Transit's increasing self-reliance documented in recent study

Transit systems throughout the country are struggling with the burdens of decreased federal operating assistance and increasing costs caused by legislative mandates such as the Americans with Disabilities Act (ADA) and drug testing. A survey conducted by APTA in 1996 revealed that over half of all transit agencies in the United States had either raised fares or cut service to balance their budgets. Such actions, however, are clearly not customer friendly and usually result in decreased ridership.

Since transit systems can no longer rely as heavily on the federal government for financial assistance, they must find ways within their own capabilities to avoid passing increased costs on to their customers. As Susan Hafner, Vice President of the APTA Bus Operations Committee, asked: "What I want to know is, what are transit systems doing to make new revenue or save money?"

CUTR anticipated the need to provide this information to transit systems by surveying all transit agencies in the United States during 1996. Each system was asked to provide a brief description of five techniques they have used to generate new revenue or reduce costs without harming the best interests of their passengers. A total of 75 transit agencies responded to the survey, offering 325 money-making or saving methods. There were clear patterns or themes that emerged among the various methods.

"By understanding the basic themes behind these techniques, transit leaders can more effectively encourage their managers to recognize similar opportunities in their own systems," notes Joel Volinski, project manager and author of the final report. The common themes among successful techniques are as follows.

Positive Opportunism

Transit agencies are taking advantage of their unique assets, which may have value to others and can become profit centers. Illustrated buses and shelters with advertising are well known, but there are many other ways transit systems take advantage of their assets.

For example, Ben Franklin Transit in Richland, Washington, has gained designation as a Ford Authorized Warranty Center based on its maintenance facilities and skilled mechanics. This allows the agency to make a profit on all repairs made to itsvans based on negotiated hourly rates with Ford. Repairs are completed much more quickly, resulting in less downtime for the fleet. Ford also pays 20 percent above each part’s cost as administrative fees and provides free training to the transit agency’s mechanics.

Partnerships

Transit agencies have expanded their list of partners far beyond the state and federal governments. By partnering with private entities and other public agencies, transit agencies have leveraged their limited funds by attracting non-traditional sources of support that pay, partially or fully, for new service or facilities where they would not otherwise be feasible.

One of many examples was provided by the Indianapolis Public Transportation Corporation. The agency was approached by 20 area employers who pooled their resources and paid 70 percent of the expense of providing open-door, late-evening, and weekend bus services to address an employee shortage problem caused by the lack of transportation for workers in fast-food restaurants, movie theaters, hotels, etc.

Cooperation

Through cooperating with other agencies or groups, transit systems can reduce their costs for current activities. A good example was provided by the Miami Valley Regional Transit Authority in Dayton, Ohio, which led efforts to organize a self-insurance pool for mid-sized and smaller transit authorities in Ohio. Prompted by an inability to obtain reasonably-priced transit liability coverage, the authority worked with legal counsel, the director of a municipal pool, and 14 city members. This saved MVRTA $100,000 annually while providing much better coverage.

Service Planning or Delivery Methods

Transit systems are becoming more disciplined and creative in the traditional methods of providing service and are finding new and more cost effective ways to serve the traveling public. The Orange County (California) Transportation Authority used a private consultant to review its bus routes and ridership and accepted new policies that recognized it could not be "everything to everybody." Following a restructuring of service around the concept of a three-tiered family of services, ridership has increased approximately 12 percent while operating expenses have been reduced by 5 percent.

Other transit agencies are improving their productivity through making radical changes to the way they provide service. For example, Kosciusko Area Bus Service in Warsaw, Indiana, changed from a fixed-route service to a point-deviation service. Ridership increased by 41 percent while total vehicle miles decreased by 24 percent.

Maximizing Capital Budgets

Strategic use of capital funds can reduce operating costs while increasing productivity. King County Metro in Seattle saves $500,000 annually due to its automated customer information service, which handles over 600,000 calls per year and eliminates the need for 17 telephone information staff positions.

Automated scheduling saves Milwaukee County Transit $900,000 annually in reduced operator costs. Palm Tran in West Palm Beach, Florida, is saving $800,000 per year after constructing an additional operating facility, which has allowed them to dramatically reduce deadhead mileage.

Improved Management of Resources

Transit agencies are improving their skills in questioning the status quo through modifying the management of their organization, resources, expenses, and processes. Improved management of energy demand has saved New Jersey Transit, Metra (Chicago), BART (Oakland), and the Maryland Transportation Authority between $500,000 and $2 million.

Another example of improved management of resources comes from Dallas, where DART has modified its management of annual and sick leave. Both leave categories are now lumped together into one category, "Paid Time Off" (PTO), where employees start at 17 total PTO days for the first five years and increase by three days for every five years, capping at 29 PTO days per year. In addition to buying out all accrued vacation at the end of the year, these steps will save the agency over $1 million annually.

In short, transit systems have made positive progress as they evolve from being dependent on federal funds to being more independent as well as interdependent with new partners.

As Joe Calabrese, manager of the Central New York Transit Authority said, "We had to make a number of difficult choices, but the general response from the media and business community was ‘It’s about time you stopped begging and started managing’."

Volinski adds the following: "What we are seeing is not inconsistent with the bigger political picture. The concept behind welfare reform is the concept of greater self-reliance and less government. Transit systems are being asked to be more creative and self-reliant as well." Fortunately, there are some good examples for other transit systems to learn from. The preliminary results of CUTR’s research were presented at the annual conference of APTA and the Florida Transit Association in 1996. The final report, entitled "Lessons Learned in Transit Efficiencies," will be widely distributed.

For further information, contact Joel Volinski at (813) 974-3120, or by email at volinski@cutr.usf.edu.

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