Chapel Hill TransitStrategic and Financial

Sustainability Plan Update

Chapel Hill-Carrboro Chamber of Commerce

February 5, 2015

Today’s Agenda

• Overview of Chapel Hill Transit

–Performance Overview

–Funding Overview

–Key Challenges Overview

• Strategic and Financial Sustainability Plan Update

• Questions and Feedback

CHT OverviewCHT is the second largest transit system in North Carolina, serving Chapel Hill, Carrboro and the University of North Carolina at Chapel Hill.

Responsibilities: Fixed-route Bus Service (32 weekday & weekend routes) EZ Rider (ADA Service) Short and Long Range Transit Planning Marketing and Public Relations Major Transit Initiatives

Staff (210 employees): Operations – 165 Maintenance – 31 Administration – 14

Fleet (118 revenue vehicles): Buses – 99 (29 hybrids) Demand Response – 19

Organizational StructureWhile a department of the Town of Chapel Hill, CHT is advised by the Chapel Hill Transit Partners Committee, which provides policy and financial guidance:

• Jim Ward, Chair, Town of Chapel Hill – Council Member

• Ed Harrison, Town of Chapel Hill – Council Member

• Matt Czajkowski, Town of Chapel Hill – Council Member

• Damon Seils, Town of Carrboro – Alderman

• Bethany Chaney, Town of Carrboro – Alderman

• Julie Eckenrode, Town of Carrboro – Assistant to theTown Manager

• Meredith Weiss, University of North Carolina at Chapel Hill – Senior Associate Vice Chancellor for Finance and Administration

• Than Austin, University of North Carolina at Chapel Hill – Associate Director of Transportation and Planning

• Cheryl Stout, University of North Carolina at Chapel Hill – Director, Transportation and Parking

Ridership:

– 6,938,657 annual rides (FY13-14)

– Over 133,435 rides per week

– Over 80 rides per capita

• Service Miles: 2,091,748

• Service Hours: 179,044

Performance standards:

– Rides/Hour: FR – 44.3 DR – 2.58

– Rides/Mile: FR – 3.92 DR – .20

– Cost/Ride: FR – $2.53 DR – $25.15

(FR = Fixed Route and DR = EZ Rider)

CHT Delivers CHT Delivers

CHT Delivers

Median Time Period Performance (Passengers per Hour)

2014 2013 2012 2011

AM PeakStart of service – 9:59 a.m.

62.3 49.7 53.5 39.8

Midday10:00 a.m. –3:29 p.m.

64.1 54.8 56.4 51.1

PM Peak3:30 p.m. –6:59 p.m.

49.5 42.3 43.9 38.0

Night7:00 p.m. –End of service

36.6 30 30.4 26.6

Weekend 39.35 38.5 37.5 29.5

CHT & Sustainability

• 2nd highest transit ridership in the state.• Using ULSD we are producing as little emissions as

possible from our traditional diesel buses.• Hybrid buses are 19% more fuel efficient than diesel

buses and produce 57% less particulate matter than standard diesel buses.

• By putting one Articulated bus on the road CHT can take 2 traditional buses off the road.

• By designing for public transportation in initial development plans, CHT transit vehicles are accommodated, thereby promoting transit as a viable means of transportation.

• More than 90% of transit expenses are directly related to puttingservice on the street and are subject to market rates.

• CHT makes considerable and concerted efforts to mitigateexpense increases in every category.

FY2014-15 Budget Highlights

• FY12-13 included first increase in partner contributions in four years.• FY09 and FY10 included ARRA funding of about $500,000 in each year.

Funding History

State & Federal Funding History

• Note – State Assistance has decreased by ~$1Million since FY10-11

Key Challenges

• Fleet Age:

– 42 buses, 13 demand response and 12 service vehicles need to be replaced.

• Staffing:

– Full Time Operators

– Supervisory Staff

– Additional Maintenance Shift

• Funding

• Community and Partner Goals:– 2020 Plan

– Current and Planned Development

Financial Sustainability Plan

• Development of Strategic and Financial Plans:

– Organizational Staffing Assessment

– Vision and Goal Setting Process

• Consistent with 2020 Comprehensive Plan, 2020 Focus Area Studies, Carrboro Vision 2020 and UNC’s Development Plans

– Develop Strategic and Long Term Financial Plan

• Identify full range of financing strategies to meet operating, maintenance and capital costs

Financial Sustainability Plan

• Current Focus to Inform FY2016 Budget Process:

– Capital Plan and Associated Funding Plan

– Short-Term Staffing Plan

• Future Focus:

– Service Development

– Long-Term Staffing Plan

– Performance Benchmarking

Strategic and Financial Sustainability Plan

Significant Ridership Growth

Nelson\Nygaard Consulting Associates, Inc.

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Passen

ger

Tri

ps

■ Source: National Transit Database

95

%

Drop in ridership

reflects 2010

service cuts

Significant Increase in Service Provided

Nelson\Nygaard Consulting Associates, Inc.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Reven

ue H

ou

rs

■ Source: National Transit Database

26

%

Increase in Cost per Hour of Service

Nelson\Nygaard Consulting Associates, Inc.

■ Source: National Transit Database

68%

$0

$20

$40

$60

$80

$100

$120

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Op

era

tin

g E

xp

en

se p

er

Reven

ue

Ho

ur

Operator Salary/Wages: 53%

Fringe Benefits: 104%

Fuel/Lube: 382%

Casualty/Liability Costs: 86%

Nelson\Nygaard Consulting Associates, Inc.

Revenue Trends: Federal Funding

■ Source: Town of Chapel Hill

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Nelson\Nygaard Consulting Associates, Inc.

Revenue Trends: State Funding

■ Source: Town of Chapel Hill

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

-26%

Chapel Hill Transit – Partner Contributions

Nelson\Nygaard Consulting Associates, Inc.

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

UNC Carrboro Chapel Hill

■ Source: Town of Chapel Hill

49%

State of the System

■ Growth has Stabilized

– Ridership and service hours remained steady

– Cost increases largely reflect inflation

■ But, Impact of Growth and Expansion Still Being Felt

– Providing more service

– Cost of each unit of service increased

– Funding equation changed

• Federal and state funds flat, declining and changing

• Partner increases offset declines

■ Growth Occurred Without Corresponding Investments

• Capital – mostly vehicles but also some facilities

• Staffing – operators, mechanics, and supervisors

Nelson\Nygaard Consulting Associates, Inc.

State of the System

■ Chapel Hill Transit Operations are Financially

Unsustainable

■ $80 million (estimated) additional revenues needed

over next 10 years

– Invest in capital investments

• Buses, paratransit vehicles, technology, and park-and-ride lots

– Invest in staff and operations

• Operators, mechanics, and supervisors

Nelson\Nygaard Consulting Associates, Inc.

Opportunities

Potential Opportunities

■ Orange County Bus and Rail Investment Plan

■ Reduce Service Levels

■ Additional Revenue Sources (Fares)

■ Finance Vehicle Purchases/Lease Vehicles

■ Increase Local Taxes/Partner Contributions

Nelson\Nygaard Consulting Associates, Inc.

Orange County Bus and Rail Investment Plan

■ New (2012) Revenues for Transit in Orange County

– One-half Cent Sales Tax

– New or increased Vehicle Registration Fees

■ Full Year Revenues Estimated at $6.7 million – All Sources

– Most for regional services and future light rail

■ Existing Service (Chapel Hill Transit) has Access to New

Vehicle Registration Fee Revenues Only

– Estimated revenue - $338,000/yr

– 2% per year is assumed growth rate

– Already assumed in financial projections for operations and

capital

Nelson\Nygaard Consulting Associates, Inc.

Reduce Service/Operate Fewer Routes

Opportunities

■ Potential strategy to

reduce cost and demands

on capital resources

Challenges

■ Big impact on riders

■ Contrary to CHT Partner

priorities and community

goals

■ Less service results in

fewer federal and state

funds

Nelson\Nygaard Consulting Associates, Inc.

Fares and User Fees

Opportunities

■ Shares costs with users

Challenges

■ Requires capital investment

(fare boxes)

■ Will impact service

operations and staffing

■ Will impact ridership

Nelson\Nygaard Consulting Associates, Inc.

Leasing and Debt Financing

Opportunities

■ Allows CHT to acquire

vehicles relatively quickly

■ Spreads costs evenly over

several years

■ Town of Chapel Hill

already has vehicle leasing

program

Challenges

■ Current governance

structure means Town of

Chapel Hill alone would

hold the debt

■ Adds financing costs

Nelson\Nygaard Consulting Associates, Inc.

Raise Taxes/Partner Contributions

Opportunities

■ Increase funding to system

needs

■ Share burden across

partners

Challenges

■ Contrary to CHT Partner

priorities

■ Just raised taxes and

increased fees

Nelson\Nygaard Consulting Associates, Inc.

Questions/Feedback

Brian M Litchfield

Director

Chapel Hill Transit

(919) 969-4908

blitchfield@townofchapelhill.org

www.chtransit.org

www.facebook.com/chtransit

www.twitter.com/chtransit

Customer Service Line: (919) 969-4900

It’s about Community Goals