|
Items in cart [0] |
Questions? Call 888-624-8373 |
| Copyright © 2009. National Academy of Sciences. All rights reserved. Terms of Use and Privacy Statement |
Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 223
LOS ANGELES COUNTY METROPOLITAN
TRANSPORTATION AUTHORITIES
IMMEDIATE NEEDS TRANSPORTATION PROGRAM
CASE STUDY
OCR for page 224
OCR for page 225
LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY'S
IMMEDIATE NEEDS TRANSPORTATION PROGRAM
Los Angeles County Metropolitan Transportation Authority (MTA) has a service area of 1,433
square miles in Los Angeles County, California. It has a fleet of 2,437 buses with a 1996 average
weekday boarding of over one million riders. Its three rail lines carry a weekday average of
94,300.
MTA is governed by a thirteen-member board: the mayor of Los Angeles and his three
appointees; the five county supervisors; and four members appointed by cities within the service
area. It has 8,146 employees and a 1997 capital and operating budget of over $3 billion, of which
$735.6 million is dedicated to operations.
ORIGIN OF THE IMMEDIATE NEEDS TRANSPORTATION PROGRAM
Highlights
A safety net for the "bottom rung "
600 social service agencies participate
Taxis and transit work together
Each $1 invested=$2.60 in benefits
On April 29, 1992, a civil disturbance broke out throughout
the City of Los Angeles after the jury's verdict about the
police officers involved in the Rodney King arrest.
Vandalism was widespread, stores were looted and whole
blocks were burned. Seventeen gas stations were burned,
creating a fuel shortage for residents. Bus service was also impacted. In addition, a curfew was
enacted in South Central L.A., preventing cars from driving in or out of the area after 6 p.m. To
provide mobility to residents, L.A Taxi Company offered $ ~ rides to essential services, such as
grocery stores and medical appointments. L.A. Taxi initiated this emergency service, dubbed
Operation Breadbasket, with $8,000 of its own funds. Three major corporations, Xerox, IBM
and Kal Kan, continued it by contributing an additional $130,000 for the program.
When the corporate funding ran out after a month, staff from the Los Angeles County
Transportation Commission (LACTC), one of the predecessors of the MTA, approached the First
African Methodist Episcopal Church (FAME) to ask it to continue the program. FAME, which
offers community programs through its non-profit Renaissance organization, agreed. LACTC
then established the Immediate Needs Transportation Program in May 1992 as part of its
contribution to Rebuild L.A., a consortium formed to address some of the problems laid bare as a
result of the civil disturbance. Immediate Needs is funded from two local sales tax measures
passed in 1980 and 1990 for transportation projects and services.
FAME was asked to administer a program of $ ~ million for taxi vouchers to be used for short-
term or emergency trips. The International Institute of Los Angeles (m~A), a community-based
organization with a large Latino clientele, was subsequently asked to co-administer the program
along with FAME. Los Angeles County, with a population of 9 million, was split into two
territories, with FAME generally covering the southern and western half and IWA covering the
northern and eastern half.
OCR for page 226
The program design included empowering the community itself to make decisions about the
residents' immediate transportation needs. Although the amount of required sign-ups, forms,
rules and regulations was purposely limited, the Immediate Needs program is required to account
for the use of funds in a way that can withstand scrutiny from fiscal overseers. FAME and MA
have successfully incorporated checks and balances to insure the financial integrity of the
program without creating bureaucratic roadblocks for the clientele being assisted.
Today Immediate Needs is a $5 million program funding both taxi vouchers and bus tokens.
MTA staff notes that Immediate Needs "is filling a service niche which is not effectively
addressed through other transportation programs." ~ ~ ~ Under the administrative brokerage of
FAME and IDA, about 600 social service agencies participate in providing trips to food banks
and grocery stores, medical appointments, job training and job interviews, and for emergencies.
In the first half of 1997, over 403,000 trips were provided at an average cost of $5.50. (2)
ADMINISTRATIVE PARTNERSHIP
MTA provides general oversight of the program and its design. However, the day-to-day
administration is all handled by the two brokers, FAME and mesa, who are paid a 17 I/2%
administrative fee. Each broker is responsible for $2.5 million allocated to their half of the L.A.
County program. The brokers enroll social service agencies and distribute the tokens and taxi
vouchers to them. FAME and m-A manage the contracts with the 17 taxicab companies, ranging
in size from 52 cabs to 1,175 cabs, who have qualified as service providers. They verify the
legitimacy of the trips taken with vouchers and account for all trips in reports sent monthly to
MTA.
At FAME, a staff of six handles the administration under the supervision of the Project Manager
for Transportation. The staff includes two full-time and two part-time data entry clerks and two
Transportation Specialists, who divide up FAME's half of the county.
To enroll the social service agencies, mesa initially held recruitment fairs in parts of the county,
such as the San Gabriel Valley, where no social service agencies were participating. Now, with
600 agencies enrolled countywide, serving approximately 125,000 individual monthly clients,
word-of-mouth marketing is sufficient to bring in new applicants. Agencies must have a 50Ic(3)
non-profit status from the Internal Revenue Service and must write a letter of request to the
broker. They are then evaluated to see if their services match the goals of the Immediate Needs
program. An agency which helps dialysis patients with trips, for example, would not qualify,
because the trips are an on-going, not immediate, need. Because of funding limitations, there is a
waiting list of agencies wishing to participate.
Agencies themselves determine whether a client has an immediate need. Some give priority to
those on County General Relief or Supplemental Security Income. Another agency providing
medical assistance might decide that transportation will make a difference in whether an elderly
person can remain at home instead of being institutionalized. A third might give transportation
assistance to take advantage of a client's sudden determination to enter a substance abuse
2
OCR for page 227
treatment program. At first agencies are given a maximum of 50 taxi vouchers a month to
distribute. The agency's staff has an incentive to screen their clients carefully in order not to run
out of vouchers before the end of the month. If an agency is very large or if it can justify its need
for additional vouchers, the broker will increase the allocation.
Social service agencies do not get compensation for participation in Immediate Needs. However,
the transportation resources they receive through Immediate Needs enhance their own programs
and give them added value. Having the vouchers and tokens can free up the social workers, who
otherwise must spend time trying to find transportation for a client to access needed services.
For example, the Downtown Women's Center in the City of Los Angeles provides daytime meals
and programs to transient women, who must find a shelter for the night. Now, the staff can
provide these women with a bus token to go to the shelter, whereas previously they had to make
numerous telephone calls to find the homeless women rides. In some cases, the social worker
has had to transport the client in an emergency, using professional time that could be spent more
productively, or even putting himself or herself in danger. A staff member of the 1736 Family
Crisis Center, for example, has worried about her safety when transporting a client out of a
situation where a spouse or parent may be violently angry. Where agencies have spent their own
dollars on transportation, Immediate Needs frees up those funds to deliver additional or higher
quality human services programs. While participation is clearly advantageous for the social
service agencies, it also assists MTA: The 600 agencies provide an in-kind contribution to MTA
by helping MTA fulfill its mission of increasing mobility for Los Angeles County residents.
PROGRAM USAGE (3)
For the first three years, the program consisted of individual taxi vouchers and couponless trips,
which are accounts granted to certain agencies for non-emergency medical trips. In ~ 995
distribution of bus tokens was added in order to "increase the number of trips which could be
provided without increasing the cost of the program." (4) Staff from the social service agencies
go to FAME or ALA to pick up their allocation of He tokens and vouchers each month. Clients
may receive up to a maximum of $30 a month in transportation assistance through a combination
of tokens and taxi vouchers.
Taxi Vouchers
An individual can receive up to four taxi vouchers a month, each worth a maximum of $7.00.
Participants in the MTA or City of Los Angeles paratransit programs are not excluded from
eligibility for Immediate Needs as well. In the first half of 1997, over 30,300 trips were taken a
month, primarily for non-emergency medical trips (trio). Almost 28% were for food. The
average trip length was 4 3/4 miles at a cost of $5.75 per passenger. Participants are encouraged
to share rides in order to conserve their vouchers.
3
OCR for page 228
Couponless and Variable Voucher Trips
Some agencies, such as hospitals, have been authorized to maintain transportation accounts.
Agencies can arrange a taxi trip for a patient, who may be too frail to go to the facility to pick up
a voucher, and bill for the trip against a pre-established account. In order to more closely control
these "couponless" trips, MTA has created variable vouchers. The agency calls the taxi company
to establish the price of the trip in advance and issues a voucher for the agreed-upon amount.
About 78% of the couponIess and variable voucher trips are for medical reasons. The average
trip length is between 10-] ~ miles and costs between $14-19 per passenger. However, these
more expensive trips represent only lo of all the trips in the Immediate Needs program.
Tokens
After a demonstration phase in Spring, 1995, where 10 social service agencies distributed bus
tokens to assess their usage, tokens now are used for over 48 370 of all trips in the Immediate
Needs program. Clients may receive 10 tokens a month in addition to two or three taxi vouchers.
The 10 tokens have a value of $9.00 in trips. About 22% of the trips are for job training and job
interviews, 26% for medical reasons, and 28% for case management appointments. The rest are
used for various emergencies (9 '/~%) to obtain food (Tao), to attend church or religious meetings
(3 ~/~%), and to go to a shelter (4%~. Because of the introduction of the tokens, the Immediate
Needs program has been able to grow without increasing the overall cost.
MEASURING TEIE COSTS AND BENEFITS
In order to measure the economic benefits of the Immediate Needs program, a survey was
designed and administered in September, 1997. FAME and ALA selected five agencies that had
a high proportion of job training or medical trips, since these were the two types of trip purposes
most likely to experience measurable economic benefits. Staff at the five agencies assisted their
clients with the survey, which asked how many vouchers or tokens clients received, what types of
trips they took, and how the program helped them with their medical care or with finding or
training for a job. Based on the responses, the Immediate Needs Transportation Program
produces benefits of over $5 million for job-seekers. Furthermore, about $4.3 million is the
direct value of the vouchers and tokens provided by MTA to its customers. It is also
reasonable to assert that the program produces additional health benefits of $4.5 million to
people who can avoid institutionalized care, can avoid getting much sicker, can continue to see
their own doctor, and can keep doctors' appointments. Taken together, these economic benefit is
$2.60 for every $1 invested, and the total annual benefits from the Immediate Needs
program are $13,951,000.
Technical Approach
In consultation with FAME and IILA, the research team decided that it was infeasible to survey
all 600 agencies which participate in the Immediate Needs program, because of the logistics and
expense, because of the disparate nature of services provided, and because of language and
4
OCR for page 229
comprehension barriers. Therefore, FAME and ALA chose two job assistance agencies and three
medical assistance agencies to sample for the survey. The agencies' staff agreed to fill out the
survey with each client when the client received the monthly vouchers and tokens. (See
Appendix A for a copy of the survey.)
There were ~ 34 surveys returned. Answers to questions about how many vouchers or tokens
were received and the trip purposes for which they were used were compared with the same
information that MTA tallies quarterly. The fact that the answers were similar lends validity to
the survey results.
Although MTA calculates the number of tickets dispersed, the number of monthly passengers,
and the number of trips taken by trip purpose, it does not track the number of individual users.
Therefore, a methodology was devised to translate the survey results into numbers of users (See
Appendix B). The result is an estimate of 13,762 individuals a month who receive Immediate
Needs benefits.
It was also necessary to estimate an annual turnover rate: that is, how often new participants enter
or existing participants leave the program. Based on evidence supplied by ALA and its affiliated
programs, participants in medical assistance programs are a fairly stable group. Therefore, an
annual turnover of I.5 participants for medical trips was assigned to the survey responses for
medical programs. A survey of 34 job assistance programs enrolled by MA revealed that the
average time to train a student is about 5.3 months, at an average training schedule of 20 hours
per week. On this basis, an annual turnover of 2 in job programs was used.
Economic Benefits
Job Programs
Survey respondents indicated that they either are being trained for a job that will pay an average
of $837 a month or, with Immediate Needs assistance, they can look for a job that will pay an
average of $1036 a month. A wage escalation factor of 2 was applied to these wages to reflect at
least an annual lifetime wage earning capacity of twice these amounts over a period of 30 years.
This escalation factor reflects a long-term earning capacity, not the entry level wages reported,
based on the assumption that trained persons will have better job security and more assured
advances in responsibility and pay.
Although training is normally free to the participants, the cost of providing the training must be
included when determining the total benefits. The average hourly cost to train a student in the
Los Angeles area is about $ ~ I, based on a sample of job training program rates authorized under
the federal Job Training Partnership Act.
Using the assumptions described in the preceding two paragraphs results in the following annual
benefits:
s
OCR for page 230
Job training value:
Job prospect value:
Deduct training costs
Job Program Benefits
$3,087,000*
$3,057,000*
I,07S,000*
$5,066,000
*See Appendix B for a more detailed explanation of how these numbers were calculated.
Direct Value of Vouchers and Tokens
Based on MTA's statistics for the January-March, 1997 quarter, the annualized cost of the taxi
vouchers, variable vouchers, couponiess program, and bus tokens will cost MTA about $4.2
million. However, MTA discounts the $~.35 retail value of the bus tokens to 90 cents for the
Immediate Needs program. Calculating bus tokens at the full retail value of $~.35, the annual
economic benefit of the direct transportation assistance to MTA's customers is $4,333,204.
Medical Program Benefits
Beyond the clear economic benefits discussed in the preceding two sections, there are more
speculative but nonetheless real benefits from the medical programs participating in the
Immediate Needs program. For example, 27.2~o of the people answering the survey indicated
that they "can stay in my home instead of going to a nursing home or hospital" because of the
Immediate Needs program. To quantify this benefit, a conservative assumption was made that
only 2% of those responding actually avoid going to a hospital because of Immediate Needs and
only 10% avoid going into a nursing home. An additional assumption was made that 10% of
these respondents avoid using ambulance service. Based on 1996 national average cost data
from the Health Care Financing Administration, shown in Table ~ below, the annual economic
benefit of these avoided medical costs is $4,163,516.
Table I: Medicare Program National Average Costs*
Medical Average Average Cost per
Service Daily Cost X Duration = Average Stay/Trip
Hospital $1983 6.7 days $13,286
Skilled nursing $ 224 todays $ 2,240
Ambulance $ ~ 17
*Source: "Medicare State Summary Calendar Year 1996," The Health Care Financing
Administration, Office of Information Services, Enterprise Data-Based Group, Division of
Information Distribution.
6
OCR for page 231
It has been assumed that ~ 00% of those answering the questions about Immediate Needs
transportation to medical care received some level of benefit. Therefore, an attempt has also
been made to quantify the economic benefit of these other survey responses:
· ~ can get well enough to look for a job (6.2%~;
· ~ can get care before ~ get much sicker (35.~%~;
· ~ can continue to see my own doctor (65.4%~; and
~ don't miss doctor's appointments (75.3%~.
The percentage checking one of these categories ranges from 6.2~o to 75.3%, and adds to
IS2.7%, since multiple answers were permitted. As a very conservative approach, this
percentage was discounted to 78% of respondents. The 78% is derived by subtracting out the
22% of individuals discussed in the preceding paragraph who received benefits by avoiding more
intensive care. This subtraction was done to prevent double-counting benefits to individuals.
A modest cost savings to the patient or the doctor of $60 was then assigned. Assuming a
doctor's visit would likely cost around $60, the patient saves at least this amount if he or she can
receive care before getting much sicker and, thus, avoid multiple doctor's visits. The doctor can
save this amount when the patient keeps an appointment instead of missing it for lack of
transportation. Using these assumptions produces an additional benefit from the Immediate
Needs program of $38S,327.
Therefore, the total economic benefit from the medical programs participating in Immediate
Needs is $4,551,843.
Additional MTA Costs
Besides the annual Immediate Needs program costs of $5 million, MTA incurs costs to provide
its own staff oversight and accounting, which it does not charge the program. Another cost is
that of providing additional buses on some lines which are impacted by riders using the more
than 200,000 free tokens distributed annually. MTA estimates the incremental cost of providing
these two support services to the program at $~.10, which is its systemwide cost per rider.
Therefore, MTA incurs about $400,000 in additional costs above the $5 million contribution of
vouchers and tokens.
Benefit/Cost Ratio
For every $ ~ invested in the Immediate Needs Transportation Program, the economic benefit is
$2.60 This is determined by adding the Job Program Benefits, Direct Value of the Vouchers and
Tokens, and the Medical Program Benefits, totaling $13,95 1,000, and dividing by MTA's cost of
$5,400,000. A benefit/cost ratio of 2.6 is quite favorable, compared with the usual criterion of at
least a ratio of 1.0 for economically viable projects. Table 2 below summarizes these economic
benefits.
7
OCR for page 232
Table 2: Summary of Economic Benefits
A. Job Program Benefits
Job training value:
Job prospect value:
Deduct training costs
Job Program Total
B. Direct Value of Vouchers and Tokens
C. Medical Program Benefits
Avoiding more intensive care
Additional benefits
Medical Program Total
TOTAL BENEL'l'l'S
D. Total Annual Costs
Benefit/Cost Ratio (A+B+C/D)
$3,087,000*
$3,057,000*
1,078,000*
$5,066,000
$4,333,000
$4,164,000
$ 38S,000
$4,552,000
$13,951,000
$5,400,000
2.6
These are robustly positive numbers, demonstrating the economic viability of the program.
The following section describes the qualitative and less quantifiable--benefits that emerged
from interviews during the site visits in Los Angeles.
Qualitative Benefits
Besides these quantifiable benefits, there are many other advantages to society or to individuals
that are difficult to measure. To help identify these benefits, the following social service
agencies participated in focus groups or on-site interviews:
King-Drew Medical Center
Theresa Lindsey Senior Center
Family & Youth Enhancement
Long Beach Human Social Services
1736 Family Crisis Center
AIDS Project Los Angeles
Friends Outside
Downtown Women's Center
AltaMed Senior Health/Multipurpose Senior Services Program
8
OCR for page 233
Representatives of these agencies outlined a number real but hard-to-quantify benefits. Their
thoughts are paraphrased below:
We all benefit when individuals can access more parts of society. Immediate Needs saves
us money when we can:
avoid medical institutionalization of the indigent;
prevent crime by providing job training for employment and food for the hungry;
reduce the demand on more expensive and oversubscribed paratransit services;
and
provide an option to a costly ambulance ride for medical care.
With Immediate Needs as a resource, other agencies funded by our tax dollars are saving
money and increasing productivity. Case workers now have more time to spend on
solving serious problems because they no longer have to worry about finding
transportation. Services set up to help people can be better utilized when individuals
needing them can get to them. A specific example of increased productivity has occurred
at King-Drew Medical Center, a county facility which experienced around 600 fewer
missed appointments, a drop of 50%.
Immediate Needs increases individuals' dignity, independence, and safety. The elderly
can access essential medical care while remaining in their homes. Patients released from
the hospital at night can get home without becoming victims on the street. Battered
women can flee a dangerous situation immediately. Mothers can take their children with
them in taxis instead of finding child care or leaving children alone. Individuals can save
money by traveling to supermarkets instead of relying on neighborhood mini-marts within
walking distance but with inflated consumer prices. When transportation is not an
obstacle, people whose lives are in chaos can focus their energies on identifying the
resources to help themselves make positive changes.
MTA benefits from Immediate Needs by increasing its credibility in the community. It
has gained a new respect from the public by demonstrating that "MTA has compassion
for people," said one person. It has shown a responsiveness to community needs.
Improved Taxi Service
Taxicab companies benefit from the Immediate Needs program as well as provide a contribution
to it. Various operators estimated that 5-15% of their company's business comes from
participation in Immediate Needs. However, the value to them is greater than that. Since it
provides a stable source of business, they can afford to hire more drivers, increasing their overall
scheduling flexibility. Immediate Needs gives them additional visibility in the community and
introduces new customers to using taxicabs. Because of these multiplier factors, one operator
said he would lose 20% of his business if Immediate Needs disappeared, even though it
comprises only 5-10% of his business now.
9
OCR for page 238
FOOTNOTES
(1) Report to Board of Directors dated June IS, 1996.
(2) MTA spreadsheet from the Program Manager, dated November 7, 1997.
(3) Data in this section rely on the MTA spreadsheet from the Program Manager, dated
November7 1997.
(4) Report to Board of Directors dated June 18, 1996.
(5) Crain and Associates, "Strategies to Assist Local Transportation Agencies in Becoming
Mobility Managers," Phase ~ Draft Final Report, Transportation Research Board, April,
1997.
14
OCR for page 239
APPENDIX A
AGENCY
I. ~ received
IMMEDIATE NEEDS
DATE
HOW DOES THIS PROGRAM HELP YOU?
How many?
bus tokens
taxi coupons
variable voucher worth $
How many trips?
2. I will use them for (Put the number of trips you will take by all that apply.)
doctor or hospital visit
drug or alcohol program
to get food
work
job training or a job interview
social worker
church
go to a shelter
Other, please explain
1
~1
OCR for page 240
3. Medical: This program helps me because: (check all that apply)
can stay in my home instead of going to a nursing home or hospital.
can get well enough to look for a job.
~ can get care before ~ get much sicker.
T can continue to see mv own doctor.
don't miss my doctor's appointments.
can save my own money for other needs. Without this program, my costs for medical
transportation would be $ (Circle one: a day a week a month)
Other, please explain:
.~2: This program helps me because: (check all that apply)
am being trained for a job which will pay $ (Circle one: a day a week
a month)
can look for a job which will pay $
.(Circle one: a day a week a month)
can save my own money for other needs. Without this program, my costs for
transportation to job interviews or training would be $ (Circle one: a day
a week a month)
Other, please explain:
4. Other ways this program helps me. Please explain:
Your age Male Female.
4~ 2
OCR for page 241
APPENDIX B
SURVEY RESULTS AND BENEFIT CALCULATIONS
Survey Results
In September, 1997, the supervisory staff of five FAME and MA social service agencies
conducted a survey of their Immediate Needs clients, using the appended survey form. The form
was developed in cooperation with Crain & Associates for the purpose of estimating the
economic benefits of the Immediate Needs program. Agencies were selected for the survey that
had a high proportion of job training and/or medical trips, since these were the two types of trip
purposes most likely to experience measurable economic benefits from the Immediate Needs
program. Survey responses numbered ~34, arid produced the results shown in Table A. Also
included in Table A is relevant information from the Immediate Needs accounting system,
principally from the January-March or April-May lines of their spreadsheet dated 7/28/97 or (for
items ~ a, b, and c) from MTA Immediate Needs staff estimates.
TABLE A. SURVEY RESULTS AND ACCOUNTING INFORMATION
Accounting
Survey Results Information
Number received monthly
a. Bus tokens 9.3 8.0
b. Taxi vouchers 2.5 3.0
c. Variable vouchers 1.6 1.4
Average unit value
d. Bus tokens n.a. $0.90
e. Taxi vouchers n.a. 7.00
I. Variable vouchers $21.17 19.70
2. Trip Purposes
a. Medical 36.8% 40.2
b. Job training or interview 22.4 13.4
c. Work 11.7 n.a.
d. Food 17.5 16.2
e. Case management (social worker) 4.0 19.2
f. Nonmedical emergency ma. 5.9
g. Religious (church) 3.1 2.3
h. Shelter 0.4 2.5
i. Drug or alcohol program 0.4 n.a.
j. Other 3.6 0.2
Total 99.9% 99.
3. Reasons the Immediate Needs program helps with medical trips
Survey Only
a. Can stay home instead of using nursing home or hospital27.2
b. Can get well enough to look for a job .6.2
c. Can get care before getting much sicker35.8
d. Can continue to see own doctor65.4
e. Don't miss doctors' appointments75.3
I. Can save medical transportation costs37.0
g. Other49
Total251.9
*Multiple answers were possible in items 3 and 4.
~1
OCR for page 242
4. Reasons the Immediate Needs program helps with fob training
a.
b.
c.
J.
Am being trained for a job that will pay an average of $837/month
Can look for a job that will pay an average of $1036/month
Can save training & interview Gavel costs
Total
c Multiple use of tokens and coupons
Bus tokens only
Taxi vouchers only
Variable vouchers only
Subtotal
d.
Bus tokens and taxi vouchers
Bus tokens and variable vouchers
Taxi vouchers and variable vouchers
Subtotal
Total
6. Monthly Ravelers using different fare media (see appendix for derivations
a.
b.
c.
Travelers using bus tokens
Travelers using taxi vouchers
Travelers using variable vouchers
Total
7. Percent of survey respondents who were:
a.
b.
~ - r
Female
Male
Total
34.9%
39.7
57.1
131.7~o
22.8%
33.9
3.2
59.9%
34.6
1.6
3.9
48.1%
100.0%
2,652
9,301
1~809
13,762
71.7%
28.3
100.0%
From the comparison in Table A, the survey results are reasonably representative of the program
accounting data in items 1 and 2 of the table. Items 3, 4, 5, and 6 in Table A provide the basis for
the benefit estimates that follow' and item 7 shows the percentage of respondents by gender.
One missing type of information is the annual turnover rates of the 13,762 monthly travelers
identified in item 6 of the table. For the two trip purposes used for the benefit estimates, we
estimate I) an annual turnover of only I.5 for medical trips, based on information from the mesa
program staff that this is a fairly stable group of people from month to month, and 2) an annual
turnover of 2 for job training or interview trips, where the typical training program lasts about 5
months, allowing a month for trained individuals to find jobs.
Benefit Estimates
Two major benefits of the Immediate Needs program were identified by survey respondents in
items 4a and b of the table, as jobs resulting either from 1) the training they are receiving (the
Immediate Needs program gives them tokens or vouchers for attending the training). or 2) from
~7 in,
the job interviews, preceding or following the training, for which they can also receive tokens or
vouchers. However, the survey results for the average value of jobs after training and interviews
pa-2
OCR for page 243
places the hourly rates for these jobs close to the minimum hourly wage. The minimum wage is
an inappropriately low figure for a long-term benefit estimate, so a wage escalation factor of 2
will be applied to the average wages shown in item 4 of the table. Trained persons will have
better job security, more assured advances in responsibility and pay, and the average salaries used
in their benefit estimates, which assume a study period and lifetime wage earning capacity of
thirty years, should reflect the long-term annual average, not the entry level wage.
A second type of adjustment being made in the item 4 survey results is to attribute 50% of
respondents to item 4a (being trained for a job) and 50% to item 4b (can look for a job).
Virtually all of the trainees and interviewees getting Immediate Needs program help receive
some training, with an average training period of 5.3 months for 22 training programs that were
sampled to develop this average. Therefore, the answers to questions 4a and 4b should total
100%, and the actual answers are close enough to each other to assume an equal split.
The first two items below calculate the training benefits under the preceding guidelines, and the
third item deducts the estimated cost of training from the training benefits. The training is
normally free of cost to the trainees, but the cost of providing the training is a valid offset to the
benefits of training.
1. From the preceding information and items 2b and 6 in Table A, multiply 13.4% of
trip purposes for job training and interviews x $837 average monthly job value x 2 (the
wage escalation factor, explained previously) x 50% of job training survey respondents x
13,762 monthly passengers x estimated annual turnover of 2 to get annual benefits of
$3~087~037.
2. From the same sources, multiply 13.4% of trip purposes for job training and
interviews x $1036 average monthly job value x wage escalation factor of 2 x 0.8 (our
estimated probability of persons actually getting a job from the interviews) x 50% of job
training survey respondents x 13,762 monthly passengers x estimated annual turnover of
2 to get annual benefits of $3.056~793.
3. Deduct from training benefits the average cost of training for 5.3 months/12
months x 52 weeks x average training costs of $ 11 per student hour x 20 hours/week x 30
year capital recovery factor of .05783 (to convert an initial amount to an equivalent
annual amount over a 30 year period at 4% interest, which is the estimated long-term cost
of capital ignoring inflation) x 13.4% of trip purposes for job training x 13,762 monthly
passengers x estimated annual turnover of 2 to get annual equivalent training costs of
$1~077,681.
4. The other major economic benefit is the value of fare media provided by the
Immediate Needs program to its customers. The cost of such fare media was running at a
monthly rate in January-March 1997 of $4,174,380 annually, but counting the retail value
of the bus tokens as $1.35 rather than the discounted cost to the Immediate Needs
program of $.90 raises the annual fare media value by $1.35/$.90 - 1, or 50%, which
amounts to $15S,824, for a total of $4,333~204.
6-3
OCR for page 244
Beyond these clear economic benefits of the Immediate Needs program are more speculative but
nonetheless real benefits of the type listed in item 3 of the table. For example, item 3a states that
27.2% of medical travelers "can stay home instead of using nursing home or hospital." Using the
Medicare program national average costs, cited earlier in the text of this report, of $ ~ 3,286 for an
average hospital stay, $2,240 for an average skilled nursing facility stay, and $! 17 per ambulance
trip, and assuming conservatively that 2~o of responding medical travelers avoid using the
average level of hospital care, logo avoid skilled nursing facilities, and 10% avoid ambulance
service leads to the following benefit calculation:
5. [~2% x $13,286) + (10% x $2,240) + (10% x $] 17~] = $501.72 x 40.2~o medical
trips, (from item 2a of Table A) x . ~ 3,762 monthly passengers x I.S estimated turnover
rate = $4,163,516
Item 3f in Table A has already been covered by the annual program ticket value calculation, but
the remaining four items certainly have some economic value. They involve getting well enough
to look for a job, getting care before getting much sicker, continuing to see one's own doctor, and
not missing doctors' appointments. The percentage checking one of these categories totals
~ 82.7% (multiple responses were permitted). Conservatively, this number has been reduced to
78% (100% less the 22% avoiding more intensive care in item 4, above) to prevent double
counting of individual benefits. A modest cost savings of $60 per trip to the patient or doctor is
then assigned, leading to the following benefit calculation:
6. Average cost saving of $60 x 40.2% medical trips x 78% of survey respondents on
medical trips checking one of the four items x ~ 3,762 monthly passengers x estimated
annual turnover rate of 1.5 = $388~369.
Cost Estimate
In addition to the annual Immediate Needs program cost of $5 million, MTA in effect subsidizes
the program by a) its commitments to maintain a high quality of bus service by increasing service
when needed due to the distribution of over 200,000 free tokens annually, and b) providing
central staff accounting and monitoring services at no cost to the Immediate Needs program.
MTA estimates the incremental cost of providing these two types of services at $~.10 per token
distributed, leading to the estimate that follows.
7. 90,923 tokens distributed to clients in January-March 1997 x 4 quarters of the
year x $~.10 per token = $400,06 1, for a total MTA program cost of $5~400~061.
A,' 4
OCR for page 245
Summary of Economic Benefits and Costs
Totaling the foregoing underlined benefits and costs gives the following summary:
($000)/year
Annual Job Training Benefits
Job training value
Job prospect value
Deduct: estimated annual job training costs
Subtotal, Job Training
Annual Value of Travel Tokens and Vouchers
Annual Medical Benefits
Avoiding more intensive medical care
Other (getting well enough to job hunt, avoiding more
serious illness, continuing with own doctor, not missing
doctors' appointments)
Subtotal, Medical
Total Annual Benefits
Total Annual Costs
Ratio of benefits to costs
$3,087
3,057
-1 078
$5,066
$4,333
$4,164
388
$4~552
$13,951
$5,400
2.6
A benefit/cost ratio of 2.6 is quite favorable, compared with the usual criterion of at least a ratio
of 1.0 for econo~rucally viable projects.
Derivation of Average Monthly Users
This section documents the derivation of item 6 in Table A, which is an estimate of the average
monthly number of users or travelers receiving Immediate Needs tickets and vouchers. Such an
estimate is necessary in spite of its complexity, because the Immediate Needs program statistics
do not track this number, it is needed in the benefit/cost estimates, and data were collected on the
survey that can be arranged to develop such an estimate. A detailed explanation of this estimate
follows, concluding with a summary version (in a box at the end of the appendix) that may be
easier to follow.
The relevant survey data are part of answers to the survey question on the type of tickets issued to
survey respondents. The answers, summarized in item 5 of Table A, reveal that many
respondents receive two types offare media (tokens or vouchers) monthly. A few also receive all
three types, but these have been ignored because of their small numbers (4% of total respondents)
and the possibility that respondents checking all three types were thinking of longer than a
B-s
OCR for page 246
monthly period. If you simply divide the number of fare media redeemed by the average fare
media per user, the resulting apparent users do not account for multiple use of tokens, taxi
vouchers, and variable vouchers by a single user.
The first step in discounting for multiple uses of fare media is to derive reduction factors for
converting apparent to actual travelers. Table B documents this process, which starts in column a
with the fare media issuance information in items Sa to c of Table A. Then Column b allocates
the users involved in multiple fare media issuance, from items Sd to f of Table A, to the type of
fare media they were issued. Under bus tokens, for example, appears the two bus token
percentages, 34.6 from item Sd and 1.6 from item Se; under taxi vouchers appear the two
numbers for users receiving multiple fare media in items Sd and Sf (34.6 and 3.9), and under
variable vouchers appear the two numbers for variable vouchers from items Se and f ~ ~ .6 and
3.91. This double allocation creates a total fare media allocation of 80.2, not 40. I, which is
appropriately twice the number of users represented in items d-f. Column c, the sum of a and b,
then represents the number of fare media assigned or allocated to each fare media type.
TABLE B
CALCULATION OF REDUCTION
FACTOR FOR MULTIPLE TICELE:T USE
Column a
Total
Items Items Fare
Sa to c + Sd to f = Media
.
b c
Reduction Rounded
One-half Users Factor Reduction
of colt b (a + d) (e/c) Factor
g
d e f
Bus tokens 22.S 34.6+~.6 59.0 IS.10 40.90 .693 0.70
T.
ax1
vouchers 33.9 34.6 + 3.9 72.4 19.25 53.15 .734 0.75
Variable
vouchers 3.2 I.6 + 3.9 S.7 2.75 5.95 .683 0.70
Total 59.9 80.2 ~ 40. ~40. ~ 00.0 .714 0.73
Column d then allocates one-half of column b, which is added to column a to produce, in column
e, the number of users by the same three fare media. Total users now number 100, in column e,
the same as in the original numbers from item S of Table ~ expressed there as percentages rather
than numbers), only now the 40. ~ % of users buying multiple fare media have been allocated to
bus tokens, taxi vouchers, or variable vouchers in the same ratio as the 80.2 fare media were
allocated in column b. Next, column e is divided by column c to produce the ratio of users to
fare media byfare media type, called the reduction factor. Finally, column g rounds these
numbers off slightly upwards, because the population surveyed may be more prone to multiple
fare media issuance than all Immediate Needs users.
The final step in this process is to apply the rounded reduction factor to the number of apparent
users to find the actual number of users. Table C below carries out this calculation.
P,-6
OCR for page 247
TABLE C
CALCULATION OF ACTUAL USERS
Fare Average Rounded
Media Fare Media Apparent Reduction Actual
Redeemed / Per User = Users x Factor = Users
Bus tokens 30,308 ~ 3,788 0.70 2,652
Taxi vouchers 37,206 3 12,402 0.75 9,301
Variable vouchers 3,618 I.4 2~584 0.70 1~809
Total 71,132 18,774 13,762
In the first column, fare media redeemed is the monthly average of that variable from the
lanuary-March, 1997 period for the Immediate Needs program. According to MTA staff, fare
media redeemed is a more accurate measure of travel than fare media distributed. Fare media
redeemed are then divided by average monthly fare media per user, from Table A, items ~ a-c.
The result, called apparent users for convenience, is multiplied by the rounded reduction factor
from the preceding tabulation to find the number of "actual Users,' -- that is the number of users
after taking into account multiple types of fare media distribution to the same individuals.
If the reasoning in the foregoing calculations is not clear, there is an easier way of getting to the
same goal, by using only the totals in Table B to derive the reduction factor. The reasoning is
then as follows:
1.
Notice that column c of Table B totals 140.1, which is clearly the number of fare media
per 100 users implied by item 5 in Table A; and column c totals 100, which is clearly the
number of users implied by item 5, once the responses in that item have been reduced to
percentages as was done from the start.
2. Now divide the total users, 100, by the total fare media, 140.1, to get an overall reduction
factor of .714 for converting fare media to users, and round this number up slightly to
0.73 for the overall rounded reduction factor.
3. Finally, multiply the rounded reduction factor of 0.73 times the number of apparent users
in Table C, IS,774, to get the number of actual users, 13,705. This number is 57 less that
the actual users estimated in the last column of Table C, or 13,762. That is an
insignificant difference of 0.41 %, due to rounding, which demonstrates that this simpler
approach leads to the same outcome.
~ - 7
OCR for page 248
Representative terms from entire chapter:
job training
