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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
William Greene, Chief Financial Officer |
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PRESENTER(S): |
William Greene, Chief Financial Officer |
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Monica Morton, Fares Director |
TITLE:
title
R2022-01-05 - Resolution Establishing Parameters in which the Executive Director can Declare “Free Fare February” in Commemoration of the Twentieth Anniversary of the 2002 Winter Olympic Games
end
AGENDA ITEM TYPE:
Resolution
RECOMMENDATION:
Approve and adopt resolution R2022-01-05
BACKGROUND:
Utah Transit Authority (“UTA”) provides partners with various opportunities to subsidize rider fares including the Free Fare for Clean Air program. This program is part of an effort to improve air quality along the Wasatch Front by encouraging more people to consider using transit as an alternative to driving.
A request was made by Salt Lake City (“SLC”) to subsidize rider fares for the month of February - Free Fare February. The main goals of this initiative are to:
• help people get out of their cars, reduce emissions, and improve air quality
• commemorate the 20th anniversary of the 2002 Olympic Winter Games
• gather valuable data on how free fares impact transit use
Both UTA and SLC have worked together to obtain community support to offset fare revenues for the month of February. This includes financial contributions, media support, and requests to UTA contract partners to continue providing their current level of subsidy during the month of February.
The target of $1.2 million in required funding has been raised through the support of the community. UTA requests that the Board of Trustees approve resolution R2022-01-05 and authorize free fare system wide on all UTA services from February 1st, 2022 to February 28th, 2022.
DISCUSSION:
February’s total estimated monthly passenger revenue is $2.2 million. This amount is comprised of revenue from partner contracts and public fares. Revenue from partner contracts comes from educational institutions, corporations, and other contracts in which entities subsidize fares for users. Public revenue is received from fareboxes on buses, the UTA reloadable FAREPAY card, Microtransit service, mobile ticketing application, paper pass sales through retail outlets, and ticket vending machines on FrontRunner and TRAX platforms.
Response to the initiative has been very positive. Multiple sponsors have agreed to provide financial support through contributions in the range of $1.2 to $1.5 million dollars. In addition, many partners, including the largest pass partners, have committed to continue to pay their current level of subsidy during February. If the majority of current fare contract partners continue their payments for the month of February, the full $2.2 million in lost passenger revenue will be covered. UTA’s risk is therefore based upon the number of current fare contract partners who consent to continue payments for the month of February and is estimated by UTA staff to be a maximum of $500,000.
ALTERNATIVES:
Do not approve the resolution and continue to collect fares during February
FISCAL IMPACT:
The fiscal impact of approving this resolution is a potential revenue loss of up to $500,000. The revenue loss will result if some partners are not willing to continue to subsidize passes during the month of February.
ATTACHMENTS:
1) Resolution