RTA's GM Urges Support of Public Transportation to Prevent Future Cuts
RTA General Manager Joe Calabrese testified on Capitol Hill in December, reporting to the House Committee on Transportation and Infrastructure, the status of projects funded by the 2009 American Resource and Recovery Act (ARRA), and to request additional funding for public transportation authorities across the country.
Public transit systems across the nation have already created many jobs through shovel-ready infrastructure projects. At RTA, 113 contracts have been awarded on 16 projects valued at $53.2 million. RTA's major ARRA projects include construction of the Stephanie Tubbs Jones Transit Center and the rehabilitation of both the Puritas and E. 55th Street Red Line Rail Stations.
While the stimulus funds will produce long-term benefits, transit authorities across the country are facing immediate budget challenges. If transit systems had greater flexibility in the use of federal funds, service cuts could be avoided. In 1993, the federal government changed the way it supported public transportation. Today, in most instances, federal funds can only be used for capital projects and the purchase and maintenance of buses and trains, and cannot be used to cover expenses of daily transit service.
Calabrese asked for the reauthorization of the Transportation Bill at the highest level of investment possible, and to provide added flexibility to address the operating needs of transit systems across the nation. He also offered the ability of treating fuel as a capitalized expense as one possible solution in addressing budget shortfalls.
"Fuel costs have a big impact on transit systems both large and small," said Calabrese. "If we had the ability to cover a portion of this large expense with federal funds, we would be better able to close our funding gap."
RTA hopes additional funding can be forthcoming to help address a projected $17 million budget shortfall in 2010. Because the transit authority cannot end a year in a deficit, it has proposed a 12% service cut which will be implemented by the beginning of April 2010.
Transit funding in America needs to change in order to save jobs and preserve rail and bus service. In November, several organizations came together to champion this message. Policy Matters Ohio, a nonprofit research organization working to broaden the debate about economic policy, along with the American Public Transportation Association, and the Ohio Public Transit Association, are seeking a dedicated funding source for public transit systems in Ohio.
The recession has strained all levels of government. However, much of the needed dollars for transit already exist. On the federal level, funding guidelines could be changed allowing transit systems to use a portion of the dollars they receive for operations. In the State of Ohio, a portion of the money dedicated to roads and bridges could be dedicated to transit. Ohio's constitution, however, requires that all funds obtained in the Motor Fuel Tax be used for highway/road construction. If just a small portion of these funds were made available to transit authorities, cuts could be avoided.
Citizens who believe it's time to change transit funding should go to www.fundohiotransitnow.org. At this site, you can send a message to your federal and state representatives. Petitions are also being circulated throughout the state. To date, thousands of signatures have been captured. To receive a petition form for your organization contact Beth Castelucci in RTA's Marketing Department at 216.566.5220 or firstname.lastname@example.org.
RTA has made sustainability a priority. At the transit authority's main office, everything that can be recycled is, from paper, batteries, and plastic. There are also friendly reminders to turn lights off when you leave, and recycled paper centerpieces encouraging employees to think sustainability at work.
Now, thanks to a $2.26 million grant from the Federal Transit Administration, RTA will be able to retrofit its major facilities to be more energy efficient. RTA was one of 43 transit systems to share $100 million provided through Economic Recovery Act funding. The goal is to support agencies pursuing cutting-edge environmental technologies designed to reduce global warming and increase the number of green jobs, while lessening America's dependence on foreign oil.
Light fixtures, HVAC control systems and roof upgrades will be the focus of the facility energy retrofits. RTA will upgrade a total of eight facilities in all, including Central Rail and Central Bus, its four bus garages, its Paratransit center, and its main office. These facilities were selected because the retrofits will generate the greatest savings. RTA's own internal analysis concluded that more than 60 percent of all facility-related energy usage occurred at these eight facilities.
RTA's route to green technology began more than a decade ago. It started with the conversion to clean-air vehicles. Today, the transit system's bus fleet operates on ultra low-sulfur diesel. The vehicles are also equipped with after-treatment filters that remove 90 percent of all particulate matter from the exhaust. This change has contributed to improved air quality – Northeast Ohio's Ground-Level Ozone Emissions have dropped significantly over the past six years, going from 103 parts per billion (PPB) down to 89 PPB.
Green engineering was also an integral part of the HealthLine design. The 21 hybrid vehicles that operate on the route are powered by clean diesel engines and electric transmissions with 100 kW motors and 600-volt nickel hydride battery packs. This unique power train reduces particulate emissions while dramatically improving fuel efficiency. In addition, the streetscape along the 9.4 mile route was designed to create a healthier environment, with 1,500 trees planted and urban gardens placed at center median stations.
Encouraging cycling is another facet of RTA's green strategy. By the end of 2009 more than 50,000 riders racked their bikes on RTA buses. In May of last year, the transit authority supported Bike to Work Day, providing anyone who got out of their car and onto their bike a free RTA pass. And in the fall, RTA supported the efforts of Cleveland's legal community to reduce its carbon footprint by biking, walking, or taking public transit. Commuters who rely on public transportation to get to and from work, reduce their carbon footprint by 4,800 pounds per year.
The FTA grant will help RTA reduce its carbon footprint. It's anticipated that the transit authority will save more than 6.3 million kWh/year once all the retrofits are complete in 2011. This will lower RTA's energy costs by an estimated $500,000 annually – making it a green movement in more ways than one.
When the ribbon was cut on the HealthLine in October 2008, there was quite at bit of buzz on how this new line would transform travel along the city's most historic corridor. Despite facing one of the worst economic downturns since the Great Depression, RTA's first bus rapid transit line posted impressive numbers.
Over 4 million people have taken the HealthLine since service began. In comparison to 2008 route #6 bus numbers, the new line realized a nearly 50 percent increase in ridership. The HealthLine also achieved its established travel time, reducing the commute between Downtown and University Circle to just 20 minutes.
According to a marketing survey conducted in July 2009, those who rode the new bus rapid transit line were pleased. The HealthLine approval rating was nearly 90 percent among the 600 survey participants. Riders cited reliability and on-time performance as the top reasons for their high level of satisfaction.
Economically, the HealthLine continues to spur redevelopment despite the recession. More than $3.3 billion in development projects have been completed recently or are under way near the HealthLine, including expansions at the Cleveland Clinic, University Hospitals, The Cleveland Museum of Art, and other major institutions. This development is complemented by the HealthLine streetscape – composed of public art, trees, and urban gardens.
The successful rollout of the HealthLine has also captured attention from transit officials in San Antonio, Milwaukee, Nashville, San Bernadino, and as far as France, Ireland, and Vancouver, British Columbia. And now that RTA has set the bar, it will begin to explore other routes in the region best suited for a BRT system.
In 2008, RTA implemented a performance management initiative in an effort to reduce expenditures. The initiative, entitled TransitStat, is an adaptation of the New York Police Department's CompStat, which helped the Big Apple monitor and reduce the city's crime rate. Stat-type programs require frequent data gathering, review, and analysis. This continuous review process helps identify problems and accelerates change.
RTA first used TransitStat to study non-operator overtime. This is one of the transit authority's larger variable cost areas. It was believed that overtime could be reduced substantially if operations better monitored actual workload needs. Operations directors were asked to forecast how much overtime they would need for the year. Collectively, the group set a goal of reducing overtime by 30 percent. By year's end, the directors were able to reduce overtime by 47 percent, saving more than $2.3 million in 2008 using the TransitStat process.
With its success in dramatically lowering non-operator overtime, RTA extended the use of TransitStat to manage workers' compensation, electricity consumption, revenue collection, fuel hedging, and other tasks. RTA has since implemented a number of cost-savings changes. In the area of inventory management, the transit authority found that it could save up to nearly $200,000 by outsourcing part replacement part inventory. And after getting the Ohio Law changed, RTA began to purchase fuel through the futures market at significant savings. As a result, it is anticipated that cost of fuel for 2010 will be $8 million less than it was in 2009.
In total, TransitStat has saved RTA nearly $15 million since being implemented. In the future, as RTA works to provide the best possible service with tight financial resources, TransitStat will became an even more invaluable management tool.
Several shovel-ready RTA transit projects broke ground in 2009 through funds received from the American Recovery and Reinvestment Act. Chief among them was the Stephanie Tubbs Jones Intermodal Transit Center. This center, located downtown at the corner of East 22 and Prospect, will service more than 500 buses daily. And for riders, it will provide a warm, safe, and first-class waiting environment. The $9.3 million facility is expected to be completed in late 2010.
The 40-year old Puritas/West 150th Station on the Red Line Rapid is also undergoing a much needed makeover. This is one of RTA's most heavily used stations, serving both local residents and interstate commuters. The rehabilitated station will have two entry buildings, a new pedestrian bridge, elevators, an expanded parking lot, landscaping, and other improvements for a total cost of $11.7 million.
On the opposite side of town, the East 55th Street Station is also in the midst of a makeover. It's an important station for RTA, serving all three of the transit authority's rail lines. The new station will offer a single center-loading platform, consolidating the separate track levels for the light and heavy rail service. Construction will be complete in the summer of 2011 at a total cost of $11.5 million.
RTA will also use a portion of the stimulus dollars to continue its Heavy Rail Rehabilitation Program. This project extends the useful life of rail cars used on the Red Line Rapid. Additionally, one of the unique features of the program is apprentice training for rail mechanics.
In total, RTA has 15 projects underway as a result of the $50 million in ARRA funding. To date, 109 contracts have been awarded – 22 percent of the value to Disadvantaged Business Enterprise companies. RTA has also identified five additional shovel-ready capital improvement projects, which have been submitted for consideration.
Articulated vehicles have found their way to routes other than the HealthLine. In 2009, RTA placed 17 articulated buses into service to address heavy ridership during peak route times. And the decision has paid dividends in both greater customer satisfaction and efficiency.
With a seating capacity of 54 compared to 34 on a standard 40-foot bus, the need for an extra bus to service high passenger volume is eliminated. When you combine standing room, the total capacity is 100 riders. This has made the 60-foot long vehicles an ideal fit for the #22 and #26 bus routes.
The new buses have also scored big points for nimble handling, equipped with a turning radius of 38.6 feet. But even more impressive is how the vehicle is able to deliver savings during a time of tight budget constraints. The larger capacity reduces the number of vehicles and operators needed to service high ridership routes.
"We now look at every possible way to reduce costs," said RTA General Manager Joe Calabrese. "This is a case of how federal funds provided to make a capital purchase is also having a positive impact on operations as well."
In 1979, RTA created the Citizen Advisory Board (CAB), a voluntary group of 20 citizens who serve as the eyes and ears of riders – advising the transit authority on ways to provide the best possible service to all residents of Northeast Ohio.
Over the years, this group has helped RTA become more accessible to those with disabilities, improve riders' transit experiences, and keep fares and service in balance with the needs of commuters. In 2009, the CAB explored ways to enhance RTA's usability. It also worked with transit police and the transit authority's safety team to review the overall safety and security blueprint for the transit system. And in a year when RTA was facing an $18 million budget shortfall due to lost revenue, the CAB became an advocate for public transit, coordinating with groups such as Policy Matters Ohio to petition for better funding from the state and federal governments.
"Reliable and affordable public transportation is needed now more than ever," said Brad Chase, Chair of the CAB. "Many people in our region are completely dependent on transit to get to work, school, or to get to a doctor's appointment. Reliable and safe transit service helps make this region more competive and provides significant environmental benefits."
Year-End Financial Report
In 2009, RTA faced the most difficult fiscal management challenges in decades. Effects of job losses and reduced spending caused by the recession dramatically reduced revenue and ridership. Through a combination of operating expenditure cuts, a service reduction, fuel surcharge, and a one-time revenue supplement from the American Recovery and Reinvestment Act (ARRA), RTA was able to end the year with a $2.8 million balance.
Sales Tax collections were the lowest since 1999. This is RTA's primary funding source, covering between 60-70 percent of the operating budget. Revenue from the Sales Tax receipts declined by 10.94 percent in 2009 compared to 2008 collections, creating an operating loss of $18.6 million for the transit authority. Unfortunately, this trend is projected to continue in the near term.
Passenger Fare Revenue also fell below budget estimates. After recording six consecutive years of ridership gains, the region's high unemployment rate caused ridership to drop by 14 percent. And with fewer riders, fare revenue ended by $4.6 million below budget. Interest income was down by $.2 million, and funding for Ohio Elderly Fare Assistance from the State of Ohio was cut from $2.1 million to $688,000. Offsetting these losses was $11 million from the American Recovery and Reinvestment Act (ARRA), which was a one-time disbursement from Congress to supplement operating costs. In addition, the $0.25 fuel surcharge began to help raise fare revenue in the fourth quarter. With an $8 million short-term loan, revenue ended the year $10 million under budget projections.
To overcome the revenue shortfalls, RTA aggressively monitored expenditures. The transit authority reduced the non-union staff by 8 percent, enacted a minimum 3 percent wage reduction to the non-union staff, implemented a hiring freeze, lowered expenditures by canceling purchase orders, and postponed the last 2009 pay schedule for the non-union staff into 2010. In addition, RTA reduced inventory parts and purchased transportation costs, and decertified purchase orders from previous years. The elimination of the Community Circulators and some bus routes with the other expenditure reductions saved $1.3 million, allowing total operating expenditures to be $8 million below budget estimates.
Capital Expenditures remained relatively close to budgeted levels as progress was made on the Capital Improvement Plan (CIP). The infusion of $46 million from ARRA helped move a number of capital projects forward.
Financial Indicators provided an overview of RTA's fiscal health. Operating Ratio was 21.8 percent of total operating expenses, dipping slightly lower than budget. Fare Subsidy Per Passenger also did not meet the transit authority's goal of three times the average fare of $0.86 (or $2.58) due to lower revenue.
Operating Reserve was also impacted by the revenue losses. For the 2009 Budget, a one-month reserve equaled $20.5 million. The $2.8 million ending balance was less than 0.1 month reserve. Overhead Cost to Total Cost ended at 12.8 percent, slightly higher than the budget and well below the maximum of 15 percent. The goal for Cost per Hour of Service is to be below the level of inflation. By year's end, it was $115.04, or 1.2 percent under budget, and only 9.1 percent more than last year. RTA's aggressive action to reduce expenditures helped improve its Debt Service Coverage. A mid-year projection of 0.68 was improved to 1.14 through the cuts, which is below the 1.5 minimum and lower than the budgeted level of 1.18. Sales Tax Contribution to Capital was budgeted at 16.6 percent. Due to the decline in revenue from Sales & Use Tax, relative to the increasing financial needs of the transit authority's capital program, the indicator finished the year at 18 percent.
|2008 Actual||2009 Actual||$ Change||% Change||% of Total|
|Passenger Fares||$ 48,173,966||$ 49,757,803||$ 1,583,117||3.29%||18.81%|
|Total Operating Revenue||$ 50,591,138||$ 51,152,996||$ 561,858||1.11%|
|Sales/Use Tax||$ 173,568,817||$ 154,586,220||$ (18,982,597)||(10.94%)||58.44%|
|Total Non-Operating Revenue||$ 211,534,422||$ 213,360,725||$ 1,826,303||0.86%||0.0|
|Total Revenue||$ 262,125,560||$ 264,513,721||$ 2,388,161||0.91%||100%|
|Labor/Fringe||$ 173,016,961||$ 176,631,322||$ 3,614,361||2.09%||65.5%|
|Total Operating Expenditures||$ 239,952,110||$ 238,537,640||$ (1,414,471)||(0.59%)|
|Transfer to Insurance Fund||$2,900,000||$ 3,520,000||$ 620,000||21.38%||1.30%|
|Transfer to Pension Fund||100,000||100,000||0||0%||0.04%|
|Transfer to Bond Retirement Fund||14,718,950||17,327,062||2,608,112||17.72%||6.42%|
|Transfer to Capital Improvement Funds||10,100,882||10,550,000||449,118||4.45%||3.91%|
|Total Non-Operating Expenditures||$ 27,819,832||$ 31,497,062||$3,677,230||13.2%|
|Total Expenditures||$ 267,771,942||$ 270,034,702||$ 2,262,759||0.85%||100%|
|Revenue/Expenditures||$ (5,646,382)||$ (5,520,981)|
|Balance Jan. 1||$ 14,047,468||$ 8,401,086|
|Balance Dec. 31 (Less Reserve Funds)||$ 8,401,086||$ 2,880,105|
|2008 Actual||2009 Actual||$ Change||% Change||% of Total|
|Federal Capital Grants||$ 86,109,609||$ 73,648,082||$ (12,461,527)||(14.5%)||60%|
|State Capital Grants||9,370,685||9,162,154||(208,531)||(2.2%)||7%|
|Total Revenue||$ 144,594,119||$ 93,632,596||$ (50,961,523)||(32.51%)||100%|
|RTA Development Fund Projects||$ 128,830,215||$ 93,705,234||$ (35,124,981)||(27.3%)||95%|
|RTA Capital Fund Projects||3,634,639||2,276,798||(1,357,841)||(37.4%)||3%|
|Transfer to Bond Retirement Fund||2,113,000||700,000||(1,413,000)||(66.9%)||2%|
|Total Expenditures||$ 135,050,413||$ 96,682,032||$ (38,368,381)||(28.4%)||100%|
|Revenue/Expenditures||$ 9.543,706||$ (3,049,436)|
|Balance Jan. 1||$ 24,211,812||$ 33,755,518|
|Balance Dec. 31 (Less Reserve Funds)||$ 33,755,518||$ 30,706,082|
Annual Operating Budget
49.9 million passenger trips
458 square miles
1.3 million people
492 vehicles on fixed routes
8,557 bus stops
17.1 million service miles
2.6 million service miles, estimated
Red Line Rapid Transit
60 heavy-rail cars
19 miles of one-way track
Blue/Green Line Rapid Transit (Includes Waterfront Line)
48 light-rail cars
18 miles of one-way track
540,739 passenger trips
|Bus Rapid Transit (BRT) Service
1 route on Euclid Avenue and Public Square
9.4 miles of bus-only lanes
20 Rapid Transit Vehicles (RTVs)
59 stations and 3 platform stops
More than 922,000 calls were received
RTA Web Site, www.rideRTA.com
More than 1.6 million visitors viewed more than 9.5 million pages *
Commuter Advantage program
$6,300 estimated savings per commuter
* The on-line store sold more than $250,000 of fare media.