Transit as Part of a Comprehensive Transportation Demand Management (TDM) Strategy

Campus transit systems formed in the 1970s and 1980s principally to provide safe, affordable mobility for students. These systems were designed to connect remote housing and parking locations with central campus and to provide safe nighttime transportation throughout campus and the university community. More recently, however, campus transit systems have been seen by university administrators and planners as a part of a larger land use and transportation demand management (TDM) strategy. Improved transit services are being developed both in large and small urban university settings to reduce auto travel thus reducing congestion, pollution, and the need for increasingly expensive parking. Transit solutions also allow universities and their surrounding communities develop more intensely by reducing the need for space devoted to parking or wider roadways.

TDM, a coordinated set of policy and operating strategies that include a combination of incentives and disincentives, emphasizes alternatives to single-occupant-vehicle (SOV) These strategies involve ways to increase the cost of driving or parking and are offered in conjunction with programs to encourage the use of other modes including transit, bicycling, and walking. Universities in both large urban and small "college town" communities have embraced such strategies to cope with increasing congestion and, in the case of smaller communities, the increased demand for parking due to university growth. Universities, because they can control key elements of TDM, especially parking availability, parking rates, and land-use control, are able to more easily implement coordinated programs of incentives and disincentives to single occupant vehicle travel.

One of the earliest pioneers to use transit as part of a comprehensive TDM strategy was Cornell University in Ithaca, NY. Motivated primarily by the desire to reduce the cost and space requirements of increased parking, Cornell implemented a comprehensive TDM program that includes charges to faculty and staff for parking at rates that approximate the true cost of the parking and then discounts on those rates to encourage ride sharing. Further, the university was the leader in establishing a region-wide transit system that offers high-quality, low-cost transit services to not only the students, faculty and staff of Cornell, but also to residents of the surrounding communities. (3)

Williams and Petrait, in their review of the University of Washington U-Pass program, a very comprehensive and effective TDM program, identified several lessons learned from the Washington experience that directly apply to this issue of what is required for a successful TDM program (11) First, they observe that a balanced TDM program should include both benefits and disincentives. The University of Washington would not have been able to sell a disincentive to driving by significantly raising parking rates had their TDM strategy not included the transit and other commute option incentives. Cornell University also cites the role of incentives as key to gaining acceptance for parking rate increases and parking restrictions (3). Free transit and/or parking options with price or location incentives to encourage ridesharing are essential elements of a comprehensive program.

A second lesson learned from the Washington experience is that to gain public acceptance the commuting options offered must be flexible. People cannot always commute by the same mode every day. The U-Pass program recognizes this reality and therefore provides limited parking passes to persons that ride the bus at least three days a week. Likewise, it issues free U-Pass transit passes to purchasers of parking permits in the hope that these single-occupant vehicle operators will choose transit whenever possible.

A third lesson from the U-Pass TDM effort is that parking fees are an essential component of a TDM program both because raising fees serves as a disincentive to SOV use, but also because high parking fees can generate the revenue needed to fund other elements of the TDM program. In the University of Washington's case, parking revenue provides about a third of the total program budget. Williams and Petrait also stress the role that parking plays in a TDM effort. Free or low-cost parking encourages SOV use and thwarts efforts to reduce congestion and parking demand.

TDM has become a popular concept that has been applied and misapplied to a wide variety of transportation activities. In some cases, universities and regional organizations call their transportation activities a Transportation Demand Management program when, upon closer scrutiny, the TDM title is just an umbrella name given to a group of related, but independent activities, such as transit and parking. Even at the planning stage, what used to be called a campus transportation plan study is now often called a Transportation Demand Management Plan. Certainly grouping related activities under one organization is the first step toward coordinating transportation policy and operations, but without substantial integration of program elements, especially transit services and parking rates and availability, achieving the goals of TDM is unlikely. Programs such as the U-Pass program at the University of Washington and the Cornell University program meet the definition of effective TDM efforts.

The TCRP synthesis study survey concluded that universities in large urban areas such as Seattle and Milwaukee are embracing TDM, but so are universities like NDSU that are located in smaller communities. The following universities responded in the TCRP survey that their transit systems were part of a larger TDM strategy:

• Colorado State University
• Florida State University
• Northern Illinois University
• University of Illinois Champaign-Urbana
• University of Massachusetts -- Amherst
• University of Michigan -- Ann Arbor
• University of New Hampshire
• Cornell University
• East Carolina University
• Penn State University
• Clemson University
• University of Wisconsin -- Madison

In summary, a comprehensive TDM strategy that includes policy actions related to parking availability and cost, promotion of non-auto travel, and considers the transportation implications of land-use decisions is likely to result in the most successful transit service with the best service and highest ridership. Furthermore, universities that have adopted a TDM approach have been the most successful in reducing the cost of mobility to, from, and on campus and the negative impacts of growth.

Unlimited-Access Transit

Each time transit riders travel they are usually required to drop a fare, in the form of exact change, into the farebox. Contrast this situation with motorist traveling in their own private vehicles who can jump in the car, turn the key, and go their own way. While motorists know that automobile travel is expensive, the variable costs of a particular trip are very small. On the other hand, when a transit rider pays a cash fare to use transit, not only are transit's costs immediately obvious, they are seen to be directly related to the number of trips taken.

For decades, transit proponents have identified this disparity of the way users pay for their transportation as a major obstacle to increased transit use. Consequently, most transit systems have developed pass programs, and other prepaid, unlimited use options so that transit riders can have unlimited ridership for a given period of time (usually one month) and avoid the fare payment hassles of a cash fare. These passes are also usually discounted to encourage regular ridership. More recently, smart card technology is being introduced that makes this fare payment method more flexible and easier to administer for the transit system and more convenient for the customer. However, all of these schemes still require the individual user to make a decision to incur a regular outlay to use transit.

"Free" transit has often been proposed as a way to encourage transit use. Proponents of this approach do not really mean that the transit service is free to provide; rather, they propose that the cost of providing transit services be prepaid either from tax revenues or other sources. For large transit systems, this prepaid scheme has seemed an unattainable goal because of the fiscal implications of losing all farebox revenue while having to cover the cost of increased service needed to meet demand that would be expected when fares were abolished.

Though believed to be impractical in large urban areas, prepaid transit that would allow users unlimited access to high-quality transit has been tried and proven in university communities throughout the country. As early as the late 1960s, some universities either started their own unlimited access systems or partnered with local transit agencies to offer bus services that were open to all students, and usually faculty and staff. High quality transit services resulted in high ridership, and these systems were great successes.

However, although many examples of prepaid, unlimited-access transit existed throughout the country, adoption of the concept moved slowly during the 1980s. The 1990s, however, have witnessed an explosion in the number of universities, both in traditional "college towns" and large urban areas, that have implemented unlimited-access systems. Several factors account for the accelerated implementation rate in recent years. Three of the most significant ones are described below.

One reason for the growth of unlimited-access systems is that the transit systems serving campus communities have matured and have the organizational, managerial and operating capability to provide expanded high quality service. Another reason for the recent move to unlimited-access transit is the funding situation for public transit. The earliest unlimited-access systems were started in the 1960s and 1970s when state and federal funds helped university communities respond to concerns about safety and mobility. The 1980s, however, was a period of retrenchment for many transit systems both in large urban areas and in small university communities. The fiscal uncertainties of this period dissuaded transit managers and policymakers from advocating transit expansions such as those required with unlimited-access systems. However, the funding picture has been much more positive since the passage of the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991 and The Transportation Equity Act for the 21st Century (TEA-21) in 1997 that provided significant increases in federal transit funding that has also been matched by many states with increased state funding. Transit systems are now in a position to experiment with new services.

A third reason for the increased interest in unlimited access systems is the promise and, in many cases, the proven contribution that transit can make to addressing a number of objectives shared by both students and university administrators. Extensive transit services that are used by most students and a significant portion of faculty and staff can help a university in the following ways:

• reduce the demand for more parking,
• increase students' access to housing and employment,
• reduce congestion on campus and in the surrounding communities.

NDSU has instituted unlimited access transit using the MAT system. Students can show their ID cards and ride "free" because the university pays the transit system a modest fee to provide the unlimited access service. However, unlike many of the unlimited-access systems reported in the TCRP and other reports, the level of transit service provided to the NDSU students, faculty, and staff, has not significantly increased as a part of the unlimited access policy. Therefore, the frequency and hours of operation of the MAT service are not typical of those found in most unlimited-access situations. Nevertheless, the MAT/NDSU version of unlimited access has begun the process of improving mobility in the area without greatly increasing the cost of service and thus avoiding some of the difficult funding issues faced by other universities adopting the unlimited access model. The data reported below was taken from the TCRP synthesis survey and provides some background data that may be useful to NDSU officials as they consider the merits of expanding the current service.

The most fundamental decision in designing an unlimited access system is determinating the categories of potential users who will be afforded the unlimited access. In the context of campus communities, the most obvious riders will be students. Brown, Hess, and Shoup, in their 1999 survey of 31 unlimited-access systems determined that just over half of the systems (16 of 31) provided unlimited access service only to students. The other half provided unlimited access to students, faculty and staff (2). In addition, the survey results identified at least one example, Clemson University, where the transit system offered unlimited access to all residents of the community, not just those affiliated with the university.

The decision to limit participation in the unlimited-transit option can most closely be tied to funding. If only student fees are used to support the transit system, then equity concerns might arise if other categories of users, such as faculty and staff, are given access to the transit system. Universities often address this equity concern by funding the faculty and staff use of the system by providing university general funds or revenue from parking permit fees. Systems such as the one at Clemson University that are open to the general public receive state and federal transit operating assistance or other source of funds contributed by local governments.

Another reason to limit participation in an unlimited-access transit program is a concern for system capacity. However, because students have been shown to be the primary users of the unlimited access system, opening the service to faculty and staff will add relatively little additional demand. Universities have often sought to limit eligibility for transit service as they transition from a more traditional fare payment method to an unlimited-access option because of concerns for excessive demand that will lead to added service beyond the financial resources in place at the time the service is implemented.

Ridership growth upon implementing unlimited access has, in some cases, been 200-300 percent. Table 2.6 shows the ridership gains reported at the start of unlimited access service for several campus systems. Faced with this possibility, university and transit system administrators have chosen to implement unlimited access incrementally by either restricting eligibility or by restricting the services offered in the unlimited-access program. For example, Penn State recently introduced unlimited access on its campus loop shuttle routes but has hesitated to expand the concept to the entire regional system used primarily by students, faculty and staff. This hesitation stems from capacity constraints facing the transit operator, and more important, possible financial exposure from opening the entire regional system. Likewise, in the fall of 2000, Indiana University began a three-year phase-in of an unlimited-access program by opening the Bloomington Transit system to all students but by delaying the same expansion for the Campus Bus-operated routes.

Table 2.6 Ridership Increases Experienced when Unlimited Access Service is Introduced - Source: (7)

Student-only unlimited access systems, once successfully implemented, usually add faculty and staff as eligible users because these groups see the benefits of the service, and the university administration recognizes the value of the transit service as an employee commuting option. Another factor that may accelerate the move toward adding university employees as eligible recipients of unlimited access services is the recent change to the federal Commuter Choice program. Under this program, employers can provide up to $100 per month to reimburse transit expenses for their employees and the benefit is not taxed. Employees save federal, state, and local income taxes and FICA contributions and employers also save FICA and other taxes. The federal government now provides this commuting benefit to all of its employees. Private firms along with state and local governments are also adding this benefit for their employees. Given these trends, universities are likely to be asked to offer the same benefit to remain competitive with other employers, and they can do so through a properly structured contribution to the unlimited-access program on their campus.

One of the most difficult negotiations involved in setting up an unlimited access system is to determine the fairest way to pay for it. As can be seen from Table 2.7, the TCRP survey concluded that nearly two thirds of the unlimited-access systems used student fees to pay for the service and more than a third used parking fees. University general funds were used in nearly a quarter of the systems.

Table 2.7 Sources of Revenue for Campus Transit Systems Source: (7)

Where student fees are used, the amount varies largely with the amount of service provided and the additional sources of funding available to support the campus service. Table 2.5 shown earlier summarizes the fee levels reported in the TCRP survey.

One final issue related to unlimited access systems that will be important to the continuation and possible expansion of the unlimited access system at NDSU and other universities in the Fargo-Moorhead area is the way in which the revenue generated from the sources described above are provided to the transit operator to offset operating and capital expenses. Even in cases where the university directly provides the unlimited-access service, the parties responsible for providing the funds usually insist on some objective method for determining the amount of funds required. In cases where a separate transit agency or private provider operates the service, a formal contract is required.

Several workable reimbursement models have been widely used. In the case where the transit provider is a department of the university, the method for determining annual contributions from the various funding sources can be negotiated annually or be based on predetermined cost-sharing basis that might, for example, call for student fees to cover 75 percent of all costs, and parking revenues the other 25 percent. The transit budget would be developed according to university procedures and might include review and approval by a policy board that includes student representatives.

If the transit provider is a separate agency, as in the case of NDSU and MAT, the transit system can be reimbursed for service in one of three ways. The first would be a negotiated fixed amount that is not specifically tied to the number of riders or amount of service provided. Several transit systems reported in the TCRP synthesis study that the transit system and the university negotiated a specific dollar amount that the university was willing to contribute to the unlimited-access program. This amount often represented what the university had spent previously to provide its own transit service prior to the transition to unlimited access service provided by the regional operator.

The other two ways that transit systems might be reimbursed are based on either the amount of service provided or the number of persons using the service. Payment based on the amount of service is most common, but the per-ride or per-passenger basis is gaining popularity in large urban areas. Payment based on service is usually negotiated either explicitly by setting an hourly rate, or implicitly by having both sides consider the amount of service required as they negotiate specific dollar amounts. An example of the explicit statement of a per-hour rate can be found in the contract used by Michigan State University and the Capital Area Transportation Authority that details a costing methodology to determine the cost per hour for both fixed-route and paratransit services. It also prescribes the procedure to be used to add or reduce hours of service.

The per-trip or per-pass reimbursement method for unlimited access system may call for the university to pay the transit provider based on a predetermined per-trip payment. Alternately, the reimbursement method may be to purchase passes for students and employees according to a fee schedule that often reflects a discount over the general public pass price. Quantity discount incentives to encourage universities to promote the transit program may also be included in the arrangement. Sometimes a combination of these per-trip or per-pass arrangements are used by the same transit system. For example, Port Authority Transit in Pittsburgh began its U-Pass program with the University of Pittsburgh by negotiating a per-trip reimbursement. Once the university and the transit system gained operating experience, the contract between the two agencies became a fixed-price contract that did not depend on ridership. In addition to fixed-price contracts with Pitt and Carnegie Mellon University, PAT offers discounted monthly passes to smaller colleges in its service area.

Summary

NDSU has recognized the benefits of high-quality public transportation both on campus and between the surrounding community and the ever-expanding university campus. As such, it joins many other progressive universities around the country that use the many policy options available to improve land use, reduce the negative impact of single-occupant vehicle travel, and provide for mobility to a growing population without destroying the ambiance of the small-town university community. The information reported in this chapter, especially related to unlimited access systems, governance, and student fees, should help local decision makers formulate transit plans that will benefit both the university and surrounding community and provide for an equitable way of paying for the needed services.