ExpressLanes fee waiver item

7/27/2019 ExpressLanes fee waiver item

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2Lo s Angeles CountyMetropolitan T r a n s p o r t a t i o n A u t h o r i t y

M e t r oOne ateway P l a z a zi3.gzz.z000 e lLos Angeles, C A 9ooi2-2952 m e t r o . n e t

ADHOCCONGESTION PRICING COMMITTEEOCTOBER 6, 201 3

SUBJECT: LACOUNTYCONGESTION REDUCTION DEMONSTRATIONPROGRAM: EXPRESSLANES MONTHLYACCOUNT MAINTENANCEFEE

ACTION: APPROVERECOMMENDATIONRECOlVlIl~ElVDA~IONContinue t o waive the monthly account maintenance fee o r a l l p a r t i c i p a n t s w h o i t h e rwork o r r e s i d e i n Los Angeles County o r t h e remainder o f t h e p i l o t p e r i o d .ISSUEAt i t s A p r i l 201 3 Board m e e t i n g , th e Board approved M o t i o n #51 by D i r e c t o rYaroslaysky t h a t waived t h e monthly account mai ntenance fee f o r s i x months f o r a l lp a r t i c i p a n t s wh o e i t h e r work o r r e s i d e i n Los Angeles County. Th e m o t i o n a l s o d i r e c t e ds t a f f t o g a t h e r a nd analyze data a nd r e p o r t back t o th e Board. Th e s i x month w a i v e rp e r i o d i s scheduled t o e x p i r e on October 25 , 201 3 so t h i s r e p o r t p r o v i d e s a f i v e montha n a l y s i s o f t h e impact o f t h e w a i v e r .BACKGROUNDA l l o f th e t o l l agencies i n Southern C a l i f o r n i a assess a monthly account maintenancefee t o a i d i n c o s t r e c o v e r y a nd m a n a g e o p e r a t i n g expenses. S i m i l a r l y , Metroe s t a b l i s h e d a p o l i c y i n 2010 t h a t every customer w h o o p e n s a n account w i t h t h e MetroExpressLanes s s u b j e c t t o a $3 e r month account mai ntenance f e e . Th e p o l i c y wenti n t o e f f e c t on February 23, 2013, o i n c i d i n g w i t h t h e opening o f t h e 1 0 ExpressLanes.Permission t o assess t h i s fee i s p r o v i d e d wh e n t h e customer agrees t o t h e terms a ndc o n d i t i o n s upon opening a FasTrak~ a c c o u n t . Th e monthly fee ca n be waived i f a naccount h a s f o u r o r m o r e on e-way t r i p s p e r month on t h e Metro ExpressLanes.Q u a l i f y i n g t r i p s i n c l u d e those m a d e w h i l e c a r p o o l i n g , v a n p o o l i n g , a s a s o l o d r i v e r , o ru s i n g a r e g i s t e r e d TAP a r d on t r a n s i t t h a t operates a l o n g t h e ExpressLanes d u r i n gp e ak h o u r s .I n D e c e m b e r 2012, D i r e c t o r Yaroslaysky i n t r o d u c e d a m o t i o n t o e l i m i n a t e t h e $3 ee i ni t s e n t i r e t y s t a t i n g t h a t i t w a s a b a r r i e r t o e n t r y f o r those o c c a s i o n a l u s e r s o f t h eExpressLanes. Th e m o t i o n wa s c a r r i e d over a nd r e v i s e d t o s t a t e t h a t t h e monthly


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account maintenance fee be waived f o r s i x months f o r a l l p a r t i c i p a n t s t h a t r e s i d e o rwork i n Los Angeles County. The Board approved t h e M o t i o n a t i t s A p r i l 25, 2013meeting (Attachment ) .DISCUSSIONUpon a p p r o v a l o f the m o t i o n , t h e monthly account maintenance fee w a s m m e d i a t e l ywaived f o r a l l accounts w i t h an LA County i p code. Communication o f t h e w a i v e r t oc u r r e n t and p r o s p e c t i v e customers o c c u r r e d t h r o u g h t h e f o l l o w i n g channels: Posted on Metro B l o g , "The Source" A p r i l 25, 2013) Posted on Metro ExpressLanes Facebook P a g e A p r i l 25, 2013) www.metroexpresslanes.net p o s t e d m essag e under L a t e s t News" A p r i l 25,2013 o p r e s e n t ) i n E n g l i s h and Spanish L o c a l newspaper r t i c l e s ( A p r i l 2 6 27, 2013) p e c i a l promotion on www.metro.net o r the month o f M a y d v e r t i s i n g t o LA

County r e s i d e n t sA n a n a l y s i s o f t h e p o l i c y f o r t h e i r s t f i v e months i n c l u d e s an e v a l u a t i o n o f t h e FasTrak~a d o p t i o n r a t e , r i p f r e q u e n c y , revenue i m p a c t , . a n d p u b l i c response. A u m m a r y o f keyr e s u l t s o f the p o l i c y waiver a r e : New A County FasTrak account openings i n c r e a s e d by 41%f r o m 124,594 o

176,243. The n u m b e r o f L A County accounts w i t h i n f r e q u e n t t r i p s i n c r e a s e d by 71%f r o m

49,759 o 85,102; h e number o f accounts w i t h zero t r i p s i n c r e a s e d by 103%from 22,053 o 44,767.

90% f t h e LA County accounts w i t h i n f r e q u e n t t r i p s were e x i s t i n g Metro accounth o l d e r s p r i o r t o t h e i m p l e m e n t a t i o n o f t h e p o l i c y w a i v e r . The m a j o r i t y o f theseaccounts are from t h e South B a y Attachment B ) .

The revenue generated from LA County i n f r e q u e n t u s e r s i s $1 p e r account p e rmonth.

Since Metro i n c u r s an o p e r a t i n g c o s t o f $3 e r account p e r month, h e r e s u l t i n gn e t revenue l o s s i s $1,548,430 on an a n n u a l i z e d b a s i s .

F i n a n c i a l ImpactThe a n a l y s i s o f revenue i n c o r p o r a t e s b o t h the a m o u n t o f u n c o l l e c t e d revenue as ar e s u l t o f t h e waiver o f the $3 ee f o r L A County r e s i d e n t s , and the a m o u n t o f c o l l e c t e dt o l l revenue from the LA County i n f r e q u e n t u s e r s . A n i n f r e q u e n t user i s d e f i n e d as anaccount w i t h t h r e e or fewer r i p s , i n c l u d i n g zero t r i p s i n a month.

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Table 1 LA Count Infrequent User Accounts

MonthNumber o fAccounts

AMaint Fee p e r

AccountB

T o t a l AmountWaivedC

T o i l s Paid byI n f r e q u e n t Users

DNe t Revenue

( D e f i c i t )E=C+D

Avg T o l l Re vPe r AccountF=D/A

Ma 51,207 $3 $153,621 $59,077 ($94,544) $1.15June 58,020 $3 $174,060 $54,639 ($119,421) $0.94J u l 64,551 $3 $193,653) $60,022 ($133,631) $0.93Au u s t 68,201 $3 $204,603 $66,987 ($137,616) $0.98Se tember 74,567 $3 $223,701 $63,734 ($159,967) $0.85

5-Month Total ($949,638) $304,459 ($645,179)Annualized Total ($2,279,131) $730,702 ($1,548,430)

As xpected, h e number o f LA County accounts w i t h i n f r e q u e n t t r i p s c o n t i n u e st o grow each month. Column A bove)

Column C bove i d e n t i f i e s t h e c o r r e s p o n d i n g amount f revenue l o s t as a r e s u l to f t h e p o l i c y waiver o r LA County r e s i d e n t s .

Column D bove i d e n t i f i e s t h e amount f revenue generated by LA Countyaccounts w i t h i n f r e q u e n t t r i p s .

T he n e t impact o f Columns C&D s c a l c u l a t e d i n Column E bove. Column F d e n t i f i e s t h a t on average, h e revenue r e c e i v e d from i n f r e q u e n t u s e r s

i s $1. As r e s u l t , t o l l re venue from the LA County account h o l d e r s w i t h f r e q u e n tt r i p s i s used t o cover the d i f f e r e n c e .

P u b l i c ResponseAs xpected, h e p u b l i c r e a c t i o n t o t h e w a i v e r has been p o s i t i v e as l l u s t r a t e d by t h eamount f c o m p l a i n t s r e c e i v e d d u r i n g t h e p e r i o d o f t h e w a i v e r . Complaints about h emonthly account maintenance fee have reduced from 2 6 n A p r i l ( p r i o r t o t h e w a i v e r ) o6 n May a f t e r t h e w a i v e r ) . A e c e n t survey o f e x i s t i n g FasTrak customers a l s oi l l u s t r a t e s t h a t t h e maintenance fee i s n o t a d e t e r r e n t t o opening an a c c o u n t . Of h e 5%o f customers w ho i t e d maintenance fee 74% re 110 u s e r s .

~Nhat Could MetroExpressLanesDoTo mprove

Your Experience?T o l l Amount

Misclane Improvement

EnforcementDiscount/ n c e n t i v e

'Alternative V e h i c l e s

3` 11%~~% 28%o~~ ~ 0 ~~% 22%a

08s0 0~% 7%0 1000 2000 3000 400 4 5000 6 0 0 0 7000 8dd4 9000Page 3


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The n a l y s i s o f the LA County n f r e q u e n t user n d i c a t e s t h a t w h i l e 90% f the accountsw i t h i n f r e q u e n t t r i p s were Metro FasTrak account o l d e r s p r i o r t o the p o l i c y w a i v e r ,r e s i d e n t s throughout the County i d b e n e f i t from the waiver with the m a j o r i t y of heb e n e f i t i n the South Ba y e g i o n (Attachment ) .Table2 LA ount Infrequent AccountsMonth New ccounts T o t a l LA Count %New A CountMa 7,022 51,207 14%June 6,149 58,020 11J u l 5,670 64,551 9%Au u s t 5,692 68,201 8%

Avera e 10%P o s i t i v e p u b l i c response/acceptance of he i l o t p r o j e c t i s a n i m p o r t a n t success a c t o r .The n a l y s i s demonstrates h a t waiver f the account maintenance ee does h i f t t r a v e lbehavior o i n f r e q u e n t use and a s a e s u l t , increases the o p e r a t i n g expenses f thep r o j e c t . However, he impact on gross o l l revenues and debt e r v i c e can be a a c t o r .Gro s s o l l revenue estimates o r f i h e e n t i r e p i l o f i p r o j e c t a ~ f i S e p t e ~ r r b e r exceed $21m i l l i o n . The e d e r a l Congestion Reduction Demonstrat ion g r a n t enabled the r o j e c t n o tt o r e q u i r e debt e r v i c e s o h a t i s n o t a a c t o r f o r the i l o t p e r i o d . While the a n a l y s i sdemonstrates he waiver f the monthly account maintenance fee ha s a n impact onfrequency of use, and a s a r e s u l t , corresponding impact on o l l revenue, l l LA Countyr e s i d e n t s can b e n e f i t from t he w a i v e r . As e s u l t , s t a f f recommends h a t the waiver becontinued f o r the remainder of he i l o t p e r i o d .DETERMINATION OFSAFETYIMPACTThis Board a c t i o n w i l l not have an impact on e s t a b l i s h e d s a f e t y standards.FINANCIAL IMPACTApproximately $606,000 f o l l revenue o l l e c t e d from frequent user a ccounts i l l n o tbe v a i l a b l e f o r reinvestment n the o r r i d o r . I n s t e a d , the amount i l l be used t o fundthe increased o p e r a t i n g c o s t s .IMPACT TO THEBUDGETThere s no impact o the FY14 udget.ALTERNATIVESCONSIDEREDThe Board may e c l i n e t o approve the recommended a c t i o n . As n a l t e r n a t i v e , theBoard c o u l d e l e c t t o : Reduce he monthly account maintenancefee from $3 o $2; Expand the r a n s i t r o u t e s e l i g i b l e f o r waiver f the monthly account maintenance

fee o a l l r o u t e s t h a t are TAP nabled; and

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E s t a b l i s h a Convenience Plan Account o r i n f r e q u e n t u s e r s . Metro customerswho ish t o e n r o l l i n t h i s Convenience Plan would be r e q u i r e d t o pay aone- t i m enon- r e f u n d a b l e e n r o l l m e n t fee o f $25 n a d d i t i o n t o t h e i r $40 or $50 p r e- p a i d t o l ld e p o s i t and any transponder d e p o s i t (where p p l i c a b l e ) . Once they are e n r o l l e di n t h i s Plan, h e r e are no minimum number f t r i p s r e q u i r e d and they are n o tassessed the monthly account maintenance e e .

These l t e r n a t i v e s are not recommended a t t h i s time since o n l y f o u r months fo p e r a t i o n remain d u r i n g the i l o t p e r i o d .ATTACHMENT:

A. A p r i l 25, 2013 Board Approved D i r e c t o r Yaroslaysky Motion #51 FasTrakMonthly Account Maintenance Fee,

B. Map f I n f r e q u e n t Users n LA County(May 2013 Septem ber 2013)

Prepared b y : Stephanie Wiggins, Executive f i F i c e r 2 i 3) 22-1023

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PauiC.TayorDeputy Chief O f f i c e r

~~~ . , .

A r t h u r T. Leah yCh ief ExecutiveO f f i c e r

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At~acment A

MOTION BYDIRECTORZEVYAROSLAVSKY7anuary 17,2013

ITEM# i astrak Monthly Account Maintenance F ee

I n November 2012, e t r o l a u n c h e d t h e E x p r e s s l a n e s t o l l i n g p r o g r a m on h e 110f r e e w a y . C u r r e n t i y i n f r e q u e n t u s e r s who make e s s t h a n 4 r i p s p e r month pay a$3.00 m o n t h l y m a i n t e n a n c e f e e . I t i s e s t i m a t e d t h a t i n f r e q u e n t u s e r s w i l t makeup p p r o x i m a t e l y 10% f a{ I u s e r s i n t h e system 30,000-35,004 a r t i c i p a n t s .~a~ Diego and Q r ~ r ~ g ~ c , ~ u n t i e s have had o l l i n g programs n p l a c e f o r a numbero f y e a r s . A l l a g e n c i e s w i t h i n t h o s e c o u n t i e s c u r r e n t l y c h a r g e m o n t h l ymaintenance e e s . M e t r o s t a f f b e l i e v e s t h a t a t l e a s t 30% f l l u s e r s from SanDiego and Orange o u n t i e s- 1 9 4 , 0 0 0 p a r t i c i p a n t s - - w i l l abandon h e i r r e s p e c t i v ec o u n t y program and o i n M e t r o ' s p r o g r a m t o a v o i d p a y i n g t h e m a i n t e n a n c e f e e sw h i l e a t t h e same i m e n o t use u r system.f n o r d e r t o p r e v e n t t h i s i n e q u i t y , we need t o d i s c o u r a g e p a r t i c i p a n t s f r o m o t h e rc o u n t i e s from o i n i n g M e t r o ' s program n o r d e r t o a v o i d t h e i r own c o u n t y ' sm o n t h l y maintenance e e s .I , THEREFOREMOVE h a t t h e m o n t h l y m a i n t e n a n c e fee be w a i v e d f o r a l lp a r t i c i p a n t s who i t h e r work o r r e s i d e i n Los Angeles o u n t y .FURTHER 1 ~ O V E t h a t S t a f f c o n t i n u e t o g a t h e r and a n a l y z e d a t a and p r o v i d e

t h e Board w i t h q u a r t e r l y u p d a t e s on h e p r o g r a m .


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ExpressLanes fee waiver item