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LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITIES IMMEDIATE NEEDS TRANSPORTATION PROGRAM CASE STUDY
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.
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
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
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
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
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
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
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
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
However, the taxicab companies themselves also contribute to the frnmediate Needs program. In order to pay the drivers, the companies buy back the vouchers received from customers by individual drivers. The company then bills ALA or FAME for reimbursement, so the company is carrying or "floating" the transportation expense for the 30-60 days until it is paid. There are also administrative costs to fill out the paperwork required for the program. In some instances, when the trip costs more than the $7 taxi voucher, passengers cannot or will not pay the extra amount, so the driver just absorbs the overrun rather than argue. Companies can also lose on variable vouchers when the quote hasn't captured the time spent in a traffic jam or on an unexpectedly circuitous route. Both MTA staff and the taxicab operators themselves agree that the quality of taxi service in Los Angeles has improved as a result of the Immediate Needs program. Companies must document that they are licensed and carry the necessary insurance. Agencies are free to call any of the providers, so competition has enhanced attributes such as responsiveness and timeliness. There is also a complaint form that agencies can fill out on behalf of their clients, which is turned over to the brokers for resolution. Taxicab companies who abuse the system are expelled from the program. Modifications have been made to the vouchers to help identify any abuse. The colors are changed every three months so attempts to copy them are thwarted. The paper has also been changed, enabling the two m-A accounting clerks to see any alteration marks when the vouchers are held up to a black light. Staff also checks the mileage to determine if it is reasonable for the amount charged. The MA program director has on occasion taken her car and rerun the route if the voucher amount seems suspicious. The participating taxicab companies support this accountability and praise the brokers for their willingness to include the companies in designing and improving the system's operation. For their part, the taxi operators believe they are fulfilling a social responsibility by their involvement in the program, noting their role in originating the program in 1992. If there were no Immediate Needs Transportation Program, it's the inner city residents who would lose, they said. Senior citizens, who were accosted by street gangs and afraid to go out for their basic needs, can now get door-to-door taxi rides in safety. For safety reasons and the unmet needs of the frail elderly, the operators expressed concerns about the increasing emphasis on bus tokens in the Immediate Needs program. FUTURE PLANS Although the MTA Board of Directors has consistently allocated funds for the Immediate Needs Transportation Program, some directors have expressed reservations. They are concerned that the door-to-door taxi rides provide a level of service higher than that available to all constituents. However, a Board member, who represents one of the districts as County Supervisor where Immediate Needs is heavily utilized, indicated that the circumstances in her district restrict mobility more severely than in some others. For example, commercial establishments, such as supermarkets and shopping malls, are limited in number or non-existent. The low income of 10
residents means fewer have private automobiles for transportation. Therefore, Immediate Needs fulfills MTA's mission of providing mobility to these constituents in a program that is not as critically needed in all districts. The County Supervisor expressed confidence that the Board will continue Immediate Needs as long as the program remains unique and not competitive with other programs. The program's staff has supported the $5 million budget for Immediate Needs as a reasonable amount, particularly when comparing the program's costs to the overall cost of MTA operations and the significant discounts provided by MTA for seniors, students, and persons with disabilities. The $5 million is I/6 of ~ % of the MTA operating budget. Since it is funded with local sales taxes, the Board has viewed it as a way of "giving something back to the community" from the community's own transportation dollars, according to the program's staff. Staff envisions Immediate Needs as part of a three-tiered strategy in MTA's Long Range Transit Plan. High frequency, high capacity buses would comprise tier one; 40-foot buses along fixed lines with flexible routing in the neighborhoods would comprise tier two. Tier three would be a community-based network, including point deviation routes, late night taxi service, Immediate Needs, and the currently contracted Americans with Disabilities Act program. In this way, Immediate Needs would become more integrated into the fabric of MTA and its menu of services. ELEMENTS OF SUCCESS As with any organization as large and complex as the Los An~eles Countv Metronolitan Transportation Authority, the MTA has had its share of problems, some resulting from the merger of two different agencies. It has been criticized for its management of the raid extensions and has had money withheld by the federal government. And a lawsuit brought against MTA accused it of spending too much on rail extensions serving the suburbs at the cost of enhancing inner city bus service. On the other hand, the Immediate Needs Transportation Program presents a different face of this influential public institution. The program illustrates how MTA has used significant resources to transcend its traditional role as bus and raid operator. In a program that has been relatively immune to criticism, MTA has achieved success by concentrating on three factors: Administrative Partnerships, Community Involvement, and Mobility Management. administrative Partnerships The administration of Immediate Needs is a highly unusual partnership with the community- based organizations. Although collaboration with social service agencies has occurred within the transit industry, it is not commonplace. But what is unusual in MTA's Immediate Needs program is the extent to which it has given over the entire administration to FAME and IILA. The Board has indicated they want to direct the policy but not the practice, with the assurance that there are strict financial controls. 11
The result has been a much more open and less bureaucratic program than is normally seen in a large organization such as MTA. The most serious requirement is that the accounting of MTA's funds by FAME and MA must pass financial scrutiny. In the absence of excessive rules and paperwork, the bulk of the $5 million goes to service delivery for those who need it most. And MTA benefits by minimizing its exposure to potential abuse. Instead, those agencies who work directly in the community are better situated to police the program and make sure it benefits the intended recipients. Community Involvement During a time of crisis in Los Angeles, MTA agreed to be part of the solutions put forward in Rebuild L.A. following the civil disturbances. It went beyond simply restoring bus service by listening to community representatives and designing a new mobility program in concert with them. "Immediate Needs started with the grass roots and the people in the community, and the taxi companies designed it," said one taxicab operator. Another taxicab operator added, "The people in control hadn't been in a taxi for years. (At first), the engineers drew up forms we couldn't fill out. (But then) they asked questions before writing it up (because) we are out on the street." He indicated appreciation for the flexibility shown in designing a program that would work for both the operators and their passengers. Through its simplicity, the design of the Immediate Needs program has also been sensitive to the disruption and struggle in the lives of the people it serves. It avoids rules about application forms, pre-qualifying affidavits, and referrals to multiple telephone numbers for information. It moves people countywide without troubling users with regulations about jurisdictional boundaries and institutions. "Immediate Needs gets to the bottom rung," said the County Supervisor and Board member. Mobility Management Immediate Needs gets to the bottom rung because it recognizes the mobility gap that has existed in serving the people who are on that rung. While some within MTA regard Immediate Needs as a social service program outside the scope of a transit agency's responsibility, program staff views it as a transportation "safety net" well within its mobility manager role. The definition of mobility management is '`an institutional state of mind that emphasizes moving people instead of the mode of transportation." (5) In the case of Immediate Needs, MTA moves people in a program designed to meet the community's transportation needs rather than attempting to fit those needs into its traditional bus and rail system. In addition, MTA determined that a collaborative program with community-based organizations was the appropriate structure, instead of administering it internally. 12
Comparing it to the commuter program which guarantees transit riders and carpoolers a taxi ride home in an emergency, program staff said that Immediate Needs "is like Guaranteed Ride Home for the transit dependent." Through Immediate Needs, MTA is not just a transit operator-it is a transportation agency. As a mobility manager, it has assumed the role of getting people where they need to go when they need to be there by the mass transportation mode most suitable for their needs. 13
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
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
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
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
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
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
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
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
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
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
