Staff memo to the Board of Directors, March 12 - AC Transit

GM Memo No. 07-273aMeeting Date: January 23, 2008Page 3 of 4monthly passes, it retains a very deep 65% discount off the discountedLocal Adult 31-Day pass.- An across-the-board, straight-line increase, with regularly scheduled CPIadjusted increases as proposed likely complies with Title VI as it does notchange the fare structure. In any event, staff recommends a Title VI reviewof the adopted fare proposal.Fare Proposal 2 (Straight-line)Proposal 2 (attachment B) is a standard straight-line increase of $0.25 with correspondingincreases in fare media with no additional consideration for future years. Youth and Sr/Dispasses increase, but only by the same percentage as the rest of the proposal, and pricing isnot tied to the Local Adult 31-Day pass.Fare Proposal 3 (CPI Index only)Proposal 3 (attachment C) is based on CPI-indexed, regularly scheduled fare increases.The advantages of CPI index-based fare increase are detailed above in Fare Proposal 1.Fare Proposal 4 (no transfer fee)Proposal 4 (attachment D) is similar to the 2005 fare increase ($0.25 increase in base farewith corresponding fare media increases; no change to Youth 31-Day and Sr/Dis monthlypasses) but also eliminates the $0.25 fee for transfers. With no changes in ridershipassumed, this raises only $4.5 million and further increases the disparity between the LocalAdult 31-Day pass and the Youth 31-Day pass.SummaryAttachment G (Fare Proposals vs. Farebox Budget) provides a recap of the effect of all fourproposals as measured against the current Board approved 10-year farebox budget. Forease of comparison, the revenue estimates for all four proposals assume no ridershipchange and 100% recovery of the projected increase. Also for comparison purposes,Attachment H (Fare Structure Review for Selected Transit Agencies) recaps current faresfor the Bay Area transit agencies as well as New York, Chicago and Los Angeles.Staff believes that, based on the 2005 fare increase, the potential exists to recoup a veryhigh percentage of the estimated receipts, but recognizes that the realized revenues may beless than estimated. Staff also believes that the potential for elasticity is the same for all ofthe proposals and any elasticity variation between them will likely be small.