Marion Co. Transit Plan: Not Visionary for Indy
$1.3 Billion Proposed Plan Hearkens to 1940s – Where’s the Innovation?
Contact: Lee Lange- 317.259.4334
Release: Oct. 18, 2016
(Indianapolis) – If voters approve the transit referendum Nov. 8th, Indianapolis will buy a quaint 1940’s solution to a 21st Century opportunity. When Uber and Lyft – the transportation innovation leaders of today — are initiating a transportation revolution in other communities, Indianapolis once again looks in the rear-view mirror. Indianapolis leaders, IndyGo planners, and taxpayers should be anticipating the flood of change that will occur over the next few years—not building permanent bus lanes down the middle of major city thoroughfares which will be rendered obsolete.
Huge “ifs” About Marion County Transit Plan
$1.3 Billion Proposed Plan to Become Indy Taxpayers’ Burden, Cannibalize Funding for Other Local Priorities
Contact: Lee Lange- 317.259.4334
Release: Oct. 10, 2016 (Indianapolis) – If IndyGo proceeds with construction of the proposed Red Line bus line, Indianapolis residents and/or property owners need to start hoping and praying that IndyGo will construct the Red Line better than it did the new Downtown Transit Hub. Nine months late and cost overruns of the entire 25% contingency fund for the hub don’t bode well for the Red Line and completely closing Meridian St. and College Ave. along the line for at least a year.
• Congress delayed action on the budget funding of IndyGo’s Small Starts grant application until after the November 8th election. Construction funding remains unclear.
• IndyGo is proceeding with plans to construct phase one of the Red Line in spite of uncertain federal funding and uncertain results of the voter referendum. 80% of construction costs are expected to be funded by the yet to be determined 2017 congressional budget.
• The proposed Red Line will construct permanent 15-inch-high concrete lanes down the middle of Meridian St. and College Ave. with 60-ft. stations in the middle of the streets.
• Meridian and College will decrease to one lane each direction to accommodate lanes and stations and more than 50% of parking along Meridian and College will be eliminated.
• Businesses along the route are being informed in meetings that College and Meridian will be closed for a year while the route is built. (Red Line starts at 66th St. south on College Ave., west on 38th St. to Meridian; at 38th the Red Line plan goes south to 18th St. where it jogs to Capitol Ave. to downtown.)
• IndyGo described the Red Line project as “one of the largest infrastructure projects Indianapolis has ever seen” according to its June Board materials.
• If Marion Co. voters approve the referendum, IndyGo will receive $100 million annually from taxpayers ($56 million from the referendum; $44 million from property and state taxes). IndyGo’s annual budget this year is $70 million. Bus fares equal 16%.
• Marion Co. residents will vote yes/no whether to increase the overall county option income tax to 2.1 percent, including the .25% increase to fund the Marion Co. Transit Plan. This would mean a resident who makes $40,000 a year will pay $850 annually for their total county income tax. A $100,000 earner will pay a total of $2,100.
• To build the system by 2021, IndyGo must identify $390 million in capital funds, none of which has been secured. Marion Co. property owners already have two taxes on their property, one subject to the property tax cap (designated for capital exps.) and one that is open-ended (funds annual operations).
• No priority for low-income people or people who depend on the bus system to get to jobs and health care.
• Voters are being asked to fund a hope and a dream.
Download pdf version here: strl-pr-many-ifs-10-10-16
A public question to be placed on the November ballot will ask Indy voters to approve a new tax for improvements to the existing bus system and the addition of three bus rapid transit lines: Red, Blue and Purple. The language of the public question, however, fails to disclose that the transit plan will lead directly to substantial bus-fare increases that will fall disproportionately on low-income, transit-dependent residents of Marion County. Here’s how that burden will emerge.
If the November referendum is approved, a .25% local option income tax would be initiated. According to IC 8-25 (SB 176, 2014) the transit system’s fare revenue must account for 25% of its operating budget for this local option income tax to be implemented. But IndyGo’s budget projects estimates that fare revenue will remain constant at 17% after the referendum. Consequently, IndyGo would have to increase revenues by $6.17 million — from $10.4 million to $16.5 million – by 2018 to simply maintain the 17% fare recovery rate. However, to meet the statutory requirement of 25% under SB176, IndyGo’s fare revenue would have to grow to $24.25 million – a $7.75 million increase above current projections. This $7.75 million increase – a 46% jump above the current projection – would have to come through increased fares, which would disproportionately impact low-income citizens who depend on mass transit.
According to the fiscal impact statement prepared by Legislative Services Agency, an increase in fares would be “likely” under a transportation project authorized under SB 176.
The Indiana General Assembly passed a mass transit bill (SB 176) in 2014. SB 176 provided for the establishment or expansion of public transportation services in an eligible county through a local public question placed on the ballot under an ordinance adopted by the fiscal body of the local county.
The fiscal impact statement for SB176 defines a public transportation project as “an action to plan, design, acquire, construct, enlarge, improve, renovate, maintain, equip, or operate a public transportation system in an eligible county.”
The fiscal impact statement for SB 176 acknowledges that a requirement is set for 25% of the operating expenses for such a project be covered by passenger fares. It also indicates a fare increase will likely be necessary to meet the requirement:
If a public transportation project is created under the bill, at least 25% the operating expenses of the public transportation system must be paid for through fares.
Farebox Revenue: The bill requires that at least 25% of the operating expenses of a public transportation system be paid for out of fares or charges to consumers utilizing the system. This likely will require the increase of fare revenue in the event that a public transportation project is approved in an eligible county that already operates a public transportation system, although the exact fare increase (per rider) that will be necessary to fulfill this requirement is unknown at this time. IndyGo, the public transportation corporation operating Marion County’s current public transportation system, has fare revenue that generates roughly 17% of its total operating expenses (as of 2012). [emphasis added]
The Marion County Transit Plan, or IndyConnect, is the project under consideration for funding under the referendum. The plan states that the project to be funded is holistic and includes improvements to the existing local bus networks, system-wide expansion of service hours and days, the acquisition of new technologies, as well as 3 Bus Rapid Transit (BRT) lines:
The Marion County Transit Plan includes significant investment in the local bus network and three rapid transit lines on high ridership routes. The Marion County Transit Plan includes: “Improvements to the local bus network; Shorter wait times between buses; Service earlier in the morning and later at night; More efficient transfers ; Advanced payment technology and real time arrival information; All routes operating 7 days a week; and 3 rapid transit lines: Red, Blue, and Purple Transit Lines.”
Proposal 145 being considered by the City County Council also reflects the broad scope of the transportation project being considered for funding under SB176. The proposed language to be included in the referendum specifies the new income tax is intended to fund the entire Marion County Transit Plan, not simply the 3 new BRT lines:
Shall Marion County have the ability to impose a county economic development income tax rate, not to exceed a rate of 0.25%, to pay for improving or establishing public transportation service in the county through a public transportation project that will create a connected network of buses and rapid transit lines; increase service frequency; extend operational hours; and implement three new rapid transit lines?
SB176 states IndyGo “shall establish fares and charges that cover at least twenty-five percent (25%) of the operating expenses of the urban mass transportation system” and defines operating expenses as “only those expenses incurred in the operation of fixed route services that are established or expanded as a result of a public transportation project authorized and funded under IC 8-25.”
Arguments have been made that only BRT is considered a “fixed-route service,” and the required 25% fare-recovery rate applies solely to the operating expenses of the new BRT lines. However, the Federal Transit Authority’s definition of “fixed-route service” includes local bus services:
Fixed Route Services: Services provided on a repetitive, fixed schedule basis along a specific route with vehicles stopping to pick up and deliver passengers to specific locations; each fixed route trip serves the same origins and destinations, such as rail and bus.
This term should not be confused with “fixed guideway systems,” which the FTA defines differently:
Fixed Guideway Services: Using and occupying a separate right-of-way (ROW) or rail for the exclusive use of public transportation.
If SB176 limited operating expenses to “fixed guideway system,” then the 25% fare-recovery rate would only apply to the operating expenses of the BRT lines, but that is not the case.
The existing bus network and new BRT lines are both considered “fixed route services” that are “established or expanded” as a result of the Marion County Transit Plan, which is “authorized and funded under IC 8-25.” Thus, the operating costs of both must be included in the calculation of the fare-recovery ratio, which is only 17% according to IndyGo’s financial analysis.
An assumption is made in the financial analysis submitted by IndyGo (below) that the fare-recovery ratio (17%) will remain constant despite an increase in operating expenses for fixed route services (not including paratransit) from $62m (2016) to $86m (2018). The fare-recovery ratio is kept constant by assuming a 50% increase in ridership, with passenger fare amounts rising from $10m (2016) to $16m (2018).
Even under the assumption of a 50% increase in ridership, which is a best-case scenario, passenger fares would still be shy of meeting 25% of operating costs. State law (SB176) will require that they be raised.
If the MCTP is placed on a referendum, voters will need to be educated that the plan under consideration will increase fares, as well as income taxes.
Figure 1:IndyGo Budget Projections, IndyConnect Fin. Model Vol. 3-Marion Co. w/ Referendum
|State PMTF / Municipalities||$10,520,774||$10,520,752||$10,520,729||$8,084,542||$8,084,533||$8,078,938||$7,510,455||$7,510,448||$7,384,451||$7,384,444|
|Local Property & Excise Tax||$32,701,229||$33,502,409||$34,323,218||$35,164,137||$36,025,658||$36,908,287||$37,812,540||$38,738,947||$39,688,051||$40,660,409|
|Other Operating Revenues, net||$998,400||$1,014,374||$1,030,604||$912,851||$927,457||$859,152||$788,425||$801,040||$741,190||$753,049|
|Federal 5307 Preventative Maint.||$9,967,507||$10,216,695||$10,472,112|
|Local Route Operating Costs||$50,609,557||$51,874,796||$53,171,666||$79,601,657||$81,591,699||$76,152,644||$70,417,698||$72,178,140||$67,521,434||$69,209,469|
|BRT Operating Costs||$0||$0||$0||$6,459,462||$6,620,949||$13,608,051||$20,741,630||$21,260,171||$26,430,056||$27,090,807|
|Paratransit Operating Costs||$10,600,000||$10,865,000||$11,136,625||$11,415,041||$11,700,417||$11,992,927||$12,292,750||$12,600,069||$12,915,071||$13,237,947|
A panel of representatives from IndyGo, the Indy Chamber of Commerce, the Department of Public Works, Metropolitan Planning Organization, and the CFO of the Indy City Council presented the Marion County Transit Plan being proposed for a referendum this fall at a forum. To say that community members in attendance were highly skeptical of the “facts” presented by the panelists, would be an understatement. Watch it for yourself below. The Q and A starts at marker 31:00.
The use of a permanent, bus-only lane with a cement median running down the center lane of the Red Line is at the heart of opposition from residents affected by the project. If you can’t imagine what this type of lane looks like, think of a train track made of cement which the bus straddles. Here is IndyGo’s rendering of what it will look like.
The center median (which cars can’t hop) will run down the center of College Avenue from Broad Ripple to 38th and on Meridian from 38th to 18th before turning to go down Capitol. All left-hand turns (including into your driveway if you live on College) would be restricted to specific intersections at 57th and at the new 60′ bus stations which are proposed for Broad Ripple Ave., Kessler Blvd., 54th, 52nd, 49th, and 46th streets. Here is an IndyGo rendering of a bus station. Notice how little space there is for vehicular traffic and parking, as well as how close the traffic comes to the sidewalk– the guy in the jacket shown walking on the sidewalk could high-five a passenger in a passing car.
If IndyGo could still receive the grant without crippling the surrounding neighborhoods with permanent lanes, why are they choosing to do otherwise? According to guidance from the FTA, a transit agency can qualify a project for federal funding without the inclusion of permanent lanes, technically referred to as “fixed-guideway” systems.
[P]rojects must (1) meet the definition of a fixed-guideway for at least 50 percent of the project length in the peak period [Footnote 10] or (2) be a corridor- based bus project with certain elements[Footnote 11] to qualify as a Small Starts project. [emphasis added]
The elements of a “corridor” project versus a “fixed-guideway” system listed by the FTA guidance include the following:
 According to FTA’s guidance, a corridor-based bus project must have the following minimum elements: substantial transit stations; traffic signal priority/preemption, to the extent, if any, that there are traffic signals on the corridor; low-floor vehicles or level boarding; branding of the proposed service; and 10-minute peak/15- minute off-peak running times (i.e., headways) or better while operating at least 14 hours per weekday.
It appears that the Red Line includes all of the elements to be considered a “corridor” project, and the permanent bus lanes are not necessary. This begs the question; Is it worth the disruption it will cause to traffic and businesses in the existing neighborhoods or the additional financial costs to build them? The College segment is 3.5 miles and will cost $11 million to build and the Shelby segment, which is also 3.5 miles but does NOT have permanent bus lanes, will only cost $2.9 million to build. See the financials from IndyGo’s cost analysis on College here College Segment IndyGo BRT – SS – OPCC – Concept Level and Shelby here Shelby Segment IndyGo BRT – SS – OPCC – Concept Level.
IndyGo claims that permanent lanes will allow the buses to run faster and will decrease travel times, but it has yet to provide a study detailing what the time savings will be. In the face of so much opposition, IndyGo’s lack of such proof suggests the savings aren’t what they pretend.
The IBJ recently wrote an oped admonishing Mayor Joe Hogsett for remaining neutral on the proposed IndyGo tax referendum. The author questioned his lack of leadership because “nearly half of jobs in Indianapolis would be along a high-frequency route, almost double the number today.”
However, the author fails to mention that there are no new routes in the IndyGo plan, the bus will simply run more frequently (see maps here). For example, there is already a bus route that runs the entire length of the Red Line, it just stops every 15 to 30 minutes (regular-frequency) versus every 10-15 minutes (high-frequency). Therefore, any jobs along the new transit route are already accessed by the current bus system.
If IndyGo’s proposed plan actually offered new employment destinations, perhaps it would make sense to spend the additional $40m in operating costs which rise to $100m under the plan by 2018. It remains unlikely, however, that providing more frequent service will be worth the huge tax increase to voters.
The author also claims that “the proposed tax increase would fund three rapid transit routes.” This is simply not possible because the revenues won’t cover the $390 price tag to build them. The IndyGo financial plan shows revenue forecasts of only $32m from property taxes and $54m from the referendum. This begs the question: How will the new transit tax cover $100m in operating costs AND $390m in construction costs?
According to IndyGo’s financial plan, it will issue debt in the form of bonds and seek federal grants (for which IndyGo has yet to apply) to build the rapid transit lines. While the referendum states the new tax will pay for three rapid transit lines, it won’t. In fairness to voters, IndyGo should clearly state that on the ballot.
I agree that leadership is needed from Mayor Hogsett, but it should be in the form of a warning to voters that the referendum will NOT do as promised.
Indiana Policy Review: Red Line Article by Andrea Neal
A contentious point of the City County Council meeting regarding a referendum to increase income taxes for the expansion of local bus service and create three Bus Rapid Transit (BRT) systems was whether or not a state law mandating 25% of the operating costs of the system be covered by passenger fares would be met.
Currently, IndyGo collects $10,665,765 from passenger fares with operating costs of $62,739,796.00. This equates to 16.9% of the operating costs being covered with passenger fares. In the financial analysis offered by IndyGo, an assumption is made that the same percentage of operating costs will be covered with fares in 2018, despite a surge in operating costs to $97,476,161 when the plan kicks in.
How do they assume the same percentage with such an increase in costs? They project that ridership will increase by 55% and passenger fare amounts will rise to $16,570,947.
That is a best-case scenario with all the transit gods bestowing upon IndyGo a great gift. But what happens if ridership doesn’t increase? It isn’t too far-fetched, especially in the first few years. If ridership remains constant, the percent of operating costs covered by fares in 2018 would be 10.9%. If it went up by half the amount IndyGo prays for, the percent is 13.9%
State law requires any project approved through the referendum to set the fare rates equal to 25% of the operating costs of the previous year (more info on 25% requirement here). This is the law, there is no going around it.
The current fare for one trip on IndyGo is $1.75. If the number of riders remains constant, but operating costs increase due to the new transit plan approved under the referendum, the fare rate will be $2.76. That means fares will rise by 50%. Even if IndyGo achieves a 30% increase in the number of riders, the fare would still increase to $2.30.
During the City County Council on April 26th, many councilors believed allowing voters to choose whether or not they wanted to pay for this system with a new tax was the right thing to do. But, do they think voters will be informed of the potential fare increase? It’s not likely, because IndyGo has been mute on this issue. In fact, it’s doubtful many Councilors will be fully aware of it.
There is nothing decent about putting an issue to the voters when no attempt has been made to fully educate them on it. Call your city county councilor and tell them to vote NO on proposal 145. They vote May 9th.