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118 Introduction This chapter describes the typical steps necessary to implement a transit program, to make enhancements to an existing program, or to ensure sustainability of transit service. Operations Plan As part of the operations plan, the following elements need to be determined so that imple- mentation can begin as soon as funding is secured: â¢ Routes and schedules: The types of service and route structures need to be determined and the preliminary schedules planned. The transit demand analysis and the community needs determined in previous tasks should make clear the type of transit service that would be most appropriate for the community. Chapter 7 presented details on the various types of transit services, ranging from fixed-route to demand-response service. A determination must be made about whether the service will be offered to the general public, as a specialized transportation service for seniors and people with disabilities, or for meeting specific pur- poses such as trips for education or medical appointments. If federal funds will be used for a fixed-route service, compliance with the Americans with Disabilities Act (ADA) requirement to provide complementary paratransit service within a Â¾-mile radius of each fixed route is mandatory. The preliminary route schedules are estimates based on the distances each bus must travel and their respective speeds. As with planning any schedule, these routes should all be driven in an appropriate vehicle and modified as necessary before implementation. The schedule should take into account transfer connections between the tribal transit program and other transportation providers. TCRP Report 30: Transit Scheduling: Basic and Advanced Manu- als and TCRP Report 135: Controlling System Costs: Basic and Advanced Scheduling Manuals and Contemporary Issues in Transit Scheduling provide detailed guidance for developing schedules. The operations plan should indicate the preferred route structure. The names given to the routes should suit the public. It is possible to add numbers to the routes for clarity. â¢ Hours and days of operation: The hours and days of operation need to be determined. Will this service operate from Monday through Friday? Will service be available on a reduced schedule on Saturdays or Sundays? Establishing the days and hours of operation helps in plan- ning the financial budget for the next 5 years. â¢ Operating characteristics: Other operating characteristics that need to be determined include â frequency of service (the number of vehicles passing a point on a route within a given unit of time); C h a p t e r 9 Elements of Transit Program Implementation
elements of transit program Implementation 119 â headways (intervals of time between vehicles running in the same direction on the same route); â fare structures for various types of service; and â discounts (including whether to offer discounts for tribal members, seniors, or people with disabilities; discounts for monthly passes and ride passes; and the value of each type of discount). The conversion to the final system could be phased to allow users to become familiar with the new transit system and the increase in costs if applicable. â¢ Vehicle types and assignments: Vehicles are essential and therefore must be included in the operations plan. The operations plan needs to include the type and number of vehicles to be used based on the type of services and vehicle assignments. With this information, the tribal transit program will be able to estimate the cost of vehicles for 5 years. The plan should assume that several of the vehicles will require replacement in the upcoming years. The operations plan should also detail the vehicle replacement purchases over the next 5 years, so that local match and funding can be planned. â¢ Driver schedules: Once the operating schedule is decided, the driver schedule needs to be incorporated into the operations plan. Doing this helps determine the number of drivers that need to be hired and whether substitute or backup drivers need to be hired. Organization and Administration As part of the Transit Program Implementation Plan, a detailed plan should be developed covering organization and administration. This plan should include the following elements: â¢ Staffing â¢ Policies â¢ Job descriptions Staffing From the study of currently operational tribal transit systems, transit staffs ranged from a couple of individuals wearing all hats to a full staff with separate positions for administration, dispatching and scheduling, driving, grant writing, planning, and financial operations. A common issue iden- tified by several tribes was the inability to find qualified individuals to perform some of the tasks needed to operate a transit system (from drivers to planning to administration) in a rural area with a limited labor force and limited access to other professional resources. In general, depending on the size of the tribal community and the needs of the community, the tribal transit program may include the following positions: â¢ Transportation manager â¢ Transportation director or finance/grants director â¢ Transportation program assistant â¢ Secretary/dispatcher â¢ Bus driver â¢ Mechanic Duties associated with the above positions frequently are combined based on the systemâs requirements and budgetary constraints. Marketing of the transit service was commonly noted as neglected by the surveyed tribes. Marketing tasks generally fall to the transportation director or are handled as a group effort by the transit staff. Duties associated with each position are discussed in the following sections.
120 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Job Descriptions Job descriptions are important for the implementation of a transit service because they distrib- ute the workload and clarify responsibilities. Job descriptions should be as detailed as possible. As general guidelines for the staffing options listed above, the following broad job descriptions can provide a starting point: â¢ Transportation manager: Responsible for the day-to-day operation and oversight of the transit service. â¢ Transportation director: Oversees all phases of transportation including fiscal management, operations, maintenance, personnel, and public relations. Works on transportation coordi- nation with other agencies as needed and as opportunity arises. Essential duties include fiscal responsibility for all transportation, responsibility for reporting requirements, responsibility for design and implementation of promotional and marketing campaigns, and planning and grantsmanship. â¢ Transportation program assistant: Maintains daily and monthly cost disbursement journal. Generates daily logs used for monthly, quarterly, and annual reporting. Produces reports tracking mileage and revenue by trip. Handles billing for vehicle maintenance. Counts fare revenue. Provides backup for dispatcher when necessary. â¢ Secretary/dispatcher: Takes calls for trip requests by telephone. Communicates with drivers via radio or other communication equipment. Assists in collection of revenue, log sheets, receipts from drivers, and so forth. Maintains data on ridership. Assists in completing required state and local reporting, and assists in scheduling rides to maximize system efficiency. â¢ Bus driver: Drives bus on selected routes or van to handle scheduled trips. Collects fares and tickets and turns them in to secretary/dispatcher along with daily trip sheets. Essential duties include regular maintenance checks of transportation equipment, record-keeping of fuel and mileage for vehicles, assisting passengers boarding and leaving the bus (as necessary), and providing program assistant with all information needed to maintain accurate records. â¢ Mechanic: Responsible for all phases of repairs to keep vehicles in safe operating condition. Responsible for record-keeping on each vehicle. Essential duties include preventive mainte- nance programs, regular maintenance checks of transportation equipment, record-keeping of fuel, mileage, fuel costs, etc. Policies A written service policy is important to the smooth operation of a transit system. Policies should use clear, simple language and establish the parameters of the service area and which pro- cedures should be followed in a variety of situations. The following elements should be included in a transit service policy document, depending on the type of service being provided: â¢ Description of service: Type of service in language appropriate for the general public. â¢ Service area: Map of area served (including points beyond the tribal lands to which service, even if infrequent, is provided). â¢ Days and hours of service: Including holidays, office hours, where to call for information on inclement weather or emergency situations, service hours (including earliest possible pick-up and latest possible drop-off, if appropriate), and a statement about how extenuating circum- stances are handled. â¢ Reservations, scheduling, and cancellations: Policy regarding being ready for pick-up (e.g., if the passenger must be ready for pick-up a certain amount of time prior to the scheduled pick- up time), minimum call-in time (i.e., how much advance notice must be given for a scheduled pick-up), whether or not dispatchers will call agencies or doctors to confirm appointments, description of how service is handled on holidays, a statement about how the transit system tries to meet as many needs as possible in a cost-efficient fashion, the standard wait time,
elements of transit program Implementation 121 when a passenger will be considered late and the driver will move on, a call-in phone number, detailed instructions for how to call and reserve or cancel a trip, and a policy on no-shows. â¢ Fares: Detailed breakdown of the systemâs fare structure including special considerations for different types of passengers and eligibility requirements. â¢ Passenger assistance: Details about the level of assistance the transit system provides to passengers with disabilities in compliance with the ADA. This includes the driversâ ability to enter passengersâ homes or otherwise pass beyond the threshold when providing door-to- door service; policy on escorts or attendants, particularly as this applies to passengers with disabilities; transportation of unaccompanied children; transportation of packages or other personal items; accommodation of mobility aids; and a policy on when standees are allowed. â¢ Passenger conduct and responsibilities: Details about when service can be denied. Passenger conduct expectations should be clearly stated, including the expectation of passenger courtesy and consideration of others, driver authority, seatbelt use, types of inappropriate on-vehicle behavior (potentially including eating, drinking, using tobacco products, foul language, lack of personal hygiene, bothering other passengers, horseplay, fighting, carrying weapons, pos- sessing illegal drugs, having open containers of alcohol on the vehicle, and so forth), compli- ance with the fare policy, securing of items and belongings, and finally, the transit systemâs right to refuse service based on violation of these standards. â¢ Passenger comment and complaint procedures: A statement of the transit systemâs commit- ment to respond to passenger perceptions and complaints; explanation of the comment card policy; phone number, address, or e-mail for complaints and commendations; explanation of how input is handled; and time-frame during which a response should be expected. â¢ Transit system responsibilities: Explanation of transit systemâs mission, including provid- ing clean, on-time, reliable, safe, and efficient service and abiding by the service policies listed in the document, but not responsibility for passengersâ belongings. Other statements should address the transit service insurance coverage (meeting or exceeding legal require- ments); abiding by applicable federal, state, and local regulations; maintaining an alcohol- and drug-free workplace; and the transit systemâs commitment to keeping vehicles in safe working order. â¢ Safety: Required licenses and training for drivers and staff; seating, seatbelt, and wheelchair- securing requirements while vehicle is in motion; wheelchair tie-downs, safety restraints, and child restraint systems; secure locations for belongings and service animals; onboard safety equipment, inspection schedule, and the safe operation of vehicles. â¢ Emergency procedures: Policies regarding inclement weather and emergency closings; accident/ on-vehicle emergency procedures for drivers and passengers; and the transit systemâs role in the communityâs disaster preparedness plan. â¢ Non-discrimination: Part of civil rights assurance requirements. The operations plan should ensure that service is provided in a manner that does not discriminate based on race, color, or national origin. â¢ Closing statement: A reiteration of the transit systemâs mission statement, with contact infor- mation (address, phone number, and e-mail address) for comments and further information. Monitoring and Reporting This section outlines the monitoring program for a tribal transit service. A monitoring pro- gram is essential to determine the efficiency and effectiveness of the service being provided. Without specific measures, success is difficult to measure from year to year. Monthly reports, including information on productivity measures, should be prepared by the tribal transit pro- gram and presented to the Tribal Council and the stakeholders. In addition, a rider survey should be conducted every other year.
122 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Many grant programs may require monitoring and reporting as described in Chapter 8. Although reporting to funding agencies is obviously important, monitoring is even more impor- tant for good management. Productivity measures should indicate the number of passengers per revenue-hour and pas- sengers per revenue-mile by service area. The actual productivity should be compared with system standards. Monitoring Program Monitoring of service should be a daily function. Data collection is essential to evaluate the service performance and to determine if changes should be made in the service delivery. Data to be collected fall into three basic categories: ridership, on-time performance, and financial. Ridership To monitor productivity, it is essential that passenger ridership data be collected on an ongo- ing basis. The simplest approach for collecting ridership data is to equip each bus with manual counting devices that allow the drivers to register each passenger who boards by the appropriate fare category. The ridership data should be collected by route and not by bus, so that each route can be compared to the whole system. When a bus moves from route to route, the count should return to zero. Hence, runs should also be counted individually. This allows the tribal transit program to track the service demand not only by route, but also by hours (peak and off-peak hours) and miles. The performance measurement data should be entered into a spreadsheet or database for analysis and presentation to the Tribal Council and stakeholders. The data help the tribal tran- sit program establish ridership patterns and characteristics. As ridership data are collected and appropriate changes are incorporated into the transit service plan, better methods may be devel- oped to project ridership trends based on transit service alternatives. Tracking and reporting of miles traveled in addition to ridership is important because of the long travel distances for many tribal transit services. Cost information also should be reported monthly by the tribal transit program to the Tribal Council and stakeholders. Such information includes the cost per passenger, cost per revenue- mile, ridership, and average fare. These data should be collected and tracked based on each route of the transit system. The monthly reports on costs should be prepared in a spreadsheet or database format for the continuing analysis of data and trends. The tribal transit program and stakeholders can use them to determine the appropriate policy direction and recommend fund- ing decisions to the Tribal Council. An onboard passenger survey should be conducted periodically. It is recommended that a survey be conducted 6 months after service changes have been implemented. Following that, passenger surveys should be conducted at least every 2 years. Survey instruments with questions appropriate for the tribal transit program should collect information about passenger demo- graphics, trip characteristics, and perceptions of the transit service. On-Time Performance With any transit system, it is important to monitor on-time performance. An on-time per- formance goal should be established. For instance, an attainable on-time goal of 95 percent for the service may be considered for system changes. Minor adjustments to routes may be needed to ensure that schedules and headway adherence can be maintained. To record on-time performance, drivers should report actual arrival and departure times at designated bus stops along the routes and at major stops. It should be emphasized that drivers
elements of transit program Implementation 123 should not leave prior to a scheduled stop time to make up time along a route. Leaving early could cause riders to miss a bus. This effort should continue for the first 3 months of service. After that, on-time data should be checked randomly to ensure that performance remains acceptable. Financial Data The tribal transit program should carefully track financial data. Accounts should be kept so that separate costs can be tracked for each route. Financial data are required to evaluate perfor- mance measures such as the operating cost per hour of service and the cost per passenger-trip. A more detailed operating budget should be prepared that separates administrative costs by type of service, such as fixed-route and paratransit services. Database Formats and Reports Several options are available for storing data. The recommended approach is to set up data- bases in a computer program like MicrosoftÂ® Access or Excel to record passenger data. Separate databases should be set up for routine passenger data and for the boarding and alighting counts. Similarly, onboard survey data can be entered into a database program like Access or a spread- sheet program like Excel. Tribal transit staff should provide monthly performance reports, not just quarterly. The report should include performance data for the current month, the same month in the previ- ous year, year-to-date performance, and the prior year-to-date performance. Information that should be reported includes the following items: â¢ Passenger boardings by route â¢ Passengers per revenue-hour by route â¢ Total passengers by fare category â¢ Total passengers â¢ System passengers per revenue-hour Financial information should be reported, including the operating cost and the cost per passenger. The average fare should be calculated and reported based on operating costs and passenger counts. Quarterly reports should be considered for providing recent trends and interim performance data to the Tribal Council and the stakeholders. Additionally, an annual report should be com- piled and presented. The information for these reports can be easily generated from the data- bases and the accounting system. Performance Measures Transit performance measures serve as a guide to find out how a transit system performs. Performance measures define the types of data to be collected and give the tools necessary to identify transit system deficiencies and opportunities. It is worth noting criteria for the selection of performance measures. An effective performance measure will â¢ be measurable; â¢ have a clear and intuitive meaning so that it is understandable to those who will use it and to non-transportation professionals; â¢ be acceptable and useful to transportation professionals; â¢ be comparable across time and between geographical areas;
124 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook â¢ have a strong functional relationship to actual system operations so that when changes occur in system operations, changes in performance (and to the performance measure, if needed) can readily be determined; â¢ provide the most cost-effective means of data collection; â¢ be based on statistically sound measurement techniques where appropriate; and â¢ be consistent with measures identified for other systems. Performance measures should include the following categories: â¢ Passengers per hour: Number of total monthly and annual passengers divided by the cor- responding revenue-hours. â¢ Passengers per mile: Number of total annual passengers divided by the annual revenue-miles. â¢ Cost per trip: Total expenses divided by total annual one-way trips. â¢ Passenger-miles: Passenger-miles are one of the most difficult performance measures to calculate. Multiplying total system-miles by one-way passenger-trips does not give a good measure of passenger-miles. This involves very detailed data collection to get average passenger-miles per route. One way is to take an average trip length multiplied by systemwide miles or sample passenger activity. â¢ Vehicle-miles by service area: This performance measure can provide an effective assessment of the level of service being provided. The service area must be realistically identified, however. As an example, a tribal transit program may say it serves the entire reservation, but in fact, much of the reservation is very rural and does not receive service. â¢ Service (road calls): Vehicle breakdowns are inevitable. This performance measure indi- cates the distance traveled between mechanical breakdowns. Although frequent occurrences can create disruptions in a transit system, it is important to track the frequency and type of mechanical failures of each vehicle in addition to monitoring a fleetâs age. Monitoring of vehicle breakdowns is one method of reducing system disruptions and may allow an agency to improve monitoring of vehicle replacement schedules and preventive maintenance practices. Data collected should include date, time of day, type of failure, age of vehicle, vehicle number, vehicle mileage, and how the situation was rectified. Monitoring of these items will allow an agency to recognize repeated types of mechanical breakdowns and breakdowns related to vehicle type, age, or mileage, and assist with preventive maintenance programs. Wheelchair lift failures also should be monitored. Data should be included in the monthly report. â¢ Accidents per 1,000 miles: This is a measure of driver safety. Accidents must be defined as a standard. â¢ Average age of fleet: This measure provides a good single indicator of vehicle replacement needs, although individual vehicle inventories, ages, and mileage also should be tracked. â¢ Cost per revenue-hour: An excellent indicator of efficiency is cost per revenue-hour of service. Costs per hour should be analyzed by route and compared to overall system averages. Provide Comment Cards and Boxes To receive public input on how the transit service is working for passengers, the tribal transit program should provide comment cards and boxes on each transit vehicle so that the passengers have an opportunity to provide input regarding the transit system. Planning for Hazards and Safety The requirements for a Hazards and Security Plan and for a Maintenance and Safety Plan have been described in detail in Chapter 7. Before starting transit service operations, these plans should be in place to ensure adequate maintenance of vehicles, equipment, and facilities and protection of transit assets and personnel.
elements of transit program Implementation 125 â. . . [M]arketing is designated as a means to achieve the organiza- tionâs goal. It is a toolâ really a process and a set of tools wrapped in a philosophyâfor help- ing the organization do what it wants to do. Using marketing and being customer oriented should never be thought of as goals; they are ways to achieve goals.â âKotler and Andreasen, Strategic Marketing for Nonprofit Organizations Marketing Plan Marketing Is More than Advertising Having been deluged with advertisements all their lives, most people recognize an advertise- ment when they see one. Almost as many people believe they are equally cognizant of marketing, but when pressed for a definition, provide one that is remarkably similar to that of advertising. Missing from their definitions is the comprehensiveness of marketing, that marketing functions include or influence just about every aspect of a transit system from the way the telephone is answered to the color of the vehicles. Marketing is more than selling. A broader view of market- ing includes the following elements, excerpted from Strategic Marketing for Nonprofit Organiza- tions, 5th ed.: 1. Marketing is a set of activities designed to influence behavior. The essence of marketing is behavior change. Ideas and thoughts may come first, but the desired outcome is action. 2. Behavior by a target consumer is carried out at the end of an exchange process. Passengers exchange their time (waiting for the bus, extra time on the bus, organizing their day around the bus schedule), effort (finding out where and when the bus stops for them), and money (fares) for safe, predictable, easy-to-use, priced-right transportation that is sometimes fun. 3. An exchange will result in a transaction whenever the target consumer perceives the benefits of the action exceed the costs or sacrifices the behavior entails and the ratio of benefits to costs is better than that achieved by âspendingâ the costs in any other conceiv- able way. The passenger has made a calculation of trade-offs and has decided that riding the bus is in his or her own best interest. Marketing should focus on maximizing perceived benefits and minimizing perceived costs. 4. Behavior by the target consumer yields benefits to the marketer (which was the reason for marketing in the first place), while most of the benefits the consumer receives will involve costs for the marketer. These tend to be reciprocal, with benefits the passenger derives from riding the bus involv- ing costs to the service, and the costs the passenger pays are benefits to the bus system. 5. Transactions can also be affected by interpersonal influence and by perceptions of outcome efficacy and self-efficacy. Word of mouth is an effective low-cost, high-impact marketing tool. Perceptions of out- come efficacy refers to the fact that people are unlikely to do some activity if they do not believe that the behavior will achieve the desired outcomes and that they can actually carry out the behavior (self-efficacy). Word of mouth usually outweighs outcome efficacy and self-efficacy. 6. The outcome of an exchange may be of fixed duration or continuing. One bus ride is of fixed duration, but a habitual bus rider is a continuing exchange. Mar- keting should not stop when the target market becomes riders, but must continue to reinforce and encourage use of the bus service. 7. There may be two or more parties, one or both of whom may be carrying on marketing. Marketing efforts can be aided by: a. Family members, neighbors, and friends. b. A social service agency. c. The corner store who displays your schedules. d. The local chapter of an environmental organization that urges people to ride the bus and save the environment (Kotler and Andreasen, pp. 110â113).
126 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Marketing Mix This portion of marketing is what most people believe marketing is all about. The marketing mix is often described in terms of the âFour Psâ of marketing. Many experts add a fifth âPââpeople. Together, the Five Ps are product, price, placement, promotion, and people. 1. Product: In the case of transit, this refers to the services being offered: dial-a-ride, downtown shopping shuttles, scheduled service to the local college, special tourist trolleys, sheltered workshop service. 2. Price: At first glance, this seems to be about how much it costs to ride the bus in terms of fares. Pricing of this sort usually is a governmental decision not directly in the control of transit managers, who can support fare structures with information on the costs of other forms of transportation, how much the target markets are willing to pay, operating expenses, and available and projected revenue. Price also can be about how much it costs passengers to ride the bus in terms of effort on their part: wait times, distance walked to the stops, getting rained on while waiting for the bus, ease of transfers, availability of current and correct schedule information, courtesy of the driver, and all the other service attributes that make the system worth riding. 3. Placement: Transit service occurs in one place, albeit a moving placeâthe transit vehicle. As applied to transit operations, placement can refer to how well operations fit the patterns of mobility in the community (e.g., the locations of bus stops, routes, and schedules). Placement also can refer to availability of information about the system (e.g., schedules placed or posted at grocery stores, pharmacies, or schools). Medical appointment cards are another example: People in the community should be able to find the answer to the question, âDoes the bus stop here?â 4. Promotion: Here are the most visible portions of a marketing project: advertising, premi- ums, brochures, flyers, posters, bus boards, and special events. 5. People: Committed employees who are trained to deliver excellent customer service. The Five Ps of the marketing mix are supporting characters for the main stars of the market- ing campaign: branding and customer touchpoints. Branding is building a sense of ownership of the transit system in the rider. Customer touchpoints are areas of interface at which people make an emotional response to the marketing materials. Marketing and promotional campaigns seek to increase ownership and positive emotions. Well-designed user aids can help encourage those feelings. User Aids Riding a bus involves costs and benefits to both the rider and the transit provider. For many people, riding a transit vehicle is a new and somewhat frightening experience. When deciding to board the bus for the first time and then to continue riding, an individual actually completes a four-step process. The steps are as follows: 1. Awareness of need (need arousal) 2. Assembly and evaluation of alternatives 3. Formation of behavioral intention 4. Preparation and action (Kotler and Andreason, p. 120) Each step in this process offers an opportunity for the transit system to communicate a mes- sage to riders or potential riders. User aids help people decide that riding the bus will get them where they need to go in a safe, easy-to-use, predictable, priced-right, and sometimes fun way. For many riders, riding the bus means changing their behavior and changing their ideas about public transit. User aids such as usersâ guides, appointment cards, timetables, system maps, bus stop signs, bus stop shelters, and schedule and map displays make it easier for people to change their behavior and ride the bus. Figures 9.1 and 9.2 present some of the user aids developed for their transit system by the Eastern Band of Cherokee Indians. âMarketing management is the process of planning and executing programs designed to create, build, and maintain beneficial exchange relationships with target audiences for the purposes of satisfying individual and organiza- tional objectives.â âKotler and Andreasen, Strategic Marketing for Nonprofit Organizations
elements of transit program Implementation 127 When selecting and preparing user aids, transit planners should consider the following factors. 1. Function â¢ What is the purpose of this item? â¢ Who is the target audience? â¢ What information needs to be in this item? â¢ How will it be delivered? â¢ Is this for a special occasion? â¢ Is this item time-sensitive or can it be used for a long time? â¢ Can this serve more than one purpose? Figure 9.1. Cherokee Transit brochure. Used by permission of Cherokee Transit. Figure 9.2. Cherokee Transit map. Used by permission of Cherokee Transit.
128 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook 2. Aesthetics â¢ Does this item reflect the systemâs organizational identity, using the serviceâs name, tele- phone numbers, colors, typeface, logos, slogans, and artwork, so that people can instantly recognize its source? â¢ Does its appearance suggest a professional, competent, and concerned organization? â¢ Can you read it? â¢ Is the itemâs appearance commensurate with the transit systemâs budgetâor will people think, âNo wonder they cut service, they spent all their money on this brochureâ? â¢ Do you like it? 3. Cost â¢ Are the expected benefits worth the cost? â¢ Can the transit system afford a first-class production by people who know what they are doing? â¢ Can this item be produced competently in-house? If so, is that option less expensive than having someone outside produce the item? â¢ Have you correctly calculated the number you need? â¢ Are you using standard sizes to hold down costs? Websites It is imperative that transit services have a web presence. At the least, a âbusiness cardâ website that provides the pertinent telephone numbers and information about the services is necessary. More sophisticated websites can provide schedules, updates, announcements, and helpful links to more information about specific services (see Figure 9.3). At the high end of websites for transit are those like wmata.com, which has extensive informa- tion about Washington Area Metropolitan Transit Authority services and interactive trip plan- ning tools. Numerous tools are provided and website assistance is available online. Professional webpage design firms can give a site a sophisticated look and can make updating the site easier. At the other end of the scale, for a no-cost, easy approach to building a website, see www.weebly. com. Also, the National RTAP Website Builder is now available at http://www.nationalrtap.org/ WebApps/WebsiteBuilder.aspx. Social Media Social media is not just for kids. Pew Internet reported that from April 2009 to May 2010, while social media use by 18- to 29-year-olds grew 13 percent (from 76 percent to 86 percent), âboomersâ were catching on, too. Social-media use jumped by 88 percent for 50- to 64-year-olds (from 25 percent to 47 percent) and by 100 percent for persons ages 65 and older (from 13 per- cent to 26 percent) (Pew Internet). A recent Advertising Age article noted that âaccording to Forresterâs benchmark report, 40 percent of the U.S. population maintains a social-networking profile, up from just 17 percent in 2008â (Snyder-Bulik, September 2010). Many how-to articles and other information about social media are available at www.mashable.com. For applications specific to transit, see www.gosocialtransit.com. Medical Appointment Card A vital user aid is the medical appointment card (Figure 9.4). The object of the medical appointment card is to better coordinate health-related trips. Generally, appointments should not be made before 9:00 a.m. or after 3:00 p.m. Times should be set based on length of travel and cooperation of health care providers. The driver gives the card to the passenger before going in so their next appointment is properly scheduled and checks the card when they pick up the person for the return trip. The example in Figure 9.4 is from OATS, a transit system headquartered in Columbia, Missouri.
Figure 9.3. Home page, Cherokee Transit website. Used by permission of Cherokee Transit. Figure 9.4. Sample medical appointment card. Source: Sample provided by Peter Schauer, former director of OATS.
130 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Customer Service TCRP Report 47: A Handbook for Measuring Customer Satisfaction and Service Quality lists the following benefits from increases in customer satisfaction that relate to service quality measure- ment. According to research cited in the report, . . . increases in customer satisfaction are generally believed to: â¢ shift in the demand curve upward and/or make the slope of the curve steeper (i.e., lower price elasticity, higher margins) â¢ reduce marketing costs (customer acquisition [in the first place] requires more effort) â¢ reduce customer turnover â¢ lower employee turnover (satisfied customers affect the satisfaction of front-line personnel) â¢ enhance reputation and public image (positive word of mouth) â¢ reduce failure costs (handling customer complaints). For transit agencies, an increase in customer satisfaction translates into retained riders, increased use of the system, newly attracted customers, and an improved public image. (Morpace International and Cambridge Systematics, 1999, p. 5) In Strategic Marketing for Nonprofit Organizations, Kotler and Andreasen define satisfaction as âthe state felt by a person who has experienced a performance (or outcome) that has fulfilled his or her expectationsâ (Kotler and Andreasen, p. 605). Transit performance doesnât have to be out of this world, it simply has to be what the rider expects. Kotler goes on to say that a person will experience three states of satisfaction: âIf the results exceed the personâs expectations, the person is highly satisfied. If the results match expectations, the person is satisfied. If the results fall short of the expectations, the person is dissatisfiedâ (Kotler and Andreasen, pp. 604â5). How riders feel about their last ride on the bus is a balance between what they just experienced and what they were led to expect by the promotions. As a marketer, the tribal transit system cannot promise what it cannot deliver, nor can it lower expectations so much that no one will come near one of its vehicles. Managing expectations is important. âIndeed, it has been found that dissatisfied customers are likely to tell 9 to 12 other customers, whereas satisfied customers speak only to 2 or 3â (Kotler and Andreasen, p. 605). Do not discount the power of two or three satisfied customers. As profiled in Advertising Age, Walmart âis a company built on word-of-mouth reputationâ (Fisher, p. 3). The company counts on satisfied customers for its marketing campaigns. Walmart has a low advertising budget for a business of its size. From the beginning, it has relied on making service levels and prices so attractive to the people who shop there that they enjoy the experience and want to come back. Consistent prices build goodwill and trust in consumers. Feedback Techniques Several simple ways are available to find out if riders are satisfied with the service the system is providing. Trip sheets, customer comment forms, and onboard rider surveys can collect impor- tant information about the quality of the service. Trip sheets: Add a line or two to trip sheets to collect the opinions of your riders and drivers. This may be anecdotal evidence, but it is also a form of naturalistic inquiry that is a valid and useful method of gathering information. Trip sheets usually contain the date, vehicle number and location, total operating miles and hours, beginning and ending odometer, number of rid- ers, and cash received. Depending on service type, some trip sheets contain passenger name, identification number, funding source, trip origin and destination, purpose of trip, and number of stops per passenger (Kosky). Comment forms: Comment forms should include spaces for a customerâs name, address, and telephone number. Ideally, comment forms should be reviewed daily and responded to within 24 hours (48 hours maximum). People may be surprised that anyone takes their complaint seriously.
elements of transit program Implementation 131 Comment cards only provide broad opinions. These opinions often are valid, but they can- not be used to track trend changes in ridersâ opinions. Because of this limitation, the value of comment cards pales in comparison with that of the information obtainable using a quantitative rider satisfaction survey. In the best of all worlds, a quantitative rider satisfaction questionnaire includes a âcommentâ question. Comment cards are not a complete waste of money, but their value pales in comparison with the information obtainable using a quantitative rider satisfaction survey. Figure 9.5 presents a sample of a comment form distributed on vehicles. Figure 9.6 presents a form for documenting the most important partâthe transit system response to the complaint. Rider surveys: Surveys have room to ask more questions than comment forms and the ques- tions can be phrased to examine specific aspects of your service. Figure 9.7 provides an example of a rider survey. Public Relations and Marketing Plan Whether large or small, a transit system does not have to rely on big, expensive marketing cam- paigns. To make the most of available money, start talking. Ride the bus and interact with riders. The importance of talking to riders cannot be overstated. This task can be approached in several ways, as detailed in the following excerpts from an article by Holly Pavlika in Advertising Age: Talk to riders: This is especially important if customers are seeing negative press about your brand, your companyâs financial health, or any other possibly perceived negative coverage. You cannot afford not to talk to your customers. Especially your best customers. Reassure and inform them. If you withdraw, you will only add credence to the negative publicity. Have your riders talk to potential riders for you: We once advised a financial services company, based on the current economic situation, that the best place for it to put its marketing dollars was in a customer-get-a-customer program. Use your database to get an understanding of who your best customers are. Then galvanize your relationship with them. Know your riders and call them: Very few companies are communicating with their best customers in relevant ways. [The authorâs husband is a heavy cell phone user,] . . . yet he had to call his wireless carrier to take advantage of a special promotion they were running. When he asked the customer service rep if he was ever going to be told about it, the rep replied, âNo, you have to ask.â Talk to employees: With employee layoffs making headlines daily, have in place an internal communications program to keep employeesâ morale up. Even if your own company is stable, [if there is uncertainty about jobs in the community] it will have a negative impact on your staff. They have direct client contact and such anxieties will be quickly passed along. Keep your employees in the loop. Enlist their ideas for marketing initiatives (Pavlika, p. 24). Talking to Riders Skills Checklist 1. Do I make eye contact with each rider? 2. Do I try to maintain eye contact with each rider? 3. Do I have distracting habits that interfere with the conversation? 4. Am I physically relaxed during the conversation? 5. Do I look interested? 6. Do I keep my tone of voice sincere? 7. Do I have to ask the rider for information that he/she has already given me? 8. Do I hear the conversation accurately? 9. Do I have trouble remembering important points?
132 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Figure 9.5. Sample rider comment form. (Transit Agency Name) wants to know: How are we doing, folks? We would appreciate knowing if there is anything about (Transit Agency Name) that needs our aï¿½ention. Thank you for your time. The driver has a free round-trip bus pass for you as our way of saying thanks! Did you have any difficulties or problems making your reservation for this trip? Comment: __________________________________________________________ Did the bus pick you up when it was supposed to? YES NO Comment: __________________________________________________________ Was your trip safe? YES NO Comment: __________________________________________________________ Is (Transit Agency Name) easy to use? YES NO Comment: __________________________________________________________ Is the trip priced right? YES NO Comment: __________________________________________________________ Was the trip fun? YES NO Comment: __________________________________________________________ Anything more we should know? ________________________________________ __________________________________________________________________ Thanks! Please drop in box by driver. Be sure to ask the driver for your pass for one free round-trip.
elements of transit program Implementation 133 Figure 9.6. Sample form documenting transit system response to complaint. Rider name: __________________________________________________ Address: _____________________________________________________ Telephone number: ____________________________________________ Day, date, and time complaint received: ____________________________ Nature of complaint: ____________________________________________ ____________________________________________________________ ____________________________________________________________ Day, date, and time complaint occurred: ____________________________ Driver: _______________________________________________________ Person responding to complaint: __________________________________ How was complaint resolved? ____________________________________ ____________________________________________________________ Was the rider satisfied? _________________________________________ Is more action required? _________________________________________
134 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Figure 9.7. Sample rider survey. Rider Survey Please Return by . Dear (Transit Agency Name) Rider, We are doing a customer satisfaction survey. This survey will help us serve you beï¿½er. Your opinion is important and is conï¬dential. Thank you for ï¬lling in the survey. Please return your completed survey by giving it to your driver on any bus before . 1. How many days did you ride the bus within the last seven days? (Circle answer.) 0 days 1 day 2 days 3 days 4 days 5 days 6 days 7 days 2. Which of the following statements best describes why you ride (Transit Agency Name)? (Please circle one response.) A. I ride because I canât or donât know how to drive. B. I ride because I donât have a car available. C. I prefer riding the bus. Why do you prefer the bus? _____________________ D. Other: (Please tell us why.) __________________________________________ 3. For what purposes do you ride (Transit Agency Name)? (Circle as many answers as apply.) A. I ride to/from work. B. I ride to/from school. C. I ride to/from shopping. D. I ride to/from necessary business. E. I ride to/from recreation. F. I ride to/from friendâs or relativeâs home. G. Other: (Please tell us why you ride.) ___________________________________________________________________ 4. What got you to ride (Transit Agency Name) the ï¬rst time? _________________ 5. What could (Transit Agency Name) do to get you to ride the bus more often? ______________________________________________________________________ 6. What could (Transit Agency Name) do to get new riders? ___________________ 7. What is the one thing you would like to change about (Transit Agency Name)? ______________________________________________________________________
elements of transit program Implementation 135 Figure 9.7. (continued). 8. Listed below are factors about the bus system. On a scale of 1 to 4, with 1 being very unsatisï¬ed and 4 being very satisï¬ed, please write in the number showing how satisï¬ed you are with each of these factors when thinking about (Transit Agency Name). 1 = very unsatisï¬ed 2 = unsatisï¬ed 3 = satisï¬ed 4 = very satisï¬ed The cleanliness of (Transit Agency Name). The temperature on (Transit Agency Name). Number of bus stop shelters. Number of bus stop signs. Service from the driver. On time performance of system. Geï¿½ing information about (Transit Agency Name) (calling for information, asking the driver, etc.). Maps and schedules for the service. Buses aï¿½ractive and easy to see. Buses that are easy to get into and out of. Service hours. Days of service. Fares for service. Overall courtesy and friendliness of (Transit Agency Name) service. Safety of (Transit Agency Name) service. 9. Can you recall seeing any advertising for (Transit Agency Name)? What did you see and where did you see it? _______________________________________________________________________ 10. How likely are you to recommend riding (Transit Agency Name) to someone you know? Deï¬nitely will. Probably will not. Probably will. Deï¬nitely will not. 11. Please give us any other comments about (Transit Agency Name). Optional Questions: (Please answer by circling your responses.) A. Are you a: Student Employed Self-Employed Unemployed Retired B. Your Age is: 15 years or less 16â25 years 26â65 years 65 or older C. Male or Female? D. Your approximate household annual income: Less than $25,000 More than $25,000
136 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook 10. Do I tend to make too many assumptions about a rider right away? 11. Do I make assumptions about the riderâs transit needs? 12. Do I restate what the rider wants? 13. Do I interrupt riders to try to hurry them along? 14. Do I follow-up on the conversation? Word of Mouth One of the most powerful, and at the same time overlooked, tools for building partnerships with riders and the community as a whole is word of mouth. Planning for, managing, and main- taining positive word of mouth is at the core of marketing transit service. For systems serving smaller communities and rural areas, it is a particularly potent method of communicating the desirability of using your service. Chance conversations next to the cereal aisle at the market or outside the door at church can broadcast the news, positive and negative, about what sort of service is provided. According to author Don Smith, word of mouth is persuasive, influential, and directed, as follows: Persuasive: Usually the person conveying the message to the next person has the two most important persuasive qualitiesâtrust and respect. He or she is credible. Influential: Word of mouth usually comes from firsthand experience and contains reliable information. The person speaks with conviction based on actual experience. Directed to a highly segmented audience: The word of mouth message is directed to people who are family, friends, neighbors, or associates. Receivers are usually people of the same class or social group who would likely use your service (Smith, p. 34). Word-of-mouth marketing does not just happen by chance. It can be planned for and man- aged like other forms of promotions and advertising. Word-of-mouth campaigns should focus on the following: â¢ The exceeded expectation. The goal should be to provide a level of service that satisfies the rider. â¢ Providing riders with the information and language to tell others about their experience. The goal is to make it easy for riders to talk positively. The campaign should be designed to: â¢ incorporate activities that will encourage people to talk; â¢ support those activities with a budget (e.g., by providing a promotional item); â¢ use service personnel as advertising agents; â¢ make ridersâ word of mouth the channel that delivers your message; and â¢ establish the target audience as the friends, family, and associates of the rider. The following tips can support the campaign by helping encourage riders to talk positively: â¢ Provide the unexpected extra. Offer riders a tangible or intangible benefit for which they do not pay. â¢ Include riders in pioneering experiences. Help riders feel like pioneers by offering them the chance to try a new service or route that you are offering for the first time. â¢ Establish the rider as an authority. Help riders to become authorities on your system by shar- ing knowledge that they can, in turn, pass along to others. â¢ Make consultants of your riders. Ask riders their opinions about vehicles, routes, schedules, appointment procedures, or new ideas. Doing this has the additional benefit of gathering informal research data. â¢ Have your drivers point out the serviceâs features, advantages, and benefits (FABs). Drivers are the most visible employees in your organization. In addition to being courteous, competent,
elements of transit program Implementation 137 caring, and correct, they can be excellent promoters of the service and they need a 1- to 3-minute âstump speech.â â¢ Recognize riders. Drivers and other staff who come in contact with riders need to know them by name and should address riders by name. People using mass transportation want to be treated as individuals. Financial Plan and Budget Budgets Budgets are important to transportation service agencies because the budget document serves as a planning tool. A budget forces agency management to sit down and formally decide what they want and expect to happen in the future. During the annual budgeting process, agencies need to look at the following issues: â¢ Reducing or ending certain services â¢ Extending profitable services â¢ Adding new services â¢ Raising or lowering the rates being charged As government grant funding becomes more competitive, it is important for an agency to be able to estimate operating costs ahead of time in order to decide how much to realistically apply for and what services take priority. Grant requests are more likely to be funded if a well-prepared budget shows estimated operating deficits and the cost of services provided. Budgets must have both expense and revenue sections. Typical expense and revenue catego- ries are described in this section. Expenses should be shown in the budget by the classification from which they are paid (e.g., transportation), by the activities for which the expenditures are made (e.g., vehicle operations), and by the objects of the expenditures (e.g., driver salaries). Revenues should be shown by sources. Sources can be fares, agency contracts, or grants. Showing revenues by source allows for more accurate revenue estimates because factors that determine the amount of revenue coming in each year affect each source differently. Cost Categories Operations Costs Operations costs for a transportation system include costs dependent on vehicle-miles (e.g., fuel, oil, and vehicle maintenance); costs dependent on service vehicle-hours (e.g., driver and dispatcher wages); and costs dependent on the number of vehicles (e.g., insurance, registration, and vehicle storage costs). Vehicle maintenance costs include all contract and/or in-house maintenance of vehicles. Driver wage costs are expressed as driver wage rate per hour plus fringe benefits. Dis- patcher wage costs are expressed as the dispatcher wage rate per hour plus fringe benefits. Capital Costs Capital costs associated with transportation include the costs of vehicles, office equipment associated with the actual operation of those vehicles, and dispatch equipment. Capital costs are expressed in terms of annual cost per vehicle and include depreciation, leases, and rental costs. Administrative Costs Administrative labor costs within each personnel category are expressed in terms of hourly wage rates plus fringe benefits. Positions typically include the transportation director, transportation
138 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook assistant director, transportation manager or coordinator, finance/grants director, bookkeeper, trans- portation program assistant or administrative assistant, and secretary/dispatcher. Some employeesâ time may be split between tasks that are an operations cost and tasks that are administrative. For example, a driver may also spend part of his or her time cleaning the office. â¢ Costs for administrative office space are expressed as the monthly rent per square foot for office space devoted to transportation administrative activities plus the rates of the other space costs. Other space costs associated with the office space include: utilities, custodial services, security services, trash collection, property taxes, facility insurance, and maintenance of the facility. â¢ Other general and transportation administrative costs include items such as telephones, sup- plies, postage, staff travel, printing, bonding, marketing, administering drug and alcohol requirements, and dues and subscriptions. Allowable cost standards under federal government guidelines are slightly different for non- profit organizations than they are for local governments, transit districts, and Indian tribal organi- zations. Nonprofit organizations follow Office of Management and Budget (OMB) Circular A-122 and local governments, districts, and Indian tribal organizations follow OMB Circular A-87. Edu- cational institutions follow OMB Circular A-21. There are 10 cost standards under the circulars: 1. Cost reasonableness 2. Costs must be allocable (ability to be distributed properly) 3. No prohibition under law 4. Conformance with principles, grants, and regulations 5. Consistency with policies 6. Consistent accounting treatment 7. Conformance with generally accepted accounting principles (GAAP) 8. Prohibition of use as local match 9. Net costs 10. Documentation Table 9.1 compares what is allowed in each circular. Some public transit systemsâsuch as units of local government or multipurpose nonprofit corporationsâperform many departmental or program functions and would likely incur indi- rect expenses. In these cases, the expenditures benefit not only transit, but also other programs and departments. Indirect costs are normally charged to federal grants by the use of an indirect cost rate and a cost allocation plan. A separate rate usually is necessary for each department or agency of the governmental unit claiming indirect costs. According to federal guidelines, costs must be adequately documented. For example, under Federal Transit Administration (FTA) guidelines, accounting records must be supported by source documentation such as: cancelled checks, paid bills, payrolls, time and attendance records, and grant contract documents. Revenue There are four major categories of revenue for transportation services: 1. Fares 2. Agency contracts 3. Grants and other governmental payments 4. Other sources
Table 9.1. Comparison of cost allowability standards for state, local, and tribal Indian governments with nonprofit organizations and educational institutions. (continued on next page)
Table 9.1. (Continued).
elements of transit program Implementation 141 Fares Farebox revenue includes fares paid by passengers and prepaid fare media used by passen- gers, including multi-ride passes and tokens, prepaid passes, or other fare media purchased by a human service agency for distribution to its clients, and user-side subsidy arrangements. Farebox revenues do not include payments made to the transit provider by human service agencies under the terms of a purchase-of-service agreement. Agency Contracts Contract revenues involve a funding agency (such as human services) contracting with a transit system to provide transportation for the passengers specified by the agency. Transit agen- cies may be involved in multiple contracts. Most often these contracts last for 1 year and will be negotiated annually. Local Match Requirements Many grant programs require some type of local match. The amount of matching funds var- ies by program. In addition to cash matches, some programs will allow matching using in-kind contributions. Fare revenue cannot be used as local match. To reach a net operating expense, which is the basis for applying for FTA Section 5311 grant operating assistance, the following equation must be followed: Total Operating Expenses Unallowable Expensâ es Farebox and Other Operating Revenue = Ne â t Operating Expenses. Net operating expenses are expenses that remain after operating revenues are subtracted from eligible operating expenses. At a minimum, operating revenues must include farebox revenues. The following categories of income can be used as local match: â¢ State or local appropriations â¢ Dedicated tax revenues â¢ Private donations â¢ Net income generated from advertising and concessions As described in Chapter 8, under FTAâs Section 5311, Formula Grants for Other than Urban- ized Areas program, funds received by agencies for service agreements (agency contracts) with a state or local social service agency or a private social service organization may be treated as local rather than federal funds and can be used as local match, even though the original source of such funds may have been another federal program. Section 5311 recipients have the option of treating income from contracts to provide human service transportation to either reduce the net project cost or to provide local match for Section 5311 operating assistance. The manner in which an agency applies income from these contracts affects the calculation of net operating expenses and, therefore, the amount of Section 5311 operating assistance the agency is eligible to receive. To use human service contract revenue as local match or reduce the net cost in service, the contract revenue must be eligible according to federal guidelines. Generally speaking, the fol- lowing guidelines apply: 1. Contract service expenses must be included in total rural public transportation costs. The expenses associated with delivery of contract human service agency transportation must be included in the total operating costs for the Section 5311 project in order to use the revenues derived from that contract to either reduce the local matching share or as local match.
142 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook 2. Contract service must be operated as eligible mass transportation. Human service transportation under contract must be operated as eligible mass transporta- tion services (not charter services). To be considered eligible, the grantee must (a) maintain control of the contract service, (b) operate the service as âopen door,â and (c) be able to schedule any other rider on the vehicle in addition to the agencyâs clients. Table 9.2 lists federal program funds that can be used as local match for rural transit program projects. Non-cash revenue such as donations, volunteered services, or in-kind contributions are eli- gible to be counted toward the local match only if the value of each is formally documented and supported and represents a cost that would otherwise be eligible under the project. States and funding agencies have different limitations on the use of non-cash revenue to meet local match requirements. OMB Circular A-87 (pertaining to state and local governments and tribal organizations) states that contributions and donationsâincluding cash, property, and services by governmen- tal units to others, regardless of the other recipientâare unallowable as local match. Donations, volunteered services, and other in-kind contributions provided by other non-governmental organizations may be eligible as long as they are approved in advance. OMB Circular A-122 (pertaining to nonprofit organizations) allows for donated or volunteer services to be furnished to an organization by professional and technical personnel, consultants, and other skilled and unskilled labor. The value of these services is not reimbursable either as a direct or indirect cost. The value of donated or volunteer services may be used to meet the local match requirements as long as the donations meet all the following requirements: â¢ Verifiable from the recipientâs records â¢ Not included as contributions for any other federally assisted program â¢ Necessary and reasonable for program objectives â¢ Allowable under applicable cost principles â¢ Not paid by the federal government under another award â¢ Provided for in the approved budget for the grant award Fair market value of contributed or volunteer labor must be determined based on the regular rates paid for similar work in other activities of the organization or, in cases where the kinds of skills Table 9.2. Federal program funds usable as local match for rural transit program projects. Agency Program Title U.S. Department of Labor Foster Grandparents Retired Senior Volunteer Program (RSVP) Senior Companions Workforce Investment Act/Job Training Funds Community Service Agency Community Services Block Grant U.S. Department of Health and Human Services Title III of the Older Americans Act Title XIX Title XX General Relief Head Start Temporary Assistance to Needy Families (TANF) U.S. Department of Housing and Urban Development Community Development Block Grant
elements of transit program Implementation 143 involved are not found in other activities of the organization, the rates must be consistent with those paid for similar work in the labor market. For example, if the agency has some paid and some volunteer drivers performing the same tasks, and those who are paid are paid at a rate of $10.00 per hour, then the volunteerâs time should be valued at $10.00 per hour. If no paid staff members are doing equivalent work, then the federal minimum wage amount should be used. The agency must document all volunteer services in the form of timesheets signed by the volunteers. Financial Plan The Financial Plan is the financial strategy for implementing the proposed transportation project. It describes its costs and how they will be paid. This section provides a framework for preparing the Financial Plan, shown in Table 9.3 Each element is discussed here. Introduction The introduction should be brief and highlight the key features of the Financial Plan. It is a summary and should be prepared after other elements of the plan are completed. General Overview. Describe the project sponsor and other sponsors that will assist with financing or the delivery of project services. Explain the project goals and objectives and how they fit within the goals and objectives of the sponsor organization. Summarize the intended benefits and services of the project. Financial Overview. Begin the financial summary with the assumptions used to determine project expenses and costs. Consider how each of these factors will influence cost: inflation; proj- ect labor, equipment, and materials; and planned levels of service. If, for example, the project service area is experiencing an economic downturn, this may influence labor rates, which may be lower than average. If the project adds one route to an existing bus service, the operating costs for the added line should be less than implementing a completely new service. Table 9.3. Basic elements of the financial plan. 1. Introduction a. General overview Project sponsor and funding partners Project sponsor goals and objectives Project description and purpose b. Financial overview Assumptions Finance strategy 2. Operating plan a. Project operating expenses b. Project operating revenues c. Operating expense and revenue schedule 3. Capital plan a. Project capital needs and costs b. Project capital funds c. Capital costs and funding schedule 4. Cash flow analysis a. Cash flow projections b. Financial analysis 5. Appendix (supporting documentation)
144 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook After explaining the assumptions, summarize the strategy for financing the project. Briefly describe project costs and the sources that will be used to pay for them. Operating Plan The next element of the Financial Plan is the operating plan. It describes the expenses that will be incurred in the delivery of project services. It also identifies the sources of funds to pay for them and provides a schedule showing expenses and revenues over time. Operating Expenses. Project operating expenses typically include administrative, mainte- nance, labor, and materials costs. Collectively these are known as operating and maintenance (O&M) costs. They should be categorized by function, such as administration, and then catego- rized further by type, such as office supplies. An example is shown in Table 9.4. Operating expenses should be based on verifiable assumptions and facts. This could be his- torical data from an existing program or factors derived from a reliable and respected source such as the National Transit Database (NTD). Once first-year expenses are estimated or known, they should be forecast by function and type over the project planning period. Factors that influence an expense, such as inflation, should be explained and supporting documentation inserted in the appendix of the Financial Plan. Although it is not required, a sensitivity analysis may be conducted once expenses are known. An example of a sensitivity analysis is shown in Table 9.5. Here, a change in proposed revenue- hours or ridership affects service productivity, which is measured by the expense per passen- ger ratio or the expense per revenue-hour ratio. The sensitivity analysis enables testing of the Function Type FY2010 Contract service Service leases/service rentals $ 500 Support transportation services 1,600 Maintenance Labor/ fringe benefits 8,000 4,000 Non-vehicle: storage, equipment 200 Administration Insurance: casualty, liability 11,000 Administrative personnel, payroll 15,000 Dispatcher space, equipment 1,500 Office supplies 300 Utilities: electric, telephone 800 Other: marketing Printing, advertising, maps 300 Total project expenses $43,200 Vehicle: tires, fuel, replacement parts Table 9.4. Sample project operating expenses by function and type.
elements of transit program Implementation 145 project concept against project expenses; enables a âreality checkâ on the reasonableness of estimated expenses; and helps to determine if the intended goal and objectives for the project are achievable. Operating Revenue. Operating revenues pay for the operating expenses. Revenues may come from the following sources: â¢ Passenger or farebox revenue â¢ Federal funds by program source â¢ State and local funds by program source â¢ Local match and contribution from the sponsor â¢ Local match and contribution from regional, county, local, or tribal entities â¢ Service contract funds â¢ Advertising â¢ Donations from the public â¢ Contributed or in-kind services â¢ Other revenue sources List revenues by their source, their totals, and their status. In Table 9.6 most of the project revenue (84 percent) is from federal and state sources. The remaining 16 percent is from local, FY2010 Actual FY2011 Est. FY2012 Est. Passengers 10,174 10,290 8,502 Total expenses $43,200 $44,928 $47,051 Revenue-hours 2,680 2,793 2,344 Passenger per revenue-hour 3.8 3.7 3.6 Expense per revenue-hour $16.12 $16.09 $20.07 Expense per passenger $4.25 $4.37 $5.53 Table 9.5. Sample of project operating expenses and productivity factors. Funding Source Total Status Federal FTA Section 5311 $150,000 Appropriated through FY2012 with renewal in FY2013 and FY2014 BIA â IRR $11,200 Appropriated through FY2014 State Flexible funds $55,000 Appropriated through FY2014 Local Tribal local match $10,000 Authorized Tribal reserve fund $20,000 Authorized County transit $5,000 Committed City human services $5,000 Committed Total revenues/reserves $256,200 Table 9.6. Sample project operating revenues by source and amount.
146 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook county, and sponsor sources. A $20,000 reserve (8 percent of anticipated revenue) is estab- lished by the sponsor in the event of a funding shortfall or delay. The validity and verification of project-generated revenue (such as passenger fares) and external revenue (such as government grants) should be documented in the appendix of the Financial Plan. Schedule of Operating Expenses and Revenues. Once expenses and revenues are estimated or known, they should be forecast over the project planning period. A sample schedule is shown in Table 9.7. The forecast period generally is 5 years, but may be longer depending on the dura- tion and complexity of the project or the requirements of the granting agency. This operating plan (expenses, revenue, and schedule) should be inserted in the project Finan- cial Plan and also incorporated in the sponsorâs agencywide operations plan. This demonstrates sponsor commitment to and responsibility for the project in the context of other agency pro- grams and objectives. Capital Plan Similar to the operating plan, the capital plan matches project costs with funding sources. The capital plan, however, is concerned with investments or expenditures in physical assets such as vehicles, equipment, and infrastructure. Six basic steps are involved in preparing a capital plan (see Table 9.8). Each step is discussed in this section of the guidebook. Capital Costs. Capital costs represent the purchase or the replacement of vehicles and phys- ical items like fareboxes, radios, electronic communications, and computer hardware. Capital FISCAL YEAR 2010 2011 2012 2013 2014 TOTAL Actual Budget Operating expenses Contract services $ 2,100 $ 2,184 $ 2,271 $ 2,362 $ 2,457 $ 11,374 Maintenance 12,200 12,688 13,196 13,724 14,273 66,081 General administration 28,600 29,744 30,934 32,171 33,458 154,907 Other 300 312 325 338 352 1,627 Total expenses $43,200 $44,928 $46,726 $48,595 $50,540 $233,989 Operating revenues Federal: FTA - 5311 $30,000 $30,000 $30,000 $30,000 $30,000 $150,000 BIA - IRR 2,400 2,400 2,400 2,000 2,000 11,200 State: Flexible 11,000 11,000 11,000 11,000 11,000 55,000 Local: Tribe local match 2,000 2,000 2,000 2,000 2,000 10,000 County transit 1,000 1,000 1,000 1,000 1,000 5,000 City human services 1,000 1,000 1,000 1,000 1,000 5,000 Total revenues $47,400 $47,400 $47,400 $47,000 47,000 $236,200 Project reserve fund ($20,000) $24,200 $26,672 $27,346 $25,751 $22,211 Table 9.7. Sample 5-year schedule, project operating expenses and revenues.
elements of transit program Implementation 147 costs also involve the procurement of equipment, furnishings, and lighting, and the construction or repair of facilities or infrastructure needed for the project. Step 1. Inventory of assets: The first step in preparing a capital plan is to take stock of the capital assets available to the project. Conduct an inventory of assets by listing every known asset by land, building, equipment, and vehicle. The inventory should contain the original purchase price of each asset, the date it was put into service, and its current condition. The inventory should be updated annually. Step 2. Asset replacement schedule: The second step in preparing a capital plan is to pre- pare an asset replacement schedule for the inventoried assets. If, for example, three vans were purchased and placed into service in Year 2005 and their documented life expectancy is 5 years, they will likely need to be replaced in Year 2010, assuming there are no changes in the use of the vans. The asset replacement schedule should reflect the useful life of the vans. It enables early knowledge of what will be needed and will influence funding requests. Asset replacement decisions are not arbitrary and often are guided by the rules of the granting agency. Consultation should be sought from staff, auditors, vendors, consultants, or state depart- ments of transportation to determine useful life. This due diligence will enable appropriate justifi- cation for funding requests. It will also enable compliance with stringent reporting requirements when the project is underway. Figure 9.8 presents an example of the vehicle replacement rules for the rural transit program administered by the Ohio Department of Transportation (Ohio DOT). Maintaining an inventory of assets and an asset replacement schedule helps to address the kinds of rules specified in the Ohio Department of Transportation criteria. In Figure 9.9, the inven- tory sheet addresses both the vehicle replacement rules and the asset replacement schedule. Step 3. Asset financing and cost: The third step in preparing a capital plan is to know the cost for financing each needed capital item and the terms of financing. Specifically, will a single up- front payment suffice or will multiple payments be required over the course of the project? The type and frequency of capital payments affect cash flow and the schedule of grant receipts. Before pursuing new assets, alternative procurement methods should also be considered. As advised in TCRP Report 101: Toolkit for Rural Community Coordinated Transportation Services: In assessing capital needs and understanding the financial constraints that are present, care should be taken to look for opportunities for contributed services and equipment that may substitute for capital purchases. Donated vehicles are an area of particular opportunity. For rural programs in particular, some state departments of transportation provide state contracting that local organizations may use for vehicle and other equipment purchase. This enables local organiza- tions to complete purchases based on competitive bid processes without the need for a complicated, competitive bid process of their own. (Burkhardt, pp. 122â23). Table 9.8. Steps in preparing the project capital plan. Step 1. Inventory of assets Conduct an inventory of all capital assets available to the project. 2. Asset replacement schedule Determine date and reason for asset replacement and purchase. 3. Asset financing and cost Investigate the costs of asset replacement or procurement. 4. Capital needs and budget Prepare capital needs list and budget. 5. Funding sources Determine sources of capital funds. 6. Project capital schedule Prepare capital cost and funding schedule over project planning period.
Figure 9.8. Sample rules guiding vehicle replacement. Source: Ohio Department of Transportation. Ohio Department of Transportation (ODOT) Rural Transit ProgramâReplacement Vehicle Justiï¬cation 1) Justiï¬cation for replacement vehicles must include detailed information regarding vehicle mileage and condition. 2) For an expansion vehicle, indicate whether it is for ADA eligibility, for expanded service, or to meet back-up requirements. If for expanded service, elaborate on the expansionâe.g. expanded hours, increased peak-hour requirement, etc. 3) For back-up vehicles, indicate the system spare ratio which may be deï¬ned as a system with a peak-hour* operating requirement of 1 to 10 vehicles. Under the ODOT program, this system type is allowed up to two back-up vehicles. A system with a peak-hour ï¬eet of 11 or more is allowed a spare ratio of 20 percent of their ï¬eet. Include the peak-hour ï¬eet require- ments before and after the purchase of the planned vehicle(s). 4) The back-up and total ï¬eet size calculation for ï¬eets with 11 vehicles or more is: - Peak-hour X 20% = Back-up(s) - Total Allowable Fleet Size = Peak Hour + Back-up(s) *Note: Peak-hour refers to the maximum number of revenue vehicles used on a regular basis during the busiest hours of an average day. Typically, these hours are 7-9 a.m. and 3-5 p.m. but may vary by system. For example, a system with a ï¬eet of 18 revenue vehicles would be allowed three back-up vehicles assuming that the systemâs peak-hour requirement is 15 (15 X 20% = 3 back-up vehicles). If a system, however, has a ï¬eet of 18 vehicles, but is only operating 12 vehicles during peak hours, then the maximum number of vehicles required would be 14 (12 X 20% = 2 back-up vehicles). In this example, ODOT would not approve any expansion vehicles and the system would be required to dispose of the excess vehicles. Figure 9.9. Sample inventory sheet that addresses vehicle replacement. Replacement Vehicle(s): One Converted Van Vehicle Inventory #: B581 Vehicle Acquisition Date: 3/15/02 Estimated Disposal Date: 7/31/10 Mileage Estimate: 285,000 Current Condition of Vehicle: Fair/Poor Expected Condition: Poor Estimated Milestone (Purchase Order) Date for New Vehicle: 1/31/10 New or Existing Radio: New Additional Information: This vehicle is starting to have higher maintenance costs and will be ready for replacement. Total vehicles in current ï¬eet: 12 Total vehicles in ï¬eet after expansion: 13 Peak-hour usage: 11 Back-up calculation: 11 x .2 = 2 back-ups + 11 = 13 total Expansion Justiï¬cation: Our total peak-hour usage rate of 11 provides justiï¬cation for the purchase of the expansion vehicle. This vehicle will be used for the increasing demand for our region-wide service. Ridership is increasing at a constant six percent rate per year. This may require us to purchase another expansion vehicle in Year 2011. We will address this in next yearâs Capital Plan. This vehicle will be wheelchair-equipped and will meet ADA requirements since we plan to purchase from ODOT term contracts. Source: Ohio Department of Transportation.
elements of transit program Implementation 149 Vehicle leasing is an often-used financing tool in transit service planning. Several tribal transit programs participate in the U.S. General Services Administration vehicle leasing program. Ben- efits of lease obligation financing include the following: â¢ Leasing allows the agency to spread the cost of equipment and capital assets over many years. â¢ Lease obligation financing can provide competitive credit terms. â¢ The period of the lease can be tied to the useful life of the asset. â¢ Leasing preserves liquidity since it does not tie up other working capital or credit lines. â¢ Leasing provides cost certainty for a known period. â¢ Leasing can avoid loan or debt limitations since it is accounted for as an operating expense. â¢ Leasing simplifies tax accounting as asset depreciation is the responsibility of the lessor. One caveat in asset leasing is that FTA will not reimburse for more than the depreciated value of a leased asset in a given period. Under FTA rules, on a 10-year lease of a bus with a 12-year use- ful life, the agency will only reimburse 80 percent of 1/12th of the assetâs value each year rather than 80 percent of the lease payment. Step 4. Capital needs list and budget: The fourth step in preparing the capital plan is to sum- marize the need, cost, and method for procuring or replacing project assets in a capital needs list and budget. This step captures the number and type of items needed, purchase price, total cost, life expectancy, rationale for purchase, priority of purchase, and other features. A sample capital needs list and budget is shown in Table 9.9. Step 5. Capital fund sources: The fifth step in preparing a capital plan is to identify fund- ing sources to pay for the needs summarized in Step 4. Knowledge of programs that award grants for capital improvements and investments will be required. Research the granting agency purpose, eligibility requirements, local match terms, funding cycle, funding levels, and funding history. Federal, state, regional, county, and local governments; tribal orga- nizations; social and human service agencies; and profit and nonprofit entities should be investigated and matched to the capital needs of the project. When funding is approved, insert documentation verifying the funding commitment and terms into the appendix of the Financial Plan. Step 6. Schedule of capital costs and funding sources: The sixth and final step in prepar- ing the capital plan is to schedule known expenditures with known funds. This is shown in Table 9.10. It is noted that a $6,000 contingency (5 percent of total expenditures) is established by the sponsor. Contingencies provide reserves against the risk of unexpected costs and unan- ticipated funding shortfalls or delays. Borrowing, debt levels, and ratings: Often the financing of capital needs is achieved through borrowing. If the capital plan involves debt or debt proceeds, a separate schedule should show outstanding debt levels, the gross amount of each debt issuance, the net proceeds from each issuance, debt service requirements, and interest rates for the present year and the past (if appli- cable) and future 5 years, at minimum. The borrowing costs should be listed by year as a line item under capital expenditures in the capital plan schedule. The completed capital plan (expenditures, funding, and schedule) should be inserted in the project Financial Plan and also incorporated in the sponsorâs agencywide capital plan. This demonstrates sponsor commitment to and responsibility for the project in the context of other agency programs and objectives. Cash Flow Analysis The fourth element of the Financial Planâcash flow analysisâsummarizes the operating and capital data and permits a year-by-year review of the financial condition of the project.
Table 9.9. Sample project capital needs and budget.
elements of transit program Implementation 151 More than 5 years of analysis may be required when preparing cash flow, depending on the dura- tion and complexity of the project or the requirements of the granting agency. Cash flow analysis is a valuable tool for project planning. It assesses the financial strategy and quickly detects any risks, inconsistencies, or changes that may be needed. An example is presented in Table 9.11. Sample Analysis. In considering the sample project, the operating budget appears adequate and suggests the $20,000 operating reserve created by the sponsor could be reduced or elimi- nated. However, it also provides some protection against possible unknown changes in costs such as a large increase in the price of fuel. On the capital side, the $6,000 contingency established by the sponsor may not be enough to cover risks. There is a shortfall in capital funding which would require additional funding from the tribe or a transfer from the operating reserve funds. Should the FTA capital infusion anticipated in 2013 be delayed, the planned vehicle replace- ments scheduled in 2013 may not be possible given the limited contingency. Options that may be considered include the following: â¢ The sponsor may wish to re-think the diversity of its capital sourcesâwith less reliance on the one-time 2013 FTA capital grant and further exploration of local, regional, county, or state sources that may support the procurement of one or all of the needed buses. â¢ The sponsor may consider reducing capital costs by leasing the needed vehicles or procuring used vehicles in good condition in lieu of new vehicles. â¢ Two, rather than three, vehicle procurements by 2013 may be considered after reviewing how the reduced fleet may affect ridership and service levels. â¢ The option of re-allocating all or a portion of the proposed operating reserve to the proposed capital contingency could be considered. Appendix The final element of the Financial Plan is the appendix, which contains documentation that supports the assumptions and forecasts of the plan. At minimum, the appendix should provide the items listed in this section. Fiscal Year 2010 2011 2012 2013 2014 Actual Budget Capital expenditures 15-passenger van (3) 0 0 0 $90,000 0 Garage roof repairs $26,000 0 0 0 0 PC and printer 0 $4,000 0 0 0 Total capital expenditures $26,000 $4,000 $0 $90,000 $0 Capital funding sources FTA Tribal Transit (Section 5311 [c]) $1,600 0 $36,000 0 BIA â IRR $10,400 $1,600 $36,000 State rural transit (local match) $5,200 $800 0 $18,000 0 Tribe contingency $2,600 $400 0 $3,000 0 Total capital revenue $18,200 $4,400 $0 $93,000 $0 Beginning cash balance $24,200 $2,600 $1,400 $91,600 $1,600 Change to cash balance ($26,000) ($4,000) 0 ($90,000) 0 Closing cash balance ($1,800) ($1,400) ($1,400) $1,600 $1,600 Table 9.10. Sample 5-year project capital plan, FY2010â14.
152 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Economic, Demographic, and Related Documentation. â¢ Historical data and forecasts of local economic, demographic, employment, and popula- tion levels and conditions that support the need for or affect the costs of the proposed service. â¢ Growth or inflation rate assumptions that may affect costs, ridership, operations, and service levels. â¢ Other transit operations or needs in the service area which may complement the project. Project Sponsor Information. â¢ Three years of audited financial statements for the organization. â¢ Agencywide capital and operating plans, which include the operating and capital data of the proposed project. â¢ Existing and anticipated service contracts, service agreements, and leasing agreements. â¢ Past performance in receiving operating and capital grants including evidence of timely match and history of obligations and draw-downs. â¢ Inventory of assets, asset replacement schedule, and fleet management plans. â¢ Other services provided through the organization, including their history, and how the ser- vices are managed, administered, and financed. â¢ If applicable, the Long-Range Transportation Plan (LRTP) and Transportation Improvement Program (TIP) of the organization or the government entity supporting the proposed service. The documents should include the proposed project. Fiscal Year 2010 2011 2012 2013 2014 Total Actual Budget Operating Operating revenue (see Tables 9.6 & 9.7) $47,400 $47,400 $47,400 $47,000 $47,000 $236,200 O&M expenses (see Tables 9.4 & 9.7) $43,200 $44,928 $46,726 $48,595 $50,540 $233,989 Balance from operations $4,200 $2,472 $674 ($1,595) ($3,540) $2,211 Capital Capital revenue (see Table 9.10) $18,200 $4,400 0 $93,000 0 $115,600 Capital expenditures (see Table 9.10) $26,000 $4,000 0 $90,000 0 $120,000 Change in capital funds -7,800 400 0 3,000 0 -4,400 Cash balance Beginning cash balance $26,000 $22,400 $25,272 $25,946 $27,351 Change to cash balance -3,600 2,872 674 1,405 -3,540 Closing cash balance $22,400 $25,272 $25,946 $27,351 $23,811 Table 9.11. Sample project 5-year cash flow analysis, FY2010â14.
elements of transit program Implementation 153 Information About Other Sponsors. â¢ Description of other sponsors, subcontractors, or subrecipients involved in the delivery of project services or financing of project assets including the financial profile of each and description of their involvement. Funding Information. â¢ Commitment letter, notification of funding, official grant agreement, or other documentation evidencing commitment of funds. â¢ Written verification from the granting agency or funding partner indicating âintent to com- mitâ if no formal commitment or programming of funds is in place. â¢ Detailed description of any financing or borrowing technique or method used to support the project. Annual Update The Financial Plan should be updated every year as new budget information becomes avail- able. Actual financial results should replace forecasts from the previous year. Forecast equa- tions should be re-estimated with another year of data and the resulting forecasts updated. Any changed policy, cost, or revenue factors should be incorporated to reflect current reality. More- over, any event that has a material impact on the current or future financial profile of the project should trigger an update of the Financial Plan. Events such as the loss of funding or changes in the service schedule; cost changes for critical capital procurements; or other events, such as the introduction of a new regional service that may diminish or complement the proposed project, should be reflected in the revised Financial Plan. Alternative Fuels Choosing a fuel is a decision that affects an organizationâs long-term costs, performance, and public perception. Some of the factors important for making a prudent fuel choice are intro- duced in this guidebook. It provides a starting point for assessing fuel choices. This section is adapted from information published in TCRP Report 146: Guidebook for Evalu- ating Fuel Choices for Post-2010 Transit Bus Procurements. It addresses developing a short list of fuels to further explore. Developing a Short List of Fuels Transit agency fuel choice decisions are based on a variety of factors, including the following: â¢ Capital and operating costs â¢ Environmental concerns â¢ Reliability of fuel and technology suppliers â¢ Popularity, including political support â¢ Transit agency experiences â¢ Risks associated with fuel change A detailed analysis of each fuel option takes significant time and effort. Many agencies reduce their detailed analyses by first establishing a short list of two to three fuels. To aid in developing this short list, overall fuel comparisons are shown in tables and graphs. Infrastructure and Availability Infrastructure risks are one of the types of risks associated with changing fuels. These risks include unavailability or interruption in the fuel supply, fuel-specific equipment, spare parts, Types of Fuel: Liquid Fuels â¢ Diesel â¢ Biodiesel â¢ Gasoline â¢ Ethanol Gaseous Fuels â¢ Compressed natural gas (CNG) â¢ Liquefied natural gas (LNG) â¢ Hydrogen â¢ Propane â¢ Dimethyl ether Electric Power â¢ Trolleybus â¢ Battery electric â¢ Hybrid electric â¢ Fuel cell
154 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook and maintenance and warranty services. Infrastructure risks are generally for less broadly used fuels. Over time, relative usage of different fuels has varied. The level in recent years is often a direct indicator of the availability of the fuel and its associated technology. Figure 9.10 shows the total number of natural gas buses in the United States compared to the total number of electric and hybrid buses between 1996 and 2008 based on data collected by the American Public Transportation Association (APTA) for transit buses (fixed-route service). Although the number of natural gas buses steadily increased during this period, electric buses were initially very slow to increase in numbers. However, beginning around 2004, a technology improvement in the hybrid powertrain led to subsequent increases in use of hybrid buses. The inset box in Figure 9.10 shows on a different scale the same data for natural gas and diesel buses. From the inset, it can be seen that while natural gas usage has been steadily increasing, most transit buses are still powered by diesel. All other alternatives have lower usage than natural gas. Figure 9.11 shows the relative number of transit buses currently running in the United States for each fuel discussed in TCRP Report 146. These number ranges are based on a variety of recent estimates with differing precision, and imply general differences in availability and confidence in generalizing the available data. Note that 5 of the 13 fuel types have less than 100 operating buses nationwide in 2010. Emissions Comparisons Emissions have been an important factor in the fuel selections at many transit agencies. The more stringent Environmental Protection Agency (EPA) 2010 emissions standards apply to all heavy-duty engines no matter which fuel they burn. As such, the difference in tailpipe emissions between the various fuel choices has been greatly reduced. Most bus engines require emission control technolo- gies to bring emissions down to the level mandated in the 2010 standard, regardless of the fuel. Figure 9.10. Number of transit buses by fuel type over time. Source: TCRP Report 146: Guidebook for Evaluating Fuel Choices for Post-2010 Transit Bus Procurements, p. 2-2. Diesel Gallon Equivalents: Diesel gallon equivalents (DGE) is a unit used when comparing dif- ferent fuels. One DGE always has the same en- ergy content as 1 gallon of diesel. Since diesel has around 128,450 Btu per gallon, 1 DGE is defined as being what- ever the quantity of another fuel that contains 128,450 Btu. A DGE is more than 1 gallon of the common alternative fuels because they contain less energy per gallon.
elements of transit program Implementation 155 Figure 9.12 shows a basic comparison of emissions from various types of fuels. Figure 9.12 shows only tailpipe emissions of regulated pollutantsâthese pollutants are released locally as the bus operates. A recent National Energy Technology Laboratory (NETL) analysis of greenhouse gas (GHG) emissions from conventional transportation fuels found that âopportunities for lowering the life cycle GHG emissions from transportation-related fuels will best be achieved through improved vehicle efficiency or alternative sources of transportation fuelsâ (Skone and Gerdes). Figure 9.11. Number of transit buses by fuel type. Source: TCRP Report 146: Guidebook for Evaluating Fuel Choices for Post-2010 Transit Bus Procurements, p. 2-2. Figure 9.12. Regulated tailpipe emissions. Source: TCRP Report 146: Guidebook for Evaluating Fuel Choices for Post-2010 Transit Bus Procurements, p. 2-3.
156 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook GHG emissions are not currently regulated. A fuelâs lifecycle GHG emissions can vary greatly depending on how it is produced and transported. Fuels such as ethanol could potentially reduce or increase lifecycle GHG emissions compared to diesel depending on factors such as feedstock and land use. Fuels such as hydrogen and electricity only produce zero-GHG emissions on a tailpipe level; on a lifecycle basis, these fuels may be responsible for significant levels of GHG emissions depending on how they are produced. Cost Comparisons Many costs come with purchasing a new type of bus, ranging from retrofitting garages to training employees to handle the fuel. The two most obvious costs, however, are the buses them- selves and the fuel required to power them. Figure 9.13 and Figure 9.14 show comparisons of these costs. Vehicle Disposal FTA establishes useful vehicle life requirements for vehicles purchased in whole or part with federal dollars. These requirements are given in terms of years and accumulated miles for vari- ous vehicle types. These regulations were established to ensure that taxpayer dollars are spent effectively. Vehicles that are retired or disposed of prior to their established service-life leave the transit agency subject to financial penalty. An FTA study found that, in general, vehicles are in service for 1 to 3 years past their minimum service-life guidelines. These minimums are depicted in Table 9.12. The minimum life is reached when either the service years or miles have been reached, whichever comes first. Disposal Before the End of Useful Life For projects that receive grant funds directly from FTA, the disposal of a vehicle before the end of its useful life requires prior FTA approval. In addition, FTA is entitled to its share of the Figure 9.13. New bus purchase prices by fuel type. Source: TCRP Report 146: Guidebook for Evaluating Fuel Choices for Post-2010 Transit Bus Procurements, p. 2-4.
elements of transit program Implementation 157 remaining federal interest. This interest is determined by calculating the fair market value of the property immediately before the removal from use. Straight-line depreciation is always used so that calculation of remaining value is relatively simple. For example, a vehicle with a 12-year service-life depreciates at 1/12th of its value each year until it reaches the end of its service-life. After the fair market value of the vehicle is established, the federal interest is simply the portion of the original grant paid for with federal funds, generally 80 percent of the total. For vehicles purchased using funds received through the state, the requirements of the state must be followed. Retain and Use Elsewhere If the minimum useful life of the vehicle has been reached and the vehicle is no longer needed for its original project purpose, it can then be used for other projects or programs without FTA approval. Fair Market Value More than $5,000 After the service-life of the property has been reached, vehicles with a fair market value more than $5,000 may be retained or sold. Reimbursement to FTA is calculated at the time of disposi- tion or net sale proceeds by the percentage of FTAâs participation in the original grant. Figure 9.14. Fuel prices per diesel gallon equivalent (DGE). Source: TCRP Report 146: Guidebook for Evaluating Fuel Choices for Post-2010 Transit Bus Procurements, p. 2-4. Table 9.12. Minimum service-life guidelines. Category Minimum Useful Life Years Miles Heavy-duty large bus (35â60 feet) 12 500,000 Heavy-duty small bus (30 feet) 10 350,000 Medium-duty bus (30 feet) 7 200,000 Light-duty mid-sized bus (25â35 feet) 5 150,000 Light-duty small bus, cutaways, modified vans 4 100,000
158 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Fair Market Value Less than $5,000 Vehicles with a fair market value less than $5,000 may be retained, sold, or disposed of without obligation to reimburse FTA after the service-life of the vehicle has been reached. Additional information regarding vehicle disposal and service-life can be accessed via the following sources: â¢ FTA Circular 5010, at http://www.fta.dot.gov/documents/C_5010_1D_Finalpub.pdf â¢ FTA Useful Life of Buses Report, at http://www.fta.dot.gov/documents/Useful_Life_of_ Buses_Final_Report_4-26-07_rv1.pdf Legal Issues Legal Authority A public tribal transit authority is an expression of tribal sovereign power. Public transit authorities, like other government agencies, are creatures of statute or law, which authorize the terms and conditions of their existence. Such agencies are created by governments to conduct a public service and, as such, are a branch of that government. The government generally estab- lishes criteria under which the transit authority must operate. Common issues include the ability to receive and manage funds, as well as apply for external grant and contract opportunities with state, federal, and local agencies. Tribal authority to engage in transit-related activities can be expressed through several dif- ferent avenues. Tribes have inherent authority to create and charter public and private entities under tribal law. Congress also created mechanisms for tribal government organization under the Indian Reorganization Act (IRA) of 1934. Section 16 of the IRA provides for organization of tribal government itself, and Section 17 provides for federally chartered tribal corporations. Tribes can also create state chartered corporations. When creating a transit agency, tribes must consider the role of tribal sovereign immunity from suit. Sovereign immunity is the doctrine that precludes the assertion of a claim against a sovereign without the sovereignâs consent. The law of tribal sovereigntyâas it has developed in the federal courts and by federal statutes, executive orders, and treaties over the last 2 centuriesânow rests on several fairly well-settled tenets: 1) tribes have virtually unlimited authority over internal tribal affairs; 2) tribes are subject to the plenary, or absolute, power that Congress has over them; 3) tribes are presumptively immune from state law; 4) tribes cannot be sued absent their express consent or a waiver of their immunity; and 5) tribal sovereign immunity does not extend to individual tribal members except to the extent that tribal officials act within the scope of their official capacities. The conduct of a transit service creates the risk of liabilities to the public and transit agency employees in addition to the contractual relationships with funding agencies and vendors. Although tribes have long been found to possess immunity from unconsented suit, there have also been situations where courts have found that immunity waived. Through careful document drafting while creating the public transit agency, tribes can choose to provide limited waivers of sovereign immunity designed to protect and assert tribal sovereignty while addressing the need for responsibility for any harm resulting from that activity. Though tribes are reluctant to submit themselves to the jurisdiction of a foreign court (state, county, or federal), these same entities are reluctant to submit their agencies to tribal court jurisdiction for the resolution of disputes. Some frustration exists in this situation based on the Indian Commerce Clause delegation of authority over tribal affairs to Congress. Congress has passed several laws that require tribes to obtain transit and other funding by application to state agencies without addressing the need for effective dispute resolution between those separate
elements of transit program Implementation 159 sovereigns. In the absence of clear congressional directives in this area, tribes, states, and local agencies are left to negotiate their own terms for transit funding agreements. Contracts Tribes engage in a wide range of contractual arrangements in the day-to-day operation of a transit agency. A contract is an agreement between two or more persons or entities in which there is a promise to do something in exchange for something of value (called âconsiderationâ). Some of these contracts are commercial in nature, involving the purchase of goods and services. Other contracts are government-to-government agreements involving program funding, land use, sharing of resources, and allocation of jurisdictional responsibility. Proper management of these legal obligations requires careful consideration of the types of relationships involved, iden- tification of legitimate government interests at stake, and management of risks through careful document drafting and insurance requirements. Any contract to be considered by the tribe as part of the transit program should be reviewed and approved by an attorney for the tribe. Insurance Operating a transit program involves liability as vehicles are operated on public roadways and passengers are transported in the agency vehicles. The transit program should obtain insur- ance for the vehicles, the agency, and employees. Insurance requirements may include workersâ compensation, general liability, and vehicle liability. Tribal transit programs typically obtain insurance through the insurance carrier for the tribe. Requirements for minimum coverage may be determined by the tribe, states, or funding programs. The requirements of each agency or funding program will need to be considered depending on the service and sources of funding. Barriers and Obstacles Some tribes develop an implementation plan and prepare to start a transit service only to find that they are faced with barriers and obstacles. This section describes some of the barriers and obstacles faced by tribes in implementing a transit service. Meeting FTA Requirements Some tribes have encountered obstacles in meeting FTA requirements. For example, Oglala Sioux Transit was delayed 4 years because the tribe was required to complete a Disadvantaged Business Enterprise (DBE) Plan as part of its certifications and assurances for receiving FTA 5309 funds. The tribe was concerned that the certifications and assurances would give away tribal sovereignty and that many of them did not fit the tribeâs situation. After a delay of 4 years, the tribe finally signed the certifications and assurances as required by FTA and was able to start a transit service. Although the tribe signed the agreement, the tribe has since seen changes in how FTA deals with tribes. Lack of Support from Tribal Council The Eastern Band of Cherokee Indians faced initial opposition from the Tribal Council when they wanted to start their transit service. The Tribal Council did not think people would use such a service. The transit manager collected actual names of people who would use such a transit service. This convinced the Tribal Council to give their approval for such a transit service.
160 Developing, enhancing, and Sustaining tribal transit Services: a Guidebook Change in Administration At the final stages, some tribes have had to face challenges such as a change in administration. For example, the Northern Cheyenne Tribe applied for a technical assistance grant through the Community Transportation Association of America (CTAA). This grant helped the tribe identify needs, look at the feasibility of providing public transit services, and involve key players in planning the transit system. Based on the study, the tribe applied for a grant through FTAâs Tribal Transit Program (TTP) and was awarded $157,000 in Fiscal Year 2007 to operate the new service. Despite having the funding awarded, the tribe had to manage issues related to a change in tribal administration. They also had to re-sign all the documents for FTA. The tribe finally started their service in April 2009, providing service on the reservation and to Billings. The Crow Reservation found itself delayed in obtaining funding and starting service because of a change in administration. The tribe has tribal elections every 4 years. Whenever there is an election, the chairman changes and all the staff under the chair also changes. The tribe eventu- ally was able to submit the grant application, but was delayed in obtaining funding and starting service because of the change in administration and senior staff. Implementation Process This chapter has described the elements that make up an implementation plan. Once feasibil- ity has been determined and the tribe decides to move forward to implement transit service, the elements described in this chapter must be completed. Implementation Steps Each element of the implementation plan should be broken down into specific steps and tasks that must be accomplished for completion of that element. For example, the operations plan requires that driversâ work schedules be prepared. However, to complete the driversâ work schedules requires completion of operating schedules, vehicle assignments, and driver run cuts. Specific tasks should be identified for each component of the implementation plan. Responsibilities To complete each element of the implementation plan, specific responsibilities must be estab- lished and assigned for each task. Formation of an implementation task force will provide for shared responsibilities, but a single person should be responsible for each element. It will also be imperative to assign overall responsibility to a single person who will provide leadership for the task force. Critically important for tribal transit programs is to have this local leadership provided by someone committed to the success and implementation of the service. Implementation Milestones Deadlines and milestones for completion of each task and component of the implementation plan must be established. Several elements may require significant time to complete. Before ser- vice can start, buses must be obtained. If buses will be purchased, sufficient time must be allowed to complete the purchase. Depending on how the vehicles are purchased, this process can take from 6 months to over a year. The buses cannot be purchased until funding is available. Grant cycles vary by program, but some states use a 2-year cycle, which means the grant application must be submitted up to 2 years or more before service may begin. Tracking each milestone will be important because a missed deadline for a grant application could delay the implementation by a year or more. To be successful, the implementation effort requires a strong local leader with skills to manage multiple tasks and deadlines.
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