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Lessons Learned in Transit Efficiencies, Revenue Generation, and Cost Reductions Presented by: Joel Volinski, Director, National Center for Transit Research, University of South Florida Over the years, transit systems have responded to budget challenges by becoming more diligent and creative in developing ways to generate non-traditional revenues and to reduce costs without raising fares or cutting service. Mr. Volinski will discuss a project, first reported on in 1996, whose objective was to collect innovative ideas from transit agencies throughout the country. The ideas collected were then synthesized and redistributed to transit agencies throughout the nation, allowing all agencies to have the potential to replicate successful techniques. Mr. Volinski will also provide a sampling of the 200 successful ideas that have been put in place in dozens of transit agencies across the country.
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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
813.974.9847
