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Max for Mayor
Cap Metro Reform Extra!
Stephen Bayer is former chairman of the Capital Metro board. Nofziger and Bayer teamed up back in 1987 -- and the results have not been duplicated since: increased bus ridership, decreased traffic load on key roadways (e.g. the Lamar Blvd. Bridge), elimination of bus fares while reducing the sales tax a quarter cent. When Max wanted to formulate a plan for Cap Metro reform, it was only natural he would turn to Steve for ideas. What follows is Steve's report to Max, which provided many ideas that formed the base of "The Nofziger Plan to MAXimize Transit."
The Capital Metro Board is a body of unelected officials with the power to impose taxes. It is very unusual in the U.S. to give taxing authority to such a body. It violates a long-recognized principle of our republic, a principle that was at the top of the agenda in the American Revolution (recall Sam Adams' "Taxation without representation is tyranny!"), and then scrupulously observed by Mr. Madison and his cohorts in the drafting of the Federal Constitution. (Only the House of Representatives may originate tax bills.)
If there are mitigating factors that would permit us to relax this standard of accountability, they must be these: that Capital Metro is a special purpose agency with a very specific and measurable objective, and that Board Members are themselves appointed by elected officials (City Council Members, County Commissioners, and Suburban Mayors), whom we can and must hold accountable for the performance of the Board.
The Board's mission is clearly provided by the "enabling" legislation. It can be summed up in three words: Reduce Vehicular Traffic. The "Finding" that precedes the legislation cites two benefits we can expect to reap from this effort: "Improve air quality" and "Reduce traffic congestion". Others might equally well have been mentioned, since a reduction in vehicular traffic, replacing 1.2-passengers-per-vehicle passenger trips with many-passenger-per-vehicle trips, will reduce almost every cost that we incur moving ourselves around the city. (Exception: street maintenance, that varies not with the number of vehicles but with the weight per axle.) Thus, for example, if we make more of our trips with fewer vehicle miles, there will be fewer vehicle-vehicle mishaps, our system will be safer, and our insurance costs will go down.
One particular kind of cost deserves special mention: real estate.
Our current 1.2-passengers-per-vehicle transportation system is "real estate intensive". In the Austin Metropolitan Area, 75 per cent of our developed urban real estate is allocated to the transportation system: roadways and parking lots. Our current system consumes 3 times as much real estate as it accesses. This simultaneously pushes real estate costs up and produces urban spawl. Urban sprawl is not suburbanization; all cities, at all times, grow through suburbanization. But urban sprawl makes the suburbs ever farther away, both from the central city and from each other. And this, in turn feeds back into the distances we all have to travel in our daily life. This is a fact of geometry. The lower the ratio of passenger miles to vehicle miles of travel, the higher the number of passenger miles we must must travel to reach our destinations. This drives the costs of transportation still higher: a vicious circle. It also drives up the cost of all public services provided by "networks": gas, electric, water, telephone, cable television, ISDN and fiberoptics; in short, any capital investment whose costs are incurred per linear foot.
That we are caught within this vicious circle is indicated by the fact that the costs of urban transportation have grown more rapidly in the past quarter century than even medical costs. The average American drives twice as many miles today as he did 20 years ago. This, in spite of the fact that since the passage of the Federal Urban Mass Transit Act of 1972 (and the subsequent creation of metropolitan transit authorities nationwide), we have steered billions of dollars of new public subsidies to our transit systems. This failure has led many to conclude that the goal of reducing vehicular traffic with improved transit is simply unattainable, a view shared by perhaps most transit officials: professional staff, transit authority boards, and their appointing bodies. As evidence of this, we note that while annual per capita transit ridership has dropped in every year since 1991, nary a word of concern has been uttered by our public officials.
This attitude of defeatism, has produced a characteristic mission creep. Without confidence that we can meet high performance standards, the Board de-emphasizes (or worse, hides) actual performance results, and instead promotes objectives other than reducing vehicular traffic: "helping out" the School Board, funding city roadway projects, diverting a portion of the tax (either openly or discretely) to the police, the airport, or to various Council "pet" projects, as well as pleasing the myriad vendor interests that hover around our planning agencies. Others express the view that the tax rate ought to be cut to a bare minimum and that we should provide merely a basic level of transit service as a social welfare program for the poor.
The conviction that transit improvements will fail to produce significant reductions in vehicular traffic is a self-fulfilling prophecy, and it is neither necessary nor wise that we should so hastily jump to this conclusion. For we have before us, not just a nationwide record of failure, but at least one modest success. Capital Metro, itself, in its first 5 years, was the most successful transit system in the United States since the end of World War II. Average weekday ridership rose from 17,000 trips in 1994 to a peak of 90,000 trips in 1990 (excluding the UT Shuttle counts), and annual per capita transit ridership rose from 24 to 60 during this period. The ATS-compiled vehicular traffic counts reveal that on those roadways on which we experienced the greatest gains in transit ridership, there were, in fact, modest but significant reductions in vehicular traffic, contrasting with increases on virtually all other arterials. And while, over the last 6 years, ridership has fallen back to 40 annual trips per capita, we can clearly examine the expenditures of the Authority, over its entire history, and see what worked, and what didn't. Moreover we know with absolute confidence that certain requirements must be met by a successful transit system. Armed with this information, we can steer our course accordingly.
1. If we are to see significant reductions in vehicular traffic we must produce very large ridership gains. While we cannot accurately state the ridership needed to produce specific reductions in traffic, we note that the ATS planning model predicts that we will have to attain 80 trips per capita annually simply to avoid having to add lanes to almost all of our inner city arterials.
2. Given that the Authority has a dedicated and strictly limited tax base, dramatically increasing the number of trips we can carry depends on dramatically reducing the average subsidy per trip. If we can take at most $120 dollars per capita annually from the taxpayers (at a 1 cent tax rate), then 80 trips per capita can be attained only if the local subsidy per rider averages $1.50 or less. Since the current subsidy per rider stands now at over $2.50, we must ensure that future ridership increases are gained at a far lower marginal subsidy per trip. We must examine past uses of the subsidy in terms of their measurable effectiveness, identify what has worked and what has not, and pursue only those deployments of the subsidy that are "high-yield", that produce the greatest ridership at the lowest marginal subsidy per trip. Moreover we must jettison those costs that are incurred in pursuit of goals beyond the Authority's legitimate objectives.
3. Since the mission of the Authority is inherently competitive, the system improvements we make must dramatically improve the value of the service to our riders. And recognizing a proven principle from Marketing 101, that it costs far less to retain a current customer than to attract a new one, pleasing our current riders must be our first priority. (The fact that most of our current ridership is young, aged 18 to 24, means that very large gains can be achieved simply by following this rule. In these terms, transit service is a marketing executive's dream.)
Our experience to date reveals the following winners and losers, the improvements that have added, or promise to add, ridership at a low and, conversely, at a high marginal subsidy per rider.
The winners, in order of effectiveness:
The losers:
None of the light rail plans Capital metro has prepared has come close to meeting even the minimum performance standards that we expect from our bus routes. In general, we eliminate bus service where the cost per rider is over $6.00. But the marginal cost per rider anticipated from these rail plans has ranged from $15 to $20 dollars. If we insisted on adding ridership at such high cost, we would need a 6% or 7% sales tax rate to achieve the ATS's 80 annual trips per capita.
The latest version, if implemented, would perhaps improve per capita transit ridership by 2 or 3 per cent in its first year of operation, but then performance would resume its relentless decline.
So poor are the numbers that the Board promotes instead the "magic of light rail", and shows the public "futuristic" rail cars rather than their dismal cost and ridership forecasts. Beneficial land use impacts are touted, but, in fact, without large ridership gains, such Portland-style development amount to little more than shuffling land uses around the 25 per cent of our real estate relegated to actual economic uses, without ever making a dent in the problematic 75 per cent.
This is not a condemnation of Light Rail, but rather of a planning process in which no performance standard has ever been established except "affordability". In fact, Austin, by virtue of its geology and topography, is destined to grow within a narrow crescent between the Balcones Fault and the Sloppy Marls, and is thus especially suited for rail transit. But the economics of light rail are, first and foremost, economies of scale: the higher the system ridership, the lower will be the marginal cost per trip expected from a rail line. There may well be significant benefits to transit ridership deriving from the civic pride we might take in rail transit, but such benefits can be tested and evaluated with a far less expensive and more productive investment than has hitherto been envisioned. And ultimately, a rail line will succeed for precisely the same reasons that a bus route succeeds: by delivering the maximum possible benefit to the riders at the lowest possible cost.
If we are to hold the City Council accountable for the performance of Capital Metro then we must expect the Council, first, to establish performance goals for the Board, and then to scrutinize performance results and hold the board to its goals. An appropriate set of goals would be:
Note that the last two goals sharply curtail the revenue of the Authority (by roughly $22 million in tax and $3.5 million in fare revenues). This will ensure that the other goals are achieved at an acceptably low marginal cost. These are, to be sure, ambitious goals, but as Peter Drucker once pointed out, if we do not set our goals high, we will probably not accomplish anything at all.
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Political ad paid for by the Max for Mayor Campaign,
Linda Curtis, Treasurer. This campaign has agreed to comply with
the contribution and expenditure limits of the Austin Fair Campaign
Ordinance.
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