lessons learned in transit efficiencies, revenue generation, and cost reductions

MANAGING DURING HARD TIMES – LESSONS LEARNED IN TRANSIT

EFFICIENCIES AND REVENUE GENERATION

MANAGING DURING HARD TIMES – LESSONS LEARNED IN TRANSIT

EFFICIENCIES AND REVENUE GENERATION

Joel Volinski, Director

National Center for Transit ResearchUniversity of South Florida

Study Objective

Identify cost saving and revenue generation techniques that produce the least harm to passengers

Share the information gained with the entire transit industry

“People seldom improve when they have no other mode but themselves to copy after.”

Methodology

Direct emails sent to 600 managers using APTA’s electronic directory

Follow up phone calls and emails

Literature/Internet Research

Results of Surveys

Responses received from 94 agencies

Over 200 techniques were reported

Some were significant, and others minor, but all are evidence of systems trying to do their best.

Painful Recession-Driven Choices Layoffs Hiring Freezes Wage Freezes Furloughs Elimination of Vacancies Reduced training and professional

development Deferred Maintenance/Reduced Capital

Impacts to Customers and Personnel 84% of agencies reported they are

considering raising fares or cutting service 59% already had done so by April 2010 70% predict budget shortfalls for FY2011 CTA and NYCT laying off over 1,000

employees each MARTA planning for a 25% cut in service

Managing Resources is Critical

Creativity/desperation is still alive and well.

The structural problem is huge, but agencies can still help themselves.

These techniques might not bridge the budget gap, but they demonstrate the agency is doing all it can with what it has.

Customer Suggestions on How to Bring in New Revenue

Put snowplows and salt spreaders on buses for snow removal and charge the city

Allow furniture companies to demonstrate their wares inside transit stations

For a fee and after a little training, let people experience what it is like to drive a bus

Reserve a train car for singles who want to mingle sponsored by match.com

Marketing and Advertising

New York, Chicago, and Santa Monica are exploring digital LED advertising on the sides of buses.

Marketing and Advertising

Phoenix/Denver now wrap light rail trains and expect $350,000 /$1.1M in revenue annually

Marketing and Advertising

Star Metro is buying its own vinyl wrap printer for $30,000 and will print their own ads and produce wraps and banners for others

Audio Advertising on Buses

Dayton, Champaign-Urbana, TARTA, and KCATA now have audio ads timed to promote businesses along routes

Partnership of Continental radio/GPS system and Commuter Advertising developed on-board messaging

KCATA gets 40% of revenue, expects $60,000 in the first year (no start up costs)

Agency announcements have priority

Marketing and Advertising

Metro in Minneapolis has sold the naming rights for its rail station (Target)

NYCT gives exclusive rights to advertisers at stations (station domination)

Cleveland sold the naming rights to BRT

Purchasing/Procurement NJT purchases all fuel for its

contracted services to lower cost and avoid tax saving $250,000.

Red Rose Transit reduced banking services by $25,000 by seeking bids.

Tri-Met reduced printed schedule costs by $30,000 by printing only when needed.

UTA contracted out for cleaning services to save $200,000.

Purchasing/Procurement (continued)

88 vendors voluntarily participate in an SFRTA Deficit Reduction Plan. 88 vendors have reduced their prices between 3 and 10% resulting in $3 million in savings per year (CTA saves $2 million)

NCTD purchased 28’ Star Tran buses saving fuel costs and capital dollars.

Revenues/Savings from Facilities

Lynx and CTA leased empty office space in their facilities to earn $155K and $1 million.

Long Beach Transit has audited their electric, water, and waste procedures and cut costs by 15%.

TARC reported cost reductions of 55% in HVAC of their bus garage.

More Revenue from Facilities Rockford Mass Transit built a body

shop and reduced cost of body work by 50% through lower hourly cost and no mark up on parts.

Red Rose Transit earns $20,000 a year from leasing its radio tower to cell phone companies

MBTA will earn $1 million a year from billboards they will have erected on their properties.

Controlling Health Care Costs Chittendon County switched from a

premium based co-pay to a high deductible plan saving hundreds of thousands

Akron Metro outsourced FMLA management and had a 15% drop in FMLA usage

Controlling Health Care Costs

Stark Area Regional Transit instituted FSA savings plans for pre-tax payment of health care costs and established a self-insured layer to hospitalization care, saved $350,000 a year.

BART provides a medical opt-out for those with access to other insurance.

AC Transit hired a consultant to monitor workers comp and review medical billing and saved $930,000; KAT had WC agent speak to operators to show impact.

Better Management Processes

GCRTA established “Transit Stat” for data driven management decisions based on team review of performance to save $15 M over two years.

MDT used the Six Sigma process to reduce warranty cycle time from 96 days to 55 days and reduce percentage of buses down due to parts from 10% to 2.6%.

MARTA’s improved attendance analysis saves the agency $4M.

Greater Use of Partners

Rochester-Genesee’s Business Development Program works with education, non-profit, and private companies to subsidize service.

Video

Greater Use of Partners

Monterey TD partners with local military installations that use the Federal Transportation Incentive Program-Mass Transit Benefit to pay for 11 new routes and earn $2 million (10% of total revenue and 16% of total boardings.

Nashville’s Easy Ride program works with colleges and State and County offices to subsidize transit for their employees.

VRT performs vehicle emission inspection services for State DMV for $28 per test

VRT earns fees for administering DMV vehicle registration (3% for first $500K, 5% for everything above)

Savings in Operations

SW Transit in Minneapolis reached an agreement to park their express buses at fairgrounds on the edge of downtown to save $100K.

NCTD contracted out the operations of their entire bus system and avoided a 25% service reduction at same cost.

Savings in Operations

San Joaquin replaced fixed route and paratransit services with route deviation to reduce costs per trip from $50 to $19

SARTA saves $200K by reduced idling

MUNI can save $3M consolidating stops

Savings in Paratransit

TARC uses Yellow Cabs to fill in only when needed to carry paratransit trips, saving $300,000 through reduced trip costs, better fuel mileage, and smaller fleet

CCCTA’s Community Connection program provides vans to non-profits who provide ADA-eligible trips saving $350,000, reducing trip costs from $26 to $.79 and adding 4.6% more trips at no extra cost

Savings from Better Planning Rochester Genesee’s formalized route

productivity evaluation program has saved millions

LAMTA route restructuring eliminated 145,000 hours of duplicative or non-productive service

MDT utilized data from automated fare collection system that saved $12 million with little effect on ridership

Technology

Server virtualization allows Omnitrans to consolidate servers from 75 to 57 and eventually to 12 to save $100K on replacement; web-based data warehouse consolidates various applications saving $400K and lots of time.

RTD is using “thin clients” rather than PCs (eliminating hard drives) saving all information to main servers. This reduces set up and maintenance time, uses .10% of energy, lasts three times longer and is 90% recyclable.

Technology in Facilities

Akron’s new transit center is LEEDS certified and will achieve ROI in less than ten years through solar panels and geothermal wells.

Other Techniques

Boca Raton has developers and businesses make one-time or annual “voluntary contributions” based on square footage and/or traffic impacts

Miami-Dade’s Managed Lanes are working as intended and bringing in sufficient revenue to fund transit services in the corridor.

EMP Engine Cooling System

Replacing hydraulically-driven cooling fans with 8 smaller electric fans saves 700 gallons of diesel a year - payback is 3 to 5 years

Other Maintenance Techniques

Rebuilding friction plates in Voith transmissions rather than buying new saved Tri-Met $250,000

Indygo reduced overtime in their maintenance shop from 20% to 9% with an Ellipse planning and scheduling package saving $500,000

Low-Tech Grounds Maintenance

CONTACT

Joel Volinski, DirectorNational Center for Transit Research

University of South Florida

volinski@cutr.usf.edu

813.974.9847