TRANSIT WINDSOR REPORT
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1 TRANSIT WINDSOR REPORT MISSION STATEMENT: PROVIDING SAFE, RELIABLE AND AFFORDABLE PUBLIC TRANSIT FOR THE COMMUNITY THROUGH CONTINUOUS IMPROVEMENT IN CUSTOMER CARE, ENVIRONMENTAL STEWARDSHIP AND EMPLOYEE EXCELLENCE. TO: FROM: Transit Windsor Board of Directors Director of Corporate Services, Director of Operations and General Manager DATE: August 7, 2013 SUBJECT: 2014 TRANSIT WINDSOR FARES RECOMMENDATION: That the following fare structure be implemented, effective January 1, 2014 for cash and tickets, and effective January 15, 2014 for the sale of February passes: Cash Tickets (book 5) Passes Adult Student Senior Adult Student Senior Adult Student Senior Jan 1, August price Increase(rounded) % % * Affordable pass is equal to the senior pass. * Does not include bus pass program for Social Services. * Bus passes purchased by the School Board increase effective September * Student Summer Saver from $87.00 to $96.00 valid for July and August (). * Tunnel fares increase from $4.00 to $4.50 (pass from $7 to $87.00) () and combo pass $ (). * All day passes and family passes are three times the cash fare (from $7.50 to $8.25). BACKGROUND: At the meeting of November 27, 2012, the Transit Windsor Board of Directors approved Resolution T.W. 86/2012 as follows: That the following fare structure be implemented effective January 1, 2013 for cash and tickets and effective January 15, 2013 for sale of February passes: Cash Tickets (book 5) Passes Adult Student Senior Adult Student Senior Adult Student Senior August price Increase(rounded) % % 44.00
2 Transit Windsor Board of Directors August 7, 2013 * Affordable pass is equal to the senior pass. * Does not include bus pass program for Social Services. * Bus passes purchased by the School Board increase effective September * Student Summer Saver from $87.00 to $96.00 valid for July and August () * Tunnel fares increase from $4.00 to $4.50 (pass from $7 to $87.00 () and combo pass $ () * All day passes and family passes are three times the cash fare (from $7.50 to $8.25). This proposal was presented to City Council at the meeting of December 17, 2012 and was deferred to the budget deliberations. At the budget meeting held March 8, 2013, City Council did not support a fare increase and other strategies were introduced to balance the 2013 budget request, including one time funding, service reductions, and deferral of discretionary and other costs. DISCUSSION: History of Fare Increases App % Cash Tickets (book 5) Passes Inc Adult Student Senior Adult Student Senior Adult Student Senior January / January July January August The above chart provides some history of fares over the last decade. Some further strategies, designed to increase ridership, were implemented and have also affected revenue. In 2009, Transit Windsor revised the definition of a student to include post-secondary students as being eligible for the discounted student fares. In all previous policies, the definition of a student included elementary and secondary students only as being eligible for the reduced fares. This caused a significant shift from the adult category to the student category. The increase in 2011 was to move to a one cash fare for all categories. At the same time, we introduced an open window transfer which allows a person to transfer to any bus, in any direction, for up to two hours from when they received the transfer. This allows a person to board the bus, stop for any reason, and go home on the same fare if they are within the two hour limit. The standard in the industry for an open window transfer is 90 minutes. With the introduction of the open window transfer, our transfer rate, as at September 30, 2012, has increased 64% when compared to 2011, and from 263,000 transfers to 740,642 transfers in 2013, indicating a very high use of this option, based on the first six months in In 2011, at the same time that we introduced these initiatives, we reduced the cost of tickets and introduced an all day pass valued at three times the cash fare, and a family pass which is valid for one adult and up to four children under the age of 12 (accompanied by an adult). In 2012, the
3 Transit Windsor Board of Directors August 7, 2013 criteria was updated to also include two adults and up to three children under the age of 12 and accompanied by an adult. These passes allow for unlimited rides for the entire day. Also, in 2011, in partnership with Pathway to Potential (P2P), we introduced a deeply discounted monthly pass for low income individuals and families. Any individual and their spouse/partner and/or dependents may apply if their combined household income falls below the Statistics Canada Low-Income Cut-Off. The uptake on the affordable pass has increased 41% when compared to 2012, based on the first six months of While this provides the customer with more affordable options, revenues for this category are approximately one-half of the regular fare and the contribution from P2P is capped. Any change in funding for this program, or if the uptake exceeds the cap, may require a review of the options available to limit the revenue loss. In addition, the use of accessories continues to increase with the first six months of 2013 showing an increase of 31% in the usage of wheelchairs, strollers and bikes. This does have an impact on our service levels, as it takes longer time to board passengers. Fuel costs Since 2007, fuel costs alone have risen 28%, while fares have remained relatively constant, with the revision a result of a change in the fare policy. Average Fuel Cost Per Year Fares: Year $ (YTD) For comparison purposes, we conducted a search of websites, as at August 6, 2013, to determine the current fares of various transit systems in Ontario. An survey was also conducted to determine if a fare increase was planned for Of the responses received, most indicated that they are in the process of developing their 2014 budgets and the information is not yet available; two systems confirmed a fare increase, and one system said there was no fare increase planned. Cash fares In 2013, seven of the listed systems had increases ranging from 3% to 11% with an average increase of 7%.
4 Transit Windsor Board of Directors August 7, 2013 Windsor, Niagara Falls, Kingston and Sarnia have the lowest cash fares for adults at $2.50. Niagara Falls and Kingston provide a slight discount for students and seniors. Of the three, only Niagara Falls offers the open window transfer that allows customers paying with cash or tickets the opportunity to travel on any route in any direction; however, Niagara Falls window is one hour, while Windsor allows travel within a two hour window. As 27% of our riders use cash, this represents a significant method of payment. It is worth noting that three of the properties surveyed still offer reduced fares for students and seniors, while Sudbury and Brampton offer a discount only for seniors. Of those that offer reduced fares, Windsor and Sarnia are the 4 th lowest for students and 6 th lowest for seniors. In August 2011, our cash fare structure changed from $2.45 for adults and $1.70 for students and seniors to the current single cash fare of $2.50. At the same time, however, we introduced the day pass, the family pass, the two hour open window transfer, and we slightly reduced the price of tickets. The criteria for the family pass was expanded in 2013 from one adult and up to four children under the age of 12 to two adults and up to three children under the age of 12. Cash Adult Student Senior 1 Niagara Falls Kingston Sarnia Windsor Hamilton Cornwall 7 London 8 St. Catharines 9 Sudbury Toronto Barrie Milton Guelph Kitchener/Waterloo Mississauga Oakville Ottawa Brampton Burlington York
5 Transit Windsor Board of Directors August 7, 2013 Tickets Tickets represent 13% of the revenue. Every transit system offers some reduction for using tickets rather than cash. In 2013, Oakville eliminated the tickets altogether for adults and seniors and offers weekly passes instead. Eleven other systems had fare increases ranging from 2% to 15% with an average increase of 8%. The reduction from the cash prices varies greatly with no consistent trend apparent. If the analysis was based on the student and senior fare, Windsor would rank 2 rd lowest for the student and 4 th out of 20 for the senior category, with only London, Milton and Brampton being lower (and Sudbury being the same). Tickets (book 5) Adult Student Senior 1 London Hamilton Windsor Sudbury Kingston Kitchener/Waterloo Milton Cornwall Sarnia Niagara Falls Guelph St. Catharines Barrie Toronto Burlington Mississauga Brampton Oakville Eliminated Eliminated York Ottawa Passes In 2013, nine of the systems increased the price of the pass, with increases ranging from 2% to, with an average increase of 5%.
6 Transit Windsor Board of Directors August 7, 2013 At Transit Windsor, passes represent 60% of all fare media used. Of the $5,220,000 revenue generated by passes, $1.8 million or 34% is supported by Social Services through their bus pass program. Windsor fares for bus passes ranks just in the mid range; however, most of the transit properties at the lower end of the range are in the smaller cities, the exception being the Kitchener/Waterloo area, which also has a robust U-Pass program (as do all other cities in Ontario with a college or university located in the city). In addition, based on the 2011 Canadian Urban Transit Association statistics, Kitchener/Waterloo operates at a very low revenue to cost ratio (39%), compared to Windsor (45%), which would be reflective of the lower fares. Windsor has the 5 th lowest fares for students and, along with Cornwall and Ottawa, has the lowest fares for seniors. Passes Adult Student Senior 1 Cornwall Milton Sarnia Kingston Kitchener/Waterloo Niagara Falls Guelph Sudbury Windsor Barrie London Hamilton St. Catharines Oakville Burlington Ottawa Brampton York Mississauga Toronto
7 Transit Windsor Board of Directors August 7, 2013 RISKS: A fare increase has been proposed and we know that this will have an impact on our customers. Based on industry standards, we have factored into the assessment that we will lose 3% ridership for every increase in fares. We have also assumed that 15% of the ridership will convert from the higher cash fare to tickets in an attempt to reduce the impact of the fare increase. While we have tried to be conservative with these assumptions, there is a risk that the assumptions will vary from actual, which will likely result in variances from projections. As well, the revenue projections were based on the annual increase in revenue. Any delay in implementing the fare increase will reduce the revenue projecting proportionally. Further, the 2014 budget assumes that the bus pass programs supported by Social Services will remain unchanged. Any reduction to these programs will directly impact revenues. The increase to the School Board will not be effective until September CONCLUSION: The 2014 budget request included the assumption that the fare would increase in January 2014, generating an additional $600,000. Approval from City Council is required in order to implement the fare increase effective January Should the Board of Directors wish to consider a further increase in order to offset the incremental costs of service improvements, an increase in cash fares to $3.00 and an additional 5% increase to all other fares would generate an additional $600,000 of the projected $830,000 (after gas tax), reducing the shortfall to implement the service improvements on the Transway 1C and Crosstown 2 and to provide the same schedule all year long, to $230,000. Consideration should also be given to developing a fare policy that allows for annual increases to the fares to keep in line with inflation and to allow for service improvements to be implemented in a fiscally responsible manner. Should the Board wish to review a policy, Administration will survey the industry to determine best practices and bring a report back to the Board for consideration. Tony Houad Director of Corporate Services Patrick Delmore Director of Operations Penny Williams General Manager
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