Streetcar faces funding issues

On the heels of an analysis that Streetcar farebox revenue was only about half what is expected, the Portland Mercury publishes an article further detailing the Streetcar’s funding woes. One interesting tidbit is that much of the revenue shortfall is not due to fare evasion, but due to TriMet passholders riding the Streetcar:

According to Portland Transport’s very own Chris Smith, who sits on Portland Streetcar’s board of directors:

We’re seeing more of our ridership be pass-holders than expected…
If TriMet handles the sales, they keep the money. It’s not necessarily a fare collection problem or a ridership problem.

While it’s a good thing for TriMet if people buy TriMet passes (allowing use of the entire system) rather than Streetcar passes (good only on the Streetcar), this isn’t necessarily a good thing for the Streetcar agency itself, which operates on rather tight budget constraints. Of course, TriMet does help subsidize Streetcar operations….

CL line ridership will probably increase in two years, when MLR opens and the line’s OMSI terminus turns from transit no-man’s-land to a major connection point, and ample transfer opportunities from both MLR and the various bus lines that use the new bridge. On the other hand, virtually all of these riders will have (or need) Trimet tickets and/or passes, and have no particular reason to buy a Streetcar-only ticket.

29 Comments

29 Responses to Streetcar faces funding issues

  1. zefwagner
    March 20, 2013 at 10:44 am Link

    The problem here is obvious–there is no real dedicated funding source and never has been. TriMet needs the payroll tax, and the streetcar needs a similarly consistent funding source. Instead, they seem to cobble together money every year and they never have enough. Even the Eastside parking revenue is not going to make a huge difference. I say levy something like a restaurant/hotel tax on the central city, and use that to boost streetcar to the frequencies needed to actually make it useful.

  2. EngineerScotty
    March 20, 2013 at 10:59 am Link

    At some point, might a merger of Streetcar and TriMet operations make sense? The two agencies have different focuses and goals–PSI has always been about placemaking and land-use transformation, and TriMet focuses on moving people–but once a line is in place, why not have greater integration of operations?

  3. Charlie
    March 20, 2013 at 11:00 am Link

    Agreed with zefwagner, except I’d make it a car ownership tax.

  4. Chris Smith
    March 20, 2013 at 11:00 am Link

    FYI – this year and possibly next, we have BETCs (Business Energy Tax Credits) that we can use to buffer this. But beyond that we do indeed need to identify additional funding, particularly if we want to get the Loop headways down under 15 minutes (currently 18 min).

  5. Reza
    March 20, 2013 at 12:01 pm Link

    For the record, I also agree with Zef. As long as streetcar remains slow (no signal priority, no stop consolidation), better make it run every 5-10 min all day, AND extend service to 2AM at least on weekends.

    How long until THIS conversation devolves into the usual anti-streetcar diatribes? Maybe we can finally have an intelligent discussion on this topic instead of the usual false claims (like how nobody rides the Streetcar).

  6. Andrew Seger
    March 20, 2013 at 1:03 pm Link

    Or we could continue to let frequency drop and treat the streetcar like the trolley at The Grove mall in LA: a nice draw for suburban shoppers. http://www.carusoaffiliated.com/caruso/development/property.php?id_property=2

    From an opportunity cost perspective it would be more effective and useful to spend any new money increasing frequency/service hours on the 6 & 15 lines instead of whatever it would cost to bump up streetcar service levels.

  7. Jason McHuff
    March 20, 2013 at 1:40 pm Link

    For now, Streetcar is also facing car issues, too:
    They were down 2 cars and the CL Line was running only every 30 minutes on a weekday:
    tweet 1
    tweet 2

    That being said, I have heard car 21 (one of the production streetcars from Oregon Iron Works) out being tested.

  8. Nick
    March 20, 2013 at 1:42 pm Link

    How does this impact the viability of network expansion (per the Streetcar System Concept Plan?)

    If we can’t fund central-city streetcar, it seems like branching into neighborhoods might be problematic? or is that a totally different ballgame?

  9. Curt Ailes
    March 20, 2013 at 1:52 pm Link

    It seems like the two agencies have been arm in arm for so long now, that the operational cooperation would have organically grown into one entity. Perhaps the aims of the two are different, but the goals of moving people efficiently are close enough to grow operations together.

  10. al m
    March 20, 2013 at 1:55 pm Link

    Haha, oh boy, the plunge into transit insolvency is continuing it’s march unabated

  11. al m
    March 20, 2013 at 1:57 pm Link

    Maybe they can do like Greece is doing, sell it to some billionaire and let them worry about it.

    It’s gonna happen anyway, might as well get rid of it now.

  12. Jim Lee
    March 20, 2013 at 3:25 pm Link

    Today I rode the 10 bus to the CL line, then the NS line to the 17 bus, and back home.

    Nice trip, all on my TriMet “H” pass.

    Sorry, Chris.

  13. Chris Smith
    March 20, 2013 at 3:26 pm Link

    No apologies necessary!

  14. dwainedibbly
    March 20, 2013 at 5:24 pm Link

    Anybody have any data from when the NS line first started? I wasn’t living in Portland back then. How much of today’s development on the west side was there when the NS line started? I guess my point is that once (if) we get some inner East side development going, things should improve for the CL line.

  15. John Reinhold
    March 21, 2013 at 11:32 am Link

    I have never purchased a Streetcar fare. All of my rides have been with a Tri-Met pass or fare, or back in fareless/free-rail days.

    Most people don’t even know there is a difference…

  16. zefwagner
    March 21, 2013 at 11:32 am Link

    It would make sense for streetcar to be taken over by TriMet someday, just because it is silly and somewhat confusing to have separate agencies and different fares and all that. However, I do think dedicated funding that comes from the central city should still be the main sources of operating funds. Since the explicit goal of streetcar is to spur development and enhance the central city, those who benefit should provide most of the funding.

    Is there any possibility of OHSU and other south waterfront employers helping pay for the streetcar, since they will be so reliant on it in the future? And what about Conway, wouldn’t they want better service? It seems like private funding will be essential. In Seattle, Amazon and Fred Hutch help pay for streetcar operations.

    As far as expansion goes, I personally think the streetcar system plan should be scrapped and/or ignored. Streetcar only conceivably makes sense in the central city. Once you start building a radial system, you really are simply replacing bus service with slower and less flexible streetcar service. It would also not have the same effect on development once you get out to areas that aren’t really zoned for dense development.

    There are also network problems–if we build a streetcar on Belmont that cuts down to Hawthorne as the streetcar plan says, what happens to the 15 and 14 bus lines? If we build a streetcar to Hollywood, what happens to the number 12 bus? Does it then run only between Hollywood and Parkrose Transit Center? Problems abound, and the streetcar plan seems to ignore all these questions.

  17. Nathanael
    March 25, 2013 at 10:27 am Link

    “If TriMet handles the sales, they keep the money. ”

    There seriously isn’t a TriMet->Streetcar funding transfer agreement based on the number of TriMet passholders riding the Streetcar?

    There should be. That’s how these things are usually done. I realize it requires counting the number of passholders on the streetcar every so often.

  18. Nathanael
    March 25, 2013 at 10:45 am Link

    FWIW, if an actual majority of streetcar riders have TriMet passes, then the streetcar probably ought to be folded into TriMet. A funding transfer based on ridership count would work, but would have a lot more overhead.

  19. Chris Smith
    March 25, 2013 at 10:54 am Link

    There seriously isn’t a TriMet->Streetcar funding transfer agreement based on the number of TriMet passholders riding the Streetcar?

    When they give us several million dollars a year to help run the system, it seems a bit churlish to ask them to count tickets :-)

    But seriously, with the advent of electronic fares, it will get easier to track how a fare instrument is used, and that might become part of the calculation/justification of the funding agreement between TriMet and Streetcar. But for the moment, no, we don’t try to capture that as a separate bucket.

  20. R A Fontes
    March 25, 2013 at 12:10 pm Link

    TriMet is bound by its participation in the CL FTA FFGA (sorry about that) to contribute about $1.25 million annually, presumably for five years. That may not be appropriate, but is required.

    If Portland continues its policy of undercutting TriMet with rock-bottom streetcar fares: fine, but then shouldn’t all subsidies come from Portland sources with emphasis on streetcar promotions and LID’s?

    It’s more than appropriate for TriMet to make in lieu payments to PSI for trips made using TriMet passes and tickets not bought at streetcar TVM’s. The question is: What should be the appropriate rate? A fair answer would be something along the lines of the farebox recovery per boarding ride from those who are not traveling on TriMet instruments.

    Last year, streetcar’s total farebox recovery per boarding ride was something like five cents and fares paid about 3% of ops, but I’ve never seen any data separating out TriMet instrument holders. If, for example, TriMet passengers were half of all riders, then per rider recovery from streetcar-only passengers would have been 10 cents. Now that legal free rides have been eliminated and streetcar’s annual pass raised to $150, per ride streetcar-only recovery could well be up to 20 or possibly even 30 cents. Whatever that number is, it would be the fair amount for TriMet to use as the basis for in lieu payments.

    The payment should be applied to the $1.25 FFGA minimum; i.e. TriMet should pay the greater of either the minimum or the in lieu amount if streetcar continues to undercut the district’s fares.

    If, however, streetcar is simply folded into the TriMet fare system then there would be no point to having in lieu payments. It’s been pointed out here before that doing so might not actually increase revenue because of the expected ridership drop. If so, it would still be appropriate for TriMet to absorb the difference up to the point of its own average subsidy per boarding ride, currently about 54% of ops. Any more subsidies than that really do need to come from Portland sources as long as streetcar is not a TriMet operation.

  21. al m
    March 25, 2013 at 12:32 pm Link

    I still say sell the streetcar to one of the developers that made a fortune off it (Tiffany Swietzer maybe) and let them operate it.

    They do this sort of thing in LOTS OF PLACES NOW

  22. Lenny Anderson
    March 25, 2013 at 8:38 pm Link

    Its worth noting that 20 years ago what is now called South Waterfront was, except for Zidell, a virtually abandoned industrial area. And North Waterfront (later The Pearl District) was abandoned rail yards north of Hoyt St, and featured the Lovejoy and 10th Avenue ramps to the Broadway Bridge. Even the West End was a tired and pretty forlorn corner of town. The coming of Streetcar and the development of these neighborhoods was not merely coincidence. Indeed its pretty clear to me that Streetcar has been a much more successful spur to development than MAX.
    Streetcar was not rammed down the people’s throat by some city planner; grew out of an instense and very citizen driven planning effort in the 80’s that produced the Central City Plan. Bill Naito was a major cheer leader (and developer who restored many of the old buildings in Old Town/China Town). The concept of a “people mover” between the close-in neighborhoods on the inner west side had broad support from Neighborhood Associations and the business community. Indeed a lion’s share of the initial cost was covered by an LID…it wasn’t just talk.
    TriMet was cool to the idea, but agreed to support operations and provide operators (probably after Mayor Katz twisted Fred Hansen’s arm.) The transformation of the neighbhoods thru which it travels strikes this Portland (almost) native as the most remarkable thing to have occurred in the city’s last 50 years. It has played a key role in turning Portland into a real City. And its not over. More is being built and will be built on both sides of the River in the coming years. And yes, most of it will be built by developers; who else? Most of them will make a nice profit; some will lose their shirts.
    Let’s hope the money is found to keep it running and to get its frequency down to 10 minutes.
    And run it up Broadway/Wiedler to Hollywood, an alignment with acres and acres of parking lots and other vacant and under used land.

  23. Anandakos
    March 25, 2013 at 11:18 pm Link

    Actually, Al, the Shaker Heights Terminal Transit was built and for many years operated by the developer of the town. Your suggestion isn’t so radical.

  24. al m
    March 26, 2013 at 9:11 am Link

    The transformation of the neighbhoods thru which it travels strikes this Portland (almost) native as the most remarkable thing to have occurred in the city’s last 50 years. It has played a key role in turning Portland into a real City.

    ~~~>I needed a good laugh in the morning and this fit the bill perfectly.

    (I like the bunker style apartments going on in Lovejoy, lovely improvement if I must say)

    Always enjoy Lenny’s posts cause I always can comment on them.

  25. Erik H.
    March 27, 2013 at 9:28 pm Link

    Its worth noting that 20 years ago what is now called South Waterfront was, except for Zidell, a virtually abandoned industrial area.

    This comment should be struck in the exact same fashion as the “Loop Streetcars run empty” comments.

    The industrial area had many small businesses housed there. It was not “abandoned” as is claimed. Those businesses were forced to move – in some cases, they simply shut down.

    Lenny’s statement is just as accurate as “the Streetcars run empty” but why is only one being singled out as “inflammatory”?

    It has played a key role in turning Portland into a real City

    Portland has always been a “real City”. Many “real Cities” all throughout the world exist without Streetcars. In fact, many would argue that Streetcars are themselves a joke, compared to “real transit systems” like 10 car long subways, elevated rail, commuter/regional rail – and of course comprehensive bus systems that actually operate 24 hours a day and can take anyone, anywhere, at any time – not the system Portland has that shuts down around 8:00 PM, is a patchwork of services that is unreliable, and of course reliant upon a fleet of up to 22 year old buses in daily revenue service…

    Most “real cities” actually invest in their bus systems…

  26. Lenny Anderson
    March 27, 2013 at 9:37 pm Link

    Architecture is a matter of taste; some like boxes, some don’t, but places for folks to live are much better than vacant lots or parking lots.
    Looking back again 50 or 60 years, I have to add that the 70’s transportation “revolution” was huge… M&F parking lot becomes a public square; an old Harbor Drive becomes a riverside park; two main streets of downtown become the almost car free Transit Mall; and most of all Mt Hood freeway money used for the first MAX line. Streetcar grew out of this same explosion of political energy and guts. We haven’t seem much of that since.
    The other transformative thing in those years was the construction of the Robert Moses inspired “freeway loop.” But unlike the Streetcar loop, the freeway loop destroyed neighborhoods (PSU student “ghetto” in Goose Hollow, South Portland, Lower Albina). Even the head of ODOT (then Highway Commission), Glenn Jackson said at the time that the Marquam Bridge and eastbank freeway were mistakes.
    Portland was a sad, dying place in the late 60’s when even on a sunny day Mt Hood was lost in smog.

  27. dave
    March 27, 2013 at 9:52 pm Link

    Lenny – the transformation that you are looking at in the central city is more the result of demographically changes taking place all around the country. Baby boomers, Gen Xers and Gen Y are increasing downsizing and moving into more urban neighborhoods. The results that you see in the Pearl are taking place nationwide. Look at Belltown in Seattle, Gas Lamp in San Diego, SoMa in San Francisco. Heck, even Brooklyn, Phoenix and Las Vegas are seeing a ton of new urban developments. To say that this is unique to Portland or that the street car was the spark for all this, is really missing large overall trends that are taking place nationwide.

    The eastside streetcar is another story. It’s doomed to fail. There are major differences as compared to the westside line that will severely limit its success. The westside line runs on walkable urban streets. The eastside line runs on wide, traffic clogged streets (MLK, Broadway, Grand) that discourage business. The jog out to the Lloyd Center misses the mall by a block and no one knows it’s there. Also, there are zoning issues that prevent rapid redevelopment that large developers prefer.

  28. Anandakos
    March 28, 2013 at 12:23 am Link

    I think Dave is right about the Eastside streetcar, for the very reasons he states. MLK and Grand are pedestrian un-friendly, whereas 10th and 11th are auto un-friendly, at least north of Burnside, so people on foot feel at home.

    Plus, who wants to go from the Eastside to the Pearl district anyway? If the Eastside gentrifies (sadly, a big “if”) it will have it’s own bars and restaurants. Anyone going downtown will either walk across the closest bridge or ride the bus.

    It was not well thought out. Better to have extended it southward along Macadam.

  29. al m
    March 28, 2013 at 10:56 am Link

    Portland was a sad, dying place in the late 60’s when even on a sunny day Mt Hood was lost in smog.

    There were two reasons Portland boomed and the money came here, neither of them have to do with the streetcar.

    1-It’s a city on the west coast
    2-Property values were cheap compared to Seattle and San Francisco.

    The money came here because it was cheap to buy property.

    Now its expensive to live here, that’s a success?

    Not if your not wealthy.

    People that lived in Portland were forced out of Portland due to the gentrification effect.

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