Pasadena May Pull Out of Metro’s Bike Share Program

Transportation Department recommends continuing the program for now, though farebox income is at 8%, as compared to Metro’s projected 60%

Published : Monday, March 12, 2018 | 5:53 AM

Metro's Bike Sharing Program

The wheels may be falling off Pasadena’s involvement in Metro’s Bike Share program at the moment, but the City has no current plans to apply the brakes. Not just yet, anyway.

Income from riders’ fares is so far below Metro’s projections that, barring new sponsorship or advertising revenue to defray costs or a change in Pasadena’s share of paying for operating the system, the City may elect to cancel its participation altogether, according to a report by Pasadena’s Transportation Director Frederick Dock.

Dock said that although the City can terminate its participation at any time, he recommends that the City continue with the Bike Share program until the Memorandum of Understanding with Metro expires in October, 2018.

Terminating its participation now, Dock said, would mean the City could avoid four months of operations and maintenance expense — $480,000 — but would cost the city a “significant” amount of money to remove the Bike Share stations around the city.

According to Dock’s report to be presented to the City Council’s Municipal Service Committee on Tuesday, Metro has reported as of January 31, 2018, a total of 26,527 rides have been completed using the existing Bike Share network since its launch.

Monthly pass holders took 64 percent of the rides, 31 percent were walk-up rides, and five percent were combined monthly, one day, and business pass holders.

Back during agreement negotiations in 2016, Metro estimated Title Sponsorship revenues of $516,000 – $750,000 per year, and also estimated a 60% fare box recovery as a best case. “Fare Box Recovery” refers to the portion of fares that the City would receive to offset operation costs.

As noted in the October 10, 2016 agenda report, the best case scenario would result in a sustainable level of Operating and Maintenance costs.

But Pasadena is currently reporting only an 8 percent recovery rate. Metro has also not yet secured a Title Sponsorship, and a Request for Proposals for panel advertising failed to garner any interest.

Said the Transportation Department report, “Unless Metro secures a title sponsor, fare box recovery improves substantially and/or Metro modifies the terms of any subsequent MOU to be more favorable to the City, it is unlikely that continued support for the bike share system in Pasadena can be recommended as fiscally prudent.”

Winter weather and the removal of five high performing stations along Colorado Boulevard for the Rose Parade combined to reduce network usage in December. The stations removed for the Rose Parade were out of service during December 2017 and were re-installed on January 11, 2018.

Since July 2017, the top performing stations in the network are the Memorial Park Station with 1,695 rides, Oak Knoll, Colorado with 1,428 rides, the Rose Bowl with 1,425 rides, Del Mar Station with 1,414 rides and Caltech East 1200 rides.

However, according to the report, the Rose Parade and Rose Bowl events brought an increase in bike share station usage located near the Rose Bowl, Memorial Park, Pasadena Museum of History, Mercantile Alley, and Convention Center. These numbers would affect the average daily ridership figures.

Pasadena’s financial contributions to the project consists of two parts—capital and operations & maintenance. The total capital costs of the program as defined in the City’s agreement with Metro, which runs the program, is $2,071, 574.

Metro contributed $735,085 and Pasadena contributed $1,336, 489.

A $954,635 2015 Call for Projects (CFP) grant for the bike share program was applied to Pasadena’s Capital Cost obligation. The City has also paid the 2015 CFP required local match commitment of $381,854. With the $954,635 grant plus the $381,854 cash requirement paid, the City has satisfied its required contribution of $1,336,489.

The term of the agreement between the City and Metro is two years from October 27, 2016. During this period, Metro and the City agreed to share in the cost of Operations and Maintenance (O&M) services, with the City responsible for 65% of the net O&M costs.

At the same time, the agreement allows for O&M costs to be offset by Title Sponsorship dues, panel advertising, and bike share revenue.

However, as reported in the October 10, 2016 and the February 27, 2017 agenda reports, staff recommended not to expect any offsetting revenue and requested that Council appropriate $1,260,683 for the City’s expected two-year operations and maintenance cost.

Either party may terminate the agreement at any time by giving the other party 60 days written notice, but in the event the City terminates the agreement early, the City will be responsible for the cost of removal of the Bike Share equipment.

With approximately seven months remaining to the expiration of the MOU, the City could elect to cancel and recover potentially four months of operating costs following the notice period. Four months of O&M is approximately $480,000. However, according to the staff report, that amount would be reduced by the cost of equipment removal, which, while unknown, is estimated to be significant.

Metro is developing marketing plans to increase ridership and working to secure a Title Sponsor, according to the report, and is also re-evaluating the existing fare structure for the system based on user surveys and bike share operations in partner cities.

Accordingly, according to the staff report, “given the timing of the overall performance period of the MOU and the potential cost to the City to terminate early, continued participation is the recommended course of action.”

Concluded the report, “The next quarterly performance statistics should indicate if the Bike share system will recover from the Rose Parade interruption and what the prospects are for offsetting O&M costs, as the bike share system matures regionally.”