5.  RFC PROJECT TIMELINE

5.1 Introduction

The previous chapter discussed the benefits of a regional fare card system.  This chapter reviews the progression of the RFC Project, from discussions of the initial concept to its current level of development, and reviews the events that shaped its development and the factors that motivated partner participation.  This chapter provides a detailed chronology of events for the project and this evaluation, and offers a discussion of the more important milestones along the timeline.

5.2 Emergence of New Technology

The initial thinking on the RFC Project dates back more than 10 years to 1994, when King County Metro was Seattle Metro, before it merged with King County.  Seattle Metro was designated by the region as the agency to lead the planning effort to identify strategies and appropriate technologies to improve regional fare coordination.  With regard to the use of fare collection technology as a solution to replace paper fare media, the choice was between magstrip (magnetic stripe), which was being introduced around the country; or smart card, a relatively unproven technology at the time.  The interest in smart card technology was increased because at that time the Metropolitan Atlanta Rapid Transit Authority (MARTA) was investigating smart card applications for use in the upcoming 1996 Olympic Games in Atlanta.  In 1995, Seattle Metro commissioned a technical feasibility study to evaluate the two technologies.  The Regional Fare Integration Planning Team issued a report titled Regional Fare & Technology Integration Feasibility Study that concluded smart cards offered greater benefits in usability and reliability compared with magstrip technology. They recommended the implementation of a contactless smart card fare collection system for deployment in the Puget Sound region.

5.3 Moving Towards Regionalism

An institutional factor that contributed to the interest in new fare technology was a growing commitment to transit regionalism in the Central Puget Sound area.  As noted earlier, in 1992 the state legislature in Olympia passed a law requiring the formation of a Regional Transit Authority (RTA) comprised of three counties in the area: Pierce, King and Snohomish.  The RTA later became known as Sound Transit when, in 1996, voters in the three counties approved the “Sound Moves” regional transit plan.  The plan encompassed $3.9 million worth of bus and rail service improvements in the region.

A key reason for the legislature’s interest was the increasing highway congestion throughout the region.  It was felt that longer distance commuting trips in the region were not being well served by the transit agencies, so that these travelers had no viable option other than to use private passenger vehicles and add to the congestion.[32]

As part of its voter-approved mandate, Sound Transit is responsible for facilitating regional travel.  A regional fare system was seen as a necessary condition for fulfilling its plan, and Sound Transit’s creation put renewed interest and resources into the RFC Project.

A Regional Fare Coordination Planning Team was created.  It consisted of people from all the agencies including the RTA and the Puget Sound Regional Council.  The Cascadia Project was interested in the project as a representative of AMTRAK to create a corridor from Eugene, Oregon to Vancouver, BC where one fare medium could be used on all public transit.  However, Cascadia staff did not actively participate in the planning process.   The team retained the IBI Group to prepare a business analysis / feasibility study that would “present a summary of a business needs assessment and feasibility analysis for a new smart card fare collection system.”  The Regional Fare & Technology Coordination for Central Puget Sound: Final Report Phase I Feasibility Study was submitted on January 15, 1996.

This report identified the following potential benefits of a regional fare card coordination project:

• Improved collection of ridership and revenue data,
• Workload reduction and improved safety for operators,
• Customer convenience,
• Opportunity to expand employer programs,
• Additional retail opportunities, and
• Increased ridership.

5.4 Business Community Interest

Even before the study was completed, the Regional Planning Team approached corporate entities in the region to gauge corporate interest in the smart card concept as a mechanism to provide transportation benefits to their employees.  In addition, the Team received funding from the Boeing Company via the City of Everett Transportation Mitigation Fund.  Boeing and many other corporate interests also provided non-monetary assistance by actively publicizing their support for the initiative and thereby swaying some political elements in the region.

5.5 Financial Planning

Planning for funding sources started very soon after initial technology investigation.  By 1998, a finance plan was beginning to take shape, and the partner agencies had completed a business requirements study that outlined a preferred operating concept, customer service business rules and conducted a system benefit-cost analysis.  In early 1999, the partners issued a procurement plan and RFP.  Later that year, however, Washington voters repealed the state’s motor vehicle excise tax (MVET) which significantly jeopardized funding for transportation improvements.  As a result, the procurement was suspended and partner agencies turned their attention to filling the funding gap in current operations and finding new sources of funding for the RFC Project.[33]

Following passage of the MVET repeal, the Washington Legislature enacted legislation authorizing local governments to ask voters to raise sales taxes dedicated to public transit up to 0.9 percent.  In recent years, voters in King, Snohomish, Pierce and Kitsap counties have approved increases in local sales taxes to aid local transit districts.  Even with the passage of local sales tax enhancements, as noted earlier several partners were struggling to make the business case before ST agreed to fund a portion of these partners’ fare card system capital costs not covered by grants, and two years’ operating costs.  As examined in Section 8.5 of this report, ST’s contribution will replace a current commitment to subsidize agencies participating in the Puget Pass system.

More than 10 years after initially commencing financial planning, the partners have designed a finance plan that includes 12 federal grants (e.g., Federal Section 5307, Congestion Mitigation and Air Quality, ITS Earmarks), local sources, contributions from the partner agencies’ capital budgets, and a corporate grant from Boeing via the City of Everett Transportation Mitigation Fund.  Approximately 48 percent of the estimated capital budget of $42.1 million is funded with federal, local and corporate grants totaling $20.2 million.

5.6 RFC System Specification Development

The RFC Project is built on an extensive history of early developments that help pave the way for implementation (Table 3).  Two precursor fare pass programs were implemented in the Puget Sound region in the early and mid 1990s: U-Pass and FlexPass.  U-Pass was established in 1991 with the primary objective of reducing the number of students, staff and faculty driving alone to the main campus of the University of Washington in Seattle.  Riders were provided with a pass that offered a variety of benefits, including not having to pay cash for their rides, and an unlimited number of rides on King County Metro, Community Transit and Sound Transit buses.  The success of this program led to the development of FlexPass, a similar system that is now in use by over 130 major employers in the Puget Sound region.  FlexPass was the first employer-based program of its kind in the nation.[34]  While these programs did not use electronic fare cards, they provided many travelers in the region with experience using a single fare pass valid on buses across multiple agencies.

The Regional Planning Team, which comprised staff from all seven transit agencies operating in the central Puget Sound area, was tasked to develop a coordinated fare system within the region.  This group commissioned a smart card demonstration project that took place from October 1, 1996 through March 31, 1997.  The demonstration had the following goals:

• Solicit customer and operator feedback;
• Test technology in revenue and non-revenue operations.  A particular goal was to analyze the impacts of high levels of electromagnetic energy in ferry and trolley bus applications, and to assess the capability of the technology to operate in the typical public transportation environment;
• Raise awareness of the project among customers, transit agency staff, media, policy makers, and the general public; and
• Identify customer and driver needs and issues for consideration in project design.

Smart cards were distributed to 144 customers (57 on KCM, and 87 on Pierce Transit), with on average 100 cards in use each month due to attrition and recruiting.  Equipment was installed on four routes each of KCM and Pierce Transit.  The technology consultant IBI performed an evaluation of the demonstration based on survey responses from customers and focus groups involving both customers and operators.  Among other things, the demonstration evaluation found that:

• 15 tests conducted to test for Radio Frequency and/or electro-magnetic interference were passed;
• Customer focus-group participants rated the system 7.3 out of 10.  Drivers gave the system an average rating of 7.6 out of 10;
• 70 percent of survey respondents stated they would use the card on more than one system;
• Even though all but one of the survey respondents identified themselves as pass-only riders, the ability to store cash value or rides on the cards was of high interest; and
• The single most important characteristic of the concept to focus group participants was its ability to work across the different systems.

King County provided the administrative lead for the procurement process, meaning that the team used King County’s procurement protocols and administrative resources.  At the time the RFP was issued to solicit vendor candidates for the regional fare card hardware and software (February 1999), the agencies were already committed to establishing the Puget Pass Program, which formally began operations in September of that year.  The RFP noted that smart card technology was to be the basis for improving the revenue reconciliation process.  Two proposals were received but only one was deemed responsive.

Sound Transit took the lead in creating the Puget Pass system.  The Puget Pass system was put in place only as a stepping-stone to the smart card-based fare integration system.  A region-wide agreement among five transit agencies provided transit riders a one-ticket fare system (though not a single regional fare structure) with seamless transfers on regional bus, commuter rail and light rail services.  Puget Pass represented Sound Transit’s fulfillment of both a commitment in its ballot initiative as well as a contractual obligation to the Washington State legislature to support regionalism in Puget Sound.  This system also ultimately benefited the RFC Project because many of those who participated in negotiating the terms of the Puget Pass program also participated in the early deliberations and development of the RFC Project.  The governing group responsible for Puget Pass evolved into the Joint Board governance structure that now manages the RFC Project.  The difficulty and cost of reconciling revenues in this paper-based system also focused the attention of potential RFC Project partners on the advantages of electronic fare media in this regard.

Agency representatives interviewed for this evaluation noted that the Puget Pass system provided an opportunity to work out the policy issues inherent in a coordinated regional fare program without also having to address the technology issues related to smart cards, and that the Puget Pass system contributed significantly to the subsequent development of the RFC program.  They believed that it would have been overwhelming for the partner agencies to try to grapple with both types of issues at one time.  Additionally, the Puget Pass system was a way for Sound Transit to deliver in a timely manner on its charter to champion regional transit.  Waiting for the technology issues to be worked out would have severely delayed its mission.

Even though the Puget Pass system is quite successful from the rider’s viewpoint, it is very costly to administer, and those costs fall on Sound Transit in a variety of ways.  First, Sound Transit is responsible for collecting the data required to perform the fare reconciliation needed as part of the Puget Pass system.[35]  Currently, those data are obtained from ridership surveys that are costly to carry out and analyze.  Second, the Puget Pass agreement places the risk of the system on Sound Transit.  That is, if not enough revenue is received from sales of Puget Passes to cover the price of providing the rides used on the Puget Pass (as measured by the average fare per boarding), then Sound Transit is required to make up the difference from a fund set up for that purpose.

For these reasons, Sound Transit has a strong incentive to phase out the current Puget Pass system in favor of a smart card system.  Under a smart card system, agencies will receive their appropriate portion of the revenue from the use of regional pass fare products.  That portion will be determined by actual ridership data generated automatically by the operation of the system.

In 2000, the motor vehicle excise tax (MVET) was rescinded, resulting in a halt to transit funding.  The fare card procurement process was halted for about a year as the partner agencies sought to identify new funding.  Communities had to levy new local taxes to replace the lost revenue.

In November 2000, the agencies requested revised proposals from the ERG and CDS NET teams.  In June 2001, the agencies requested “best and final” offers.  Also in 2001, the FHWA designated the Central Puget Sound Project as an ITS evaluation test site for automated fare collection with focus on agency organizational relationships and governance processes.  This report presents the findings from that evaluation.

The year 2002 saw the negotiation of the vendor contract and the development of the Interlocal Agreement (ILA) among the agencies.  Both the contract and the ILA were signed in 2003.  Following the signing of those two documents, the Joint Board began meeting, agency Site Managers were hired and system design began.  The design development and review processes have continued through 2005.

5.7 Value of Implementing a Precursor System

The Central Puget Sound RFC Project has benefited from having first hand experience with several transit fare pass programs over the past decade.  While these were implemented to provide immediate benefits to transit riders, it was understood from the start that they were temporary systems – interim steps on the way to a comprehensive regional fare card system.  These early fare systems provided invaluable experience that laid the foundation for the RFC Project, giving passengers, system operators and transit agencies a chance to learn about these systems and to identify and resolve some of their issues before committing to a full scale, region-wide fare card system.

The lessons here point to the value of moving in a step-wise fashion toward the development of a full regional fare card system, building upon the experiences gained from less ambitious fare programs that have some elements in common with a full system.  Whether precursor fare systems are always needed is a matter of judgment, although their value in helping participants “get on board” with the concepts and challenges cannot be overemphasized.  Agencies in other parts of the country can now develop their fare card programs by building on the experiences of the Central Puget Sound RFC system and other more fully developed projects.  The challenges are to understand the similarities and differences between regions, and how those differences might suggest adjustments in approach and implementation.  A regional fare card project needs to be tailored to the needs, capabilities, customer base and institutional context of each region.  However, the general themes exhibited in the Central Puget Sound RFC Project can be expected to be relevant for most other situations involving multiple agencies and systems.

Some lessons from Puget Sound’s experience with several precursor fare systems include the following:

 

 

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