The issue of fare restructuring — and problems with Metro’s current fare structure — were discussed today by the Metro Board of Directors’ Finance, Budget & Audit Committee. Metro staff are currently finalizing fare restructuring options that will likely be released to the public in early 2014.
Among options likely to be looked at are offering unlimited rides on a single fare for a certain time period (for example, an hour or 90 minutes), different fares for peak and off-peak hours and a simplified zone structure and/or offering flat fares for zoned buses.
Since the passage in May of the 2013-14 budget, Metro CEO Art Leahy has been telling the public and Board members alike that staff would be proposing a fare restructuring as part of next year’s budget. The big issue: Metro is seeking to avoid a budget deficit beginning in fiscal year 2017.
On Wednesday, Leahy also outlined other reasons why fare restructuring is important. In particular, Leahy said that the bus and rail route structure was designed to encourage transfers to help people reach a myriad of destinations around Los Angeles County. The average rider, in fact, has to transfer at least once to reach their destination.
On the other hand, Leahy said, the agency has a fare structure that discourages transferring by charging the full fare per transfer. As a result, riders take longer routes to avoid transfers — and that, in turn, doesn’t promote efficient use of the system, driving up operating costs and requiring riders to spend more time on transit than they should.
From a financial viewpoint, Metro staff offered several statistics. The most significant:
•Metro’s farebox recovery rate is 26 percent whereas the agency’s Long Range Transportation Plan, released in 2009, calls for getting that number to 33 percent. Farebox recovery is the percent of operating costs actually covered by fares.
•That farebox recovery rate, according to Metro staff, is the lowest among peer transit agencies around the world. If nothing is changed, Metro would be faced with a $36.8-million deficit in 2017 that would grow in subsequent years.
•There have only been three fare increases in the past 18 years, the most recent on July 1, 2010, when fares were raised for regular riders. At that time, fares for seniors, students, the disabled and Medicare recipients was not changed thanks to Measure R.
Leahy said that if the agency chooses to do nothing, a host of problems could arise including taking on more deferred maintenance, the evaluation of service levels and the potential loss of federal grants.
Metro staff are currently finalizing fare restructure options — there will be a number of them — to be included in a public notice and hearing date. Leahy said that three to six months would be needed to implement a fare change.