Disclaimer

The preparation of this document was funded in part by the United States Department of Transportation with funding administered through the North Dakota & Minnesota Department's of Transportation, the Federal Highway Administration and the Federal Transit Administration. Additional funding was provided by the Minnesota Department of Transportation and through local contributions from the governments of Fargo, West Fargo, and Cass County in North Dakota; and Moorhead, Dilworth, and Clay County in Minnesota. The United States Government and the States of North Dakota and Minnesota assume no liability for the contents or use thereof.

This document does not constitute a standard, specification, or regulation. The United States Government, the States of North Dakota and Minnesota, and the Metropolitan Council of Governments do not endorse products or manufacturers. Trade or manufacturers' names appear herein only because they are considered essential to the objective of this document.

The contents of this document reflect the views of the authors, who are responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the policies of the state and federal Departments of Transportation.

The contents presented in this report are the sole responsibility of the Upper Great Plains Transportation Institute and the authors.

Executive Summary

Determining the optimal form of service where economic realities and the desire for a high level of customer service must find balance is one of the most difficult challenges facing providers of community transportation. Accurately estimating the impacts of changes in service policy in terms of ridership, revenues, and costs is just one, though important, aspect of service design. Considering the political, economic, and customer service implications resulting from such changes is also necessary. When altering ADA complementary paratransit service care must be taken to ensure continued compliance with federal regulations.

In this study five options for the deployment of Metropolitan Area Transit's (MAT) complementary paratransit service in the Fargo-Moorhead Metropolitan Area are analyzed. The objective is to provide information to assist in determining the optimal form of service where economic realities and the desire for a high level of customer service must find balance. The options vary only by the fare charged and the availability of service. The remainder of MAT's paratransit operations policy is expected to remain in its present form.

All service alternatives meet federal Americans with Disabilities Act (ADA) regulations regarding complementary paratransit service. This includes the mandated delivery of comparable paratransit service within three-quarters of a mile of fixed-route lines with fares no higher than twice that of fixed-route service. Though MAT provides uniform service at the same fare to all of Fargo, Moorhead, West Fargo, and Dilworth, MAT has ability to determine what, if any, service is provided and at what fare in areas more than three-quarters of a mile from fixed-route lines.

MAT's paratransit fleet is equipped with mobile data terminals (MDTs) and is managed with the aid of software and dispatch software. The presence of such technology readily provides MAT with the technical capability of adopting the more complex service alternatives considered. Being readily able to account for and collect the correct fare for premium fare trips, based on distance or zone, is necessary for the services to be successful.

The issue of uniformity of paratransit service in the metropolitan area is an important one. The cost of managing a complex system and educating riders and the community is sure to be higher than when a relatively uniform service structure is in place. Equitable local support of public transportation, which is not the current situation within MAT, is also valuable. As a result, the delivery of paratransit service to Dilworth was of particular interest to those commissioning the study.

Federal regulations require that complementary paratransit service be made available to those within three-quarters of a mile of fixed-route service if the transit agency has the legal authority to do so. It is assumed by SURTC that MAT does have the authority to provide trips within the City of Dilworth, given the fact they currently supply such service, and that it must provide the federally mandated minimum level of service. Though a formal contractual agreement between the cities of Fargo and West Fargo for the delivery of paratransit service to West Fargo locations is in place, there does not appear to be a mechanism or precedent for compelling municipalities, such as Dilworth, to contribute financially to public transportation in their situation.

The Five Service Options

Five service options for delivering ADA compliant paratransit service in the Fargo-Moorhead metropolitan area were analyzed. General descriptions of each of the service options, including the perceived benefits and costs in terms of system uniformity, financial cost, and fairness are described below. Adoption of some of the alternatives may be unlikely, primarily because of adverse political ramifications or contractual obligations. However, quantifying their impact should aid in the evaluation process. Maps presenting the geographic boundaries for each of the five service options can be later found in the report.

Metro Service

Presently, MAT provides uniform paratransit service at a charge of $2 a ride, twice that of fixed-route service, to the communities of Fargo and West Fargo, N.D., and Moorhead and Dilworth, Minn. This includes the elective delivery of service to areas more than three-quarters of a mile from fixed-route where service is mandated by the ADA. The complementary paratransit fare is limited by the ADA to twice the fixed-route fare for service within three-quarters of a mile of fixed-route lines, but it is unrestricted for trips beginning or ending beyond that distance. The first service option is to keep this system in place in its entirety.

The metro service option provides a high level of customer service delivered by a single, uniform system which is easier to manage than the following alternatives. However, such service comes at a high cost financially. The option is not fair in an economic sense because individuals who take longer, more expensive trips pay the same fare as other riders. As the City of Dilworth does not provide local funds, though their residents receive the same service as residents of the other municipalities, there is also a degree of political unfairness in MAT's current service policy.

Three-Quarter-Mile Service

The three-quarter-mile service option provides the minimum amount of service as mandated by ADA. Here the MAT's paratransit service area would extend three-quarters of a mile from existing MAT fixed-route service. This results in the loss of service to the majority of the city of Dilworth, portions of residential Fargo and West Fargo, and industrial and non-developed portions of Fargo and Moorhead.

The three-quarter mile service option is the lowest cost service alternative. It also results in the largest number of forgone rides. There is an element of political unfairness as residents whose local taxes support MAT and who desire to travel to or from outlying areas will no longer be able to do so. Service to a large portion of Dilworth is also lost, an action that aggressively compensates for the absence of local contributions to MAT. Much of the southwest portion of the metropolitan area, which has been seeing rapid growth, would also lose service. The significant reduction in service that would result from the implementation of three-quarter-mile service might draw the ire of government officials and agencies who oversee MAT operations and funding. It would also likely violate the contractual agreement for the delivery of public transportation service that exists between Fargo and West Fargo.

Two-Zone Service

The two-zone service alternative divides the metropolitan area into two zones. Zone 1 consists of areas within three-quarters of a mile of MAT fixed-route service. Zone 2 consists of the remaining parts of the four communities. Rides originating or terminating within Zone 2 would be subject to a fare of $5 compared to the existing $2 paratransit fare. The calculations for two-zone service rely on assumptions regarding riders' response to the change in price which are based on data collected from fare changes in Sheybogan, Wis., during the 1990's.

Two-zone service results in a moderate cost savings, but requires additional resources to manage. There is also a political cost to having lower levels of service in outlying areas. A degree of economic fairness is introduced as those who make trips to distant locations impose higher costs on the system, costs offset to some degree by higher fares. Satisfactions levels may also suffer as customers will need to be educated about the new, more complex service. Two-zone service would likely require the agreement between Fargo and West Fargo for the delivery of transit service to be altered.

Three-City Service

The three-city service option would end MAT paratransit service to those parts of Dilworth more than three-quarters of a mile from existing MAT fixed-routes while continuing to provide service to all parts of the other three communities. This service option results in a loss of service to a large portion of Dilworth. However, service to the entire city is not ended to maintain compliance with the ADA.

The three-city service option results in modest financial savings and decrease in rides delivered. The option maintains a uniform system for the areas that retain service. As with three-quarter-mile service, the three-city alternative aggressively compensates for the absence of local funding from the City of Dilworth and the higher cost of rides provided to the area. The three-quarter-mile service option would likely violate the current contractual agreement between West Fargo and Fargo.

Three-City-Two-Zone Service

The three-city-two-zone service option is essentially the same as the two zone service option described previously. The only difference is that in this case service to those parts of Dilworth more than three-quarters of a mile from MAT fixed-route service will no longer be available.

Adopting the three-city-two-zone service option will result in modest decreases in both trips delivered and financial cost. The system would loose a degree of uniformity in exchange for an increase in economic fairness. As with the two-zone option, riders traveling to or from distant locales will be required to pay a higher fare to offset the higher cost of the rides. Three-city two-zone service would also likely require the agreement between Fargo and West Fargo for the delivery of transit service to be altered.

The Analysis

The formal analysis relies on information available from MAT and the transit service planning literature. Only operating costs are considered in the analysis. Neither the cost of transitioning to a new system, which may be substantial in the case of the implementation of two-zone service, nor the capital savings from operating a smaller fleet are included. MAT currently employs mobile data terminals (MDTs) on its paratransit fleet and makes use of scheduling and dispatch software that allows for more complex fare structure and billing. Under the most liberal assumptions, it does not appear that more than one vehicle would be saved by reducing service under any of the five scenarios. In most cases the fleet size would remain constant.

Results

Estimates of the change in ridership, measured in unlinked passenger trips, fare revenue, operating expense, and savings under the five service options are presented in Table 1. These estimates rely on moderate assumptions; the full report also presents figures arising from more conservative and liberal assumptions for each of the service options. The metro service option values are actual MAT numbers for the calendar year 2004.

The alternative service options have relatively small impacts on ridership and savings as most MAT Paratransit trips originate and terminate within three-quarters of a mile of fixed-route service where service is required by federal law.

Two values on the service options comparison table need to be defined. The first term, uncovered expense is operating expense less fare revenue. The second is the term savings, which is the difference between the uncovered expenses under the current service policy versus those from a particular alternative. For example, using the metro service option in Table 1, the operating expense, $536,571, minus fare revenue of $177,698 yields an uncovered expense of $358,873. The savings from implementing the three-quarter-mile service option, $21,953, is equal to the uncovered expense under the metro service option, $358,873, minus $336,920, the uncovered expense under the three-quarter-mile alternative.

Table 1. Service Options Comparison

Relatively significant financial savings of $21,953 are estimated for paratransit service limited to three-quarters of a mile from existing MAT fixed-route lines. This comes at the cost of a sizable decrease in trips delivered, 1,768. Implementation of the two-zone alternative is expected to have less pronounced affects with a decrease in annual trips of 707, resulting in a $2,794 decrease in fare revenue and an $11,946 reduction in operating expense. Three-city service results in 468 fewer trips delivered per year compared to 988 for three-city-two-zone Service; options which have expected savings of $5,811 and $12,268 respectively.

Given the tradeoffs that exist between financial cost and customer service, it is not possible to objectively determine which of the service options best meet the needs of MAT's customers. For example, while the three-quarter-mile service option yields the greatest savings it is also the least politically palatable as residents of Dilworth, Fargo, Moorhead, and West Fargo will be denied service, based on the location of their ride origin or destination. For the two-zone options the concept of economic fairness is addressed as trips that begin or end in areas from the geographic center of the metropolitan area that are significantly more costly than other trips are charged higher fares. Finally, the current service policy provides the highest level of customer service, but at a significant financial cost.

The Impacts of MAT Fixed-Route Expansions

The service options were studied given current MAT fixed-route and paratransit service performance. Due to the interrelated nature of the two transportation types, which arises as a consequence of ADA regulations, the impact of future fixed-route expansion, which will be addressed as part of the 2007 Transit Development Plan, should also be considered when deciding upon paratransit service options in the near term.

Given the rapid growth of southwest Fargo and West Fargo, the addition of fixed routes to MAT's current service in the future is plausible. In light of this, the alteration or elimination of paratransit service becomes less pragmatic. To change service only having to change it back a short period later, after the addition of fixed-route service in these areas, would impose a number of costs on MAT both financially and in terms of service quality.

Additional Service Alternatives

Though this study looked specifically at the impacts of various service alternatives where either flat fares or zonal fares are used, there are other, possibly viable alternatives, for MAT's paratransit service/fare structure. One option, touch on briefly in this paper, is the implementation of per-mile charges for those trips outside the three-quarter mile service area similar to that used by Bis-Man Transit in providing rides to outlying rural areas. Another possibility is that of introducing agency rates. This alternative has been considered before and was the subject of a 1998 Fargo-Moorhead Metropolitan Council of Governments study.

Service Policy Considerations and Recommendation

As part of the study SURTC was asked to provide a recommendation as to the best MAT paratransit service policy. Based on the analysis, SURTC recommends that, if possible, MAT maintain its current operations policy and its high level of customer service by continuing to provide uniform paratransit service Dilworth, Fargo, Moorhead, and West Fargo. The potential benefits of the alternatives, which in essence scale back the level of service, are offset by significant non-financial costs on communities in the form of forgone paratransit rides.