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Agenda Item # 8

BOARD MEMORANDUM

FOR INFORMATION ONLY

BACKGROUND: 

This report summarizes the FY 2005 preliminary annual performance of VTA Transit Operations.   The report becomes finalized later in 2005 with the completion of the annual audit of the financial information contained in this report.   The general performance trend results contained in this report are generally positive in terms of service quality, operating expenses, and productivity.  Overall, ridership declined in FY 2005 but now appears to be trending upward.  A detailed summary of the performance of these specific areas follows.

DISCUSSION: 

Ridership

Bus ridership for FY 2005 totaled 30.3 million boardings, a 7.9% decrease compared to the previous fiscal year.   Average weekday ridership was 97,117, an 8.0% decrease, and average Saturday and Sunday ridership decreased by 6.8% and 7.7%, respectively.  Recent bus ridership suggests that we may start seeing an upward trend over the next 6 to 12 months.  The primary indicator of improving bus service ridership comes from a review of the 12-month bus ridership trend from July 2004 to June 2005.  The trend shows that over the past 12 months bus average weekday ridership declines have been cut in half, from a 15.9% decline when comparing July 2003 to July 2004 to an 8.0% decline when comparing June 2004 to June 2005.  This change in the severity of the decline indicates that bus ridership is beginning to stabilize.  If the 12-month trend is accurate and remains consistent over the next 12 months, it is likely that VTA will soon experience an upswing in ridership, assuming that the economy continues to improve.  In fact, the July 2005 bus average weekday ridership of 98,607 is 1.2% higher than the average weekday ridership recorded in July 2004.  This is the first increase in weekday bus ridership since February 2002.

Light rail ridership continues to be very strong showing 23.9% improvement in total boardings for FY 2005.    To put this number in better context, 1,307,407 more trips were taken in FY 2005 when compared to FY 2004.   Approximately 702,000 of the 1.3 million additional trips can be attributed to the new segment between I-880 and Alum Rock (Tasman East/Capitol extension).  In short, light rail would still have increased by more than 11.1% for FY 2005 without accounting for the Tasman East/Capitol extension.  Furthermore, light rail ridership for July 2005, which is the first month-to-month comparison that includes the Tasman East/Capitol extension, increased 9.0% compared to July 2004.

Overall, FY 2005 system ridership (bus and rail) decreased by 3.4%.   However, July 2005 system ridership shows a 0.8% increase compared to July 2004.  Average weekday ridership increased 2.3%, and average Saturday and Sunday ridership increased by 0.5% and 8.0%, respectively.   In fact, July 2005 system ridership would have been up 2.6% if not for the one less weekday compared to July 2004.  These increases in system total, average weekday, average Saturday, and average Sunday ridership are the first since January 2001.  It should also be noted that FY 2006 (which just began) will be the first time since 2001 that we will not be raising fares or cutting service.

Operating Expense and Revenue

The preliminary total transit operating expense for FY 2005 is $232.6 million, up 1.9% compared to FY 2004, well below the estimated 9.0% increase projected by the FY 2005 revised budget.

Preliminary FY 2005 wages decreased by 4.2% compared to FY 2004 due to a 5.3% reduction in transit operations staffing and productivity improvement directly attributable to reduced absenteeism.   Cost of benefits continued to increase in FY 2005, as evidenced by the 10.2% increase compared to FY 2004.

Supplies and services consist primarily of parts, diesel fuel, professional services, security services, utilities, and other operating expenses.   In FY 2005, money spent on supplies and services decreased 1.0% compared to FY 2004.   Over the last four years, supplies and services costs fell by 41.0%.

System total operating hours in FY 2005 were 0.9% less than FY 2004.   The combination of increased operating expenses and decreased total system hours resulted in an increased system cost per total hour of 2.8% from $156.47 to $160.89.  The same is true for bus.  Bus total operating hours in FY 2005 were 2.1% less than FY 2004.  The decreased bus total operating hours and the estimated increase of bus operating costs of 2.0% resulted in an increased bus cost per total hour of 4.2% from $134.20 to $139.81.  On the other hand, the estimated increase in light rail operating costs of 1.7% was outpaced by the 15.9% increase of total light rail operating hours, resulting in a 12.3% decrease of light rail cost per total hour from $462.45 to $405.63.

Preliminary fare revenue collected was $32.1 million, up 4.7% compared to FY 2004.   The increase is primarily due to increased light rail ridership and increased average fare revenue.  The FY 2005 farebox recovery ratio of 13.8% was a 3.0% improvement compared to 13.4% in FY 2004. 

Key Performance Indicators

The general performance trend for FY 2005 shows continued progress in providing safe and reliable transportation for our customers on both bus and light rail.   Combined bus and light rail miles between chargeable accidents exceeded the established goal by 48.7%.  Bus and light rail service reliability exceeded established goals.  In addition, FY 2005 bus and light rail miles between mechanical schedule losses improved 3.2% compared to FY 2004.

Bus operators unscheduled absenteeism (or personal time-off) improved by 23.1% from 10.8% last year to 8.3% this year.   Light rail operators unscheduled absenteeism improved by 18.5% from 9.2% last year to 7.5% this year.   Bus and Light Rail Maintenance unscheduled time-off improved by 20.3% and 32.1%, respectively, as compared to the same period last year.  These productivity improvements resulted in an estimated cost savings of $2.1 million.

For on-time performance, FY 2005 light rail on-time performance of 96.7% was 1.2% better than FY 2004 and exceeded the established goal of 95.0%.   Bus on-time performance was 94.0% in FY 2005, down from last year’s 96.6%.   This decline was primarily due to route changes, introduction of new routes, and heavier traffic.    It takes time to diagnose correct running times (and make the necessary adjustments) to new and restructured routes.  During FY 2005 VTA introduced three new routes and implemented major changes that affected eight routes while no changes were made during FY 2004.

Paratransit

Compared to FY 2004, the net cost to VTA was reduced an additional 8.0% or $2,042,959 in FY 2005. During this same time period, ridership decreased only by 1.9%, primarily due to the economy as active riders took approximately one less trip per month.

The Paratransit program was delivered under budget in FY 2005 despite having added the new Eligibility Ride Program during the last two months of the year. Cost savings were generated on both the Broker and Vendor sides of the program budget.   Broker services were delivered $402,943 under budget in FY 2005. 

Cost reductions were achieved by reducing overall wages; reducing benefit costs by securing a less costly health plan coupled with larger employee co-pay; reducing financial, accounting, contract management and other management costs; and reviewing and reducing all other broker budget line items for such items as office supplies, insurance, facilities, communication costs, and vehicle communication costs.

Vendor services were also delivered under budget in FY 2005.   Vendor cost reductions were secondary to vendor contract negotiations to reduce compensation rates; ride distribution through automated scheduling and vehicle routing to maximize cost-effectiveness among vendors; and partial cents sales tax rebate from the State on fuel for Paratransit.  Despite planned annual vendor compensation rate increases, the average net cost per trip in FY 2005 decreased 6.0% from $27.26 last year to $25.63 this year.

Other Contracted and Inter-Agency Services

VTA is a funding partner supporting Caltrain, ACE, Highway 17 Express and Dumbarton Express.   Ridership during FY 2005 compared to ridership in FY 2004 is as follows:

• Caltrain ridership was 9,441,567, up 16.7%;
• ACE ridership was 639,890, up 3.8%;
• Highway 17 Express ridership was 197,290, up 42.7%;
• Dumbarton Express ridership was 192,621, down 7.3%. 

CONTACT THE OFFICE OF THE BOARD SECRETARY FOR ATTACHMENTS.

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