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 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 03/19/2019
ITEM NO: 9
DATE: MARCH 14, 2019
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: STAFF RECOMMENDS THAT THE TOWN COUNCIL REVIEW AND APPROVE
THE SCHOOL BUS PROGRAM BUSINESS PLAN AND PROVIDE DIRECTION TO
STAFF FOR THE ONGOING PROGRAM
RECOMMENDATION:
Staff recommends that the Town Council review and approve the School Bus Program Business
Plan and provide direction to staff for the ongoing program.
BACKGROUND:
The Town has identified a school bussing program as one piece of a multi-faceted approach
towards relieving congestion around schools. Upon completion of a Congestion Relief School
Bus Feasibility Study, the Town Council, at its June 5, 2018 meeting, authorized staff to proceed
with a school bus pilot program. At its September 18, 2018 meeting, the Town Council
authorized funding to provide a pilot service consisting of two routes for 18 months of service.
The two-route pilot service started on January 7, 2019, with a celebratory reception of bus
riders through a balloon arch at Fisher Middle School. The Town and contract provider, Student
Transportation of America (STA), has delivered on-time service and a high level of customer
care. Passenger sign ups have continued to increase, with 113 paid passengers as of early
March (Table 1). The actual paid participation level now equals the original expressed level of
interest.
PAGE 2 OF 6
SUBJECT: STAFF RECOMMENDS THAT THE TOWN COUNCIL REVIEW AND APPROVE
THE SCHOOL BUS PROGRAM BUSINESS PLAN AND PROVIDE DIRECTION TO
STAFF FOR THE ONGOING PROGRAM
DATE: MARCH 14, 2019
S:\COUNCIL REPORTS\2019\03-19-19\School Busing Busin. Plan\Staff Report FINAL.docx 3/14/2019 3:56 PM
BACKGROUND (continued):
Table 1: Paid Passenger by Route
ROUTE Passengers
Route A North Los Gatos to Fisher and Blossom Hill 50
Route B Mountains to Los Gatos High and Fisher 63
Total 113
Note: Information updated March 5, 2019
This report presents the Council with a Business Plan (Attachment 1). The Business Plan is
timely as it provides useful information for ongoing discussions of funding, staffing, and
program size. By starting the program review early, the Town will have more opportunities to
explore resources with which to create a sustainable program and consider appropriate next
steps.
DISCUSSION:
The Business Plan provides an in-depth analysis of the program’s financial and organizational
outlook and options over the next five years and presents two new concepts for the Council’s
consideration. Following are excerpts from the Business Plan:
Program Goals and Benefits
As identified by the community and the Town Council early on, the school bus program has a
primary goal of reducing congestion around schools. The pilot was intended to provide a proof
of concept; thus, it needs to address the question of whether school bussing is the right tool to
help solve the school-related congestion problem.
With only two buses running, the pilot program is small in size; however, the service is
effectively tapping into the previous unserved market of school transportation, complimenting
existing walking or biking options that will continue to serve students who live closer. These
solutions are two tools among a number of tools that combine to help reduce traffic congestion
around schools.
The market analysis conducted through the program further concludes that the scale of a
school bus program will likely remain small over the next five years, projecting that the service
could scale from two routes to four routes in year four and six routes in year five. The number
PAGE 3 OF 6
SUBJECT: STAFF RECOMMENDS THAT THE TOWN COUNCIL REVIEW AND APPROVE
THE SCHOOL BUS PROGRAM BUSINESS PLAN AND PROVIDE DIRECTION TO
STAFF FOR THE ONGOING PROGRAM
DATE: MARCH 14, 2019
S:\COUNCIL REPORTS\2019\03-19-19\School Busing Busin. Plan\Staff Report FINAL.docx 3/14/2019 3:56 PM
DISCUSSION (continued):
of routes is constrained by the families’ reception to using the bus, the geographic distribution
of students, and the availability of funding.
Cost Projections
This congestion relief measure comes at a high cost. The Business Plan provides a cost
projection over five years, as shown on Table 2. The total expenditures include transportation
service, contract management, customer service, ticket sale, and administration. Although the
cost increases over the next five years are controlled by the current service contract, the Town
should be aware that the ultimate future cost will be affected by the trends in the industry. A
number of agencies recently have experienced 20% to 30% increases upon contract renewal.
The Town’s contract runs only through the end of fiscal year 2019/20 with options for renewal
to fiscal year 2022/23.
Table 2 - Projections of Costs
Revenue and Funding Strategies
The pilot service and the future program funding could come from three sources: fare revenue,
grants, and Town funds. The Business Plan provides additional information and discussion on
existing and potential funding sources. The most relevant topics include the discussion on the
fare structure and the risk of not having a dedicated funding source.
As the business plan notes, the fare revenue in the Los Gatos program is low compared to
similar programs elsewhere. Setting the fare low at the onset of the program makes sense to
build confidence in the program with the community, thus helping to ensure demand. As
existing routes become full, there may be an opportunity to allow the fares to increase.
Year 1/2 Year 2 Year 3 Year 4 Year 5
FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Two Routes 2 2 2 2 2
$167,528 $285,563 $294,130 $302,954 $315,072
Six Routes 2 2 2 4 6
$167,528 $285,563 $294,130 $605,908 $945,216
PAGE 4 OF 6
SUBJECT: STAFF RECOMMENDS THAT THE TOWN COUNCIL REVIEW AND APPROVE
THE SCHOOL BUS PROGRAM BUSINESS PLAN AND PROVIDE DIRECTION TO
STAFF FOR THE ONGOING PROGRAM
DATE: MARCH 14, 2019
S:\COUNCIL REPORTS\2019\03-19-19\School Busing Busin. Plan\Staff Report FINAL.docx 3/14/2019 3:56 PM
DISCUSSION (continued):
Based on a comprehensive analysis of the service needs and comparable programs, the
business plan concluded that there are great risks of not having dedicated revenue sources to
support an ongoing service.
Management Challenges and Organization Structure
The Business Plan presents several options of how a program could be managed, exploring the
pros and cons of each option. Table 3 provides a high-level comparison of these options,
including Town-managed, outsourced program management, Joint Powers Authority (JPA), and
transit agency as a service provider.
Table 3 - Pros and Cons of Program Management Options
Option Town-Managed Outsourced JPA Transit Agency
Decision-Making Town: 100% Town: 100% Shared Shared
Cost to Town High High Medium Low
Town Staffing Level High Low Medium Low
Pre-requisite Town’s
contribution
Town’s
contribution
Other
partners
Transit agency
engagement
The staffing resources required to operate the program remain high as currently structured.
This creates competition with other workplan priorities and job duties. The most evident trade-
off in the current Town-managed model is diversion of staff resources away from pursuing
grants for other Town Council priorities.
Near Term Opportunities
The Business Plan illustrates the resource intensive nature of continuing to provide the school
bus service, which has lead staff to revisit the problem statement of congestion around schools
and to consider alternative solutions.
Staff has identified two alternative models that may meet the goal of the program with reduced
resource impacts to the Town. These alternatives are conceptual, requiring some exploration
to identify actual viability and Council’s direction on these alternatives is appreciated at this
point.
PAGE 5 OF 6
SUBJECT: STAFF RECOMMENDS THAT THE TOWN COUNCIL REVIEW AND APPROVE
THE SCHOOL BUS PROGRAM BUSINESS PLAN AND PROVIDE DIRECTION TO
STAFF FOR THE ONGOING PROGRAM
DATE: MARCH 14, 2019
S:\COUNCIL REPORTS\2019\03-19-19\School Busing Busin. Plan\Staff Report FINAL.docx 3/14/2019 3:56 PM
DISCUSSION (continued):
The first is partnering with VTA to modify existing bus routes to serve the schools. This concept
serves two purposes: it increases VTA route ridership and it takes advantage of existing
operations. The second is a vanpool incentive option. In this model, the Town would subsidize
a vanpool company. The advantages here are outsourcing of the service and the ability of a
vanpool to serve smaller concentrations of students with shorter amounts of time in the
vehicle.
CONCLUSION AND NEXT STEPS:
The following questions are for the Town Council’s consideration:
1. Scale: What does the Council envision the scale of the program to be in five years?
2. Fare structure: Does the Council want to set the fare to keep pace with the total cost of
the service to increase the farebox recovery ratio? If so, what is the desirable ratio?
3. Organization Structure: Does the Council have a preference for any of the organization
structure options?
4. Alternative models: Should staff explore a partnership with VTA? Should staff explore a
vanpool option?
5. Metrics: Appendix A to Attachment 1 provides a discussion of several metrics for
success, including transportation benefits, financial sustainability, safety, service quality,
staffing and responsibilities, and bell schedules. Does the Council have any comment on
these metrics or are there other items that would useful to the Council in deciding on
the future of the program?
Staff looks forward to the discussion and direction from the Town Council.
COORDINATION:
This report was coordinated with the Finance Department.
FISCAL IMPACT:
This agenda item does not financially obligate the Town; however, in light of the Five Year
Forecast and all of the Council’s priorities, it is prudent to begin to consider approaches that
would be financially sustainable for the Town. If the Council directs staff to expand the current
pilot program or initiate developing new proposals, the cost impacts would be made available
for discussion through the annual budget process for FY2020/21.
PAGE 6 OF 6
SUBJECT: STAFF RECOMMENDS THAT THE TOWN COUNCIL REVIEW AND APPROVE
THE SCHOOL BUS PROGRAM BUSINESS PLAN AND PROVIDE DIRECTION TO
STAFF FOR THE ONGOING PROGRAM
DATE: MARCH 14, 2019
S:\COUNCIL REPORTS\2019\03-19-19\School Busing Busin. Plan\Staff Report FINAL.docx 3/14/2019 3:56 PM
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA and no further action is required.
Attachment:
1. School Bus Program Business Plan with Appendix A