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

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18 Overview The spectrum of integration activities examined in this research is broad and encompasses significant variation in how the integration process was undertaken; despite this diversity, sev- eral lessons are consistent across many different integration examples. For example, the research suggests there are many real and substantive benefits that result from integration; this is particu- larly 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. Results of this research also suggest 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 col- laboration. In particular, challenges related to local control, autonomy, and revenue sharing/ funding are common obstacles. Among the most important factors leading to successful inte- gration 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. Ultimately, the proliferation of efforts going on nationwide, as documented in this research, are a testament to the fact that these efforts are worthwhile and that the benefits outweigh the potential difficulties and costs of getting projects up and running. This chapter organizes the Research Findings into four sections: • Common Benefits and Challenges of Coordination and Integration • Strategies to Overcome Challenges • Overarching Issues Related to Integration Efforts • Lessons Learned Common Benefits and Challenges of Coordination and Integration Common Benefits Why would an agency undertake a coordination or integration project across multiple transit providers? A key lesson from this research is that coordination projects are time consuming and challenging but have real benefits that make them worthwhile to pursue. However, stakeholders across all case studies attested that despite the resources required and determination necessary to bring integration projects to fruition, the results are worth the effort and cost. (A more extensive C H A P T E R 3 Research Findings

Research Findings 19 discussion of the costs and benefits attributed by stakeholders to these projects is included in Chapter 4.) Customers/Riders In undertaking collaborative projects, better customer service is the most likely outcome. The customer benefits are paramount; integration/coordination makes fare payment and transfers easier and makes the system appear and function as a seamless network across multiple agencies. Better customer service can also bring ridership gains to the collaborating agencies. For example, by having initial data on cross-boundary trips, agencies may be able to demonstrate ridership growth in submarkets—such as an increase in trips beginning on one system and ending on another. Although systemwide ridership increases often cannot be directly attributed to integration efforts alone, such cross-boundary integration can increase transit market share on corridors with strong travel demand. The agencies studied in this research illustrate approaches that have resulted in positive customer service. Customers in Butte County have seamless service across a large rural county with timed connections and a single system of fares, whereas before consolidation, passengers traversed two or sometimes three transit providers to complete a trip. Similarly, Valley Metro’s regional fare struc- ture, unified service branding, and common passenger information systems significantly improve a rider’s ability to understand and use the system. Appreciation for these customer improvements is evidenced by the increased ridership in the Phoenix metropolitan area. In the Central Puget Sound region, the ORCA electronic fare card has eliminated the need for monthly purchases of multiple tickets in four counties. But it has also helped transit stay relevant and appear modern, countering the more traditional, antiquated, or bureaucratic image that sometimes prevails; this is especially important for attracting and retaining younger tech-savvy riders. Based on these examples, integration efforts are likely to offer customer improvements that make the challenge of coordinating and integrating services ultimately worthwhile, because the enhancements help to attract and retain riders. Such integration efforts are critical for public transit to be a more user-oriented, competitive travel option. Cost Savings Cost savings is often one of the primary drivers of coordination and integration efforts. However, the process of setting up a project costs money in terms of staff time, administrative infrastructure, consultant hiring, and study conduct; and the outcome may actually be more expensive on an ongoing basis than the status quo. That is not to say that cost savings will not be achieved. Because of the ORCA smart card technology, the seven Central Puget Sound region transit agencies realized multiple benefits internal to their operations, such as a decreased number of fare media to produce, account for, and train the operators to recognize; less fraud; and fewer cash purchases, which simplified cash handling and accounting. In the Research Triangle, a contractual merger between the City of Durham’s transit operations and the regional provider resulted in an improved fleet condition and savings on bulk purchases such as tires, oils, and transmission fluids. Similarly, the ATUQ in Quebec, Canada, realized savings averaging 15% through group purchasing of buses, tires, and gasoline. In the Phoenix metropolitan region, the joint service contract that Valley Metro and Tempe negotiated with the same provider is expected to save several million dollars for Tempe. These savings are gained through shared staffing (including management), fuel costs, greater competition for the contract, and shared bus facilities, among others. Agencies can also derive cost savings through streamlined operations. In Butte County, consolidation allowed vehicles from multiple operators to be brought together in a single fleet. With a single fleet, vehicles could be reassigned as needed to meet service needs.

20 Improving Transit Integration Among Multiple Providers Although some costs may be reduced because of increased efficiencies, transit operators need to be realistic and transparent about the cost savings that can be achieved. Qualitative benefits of integration are often just as important or more important. For example, in the Research Triangle, adding real-time information coincided with an increase in staff to manage the data feeding into the system; however, the benefits to the riders overrode any concern about the slight increase in overall costs to provide real-time information. In the case of implementing the ORCA card, the $42 million cost to initiate the system paid off not only in quantitative benefits, such as reduced fraud, but also in qualitative benefits, such as better participation of the business community in the simplified fare program and the corresponding political capital earned by the transit agencies, as well as improved coordination among the seven agencies on other service planning issues. One stakeholder observed that cost-benefit analyses are not always helpful because the num- bers may be underwhelming to the public or policymakers. He cautioned that cost savings may be there, but may be 1% or 2% compared to expectations of 15% by external stakeholders. Therefore, it is important to 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. Economic Development An offshoot of greater customer benefits is the economic benefit that a seamless transit system can bring. Easy-to-use transit encourages more people to ride or ride more frequently, 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 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. Economic development was on the minds of the businesses in McAllen when decisions were being made about where Central Station would be located. Early plans called for the transit station to be located near a freeway ramp. Downtown merchants supported a location that was closer to the heart of the central business district. Stakeholders now cite the downtown location as part of the success of their vibrant downtown: McAllen continues to have a healthy downtown despite the recent recession. Over four million people visited Central Station in fiscal year 2013. The City of Minneapolis is another example of transit enhancing access to businesses. After two major downtown streets were redesigned as a pair of dedicated transit corridors, the City and Metro Transit coordinated with all providers to keep traffic flowing and buses on schedule in the heart of downtown. Similarly, an intermodal transit station designed by Metro Transit at the Mall of America accommodates 1.2 million passengers annually on light rail vehicles and more than 900,000 passengers riding buses, as well as additional passengers riding para- transit and private shuttles. The Minneapolis example illustrates how transit coordination can be important to local businesses, both by alleviating congestion and by bringing customers to their doors. The Tourism Bureau, representing downtown businesses in the Quad Cities region of Iowa and Illinois, identified a need for an easy way that tourists could visit features of the riverfront area, such as the casino, hotels, the convention center, theaters, parks, trails, and the botanical center. They advocated that the three transit agencies serving this area create a single route with no transfers. The resulting Loop is a riverfront circulator operating from 5 p.m. to 1:20 a.m. on Thursdays through Saturdays and during the day on Sundays. It is advertised as “the only single route in the country that crosses two bridges in two states and serves four separate city down- town areas.” The Quad Cities Loop shows how engaging outside community groups to create partnerships can benefit the economics of the greater region.

Research Findings 21 These examples illustrate the positive effect that multiple transit providers’ collaborative efforts can have on communities. By working together to ensure strong operational performance, transit providers can collectively create opportunities for increased ridership and benefits for the wider region. Stronger Relationships In some cases, the partnerships that have been built through the process of implementing a coordi- nated project have prompted more robust regional cooperation on a variety of other issues that benefit customers. In cases where projects fully came to fruition as originally envisioned (e.g., McAllen and the Central Puget Sound region), additional projects have been initiated beyond the original intent of the integration effort. In cases where the original intent of consolidation has not been entirely fulfilled, multiple coordinated efforts were nevertheless implemented as a result of agencies working together. The McAllen Central Station is complete, but the partners have continued to work together to improve regional and local transit services. Staff at Metro McAllen helped design and plan a new multimodal terminal in another city in the region. The region will soon implement a new regional bus service connecting the multimodal terminals, and the partners have collaborated on other projects, such as joint procurement of vehicles. A very strong working relationship was also devel- oped among the site managers at the seven Central Puget Sound agencies working on the ORCA card. These relationships enabled coordination on other fronts, such as information sharing that has benefited each agency’s operations, and interagency agreements for service planning. Similarly, the Northwest Oregon Transit Alliance, through a partnership of transit agencies in five rural counties, has created the North by Northwest Connector. By building relationships among the five participating transit agencies, the agencies were able to overcome concerns about losing ridership and funding sources to each other’s system. Each of the five agencies retains ownership of all its assets and operation of all its services, but they have implemented coordinated transfers and share resources such as transit stops and staff. In the Research Triangle, though full consolidation did not come to fruition, the agencies subsequently established the Seamless Public Transportation Service Project, composed of nine coordination projects. By working together, they successfully implemented many of the projects in the consolidation study, such as a seamless Triangle bus service plan, a regional paratransit service, and a regional call center. Partnerships on singular integration projects allow 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. Strengthened Political and Public Support Case study agencies experienced regional benefits of creating an integrated system by gain- ing political leverage and increased public support. Specifically, a partnership between multiple transit agencies can potentially leverage more funds than any single agency would have access to on its own. For example, in the Central Puget Sound region, the two largest operators attested that they were able to build a much more compelling case at the state legislature for additional funding and other policy initiatives because they could show they were coordinating with one another and successfully working together in the public interest. Stakeholders in the Central Puget Sound region also said the ORCA single fare card is seen as a major employee benefit valued by employers in attracting and retaining employees, which has built support for transit service in the business community. ATUQ, an association of nine providers in Canada, believes that its collective efforts influenced the passage of the Quebec Public Transit Policy for stable transit funding. Valley Metro, especially through the development of the light rail service but also the bus system, has strengthened a positive public perception of transit and a willingness to fund system expansion. The population’s willingness to invest in transit infrastructure and services through a

22 Improving Transit Integration Among Multiple Providers 2004 tax measure demonstrates support for a regional system and trust in Valley Metro. Similarly, in 2012 and 2013, two counties in the Research Triangle approved the levying of a new ½-cent sales tax to support the construction of a light rail line, a commuter rail line, and enhanced bus service throughout the two counties. The passage of these tax measures after the original 2003 failed consolidation study illustrates the benefit that more experience with regionalism has yielded. The population of a region—residents, commuters, businesses—is not interested in conflicts between transit agencies and their operations. They are interested in results that benefit them and their communities. By showing the ability to collaborate on the delivery of services, transit agencies generate political and public support needed for a better system for everyone. Common Challenges The benefits identified were not achieved without overcoming some real obstacles along the way. The primary challenges fall under two related categories: local control and funding. Other challenges include dissimilar business and operations practices, and overcoming past history. Local Control Giving up local control over the operation of a transit agency and “turfism” are two of the most prevalent barriers to integration. In their own communities, local boards have total control over decisions and feel a responsibility to the constituents whom they were elected to represent. For example, one stakeholder in the interviews expressed concern that a regional transit agency would cut unproductive local routes that primarily served the old and infirm. In another example, the fear that Capital Area Transit Authority (CATA) in Lansing, Michigan, would take over suburban operators in adjacent counties was a barrier that had to be overcome. When concern over the loss of local control was alleviated, the outcome was shortening long trips by a suburban operator through timed transfers to CATA. On a consolidated board, each jurisdiction would typically have only one or maybe two rep- resentatives and smaller communities could potentially be subject to weighted voting, which would favor the larger jurisdictions. Therefore, resistance to giving up local control is based upon a concern that a community would lose its decision-making power and be disadvantaged in a larger pool of decision makers. How projects have dealt with issues of local control and autonomy is one of the biggest fac- tors that set the case studies apart. 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; other regions have struggled to overcome this challenge and have, therefore, experienced less success accomplishing their integration goals. Strategies to overcome the challenges of losing local control are further discussed later in this chapter. Revenue and Cost Sharing Beyond loss of local control over decisions, loss of local control over funding for transit is a major challenge to integration of services. Figuring out how to equitably allocate costs and rev- enues so that every agency feels it is getting its fair share of revenue (or cost savings) and paying its fair share of costs is a related challenge. In the Twin Cities, equitable distribution of transit resources was the primary reason that the 12 suburban communities opted out of the urban transit system. In the Research Triangle, sharing local funding was also grounds for failure of the consolidation plan for the seven transit agencies. And in Butte County, even though they eventually achieved consolidation, it took four years before the affected agencies could agree on a cost-sharing formula. Similarly, the Phoenix metropolitan area was challenged with designing a regional transit service that reflects an equitable distribution of regional tax revenues across

Research Findings 23 multiple jurisdictions. In the Central Puget Sound region’s fare integration efforts, a revenue allocation formula for the regional pass was successfully agreed on, but it represented one of the most challenging negotiations it undertook. Nonetheless, one of the greatest benefits of transitioning to an electronic card system has been the robust data it generates that can be used to allocate revenue accurately; it has given all the agencies confidence that they are getting their fair share. Figuring out how to distribute funding, share costs (both cost increases and cost savings), and allocate revenue in a way that all stakeholders agree is equitable is one of the most difficult tasks of undertaking an integration project of any sort. Dissimilar Business and Operations Practices Transit agencies’ business and operations practices have evolved differently, so to actually inte- grate dissimilar practices can be very time-consuming. In every case study, this meant something different, but all the integration processes were complex. In Butte County, one transit agency’s service began at 5:30 a.m. and another’s at 8:00 a.m., and there were also disparities in evening and weekend operations. These variations were due to the different needs of each local community, so policies could not be changed overnight but rather required negotiations and careful consideration of local needs. Additionally, significant variations in fleet type and fueling had to be reconciled. In the Valley Metro service area, as of 2012, there were five fixed-route service contracts: four con- tracts held and managed by municipalities, plus one Valley Metro contract for regional service. There were also separate contracts with demand-response service providers. Merging all these contracts would be a significant barrier to further integration. Merging union and non-union personnel into one system can also be a problem. When the City of Durham contracted with the regional provider Triangle Transit Authority (TTA), a way around North Carolina’s prohibition on collective bargaining in the public sector was necessary. Durham, which had inherited the union when it purchased its transit system from a private company, retained the union by contracting with a private transit management company. TTA continues to contract with the private management company that employs the transit staff and collectively bargains with the union, even though its other employees are not unionized. Another issue that inhibits further consolidation in the Research Triangle is that Chapel Hill Transit is a fare-free system, with major funding from the University of North Carolina at Chapel Hill, whereas the other six transit agencies in the region all collect fares. In the Twin Cities, for the regional operator, Metro Transit, and the Metropolitan Council, equity and regional mobility are key goals. However, for several of the suburban operators, congestion mitigation is the main goal, not regional mobility and equity. Because of this different focus, to design an attractive commuter service, the suburban operators were the first to use over-the-road coaches and install Wi-Fi on buses in hopes of attracting choice riders and, thus, reducing congestion. In the Central Puget Sound region, integrating special fare categories (e.g., senior, youth, and disabled) required each agency to strike a delicate balance between local political demands, unique local needs, and the benefits of regionalization. Fare policy touches nearly every aspect of agency operations, and the depth of coordination that was needed was far greater than initially anticipated; it proved extremely complex and time consuming to integrate the business practices of seven different agencies of various sizes and involved hundreds of meetings among agency staff. Integration efforts require delving into the challenging and complex territory of differing operational practices, business practices, and values/goals; agencies must engage in negotiations to align their differences as well as determine what aspects may be able to remain independent. Butte County and the Central Puget Sound region have largely overcome dissimilarities in their business and operational practices; Valley Metro and the Twin Cities have had less success.

24 Improving Transit Integration Among Multiple Providers Overcoming History The world is full of examples of the past tainting the present—clan rivalries, border disputes, perceived disrespect. It is not surprising, then, that the past can be a barrier to changing the dynamics among multiple transit providers. The influence of history is most evident as a bar- rier to integration in the Twin Cities case study. In 1967, the Minnesota legislature created two regional organizations to handle transit operations and planning. Twelve suburban communities objected that they were not getting their fair share of funding in this arrangement; so in 1981, the legislature allowed them to opt out of the regional system. To this day, the split has both encouraged and strained coordination activities. Similarly, in the Research Triangle in 1981, the North Carolina General Assembly created a regional transit provider, TTA. Some transit agencies perceived the state’s leadership as an insinu- ation that funding would be tied to participation in consolidation and not based on population, as it had been historically. Consequently, when consolidation was considered in 2003, trust of TTA and the state, which both favored consolidation, was one of the issues that stood in the way. Individual personalities can also have much to do with coordination failure. Sometimes, certain staff members in key positions can stymie a coordination effort, as historical animosities can be difficult to overcome. Butte County’s consolidation effort moved forward after a city council mem- ber was elected to a higher office and his seat was taken by someone supportive of consolidation. On the other hand, some personality traits can be a positive attribute needed to get projects started and to continue through difficult times. Sometimes a change in staffing, leadership, demographics, or even a collective change in a region’s vision of itself can overcome history. These changing external circumstances can also move the dynamics of the parties toward more collaboration and integration. Strategies to Overcome Challenges Collaborative projects take effort to implement and maintain over time. A variety of specific strategies at the case study agencies were used to overcome the challenges they faced. While these strategies are, in most cases, not complete solutions, they represent a road map of how to progress toward the goal of integration. Local Control and Governance How regions deal with governance is critical to the success or failure of integration efforts: it gets to the heart of local control issues, one of the primary challenges that these efforts face. Those involved must strike a delicate balance between accommodating local political demands and unique needs versus the group’s commitment to the benefits of regional goals and functions. Each case study offers a different governance approach. The bottom-up strategies tended to yield more long-lasting results than the centralized or top-down approaches. In most cases of success, stakeholders built inclusive and broadly representative structures and processes that were trusted by stakeholders. To some degree, as much can be learned from the failures as from the successes. The follow- ing examples illustrate a variety of paths to integration and their comparative advantages and disadvantages. Butte County One of the most successful examples among the case studies of shared governance is Butte County. A number of options for what type of governance model would be most appropriate

Research Findings 25 were considered. Ultimately, the participating jurisdictions agreed to have the metropolitan planning organization (MPO), the Butte County Association of Governments (BCAG), be responsible for governance and administration of the consolidated transit operation. This agency was seen as the most neutral party and its board had representation from all jurisdictions in Butte County. The largest city in the county, Chico, was especially concerned about the loss of decision making regarding local transit services within the city, because Chico held only one seat on the BCAG Board, along with a few county representatives from the greater Chico area. To address concerns raised by Chico and other jurisdictions, it was agreed that all transit policy decisions would require a supermajority vote of the board (at least seven of ten members), so that jurisdic- tions would have to have consensus on major transit interests. Phoenix Metropolitan Area In the Phoenix metropolitan area, Valley Metro is the regional transit provider. The agency was created through a voter-approved sales tax in 1985. All Valley Metro members contrib- ute financially to the development and provision of regional transit services, and the gover- nance structure is composed of representatives from 16 communities, including Maricopa County. Most of the board members are elected officials in their home communities. At the same time, most of the larger communities also fund and manage their own local transit services. Valley Metro has for many years successfully employed a committee structure to make deci- sions, manage projects, and report back to the full board. These committees include a regional marketing committee and a regional fare committee. The approach has worked well for both Valley Metro and the individual jurisdictions; members are invited to participate and collaborate on decisions affecting their service. Twin Cities The Minnesota state legislature played an unusually active role in Twin Cities transit gover- nance. The legislature created the Metropolitan Council, or Met Council, to “coordinate the planning and development of the metropolitan area” and bestowed it with strong authority over transit agencies. The legislature also created the regional transit provider, Metro Tran- sit, which is a division of the Met Council and the region’s largest provider. The legislature mandated a common fare structure and fare instrument among all transit providers, which established a baseline of coordination that most stakeholders agree has been important for creating a seamless experience across providers. The Met Council’s top-down approach to consolidation has met with resistance by some suburban transit providers, who believe that their concerns and ideas are often not fully considered by the Met Council and its Metro Transit operation. When suburbs were originally given the opportunity to opt out of the regional service, they did so because they did not believe they were receiving their fair share of services from the regional transit provider. Today, the six suburban transit providers operate service within their own jurisdictions as well as some commuter services and are governed by their own policy boards. Metro Transit, as a division of the Met Council, is governed by a 16-member governor- appointed board, which many of the suburban providers contend does not represent their inter- ests even though most of the decisions made by the regional Met Council impact the suburban communities. Recently, a 2011 report, Governance of Transit in the Twin Cities Region, recommended incorporating some elected officials on the regional governing board, as well as staggering their terms to foster more independence and stability. Significant consolidation is still unlikely,

26 Improving Transit Integration Among Multiple Providers however, as the suburban transit providers wish to retain their identities and independence as much as possible. Top-down governance of coordination efforts can be effective—transit agencies in the Twin Cities region have created a regional transit system that is seamless in ways that matter to customers—but the approach can breed distrust, which can be very difficult to overcome. Research Triangle The Research Triangle illustrates that players must first truly understand the benefits and buy into the concept of one regional system before any integration activities can take place. In 2003, a state-initiated consolidation study recommended transferring the governance and management of a consolidated system to an existing regional agency, the Regional Pub- lic Transportation Authority (RPTA), but the plan was rejected by the local communities. In the view of many stakeholders—riders, other elected officials—the plan effectively put “the cart before the horse.” That is, it laid out the steps for consolidation without gaining regional agreement about why consolidation was needed. The consolidation plan did not adequately address unique local concerns and all the local stakeholders weren’t brought into the process early enough. Therefore, local control concerns superseded other advantages for consolidation. Mayors of the four largest cities took up the challenge for more integration. One city, Durham, saw advantages for a contractual merger with the regional transit provider, TTA, which would provide improved service and on-time performance for its riders. While short of consolidation, the other communities eventually found advantages in many joint projects. They established the Seamless Public Transportation Service Project, with subcommittees working on nine coordina- tion areas—marketing, bus planning, customer service, paratransit, capital procurement, pas- senger amenities, maintenance, technology, and safety and security. Because the subcommittees were required by the mayors to report quarterly over a five-year period, the projects were kept on track and moving forward. Simply the process of meeting together on the nine projects brought an understanding of each agency’s concerns and needs. This understanding translated into trust on a people-to-people basis that the different agencies were collectively working for a goal that would improve service for all their customers. Taking a more gradual and inclusive approach—implementing selected elements of the consolidation study over time with agency buy-in—helped agencies understand why a level of integration is beneficial to their customers and to their agencies. Once they more fully understood the justification and rationale for the project, stakeholders were able to move forward on a wide range of integration activities, and the region has achieved significant coordination outcomes over a five-year period. McAllen In McAllen’s Central Station, local control was not a key issue, since the City of McAllen was the agency responsible for building and operating the station. However, even here, many dif- ferent interests needed to be balanced to create a project that met everyone’s needs and fulfilled all the goals. Interviewees emphasized that inclusiveness, that is, everyone having an equal seat the table, was critical for bringing the project to fruition. Making special efforts to include and understand the needs of the Mexican bus operators was particularly important, because they represented a majority of potential lessees and, therefore, a fundamental ingredient in the station’s financial sustainability. This broader and more inclusive group of stakeholders ensured that the City of McAllen would achieve its goals, primarily that Central Station would become the focal point for all intercity transit operators and secondarily that the Station would succeed financially through renting and leasing of space.

Research Findings 27 Central Puget Sound Region Governance of the successful ORCA card in the Central Puget Sound region is “bottom up.” A comprehensive interlocal agreement was negotiated for development of the ORCA card that created a seven-member joint board composed of the general managers of each agency. Every participating agency has one vote on the joint board; the smallest agency’s vote is equal to the largest—there is no proportional or weighted voting. Further, the board operates on a consensus- based model, seeking full agreement on issues before moving forward (which it largely achieved throughout the planning period). This equal and representative process removed the power dynamic inherent in agency size and created a level playing field for small agencies and large agencies to work together. The process required the larger agencies to give up the control that their size normally would leverage. It also meant that the smaller agencies had to take just as much responsibility for their decisions as the larger agencies. This governance structure also delegates decision making to the appropriate level with clear lines of reporting back to policymakers, which has proven very valuable in such a complex, multi-faceted negotiation. The interlocal agreement required each individual agency’s board to cede authority to the joint board to make all major decisions about implementing the ORCA card. The joint board is responsible for all policy decisions, but all implementation details are delegated to a regional site managers’ group consisting of a senior-level staff representative from each agency. Establishing site managers as the single points of contact at each agency enabled decisions to be made much more quickly, while also ensuring site managers had a direct report- ing relationship to their joint board representatives for all policy issues. The downsides of this governance structure are that a single entity can veto an action, regard- less of the size of that transit district, and that the process has been very slow. Reaching consen- sus among seven agencies on every operational detail was a lengthy process for a very complex project. (It should be noted that transit governing boards with legislative powers should check with their attorneys to make sure that they do not have a constitutional conflict with equal voting for participants of unequal size.) Another factor in the success of ORCA was maintaining local agency control over fare changes. This gave agencies—especially smaller agencies—a sense of autonomy. They did not sense they were being subsumed, rather that they were simply integrating a key feature—the fare medium— that had tremendous customer benefits. Revenue Allocation and Cost-Sharing As discussed under Common Challenges, determining how to equitably allocate costs and rev- enues so that every agency feels it is getting its fair share of revenue (or cost savings) and paying its fair share of costs is one of the greatest challenges to integration efforts. The following vignettes discuss how case study sites used different strategies to address revenue allocation and cost- sharing issues: 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 Butte County Several cost-sharing formulas existed among the transit providers prior to consolidation to account for overlapping service areas and the availability of regional services in each city. There

28 Improving Transit Integration Among Multiple Providers was no uniformity in the formulas, and the agreements were not necessarily documented or formalized. Nevertheless, agencies working together to pursue consolidation recognized that any formula change would result in an increase or decrease over current financial obligations, and they were concerned that if any jurisdiction would be required to increase its financial con- tribution, it could thwart service consolidation. In order to work toward consensus, the agencies agreed that their goal would be to minimize the financial impact on any single jurisdiction while, at the same time, ensuring the formula was fair and equitable. With goals and objectives clearly stated, the next step was to agree on a series of formulas, calculating hypothetical local funding obligations to determine if the results would increase or decrease the financial contributions for each jurisdiction. Through this process, which required a lot of discussion back and forth between different city councils and the County Board of Super- visors, they achieved their goal of an equitable funding arrangement. The formula to determine the financial contribution for fixed-route services would be based on a jurisdiction’s population (50%) and total service hours within that jurisdiction (50%). For dial-a-ride services, the for- mula dictated that financial contributions would be based on a jurisdiction’s population (50%) and total boardings (ridership) within that jurisdiction (50%). Population alone was originally assumed to be a preferred basis for sharing costs, but through ongoing discussions, it became clear that population alone is not necessarily a predictor of ridership, so by accounting for rider- ship, agency representatives said they believed the formula was fair to everyone. Phoenix Metropolitan Area In 2004, Maricopa County voters authorized a 20-year regional tax of $2.8 billion for transit, including funding for bus and light rail transit improvements, development of a “supergrid” bus network, and development of 27 additional miles of light rail or other high-capacity transit ser- vice. Because the revenue source is a regional tax to which all county residents are contributing, regional equity in terms of the allocation of funding was a critical part of selling and managing a regional system. Valley Metro established a regional equity mechanism that allocates a certain number of ser- vice hours and miles based on financial contributions from each area. Although this strategy is “equitable” and has the buy-in of all participants, it also means that in some cases services are developed in response to equity concerns rather than demand and need. As a result, Valley Metro operates in areas with less productive service while other areas are underserved. Maricopa County is challenged by having multiple operators. But, the region—including both Valley Metro and the municipal systems—has clear direction about the funding of these services and sharing fare revenues. The challenge occurs when collaboration projects create financial benefits and a determination must be made regarding how those financial benefits are shared regionally. An ongoing example is provided by the City of Tempe. Valley Metro and the City of Tempe recently issued a joint contract, which is expected to generate considerable cost savings. The challenge lies in how those cost savings are shared and distributed. Both the City of Tempe and Valley Metro recognize the need to share the financial benefits, but the City of Tempe believes it has a strong case to reinvest a substantial portion of the savings into its system, while Valley Metro believes an equally valid case can be made to dedicate a large share of the savings to its system, which serves the entire region. Twin Cities In 2008, the Met Council developed a regional operating revenue allocation model, adopted by the Met Council staff over the objections of the suburban transit providers. Several rea- sons explain why stakeholders from nearly all of the agencies voice reservations about the model. Unlike many revenue allocation models that are based on population or demographic

Research Findings 29 characteristics, the Met Council model is roughly based on the level of service that was in place when the model was prepared, meaning that money distributed among the agencies correlates to the amount of transit service each agency has historically provided. All transit operators have limitations on how much money may be kept in an operating reserve fund, called a fund balance. Although the model is far from perfect—and often frustrating to administer, according to Met Council staff—representatives from the Met Council and several of the suburban providers said renegotiating the model would be especially challenging because there are such differing views on how the funding formula should be revised. Research Triangle While the Research Triangle transit agencies generally retain local control over their funding, in the City of Durham and two of the counties, financial issues are addressed in ways that foster more collaboration on the control of local funds. In 2010, the City of Durham transferred the planning and management of its transit system, DATA, to the regional transit provider, TTA. In this contractual merger, the City owns the buses and maintenance facility and pays for ser- vice. The City is still the federal and state grantee for transit funding. TTA and Durham use a perpetual rollover contract, which renews automatically unless one party or the other wants to renegotiate terms. In addition, in 2011 and 2012, voters in Durham County and Orange County passed a new ½-cent sales tax to support the construction of a light rail line to Chapel Hill, a commuter rail line to Raleigh, and enhanced bus service throughout the county. To determine how to pay for these investments with the tax and vehicle fee revenues, county representatives developed a shared-benefits analysis. This analysis examined “the different types of new revenues that might be available and their sources by location; the cost of the investment and how these costs relate to the amount of bus service that could be provided in each county; and the benefits of the invest- ments and the degree to which these benefits can be attributed to citizens and enterprises in each county.” The goal of the Shared Benefit Analysis is to have a framework in place that is accept- able to the two counties on how revenues and costs would be shared near the Durham-Orange County line when the future light rail line is operational. Central Puget Sound Region The ORCA card utilizes a model to allocate the regional pass revenue that accounts for each agency’s approach to fare policy. Revenue is distributed based on the proportional “share” of a trip (what the single-trip cash fare would otherwise be). For example, if someone begins a trip with Agency A on a service that costs $3 and transfers to Agency B to complete his trip on a ser- vice that costs $2, that rider pays only $3 (transfers are free). Of the passenger’s total payment, Agency A gets 60% and Agency B gets 40%. The advantage of this system is that each agency’s revenue from regional passes is an extension of its local pass revenue: if fares are low, its revenue will be lower; if fares are high, its revenue will be higher. This system works particularly well because the electronic fare card yields very accurate data on boardings, which means agencies have a high level of confidence that they are getting their fair share. Need for a Regional Authority 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.

30 Improving Transit Integration Among Multiple Providers It is particularly valuable for this agency to have access to funds to help cover startup and implementation costs and even fund agency participation during planning stages if necessary. This body does not have to be a transit agency; any agency with a regional presence can play this role. Butte County As the California-designated Regional Transportation Planning Agency and federally desig- nated MPO for Butte County, BCAG is responsible for the preparation of transportation plans and programs, and distributes federal and state transportation funds. BCAG staff assessed their abilities and determined that the agency was interested in assuming the administrative function for transit previously held by the various jurisdictions. BCAG approached city managers and representatives from the county to discuss the potential for consolidating transit services. The primary concern expressed by city and county officials was whether consolidation would make services more cost effective. In 1999, BCAG initiated the study process to consider consolidating services. Effectively, staff-level discussions spurred the consolidation process, without significant involvement from elected officials. Select elected officials were consulted in a round of stakeholder interviews at the start of the consolidation study. Stakeholders said that they generally wanted to consolidate ser- vices to improve service quality and enhance service levels and that they expected a consolidated system would allow for expansion of service either through improved frequencies or extended service hours and days. After several years of study, transit services in Butte County consolidated under the B-Line brand, with BCAG as the lead agency and policy board for transit. The various jurisdictions have representatives on the BCAG board but are not involved in day-to-day decision making about the system or its operations. BCAG has been an effective leader, perceived as having a regional approach that is appropriate for administering transit in the county. Phoenix Metropolitan Area In the Phoenix Metro area, Valley Metro is a regional transit agency with authority granted by the taxpayers. Valley Metro’s governance challenge relates to it being a relatively new agency providing services as an overlay to municipal services. Indeed, these two challenges are related. When Valley Metro came into being, several of the regional transit service organizational and funding functions were already entrusted to local agencies or other regional authorities. In addi- tion, some of the older transit systems are larger systems. Thus, in some cases, consolidating authority has not been easy; agencies that hold authority are reluctant to relinquish authority, often citing experience, competence, and their regional role. Valley Metro has, however, achieved success in regionalizing and consolidating several oper- ating and management functions. This success has largely been realized in functional areas that offer considerable, tangible benefits to riders (joint marketing) and/or are perceived as more challenging functions, such as call centers, complaint lines, and Americans with Disabilities Act (ADA) paratransit. Valley Metro has used the regionalization of each of these functions as an opportunity to achieve rider benefits, demonstrate competence, and build trust. Valley Metro also takes a long-term approach to address many of the regional functions, acknowledging that it must work toward regionalization incrementally. Twin Cities The Met Council has the authority to set policies for regional transit operations, procurement, and budgeting practices. Some of the Met Council’s stated goals include the following, which relate to the organization’s approach to coordination:

Research Findings 31 • Ensure that high-quality, seamless, and coordinated transit service is provided throughout the region. • Maintain the equitable, efficient, and transparent distribution and use of regional transit capital and operating resources. • Ensure compliance with all federal and state laws, regulations, and procedures governing the use of transit funds by the Met Council and all subrecipients, including suburban transit agencies. The Met Council is both the direct recipient of most federal funding and distributor of regional transit funds. With a strong interest in promoting regionalism, the Met Council has led several coordination efforts that have included assuming control and management of the regional vehicle fleet, collection and redistribution of fare revenues, and implementation of a common automatic vehicle location (AVL) system used by all but one of the suburban transit providers. The Met Council’s regional perspective is valuable for planning and funding, but because Met Transit is one of its divisions, it is also one of several transit operators in the region. For this reason, some perceive that the Met Council has a conflict in prescribing policies for all of the other smaller providers. Because it is responsible for establishing policy in the region, the Met Council has significant influence over administration, financing, and planning of transit services at the smaller providers, which has allowed for the appearance of seamlessness to transit riders. Research Triangle TTA, the RPTA, has 13 members representing the counties and cities. As such, it has taken on much of the transit coordination role for the Research Triangle. For example, the idea for a regional call center was initially floated in 2002, but agencies were deterred by the cost. To jumpstart the regional call center in 2006, TTA bore most of the initial costs, but now each city is billed for the service based on call volumes from their constituents. TTA created the GoTriangle brand, and all buses in the network have a GoTriangle sticker. TTA has also led other coordination projects, such as common bus stop signage, cost sharing for a regional paratransit system, regional ADA certification, and software for real-time information. TTA periodically calls together the planners from the different cities to discuss regional planning as it relates to transit. This is jointly coordi- nated through Triangle J Council of Governments, the agency which mediated the Shared Benefit Analysis discussed earlier. Although neither of these agencies has ultimate authority to mandate changes, the leadership provided by TTA and Triangle J is important for continued collaboration among the transportation providers in the Research Triangle. McAllen Even though coordination efforts were largely local in McAllen, a regional agency was a key player in initial transit integration efforts. In 1996, the City of McAllen had commissioned a Transit Feasibility Study. The initial local bus service, which began operating in 1997, was oper- ated by Valley Metro, a division of the Lower Rio Grande Development Council, because it had existing vehicles and the capability to operate transit service. Eventually, service was brought in-house, but the regional agency served an important role in providing an operator during the initial years of McAllen Metro. Central Puget Sound Region Sound Transit is a regional agency whose voter-mandated mission is regional integration. It provided the administrative and financial backing for the ORCA project as well as an established forum for coordination. Specifically, Sound Transit agreed to fund the capital costs required for ORCA implementation, such as purchase and installation of card readers in vehicles, as well as to cover ORCA operating expenses for the first two years. This financial commitment was critical

32 Improving Transit Integration Among Multiple Providers to getting the smaller agencies to willingly participate in the ORCA project. Its financial support was particularly critical in late 1999 when a successful citizen’s initiative, Proposition 695, cut funding for all the other transit agencies in the midst of the planning and procurement process for regional fare integration and ORCA. The project became less active during what was a very difficult time at the regional transit operators, but Sound Transit continued to pursue the project until most agency funding was restored a couple of years later. In addition, Sound Transit, together with King County Metro, the largest transit agency in the region, staffs a small regional team that manages and coordinates the ORCA project. They do not provide decision-making leadership but do provide critical project management, such as convening meetings, planning and strategizing projects, and maintaining legal agreements and other records. This role was universally lauded by stakeholders as a key to ORCA’s success. Sound Transit has been trusted in the central organizing role in part because it is respon- sive to local concerns; a representative from every individual transit agency’s board sits on the Sound Transit Board and has an equal vote. Similarly, King County Metro has been trusted to offer administrative support to the project because it has proven that it has the region’s interests in mind by entering into an equal relationship with agencies far smaller, thereby giving up the power inherent in its size. Overarching Issues Related to Integration Efforts Changing circumstances involving growth and visionary projects can act as catalysts for inte- gration projects. Joint long-range planning can result in a more strategic approach to regional projects, and technology can be a tool that stimulates implementation of planned actions. These overarching issues can be found in many integration efforts. Taking Advantage of Changing Circumstances An old adage, “Timing is everything,” can also apply to the task of furthering transit inte- gration. While integration might be the logical path to pursue for multiple reasons, it may fail because the timing is not right. Change is difficult, and a community may not understand why it should give up something familiar. Lethargy may set in because the many steps that need to be taken seem overwhelming, the obstacles too challenging, or the resistance too great. Often, however, something occurs that is just the right catalyst for moving forward. Regional growth in an area often necessitates a regional approach, leading to increased collaboration. Ambitious, large-scale projects, such as new rail systems, can be the byproduct of a new wave of regionalism, allowing communities to envision themselves in a fresh light and giving them a more cohesive sense of place than the distinct towns they once were. Several examples illustrate how the case study integration efforts were sparked by external circumstances. Regional Growth McAllen, the Research Triangle, and the Central Puget Sound region undertook efforts for increased collaboration as a result of growth in their respective regions. In McAllen, growth in regional travel followed the 1994 signing of the North American Free Trade Agreement (NAFTA), which eliminated most of the restrictions on cross-border bus operations. Direct connections between cities made travel easier, opened new markets for travel, and encouraged competition among operators. A need then arose to prevent multiple operators from using passenger loading and unloading zones randomly in the city. As a result of these external forces, the City of McAllen

Research Findings 33 developed Central Station. Now nine local and international transit operators rent or lease space at the station, creating one of the largest passenger ground hubs in the country. In North Carolina, as the Research Triangle’s population almost doubled between 1990 and 2013, the boundaries between the four primary cities began to blur. The leadership began to think of the area as a region instead of distinct communities after the 2000 Census, for the first time, showed contiguous metropolitan areas. The governor convened a conference to discuss regional issues, including transportation. The outcome was the creation of a new regional bus system, the TTA, and ultimately, collaboration on many services, such as a regional call center and regional fares. At the time that planning for the ORCA card in the Central Puget Sound region was initiated, the greater Seattle region had grown significantly and was ranked as the sixth most congested urban area in the United States. Facilitating more use of transit was seen as a key congestion mitigation effort. These conditions created a circumstance where there was widespread acknowl- edgment by the community, state and local politicians, and transit leaders that a more seamless system was needed in the Central Puget Sound region to make using the region’s multiple public transportation providers easier for consumers. Two of the profile agencies, Linx Mobility Management Co-op in Yellowstone National Park and CRTM in Madrid, Spain, although extremely different in their size and organization, are both the product of growth in their regions. Linx, whose service area covers 35 to 40 million acres in the Yellowstone region, is a transportation cooperative that facilitates access to a variety of transportation services, including public transit, human service transportation, and private car- riers. It emerged from a series of public roundtables identifying transportation as a critical need in a vast geographic region with a sparse population, but no coordinated system to get people to work, to human services, and to tourist sites. The local leaders recognized that they no longer were living in isolated pockets but were part of an interdependent community needing linkages over the immense territory they called home. CRTM plays a similar coordinating role as Linx but for a service area of 3,100 square miles and a population of 6.5 million. As the population of Madrid grew and spread from the central city to towns and centers on the periphery, the lack of coordination between Madrid’s multiple transportation systems became increasingly apparent. All the transit operators that form part of CRTM maintain autonomous management of their operations but cede control over establish- ment and planning of service to CRTM, which is responsible for the physical, administrative, and fare structure integration of the regional system. Advancing Integration as Part of a Package of Visionary Projects A collective goal among leaders can stimulate integration as part of a larger vision for their region. In the case of both the Research Triangle and Maricopa County, a tax to support a new rail system served as a catalyst for increased collaboration on bus systems to support the new rail proj- ects. In the Research Triangle, the ½-cent sales tax to construct commuter and light rail lines and enhanced bus service is viewed by some as the next step toward regional consolidation. Similarly, a successful sales tax initiative in 2004 in Maricopa County was a major step forward in creating a regional transit network in the Phoenix metropolitan region, because it authorized a funding package to develop a regional bus and rail network organized around the regional grid system. McAllen’s Central Station also emerged from a successful tax initiative. The tax passed in 1997 won approval by including both public transportation services (McAllen Metro) and a physical hub (Central Station) as two of the public projects included in the tax measure. The Sound Move initiative in the Central Puget Sound region was a vision for a one-ticket ride on transit. In 1996, voters in King, Pierce, and Snohomish Counties approved the Sound Move

34 Improving Transit Integration Among Multiple Providers initiative to fund a package of transportation improvements, including a “one-ticket ride”— a uniform, single-ticket fare system among local and regional transit providers and an integrated fare policy for the entire public transit service network. Creation of this dedicated funding source, the “regional transit integration fund,” and a regional policy directive to integrate fares ultimately would prove critical to the future success of ORCA. This mandate kept the project moving forward through many hurdles. Joint Long-Range Planning Beyond coordination and integration, several profiles and case studies provide a model for regions to do joint capital and other integrated long-range planning, taking a more strategic approach to identifying and implementing capital projects and services. Through joint planning, agencies can produce projects that are beneficial to all rather than the typical segmented approach, thus avoiding multiple projects and service plans specific to each transit agency, as well as reducing the likelihood of duplicate services or services that don’t connect at all. Cases like the ORCA card and McAllen’s Central Station are collaborative efforts that have included development of regional capital projects and, therefore, can offer direct lessons for achieving regional capital planning. In another example, Durham and Orange Counties in the Research Triangle have developed and adopted a unified Bus and Rail Investment Plan to serve the new rail system being planned. Also, the Seamless Public Transportation Service Project identified capital projects to benefit the region, such as a server and software to store automated passenger count data and next bus technology, an AVL system, and global positioning system (GPS) to make real-time information available to riders. In the Twin Cities, long-range planning efforts are spearheaded by the Met Council to encourage participants from across the region to share their ideas and work together on joint projects that include transitways and new transit facilities. All agencies are invited to the table, and this has led to a network of transit investments throughout the region, including in a number of suburban areas (e.g., the new METRO Red Line Bus Rapid Transit service is wholly in suburban areas). In Maricopa County, Valley Metro is developing shared service standards and guidelines as part of a regional framework for managing service development in line with service performance and productivity. Valley Metro hopes to use this process to set goals for service delivery, define service types, identify operating standards, and define performance measures. Agreeing on guidelines will support a system for service management and delivery that also helps create more consistency and fewer redundancies across service areas. Many of the same strategies that are critical to achieving integration across multiple providers discussed in this chapter can be applied more broadly to long-range planning. In particular, by designing inclusive processes, stakeholders believe their participation and input are valued. A regional authority is important in long-range planning to convene stakeholders, provide project management, sustain efforts over long periods of time, and counter agencies’ natural tendencies toward turfism by keeping the regional perspective at the forefront of discussions. Technology Technology cannot by itself effect integration, but it can support and facilitate integration efforts. Any integration effort has to start with transit providers asserting their combined commitment to a goal—whether it be constructing a transit hub as McAllen did or creating a seamless network through branding, as Valley Metro does. However, technology can be the tool to move coordination from an idea to an integrated system.

Research Findings 35 The benefits of technology can be most clearly seen in fare coordination. Before the ORCA electronic payment card, the Central Puget Sound region was already using a paper-based regional transit pass across multiple operators, so the foundation for coordination predated any application of technology. However, there were a number of challenges with a paper-based medium; most notably, revenue reconciliation was cumbersome and time-consuming and revenue allocation was based on annual survey data that agencies felt was unreliable and not reflective of actual ridership patterns. Therefore, evolving to an electronic system was a major improvement for two main reasons: it built agencies’ trust in the system—and, thereby, their willingness to participate—and it streamlined certain systems. The smart card allows for transit usage to be precisely tracked, giving operators more certainty that they are getting their “fair share” of revenue from regional pass sales. ORCA also allows for faster and less cumbersome revenue distribution and reconciliation, a cost savings. Another popular use of technology is the establishment of a regional call center. Metro Transit in the Twin Cities handles customer calls from people across the region at its Transit Information Center and keeps the website with information on all operators up to date. In the Research Triangle, one of the most praised outcomes of the collaboration that resulted from the consolidation plan is the Regional Call Center. Each city pays into the call center every year based on the system’s tracking of calls logged from its citizens. New technology also made real-time information avail- able, decreasing the number of phone calls fielded at the call center. A technology project in Central Florida is now under way to use web-based regional trip-booking and scheduling software and an associated regional geographical information system map base to integrate three public transit agencies, six human service agencies, and veterans’ transportation services. The Model Orlando Regionally Efficient Transportation Management Coordination Center (MORE TMCC) leverages a range of mobility resources and funding sources efficiently and still fulfills program eligibility and reporting requirements for each agency. It integrates general public transit, human services transportation, and rural services and will connect to a regional 211 One-Call, One-Click mobility management system. This allows multiple providers to integrate services through technology without agencies abdicating their role or authority. However, selecting the right technology for the environment in which transit operates—extreme weather conditions, dust, vehicle vibrations—can be a time-consuming process. Technology can also be costly to implement and maintain. For example, in the Central Puget Sound region, just creating a request for proposals (RFP) that specified all the technological, financial, management, customer service, and agency-specific requirements for the system was an enormous undertaking that took months longer than expected. The final RFP was hundreds of pages long. Despite this highly involved process, it still took six years to overcome all the technological challenges after the vendor was selected. Even now, the ORCA software has been described as “clunky,” causing the need for many workarounds to block cards or transfer the balance from one card to another, all of which require ongoing staff time. All told, it cost $42 million to initiate the ORCA card, which did, in fact, come in on budget; it costs approximately $7.5 million per year to operate the ORCA system. All stakeholders remain in agreement that the card’s benefits are worth it, but projects involving technology with this level of complexity require significant time and financial resources. Despite the benefits of technology in easing the arduous tasks that must be accomplished in integration, keeping up with the fast changes in technology can be challenging. For example, the FlexBus demonstration project in Central Florida came originally from a 1999 effort to define a better way of serving suburban travel but will not go live until the summer of 2015. The FlexBus concept is a transit service that serves stations at designated locations according to the user’s request in real-time rather than by fixed route and fixed schedule. It requires signifi- cant use of transit technologies for scheduling, trip-booking, fare payment, and vehicle assign- ment functions in real-time. The final design was completed in 2007 but Small Start funding

36 Improving Transit Integration Among Multiple Providers requests for construction were not successful. In 2010, the FTA funded $3.5 million to develop and demonstrate the concept. In this case, the delay in obtaining funding was advantageous because the advances in web-enabled smartphones now provide an ideal platform for requesting and paying for service and as a “boarding pass.” Collaboration and consolidation are lengthy processes of negotiation. The chosen technology to support change can be antiquated by the time the negotiations are concluded and implementation has yet to begin. Nonetheless, these case studies confirm that the ability of technology to quantify costs among participants and to speed up the tasks of integration can be worth the investment. Lessons Learned The research and case studies illustrate several commonalities that highlight the most effective ways agencies have worked together toward their coordination goals. The key lessons learned, each explained in turn below, are as follows: 1. Prioritize the Customer Experience 2. Collaboration Succeeds when Implementation Is Incremental 3. Strong Local Leadership Is Needed to Sustain an Integration Effort 4. Broadening the Pool of Stakeholders Leads to More Widespread Acceptance 5. Create Processes that Develop Trust Among Stakeholders 6. Maintain a Level of Local Control 7. Set Goals and Document Anticipated Outcomes at the Outset of an Integration Process 8. Benefits May Outweigh Additional Costs Incurred in Integration Lesson One: Prioritize the Customer Experience Transit providers are 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 improving 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. These processes are difficult so the expected benefits must be clearly stated. Maintaining the common focus on improving the quality of the customer service experience can help ease friction among operators and get partners through challenging negotiations. Further, in many cases, cost savings, one of the other hoped-for benefits, were not realized. However, transit agencies and elected officials interviewed believe that the expenditures involved in integration are a worthwhile investment because they improve service quality for the customer. Further, a focus on the customer allows agencies to strategically “choose their battles,” tackling integration issues that will have the most benefit for passengers while allowing other areas that do not affect passengers as directly to remain independent, preserving a degree of autonomy and local control. It is clear from these six case studies that transit agencies can achieve some success in integrat- ing 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

Research Findings 37 together over time, staff and leaders built trust, established a step-by-step track record of success, and came to understand—and “buy in” to—the benefits of integration. These examples illustrate that agencies were able to move along the continuum (Figure 1-1) from communication to more robust integration activities over time. When integration among multiple transit providers is pursued, perhaps the old adage, “If at first you don’t succeed, try, try again” applies. The case studies demonstrate that patience among the participants and commitment to improving the passenger experience is essential. While each of these regions evolved differently, they all succeeded in developing trust among skeptics by building on early successes in order to move toward a more mature stage of integra- tion. Where some agencies have moved quickly and skepticism has remained, integration has been more challenging. Lesson Three: Strong Local Leadership Is Needed to Sustain an Integration Effort State intervention was important to initiate integration efforts in two of the case studies. However, decrees and even additional funding that originate at higher political levels are not enough to sustain collaboration in the long term. As shown in Lesson Two, implementation of collaborative measures is almost always incremental, leading to the ongoing involvement of local leadership. Examples from the case studies underline the importance of local leadership that is committed to the value of integration for their community. When that commitment is present, the leader- ship 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 also have the effect of slowing a project down, but many of these integration efforts, especially those farther along the continuum, could not have been accomplished without this more “grassroots” approach. In particular, thinking broadly about partnerships—law enforcement, firefighters, retailers, nonprofit organizations, the business community—can avoid problems later in imple- mentation and can build advocates if controversy arises. A diversity of stakeholders ensures the following: • Projects are not dominated by a single interest or stakeholder group. • The needs and perspectives of a broader range of users are included in project design. • A large base of support sustains the project through challenges. A plan, even with the leadership of mayors or the state, was not enough to bring about con- solidation, or even collaboration in three of the case studies. The affected parties had to be brought into the process to develop their own understanding of the benefits and be able to then articulate those benefits to their communities and to the riders they serve. The need to be more

38 Improving Transit Integration Among Multiple Providers inclusive, while lengthening the process, ultimately can lead to a project supported by the whole community. The failure proves the rule: where stakeholders have felt excluded or not respected, coordination efforts have faltered. 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. 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. Some additional processes that develop trust include: • Creating budgets and timelines that span elected terms: Projects can get hijacked by a political turnover with a different or competing vision. Stakeholders can be discouraged over the time they invested in a project they believed in and will have reluctance returning to the process. Keep the political background in mind to avoid such disruption. • Meeting stakeholders on their own “turf,” both physically and metaphorically to understand partners’ needs, interests, and limitations. If important stakeholders are reluctant to join the process, visit the persons or agencies in their own territory instead of asking them to come to unfamiliar ground. Leaders willing to extend themselves show that the project values broad participation. It may be helpful to identify a “power player” who will support the process to bring others on board. • Developing systems for continued participation by partners. When agencies share or relinquish authority to another agency, they need assurance that their needs will remain at the forefront of decision making. Several of the case study examples crafted systems, typically committees but also guidelines, which allowed agencies to retain some influence and authority on an ongoing basis. If effective, such systems build trust and confidence and can lead to additional integration/ collaboration efforts. Lesson Six: Maintain a Level of Local Control Fear of the loss of local control is one of the chief tests integration efforts will encounter. Therefore, one of the biggest challenges for coordination projects is balancing local control with regional interests. Having pre-determined ways that agencies can provide input and main- tain some degree of local control, while regionalizing other functions, has proven critical in many cases. 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 cooperative agree- ments instead of top-down mandates, negotiating formulas to prioritize projects, and creating subcommittees to determine local vs. 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.

Research Findings 39 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 determine whether to stay the course or make changes as the project is implemented. Communi- cating financial information clearly throughout the project will build trust among participants. Budgets must be realistic and accurate to be believable to participants. Participants will need to understand service costs, funding sources, and the benefits, both qualitative (e.g., more down- town activity) and quantitative (increased ridership). Determining how close the project came to meeting its goals and anticipated outcomes can assist in an evaluation of the integration project after it has been implemented. 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. Chapter 4 discusses this lesson learned in more detail. 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 and therefore cost savings is one of the primary assumed benefits that will result from an integration project. Many transit agencies have found, however, that integrating transit sys tems, programs, and services does not necessarily result in cost savings. In fact, these projects can lead to increased costs. This increase is often because successful transit integration requires effort on the part of indi- viduals at all participating agencies over an extended period of time. Effort comes at a cost of time, money, and other resources. Sometimes these costs are only upfront for planning and project setup, and over time costs do go down as a result of integration. Further, some of the efficiency improvements promised by integration projects take time to be realized, only occurring once the projects are mature and staff and processes at all the agencies have had time to align. Even when projects result in permanently 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. In addition, in cases where efforts have yielded cost savings, agencies sometimes opt to reinvest those savings into additional service. This lesson underscores the significance of Lesson Seven, the importance of getting all stake- holders on the same page from the start about the goals of a project and the range of anticipated outcomes. For example, if the group determines that cost reduction is the sole motivator to do the project, then it may make sense to assess the likelihood of cost savings as an outcome before undertaking the project. Or, alternatively, if a range of desired benefits are identified, then even if a project incurs added costs, the team can still declare it a success if it achieves the other desired outcomes.