Implementation and Outcomes of Fare-Free Transit Systems (2012)

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36 IntroductIon The synthesis survey results provide an overview of the major issues regarding fare-free public transit service as it is pro- vided in 39 communities throughout the United States. After a review of all returned surveys, five agencies were chosen as case study sites. Personnel who provided thorough responses to the surveys agreed to be interviewed by telephone to offer further insights and information. The case studies provide more background and context in terms of the implementa- tion and outcomes of the provision of fare-free transit in these communities. The case study sites were selected with the following cri- teria: (1) include at least one example from each of the three categories of communities, small urban and rural, university- dominated, and resort; (2) include agencies from different states representing a geographic distribution throughout the United States; (3) include public transit agencies that had pro- vided fare-free transit for various lengths of time; (4) include public transit agencies from different political environments; and (5) include one agency that has discontinued providing fare-free public transit after encountering financial and polit- ical challenges. The case study sites are in five different states. The length of time they have provided fare-free service varies from a few months to 20 years. Two have conservative political envi- ronments, two have progressive political climates, and one has a very mixed political climate. The five agencies chosen provide a representative sample of the types of agencies that provide fare-free transit in the United States. All agreed to be the subject of case studies for this report. The information in the case studies comes from a combination of the responses to their returned surveys and follow-up phone calls and e-mails. Figure 1 in chapter one shows the locations of each of the fare-free systems including the following five case study sites: • Corvallis (Oregon) Transit System • Cache Valley Transit District (Logan, Utah) • Breckenridge (Colorado) Free Ride • Advance Transit (Upper Valley of New Hampshire and Vermont) • Link Transit (Chelan–Douglas Counties, Washington) PublIc transIt agency that converted to a Fare-Free system In an area wIth a strong unIversIty Presence corvallis transit system Agency and Community Background The city of Corvallis is located in central western Oregon (Figure 2). It is the county seat of Benton County and the location of Oregon State University (OSU). As of the 2010 United States Census, the population was 54,462, including the 20,000 OSU students. Corvallis Transit System (CTS) is a small urban system owned and operated by the city of Corvallis that uses eleven 35-ft buses to carry approximately 2,100 passengers a day. Fare-free paratransit service is pro- vided through contract by Benton County’s Dial-A-Bus. CTS received revenues from Federal 5307 and JARC (Job Access and Reverse Commute program) 5316 sources through a state grant, fares (including group-pass programs), a direct contribu- tion from OSU, local property taxes (the general fund share), rental of space on the buses for advertising, and revenue from the Oregon State Business Energy Tax Credit program. OSU students account for 43% of the overall CTS rider- ship. OSU faculty and staff account for another 4% of rider- ship. Both of these groups were riding “fareless” through group-pass programs. The students were paying a small amount ($2.76 per student per term) through their quarterly student fees for unrestricted use of the public transit system, and the university provided $20,000 per year to CTS to allow faculty and staff to ride fare-free. The university was sup- portive of these group pass programs to help ease parking pressures on campus. Cash fares, coupons, individual bus passes, and group pass programs (that included a number of businesses) accounted for approximately $330,000, or 14% of the agency’s $2.4 million operating budget. The base cash fare was $0.75. Corvallis has long been very progressive and supportive of public transportation and environmental and social initia- tives. That environment was important to the process of the system becoming fare-free. In 2008, the Corvallis Sustainability Coalition, a grass roots group of organizations and citizens, held a series of town hall meetings, attended by more than 500 citizens, to gather public input on how to make Corvallis an even chapter four case studIes

37 more sustainable community. The result was the Commu- nity Sustainability Action Plan, which listed more than 300 action items in 12 topic areas. Eventually, five action items were presented to the city council, one being to pro- vide fare-free transit in the community. This was proposed to encourage increased ridership, reduce air and water pollution and greenhouse gas production, and to increase the availability and ease of transit service to seniors, youth, and low-income community members. Funding Support for Fare-Free Service To replace the lost farebox revenue, a small monthly transit fee of $2.75 a month charged to Corvallis Utility residential customers was proposed. The fee would accomplish three things: replace farebox revenue; replace the amount of local general fund (property tax) that funded public transit; and add a small amount for system expansion. On a 5 to 4 vote, the city council supported the change for sustainability rea- sons, but also to reduce the competition for general fund dollars used for other critical city services including police, fire, library, and parks and recreation. There was consider- ation given to lowering the transit fee to the level where only the general fund component was being replaced, but it was ultimately decided to include the costs of replacing the pas- senger revenues and small expansion components to provide more service than what the citizens were already paying for in their property taxes. The new Transit Operations Fee also eliminated the $2.76 quarterly student fee. Fare-free transit began on February 1, 2011, and the new Transit Operations Fee began to appear on monthly city services bills. The fee paid ranged from $2.75 for a single household to more than $1,000 for a business. All passengers could now board fare-free without the need to show any kind of pass. Individuals were provided the opportunity to obtain a refund for previously purchased bus passes, coupons, and day passes. There were a few letters to the local newspaper objecting to the three new fees for transit, sidewalk mainte- nance, and street tree maintenance by people who thought they were of no or little personal value. However, there has been no recognizable resistance or push-back to this new fee. Operations and Security Issues No employee positions were reduced as a result of going fare- free. Only one employee was required to take farebox revenue to the agency’s financial institution, a task that took only a few hours per week. This employee was assigned additional non-transit duties to complete his work schedule. Transit staff discussed the issues they would need to be pre- pared for, but did not complete a cost-benefit analysis. They anticipated an increase in ridership in the range of 20%–50%. They also anticipated issues with overuse of the system by the homeless (the buses becoming rolling homeless shelters) and individuals presenting behavioral challenges. The results of the change to a fare-free system have been impressive. Ridership increased more than 24% the first month and 43% the second. Even though ridership has increased sub- stantially, the buses have been able to stay on schedule more easily even with increased numbers of stops being made. The time for boarding has been reduced significantly. CTS still requires people to enter the front door for a greater sense of control and safety. After two months, there was still sufficient capacity to handle the additional passengers. No passenger has been denied boarding as a result of inadequate capacity, but the agency is monitoring this carefully. No new service had been added at the time of this report, although the new fee produced $75,000 (plus anticipated match) to increase service hours. CTS provides 30-minute service dur- ing peak hours and 60-minute service off-peak. The staff identified a few other factors that might have con- tributed to the increases in ridership. Gas prices have gone up sharply in Oregon, as they have in other areas of the coun- try. Coincidentally, the parking control for the customer free zone in downtown Corvallis went from an unlimited time to a three-hour limit. This was done totally separately from the transit fare change, and likely has little if any impact on transit use. OSU also has accepted more international students who might have more comfort using public transportation. How- ever, CTS staff believes that the fare-free policy is clearly the reason for the vast majority of the increase in ridership. Staffers have not yet had the opportunity to survey the rid- ers to find out how many are new to the system and how many are veteran riders who are using it more. Anecdotally, they have seen and heard from new riders and claim they know previous riders are using the system more. No significant complaints have been received. Nor has the agency experienced any new issues with mem- bers of the homeless community or increased behavioral issues FIGURE 2 Corvallis Transit System, Oregon.

38 with teenagers; therefore, no additional supervision or security has been required. Operators were wary of the conversion to fare-free service before it was implemented. Management speaks with drivers on a daily basis and although there are always concerns, drivers have been pleasantly surprised that there has been no increase in incidents. CTS staff believes there might be two reasons that problems that have plagued other experiments have not surfaced in Corvallis. First, the city already had a group pass program that allowed the local school district middle and high school students to ride free by showing a valid ID. Hence, they were already riding fare-free and were aware of rules of behavior. Second, during the previ- ous two years, the city allowed homeless men to travel from the downtown transit center to the cold weather shelter on a specific route once in the morning and once in the afternoon. Staff believes that since these two groups were already familiar with the code of conduct, the transition to fare-free service was smoother than in earlier fare-free demonstrations in places such as Denver, Trenton, and Austin. As a precaution, staff and the citizen’s advisory commission have discussed putting a policy in place that would require the trip to be destination-based if this becomes a problem. A portion of the system, the Philomath Connection (PC), had free two-way transfers and used the same fare structure as CTS. PC is a service connecting Corvallis and Philomath, and the bus and local match are provided by the city of Philomath. The PC did not go fare-free; therefore, although the trans- fer from the PC to CTS is still free, riders transferring from CTS to PC must pay the PC fare. The only other complica- tion is that the fare for CTS Paratransit is also free. CTS’s contractor had to set up the billing system to charge no fares for those rides as opposed to other rides provided to seniors and persons with disabilities, including paratransit rides in the PC service area. Livability and Other Issues The fare-free service is simply too new to have had the time to influence development in Corvallis. Anecdotally, CTS has received comments that riders appreciate the fare-free system and view it as a community livability factor, and others have commented that they see the positive impact this change has made in the contribution to making Corvallis even more liv- able. Staff is not aware of either positive or negative impacts on parking and no survey has been done. Annual ridership for July 1, 2009 through June 30, 2010 was 700,791. For FY 2010 to 2011, ridership is projected to be more than 850,000, even though the fare-free program did not start until February 1, 2011. Ridership for the most recent month had increased to more than 100,000, leading staff to anticipate that ridership will increase to at least 1,200,000 in the next fiscal year, which would represent an increase of 71% in one year’s time. PublIc transIt agency that establIshed a Fare-Free system From IncePtIon wIth a strong unIversIty Presence cache valley transit district Agency and Community Background The Cache Valley Transit District (CVTD) is headquartered in Logan, Utah, and serves 11 municipalities in the Cache Val- ley, in the northern part of the state (Figure 3). Logan is the county seat of Cache County and the home of Utah State Uni- versity. The population of the CVTD service area is approxi- mately 80,000. The agency operates 36 vehicles of 35 ft and 40 ft length. CVTD operates a hub and spoke system with city routes that are designed to meet at the transit center every 30 minutes in a pulse fashion. Managers noted that the fare- free service definitely allows the buses to maintain schedules more effectively. They have significant ridership during peak times, which can make staying on time a challenge even with no one paying fares. The fixed-route system carries 2 million passengers a year and enjoys a very productive rate of 39 passengers per hour. Students at Utah State account for approximately 45% of the total ridership. The system provides approximately 30,000 paratransit trips a year, which are also fare-free. Commuter service is provided that crosses the border with Idaho. Funding Support for Fare-Free Service CVTD is funded primarily through a 0.3% local option sales tax. It also receives 5311, 5307, and 5309 funds through FTA. Advertising on vehicles generates additional funds. Initially the sales tax was passed by only the voters in Logan City, and FIGURE 3 Cache Valley Transit District, Utah.

39 the transit district was first created as a department of Logan City. In 2000, the voters in nine other cities and the county were allowed to vote on creating a regional transit district and passing the sales tax. This vote created the Cache Valley Tran- sit District. From 2000 to 2007, CVTD contracted to have ser- vices provided by the Logan Transit District. In 2007, CVTD officially separated from Logan City and became a special- ized service district or authority under Utah code. The original policy board initiated the fare-free philosophy in 1992. The Cache Valley area is a very conservative commu- nity, and the original intent was to retain the fare-free policy for only the first year of operations. According to Transit Direc- tor Todd Beutler, the board at the time doubted that enough people would want to use public transit in such a conservative community, and believed that offering fare-free service would attract riders. Although only intended to be fare-free for one year, it remains so 19 years later. The voters of each commu- nity the district serves had to pass the local option sales tax to join the district and receive fare-free service. The district board, now with 19 members, sets goals for management and then lets management determine how to best achieve those goals. The board’s diversity results in goals that are broad and supported by all members, whether they are conservative, moderate, or progressive. The district board has adopted the following mission: “To offer innovative ser- vices that reduce dependency on the automobile.” The agency believes that operating fare-free is an important tool to use to achieve this objective. CVTD studies the fare-free issue in its short range transit plan every five years. In the last plan, completed in 2006, it was estimated that CVTD could lose up to 50% of its rider- ship if a fare was charged at a level to cover the costs of imposing the fare. A phone survey was conducted as part of the short-range plan. One of the survey’s findings was that the primary reason non-riders did not use CVTD’s ser- vices was because of the inconvenience associated with rid- ing transit. The agency believes that imposing a fare would make using the system more inconvenient. If a fare were instituted, CVTD states that it would need to increase head- ways to allow extra time to collect fares. It would also need to create fare zones and transfers, prepare fare media, and gear up for all the activities associated with collecting fares. These are the primary reasons CVTD has chosen to remain fare-free. Unless the board’s goals change, staff anticipates that CVTD will remain fare-free. However, they will be studying the fare-free philosophy again this year in the Short Range Transit Plan. They want to make sure their current under- standing of conditions and community attitudes are support- ive of continuing the fare-free policy. If they are presented with information indicating conditions have changed and policies need to be reconsidered, it will be shared with the Board for discussion. The staff believes that if any fare were to be charged, it would not be a minimal fare, which is sometimes used with the intent of keeping problem passengers from riding the service. Operations and Security Issues Transit managers report that they have a very respectful com- munity, and undesirable passengers might represent only 2% of all riders. Indeed, in 2005 and 2007, Morgan Quitno, a research and publishing company based in Kansas that com- piles statistics of crime rates, health care, education, and other categories and ranks cities and states, determined the Logan metropolitan area to be the safest in the United States (44). In their response to the questionnaire, staffers provided considerable detail on how they deal with vagrants or disrup- tive passengers. Because this topic comes up quite frequently when the subject of free fares is discussed, it is worth provid- ing their responses in this report. There are several passen- gers that will ride the buses to pass the time. Operators allow this so long as they are not causing problems. However, after one round trip, operators specifically ask them where they are going and put them on the appropriate bus or make them switch to another route. They are vigilant in making sure it is the passenger’s behavior that is monitored (not just their presence) and the basis for any action they might take. The staff reported that not many individuals do this, and even some of the elderly like to get on and ride around to see the sights or visit with people, which operators do not mind. They view this as a quality of life issue and if passen- gers are being respectful, then they see no harm. A few years ago, CVTD suspended an elderly woman’s riding privileges because she violated the agency’s policy on round tripping. This incident made international news. The woman took the issue to court, claiming her rights were being violated, and the court cited CVTD. CVTD re-instated her riding privi- leges as soon as she agreed to abide by the conduct policy. Although Cache Valley is considered to be a safe com- munity, system managers, like agencies elsewhere, note that they have vandalism and disruptive behavior. The drivers have the authority to ask passengers to leave their bus and the agency allows them to make the initial determination on the length of time they should be denied boarding. Drivers can keep disruptive riders off for one trip or one day. If they want them kept off longer, they give the individual the card of a member of management and tell him/her to talk with the manager before riding again. Item 30 in CVTD’s conduct policy reads: “The General Manager will take a picture of the person which will be posted in the operations facility; this picture cannot be used for any other purpose than to inform CVTD representatives that the person’s riding privileges have been suspended or restored.”

40 The pictures allow the drivers to know which individuals to keep from boarding the bus. Most of the drivers already know the violators. The individuals know that if they try rid- ing while they are suspended the punishment will be much greater than if they follow the process. Word spreads quickly about how they deal with individuals when they follow the process and when they do not. Before an individual can have riding privileges restored, he/ she must meet with CVTD staff, with a legal guardian if nec- essary. The proper behavior for riding the bus is explained, and the person must sign a contract promising to abide by the rules before having riding privileges restored. This meeting resolves most issues. If the individual cooperates, the time of revocation is brief, but if he/she does not, the policy is followed in full. Almost all individuals value the opportunity to ride and agree to cooperate. CVTD reported that it has only a few times had to keep someone off the bus for more than a month. CVTD has a police substation inside its transit center with the logos of the county sheriff and the local police depart- ment prominently displayed. Law enforcement personnel have all the necessary equipment in the office to file reports. CVTD contracts with the sheriff’s department to provide a deputy at the transit center for four hours each day during peak times. The deputy has CVTD’s radio frequency, which enables bus operators to make direct contact with him/her if necessary. Most of the deputy’s time is spent at the transit center, but he/she can board the buses if there is a problem or go to stops in his or her car. This has been reported to be a good partnership and helps CVTD maintain control. CVTD instructs its supervisors and the sheriff’s department that it prefers warning unruly passengers at least a couple of times before resorting to discipline because it wants peo- ple riding the bus. The CVTD manager emphasized that the agency does not want riders removed and wants them riding again as quickly as possible. CVTD believes it does not have larger problems because it treats all individuals with respect. The use of security cameras allows CVDT to deal with van- dals quickly and effectively, and word of this tends to spread. The agency repairs any vandalism immediately to demonstrate a zero tolerance for such behavior. CVTD reports that its bus operators are highly supportive of the fare-free system. Livability and Other Issues CVTD’s fare-free policy has been the source of political pres- sure on other nearby systems that have had to justify why they charge a fare when CVTD does not. Initially CVTD did not connect with any other systems. In 2006 it began provid- ing service across the state border into another transit sys- tem. Recently that system started providing midday service to CVTD’s transit center. Because the morning and evening service CVTD provides to the system in Idaho is fare-free, the Idaho system elected to provide the midday service fare-free, even though this has resulted in lost revenues. The fare-free policy has had no major impact on parking in cities but, not surprisingly, CVTD managers note that it has helped reduce the required parking at the university, which has been able to eliminate existing parking lots and build more facilities. In terms of livability, the transit service has enabled more discussion of higher density housing. A county-wide planning process conducted in 2010 dealt with better land use planning and Transit-oriented Development (TOD) planning; however, the transit agency has not been able to determine if any new development has gone forward as a result of the availability of its service. There is a vocal minority of non-riders that strongly believes a fare should be charged to ensure that riders are paying their “fair share.” However, surveys conducted by CVTD revealed that passengers are very supportive of the fare-free policy, as is the majority of the population in the service area. CVTD intends to expand the system as revenues allow to meet the growing needs of its community. The agency anticipates asking the voters for a second tier sales tax in the next few years to provide the funding necessary to meet the growing need. Fare-Free PublIc transIt In a resort communIty breckenridge Free ride Agency and Community Background Breckenridge, Colorado, is one of many ski resort towns in the Rocky Mountain States that provides fare-free transit service (Figure 4). All the systems it connects with also provide FIGURE 4 Breckenridge Free Ride Transit System, Colorado.

41 fare-free service. The permanent population of the town is 3,400, but the community is host to more than 50,000 visi- tors on busy weekends. The transit service the town provides called “Free Ride” is considered essential in the winter to manage this substantial increase in population. Thirteen buses of varying lengths are used to provide fixed-route service. The town contracts for complementary paratransit service, which is also provided fare-free. The system reports that it car- ried 669,208 passengers in 2009. Breckenridge is the most visited ski area in the country. The town is very environmen- tally oriented and pro-transit. Free Ride is a complementary system to the one that is oper- ated by the Breckenridge Ski Resort and the two separate tran- sit systems coordinate their efforts. The public transit mission is to move the low-income job access commuters to and from work, encourage guests to park their cars for the entire day to eliminate all-day gridlock, move the overnight guests into town for the restaurants and nightlife, and provide convenient trans- portation for residents. The system is intended to enhance the guest experience, which in turn can make the difference in the choice people make to return to Breckenridge for another visit. As the Free Ride transit manager put it, “Everything we do is feeding the economic engine.” She noted that public transit is seen as providing important value in the community. From its inception, the town council decided to offer the service on a fare-free basis. Charging a nominal fare had been considered, but survey data and cost-recovery projections pro- vided reasons for the system to stay fare-free. A consultant estimated the system would need to charge a minimum fare of $1.00 to break even on the costs of fareboxes and other money- counting equipment and facilities, and for the on-going costs of administration (collections, counting, and accounting). Free Ride carries a significant percentage of choice rid- ers. Many of the trips taken on Free Ride are short, and sur- veys revealed that people would more likely move their car more often than have to pay a fare for multiple short trips. In addition, skiers often do not carry change or cash, which would pose a problem during the boarding process. Survey data indicated that there would be a 35% to 45% decrease in ridership if a fare were charged. The result would be far worse traffic congestion, streets that were not as safe, and a less attractive community to visit and live in. Funding Support for Fare-Free Service Transit service is funded through the town’s general fund, which is supported through a sales tax, an accommodations tax, and real estate transfer taxes. Although none of these sources is dedicated to transit, there is a $2 surcharge on the town’s parking facilities that is directed to transit. This sur- charge provided $78,000 dollars in 2010, which is only a small portion of the $2 million operating budget, but it does help to relieve some pressure on the general fund. The biggest challenge the system faces is funding sustain- ability. Without a dedicated revenue stream, the system is described as “a big tap” on the general fund. When revenues decline, as they did during the recent recession, the agency has had to make hard choices about what services to scale back. There has never been any noticeable negative public comment from any elements of the community regarding the fare policy. Free Ride still carefully manages its costs and has scaled back summer operations in recent years in reac- tion to the downturn in the economy. The budget for Free Ride had been as high as $2.8 million in 2007. The town is exploring alternative tax options with a partial dedication to support transit to take to the electorate at a future date. Operations and Security Issues Free Ride’s Transit manager stated that its bus operators are very supportive of the fare-free policy and that they enjoy being ambassadors for the town. They have more time to answer guest questions than they would if they had to collect fares. It makes for a more positive experience when guests receive assistance and personal attention. The fare-free system has also helped Free Ride to provide on-time service, except at some peak traffic days/times, but during those times bus service is no slower than the general traffic. The system has steadily gained ridership over the 14 years since its inception. The agency believes that people return to Breckenridge as a choice destination at least par- tially because of the convenience and positive experience they have with Free Ride. Free Ride’s Transit Use Policies and Guideline document prohibits loitering and riding without a destination. Buses also have on-board video surveillance technology. Through a zero-tolerance policy, drivers effectively eject anyone who is not complying with their use policy. Free Ride’s transit operators are empowered to have any- one violating system policies removed at the next bus stop. They are required to radio the supervisor where they left the individual. Supervisors provide support to the operators and have the difficult conversations with passengers who are offen- sive or disruptive. Law enforcement is called as a last resort, but is supportive. The individual is charged under local ordi- nance for “hindering public transportation,” because the bus does not move until police respond. Hindering is the mini- mum charge; the individual might also be charged with dis- orderly conduct or other offenses. The driver follows specific protocols, attempting to re- direct the person’s behavior twice. If after two attempts the rider is still being belligerent or not complying, the driver will ask him/her to disembark. If the person will not get off the bus, then dispatch is called. The supervisor and/or police respond depending on the situation. The agency prefers to

42 have clearly abusive people charged with hindering so it can seek a restraining order. The judge in town will only permit Free Ride to deny service to someone for a 24-hour period if operators or supervisors remove him/her from the bus. How- ever, when police are involved and charge a passenger with a violation(s), a court order can deny service. The judge in Breckenridge has issued 90-day, 6-month, 1-year, and per- manent suspension of bus privileges, depending on the trans- gression. The on-board video has been very helpful for such prosecution. Local riders, particularly the low-income job access com- muters, often help the driver because they know the bus will be stopped until a supervisor or police officer arrives. They will use peer pressure to persuade the passenger to stop because they do not want to be late for work. Given Breckenridge’s status as the highest-rated North American ski resort for nightlife, the actual number of incidents is fairly low (45). Nonetheless, the agency believes its policies have proven to be effective and feel very fortunate to have the support of the local police department and municipal court. Livability and Other Issues The managers of Free Ride take pride in the contributions its system makes to improve the environment and livabil- ity of Breckenridge. Between 1997 and 2010, they calculate that Free Ride has eliminated more than 1,730,557 pounds of carbon emissions. They also reported that there has been transit-oriented development that includes low-income hous- ing, which is critical to provide in a service-based economy where the average cost of housing is well above $500,000. The following excerpts are taken from a Livability Grant application submitted by Breckenridge in 2010 that demon- strates the town’s awareness of the significance of its transit services to improved livability: The Free Ride Transit System is a fixed route, year-round transit service that services many transit dependent seasonal workers, local residents, and visitors to the community within the Town limits. The Town of Breckenridge has 3,407 full time residents based upon the 2000 Census. Maximum peak population can swell to more than 50,000 people on any given day during the peak winter season in the Upper Blue Basin. Providing transit service to job access commuters, local residents, and visitors partaking in the recreational activities to reduce traffic conges- tion and maintain livability in our small Town is the goal for the Free Ride Transit System. The Town of Breckenridge has made significant investments in both current and future affordable housing projects, which are transit oriented by design. The Free Ride provides transit and walk-ability access to recre- ation, medical, educational, shopping, dining, affordable hous- ing, residential neighborhoods, Main Street, and Town Hall. A parking spot in Breckenridge is the new kind of gold and the Free Ride makes it possible to keep the cars parked all day and get people to wherever they need to go, both free—without fare—and with easy convenience. The Town of Breckenridge Free Ride Transit System hit an all time yearly high for ridership in 2008. The Free Ride provided 688,461 passengers with a free ride, which was a 19.7% increase in ridership over 2007. The carbon emissions vs. if the same people had driven their own cars, resulted in 202,336 pounds of carbon dioxide that were saved from our environment in 2008 because they took a Free Ride. System ridership in 2009 declined by 2.8%. We had a very strong start to the year, with January 2009 being our all-time record monthly high ridership total of 154,624 passengers in a single month, and then our ridership was impacted by having to reduce service levels from mid-April through mid-December for budgetary reasons due to the economic climate. Free Ride Transit service in 2009 saved another 196,671 pounds of carbon dioxide from the environment in our community. Free Ride’s manager sums up livability by noting that Breckenridge has a quality of life that is unsurpassed, with year-round recreational opportunities where people can live, work, and play in one of the most beautiful and natural places in the world. The community is committed to being green and sustainable on behalf of its residents, employees, and visitors and it understands the value of fare-free transit and livability to its own economic competitiveness. Another interesting bit of information provided by the tran- sit manager (and that was also noted by other fare-free transit communities in resort areas and university towns) was that homes with transit access might not have more value than homes without, but they tend to sell faster. Rental units with direct transit access also have fewer vacancies and rent more quickly than rental units without such access. Fare-Free PublIc transIt In a small urban/rural communIty advance transit, upper valley of new hampshire and vermont Agency and Community Background Advance Transit (AT) is a private nonprofit organization pro- viding service to six towns in two states, Vermont and New Hampshire (Figure 5). The population of the service area is approximately 38,000. Hanover, New Hampshire, is the home of Dartmouth College. In 2010, the agency provided 850,000 free trips, including paratransit trips, with 30 vehi- cles. The political environment varies widely, with a mixture of conservative and progressive philosophies, although it was not a factor in the establishment of fare-free service. The area is also generally supportive of environmental goals. In 2007, CNN and Money magazine rated Hanover the second- best place to live in America (43). In the middle of the 1980s, the town of Hanover started a shuttle funded jointly by the town, the Dartmouth Hitchcock Medical Center, and Dartmouth College. These park-and- ride shuttles were fare-free and designed to encourage people to avoid bringing their cars to the major traffic generators

43 of the college and medical center, which were very close to each other at the time. In the early 1990s, the medical center moved approximately six miles south of the college. A new type of service was needed, and AT became the provider. AT had been a provider of fixed-route service that charged tra- ditional fares since its inception in 1984. In 1994, a fare-free zone between Hanover and the Dartmouth Hitchcock Medi- cal Center was established with some revenues from Dart- mouth College and the medical center to support the cost of the service. Between September 2000 and January 2002, AT eliminated fares throughout its system in three phases; since January 2002, AT has been totally fare-free. A major goal of the agency and community was to discourage automobile use and reduce carbon emissions. A complementary motivating factor for this initiative was to reduce parking demand and the eventual need for a major capital expenditure for park- ing facility construction. Through efforts initiated by AT’s executive director, the agency was able to institute its fare- free system in part because there were sufficient revenues from other sources to cover its match requirements. Funding Support for Fare-Free Service Advance Transit’s operations are funded through a diverse range of federal, state of New Hampshire, state of Vermont, and local funds, including contributions from municipali- ties and major community institutions as well as emerging philanthropies and broad-based community sponsorship. AT generates approximately $40,000 annually through over a dozen sponsorship contracts. Among rural transit programs in the nation, Advance Transit has developed one of the most innovative and diversified funding packages to support its operations (10) (Table 20). The amount of revenue AT had collected through the fare- box did not change much between 1984 and 2002, but shrank as a percentage of total revenue from 10% to about 3%. The initial commitment to operate fare-free was for a two-year trial period based on the major contributions made by the college and the medical center, with little analysis involved. Given its track record of creative partnerships, AT believed it would be able to replace the lost revenues with other con- tributions. Fare-free transit was also considered to be more attractive and effective than modest fares in order to encour- age people to use their cars less. FIGURE 5 Advance Transit, Upper Valley of New Hampshire and Vermont. Source of Funds Amount of Funds Federal Section 5311 from State of New Hampshire $1,497,509 Federal Section 5311 from State of Vermont 180,688 State Funding from New Hampshire 34,000 State Funding from Vermont 135,403 Municipal Contributions 338,695 Institutional Contributions 762,381 Dartmouth Hanover Shuttles 359,608 Rideshare 82,920 RTAP 7,000 Philanthropy/Other 135,500 Total $3,352,705 TABLE 20 ADVANCE TRANSIT REVENUE SOURCES (JUNE 2008)

44 AT’s executive director reported that the funding environ- ment is challenging, but the economic climate has tradition- ally been relatively healthy. Maintaining the fare-free policy has required study, continuous explanation, justification, and political support from advocates. Some officials question why municipalities are asked to contribute when passengers pay no fares. In the past four years, a new fundraising program has attracted a thousand new donors and sponsors generating more than $100,000 annually. Operations and Security Issues Originally, a fare-free zone was established between the col- lege, medical center, and downtown Hanover without a dra- matic increase in ridership. Ridership began to increase as service planning improved, with more frequent and direct service, and then rose more sharply as the system-wide fare- free policy was implemented. AT has a broad range of demographics among its riders. It has had a few incidents with teenagers or the homeless, but not so many that it has reconsidered changing its fare- free policy. The agency reports no more evidence of a lack of respect toward drivers or incidents of rowdiness than might be expected in a public transit system that charges fares. The system bus operators and the administrative staff all appreciate the fare-free policy. Increased boarding activity slows the bus, but boarding time per passenger is reduced. Ridership has grown to the point that current schedules could not be met without this policy. However, the system cannot handle many more passengers within existing budgets and headways. The executive director notes that while passengers universally prefer riding free to paying a fare, some believe that paying a fare might increase the financial viability of the service and have indicated a willingness to pay. Many riders contribute to annual fundraising campaigns. As a non-direct recipient of federal funds, AT did not pro- vide complementary paratransit service prior to 2007. At that time, however, it was determined that the agency was required to implement it. By law, 100% of the demand for service by those that qualify must be met regardless of cost. Because a fare is not charged on fixed-route service, it cannot be charged on ADA paratransit service either. Fare-free paratransit is attractive but much more costly to provide. The large growth in fixed-route ridership has placed pressure on transit sched- ules and increased demand for improvements such as bus stop amenities. The increased volume of riders results in more ciga- rette butts and trash at bus stops, which has generated com- plaints from property owners, both public and private. AT has added one administrative position and additional drivers for added ADA service. On the fixed-route side, it has three times as many riders as before the fare-free policy took effect with no additional administrative positions. Livability and Other Issues Passenger surveys indicate that in 2008 more than 50% of transit passengers had a car available for their trip. Ten years before that the figure was 25%. During that time frame ridership tripled, indicating that the agency has succeeded in persuading people to leave their cars at home and take the bus. The fare-free policy has lessened the need for parking, although some businesses that offer free parking have occa- sionally complained about people parking their cars at their properties and taking the bus. According to an impact study by Vital Communities com- pleted in 2005, it was calculated that AT service contributed to an annual reduction in airborne pollutants of five tons based on ridership at the time (10). An updated air quality analysis is being conducted by the regional planning commission and will be completed in 2011. The net reduction in air borne pollutants is expected to be significantly greater owing to lower emissions buses and higher ridership. Livability is considered a subjective term by many, but AT’s executive director would consider the reductions in air pollutants a factor that improves livability. Another is the ease and affordability for low-income users and developmen- tally disabled users that find fare-free transit easier on their incomes and their ability to navigate the system. Despite the growth of choice transit riders, more than 100 individuals have reported reliance on transit service to commute to and from work. It cannot be quantified what that number might have been if fares were in effect. AT reported that real estate listings and rental housing list- ings always mention if they are on the bus line. Very recently, a private developer with experience in transit-oriented devel- opment approached AT with a proposal to build a mixed-use development that would include a new transit hub, and com- munity meetings are being conducted to receive input on the proposal. In October 2008, CTAA completed a report entitled An Analysis of the Impacts of Introducing a Fare for Riders of Advance Transit (10). This analysis carefully considered the loss in ridership that could occur under different fare levels and the new expenses the agency would incur to collect and account for fares. It also identified other impacts on air pollu- tion, access by low-income riders, traffic congestion around the major employers, and the need for more parking, but did not make a recommendation. The summary of the report’s findings is provided here: • AT ridership is currently at record high levels. • Nationally transit ridership is also at record high levels. • AT’s fuel costs have escalated significantly, with bud- geted fuel costs for 2009 double that of 2008.

45 • Public transit programs are not self-sustaining through fares. • Removal of fares in 2000–2002 resulted in approxi- mately 32% more riders. • Introduction of a $1 fare would reduce ridership by approximately 30% or by 62,400 riders annually. • Introduction of a $1 fare would generate $145,600 in new revenue. • Some transit services might continue to be fare-free. • The annual operating cost of a fare system would be approximately $53,350. • The initial capital cost of a fare system would be approx- imately $441,450. • The public may recognize that higher fuel costs can justify imposition of a fare. • The current economic climate is not conducive to increas- ing costs for public services. It was decided to continue to operate fare-free after ana- lyzing all the potential impacts. However, this position has to be defended every year before local city/town councils that contribute to AT. With increasing fuel and ADA costs, combined with stagnating or shrinking revenues from local, state, and federal governments, as well as soaring demand resulting from rising fuel prices, fares may become neces- sary. AT managers are exploring high-tech fare systems such as contactless card readers and other technologies that would minimize boarding times and provide maximum opportunity for third-party billings. a communIty that dIscontInued Its Fare-Free PublIc transIt servIce link transit, washington state Agency and Community Background Link Transit is located in central Washington State, serving Douglas and Chelan counties (Figure 6). It serves a rural population of 105,000 spread over an area of 3,500 square miles. The agency has an annual budget of $11 million, sup- porting the operation of 55 buses and 22 paratransit vehicles, many of which are cutaways and minivans. Approximately 70% of its revenue is provided through a sales tax and 20% from grants. Only 6% of its total revenue is generated from the farebox. Given its very large service area, Link Transit provides a substantial route deviation service and some com- muter express service. It is a relatively conservative area, with a few significant recreation resorts providing the most sizeable employment opportunities. Funding Support for Fare-Free Transit Link Transit was created as a Public Transportation Ben- efit Area in 1989. The champion for creating the agency was Mayor Tom Green, who also advocated for the establishment of a fare-free system. To pay for the system, a sales tax of 0.4% was proposed. This would be added to revenues that were col- lectable from the state motor vehicle excise tax. At that time, revenues from the tax excise were provided primarily to transit agencies throughout the state. However, because there was no transit agency at that time serving Douglas and Chelan counties, they did not take advantage of any revenues that their own citizens were paying when they purchased private vehicles. Link Transit’s managers reported that the marketing strategy for passing the referendum to create Link Transit was, in essence, “Vote for transit—you’re already paying for it.” Perhaps the more accurate phrase would have been “you are already paying for most of it.” To be able to provide a fare- free system, the additional 0.4% sales tax was included in the referendum. If passed, it would support a system that would help link the various small cities in this large rural area, giving people new mobility options and providing hospitality workers in particular a very affordable way to get to work. It would be pre-paid and anyone would be able to board without paying a fare or showing any ID. Voters approved the referendum creat- ing the Public Transportation Benefit Area and the additional local sales tax by a relatively narrow margin of 53% to 47%. The advocates for the system did not do a detailed cost- benefit analysis of establishing a fare-free system. They believed that revenues from the state excise tax, the local sales tax, and federal and state grants would be sufficient to operate the system without the need for farebox revenue. They were correct, and Link Transit operated as a fare-free system quite comfortably until 1999. In that year, citizens throughout the state voted to eliminate the motor vehicle excise tax. That vote hit every transit agency in the state very hard. In Link Transit’s case, it resulted in a loss of 45% of its operating revenue. This loss of revenue resulted in a concomitant 45% reduction in service. Operations and Security Issues To deal with this devastating impact on its budget, the board of Link Transit saw charging fares as one of the few options available to them to help sustain as much service as pos- sible. In the year 2000, the agency performed an analysis of FIGURE 6 Link Transit, Washington.

46 whether it would collect more in fares than it would spend on new equipment, facilities, personnel, and services associated with the fare collection function. It found it could absorb the hours required to count fares with existing staff. Link Transit chose to rotate employees assigned to this task from among extraboard operators, maintenance staff, and IT personnel. A variety of employees was used to prevent any one person from becoming so familiar with the process that he/she might devise ways to steal collected cash without being detected. A local bank gave the agency a coin roller to help ease the process of counting fares. A decision was made to purchase basic fare- boxes for the 50 buses at a cost of only $1,600 apiece. By keep- ing costs associated with collecting and counting money very low, Link Transit was convinced that it would be economically beneficial to collect fares which, they started to do in 2001. Many of the residents in the rural service area are quite conservative, and had never completely embraced offering fare-free transit. The margin of victory in the initial refer- endum was small, and given the need to generate revenue, most residents considered charging people for direct services completely appropriate. Among passengers most affected by the new base fare of $1 were Hispanic service workers who often traveled with children. Before the institution of a fare, the entire family could ride free. Once the fare was implemented, their cost of traveling was suddenly substantially higher. It also particu- larly affected seniors on fixed incomes and disabled passen- gers who had received free paratransit service, but now had to pay for each ride. According to system managers, one of the few silver linings of this dramatic change was a decrease in complaints about “gang-like” and homeless passengers. Some individuals sus- pected there was drug trafficking on the buses, and although it might appear that those dealing in drugs could afford a $1 fare, there is a general feeling that this sort of activity, as well as vandalism, has greatly diminished. Passenger fares now account for almost $650,000 of the $11 million annual budget. Although that represents only 6% of the budget, and some relatively small expenses could be eliminated if the system was fare-free, there has been no champion to reinstitute a fare-free policy.