PURPOSE:   

This is an update on the ongoing expansion program of local transit services that the City Council authorized on January 25, 2005.  The report includes ridership figures and other information on the recently implemented NoHo Line South service, an update of the overall marketing, branding, and information program, options for acquiring the transit vehicles that will be needed for the May and August service implementations, and a funding and budget update.  The Transit Services Task Force continues to meet and provide direction to staff on the elements of the ongoing expansion program. 

BACKGROUND:

On January 25, 2005 the City Council approved a three-phase service expansion of the Burbank Local Transit (BLT) program.  As shown on Exhibit A, the initial phase was to implement a new transit route between the Metro Rail Red Line station in North Hollywood and the Burbank Media District, operating through the Magnolia Park area.  That service began on February 28^th and has been in operation each weekday between 6:00 a.m. and 10:00 a.m., and 3:00 p.m. and 7:00 p.m.  The service is free to Metro and Metrolink cardholders.  An update on this new service is provided below. 

The second phase of the expansion program is scheduled to begin in late May of this year, when the existing on-demand services in the Downtown and Golden State areas will be converted to fixed routes.  The third phase, scheduled for August, will implement a new fixed route service between the Metro Rail Red Line station in North Hollywood and the Golden State area.  These two phases will require four additional transit vehicles for the routes, and at least two additional back-up vehicles for the entire program.  Vehicle procurement options are discussed later in this report.

The Transit Services Task Force was appointed by the Council to provide direction to staff in developing the local transit program.  The Task Force met several times over seven months throughout the prior year, and is continuing to meet to monitor progress and provide direction on the implementation of the new services. 

PHASE I IMPLEMENTATION�NOHO LINE SOUTH:

As of the preparation of this report, ridership on the new NoHo Line South had increased steadily from 108 passengers during the initial week of operation, to a high of 315 passengers transported during the fourth week of operations.  Ridership dropped a bit to 310 passengers during the fifth week, possibly due to Easter and Summer Break vacations.  Staff anticipates that there will be a significant increase in April as some holders of Metrolink passes for the month of March opt to switch to the less expensive Metro Rail service when their passes expire.        

Marketing efforts have been intensive since the start of the new service in late February.  Numerous articles on the transit expansion have appeared in each of the local general-circulation newspapers, as well as in the Burbank Business Journal, and the City�s Burbank Today.  Additionally, a public information piece has been appearing on Channel 6, and our marketing consultant Moore and Associates has been working with representatives of local Media District and Magnolia Park companies to put informational articles in employee newsletters, canvassing property owners and businesses along the route, developed a NoHo area direct mail campaign, and is working with the MTA to include the new service in their �trip planning� database that it offers on their transit website.  The City�s Transporation website has been updated to include the new route and schedules, and utility bill inserts are being prepared to provide an additional source of information for Burbank residents. 

MARKETING AND BRANDING PROGRAM

Staff has been working with the Transit Services Task Force to develop an extensive branding program for all of the local transit services.  The proposed program includes a new name (Burbank Bus), new colors and graphics for the transit vehicles, matching signage at the bus stops, newly designed color brochures and other informational materials, and a new transportation website that will provide transit routes and schedules, as well as information on the local bikeway system, pedestrian routes, and other modes of local transportation.         

The new �look� developed for the local transit system will become the basis for an ongoing marketing and information program that will continue indefinitely beyond this year�s implementation of new routes.  While the short-term marketing efforts described above continue, staff is developing a comprehensive outreach program that will be designed to provide ongoing and continuous exposure to residents and employees alike. 

The comprehensive marketing and branding program will be substantially completed by the scheduled Council meeting, and will be presented at that time.  The program will be modified as necessary to respond to Council direction, and implemented prior to the May start of the next phase of the transit expansion.

PHASE II AND III SERVICE EXPANSIONS

Phase II of the transit expansion program will convert the two on-demand service areas to two separate fixed routes, the Downtown and Airport/Empire lines.  Phase III, scheduled for August, will be the NoHo Line North which will connect the North Hollywood Metro Rail station with the Airport/Empire area.  Both of these expansions will require the acquisitions of additional transit vehicles.  To date, including the newly implemented NoHo South line, we have been able to rely primarily on City-owned CNG vehicles. 

In order to implement the Phase II service conversions, four vehicles will be needed concurrently and one additional vehicle as a back-up.  Phase III will require two vehicles to be operated concurrently, with one additional vehicle to back-up the entire system.  Seven vehicles will need to be acquired, either leased or purchased, within the next five months to implement the planned routes. 

New 30-35 foot CNG vehicles cost in the range of $175,000 to $325,000 depending upon their projected service life and optional equipment.  At the January 25 meeting when the Council authorized the expansion program, staff identified the need for seven additional vehicles and suggested that it would likely be necessary to lease diesel vehicles until sufficient funding could be allocated to purchase new CNG (or other alternative fuel) vehicles.  The cost of using vehicles provided by our operating contractor, $15 an hour per vehicle, and/or leasing vehicles from an independent dealer, approximately $2,000 a month per vehicle, was included in the original cost projections of the expanded transit services. 

During the prior two months, staff has discussed leasing opportunities with several transit vehicle dealers.  There is no scarcity of diesel vehicles available for lease; however CNG-fueled vehicles are not currently available.  The lease terms vary considerably with vehicle age, quality, service arrangements, and length of the lease commitment.  The vehicles are typically delivered newly-painted white, and can be re-painted to match local needs.  Staff has recently been discussing with Foothill Transit the possibility of acquiring, at no cost, two or more diesel buses that are being retired from the Foothill fleet.  While the vehicles appear to be in good condition, they would be thoroughly inspected prior to entering into any agreement. 

While purchasing and operating an all-CNG fleet of vehicles continues to be the long-term goal, purchasing seven new vehicles represents a substantial cost.  Staff intends to submit an application through the AQMD grant program for a 50% match against the purchase price of two new vehicles, using (pending Council approval) a portion of the unallocated General Fund cash balances earmarked by the Council for infrastructure and traffic needs.  A condition of approval of the Platt project requires the developer to provide $500,000 towards the purchase of new transit vehicles.  Additionally, Congressman Schiff was able to get approximately $450,000 earmarked over a three-year period included in the transportation re-authorization bill.  While these funding sources will provide opportunities in future years to purchase new equipment, the service expansions planned for the next five months will require the immediate procurement of vehicles.            

BUDGET AND FUNDING UPDATE:

The report presented to the Council on January 25^th identified the projected approximate costs of the three phases of the service expansion.  To date, expenditures for the continuation of the Media District service and start-up and operation of the new NoHo Line South service are consistent with the originally budgeted funding and the mid-year appropriation of $80,000 authorized by the Council.  These funds are also anticipated to cover the start-up costs of the Phase II service conversions (on-demand to fixed routes), and the roughly one month of that service that will occur in the current fiscal year. 

Attached (as Exhibits B and C) are projected Cash Flow statements for the Proposition A and C, Funds 104 and 105 respectively, which are the primary sources of funding for the local transit programs.  While existing cash balances are substantial, projected costs exceed projected revenues in both funds in each of the four upcoming years.  This will have the effect of reducing Proposition A cash balances by approximately 23%, and Proposition C cash balances by 15%, over the next four years.  In addition to the added costs of the expanded transit program, which is estimated at $229,000 per year, the increasing deficits of expenditures over revenues is due to projected increases in salaries and benefits of City employees, and rising insurance and miscellaneous operating costs.  At the same time, revenues from interest income are decreasing due to the annual cash-balance reductions. 

Potential increases in transit revenues would help to offset the projected yearly deficits in Proposition A, Fund 105 program.  Staff is conservatively using the current $90,000 annual Metrolink reimbursement of 50% of the stated fare ($1.00/2 = $.50) in the 5-year Cash Flow statements.  Realistically, this will likely rise as additional routes are implemented and ridership grows. 

Another cash flow improvement would result from a potential reduction in the transit operating costs.  In estimating the annual operating costs associated with the expanded program, staff conservatively assumed the cost of operating Phase II and III services would be based on the higher hourly rate for contractor-supplied vehicles.  It now appears that by leasing vehicles from an independent dealer, that operating cost could be somewhat lower.  Further, if the Foothill vehicles are provided at no lease cost, that procurement costs of vehicles for Phases II and III would be substantially less than originally forecasted. 

Also relating to vehicle costs, Finance has agreed that a reduction in the Fund 532 vehicle replacement change for City-owned transit vehicles is warranted given the opportunities for acquiring vehicles with a low local match (typically 20-30% of the purchase price).  This reduction makes the acquisition of new vehicles more affordable, in that the annual replacement charges are now significantly lower.  The attached Fund 105 Cash Flow sheet reflects this reduced rate for the recently acquired CNG vehicles in the �F532� cost.

CONCLUSION:

This report is intended to provide an overview of the ongoing implementation of the local transit expansion program authorized by the Council.  Additional ridership data for the NoHo Line South will be available for review when this report is presented, as will be graphic illustrations and a more detailed description of the proposed marketing and branding program. 

RECOMMENDATION:

Staff requests direction from the Council on the information presented in this report and at the meeting.  

ATTACHMENTS

EXHIBIT A     BURBANK LOCAL TRANSIT EXPANSION PLAN

EXHIBIT C     PROPOSITION A CASHFLOW STATEMENT

EXHIBIT D     PROPOSITION C CASHFLOW STATEMENT

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