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DART’s Financial Status

DART’s Financial Status. T-FLEx Spring Conference Las Vegas April 5, 2006. Purpose of the Financial Plan. To validate the affordability of DART’s long-range Transit System Plan, including the Agency’s commitments for future expansion and the issuance and repayment of debt.

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DART’s Financial Status

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  1. DART’s Financial Status T-FLEx Spring Conference Las Vegas April 5, 2006

  2. Purpose of the Financial Plan To validate the affordability of DART’s long-range Transit System Plan, including the Agency’s commitments for future expansion and the issuance and repayment of debt.

  3. Illustrated View of the Financial Plan Ridership/ Operating Revenues Service Levels Inflation Financial Plan Operating Expenses LRT Phase II Debt Service Capital Programs Federal Funds Sales Taxes Interest Rates

  4. Sales Taxes • Components of Future Sales Tax Growth • Inflation • Regional Population Growth • Real Economic Growth

  5. Projected Sales Tax Receipts(2005 – 2024) $5.8 B Billions

  6. Other Sources of Funds • Operating Revenues • Interest Income • Federal Funds (Formula & Discretionary) • Debt • Other (Contributions)

  7. Uses of Funds (In Millions)

  8. Impact of a $1 Million Increase in Fiscal Year 2006 ($ in millions)

  9. FY04 Financial Plan Affordability

  10. FY05 Financial Plan Affordability

  11. FY06 Financial Plan Affordability

  12. Operational Cost Drivers

  13. FY 2006 Operating Budget$323.9 Million • Direct Service Costs: (66% - $215M) Costs directly related to providing transportation service to the customer • Indirect Service Costs: (25% - $81M) Costs that are one step removed from direct costs; generally impact service quality • General & Administrative (G&A): (9% - 28M) Costs not directly related to service but provide essential business functions

  14. Direct Service Costs • Primary Cost Driver: Service Levels • Hours – operator wages & benefits • Miles – maintenance wages & benefits, fuel, parts, maintenance service contracts

  15. Service Characteristics – Schedule Efficiency Deadhead Ratio (18.5%) Peak-to-Base Ratio (2.3 to 1) Span of Service (3:30 AM – 1:50 AM) Age of Fleet (5-6 years) Quality Standards Wage Rates Benefits Fuel Prices Position Vacancy Rates Work Rules Absenteeism (Extraboard) Direct Service Costs(Continued) • Secondary Cost Drivers:

  16. Direct Service Costs(Continued) • Purchased Transportation Contract Rates (CR, Para, HOV) • Acceptable Load Factor (LRT) • Cost Sharing with FWTA (CR) • Zero Trip Denials (Para) • Certification Process (Para) • Type of Facility (HOV)

  17. Indirect Service Costs • Primary Cost Drivers: • Service Levels • Service Quality • Components: • Transportation Ops & Field Supervision • DART Police / Security • Maintenance Supervision & Facility Maintenance • Direct Customer Marketing • Materials Management • Paratransit (scheduling, dispatch, etc.) • Planning (service planning & scheduling) • Risk Management/Safety/Insurance • Finance (revenue collection, yard control, pass distribution) • Other (IT Ops, Ops Tech, Commuter Rail Ops, Project Mgt, etc.)

  18. General & Administrative Costs • Primary Cost Drivers: number of transactions, processes, and projects • Major Components: • Agency-wide information systems • Marketing & Communications • Human Resources • Executive, DEO, Audit, Board Support • Procurement • Finance • Legal • Risk Management • Other (EVP Ops, EVP Program Development, Commuter Rail Admin)

  19. Compensation & Benefits

  20. Salaries, Wages and Benefits as a Percentage of the Budget Other - 33% ($106.3 M) Salaries & Wages - 46% ($150.1 M) Benefits - 21% ($67.5 M)

  21. Operator, Non-Operator and Salaried Wages

  22. Hourly vs. Salaried Compensation – FY04 • $49,205 - Median Hourly Compensation • $52,366 - Median Salaried Compensation • Employees with at least 1872 pay hours (90% of 2080) • Includes all pay including OT, Bonuses • Does not include such things as tuition reimbursement, uniform and tool allowances, etc. • The Median is the center value. Half of the employees are above the median, half are below the median.

  23. FY06 Budget – Benefits ($67.5 million)

  24. Consumer Price Index

  25. Wage Inflation vs. CPI

  26. Benefits Escalation Summary

  27. Purchased Transportation (PT) Escalation • $20.5 M - Paratransit contract (including On-Call) - 4% for FY06, re-bid after that; exact escalation unknown • $14.8 M - TRE contract – No Escalation for FY06 & FY07; 4% per year thereafter • Combined PT Budget - $35.3 M

  28. Budgetary Example

  29. Budgetary Example(Millions)

  30. The Transit Environment – Recent Headlines • “Transit fares to rise by 25 cents” San Diego (3/03) • “Warning of Budget Gap, M.T.A. May Pare Metrocard Discounts” New York (10/03) • “Despite fare increases, BART faces big deficit” San Francisco (BART) (2/04) • “SEPTA Details Proposed Cuts” Philadelphia (11/04) • “Muni chief suggests increase in taxes to cut agency deficit” San Francisco (Muni) (12/04) • “Pittsburgh rail transit fares become nation’s most costly” Pittsburgh (12/04) • “Budget Gap Threatens Chicago Transit” Chicago (4/05)

  31. Competing Priorities Accelerate LRT Build-out Address Employee Compensation / Satisfaction Increase Ridership / Expand Services Improve Service Quality / Safety / Security Cut the Operating Budget DART’s Challenges Increase Stakeholder Satisfaction Enhance Internal Controls Maintain Existing Infrastructure Minimize Fare Increases Minimize/Eliminate Debt

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