MAgenda

o

BUSOPERA~ONSSUBCO~MITI~

Thursday, February 6, 1992 - 9:30 a.m.

Long Beach Room, llth Floor

818 West Seventh Street

Los Angeles, CA 90017

Call to Order

Approval of Minutes for Meeting of January 9,1992 (To be distributed at meeting)

Bus Transit Formula Allocation Shares - FY 1993(To be distributed at meeting)

Proposition A 40% Discretionary - Restructuring ofBase Shares (Item #4, Page 2)

5. Proposition C Guidelines

o

(Oral Report)

SCRTD Concerns - Proposition C DiscretionaryGuidelines (Item #6, Page ii)

7. New Business

8.. Adjournment

DISPOSITION

ACTION

ACTION

INFORMATION(L. Tyner)

INFORMATION(J. Austin)

DISCUSSION(B. Cardwell)

INFORMATION(J. McLaughlin)

Los Angeles County 818 West Seventh StreetTransportation Suite 1100Commission Los ~geI~. CA ~017

Tel 213 623-1194

Leading the Way to Greater Mobility,

MinutesBUS OPERATIONS SUBCOMMITTEE

JANUARY 9, 1992

MEMBERS PRESENT

Name

Stephanie GriffinGreg KelleyDavid FeinbergTom BachmanTodd DerbishJim MillsBirgit BrazillMichael UyenoMark MaloneLarry TorresGwen JonesCara RiceMike PriorA1 ReyesBob Hildebrand

Agency

Santa MonicaAntelope ValleyArcadiaCommerceFoothill TransitGardenaCulver CityL.A.D.O.T.Long BeachMontebelloNorwalkRedondo BeachSanta ClaritaSCRTDTorrance

OTHERS PRESENT

Susan RizenmeanTom WhittlePeter BeaudryMike LenschDolores Buddell-TeubnerTamara BoswellAngeli MensesJulita de Le6nRichard AndersonSteven BrownHaim GeffenDennis Nemjahi

Culver CityGardenaLancasterNorwalkPalmdalePalos VerdesSCAGSCAGSCRTDSCRTDSCRTDSCRTD

LACTC STAFF MEMBERS PRESENT

Julie AustinWalt DavisRex GephartErik JohnsonBrad McAllesterRay Maekawa

Jim OrtnerAlan PatashnickDale Royal

Brent Cardwe!lRichard DeRockSteve GleasonBryce LittleJim McLaughlinSamantha MockJim ParkerDesiree Portillo-Rabinov

Los Angeles County 818 West Seventh StreetTransportation Suite1100Commission Los Angeles, CA 900I 7

Tel 213 623-1194

Leading the Way to Greater Mobility

BOS MinutesMeeting of January 9,Page Two

1992

CALL TO ORDER

The Meeting was called to order at 9:35 a.m.

APPROVAL OF MINUTES

Approved as presented.

FDNDING MARKS

i. Lorenzo Tyner presented revised estimates of for 92/93/94.

2o % used to allocate additional LACTC revenue is the Prop ADiscretionary Share.

o Question remains as to whether the source of the additionalrevenue automatically match the use of the funds.

Foothill subsidies for 92/93/94 are not determined yet,pending further discussions.

5. Foothill subsidy for BSCP service is still not determined.

6o Court action in San Diego was misleadingly reported in theL.A. Times: actually strengthens not weakens legality ofPropositions A and C.

o Foothill subsidy decisions need to be discussed at BOS.Members request discussions brought to BOS regarding BSCPservice.

8. What about use of?

FY 91 STA unused funds ((unfair to operators who did notdrawdown).

-- Prop A available carry-over

-- How do we drawdown money?

-- Shore shores calculation

FAST will fax revised draft. Then take action recommendation tonew Finance and Programming Committee. BOS will make formal com-ments to the Finance and Programming Committee.

BOS MinutesMeeting of January 9, 1992Page Three

INTERIM COMPLEMENTARY PARATRANSIT PLAN

Richard DeRock, LACTC, reported that the draft copy of the interimcomplementary paratransit plan proposed by the ADA through the CTSAwas available and operators were encouraged to take a copy. In ad-dition, Richard noted that the day before there had been a publichearing regarding the new ADA plan, and the biggest complaint re-ceived was the potential for users to have to pay double the basefare for usage of the complementary service. The final plan willbe submitted to the Commission for approval in July, along with abudget for adoption of this new service.

PROPOSITION C GUIDELINES

Brent Cardwell, LACTC, informed BOS members of the upcoming PMIC,Prop C workshop, which will be held January 27th, at noon, in theLong Beach Room. All administrative guidelines on all Prop C com-ponents will be discussed. Brent encouraged all BOS members to re-view the Prop C draft guidelines there were mailed out.

LACTC/SCRTD REORGANIZATION

Julie Austin, LACTC, explained that draft legislation has ibeen sub-mitted for the reorganization. A spot bill - AB 152, which could toto the governor to be signed as early as March 92, holds a placefor the legislation. This legislation could be signed by the gov-ernor in March if it is identified as emergency legislation. If itis not, then the governor probably won’t see it until January 93,with adoption nine months later. Adoption of this bill dissolvesthe LACTC and SCRTD and forms the LACMTA.

CERTIFICATES OF PARTICIPATION SUMMARY OF TERMS

Rex Gephart, LACTC, informed the BOS of the UMTA (FTA) Section financing for large capital items. Five of the operators werefunded in the past through Section 9 and Rex urged BOS members toread the proposed summary of terms and think about this while put-ting together their SRTP Capital Plans. Rex suggested that theCommission come up with a program to help operators file for capi-tal items with means other than cash. He used the example of thesecertificates like purchasing a home and paying for it later.

NEW BUSINESS

Stephanie Griffin, Santa Monica Municipal Bus Lines, informed theBOS that the Private Sector Forum will meet with the BOS will be onMarch 2, 1992. All operators need to have their plans on the Pri-vate Sector Participation for te SRTP to JIM Parker by Friday,February 21, 1992.

BOS MinutesMeeting of January 9, 1992Page Four

Rex Gephart, LACTC, added that the Munis should submit five copiesof their SRTP, and RTD should submit seven copies this year.

ADJOURNMENT

The meeting adjourned at 10:50 a.m.

BOS:MINUTES.BOSDR:db

MJanuary 27, 1992

M~MO TO:

FROM:

SUBJECT:

BUS OPERATIONS SUBCOMMITTEE - 2/6~92 MEETING

JULIE AUSTIN, POLICY ANALYSIS

PROPOSITION A 40% DISCRETIONARY FUND A¥~CATION -RESTRUCTURING OF BASE SHARES

ISSUE

In accordance with the revised Proposition A40% DiscretionaryGuidelines adopted April 24, 1991, LACTC staff is working withtransit operators to develop a methodology for recalculating "base"levels of Proposition A 40% Discretionary funds in.the event ofservice additions, new operators, or service reductions.

RECOMMK~DATION

Review and co~ent. Approval of the base restructuring methodologywill be requested from LACTC after BOS review andapproval.

RR~%TIONSHIP TO 30-YEAR INTEGRATED FINANCTAT. pTm~

Development of a method for restructuring "base"service levels forProp. A 40% Discretionary recipients will ensure a continuingsource of funding for new and/or expanded transit operations,enabling service levels to keep pace with levels projected in the30-Year Plan.

No direct i~pact to LACTC budget..

BACKGROUND

The revised Proposition A 40% Discretionary Guidelines adoptedApril 24, 1991, state that "LACTC agrees to develop a methodologyin cooperation with bus operators for determining future fiscalyear changes to the base year noted above (FY 1992 formula sharesbased on FY 1990 audited data). LACTC recognizes that new serviceshave been added since FY 1990, and agrees that those services willbe given priority in the development of new fund uses."

Los Angeles County818 w~st Seventh StreetTransportation Suite 1100Commission Los Angeles, CA 90017

"i’e1213 623-1194

Leading the Way to Greater Mobility

BOS - 2/6/92PROPOSITION A 40% DISCRETIONARY FUND ]~T3~CATION -RESTRUCTURING OF BASE SHARESPage 2.

Draft base restructuring guidelines are attached (Attachment A).LACTC staff has met with Santa Monica and SCRTD subsequent tothe December i0, 1991 BOS meeting to discuss and further refine thescenarios comprising these draft guidelines. Also included in theattached draft are BOS comments from discussion at the January 27,1992 Base Restructuring workshop.

As required in the Proposition A Discretionary Guidelines, the"base" service level for Proposition A Discretionary fundingeffective in FY 92 will be the level of service as reported in theaudited FY 1990 Transit Performance Measurement (TPM) reportingform. On a competitive basis via application, service above FY 90levels will be funded with Prop. C funds (pending the outcome ofcurrent litigation and approval of remaining Proposition C 40%Discretionary Guidelines). Redeployment of services within base FY90 levels is permitted.under the guidelines; the intent is to focusProposition C resources on the most cost-effective services.

Revisions to Attachment "A" made following the January 27 workshopare in boldface and are underlined.

PREPARED BY: JT/LIE AUSTINPOLICY PROJECT MANAGER

PROPOSITION A 40% DISCR~’IONARY FUNDRESTRUCTURING OF FY 90 "BASE"

DRAFT GUID~r.INES - FOR DISCUSSION PURPOSES ONLY

INTRODUCTION

The Proposition A Discretionary "Base" Restructuring Guidelinessummarize the funding policies and administrative proceduresrelated to: a) defining the base level of transit service providedby operators receiving funds under the 40% Discretionary Program;and b) outlining the methodology to be utilized by LACTC related to

incorporating new operators, new services/service ex~.ansion, orreductions in overall service levels into the Proposition A "Base".These guidelines are to be incorporated into the Proposition A 40%Discretionary Grant Program Guidelines adopted April 24, 1991.

The overall purpose of these guidelines is to ensure stable fundinglevels to transit operators with which to operate the FY 90 baselevel of service, as reported on audited Transit PerformanceMeasurement (TPM) forms. It is the intent of the transit, operatorsand LACTC in preparing these guidelines to:

allow operators maximum flexibility to deploy the baselevel of service in the best interests of the ridingpublic, the transit operators themselves, and Los AngelesCounty as a whole. This flexibility relates specificallyto route and schedule restructuring, and serviceredeployment;

fulfill reporting requirements using existing datasources and data collection methods to the fullest extentpossible;

maintain operators’ incentive to improve the cost-efficiency of transit services; and,

allow the administration of the program to be carried outin a cost-effective and efficient manner.

BOS - 2/6/92DRAFT GUID~,INESBASE RESTRUCTURINGPage 2.

BACKGROUND

The revised Proposition A 40% Discretionary Guidelines adoptedApril 24, 1991 (hereinafter referred to as the "Guidelines") statethe following:

LACTC agrees to develop a methodology in cooperation with thebus operators for determining future fiscal year changes tothe base year noted above (FY 1992 formula shares based on FY1990 auditeddata). LACTC recognizes that services have beenadded by the operators since FY 1990, and agrees that thoseservices will be given priority in the development of new funduses.

DEFINITION OF PROP. A "BASE" LEVELOF SERVICR

The Guidelines state that the base service level for Proposition A

Discretionary.funding effective in FY 92 will be the level ofservice reported in the FY 90 Transit Performance Measurement (TPM)report. The base level of service is further defined as the numberof System total annual vehicle service hours, excluding "other"services. Within the constructs specified in l.a. and l.c. above,operators warrant the provision of similar route configurationsoperated as part of the FY 90 base level of service.

RR~TIONSHIP TO PROPOSITION C

At this writing, Proposition C (Ordinance 49) is undergoing a legalchallenge in the California State Supreme Court. It is recognizedthat the Proposition A Guidelines are predicated upon the approvalof the validity of Proposition C. In the event that Proposition Cis found to be invalid, these Guidelines would be reevaluated andamended as appropriate.

RESTRUCTURING SCENARIOS

A variety of circumstances may trigger a restructuring of theProposition A "Base" funding shares. Listed below are threescenarios which would require base restructuring.

SCENARIO I: NEWIEXPANSION SERVICE ABOVE ~ FY 90 BASE LRVRL

Service Added Durinq FY 91 and FY 92: Service added which exceedsthe Proposition A Base funding level must be approved by the LACTCas part of the regular Short Range Transit Plan (SRTP)/

P~S - 216192DRAFT GUIDI~F.INESBASE RESTRUCTURINGPage 3.

¯ Tansportation Improvement Program (TIP} process. Local funds,where available, shall be the funds of "first use" for theprovision of new or augmented transit services which exceed theProposition A Discretionary "Base" funding level. Operators mustinclude a financial Capacity certification for service added aspart of their SRTPs. An operator cannot assume that added servicenot approved by LACTC will become eligible for Proposition C and/orSec. 9, TDA and STA formula funds. However, any service approvedby LACTC in an operator’s FY 91 and/or FY 92 SRTP will receivepriority consideration for inclusion in formula funding.

Demonstration Projects: Service funded as a demonstration projectwith Incentive funds, Transit System Expansion Funds, orProposition C Discretionary funds must be deemed successful byLACTC prior to incorporation into the base level of service forpermanent funding.

(TO DATE, TWO OPTIONS HAVE BEEN DISCUSSED FOR INCLUDING SUCCESSFULPROPOSITION C BUS SYSTEM CAPACITY RYPANSION PROJECTS TO ~ BASE.

OPTION A:

Proposition C Bus System Capacity Expansion Projects: After beingawarded Proposition C 40% Discretionary q rant funds, "Operator X"~perates a new transit service during a demonstration period of o~to three years. LACTC finds the project successful, and theservice is incorporated into the Proposition A Discretionary "Base"for permanent funding.

New,expansion service will require separate reporting duringdemonstration period for monitoring purposes. Since each~perator’s Prop. A "base" funding will r~m~inunch~nged,new/expansion service must be reported on separate TPMfo~ms. If Operator X also receives formn]R funds, the new~xpansion service should not be added to the formn]R, but100% from Prop. C Discretionary funds transferred to the Prop. A"Base". The amount of funds transferred from Prop. C willthe amount of ftlnds allocated for the new or expansion service~uring the last year of the demonstration period, adjusted for CPI.After service is added to the base,the percentage shares~hanqe without reducing other operators’ f~,d~nq. The tran~ferredProp. C funds will keep the operators "whole". Add~ngtheseservices to the FAP could dilute the fn,d~ng available through

O0000t~

BOS - 216192DRAFT GUIDR[.INESBASE RESTRUCTURINGPage 4.

federal and state revenue sources for operators who do notservice.

OPTION B:

Proposition C Bus STstemCapacitTExpansionProject~: After beingawarded Proposition C 40% Discretionary grant funds, "Operator X"operates a new transit service during a demonstration period of oneto three years. LACTC finds the project successful, and theservice is incorporated into the Proposition A Discretionary "Base"for permanent funding. If Operator X also receives formula funds(Section 9, TDA and STA), the increased service will increase

Operator X’s formula share. Therefore, the amount of Proposition Ctransferred to the "base" share will be reduced Proportionately tothe increase in formula funds. For example:

FY 92 Bus System Capacity Expansion: $15,000.FY 94 Increase in Formula Funds: ( 9,000)*

FY 94 Prop. C transferred to the "Base" $ 6,000 + CPI

*Effective implementation~of this transfer will requireoperators to track and report their vehicle service miles,unlinked passengers, and fare revenues for the added serviceseparately in order to determine the effect of the addedservice on the operator’s formula funding.

This marginal adjustment is necessary as Proposition CDiscretionary will be the funds of "last resort". The marginalbase increase will be increased by CPI, in keeping with theProposition A Discretionary Grant Guidelines. The additional hoursoperated will be added to the operator’s system total annualvehicle hours. The new total, as adjusted above, shall constitutethe recalculated "base", and will be adjusted annually inaccordance with the CPI. LACTC annually reviews actual receiptsagainst projections at mid-year. If the mid-year adjustment showsthat the Proposition A receipts will be lower than the CPI, therewill be a mid-year adjustment to each operator’s maximum grant andoperators will be credited with the marginal increase in future¯

years as Proposition A 40% funds become available.

The $9,000 example shown above funded from the increase in formulashare will remain in the Proposition C Bus System CapacityExpansion account and made available for new demonstrationprojects. The intent of this approach is to retain incentives foroperators to add service and to avoid depletion of Proposition Cfunds.

If Operator X does not receive formula funds, credit for the entire$15,000 (plus CPI) will be transferred into the "base".

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BOS - 216192DRAFT GUIDeliNESBASE RESTRUCTURINGPage 5.

Transit Perfoimance Measurement (TPM) Reporting: New/expansionservice will require separate reporting during the demonstrationperiod and thereafter. Operators will continue to submit: an annualTPM form covering the operation of "base,, service levels. Aseparate TPM form covering "new/expanded" service operated abovethe base will be prepared by operators who provide such service.In the interest of using existing data collection methods, theseparate TPM submittal may exclude "Full Time EquivalentEmployees".

When service originally funded from Proposition C Bus SystemCapacity Expansion funds is operated to augment existing routes(e.g., overcrowding relief, line extensions, headway reductions),

data for this augmented servicewill be subtracted from auditedsystem totals and reported in accordance with the reportingrequirements of the Proposition C Bus System Capacity Expansionguidelines.

SCENARIO II: ADDING AN OPERATOR

New operators petitioning for inclusion into the FAP and theDiscretionary Base funding will be subject to the LAcTC-adoptedrequirements for new included municipal operators in accordancewith TDA law. The City of Los Angeles Department of Transportation(LADOT), Santa Clarita and Antelope Valley Transit Systems wereadded to the funding package in FY 92. Proposition A IncentiveFunds are being used to subsidize these systems through theeconomic recession. It is anticipated that Prop. A growth overinflation may be used to fund these operators in the future,including their "base" funding. This temporary arrangement doesnot preclude the new operators from eventually claiming formula and"base" funds.

The County of Los Angeles’ Bus Service Continuation Project (BSCP)lines were approved for formula funding once Foothill Transit Zonebecame an included operator. Due to the implementation delaysnecessitated by litigation, Foothill will not be folded into theformula until FY 96 or FY 97, representing three years of fulloperations. However, LACTC staff is proposing that the BSCP Countylines be funded with Proposition A Incentive funds on a formulabasis in the’same manner as LADOT, Antelope Valley, and SantaClarita until the Foothill Zone is folded into the formula. .TheBSCP funding was approved by LACTC as part of the Zone application,and the funds were intended to be taken from SCRTD’s formula share.This alternative approach (using Incentive funds) is proposed offset the funding reductions experienced by the SCRTD during theeconomic recession.

000008

BOS - 216192

BASE RES~RUC’I~TNGPage 6.

New operators who operated successful Prop. C System CapacityExpansion demonstration projects will be funded from the Prop. ABase. The amount of funds transferred to the "base" from Prop. Cshould equal the amount of funds allocated during the last year ofservice, plus CPI growth in receipts.

SCENARIO III: ]~RDUCED SERVICE

If an operator cuts service from the FY 90 base service levelwithout providing a comparable and effective alternative service,significant service reductions would require funding reductions(examples of "significant" reductions could be i0,000 hours or 5%total system vehicle service hours, whicheveris less, formunicipal operators; and 70,000 hours or one percent vsh, whicheveris less, for SCRTD). The measurement of reduction and whatconstitutes a "significant" reduction in service levels requirefurther discussion. However, service reductions should bemonitored on a systemwide basis. Systemwide monitoring allowsoperators to achieve effective redeployment. LACTC staff willmonitor audited.service levels annually based on separate TPMreporting forms°

Once a "significant" service reduction is identified, LACTC staffwill recalculate the formula to determine the marginal change inoverall service levels. The percentage of the reduction will beapplied to the overall dollars allocated to the operator, and thatdollar amount will be reduced from the operator’s base. Forexample: During Year I an operator’s funding level is 50% of thebase (total base $200,000), or $i00,000. In Year II, service hoursare reduced 5%. After recalculating the formula, the marginalreduction in the FAP share is two percent, leaving the operatorwith a total 48% funding level. Assume CPI at five percent over~o years. If the operator had maintained its Service levels fromYear I, it would have received $i00,000 plus five percent CPI, or$105,000, in Year III (adjustment takes place in Year III to allowtime to review audited data). However, the two percent reductionin the share would be subtracted from the total Prop. A Bass~bsidy (two percent of .$200,000), reducing the total subsidy inYear III to $100,800.

Year I Funding Level = 50% of $200,000, or $i00,000

Year III Funding Level = 48%, after recalculating formula

based on reduced service levels

50% - 48% = 2% of $210.000 (base + CPI) $4 ,200

$105,000 - $4,200 = $100,800 (Year III Prop. A allocation)

The $4,200 would be transferred to the Prop. C Bus System CapacityExpansion account.

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eOS- 216192DR~I~GI~:D’RI:,:~ES~SE RESTRUCTURINGPage 7.

When funding is reduced for one operator, the funding levels willnot be changed for other operators. The lapsing funds will betransferred to the Bus System Capacity Expansion account to augmentavailable funding for new and expansion service.

A distinction is hereby made between reductions in the base levelof service resulting from a decline in county-wide subsidyreceipts, and those caused by all other circumstances. In theevent that county-wide subsidy receipts fall below budgeted levelssuch that major service reductions are implemented, the precedingparagraphs under Scenario III do not apply.

Service Notification Policy:

Whenever a service change proposed by an operator is subject to theIACTC’s adopted Service Notification Policy, the operator willdemonstrate whether and how the changed service effectivelyprovides comparable service. This comparable service car, beprovided via restructuring, redeploying, or replacing service witha different mode or operator.

All operators will ensure that the Service Notification Policy isfollowed and that route and schedule changes subject to the policyare communicated amongst all operators that could possibly beaffected. Any problems will be handled through the service disputeresolution process. As a courtesy, ALL schedule changes should becommunicated to potentially affected operators.

Alternative Modes:

How would funding be adjusted in response to service changes andreductions due to the implementation of alternative modes? Oneoption would be to allow any savings incurred from reducing a linethat ran parallel to new rail service to be transferred toalleviate bus overcrowding, or to.bus electrification. Sinceformula funds are allocated based on bus service, and haverestrictions on their use, it may be inappropriate to reallocatebus subsidies to rail operations.

JA.BASE.TAG

0000~0

ITEM #6

SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICTAGM PLANNING AND PUBLIC AFFAIRS

MEMORANDUM

DATE:

TO,:

FROM:

SUBJECT:

January 24, 1992

PMIC Wcrl~shop Attendees

Issues relied to Proposition C (Ordinance 49) 40% Discretionary Guidelines

The following is a summary/outline of the issues covered in the attached January 13 letter fromAlma Pegg to Neil Peterson. The District is currently drafting a proposed set of revised

¯ guidelines based on these issues. After approval by its Board of Directors, District staff willcirculate the revised guidelines to all BOS members and LACTC staff for discussion.

Although "providing fare subsidies" is one of the provisions of Ordinance; 49, theguidelines do not mention how or when this is to be implemented. In times of recessionthe replacement of the shortfall in local and state funds based on sales tax revenues shouldbe the #1 funding priority.

The administrative complexity of the guidelines is excessive and unnecessary. Theguidelines could be greatly simplified while retaining the structure proposed in theoriginal. Four eligibility groups could be defined with distinctive goals, while poolingcommon goals, eligibility criteria, funding procedures, approval processes, and reportingrequirements wherever possible. The pooling was implicitly suggested by Commissionstaff statements in the Jamlary 9, 1992 BOS meeting, saying that the 4 components arenot intended as funding sub-pools.

The guidelines should let the operators manage their own resources; they should eschewmicro-management and the insinuation of additional agenda on the mandate for expandingtransit services. Things such as redeployment plans should be eliminated from therequirements.

Rather than have new service perform better than the average service currently offered,the new service should perform within some measure of variance from the system orTPM category average.

The focus on short-term costs should not be at the expense of operator and customerperformance concerns. The guidelines should explicitly recognize that some kinds ofservice quality improvements should not be expected to save money in terms of loweringthe cost per passenger.

While leverage of other revenue sources, including local funds, should ~emain aconsideration, operators without access to these funds should not have meritoriousprojects discounted because of lack of access.

Alan F. PeggGeneral Manager JAN 1 3 1992Nell PetersonExecutive DirectorLos Angeles County Transportation Commission818 West Seventh StreetLos Angeles, California 90017

Dear Mr. Peterson:

Re: PROPOSITION C (Ordinance 49) 40% DISCRETIONARY. GUIDELINES

The currently proposed Proposition C Discretionary Guidelines are the product of a lengthydevelopment process. As the development of guidelines for each of the funding programs hasoccurred somewhat indePendently over the past year. "he concept of a single uniform applicationprocess for all projects, regardless of potential funuing program, has emerged. Guidelinesdeveloped earlier in the process, such as those for the Bus Service Expansion program, werebased on an assumption that applications for funding would be submitted separately for eachprogram under which a project might qualify. As a consequence of the evolution of thoughtregarding the administration of Proposition C, it is apparent that further work needs to be doneto rectify the inconsistencies which now exist in guidelines for each of the discretionary fundingprograms. Additionally, District staffhas anumber of more specific concerns regarding detailedguidelines for the individual funding programs.

General Concerns

Los Angeles County Transportation Commission (LACTC) staff maintains that theprocess of applying for Proposition C Discretionary funding should be simple, but theguidelines for the four component project pools (and the overall administrativeguidelines) describe a tedious and complicated application and evaluauon process. SinceCommission staff assures us that the components are not intended as funding sub-pools,it makes sense that the components should only describe goals and types of eligibleprojects, while funding decisions for all projects should be based on one set of criteria.Criteria that are specific to a funding program should be stated in the guidelines for thatprogram. All other criteria should be a part of the administrative guidelines.

Proposition C has a primary aim of expanding transit service. Yet its guidelines directlyaffect management of operators’ services to an extent that would impede obtaining thisobjective~ For example, the Bus Expansion Component’s request for redeployment plansand its request for an explanation of how redeployment will help fund the new serviceconnects long-standing controversies over existing deployment to the funding of newservices. These should be addressed as independent issues in another forum, not in thismanner. The language about external redeployment plans indirectly imposes a solution

Southern California Rapid Transit District 425 South Mare Street. Los Angeles. California 90013 (213) 972-4300

Neil PetersonPage 2

to an area of controversy among a variety of actors including organized labor, theDistrict, and the Commission.

The concern for marginal costs, rather than fully allocated costs, is a new departure andan important precedent for the Commission. The Commission will find that it will savemoney and encourage regional efficiencies by allocating funds on the basis of marginalcostS.

¯ Although "providing fare subsidies" is one of the provisions of Ordinance 49, theguidelines do not mention how or when this is to be implemented.

Priorities within each of the components confuse the relative importance of the expressedobjectives. For example, listing the objective "Strengthen and improve the regionaltransportation system" last in the Bus System Capacity Expansion Component seemsinappropriate. There is no clear priority established for uses of funds under the RailExpansion Component. Continued funding of existing services is given first priority butthere is no priority ranking thereafter for rail start- aps, service hour extensions, headwayimprovements, or construction of branches. In the Convenience Component, customerconvenience has lower priority than conformance with the 30 Year Plan.

At times, the guidelines seem to focus primarily on short-tetra costs. For example, costeffectiveness has an apparent lower priority than the amount of local co~a’ibution in theBus Expansion Component. This shows a concern for the initial cost of the project(which is the Commission’s immediate area of responsibility) and a discounling of theconcerns of the operator and customer. This is also shown in the Rail Component whichseems to rank efficiency and performance lower than leveraging outSide funding.(Notwithstanding the need for re-prioritization, the ability to leverage funds shouldremain an important criterion of evaluation.)

Requiring a new project to do better than the minimum system requiremeat or better thanthe systemwide average is too restrictive. If the operator has been reamnably efficientin deploying its services, then it has already deployed the most cost efficient service. Anew service may be the best of a set of remaining candidate services and still berelatively marginal. A more reasonable minimum requirement would be that the newservice perform within some measure of variance from the systemwide average.

For example, an isolated project should not be mandated to maintain the same minimumfarebox recovery standard as the system overall, especially sine, it would beoutperforming an undetermined number of existing segments in that system. Also,requiting new rail or bus service to have less than the countywide weighted averagesubsidy per linked rider is too restrictive. This means that the new service must dobetter than many existing services. In the case of rail services, operation of a negotiatedminimum level of service is mandatorv to justify the capital expense associated with theline’s construction.

000013

Neil PetersonPage 3

The District should be specifically released from local contribution requirements becauseit is not eligible for local return funds. In the Bus Expansion Component, giving priorityto projects that make contributions toward the purchase or lease of revenue vehi.cles withlocal return funds during the demonstration period gives an undue advantage to RTD’scompetitors with access to local funds. The requirement in the guidelines that says"Should the experimental service not receive an ongoing funding commitment from theLACTC, the applicant must pay back into the Proposition C fund the prorated share ofremaining vehicle life" gives the Commission sufficient protection without the furtherstipulation.

Concerns about the Bu~ System Capacity Expansion Componenp

Base, extended, and new services are not adequately defined; nor are the criteria usedto evaluate comparisons between the services. The problem is best illustrated by twoscenarios:

1) A new line or otherwise totally new service is added: When there is no ambiguityat issue (i.e. when base service and new service are clearly distinct) determining themarginal linked riders per marginal subsidy dollar is a straightforward calculation,and evaluative comparisons between base costs per rider and marginal costs permarginal rider are also easy to interpret.

2) Existing service is incremented along various segtnents: When a project addsservice hours to a system, it is not always easy to separate scheduling adjustmentsfrom service enhancements on a line-by-line basis, even though an incrementalchange of service hours systemwide is verifiable. Forcing the operator to a~itrarily"earmark" specific line segments as part of a project, when the system overall isconstantly being adjusted, can skew systemwide priorities in favor of the earmarkedsegments, limiting change along those segments and generating unacceptable

monitoring costs and administrative burdens (e.g. redundant staffing, operational andreporting delays, and non-responsiveness to conditions).

An alternative is to com0are costs and patronage at the aggregate level. When doingthis, year-to-year comparisons should be avoi0ed. They do not reveal much about theeffects of the new investment because year-to-year patronage variations on the basesystem usually overwhelm the marginal impact of all but the largest projects. It wo~ldbe unfair to call the systemwide changes a result of project innovations. Instead, themarginal change in hours and costs by Transit Performance Measurement (TPM) servicecategories could be calculated. The marginal costs could be calculated and aggregal~l,and patronage within each category could be apportioned and then aggregated. Theresulting marginal cost per marginal rider would tend to be the same as the base system

Although this component was originally adopted on April 24, 1991, it should be revised and re-adolgedto insure consistency with the pending Administrative Guiddines and changes to the other comlxm¢~l~.The revisions should also reflect some of the concerns raised by this systematic review. ,

Neil PetersonPage 4

cost per rider, but it would be somewhat higher if increases in cost-inefficient TPMeategofies .were emphasized and lower if increases were in the cost-efficient categories.

In instances in which the operator’s service represents only one or two TPM categories,the Commission may have to resort to year-to-year comparisons. Here, the mostappropriate comparison would be the change in the operator’s performance as comparedto the change in countywide performance. This would provide a baseline that wouldmitigate countywide temporal trends.

While asking for an estimate of a new service’s net linked passenger trips per netadditional dollar, some language should be added to recognize that some projects that addto service convenience, such as overcrowding relief, are not expected to generate newpatrons, in effect, making the cost comparison statistics for these projects seem worse.

Concem~ about the Rail System Capacity Expansion Component

Requiring improved farebox recovery over the life of the project is sometimesinappropriate. For example, extending service hours into the late evening may increaseconvenience but probably will decrease the overall farebox recovery ratio.

Exempting the Commission from submitting a funding application for rail extensions isunfortunate. A proposal should be prepared for any use of Proposition C Discretionaryfunding for a rail extension that indicates how the extension will perform according tothe same criteria mentioned for rail expansion. This will ensure that funding for suchprojects is as cost effective as other funding requests that may be under consideration.

Concerns about the Service Quality. and Customer Convenience Improvements Component

Almost all quality and convenience projects are intended to apply to the system as awhole. Therefore, stating that projects included in Proposition A base senrice areineligible is not meaningful - the statement should be dropped.

"Security personnel" is mentioned once, "security equipment" is mentioned under twodifferent subheadings, and "all other projegts currently eligible under Proposition C I~ailand Bus Security" is mentioned once as eligible projects. Considering the 5%Proposition C funding for security, it should not receive such empbasi_s in theDiscretionary Fund guidelines.

Bicycle storage and bicycle accessibility improvements are mentioned as two eligible railrelated improvements. These improvements are reasonable and comparable to providingpark-fide and kiss-ride facilities at rail stations. The listing of improvements to existingbikeways should only have the same eligibility as comparable improvements to roadwaysnear the station.

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The main issues of service quality and convenience (i.e., service reliability, speed,crowding relief and other accommodations) are not addressed by the list of eligibleprojects. Service reliability projects should be put on the list such as "signal pre-emptionand other bus flow techniques~ and ~overcrowding reduction projects’.

While the language in other components states that projects should be consistent with the30 Year Plan, the blanket statement in this component is excessive. "At theCommission’s discretion, all eligibility criteria can be waived, modified and amended toreflect amendments and changes in the 30 Year Plan.~ In other words, the 30 Year Plantakes precedence over established rules and regulations; and there is no mention abouta process for change or involvement of interested parties such as operators.

In other components the Commission can require repayment of funds in cases in whichstated objectives are not met. The statement in this component is not so restricted - itshould be.

The inclusion of Americans with Disabilities Act (ADA) improvements under thiscomponent is misplaced. Compliance is legally mandated - ADA costs should becovered in the Mandated Component.

Concerns about the Mandated Programs Componen!

There is no reason why fixed-route transit providers should only be eligible for capitalfunds as they relate to ADA compliance. Why is only the Consolidated Transit ServicesAgency (CTSA) eligible for operating funds out of this component? This is a reversalof the stated priorities of the ADA. The ADA gives precedence to mainstreamoperations; paratransit is to provide a supplement serving those who cannot bemainstreamed.

To state that the CTSA is the County’s blueprint for meeting the federal requirementassumes that it is the only element in the chain for mandated service. The CTSA wasestablished under Government Code 15950 et seq. to coordinate social servicetransportation in Los Angeles County. This is neither the only nor the largest elementof the ADA which requires action by transportation agencies in the County. Departmentof Transportation regulations note that public entities operating fixed route systems arerequired to provide complementary paratransit services which mirror the fixed routesystem for those individuals who cannot use that system. Other portions of theregulations set out specific service, maintenance, and administrative requirements whichgo beyond the current levels of accessible service delivery expectations. Under priorstandards the District had achieved 84% accessibility; under the new standards it has onlyachieved 30% accessibility. The operating and capital costs associated with maintainingthe higher standards have not been addressed by the Commission staff- at least not withany input from fixed-route operating agencies. The increases in their legally mandatedoperating (and capital) expenses are anticipated to be substantial.

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Under hAir Quality mandates" both marginal operating and capital costs related to facilitymodifications that accommodate alternative fuels and power sources are eligible.(Eligibility for marginal capital costs are extended to clean fuel vehicles.) Thiseliminates clean fuels and everyday operations of clean fuel fleets (even the marginalcosts associated with these). They should be included.

The list of eligible projects for Air Quality mandates should include the followingaddition: MMarginal capital and operating costs associated with operator compliance withthe AQMP and other environmental legislation."

"Extraordinary capital costs" are poorly defined in the section that relates them to thefederally mandated ADA. The guidelines should either drop the term "extraordinary"or specify the Federal Transit Administration definitions that are used to determineextraordinary capital costs.

The guidelines should mention that funds under this component are a supplement to localreturn funds for the purposes of complying with the ADA and providing supplementalparatransit services referenced in :i~e language of Ordinance 49.

Concerns about the Administrative Guidelines

Favorably evaluating applicants with lower than average subsidies per vehicle hourshortchanges highly productive operators with services that are intrinsically moreexpensive. Elsewhere, the guidelines focus on the number of people moved; yet here,the discussion looks at the cheapness of the service - not its productivity. The cost perhour should be normalized by a unit of consumption such as boar0ings or p~ssengermiles. The cost per person or the cost per person-mile is more relevant than the cost pervehicle service hour since it is people that the transit industry serves.

The Administrative Guidelines will use marginal linked riders per marginal subsidy do!!axas an evaluative criterion. It is not always appropriate. For example, a project thatreduces overcrowding may result in a low increase in riders, but it will benefit a verylarge number of riders on the relieved lines.

The Administrative Guidelines state the need for surveys indicating "constituent"concerns in order to justify funding. "Patron" would more appropriately substitute for"constituentn. The example in the Guidelines is telling - constituents express the needfor security far more than patrons as their major concern (the latter are more concernedwith the inconveniences they experience: pass-ups, lateness, and overcrowding).

Making Proposition C Discretionary funds "the funds of last resort" and requiting allother funds to be exhausted before Proposition C funds can be used,appears to precludeuse of Proposition C funds to leverage State, federal and other funding. Other languagein the guidelines suggests that this is not intended; a statement should make this explicit.

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The statement that ADA mandated projects "will not duplicate existing federal law" isambiguous and should be restated.

CONCLUSION

As stated above, the District’s main concern is over the administrative complexity mandated bythe proposed guidelines. District staff is working on a somewhat simplified version to bepresented to the Bus Operations Subcommittee (BOS), one that retains much of the structure the presently proposed format. A more simplified guideline structure should also be considered,one that radically restructures the administrative process. This, too, will be discussed.

The District understands that Commission staff and BOS members want some forrn of theguidelines adopted as soon as is practical. This would facilitate the commencement of trainingfor the application process, the timely submittal and review of applications, and the timelydevelopment of a list of candidates for funding (once Proposition C litigation is resolved). agree with this goal and feel that the District should not be seen as delaying the process. Withthis in mind, the District would like to work with the Commission and BOS members tomutually agree upon a set of interim guidelines, while further review of more substantial changesis conducted during the upcoming year.

co: Bus Operations Subcommittee members