DATE: JULY 25, 2012 TO: ATN BOARD OF DIRECTORS RE...

DATE: JULY 25, 2012 TO: ATN BOARD OF DIRECTORS FROM: ATN EXECUTIVE DIRECTOR RE: AGENDA ITEM #11 RECOMMENDATION: Approve a fare increase for the Anaheim Resort Transportation (ART) adult and child passes effective October 1, 2012 and associated Title VI Equity Analysis Report Public Hearing Conducted on May 23, 2012 and June 27, 2012 DISCUSSION: The Ad Hoc Executive Committee recommends increasing ART passes to the following amounts: Adult Child 1-day ticket $ 5.00 $2.00 3-day ticket $12.00 $3.00 5-day ticket $20.00 $5.00 No fare increase is recommended on the new introduced 15- and 30-day ART passes. Price of the 15- and 30-day ART pass to stay at the same rate as OCTA fare ART Past Pass Increases:

Year

ART 1-day Adult Pass



ART Child 1-day Pass



2002 $2.00 $5.00 $8.00 2003 $3.00 $8.00 $10.00 2005 $4.00 $10.00 $16.00 2008 $1.00 $2.00 $4.00 2012

(Proposed)

$5.00

$12.00

$20.00

$2.00

$3.00

$5.00

Rebate Structure: Revenue from the increase in adult tickets would be shared 50/50 with hotels until the sales benchmark was reached after which, the hotels would receive 100%. Revenue would be provided to the hotels in the form of a discount in the purchase price of the ticket. For example, the increase in a 1-day adult ticket would be $1.00, therefore, the ticket would cost the hotel $4.50 before the benchmark and $4.00 after the benchmark. Revenue from TVMs located at hotel properties would be reimbursed annually. GardenWalk would realize an annualized average percentage savings equivalent to other participating establishments. ATN would receive 100% of all revenue from the increase in child tickets and sale of ART passes through Ticket Vending Machines (TVMs) located at Disneyland Resort and Anaheim Stadium Train Station. Baseline Scenario:

2010 Sales

2011 Sales

Avg. # of sold tix =

Benchmark

Projected Property

Share

Projected ATN

Share

Sample Hotel 30,000

40,000

20,000 $10,000 $10,000

Customer Comment Cards: To provide customer feedback on the current fare structure, staff analyzed 102 customer service comment card responses. Out of 102 comment cards received,79 or 77% indicated that the ticket price was a good value, five (5) or 5% indicated that it was a poor value, and eighteen (18) or 18% indicated that it was not applicable (typically because the tickets were part of an overall travel package). Proposed Timeline: Effective Date October 1, 2012 Wholesale Clients January 7, 2013

Title VI Assessment for the Fare Increase effective October 1, 2012

Anaheim Resort Transportation – ART

Service of Anaheim Transportation Network

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2012 ATN FARE INCREASE ASSESSMENT

Approved Date: July 25, 2012

1. INTRODUCTION To ensure compliance with federal and state civil rights regulations, including but not limited to Title VI of the Civil Rights Act of 1964 and FTA Circular 4702.1A, dated May 13, 2007, ART performs an analysis of any fare change to determine if the change has a disproportionately high and adverse effect on minority and/or low-income populations. ART also conducts outreach to the public to receive their input on the fare change, consistent with ART’s Public Participation Plan, and the FTA Circular’s requirement to provide meaningful opportunities for underrepresented populations to participate in transportation decisions. This report documents ART’s Title VI impact analysis for the fare increase scheduled to become effective October 1, 2012. The fare increase is estimated to generate an additional $625,000 in fare revenue in Fiscal Year 2012/2013, which is needed to offset increasing operational costs. ATN has not increased fares in over seven years, while operating costs have steadily increased. ATN is facing increasing maintenance and fuel costs, as well as unexpected facility relocation costs. Because ATN’s operating subsidy comes in the form of local assessments which cannot be increased, a fare increase is a better alternative to service reductions. Although, a fare increase is needed at this time, ATN recently provided other service enhancements that help mitigate impacts on minority and low-income populations. ATN expanded service to Santa Ana and to Buena Park in an attempt to provide service to employees working within the Anaheim Resort™. This new commuter service was also accompanied by new fare media in the form of 15-day and 30-day passes, so that cost of commuting on ART would be comparable to using Orange County Transportation Authority (OCTA). These service changes were analyzed under Title IV in a report titled “Impacts to ART Service Expansion Routes 18 and 19”. In order to provide meaningful public participation, ATN held two public hearings (May & June 2012) and one community meeting (June 2012). Notices were mailed to approximately 2500 community members, and were provided on-board all ATN buses during May and June 2012. Additionally, two public notices were published in the local paper prior to the public hearings. Results from public participation activities are summarized in a separate report titled “Public Participation Summary Report for the Fare Increase effective October 1, 2012.” 1.1 2012 Fare Change The fare change, as approved by the ATN Board of Directors in Resolution, 1204 increases the 1-day adult and 1-day child passes by $1.00 each. The 3-day adult/child and 5-day adult/child passes increase correspondingly as shown in Figure 1.1. Fares for adult passes were established in 2002, when ART service first began. Adult fare passes were increased the following year in 2003, and again in 2005. Fares for child passes have not increased since they were first established in 2008.

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Figure 1.1 Previous Fare Increases

Year







2002 $2.00 $5.00 $8.00 2003 $3.00 $8.00 $10.00 2005 $4.00 $10.00 $16.00 2008 $1.00 $2.00 $4.00 2012

$5.00

$12.00

$20.00

$2.00

$3.00

$5.00

1.1.2 Additional Fare Media As discussed in the introduction, in April 2012, ATN added two routes in order to provide service to employees commuting to the Anaheim Resort™. The areas serviced by these new routes tend to be lower income and minority (see “Impacts of ART System Expansion Routes 18 & 19), so as part of that expansion, ATN introduced 15-day and 30-day passes for adults, children, seniors and the disabled. The purpose of introducing these passes was to provide commuters, and Title IV populations, with a viable option that would be less expensive than using other short-term fare media, and to be comparable to the monthly cost of commuting using OCTA service. Additionally, in August 2011 ATN began providing discounted fare passes for seniors and the disabled. These fare media along with those shown in figure 1.2 will not be affected by the fare increase, nor will the policy of allowing children under two years of age to ride for free be changed.

Figure 1.2 ART Fare Media Not Subject to Fare Increase

Adult Child (Under 2 Free) Reduced one-way cash fare $3.00 one-way cash fare $1.00 one-way cash fare $1.00 15-day pass $27.00 15-day pass $22.00 15-day pass $10.00 30-day pass $55.00 30-day pass $27.00 30-day pass $20.00

1.2 Revenue from Fare Increase The fare increase will go into effect October 1, 2012. It is estimated to generate an additional $625,000 in fare revenue the upcoming fiscal year (FY 12/13). This revenue will be used for two purposes, 1) to incentivize ticket sales by reducing assessment contributions from ART members and, 2) to contribute to the inflationary increases in ART operating costs. 1.2.1 Offset Assessment Contributions ATN’s revenue comes primarily from fares and annual assessment contributions collected from members of the ART service. In order to increase overall revenue from ticket sales, ATN will establish a revenue sharing program with ART members based on ticket sale performance. ART members who sell tickets at their properties, would have a sales benchmark based on past

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ticket sale performance. Each ART member would receive half of the revenue collected from the increase in adult passes until the benchmark was reached, after which they would receive the full amount. In practice, the revenue would be provided in the form of a discount in the purchase price of tickets being sold by ART members. For example, the increase in the price of a 1-day adult ticket would be $1.00 (from $4.00 to $5.00), therefore, the ticket would cost the ART member $4.50 before the sales benchmark was reached and $4.00 after the benchmark was reached. See figure 1.3 for a sample baseline scenario.

Figure 1.3 Sample Baseline Scenario:

2010 Sales 2011 Sales Total 2010 & 2011 Sales

Avg. # of passes sold at $3.50 avg. pass price = Benchmark

Projected Property Rebate

Projected Operational Revenue to ATN

30,000 40,000 $70,000 20,000 $10,000 $10,000

Revenue generated at Ticket Vending Machines (TVMs) located at ART member locations would be calculated and rebated annually. 1.2.2 Offset ART Operating Costs As discussed above, ATN is faced with increasing operating costs due to rising maintenance and fuel costs both from inflation as well as fleet expansion. Additionally, ATN is required to relocate its administrative, and fleet storage and maintenance facilities at the end of 2012. ATN has not increased fares since 2007 and is unable to increase assessment contributions to cover these increasing costs. To help offset these costs, ATN would retain all revenue generated from the increase in child passes, as well as, from the increase of all fare media sold at TVMs located at Disneyland Resort and Anaheim Amtrak/Metrolink Station. Additionally, ATN anticipates receiving additional revenue from the increase in the total number of tickets sold by ART members. Together, this additional revenue will allow ATN to continue existing service without the need for service reductions.

2. IMPACT ANALYSIS 2.1 Assessing Fare Increase Effects This section assesses the effects of a fare change on minority and low-income populations following the procedures in FTA Circular 4702.1A Section V.4.a, Option A (1)(a). As indicated,

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information generated from ridership surveys was used in the analysis. Additionally, 2010 Census data was analyzed to determine the percentage of the population within the ATN service that are considered minority and low-income. 2.1.1 ATN Demographic Profile ATN’s service area consists of areas within the City of Anaheim, specifically the Anaheim Resort™ and Platinum Triangle. Within that service area, 72.96 percent of the residents are considered minority. Minority and Non-Minority residential areas are those areas with greater than the ATN service area average, and are shown in Figure 2.1. Figure 2.2 shows that 73 or more of ATN’s route service is within minority residential areas. A radius of one-half mile was applied to each route. The routes in this map are based on June 2012 ART System Route Map alignments. Figure 2.3 shows the distribution of low-income populations within the ATN service area. The low-income population distribution is determined by where the per capita income is less than $21,867. The threshold of $21,867 is based on 80 percent of the national per capita income of $27,334. The residential areas of low-income census tracts are displayed as low-income populations. As of June 2012, all ATN routes have greater than 50 percent of their service area within low-income areas.

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Figure 2.1 – Minority and Non-Minority Areas

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Figure 2.2 – Minority Routes

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Figure 2.3 – Low Income Populations

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2.1.2 Ridership Demographics Survey In July 2011, ATN conducted a Ridership Demographic Survey (see figure 2.4) that included questions about ridership composition, trip origins, mode of transportation to the area, reason for the visit, length of stay and ART usage. The survey does not provide data about the respondent’s ethnicity or income level, however, it does suggest how riders may react to fare price and fare media options. Approximately 3000 ART users participated in the survey. The survey indicates that typical ART users are families (adults with either teenagers or children). Only 20% indicated that they were adults with no children. The survey also indicated that most of the ART users come from outside of California (56%) for the purposes of traveling on an overnight vacation or holiday (84%). Only 4% indicated that they used ART for a day-trip, and 2% indicated using ART for business. ATN is currently developing another ridership survey that will be conducted beginning September 2012. It will include questions about ethnicity, income level and fare media used.

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Figure 2.4 Summary of Ridership Demographic Survey

2.1.3 Customer Comment Cards: ATN provides riders an opportunity to comment on service in a variety of ways including on-board customer comment cards, online surveys or by the calling customer service line. The on-board survey asks riders to comment on the value/cost of the ART pass in order to provide feedback on the current fare structure. As can be see in figure 2.5, the survey data indicate that the majority of respondents do not feel that the existing fares are too expensive.

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Figure 2.5 – Customer Service Response

Response: How would you rate the value of an ART pass? Good Value Poor Value No Response Total # respondents 95 6 14 115 82.6% 5.2% 12.2% 100.0%

2.1.4 Fare Media Distribution The majority of ART passes sold in FY 11/12 were 1-day adult passes (62%), followed by 1-day child passes (19%). All other pass types, including reduced fare passes, make up 5% or less of total sales. These figures do not include the sale of 15-day or 30-day passes, which begin July 2012.

Figure 2.6 – ART Pass Sales by Denomination/Pass Time & Location

ART Pass Sales (FY 11/12)

Sales Location 1-Day Adult

3-Day Adult

5-Day Adult

1-day Child

3-Day Child

5-Day Child Other Total

Hotel 326,165 7,854 2,544 96,657 10,526 1,303 445,049 Wholesale 1,238 592 24,150 215 163 3,650 30,008 TVM 148,038 28,948 5,029 50,989 13,222 11,541 257,767 All other 33,911 33,911

Internet 2,038 1,737 1,134 794 598 413 6,714

Total 477,479 39,131 32,857 148,655 24,509 16,907 33,911 773,449 % Sold 62% 5% 4% 19% 3% 2% 4% 100%

3.0 Alternatives Available for People Affected by the July 2012 Fare Increase This section analyzes alternative fare payment media and transportation options available for individuals who could be affected by the fare increase following the procedures in FTA Circular 4702.1A Section V.4.a, Option A (2)(b). 3.1.1 Alternative Fare Media The fare increase will be applied to 1-day, 3-day and 5-day adult/child passes. ART provides other fare media that will not be affected by the fare increase including the one-way cash fares and children under two years of age will continue to ride for free.

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Figure 3.1 One-way Cash Fares

One-way Cash Fare Adult Child (Under 2 free) Reduced $3.00 $1.00 $1.00

3.1.2 Alternative Transit Modes including Fare Payment Types ART operates a single mode, public bus transportation service within and around the Anaheim Resort. As an alternative to ART service, the Orange County Transportation Authority (OCTA) provides public bus service for the entire Orange County area and provides service parallel to of the ART system. In comparing ART and OCTA fares (see figure 3.2), the local cash fares are higher on ART’s current service. However, ART receives no public operating subsidy for it operations and relies on fares and a local community-based assessment structure to support and fund its operations. In order to maintain necessary level of service, a fare increase is perceived as a better alternative to service reductions. Additionally, ATN and OCTA are currently negotiating an inter-agency fare agreement that would allow OCTA pass holders to ride on ART buses. 3.1.3 Parking at Major Attractions As shown in figure 2.1, the majority of ART users are families traveling from outside of California for the purpose of overnight vacation or holiday—mostly for the purpose of traveling to Disneyland®. Accordingly, all ART routes begin and end at Disneyland’s® Main Transportation Center (see Figure 3.3). When considering the fare increase, the cost of parking at Disneyland® was compared to what it would cost a family of four to use the ART system. Currently, it costs $15.00 to park a car at Disneyland®, while a family of four (2 adults and 2 children) can use ART for only $14.00. While driving to the park is an alternative to using ART, ART is still a better value under this scenario.

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Figure 3.2 Comparison of ART and OCTA Fares

Comparison of ART and OCTA Fares ART Fares effective October 1, 2012 Adult Local Fare ART OCTA Adult minimum fare $3.00 $1.50 Child minimum fare (under 2 free) $1.00 N/A Adult reduced minimum fare $1.00 $0.60 Adult Passes ART OCTA 1-day adult unlimited use fare $5.00 $4.00 3-day adult unlimited use fare $12.00 N/A 5-day adult unlimited use fare $20.00 N/A 7-day unlimited use fare N/A $20.00 15-day adult unlimited use fare $27.00 N/A 30-day adult unlimited use fare $55.00 $55.00 Reduced Passes ART OCTA 1-day reduced unlimited use fare $2.00 $1.25 3-day reduced unlimited use fare $5.00 N/A 5-day reduced unlimited use fare $8.00 N/A 7-day reduced unlimited use fare N/A $6.50 15-day reduced unlimited use fare $22.00 30-day reduced unlimited use fare $27.00 $18.00 Child Passes ART OCTA 1-day child unlimited use fare $2.00 N/A 3-day child unlimited use fare $3.00 N/A 5-day child unlimited use fare $5.00 N/A 15-day child unlimited use fare $10.00 N/A 30-day child unlimited use fare $20.00 N/A

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Figure 3.3. ART System Map

4. MITIGATION This section analyzes actions to mitigate adverse effects of the fare increase on minority and low-income populations following the procedures in FTA Circular 4702.1A Section V.4.a, Option A (4). 4.1 Introduction of Additional Fare Media There is no indication that low-income and minority populations are disproportionately impacted by the fare increase as compared to non-minority and non low-income populations, however, ATN has taken steps to ensure that minority and low-income populations have alternatives to the fare media affected by the fare increase. As part of ATN’s overall service change plan, ATN recently expanded service in order to provide employees living in Buena Park and Santa Ana another commuting option when traveling to the Anaheim Resort™. Route alignments were specifically designed to travel into residential areas with little or no existing transit service. As part of that service expansion and with the understanding that a future fare increase would be taking place, ATN introduced 15-day adult/child/reduced passes and 30-day adult/child/reduced passes in order to provide lower cost alternatives and to provide a monthly commuting cost comparable to OCTA’s monthly pass.

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The 15-day and 30-day passes offer significant savings when compared to the 1-day, 3-day or 5-day passes. Figure 3.2 shows a comparison of the cost of adult passes based on a five-day workweek per month. As can be seen, the 15-day and 30-day passes cost significantly less per month that the other types of fare media and offer an alternative to the fare media affected by the fare change.

Figure 3.2 Monthly Cost for Adult Passes

Monthly Cost for Adult Passes

Fare Media Before Fare Increase After Fare Increase 1-day adult $80.00 $100.00 3-day adult $66.67 $80.00 5-day adult $64.00 $80.00

15-day adult $54.00 $54.00 30-day adult $55.00 $55.00

4.2 Fare Transfer Agreements ATN recently signed fare transfer agreements with OCTA and Metrolink in order to help provide a more cohesive and seamless transit system for users. The fare transfer agreement with Metrolink was introduced in June 2012 and allows Metrolink pass holders to travel on ART to and from the area’s major attraction. The fare transfer agreement with OCTA will be introduced July 2012, and will allow OCTA and ART pass holders to use each system interchangeably. In addition to providing a more cohesive transit system, this fare transfer agreement helps to eliminate the cost of transferring from one system to the other which can provide a significant savings to transit users. 6. CONCLUSION ATN is proposing to increase fares for adult/child 1-day, 3-day and 5-day passes. Fares have not increased for adult passes since 2005 and fares for child passes have not increased since they were first introduced in 2008. Although the ATN service area is predominately minority (72.96%), and all ATN routes are within low-income residential areas, the majority of riders surveyed do not feel that the existing fare price is too expensive. Additionally, when compared to parking at the area’s major attraction, ATN’s transit service is a better value for a family for four. Although there is no indication that Title VI populations are disproportionately impacted by the fare increase, ATN has taken several measures as part of the overall 2012 service change plan to mitigate impacts on low-income and minority populations, including expanding service to

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Buena Park and Santa Ana and the introduction of the 15-day and 30-day adult/child passes. Additionally, in 2011, ATN introduced a reduced fare pass for seniors and the disabled. ATN is also improving access to regional transit service through fare-transfer agreements with OCTA and Metrolink. OCTA is the regional transit provider and offers parallel service to ATN routes and can be used as an alternative. For commuters, however, the 15-day and 30-day passes are comparable to OCTA fare prices and offer significant savings when compared to the 1-day, 3-day or 5-day passes. Because no disparate impacts were found and mitigation measures are included as part service change, and alternatives are available, no other action is necessary to implement this proposal.

DATE: JULY 25, 2012 TO: ATN BOARD OF DIRECTORS RE...

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