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CITY COUNCIL WORK SESSION AGENDA REPORT
MEETING DATE: FEBRUARY 25, 2012
AGENDA #: 1
PREPARED BY: JANE KANSIER, ASSISTANT CITY MANAGER
PRESENTED BY: JANE KANSIER
AGENDA ITEM: TRANSIT ISSUES
DISCUSSION: Introduction
The purpose of this Work Session is to discuss the current state of transit and the
future of transit in Prior Lake and Scott County.
History
Attached for your information is a brief history of transit in Prior Lake. Also at-
tached is the 2012-2018 Scott County Transit Operations and Capital Plan. These
documents will provide background for our discussion at the Work Session.
ISSUES: There are several issues for Council discussion. These are (in no particular or-
der):
• The role of the Transit Review Board (TRB)
• Transit governance
• Funding (including operations, capital and Transit Fund Balance)-
• Metropolitan Council posture on opt-out providers
• Prior Lake Resident Ridership/Park and Ride Usage
• Congestion Mitigation Air Quality (CMAQ) grant
• County Transit Improvement Board (CTIB)
• Governor's %4 cent sales tax proposal
Lezlie Vermillion, Scott County Deputy Administrator, will also be available to con-
tribute to the discussion.
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City of Prior Lake Transit
Background Information
H ISTORY
Since at least 1975, the City of Prior Lake has been part of the Metropolitan Transit Tax-
ing District. Even though the tax was included as part of the property tax, the only
available bus service to Prior Lake was a single, daily express bus to downtown Minne-
apolis. This service was operated by the Metro Transit Commission (MTC). In 1984, the
Minnesota Legislature adopted MN Statute 473.338, allowing the City to "opt-out" of
the MTC system, and apply our contribution to the transit tax to our own system. At
that time, the City joined the Minnesota Valley Transit Authority (MVTA).
Over the years, the MVTA service did not improve much over the MTC service, so in
2001, the City also opted out of MVTA and created its own service, the Laker Lines. All
funds contributed by property owners in the City of Prior Lake were deposited in the
City's dedicated transit fund. Shortly thereafter, the Legislature removed the transit tax
and authorized funding of the transit system through the Minnesota Vehicle Sales Tax
(MVST).
EXPRESS SERVICE
In 2002, Laker Lines began operating two express bus services to Downtown Minneap-
olis. In 2004, we added a third bus, and by 2007, we were operating four morning and
four evening routes. The chart below summarizes the ridership numbers since 2003.
The 2012 number includes riders through October; however, at our current rider levels,
we should provide more than 95,000 rides by the end of the year.
I Laker lines Total Riders �
� 2003-Present
100,000 94,772 _
90,000 . _- _---- - - _.. _.. ____... __ ... ... - - - - 85,524 _..
80,000 ___._ _ .._ . -----_ _
70,000 -- - ------- _ _
6Q000 -------.... _ . .. --- ---. _.__________ SA;090_ __- -_._._.__-
50,000 48,452 4$ 909
40,000 _ 34�539 __ -
3Q000 _ 23 23f 23,575 _._
20,093 20,563 '
_._ _
20,000 __. _ _ _
10,000 _ _. _ _ _ . _ 8,486
0 � _ .
_ _ _.._ _ _ �...
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Transit Background � _
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Although technically considered separate operations, Laker Lines and Shakopee Transit
have jointly operated the BlueXpress commuter service since July, 2007, with 8 morning
and 8 evening commutes. Today, BlueXpress offers 10 morning, 10 evening, 2 midday
and 8 reverse trips. Ridership on BlueXpress continues to grow. In 2011, we experi-
enced a 20% increase in riders over 2010. So far, in 2012, we have seen an 11% in-
crease in riders. Although we are the smallest transit provider in the Metro region, no
other provider, including Metro Transit, is growing at the same rate.
BlueXpress Total Riders
zoo,000 : _ _ iss,oss _
180,000 . . _ � ___.. _ 169,953 ,,.�-_, _:.. .._____..
160,000 142,347 141685 � �...�..._....._.....
137,289 ' ;
140,OpQ , .,�.._.�,._.___._._
120,000 . _.- -____ . I _
� 100,000 -- _ -- --- --- -- — ' '
� 80,000 ...
60,000 52,304 ,_ .._ +
40,000 — � � . — — � � - ---- ____ _
20,000 16,545
� - --- _ --
; o _ _ __ --_ ��...� � � . _.
2007 2008 2009 2010 2011 2012 2013
�_— _��_..— — -- — —
The efficiency of a transit service is often measured by subsidy per passenger. While
this is not the only measure or even the best measure of efficiency, this is the metric
used by the Metropolitan Council. According to the draft 2011 Route Subsidy Analysis,
prepared by the Metropolitan Council, the subsidy per passenger for BlueXpress is
$7.29. This is considered within the targeted threshold for express service.
When considering this subsidy, there are some important points to keep in mind about
the BlueXpress service:
• BlueXpress buses travel further to reach the downtown employment center
than almost any other express service. In order to be considered an "express"
service, buses must travel 3 miles on the freeway; BlueXpress buses travel 25
miles one way. Longer travel distances equal higher costs.
• Fares are set by the region (Metropolitan Council) so express routes traveling a
few miles collect the same fare as routes traveling 25 miles. This has two im-
pacts. Shorter routes have the ability to make several trips with fewer buses, so
fare recovery is higher. Also, shorter routes typically cost less to operate, so the
fares collected will go further in reducing the subsidy.
-------_-- -- -------- ------ - .. �------- -------------------
Transi4 Background - 2 -
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The closest route comparison to BlueXpress is the Rush Line, which runs from Forest
Lake to downtown Minneapolis, and which is operated by the Metropolitan Council.
The subsidy per passenger for this service is $9.43.
As part of the BlueXpress service, we jointly operate 2 park and ride lots, Southbridge
Crossings Transit Station and Eagle Creek Transit Station. Together, the 2 facilities have
approximately 1,100 parking spaces. Marschall Road Transit Station is the third facility
and is currently in the planning stages. We expect it will be operable in 2014. The MRTS
is a former auto dealership site. The existing building will house Scott County Transit
offices, along with other Scott County facilities. A small portion of the building will also
be used for BlueXpress riders. There will be indoor waiting areas and restrooms, some-
thing both existing facilities do not have. The MRTS will be able to accommodate 400
park and ride spaces.
LOCAL $ERVICE
Beginning in 2000, Scott County Transit in cooperation with the City provided dial-a-ride
service during the summer months for Prior Lake residents. The additional service dur-
ing this peak period of time proved to be a valuable service to our residents. Each year
an average of 1,400 riders used our summer transit services as a means to get to sum-
mer school, work, appointments and various summer activities.
In 2004, the City replaced the dial-a-ride service with the Local Laker Link, a fixed route
circular service focusing on access to summer school and summer jobs. The idea behind
the Local Laker Link is to provide more service to a larger number of riders. The circula-
tor bus route provides continuous service to several destination and pickup points
throughout the day. This service will also stop and pickup or drop off riders anywhere
along the route if it is safe to do so. The chart below illustrates the number of rides
provided by the Local Laker Link since 2004.
tocal Laker link Total Rides
z5oo . ..
2168
2000 � 1800 1900 _
� 1600
1500 1400 _ 1418
_._ 1288 _ _
1000 953 _
_
654
500 ti' �
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2004 2005 2006 2007 200$ 2009 2010 2011 2012
Transit Background _ 3 _
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The users of the Local Laker Link are primarily summer school students, the cost per
rider is very high, and rider numbers have continued to decline. For this reason, we are
discontinuing the service. In 2013, we hope to collaborate with Scott County, Shakopee
and Savage (through MVTA) to look at ways to establish a local circulator service to pro-
vide service to a broader segment of our population.
OBLIGATION TO PROVIDE $ERVICE
When the City opted out of the regional service, it committed to providing some sort of
transit service to its residents. The level of service is up to the City. The City has been
committed to providing express service since 2001, and further enhanced that com-
mitment when it entered into a joint powers agreement with Scott County, the City of
Shakopee and other Scott County communities to form the Transit Review Board in
2004. As part of that agreement, the City is a full partner in BlueXpress and has provid-
ed funding for the Southbridge Crossings Transit Station, the Eagle Creek Transit Station
and the Marschall Road Transit Station.
FUNDING FOR TRANSIT SERVICES
Funding for "opt-out" transit operations is defined by Minnesota Statute. Prior to 2001,
transit was primarily funded from two sources: 1) property taxes, and 2) the State Gen-
eral Fund. The property tax was enabled in 1970 when the private Twin Cities Rapid
Transit Company (which had provided streetcars, then buses) was taken public. The
property tax continued until 2001 when Minnesota Statutes 473.388 was amended to
set out the formula under which suburban transit providers would receive a share of
the Motor Vehicle Sales Tax (MVST).
In 2010, after the State Constitution was amended to allocate a greater share of MVST
to transit, the Metropolitan Council adopted the Revenue Allocation Policy. While State
statute mandates suburban transit providers a specific percentage of MVST based on
the 2001 legislation, the Metropolitan Council's Revenue Allocation Policy bases the al-
location of any additional share of MVST from the 2006 constitutional amendment on
the provider's fund balance. If a provider's fund balance exceeds the amount deter-
mined by the Metropolitan Council, the provider will not be eligible for any share of the
MVST funds above the original percentage. Transit service in Scott County, and specifi-
cally in Prior Lake and Shakopee, is a relatively young service. Over the years, the cities
have accumulated fund balances to be used to grow transit service and facilities as
population and demand increases. The Revenue Allocation Policy means Prior Lake and
Shakopee must spend down reserves to a minimal amount in order to receive any addi-
tional funds from the region. The longer-term impact is to reduce the ability of subur-
ban transit communities to retain funds from year to year to make investments.
Transit Background _ q _
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In 2011, the State Legislature further reduced the amount of MVST allocated to the
suburban transit providers by reducing the amount received in State Fiscal Year 2011 by
a total of $3.3 million in SFY 2012 and 2013. The Metropolitan Council made the deci-
sion on how these reductions would be taken from each provider. For Prior Lake, this
legislation meant a 37% reduction in MVST and for Shakopee it meant a 13% reduction.
Overall, the Scott County reduction is 23%.
The City of Prior Lake's share of MVST in 2013 is currently estimated at approximately
$627,000. In addition, we expect to recoup about $220,000 in fares. These funds,
along with the transit dollars provided previously, are deposited into a Transit fund ded-
icated to transit-related activities. The funds are used for operating the bus service,
capital improvements, such as the park and rides and the purchase of buses, and ad-
ministration costs. Any unused funds are placed in the Transit reserve, and are used for
expenditures over and above our share of MVST dollars and fare revenues.
GOVERNANCE ISSUES
The City, as is true of all opt-out providers, is directly tied to the Metropolitan Council.
Our buses are owned by the Metropolitan Council, and leased to the City. Our funding
is funneled through the Metropolitan Council as well. We are also required to comply
with the Metropolitan Council's transit policies.
CURRENT PROJECTS
In 2010, Scott County purchased a former auto dealership site on Marshall Road and US
Highway 169 in Shakopee. This site will be used to house the Scott County Transit of-
fice, and eventually will act as an additional BlueXpress park and ride facility. We are
looking at service to the site in 2014-2015.
We have been awarded a Congestion Mitigation Air Quality (CMAQ) grant on behalf of
BlueXpress for $1.6 million. This proposal includes funding for 3 coach buses and start
up operating costs to add express service to the University of Minnesota and the I-494
corridor. The 3 new buses are intended to provide express bus service to downtown
Minneapolis from the Eagle Creek Transit Station. With the addition of these 3 coaches,
the BlueXpress fleet will be large enough to begin midday express bus service to the
University of Minnesota, and to provide express service to the I-494 corridor. This grant
funding will be available in 2013. Buses are expected to arrive in 2014.
We applied for and have received preliminary approval of a second CMAQ grant for
$2.7 million. This proposal includes funding for 3 coach buses and start up operating
costs to provide service to the Marschall Road Transit Station. This grant funding will be
available in 2016.
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Transit Background _ 5 _