Driving out of Poverty in Fuel Efficient Cars the Jump Start ™ Program and

1. Strengthening Rural Families: An Action-Learning Institute for Washington Horizons CommunitiesNovember 1 - 4, 2009 Driving out of Poverty in Fuel Efficient Cars the JumpStart™Program and

2. A little context….

3. With this mission: ….to take action against poverty by developing the social and economic assets of low-income families and their communities and by working to create a more just and sustainable society no less

4. With Programming in : • Housing Preservation • Housing Development • Homelessness Prevention • LMI Homebuyer Assistance • Regional Economic Development • Nutrition and Local Food • Low Income Transportation

5. We Serve Seven Rural WI Counties: • 5,200 square miles • No communities over 15,000 population • Two of WI wealthiest and fastest growing counties in Wisconsin • Great diversity of wealth and income – 4.7% to 12% county poverty rates before the recession

6. And this view of our future:

7. We must help our low-income households and our communities do three things: Dramatically reduce our consumption of fossil fuel and non-renewable resources. Build the capacity of our local and regional economies to meet our needs. Foster local communities based on mutual assistance and cooperation.

8. And the answer is ………..

9. 75%

10. the JumpStart™Program

11. the JumpStart™Program A program that helps TANF moms buy late model economy cars

12. 1997: West CAP Creates JumpStart - Work not Welfare Pilot - Talked to everybody - “Becky Gets to Work” - Otto Bremer Foundation - WETAP (TANF)

13. The Ten Requirements • Safety • Reliability • Flexibility • Manageability • Affordability • Consistent, predictable Expenses • Sustainability • Rural and Urban Applicability • Reasonable Public Cost • Environmental Responsibility

14. JumpStart meets ALL ten Requirements!

15. enter… West CAP’s nonprofit car dealership

16. Follow the Money • Car: 2-3 Year old econ (4 cyl) - 31,000 miles on odometer $9,975 Average Retail Price _______________________________________________________________________ • Base Program Price $8,479 (Incl. fees, transport, inspection, repairs) • Sales Taxes 466 • Registration98 = 564 • Total Price + taxes & reg. 9,043 • Participation Fee 400 (Major Repair Assurance) • Total Price to Client $9,443 • Less Downpayment(1,500)(Forgivable loan) Client Loan Amount $7,943 • Monthly Loan Payment 159 (5 years/7.75%) • Escrow Repair Fund 20 (Held in escrow) Monthly Payment $ 179

17. So………. What Happens if you meet all of the 10 Requirements for the “Beckys” of the world, (or of Wisconsin at least, and probably the rest of rural America)?

18. In three separate surveys, from 2001 to 2004, JumpStart customers reported significant (over 20%) to dramatic (over 80%) improvement in these areas:

19. - Increased income - Changed to better jobs - Moved to better housing - Went from renters to homeowners - Advanced their formal / technical education - Improved the quality of their child care - Improved overall financial security - Increased credit scores - Reductions in public assistance - Greater social and community involvement - Better overall quality of life

20. In fact, we found these significant to dramatic results in every area we measured. so We believe good, economical cars are a lynchpin connecting low-wage workers to other assets

21. Why Does JumpStart Work? • Born in the field • Carefully researched; lowest cost per mile for safe, reliable, affordable transportation • Holistic approach • Connects meaningfully to the whole life of the customer over time; meets all their transportation needs; exit strategy • The customer is an active, invested partner in the program and Loves the Car and has a powerful incentive to do what it takes to keep it • Works for everybody else too; funders, lenders, service providers, partners, sponsoring agency • Combination of flexibility and a commitment to success

22. Why Does JumpStart Work? • Major emphasis on the machine itself • Minimum EPA hwy rating of 32 mpg • Late model – low mileage • Vehicle models with proven reliability & good repair ratings • Thorough inspection and repair • Synthetic oil and transmission fluid • Maintenance training and ongoing maintenance required • Ideal Auto dealership services • A willingness to take managed risks

23. Lessons Learned • With precious few exceptions, working families in rural America must rely on cars for viable transportation • Owning a reliable, economical car can bring a host of other opportunities into reach for low-income families (a reality vastly under-appreciated in the social policy world)

24. Lessons Learned • The opportunity to own a good late model car can have a profound psychological impact on a low-income person and provide a powerful, immediate incentive for positive behavioral change • Careful selection, inspection and maintenance of a car can greatly impact the incidence of repair, the useful service life of the vehicle and its value as an asset - Lenders love to have their collateral guaranteed

25. If this is such a HOT idea…. why isn’t everybody doing it?

26. JumpStart™: Challenges • Stubborn existing paradigm meets counter-intuitive model • Almost all Federal funding of low-income transportations is for mass and group transit and specifically excludes car ownership • Math – “The Big Story Problem” = about 1 in 8 qualify • The Price of Gas; now Everyone wants “our” cars • 95% of Americans favor mass transit for others • Peak Oil

27. We Don’t Care, we Want to do it Anyway!

28. cool

29. JumpStart has been Replicated • Three were/are very successful • One was, er, mixed • Two flopped So we have learned a few things about replicating JumpStart

30. JumpStart Replication Option #1 • Identify an organization willing and able to set it up and run it – CAP Agency? • Find a funder, or funders • Set up a car dealership • Find a lender, or lenders • Do a lot of legal work around car ownership • Locate low-income customers who fit the program

31. JumpStart Replication Option #2 • Call Peter Kilde at 715-265-4271, ext, 328, Monday thru Friday generally after 9:00 am. -- since I am a night owl and more likely to work late than come in early.

32. A Few Reflections on The Rocky Road Ahead And West CAP’s Community Jitney Program

33. The catalyst…

34. The Automobile Problem • Economy car (32 mpg) drops Btu/mi to 2662 • Hybrids drop btu/mi to 1893 • Vanpools come in at 1294 Btu/mi • 1.3 million hybrids in a world with 800 million cars

35. ..and a Jitney Demonstration: Fuller Cars = Fewer Cars = Less Oil Needed • Driver only @25 mpg = 25 pmpg* • Driver plus one @25 mpg = 50 pmpg! • Driver plus two @ 25 mpg = 75 pmpg!! • Driver plus three @ 25 mpg = 100 pmpg!!! • Driver plus four @ 25 mpg = 125 pmpg!!!! * pmpg = People Miles Per Gallon

36. The “Smart Jitney” Option Intermediate solution that uses existing vehicles Jitney can be defined as a small bus or car that carries passengers. Also, as an informal “taxi.” Basically, a form of mass transit using cars and vans, not buses, that are not required to follow a fixed schedule A traditional system, but using technology to adapted to US today

37. “Smart Jitney” • Set up as formal system, with appropriate regulation • Utilize new technology to match riders with “jitney cars • Increase occupancy from 1.5 persons per trip to 4-6. • Minivan that gets 20 mpg with one passenger, gets 120 mpg with six passengers • Reduce cars, save gas, save money, provide enterprise

38. Community Wheels Co-op Ride Sharing Barron Somali Community Association purchased 2008 Dodge Grand Caravan through Ideal Auto Hired a part-time driver @$350/wk Workforce Development contracts to pay for shared rides for jobs and education. Weekend trips to Minneapolis: 160 miles - $25 per rider. Rich history going all the way back to June 1, 2009 Considering hybrid car purchase for expansion West CAP Option

39. Other ideas: The Tesla Roadster • 100% electric • 244 miles per charge • 0 – 60 in 3.9 seconds • $180,000 price tag may strain low income budgets • Worth a look anyway