1. Minnesota Intercity Bus Network Study Project Advisory Committee Meeting: June 17, 2009

2. 1 Agenda Review of Scope Progress to Date: –Overview of Technical Memorandum #4 Current Program Issues-Updates on Fargo/Twin Cities, and Duluth/Twin Cities Next Steps

3. 2 Project Scope Task 1: Background and Context Task 2: Data Collection and Needs Assessment Task 3: Action Plan Task 4: Findings and Recommendations Task 5: Project Evaluation (Methodology) Task 6: Final Report

4. 3 Alternative Future Networks Summary table of proposed options presents estimated costs and revenues Option 1: Near-Term: Existing lifeline network, plus incremental additions of lifeline service to unserved High Need areas Option 2: Medium-Term: Adds frequencies to provide morning inbound/evening outbound services Option 3: Longer-Term: Adds express/skip-stop services

5. 4 Map of Network Options

6. 5 Project Evaluation Methodology: Review project proposals in terms of: –Addresses federal and state program goals –Eligible project –Eligible applicant/management structure –Coordination with other services/entities Operationalize in the Application and an Evaluation Sheet Scoring and Review by a Committee including departmental, regional planning representation.

7. 6 Evaluation Factors –Does it meet Departmental and Federal requirements/compliance? –Does it meet the definitional criteria of rural intercity service? Serves some rural places under 50,000 Long distance between two or more urban areas Capable of carrying baggage Not commuter service –Does it provide a meaningful connection to the national network of intercity bus services? Stop locations are in close proximity to national network Schedules allow for connections (two hour window?) Interline ticketing available Information about connections available –Does it request funding for eligible activities? Operating Assistance Marketing Assistance/information systems Capitalized maintenance of vehicles used for rural intercity service Vehicles for use on eligible services Infrastructure (limited to bus stop upgrades, signs, parkingdirectly related to rural intercity services) –Does it serve an area without other intercity service options? –Does it serve an area identified as having a high density of transit need, based on the demographic analysis in the plan? –Does it serve a key destination that is otherwise unserved? –Does it maintain existing service that would otherwise be discontinued? –Does it have an actual or projected farebox recovery of 20 percent or more (could give points based on different levels, with higher scores for better recovery) –If not an existing service, does it address MnDOT priority services (gaps as identified) –Describe coordination with local transit providers: Support for application Common or shared stops Feeder or connecting services Provision of information about connections Fare coordination –Describe the proposed project management structure-does it appear to be able to manage the project?

8. 7 Develop Findings and Recommendations (continued): Linkages to other state policy documents –Greater Minnesota Transit Plan By referencethere is this additional study Map of intercity bus services Program summary/descriptionwhat the funding is for, etc. –Statewide Transportation Plan Chapter (or for Appendix) describing: –Existing service –State role (S.5311(f) funding –Evaluation criteria for program –Alternative future networks Evaluation Criteria for Statewide Plan: –Percentage of population with access to intercity bus service (from ACS) within 25 miles –Percentage of Regional Trade Centers served by intercity bus (at least three round-trips per week to/from the Twin Cities)

9. 8 Develop Findings and Recommendations (continued): Transit Documents: –S.5311 State Management Plan S.5311(f) program description –Program Goals –Eligibility –Eligible Uses –Funding policies –Application –Project Evaluation –Reporting Consultation Process

10. 9 Project Evaluation Methodology: Costs and Benefits of Intercity Bus Operating and Capital Costs: –Fully-allocated operating costs typically $3.50-$4.15 per mile for over-the-road coachesincluding capital, facilities, admin, etc. –Lower mileage costs for operating less costly vehicles, or if capital and operating are broken out and funded at a higher level (80%) –Farebox recovery relatively high (58% for current Minnesota S.5311(f) routes) –Net deficit per bus-mile or passenger-mile relatively low, high per passenger deficit (few passengers, long trips) User travel time: –As compared to alternatives

11. 10 Project Evaluation Methodology: Costs and Benefits of Intercity Bus Benefits: –User: Consumer willingness to pay=farebox recovery Consumer surplus=willingness to pay more than actual cost (function of demand curve) Savings as compared to costs of alternatives: –Drive-alone auto costs for those with choice, –Costs of taxi, airport limousine options for those without, –Costs of chauffeuring (driver providing trip to non-driver), or –Costs of not making trip (loss of mobility=reduced participation in society) Reduced risk of accident (safer mode) –Society: Reduced GHG emissionsmost efficient mode Other environmental benefitsreduced air pollution Safety benefits Option benefitavailability of alternative to personal vehicle Regional economic impact from increased access to retail, services, recreation, etc. Economic impact of increased access to employment Distributional impacts may be considered another type of benefit. Intercity bus riders who are low-income, elderly, physically unable to drive, etc. benefit from the availability of the service.

12. 11 Wisconsin Intercity Bus Benefit- Cost Study Jessica Y.Guo, Jie Zheng, Qi Gong, Kevin White, Benefit-Cost Analysis Framework for Evaluating Inter- City Transit Investment, Midwest Regional University Transportation Center, College of Engineering, Department of Civil and Environmental Engineering, University of Wisconsin-Madison. Developed framework of user and social benefits to use in analyzing intercity bus investments Utilized statewide travel demand model to estimate consumer surplus, and evaluate costs and benefits by running network with and without bus service in four corridors, with four different scenarios regarding service level

13. 12 Wisconsin Intercity Bus Benefit- Cost Study (continued) Minnesota does not have a comparable statewide multimodal travel demand model that can be used to estimate changes in vehicle traffic and modal ridership resulting from changes in intercity bus service levels or linkages Results in Wisconsin for four proposed test routes under four scenarios showed benefit-cost ratios (BCR) ranging from -0.4 to 9.95. All benefits were positive except for the most rural corridor when it was run without connecting links to other population centers Benefits and performance of a route depend on connectivity and service levels on other parts of the network (including connecting modes) User cost reductions have the highest benefit value.

14. 13 Wisconsin Intercity Bus Benefit- Cost Study (continued) Benefits are highest in corridors with the most auto traffic (high demand) due to increased levels of diversion from auto Environmental and safety benefits were also significant, and higher in areas with increased diversion Implication of results is that BCR is much higher for adding service in high-density corridors where auto trips are reduced in areas of congestion Model as implemented did not include benefits for option value, chauffeuring reduction, or economic impactall of which are more likely to be benefits for rural services Properly designed intercity bus service could produce social benefits that significantly out-weigh its costs. p. 50

15. 14 Potential for a Simplified Intercity Bus Benefit-Cost Model Loosely based on methodology developed to assess rural passenger rail services in Britain in 1970s Applied to North Carolina rural routes Focus on rural routes, assumption is that service would not run without subsidy Focus on benefits in three categories: –Cost savings to passengers who could drive, –Value of loss of benefit of trip to those not traveling if the service is abandoned, and –Loss of revenue Costs are fully-allocated operating costs Calculate Net Benefit, compare to subsidy requirements A version could be applied to Minnesota routes Based on earlier experience, a positive BCR is likely to be a function of assumed auto trip cost (incremental versus full cost)

16. 15 Or, a Cost-Effectiveness Approach Instead of trying to estimate benefits, assume a network based on policies: –Serves rural places –Serves High Need areas identified in plan –Serves Key Destinations identified in plan –Serves 70% of Regional Trade Centers –Provides linkage to Twin Cities, meaningful connection to national intercity network Determine the most cost-effective means of providing these services: –Considers both operating cost and revenue, i.e. higher cost options acceptable with higher revenues –May involve different kinds of operators, vehicles, services, etc. Include as part of Project Evaluation

17. 16 Develop Findings and Recommendations: Final Report Outline-Chapter 1 Chapter 1: Introduction and Background –Purpose of Study –Intercity Bus Defined –S.5311(f) overview-Federal Policies –Industry background-deregulation, trends, etc. –History of Minnesota program Previous study Funded projects Greyhound withdrawals –Current status of Minnesota programfunding levels, etc.

18. 17 Develop Findings and Recommendations: Final Report Outline-Chapter 2 Chapter 2: Inventory –Existing intercity bus service-described and mapped –Subsidized and unsubsidized services –Intercity bus stops –Previous routes/services –Industry TrendsCurbside & airport operators

19. 18 Develop Findings and Recommendations: Final Report Outline-Chapter 3 Chapter 3: Evaluation –Needs analysis (demographic analysis and coverage of key destinations) –Ridership survey results –Existing ridership/revenue and performance of S.5311(f) routes –Information systems, coordination, and facilities –Summary of unmet need/potential roles

20. 19 Develop Findings and Recommendations: Final Report Outline-Chapter 4 Chapter 4: Potential Future Networks –Alternative networks –Costs and Benefits of Intercity Bus –Coordination with Other Modes –Alternative funding policies –Recommended Network Strategy (given current funding and federal program structure)

21. 20 Develop Findings and Recommendations: Final Report Outline-Chapter 5 Chapter 5: Policy Considerations –Program Goals: Federal and Minnesota –SAFETEA-LU Requirements: Consultation Policy –Recommended Changes in S.5311(f) Program –Project Evaluation Methodology

22. 21 Next Steps Complete Technical Memorandum 4 and 5 Draft Report Final Report