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0 DART Fare Structure and Proposed Fare Increase Board Workshop January 5, 2018

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Page 1: DART Fare Structure and Proposed Fare Increase · DART Fare Structure and Proposed Fare Increase Board ... • Reduced Fare for high school students expanded from ... DCTA passes

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DART Fare Structure and Proposed Fare Increase

Board WorkshopJanuary 5, 2018

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• Executive Summary

• Review of DART Fare Policy & FTA regulations, Financial Impact, and Fare History

• Fare Structure Changes

– Programmatic, Payment System Features, Pricing

• Revisions to initial proposal based on customer and Board member input

• Current & Proposed Fares

• Recap & Recommendation

Presentation Outline

Finance Department

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Executive Summary

• Proposed fare structure amendment meets the financial commitment in the DART FY 2018 Twenty-Year Financial Plan and complies with Board-adopted Policy

• Revisions made to accommodate customer and Board input

• Coincides with introduction of new payment system and upgrades to both mobile and farebox systems

Finance Department

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DART Fare Policy Background

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DART Fare Policy & FTA Regulations

• Board-adopted Policy (III.01)

• State legislation (§452.061) requires fares sufficient to pay expenses

• FTA Regulations: Half fare for fixed route service for “elderly” & persons with disabilities, during off peak hours. Paratransit not more than twice the fixed route fare. Equity analysis (“Title VI”) to assess disparate effects on minority & low-income riders, and public meetings & hearing – completed on staff proposal.

Finance Department

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• DART Financial Standard states “…Board will consider…fare modifications to maintain DART’s financial viability”

• Twenty-Year Financial Plan (beginning in 2004) reflects a fare increase every 5 years

• Consistent, prudent financial practices adopted by DART Board and supported by subsequent Board decisions are cited by both Standard and Poor’s and Moody’s Investors Service rating agencies as one of the major factors underlying the high credit rating assigned to DART bond issues by both rating agencies

DART Financial Plan Considerations

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Fare Structure History

Finance Department

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Fare Structure Components

• Fare schedule for each type of ticket (e.g. monthly pass) and explanatory footnotes (e.g. eligibility for reduced fare)

• Ratios: o Monthly = 16 day passes. o Annual = 10 x monthly. o Annual Corporate = 75% of Annual. o Regional = 2 x Local

• Programs

• Free fares (e.g. paratransit on fixed route, children under 5, voters, police officers in uniform)

• Reduced Fares

• Customer and route promotions, conventions, special event passes

• Corporate, residential, and higher education programs

Finance Department

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Proposed Changes to Fare Structure

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Proposed Fare Changes

• Introduction of single-ride fare for bus service at $2.50 (the price of 2-hour pass today)

• Expansion of 2-hour pass to a.m. / p.m. pass

• Across-the-board 20% fare increase except Mid-Day pass increase of 25¢ from $1.75 to $2.00 and Paratransit 50¢ increase from $3.00 to $3.50

• Ratios to remain unchanged: Monthly = 16 day passes. Annual = 10 x monthly. Annual Corporate = 75% of Annual. Regional = 2 x Local –except regional reduced fares will remain ½ local fare (see slide under comments received)

• Weekly pass ($25/week) eliminated. We sell a limited number of these passes – & we expect fare capping to eliminate demand entirely.

Finance Department

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New & Existing Fare Structure Features• Single ride at $2.50 retains current price of two-hour pass and

addresses almost 50% of all cash trips taken on bus

• Expansion of 2-hour pass to a.m. / p.m. pass

• Reduced Fare for high school students expanded from Monday through Friday to full week, starting in August 2018

• Popular Midday discounted service increasing only 25¢ to $2.00 and expanded availability to full week

• Lone Star: Participants with TANF benefits eligible for reduced fare

• DART offers reduced fares for seniors, disabled, students & children on nearly all products (not just off-peak on base fare required by law)

• Higher Education Program contracts with schools to provide discounted service to students

Finance Department

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Payment System – Best Value

• Best value is a pay-as-you-go feature for the contactless payment cards upon deployment (and for GoPass in future)

• As the GoPassTap card is tapped, the system will deduct the lowest appropriate fare from the account balance associated with the card –until the day / month cap is reached. [For example, first tap at 7:00 a.m. will deduct an a.m. pass cost. A second tap at 1:00 p.m. will deduct a midday pass cost. A third tap at 6:00 p.m. will deduct a day pass cost – less the amounts already deducted.]

• The proposed cost of a GoPassTap card is $6.00. Upon activation, the account associated with the card will have transit value of $6.00. There is no additional cost for the card!

Finance Department

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Payment System – Fare Capping

• Fare Capping is a pay-as-you-go feature that allows DART riders, using GoPass or GoPassTap card, to automatically cap the daily & monthly fare so they will not spend more than needed on travel.

• Riders pay for each part of their journey until the cap amounts are reached, then pay no more for the rest of the day or month. To benefit from fare capping, riders must tap their DART card at a validator – or activate their GoPass ticket – as they board the bus or train.

• Fare capping for GoPass available May 2018; for GoPassTap cards available as the cards are deployed (starting in August 2018 (“soft” launch) with full launch November 2018).

Finance Department

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Payment System – Stored Value

• Stored value is a payment system feature that allows DART riders to load value into a GoPass or GoPassTap account to use to purchase DART passes or pay for travel.

• Customers can add to the stored value in their account at retail locations throughout the service area, on-line, at the DART store, or by calling a special DART customer service number.

Finance Department

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Programmatic Changes

Effective Upon Board Adoption

• Expand Reduced Fare availability for high school students from Monday through Friday to full week, found in the “Footnotes to Product Price Schedule” and “Section 4: Special Programs”

• Stored Value and Fare Capping, found in “Section 3: Stored Value and Fare Capping”

• Clarifications to Fare Structure Wording, found in “Footnotes to Product Price Schedule” and “Section 2: Free Fares”

Finance Department

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Programmatic ChangesEffective Upon Board Adoption

• Addition of Programs now in pilot: Reduced Fares for the service area residents participating in a transitional program, found in “Footnotes to Product Price Schedule” and Mobility on Demand found in “Section 4: Special Programs”

• Addition of Reference to Other DART Policies: DART Board Policy III.07 DART Service Outside Service Area Boundary, and Policy III.16 Site Specific Shuttle Service Policy, both found in “Section 4: Special Programs.”

Finance Department

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Changes Deferred

• Annual pass fare increase (originally proposed for January 2018)

• Options include:

• Fare increase for passes starting January 2019

• Fare increase for passes purchased August 2018 or later. (Most annual passes are purchased at start of the year – but a limited amount of (corporate & retail) are purchased during the year at a pro-rated amount.)

• New staff proposal: Fare increase for passes purchased August 2018 or later

Finance Department

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Revisions resulting from Customer and

Board Input

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Comments Received - Day Pass and A.M./P.M. Changes

• Initial proposal: Change from 2-hr & day pass to A.M. & P.M. pass

• Why: New farebox ticket issuing mechanism more reliable, but will not issue mag-stripe ticket – needed to develop ticket easier for operators to inspect. (And lower cost A.M./P.M. passes would reduce reselling.)

• Comments received: Offer midday pass on weekend for customers beginning journey shortly before noon. Retain convenience of day pass.

• New staff proposal: Expand midday pass availability to full week and retain the ability to offer a DART day pass on bus and TVMs year round.

Finance Department

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Comments Received – Trade Schools

• Initial staff proposal: Drop trade schools from Reduced Fare & Higher Education programs

• Why: DART requires student to complete a student ID application. However, Riders often purchase student reduced fare ticket at TVM without having obtained DART-issued student ID – difficult to enforce due to variety of trade school types, school terms, identification.

• Comments received: Not equitable to drop trade schools from reduced fare programs.

• New staff proposal: Retain trade schools in Reduced Fare & Higher Education programs. Improve TVM process.

Finance Department

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Comments Received - Regional Reduced Fare

• Initial staff proposal: Increase Regional Reduced Fare to ½ Regional Full Price Fare

• Why: Reduced fare products are currently regional passes – but sell for ½ local reduced fare. Staff proposal revises reduced fare to mirror regular fare – i.e. regional reduced passes sell for ½ regional full price fare.

• Comments received: This represents a large increase for reduced fare riders that travel regionally.

• New staff proposal: Continue reduced fare products as regional that sell for ½ local prices. Work with FWTA & DCTA regarding acceptance. (Without inter-agency agreement, riders will need to purchase FWTA or DCTA passes when travelling from one agency service area to another).

Finance Department

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• Initial staff proposal: The approved FY 2018 Financial Plan assumes a fare increase that remains in place for five years

• Comments received: A fare increase every 5 years results in a large percentage increase

• New staff proposal:

– The most appropriate time to consider a change in approach would be in conjunction with discussion of FY 2019 Financial Plan

– The percentage increase associated with an annual fare increase needs to be tested against several twenty year scenarios to confirm what percentage would essentially be equivalent to the current five year approach

– Discussions of lower annual percentage increases than an percentage that maintains equivalence needs to be addressed as part of the FY 2019 Financial Plan and Budget deliberations

Comments Received - Annual fare increase option

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Current & Proposed Fares

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Current and Proposed Fares

Finance Department

Current Proposed

Single Ride (available only on bus) Aug. 2018

Local N/A $2.50

Reduced Fare N/A 1.25

Regional N/A N/A

Single Ride - Paratransit Mar. 2019

Paratransit – Demand Response Van/Sedan

Service

$3.00 3.50

Paratransit – Book of 10 (to be replaced by DART payment

card)

30.00 35.00

Paratransit – Trips to Fixed-Route Stops 0.75 1.00

Paratransit – Eligible Riders on Fixed-Route

Service

FREE FREE

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Current and Proposed Fares

Finance Department

Current Proposed

Two-Hour (will expand to a.m./p.m.) Aug. 2018

Local $2.50 $3.00

Regional 5.00 6.00

Reduced Fare – Regional 1.25 1.50

Mid-Day (9:30 a.m. – 2:30 p.m.)

Local 1.75 2.00

Regional 3.50 4.00

Day

Local 5.00 6.00

Regional 10.00 12.00

Reduced Fare 2.50 3.00

Day Pass Voucher

Regional (10 vouchers) $30.00 $36.00

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Current and Proposed Fares

Finance Department

Current Proposed

Aug. 2018

Week (not available after August 2018)

Local $25.00 N/A

Regional 50.00 N/A

Month

Local 80.00 $96.00

Regional 160.00 192.00

Reduced Fare – Regional 40.00 48.00

Lone Star – Regional 40.00 48.00

Paratransit N/A 112.00

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Current and Proposed Fares

Finance Department

Current Proposed

Aug. 2018

Annual

Local $800.00 $960.00

Regional 1,600.00 1,920.00

Senior – Regional 480.00 576.00

Corporate – Local 600.00 720.00

Corporate – Regional 1,200.00 1,440.00

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Payment Systems Changes

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New Payment System Features

• GoPass (mobile) upgrade with ability to purchase tickets and add stored value using cash rather than a credit or debit card, available Spring 2018

• Contactless payment card (GoPassTap) available August 2018 (“soft” launch; full launch November 2018) with similar stored value features

• Cards available at over 900 locations throughout service area starting in August 2018

• Retail locations accept cash for GoPass mobile (starting Spring 2018) & payment card purchases (starting in August 2018)

• Fare capping allows the pay-as-you-go purchase of a monthly pass. Available May 2018 for GoPass and August 2018 for GoPassTap

Finance Department

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Payment System – Mobile App & Contactless Payment Card

• Customers will continue to be able to set up a GoPass account on their mobile phone using the DART GoPass app

• The new DART payment system will also include contactless payment cards (GoPassTap). Customers can purchase GoPassTap cards at retail locations throughout the service area, on-line, or at the DART store. GoPassTap cards will have valuable features such as lost card value protection once registered.

• Riders must tap their DART card at a validator – or activate their GoPass ticket – as they board the bus or train.

• The new payment system will have new features including : Stored value, best value, and fare capping

Finance Department

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• New fareboxes will be installed in the first calendar quarter of 2018

• New equipment will reduce revenue loss associated with out of service fareboxes

• Ridership reporting will reflect a noticeable increase in bus ridership due to reduction of out-of-service fareboxes

• Cash collection expenditures will be reduced due to lower cost printed media and lower maintenance cost due to elimination of “trim unit” (an expensive and high maintenance device previously needed to hold print media)

Farebox Replacement

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Recommendation

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Recap

• Proposed fare structure amendment meets the financial commitment in the DART FY 2018 Twenty-Year Financial Plan and complies with Board-adopted Policy

• Expansion of discount programs:

• Single ride at $2.50 retains current price of two-hour pass.

• A.M./P.M. adds value over two hour product.

• Reduced Fare for high school students expanded from Monday-Friday to full week.

• Trade schools remain in reduced fare programs. Reduced fares remain regional passes.

Finance Department

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Recap (continued)

• The new payment system will include contactless payment cards available at retail locations throughout the service area.

• The new payment system will have new features including:

• Stored value

• Best value

• Fare capping

• Lost card value protection.

Finance Department

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Summary of Recommendations

• Across-the-board 20% price increase except Mid-Day pass increase of 25¢ from $1.75 to $2.00, change to AM/PM from two hour and Paratransit 50¢ increase from $3.00 to $3.50 effective August 2018

• Retain current ratios : Monthly = 16 day passes. Annual = 10 x monthly. Annual Corporate = 75% of Annual. Regional = 2 x Local – except regional reduced fares will remain ½ local fare

• Re-introduce single-ride fare for bus service at $2.50 (the price of 2-hour pass today)

Finance Department

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Summary of Recommendations (continued)

• Trade schools continue as part of the reduced fare programs

• Weekly pass ($25/week) eliminated

• Reduced Fare for high school students expanded from Monday through Friday to full week

• Midday pass availability extended to weekends

• Reduced fares remain regional passes

Finance Department

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Financial ImpactProduct Current Proposed Impact ($000) Total ($000)

Day - Local (Change to AM + PM) Some customers will shift to either a AM or PM fare 5.00 6.00 ($1,981) $13,582

Day - Reduced Fare (Change to AM + PM) Some customers will shift to either a AM or PM fare 2.50 3.00 (402) 2,777

Day - Govt. & Not-for-Profit 3.00 3.60 32 1,816

Two-hour - Local (Change to AM/PM) Some customers will shift to single ride fare of $2.50. 2.50 3.00 3,990 18,081

Two-hour Reduced (Change to AM/PM) 1.25 1.50 1,707 3,127

Midday - Local 1.75 2.00 166 1,872

Monthly - Local 80.00 96.00 1,204 9,122

Monthly - Reduced 40.00 48.00 352 2,670

Annual - Corporate Local 600.00 720.00 1,712 10,276

Annual - Corporate Regional 1,200.00 1,440.00 419 2,511

All Other (include Paratransit) 3,245 8,732

Total Passenger Revenues $10,445 $74,568

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– Daily Use: Single Ride, AM/PM, Midday and Day Pass Vouchers

– Extended Use: 7-Day (converted to AM/PM) and Monthly

– Other: Retail Annual and Special Event

Overview of Proposed Fare Increase (20%)

Fare Types

Avg %

Increase

Estimated

FY 2018

Revenue

Projected

FY 2019

Revenue

Revenue

Impact

Daily Use 17% 34,749,642$ 41,694,213$ 6,944,571$

Extended Use 20% 12,812,878 14,627,876 1,814,998

Corporate 20% 12,155,918 12,807,786 651,868

Paratransit 20% 2,446,509 2,932,592 486,083

College 20% 1,596,649 2,128,841 532,192

Other 20% 360,913 376,286 15,373

64,122,509$ 74,567,594$ 10,445,085$ Totals

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Calendar for Fare Structure Approval and Implementation

Finance Department

Date Description

1/5/18 Board workshop

1/23/18 Budget & Finance Committee briefing of new fares

2/27/18 Budget & Finance Committee approval of new fares

3/3/18 Board approval of new fare structure

3/3/18 Effective date of programmatic changes (e.g. fare capping)

May 2018 GoPass 2.0: Fare capping on GoPass

August 2018

Deployment of new payment system (“soft” launch)

Fare capping on contactless payment cards

August 2018 General fare increase

August 2018 Introduction of $2.50 single fare on bus

August 2018

Elimination of weekly pass

Start charging fares for LoveLink ride from Love Field

August 2018 Annual pass fare increase

November 2018 Full launch of new payment system

March 2019

Expansion of new payment system to,

and fare increase for, Paratransit service