6.

ETS Service to Edmonton International Airport -

Options and Costs - Alignment with
Memorandum of Understanding

Recommendation
That the November 27, 2017, City Operations report CR_5072rev, be received for
information.

Previous Council/Committee Action

At the September 12/13, 2017, City Council meeting, the following motion was passed:
That the September 12, 2017, City Operations report CR_5072, be referred back
to Administration to align with the Memorandum of Understanding to establish a
Regional Transit Services Commission (as set out in Attachment 2 of the
September 12, 2017, City Operations report CR_4841 - Edmonton Metro Region
Commuter Service - Memorandum of Understanding to Establish a Regional
Transit Services Commission) and the Inter-Jurisdictional Cooperation Accord
between the City of Edmonton, Leduc County, City of Leduc and Edmonton
International Airport, and return to Committee prior to the 2017 budget
discussions.

Executive Summary
Since April, 2012, ETS Route 747 has provided express bus service between the
Century Park LRT Station and the Edmonton International Airport. The service was
initially funded by an annual subsidy agreement of $500,000 from the Edmonton
Regional Airports Authority and fare revenues. The subsidy agreement expired on April
30, 2017. ETS has continued to provide full Route 747 service since then, which has had
budget and resourcing implications. As work continues to develop a Shared Investment
for Shared Benefits agreement with regional stakeholders, Administration requires
Committee direction on the interim service and fare parameters for the Route 747
service.

Without changes to the service levels and/or fares, a funding increase of $500,000 is
required to maintain the service. In the absence of any funding commitments for transit
service to the Edmonton International Airport, Administration provides Committee with
options and financial impacts for its consideration, including reducing service and
increasing fares. Committee direction will be used to develop a service package for the
Fall 2017 Supplemental Operating Budget Adjustment (SOBA) deliberations that allows
ETS to continue to provide interim service to the EIA.

ROUTING - Community and Public Services Committee | DELEGATION - D. Jones/E. Robar

November 27, 2017 City Operations CR_5072rev
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 ETS Service to Edmonton International Airport - Options and Costs - Alignment
with Memorandum of Understanding

Report

Background
The City of Edmonton recognizes that public transit connectivity to the international
airport supports regional collaboration, economic development and global business
competitiveness.

In 2012, the City of Edmonton entered into an agreement with the Edmonton Regional
Airports Authority to provide public transit service between the Century Park transit
centre and the Edmonton International Airport. Since the service was introduced, ETS
has provided an average of 172,000 rides a year. The service currently attracts 20
passengers per hour during peak hours and 17 passenger boardings per hour during the
off-peak hours.

The Edmonton International Airport transit service was partially funded through an
annual subsidy agreement of $500,000 from Edmonton Regional Airports Authority
(which expired on April 30, 2017) and fare revenues. Current Route 747 fares are $5
cash for one-way travel or two ETS tickets. A monthly pass offering unlimited trips is
available for $100. The revenue generated from fares between April 2016 and March
2017 was approximately $0.71 million. For 2018, the gross operational cost for the
current service will be approximately $1.89 million, and the annual tax subsidy necessary
to support the current operations will be approximately $1.2 million.

Emergent Issues
On October 5, 2017, the Airport Accord Oversight Committee met with representatives of
the Edmonton International Airport, Leduc County, and the City of Leduc to explore the
concept of Shared Investment for Shared Benefits (SI/SB) in the context of the airport.
The Committee is collaborating on a model for Shared Investment for Shared Benefits
that will be applied to a regional transit route that links Edmonton to the International
Airport and the City of Leduc. Regional partner funding will not be available in the short
term.

If a regional solution is reached, Administration plans to initiate a marketing and

communications plan to promote and enhance ridership on the Route 747 service
(Attachment 1). However, until such agreements are in place, ETS could make interim
adjustments to service levels and fares.

2018 Budget Adjustments

Pending direction from Council on funding, ETS has continued to provide full Route 747
service since April 2017, which has had budget and resourcing implications. As work
continues to develop a Shared Investment for Shared Benefits agreement with regional
stakeholders, Administration requires Committee direction on the interim service and fare
parameters for the Route 747 service.

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 ETS Service to Edmonton International Airport - Options and Costs - Alignment
with Memorandum of Understanding

For Committee consideration, below are examples of options to adjust both the service
levels and the fare structure for the Route 747 service. Committee direction will be used
to develop a service package for the Fall 2017 Supplemental Operating Budget
Adjustment (SOBA) deliberations that allows ETS to continue to provide interim service
to the EIA. Approval of the service package will provide the budget to operate the service
throughout 2018, or until an alternative agreement is reached among regional partners.
Should no alternative agreement be reached, Administration will re-engage with
Committee to discuss service delivery beyond 2018.

Service Level:
The Route 747 is an express bus service that currently runs every hour each day of the
week, with additional trips providing service every half hour during peak hours. The
service runs approximately 20 hours a day with service starting at 4:10 a.m. from
Century Park and 4:34 a.m. from EIA and ending at 11:48 p.m. from Century Park and
12:18 a.m. from EIA. The direct cost of providing the Route 747 service at this level for
2018 is expected to be $1.89 million.

Similar to standard transit bus services, Administration has assessed demand for the
Route 747 service for particular routes/times throughout the day. Based on this,
Administration has developed a reduced Route 747 Service Model. The reduced service
level, outlined in Attachment 2, reduces service frequency to every hour during peak
times and eliminates service in lower demand times (e.g., after 10 p.m.). Implementing
the reduced service model will decrease the overall 2018 operating requirement by $0.38
million. The reduced service could be implemented by April 29, 2018 (with current
services levels maintained until then) and is projected to impact ridership for the route by
approximately 15 percent independently of fare changes.

The September 6, 2017 Edmonton Transit System Advisory Board (ETSAB) report on
Tourism and Transit (CR_5114) advised Edmontons Urban Planning Committee that
frequency for the Route 747 should be increased to every half hour and service hours
extended. Given the current operating costs vs revenues, and the projected ridership for
the additional service, Administration is not recommending an increase in service levels
at this time.

Route 747 Fares:

Since the service was launched, a separate fare structure has been in place for Route
747 that includes a distinct cash fare, option to use two ETS tickets, or a separate
monthly pass; the Route 747 fare does not integrate with other ETS services. If the
current fare structure and service level is maintained, revenue from the service is not
expected to be impacted.

To offset some of the impact of the changes in partner funding, Administration reviewed
potential fare increase structures that would be in line with airport services in other

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 ETS Service to Edmonton International Airport - Options and Costs - Alignment
with Memorandum of Understanding

municipalities but also minimize the projected impact on ridership levels. Administration
developed the following fare increase option to provide a balanced approach between
increasing recoveries and maintaining ridership:
Cash fare from $5.00 to $7.50
Ticket fare from $5.10 to $7.65
Monthly pass fare from $100 to $120

Council could also direct Administration to increase fares at a rate different than those
listed above.

Fare elasticity is a term used to describe the extent to which ridership responds to fare
increase or decrease. Several factors, including user type, trip type, and geography
affect the degree of elasticity. Based on data available from previous ETS fare increases
as it correlates to ridership trends and the experiences of other jurisdictions, it is
estimated that ridership on Route 747 could initially drop by up to 11 percent as a result
of this fare change. Accounting for the projected decrease in ridership, this fare increase
for the Route 747 service is projected to generate $0.16 million in additional revenue
from the service. It is unknown at this time if the elasticity experience from previous fare
increases within the City of Edmonton is directly correlated to elasticity for the 747
service; however, it is reasonable to conclude that ridership will be impacted.

These potential rates would be comparable with other jurisdictions and are still more
affordable than some other transportation options to the Edmonton International Airport.
Fares to ride the ETS service to the airport on both a total and on a per km basis remain
significantly lower than other major airports being serviced by public transit (excluding
municipalities where the airport is in close proximity to the core transit network). Cost
comparisons are in Attachment 3.

The Committee could also consider operating the airport service as a regular transit
route that can be accessed by transit users with regular ETS fares. An integrated fare
structure would likely eliminate all revenues that were directly associated with the Route
747 service, creating an increased funding requirement of $0.71 million, to a total of
approximately $1.8 million annually (assuming current service levels are maintained).

Conclusion
The City of Edmonton recognizes the ongoing economic and social benefits of providing
public transit to/from the airport and remains willing to collaborate with regional
stakeholders.

The expiry of the subsidy agreement with Edmonton Regional Airports Authority means
that without changes to the service levels or fares, a funding increase of $0.50 million is
required to maintain the service. The net budget requirement to operate the service in
2018 (without service/fare changes) would be approximately $1.18 million. Options to
address this budget requirement include adjustments to the fare structure and service

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 ETS Service to Edmonton International Airport - Options and Costs - Alignment
with Memorandum of Understanding

levels. The financial and ridership implications of the various combination of these
options are summarized in Attachment 4.

Administration is seeking direction from Committee on the service level and fare
structure for the Route 747 service. Based on direction from Committee, Administration
will prepare a Service Package for consideration as part of the Fall 2017 Supplemental
Operating Budget Adjustment deliberations; the budget included for the service package
will incorporate projected impacts based on the revised service level and fare structure.
The service package would provide interim funding to operate the service throughout
2018.

Corporate Outcomes and Performance Management

Corporate Outcome: Edmontonians use public transit and active modes of

transportation

Outcome(s) Measure(s) Result(s) Target(s)

Transit is accessible and affordable to Total airport 172,000 *Increase to 200,000

Edmontonians and visitors, and service annual annual boardings by
ridership grows as the city population ridership. boardings 2019.
and tourism grows.
*Targets for the Route 747 service will be adjusted based on Committee direction.

Attachments
1. Marketing Branch EIA Conceptual Plan
2. Ridership and Proposed Service Reductions on Route 747
3. Cost Comparisons
4. Project Financial and Ridership Impacts for EIA 747 Bus Service

Others Reviewing this Report

T. Burge, Chief Financial Officer and Deputy City Manager, Financial and
Corporate Services
L. McCarthy, Deputy City Manager, Urban Form and Corporate Strategic
Development
C. Campbell, Deputy City Manager, Communications and Engagement
G. Klassen, Deputy City Manager, Regional Economic Development

Page 5 of 5 Report: CR_5072rev