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HomeMy WebLinkAbout13.A.1. Office of the Legislative Auditor (OLA) Report on Governance of Transit in the Twin Cities RegionCITY OF SHAKOPEE Memorandum TO: Honorable Mayor and City Council Mark McNeill, City Administrator FROM: R. Michael Leek, Community Development Director RE: Discussion of Office of Legislative Auditor (OLA) Report on "Governance of Transit in the Twin Cities Region" DATE: February 1, 2011 INTRODUCTION: On Friday, January 21, 2011 the OLA presented its report to the Legislative Audit Commission. On Monday, January 24 the report was presented to the House Transportation Policy and Finance Committee, which is chaired by Rep. Michael Beard. The author of this report was present for that meeting. On Wednesday, January 26 the report was presented to the Senate Transportation Committee, chaired by Sen. Joe Gimse (Sen. District 13, Willmar and surrounding areas). The Council is asked to discuss the report, and provide any direction it may have regarding further City follow -up on the report. Councilor Pamela Punt, who is the Council's liaison to the Scott TRB and STA, will open the discussion. DISCUSSION: Attached for the Council's information is a copy of the Major Findings, Key Recommendations and Summary of the report. A full copy of the report, including the comment letters from the Metropolitan Council, Counties Transit Improvement Board (CTIB), and Suburban Transit Association (STA) can be viewed or downloaded by going to the OLA website: http : / /www.auditor.leg.state.mn.us. The report was about eight months in the making, and involved surveys of elected officials, meetings with agencies involved in transit in the seven - county region, data collection, and site visits. Specifically, the OLA team met a number of times with the STA representatives together, as well as visiting them separately. Once the initial draft report was prepared representatives of the Metropolitan Council, CTIB, and STA were given the opportunity to review and comment on the draft, and to meet with the OLA team to discuss the comments. The author of this report was a member of the STA review team. The OLA team considered the comments it had received and then prepared the final draft. The three reviewing entities were given the opportunity to submit a comment letter (and all three did) which was then appended to the report. A copy of the letter submitted by the STA is also attached for the Council's information. A brief summary of the Major Findings in the report is as follows; • Transit in the Region performed well on measures of efficiency and effectiveness as compared with 11 peer regions; • The governance of transit in the Region is complex, and "fraught with distrust...;" • The structure of the Metropolitan Council (i.e. appointed by the governor with terms that are coterminous with the governor's) has hampered its role as regional planner for transit; 13.13.1. CC/0921_201 0/0LA rpt discussion memo 1 • There is a lack of an agreed upon set of priorities for transitway development in the Region; • Scarce resources for transit will only become more scarce; • Suburban providers and the Metropolitan Council have disagreed about how supplemental MVST should be distributed. These findings resulted in the following Key Recommendations (summarized); • The Metropolitan Council should be restructured to have a mix of elected officials and appointees. • In light of the current structure, organizations like the CTIB and suburban providers should not be eliminated. • There should be better coordination with stakeholders to prioritize future transitway development. • The prohibition of study of the Dan Patch corridor should be eliminated. • The Legislature should only commit capital funds for transitway development where it has ensured that there will be operating funds for those investments /services for five to ten years. • The Metropolitan Council should have explicit authority over the allocation of supplemental MVST. On Monday the report was the subject of discussion at a legislative breakfast hosted by the STA, as well as the STA board meeting. Councilor Punt was in attendance at both of these meetings and an active participant in the discussion of the STA's legislative agenda, especially in light of the OLA report. The report was also discussed at this week's Scott TRB meeting (also attended by Councilor Punt), and they directed the TPT to further discuss and develop alternatives for governance structure to bring forward to the TRB and to SCALE as well. RELATIONSHIP TO CITY GOALS: The OLA report relates to City Goal D. Maintain, improve and create strong partnerships with other public and private sector entities. ACTION REQUESTED: Discuss and provide any direction regarding city follow -up on the OLA report. R. Michael Leek Community Development Director CC /0921 2010 /OLA rpt discussion memo 2 • it I 4 4 4 4 ■ 4 4 0 0 4 0 0 0 0 I. 0 4 i es 0 0 to 4 to The region has made significant advances in transit in recent years, but the region's transit governance structure is far from ideal. Summary Major Findings: • The Twin Cities region's transit system has performed well on most measures of efficiency, effectiveness, and impact in comparison with 11 peer regions. (pp. 100 -115) • However, the governance of transit in the Twin Cities region is complex and fraught with distrust, and coordination among the many transit organizations in the region has been difficult. (pp. 31 -34) • The Metropolitan Council's role as the regional transit planner has been hampered by how members are appointed; as a result of its structure, the Council lacks adequate credibility and accountability among stakeholders. (pp. 34 -35) • Additionally, there is no agreed - upon set of priorities for transitway development in the Twin Cities region, and existing Minnesota law prohibits consideration of all potential transitways in the region. (pp. 37 -38, 86 -88) • Scarce resources for transit are likely to become scarcer as the state confronts a significant budget deficit. (p. 38) • The Metropolitan Council and suburban transit providers have disagreed over the allocation of "supplemental" Motor Vehicle Sales Tax revenue in the region, increasing the distrust and tension between these groups. (pp. 70 -72) Key Recommendations: • The Legislature should restructure the Metropolitan Council so that it has a mix of appointed and elected Council members, all serving staggered terms. (pp. 41 -49) Given the current structure of the Metropolitan Council, we do not recommend eliminating other organizations involved with transit, such as the Counties Transit Improvement Board or the Transportation Advisory Board. (pp. 51 -52) • We do not recommend eliminating the suburban transit providers, although there are opportunities for some consolidation. (p. 52) • The Metropolitan Council should coordinate with stakeholders to prioritize potential transitways for future development based on the needs of the region. (pp. 91 -92) • The Legislature should amend Minnesota law and allow consideration of the Dan Patch corridor. (p. 93) • The Legislature should not commit capital funds to transitway development projects without ensuring that operating revenues for the first five to ten years have been identified. (p. 94) • The Legislature should explicitly give the Metropolitan Council authority to allocate the "supplemental" revenue for transit in the region generated by the Motor Vehicle Sales Tax. (p. 73) x The transit system in the Twin Cities region performed well relative to 11 peer regions around the country. However, the region's governance structure has created challenges and conflicts. GOVERNANCE OF TRANSIT IN THE TWIN CITIES REGION Report Summary Transit in the Twin Cities region includes several transit types, or "modes." Our evaluation included four modes of transit: regular -route bus service, light rail transit, commuter rail, and bus rapid transit.' The Twin Cities region has recently added two modes of transit, bus rapid transit and commuter rail, and is developing two new light rail lines. Nevertheless, in 2009, regular -route bus service provided close to 90 percent of the transit rides in the region. Metro Transit, a division within the Metropolitan Council, is the primary provider of transit in the region and operates bus, light rail, and commuter rail services. Suburban providers offer bus service to 12 communities in the Twin Cities metropolitan area. Several organizations have transit responsibilities in the region, including the Metropolitan Council, the Transportation Advisory Board (TAB), the Counties Transit Improvement Board (CTIB), county regional railroad authorities, and suburban transit providers. Many of these organizations were created to address perceived local transit needs. The structure of transit governance in the region has changed several times since the Council was created in 1967 and has gone through periods of fragmentation and consolidation. In 2009, providers spent almost $319 million on transit operations in the Twin Cities region. Since 2004, the region has spent more than $1.7 billion on transit capital expenditures. I Our evaluation does not address dial -a -ride service, such as Transit Link and Metro Mobility. When compared with 11 peer regions around the country, transit in the Twin Cities region performed favorably. For example, in 2008, the Twin Cities region's transit system performed better than most of its peers on efficiency measures, including subsidy per passenger and operating costs per passenger. The Twin Cities region also compared favorably when evaluating service - use measures, such as passengers per hour and passenger miles per mile of service. Our evaluation focused on governance of transit in the region. We considered the governance of transit to include: (1) planning for and identifying potential corridors for new transit; (2) developing and building transitways, including conducting analyses to determine optimal routes and transit modes; (3) providing transit; (4) generating revenue for transit, typically through imposing a levy or tax or collecting passenger fares; (5) allocating revenue for transit; and (6) measuring the performance of transit. Governance of transit in the Twin Cities region is complex and made more difficult by the uneasy relationships among the various organizations involved with transit in the region. Each transit organization serves a distinct but somewhat overlapping role for transit in the region. Each organization can operate independently to some extent but also must coordinate with others in the region. The complexity of the system makes it difficult to know which 2 The 11 peer regions are: Baltimore, Cleveland, Dallas -Fort Worth, Denver, Phoenix, Pittsburgh, Portland, St. Louis, San Diego, Seattle, and Tampa. 0 0 4 0 4 4 4 4 4 4 4 4 4 4 4 4 • 4 0 4 0 4 SUMMARY xi Coordination among the many transit organizations involved in governance is difficult. A central governance issue has been the Metropolitan Council's lack of credibility with elected officials and other transit stakeholders. organization is accountable for which transit responsibility. There is significant distrust between the Met Council and the other transit organizations in the Twin Cities region. This distrust makes coordination among the organizations difficult. The strongest example is the relationship between the Met Council and the suburban transit providers. In interviews we had with suburban transit providers and Council staff, and during joint meetings with representatives from the two organizations, the conflict and distrust between these two groups were evident. The relationship between the Met Council and the Counties Transit Improvement Board is also strained. For example, the two organizations disagree over the definition of "transitway," which has led to tension regarding CTIB's funding priorities. Coordination among transit organizations in the region is time consuming and inefficient. The suburban transit providers and Metro Transit coordinate their services effectively. However, coordination between the Met Council and the suburban providers has required significant time and energy from both Council and suburban provider staff, even though the suburban providers represent only about 6 percent of all rides in the region. The suburban providers and the Council have had innumerable staff and committee meetings, required approvals, e- mails, and shared letters. Staff on both sides of this relationship think the coordination efforts are inefficient and time consuming, and the lack of trust between these two groups makes it difficult to reach agreement on many transit- related issues. Coordination between the Council and CTIB is also time consuming. Having both bodies make decisions about transit investments in the region leads to overlap and requires additional coordination. The Metropolitan Council's structure has created a lack of credibility among many stakeholders and transit organizations in the region. The Met Council's lack of credibility stems from the governance structure of the Council itself. Because Council members are appointed by the governor rather than elected, many stakeholders we interviewed did not think that Met Council members are sufficiently accountable for their decisions. Many stakeholders with whom we met believed that Council members represent the views of the governor and not the region as a whole or the district from which they were appointed. Because Met Council members are appointed, local elected officials often question the legitimacy of Council decisions. Transit resources have been unpredictable. Transit providers spent almost $319 million in 2009 on transit operations in the region. Motor Vehicle Sales Tax (MVST) revenues are the largest source of operating funds for transit in the Twin Cities region. However, these revenues have not grown as projected. The state's May 2007 projections anticipated that more than $169 million of MVST revenues would be allocated to transit in the Twin Cities region in fiscal year xii With multiple entities involved in governance, the region has not achieved consensus on a set of priorities for transit. Changing the composition of the Metropolitan Council is the first step in improving the governance of transit in the region. GOVERNANCE OF TRANSIT IN THE TWIN CITIES REGION 2010; instead, $140.7 million was allocated to transit in the region. Minnesota statutes do not identify how "supplemental" Motor Vehicle Sales Tax revenue should be allocated for transit in the region. In 2006, Minnesota voters passed a constitutional amendment to allocate additional Motor Vehicle Sales Tax revenue to transit. However, the Legislature has not clarified how this funding, known as "supplemental" MVST revenue, should be allocated within the region. Staff from the suburban transit providers told us that they had expected to receive a formula -based portion of the new funds. Instead, the Met Council created a procedure to distribute the supplemental MVST funds based on regional priorities. There is no agreed -upon set of priorities for transit in the region, and state laws prohibit consideration of all potential transit corridors. Because the process for developing transitways in the region relies on local initiatives and funding, there are multiple transit corridors being evaluated without a common understanding of the region's transit priorities. Each community considers its transit project to be a priority, but the project may not be a priority for the region. Additionally, at one time organizations in the region had conflicting maps regarding potential transitways in the region. In its 2030 Transportation Policy Plan, the Met Council developed a map identifying potential transitways in the region. But, the Counties Transit Improvement Board developed a different map that did not include all potential transitways and indicated different modes for some potential corridors. State statutes do not add clarity. The goals for transit identifed in law are vague and are not prioritized. Furthermore, state law prohibits the consideration or study of the Dan Patch corridor (a potential commuter rail corridor between Minneapolis and Northfield) for development as a commuter rail line. The prohibition regarding the Dan Patch corridor has implications when planning other transitways in the region. The Legislature should restructure the governance of the Metropolitan Council to increase its credibility, accountability, and effectiveness as the regional transit planner. Many problems with the governance of transit stem from having the governor appoint members to the Met Council. In particular, the current governance structure has led to: (1) diminished accountability and credibility for the Council, (2) difficulty in building consensus across organizations in the region, (3) reduced effectiveness due to an increased need for coordination, and (4) multiple competing visions for transit. We conclude that the structure of the Met Council must be addressed before other aspects of transit governance can be corrected. We present four governance options for the Metropolitan Council for the Legislature to consider; we recommend having a mix of appointed and elected Council members, all serving staggered terms. 3 Laws of Minnesota 2002, chapter 393, sec. 85, subds. 2 -4. SUBURBAN TRANsir AssoCIATION January 13, 2011 James Nobles Office of the Legislative Auditor Room 140 Centennial Building 658 Cedar Street St. Paul, Minnesota 55155-1603 Dear Auditor Nobles, League of Minnesota Cities Building 145 University Avenue West, Suite 450 St. Paul, MN 55103 Telephone: (651) 228-9757 Facsimile: (651) 228-9787 On behalf of the Suburban Transit Association, I would like to thank you and your staff for the extensive work and exhaustive effort that went into preparing the report on Governance of Transit in the Twin Cities Region. We recognize what a huge undertaking this was. Judy Randall, Emi Bennett and Julie Trupke-Bastidas conducted themselves in a most professional manner throughout the entire process and were a pleasure to work with. Our members appreciated meeting collectively, as well as individually, with your office and applaud their collective efforts. We would like to amplify the many positive outcomes of the regional transit system and take this opportunity to expand upon and respond to the OLA's Major Findings and. Key Recommendations and other recommendations in the report. • We are very pleased that your study has confirmed that the region's transit system has performed well on measures of efficiency and effectiveness on a comparative basis with other peer regions. The report also recognizes that transit operations are well-coordinated among the regional providers resulting in seamless, high quality service to transit users. Transit riders are pleased with the services of all providers and ridership has increased throughout the region. We believe that the efficiency and effectiveness of our regional bus transit system is, in part, a result of the competitive nature among providers that has led to valuable innovations and other regional transportation benefits. • We acknowledge that the administration of transit governance in the region is complex; however, this is a. common characteristic of most regional transit systems, including, those in the cities/regions that were used for peer review purposes, and is not unique to the metropolitan area. While complex, the region has benefited from expanded services, reduced congestion, and regional innovations as a result of the suburban providers' presence and initiatives. We believe an important role of the regional planning agency should be to build consensus among the various stakeholders, which would help mitigate the complexities of the governance structure. Members: Maple Grove Transit,-Nllinnesota Valley Transit Authority Plymouth Metrolink, Prior Lake Laker Lines, Shakopee Transit, South West Transit 24249■1 • We believe that the relationship between the suburban providers and the Metropolitan Council has been strained due to the scarce financial resources, which has further hampered planning of our future services. We also believe a lack of consensus over regional allocation of funding among the region's bus - transit providers and between the different modes of transit has exacerbated and highlighted these conflicts. • As a member organization, we have not taken a position on the form of Metropolitan Council governance, although the city councils of our member cities may choose to do so. Still, we recognize the opportunities for governance consolidation presented in the report as a potential benefit to the region. • We appreciate the report's recognition of the important role that the suburban transit providers play within the regional transit system through your recommendation that the suburban providers continue in operation. Our ability to stay close to the needs of our riders and communities has increased ridership in areas previously underserved, has brought innovative transit solutions to the region and has reduced congestion on the regional highway and road system. We will continue to look for areas to improve the efficiency and effectiveness of our operations between and among the various suburban providers and Metro Transit. • We strongly agree with the report's recognition that the Legislature, and by association other funding bodies, should not commit capital funds to transitways without first ensuring that operating revenues for the first 5 to 10 years have been identified. As the report also highlights, funding resources for transit services are scarce and likely to become scarcer. Funding capital investments in transitways without committing the corresponding operating funding is likely to aggravate the already difficult funding allocation process among existing providers. • We believe that suburban providers should receive a proportional share of the "supplemental" MVST revenue. However, if the Metropolitan Council is given authority to allocate the "supplemental" revenue, in order to ensure accountability and transparency in its decisions relating to revenue sharing, the governance changes recommended by the report should first be enacted. • We are concerned with the report's recommendation to expand the transit taxing district. While we recognize the issues raised in the report relating to the inequitable allocation of transit services through the negotiated expansion process that currently exists, expanding the transit district without providing the additional capital and operating funding necessary to provide transit services to areas in which the district was expanded would simply create new inequities. 2424911 - 2 - r • F Thank you once again for all of your hard work and for the opportunity to participate in your process and comment on your report. We look forward to discussing this report with legislators. With best regards, /e.t. r-a-c Tom Furlong Chairman Suburban Transit Association 24249 \1 -3-