Metra Board of Directors. Board Meeting September 16, 2011

Transcription

1 Metra Board of Directors Board Meeting September 16, 2011

2 Continued Discussion on FY2012 Budget Metra Board of Directors September 16, 2011

3 2012 Capital Program Metra Board of Directors September 16, 2011 Presented by Lynnette Ciavarella Senior Division Director, Strategic Capital Planning/ Grants Development

4 2012 Capital Funding Shortfall Projected Federal Funding Marks Five Year Program (in 000 s) Total August 2010 $143, , , , , ,304 $950,004 August 2011 $136, , , , , ,970 $844,254 Actual Reductions ($6,896) (12,690) (16,000) (19,460) (23,370) (27,334) ($105,750) Reauthorization of federal transportation legislation is essential; the outlook for projected levels of capital funds seen here is optimistic yet uncertain 2

5 2012 Core Capital Program Challenges Projected Federal Funds: $136 Million Phase Funded Initiatives $53 million identified in financial commitments to ongoing projects Federally Mandated Programs Positive Train Control needs nearly $30 million These commitments result in approximately $53 million remaining to address needs across all asset categories 3

6 Core Capital Program Challenges Deferred Projects At least $100 million has been identified in 2012 priorities that will be pushed into future program years Preventive Maintenance While no funds are programmed beyond 2012 for operating assistance, uncertainty of funding availability may impact future programming 4

7 State of Illinois Capital Bond Program Program of projects as approved is not consistent with State of Illinois funding award cycle Program revision is necessary to preserve funded and future projects $585.1 Million for Metra Electric District Highliner Cars $38.2 Million for Station and Parking Improvements Program shifts for Bridges, CREATE, Positive Train Control and Yard Improvements will be necessary Future capital bond funding uncertainty remains 5

8 Capital Funding Initiatives Grant Opportunities Congestion Mitigation Air Quality (CMAQ) TIGGER (Transportation Investment for Greenhouse Gas and Energy Reduction) TIGER (Transportation Investment Generating Economic Recovery) 6

9 Reductions and Additions to the 2012 Operating Budget Metra Board of Directors September 16, 2011 Presented by Jim Mickus Director, Budget 7

10 Budget Reductions List Cost Cuts & Efficiencies - Administration Fiscal Year 2012 Professional Service Consulting Contracts Hillard Heintze / Metra Inspector General Blackman Kallick Professional Service Contract State Lobbyist Contract Recruiting expenses Outside litigation costs Printing costs Total Administration Reductions to Date $2.3 Million 8

11 Budget Reductions List (cont.) Cost Cuts & Efficiencies - Operations Fiscal Year 2012 Overtime savings from changes in Engineering signal crew deployment Mechanical department increased savings due to implementation of new comprehensive warranty tracking system in 2012 Police Dog Teams / Supervision covered by Federal Grant Total Operations Reductions to Date $2.1 Million Total Admin / Ops Reductions to Date $4.4 Million 9

12 2012 Budget Additions ($ in millions) 2012 Plan Operating Items Diesel Fuel at $3.40 Per Gallon $ 26.3 FRA Mandate Hours of Service Limitation 3.7 Union Pacific Freight Work out of Locomotive Shop 2.5 Snow Removal Costs 1.5 Subtotal Budget Additions Related to Operations 34.0 Financial Review Items Elimination of Administration Capital Grant 8.0 Claims Reserve Increase for Existing Claims 3.0 Insurance Program Premium Increase 10% - 15% 1.5 Subtotal Budget Additions Related to Financial Review 12.5 Total 2012 Budget Additions

13 2012 Preliminary Budget ($ in millions) 2012 Plan Total 2012 Budget Additions Select Items $ 46.5 Regular Growth in Budget Items Est 3.1% 20.6 Identified Budget Savings to Date (4.4) Estimated 2012 Expense Growth $

14 2012 Preliminary Budget ($ in millions) 2012 Plan 2011 Budget Revenues $ Budget Expense Budget Deficit $ Estimated 2012 Total Expense Growth 62.7 Estimated 2012 Deficit $ Revenue From Senior Fares (7.5) Metra Sales Tax (Less $10.0 for Capital) (327.4) Remaining Deficit to Fund $ 64.7 (est. 27% - 30% fare increase, assuming no capital transfer or service reduction) 12

15 Service Reductions Metra Board of Directors September 16, 2011 Presented by George Hardwidge Deputy Executive Director - Operations 13

16 Service Reduction Options Service Reduction Option 1 Eliminate one train crew and one set of equipment on all lines except the Heritage Corridor Eliminate weekend service added on May 19, 2008 and March 21, 2009 (Milwaukee North, SWS & UP North) Eliminate extra service for White Sox and Bears games Service Reduction Option 1A Eliminate weekend service added on May 19, 2008 and March 21, 2009 (Milwaukee North, SWS & UP North) Eliminate SWS extension to Manhattan from Orland Park, 179 th St. on Weekday Train Nos. 815 & 830 No service reductions 14

17 Service Reduction Option 1 BNSF Heritage Corridor Metra Electric Milwaukee North Milwaukee West North Central Service Rock Island SouthWest Service Union Pacific North Union Pacific Northwest Union Pacific West Mechanical Department Savings (Due to eliminating 1 set of equipment per line) Reduce Weekend Service (May 19, 2008 & March 21, 2009) Extra Service (Bears and White Sox) Estimated Total Cost of Service Reduction Option 1 Estimated Annual Revenue Loss of Service Reduction Option 1 Estimated Total Annual Savings of Service Reduction Option 1 $996,000 No Service Cuts $588,000 $575,000 $305,000 $416,000 $1,319,000 $266,000 $797,000 $895,000 $755,000 $1,195,000 $943,000 $151,000 $9,201,000 ($1,000,000) $8,201,000 15

18 Service Reduction Option 1A Eliminate Weekend Service Added on May 19, 2008 & March 21, 2009 Milwaukee North Line (May 19, 2008) 2 roundtrips on Saturday & 1 roundtrip on Sunday Union Pacific North Line (May 19, 2008) 2 roundtrips on Saturday & 1 roundtrip on Sunday SouthWest Service (March 21, 2009) Saturday Service (3 inbound trains and 3 outbound trains) Eliminate SWS extension to Manhattan from Orland Park, 179 th St. on Weekday Train Nos. 815 & 830 (March 21, 2009) Milwaukee North Union Pacific North SouthWest Service $296,000 $313,000 $334,000 Estimated Total Cost of Service Reduction Option 1A Estimated Annual Revenue Loss of Service Reduction Option 1A Estimated Total Annual Savings of Service Reduction Option 1A $943,000 ($49,000) $894,000 16

19 Service Reduction Staff Recommendation Service Reduction Option 1 Eliminate one train crew and one set of equipment on each line except the Heritage Corridor Eliminate weekend service added on May 19, 2008 and March 21, 2009 (Milwaukee North, SWS & UP North) Eliminate extra service for White Sox and Bears games Service Reduction Option 1A Eliminate weekend service added on May 19, 2008 and March 21, 2009 (Milwaukee North, SWS & UP North) Eliminate SWS extension to Manhattan from Orland Park, 179 th St. on Weekday Train Nos. 815 & 830 No service reductions 17

20 Fare Structure & Policies Metra Board of Directors September 16, 2011 Presented by Lynnette Ciavarella Senior Division Director, Strategic Capital Planning/ Grants Development 18

21 Current Fare Structure 5-mile zone increments Fare differential $0.50 per zone, except: Zone A to B $0.25 Zone B to C $1.00 One-way fares considered base fare Ten-Ride Tickets Approximately 20% discount Monthly Tickets Approximately 40% discount 19

22 Current Fare Structure (cont.) Free Rides Circuit Permit Program Children: 6yrs & younger w/ fare paying adult Weekend Family Fares: up to 3 children 11yrs & under w/ fare paying adult Police & Fire officers in uniform Reduced fare Seniors 65 yrs or older Citizens with Disabilities Student Fares: Up through Grade 12 w/ valid school ID or letter 20

23 Current Fare Structure (cont.) Promotional Fares/Special Events Weekend Pass: unlimited travel Saturday & Sunday Children: 7 11yrs (reduced fare) Young Adult Fare: 12 17yrs weekend & holidays (reduced fare) U.S. Military: reduced fare with Active Duty ID Ravinia Park/Miscellaneous Group Travel Regional Fare Program: tickets are good on all rail lines Link-Up Tickets $39 unlimited connecting travel on CTA (peak period) & Pace Metra subsidy $6 per ticket PlusBus Tickets $30 unlimited use on most Pace routes Metra subsidy $

24 Current Fare Structure (cont.) On-Board Penalty Raised from $2 to $3 in 2010 Ticket Expiration One-way & Ten-Ride Tickets valid for 1-year from date of purchase Monthly valid through noon of 1 st business day after valid month Weekend valid for weekend punched Refunds Provided on all tickets types One-way full refund Ten-Ride refund with fewer than 8 rides used Monthly tickets prorated after the first of the month 22

25 Principles for Fare Policy 23 Maintain a fair pricing structure that maximizes revenues Review fare media to improve fare collection and simplify overall collection activities and reconciliation Minimize on-train transactions and overall transaction costs Recognize that convenience has a value Equalize fare differentials by zone Evaluate fare policies of sister agencies and peers Acknowledge the total cost and the total value of providing services Consider regular fare adjustments that ensure a balanced budget, keep pace with inflation, and avoid significant, infrequent fare increases

26 Ticket Sales by Type Ticket Type % Tickets Sold % Trips Taken % Fare Revenue One-Way 69% 12% 18% Ten-Ride 13% 23% 26% Monthly 8% 61% 52% Weekend 10% 4% 4% 24

27 Peer Analysis: One-Way Ticket Expiration Agency Valid Period Refund Period % Refund Metra Current One year from One year from 100% refund LIRR 14 days, including 30 days from 100% refund, including unused portion of round-trip ticket, less $10 fee NJT No expiration date No refund No refund MNRR 14 days, including 30 days from 100% refund, including unused portion of round-trip ticket, less $10 fee MBTA 180 days from 180 days from 100% refund (no refund for onboard round-trip ticket purchases) SEPTA 180 days from 180 days from 100% refund, including unused portion of round-trip ticket Metra Proposed 14 days from No refund No refund 25

28 Estimated Proposed One-Way Fares Weighted average increase of 17.3% $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Proposed One-Way Current AA AB AC AD AE AF AG AH AI AJ AK AL AM 26

29 Peer Analysis: Ten-Ride Ticket Expiration Agency Valid Period Refund Period % Refund Metra Current One year from One year from 100% refund, less one-way fare for each ride used, up to 8 rides LIRR Six months from 30 days from 100% refund, less applicable oneway fare for each ride used, less $10 fee NJT No expiration date No expiration date 100% refund, less one-way fare for each ride used MNRR Six months from 30 days from 100% refund, less peak one-way fare for each ride used, less $10 fee MBTA 180 days from 180 days from 100% refund, less one-way fare for each ride used SEPTA 180 days from 180 days from 100% refund, less peak one-way fare for each ride used Metra Proposed 6 months from 3 months from 100% refund, less applicable one-way fare for each ride used (up to 9 in 2012, 10 in 2013), less $5 processing fee 27

30 Peer Analysis: Ten-Ride Ticket Discounts Agency One-Way Fares Discount Weekly Tickets Metra Current % No LIRR % Yes NJT % Yes MNRR % Yes MBTA* % No SEPTA % Yes Metra Proposed 9.0 / 10.0 (2012) / (2013) 10.0% / 0.0% (2012) / (2013) No 28 *MBTA offers a twelve-ride ticket.

31 Estimated Proposed Ten-Ride Fares Weighted average increase of 32.2% & ticket equal to cost of 9 one-way tickets $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Proposed Ten-Ride Fare Current AA AB AC AD AE AF AG AH AI AJ AK AL AM 29

32 Peer Analysis: Monthly Ticket Expiration Agency Valid Period Refund Period % Refund Metra Current Through noon of 1 st business day after valid month Pro-rated after start of month 100% refund through day 1 of valid month, 85% refund on day 2, refund reduced by 5% per day during days 3 though 18, 0% refund after day 18 LIRR Through 10 am of 1 st business day after valid month Pro-rated after start of month 100% refund, less cost of cheapest combination of fares that could have been used for elapsed days of valid month, less $10 fee NJT Through noon of 1 st business day after valid month Pro-rated after start of month 100% refund, less cost of 2 one-way tickets for each elapsed business day of valid month MNRR Through 10 am of 1 st business day after valid month Pro-rated after start of month 100% refund, less cost of cheapest combination of fares that could have been used for elapsed days of valid month, less $10 fee MBTA Through valid month only Pro-rated after 2 nd day of month 100% refund through day 2 of valid month, 50% refund during days 3-9, 25% refund during days 10-14, 0% refund after day 14 SEPTA Through 10 am of 1 st business day after valid month Pro-rated after start of month 100% refund before valid month, 50% refund during days 1-10, 25% refund during days 11-20, 0% refund after day 20, less $1 fee Metra Proposed Through valid month only Pro-rated after start of month 100% refund through day 1 of valid month, 85% refund on day 2, refund reduced by 5% per day during days 3 though 18, 0% refund after day 18, less a $10 processing fee 30

33 Peer Analysis: Monthly Ticket Discounts Agency Metra Current LIRR NJT MNRR MBTA SEPTA Metra Proposed One-Way Fares Discount* 40.6% 50.8% 33.9% 47.8% 24.4% 40.0% 34.3% 31 *Based on 43 one-way trips per month.

34 Monthly Ticket Discount vs. One-Way Fare Zone One-Way Fare (est. proposed) Cost of 43 Trips Zone E Monthly Fare (est. proposed) Discount Zone E $5.25 $ $ % 32

35 Estimated Proposed Monthly Fares Weighted average increase of 29.8% & ticket equal to cost of one-way tickets $300 $250 $200 $150 $100 $50 $0 Proposed Monthly Fare Current AA AB AC AD AE AF AG AH AI AJ AK AL AM 33

36 Other Recommendations Weekend Tickets Replace with $7 Weekend Day Pass Valid Saturday or Sunday Eliminate subsidy for Link-up & PlusBus Offer as convenience passes Subsidy passed onto customer (Link-up $6; PlusBus $8.54) $500,000 in annual savings for Link-up $135,000 in annual savings for PlusBus Eliminate Young Adult fares Currently allowed on weekends and holidays only Would pay for weekend ticket or regular fare Ticket rounding Attempt to round to nearest $

37 Metra Zone E One-Way Fare versus CPI $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $ Metra Fare CPI Adjusted Fare 35

38 Metra vs. Peer Agency Fares Monthly Fares, 1990 and 2011 $400 Monthly Fares in Effect in 1990 by Metra Zone, Metra vs. Avg. of Large Agencies $450 Monthly Fares in Effect in 2011 by Metra Zone, Metra vs. Avg. of Large Agencies $350 $400 $300 $350 $250 $200 $150 $100 $300 $250 $200 $150 $100 $50 $50 $0 A B C D E F G H I J K L M $0 A B C D E F G H I J K L M Metra, 1990 Avg of Large Systems, 1990 Metra, 2011 Avg of Large Systems, 2011 Avg. of Large Agencies includes: Zones A-H = LIRR, MNRR, NJT, MBTA, SEPTA Zones I-K = LIRR, MNRR, NJT, MBTA Zones L-M = LIRR, MNRR, NJT 36

39 Metra vs. Peer Agency Fares Monthly Fares, 2011 and Est. Proposed 2012 $450 Monthly Fares in Effect in 2011 by Metra Zone, Metra vs. Avg. of Large Agencies $450 Est. Proposed Monthly Fares by Metra Zone, Metra vs. Avg. of Large Agencies $400 $400 $350 $350 $300 $300 $250 $250 $200 $200 $150 $150 $100 $100 $50 $50 $0 A B C D E F G H I J K L M $0 A B C D E F G H I J K L M Metra, 2011 Avg of Large Systems, 2011 Metra Proposed Avg of Large Systems, 2011 Avg. of Large Agencies includes: Zones A-H = LIRR, MNRR, NJT, MBTA, SEPTA Zones I-K = LIRR, MNRR, NJT, MBTA Zones L-M = LIRR, MNRR, NJT 37

40 Monthly Costs to Drive vs. Using Metra To and From Downtown Origin Station Current Origin Zone Metra Fare* Est. Proposed Metra Fare** Driving Costs*** Edgebrook C $90.45 $ $ Tinley Park E $ $ $ Naperville F $ $ $ North Chicago G $ $ $ Laraway Rd. H $ $ $ Elburn I $ $ $ Woodstock K $ $ $ * Assumes regular monthly fare **Based on w eighted fare increase of 29.8% ***Based on 22 w eekdays, 25 $3.95/gallon, and $18/day parking Example: Annual savings for Zone E ticket would be $5,300, Zone K $7,100, compared to the cost of driving 38

41 Next Steps Metra Board of Directors September 16, 2011 Presented by Alexander D. Clifford Executive Director/CEO 39

42 Principles for Fare Policy 40 Maintain a fair pricing structure that maximizes revenues Review fare media to improve fare collection and simplify overall collection activities and reconciliation Minimize on-train transactions and overall transaction costs Recognize that convenience has a value Equalize fare differentials by zone Evaluate fare policies of sister agencies and peers Acknowledge the total cost and the total value of providing services Consider regular fare adjustments that ensure a balanced budget, keep pace with inflation, and avoid significant, infrequent fare increases

43 Board Guidance Service Options 1, 1A, or no service reductions Fare Policy Fare Principles Metra Proposals Valid period, refund period, % Weekend Day Pass Ticket Eliminate subsidy for Link-up & PlusBus Eliminate Young Adult fares 41

44 42 Metra Board Timeline July 15, 2011 Guidance on service options Guidance on fuel price risk August 12, 2011 Direction on service options Direction on fuel price assumption risk September 16, 2011 Final marks received Refined budget scenario Guidance on Fare Policy Guidance on Capital Program October 14, 2011 Release 2012 Capital & Operating Budgets for public comment November 2011 Public Comment Hearings Final approval: 2012 Budget by Metra Board February 2012 Implement fare & service changes