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Transit Fare Arrangements for Public Employees Summary Previous TCRP studies, especially TCRP Report 87, Strategies for Increasing the Effective- ness of Commuter Benefits Programs and TCRP Report 107, Analyzing the Effectiveness of Commuter Benefits Programs have analyzed employer pass programs in the broader con- text of commuter benefits. Most of the examples and case studies in these reports involve the private sector, because the tax advantages of participating in these programs are an obvious incentive for private-sector employers. A few examples mention public-sector par- ticipation, but a systematic analysis of employer pass programs has not been conducted in the public sector. The purpose of this synthesis is to document the state of the practice in terms of fare arrangements for public employees. Results of a cross section survey of transit agencies in North America are used to document important issues such as the following: Genesis and leadership of the program (who initiated and why) Barriers, obstacles, and constraints Administrative procedures Implementation Lessons learned (If you had it to do over again, what would you do differently?) Cost, financing, and pricing (for example, cost neutral versus subsidized policy) Program evaluation. The most important findings of this synthesis are listed here, followed by a summary of survey results and the experiences of six transit agencies that served as case studies. Major findings include: A champion within the public employer is extremely helpful in generating interest in an employer pass program. This is true for both public and private employers, but the transit agency might assume that another public agency naturally would be interested. Many public employers are committed to reducing the single-occupant automobile travel to and from work, but a champion within the public employer is instrumental in converting this commitment to action. A member of the board of directors who works at a public agency has been the champion in several case study examples. This suggests that board diversification can have unexpected benefits for the transit agency. Public employers need to be convinced of the benefits of an employer pass program. The genesis of the case study programs varied. Several grew out of a U-pass program for students. Others built on past partnerships, had a board member as the champion within the public agency, or drew attention because of state laws or rules regarding trip reduction. Once the agency has the attention of the public employer, the emphasis shifts to how an employer pass program will help the employer (through increased employee morale, reduced need for parking, congruence with state or local goals, and ease of administration). Ideally, all levels of the public agency are involved in program design and publicity.

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2 Public employers are not monolithic. Most programs for municipal employees involve all municipal employees, although the definition of "municipal employee" is not always as obvious as the transit agency might assume. State agencies appear to have more autonomy in terms of the decision to participate in employer fare programs. As the case studies demonstrate, some programs for state employers are only for specific state agencies and a specific state agency may emerge as the program champion. There has been a shift in the reasons for transit agencies and public employers to establish an employer pass program. The cost of providing parking for its employees continues to be a motivating factor for public employers, whereas the prospects of increased ridership and a stable source of revenue are appealing to transit agencies. Today, sustainability is an emerging goal in the public sector and can spur interest in establishing an employer pass program. A defensible pricing methodology and a means of estimating (pre-program) and mea- suring impacts are important program elements. Many agencies began by negotiat- ing individual deals with specific employers; however this is not a sound approach as the program expands owing to the resulting administrative complexity. Surveys of employees are helpful in estimating costs before implementation and in measuring impacts. A pass that can be read and recorded by the farebox is also very useful in tracking transit use. Regular updates for participating employers regarding pass use by their employees keep the lines of communication open and remind employers of the value of the program. Flexibility in program design allows the employer to tailor the program to meet its needs. The ability to choose the level of subsidy offered and to define program eligibil- ity is important for employers and encourages participation. An important component of an agency strategy is to publicize its successes. Word of mouth is a very effective way to encourage other public (and private) employers to par- ticipate. News features on the program will get the attention of other public employers and employees. Public employees can be very persuasive in convincing their agencies to participate. An employer pass program provides an attractive employee benefit at relatively low cost. At a time when sustainability and greenhouse gas reduction have emerged as important goals, public-sector employers are receptive to proven programs with a reasonable price tag. In times of tight public budgets, provision of a new benefit for employees is one means of boosting morale within the public agency. Thirty-one completed surveys were received from the 43 transit agencies in the core sample, a response rate of 72%. Nine agencies not included in the core sample heard about the survey and also participated, for a total of 40 responding transit agencies. Survey results include transit agency assessments of the effectiveness of their programs, benefits, and draw- backs from the perspective of the transit agency and of the public employer, desired changes, and lessons learned. Agencies that have not adopted employer pass programs for public employees were also surveyed to gain an understanding of the reasoning behind the decision not to undertake such a program. Key survey findings include: The primary goals cited by the majority of respondents are to increase ridership and build partnerships for transit. A program champion is very helpful and even necessary in establishing a successful program. Transit agencies are satisfied with their public employee fare programs. The primary benefits of these programs to the transit agency include ridership increases, revenue increases, and increased awareness of transit. Constraints mentioned in a majority of programs are the availability of free parking for employees and lack of attention from the employer.

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3 Drawbacks to these programs to the transit agency include administrative complex- ity, fare abuse, under-pricing or limits to revenue, and inadequate access to riders. The most frequently mentioned aspects of program design and implementation that transit agencies would like to change include standardizing requirements for employ- ers, making it easier for employees and employers to participate, and simplifying options and administration. The most common reason that agencies do not offer these programs is the lack of interest from public employers. In most programs, employees have the option of paying for their share of the program with pretax payroll deductions. Employers typically assume the responsibility for day-to-day program administra- tion and are also heavily involved in publicizing the program to their employees. Marketing activity is greatest when the program is implemented, and spikes when a new employer joins the program. Twelve transit agencies shared lessons learned from the implementation of 18 fare pro- grams for public employers. Lessons regarding relationships with public employers led the list of topic areas, followed by program procedures, funding, and marketing. The involvement of multiple levels of the public employer's organization in program design and marketing is important. Frequently, the transit agency uses its own media and relies on the public employer for distribution. A strong marketing and public relations campaign at the outset is very important to spread the word among employees and also among other employers. Size of the system and the amount that can be invested in the program are limiting factors. The case studies are intended to provide additional details on innovative and successful practices as well as on issues related to public employer pass programs. The six case study agencies are: Capital Metro, Austin, TX King County Metro, Seattle, WA Monroe County Transportation Authority, Monroe County, PA Nashville Metropolitan Transportation Authority, Nashville, TN Intercity Transit, Olympia, WA TriMet (Tri-County Metropolitan Transportation District of Oregon), Portland, OR. The case study agencies offered the following items as important to lessons learned: A strong relationship with the department responsible for administering the program. Responsibilities defined for marketing the program as part of the agreement. Avoid flash passes. Simple procedures for both the customer and for internal administration. A champion within the public employer, as stated earlier. Keeping in mind that the public employer benefits not only through reduced parking needs but also through increased employee morale. A flexible program the employer tailors to meet its needs. Working with groups to brainstorm ideas for improving mobility. All scenarios regarding employee eligibility addressed in the contract. A standard pricing methodology developed based on current transit use by employees to justify costs to employers.

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4 A means of measuring program impacts such as ridership and mode split and report these impacts on a regular basis. Factors outside of the agency's control, particularly the availability and cost of parking, are critical aspects of program success. An "Emergency Ride Home" program is a critical component that provides employees with the assurance that if they use alternative transportation they can get back home if the need arises. Findings from this synthesis suggest six major areas of future study: The most appealing aspects of an employer pass program to the public employer. Differences between public-sector and private-sector employers. Accounting for externalities. Pricing. Finding and encouraging program champions at public agencies. Measuring the value of public employer pass programs.