Staff Report
PREPARED BY : YING SMITH
Transportation and Mobility Manager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Parks and
Public Works Director
110 E. Main Street Los Gatos, CA 95030 ●A 40 8 -354 -68 32
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 06/05 /201 8
ITEM NO:
D ATE : MAY 2 9 , 2018
TO : MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
RECOMMENDATION :
Staff recommends that the Town Council a uthorize staff to proceed with a school bus pilot
program targeting a January 201 9 start date .
EXECUTIVE SUMMARY
When Measure B was initially proposed, the Town Council identified potential projects that
should be included with the funding measure with p articular priority placed on a school bussing
program modeled after the TRAFFIX program in Contra Costa County. Since this priority was
identified, t he Town and the school community have been exploring new transit services
customized to meet the needs of students traveling to and from schools. The primary areas of
potential program formulation are corridors with the highest level of traffic, with congestion
relief being a major measure of success.
A significant amount of stakeholder outreach and analys is has gone into development of a pilot
program in acknowledgement of the sensitivity around transporting children to and from
school. A stakeholder group made up of representatives from the Los Gatos -Saratoga Union
High School District, the Los Gatos Uni on Elementary School District, the Los Gatos -Monte
Sereno Safe Routes to School Coalition, and the Transportation and Parking Commission
participated in the process to date. Through this work, staff was encouraged by the interest
and support of potential customers.
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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EXECUTIVEASUMM RYA(cont’d):
Staff is recommending moving forward with the pilot project ; however, as this report details,
getting prospective customers from the point of having interest in a program to actually riding a
bus and paying a r easonable price for the service can be very difficult.
Initial ly, staff considered piloting a small program with just a couple of routes, using the limited
supply of seats to create interest through unmet demand. As the varying service needs of
custome rs became more clear through the stu d y , it may be that the customer base is small due
to a limited initial demand resulting from specific preferences of individual families , with some
risk that filling two routes may be difficult to achieve.
Cost will a lso be an ongoing concern as customers have demonstrated price sensitivity and
constraints on gran t resources may create a less viable model.
Based on the extensive outreach, staff identified these key findings through the feasibility
study:
1. Parent and C ommunity Input: There is overwhelming support for the service in concept.
2. Ridership Demand: Enough potential demand for a small pilot program exists.
3. Price Sensitivity: Parents expressed a high level of price sensitivity.
4. Financial Feasibility: Fare revenue will not be sufficient to offset the total cost of the
service, meaning additional revenue will be needed for the pilot and long -term services.
BACKGROUND:
The Town of Los Gatos and the school community have been exploring new transit services
cu stomized to meet the needs of students traveling to and from schools. The primary areas of
interest are corridors with the highest level of traffic , with congestion relief being
the major measure of success. The Council approved $50,000 in Fiscal Year 20 17/18 for a
Congestion Relief School Bus Feasibility Study. Town staff and a consulting team, School Bus
Consultants (SBC), kicked off the study in October 2017 .
Through the feasibility study, the t eam completed two parent surveys (Attachments 1 and 3),
conducted focus group meetings (Attachment 2), and provided messages and updates on the
s tudy’sAwebpage,A throughAtheATown’sAsocialAmediaAplatform , and through the school s’
newsletter s . The t eam received extensive input from the parents and community. In addition,
the s tudy t eam conducted research o n similar programs being provided by other agencies,
including Hillbrook School in Los Gatos, TRAFFIX bus service in the Danville -San Ramon area,
Lamorinda in Lafayette, Moraga and Orinda , and several programs i n Marin County.
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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DISCUSSION :
Through the outreach, staff explored several topics important to the future of a bus program.
Service Model
During the study process, staff considered and presented a few service delivery options,
including the school bus service, leveraging VTA service for a school route, and a private
provider youth shuttle service. These service options are subject to different regulations and
requirements and are varied in cost. Based on the input from potential customers, the only
o ption that proved viable was the “yellow school bus model ”,AwhichAisAaAserviceAthatAmeetsAallA
the Federal and State student transportation requirements . The yellow school bus provides the
highest of driver and safety standards and helps parents feel comfo rtable with the service.
Actual service providers vary throughout the state and include school districts, transit agencies,
and service specific joint powers authorities.
One attractive element for parents are the safety features built into a school bus model. For
example, i nput on a seat belt requirement received much discussion. Based on additional
research on the State requirements and comparing peer agency experiences, s taff concluded
that this is a feature that should and can be included. Other important factors include driver
training and vehicle safety inspections.
Pay per Ride v ersu s Subscription -Based
Although up to 80% of the interested parents prefer a service schedule aligned with bell times,
many survey respondents expressed their desire to have flexibility in the schedule, such as
choosing to participate in morning or afternoon only, deviation from bell times to
accommodate after school activities, pay ing only for the rides taken, etc.
A key to the financial success of a program is pre dictability in filling a bus , which will result in
congestion relief and fare revenue . Although the desire for a pay as you ride service is
understandable, this does not provide for the budgetary planning necessary to run a successful
program and no such model has been implemented in any of the jurisdictions with similar
busing models.
Fare Structure and Cost Sharing
Like other models in the Bay Area, th e Los Gatos pilot would also be funded by three sources:
fare revenue, grants, and potential Town sub sidy. A detailed discussion of potential Town
subsidy is discussed later in the Fiscal Impact section of th is report.
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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DISCUSSIONA(cont’d):
Typically, public agencies consider several factors in establishing the fare structure for public -
funded bus services,AincludingAcustomers’ApriceAsensitivity,AcostAandArevenue,AandAtheAfaresA
charged by similar services.
Through the survey, respondents identified the maximum price they are willing to pay with
sufficient data for a price sensitivity analysis. St aff concluded that a base fare of $350 annually
will produce the maximum fare revenue while still attracting a requisite amount of committed
ridership of 65 passengers per route .
Price sensitivity is a dynamic factor and will likely change over time as the program is initiated
and evolves . With a full school bus, staff estimates the total annual cost of providing service at
$1,700 per rider , making the proposed base fare a significant discount on the cost of service . If
the buses are not full, the actu al cost of the program on a per rider basis increases.
Staff reviewed the fare structures of peer agencies. Base fares of comparable programs are
provided in T able 1 below.
Table 1 - Fare Comparison
Service Annual Pass
Mill Valley $625
Ross Valley $750
Tiburon and Belvedere $590
Lamorinda $492
TRAFFIX $335
For the pilot service, staff is recommending a base fare of $180 for the January through June
2019 program (one half of the school year) and $350 annually starting in August 2019.
Within th e proposed pilot project financing plan, grants are expected ultimately to play a
significant role. Staff has applied for a Transportation Fund for Clean Air (TFCA) grant in the
amount of $120,000. In addition, Measure B funding will potentially be instr umental in
reducing the startup costs of the program. Any grant funds not received would require the
Town or riders to fund the balance. Staff believes the pilot program is competitive for non -
Town funding due to its benefits in congestion relief and emi ssion reduction. However, it
should be noted that during early discussions with VTA, staff has not received positive feedback
on the eligibility for Measure B funding. Although that work is still in progress, it may ultimately
require the expenditure of r egional political capital to achieve success.
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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DISCUSSIONA(cont’d):
One unanticipated element associated with eligibility for these grants is that the pilot program
not be restricted to particular population s . Many parents envisioned the proposed servic e as
for school children only. In order to compete for grants, staff is attempting to construct a
service model that is eligible for the grant programs while still being suitable and safe for
students. The envisioned service design focuses specifically on home -to -school trips , thus
mak ing it virtually useless for other purposes. Additionally, t he annual subscription
requirement will give the Town information on the passengers, including age, home address
and destination school , such that all potential riders are well identified . T he proposed fare
structure will also make use by non -students unlikely as the annual unsubsidized subscription
will be approximately $1,700.
Geographic Considerations
The surveys were distributed through the targeted schoo ls includ ing families outside of the
Town limits and in C ounty pockets, such as mountain residents and residents of San Jose and
Monte Sereno. There are two considerations when evaluating providing service to these areas.
The first is focusing on congest ion relief around the schools and if providing service to areas
outside Town limits makes sense from the perspective of that goal, it c ould be considered . The
other consideration is that the program will likely require a heavy Town subsidy (as discussed
b elow) and that the Town should not subsidize service to non -residents.
Demand Analysis
The concept of congestion relief as the basis for the service has been well received by survey
respondents with parents expressing interest for over 1,000 students ac ross an estimated 680
families (see Attachment 1). The second survey targeted this group with the goal of further
exploring service components that would influence the decision to participate in the program
(see Attachment 3 ).
Through the second survey , p arents shared their preference in cost, travel time, walk distance,
bus stop locations, and schedule flexibility. Each question helped to refine the potential initial
customer base. Parent response to each of these high priority service elements helpe d to
identify the likely participation in an actual program. By incorporating the responses to these
more refined questions, the likely (orA“amenable”)A customer base decreased to approximately
335 students .
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
S:\COUNCIL REPORTS \2018 \06 -05 -18 \14 Bus Feasibility Stu dy \Staff Report.FINAL.docx 5/31/2018 9:53 AM
DISCUSSIONA(cont’d):
The amenable custo mer concept is not exact as there are still likely some who will choose not
to participate and others w h o are not in the amenable customers category that will choose to
participate. The chart below demonstrates how the various factors influenced a respond ent’sA
potential decision to participate in the program or not . The chart simplifies the evaluation a
little as the relationships are not as linear as depicted ; however , the end result is informative
for the pilot program development .
Using these resu lts , t he s tudy t eam mapped the home locations of these students using the
addresses provided by the survey respondents . Attachment 3 includes maps showing the
concentration of demand.
The ideal route size is 65 students, which equals approximately 90% o f the capacity of a school
bus and maximizes the program from a congestion relief and cost perspective. With 335
students as prime candidates for participation, creating effective routes becomes difficult as
those students are distributed across a number of schools .
1046
335
0
200
400
600
800
1000
1200
Total Students
Interested in
Service
Walk more than
1 block
Ride on a bus
more than 16
minutes
Ride on a
schedule aligns
with bell times
Willing to pay
more than
$350/year
Amenable
Population
(Students)
Amenable Population
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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CONCLUSION AND NEXT STEPS:
Staff recommends starting a pilot program with two routes in January 2019 . To implement the
pilot service, s taffAwillAundertakeAtwoArelatedAandAparallelAefforts,AoneArepresentsAtheA“demand”A
and the other rep resentsAtheA“supply”Aside of the program .
On the service demand side, s taff will design up to four routes based on results from the two
surveys, taking into consideration congestion relief benefits, ridership potential , and service
efficiency. The draft service plan will include routes, schedule, and tentative bus stops. These
options will be made available for sign up and potential customers will be able to make a
commitment by putting down a deposit. The selection of the routes will be based on custom er
commitment. The two routes that best fill buses through sign ups by the schedule deadline
would be selected for the pilot. Council will be kept apprised of the sign ups and the final
routes for the pilot. The key milestones of this effort will include :
July 30, 2018: Release draft service plan for customer sign up.
July 30 – August 20, 2018: Customer sign up with deposits
August 20 - 30, 2018: Select final routes
September – December 2018: R efine service plan, publish schedule
November – December 2 018: Customer confirmation and receive passes
In the meantime, to deliver the supply side , the s tudy t eam will begin preparing a b usiness p lan ,
including tasks of evaluating service provider options, evaluating staffing options for different
function s , re commending best practices , and determining metrics for the evaluation of the
pilot . In addition, the b usiness p lan will map out a phasing strategy and propose a potential
revenue structure over five years. If the Council concurs with this direction, on a future Council
agenda, s taff will bring the Council a contract amendment with SBC to assist in completing the
b usiness p lan that will lead to service implementation in 2019 .
Ultimately, the Council would also need to approve contracts with the bus serv ice providers ,
final routes in the pilot, and the fare schedule.
The key milestones of this effort will include:
June 2018: Finalize transportation service scope and specifications
June 22 – July 20, 2018: Release Request for Proposal s for a transportatio n service
contract
July 20 – August 20, 2018: Proposal evaluation, selection and negotiation
After August 20, 2018: Contract execution
September – December 2018: Selected vendor conducts v ehicle procurement, driver
recruitment and training , and facility readiness
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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CONCLUSIONA NDANEXTASTEPSA(cont’d):
The schedule to launch the pilot service in January 2019 remains very aggressive, with the tasks
of obtaining a service provider and locking in commitments from customers as critical path
milestones. If the re are unforeseen challenges in the process, the implementation schedule
may be delayed until August 2019.
Staff is looking for Council direction on the key topics as discussed above, with particular focus
on the program structure, including the potentia l Town subsidy, grants, and fare structure as
well as the grant requirements for inclusivity of ridership.
COORDINATION:
This report was coordinated with the Finance Department, the Stakeholder Group, and the
Transportation and Parking Commission .
FISC AL IMPACT :
Like other models in the Bay Area, this service would also be funded by three sources: fare
revenue, grants , and Town subsidy . The service expenditure and revenue are illustrated in Table
2 below.
The program reflects a half year program to a lign with the school year with year two increasing
to the full school year and year three increasing the number of routes. The costs include an
estimate of additional staff time to administer the program equal to approximately 0 .5 FTE,
depending on the ac tual classification. In addition, overall management of the program
throughAtheApilotAperiodAwillArequireAapproximatelyA40%AofAtheAtimeAforAtheATown’sA
Transportation and Mobility Manager . This time would otherwise be spent advancing other
projects and se eking grant opportunities.
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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FISC LAIMP CTA(cont’d):
Table 2 - Pilot School Bus Program Revenue and Expenditure
Expenditure
Based on information from peer agencies and potential service provider s , Town staff and
consultant estimated the cos t of providing the pilot service. The expenditure s would include
transportation service, contract management, customer service, ticket sale, and administration.
The cost per route is higher for a small -scale service and would gradually decrease if the se rvice
expands. The total cost, including all tasks and functions, will be updated as the t eam gathers
and analyzes additional information in the business plan development.
Revenue - Fare
Establishing a sound fare structure is the key to the financial su ccess of this service. Staff is
looking to strike a balance between reasonable share of the total cost and an indication of
commitment from the customers. Staff is currently running estimates based on a year 1 fare of
$180 per passenger and a fare of $35 0 annually thereafter with the expectation that these price
point s would attract on average 65 passengers per route .
Revenue - Competitive Funds
Competitive f unding sources for providing the congestion relie f school bus service are limited.
Staff has ide ntified the Santa Clara County 2016 Measure B and the TFCA as the only two
potential source s , based on the current program policies and guidelines.
Year 1/2 Year 2 Year 3
Expenses FY18-19 FY19-20 FY20-21
No. of Routes 2 2 4
Total 110,600 $ 221,200 $ 341,880 $
Per route 55,300 $ 110,600 $ 85,470 $
Per passenger (assume 65/route)851 $ 1,702 $ 1,315 $
Revenue FY18-19 FY19-20 FY20-21
Fare Revenue 23,400 $ 45,500 $ 91,000 $
GFAR 57,200 $ 115,700 $ 220,880 $
TFCA 30,000 $ 60,000 $ 30,000 $
Grant - Measure B ------
Other contributions ------
Total 110,600 $ 221,200 $ 341,880 $
Town Fund %52%52%65%
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SUBJECT: AUTHORIZE STAFF TO PROCEED WITH A SCHOOL BUS PILOT PROGRAM
TARGETING A JANUARY 2019 START DATE
MAY 29 , 2018
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FISC LAIMP CTA(cont’d):
The TFCA funding of $120,000 to be awarded by VTA in September 2018 may suppleme nt funds
for two routes for a total of 24 months. The TFCA grant amount is dependent upon the
service’sAcostAeffectivenessAinA the number of reduced automobile trips and vehicle miles
travelled resulting from the school bus service. The likelihood of cont inuing to compete well in
the TFCA program is largely dependent upon the ridership success of the service. The program
will have to compete for future funding every two years as long as this grant program is
available.
When the Measure B funds become ava ilable, staff will apply for the Innovative Mobility
Models and Programs Category fund ing . It is important to note that Measure B is very different
from Measure J in Contra Costa County, which includes dedicated funds for the TRAFFIX and
Lamorinda service s . In comparison, Measure B has a competitive program in which the
proposed service may qualify to compete , but funding is not guaranteed .
The pilot may be scalable for future expansion , including future grant funding, d epending on
demand and available outside funding. Service scale would depend on ridership, fare revenue ,
and other revenue sources , including grant funds and contributions from other organizations .
The next TFCA cycle will be open in early 2019 and funds will be available in July 2019. The
Measure B schedule is less predictable, but funds are likely to be available in the second half of
20 19 .
Revenue – Town Sources
The proposed FY 20 18 -19 Capital Improvement Program (CIP) Budget includes $80,000 for FY
18/19 for a pilot school bussing program . Additional Town subsidy would need to be discussed
annually as part of the budget process. Prior to any additional funding decision, staff will return
with the metrics for the Winter/Spring 2019 pilot to assist the Council in determining
adjustm ents to fare s, schedule, Town subsidy, etc.
ENVIRONMENTAL ASSESSMENT :
This is a project defined under CEQA and staff will prepare a CEQA analysis prior to
implementation.
Attachment s :
1. Survey 1 Final Report
2. Focus Group Service Design Charrette Summary R eport
3. Survey 2 Final Report