AC Transit Cost Reductions Presentation to Board of Directors (September 1, 2010)

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On September 1, 2010, the AC Transit Board of Directors were presented with potential Cost Reduction Strategies by the District's staff. The Short-Term and Long-Term cost reduction strategies included cutting all but major weekend service, eliminating All-Nighter Services and eliminating all weekend service.

Additionally, it was proposed that AC Transit's ParaTransit Division (Division 8) be shuttered and contracted out.

Presentation: AC Transit

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AC Transit Cost Reductions Presentation to Board of Directors (September 1, 2010)

  1. 1. Further Cost Reductions Scenarios Further Cost Reductions Scenarios Board of Directors  Workshop September 1, 2010 September 1 2010 1
  2. 2. Workshop Purpose Workshop Purpose • Provide Updated Financial Information • Receive Board Direction on Short Term  (Immediate) Strategies (Immediate) Strategies • Receive Board Direction on Longer Term  Strategies 2
  3. 3. Current Conditions Current Conditions • Financial Realities:  – $56 Million Deficit for FY 2009/10 and 2010/11 • $9 Million – Administrative Reductions  • $15 Million – Anticipated Savings from ATU Agreement • $22 Million – Anticipated Savings from 2 Service Cuts 3
  4. 4. Current Conditions Current Conditions • Financial Realities:  – FY 2010/11 Budget Deficit Prior to                    August 8, 2010:  Balanced Budget – $17.6 Million Deficit through June 2011 • $15.7 Million – Delayed Savings from Labor Agreement • $1.9 Million – Delayed Savings from August 2010  Service Reductions Implementation – FY 2011/12 F FY 2011/12 Forecast Budget Deficit:  $11 Million t B d t D fi it $11 Milli – Continued Revenue Pressures and Uncertainties  4
  5. 5. FY 2010/11 Cost Reductions Scenarios FY 2010/11 Cost Reductions Scenarios • Short Term:  Need to Act Immediately – Service Reductions  • Represents the maximum that can be done at this point • Based on previously‐conducted public hearing • Longer Term:  6 Months to 2 Years g – Range of Alternatives – Will require additional  study/review 5
  6. 6. FY 2010/11 Cost Reductions Scenarios  – Short Term h • Service Reductions – Weekend Trunk and Major Corridor Only Network • Basic Level of Service to the District – Li Lines 1, 18, 20, 22, 40, 51A, 51B, 57, 60, 72, 72M, 73, 88, 97,  1 18 20 22 40 51A 51B 57 60 72 72M 73 88 97 99, 210 and 217 to operate • Ridership Impacts – ~1/3 of Weekend Ridership • Preliminary Title VI Review Shows Potential Impact  Areas: – North Richmond:  Solution, retain Line 76 – West Oakland:  Solution, retain Line 26 – East Oakland:  Solution, retain Line 45 6
  7. 7. FY 2010/11 Cost Reductions Scenarios  – Short Term h • Service Reductions – All Nighter Core Service Only • Operate 800 and 801 only – RM 2 Funded • Di Discontinue 802, 805, 840, and 851 – Di i F d d i 802 805 840 d 851 District Funded • Minimal actual ridership impact, but major to users • Closure of Division 8 (Paratransit) Closure of Division 8 (Paratransit) • AC Transit/BART Operate Consortium (69%/31%) • Redistribute hours to existing providers gp • No Patron Service Provision Impacts • What do these reductions translate to… 7
  8. 8. FY 2010/11 Cost Reductions Scenarios  – Short Term h Total Platform Hours Historical Trend Includes  Short Term Service Reductions for December 2010 Includes "Short Term" Service Reductions for December 2010 2400000 2320000 2300000 2252000 2230777 2198702 2200000 2110000 2073000 2088000 2124514 2080004 2073567 2100000 1981456 2000000 1965016 1927219 2011000 1956120 1974266 1900000 1947000 1979000 1920855 1808329 1968614 2043995 1790410 1800000 1755306 1782902 1700000 1629410 1600000 1500000 Winter 86‐87 87‐88 88‐89 89‐90 90‐91 91‐92 92‐93 93‐94 94‐95 95‐96 96‐97 97‐98 98‐99 99‐00 00‐01 01‐02 02‐03 03‐04 04‐05 06‐07 07‐08 08‐09 1* Fall 09‐10* 05‐06 10‐11* W 10‐11 0 8
  9. 9. FY 2010/11 Cost Reductions Scenarios  – Short Term h • Implementation Schedule – 9/22:  Board Consideration of Final Plan • To Include Preliminary Title VI Review – 10/27 or 11/10:  Final Title VI Compliance Review / / – 12/19:  Implementation • Board Questions or Comments? 9
  10. 10. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Some Depend on Arbitration Results Some Depend on Arbitration Results • Scenarios include: – S i C t ti O Service Contracting Opportunities – 12 M th t iti 12 Months  – Further Overhead Reductions – 6 to 12 Months – Operations Efficiencies – 12 Months – Further Service Cuts – 6 to 9 Months 10
  11. 11. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Fixed Route Service Contracting Opportunities – Transbay and Supplementary • Peak Only Services – relative higher cost than basic •DDepending on District costs reduced, could result in  di Di i d d ld l i anywhere from $5 to $15 Million in savings • Retains the service, no ridership impacts 11
  12. 12. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Further Overhead Reductions – Close Division 3 • Lowest service levels in 25 years – 1985 AM P k P ll 701 1985 AM Peak Pull = 701 – October 2010 Service AM Peak Pull = 471 • Facility closure is separate from service reductions • Estimated annual operating savings ‐ $2.8 Million  • Estimated annual costs due to route re‐alignment ‐ TBD • Estimated one‐time revenues for property sale ‐ Estimated one time revenues for property sale TBD • Estimated one‐time costs for route re‐alignment ‐ TBD 12
  13. 13. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Further Overhead Reductions – Contracting‐Out Strategies • As Mentioned in the GM Memo • Operations Department Efficiencies • As Mentioned in GM Memo • F Fare Increase I – Completed in connection with Fare Study – Projected Fare Increase in FY 2012/13 j d i / 13
  14. 14. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Additional Fixed Route Service Reductions – Reduced Hours of Operations on Weekends • Represents an extension of short term 50% reduction  of service of service • Reduce Trunk and Major Corridor lines based on  demonstrated ridership demand 14
  15. 15. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Additional Fixed Route Service Reductions – Complete Elimination of Weekend Service • Remaining lines under Short Term • Major Ridership Impacts M j Rid hi I • Not in keeping with an urban area • Offers flexibility in planning for reductions Offers flexibility in planning for reductions 15
  16. 16. FY 2010/11 Cost Reductions Scenarios  – Longer Term • Additional Fixed Route Service Reductions – Proportionate Reduction of Lines by Productivity • As Mentioned in the GM Memo – Elimination of Weekday Service Before 6am and  f f After 8pm • As Mentioned in the GM Memo As Mentioned in the GM Memo – Elimination of Transbay and Supplementary Svc • As Mentioned in the GM Memo • Contracting Service is a viable alternative to canceling 16
  17. 17. FY 2010/11 Cost Reductions Scenarios FY 2010/11 Cost Reductions Scenarios • Questions or Comments on Longer Term • Next Steps Next Steps – Board Direction on Implementation of Short Term  Strategy – Board Direction on Development of Longer Term  Strategies 17

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