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77 Table 25. Estimated leakage rates for selected toll agencies, 2006 and 2008. NTTA E-470 ISTHA SR-91 OOCEA DRPA 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 Revenue ($M) $199 $250 $92 $90 $585 $808 $44 $46 $193 $206 $200 $213 Leakage rate as % of 6.6% 1.8% 0.5% 0.5% 5.0% 18% 8.6% 13.3% 0.3% 0.0% 2.5% 2.1% revenues Sources: 2006 and 2008 comprehensive annual reports from NTTA, E-470, OCTA, OOCEA, and DRPA. unpaid fees rather than unpaid tolls. Lastly, leakage rates may 4.3.8 Summary of Operating Costs also be affected by growth in total revenues. SR-91 generated roughly the same amount of revenues in 2006 and 2008, but Table 26 summarizes the total operating costs and revenues the amount of net violations increased from $3.8 million to collected by tolling agencies from 2003 to 2007. The table also $6.2 million, respectively. presents the average operating cost and revenue for each agency for all years. Detailed administrative, collection, and enforcement cost data are summarized in Appendix C. 4.3.7 Enforcement Costs An additional measure of financial performance is operat- Toll enforcement costs encompass: ing margin, which is defined as net income as a percentage of net sales. Net income includes depreciation and amortization Catching violators, expenses but excludes taxes payable, interest expense, interest Assessing administrative fees and fines, income, and nonrecurring expenses. Operating income is also Account settlement before the toll violation reaches court, known as earnings before interest and taxes (EBIT). Since and some of the toll authorities are involved in other transporta- Prosecuting violators (court costs). tion and non-transportation activities, this definition has been refined slightly to include only net income from toll opera- Included are police services, which can be directly carried out tions over toll revenues. High operating margins are an indi- by the toll agency, outsourced to a public agency with monthly cation that a company or a public agency has effective control or annual payments for services rendered, or conducted inde- of its costs or that sales (revenues) are increasing at a faster rate pendently by a public agency. Police services may also include than operating costs. incident management and communication expenses. Ten of In 2007, the average operating margin for the toll agen- the agencies under study recorded some type of enforcement cies included in this analysis was 36.2%. The privately oper- costs. Because court activities tend to be conducted by a sepa- ated Toronto 407 had the highest operating margin of the rate judicial agency, these costs have typically not been included agencies analyzed, with a 65.2% operating margin. The sec- in the analysis. ond highest was the Dulles Greenway, which had an oper- On average, enforcement costs accounted for 6.3% of total ating margin of 60.0%. The lowest operating margin was revenues and were about $0.09 per transaction. Enforcement recorded by NYSTA, which had an operating margin of costs ranged from $0.01 (DRJTBC) to $0.28 (OTC). In terms -15.9%. This shortfall is due to the depreciation expenses, of total revenues, the Dulles Greenway had the lowest costs which account for nearly a third of NYSTA's operational (1.2% of total revenues) and the Dulles Toll Road had the expenditures. SANDAG (for the I-15 HOT lanes only) had the highest costs (17.5%). It should be noted that the $0.09 per- second lowest operating margin, at 7.4% in 2007. Figure 42 transaction average includes outliers at the high end of the summarizes operating margins for the 15 facilities included data analyzed. As a result, this statistic may not be reflective in this analysis. of the enforcement costs of most of the agencies under analy- sis. With the exclusion of these outliers, enforcement costs 4.3.9 Capital Costs averaged approximately $0.04 per transaction. Toll enforce- ment costs may be a function of the number of centerline Capital costs for toll-collection activities tend to vary con- miles to be covered by enforcement agencies as well as toll siderably depending on (i) type of collection system imple- enforcement statutes, regulations, and policies. This estimate mented, (ii) system objectives, (iii) implementation rate, and does not include court costs. Figure 41 summarizes enforce- (iv) funding availability. Start-up toll agencies such as CTRMA ment costs. incur capital costs for the initial design and implementation of