LG Los Gatos Policy Research
Project · Los Gatos transit · Full analysis

Los Gatos transit, by the numbers, and what to do about it.

VTA's Route 27 is already an economic boon to Los Gatos, returning $1.71 in economic benefits per $1 spent, based on 8 federally recognized benefit categories. Below is a full description of our findings and methodology.

This analysis is used as a springboard for testing different public transit solutions, both from the Town's research and our own. These solutions are discussed in our Route redesign section, and are projected to create meaningful changes in VTA's cost-effectiveness.

Reading note for transit-planning reviewers: every figure on this page, including the FTA Cost-Effectiveness Index ($/TSUB-hr) shown inside the “Cost Benefit Analysis” breakdown, describes the current network as it operates today, not the optimised network. The current CEI rating reflects today’s service pattern; the optimised redesign is evaluated on its own page.
Methodology corrections & federal-guidance updates applied

A few of the inputs to this analysis use updated values rather than the older defaults you sometimes see in transit reports. We list them here in the open:

Route Financials
What Route 27 costs to run versus the fares it brings in, compared against Highway 17 Express. Most US transit systems run a deficit by design, the public benefit is what justifies the gap.
NTD Peer Benchmarks
How VTA’s bus operating cost compares to other California transit agencies (per hour of service delivered).
How the CBA Works
For each year over 20 years, the model computes the economic value of benefits (right column) and compares them to the annual cost of running the transit service. The present economic value of future benefits and costs is then found via OMB-prescribed discount rates (2%, 3.5%, 7%). The Benefit-Cost Ratio (BCR) is PV Benefits ÷ PV Costs. BCR > 1.0 means the service creates more economic value than it costs.
Cost Benefit Analysis
What this network costs to run versus what it returns over the next 20 years. All future costs and benefits discounted to present value per federal standards. Click any card for the breakdown by benefit category and discount rate.
Reading these cards: BCR > 1.0 = benefits exceed costs. The 3.5% rate is OMB’s recommended rate for long-lived infrastructure. All costs are the study-area share of VTA route costs (not full system). Benefits use corrected SCC ($120/tCO₂) and include induced demand (8th category).
Benefit Category Reference
These are the eight ways transit creates economic value, each with a federally-defined methodology. Add them up over 20 years and compare to costs.
CATEGORY 1
Travel Time Savings
When a transit rider switches from driving, they save the productive value of reduced auto travel time. Because a rider can read, work, or rest on the bus, an hour spent on transit carries only 60% of the time-cost of an hour spent driving. In other words, the same minutes are "cheaper" on the bus, so the rider comes out ahead by switching. The dollar value of time (VOT) is split by trip purpose: personal trips = $17.80/hr, employer business trips = $31.90/hr (25% of LG ridership estimated as work trips via ACS).
USDOT BCA Guidance 2024, Table 4 • OMB Circular A-94
CATEGORY 2
Vehicle Operating Cost Savings
Every auto trip replaced by transit avoids the marginal cost of operating a private vehicle: fuel, oil, tires, and maintenance. At $0.68/mile (AAA 2024 CA average) and 7.5-mile average trip, each diverted ride saves ~$5.10 in vehicle costs. Across tens of thousands of annual boardings this accumulates rapidly.
AAA "Your Driving Costs" 2024 • FTA CBA Guidelines
CATEGORY 3
Crash Reduction
Fewer miles driven means fewer crashes. Using Santa Clara County crash rates (~120 crashes/100M VMT, SWITRS 5-year average) and FHWA KABCO severity weights, each avoided VMT reduces expected crash costs. Fatal crashes are valued at $12.8M (USDOT VSL 2024). Even rare reductions in serious injury rates produce large economic benefits.
FHWA crash cost tables (2022 update) • SWITRS Santa Clara County
CATEGORY 4
Emission Reduction
Avoided auto VMT reduces CO₂, NOx, and PM2.5 emissions. CO₂ is valued at $120/metric ton per EPA 2022 regulatory guidance (3% rate). Criteria pollutant health damage valued via EPA BenMAP-CE.
EPA SC-CO₂ Comprehensive Update 2022 • EPA MOVES3.1 • BenMAP-CE
CATEGORY 5
Health Benefits (Active Transport)
Transit riders walk an average of 12 minutes per trip to and from stops (WHO HEAT default). This physical activity reduces mortality risk and healthcare costs at $0.16 per walking minute (CDC valuation of avoided sedentary-related costs). For a system with ~264K annual boardings this represents ~790K walking-hours per year of health benefit.
WHO HEAT v5.2 • CDC Physical Activity Economics 2023
CATEGORY 6
Reliability Benefits
Transit schedules are more predictable than driving on SR-17 and SR-85, where congestion variability can add 10-25% to travel time. Travelers value reliability at 80% of mean travel time savings (USDOT guidance). Observed schedule data shows average deviation of +2.2 minutes at LGHS stops, confirming real variability in this corridor.
USDOT BCA Guidance 2024, Section 5.3 • PeMS SR-17 observed data
CATEGORY 7
Option Value
Even non-riders benefit from transit availability. When a car breaks down, gas prices spike, or someone loses driving ability, transit provides a backup. This option value is estimated at $20-$40 per capita per year (mid-range of stated-preference studies). With ~68,000 residents in the service area, this is a significant base benefit that does not depend on ridership levels.
TCRP Report 78, Section 4.5 • Boardman et al. Ch. 6
CATEGORY 8, NEW
Induced Demand (Accessibility)
Not all transit riders would otherwise drive. An estimated 20% of riders are induced, they make trips that simply would not occur without transit: seniors without licenses, teens, zero-car households, and people making trips that aren't worth the parking cost. Their economic benefit is valued at 50% of the equivalent auto trip cost (consumer surplus triangle). This category is absent from analyses that assume all ridership is auto diversion.
TCRP Report 95, Ch. 1 • Boardman et al. Ch. 5 (demand curve CS triangle)
What is NOT counted here (conservative scope): Property value uplift near stops (+2% within 0.5mi, Optimistic scenario only) • Wider agglomeration/labor market effects • CEQA/environmental compliance value • Tax revenue impacts • School access value (Moderate/Optimistic scenarios only)

Glossary

Every acronym and key concept used in this analysis, with sources. Underlined terms in the page text show a definition on hover. Click any term to jump here.