Year
A new report from the American Public Transportation Association finds that $4 per-gallon gas prices could result in an additional 670 million passenger trips. And here in Cleveland, RTA is ready to fill the seats.
In 2010, transit authorities across the country were forced to "right-size" their systems to account for proportionally large decreases in funding. RTA did the same, reconfiguring its service and operations to cut expenses by more than $30 million. It also looked at ways to stabilize its balance sheet in the long-term. Using commodity hedging, RTA locked its price for diesel fuel for the next several years. This approach saved the transit authority $9.4 million in 2010. A statistical performance management initiative has also been employed by the agency, monitoring everything from overtime to inventory. And sustainability efforts are helping to further reduce the authority's energy consumption costs at its facilities.
At the same time that it was looking for new efficiencies and savings, RTA was employing federal stimulus grants to reinvest in the future. Capital projects include a new $9.3 million downtown transit center, construction of a new Puritas/West 150th Station, and a makeover for the East 55th Street Station. It also made infrastructure upgrades to its rail lines, and purchased new MCI motor coaches for its Park-N-Rides.
All the changes have strengthened RTA's ability to offer an attractive alternative to driving. It's able to offer commuters shelter from high gas prices, saving them an estimated $9,000 a year. Now, learn how it's bringing riders back — read Ready to Ride inside.
TransitStat Posts Big Numbers
Over the last three years RTA has saved nearly $24 million using a mathematical approach to management. The initiative, entitled TransitStat, requires data gathering, review, and analysis to refine processes and accelerate change.
In 2010, RTA used TransitStat to reduce costs, increase efficiency, and improve performance throughout the organization. Monitoring the need for overtime has been one of the biggest areas of savings, as it represents one of the transit authority's largest variable cost areas. Working as a team, directors responsible for managing overtime regularly meet, set overtime forecasts, and propose achievable goals for reducing overtime. This process saved RTA $3.38 million in overtime last year.
Other areas where TransitStat has been employed include managing workers' compensation, electricity consumption, revenue collection, and fuel hedging. Last year, fuel hedging allowed RTA to save $9.4 million. The authority has locked in the price of diesel fuel for several more years, and based on the current surge in oil prices, will save millions more in 2011 and 2012.
TransitStat has also made improvement in some unlikely areas. It helped lower costs in vehicle tows in 2010 by $250,000, reduce the number of lost calls at RTA's call center by 20 percent, and over the past three years, decrease inventory costs by more than $1.5 million.
RTA was one of the first transit authorities in the nation to implement this type of management initiative. TransitStat is an adaptation of the New York Police Department's CompStat, which helped the Big Apple monitor and reduce the city's crime rate. Representatives from RTA have educated transit authorities across the country about TransitStat. They have also spoken to students at universities. In the future, as RTA works to provide the best possible service with tight financial resources, TransitStat will became an even more invaluable management tool.
In just the past few years, platforms such as Twitter and Facebook have become some of the most powerful and effective tools for marketers. Creative advertisers are using these social media networks to spur discussion on everything from the best wings to the worst car designs, driving sales for companies as different as BW3 and BMW. And while every organization is looking for the next viral idea like Burger King's Subservient Chicken, good social media starts with a sound marketing strategy.
Here in Cleveland, RTA needed a way to attract younger riders. Ridership surveys conducted in 2009 and 2010 revealed that RTA's customers were getting older. The average age of a transit rider in Cleveland is 42. This is not unique to Northeast Ohio. According to the American Public Transportation Association, the average age of a transit rider in the United States is 39.1.
RTA took a unique social media approach to reach the younger demo group. Instead of going in with a hard pitch on taking transit, it's starting by selling destinations in the city and building a conversation about commuting. Just as RTA is a connection to everything Cleveland in the real world, it established connections to hot spots and attractions in the virtual world. Facebook fans can learn about upcoming concerts and new restaurant openings, and find out what other college students and young professionals think about living in the city. RTA also conducts a weekly drawing, giving its Facebook fans tickets for food, shows, games, and the hottest tech items such as an iPad. In addition, the transit authority has taken its social media efforts on the road, sponsoring Browns' tailgate parties and the Cleveland Indians' Snow Days.
Based on the numbers, younger commuters "Like" what they see. Since launching its Facebook page, RTA has attracted more than 4,000 fans. The goal is to continue educating these fans about transit, converting them from drivers to longtime riders.
Big development projects are back in a big way. Construction of the $465 million convention center and medical merchandise mart is underway. Plans are being finalized for a new downtown casino. And work on numerous projects in University Circle continues. The one thread connecting everything together is the HealthLine.
The various construction projects will complete a vision conceived nearly 50 years ago. For years, the city was divided, with businesses located Downtown and hospitals and cultural institutions in University Circle. The HealthLine was developed to link the two centers together. The various projects, such as the Medical Mart, will create an even stronger interconnection.
Visitors to the city for medical conventions will need a convenient transportation option to reach medical centers in University Circle. In addition, numerous medical device companies will operate out of the Medical Mart, and people working at these firms will commute between the two employment areas. The HealthLine has already become a popular transportation option for medical professionals, students, and employees who live and work along the route.
Like Silicon Valley in California and the Quadrangle in the Carolinas, the HealthLine route is becoming a center for job creation. More than $4.3 billion in development has occurred or has been committed along the route. This includes rehabilitation of old buildings into housing and new locations for startup businesses.
Major projects have been completed or are nearly complete on the HealthLine. In University Circle, the Cleveland Museum of Art is in the final phase of its multi-million dollar expansion. University Hospitals also opened its $260 million, 375,000-square-foot Siedman Cancer Center. In addition, the Cleveland Hearing & Speech Center has a new 4-story, 48,000 square foot building through an investment of $16 million. Housing projects include the old Commodore Hotel, which is being converted into Commodore Place, featuring new retail and housing. And work on the Circle 118 Townhomes is now underway.
Midtown is also experiencing a boost in new development. A $35 million mixed-use development was recently proposed and includes a 70,000 square-foot medical office building, 150 homes for seniors, 14,000 square feet of retail and two restaurants. The State of Ohio also awarded $3.5 million for the construction of a Tech Park.
Downtown, in addition to the Medical Mart and the casino, construction is underway on Wolstein's Flats East Bank project. Cleveland State University is making progress on its $500 million Master Plan, and numerous buildings along Euclid Avenue are being renovated.
Operationally, the HealthLine has been a success as well. It has realized steady ridership growth, even in 2010 when other transit services declined because of high unemployment. This is due in large part to its strategic location. The line operates within a half mile of more than 200,000 employees and 58,000 households.
The HealthLine has captured the attention of many in the transit industry as well. Last year, several transit industry professionals from around the world came to Cleveland to tour the route first hand.
Beyond its impact on economic development, the HealthLine is recognized for its advanced engineering design. As a result, it received top honors from the American Council of Engineering Companies in 2010.
Development is definitely back in Northeast Ohio. And the HealthLine will continue to be a vital link in bringing all the pieces together.
Youth in Cuyahoga County now have a rolling support network thanks to RTA's participation in Safe Place. The transit authority introduced the program to Northeast Ohio last year, creating the first transit-focused Safe Place initiative in the nation. Through this national program, youths in crisis can board an RTA bus or train and alert the operator. They will then be taken to a community safe haven for needed services.
RTA's Safe Place partners include Next Step/West Haven Youth Shelter and Bellefaire's Homeless Youth Program. After the immediate crisis is resolved, the centers can put kids and families in touch with assistance programs available in Cuyahoga County.
Easy access to help is a key aspect to the success of Safe Place. In other cities, along with transit systems, convenience stores, fast food restaurants, grocery stores, and discount retails have been designated safe place locations. These are places where youth between the ages of 12 and 17 years of age are familiar. Safe Place stickers are on all RTA vehicles to identify the spot as an outreach for assistance.
RTA created a new ridership program in the fourth quarter of 2010. The program is entitled Ready to Ride, targeting Downtown and University Circle employers. As the largest employment centers in the region, these two areas offer commuters a multitude of transit options. This program takes advantage of the many bus and rail routes to encourage employees to try transit. Ultimately, the goal is to switch them from driving to riding, saving them money and promoting sustainability.
This is how Ready to Ride works. RTA provides employees two free Work Week Passes. It also assigns each employee a personal transit assistant to guide them through the riding process. And at the end of the trial period, it offers employees ready to ride RTA on a regular basis a free Monthly Pass.
RTA manages all aspects of Ready to Ride. Once an employer agrees to participate, RTA's Customer Service Team develops a customized employee communications plan, schedules a launch kickoff meeting, registers employees into the program, monitors ridership activity, and furnishes a follow-up report. And for employees who are interested in being regular riders, RTA's team can explain the savings gained by participating in the company's pre-tax fare program.
From start to finish, Ready to Ride takes four weeks. The first week is used to promote the program internally to employees. The last two are when employees get on RTA trains and buses to experience a car-free commute.
Employers interested in learning more about this program are encouraged to contact Jim Frick, RTA's Sales Director at 216.781.4764.
Among all energy alternatives and conservation methods available for reducing our dependence on foreign oil, transit remains the most viable. It makes sense then to reinvest in the infrastructures of public transit systems. And in 2010, RTA did just that with funds received through the American Recovery and Reinvestment Act of 2009. The transit authority received $50 million in funding for a number of projects.
In 2010, the first major capital project funded by the federal grant program was completed. In October, the Stephanie Tubbs Jones Transit Center was opened. The $9.3 million complex is located downtown, and now services more than 500 buses daily. It also offers a warm, safe, and first-class waiting environment for riders. Members of the Tubbs Jones' family attended the opening and experienced the unveiling of a sculpture depicting Tubbs Jones in the form of angles.
Work on the East 55th Street Station continued in 2010. It's an important station for RTA, serving all three of the transit authority's rail lines. The new station will offer a single center loading platform, consolidating the separate track levels for the light and heavy rail service. Construction is expected to be completed in the summer of 2011 at a total cost of $11.5 million.
On the opposite side of town, the 40-year-old Puritas/West 150th Station was receiving an $11.7 million makeover. This is one of RTA's most heavily used stations, serving both local residents and interstate commuters. The rehabilitated station will have two entry buildings, a pedestrian bridge, elevators, an expanded parking lot, landscaping and other improvements.
This past February FTA Administrator Peter Rogoff toured the Puritas Station construction site and held a press conference. He recognized RTA for its tight fiscal management of the project, and cited the station as an example of how federal dollars can work for both short- and long-term job growth.
Year-End Financial Report
After dealing with a $19 million loss from its prime revenue source in 2009, RTA began the process of adjusting its finances in 2010. In the first quarter, significant changes were implemented to prepare the transit authority for a paradigm shift in revenue. The cost-cutting measures stabilized RTA's financial position, allowing it to end the year with a $15 million balance.
Revenues came in close to budget at $266.3 million versus the budgeted amount of $266.6 million. Sales Tax receipts represent RTA's primary funding source, covering between 60-70 percent of the operating budget. Revenue from Cuyahoga County Sales Tax collections actually finished the year above budget estimates as signs of the economic recovery were realized with more purchases made during the 3rd and 4th quarters. The Sales Tax revenue was 4.3 percent above budget at $163.2 million.
The gains achieved in Sales Tax revenue were offset by a drop in RTA's second largest funding source, Passenger Fare revenue. Fare collections were 10 percent below budget estimates at $47.15 million. Most of the loss occurred during the first half of the year, with unemployment peaking at 11 percent in Cuyahoga County that led to a drop in ridership. Other revenue items included Reimbursed Expenditures and CMAQ grants, which came in $2.1 million above budget.
Operating expenses were dramatically reduced in 2010, down by more than $30 million from 2009. The combination of 12 percent service cuts, fuel and energy savings, and the closing of the Harvard Garage contributed to these savings. At year-end, 2010 operating costs were $208.1 million, a 7.8 percent decrease from the budget. Personnel costs decreased from $176.6 million in 2009 to $157.0 million for 2010. Other expenses were cut from $61.9 million in 2009 to $51.1 million for 2010.
Fuel costs were a major area of savings. Part of this gain came from the service cuts. The remainder was gained as a result of RTA's participation in two programs designed to reduce the cost of fuel and energy. The first, the Energy Price Risk Management Program, reduced fuel costs from $17.4 million in 2009 to $8.0 million in 2010. The second, the Energy Management Program, allowed the transit authority to lower its cost of electricity by another $1.4 million.
Capital Expenditures ended the year below budget forecasts. Delays in budgeted project timelines, the use of alternative or nontraditional funding sources for three unfunded capital projects, and the closeout of remaining budget appropriation in completed projects allowed RTA to end the year with a positive variance of $63.2 million, with $453.38 million in capital commitments.
Financial Indicators provided an overview of RTA's fiscal health. As a result of the significant reduction in operating expenses, the transit authority was able to meet three of the financial indicators according to Board Policy Goals.
Operating Ratio for 2010 was 23.8 percent of total operating expenses, dipping slightly lower than the budget of 24.1 percent, and was below the 25 percent established as a policy. This drop is due to the decrease in passenger fare revenue, advertising, and low interest income. Fare Subsidy Per Passenger also did not meet the transit authority's goal of three times the average fare of $1.06 or $3.18 due to lower revenue.
Operating Reserve met the board policy target. In fact, it exceeded it, ending the year at 1.2 months worth of reserves. This was a dramatic change from 2009, which had an Operating Reserve of only 0.1 months. The transformation was a result of RTA's continuing efforts to control costs. Overhead Cost to Total Cost ended at 14.0 percent, slightly higher than the budget and below the maximum of 15 percent. Cost per Hour of Service was $121.64, slightly below budget, but was 5.7 percent more than last year.
RTA's aggressive action to reduce expenditures also helped improve its Debt Service Coverage. The year-end ratio of 2.01 for this indicator is above the 1.5 minimum and much higher than the budgeted level of 1.06 due to a $17.6 million decrease in Total Operating Expenditures relative to stable debt service requirements.
The Sales Tax Contribution to Capital indicator has steadily grown since 2005, as the transit authority continues to invest more of its own funds to capital projects relative to its available resources. In 2010, this trend continued with the Sales Tax Contribution to Capital ending the year at 18.3 percent. Capital Maintenance Outlay to Capital Expansion Outlay was also outside of the 33-67 percent range outlined in the Board Policy goal. This indicates that, in a time of limited resources, the transit authority's focus has been to maintain its current assets rather than expand service levels.
Financial Indicators
General Fund
| 2009 Actual | 2010 Actual | $ Change | % Change | % of Total | |
| REVENUE | |||||
| Passenger Fares | $ 49,757,083 | $ 47,153,709 | $ (2,603,374) | (5.23%) | 17.70% |
| Advertising/Concessions | 1,197,713 | 956,688 | (241,025) | (20.12%) | 0.36% |
| Investment Income | 198,200 | 71,468 | (126,732) | (63.94%) | 0.03% |
| Total Operating Revenue | $ 51,152,996 | $ 48,181,865 | $ (2,971,131) | (5.81%) | 18.09% |
| Sales/Use Tax | $ 154,586,220 | $ 163,220,649 | $ 8,634,429 | 5.59% | 61.29% |
| Grants | 5,453,873 | 3,018,964 | (2,434,909) | (44.65%) | 1.13% |
| Other | 53,320,632 | 51,908,477 | (1,412,155) | (2.65%) | 19.49% |
| Total Non-Operating Revenue | $ 213,360,725 | $ 218,148,090 | $ 4,787,365 | 2.24% | 81.91% |
| Total Revenue | $ 264,513,721 | $ 266,329,955 | $ 1,816,234 | 0.69% | 100% |
| OPERATING EXPENDITURES | |||||
| Labor/Fringe | $ 176,631,322 | $ 156,964,659 | $ (19,666,663) | (11.13%) | 62.90% |
| Materials/Supplies | 11,574,565 | 11,890,431 | 315,866 | 2.73% | 4.76% |
| Fuel/Utilities | 30,216,948 | 81,947,324 | (11,269,624) | (37.30%) | 7.59% |
| Services | 8,294,280 | 8,567,127 | 272,846 | 3.29% | 3.43% |
| Purchased Transportation | 4,586,590 | 4,841,889 | 255,298 | 5.57% | 1.94% |
| Liabilities | 6,133,651 | 5,988,207 | (145,444) | (2.37%) | 2.40% |
| Other | 1,100,282 | 914,855 | (185,427) | (16.85%) | 0.37% |
| Total Operating Expenditures | $ 238,537,640 | $ 208,114,492 | $ (30,423,148) | (12.57%) | 83.40% |
| Miscellaneous Finance Costs | $ 0 | $ 8,254,743 | $8,254,473 | n/a | 3.31% |
| Transfer to Insurance Fund | $3,520,000 | $ 3,203,000 | (317,000) | (9.01%) | 1.28% |
| Transfer to Pension Fund | 100,000 | 100,000 | 0 | 0% | 0.04% |
| Transfer to Bond Retirement Fund | 17,327,062 | 17,351,950 | 24,888 | 0.14% | 6.95% |
| Transfer to Capital Improvement Funds | 10,550,000 | 12,525,000 | 1,975,000 | 18.72% | 5.02% |
| Total Non-Operating Expenditures | $ 31,497,062 | $ 41,434,693 | $9,937,631 | 31.55% | 16.60% |
| Total Expenditures | $ 270,034,702 | $ 249,549,185 | $(20,485,517) | (7.59%) | 100% |
| Revenue/Expenditures | $ (5,520,981) | $ 16,780,770 | |||
| Balance Jan. 1 | $ 8,401,086 | $ 2,880,105 | |||
| Balance Dec. 31 (Less Reserve Funds) | $ 2,880,105 | $ 19,660,875 | |||
Capital Fund
| 2009 Actual | 2010 Actual | $ Change | % Change | % of Total | |
| REVENUE | |||||
| Federal Capital Grants | $ 73,648,082 | $ 81,487,975 | $ 7,839,893 | 10.60% | 84.80% |
| State Capital Grants | 9,162,154 | 1,807,284 | (7,354,870) | (80.30%) | 1.90% |
| Local Sources | 10,550,000 | 12,525,000 | 1,975,000 | 18.70% | 13.00% |
| Other | 0 | 0 | 0 | 0% | 0 |
| Investment Income | 272,360 | 245,001 | (27,359) | (10.00%) | 0.30% |
| Total Revenue | $ 93,632,596 | $ 96,065,260 | $ 2,432,664 | 2.60% | 100% |
| EXPENDITURES | |||||
| RTA Development Fund Projects | $ 93,705,234 | $101,488,018 | $ 7,782,784 | 8.30% | 96.80% |
| RTA Capital Fund Projects | 2,276,798 | 2,633,341 | 356,543 | (15.70%) | 2.50% |
| Other | 0 | 0 | 0 | n/a | 0 |
| Transfer to Bond Retirement Fund | 700,000 | 700,000 | 0 | 0% | 0.70% |
| Total Expenditures | $ 96,682,032 | $ 104,821,359 | $ 8,139,327 | 8.40% | 100% |
| Revenue/Expenditures | $ (3,049,436) | $ (8,756,099) | |||
| Balance Jan. 1 | $ 33,755,518 | $ 30,706,082 | |||
| Balance Dec. 31 (Less Reserve Funds) | $ 30,706,082 | $ 21,949,983 | |||
RTA People
RTA Facts
Annual Operating Budget
$225 million
Employees
2,115
Ridership
44.7 million passenger trips
Service Area
458 square miles
59 municipalities
1.3 million people
Bus Service
492 vehicles on fixed routes
1,269 shelters
7,748 bus stops
70 routes
15.5 million service miles, estimated
Rail Service
2.2 million service miles, estimated
Red Line Rapid Transit
1 route
60 heavy-rail cars
18 stations
19 miles of one-way track
Blue/Green Line Rapid Transit (Includes Waterfront Line)
3 routes
48 light-rail cars
34 stations
18 miles of one-way track
Paratransit
80 vehicles
541,553 passenger trips
Parking Lots
8,800 spaces
Downtown Trolleys
2 routes
11 vehicles
Bus Rapid Transit (BRT) Service
1 route on Euclid Avenue and Public Square
9.4 miles of bus-only lanes
20 Rapid Transit Vehicles (RTVs)
59 stations and 3 platform stops
RTA-Owned Bridges
85 bridges
1 tunnel
RTAnswerline, 216-621-9500
More than 575,000 calls were received
RTA Web Site, www.rideRTA.com
More than 1.6 million visitors viewed more than 8.3 million pages *
Commuter Advantage program
505 employers
11,261 commuters
$6,300 estimated savings per commuter
* The on-line store sold more than $274,000 of fare media.