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City Council Report


 City Council Meeting: September 24, 2013

Agenda Item: 9-A

To:               Mayor and City Council 

From:           Edward F. King, Director of Transit Services

Subject:        Big Blue Bus Fare Policy Update and Public Hearing



Recommended Action


Staff recommends that the City Council:

1.     Hold a public hearing in accordance with Federal Transportation Administration Circular 9030.1D and receive public comments regarding the recommendation to:

a.     Approve the elimination of the Big Blue Bus local transfer to be implemented on January 1, 2014.

b.    Provide a modification to the BBB Fare Policy through the introduction of SmartCards for the payment of fares on BBB service. 

2.     Appropriate the budget increases as outlined in the Financial Impact and Budget Actions section.


Executive Summary


The Big Blue Bus (BBB) currently offers one of the lowest one-way cash fares in the region at $1.00 regular fare and $.50 for seniors/disabled and is committed to holding the fare steady in FY 2013-14. The recommended fare policy eliminates BBB local transfers and introduces a new fare card known as the “SmartCard,” which would expedite boarding and provide customers more flexibility with fare payment. The elimination of local transfers affects less than five percent of total BBB ridership. Riders traveling under the Senior/Disabled/Medicare fare would not experience a fare increase. The maximum impact on customers riding regular fare is $1.00 per roundtrip or a total of $1.00 for unlimited trips using a day pass.  Staff estimates that this will have a minimal impact on ridership.


If implemented, the elimination of local transfers would increase farebox revenues by approximately $325,620 annually.  It is proposed that any efficiencies and the increase in revenue be used to provide additional revenue service hours to address routes that are currently overcrowded or have poor schedule adherence in addition to rider education for SmartCard migration.


FTA Circular 9030.1D requires an opportunity for a public hearing or public meeting for any fare increase.  Since the elimination of local transfers would represent a fare adjustment for some BBB customers, a public hearing is required for the recommended Council action to eliminate local transfers. In addition to FTA guidelines, transit agencies must adhere to Title VI. Title VI is a Federal statute and provides that no person shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal funds. A Title VI evaluation was performed on the changes proposed in this staff report and there was no discovery of significant disparate impact on low income or minority populations as a result of these changes.




On June 12, 2012, staff recommended the Big Blue Bus upgrade its automatic fare collection system to current technology to enable passengers to use the latest fare media, provide a more reliable, easy to use system for passengers and operators, and also provide BBB with the latest in report writing and accountability for the City.  Based on staff recommendation and Council discussion, City Council authorized the City Manager to negotiate and execute a contract with LECIP Inc., a Japan-based company with headquarters in Des Plaines, Illinois, to purchase and install all hardware, software, and training for an integrated Automatic Fare Collection System (AFC). 





BBB plans to replace its existing fare collection system in early 2014 with an Automatic Farebox Collection (AFC) system that would enable BBB customers to use Smartcards (stored value cards), pre-paid period passes, a mobile app with an IPhone or Droid, pay a regular cash fare or obtain a day pass.  The objectives of the AFC system are to provide a state-of-the-art, open access, user-friendly, fare collection system that can accept currency, convenience passes, magnetic stripe cards, and smart cards.  The AFC system would maximize:

·     Ease of use for  customers

·     Ease of operation for  Motor Coach Operators

·     Expedite the boarding process to reduce dwell time at bus stops and terminals

·     Ease of maintenance for support staff

·     Reliability of system performance

·     Accuracy and security of information

·     Cost effectiveness of operations

·     Extended service life of the system

·     Flexibility to  purchase fare media on line


The AFC would address all phases of fare collection, validation, and processing.  This includes, but is not limited to:

·       Cash and other fare media acceptance

·       Recording each transaction associated with the time and location of the fare accepted 

·       Accurate compilation of transactional records to permit a complete audit of revenues collected and analysis of passenger boarding statistics

·       Easy maintenance of all hardware and software components of the AFC

·       Integration/compatibility of City of Santa Monica identification and parking card as well as other City service access functionality


Therefore, staff recommends introducing SmartCards into the BBB system.


Local Transfers

Staff has analyzed various fare policy options to be implemented concurrent with the AFC implementation based on the following goals:


Eliminating local transfers and moving to SmartCards support BBB’s continued efforts to improve on-time performance, increase efficiencies, and provide greater flexibility to customers. Boarding speed is improved with less cash handling as well as with fewer onboard transactions such as issuing transfers. Staff conducted an informal test of 100 boardings using cash and purchasing transfers. The average transaction took approximately 23 seconds. Eliminating BBB transfers would significantly reduce this dwell time.


The proposal to eliminate local transfers would increase fares for approximately 3.8 percent of BBB ridership as Senior/Disabled/Medicare ridership using transfers would not incur any change. BBB’s base fare of $1.00 is one of the lowest in the region as illustrated in the Regional Transit Fares table below. In order to keep the base fare affordable and impact as few customers as possible, staff evaluated eliminating local transfers. BBB does not anticipate a deficit in the coming fiscal year. Therefore, it is not necessary to raise the base fare at this time, however, BBB strives to maintain this positive financial situation in the long term. Through staff reductions, reduction in overtime and the reallocation of resources from unproductive routes to high performing routes, BBB is extracting efficiencies wherever it can, thereby avoiding a base fare increase. 


Eliminating the local transfer would represent a fare increase to approximately 3.8 percent of the total ridership.  The revenue of approximately $325,620 generated would help support rider education toward SmartCard use.  In addition, the elimination of local transfers would encourage more passengers to move to pre-paid fare media that offer unlimited rides.  Most transit properties that implement day passes also eliminate local transfers to encourage the use of the day pass.  Efficiencies realized from the printing and administrative processing of transfers and the additional revenue realized would also be used to provide new service to routes that are overcrowded and/or need additional service due to schedule adherence issues.





Big Blue Bus

Culver CityBus

Long Beach Transit

Foothill Transit



Base Fare







Senior Fare








Transfer Fare



no local transfers


no local transfers

no transfers


Transfer Fare



no local transfers


no local transfers

no transfers


BBB issued approximately 2,410,744 transfers in FY 2011-12 and 2,200,000 transfers in FY 2012-13.  Thirty-four percent of all BBB transfers sold are local transfers with the remaining balance being Interagency Transfers that would continue to be available.  This amounts to approximately 825,487 local transfers in FY 2011-12 and 753,324 local transfers in FY 2012-13, which is less than five percent of BBB’s total annual ridership of 19 million. Based on ridership data, 12.2 percent of local transfers are purchased under the Senior/Disabled/Medicare (S/D/M) fare and 87.8% are under the regular fare. The table below reflects these percentages in numbers of riders.



Fare Category

FY 2011-2012

FY 2012-2013

Regular Transfers



S/D/M Transfers



Total Transfers



Percent S/D/M



Percent Regular




S/D/M customers currently using local transfers would not experience a fare increase in making a roundtrip as a result of the elimination of local transfers since the existing S/D/M day pass is deeply discounted at $1.50. The current fare for these customers using local transfers is $1.50 for a roundtrip (2 regular rides @ $.50 plus 2 transfers @ $.25 =$1.50). Given that the day pass for this fare category is also $1.50, there would be no impact provided they purchase the day pass.


Customers riding under the regular fare category would experience a maximum change in cost of $1.00 per roundtrip. The current fare for these customers using local transfers is $3.00 for a roundtrip (2 regular rides @ $1.00 plus 2 transfers @ $.50 = $3.00). With the elimination of local transfers, the roundtrip regular fare would be $4.00 (2 regular rides @ $1.00 plus 2 BBB local connections @ $1.00 = $4.00) and the regular fare day pass costs $4.00. Therefore, the maximum impact on customers riding regular fare is $1.00 per roundtrip or a total of $1.00 for unlimited trips using a day pass.  Staff estimates that this will have a minimal impact on ridership.


Public Outreach

BBB staff conducted outreach through BBB email alerts, website updates and direct outreach to SMC riders informing them of the fare policy recommendations to Council. In addition, BBB staff conducted a community meeting on August 21, 2013 from 6 to 8 pm at the Santa Monica Main Library where both the service change and fare policy recommendations were presented. Approximately 45 people attended the meeting. Six attendees expressed concerns about the financial impact of eliminating local transfers. A Title VI evaluation was performed on the changes proposed in this staff report and there was no discovery of significant disparate impact on low income or minority populations as a result of these changes.


Next Steps

After the public hearing, if the elimination of local transfers and introduction of SmartCards are approved, staff would conduct outreach and education to communicate the policy decisions and what riders can expect going forward. The elimination of transfers, if approved, would go into effect January 1, 2014. The introduction of SmartCards onboard BBB, if approved, would take place beginning Spring 2014.


Financial Impacts & Budget Actions


The proposed elimination of local transfers would increase annual revenues by $325,620 at account 41642.402000. With implementation scheduled for January 1, 2014, revenues for FY 2013-14 would increase by $162,810, prorated to reflect a partial year. The elimination of local transfers requires changes to the FY 2013-15 budget as follows:

  1. Increase FY 2013-14 adopted revenue budget at account 41642.402000 in the amount of $162,810.
  2. Increase FY 2014-15 approved revenue budget at account 41642.402000 in the amount of $325,620.


Prepared by: Suja Lowenthal, Transit Government and Community Relations Manager




Forwarded to Council:







Edward F. King

Director of Transit Services


Rod Gould

City Manager