Meeting_Body
REGULAR BOARD MEETING
JUNE 27, 2024
Subject
SUBJECT: MOTION 22 RESPONSE: BRIDGE TO FARELESS TRANSIT
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE an update on the Low Income Fare is Easy (LIFE) Program in response to Board Motion 22 Bridge to Fareless Transit (Attachment A).
Issue
ISSUE
On April 25, 2024, the Board passed Motion 22 by Directors Bass, Butts, Dutra, Dupont-Walker, Mitchell, and Solis which made the GoPass Program permanent and required staff to report back in June 2024 on opportunities to expand the Low-Income-Fare-is-Easy program enrollment and utilization.
Background
BACKGROUND
In September 2020, Metro convened the Fareless System Initiative (FSI) Task Force to study the feasibility of removing fares for the most vulnerable riders. On May 27, 2021, the Board passed Motion 45 by Directors Garcetti, Mitchell, Krekorian, Hahn, Bonin, and Solis (Attachment B) on implementation strategies for FSI. The motion directed the Chief Executive Officer to implement the FSI, subject to a final funding plan, while pursuing cost-sharing agreements, and reporting to the Board on the development, launch, and performance of FSI.
On September 23, 2021, the Board approved a staff recommendation to launch Phase 1 of the FSI for K-14 students (GoPass) on October 1, 2021, as a two-year pilot, with the understanding that future Board approval would be required to launch Phase 2 for non-student, low-income adults once available funding had been identified. At the same meeting, the Board approved Motion 40 by Directors Mitchell, Solis, Garcetti, Sandoval, and Bonin to streamline the LIFE Program and increase enrollment. On April 23, 2023, the Board approved a one-year extension of the GoPass Pilot Program to add Year 3 through June 30, 2024.
On April 25, 2024, the Board passed Motion 22 - Bridge to Fareless Transit . This motion made the GoPass Program permanent and required staff to “report back by June 2024 on opportunities to expand the Low-Income-Fare-is-Easy program enrollment and utilization, including but not limited to:
1. Creating a cost-benefit analysis to provide unlimited free rides for all who qualify for the LIFE Program;
2. Identifying revenue impacts;
3. Identifying permanent sources of replacement revenues;
4. Feasibility of enabling the TAP app to accept applications;
5. Allowing program recipients to utilize the TAP app instead of the physical card to allow for direct program access to those receiving/signing up for Aid to Families with Dependent Children, or cash assistance and other benefits through the Los Angeles County Department of Public Social Services;
6. Coordination with open loop upgrades on the TAP system so qualified individuals can use other social benefit cards instead of Metro fare media; and
7. Outreach and engagement efforts led by Community-Based Organizations that include active and direct engagement with customers.”
The motion also directed Metro to conduct outreach with local cities and Councils of Government within Los Angeles County to express the importance of subsidized transit and provide examples of how a local fare subsidy program could be instituted to support their respective constituents; describe how we are including our municipal and local operators; describe how Metro will preserve existing transit service; and describe any impact a broader fareless system could have on Access paratransit services.
Discussion
DISCUSSION
Program Analysis
The Low-Income Fare is Easy (LIFE) Program has proven to be essential to LA County’s most vulnerable transit riders. The free 20-Regional Ride option has greatly benefited LIFE participants by offering free 20-trips every month. The free 90-day pass is offered to new LIFE participants as an incentive to join the program and both options are still in use.
A. LIFE Enrollment and Program Enhancements
As a result of Motion 40, the LIFE program introduced various improvements beginning in October 2021, including self-certification. In July 2023, Metro launched fare capping to highlight the benefits of using TAP to receive fare discounts. Metro staff collected ridership data during the first 6 months of fare capping to analyze the effects on the LIFE program.
The LIFE program has over 335,000 participants currently enrolled in the program and the program has an annual cost of $33.5 million. This is triple the number of participants since 2021, when the Board requested a plan to double the number of LIFE Program enrollees. While enrollment efforts have been successful, the number of active users remains low, with a 16% utilization rate. In a 2023 survey of LIFE participants (Attachment C), 72% of respondents said they ride more frequently when they receive free fares, and 55% of those who answered said they ride multiple times a day. Staff has also heard from riders that there have been challenges loading the Free 20-Regional trip pass monthly. Currently, LIFE riders must load and activate the free trips each month, which is cited as a barrier for riders. TAP Plus upgrades will eliminate this barrier, by allowing for automatic loading of the passes after enrollment. Other improvements being made to address these issues are listed below.
The following improvements have been delivered:
• Improved LIFE Program enrollment details to customer card profile accounts on taptogo.net website and TAP app.
• In January 2024, LIFE identifier was added to TAP vendor profiles that accept LIFE products.
• Since April 2024, Metro has launched an monthly email campaign has been initiated to remind LIFE participants to load their free LIFE 20-ride passes. This will be an ongoing effort.
• In May 2024, TAP began hosting TAP Vendor Pop up events with the LIFE program to inform customers where to load Free 20-ride or discounted passes in their neighborhood.
Figure 1:
The following improvement efforts are ongoing:
• Increasing the number of TAP vendors in communities where LIFE riders live, enabling them to load passes locally, and incorporating a LIFE designation to vendor listings.
• The LIFE administrator, IILA, will be able to load LIFE 20-ride passes at their office and at events for customers who are already enrolled in the program. This will improve the customer experience as well as awareness of monthly program benefits.
• Adding the 20-ride pass to be loaded on a LIFE TAP card at Ticket Vending Machines
B. Free 90-day pass
The free 90-day pass is offered to new enrollees to incentivize ridership. The use of this pass is a strong indicator of ridership behavior, as participants have unlimited rides over 90 days. Data shows that:
- Participants tap on average 19.2 times per month
- 78% tap <30 times per month
C. Free 20-Regional Trips every month
- The free 20-Regional Trips are offered to participants every month, and need to be loaded by the participant by calling TAP customer service, or at a participating retailer A TAP card can hold up to eight active passes, so unused trips from each 20-ride pass are available until they are used up and riders can continue to load new monthly 20-ride passes (or other pass types) until all eight slots are full, meaning unused taps can be used in subsequent months if there is still space on the card.
The use of this pass shows how LIFE participants travel on the Metro system. Data shows that:
- Participants tap on average 13.3 times per month
- 85% tap <20 times per month
E. LIFE Unlimited Free Rides
The estimated cost to provide unlimited free rides for all who qualify ranges from $64 million to $123 million, annually. See details in Figure 1 below.
Figure 2:
Note 1: This is defined as all currently enrolled LIFE riders. Costs would increase if additional riders were enrolled. Based on LIFE TAP data, the majority of the 20-Regional Ride users don’t utilize all the free rides available, and utilization of the FREE 90-day pass indicated that, on average, the pass was used 19.2 times a month.
LIFE is a regional program and impacts transit operators throughout the county and will require consensus from all participating operators. Unlimited free rides will negatively impact fare revenues that every transit operator relies on to support their operations. With significant program cost increases (estimated from $30.5M to $89.8M annually, see Figure 2 below) and no dedicated funding, LIFE may not be able to continue, unless cuts in operating budgets are made by Metro and transit operators to sustain the program. These cost estimates are only based on projected ridership estimates and do not include additional operating costs that may be needed to meet demand.
The primary risk is that cuts in the operating budget will negatively impact the quality and frequency of service and unintentionally limit mobility options for those that need it the most. These budget shortfalls can affect transit access and opportunities to all including underserved, overburdened, and disadvantaged communities undermining the main purpose of the LIFE Program. Figure 2 below highlights key points of the Cost-Benefit Analysis.
Figure 3:
|
|
LIFE program |
LIFE Unlimited Free |
|
Free Trips |
20 trips each month |
Unlimited |
|
Who benefits |
87% of enrolled riders |
100% of enrolled riders |
|
Cost |
$33.5 million |
$64 million -123.3 million |
|
Benefit |
- Allows for investments in service that can better serve low-income communities - Ensures that many riders receive assistance |
- Eliminate cost barriers - Improve access to opportunity |
|
Risks |
- Moderately less investments in service |
- Invests in free fares over current service and future service improvements - Discontinue program if funding not available - Potential misuse of system - Without funding, tradeoffs will need to be made to continue program |
|
Risk mitigation efforts |
Targeted and moderate subsidies help to ensure: - Sustainability of the program - Many riders have assistance |
Identify and secure long-term funding |
Based on the performance of other free fare programs, such as GoPass, which had a 51% increase in boardings between calendar years 2022 and 2023, with the shift of the LIFE Program to unlimited free rides, usage is expected to increase significantly. In addition, there are potential risks, which could include user abuse (TAP card sharing, enrollment fraud, to sell or share) and misuse of the system. Even under the current LIFE Program, the Department of Public Social Services (DPSS) has enrolled 23,696 new participants since September 2021 (3,222 or 13.6% were found to be duplicate enrollees). Results from a random audit of self-certified participants conducted in April 2024 showed an 18% response rate when trying to reach participants to review their program eligibility documents. The auditors believed the response rate was low because many of the participants selected were unhoused and were unreachable after several attempts. After learning and understanding this challenge, auditors chose a different sample group and are conducting a second audit that began in late May. Auditors will provide recommendations after this second audit has been completed. Metro staff will continue to ensure that safeguards are in place to maintain the integrity of the program and that the program responsibly provides individual benefits only to riders who qualify for the program. These safeguards will also ensure that the LIFE Program budget will continue to offer subsidies to the greatest number of people who are eligible for the discounts.
Access to affordable transportation is essential to increasing access to opportunity. Vast disparities among neighborhoods and individuals in LA County limit this access, making opportunities harder to reach for some, whether it’s jobs, housing, education, health care, safe environments or other essential tenets of thriving, vibrant communities. Providing unlimited free rides to all LIFE participants could affect service since funding sources could need to be reallocated from service budgets to fund the added expense of free trips.
Permanent Source of Replacement Revenues
The Deloitte Report on Potential Funding Sources (Attachment D) identified a variety of federal, state and local funding sources. Metro has supported legislation for additional funding, at both the state and federal level. Metro has been successful in attaining short-term grants under the state’s Transformative Climate Communities (TCC) grant program for projects in South LA and Pomona for a total of $7 million over 5 years for LIFE and GoPass and were recently awarded $4 million to partially offset the cost of GoPass for 5 years under the federal Reconnecting Communities grant program. However, these are small amounts compared to the annual cost of these programs and only provide short-term funding. Acquiring additional Federal and state funding will be challenging and will not offer long-term solutions as they may not be consistently available year after year. In addition, seeking state and federal funding place transit needs in competition with each other and other vital public services like education or healthcare.
Local Return
Proposition A, Proposition C, Measure R and Measure M are funded by four 1/2 cent sales tax measures approved by Los Angeles County voters. Each fund source has a Local Return apportionment of 25%, 20%, 15% and 17% respectively. Proposition A, Proposition C, and Measure M are evergreen taxes. While Measure R has a sunset date of June 30, 2039, Measure M apportionment will increase from 17% to 20% of a full cent sales tax vs a half cent sales tax on July 1, 2039. As “no sunset” taxes, this fund source can be a permanent source of replacement revenues for this initiative.
The Local Return component goes directly to the cities and Los Angeles County unincorporated areas, based on population, as posted annually by the Department of Finance (DOF). All Local Return is for use in developing and/or improving public transit, paratransit, and the related transportation infrastructure. Proposition A is restricted for direct transit use. Proposition C expands the transit use for in-direct use, such as streets and roads. Measure R and Measure M expand their allowable use not only for transit use, but for transportation use as well. Each of these sources are eligible for transit subsidies to fund free fares for low-income riders.
Figure 4:
Notes: Local Return funding is based on sales tax revenues and vary each year; however, they are steadily increasing.
1. Actual Local Return funds received by jurisdictions.
2. Adopted budgeted Local Return funds allocated to jurisdictions.
3. Unspent funding that cities must expend in 4-5 years per Local Return Guidelines. This includes $31.2 million in Board approved Local Return Capital Reserve
Cities and jurisdictions can contribute a portion of their local return dollars for free low-income fares. Free fares for low-income riders through the LIFE program is estimated to cost $123.3 million. Contributions of 10% of their local return dollars could cover the cost of offering free unlimited rides for the LIFE program. If this usage is approved by the Board, staff will conduct outreach with local cities and Councils of Government within Los Angeles County to express the importance of using these dollars to subsidize transit.
The Deloitte Report cited above also identified a variety of alternative revenue options, such as future congestion pricing revenues, implementing a voluntary ExpressLanes toll round-up, or adding fees to Metro contracts (see complete list in Attachment D).
TAP App for LIFE Application
Currently, staff is working on an update to the TAP app that will allow customers to apply for both the Reduced Fare and LIFE program that would roll out by the end of 2024. This update will allow customers to conveniently apply for a Reduced Fare card and LIFE subsidies should they be eligible. All this is being done on the TAP app and on one single, streamlined application that will automatically determine what subsidies the customer is eligible for. LIFE has received customer feedback that the application process has been challenging. In response, Metro has worked hard to streamline the application process, including adding self-certification of qualifying income. In addition, about 13% of LIFE participants drop off after their first 90-days free ride pass expires. This new update will create a better user experience for LIFE patrons as they will be able to apply for and use their LIFE benefits all on the TAP app, in place of a separate application and reloading a plastic card.
Department of Public Social Services (DPSS)
In September 2022, LA Metro launched a partnership with the Department of Public Social Services. A dedicated online enrollment portal was created for DPSS agents to support enrollment at four pilot DPSS offices: The Belvedere office in East LA, The Glendale office, The Metro Family Office, near LA Trade Tech College, and The Rancho Park Office in West Los Angeles. Since then, the program has onboarded 14 additional DPSS offices bringing the total number to 18. Office locations and enrollments are :
|
DPSS Office |
Enrollments |
|
Metro Family (Los Angeles) |
8884 |
|
Rancho Park (East Los Angeles) |
4394 |
|
Metro Special (South Los Angeles) |
3094 |
|
Belvedere District (East Los Angeles) |
2375 |
|
Lancaster |
1587 |
|
Metro East (East LA/Boyle Heights) |
1205 |
|
Glendale District #02 |
1022 |
|
Florence (South Los Angeles) |
832 |
|
San Fernando |
445 |
|
Metro North (Central Los Angeles) |
301 |
|
Lancaster General Relief |
209 |
|
Santa Clarita Sub-Office |
199 |
|
Norwalk |
86 |
|
El Monte |
82 |
|
Lincoln Heights |
72 |
|
South Special (Compton) |
5 |
|
South Family (Compton) |
Onboarded |
|
East San Fernando Valley |
Onboarded |
Metro staff will continue to work with DPSS to provide administrative support and onboard the remaining 7 DPSS offices to further expand program enrollments throughout LA County.
DPSS Enrollments and TAP Cards
Since September 2022, DPSS offices have enrolled 20,343 customers into the LIFE Program. Enrollments are conducted by DPSS Customer Service Assistants (CSAs) who submit applications on behalf of the customers. As with all LIFE applications, LIFE Administrators review and approve all DPSS applications within 7-10 business days. If a TAP card needs to be mailed to a customer, then processing time may take longer due to mail and receipt of card at a DPSS office or address provided. Of those enrolled, 697 (3%) customers had their own TAP cards, which were reloaded with the discounted fare, while 19,646 (97%) customers requested a new TAP card to be mailed to them and are now using the benefit on their new card. If a LIFE TAP card is reported lost, it can easily be replaced, and a new card will be mailed out. Over 300 TAP cards have been returned undeliverable. In Spring 2023, Metro staff requested DPSS approval for CSAs to administer TAP cards provided by Metro to reduce customer wait time, but the offer was declined due to insufficient DPSS staff resources and the inability to safely store TAP cards in offices.
Open Loop Upgrades
Under the TAP Plus proposal, if approved, will introduce open payments and an account-based system. This means that the Metro system will be able to accept any debit and credit card, be they plastic or virtual, so long as the card is a contactless EMV (Europay, Mastercard, Visa) card. To enable customers to utilize their existing social benefit cards, each social benefit program must upgrade to contactless EMV cards. Currently, staff is not aware of any social benefit program using contactless EMV cards, but there is an effort underway to move in that direction.
For customers to use their credit/debit cards to receive reduced fare for transit, they must first enroll in the reduced fare program or a discount program like LIFE with that credit/debit card. Another option is that Metro can connect to an entity like EBT to automatically enroll customers. The latter option highly depends on what can be negotiated with each specific social benefits program, in terms of any connections and integrations. Furthermore, there will be some cases where additional minimal engineering work may be required due to legislation changes.
Outreach and Engagement Efforts
Community Based Organizations (CBOs) have played a pivotal role in providing transportation assistance to those most in need throughout Los Angeles County. Since the 1992 Los Angeles Uprising, CBOs like First African Methodist Episcopal (FAME) Assistance Corporation, partnered with Metro’s predecessor, Los Angeles County Transportation Commission (LACTC), to launch Operation Food Basket. This provided $7 dollar taxi coupons to residents in hard hit areas. In 1993, the program was renamed the “Immediate Needs Transportation” program to expand services to include bus tokens. To ensure residents received tokens, FAME Assistance Corporation partnered with several hundred non-profit organizations to distribute them throughout Los Angeles. For more than a decade, the program was a success, and in 2019, LA Metro merged the Immediate Needs Transportation program with its discounted fare program, “Rider Relief Transportation” program, and renamed it “Low Income Fare is Easy” (LIFE). The LIFE program contracted two CBOs, FAME Assistance Corporation and International Institute of Los Angeles (IILA), to administer LIFE program enrollments, outreach, and the taxi voucher program.
Since 2019, the LIFE program has partnered with 414 active CBOs to assist with enrollments, outreach, and the taxi voucher program. These CBOs are provided with an online enrollment portal, brochures and TAP cards to streamline the enrollment process and get benefits into riders’ hands faster.
From July 2019 through April 2024, these CBO partnerships have directly supported:
• 61,000 Enrollments
• Distributed 70,000 brochures annually
• Provided over 30,000 TAP cards annually
Metro’s CBO partners have also been deployed countywide to provide multilingual outreach and support to hard-to-reach populations, such as low-income and cash-paying riders, at Metro stations, community events, food banks, and other locations. From February 2022 through November 2023, 15 CBO partners were contracted to disseminate LIFE brochures, assist qualifying riders with applications for enrollment and support the overall public engagement campaign. Metro’s CBO partners have included the Korean American Federation LA (KAFLA), LA Metro Churches, Legacy LA, Pacoima Beautiful, Eastmont Community Center, Pico Union Corporation, In the Making, Little Tokyo Community Council, Little Tokyo Service Center, and Mundo Maya. In addition to the primary partnerships, through the partnership with KAFLA, additional outreach services were provided through a network of CBO sub-partners such as: Koreatown Youth & Community Center, Homies Unidos, Hwarang Youth Foundation, Partnership for Growth LA, and Anti-Recidivism Coalition (ARC).
From February 2022 through November 2023, collectively, these CBOS provided:
• 568 Outreach events
• 371,855 In person interactions
• 93,072 materials distributed.
• 732,525 Social media impressions and engagement
CBOs also support our LIFE Limited program that provides taxi vouchers to individuals with short term/immediate need transit services who are otherwise unable to use fixed route transit. This may include individuals who have been discharged from the hospital, have been released from incarceration, or are a domestic violence survivor. Taxi vouchers and their required reimbursements to taxi providers are managed by program administrators and distributed to the rider, through approved CBOs and agencies such as hospitals and shelters, to provide trips categorized by mobility or health limitations, urgency, or safety.
Metro staff will continue to work with CBO partners to expand the program even further; staff will continue to work with the network of CBO partners to collect and evaluate feedback received from new LIFE program participants and potential enrollees. The information will be utilized to adjust and better focus outreach efforts, as well as identify new strategies for program growth.
Impact on Other Transit Agencies
Staff hold biweekly Ad Hoc Committee meetings to collaborate with the transit agencies participating in GoPass. Most of these agencies also participate in LIFE. In 2021, transit operators agreed to pilot the GoPass program as Phase 1 of FSI using available American Recovery Plan Act (ARPA) funding, with the understanding that additional funding would need to be identified prior to the Board approving Phase 2 of FSI for low-income adults. Due to GoPass, participating agencies have seen higher ridership that results in higher costs for providing increased transit service, more vehicles, additional cleaning and maintenance, and increased security. Expanding the LIFE Program will increase ridership and costs. Participating agencies have expressed concerns about being reimbursed for these programs at a rate that is lower than their regular fare rate, while their costs continue to increase. While they support the overall goal of GoPass and LIFE programs , agencies they are requesting to be fully reimbursed for boardings that are free to riders in order to cover their own costs.
Impact on Access Paratransit Services
Section 37.131(c) of the Code of Federal Regulations states: The fare for a trip charged to an ADA paratransit eligible user of the complementary paratransit service shall not exceed twice the fare that would be charged to an individual paying full fare (i.e., without regard to discounts) for a trip of similar length, at a similar time of day, on the entity's fixed route system.
The regulations limit paratransit fares to no more than twice the full, non-discounted fixed-route base fare. A subsequent amendment in the 2015 Fixing America’s Surface Transportation (FAST) Act tied Access’ fares to the Metro base fare of $1.75 for purposes of calculating a maximum paratransit fare amount.
Access charges a fare of $2.75 each way for a trip up to 19.9 miles and a fare of $3.50 for a trip of 20 miles or more in the Los Angeles basin. For fares in the Santa Clarita and Antelope Valleys, Access charges $2 each way due to the lower base fares of the fixed-route systems in those areas. Access Services projects to collect $11.1 million in fare revenues for FY25, an increase of 25.7 percent or $2.3 million from FY24.
Fare Programs staff has consulted with County Council on this regulation, and they agree that the LIFE program fare does not constitute Metro's base fare, rather, it is a discounted fare only for eligible participants. However, a completely fareless system will have a larger impact on Access paratransit services, because Access would be required to be fareless as well.
Equity_Platform
EQUITY PLATFORM
At its core, the goal of free and reduced fare programs is to achieve greater equity by reducing barriers and improving access to transit and opportunity for all communities. The LIFE Program has tripled its enrollment over the past three years, based on the improvements already implemented. Additional improvements to the program will allow more low-income residents of LA County to benefit from increased transportation affordability. Depending on the long-term funding options and tradeoffs for expanded free and reduced fare programs, potential service impacts could impact riders’ access to opportunities.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
These programs support Metro’s Strategic Plan Goal 3) Enhance communities and lives through mobility and access to opportunity and Goal 4) Transform LA County through collaboration and leadership. Metro will continue to work toward providing accessible and inclusive services for the residents of Los Angeles County.
Next_Steps
NEXT STEPS
Staff will continue to collaborate with social benefits programs and other transit agencies throughout LA County to expand LIFE program participation in ways that also preserve service and reliability.
Additionally, staff will work to unify the qualifying senior age across the region to simplify and expand transit access for older adults. We will also continue to analyze lowering the enrollment requirement from full-time to part-time for college and vocational students to increase eligibility and potentially ridership. These efforts aim to enhance equitable access to affordable transit for all community members.
If approved, staff will conduct outreach with local cities and Councils of Government within Los Angeles County to express the importance of using Local Return and other dollars to subsidize transit.
Attachments
ATTACHMENTS
Attachment A - Motion 22
Attachment B - Motion 40
Attachment C - LIFE Survey Results
Attachment D - Potential Funding Sources
Prepared_by
Prepared by: Devon Deming, Deputy Executive Officer, Fare Programs, Customer Experience, (213) 922-7957
Michael Cortez, Director, LIFE, Fare Programs, Customer Experience, (213) 418-3423
Michelle Navarro, Senior Executive Officer, Finance, Office of Management and Budget (OMB), (213) 922-3056
Manish Chaudhari, Senior Executive Officer, Finance, Local Programing, (213) 922- 2097
Monica Bouldin, Deputy Chief, Customer Experience Officer, (213) 922-4081
Reviewed_By
Reviewed by: Nicole Englund, Chief of Staff, (213) 922-7950
Nalini Ahuja, Chief Financial Officer, (213) 922-3088
Jennifer Vides, Chief Customer Experience Officer, (213) 922-4060
