Improving Transit Integration Among Multiple Providers, Volume II: Research Report (2015)

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Study Overview TCRP Project H-49, “Improving Transit Integration Among Multiple Transit Providers,” set out to accomplish two goals: 1. To conduct original research and prepare a report that identifies and documents the motivations, benefits, and barriers to public transportation coordination and integration that facilitates seamless travel, reflecting the viewpoints of all stakeholders; and 2. Based on that report, to provide guidance on how to integrate and coordinate delivery of a public transportation system in a multi-service region. The challenge with integration lies in balancing transit operators’ interest in expanding their markets and improving service efficiency and effectiveness with a natural reticence to change existing practices and policies that could disrupt smooth functioning of the system on a day-to-day basis and challenge agencies’ delicate financial stability. The importance and difficulty of striking this balance is a theme throughout this study. The research team took a multi-step approach to tackling this topic, starting with a review of literature written on the subject and a high-level analysis of 19 examples where transit agencies have successfully undertaken integration and/or coordination, documented as “agency profiles.” The analysis looked at motivations, keys to success, and outcomes to derive lessons learned. During this first phase of research, in recognition of the fact that integration among multiple transit providers is an expansive topic, the research team estab- lished a research framework of five transit integration focus areas to organize and understand findings throughout the study: • Customer-Oriented Focus Areas 1. Services 2. Fares 3. Marketing/Customer Service and Information • Agency-Oriented Focus Areas 4. Operations, Maintenance, and Assets 5. Administration/Procurement The team then dug much deeper into a subset of these 19 examples. Six exemplary cases were selected as the most illustrative of successful integration across the range of focus areas, and because they represented a mix of system sizes and types, and U.S. locations with varying geographic characteristics. This in-depth case study approach was carried out because it offers a rich set of information on motivations (e.g., cost considerations, service improvements, political climate) as well as challenges, agency staff and customer experience, and outcomes. The site visits allowed research team members to thoroughly examine the coordination 1 S U M M A R Y Improving Transit Integration Among Multiple Providers: Research Report

2 Improving Transit Integration Among Multiple Providers experience in each community, where they conducted several hours of interviews with a wide variety of stakeholders involved in these projects. The case study sites were as follows: • Phoenix Metropolitan Region, AZ • Butte County, CA • Minneapolis–Saint Paul (Twin Cities), MN • Research Triangle, NC • McAllen, TX • Central Puget Sound Region, WA The findings from the case studies were the primary source for this report, supplemented with information gleaned from the profiles and literature review. The case studies also informed the other significant product of this research, Volume I, the Transit Integration Manual that provides step-by-step implementation guidance for agencies that desire to move forward with service and system coordination. Overview of Findings The research suggests there are many real and substantive benefits that result from inte- gration; this is particularly true for customers, but benefits also accrue to transit agencies and external stakeholders, such as community downtowns and Main Streets. In addition, beyond benefits acknowledged and celebrated by transit operators and stakeholders, there are also a host of intangible benefits that integration projects offer. In both cases, benefits are difficult to measure. The research also suggests that the challenges associated with carrying out a coordinated multi-agency effort cannot be understated; projects require time, patience, and commitment as agencies resolve many important details associated with facilitating successful long-term collaboration. In particular, challenges related to local control, autonomy, and revenue sharing/funding are common obstacles. Among the most important factors leading to successful integration is leadership. A strong leader is critical to bring stakeholders to the table, champion the project, build trust, and maintain momentum through setbacks and challenges. This report includes a discussion of common benefits of integration projects, common challenges encountered and strategies to overcome them, overarching issues related to inte- gration efforts, and lessons learned. The report also includes a chapter assessing the costs and benefits of the 19 profiles and the six case studies conducted for this research. Key lessons learned are summarized here. Benefits that Can Be Expected In undertaking collaborative projects, better customer service is the most likely outcome. These efforts are critical for public transit to be a more user-oriented, competitive travel option. Although systemwide ridership increases often cannot be directly attributed to inte- gration efforts alone, cross-boundary travel between two or more systems can increase rider- ship in submarkets, resulting in greater transit mode share. Further, by working together to ensure strong operational performance, transit providers can also create economic benefits for the wider region. Easy-to-use transit encourages more people to ride or ride more fre- quently, leading to increased access to jobs. Businesses also benefit when customers have enhanced access to their services, and the combination of these transit impacts can create a more vibrant community. These regional benefits in turn increase public support for public

Summary 3 transit and can generate political leverage for funding and policy initiatives to support enhanc- ing the transit system. These types of benefits can be some of the most elusive and difficult to measure but were widely cited as key benefits by stakeholders across the case studies. In some cases, the partnerships that have been built through the process of implement- ing a coordinated project have prompted more robust regional cooperation on a variety of other issues that benefit customers. Creating partnerships allows staff to meet and discuss common concerns about other shared issues. In this way, coordination can become a part of everyday operations for many transit agencies instead of an afterthought. Unlike the above benefits, cost savings is a frequent driver of coordination and integration efforts, but anticipated savings may not be fully realized. The process of setting up a project costs money in terms of staff time, infrastructure, hiring consultants, and conducting studies; though some savings may accrue from increased efficiencies, the final outcome may actually be more expensive on an ongoing basis than the status quo. To explore this issue further, the research team conducted an assessment of the costs and benefits of the profiles and case studies. The principal finding was that traditional quantitative, data-driven cost–benefit analyses, especially for complex, multi-year, multi-agency efforts, may not be possible or meaningful. Nevertheless, it is important for agencies to establish goals and estimate both the anticipated costs and the anticipated savings at the outset of an integration effort so that expectations can be managed and success can be fairly reported. This pre-planning process allows agencies to evaluate qualitatively whether goals have been achieved post-implementation and to allow for any needed adjustments to the project. Confronting Challenges The primary challenges fall under two related categories: local control and funding. Giving up local control over the operation of a transit agency and “turfism” are two of the most prevalent barriers to integration. Resistance to giving up local control is most often based on a concern that a community would lose its decision-making power and be dis advantaged in a larger pool of decision makers. How projects dealt with issues of local control and autonomy was one of the biggest factors that differentiated the case studies. Each case study offers a different governance approach. The places that have been most successful accomplishing their integration vision have created processes where all transit providers, especially smaller providers, believe their interests are adequately represented and that their voices are heard. In most cases of success, stakeholders built inclusive and broadly representative structures and processes that were trusted by stakeholders. Bottom-up strat- egies tended to yield more long-lasting results than centralized or top-down approaches. Figuring out how to equitably allocate costs and revenues so that every agency feels it is get- ting its fair share of revenue (or cost savings) and paying its fair share of costs is a challenge that arose in every case study. Case study sites developed different tools to address this challenge: 1. Butte County: A cost-sharing model based on population and ridership 2. Phoenix Metropolitan Area: A regional equity mechanism for tax distribution 3. Twin Cities: A regional operating revenue allocation model 4. Research Triangle: A contractual merger and a shared benefits analysis 5. Central Puget Sound Region: A revenue allocation model based on relative fare levels Ultimately, the strategy undertaken depends on the specific type of integration project undertaken and issues unique to each region. However, in all cases, leaders must acknowl- edge the sensitivity of this issue and the importance of finding a mutually agreeable solution

4 Improving Transit Integration Among Multiple Providers that all participants believe to be fair. Anything short of that risks losing agency buy-in and can undermine the likelihood of project success. Another key factor in overcoming the challenges related to integration efforts is having a regional agency with integration as a key part of its mission. These processes take time to get buy-in from all the partners, to sort through all the detailed business practices, and to review operations issues that integration efforts require. It is valuable to have a regional agency that can take on project management responsibilities, be the keeper of project records, and keep the ball rolling by reminding stakeholders of the benefits of regionalization when challenges arise. Lessons Learned Lesson One: Prioritize the Customer Experience Transit provision is first and foremost a service industry. This research found that whether providers were seeking more integration or resisting integration, the underpinning of their rationale was to provide better customer service. This means that any move toward improv- ing transit integration among multiple transit providers must address why changes to the status quo will benefit their passengers, and these benefits must be transparent to all partners involved. It is clear from these six case studies that transit agencies can achieve some success in integrating when they put the customer first. Lesson Two: Collaboration Succeeds when Implementation Is Incremental In many cases, coordination efforts were most successful when they evolved gradually over time. Agencies often were not ready to commit to full integration efforts at the start. By working together over time, staff and leaders built trust, established a step-by-step track record of suc- cess, and came to understand—and “buy in” to—the benefits of integration. In places where agencies moved quickly and skepticism has remained, integration has been more challenging. Lesson Three: Strong Local Leadership Is Needed to Sustain an Integration Effort The case studies underscore the importance of local leadership that is committed to the value of integration for its community. When that commitment is present, the leadership needs to be involved for the long term, because integration rarely happens quickly. Leaders need to be flexible and willing to change directions if the followers are not behind them as they keep their eyes on the ultimate goal of better service for their constituents; leaders must have a degree of humility to put greater goals before their own. Willingness of large agencies to cede some of the power inherent in their size and put themselves on an equal footing with smaller agencies can be very important to getting and keeping everyone at the table. Lesson Four: Broadening the Pool of Stakeholders Leads to More Widespread Acceptance Including all key stakeholders and giving them decision-making power in the process proved essential to success in most of the case studies. Further, stakeholders must have equal access to the process, information, and project leadership. A broader decision-making group can have the effect of slowing a project down, but many of these integration efforts could

Summary 5 not have been accomplished without this “grassroots” approach. The failure proves the rule: where stakeholders have felt excluded or not respected, coordination efforts have faltered. A diversity of stakeholders ensures the following: • Projects are not dominated by a single interest or stakeholder group and the needs and perspectives of a broader range of users are included in project design. • A large base of support that can sustain the project through challenges. In particular, thinking broadly about partnerships—law enforcement, firefighters, retailers, nonprofit organizations, the business community—can avoid problems later in implementation and can build advocates if controversy arises. Lesson Five: Create Processes that Develop Trust Among Stakeholders Where projects succeeded, cultivating trust and respect among project stakeholders was cited as an important factor. Establishing problem-solving processes or methods that are transparent, inclusive, and effective gives stakeholders and policymakers confidence that, as problems arise, there are systems in place to balance competing interests. Committees need to be representative of all stakeholders involved, with some degree of power to guide projects and a clear line of reporting back to the regional decision-making body. Lesson Six: Maintain a Level of Local Control Stakeholders need to determine the baseline components of a coordinated process that cannot be sacrificed. Beyond these baseline components, flexibility can be granted to ensure participants that they can retain some local identity and are not being entirely subsumed into the regional process. This flexibility was used in the case studies in a number of ways: agreeing on minimum performance standards, allowing local control over fare changes, developing coop- erative agreements instead of top-down mandates, negotiating formulas to prioritize projects, and creating subcommittees to determine local versus regional details of joint projects. Flexibility can ensure that issues that are primarily local in nature remain in the purview of the local agencies. This is important for long-term working relationships among the stakeholders involved in collaborative efforts. Lesson Seven: Set Goals and Document Anticipated Outcomes at the Outset of the Integration Process Setting goals and documenting anticipated outcomes—costs, savings, ridership gains—will help to determine whether to stay the course or make changes as the project is implemented. Communicating financial information clearly throughout the project will build trust among participants. Project evaluation is a useful and effective tool to demonstrate the value of the project to decision makers, funding agencies, and the public and to make adjustments mid-stream to improve project outcomes. Lesson Eight: Benefits May Outweigh Additional Costs Incurred in Integration Integration projects do not necessarily result in cost savings and may incur additional costs. Cost reduction is often a primary impetus for working toward transit integration. Many transit agencies have found, however, that integrating transit sys tems, programs, and

6 Improving Transit Integration Among Multiple Providers services does not necessarily result in cost savings and can in fact lead to increased costs. This is often because successful transit integration requires effort on the part of individuals at all participating agencies over an extended period of time which comes at a cost of time, money, and other resources. Sometimes these are only upfront costs and, over time, costs do go down as a result of integration. However, even in cases where projects result in perma- nently higher costs due to increased project management or ongoing coordination activities, the majority of the agencies studied in the research viewed the benefits of integration efforts as worth the additional costs they incur. In particular, they often cited the more qualitative benefits that cannot be readily measured such as a superior passenger experience, improved access to regional locations, and increased public and political support for transit. Conclusion In 2012, the United States recorded its second highest transit ridership since 1957, according to the American Public Transportation Association (APTA). Convergence of this growing interest in transit with a reduced funding environment creates a ripe climate for transit agencies to pursue increased integration among multiple providers. By partnering with neighboring providers, transit agencies may be able to address shrinking funding without decreasing overall service. These same partnerships may actually improve service for riders by transporting them to desired destinations previously inaccessible because of jurisdictional boundaries. With the benefit of lessons learned by successful peer agencies, the findings of this research project will help agencies shorten the learning curve of transit properties wishing to advance integration in their regions.