Santa Monica TDM Ordinance

Background

The City of Santa Monica has a complex and comprehensive TDM ordinance, which combines several different strategies. One of the most unique elements of Santa Monica’s program is the annual fee charged to employers, which is discounted based on an employer’s participation in the program. While many other cities have a fee, few are as significant as Santa Monica.

Policies

Any employer in Santa Monica with over 10 employees is required to pay an annual fee per employee. Small businesses with less than 50 employees are charged $16.83 per employee; employers with over 50 employees are charged $13.25 per employee. The result is a substantial operating budget for the City of Santa Monica of over $400,000 annually which currently funds two full time staff members. The City has a $1.5 million dollar surplus and plans to hire two additional staff people and use these funds to pay for trip reduction techniques, such as transit and vanpool subsidies.

Employers have the opportunity to reduce the fee if they achieve their established trip reduction goal; a 40% credit is given for year one, 50% for year two and 60% for years thereafter. In addition, employers who are members of a Transportation Management Association (TMA) automatically get a 25% discount on the fee.

Employers must survey annually to determine the Average Vehicle Ridership (AVR) number for their worksite. The survey is supplied by the city and asks employees to indicate how they arrive at work each day for a one week period. A 75% response rate is required. All employers are expected to achieve an AVR of 1.5 or better, although there is no penalty for not meeting the goal. Non-residential projects must strive to achieve a minimum AVR of 1.5-2.2 depending on the project’s location, land use, and distance to a light rail station for trips that occur between 6:00 a.m. and 9:00 a.m. Monday to Friday. The highest AVR targets are in Santa Monica’s Downtown core (AVR target of 2.2) and near light rail stations (AVR target of 2.0). In addition to its fee structure and survey requirements, Santa Monica also has an extensive list of required TDM measures.

The Trip Reduction Plan (TRP) is broken into three categories; within each category employers must select a minimum of five elements, some of which are required. The first category covers marketing programs, such as Transportation Network Company bulletin boards and new employee orientation, and is completed by all employers regardless of size. The second and third categories are only required for employers with more than 50 employees. The second category is basic support strategies which are more policy based TDM measures and requires employers to provide a guaranteed ride home program. The third category of the TRP is direct strategies which are subsidy based. Within this category, employers are required to provide a parking cash out program. The parking cash out program encourages mode shift by offering employees either a choice of the parking space or the cash value of the parking space as a benefit for not driving alone to work.

The comprehensiveness and checks and balances built into the reporting are extensive. For example, an employer who chooses to provide prize incentives to their employees as one of its direct strategies must provide a minimum of $800 in prizes and list the prizes given. The TRP paperwork is 46 pages in length. Of the 758 employees who are subject to the ordinance, about 20% use consultant services to complete their TRP.

Outcomes

At present the average citywide AVR is 1.68. Seventy seven employers met the AVR goal in 2013. Forty three employers have met their goals for three years in a row. The city is currently reviewing proposed changes to the trip ordinance which would add significant TDM requirements for developers over 7,500 square feet or 16 residential units or more, and increase the AVR requirement for employers and developers from 1.6 to 2.2 based on the proximity to transit.

Annual compliance reports are required to confirm TDM measures are in place and to monitor progress toward achieving trip reduction goals. Non-residential developments are subject to annual employee travel survey. Residential projects are subject to annual compliance visits.

After seeing success from its TDM ordinance, the City launched other groundbreaking efforts to examine resident wellbeing and establish a carbon neutrality plan. It became apparent that enhanced mobility and progress towards the City’s TDM goals were directly related to its ability to achieve those new community priorities. 

Lessons Learned

When it’s offered, parking cash-out is the single most effective TDM measure that can be provided by an employer. This is the case because it is flexible and supports all of the non-SOV options, not just a specific mode. However, Santa Monica struggles with applicability of parking cash-out within the city because many employers occupy buildings where parking is part of the overall lease agreement and the employer is unable to decrease the number of parking spaces that they lease. Generally, parking cash-out programs are only feasible if the employer has an option to save money by reducing the number of leased parking spaces.

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