Staff Report #4 April 25, 2018

To All Commissioners

Re: City of London Youth Bus Pass Program

Recommendation

That the Commission APPROVE IN PRINCIPLE the discount structure set out below in relation to the new Youth Buss Pass, noting this structure is subject to approval by Municipal Council.

Background

The Mayor’s Advisory Panel on Poverty was convened on September 16, 2015 and given a six-month mandate to develop recommendations on what more the community could do to address poverty in London, Ontario. The 2016 London For All – A Roadmap to End Poverty report set out a number of recommendations relating specifically to Transportation which included a recommendation to introduce a discounted transit pass for youth (13 to 18 years old).

A budget amendment was included in the 2018 operating budget deliberations which set out a number of models with respect to the provision of this new fare category. The models and options included in the budget amendment form are set out below.

Model 1: $52 bus pass for youth (ages 13-17)

1. a) $52 bus pass for all youth
2. b) $52 bus pass for youth under the Low Income Cut Off – After Tax threshold

Model 2: Extend current free transportation for children under 12 up to age 17

Model 3: Bulk purchase and re-sale of bus passes

1. a) Bulk purchase of passes and re-sale to youth (ages 13-17) at $52/month
2. b) Bulk purchase of passes and re-sale to youth (ages 13-17) at $250/year

As part of the 2018 budget update, Municipal Council endorsed a 22 month pilot program, and identified the model option 3a above. The budget amendment included, for reference purposes only, the table below which identified a possible discount structure and related net costs to the City on an annual basis.

The Council endorsement included direction for London Transit and Civic administrations to work together to bring a report back to municipal council which includes a proposed by-law setting out the discount rates that would apply during the pilot period as well as an implementation plan for the pilot program.

Analysis and review of current LTC ridership and pass sales indicated that the average number of monthly Citipasses sold system-wide over the past six month period was 4,933. Using this number as a base, it was determined that the number of passes included in each of the categories in the budget amendment example were aggressive, and in all likelihood, discounts would not surpass the first level. As such, an amended table was developed which attempts to offer greater discounts to the City, balancing the partnership between LTC and the City of London on this pilot program. The revised table is set out below.

Applying the sliding discount scale above, the potential costs to the City of London as well as the potential revenue loss to the LTC have been calculated and are set out in the following table.

The potential revenue loss to the LTC has been calculated on the assumption that all youth passes sold were existing Citipass purchasers, and as such, LTC would be short the difference between the $81 rate and the rate the passes were sold to the City of London. This would be considered a worse-case scenario, noting there is also the likelihood that some of the current riders utilizing student tickets will make the decision to purchase a monthly pass based on economics. With the current fare structure, a student would have to ride the bus 53 times to make a Citipass at $81 the economical choice, with the new $52 Youth Pass, the number of rides per month would drop to 34. In this case, the revenue impact to LTC would be the lost revenue from the ticket fare of $1.54 per ride, offset by the revenue from the pass sales. The transferability of the monthly Youth Pass may further impact ticket and pass sales, noting that multiple siblings would have the option to share a monthly pass if their travel patterns are such that they don’t ride the bus at the same times. The impacts on ridership and related revenue will be tracked for this new Youth Pass fare category in the same manner as set out in Staff Report #4, dated April 25, 2018 dealing with the impacts of the free transit for children 12 and under and the newly introduced subsidized pass program.

Program Implementation

Subsequent to Municipal Council approval of the discount scale and related by-law, program details with respect to reconciliation and reporting will be finalized. A communication plan relating to the new Youth pass will be launched over the summer months, with the first passes available for purchase in August and valid for the month of September.

Recommended by:

Mike Gregor – Director of Finance

Concurred in by:

Kelly S. Paleczny – General  Manager