Lessons Learned in Transit Efficiencies, Revenue Generation, and Cost Reductions


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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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Lessons Learned in Transit Efficiencies, Revenue Generation, and Cost Reductions

  1. 1. MANAGING DURING HARD TIMES – LESSONS LEARNED IN TRANSIT EFFICIENCIES AND REVENUE GENERATION Joel Volinski, Director National Center for Transit Research University of South Florida
  2. 2. 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.”
  3. 3. Methodology Direct emails sent to 600 managers using APTA’s electronic directory Follow up phone calls and emails Literature/Internet Research
  4. 4. 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.
  5. 5. Painful Recession-DrivenChoices Layoffs Hiring Freezes Wage Freezes Furloughs Elimination of Vacancies Reduced training and professional development Deferred Maintenance/Reduced Capital
  6. 6. Impacts to Customers andPersonnel 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
  7. 7. 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.
  8. 8. Customer Suggestions on How toBring 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
  9. 9. Marketing and Advertising New York, Chicago, and Santa Monica are exploring digital LED advertising on the sides of buses.
  10. 10. Marketing and Advertising Phoenix/Denver now wrap light rail trains and expect $350,000 /$1.1M in revenue annually
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 15. 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.
  16. 16. 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.
  17. 17. 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
  18. 18. 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
  19. 19. 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.
  20. 20. 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.
  21. 21. Greater Use of Partners Rochester-Genesee’s Business Development Program works with education, non-profit, and private companies to subsidize service.Video
  22. 22. 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.
  23. 23. VRT performs vehicle emissioninspection services for State DMVfor $28 per test
  24. 24. VRT earns fees for administering DMVvehicle registration (3% for first $500K, 5% foreverything above)
  25. 25. 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.
  26. 26. 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
  27. 27. 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
  28. 28. 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
  29. 29. 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.
  30. 30. 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.
  31. 31. 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.
  32. 32. 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
  33. 33. 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
  34. 34. Low-Tech Grounds Maintenance
  35. 35. Joel Volinski, DirectorNational Center for Transit ResearchUniversity of South Floridavolinski@cutr.usf.edu813.974.9847 CONTACT