Fixed-Route Operational and Financial Review

Chapter II

CHAPTER II Fixed-Route Operational and Financial Review Chapter II presents an overview of route operations and financial information for KeyLine Transit. This information will be used to develop future service recommendations. Information is organized as follows: System Performance Route Performance Financial Performance Route and Service Review Unmet Demand Prior to reviewing the various performances of KeyLine Transit, it is important to point out some key terminology, including: Cost per Passenger-Trip (One-Way) - Total system costs (all operating expenses plus administrative costs plus capital costs on a depreciation schedule) divided by the number of passenger-trips. Costs and trips must be recorded over the same period of time. Cost per Vehicle-Hour - Total system costs divided by the sum of the number of hours that each vehicle is operated in service. The typical usage is vehicle revenue-hours. Cost per Vehicle-Mile - Total system costs divided by the total distance traveled by all vehicles in the system when they are in service. The typical usage is vehicle revenue-miles. Effectiveness - For a transportation system, the effect is that people are moved from one place to another (i.e., trips). Measures of the effectiveness of a transportation system are, for example, the number of trips taken on it or the number of individual persons that it serves. Or a transportation system can be evaluated in terms of its effectiveness toward a social goal; for example, the number of persons KeyLine Operational Analysis, Technical Memorandum 2 Page II-1

who can take advantage of a particular social service because of the transportation system. Efficiency - The efficiency of a transportation system will be some measure of the relationship of system inputs to system outputs. Transit planning has generally expressed this efficiency measure in terms of the ability to minimize an input (i.e., costs) to produce a unit of output. The most often used measures are cost per passenger or cost per vehicle-mile. Fixed Costs - Typically those costs that are less (or not at all) sensitive to changes in service. They include such items as general supervision, overhead and administration, rents, and debt service. Fixed costs are differentiated from variable costs because they represent those costs that must be met whether the service operates or not. If the project runs into operating problems (e.g., loss of passengers), fixed costs will continue. Level of Service - In transportation literature, level of service is generally defined as a measure of the convenience, comfort, safety, and utility of a system or system component (vehicle, facility, etc.) from the passenger s point of view. A variety of measures can be used to determine a particular component s level of service. In transit, level of service measures incorporate such factors as availability and frequency. Level of service is typically designated in six ranges from A (best) to F (worst) for a particular service measure based on the passenger s perception of a particular aspect of the transit service. One-Way Passenger-Trips - Refers to the total number of boarding passengers carried on all routes. Passenger-Miles - The sum of the trip distances traveled by all passengers. Passenger-Trips - The number of one-way trips by persons using the system. Each passenger counts as an individual trip even if there is group boarding and alighting at common points. Page II-2 KeyLine Operational Analysis, Technical Memorandum 2

Passengers per Vehicle-Hour - The number of passenger-trips divided by the sum of the number of hours that each vehicle is operated. Passengers per Vehicle-Mile - The number of passenger-trips divided by the number of vehicle-miles provided by all vehicles. Productivity - The basic performance parameter that describes transit and paratransit service, defined as the number of passenger-trips per vehicle-hour of service. This is typically defined in terms of the number of revenue-hours. Productivity = Passenger-Trips/Vehicle Service-Hours Revenue-Hours and Miles - Those vehicle-hours and miles during which the transit vehicle is actively providing service to passengers. For fixed-route service, this includes all the time spent on routes when passengers may board the vehicle. For demand-response service, this includes all time spent in actively providing passenger service. It includes the time and miles between dropping off one passenger and picking up another even though there may be no passengers onboard at the time. Variable Costs - Those costs that are sensitive to changes in the actual level of service. They are usually affected by the vehicle-miles, vehicle-hours, or some other measure of level of service. Variable costs typically include such items as fuel, oil, tires and tubes, drivers wages, and other items of expense that are sensitive to the level of operation. Vehicles and equipment items purchased have life expectancies which require that a depreciation factor be included when figuring costs. Most typically, depreciation is figured on a straight-line basis with a 10 percent residual salvage value at the end of that time. The length of time depends on the type of vehicle. Vehicle-Hour - Either the time the engine is running or the time a driver is assigned to a vehicle; the operating time for a vehicle. Revenue-hours are the hours when the vehicle is operating and available for passenger service. KeyLine Operational Analysis, Technical Memorandum 2 Page II-3

Vehicle-Miles - The total number of miles driven on all vehicles used to provide passenger service. Revenue-miles are the miles operated by vehicles available for passenger service. OPERATIONAL REVIEW Vehicle Inventory The current inventory of buses that KeyLine owns, for both fixed-route and paratransit service is listed in Table II-1. This table provides details about the buses including the model year and capacity. As seen in the table, there are currently six fixed-route vehicles and four paratransit vehicles due for replacement. In general, larger buses should be replaced at around 12 years, with smaller buses needing replacement at around seven years, and vans at five years. There are also three paratransit vehicles that should be replaced during the current year, bringing the total number of vehicles due to be replaced to 13. Also important to note is the number of fixed-route buses. As a general rule, a transit system should have about 20 percent of the maximum vehicles operated in daily service as spares. The system currently operates ten fixed-route buses in maximum service when the trolley is in operation, and has a total of 14. The higher spare ratio may reflect the age of the vehicle fleet. The trolley buses, which are buses 2579 and 2580, are the newest in KeyLine s fixed-route fleet, with expected replacement occurring in 2015. As vehicles are replaced, the fleet size should be adjusted to incorporate an appropriate spare ratio. Fixed-Route Services KeyLine Transit operates four regular fixed routes the Green, Orange, Red and Grey routes, along with a seasonal trolley. The four fixed routes operate from roughly 6:00 a.m to 6:15 p.m on weekdays and from 8:00 a.m to 5:30 p.m. on Saturday. The trolley is directed at serving tourists to Dubuque and operates on a shuttle loop to important downtown destinations. The trolley runs from Memorial Day until Labor Day, operating seven days a week. From Labor Day until October 31 st, the trolley operates a limited service, running only on Friday evenings and on weekends. Page II-4 KeyLine Operational Analysis, Technical Memorandum 2

KeyLine Operational Analysis, Technical Memorandum 2 Page II-5 Unit Number Fixed-Route Fleet Mini-bus Fleet Year Estimated Replacement Year Replacement Due or Overdue Table II-1 KeyLine Transit Fleet Inventory Years Overdue for Replacement Estimated Replacement Cost (2008 $'s) Length - Feet Seated Capacity Standee Capacity Lift Ramp Fuel 2504 1976 1988 YES 21 $ 345,000 35 38 10 YES NO Diesel 2510 1976 1988 YES 21 $ 345,000 35 38 10 YES NO Diesel 2558 1979 1991 YES 18 $ 345,000 35 38 10 YES NO Diesel 2559 1979 1991 YES 18 $ 345,000 35 38 10 YES NO Diesel 2560 1981 1993 YES 16 $ 345,000 35 38 10 YES NO Diesel 2561 1981 1993 YES 16 $ 345,000 35 38 10 YES NO Diesel 2563 2002 2014 NO $ 345,000 30 29 10 YES NO Diesel 2564 2002 2014 NO $ 325,000 30 29 10 YES NO Diesel 2565 2002 2014 NO $ 325,000 30 29 10 YES NO Diesel 2566 2002 2014 NO $ 325,000 30 29 10 YES NO Diesel 2567 2002 2014 NO $ 325,000 30 29 10 YES NO Diesel 2568 2002 2014 NO $ 325,000 30 29 10 YES NO Diesel 2579 2003 2015 NO $ 325,000 29 28 10 YES NO Diesel 2580 2003 2015 NO $ 325,000 29 28 10 YES NO Diesel 2581 1995 2002 YES 2 $ 65,000 22 14 0 YES NO Diesel 2582 1995 2002 YES 2 $ 65,000 22 14 0 YES NO Diesel ED Van 1996 2001 YES 1 $ 40,000 16 4 0 NO YES Gas ED Bus 1996 2003 YES 1 $ 65,000 21 10 0 YES NO Gas 2501 2002 2009 YES $ 65,000 24 16 0 YES NO Diesel 2502 2002 2009 YES $ 65,000 24 16 0 YES NO Diesel 2578 2002 2009 YES $ 65,000 24 18 0 YES NO Gas 2583 2005 2012 NO $ 65,000 23 16 0 YES NO Diesel 2584 2005 2012 NO $ 65,000 23 16 0 YES NO Diesel 2585 2005 2012 NO $ 65,000 23 16 0 YES NO Diesel 2686 2005 2012 NO $ 65,000 23 16 0 YES NO Diesel 2587 2005 2012 NO $ 65,000 23 16 0 YES NO Diesel

System Performance Operating effectiveness and financial efficiency of the transit system are two important factors to the success of the system. The operating effectiveness is the ability of the transit service to generate ridership. Financial efficiency is the ability of the transit system to provide service and offer passenger-trips in a cost-efficient manner. Table II-2 presents the systemwide characteristics for KeyLine Transit s 2008 fiscal year. Table II-2 System Performance Fixed-Route Services KeyLine FY 2008 Operating Cost $1,545,816 Fare Revenue $130,000 Ride rship 270,762 Vehicle-Miles 291,885 Vehicle-Hours 25,122 Operating Effectiveness Pass.-Trips per Mile 0.9 Pass.-Trips per Hour 10.8 Financial Efficiency Cost per Trip $5.71 Cost per Vehicle-Hour $61.53 Source: KeyLine/. Route Effectiveness The route performance section presents the current passengers, passengers per hour, and passengers per mile. Table II-3 presents this information. As shown, there are routes that are very effective at providing service and those that perform relatively poorly. The Red route is the most effective route, averaging approximately 10 passenger-trips per revenue-hour, nearly three trips per hour higher than the systemwide average. Additionally, nearly one trip per mile is provided. Page II-6 KeyLine Operational Analysis, Technical Memorandum 2

Route Average Daily Miles Average per Round-Trip Route-Miles Table II-3 Route Effectiveness Average Annual Revenue- Miles Annual Passen ger- Trips Trips/Mile Hours Trips/Hour Red 242 22 73,810 84,182 1.14 6,656 13 Orange 160 16 48,800 20,676 0.42 3,016 7 Green 264 22 80,520 73,892 0.92 7,176 10 Grey 264 22 80,520 83,344 1.04 7,176 12 Trolley 53 2.5 8,235 8,668 1.05 1.098 8 Total 983 291,885 270,762 25,122 Average 16,90 58,377 0.91 6,006 10 Source: SCTS and, 2008. The most ineffective route is the Orange route. This route operates at seven passengers per hour, far below the systemwide average of 10. Additionally, this route has less than 0.5 passenger-trips per mile. The Green and Grey routes are fairly similar using these measures and represent numbers that are close to the system average. Figure II-1 shows the number of trips per hour for the KeyLine system. KeyLine Operational Analysis, Technical Memorandum 2 Page II-7

FINANCIAL REVIEW One important aspect of operating and sustaining transit services is a review of the financial capabilities of the system. KeyLine Transit has seen rising costs in terms of labor and fuel prices. Many systems are experiencing these dramatic increases and are trying to cope with budgetary issues. This section provides a review of the financial characteristics of KeyLine Transit. Revenues The revenue required to operate the Dubuque Transit System comes from a variety of sources including transit tax, federal grants, and passenger fares. The total revenue in FY 2008 was $2,345,688. Please note that this amount does not include Mini-bus passenger fares that totaled $62,351. Table II-4 provides existing revenue sources. Over half of the revenue is from local sources. Source Table II-4 KeyLine 2008 Fixed-Route Revenue Sources Budgeted Revenues Percentage of Budget Federal Grant $723,308 31% State Grant $203,000 9% Prop erty Tax $1,253,638 53% Farebox/Contract Revenue $154,742 7% Advertising Revenue $11,000 0% TOTAL REVENUES $2,345,688 Source: KeyLine, 2008 Expenses The other half of the total equation is, of course, expenditures. Total expenditures for the 2008 fiscal year were $1,545,815 not including Mini-bus service costs. The primary expenses for KeyLine Transit (and all other transit agencies across the United States) are salaries and benefits. Table II-5 provides existing expenditures for the fixed-route service. Page II-8 KeyLine Operational Analysis, Technical Memorandum 2

Table II-5 KeyLine Fixed-Route Expenses Expenditure Amount % of Total Administration $160,646 10.4% Operations $846,768 54.8% Maintenance $538,401 34.8% Total $1,545,815 Source: SCTS and, 2008. Cost Allocation Model Financial, ridership, and service information can be used to develop internal evaluation tools for KeyLine Transit. A cost allocation model provides base information against which current operations can be judged. In addition, the model is useful for estimating the cost ramifications of any proposed service alternative. The KeyLine Transit fixed-route cost allocation model is shown in Table II-6. Table II-6 Cost Allocation Model - Fixed-Route Services Budget Vehicle- Vehicle- Fixed Proposed Account FY 08 Hours Miles Cost Administration $160,646 $160,646 Wages $443,796 $443,796 Benefits $118,033 $118,033 Other Employee Expenses $903 $903 Insurance $30,544 $30,544 Utiliites and Property $27,894 $27,894 Motor Vehicle Expenses $224,678 $224,678 Contract Services $920 $920 Maintenance $538,402 $538,402 Subtotal Operating $1,545,816 $562,733 $763,999 $219,084 Service Variable Quantities veh-hrs veh-mls Fixed-C ost Used for Planning Purposes 25,122 291,885 Factor Source: SCTS, 2008. $22.40 $2.62 1.17 Cost information from the 2008 fiscal year was used to develop a two-factor cost allocation model of the current KeyLine Transit operations. In order to develop such a model, each cost line item is allocated to one of two service variables hours and miles and fixed costs. Fixed costs are those costs that are identified/ defined as being constant. These costs do not increase or decrease based on the KeyLine Operational Analysis, Technical Memorandum 2 Page II-9

level of service. This is a valid assumption for the short term, although fixed costs could change over the long term (more than one or two years). Examples of the cost allocation methodology include allocating fuel costs to vehicle-miles and allocating operator salaries to vehicle-hours. The total costs allocated to each variable are then divided by the total quantity (i.e., total revenue-miles or hours) to determine a cost rate for each variable. The allocation of costs for KeyLine Transit 2008 fiscal year operations yields the following cost equation for existing fixed-route bus operations: Total Cost = $1,326,732 + ($2.62 x Revenue-Miles) + ( $22.40 x Revenue-Hours) OR Total Cost = ($2.62 x Revenue-Miles + $2.62 x Revenue-Hours) x Fixed-Cost Factor (1.17) Incremental costs such as the extension of service hours or service routes/areas are evaluated considering only the mileage and hourly costs: Incremental Costs = ($2.62 x Revenue-Miles) + ($22.40 x Revenue-Hours) Route Efficiency Using the cost allocation model, the current route efficiency can be evaluated. Table II-7 provides a summary of route efficiency performance measures. As shown, cost per mile and cost per hour of service combined provide the operating cost per route minus administration of services. This information can be used to gauge route efficiency. The measure for determining cost efficiency is the cost per passenger-trip. The route with the lowest cost per passenger trip is the Red route. This route costs the agency about $4.74 per passenger trip. In contrast, the Orange route has a cost of $11.00 per passenger trip. This cost is much higher because of lower ridership throughout the route. Page II-10 KeyLine Operational Analysis, Technical Memorandum 2

Route Average Annual Miles Annual Passen ger- Trips Table II-7 Route Efficiency Hours Marginal Operating Cost Total Cost Cost/Trip Red 73,810 84,182 6,656 $342,290 $398,812 $4.74 Orange 48,800 20,676 3,016 $195,291 $227,539 $11.00 Green 80,520 73,892 7,176 $371,501 $432,847 $5.86 Grey 80,520 83,344 7,176 $371,501 $432,847 $5.19 Trolley 8,235 8,668 1,098 $46,150 $53,771 $6.20 Total 291,885 270,762 25,122 $1,326,732 $1,545,816 Average 58,377 54,152 5,024 $265,346 $309,163 $5.71 Note: Total Cost includes Administration Source: SCTS and, 2008. Overall Route Performance Score To evaluate the routes total effectiveness and efficiency, developed an overall route index score based upon: a. Annual number of one-way passenger-trips b. Operating cost (fully allocated) per mile c. Operating cost (fully allocated) per hour d. Cost per trip Table II-8 provides the index scores for all routes. Those above the average score of 11 should be reviewed to determine where efficiencies and effectiveness can be improved. The routes performing at the highest efficiency are Red and Grey followed by Green. The Orange route and the trolley are the least efficient routes, with a composite index score of 15. KeyLine Operational Analysis, Technical Memorandum 2 Page II-11

Page II-12 KeyLine Operational Analysis, Technical Memorandum 2 Route Annual Passenger- Trips Annual Trips Score Operating Cost per Mile (Fully Allocated) Table II-8 Overall Route Performance Cost per Mile Score Operating Cost per Hour (Fully Allocated) Cost per Hour Score Cost per Trip Cost per Trip Score Total Score Total Cost Red 84,182 1 $5.40 4 $59.92 2 $4.74 1 8 $398,812 Grey 83,344 2 $5.38 2 $60.32 3 $5.19 2 9 $432,847 Green 73,892 3 $5.38 2 $60.32 3 $5.86 3 11 $432,847 Orange 20,676 4 $4.66 1 $75.44 5 $11.00 5 15 $227,539 Trolley 8,668 5 $6.53 5 $48.97 1 $6.20 4 15 $53,771 Average 11 Note: Total Cost includes Administration. Source:, 2008.

Initial Route and Services Review A review of existing fixed routes was completed in January 2009. The Team conducted a field observation of all routes and service areas. The following key highlights were noted based on these observations. The route structure is somewhat confusing and difficult to follow. Many of the routes seem to have been appended over time as new developments arose, deviating from the original design or concept. Most of the areas with the greatest transit needs are served quite well. A large ridership cohort seems to be school-aged children. It will be important to ensure that the major schools are still served during any route reconstruction. The downtown transfer point is difficult for both passengers and buses. There are not appropriate facilities for passengers to wait during inclement weather. It is difficult for many users to make connections at transfer points with the current schedule, resulting in long travel times for some trips. Because of the hours during which the system operates, it is difficult for users to commute to and from full-time jobs or jobs that end after 4:00 p.m. Community Comparison To better understand KeyLine Transit a comparison analysis was performed with other systems in Iowa. Table II-9 provides a comparison with the following communities: Ames Cedar Rapids Davenport Des Moines Sioux City Iowa City While no two communities are exactly alike in terms of population and area, certainly general comparisons can be made between KeyLine Transit operations and these other Iowa communities. As shown, Dubuque is one of the smaller areas, particularly considering that the area population shown for both Ames and KeyLine Operational Analysis, Technical Memorandum 2 Page II-13

Iowa City do not include college students. Hence the trips per capita for these two communities are much higher than others. Dubuque has a lower than average number of passengers per hour compared to the other systems; the average for the other systems is 27 passengers per hour, while for Dubuque it is around 11. KeyLine Transit is performing well when compared to other Iowa communities in terms of cost per hour and cost per mile. When discussing cost per hour, Dubuque has a lower cost than all other systems with the exception of Ames. The system operates at nearly $15.00 per hour less than the average of the other Iowa systems. Dubuque also has the second lowest cost per mile, trailing only Des Moines. A more comparable analysis is provided in Table II-10, which shows a peer comparison with systems across the country that are more similar to Dubuque. The cost per passenger-trip for Dubuque continues to remain above the average of the other systems. This is largely due to the lower ridership being experienced by KeyLine Transit. Page II-14 KeyLine Operational Analysis, Technical Memorandum 2

Table II-9 Iowa Community Analysis Performance Measures Area No. of Annual Annual Annual Operating Fare Pass per Pass per Cost per Cost per Cost per Trips per Transit System - Location Population Vehicles Miles Hours Ridership Budget Revenues Hour Mile Pass Hour Mile Capita Ames Transit Agency (CyRide) 50,276 59 1,059,184 99,823 4,302,611 $5,547,757 $255,530 43.1 4.06 $1.29 $55.58 $5.24 85.58 Cedar Rapids Transit (FSTP) 97,716 28 1,038,454 73,918 1,104,346 $6,209,261 $651,027 14.9 1.06 $5.62 $84.00 $5.98 11.30 Davenport Public Transit (CITIBUS) 98,900 17 706,057 55,673 1,045,550 $4,228,223 $349,880 18.8 1.48 $4.04 $75.95 $5.99 10.57 Des Moines Metropolitan Transit Authority (Des Moines MTA) 369,143 89 17,706,262 156,778 3,891,235 $12,015,587 $3,694,044 24.8 0.22 $3.09 $76.64 $0.68 10.54 Sioux City 102,798 14 512,501 38,779 915,051 $2,805,551 $655,121 23.6 1.79 $3.07 $72.35 $5.47 8.90 Iowa City Transit 63,027 21 669,935 51,932 1,676,353 $4,161,409 $898,169 32.3 2.50 $2.48 $80.13 $6.21 26.60 AVERAGE 130,310 38 3,615,399 79,484 2,155,858 $5,827,965 $1,083,962 27.1 0.60 $2.70 $73.32 $1.61 25.6 City of Dubuque (KeyLine) 58,000 10 291,885 25,122 270,762 $1,396,378 $128,541 10.8 0.93 $5.16 $55.58 $4.78 4.67 Sources: SCTS and, 2008.

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Table II-10 National Peer Community Analysis for Fixed-Route Service Performance Measures Service Area No. of Annual Annual Annual Operating Fare Pass per Pass per Cost per Cost per Cost per Trips per Transit System - Location Population Vehicles Miles Hours Ridership Budget Revenues Hour Mile Pass Hour Mile Capita Pueblo Transit System (PT), CO 103,500 11 528,598 36,164 976,042 $3,067,149 $455,968 27.0 1.85 $3.14 $84.81 $5.80 9.43 Great Falls Transit District (GFTD), MT 59,380 13 443,561 33,296 427,345 $2,101,538 $202,299 12.8 0.96 $4.92 $63.12 $4.74 7.20 Fargo Metropolitan Area (MAT) 125,000 13 553,069 42,046 962,069 $3,013,650 $357,821 22.9 1.74 $3.13 $71.68 $5.45 7.70 LaCrosse Municipal Transit Utility (La Crosse MTU), WI 65,000 15 737,412 53,982 1,075,101 $4,080,316 $468,227 19.9 1.46 $3.80 $75.59 $5.53 16.54 Mesa County (GVT), CO 120,000 11 685,311 44,400 657,932 $2,226,568 $233,033 14.8 0.96 $3.38 $50.15 $3.25 5.48 Santa Fe Trails - City of Santa Fe (SFT), NM 75,500 20 800,173 59,456 625,223 $5,763,540 $440,278 10.5 0.78 $9.22 $96.94 $7.20 8.28 Albany Transit System (ATS), GA 79,939 7 535,923 32,287 766,396 $1,816,449 $377,696 23.7 1.43 $2.37 $56.26 $3.39 9.59 AVERAGE 89,760 13 612,007 43,090 784,301 $3,152,744 $362,189 18.2 1.28 $4.02 $73.17 $5.15 9.2 Dubuque (KeyLine Transit) 58,000 10 291,885 25,122 270,762 $1,396,378 $128,541 10.8 0.93 $5.16 $55.58 $4.78 4.67 Sources: SCTS and, 2008.

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Unmet Demand In order to determine the amount of demand that is being missed by the current route structure, a fixed-route transit demand model was used. The fixed-route model was first calibrated to match the current ridership, meaning that the calculated demand represents the current boardings. These data were then extrapolated to the entire Dubuque area to gauge where potential demand is not being met. Figure II-2 shows the current route structure with the density of transit demand based on current patterns. As can be seen in this figure, the majority of areas are served with only a few outlying areas showing potential demand that is being missed. It must also be understood that the existing demand is based on the current level and quality of service. As service is improved, the demand may be expected to increase. KeyLine Operational Analysis, Technical Memorandum 2 Page II-19

Figure II-2 Household Demand by Block Group 1 0 1 2 Miles Green Green_limited Grey Grey_limited Orange Orange_limited Red Red_limited Daily Demand 1 Dot = 1 Page II-20 KeyLine Operational Analysis, Technical Memorandum 2