaluating Public Transit Benefits and Costs Best Practices Guidebook. Victoria Transportation Policy Institute, Todd Litman. 10 December P.18 6 Ibid. P P a g e

13 Figure 8 18-Month Edmonton Fuel Price The table (Figure 9) that follows is a comparison of Spruce Grove transit costs and revenues over the past two years. In 2014 service was cut to the University of Alberta as students were encouraged to utilize the U-Pass to take the LRT from the downtown connection. In 2015 fares were increased, the student pass was introduced and the integrated pass was introduced. The student passes decreased revenues from the previous year, but marginally increased ridership. Advertising revenue was cut in half in 2014 with the removal of advertising benches. There was a marginal increase with seasonal bench placement. Figure 9 Cost Recovery Rate City of Spruce Grove Costs ETS Contract $ 1,116,476 $1,184,702 Bus Stop Maintenance/Cleaning $ 27,872 $32,183 Advertising (2015 Surveys) $ 1,754 $7,361 Printing (Passes) $ 2,000 $8,724 Total $ 1,148,102 $1,232,970 Revenue Sale of Bus Passes $ 346,423 $ 366,799 Cash Fare $ 96,966 $ 80,008 Advertising Revenue $ 6,115 $ 3,612 MSI Operating Grant $ 214,295 $ 210,648 Total $ 663,799 $ 661,067 Total less MSI Grant $ 449,504 $ 450,419 Taxpayer subsidy with MSI $484,303 $571,903 Taxpayer subsidy without MSI $698,598 $782,551 Cost Recovery with MSI 57.8% 53.6% Cost Recovery without MSI 39.2% 36.5% 12 P a g e

14 When comparing Spruce Grove s Cost Recovery to other transit operations (see Figure 1) Spruce Grove is higher than the 2014 National Average for populations below 50,000. In the Capital Region the rate is below the larger operation of Edmonton, but consistent with St. Albert and Strathcona County. Fare Structure A number of transit systems are utilizing a fare pricing system that increases all fares at the same rate in order to keep the fares proportionate. In all cases the base fare (Adult Cash) is considered the anchor in which all other fares are based. Two structures have been reviewed in the table below. One is the BC Transit Victoria fare study model 7 and the other is the Strathcona County Transit model 8 (Figure 10). Although the proportions are different, they reflect a similar structure generated from the base fare. Figure 10 Fare Structure Examples Applied and Compared to Spruce Grove Fare Type BC Transit Guideline Strathcona Guideline BC Transit Guideline Applied to Spruce Grove Strathcona Guideline Applied to Spruce Grove Cash Base Fare Base Fare $6.00 $6.00 $6.00 Ticket 9 times 25% less $54.00 $45.00 $48.00 base fare than base Ticket Fare - Discount 9 times base fare 25% less than adult $45.90 $33.75 Monthly Pass Adult Monthly Pass Senior Monthly Pass -Youth Day Fare less 15% times base fare times base fare less 15% times base fare less 15% 2 times the base fare Base fare less 15% ticket Fixed trip multiplier of 24 trips 10 one way trips increasing by one trip until it reaches 24 UPass available no other pass 50% less than base $120 - $180 $ $130 $102 - $153 $60.00 to $ $102 - $153 N/A $12.00 $12.00 Youth Cash $ 5.10 Fare Local Adult N/A $2.00 Local N/A $1.75 Senior/Youth Current Spruce Grove Fares 7 BC Transit Victoria Regional Transit Commission Fare Structure Review, September 15, 2015, p.16 8 Strathcona County Transit Department, ISL Consulting and DanTec Associates, June 22, 2015, p P a g e

15 Sensitivity Analysis (Price) To estimate how existing, occasional and potential transit riders may react to transit fare changes the following price sensitivity has been applied to the base cash fare and the monthly pass fare (Figure 11). Other factors discussed such as automotive fuel prices, parking fees, quality and frequency of transit service may also affect ridership. Ticket pricing has not been included as it was introduced in 2015 and sales of this product is currently limited to City Hall. Elasticity on a price reduction is assumed to be 0.2% for every 1% decrease in fare on a fare increase 0.4% for every 1% increase in fare has be applied. Figure 11 Fare Price Change Elasticity Applied to Current Revenue Adult Base Fare (cash) Current Revenue Expected change in Estimated Revenue ridership Reduction of 10% = +2% $81,600 $5.50 Reduction of 5% = +1% $80,800 $5.70 Current $6.00 $80,008 0% $80,000 Increase of 3% = $ % $79,040 Increase of 5% = $ % $78,400 Adult Monthly Pass Current Revenue Expected change in Estimated Revenue ridership Reduction of 10% = +2% $374,135 $ Reduction of 5% = +1% $370,467 $ Current $ $ 366,799 0% $ 366,799 Increase of 3% = -1.2% $ 362,397 $ Increase of 5% = $ % $ 359,463 Estimated change in Annual Ridership Based upon price The table below (Figure 12) has utilized the same elasticity figures and applied to ridership. Based upon the numbers fare reductions could enhance ridership while a fare increase may influence lower ridership. Figure 12 Fare Price Elasticity as Applied to Total Ridership Fare price strategy Cash Fare Adult Pass Total Current 15,663 71,356 87,019 Fare reduction 5% 15,820 72,069 87,889 Fare reduction 10% 15,976 72,783 88,759 Fare increase 3% 15,475 70,499 85,279 Fare increase 5% 15,350 69,929 85, P a g e

16 The Universal Transit Pass (U-Pass) The U-Pass has been established in many jurisdictions to provide transit access to post-secondary students while attending their institutions. The principle of the pass is that the post-secondary schools develop an agreement with the transit providers in a region. Institutions determine eligibility around which students are covered by the program full time, part time, etc. The institution negotiates with the participating transit authorities on a price for the pass. The pass price is then added to every student s tuition which is collected by the institution. All students must participate there is no opting out provision, unless it is established by the institution. In the Capital Region the current U-Pass agreement, which expires in spring 2017 includes the University of Alberta, NAIT, MacEwan University and NorQuest College. Edmonton Transit, St. Albert Transit and Strathcona Transit are the participating transit properties. In September 2015, Fort Saskatchewan, Leduc and Spruce Grove, met with Edmonton, St. Albert and Strathcona County to discuss the possibility of being included in negotiations with the post-secondary institutions for inclusion in the U-Pass program. There was general acceptance among the transit properties for inclusion. The only provision was that once into the agreement, there is no backing out until the end of the three year agreement. From the perspective of the post-secondary institutions, it would be viewed as very beneficial for the other regional transits to be included. Throughout 2015 the Senior Sustainability Advisor met with the Student Union President of MacEwan University, a resident of Spruce Grove. The challenge for Spruce Grove is not the post-secondary institutions, it is negotiating with the existing transit properties for an equitable portion of the funding that is collected from these institutions. Based upon current agreement, 2015 U-Pass revenue is $21.1 million. The current agreement distribution is 84% Edmonton, 8% Strathcona County and St. Albert. The 8% equates to $1.688 million. Spruce Grove has established a Student Pass at $95 starting in September In 2014 there were 192 passes sold representing $18,240 in revenue. In 2015 there was 580 passes sold which produced $55,100 in revenue. In 2015 each month that school is in, the average number purchased was 66 passes. Shoulder months of May to August ranged from a high of 33 to a low of 4 passes sold in one month. Fall is the strongest period for student pass sales averaging 80 per month. December passes are very low with only 4 being sold. In the discussion with Edmonton, Strathcona County and St. Albert regarding participation in the U-Pass program, they were prepared to share a percentage of the collected revenue on the basis of actual student transit use. There was no formula that would adapt the percentage for growth that would certainly follow. Based upon data collected from the post-secondary students with addresses listed as Spruce Grove, Stony Plain and Parkland County, the total estimated population was 3,182 (does not include NAIT). Currently there are between 66 and 83 students using the Spruce Grove bus (a 4233% difference). It is possible that although the addresses are listed in the area, they could be living on residence or with other students in Edmonton. The problem that could arise is that an amount that may cover current student transit riders will not match the potential number that would utilize the service, unless the model covers the potential growth. Even if the actual population that would take Spruce Grove Transit is ¼ of the potential based on the estimate, 795 students. This would require 20 buses. 15 P a g e

17 The potential revenue that could be shared to Spruce Grove is considerable. Even if 1.5% of the 2015 U- Pass revenue was shared, it would be $316,500. The Challenge with U-Pass is negotiating a revenue target that will address growth beyond current levels with the other transit properties. A Student s Story The unfortunate aspect to this is that students lose out, because they have to pay through their tuition, and then must pay again if they live in Spruce Grove. One student who recently discussed the issue of U- Pass is a part time at MacEwan University. She takes a single course and attends school one evening per week, yet she is paying for U-Pass. Currently she cannot take the Spruce Grove bus because it is peak service only. Students taking transit are the future growth and support of the system. With a positive experience they can be future adult riders. Spruce Grove is a City with a very youthful population, we may want to consider them as future customers. 16 P a g e

18 Seniors and Low Income Fares With respect to seniors, most transit properties are indicating that current fares are undervalued and are moving them up to be within 25% of adult fares as a standard fare. There are some municipalities that are adding a low income senior transit fare, which is administered by application and proof of income. The placement of the income range is not as low as persons on social assistance but rather a middle income level. Currently Spruce Grove has not added a senior s fare for the commuter service in the belief that access to Edmonton can be provided through Specialized Transit. At a point when Spruce Grove s service is more mature, with full day and evening local and commuter service this will need to be further examined. None of the transit surveys, nor calls to the transit or phone line have requested senior commuter fares at this point. For low income transit riders there is no special fare in Spruce Grove. In discussion with FCSS, there was a desire to acquire passes or tickets that they could administer to clients that needed access to transit for appointments in the City. There was no quantity determined and further discussions felt that a greater need would be for support for low cost transit fares once local service was established. In most municipalities, there is a low income monthly transit pass, which is issued by application and reassessed on a monthly basis. Even at these levels a payment for the pass was required. Only Banff Canmore transit and Grande Prairie transit offer free low income transit passes. Given the development of the City of Spruce Grove Social Sustainability Strategy this year, this area should be considered for additional study by 2018 and the expansion of local bus service. 17 P a g e

19 Proposed Fare Structure and Rationale All the factors that influence fare setting, the current state of the economy and our current cost recovery level were assessed. The setting of rates that follows takes into account that our current service offered has not yet changed, next year we start to offer increased service, which is a more acceptable time to increase fares. The following fare structure is proposed for the following two years with new fares going into effect in September Figure 13 Proposed Fare Schedule Current Fare September 2016/17 September 2017/18 Cash Fare Commuter $6.00 $6.00 $6.25 Commuter pass $130/month $130/month $135/month Integrated Transit Pass (Spruce $165/month $168/month $176/month Grove Residents only) Student Pass $95 $95 $100 Tickets Book of 10 $48 $50 $54 Local Rates (within Spruce Grove) Adult $2.00 $2.50 $2.75 Youth (age 6-17) $1.75 $2.50 $2.75 Senior $1.75 $2.50 $2.75 Total estimated revenue $446,807 (2015) $504,991 $685,036 Projected Cost Recovery 36% 29% 35% Note: It is anticipated a new route will start based upon the purchase of new buses. This will increase both costs and revenue figures for 2016/17 include new peak hour service to West Edmonton Mall/South Campus. 2017/18 figures include full day service on the same route. The cost recovery figure provides no provision for operational grants. Spruce Grove buses will fall under a different contract than the current arrangement for ETS owned buses - ETS will store, maintain and operate the buses owned by the City of Spruce Grove, costs under this arrangement may be more variable than current. Recommendations The Integrated Pass should be further reviewed in early 2017 as it has not been widely accepted (10 to 12 per month). Currently this pass is being subsidized at a rate of $54 per pass. The difference between the total cost of both the adult Spruce Grove Pass and the cost of the Edmonton Transit Pass. The increases in the pass price keeps the subsidy constant with ETS pass increases. With introduction of a new route next year, this pass may have more acceptance. The Student pass should be frozen at the current level until 2017 and the City of Spruce Grove should participate in negotiations regarding U-Pass. Base fares should be held as current for 2016/2017 and increased in 2017 and beyond at a regular rate of inflation or cost of service increase imposed by Edmonton Transit. Current fares overall are among the highest in the region, an increase at this time could affect ridership which may take a number of years to recover. With new service next year, a fare increase is equated with more value. 18 P a g e

20 Ticket prices should be increased. The initial price was good for the product to be established, but it has considerable room to move up and still be good value. The objective of the tickets is to be a bridge for transit riders to continue taking transit in a month that for them does not warrant a pass. Cash local fares are being increased. There is not much local traffic and the local fare has been strongly under-valued. The local fare should move to at least 50% of the commuter fare. Youth and Senior fares should be aligned with the local fare for simplicity. A more thorough review of senior s and low income fares is required. It should be completed by the end of 2018 and consider a possible integration with a future STS alignment. The City of Spruce Grove should open discussion with the City of Edmonton into formal fare integration. This may require a discussion at the political and senior management levels. The additional cost that Spruce Grove residents must pay, is a significant barrier to a wider acceptance of transit. The partnership agreement with Parkland County requires approval of their Council for an increase to commuter fares. 19 P a g e