We have written about the Pronto situation many times in recent months. For background, I suggest you read through those posts.
The Sustainability and Transportation Committee passed the Pronto buyout plan with Council a oversight amendment 4 (O’Brien, Sawant, Johnson, Juarez) – 2 (Burgess, Herbold).
In public comment, Puget Sound Bike Share President Ref Lindmark made a great point that has been largely absent from the Pronto debate so far: During outreach for the launch of Pronto, people in neighborhoods all over the city wanted bike share to reach them.
“Every neighborhood we went to said, ‘When can we have it?’” he said.
When one of the biggest complaints about the system from people who have tried to use it is that it doesn’t go enough places, that’s not a sign of failure. It’s a sign of success and demand. People want more.
There will be four amendments. Debate begins with an amendment by Councilmembers Tim Burgess and Lisa Herbold.
Burgess cited “optimism bias” to describe the buyout’s supporters. Ouch. Dude’s really earning that Cascade Bicycle Club endorsement.
He also cited SDOT’s use of Street Use Funds to bolster the system as a reason to approve his amendment, saying the Council should not ignore such an investment without Council approval.
Councilmember Herbold joined Burgess, saying it doesn’t make sense to buy a system if we don’t know we will be using this equipment in the expansion.
“It’s like buying a flip phone and paying off the flip phone company’s debt before buying a smart phone,” she said.
Pronto’s equipment is likely more advanced than people think. I had a chance to see behind the scenes, and it’s a pretty incredible system. It’s not a flip phone.
The Burgess/Herbold amendment failed 2–7. Councilmember Debora Juarez supported Burgess’s amendment in the committee, but has apparently changed her mind. This is great news.
Councilmember O’Brien’s amendment to push center city bike lanes before Pronto expansion (details below) passes 9-0.
Councilmember Lorena González proposed an amendment to make sure equity is a central piece of any bike share expansion.
She noted that bike share supporters focus on the equitable access elements, but “I have no seen any data or analysis that supports that claim,” she said.
Her amendment “sets up a bike share system that takes into account the multiple barriers to access.”
The González amendment passed 9-0.
A final O’Brien amendment clarifies that the Council wants oversight over the bidding process, specifically to address concerns about SDOT Director Scott Kubly’s perceived conflict of interest as former President of Alta Bicycle Share, which was later bought by Pronto operator Motivate after Kubly had already joined SDOT. This amendment passed 9-0.
Now, the main event: The final vote.
Councilmember Rob Johnson directly challenges Burgess’s assertion that the buyout is a product of “optimism bias.”
“I think Pronto is going to be a very successful system once we have the ability to expand,” he said.
Pronto passes 7-2. The sound of sphincters unclinching is deafening.
For background, below are the pro and con statements from Council staff:
Statement in favor of CB 118618
Councilmembers O’Brien, Johnson, Juarez, and Sawant
Most of Council is in agreement that bike share is essential to serve the transportation needs of Seattle’s residents and visitors. A robust bike share system has succeeded in many cities, including New York, Miami, San Francisco, Chicago, and Washington, D.C., to name a few. The question remains whether bike share should be a public or private system in Seattle.
Only one municipality has a completely private system – New York City – which is sustained through a massively larger population, high usage by tourists, and a distinctly concentrated network in the wealthier areas of the City. In contrast, a public system that incorporates community input will result in a more sustainable and equitable system for our city, and will complement our burgeoning public transportation network of bus and light rail. Bike-share and associated infrastructure should not be relegated to an attraction for cycle-inclined tourists; this is an investment to increase the transportation choices this city offers to residents.
At the end of the day, Seattle City Council will spend at least $1 million dollars no matter the decision: either we spend $1.4 million to acquire Pronto’s assets – and hold significant leverage on what an expansion of bike-share would encompass – or we let Pronto fail and repay a $1 million Federal Grant contingent upon Pronto’s active operations. $400,000 is certainly a worthy initial investment to ensure bike-share is a key component of our long-term transportation plans as a city and Pronto is already showing promise.
Preserving Pronto as it currently exists – rather than letting our current system fail and losing existing ridership, membership, and infrastructure – will allow the City greater leverage and flexibility in determining what the future system looks like. This leverage will allow for increased accountability and council stewardship through the forthcoming RFP process, which will help ensure a more cost effective system that serves a greater portion of Seattle residents.
With public support, bike share will expand, increase membership, and continue to be an integral piece of our transit system. Let’s make a modest investment that will go a long way towards meeting our goals as a city; one with equitable access to a healthy, environmentally friendly bike infrastructure that serves the transportation needs of residents desperate for options to get out of gridlock. All other modes of transportation have experienced similar growing pains. Now is the time for us to invest in sustainable transportation.
Statement opposed to CB 118618
Councilmembers Burgess and Herbold
In adopting the 2016 budget last November, the City Council reserved $5 million of transportation funds to support the expansion of the Pronto bike share service; however, the Council prohibited spending these funds until SDOT presented a business plan and a financial analysis of the long-term operations of the system.
Now, Council Bill 118618 proposes that the Council lift the restriction on $1.4 million of these funds so the City can acquire Pronto’s assets and take ownership of the system. By purchasing Pronto, the City will assume on-going financial responsibility for the system.
SDOT apparently first learned of Pronto’s financial problems in early 2015 as reflected in the City’s application for a federal Tiger grant. The Council should have been immediately informed of this material fact, but wasn’t.
In December 2015, after the Council had imposed the budget restriction the previous month, SDOT paid $305,000 to Pronto to sustain their operations, violating the spirit and the intent of the budget proviso.
SDOT argues that authorizing the expenditure of another $1.4 million, for a total of $1.7 million, would allow Pronto to continue its current level of service through the end of 2016. In addition to these funds, it is estimated by SDOT that future City investments could be as high as $4 million or more to expand the system to the desired number of stations.
While a bike sharing program has the potential to be an important, and desired, element of our transportation network, the current system is insolvent and lacks the ridership and revenue to be financially viable. In essence, the Council is being asked to invest in Pronto’s rescue from insolvency so a better and more financially viable service can be developed. Despite the passionate advocacy by some in favor of such a rescue, the risks of investing without a specific plan of action in hand or a clear understanding of the City’s financial exposure are exceedingly high. Such a rescue does not reflect the level of care the Council should exhibit as it exercises its fiduciary responsibilities to the taxpayers of Seattle.
The potential financial risk to the city is evident in the failure of the Pronto service to achieve its original ridership or revenue projections as illustrated in the following table.
Based on these facts, and because of the financial risk to the City, the Council should adopt Amendment #4 which would allow for repayment, if necessary, of the approximately $850,000 depreciated federal transportation grant while maintaining the proviso on the remaining funds, approximately $4 million, to support a future public-private partnership for bike sharing. This approach would substantially reduce financial risk and allow the City to develop a public-private partnership with the clear expectation that no City funding would be required for future operating revenue and that the public and private parties would appropriately share responsibility for capital expenses. This is a more prudent and wise course to follow.
If a public-private partnership has not been developed by the end of 2016 or the full amount is not needed, the remaining restricted funds should be used for high-priority pedestrian and bicycle infrastructure safety projects.
There are a couple new or adjusted amendments on the table for discussion.
Amendment 4 (PDF)
After amendments by Councilmembers Tim Burgess and Lisa Herbold both failed during the committee meeting, they have teamed up on a single amendment that would basically kill Pronto as it is, allowing the existing public/private partnership non-profit to default on its $1.4 million loan. The amendment would reserve up to $1 million to pay back grant funds the city won to buy stations (there’s still no mention of what happens to King County’s similar grant exposure for U District stations, though presumably they are on the hook to pay that back).
The revised amendment would only release the remaining funds for bike share if plans for a whole new public-private partnership are put together by the end of the year. at that point, the remaining funds would go to yet-unspecified walking and biking projects.
This legislation may have made sense ten months ago before SDOT started talks with Puget Sound Bike Share about taking the system over, but we don’t have a time machine. City negotiations essentially led PSBS to work on the transfer and then disband pending the buyout. For Burgess and Herbold to suggest now — after the city broke the existing pubic-private partnership — that they would support throwing away our existing system and starting from scratch makes no sense.
This amendment would likely kill bike share in Seattle.
Amendment 5 (PDF)
After hearing lots of arguments that bike share would work better if there were better infrastructure on the ground, Councilmember Mike O’Brien has proposed an amendment to require the city to complete five key projects before expanding the system:
a) Dexter Ave N Protected Bike Lane (Mercer St to Roy St)
b) Westlake Ave N Protected Bike Lane (W Raye St to Valley St)
c) 2nd Ave Protected Bike Lane (Yesler Way to S Washington St)
d) 9th Ave N Protected Bike Lane (Westlake Ave N to Denny Way)
e) 2nd Ave Protected Bike Lane (Pike St to Denny Way)
Amendment 6 (PDF)
This amendment by O’Brien basically just clarifies that Council must have oversight over the expansion and operator contract process.