Chapel Hill Transit Strategic and Financial Sustainability Plan Update

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1 Chapel Hill Transit Strategic and Financial Sustainability Plan Update ACT January 21, 2015

2 Today s Agenda Overview of Chapel Hill Transit Performance Overview Funding Overview Key Challenges Overview Strategic and Financial Sustainability Plan Update Questions and Feedback

3 CHT Overview CHT is the second largest transit system in North Carolina, serving Chapel Hill, Carrboro and the University of North Carolina at Chapel Hill. Responsibilities: Fixed route Bus Service (31 weekday & weekend routes) EZ Rider (ADA Service) Short and Long Range Transit Planning Marketing and Public Relations Major Transit Initiatives Staff (210 employees): Operations 165 Maintenance 31 Administration 14 Fleet (118 revenue vehicles): Buses 99 (29 hybrids) Demand Response 19

4 Organizational Structure While a department of the Town of Chapel Hill, CHT is advised by the Chapel Hill Transit Partners Committee, which provides policy and financial guidance: Jim Ward, Chair, Town of Chapel Hill Council Member Ed Harrison, Town of Chapel Hill Council Member Matt Czajkowski, Town of Chapel Hill Council Member Damon Seils, Town of Carrboro Alderman Bethany Chaney, Town of Carrboro Alderman Julie Eckenrode, Town of Carrboro Assistant to the Town Manager Meredith Weiss, University of North Carolina at Chapel Hill Senior Associate Vice Chancellor for Finance and Administration Than Austin, University of North Carolina at Chapel Hill Associate Director of Transportation and Planning Cheryl Stout, University of North Carolina at Chapel Hill Director, Transportation and Parking

5 CHT Delivers Ridership: 6,938,657 annual rides (FY13 14) Over 133,435 rides per week Over 80 rides per capita Service Miles: 2,091,748 Service Hours: 179,044 Performance standards: Rides/Hour: FR 44.3 DR 2.58 Rides/Mile: FR 3.92 DR.20 Cost/Ride: FR $2.53 DR $25.15 (FR = Fixed Route and DR = EZ Rider)

6 CHT Delivers Median Time Period Performance (Passengers per Hour) AM Peak Start of service 9:59 a.m. Midday 10:00 a.m. 3:29 p.m. PM Peak 3:30 p.m. 6:59 p.m. Night 7:00 p.m. End of service Weekend

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8 FY Budget Highlights More than 90% of transit expenses are directly related to putting service on the street and are subject to market rates. CHT makes considerable and concerted efforts to mitigate expense increases in every category.

9 Funding History FY12 13 included first increase in partner contributions in four years. FY09 and FY10 included ARRA funding of about $500,000 in each year.

10 State & Federal Funding History Note State Assistance has decreased by ~$1Million since FY10 11

11 Key Challenges Fleet Age: 42 buses, 13 demand response and 12 service vehicles need to be replaced. Staffing: Full Time Operators Supervisory Staff Additional Maintenance Shift Funding Community and Partner Goals: 2020 Plan Current and Planned Development

12 Financial Sustainability Plan Development of Strategic and Financial Plans: Organizational Staffing Assessment Vision and Goal Setting Process Consistent with 2020 Comprehensive Plan, 2020 Focus Area Studies, Carrboro Vision 2020 and UNC s Development Plans Develop Strategic and Long Term Financial Plan Identify full range of financing strategies to meet operating, maintenance and capital costs

13 Financial Sustainability Plan Current Focus to Inform FY2016 Budget Process: Capital Plan and Associated Funding Plan Short Term Staffing Plan Future Focus: Service Development Long Term Staffing Plan Performance Benchmarking

14 Strategic and Financial Sustainability Plan

15 Significant Ridership Growth 9,000,000 8,000,000 7,000,000 Drop in ridership reflects 2010 service cuts 95% Passenger Trips 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Source: National Transit Database Nelson\Nygaard Consulting Associates, Inc.

16 Significant Increase in Service Provided 180,000 26% 160, ,000 Revenue Hours 120, ,000 80,000 60,000 40,000 20, Source: National Transit Database Nelson\Nygaard Consulting Associates, Inc.

17 Increase in Cost per Hour of Service Operating Expense per Revenue Hour $120 $100 $80 $60 $40 $20 Operator Salary/Wages: 53% Fringe Benefits: 104% Fuel/Lube: 382% Casualty/Liability Costs: 86% 68% $ Source: National Transit Database Nelson\Nygaard Consulting Associates, Inc.

18 Revenue Trends: Federal Funding $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Source: Town of Chapel Hill Nelson\Nygaard Consulting Associates, Inc.

19 Revenue Trends: State Funding $4,000,000 $3,500,000 $3,000,000-26% $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Source: Town of Chapel Hill Nelson\Nygaard Consulting Associates, Inc.

20 Chapel Hill Transit Partner Contributions $16,000,000 $14,000,000 49% $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- Source: Town of Chapel Hill FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 UNC Carrboro Chapel Hill Nelson\Nygaard Consulting Associates, Inc.

21 State of the System Growth has Stabilized Ridership and service hours remained steady Cost increases largely reflect inflation But, Impact of Growth and Expansion Still Being Felt Providing more service Cost of each unit of service increased Funding equation changed Federal and state funds flat, declining and changing Partner increases offset declines Growth Occurred Without Corresponding Investments Capital mostly vehicles but also some facilities Staffing operators, mechanics, and supervisors Nelson\Nygaard Consulting Associates, Inc.

22 State of the System Chapel Hill Transit Operations are Financially Unsustainable $80 million (estimated) additional revenues needed over next 10 years Invest in capital investments Buses, paratransit vehicles, technology, and park-and-ride lots Invest in staff and operations Operators, mechanics, and supervisors Nelson\Nygaard Consulting Associates, Inc.

23 Opportunities

24 Potential Opportunities Orange County Bus and Rail Investment Plan Reduce Service Levels Additional Revenue Sources (Fares) Finance Vehicle Purchases/Lease Vehicles Increase Local Taxes/Partner Contributions Nelson\Nygaard Consulting Associates, Inc.

25 Orange County Bus and Rail Investment Plan New (2012) Revenues for Transit in Orange County One-half Cent Sales Tax New or increased Vehicle Registration Fees Full Year Revenues Estimated at $6.7 million All Sources Most for regional services and future light rail Existing Service (Chapel Hill Transit) has Access to New Vehicle Registration Fee Revenues Only Estimated revenue - $338,000/yr 2% per year is assumed growth rate Already assumed in financial projections for operations and capital Nelson\Nygaard Consulting Associates, Inc.

26 Reduce Service/Operate Fewer Routes Opportunities Challenges Potential strategy to reduce cost and demands on capital resources Big impact on riders Contrary to CHT Partner priorities and community goals Less service results in fewer federal and state funds Nelson\Nygaard Consulting Associates, Inc.

27 Fares and User Fees Opportunities Challenges Shares costs with users Requires capital investment (fare boxes) Will impact service operations and staffing Will impact ridership Nelson\Nygaard Consulting Associates, Inc.

28 Leasing and Debt Financing Opportunities Challenges Allows CHT to acquire vehicles relatively quickly Spreads costs evenly over several years Town of Chapel Hill already has vehicle leasing program Current governance structure means Town of Chapel Hill alone would hold the debt Adds financing costs Nelson\Nygaard Consulting Associates, Inc.

29 Raise Taxes/Partner Contributions Opportunities Challenges Increase funding to system needs Share burden across partners Contrary to CHT Partner priorities Just raised taxes and increased fees Nelson\Nygaard Consulting Associates, Inc.

30 Next Steps Gather input from Town of Chapel Hill Council, Carrboro Board of Aldermen and UNC on overall direction Expand analysis of leasing/vehicle financing concept Continue to work with CHT Partners on issues in partnership agreement related to issuance of debt Examine fare potential (with CHT Partners) Continue work on longer-term capital and staffing plans Nelson\Nygaard Consulting Associates, Inc.

31 Questions/Feedback Brian M Litchfield Director Chapel Hill Transit (919) blitchfield@townofchapelhill.org Customer Service Line: (919)

32 It s about Community Goals