Austin Transportation is seeking City Council’s permission to buy $700,000 worth of free transit passes as a carrot to lure more “choice” riders out of their private cars and onto buses and trains.

Rob Spillar, director of Transportation, said the transit pass program is the best way to move the needle closer to the city’s 50/50 mode split goal and change the behaviors of people who have the financial means and get to choose between driving and using transit.

The pilot would put transit passes into the hands of employers to distribute among their employees for up to six months. Spillar said the intent is to get employers, many of whom already pay for employee parking, to see the benefits of offering transit passes instead.

However, Mayor Pro Tem Delia Garza said this was not what she had in mind when she brought Council a resolution in December 2018 asking for ideas for programs to increase transit use.

“If we’re just going to be giving transit passes away, we have the Transit Empowerment Fund that (the Capital Metropolitan Transportation Authority) is a part of, which gives transit passes to people who really need them,” she said.

Council Member Kathie Tovo also questioned the value of offering 1,700-1,800 free passes over a six-month period to for-profit businesses. “It’s one thing to pay 100 percent for the bus passes for a nonprofit that may not be able to identify those extra funds in their bottom line,” she said, but “I do feel that any companies who are participating should have some cost-share.”

Tovo noted that the pilot features two main financial benefits to companies: a discounted rate on transit passes and a reimbursement from the city for the remaining costs. With that in mind, she suggested adding flexibility so that companies could be reimbursed for only three months but could continue to take advantage of the discounted rates for the entire pilot period.

As part of the proposed interlocal agreement, Capital Metro has agreed to offer passes at a 20 percent discount for non-government participants and a 30 percent discount for government entities.

Movability, a local transit management association, will be in charge of distributing the passes to its members and seeking out new businesses for participation. Lisa Kay Pfannenstiel, executive director of Movability, said that companies will not be asked to cover the costs of passes unless their passes are not being used during the first three months of the program.

Garza said she intends to bring an amendment Thursday to propose allocating some of the money to the Transit Empowerment Fund or to a purpose closer to what she initially requested.

In a study and survey last year, Austin Transportation found that some of the proposed ideas would not be ideal. The survey showed that one of Garza’s ideas, offering transit users a credit on Austin Energy utility bills, was very popular but primarily so with those who rarely or never use transit.

On the other hand, discounted passes were preferred by those who occasionally used transit. The department therefore decided that the discounts were more likely to attract transit riders who had access to transit routes and could use the system on a regular basis.

Garza said the proposal is particularly troubling given that the $700,000 is coming from parking fees, which were raised to $2 per hour last year.

“I’ve heard from people in my district very upset that we have increased our parking fees, most of them service workers,” Garza said. “And now we’re using the parking fees to give transit passes to corporations.”

Pfannenstiel said most of the giant corporations that people may imagine the program is subsidizing already provide transit passes to their employees and therefore will not be eligible to participate. Some companies excluded from the program include Google, Indeed, Merck, Facebook, and Cirrus Logic.

Council Member Ann Kitchen said it makes great sense to try to change people’s behaviors through their workplaces.

“People don’t just go out one day and say, ‘I’m going to ride the bus,’ unfortunately,” she said. “That would be nice if that happened, but it takes a certain amount of assistance.”

She said at least some of the funds should be allocated to smaller businesses and businesses with lower-wage workers.

Spillar said the department plans to collect demographic data on how the passes are distributed. He said the department is also open to the idea of using some of the money to add to the Transit Empowerment Fund or Movability’s own nonprofit assistance program NPO-Go!

Pfannenstiel said Movability is also in the process of lowering the membership rate for smaller businesses with up to 50 employees to make its programs more attractive.

The pilot will cost $150,000 to administer in its first year, covering a new position at Movability and other resources. Council will consider awarding the nonprofit $100,000 of that total on Thursday.

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