1. SMARTCARD
FARE SYSTEM SYSTÈME DE PAIEMENT PAR
CARTES À PUCE |
Committee recommendation
That Council approve:
1. That Transit Services join the Greater Toronto Area Fare
System (GTAFS) project with a view to full implementation of the Presto smartcard
system in Ottawa by 2010 subject to the following conditions having been met by
April 1, 2008:
·
Provincial Cabinet approval of the proposal presented to OC Transpo by
Ministry of Transportation staff as described in this report;
·
Successful negotiation of central system fees to enable OC Transpo to
reduce overall commission to approximately one percent;
·
The STO Commission reaching a funding agreement to proceed with a
technology upgrade; and
·
Signing of the GTAFS Procurement Governance Agreement, the GTAFS
Operating Agreement and the GTA Funding Agreement.
2.
The delegation of authority to the Director of Transit Services to act
on behalf of the City to approve and execute the GTAFS partnership agreements.
3.
That approval of these recommendations be
contingent on approval in the 2008 Capital Budget of an increase in project
authority from $15 million to $21.200 million, recognizing that the actual cost
to the City will be $15 million (or less) as a result of Provincial funding and
the potential for Federal funding, as a result of the ability to integrate STO
operations.
Que le Conseil approuve :
1. L’adhésion des Services du
transport en commun au projet de système de tarification de la région du Grand
Toronto (STRGT) en vue de la mise en œuvre intégrale à Ottawa du système de
cartes à puce Presto d’ici 2010, sous réserve des conditions suivantes, qui
doivent être respectées au plus tard le 1er avril 2008 :
·
l’approbation par le Cabinet provincial de la
proposition soumise à OC Transpo par le personnel du ministère des
Transports de l’Ontario, comme le précise le présent rapport,
·
la conclusion d’une entente sur les frais associés
à l’adoption du système afin de permettre à OC Transpo de réduire la commission
touchée par l’ensemble des détaillants pour qu’elle corresponde à environ
1 p. 100 des ventes de billets et de laissez-passer,
·
la réalisation d’une entente de financement avec
la Commission de la STO afin de procéder à une mise à jour technologique,
·
la signature des ententes sur les modalités
d’acquisition, d’exploitation et de financement pour les besoins du STRGT;
2. D’habiliter le directeur de
Services de transport en commun à approuver et à conclure, au nom de la Ville,
les ententes de partenariat relatives au STRGT;
3. Que l’approbation de ces
recommandations par le Conseil soit conditionnelle à l’adoption dans le budget
des immobilisations de 2008 d’une hausse du financement alloué au projet, qui
passerait de 15 à 21,200 millions de dollars, du fait que les coûts réels
assumés par la Ville s’élèveront à 14,268 millions compte tenu des fonds
provinciaux, ou à moins de 15 millions (ou moins) si la Ville obtient un
financement provincial ou possiblement des crédits fédéraux pour l’intégration
au système de cartes à puce de la Société de transport de l’Outaouais (STO).
Documentation
1. Deputy City Manager, Public Works and Services
report dated 13 November 2007 (ACS2007-PTE-TRA-0010).
2. Extract of Draft Minutes 15, Transit Committee, 26 November 2007.
Report
to/Rapport au:
Transit Committee
Comité du
transport en commun
and
Council/et au Conseil
13
November 2007/le 13 novembre 2007
Submitted by/Soumis par: Nancy Schepers/Deputy City
Manager/Directrice municipale adjointe
Planning, Transit and the Environment/Urbanisme, Transport en
commun et Environnement
Contact/Personne-ressource: A.
Mercier, Director/Directeur, Transit Services/Services du transport en commun
613-842-3636 ext. 2271, alain.mercier@ottawa.ca
Ref N°: ACS2007-PTE-TRA-0010 |
SUBJECT: |
|
|
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OBJET : |
REPORT RECOMMENDATIONS
1.
That the Transit Committee recommend that Council approve Transit
Services joining the Greater Toronto Area Fare System (GTAFS) project with a
view to full implementation of the Presto smartcard system in Ottawa by 2010
subject to the following conditions having been met by April 1, 2008:
·
Provincial Cabinet approval of the proposal presented to OC Transpo by
Ministry of Transportation staff as described in this report;
·
Successful negotiation of central system fees to enable OC Transpo to
reduce overall commission to approximately one percent;
·
The STO Commission reaching a funding agreement to proceed with a
technology upgrade; and
·
Signing of the GTAFS Procurement Governance Agreement, the GTAFS
Operating Agreement and the GTA Funding Agreement.
2. That the Transit Committee recommend to Council the delegation
of authority to the Director of Transit Services to act on behalf of the City
to approve and execute the GTAFS partnership agreements.
3. That the Transit Committee
recommend Council approval of these recommendations be contingent on approval
in the 2008 Capital Budget of an increase in project authority from $15 million
to $21.200 million, recognizing that the actual cost to the City will be $15
million (or less) as a result of Provincial funding and the potential for
Federal funding, as a result of the ability to integrate STO operations.
RECOMMANDATIONS DU RAPPORT
1.
Que le Comité du transport en
commun recommande au Conseil d’approuver l’adhésion des Services du transport
en commun au projet de système de tarification de la région du Grand Toronto
(STRGT) en vue de la mise en œuvre intégrale à Ottawa du système de cartes à
puce Presto d’ici 2010, sous réserve des conditions suivantes, qui doivent être
respectées au plus tard le 1er avril 2008 :
·
l’approbation par le Cabinet provincial de la
proposition soumise à OC Transpo par le personnel du ministère des
Transports de l’Ontario, comme le précise le présent rapport,
·
la conclusion d’une entente sur les frais associés
à l’adoption du système afin de permettre à OC Transpo de réduire la commission
touchée par l’ensemble des détaillants pour qu’elle corresponde à environ
1 p. 100 des ventes de billets et de laissez-passer,
·
la réalisation d’une entente de financement avec
la Commission de la STO afin de procéder à une mise à jour technologique,
·
la signature des ententes sur les modalités
d’acquisition, d’exploitation et de financement pour les besoins du STRGT;
2.
Que le Comité du transport en
commun recommande au Conseil d’habiliter le directeur de Services de transport
en commun à approuver et à conclure, au nom de la Ville, les ententes de
partenariat relatives au STRGT;
3.
Que le Comité du transport en
commun recommande que l’approbation de ces recommandations par le Conseil soit
conditionnelle à l’adoption dans le budget des immobilisations de 2008 d’une
hausse du financement alloué au projet, qui passerait de 15 à 21,200 millions
de dollars, du fait que les coûts réels assumés par la Ville s’élèveront à
14,268 millions compte tenu des fonds provinciaux, ou à moins de
15 millions (ou moins) si la Ville obtient un financement provincial ou
possiblement des crédits fédéraux pour l’intégration au système de cartes à
puce de la Société de transport de l’Outaouais (STO).
EXECUTIVE SUMMARY
Assumptions and Analysis
In September 2006, a report was presented to Transit Committee outlining the concept and functional requirements for a smartcard system for OC Transpo. The report was accepted and, as part of the 2007 budget, $15 million in capital authority was approved for a smartcard fare payment system. In November 2006, staff were approached by Ministry of Transportation of Ontario (MTO) staff to discuss the possibility of Ottawa joining the Greater Toronto Area Fare System (GTAFS) project, suggesting that it would bring significant cost savings for Ottawa, reduce implementation risk, and make good use of resources already committed to the GTAFS project by the MTO. Negotiations have been ongoing since that time to ensure that the Ottawa user requirements would be properly covered and that a satisfactory financial arrangement could be agreed.
The Ministry proposal successfully addresses all of
Transit Services’ unique requirements.
These include:
· integration with the STO
smartcard system to allow seamless fare payment for customers travelling
between Ottawa and Gatineau,
· incorporating the successful
employer deduction based Ecopass program and building upon it by offering all
customers the opportunity to take advantage of the convenience and fare
savings,
· integration with Para
Transpo so that all customers have a smartcard account and the smartcard fare
payment options are available to them
· integration of the smartcard
system with the current SmartBus system.
Should the Ministry offer be approved, Transit Services would participate fully in its ongoing governance and would be eligible to sit on the various committees and fully participate as a member in the decision making at all levels including Executive Committee, Steering Committee and various sub-committees as relevant.
Implementation of the system would be over a 30-month span. If the project started in January 2008, the full system would be complete in the summer of 2010.
Financial Implications
The GTAFS approach recommended
in this report would cost the City $14.268 million, and along with a subsidy of
$6.978 million from the Province of Ontario the total cost of the system would
be $21.246 million. This includes all
GTAFS costs, the City’s internal project management and IT costs as well as
contingencies and taxes. $15 million in
funds are available from the 2007 capital budget budgetary authority (Automated
Fare Collection, project # 9003000) to be funded by $14.975 million from
Federal Gas Tax and $.025 million from Provincial Gas Tax.
In addition, a joint
submission by STO and OC Transpo will be made to the Federal government to seek
subsidy for the software required to support interprovincial
interoperability. This represents $2.65
million of OC Transpo costs, of which 33 per cent will be funded by the
Province of Ontario.
Public Consultation/Input
The smartcard fare system concept has been
discussed at several Pedestrian and Transit Advisory Committee meetings and
their response has been very supportive.
At the Transit Committee meeting of September
6, 2006, there was concern that the system must be developed in such a way as
to allow other city functions to build on it later. This is a feature of the GTAFS.
Another concern raised at that meeting was
about the needs of people living in poverty.
Discussions have taken place with Employment and Financial Services
staff to ensure the system supports the Ontario Works program, and Employment
and Financial Services staff will work with the implementation team to ensure
the best possible access to electronic fares for this community.
RÉSUMÉ
Hypothèses
et analyse
En
septembre 2006, le Comité du transport en commun a reçu un rapport qui
décrivait le concept et les exigences fonctionnelles d’un système de paiement
par cartes à puce proposé pour OC Transpo. Le rapport a été approuvé et des
crédits d’immobilisations de 15 millions de dollars ont été inscrits au
budget de 2007 pour financer un tel système. En novembre 2006, des
représentants du ministère des Transports de l’Ontario (MTO) ont approché le
personnel municipal pour débattre de la possibilité qu’Ottawa adhère au projet
de système de tarification de la région du Grand Toronto (STRGT), soutenant
qu’une telle initiative permettrait à la Ville de réaliser des économies
importantes, réduirait les risques potentiels liés à la mise en place d’un tel
système et optimaliserait les ressources que le MTO a déjà affectées au projet
de STRGT. Depuis, des négociations sont en cours afin de veiller à ce que l’on
tienne compte des besoins des usagers d’Ottawa et à ce qu’un accord financier
satisfaisant soit conclu à cet égard.
La proposition du
Ministère répond à toutes les exigences particulières aux Services du transport
en commun, qui comprennent :
Si la
proposition du Ministère est approuvée, les Services de transport en commun
s’engageraient à participer activement à sa gestion continue et seraient
autorisés à siéger aux divers comités chargés du projet et à prendre pleinement
part au processus décisionnel à tous les niveaux (comité exécutif, comité
directeur et sous-comités pertinents).
Le système
serait mis en place sur une période de 30 mois. Si les travaux sont
entamés en janvier 2008, l’implantation devrait être achevée à l’été 2010.
Répercussions
financières
Selon la stratégie recommandée
dans le présent rapport, il en coûterait 14,268 millions de dollars à la
Ville pour mettre en oeuvre le
STRGT, et le coût total du système s’élèverait à 21,246 millions, si l’on
ajoute les 6,978 millions de la Province de l’Ontario. Ce montant comprend
tous les frais associés au STRGT, les dépenses internes engagées pour le
projet, les coûts liés aux services de TI ainsi que les dépenses imprévues et
les taxes. Dans le cadre du budget des immobilisations de 2007, une
autorisation budgétaire de 15 millions de dollars a été approuvée pour ce
système (perception automatisée des tarifs, projet no 9003000),
laquelle devait être financée par des recettes de 14,975 millions de
dollars tirées de la taxe fédérale sur l’essence et de 250 000 $
provenant de la taxe provinciale sur l’essence. Aucune autre subvention
fédérale ou provinciale n’était alors prévue.
En outre, la STO et OC
Transpo uniront leurs efforts en vue d’obtenir une aide financière du
gouvernement fédéral qui servira à l’achat du logiciel de soutien à
l’exploitation interprovinciale du système. Cette initiative représente des
pressions de 2,65 millions de dollars pour OC Transpo, dont 33 % seront
financés par la province de l’Ontario.
Consultation
publique/commentaires
Le concept du système de paiement par cartes à puce a été débattu à
plusieurs réunions du Comité consultatif sur les piétons et le transport en
commun et a été très bien accueilli par les participants.
À la réunion du 6 septembre 2006 du Comité du transport en
commun, certains se sont dits préoccupés par le fait que le système doit
pouvoir intégrer d’autres fonctions municipales dans l’avenir, ce qui constitue
l’une des caractéristiques du STRGT.
D’autres inquiétudes portaient sur les besoins des personnes qui vivent
sous le seuil de la pauvreté. Des discussions avec le personnel de Services
d’emploi et d’aide financière ont eu lieu pour veiller à ce que le système soit
accessible aux prestataires du programme Ontario au travail. En outre, Services
d’emploi et d’aide financière travaillera de concert avec l’équipe chargée de
la mise en oeuvre du STRGT afin que
ces personnes aient le meilleur accès possible au système.
BACKGROUND
Transit Services has followed the progress of electronic fare payment systems in the transit industry, and particularly contactless smartcard systems, for over 10 years. In 1997, IBI Group was retained to carry out a fare system study for OC Transpo with the emphasis on smartcards. In April 1997, the Transit Commission approved the introduction of an electronic transfer-issuing machine as a first step towards an electronic fare system but recognized that, at that time, the technology had not developed to the point at which a positive business case existed for a full smartcard fare system. Electronic transfer issuing machines were successfully installed on the transit fleet following that decision.
In 2003, a study was carried
out by KPMG to determine the role of smartcards within the City and,
specifically, whether a smartcard fare payment system was now suitable for
implementation by OC Transpo. The study
included an examination of the business case, given the current experience of
smartcard technology in the transit industry.
This work was updated in 2005 to reflect the requirements for fare collection
of the proposed Light Rail Transit (LRT) system.
The major recommendations of
the KPMG([1]) report were:
· that it would be
cost-effective to implement a Smartcard Fare Payment system for
OC Transpo; and,
· the City should adopt the
development of a multi-application smartcard as a long-term goal, with transit
as the first step.
In late 2005, staff moved
forward with the next step in the process to develop a system concept and
functional requirements for the procurement of a Smartcard Fare System, assess
the internal impacts of implementing the system and prepare a detailed business
case for the system. This work was
carried out by an experienced team from IBI consultants, who were selected as a
result of a competitive procurement process.
On September 6, 2006, a report was presented to the Transit Committee outlining the functional requirements for a smartcard fare system for OC Transpo. The report included two recommendations, both of which were approved by Council on September 27, 2006. The first was to approve the smartcard system concept and functional requirements and the second was, in essence, to allow an RFP to be issued immediately with the award of a contract contingent on:
· Council approval of the $15
million capital that was to be included in the 2007 budget; and,
· a final review of the
preferred proponent’s proposal by Committee and Council, prior to contact
award.
An issue raised during Committee discussion of the system was the desire to ensure that the introduction of a transit smartcard would not preclude an eventual expansion to a City Card i.e. a smartcard that could be used for other City services. This issue was the subject of detailed discussions with Libraries, Traffic and Parking Operations, and Parks and Recreation to ensure that no immediate opportunities are being missed and that options for the future are maintained. Following these discussions, an informal presentation was made for City staff and Councillors.
Supply Management Division,
Transit staff and IBI Consultants commenced work thereafter to plan an OC
Transpo smartcard fare system procurement process, one that would have not been
dissimilar to the Light Rail procurement process, with an initial qualification
stage followed by Draft and then a formal RFP.
This work continued over Q4 of 2006.
In early 2007, the City’s
Auditor General presented a report on the OC Transpo fare system. The report underlined concerns about
vulnerability of the current fare system to fraud and strongly recommended the
implementation of a smartcard fare system as soon as possible.
As part of the 2007 budget,
$15 million in capital authority was approved for a smartcard fare payment
system.
In November 2006, staff were approached by the Ministry of Transportation of Ontario (MTO) staff to discuss the possibility of Ottawa joining the GTAFS project, suggesting that it would reduce implementation risk and make good use of resources already committed to the GTAFS project by the MTO.
Negotiations have been
ongoing since that time to ensure that the Ottawa user requirements would be
properly covered, including integration with STO, and that a satisfactory
financial arrangement could be agreed.
The results are described in this report.
DISCUSSION
GTAFS Project Overview
The transit agencies in the Greater Toronto Area, under the guidance of the Ministry of Transportation of Ontario, have been working since 2002 towards developing and implementing a single, integrated smartcard system that would allow seamless fare payment travel for transit users in the Toronto region. One smartcard would be used to pay fares on the services of up to nine transit providers. The goal of the GTA of seamless travel across multiple service providers is similar to that of the OC Transpo system where integration with the STO smartcard fare payment system is very important to customers.
For the GTA model, the MTO would manage the overall system and be responsible for the central back-office system. Members of the consortium would pay for the direct costs of equipping their bus fleet for smartcards and pay their portion of the overall system development cost. The central system would be developed by the MTO and provided free to members.
In October 2006, the MTO awarded a contract for the GTA smartcard fare payment system to Accenture Inc. as a result of an open and competitive procurement process.
GTAFS
Proposal
The MTO had been in contact with Transit Services staff over the past few years to determine interest in joining the GTAFS consortium. Following the award of the contract to Accenture Inc., the MTO formally approached OC Transpo in November 2006 about participating in the GTA system. As there was now a contract in place with ‘go live’ implementation dates of late 2008, it seemed prudent to enter into discussions to determine what MTO could offer Ottawa.
The first step in this process was to carry out a ‘gap analysis’ to identify differences in requirements between the OC Transpo and GTA systems. Once these were known, the MTO could then make a financial proposal to OC Transpo. The major gaps identified were Ottawa requirements to integrate with the STO smartcard system, the integration with Para Transpo to include all customers under the smartcard umbrella, integration with the on-bus GPS mobile data unit that would be used as the operator interface device for smartcards as well as GPS, and the handling of Ecopass customers by the system. The final proposal from MTO was to include the cost to overcome these gaps so that all OC Transpo requirements were met.
The City of Ottawa has now received a firm proposal from the Ministry to implement a smartcard system for OC Transpo. The proposal, which would bring OC Transpo into the GTAFS as a full member, includes user requirements, capital and operating costs, and time lines. Information is also included on the subsidy that would be provided by the Provincial government and the conditions that would apply.
The information now available has been used to revise the business case for the OC Transpo smartcard and, based on this, the recommendation from staff is to proceed with the smartcard system for OC Transpo under the GTAFS umbrella. This recommendation to proceed is contingent on funding from the Province of Ontario being confirmed by Cabinet, the STO Commission reaching a funding agreement to proceed with the upgrade of their readers, and a satisfactory agreement with the GTAFS on ongoing fees and commissions.
OC Transpo User Requirements
The
system would make use of contactless smartcards and readers. Contactless cards are widely used in the
transit industry because they allow rapid boarding and the maintenance
requirements of on-bus units, with no moving parts, are much lower than for
magnetic strip cards. Customers would
be able to configure their cards as any one of a number of possible period
passes (Ecopass, annual, monthly, semester for students, etc.) that would allow
unlimited use during the period paid for.
In addition, customers would be able to ‘load’ the card with money and
have the fare for a trip deducted from the card on boarding a bus or on the
O-Train platforms. The current O-Train
ticket vending machine would be priced at the regular cash fare.
Customers
who do not have a smartcard would be able to pay their fare with cash on all
buses.
With
the introduction of the system, there would be a card reader on each bus and on
O-Train platforms. Smartcards would be
issued and recharged at OC Transpo Sales and Information offices and at
approximately 100 vendors. It would
also be possible to replenish cards through the Internet, by telephone or by
pre-arranged direct debit. The card
readers would be able to read STO smartcards, and the STO readers would be able
to read OC Transpo cards.
A
back-office system would manage the information to and from the on-bus readers
and the revaluing machines. It would
keep track of fares collected and ensure that only valid cards can be used.
The
application of a Proof of Payment (POP) system would remain in place and be
integrated with the new Smartcard Fare Payment system. OC Transpo currently operates a POP system
on 225 articulated buses and on the existing O-Train. Customers who have a valid pass can board articulated buses by
the rear doors and do not have to pass by the bus operator and customers can
board the O-Train through any door. The
enforcement of POP would be done with portable smartcard readers.
STO
Integration
Today, OC Transpo and STO customers enjoy seamless free transfer privileges between systems. This is very important to both OC Transpo and STO customers, as they often have to rely on the other service provider to complete their transit trip. As well, it gives customers more choice when both systems serve their destination.
Since 1998, STO have operated a successful smartcard system that has resulted in the elimination of all paper passes. The stored value feature of the system has not yet been implemented. STO customers using the smartcard to transfer to OC Transpo must have a paper receipt indicating the smartcard is a valid pass. Customers boarding either system who pay cash and intend to transfer onto the other system must receive a paper transfer and show this to the operator on the transfer bus. Customers paying with tickets use tickets of that service provider, and use a paper transfer to complete their trip on the other system.
With the implementation of the GTAFS by OC Transpo, the
current level of integration between the two systems would be maintained. Discussions have taken place between OC
Transpo, STO and the GTAFS to determine the required changes to support
continued seamless transfers and agreement has been reached on how this will be
done. The OC Transpo system would read
STO cards and the STO readers would be upgraded to read OC Transpo cards. Smartcards configured as passes would
provide automatic transfer privileges.
OC Transpo customers paying with stored value (electronic tickets) on OC
Transpo would have their card updated with an ‘electronic transfer’ that would
be read by STO readers. The reverse
applies for STO customers paying on STO buses and who then transfer to OC
Transpo. Similar to present day
operations where OC Transpo and STO do not accept one another’s paper
tickets in their farebox, OC Transpo customers would not be able pay their
fare using stored value on STO. The
same applies to STO customers, who would not be able to pay their fare with
stored value on OC Transpo buses.
Ecopass
OC Transpo operates a highly
successful employer payroll deduction program known as Ecopass. Major employers in the City can join the
program and offer their employees the convenience of automatic deductions for
their transit pass. Today there are
over 20,000 subscribers to the program.
The new smartcard system must maintain this program. As well, this convenience must be offered to
new customers who do not work for a participating Ecopass employer.
The GTAFS would integrate with the existing Ecopass
program to carry this program forward.
Current users would receive a smartcard that will be configured as an
Ecopass and would be valid as long as payments are received. More importantly, the GTAFS would allow all
other customers to enrol in a pre-authorized payment system whereby the price
of a monthly pass will automatically be received from their bank account each
month. It is expected the convenience
of automatic payments would attract up to 30,000 current pass users to join the
‘personal’ Ecopass system.
The Ecopass interface would allow employers to
electronically provide a list of employees who have paid for transit for the
upcoming month and whose smartcards should be extended for another month of
transit. This concept would be expanded
to other groups. Initial discussions
have taken place with Employment and Financial Services to provide smartcards
to eligible Ontario Works and Community Pass recipients and then activate the
cards based on information provided each month. This approach would replace the time consuming procedure of
physically distributing paper passes each month. This same concept will be used with school boards when bulk
purchases are made.
Integration
with SmartBus System
The smartcard system would require information to be displayed to operators (e.g. valid fare or not) as well as allowing operators to enter instructions to the card reader (e.g. accept a second stored value payment from a card). In addition, the smartcard system would require a communication system to transfer all transaction data from the bus to the central system and to transfer blacklisted card numbers from the central system to all bus readers. The SmartBus system would be leveraged to provide these functions. Changes would be made to the SmartBus mobile data terminal to handle the display/input functions while an interface between the GTAFS and SmartBus would be developed to enable the smartcard system to tap into the existing SmartBus communication system.
Para
Transpo
It is not practical to equip all vehicles that may be used to provide Para Transpo service, as this would require equipping all taxis. In addition, it would not be possible to establish secure communication links each day with the taxis. For these reasons, a different approach was needed to bring Para Transpo customers under the umbrella of smartcards.
Many Para Transpo customers use both Para Transpo and OC Transpo services and this crossover activity is strongly encouraged. It is important to offer the benefits and convenience of smartcards to Para Transpo customers as well as OC Transpo customers. This becomes a requirement with the eventual elimination of all paper passes and tickets once the smartcard system is fully implemented.
The GTAFS had not addressed this topic until OC Transpo raised it as a requirement. An innovative solution has been proposed to provide all Para Transpo customers with a smartcard account that will allow travel on Para Transpo and OC Transpo.
Governance
As a participant in the GTAFS, Ottawa would
participate fully in its ongoing governance.
The GTAFS is directed by an Executive Committee
composed of General Managers or similar representatives from each of the
participating transit agencies and is chaired by MTO. Each member including the MTO has one vote irrespective of size. All key decisions are by total concurrence
of the members participating in the decision-making. Each member can only act with the authority provided by the
member’s council or commission.
Ongoing management of the GTAFS is directed by a
Steering Committee composed of a representative from each transit agency and
MTO. The role of the Steering Committee
is to oversee the ongoing operation of the system and to make recommendations
to the Executive Committee as required.
The Steering Committee is chaired by the Project Director who is
appointed by MTO.
MTO transferred the Accenture contract to GO Transit
in March 2007, along with responsibility to manage Accenture, and ownership of
the related Intellectual Property such as the Open Interface Standards. GO Transit now acts as agent for each
transit agency in the procurement and operation of the GTAFS. As detailed in both the Procurement
Governance Agreement and Operating Agreement, GO Transit would act as OC
Transpo’s agent in OC Transpo’s procurement of its fare system under the GTAFS. The MTO continues to fully and strongly
assist GO Transit in executing the contract by supplying key staff for the
Project Office including the Project Director, and managing the project on a
daily basis on behalf of GO Transit.
At some point in the future, the Accenture contract
will be transferred from GO Transit to the newly created Greater Toronto
Transportation Authority (GTTA) to manage on behalf of the participants. This transfer should not affect the
governance of the fare system nor Ottawa’s participation in the project’s
committee structure.
As a full participant in the GTAFS, Ottawa would be eligible to sit on the various committees and fully participate as a member in the decision making at all levels including Executive Committee, Steering Committee and various sub-committee as relevant.
Ottawa would be invited to sign the Procurement
Governance Agreement in which Ottawa would be appointing GO Transit to act as
its agent in the procurement of the Ottawa fare system and the Operating
Agreement which governs the ongoing operation of the fare system. Signing these agreements would require the
approval of existing participants, which the MTO would work towards
obtaining. As well, Ottawa would be
required to sign a Funding Agreement for the project.
The MTO would set up an Ottawa-specific team to work
closely with OC Transpo staff in designing and implementing the Ottawa
solution.
Interprovincial Interoperability (STO/OC Transpo Fares)
The approach to OC Transpo/STO integration has been agreed at a staff level and the STO Commission has approved this, subject to approval of the Ministry of Transportation of Quebec.
Integration is a key requirement of the system, and the STO Commission’s direction will need to be confirmed before the final agreement with GTAFS is signed.
The costs of integration for STO are estimated at approximately $1.5 million to upgrade their on‑bus readers. OC Transpo’s costs are estimated to be of the order of $2.65 million, of which one-third will be covered by the MTO. It is intended to request the Federal government to cover the $4.15 million, less funding received from Provincial sources, required to integrate the fare systems of the two National Capital Region transit systems.
Timetable
The final decision on whether OC Transpo will be joining the GTAFS project depends on successful negotiation of central system fees and commissions to the range of one percent. The deadline for a decision is April 1, 2008. The Ministry would like to start the OC Transpo project in January on the understanding that if negotiation of the central system fees and commissions fails, the Province of Ontario will cover the costs of work to that date. The Ministry would like the project to start immediately so that the special needs of OC Transpo are considered in the development of the base system design that is now well underway for the GTAFS. The Ministry recognizes OC Transpo has considerable expertise in the administration of transit passes and they would like to ensure this knowledge is included in the base GTA system and then available to be used by other GTAFS partners.
The GTAFS proposal includes a timetable, which would see implementation take place over a period of two and a half years. If the Ottawa project start-up were January 2008, which would be possible were Council to approve the project before the end of November, the full system would be complete in the summer of 2010. This would include both passes and stored value (electronic tickets).
An advantage of joining the GTAFS project is that significant emphasis will be placed on the system development of the stored value capability. When Ottawa was proposing to purchase its own system, it was anticipated that, while bus passes would be fully implemented after two years, the addition of stored value electronic tickets would come significantly later, because of its complexity.
Business
Case
The introduction of a smartcard system would have significant impacts on the organization. The printing and distribution of paper tickets and passes would no longer be necessary and the vendor network would be smaller. Customers would have a range of convenient ways to add value to their cards.
There would be new costs associated with the system, the most obvious of which would be the maintenance of the equipment and software.
The introduction of smartcards would significantly reduce the cost of fare fraud by ensuring that a valid fare is paid and by ensuring that fare instruments do not remain in circulation after they cease to be valid (e.g. are stolen, Ecopass not returned after payment ends, etc.).
The system would offer all customers the option of signing up for pre-authorized payment programs patterned after the successful Ecopass program. Instead of employer deductions, the system would make use of bank account debits. The convenience of this feature, as well as the convenience of stored value payments will attract more customers to transit and encourage them to use transit more.
The business case for the proposed system has been updated with the new information available using conservation assumptions. The business case is sensitive to the rate of commission that would be charged by the central system. For example, if a one percent commission could be agreed, there would be a strong positive business case with a payback period of six years with the MTO subsidy taken into account. However, if a two percent charge were levied, which is the current arrangement for the GTAFS partners, the business case is not attractive, as the payback period approaches eight years.
The GTA model to be implemented in the Toronto area will strongly encourage customers to use stored value instead of passes to pay for transit. Most transactions will be paid for by credit card, which will entail a bank charge of about 1.75 percent. In Ottawa, we should build upon our successful pass program and push the expansion of pre-authorized payment for ongoing transit use among all customers to limit banking overheads. The intention is to limit payment for automatic monthly transit use to pre-authorized bank debits that carry a charge of only $0.10 per transaction, regardless of the amount of the transaction. Payment by credit cards for pre-authorized payments would not be permitted, thus saving the bank charge of 1.75 percent. The recommendation to proceed with joining the GTAFS project is dependent upon successfully negotiating the central system fees and commissions so that the average commission is one percent instead of two percent.
Risk
Analysis
Detailed negotiations have taken place with the GTAFS staff to ensure that, as far as possible, the terms of the agreement are favourable to Ottawa and that the risks associated with the project are minimized. The risk analysis is summarized in Document 1.
In general, there are significant benefits for Ottawa to join a large project on which a great deal of work has already been done. Because the project is well underway, we were able to benefit from the thinking and analysis of the GTAFS team and focus our efforts on identifying gaps in the requirements to ensure that Ottawa’s particular needs would be met. We would benefit from a contract with the system integrator, Accenture Inc., based on detailed specifications developed by the GTAFS that provides firm pricing, and supplemented to cover Ottawa’s special requirements.
The complex back-office system that deals with customer relations, data management and financial functions would be fully operational and thoroughly tested before the Ottawa system went live. This would minimize a significant risk for Ottawa including transfer of liabilities for the value of unused funds (debt obligation) to the GTAFS versus the City.
On the other side, joining a large consortium would have its disadvantages. Ottawa would be one member of the GTAFS Executive Committee and the project governance structure would be more cumbersome than would be the case for a system developed specifically for Ottawa. However, the GTAFS discussions so far have been reasoned, and every effort has been made to accommodate Ottawa’s needs.
The project schedule is another area where there would be risk because the proposed Ottawa implementation time-lines are dependent on the progress of the project in the GTA (in particular the timing of ‘Launch 2’). However, this risk should be weighed against the risk that would be associated with an Ottawa specific system development. If we were to immediately start a system procurement process for this project, the schedule would lag behind that proposed by GTAFS by at least a year.
Integration with STO poses another risk for this implementation. The ability for residents of the National Capital Region to transfer between STO and OC Transpo services seamlessly is an important system objective. This risk would be present whether or not we took the GTAFS approach and hinges on the ability of OC Transpo and STO to successfully implement the agreed structure.
Overall, from a risk perspective, the benefits of the recommended GTAFS approach significantly outweigh the risks.
CONSULTATION/PUBLIC NOTIFICATION
At the Transit Committee meeting of September
2006, there was general agreement that the user requirements covered OC
Transpo’s needs. However, there was
concern that the system must be developed in such a way as to allow other city functions
to build on it later. This is a feature
of the GTA system.
Another concern was about the needs of people
living in poverty. In this respect, we
are working with Employment and Financial Services staff to support the Ontario
Works program, and also to explore other ways of ensuring access to electronic
fares for this community.
The smartcard fare system concept has been
discussed at several Pedestrian and Transit Advisory Committee (PTAC)
meetings. The response from PTAC has
been very supportive of the smartcard system.
FINANCIAL IMPLICATIONS
The total cost of the system would
be $21.246 million, including all GTAFS costs, the City’s internal project
management and information technology costs, as well as contingencies and
taxes. The City’s portion of the costs would be $14.268 million, with the
remaining $6.978 million funded by provincial subsidy. City funds are available through the $15
million in project authority approved in the 2007 capital budget.
While the total system cost is
significantly higher than the previous budgetary figure of $15 million, it
includes the cost of STO/OC Transpo integration, SmartBus integration and
supports the successful Ecopass program and integration with Para Transpo
operations. Although these items were included
in the original estimate for the system, discussion with GTAFS staff showed
them to be much more complex than anticipated, particularly the STO
interface. The GTAFS price is based on
a careful examination of OC Transpo’s user and interface requirements and is a
fixed price.
The Ministry proposal includes $2.65
million to enable integration with STO.
A joint proposal by STO and OC Transpo will be made to the Federal
government to seek subsidy for the software required to support interprovincial
interoperability. This could further
reduce $2.65 million of OC Transpo costs of which 33 per cent will be funded by
the Province of Ontario.,
The ongoing operating costs contained in the Ministry proposal for system maintenance and third-party agency management are estimated at $528,000. The benefits of the system should mature by 2012, in the second year of full deployment, with a combined revenue and cost improvement totalling $2.4M. The revenue improvements are due to reduced fare evasion, simplified fare payment and improved boarding times. Cost savings are derived from reduction in labour and printing to handle a paper based system.
SUPPORTING DOCUMENTATION
Document 1 Risk Analysis
DISPOSITION
Following Council approval, staff will initiate
the project by:
· developing a work plan to commence
in early January 2008;
· completing negotiations and signing
the GTAFS procurement governance and
operating agreements and the GTA funding agreement;
·
requesting,
jointly with STO, financial support from the Federal government for the costs
of interprovincial interoperability.
RISK ANALYSIS DOCUMENT
1
Category |
Risk |
Mitigation |
Schedule |
· Project timetable assumes a start date of January 2008. · The project schedule is built around GTAFS full Launch and would be delayed if the full Launch were delayed. · Input from OC Transpo team (review and acceptance must be timely). · Implementation of OC Transpo smartcard system and STO reader upgrade must be integrated. |
Council’s approval is being sought in November 2007. Proposals are being offered by MTO staff to enable work to be initiated prior to Government’s approval. Accenture staff has indicated the timetable for full project Launch is realistic and achievable. OC Transpo will dedicate a project team knowledgeable in OC Transpo’s operating procedures and readily accessible to the GTFAS team. A memorandum of understanding will be developed to ensure timelines are integrated. OC Transpo project team will work closely with STO to monitor activities. If STO delays occur, efforts will be made to mitigate the schedule impact on OC Transpo. |
Financial |
· Central back office financial functions bring with them significant responsibility and liability. · Ability to set fees and commissions would be limited by membership in larger organization. · Cost overruns less likely because of the detailed agreement under which work is being done for the GTAFS. |
Becoming a partner in the GTAFS moves this responsibility and liability from the City to Ottawa to MTO. Fares would continue to be set by Council. Negotiations are underway to ensure that the fees and commissions will reflect our goal to promote payment methods that minimize banking and credit card overheads. Dedicated project management will be supplied by the City to ensure we keep the project on track and do not add additional requirements in the course of implementation. Contract is fixed price for 10 years. |
Category |
Risk |
Mitigation |
Operational |
· Problems with on-bus equipment. · Smartcard system is highly dependant on Information Technology resources. · Problems with back-office, web site and customer service functions. · Issues with vendor network. · Roll out of smartcards will result in extremely high demand for new photo IDs. · Coordination of work that must be done by the City with that of GTAFS project staff. |
GTAFS Project team and Accenture suppliers have had experience in previous deployments and will have resolved any GTFAS specific problems before Ottawa implementation. City of Ottawa ITS branch will dedicate a Project Manager to this project for the duration of the implementation. Early adopters of the system in the GTA will have resolved problems in these areas before Ottawa goes live enabling faster, more customer friendly rollout. Business Development staff will work closely with the GTAFS team to ensure a smooth transition of responsibility. Phased roll out approach, with Ecopass and student cardholders first, will help assist smooth transition. The GTFAS intends to set up a parallel project team with a focus on the Ottawa project. Ottawa will dedicate a knowledgeable Project Director to the project. |
Political |
· Government approval for the MTO funding is required and must wait until early 2008. · STO must secure funding to upgrade their readers and coordinate the upgrade with the project schedule. |
MTO will fund initial phase if the expected approval is not given. STO has obtained STO Commission’s approval and will work closely with Transit Services staff to ensure funding. |
Category |
Risk |
Mitigation |
Governance |
· Ottawa will one of nine or ten voices on the GTFAS Executive committee. |
We are negotiating the major issues we expect to have an impact on Ottawa in the coming years. We are encouraged by the cooperative attitude of the other transit systems represented on the project. Ottawa would have an equal voice in all decision making. |
Technical |
· Is the GTAFS project tied to specific suppliers/vendors? · GTAFS project potential to support future partnerships (i.e. City smartcard). · Coordination with Telecom Ottawa. |
The use of open standards enables multiple vendors to supply equipment, which is compatible with these standards. The GTAFS has been designed from the outset to be scalable and expandable to include other payment services such as parking. OC Transpo IT Project Manager will act as the direct contact with Telecom Ottawa and establish a plan that links to the GTAFS office. Monitoring will be done in terms of Telecom Ottawa project management approach and a joint governance arrangement established. |
Expansion |
· Ottawa must ensure that opportunities to expand the smartcard system to other City functions or into partnership with private firms are not precluded. |
GTAFS is aware of this need and will ensure that decisions are made with this goal in mind. The system uses open technology standards and is capable of expansion. Other members of the GTAFS have the same objective. |
Branding |
· Retaining the ability to use the card for a specific Ottawa brand, or to generate revenue through advertising partnerships should be retained. |
The GTAFS has adopted the name ‘Presto’ and the proposal is for Ottawa to use this name too. The card has been distinctively branded to emphasize interoperability across transit systems and other payment opportunities in Ontario. It has been agreed that Ottawa may propose a design for the card to suit local circumstances, providing the ‘Presto’ name co-exists. |
SMARTCARD FARE SYSTEM
SYSTÈME D’ENCAISSEMENT DES TARIFS PAR CARTE À PUCE
ACS2007-PTE-TRA-0010 CITY-WIDE/A L’ÉCHELLE DE LA VILLE
Alain Mercier, Director of Transit Services, Planning,
Transit and the Environment (PTE) provided a PowerPoint
presentation, a copy of which is held on file with the City Clerk. He was accompanied and assisted by the following
personnel:
· Joel Koffman,
Program Manager, Scheduling and Analysis, PTE;
· David Smith,
Ministry of Transportation of Ontario; and
· Michael Wilson,
Accenture, Greater Toronto Area Fare System (GTAFS) Program Manager.
The
Committee then heard from the following delegation:
Catherine
Gardner was pleased to see that Para Transpo was listed with the smartcards,
but she wished to receive some clarifications.
She pointed out that at present, users of Para Transpo who have a
Community Pass have to top up, and she noted that according to this report,
there would be no tickets, only cash fare, in lieu of the smartcard. She wondered if users of the Community Pass
would have to top at $3.00, which would be a lot more expensive. She also questioned whether the Community Pass
program would still continue and be recognized by the smartcard. She also wondered how this would work with
respect to the taxis that work in conjunction with Para Transpo. She noted that able-bodied persons are able
to use an OC Transpo transfer to board STO buses, but STO buses are not
accessible right now so Para Users could take Para Transpo to go over but
cannot use STO services once there. She
wondered if there would be any changes in that regard with the new system.
In
response to Ms. Gardner’s questions, staff commented that any change in fare
structure is a policy decision and is not part of the scope of the
program. There are some mechanics in
terms of the Para Transpo integration, but the intent would not be to change
the fare policies. Those types of
issues would be considered by Committee in future, should there be a need to do
so.
Responding
to questions from Councillor Legendre, Mr. Mercier and the accompanying
personnel provided the following clarifications:
· The KPMG report
of 2005 was referenced in the report to Transportation Committee in September
2006 (ACS2006-PWS-TRN-0004) with respect to smartcards. It was referenced as ‘held on file with the
City Clerk’s Office’)
· Staff had
discussions with the GTAFS prior to 2006 but they were not comprehensive
because the details of their system were not really known until they actually
signed a contract with Accenture. Staff
also had to develop the detailed user requirements so they could do a gap analysis
to see where the differences were, and the timing just played out after they
signed their contract in October 2006.
· Should STO not
receive the funding they need from the Province for the integration of their
system with OC Transpo, which is unlikely, it will not hamper the development
of the system here. In such an event,
staff would have to weigh the risks of an integration investment for OC Transpo
to be able to read both cards because the system would not be able to read
STO’s first generation cards and be integrated unless STO does an upgrade.
· The technology
being considered here would be able to comprehend such things as fare by
distance, by time of day, or other options.
York Region uses a zone system.
Go Transit also uses a zone system but is going to an absolute distance
based system in the future and would be using a GPS System on their buses to
measure distance.
· Not only would
the system have the option to measure true fare by distance, it could be
architected to provide rebate for not using the maximum distance, similar to
the current co-fare system in Toronto, which works between a municipal transit
and Go Transit.
· Cost is a factor
for OC Transpo and STO not accepting each other’s paper tickets.
Responding
to questions from Councillor Bloess, Mr. Mercier and the accompanying personnel
provided the following clarifications:
· The reason that
the cost has gone from the $15 Million original estimate
to the $22 Million now estimated is because although internal budgeting estimates originally amounted to approximately $15
million, there are also internal costs associated with the final system design,
as well as some functionality differences and features that will incur
additional costs, such as integrating Para Transpo. There is a bit of scope differential. With the GTAFS, the City is not taking the risk on the back
office, and that development cost for OC Transpo is part of why their cost is
higher. These technologies are changing
quite a bit but the increased investment by the GTAFS would be offset by the
City’s risks of operating costs downstream in terms of the back office because
now the City will have a fixed operating cost for ten years essentially and no
risks. The City is essentially paying
the GTAFS program to actually develop that back office, including other system
impacts that are not related that normally would have incurred finance costs,
IT costs and so on in the City’s operating budget.
· Staff have not
yet worked through the details of integration with the taxi industry. It would require a substantial review in
terms of the desire of the taxi industry to move in that direction and how it
would be done in the context of this type of program. From a priority perspective, the fact that the card could be
expanded into a payment methodology for the taxi industry is within the
technical capabilities of the system.
The question will then be whether to engage with the industry to go
through that review process with them and whether they want to sign on board
downstream, but the other steps need to be in place before that is considered.
In
reply to queries from Councillor Wilkinson, staff emanated the following
clarifications:
· Costs have
significantly escalated in this report compared to the previous KPMG study
because there are some important scope changes in this report. Many of the previous studies were the
cursory reviews of these technologies to do something simple on a basic design
pattern, but the report before committee today includes the full analysis of
how to integrate a smartcard into the City’s current business model. The integration with Para Transpo was never
looked at in the past, nor was integration with STO. The other element is that to create an opportunity for long-term
development of a card, whether for taxis, libraries, etcetera, staff had to
ensure a level of modern standard of inter-operability. It is a very robust design as opposed to
doing something in-house that would have served only basic purposes and then
would have had to expand over time.
· Smartcards will
contain the photo identification feature and they would have the capability to
be exchangeable or not, dependant upon the City’s policy. In other words, there could be small,
single-use transportable cards. Photo
ID is necessary to protect fare revenues.
· If a person puts
money into the E-purse, the smartcard could then be used at any participating
transit system within the GTAFS.
· It is anticipated
that most of the GTAFS governance meetings, in which City staff will
participate, will not incur any travel costs, as they will likely be carried out
via teleconference or through email.
· Staff have been
approached by a number of other businesses in the transportation field,
including rail and bus, about the possibility of using the card for other
transportation applications to make it easier for travelers to move within
Ontario, and that can be done but the first focus is to get it in transit, get
it in municipalities, and get it operational before proceeding further.
· The net costs of
the project will be covered by the amount ($15 Million) already authorized by
the City, minus any federal subsidies that are successfully negotiated.
Responding
to further questions from Councillor Legendre, staff provided the following
explanations:
· A person could
have a smartcard that is personalized for a monthly pass, but s/he could also
have stored cash value on that card, which could be used to pay the fare of
traveling companion, a child for example, by having the driver deduct the fare
from the stored cash on that card.
· The electronic
purse feature of the card would not be distinguishable from user to user, i.e.
it could be passed from one person to another to use, but because OC Transpo
has a pass-based system with various fare structures, it is necessary that the
card feature Photo ID is tied in to the person using it as a monthly pass in
order to avoid fare fraud.
· The term ‘purse’
is a recognized industry term.
The Committee then considered the following report
recommendation as presented:
1. That the Transit Committee recommend that Council approve
Transit Services joining the Greater Toronto Area Fare System (GTAFS) project
with a view to full implementation of the Presto smartcard system in Ottawa by
2010 subject to the following conditions having been met by April 1, 2008:
·
Provincial Cabinet approval of the proposal presented to OC Transpo by
Ministry of Transportation staff as described in this report;
·
Successful negotiation of central system fees to enable OC Transpo to
reduce overall commission to approximately one percent;
·
The STO Commission reaching a funding agreement to proceed with a
technology upgrade; and
·
Signing of the GTAFS Procurement Governance Agreement, the GTAFS
Operating Agreement and the GTA Funding Agreement.
2.
That the Transit Committee recommend to Council the delegation of
authority to the Director of Transit Services to act on behalf of the City to
approve and execute the GTAFS partnership agreements.
3.
That the Transit Committee recommend Council approval of these
recommendations be contingent on approval in the 2008 Capital Budget of an
increase in project authority from $15 million to $21.200 million, recognizing
that the actual cost to the City will be $15 million (or less) as a result of
Provincial funding and the potential for Federal funding, as a result of the
ability to integrate STO operations.
CARRIED
Councillor R. Bloess dissented.