Report Overview Policy versus Performance: Directions for North Carolina s Largest Transit Systems
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1 For Truth. For Freedom. For the Future of North Carolina Report Overview Policy versus Performance: Directions for North Carolina s Largest Transit Systems By David T. Hartgen Professor of Transportation Studies University of North Carolina at Charlotte dthartge@ .uncc.edu April 12, 2006 In brief North Carolina s largest public transit systems are often credited with reduced traffic congestion and air pollution, efficient land use, reduced dependence on oil, and much-needed mobility for some residents. Are they fulfilling these missions? How are they performing? Who do they benefit? What do they cost? This report reviews the performance trends for North Carolina s ten largest transit systems for the period 1997-, and forecasts performance to The review covers the large urban systems in Charlotte, Durham, Raleigh, Winston-Salem, Greensboro, Fayetteville, Asheville and Wilmington, the student-oriented system in Chapel Hill, and the commuteroriented Triangle Transit Authority in the Raleigh-Durham region. The analysis reviews trends in service, ridership, operating and capital costs, measures of efficiency and effectiveness, impacts on air pollution and congestion, and plans for expansion. The ten systems together carry about 41 million riders annually and cost 127 million annually. Although ridership has risen 37 percent since 1997, service has increased 64 percent. Costs have doubled in just 7 years. By 2010, operating costs will exceed 200 million. Most systems are increasing their dependence on state and federal government and are reducing support from riders and local government. Ridership remains primarily no-car, lower-income, minority, and to-work. Riders use the systems primarily as stepping stones for improving personal mobility. Inroads into choice rider markets have been very limited, and travel times for most systems are 1½ times drive-alone times. In total the systems serve less than 1 percent of regional commuting and impact about ¼ of one percent of regional air pollution or congestion. The plans for these systems are unrealistically optimistic, seeing them as significant players in transportation but downplaying their key role as mobility providers. Light rail service in
2 Charlotte and the Triangle will not substantially change the rider profile. The free to ride Chapel Hill system serves primarily UNC students and staff in a parking-constrained walkingscale environment which cannot be duplicated elsewhere. The report calls for an across-the-board reassessment of the role of transit services in the state s largest regions. Generally, systems should be re-cast as important mobility providers to interim customers, not as urban saviors. Increasing dependence on state and federal governments should be reversed. Farebox ratios, the percent of costs that riders pay, should be no less than 25 percent. State support for operating assistance should be uniform across systems and be no more than 25 percent of budget, with growth limited to inflation plus population growth. Route and service expansion decisions should be based on ridership and cost criteria. Operations should be privatized to the maximum extent possible. Services should be coordinated with school and client-agency needs, and in some regions consolidation of operations should be considered. Requests for capital expansion (not just replacement) should be scrutinized skeptically and vehicles sized to fit demand. New start proposals should be delayed until experience proves out ridership estimates; proposals should be based on independently prepared forecasts of ridership and costs. New start investments should be subtracted from regional allocations. Options should be limited to bus-only service. Long-range plans should be revised to show transit roles realistically. These actions will ensure our ability to provide continuing fair support for needsdriven markets across the state. Introduction North Carolina has 105 public transit systems, including 22 urban and regional systems, 71 rural on-demand call-in services, and 12 client-oriented systems serving special groups. The ten largest systems together carry about 41 million unlinked trips and incur about 127 million in annual operating costs. However, performance varies widely. Some systems operate quite effectively with relatively high usage while others carry few riders. In some regions, rider revenues or local government provides the primary support while in others the state is the primary source. There has been no recent assessment of the larger transit systems. They are often credited with reduced traffic congestion and air pollution, efficient land use, reduced dependence on oil, and mobility for auto-less travelers. But transit service cannot serve all goals in all regions. Therefore it should be assessed realistically in each region, against the characteristics of its present and future ridership base and its present and future costs. This study reviews the state s ten largest transit systems: Charlotte, Durham, Raleigh, Winston-Salem, Greensboro, Wilmington, Fayetteville and Asheville, the commuter-oriented Triangle Transit Authority, and the student-oriented Chapel Hill system. Detailed profiles are prepared for 1997-, then forecast to The study develops recommended strategies for each system and for the group as a whole. The study is not critical of the well-intentioned decisions of public officials, system managers or funding agencies. Instead it is an objective, data-driven assessment of where these systems stand today, where their plans propose to take them, and the likelihood of achieving those visions. Overall Picture North Carolina s 10 largest transit systems have grown substantially in service, ridership and operating costs in the past several years. Between 1997 and ridership increased 37 percent, but service increased 60 percent and operating costs increased 106 percent. If trends continue, by 2010 operating costs will be over 200 million annually, and the state s share will be close to 40 million. Capital fund costs are expected to be about 123 million annually. 2
3 Figure II.A.1: Key Statistics, Top 10 NC Transit Systems 250,000, ,000,000 Summary of Key Statistics (Aggregate) Historical Projected Total Total Capital 150,000, ,000,000 50,000,000 0 Annual Vehicle Revenue Annual Unlinked Trips (Total) For most systems responsibility for operating costs are shifting from riders and localities to the state and federal governments; 6 of the ten systems are predicted to have a state share of more than 25 percent by Rider shares of cost, now 17.5 percent, is predicted to fall to 13.7 percent. Capital fund support is also shifting to state and federal levels. Table II.A.1: Overall Trends, 10 Largest NC Transit Systems 1997 Percent Change Pct Change Ridership, m. trips Rev. Vehicle-, m Cost, m Federal Share, % Local Share, % State Share % Rider Share % Op. Cost per Trip, Capital, m Share of Travel, % 0.24 % 0.28 % % 25.0 Riders Charlotte, at 18.9 million annual trips, has the highest ridership; Triangle Transit Authority, 970,000 annual trips, the lowest. Chapel Hill has the second highest ridership, 4.9 million trips. Eight of the ten have increased ridership since The most rapid growth has been on the largest system, Charlotte. In most regions ridership growth has been higher than the growth of overall travel. Two systems Raleigh and Winston-Salem - declined in ridership between 1997 and. 3
4 Figure II.C.1: Ridership Trends WINSTON-SALEM DURHAM GREENSBORO ASHEVILLE CHAPEL HILL RALEIGH CHARLOTTE FAYETTEVILLE Transit Ridership Trends WILMINGTON Trips97 Trips00 Trips03 Trips However, these systems still constitute a small portion of regional travel: only 3 systems (Charlotte, Durham, and Chapel Hill) have a greater than 1 percent commuter share. The impact of these systems on regional travel is very small: in the aggregate, these systems offset about ¼ of 1 percent of regional automobile travel. Ridership rates (annual trips per capita) vary widely, from 94 annual trips per capita (Chapel Hill) to 3.4 annual trips per capita, for the. Figure II.C.2: Trends in Annual Trips per Capita WINSTON-SALEM DURHAM GREENSBORO ASHEVILLE CHAPEL HILL RALEIGH CHARLOTTE FAYETTEVILLE Transit Trips per Capita 100 WILMINGTON Trip/Cap97 Trip/Cap00 Trip/Cap03 Trip/Cap However, rider characteristics are surprisingly similar. In most systems, the primary ridership group, percent of riders, is characterized as captive (no auto available or owned), lower-income, and minority. Choice riders those with access to vehicles constitute less than ½ of riders on most systems. In most systems the elderly are about 3 percent of riders. Frequent use is common. 4
5 Table II.C.3: Rider Characteristics (Percents) Charlotte Durham Raleigh Winston Salem Greensboro Wilmington Fayetteville Asheville Chapel Hill No Vehicle Own/Avail Income <10K Income 10K <20K 16-20K ( 14-20) (10-25) Age > Pct to Work Pct to School Pct Minority Mean 45 min 35 min 40 min 36 min 38 min 35 min 50 min 32 min 41 min 21 min Commute Time Use 1 day 6 18 (1-2 days) 4 or less/wk Use 4-5 days/wk (3-5 days) 20 (2-4 days) Use 5+ days/wk Most systems report commuting travel times between 35 and 50 minutes, about percent longer than drive-alone times. This severely limits their ability to attract more choice riders who tend to be very sensitive to trip duration. and Capital Costs costs have been rising throughout the state. They totaled about 127 M in and are forecast to be about 202 M by Trends in Transit Costs 120,000,000 Annual Budget 100,000,000 80,000,000 60,000,000 40,000,000 20,000, Charlotte Durham Raleigh Winston-Salem Greensboro Fayetteville Asheville Wilmington Chapel Hill City About 17.5 percent of operating funds are derived from riders ( farebox ratio ) but this portion varies from a high of 44 percent in Chapel Hill (through student fees) to a low of 11 percent in Greensboro. State support varies from a low of 10 percent in Greensboro to a high of 34 percent in Wilmington. The portion of funds from state sources has been increasing, while the portion from riders has been decreasing. Figure II.D.2: Costs by Source, 5
6 ASHEVILLE WINSTON-SALEM DURHAM GREENSBORO CHAPEL HILL RALEIGH CHARLOTTE FAYETTEVILLE Op by Source WILMINGTON Fare Revenue 03 Local Revenue 03 State Revenue 03 Federal Revenue 03 Other Revenue Capital expenditures are also expected to rise sharply over the decade, reaching about M annually by 2010 (not counting rail construction). Federal funding is expected to be the primary source of these funds, but the state s share is also expected to increase. Figure II.D.3: Trends in Capital and Summary of and Capital (Aggregate) 250,000, ,000, ,000, ,000,000 50,000,000 Other Federal Assistance State Local Fare Revenues Capital Capital Capital Performance The ten systems vary widely in performance. Overall weighted average fares (annual fare revenue divided by total annual patronage) vary from a low of 25.1 cents in Wilmington to a high of 95.9 cents for. Most systems farebox ratios are less than 20 percent and declining. Table II.E.1: Performance Measures, Weighted Average Fare, cents Fare revenue % Taxpayer Subsidy per Trip Cost per Vehicle- Hour Cost per Vehicle- Mile System Cost per trip Charlotte Durham Raleigh Winston-Salem
7 Greensboro Fayetteville Asheville Wilmington Chapel Hill * Overall *paid through student fees costs per trip average 3.11, but vary by a factor of 4, from a low of 1.63 in Wilmington to a high of 7.86 for. Costs per trip and per hour have been rising. Figure II.E.1: Trends in Cost per Unlinked Trip WINSTON-SALEM DURHAM ASHEVILLE GREENSBORO CHAPEL HILL RALEIGH CHARLOTTE FAYETTEVILLE WILMINGTON Cost per Trip OpTrip97 OpTrip00 OpTrip03 OpTrip Community Impacts Contrary to popular belief, the ten systems have a miniscule impact on congestion reduction or air quality improvement. Cumulatively, these systems are offsetting 0.28 percent of regional travel. The reasons for the low impact are two-fold: first, the ridership of these systems is generally under one percent of regional travel. Second only percent of riders have autos available. Table II.F.1: Regional Impact on Travel, Daily Regional Travel, Million miles Daily Transit Passengermiles Transit Maximum Regional Impact, % Percent Riders without Auto Access Likely Transit Regional Impact, % Charlotte % 42.0 % 0.98 % Durham % 52.1 % 0.24 % Raleigh % 38.3 % 0.13 % Winston-Salem % 26.3 % 0.19 % 7
8 Greensboro % 54.3 % 0.15 % Fayetteville % 59.9 % 0.08 % Asheville % 50.0 % 0.07 % Wilmington % 59.4 % 0.14 % % 44.8 % 0.13 % Chapel Hill % 42.7 % 2.15 % All % 41.7 % 0.28 % Visions and Plans Most systems have stated visions that show considerable disconnect with the reality of their operations. The most serious weakness is the wide disparity between the very low ridership and the vision of impact on community travel patterns and environmental impacts. Second is the unrealistic vision of growth of choice riders. Optimistic forecasts, particularly ridership and costs. The plans have a distinct feelgood tone rather than a serious business expectation. Unrealistic vision of impact on community or environmental goals such as air pollution and congestion. Soft-pedaling captive ridership. No plans focused on the importance of their service to the mobility needs of no-car households. Failure to confront costs, and how to contain them. Recommendations The time has come to re-assess the direction of these systems and their roles in each community s transportation picture. 1. Re-assess mission statements. Focusing on providing mobility for captive riders, and on the economic health of the region, de-emphasize attracting choice riders or providing future choices for land use. 2. Act now to hold down escalating operating costs. The state should impose cost limitations, holding state-supported cost increases to the sum of ridership and inflation. 3. Require independent and objective forecasts of ridership and costs. The state should ensure that all forecasts of ridership and costs are independent and objective. Estimates should be accompanied by plans detailing how the funds received will be returned if the forecasts do not materialize. This is the procedure now being followed by the state s incentive grants to industries. 4. Set maximum limits on statewide operating assistance. The state should establish maximum statewide operating assistance totals, pre-specified to grow no faster than inflation plus ridership. State assistance should be no more than 25 M for FY 2007, rising to no more than 30 M for FY Impose uniform cost payment limits. The state should limit its participation to 25 percent of audited operating costs and require that riders shoulder a minimum of 25 percent of costs. These limits will ensure that local governments and riders are the primary supporters of local services. This requirement should be uniform around the state. 6. Impose uniform route expansion criteria. The state should require each system to use uniform criteria across routes for determining when to expand or contract service on routes. 7. Re-visit geographical consolidation. Most systems regions would be better served at likely lower costs, if the systems were consolidated geographically. 8
9 8. Coordinate with client-agency services. Since a high proportion of riders are transitdependent, each system should coordinate its services with client-agency services. For smaller systems serious consideration should be given to fully consolidating the present transit service with client-agency services. 9. Coordinate with school services. Given the partially overlapping system geographies and ridership for these systems and the increasing costs of each, the time has come to revisit how these systems can be better coordinated locally. 10. Review proposed capital expansions carefully. Proposed expansions of capital costs (e.g., additional vehicles), under the guise of federal cost-sharing look like a good deal initially, but later translate directly to increased operating costs which must be shouldered by the state and local governments. The state should set strict limits on what it is willing to pay for additional vehicles. 11. Slow down new start submittals. Given the tightening national criteria on the use of so-called New Starts funds, it is increasingly unlikely that systems proposed for the Triangle ( regional rail system ), the Triad (Part s planned regional commuter rail service), or Charlotte s additional transit corridors will receive finding in the immediate future. The inordinately high costs of these services drain the state s ability to provide equitable and better quality services in other regions and thus unfairly saddle the state s taxpayers with unnecessary cross-subsidies between regions. The state should prohibit systems from requesting federal New Start funds without an independent assessment demonstrating most cost-effectiveness. If New Start matching funds are committed, they should be subtracted from the state s regional allocation of transportation funds. 12. Encourage private-sector transit operations. Localities should be provided with incentives in the form of capital and operating assistance for services that are competitively bid and come in below budgeted amounts. About the Author David T. Hartgen is Professor of Transportation Studies at the University of North Carolina at Charlotte, where he established the Center for Interdisciplinary Transportation Studies and now teaches and conducts research in transportation policy. He is US Editor of the international journal Transportation, and is an Adjunct Scholar of the John Locke Foundation. He is a graduate of Duke University and is a registered Professional Engineer. He can be contacted at dthartge@ .uncc.edu, About the Study This paper summarizes the findings of a Policy Report written by Hartgen and published by the John Locke Foundation in Raleigh, North Carolina. The full study is available online at 9
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