Report to/Rapport au:

 Transportation Committee/Comité des transports

April 20, 2004/le 20 avril 2004

Submitted by/Soumis par: R.T. Leclair, General Manager/Directrice générale,

Transportation, Utilities and Public Works/Transport, services et travaux publics

Contact/Personne-ressource: G. Diamond, Director/Directeur,

Transit Services/Service du transport en commun

842-3636 ext. 2271, gordon.diamond@transpo.ottawa.on.ca

SUBJECT:     TRANSIT SERVICE FINANCIAL PERFORMANCE REVIEW 2004

OBJET:          RENDEMENT FINANCIER DES SERVICES DE TRANSPORT EN COMMUN - EXAMEN DE 2004

REPORT RECOMMENDATION

That the Transportation Committee receive this report for information, noting that staff will proceed with the following changes to rural services, based on poor financial performance:

i)        Removal of Route 163 between Stittsville and Kanata;

ii)      Removal of Route 183 between Richmond, Stittsville, and Kanata;

iii)    Removal of Route 199 in South Gloucester, subject to further performance review;

iv)    Removal of midday and evening service on Route 186 from Manotick; and

v)      Reduction of service on Route 221 from Cumberland Village.

RECOMMANDATION DU RAPPORT

Que le Comité des transports reçoive le présent rapport à titre d’information, en prenant note que le personnel procédera aux modifications suivantes aux services en milieu rural en raison de leur pauvre rendement financier:

i)        Suppression du circuit 163 entre Stittsville et Kanata,

ii)      Suppression du circuit 183 entre Richmond, Stittsville et Kanata,

iii)    Suppression du circuit 199 dans Gloucester-Sud, sous réserve d’un prochain examen du rendement,

iv)    Suppression du service du circuit 186 en provenance de Manotick en mi-journée et en soirée,

v)      Réduction du service du circuit 221 en provenance du village de Cumberland.

BACKGROUND

A detailed financial performance review of each route in the OC Transpo system is carried out each year.  The review identifies the routes that are not meeting the minimum financial performance targets during individual time periods and determines ways to improve financial performance, usually by reducing the frequency of service, removing service, or making minor route changes.  The resources saved from these changes are re-allocated to increase service on routes on which ridership has grown.

The current financial standards are summarized in Exhibit 1.  The financial standards for services in the Urban Transit Area were approved, in May 1999, by the former Ottawa-Carleton Regional Transit Commission.  These guidelines balance basic accessibility with ridership potential and are used to ensure that the resources available for service are distributed effectively.  Financial expectations for transit service from villages and rural areas were set by Council in approving the pilot project in 2002 and in approving the continued operation of the services in 2003.

In the course of developing the 2004 Budget, at a meeting on March 24, 2004, Council approved reductions in transit services on routes with poor financial performance, low ridership, or convenient alternatives available.  The services to be eliminated were ranked according to ‘customers lost per net dollar saved’.  While this approach is different from the revenue/cost ratio used in the current service design guidelines, because it takes into account alternative services available to customers, its application has removed all urban transit service that falls below the current minimum revenue/cost targets.  For that reason, there are no recommendations in this report addressing services in the Urban Transit Area.

The transit services from villages and rural areas were not evaluated in preparing the draft budget, and no recommendations were made in the draft budget that affect the rural services.  This was because several important service changes had been made to the rural services in September 2003, as approved by Council in April 2003, and these revised services had not been in place long enough for ridership to have stabilized to the point that conclusions could be drawn and recommendations made in time for the draft budget.

DISCUSSION

Services from Villages and Rural Areas

All of the services from villages and rural areas have now been reviewed in comparison with the financial expectations set by Council in 2002 and 2003, and which are summarized in Exhibit 1.  The overall cost of operating the service in villages and rural areas is funded 50 percent from customers’ fares and 50 percent from a property tax levy collected in Rural Transit Area A.  Rural Transit Area A is made up of rural Cumberland, rural Gloucester, part of Rideau, rural Nepean, and most of Goulbourn. (No property tax is collected to support conventional transit service – only Para Transpo service – in Rural Transit Area B, which is made up of Osgoode, part of Rideau, part of Goulbourn, rural Kanata, and all of West Carleton.)

Exhibit 2 shows the current ridership and financial performance of the rural transit services.

The financial performance review shows that all of the rural transit services meet the financial expectations, with the following exceptions.

Route 163 – All-day, local service in Stittsville

This route provides local service within Stittsville and a connection to Hazeldean Mall in Kanata.  Service is provided once an hour, from 6:00 a.m. to 6:00 p.m., Monday to Friday.  Connections are possible with Route 97 in Stittsville and with Route 118 and local routes in Kanata at Hazeldean Mall.  The service is operated for the City under contract by a private operator.  A special village-only fare, lower than a regular OC Transpo fare, is charged for customers on Route 163 who do not transfer to other routes.

The revenue/cost ratio on Route 163 has been calculated to be 12 percent, below the minimum financial expectation set by Council of 30 percent for services in villages and rural areas and the customers lost per net dollar saved figure has been calculated to be 0.09, below the level at which Council approved eliminating urban services in setting the 2004 budget.

Staff have identified no possible service changes that would be expected to either increase revenue or reduce costs to the point that the financial performance of Route 163 would meet the expectations.  Route 163 was changed in February 2003 to provide a new connection to Hazeldean Mall.  Following that change, ridership increased from approximately 20 customers each day to approximately 50 customers each day.  To meet the financial expectations, ridership of 125 customers each day would be required.  Based on the experience to date with Route 163, there is no likelihood that this level of ridership would be met in the next year.

Because the service does not meet the financial expectation, staff will arrange for this service to be removed.  The last day of operation will be Friday, September 3, 2004.

Local service in Stittsville will continue to be provided by Route 97, between approximately 6:00 a.m. and midnight Monday to Friday and 6:00 a.m. and 8:00 p.m. on Saturdays.  Route 97 provides service on Hazeldean Road and on Stittsville Main Street, within approximately a one-kilometre walk of all parts of Stittsville.  Route 97 does not provide the local service within the residential areas that Route 163 now serves.  In a separate report before Transportation Committee today, staff are recommending that Route 97 be changed to provide new service on Stittsville Main Street south of Abbott Street.  This change would ensure that all-day transit service continues to be provided in the southern part of Stittsville after the removal of Route 163.

Route 183 – Limited local service between Richmond, Stittsville, and Kanata

This route provides limited local service between Richmond, Stittsville, and Kanata.  Service is provided on two round trips on Friday afternoons and evenings, and three round trips on Saturdays.  Connections are possible with Routes 97 and 118 and local routes in Kanata at Kanata Town Centre and Hazeldean Mall.

Route 183 began operation in September 2003.  A previous all-day service between Richmond and Fallowfield Station was removed at that time because of low ridership and poor financial performance.  The new Route 183 was designed and scheduled based on surveys of and in consultation with transit customers and prospective transit customers in Richmond.

The revenue/cost ratio on Route 183 has been calculated to be 3 percent, below the financial expectation set by Council of 30 percent for services in villages and rural areas and the customers lost per net dollar saved figure has been calculated to be 0.03, below the level at which Council approved eliminating urban services in setting the 2004 budget.

Staff have identified no possible service changes that would be expected to either increase revenue or reduce costs to the point that the financial performance of Route 183 would meet the expectations.  Route 183 now carries approximately 4 customers each Friday and 14 customers each Saturday.  To meet the financial expectation, ridership of 80 customers each Friday and 85 customers each Saturday would be required. Based on the experience to date with Route 183, there is no likelihood that this level of ridership would be met in the next year.

Because the service does not meet the financial expectation, staff will arrange for this service to be removed.  The last day of operation will be Saturday, June 26, 2004.

Peak-period service between Richmond and downtown Ottawa will continue to be provided by Route 283.

Route 186 – All-day service from Manotick

This route provides all-day service between Manotick and Fallowfield Station.  Service is provided once per hour, from 6:00 a.m. until 9:00 p.m.  Connections are possible at Strandherd Road with other routes in South Nepean and at Fallowfield Station with Transitway service to central parts of Ottawa.  Route 186 also provides service to the Stonebridge area of South Nepean, which is within the Urban Transit Area.

The schedule and routing of Route 186 have been changed several times in the last year, and ridership levels have not yet stabilised. In September 2003, the former Route 196 was removed, and Route 186 became the only all-day service from Manotick.  At the same time, service was increased to once an hour from once every two hours. Also in September 2003, the new Route 71 was introduced, providing direct peak-period service from Manotick to downtown Ottawa in the morning and return service in the afternoon. In January 2004, peak period service on Route 186 toward Fallowfield Station in the morning and away from Fallowfield Station in the afternoon was removed, and customers were required to travel on Route 71. From April 19, 2004, at the request of customers and based on very low ridership from Manotick on Route 71, Route 71 was cut back to begin in South Nepean, and peak-period service on Route 186 was reintroduced.

Because of the very recent change to peak period service on Route 186, it is premature to draw conclusions regarding the financial performance. Nevertheless, it is appropriate to evaluate the midday and evening service based on experience since September 2003. The revenue/cost ratio for midday and evening service on Route 186 has been calculated to be 12 percent, below the financial expectation set by Council of 30 percent for services in villages and rural areas and the customers lost per net dollar saved figure has been calculated to be 0.12, below the level at which Council approved eliminating urban services in setting the 2004 budget.

Staff have identified no possible service changes that would be expected to either increase revenue or reduce costs to the point that the financial performance of the midday and evening service on Route 186 would meet the expectations.  Route 186 now carries approximately 30 customers each day during the midday and evening. To meet the financial expectations, ridership of 110 customers each day would be required. Based on the experience to date with Route 186, it is unlikely that this level of ridership would be met in the next year.

Because the midday and evening service does not meet the financial expectations, staff will arrange for this service to be removed.  The last day of operation will be Friday, September 3, 2004.

The elimination of midday and evening service on Route 186 will remove transit service at these times of day from the Stonebridge neighbourhood of Nepean, which is within the Urban Transit Area.  Service will continue to be provided to Stonebridge during peak periods.  Off-peak service to this area began in September 2002, with the expansion of service from rural areas.

The Friday-only shoppers’ service from North Gower, Kars, and Manotick to South Nepean and Carlingwood would remain available.

Before the April 2004 service change, Routes 71 and 186 together carried 41 customers each day during peak periods. To meet the financial expectations, ridership of 80 customers each day would be required. Based on the experience to date with services from other major villages, there is a reasonable expectation that ridership could reach this level. Staff will continue to monitor ridership on the peak-period service very closely over the next several months. If ridership does not show signs of increasing sufficiently that the service could meet the financial expectations, then no reductions will be made.  If ridership does not show signs of reaching this level, then staff will arrange for the service to be removed in September 2004.

Route 199 – Limited local service in South Gloucester

This route provides limited local service between South Gloucester and Greenboro Station.  Service is provided on two round trips on Sundays only.  The times of these trips are set to match the travel times of customers attending the Hindu Temple of Ottawa-Carleton, on Bank Street south of Leitrim.  Connections are possible with the rest of the transit system, including the O‑Train, at Greenboro Station.

Sunday service on Route 199 began operation in September 2003.  A previous all-day service between South Gloucester and Greenboro Station was removed at that time because of low ridership and poor financial performance.  The new Route 199, consisting of one northbound trip on Friday evenings and two round trips in the midday on Sundays, was designed and scheduled based on consultation with representatives of the Hindu Temple of Ottawa-Carleton.  The Friday-only service was removed in April 2004, because of very low ridership.

The revenue/cost ratio on Route 199 has been calculated to be 24 percent, below the financial expectation set by Council of 30 percent for services in villages and rural areas, and the customers lost per net dollar saved figure has been calculated to be 0.27, below the level at which Council approved eliminating urban services in setting the 2004 budget.

It is possible that the performance of this route may improve sufficiently to meet the financial standards.  To meet the minimum financial expectations, ridership of 12 or more customers each Sunday would be required.  Staff will monitor this route closely over the next two months and will arrange to eliminate it in June 2004 if the minimum financial targets are not met.

Route 221 – Peak-period express service from Cumberland Village

This route provides direct service from Cumberland Village to downtown Ottawa in the morning peak period and return service in the afternoon peak period, Monday to Friday.

Route 221 began operation in June 2003. Previously, a connector shuttle bus had been operated to carry customers between Cumberland Village and Place d’Orléans Station, where they could transfer to Transitway service.

The revenue/cost ratio for Route 221 has been calculated to be 34 percent, above the financial expectation set by Council of 30 percent for services in villages and rural areas, but the customers lost per net dollar saved figure has been calculated to be 0.20, below the level at which Council approved eliminating urban services in setting the 2004 budget.

Service can be reduced on Route 221 to improve the route’s financial performance. From September 7, 2004, service will be reduced from two westbound trips to one in the morning peak period and from two eastbound trips to one in the afternoon peak period. With this change, ridership is expected to decline from the current 59 to approximately 42 customers each day. The revenue/cost ratio would increase to 49 percent and the customers lost per net dollar saved figure would increase to 0.36, both above the established minimums.

SERVICE DESIGN GUIDELINES

The method that staff used to prepare the budget recommendations for Council was different from the method on which the currently approved service design guidelines are based.  It does not rely simply on the number of passengers using a service and the cost of providing that service as the revenue/cost does.  It takes into account the alternative services available to customers, and is based on customers lost per net dollar saved.

RURAL IMPLICATIONS

The service changes will reduce all-day transit service in Stittsville, Richmond and South Gloucester.  All rural express routes will continue to operate.

CONSULTATION/PUBLIC NOTIFICATION

Staff have advised representatives of the Hindu Temple of Ottawa-Carleton of the change affecting their location.  Staff have also consulted with Councillors Brooks, Deans, Jellett, and Stavinga in preparing this report.

TRANSPORTATION MASTER PLAN

The action being taken by staff to remove rural services with poor financial performance is consistent with the direction from Council in the Transportation Master Plan, that service will be provided as determined by ridership levels (Section 7.2.3, Item 1).

FINANCIAL IMPLICATIONS

The removal of rural transit service with poor financial performance will reduce the tax requirement from Rural Transit Area A by approximately $132,000, which will reduce the amount of tax collected for a residential property assessed at $150,000 from approximately $54.00 per year to approximately $50.00 per year.

SUPPORTING DOCUMENTATION

Exhibit 1 – Service Design Guidelines

Exhibit 2 – Rural Services – Ridership and Financial Performance

DISPOSITION

The service reductions described in this report will take effect on the dates noted in the report, in June and September 2004.

EXHIBIT 1

Service Design Guidelines

EXHIBIT 2

Rural Services – Ridership and Financial Performance