FY 2010 Business Plan (Including FY 2010 Annual Budget and Twenty-Year Financial Plan) Dallas Area Board of Directors

Seated: John Danish (Secretary), City of Irving; Randall Chrisman (Chair), Cities of Carrollton and Irving; Robert Strauss (Vice Chair), City of Dallas; and Pamela Gates (Assistant Secretary), City of Dallas. Standing: Scott Carlson, City of Dallas; Claude R. Williams, City of Dallas; Faye Wilkins, Cities of Dallas, Plano, Glenn Heights, and Cockrell Hill; William Velasco, City of Dallas; Angel Reyes, City of Dallas; Raymond Noah, Cities of Addison, Highland Park, Richardson, and University Park; Loretta Ellerbe, City of Plano; William Tsao, City of Dallas; Jerry Christian, City of Dallas; and Mark Enoch, Cities of Farmers Branch, Garland, and Rowlett. Not pictured: Tracey M. Whitaker, City of Garland.

400-023-79 CW

Dallas Area Rapid Transit

FY 2010 Business Plan (Including FY 2010 Annual Budget and Twenty-Year Financial Plan)

FY 2010 Business Plan (09/22/09) Table of Contents

TABLE OF CONTENTS FY 2010 BUSINESS PLAN

Section 1 – Executive Summary System Development Progress……..……………………………... EX-4 Financial Planning and Management Progress……….……………. EX-6 Strategic Priority I: Strive to Exceed Customer Expectations…….. EX-8 Strategic Priority II: Manage System Development and Maintain Infrastructure……………………………………………………….. EX-9 Strategic Priority III: Build & Maintain DART’s Regional Transportation Leadership…………………………………………. EX-11 Strategic Priority IV: Drive Change Through Employee Engagement………………………………………………………… EX-12 Strategic Priority V: Maximize Funding Resources………………. EX-12 Strategic Priority VI: Use Technology to Integrate & Advance Services & System…………………………………………………. EX-14 Section 2 – FY 2010 Annual Budget Overview…………………………………………………………... BUD-1 Sources and Uses of Funds…………………..……………………. BUD-1 Revenues……………………...…………………………………… BUD-2 FY 2010 Operating Budget………….…………………………….. BUD-4 FY 2010 Capital Budget…………………………………………… BUD-7 FY 2010 Net Debt Service Budget………………………………… BUD-13 Position Summary…………………………..……………………… BUD-14 DART Key Performance Indicators………..……………………… BUD-16 Focus on the Customer-DART’s First Priority.…………………… BUD-16 Activity-Based Costing Initiative……………..…………………… BUD-20 Section 3 – FY 2010 Twenty-Year Financial Plan Introduction………………………………………………………... FP-1 Board Approvals…….……………………………………………... FP-1 Overview………………………..….……………………………... FP-2 Sources and Uses of Funds.………………………………………... FP-5 Structural Balance of the Budget…………………………………... FP-6 Sources of Funds…………………………………………………... FP-8 Uses of Funds……………………………………………………… FP-15 Operating Expenses.………………….………………………….. FP-15 Capital and Non-Operating Expenses…………………………….. FP-18 Debt Program……….……………………………………………. FP-20 Supplemental Financial Information…….………………………… FP-22 Major Financial Plan Assumptions………………………………… FP-23 Potential Risks and Opportunities……………….………………… FP-28

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FY 2010 Business Plan (09/22/09) Table of Contents

TABLE OF CONTENTS FY 2010 BUSINESS PLAN

Section 4 – Agency-wide Overview Purpose of Business Plan…………………………………………... AW-1 Board and Policy Direction………………………………………... AW-1 Business Planning Process…………………………………………. AW-7 Budget and Financial Plan Approval and Amendments…………… AW-8 Budget Basis and Presentation of Amounts and Years……………. AW-9 Related Reports…………………………………………………….. AW-9 Acronyms…………………………………………………………... AW-9 Overview of DART’s Strategic Alignment Structure…………….. AW-10 Management Action Plans and Performance Measurements……… AW-10 Employee Performance…………………………………………….. AW-13 Customer Focus……………………………………………………. AW-14 Safety/Security………………………………………..…………… AW-16 Safety Programs……………………………………………………. AW-21 Provide Customer-Driven Service…………………………..…….. AW-24 Employee Focus………………………………….………………... AW-27 Technology…………………………………………………..…….. AW-30 Stakeholder Focus……….……………………….………………... AW-34 Section 5 – Customer – Overview…….…………………………………………………..… BUS-1 Bus Scorecard – Key Performance Indicators…...……..………….. BUS-1 Bus Ridership Trends………….……..….………………………… BUS-2 Support the First Phase of System Build-Out.…………..………… BUS-3 Ridership Development Action Plan…………………….………… BUS-4 Subsidy Per Passenger……………………………………………... BUS-10 DART Innovative Services…...……………………………………. BUS-11 Activity Center Shuttles……....……………………………………. BUS-11 Bus Cost Model……………..………………..……………………. BUS-12 Section 6 – Customer – LRT Overview…………………………………………………………... LRT-1 Scorecard – Key Performance Indicators………………. LRT-1 LRT Ridership……………………………………………………... LRT-4 LRT Subsidy Per Passenger………………………….……………. LRT-5 LRT Expansion…………………………………………….………. LRT-5 LRT Costs…………………………………………….……………. LRT-13 LRT Cost Model………………………..…………….……………. LRT-13

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FY 2010 Business Plan (09/22/09) Table of Contents

TABLE OF CONTENTS FY 2010 BUSINESS PLAN

Section 7 – Customer – & Railroad Management Overview…………………………………………………………... CR-1 Commuter Rail – TRE Scorecard-Key Performance Indicators.….. CR-1 TRE Ridership…………….…..…………………………………... CR-3 Commuter Rail – TRE Costs and Subsidy Per Passenger….……… CR-5 Departmental Overview…………….……………………………... CR-6 Commuter Rail and Railroad Management Cost Model………..… CR-11 Section 8 – Customer – Services Overview…………………………………………………………... PAR-1 Paratransit Services Scorecard – Key Performance Indicators……. PAR-2 Paratransit Ridership……………………………………………….. PAR-2 Paratransit’s Productivity………………………………………….. PAR-5 Purchased Transportation Contract………………………………... PAR-6 Paratransit Costs and Subsidy Per Passenger……………………… PAR-7 Paratransit Cost Model………….…………………………………. PAR-7 Section 9 – Customer – HOV/General Mobility HOV Overview……….………………………………………………... HOV-1 HOV Scorecard – Key Performance Indicators…………….…… HOV-2 HOV Projects...…………………………………………………... HOV-2 Ensure I-30 HOV Lane Opens on Time…………………………. HOV-7 Stemmons HOV Gates to Improve Safety………………………. HOV-7 LBJ and Central HOV Operations…………….…………………. HOV-7 HOV Service has Lowest Subsidy Per Passenger…………..…… HOV-7 General Mobility Overview ………………………………………………………... HOV-8 Scorecard………………..……………………………... HOV-8 General Mobility – Road Improvement Programs………………. HOV-10 Section 10 – Appendix

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FY 2010 Business Plan (09/22/09) Table of Contents

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Section 1 Executive Summary Index of Exhibits

Exhibit 1.1 FY 2010 Financial Plan Measures Comparison…………………….. EX-2

Exhibit 1.2 FY 2010 Twenty-Year Financial Plan-Key Comparisons as of 8/11/09…………………………………….……………….…….….. EX-3

Exhibit 1.3 FY 2010 Financial Plan Measures Comparison for FY 2028………. EX-4

Exhibit 1.4 Staffing Growth – 2007-2014………………………………………. EX-5

FY 2010 Business Plan (09/22/09) Executive Summary

Executive Summary

Fiscal Year 2009 was one in which firm foundations were developed to support the substantial, sustainable expansion of DART systems and services.

• The DART Board of Directors adopted a new set of Strategic Priorities to provide focus for the DART team over the next five to ten years. • The Twenty-Year Financial Plan was restructured to ensure that DART would be able to meet its scheduled development of new light rail lines through 2013. • Design-Build contracts were awarded for the Orange Line (Irving) and the Blue Line extension (Rowlett). Construction remained on schedule for the Green Line with the inaugural segment opening from the Dallas Central Business District (CBD) to Fair Park on September 14, 2009. • New were adopted that will go into effect September 14, 2009. • The bus modernization and procurement process was fully evaluated and will result in a new formal procurement, to be developed with the benefit of clear policy guidance that came from the original effort in early FY 2009. • DART sold $1 billion in bonds, the largest issue in its history, maintained its Triple-A bond rating, and achieved an interest rate of 4.0167% by taking advantage of the newly- introduced Build America Bond program. • A near-term, five-year financial plan was implemented to address the current economic downturn and ensure that DART would emerge in 2014 with strong financial underpinnings and fully capable of meeting its expanded system and service obligations.

The operating budget and capital budget for FY 2010 have been developed in the context of both the overall five-year financial management strategy and the Twenty Year Financial Plan (the Plan). Agency management was successful in meeting the target FY 2010 operating budget of $403 million, revised downward from earlier forecasts of $412 million. The overall capital budget plan for FY 2010 has been increased by $89 million over the prior estimates incorporated in the Amended FY 2009 Twenty Year Financial Plan adopted in May 2009. Most of the increase is due to timing differences associated with construction progress payments that will be made in FY 2010 versus FY 2009.

A comparison of the May Plan to the proposed FY 2010 Plan is provided in Exhibit 1.1. It should be noted that total annual debt service will be lower by more than $15 million, largely as a result of the lower long-term costs achieved in the June 2009 bond issue. This also improved the external coverage ratio.

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FY 2010 Business Plan (09/22/09) Executive Summary

Exhibit 1.1 FY 2010 Financial Plan Measures Comparison ($ in millions) FY09 FY09 (May Proposed (November) Amendment) FY10 Sales Tax Receipts $452.8 $387.8 $387.8 Operating Expenses $412.0 $403.6 $402.8 Capital Expenditures $1,169.2 $1,051.5 $1,140.0 Total Debt Service $134.6 $156.0 $140.8 Debt Outstanding $3,174.9 $2,999.9 $2,731.1 External Coverage Ratio 4.44 2.49 2.79 Internal Coverage Ratio 1.59 0.99 0.93 Net Available Cash $665.2 $614.9 $527.2

DART will not be able to achieve a positive Internal Coverage Ratio for the first three years of the Plan, however. Operating and other recurring revenues have continued to soften and will require the Agency to operate through 2012 with internal coverage ratios under 1.0. The Internal Coverage Ratio is a very important measure contained as a goal in the Board-approved Financial Standards. The ratio measures the extent to which recurring annual revenues meet or exceed the sum of annual operating expenses and debt service. A ratio of less than 1.0 cannot be sustained for an extended period of time. The current Plan forecasts that DART will re-establish a positive ratio in 2013.

The five-year forward financial outlook for DART forecasts an operating budget in 2014 of $477 million, approximately $40 million less than was projected in the original FY 2009 Twenty-Year Financial Plan adopted in the fall of 2009. This downward revision has been achieved through the combination of four factors: 1) lowered fuel prices that have been fully hedged through 2013; 2) lower interest costs as a result of the benefits of the Build America Bond program; 3) reduced operating costs due to the elimination of “duplicative bus routes” that are being replaced by the introduction of light rail service; and, finally 4) reduced staffing additions due to further refinements in the operating and maintenance model that utilizes annual hours and miles to forecast required staffing levels. The incorporation of more current operating data has permitted the model to be optimized and resulted in lower future headcount additions.

The Plan also confirms that the Internal Coverage Ratio will return to a positive number (above 1.0) by 2013, albeit only slightly positive. The challenge throughout the 2013 to 2020 period will be to improve this operating ratio to a higher level.

The five-year plan, which is fully incorporated into the Twenty-Year Financial Plan, now provides for full funding of the Irving-3 rail extension to Terminal A at DFW International . This extension was previously short of a full funding allocation and assumed the receipt of federal funds to make up the shortfall. Once again, the June bond sale results were the contributing factor to remove the dependency on external funding.

EX-2

FY 2010 Business Plan (09/22/09) Executive Summary

Exhibit 1.2 provides an overview of key information for the next five years from the proposed FY 2010 Twenty-Year Financial Plan.

Exhibit 1.2 FY 2010 Twenty-Year Financial Plan Key Comparisons as of 8/11/09 ($ in millions) 2010 2011 2012 2013 2014 Operating Expenses $402.8 $422.8 $441.6 $460.2 $477.4 Capital Expenditures $1,140.0 $549.4 $299.8 $430.8 $389.2 Total Debt Service $140.8 $154.0 $170.0 $179.7 $198.8 Debt Outstanding $2,731.1 $3,142.3 $3,322.6 $3,671.8 $3,867.3 External Coverage Ratio 2.79 2.77 2.61 2.68 2.60 Internal Coverage Ratio 0.93 0.96 0.92 1.05 1.05 Net Available Cash $527.2 $375.0 $298.4 $362.0 $307.2

The Plan also provides for a limited amount of funding for preliminary feasibility, planning, environmental, and engineering studies for the Cotton Belt line, a 54-mile DART-owned rail corridor traveling east-west from Collin to Tarrant counties. This allocation will permit DART to position this program for an accelerated service opening date in the event that the public/private partnership initiative currently under discussion materializes. It will be difficult to make progress toward such an arrangement without the completion of preliminary engineering and feasibility analysis.

The Twenty Year Financial Plan incorporates provisions for the orderly development of a second light rail alignment in downtown Dallas (CBD-2) and the SOC-3 light rail extension in Oak Cliff (Blue Line). It should be noted, however, that 50% federal funding is now assumed for the CBD-2 alignment to fully accommodate a potential alignment that would pass by the new Convention Center Hotel in Dallas. The SOC-3 funding allocation has been increased by slightly more than $100 million to reflect updated estimates of potential costs for the segment. The Plan continues to assume that Cotton Belt service will be introduced in FY 2028, with actual construction commencing in 2025.

The updated Plan now forecasts that the total debt outstanding in FY 2028 will be nearly $215 million lower than the May 2009 Amended Plan. Internal coverage ratios will have returned to Financial Standard levels and the external coverage ratio, the key ratio evaluated by bondholders, will continue to move well beyond the minimum ratio of 2.0.

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FY 2010 Business Plan (09/22/09) Executive Summary

Exhibit 1.3 is a comparison of certain Financial Plan measures with FY 2028.

Exhibit 1.3 FY 2010 Financial Plan Measures Comparison for FY 2028 ($ in millions) FY09 FY09 (May Proposed (November) Amendment) FY10 Sales Tax Receipts $1,091.6 $1,091.6 $1,091.6 Operating Expenses $769.8 $714.9 $736.5 Capital Expenditures $1,319.6 $1,319.6 $1,303.5 Total Debt Service $484.3 $477.9 $460.5 Debt Outstanding $6,901.4 $6,913.0 $6,698.2 External Coverage Ratio 2.80 2.28 2.44 Internal Coverage Ratio 1.29 1.39 1.38 Net Available Cash $419.9 $442.2 $244.7

The following information is intended to provide a more complete overview of the major milestones that were met in FY 2009 and the major areas of emphasis for the DART team in the upcoming fiscal year. It is important to continue to emphasize how much work the Agency is undertaking in calendar year 2010. The Agency has never put into service this much new light rail capacity in a twelve-month period. This will significantly tax the resources of all departments. Concurrently, the Agency will be moving into the major construction phases for both the Orange Line and the Blue Line extension to Rowlett. And, of course, we must ensure that our existing bus, light rail, commuter rail, HOV, paratransit, and vanpool services continue to provide the level and quality of service we are committed to provide.

SYSTEM DEVELOPMENT PROGRESS

The Agency made great progress on the advancement of the development of the Orange Line to Irving and the extension of the Blue Line to Rowlett in FY 2009. The Rail Program Development and Procurement teams utilized a design-build procurement process to successfully solicit contractors to build the two segments. Contracts were awarded in late 2008 and early 2009, and the lines will be completed and ready for revenue service in time to meet commitments to our member cities.

The Orange Line will begin service to the Las Colinas Urban Center by December 2011, followed by service to Belt Line Road in December 2012. Service to Rowlett on the Blue Line will commence in December 2012.

The DART team successfully worked through the final alignment issues associated with the extension of the Orange Line into DFW Airport. The final plan was the result of many meetings with representatives from the DFW International Airport, the Fort Worth T, North Central Texas Council of Governments (NCTCOG), the City of Irving, and other member cities. Environmental studies are now underway, and final arrangements for award of a design-build contract on the final segment of the Orange Line will be a major initiative for the Rail Program Development team for completion within the next year.

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FY 2010 Business Plan (09/22/09) Executive Summary

Equally important, the DART team, working in close collaboration with the City of Dallas, has significantly advanced the analysis relating to the second rail alignment in the CBD. This alignment will be one of the major projects the Rail Planning staff will address in the upcoming fiscal year.

The Orange Line requires an operational Green Line. The Green Line, the longest light rail project under construction in North America, will become fully operational by December 2010. The first phase of the new Green Line, operating between Fair Park/South Dallas and Victory Station, will begin revenue service on September 14, 2009. The roll-out of service for the Green Line, including final staffing, training, marketing of the new service, planning opening events, communications, and media relations, will consume significant Agency staff time, materials, and other resources over the next fifteen months.

It is important to note the multi-year reduction in operating budget estimates does not imply that the Agency will avoid significant staffing additions over the next five-year period. To support the introduction of all of the new light rail service, DART will be required to continue to augment staffing levels in Transportation, Maintenance, Police, Customer Service, and Revenue collection. Exhibit 1.4 shows the absolute number of staffing additions, by function, that are included in the FY 2010 Plan. Even though the proposed staffing increases are lower than was estimated in the last Financial Plan, it is important to note that the increases still represent an additional 301 positions over the next five years, and a total of 685 positions since 2007. Given the severe fiscal circumstances other local governmental agencies are currently experiencing, DART is fortunate to be able to not only maintain but also increase our workforce so significantly.

Over 95% of the staffing increases between 2007 and 2014 are directly in support of system expansion. While those areas that are affected the most are detailed below, the areas included under “All Other Departments” also include buildout support positions in project management, rail safety, revenue collection, recruiting, HOV operations (supporting additional HOV miles in operation). Staffing increases in the general and administrative support areas are almost non- existent. All of these teams will be expected to accommodate the higher workload volumes through either the greater utilization of technology or workflow process improvement.

Exhibit 1.4 Staffing Growth 2007 – 2014

FY07 Approved Total 2008 - Grand Department Pos i ti ons FY0 8 FY0 9 FY1 0 FY1 1 -1 4 2014 Total % Change Maintenance 779 46 77 87 47 257 1,036 33% DART Police 227 43 52 42 35 172 399 76% Transportation 1,576 68 61 25 33 187 1,763 12% Customer Service 65 2 3 9 7 21 86 32% Materials Management 73 - 0 10 0 10 83 14% All Other Departments 617 22 10 5 1 38 655 6% Workforce Additions 181 203 178 123 685 Total Workforce 3,337 3,518 3,721 3,899 4,022 4,022 21%

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FY 2010 Business Plan (09/22/09) Executive Summary

We are proposing to maintain our compensation policies and benefits program for our workforce. The FY 2010 Annual Budget provides for the orderly continuation of performance-based merit and bonus programs. Additionally, employees will not be required to absorb any increase in health or life insurance in the upcoming year.

The DART Board, through Resolution No. 080114, directed staff to immediately begin the definition, development, and implementation of the business opportunity on the Cotton Belt corridor. Therefore, a Request for Information was solicited on May 21, 2009, to identify individuals and firms interested in a Public Private Partnership (PPP) for the Cotton Belt Commuter Rail Line. The PPP is to design, construct, operate, maintain, and finance a cross- regional passenger rail service starting on or about 2013.

DART staff must fully integrate significant service additions into the current system over the next four years. Every calendar year from 2009 through 2013 will bring new light rail openings. With each will come not only the work associated with new openings but also the work involved in redesigning bus system schedules and communicating the continual system changes to our riders.

FINANCIAL PLANNING AND MANAGEMENT PROGRESS

By any measure DART has been buffeted by extremely challenging financial forces during the past 12 months. Fortunately, the Agency has achieved considerable success in addressing the long-term financial obligations of the Agency while managing the more immediate challenges associated with a significant decline in sales tax revenues.

DART was materially aided in its ability to meet these challenges by the passage of the American Recovery and Reinvestment Act of 2009 (ARRA). By virtue of the passage of the ARRA, DART received nearly $61.5 million in unanticipated new funds as well as an advance reimbursement of $78.5 million in grant funding for the Green Line that was originally scheduled for 2014.

An even more significant benefit of the ARRA was a little-discussed provision called Build America Bonds (BABs) that provided government bond issuers the ability to access the corporate bond market while receiving a 35% tax credit to offset the higher interest costs of taxable bonds. DART was able to utilize this new debt category as part of a $1 billion bond issue sold and funded in June 2009, for a net effective interest rate of 4.0167%, which is nearly 124 basis points under what was contained in the approved Financial Plan. The inclusion of this form of debt resulted in a net savings of nearly $220 million in total interest costs when compared to what traditional tax-exempt borrowing would have required.

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FY 2010 Business Plan (09/22/09) Executive Summary

The financial circumstances described above served to offset some of the burden imposed by the economic downdraft impacting sales tax revenues. The FY 2009 Annual Budget anticipated $431 million in annual receipts. The downturn resulted in a revision down to $385 million, or a $46 million reduction in anticipated receipts. Even worse for the Agency was the effect on subsequent years’ annual operating budgets. Sales tax receipts for the upcoming fiscal year are unlikely to exceed the revised 2009 totals, thus resulting in a reduction of nearly $68 million below what had been previously forecast for FY 2010. Similar reductions must be anticipated for subsequent fiscal years. Our independent economists do not forecast a return to prior annual estimates until 2018. A ten-year history of DART sales tax receipts is shown at Exhibit APX.6.

The anemic economy has not only affected the sales taxes but also carries into other categories, including advertising revenue and natural gas drilling leases. As a consequence, it was important in the spring of 2009 to undertake a comprehensive review of the entire Twenty-Year Financial Plan, with a special emphasis upon the next five years encompassing the majority of the next phase of system expansion.

As a result of this review, the DART executive team developed an overall five-year fiscal strategy that sought to achieve an operating expense level in 2013 that was approximately $35 million lower than the Twenty-Year Financial Plan adopted in November 2008. The strategy is incorporated in the Amended FY 2009 Twenty-Year Financial Plan adopted in May. It seeks to achieve lower expenditure levels through a combination of selective service eliminations on routes that will be made redundant by the introduction of light rail service, reduced overall staffing ratios for hours and miles of service based upon updated actual experience, and productivity improvements made possible by the introduction of new technology and improved workflow processes.

Finally, DART management and the Board undertook the comprehensive updating of the DART structure. Fare increases ranged from 18% to 33%, with an even higher adjustment in the corporate annual pass program. The increases in the TRE commuter rail program approached 50%. Discussion of increases in the current economic environment was difficult but necessary. The adopted fare structure, which will take effect in September, will generate nearly $12 million in increased annual revenues which are especially needed in the face of the current decline in sales tax receipts. A history of DART’s fare structure is provided at Exhibit APX.7.

It is not certain that sales tax receipts will stabilize in the upcoming fiscal year. Nor can we be certain that the projected increase in farebox revenues will materialize. Therefore, it is incumbent upon DART management to closely monitor the performance of these revenue streams. Management must be prepared to take additional cost-cutting measures in the event that conditions worsen.

On balance, we believe that sufficient steps were taken in the current fiscal year by management and the Board to permit the Agency to proceed forward in an orderly manner with the expansion of our light rail services as well as maintaining a high level of service and customer satisfaction on our current offerings.

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FY 2010 Business Plan (09/22/09) Executive Summary

To ensure that we meet this aggressive work program and maintain congruence with the mandates of the Board, we have developed and will be implementing a new five-year strategic plan in support of the Board’s recently adopted Strategic Priorities. These new priorities are the backbone of this Business Plan. DART’s programs and activities will be tied to the Board’s priorities.

We look forward to a very productive, if challenging, FY 2010. It would not be an overstatement to say that the work program outlined over the next five years is the most aggressive and demanding in our history. The DART team believes it is prepared for the upcoming challenges and very much appreciates the support of the Board in this undertaking.

The following information will highlight the major program activities in which the DART team will be working, arranged by the relevant Board defined Strategic Priority.

Strategic Priority I: Strive to Exceed Customer Expectations

DART customers have come to expect a high level of service. This in itself provides us with the challenge to just meet those expectations. There are several projects in FY 2010 which we believe will provide our customers with improved communications, service, security, and convenience.

• Where’s My Bus?® technology, which gives near real-time updates on bus locations and estimated arrival times, was implemented in late FY 2009 and will be enhanced in the upcoming year. This technology has already become a hit with our customers. • The implementation of additional cameras at our rail stations and on future bus purchases will provide improved security; and the Traffic Signal Prioritization project will improve DART Rail trip times through downtown Dallas. • DART is working with regional partners to study the feasibility of Smartcard technology for convenient payment of transit fares, tolls, parking, and city services. Dubbed the RapidCard, the study will provide a budget and recommendations for the Agency. • The level- initiative, along with the introduction of Super Light Rail Vehicles will positively impact customers with disabilities and customers with strollers and/or luggage.

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FY 2010 Business Plan (09/22/09) Executive Summary

Strategic Priority II: Manage System Development & Maintain Infrastructure

LIGHT RAIL

With the Green Line, Orange Line, and extension of the Blue Line light rail projects under construction, FY 2010 will be the busiest year DART has ever experienced. The opening of the new rail lines will cause service changes that impact both bus and rail.

• The Service Scheduling Division in the Planning Department is experiencing record-breaking levels of activity as a consequence of so many major system changes and the need to develop rider-friendly and cost-effective routes. They will be closely monitoring the implementation of the new Board-approved service program that will become effective in September 2009. Additional revisions will be prepared to address the opening of the Green Line in 2010 to better align the bus system to complement DART’s expanding rail system.

• DART’s administrative areas, such as Procurement, Human Resources, and Finance are working stride for stride with our Maintenance, Transportation, Police, and Rail Program Development areas to ensure there is sufficient staff, contracts, purchase orders, and funding to ensure that opening dates are met. • In addition to the projects under construction, DART’s Rail Planning Department is in the final stages of alternatives analysis for the second rail alignment in the Dallas Central Business District and the Orange Line’s DFW Airport station. Both are high profile projects and will have a major impact on both DART and the region.

REGIONAL RAIL

DART is involved in several new regional rail initiatives.

• Denton County (DCTA) has plans to connect with DART’s Green Line stations in Carrollton in December 2010. DART management has been in active discussions with DCTA regarding rail right-of-way, leased rail cars, and revenue sharing agreements. • In addition, strong interest in regional rail has brought public private partnership (PPP) discussions into play for DART’s Cotton Belt project. Extensive discussions are currently underway and will continue throughout FY 2010 with respect to the acceleration of regional rail service on the Cotton Belt corridor. DART is pursuing this initiative in concert with the Fort Worth T, with which it already collaborates on the TRE corridor.

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FY 2010 Business Plan (09/22/09) Executive Summary

HOV

In addition to the growing rail system, the Planning Department’s General Mobility Division is performing a comprehensive review of the entire High Occupancy Vehicle (HOV) program. During the last five years, 55 miles of HOV lanes have opened. These lanes benefit HOV users, DART, and non-users by taking cars off the roads. The introduction of a variety of HOV lanes has brought new challenges for DART. This is especially true in regard to the “buffered lanes” approach which does not utilize physical barriers but rather relies upon double-striped lines or pylons spaced at intervals to denote the HOV lane. Incidence of HOV violations is twice to three times as high on such lanes and poses significant enforcement challenges for the DART Police. To ensure the maximum effectiveness of the lanes, DART, the Texas Department of Transportation (TxDOT), and the North Texas Council of Governments (NCTCOG) will be working together to review the entire program. At the culmination of this review, the necessary adjustments will be made to achieve levels of proper utilization and reduce the non-compliance that is currently being observed.

BUS

An extensive bus procurement process was undertaken during FY 2008 and FY 2009. The relative merits of diesel versus natural gas fueling options were thoroughly evaluated. A determination was made to defer a final decision until the fall of 2009 when more would be known about the possible extension of federal fuel credits currently available for natural gas users. At the time of this deferral, extension of these credits could have made the difference in determining which technology is most cost effective.

In the interim, energy markets have shifted considerably. Natural gas is currently the lower cost option even without the benefit of a fuel tax credit. New federal legislation has been introduced and is currently pending that would extend the fuel credit for another 10-20 years. It now seems likely that DART can proceed with a procurement in the next six to nine months that will be based upon natural gas.

The need to complete the procurement within the next year is becoming increasingly apparent. Although the DART fleet is well-maintained, it is nonetheless an aging fleet. Ridership on the bus network will be subjected to less-than-satisfactory service unless an orderly change-out of the fleet occurs. With the completion of the procurement, the new will begin arriving in the latter part of 2013.

PARATRANSIT

DART purchased the Paratransit operating facility in the summer of 2007. Since that time, several capital projects have been undertaken to improve the site, parking lots, and fueling facilities. If the Board chooses natural gas technology for the bus fleet, the Paratransit operating facility will also be converted to natural gas by 2012.

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FY 2010 Business Plan (09/22/09) Executive Summary

Strategic Priority III: Build & Maintain DART’s Regional Transportation Leadership

DART can be rightly assumed to be the regional and state transit leader. DART has been successful in developing a multi-modal system that is properly maintained and highly coveted by customers, stakeholders, and political leaders. DART will continue to exercise leadership responsibilities over the next year in a number of specific areas:

• There will be an elevated level of coordination among DART, the Fort Worth Transportation Authority (the T), and Denton County Transportation Authority (DCTA) as the three systems work through rail right-of-way agreements, regional rail car considerations, and the development of “seamless transit services” for riders. • The demonstrated interest in expanded passenger rail service in North Texas, as evidenced by the level of effort expended by the North Texas cities and counties during the last two legislative sessions, argues for seeking solutions that would permit advancing the Cotton Belt project. This will require close collaboration with not only our member cities but non-DART cities, the T, and DCTA. • A regional rail car philosophy has been generally discussed by the three transit agencies. This concept will assist the transit properties in lowering maintenance and operating costs by providing economies of scale. Significant efforts by Rail Program Development staff will be expended to advance this effort within the next year. • This regional partnership emphasis is also being used as the transit properties work with North Texas Toll Authority (NTTA) and the City of Dallas in exploring the RapidCard as a regional transportation payment card. • DART’s HOV program continues to expand and will begin to incorporate managed lane options as well as the current types of HOV lanes. Management of this program requires close coordination among TxDOT, NCTCOG, DART, and the jurisdictions through which these projects extend.

• There is a statewide mandate and strong regional interest to implement Person-Centered Mobility Management. This entails coordination of transportation resources across transit and social service agencies. The objective is to enhance transportation for persons with disabilities and seniors beyond the requirement of the American with Disabilities Act of 1990. This will require collaboration among DART, the Fort Worth Transportation Authority, Denton County Transportation Authority, Human Services agencies, and the North Central Texas Council of Governments.

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FY 2010 Business Plan (09/22/09) Executive Summary

Strategic Priority IV: Drive Change through Employee Engagement

• Meeting the goals associated with this initiative will be especially important as DART ramps up its hiring in support of light rail expansion. Between FY 2008 and FY 2014, DART projects to add approximately 685 employees. The hiring, training, and integration of this many employees represents a 21% growth of the Agency and will be largest employment program undertaken by DART. • In striving to continually improve communications with our employees, the Employee Communication Committee was established. This 13- member committee has provided an additional communication avenue for the Agency and is considered to be very successful by employees.

• DART, like most companies, has the challenge of succession planning and multi- generational staffing. In order to assist in developing qualified applicants for leadership positions, a Leadership DART program was developed with 15 positions available. Forty-two applications were received, and a very diverse and qualified group of 15 individuals was selected for the first class. This class was so successful that a new class is being recruited to begin in October 2009. The inaugural class is scheduled to graduate in December 2009. Similar types of succession planning programs were implemented in the Transportation Department last year for bus and rail operators. The programs, BOSS and ROSS (Bus Operator or Rail Operator Succession to Supervision) have proven to be successful. To date, 23 operators have graduated from the program, and 12 have been promoted into supervisory positions.

Strategic Priority V: Maximize Funding Resources

DART has been successful in maximizing the available funding resources as evidenced by the Green Line’s $700 million Full-Funding Grant Agreement, and the many other federal grants awarded to the Agency, including the recent $61.5 million ARRA grants. This strategic initiative, along with the creation of a Board-level Revenue Committee, provides strong encouragement to the staff to bring forward creative ideas to be discussed and vetted. It also supports maintaining vigilance over our traditional funding sources to ensure they are not diminished by actions of others.

• The new fare structure will be fully implemented in FY 2010 along with new ticket vending machines (TVMs) being installed on the Green Line and in downtown Dallas. These new TVMs will provide the ability to issue weekly and monthly passes in addition to the day pass. The TVMs will also accept credit or debit cards.

EX-12

FY 2010 Business Plan (09/22/09) Executive Summary

• A comprehensive parking fee strategy is currently under development in recognition of the recent adoption of legislation that permits differential parking fees throughout our system. A comprehensive plan is scheduled for consideration by the Board by mid- FY 2010. • Smartcard technology will be reviewed and the impact on our riders and DART’s revenues will be analyzed during the upcoming fiscal year. It is anticipated that the program will permit the simplification of the overall fare structure and a significant reduction in . • The federal stimulus programs have provided several new opportunities for additional funding. DART was the first to submit grant proposals under the new program and has been approved to receive all funding currently available to DART. We are also prepared to submit requests for funding not used by other transit properties when it becomes available. An additional ARRA award for a four-year anti-terrorism program enhancement grant was announced in early August. DART is currently working on funding requests under the Transportation Investment Generating Economic Recovery (TIGER) and Transportation Investments for Greenhouse Gas and Energy Reduction (TIGGER) programs and will continue to pursue additional funding that becomes available. • DART has shown that Texans will use rail and that increased development will occur around stations that are properly marketed. Transit Oriented Development (TOD) is still dependent on our member cities, but DART’s member cities have proven that proper planning can produce significant development potential. There are active TOD projects in planning or underway in Garland, Richardson, Plano, Addison, Farmers Branch, Carrollton, and Irving as well as the City of Dallas. DART staff has identified a number of DART-owned properties with TOD potential and will be pursuing opportunities during the upcoming fiscal year for public/private development efforts that will create new revenue streams for DART. Equally important, these initiatives will also increase the availability of transit accessible communities within the DART Service Area. • DART drives economic development. A new study by Dr. Terry Clower and Dr. Bernard Weinstein from the University of North Texas was completed in July 2009. The study shows that for the period from FY 2009 – FY 2013, DART’s Light Rail construction activities have/will generate more than $4 billion in local economic activity, including 32,100 employment years (one job for one year equals one employment year). Its ongoing operations generate another $543 million in economic activity on an annual basis, and nearly 5,000 jobs.

EX-13

FY 2010 Business Plan (09/22/09) Executive Summary

Strategic Priority VI: Use Technology to Integrate & Advance Services & System

Technology is used in almost every aspect of transit.

• With the hiring of DART’s first Chief Information Officer, a consolidation of resources is currently being implemented so that all technology initiatives are coordinated within one department rather than fragmented throughout the Agency.. • A Technology Steering Committee has been established and will begin the development of a comprehensive technology master plan for the Agency which will guide the future selection and deployment of technology resources. • An off-site alternative processing facility will be completed and placed in service within the next fiscal year. This facility is a critical component of our business continuity plan and will greatly assist the Agency in maintaining operational network capabilities under a variety of adverse conditions. • As previously discussed, DART is pursuing the feasibility of a regional smartcard system which will allow the Agency to better structure and collect fares while providing our customers with a safer and a potentially more convenient method of payment. Rewards for our frequent riders and service demand pattern data are two of the byproducts that would positively impact our customers. Moreover, other agencies have reported substantial reductions in fare evasion and fare avoidance after implementation of the new services. • The Where’s My Bus?® program can be accessed by computer or by most cell phones. The program was developed internally and provides bus customers with up-to-date information about the location and estimated arrival time of their bus. This allows customers to better manage their time and has the potential to reduce complaints about early or late buses. The program will be refined and enhanced during FY 2010.

• The Traffic Signal Priority (TSP) project and the radio system upgrade are two other projects of considerable importance to the advancement of Agency objectives which will be in active development during the upcoming year. o The TSP project is vital to the smooth operation of our light rail system in that it will allow DART to within the required headways through downtown Dallas. The Technology Department is spearheading the project and will work closely with the Rail Program Development Department, DART’s operations departments, and the City of Dallas. o The radio system upgrade is a highly complex implementation that will involve the total conversion of the radio systems within the Agency and will result in greatly expanded network communications capabilities that will affect the bus, rail, and paratransit fleet as well as DART Police communications.

EX-14

FY 2010 Business Plan (09/22/09) Executive Summary

With these new services and so many major initiatives underway and in the development stages, coupled with the financial challenges of the current economy, FY 2010 will be one of the most demanding years in DART’s history. But, with challenges come the rewards of success. And, with success, as the next decade unfolds, DART stands poised to again transform the landscape of North Texas.

Exhibit APX.9 in the Appendix is a description of acronyms used in this report.

EX-15

FY 2010 Business Plan (09/22/09) Executive Summary

BLANK PAGE

EX-16

Section 2 FY 2010 Annual Budget Index of Exhibits

Exhibit 2.1 FY 2010 Annual Budget……………...……….…….……………… BUD-1

Exhibit 2.2 FY 2010 Sources and Uses of Funds….……………………………. BUD-1

Exhibit 2.3 FY 2008-FY 2010 Revenue Comparison..….……………………… BUD-2

Exhibit 2.4 Sales Tax History………….……..……………………..……….….. BUD-3

Exhibit 2.5 Operating Expense Budget by Expenditure Category……………… BUD-5

Exhibit 2.6 Capital and Non-Operating …………………………..…………….. BUD-7

Exhibit 2.7 Capital and Non-Operating Project Budget List……...…………….. BUD-8

Exhibit 2.8 Net Debt Service Budget…………………………………………… BUD-13

Exhibit 2.9 Full-Time Position Summary – By Department……………..….….. BUD-14

Exhibit 2.10 FY 2010 Budgeted Positions by Mode…..….……………………… BUD-15

Exhibit 2.11 Agency Scorecard-Key Performance Indicators………..……….….. BUD-16

Exhibit 2.12 Fixed-Route Ridership……………………………………………… BUD-17

Exhibit 2.13 Total System Ridership-All Modes…………………..…………….. BUD-17

Exhibit 2.14 Subsidy Per Passenger-Fixed-Route..………………...…………….. BUD-18

Exhibit 2.15 Subsidy Per Passenger-All Modes..………………………………… BUD-18

Exhibit 2.16 Subsidy Per Passenger Comparison………………………....….….. BUD-19

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

FY 2010 Annual Budget

Overview

The budget as outlined in Exhibit 2.1 is divided into three categories totaling $1.67 billion: Operating Expense Budget, Capital and Non-Operating Budget, and Net Debt Service Budget. Exhibit 2.1 FY 2010 Annual Budget (In Millions) FY10 Description Budget Operating Expense Budget $402.8 Capital and Non-Operating Budget 1,140.0 Net Debt Service 123.4 $1,666.2

Sources and Uses of Funds

The purpose of this section is to provide a detailed review of DART’s sources and uses of funds for FY 2010 and variances between the FY 2009 and FY 2010 Budgets.

Exhibit 2.2 shows total funding sources for FY 2010 projected at approximately $815 million, $1.3 billion (61.5%) lower than the FY 2009 Budget. The decreases are primarily due to Debt Issuances ($1.17 billion). More information can be found in the Financial Plan section, subsection Sources of Funds.

Exhibit 2.2 FY 2010 Sources and Uses of Funds (In Millions) % Description FY09 Budget FY10 Budget $ Variance Variance Sales Tax Revenues $384.8 $387.8 $3.0 0.8% Debt Issuances 1,170.0 - (1,170.0) -100.0% Federal Funds 366.3 249.1 (117.2) -32.0% Operating Revenues 65.9 70.8 4.9 7.4% Interest Income 29.4 17.5 (11.9) -40.5% Other Sources 97.3 89.7 (7.6) -7.8% Total Sources of Funds $2,113.6 $814.8 ($1,298.8) -61.5% Operating Expense Budget $377.0 $402.8 $25.8 6.8% Capital and Non-Operating Budget 1,181.3 1,140.0 (41.3) -3.5% Debt Service 101.5 140.8 39.4 38.8% Total Uses of Funds $1,659.8 $1,683.6 $23.8 1.4%

BUD-1

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Also included in Exhibit 2.2 is a summary of the Uses of Funds. The operating budget increased by $25.8 million (6.8%) over the FY 2009 Budget. Details can be found on pages BUD-5 through BUD-7. The FY 2010 Capital Budget decreased $41.3 million (3.5%) from the FY 2009 Budget and is primarily a function of the Phase II LRT Build-out cashflow projections. The Debt Service Budget increased by $30.0 million (24.6%) principally due to the increased debt service from the issuance of $1 billion in long-term debt in June 2009. See Exhibit 2.8 for more detail on the Net Debt Service Budget.

Revenues

Exhibit 2.3 provides a more detailed summary of the sources of funds listed in Exhibit 2.2. The changes to each major category are discussed in more detail following the chart.

Exhibit 2.3 FY 2008 - FY 2010 Revenue Comparison (in Thousands)

FY09 Amended FY08 Actuals Category Budget FY10 Budget $ Inc/(Dec) % Variance Operating Revenues $48,957 Passenger Revenues $51,804 $59,667 $7,863 15.2% $2,784 Rental Income - TRE Corridor $3,159 $2,551 ($608) -19.2% 1,623 Rental Income - Other 1,740 1,648 (92) -5.3% 4,503 Advertising Revenue 4,540 2,700 (1,840) -40.5% 1,320 Rental Income - LRT 929 929 0.0% 183 Miscellaneous 36 184 148 405.7% 116 Concession/Vending Revenue 109 96 (13) -11.7% $10,529 Advertising /Rental Income/Other Revenues $10,513 $8,109 ($2,404) -22.9% $2 Grant Revenue (other) $1,784 $1,572 ($213) -11.9% 1,303 Vanpool Grant Revenue 1,364 1,413 49 3.6% 94 Grant Revenue (COPS) 0.0% $1,399 Operating Grant Revenues $3,148 $2,985 ($163) -5.2% $60,885 Total Operating Revenue $65,466 $70,760 $5,295 8.1% $416,148 Sales Tax Revenue $431,170 $387,759 ($43,411) -10.1% 21,715 Interest Income 29,991 17,486 (12,505) -41.7% 8,322 Contributions for TRE Operations 9,548 8,862 (686) -7.2% 460 Other Non-Operating revenues 0.0% $446,645 Total Other Non-Operating $470,709 $414,107 ($56,602) -12.0% $507,530 Total Revenues $536,174 $484,867 ($51,307) -9.6% Other Sources of Funds $571,415 Debt Issuances $1,170,000 $ ($1,170,000) -100.0% Federal Funds 74,497 Formula Federal Funding 125,910 156,091 30,181 24.0% 95,878 Discretionary Federal Funding 240,363 93,028 (147,335) -61.3% Other Sources Sub-recipient fees 40 10 (30) 0.0% 506 Mineral Rights and DFW Oil/Pipeline 928 240 (688) -74.1% Contributions to Capital Projects 85,982 80,546 (5,436) -6.3% $742,296 Total Other Sources $1,623,223 $329,915 ($1,293,308) -79.7% $1,249,826 Grand Total $2,159,397 $814,782 ($1,344,615) -62.3%

BUD-2

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Sales Tax Revenues are the largest source of revenue for the Agency. Exhibit 2.4 includes actual and projected revenues from FY 2005 through FY 2011. A ten-year history of sales tax receipts is included at APX.6.

Exhibit 2.4 Sales Tax History ($ in millions) $600.0 30.0%

25.0% $500.0 $431.2 $416.1 $389.1 20.0% $384.8 $358.2 $387.8 $409.1 $400.0 $342.7 15.0%

10.0% $300.0 8.6% 6.9% 5.0% 4.5% 5.5% $200.0 2.8% 3.6% 0.0% 0.8% -5.0% $100.0 -10.0% -10.8% $0.0 -15.0% 2005A 2006A 2007A 2008A 2009B 2009P 2010B 2011P Sales Tax Revenues Sales Tax Growth

Between FY 2005 and FY 2008, sales tax receipts grew by an average of 6.7% per year, from $342.7 million to $416.1 million. FY 2008 growth was budgeted at 5% ($108.6 million), but actually grew by 6.9%. Growth for FY 2009 was projected at $431.2 million (3.6% above the FY 2008 actuals), but is now predicted to decline to $384.8 million (10.8%) due to market conditions. FY 2010 is predicted to essentially remain flat (<1% growth) over 2009, with an economic recovery taking hold beginning in FY 2011.

Operating Revenues are estimated to increase 7.4% due to increases in fixed route passenger revenue due to a fare increase effective September 2009 and a projected increase in ridership as SE-1 opens. Average fare is projected to increase from $0.71 per fixed-route passenger to $0.88 in FY10 and $0.90 in 2011 when the approved fare change is fully implemented.

Interest Income is expected to decline due to lower interest rates than were projected last year.

Debt Issuances - In FY 2009 Management made the decision to upsize the June 2009 long-term debt issuance and as a consequence, it is not anticipated that DART will issue any debt during FY 2010.

BUD-3

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

FY 2010 Operating Budget

The following assumptions were used to develop the operating budget and are tied to the FY 2010 Board goals where possible:

Salary and Wage Assumptions o 3% salary and wage increase o Hourly wage progressions o Open position annualization o Continuance of the performance bonus programs o 178 new positions in preparation for the September 2009 Green Line opening and the December 2010 Green Line Opening Benefits Assumptions o GASB 45 compliance for Retiree Post Employment Benefits o Health Benefits 80/20 cost split (DART/Employee) o New third party administrator Contract Rates o Increases for Paratransit, HOV and Software Maintenance agreements Fuel and Energy Assumptions o Diesel fuel hedge for Bus, Paratransit and TRE Services, at an average of $2.81 per gallon o Electricity rate $0.1031 per KWH Service Levels o Bus service reduction due to Green Line opening alignments o Light Rail services increasing significantly in September 2009 o Paratransit and Commuter Rail remain at the FY 2009 service levels o Annualization of nine (9) additional miles of HOV lanes opened in 2009 Reserves o Funding is included for possible increases or programs unknown during the budget process. These funds may or may not be used during the fiscal year. HOV striping and maintenance Vanpool and Ridership Counting contracts Costs associated with capital projects

BUD-4

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.5 provides a breakdown of the Operating Expense Budget by expenditure category and compares the FY 2009 Amended Budget to the FY 2010 Proposed Budget.

Exhibit 2.5 FY 2010 Operating Expense Budget by Expenditure Category (in Thousands)

FY09 Amended $ Inc/(Dec) FY08 Actuals Category Budget FY10 Budget Amended Bud % Var $50,939.2 Operator Wages $54,012.2 $56,758.3 $2,746.1 5.1% 12,234.0 Operator Leave Wages 12,530.3 12,273.4 (256.9) -2.0% $63,173.2 S&W - Operators Payroll $66,542.5 $69,031.8 $2,489.3 3.7% $34,334.1 Non Operator Hourly Wages $36,762.9 $42,008.9 $5,245.9 14.3% 1,916.7 Overtime - Hourly 1,972.1 1,932.1 (40.1) -2.0% $36,250.9 S&W - Non-Operator Payroll $38,735.1 $43,940.9 $5,205.9 13.4% $67,999.8 Salaries $77,872.8 $83,436.7 $5,563.9 7.1% 2,922.5 Overtime - Salaried 1,645.2 2,295.6 650.4 39.5% 868.3 Part-Time/Temporary 741.5 904.0 162.5 21.9% $71,790.6 S & W - Salaried $80,259.4 $86,636.3 $6,376.9 7.9% $171,214.7 Total Salaries & Wages $185,537.0 $199,609.0 $14,072.0 7.6% $22,445.6 Health & Life & Disability Insurance $27,728.8 $28,771.0 $1,042.2 3.8% 18,368.4 Pension & 401K Plans 20,889.4 22,181.5 1,292.1 6.2% 12,987.6 FICA 14,216.3 15,540.7 1,324.5 9.3% 5,425.4 Workers Compensation 6,560.8 6,794.2 233.4 3.6% 1,531.4 Paid Absences Liability 1,900.0 1,916.0 16.0 0.8% 1,668.1 Service Incentive Pay 1,609.0 1,622.0 13.0 0.8% 3,456.3 Retiree Benefits 4,378.3 4,725.6 347.3 7.9% 538.9 Unemployment & Other Benefits 343.1 329.6 (13.5) -3.9% $66,421.7 Total Benefits $77,625.6 $81,880.5 $4,254.9 5.5% $10,089.8 Contract Services $10,862.7 $11,253.5 $390.8 3.6% 3,179.7 Advertising, Marketing & Public Information 3,152.6 3,321.9 169.3 5.4% 2,816.0 Financial, Legal & Governmental 3,018.3 2,865.0 (153.3) -5.1% 3,004.1 Computer & Communications 3,356.8 3,285.0 (71.8) -2.1% 3,457.5 Administration, Human Resources & MBE 4,132.7 4,599.7 467.1 11.3% 1,097.6 Vehicle & Equip Maintenance 1,892.1 1,953.7 61.7 3.3% 277.8 Engineering & Real Estate Acquisition 426.0 391.5 (34.5) -8.1% $23,922.4 Total Services $26,841.2 $27,670.4 $829.2 3.1%

BUD-5

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.5 (continued)

FY 2010 Operating Expense Budget by Expenditure Category continued (in Thousands) Amended FY08 Actuals Category Budget FY10 Budget $ Inc/(Dec) % Variance $27,893.5 Diesel, NRV and LNG Fuel & Lube $24,527.9 $22,922.4 ($1,605.5) -6.5% 16,040.3 Motor Vehicle Parts & Supplies - Bus 15,427.3 16,875.9 1,448.6 9.4% 4,843.6 Light Rail Parts 4,023.6 5,938.5 1,914.9 47.6% 1,712.2 Facilities Operations - Material & Supplies 1,928.7 1,817.0 (111.7) -5.8% 1,813.8 Office Equipment & Supplies 2,207.0 2,388.9 181.9 8.2% 1,247.5 Uniforms, Tools & Shoes 1,680.5 1,932.5 252.0 15.0% $53,551.0 Total Materials & Supplies $49,795.0 $51,875.2 $2,080.2 4.2% $5,376.2 Power & Light LRT - Vehicle $6,655.5 $7,113.0 $457.5 6.9% 4,419.3 Utilities - Facilities 4,529.1 5,263.6 734.5 16.2% 969.5 Communications 1,286.0 1,457.9 171.9 13.4% $10,765.0 Total Utilities and Communications $12,470.6 $13,834.4 $1,363.8 10.9% $2,039.7 Liability & Property Insurance $2,228.3 $2,539.6 $311.3 14.0% 980.3 Liability Claims 1,667.0 1,744.4 77.4 4.6% $3,020.0 Total Claims & Insurance $3,895.3 $4,283.9 $388.7 10.0% $23,451.1 Paratransit Services $23,840.3 $25,608.9 $1,768.6 7.4% 17,113.6 Trinity Railway Express 18,354.0 18,776.5 422.5 2.3% 2,015.6 DART-on-Call Services 2,224.0 2,944.0 719.9 32.4% 1,357.0 DART Shuttle Services 1,470.2 1,470.2 (0.0) 0.0% 1,466.1 TDM - Vanpool 2,010.0 2,310.5 300.5 15.0% 1,345.1 HOV Services 1,151.8 1,515.6 363.8 31.6% $46,748.5 Total Purchased Transportation $49,050.3 $52,625.7 $3,575.4 7.3% $1,606.3 Fuel & Lube/ Other Taxes $1,566.0 $1,601.0 $35.1 2.2% 1,478.8 Training/Travel 1,801.6 1,935.0 133.4 7.4% 920.9 Facilities & Equip - Leases 1,003.1 1,119.9 116.7 11.6% 851.6 Employee Programs, Dues & Subscriptions 1,412.1 1,422.1 10.0 0.7% 309.1 Public Information 543.8 370.1 (173.7) -31.9% $5,166.6 Total Taxes, Leases & Other $6,326.6 $6,448.1 $121.5 1.9% 0.0 Fuel Reserves/Tax Credits (2,283.2) $.0 $2,283.2 -100.0% 0.0 Management Reserve 1,850.4 2,954.2 1,103.8 59.7% $.0 Total Reserves ($432.8) $2,954.2 $3,387.0 -782.5% $380,809.9 Sub-total $411,108.8 $441,181.6 $30,072.8 7.3% ($19,288.8) Capital P&D ($20,361.0) ($21,499.2) ($1,138.3) 5.6% (5,728.0) Start-Up Costs (13,728.7) (16,911.2) (3,182.4) 23.2% ($25,016.9) Total Other ($34,089.7) ($38,410.4) ($4,320.7) 12.7% $355,793.1 Total Expenses $377,019.1 $402,771.2 $25,752.1 6.8%

BUD-6

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

FY 2010 Capital Budget

Shown in Exhibit 2.6 is a summary of the FY 2010 Capital and Non-Operating Budget which includes such things as: Light Rail Transit (LRT) expansion; HOV lane construction; TRE trackwork; vehicle and facility capital maintenance programs; scheduled replacement of vehicles, facilities, infrastructure; etc.

Exhibit 2.6 Capital & Non-Operating (In Thousands)

FY 2009 Category FY 2010 Budget Budget Variance $1,118,395 Total Capital Projects $1,073,936 ($44,459) 20,361 Capital Planning & Development 21,499 1,138 13,729 Start-up 16,911 3,182 7,998 Non-Operating 5,569 (2,430) Road Improvements / ITS Programs 0LAP/CMS Program* 0 0 6,900 PASS Program 7,500 600 9,791 TSM (General & Street Repair Program) 10,717 926 3,862 Regional & DART/TxDOT ITS 3,885 23 $20,553 Total Road Improvements/ITS $22,102 $1,549 $1,181,036 Total Capital & Non-Operating $1,140,017 ($41,019)

* Please note that although no further funds are being allocated to these programs in FY 2010; previously unspent fund balances may be spent down.

BUD-7

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.7 is a list of major capital projects recommended for inclusion in the FY 2010 Budget.

Exhibit 2.7

FY 2010 Capital / Non-Operating Project Budget List (in $000)

5-Year 20-Year External Total Cost PROJECT NAME: FY2010 Total Total Funding Thru-FY29

AGENCY-WIDE

Administrative Facility Maintenance & Reserve $1,133 $1,133 $1,335 $0 $1,335 Communication/Information Systems

Radio Systems Replacement $51,071 $51,071 $51,071 $5,116 $55,496 Disaster Recovery Implementation 1,324 1,324 1,324 0 1,705 Maintenance - Replacement/Maintenance Reserve 214 1,258 87,727 0 87,727 Electronic Parts Catalog 1,000 1,000 3,871 0 3,871 Communication/Information Systems - 30 Projects 1,989 5,204 35,250 0 35,899 Fare Revenue Collection Equipment

RapidCard (Fare Collection System) $2,200 $22,000 $55,462 $19,360 $55,462 Fare Revenue Collection Equipment - 2 Projects 200 267 801 0 901 Operating Facility Maint./Equip. Replacement

Solar Panel Installation at DART Facilities $3,000 $3,000 $3,000 $3,000 $3,000 S & I Consolidated Dispatch 293 1,595 1,595 0 1,595 Non-Revenue Vehicles, Replacement & Reserve $1,047 $8,398 $54,601 $0 $56,083 Other

Agency-Wide Reserve $1,000 $9,367 $51,234 $0 $51,234 Other - 2 Projects 300 300 854 0 854 Passenger Facilities/Amenities $617 $617 $617 $0 $617 Security/Police

Police Facility $24,215 $34,104 $34,104 $0 $35,000 Surveillance Camera System 3,035 3,035 3,035 0 6,070 DART Police - Replacement Reserve 0 2,270 18,483 0 18,483 50 Police Vehicles 0 1,343 1,343 0 1,593 Security/Police - 3 Projects 300 443 1,418 240 1,418 TOTAL AGENCY-WIDE $92,939 $147,730 $407,125 $27,716 $418,342

BUD-8

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.7 (continued)

FY 2010 Capital / Non-Operating Project Budget List (in $000) (cont'd)

5-Year 20-Year External Total Cost PROJECT NAME: FY2010 Total Total Funding Thru-FY29 BUS Communication/Information Systems $200 $432 $2,890 $0 $2,890 Guideway Expansion & Maintenance

2030 System Plan - Bus $0 $0 $524,839 $125,697 $524,839 BRT Elm and Commerce Bus Lanes Reconstruction 3,500 7,000 7,000 0 7,000 Operating Facility Maint./Equip. Replacement

Maintenance - Replacement/Maintenance Reserve $2,358 $6,709 $83,824 $0 $84,724 Operating Facility Maint./Equip. Replacement - 16 Projects 1,868 1,868 2,197 0 2,214 Passenger Facilities/Amenities

On-Street Passenger Facilities $2,906 $11,123 $11,123 $10,002 $14,625 NW Plano 500 8,500 8,500 8,500 8,500 Passenger Facilities/Amenities - 6 Projects 1,082 1,802 1,802 343 8,466 Security/Police 180 180 180 0 180 Revenue Vehicles, Maintenance & Replacement

Bus Purchase (2013-2015) $75 $197,790 $263,644 $25,651 $263,869 Bus Replacement Program 0 0 472,957 47,296 472,957 Innovative Services Vans - Replacement 0 2,885 10,441 0 10,441 Bus Vehicle Maintenance Programs 3,840 14,603 31,944 0 51,567 TOTAL BUS $16,509 $252,891 $1,421,342 $217,488 $1,452,273 PARATRANSIT Communication/Information Systems $0 $1,022 $4,715 $0 $4,715 Operating Facility Maint./Equip. Replacement 245 245 315 0 315 Revenue Vehicles, Maintenance & Replacement 0 21,068 76,261 0 76,261 TOTAL PARATRANSIT $245 $22,335 $81,291 $0 $81,291

BUD-9

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.7 (continued)

FY 2010 Capital / Non-Operating Project Budget List (in $000) (cont'd)

5-Year 20-Year External Total Cost PROJECT NAME: FY2010 Total Total Funding Thru-FY29 LRT Guideway Expansion & Maintenance

Green Line $321,326 $335,296 $335,296 $348,916 $1,759,111 Blue & Orange Line 470,843 1,077,540 1,077,540 101,878 1,538,143 SOC-3 (Blue Line Extension) 8,457 17,324 197,814 0 235,420 Second Downtown Dallas Alignment (CBD) 4,000 261,802 505,175 400,000 511,269 West Dallas 0 0 1,030,243 254,793 1,030,243 Scyene Road 0 0 642,798 158,609 642,798 WOC Extension 0 0 622,684 154,022 622,684 Southport 0 757 467,934 0 467,934 General Service Enhancements - LRT 0 0 77,185 0 77,185 Major Capital Project Reserve 1,300 170,433 428,192 0 428,192 Capital Project Reserve - from Phase IIB 748 22,857 22,857 0 22,857 Love Field 0 7,218 28,873 0 29,122 Cedars/Lamar Land-use JV 3,000 3,000 3,000 2,450 5,665 New 6th St. Crossing at City of Garland 1,902 1,902 1,902 1,902 1,902 US75 LRT Bridge 500 1,000 1,000 0 1,000 Tunnel Delamination Study/Project 998 998 998 1,603 4,204 Corinth St/OC-2 Bridge Repair 938 938 938 0 938 Bryan Street Bridge Ramp Replacement at US 75 0 0 0 282 0 Hawkins St. Rail Junction 0 0 0 407 0 Communication/Information Systems

PA/VMB Signs at CBD Stations $1,000 $1,000 $1,000 $1,209 $3,500 Communication/Information Systems - 5 Projects 1,729 1,734 37,561 0 44,927 Fare Revenue Collection Equipment

Replace TVM 6000 on Blue and Red North Line $0 $5,463 $13,251 $0 $13,251 TVM 5000 Model Replacement 4,769 4,769 4,769 0 4,919 Finance - Replacement Reserve 0 0 7,664 0 7,664 Operating Facility Maint./Equip. Replacement

Maintenance - Replacement/Maintenance Reserve $2,511 $5,613 $70,966 $0 $71,707 Operating Facility Maint./Equip. Replacement - 22 Projects 3,080 3,080 3,167 0 3,240

Non-Revenue Vehicles, Replacement & Reserve $2,856 $4,806 $15,355 $0 $15,705

BUD-10

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.7 (continued)

FY 2010 Capital / Non-Operating Project Budget List (in $000) (cont'd)

5-Year 20-Year External Total Cost PROJECT NAME: FY2010 Total Total Funding Thru-FY29

LRT (cont'd)

Other

Valencia Development Project $2,698 $2,698 $2,698 $2,698 $3,000 Other - 3 Projects 251 251 653 0 756 Passenger Facilities/Amenities

Lake Highlands LRT Station $8,796 $10,129 $10,129 $7,500 $13,438 Frankford Station Additional Parking 3,619 4,283 4,283 3,201 5,094 Victory Plaza Expansion 930 1,178 1,178 0 1,178 Passenger Facilities/Amenities - 9 Projects 2,002 2,002 2,002 1,900 2,847 Revenue Vehicles, Maintenance & Replacement

LRV Maintenance Program $7,010 $19,561 $58,103 $0 $62,144 LRT Vehicle Business Systems (VBS) 3,699 7,211 7,211 0 18,968 CCTV - 48 SLRVs 3,332 4,976 4,976 0 4,976 LRV 8 C-cars 2,470 2,525 2,525 0 12,096 Revenue Vehicles, Maintenance & Replacement - 6 Projects 1,849 1,858 1,018,196 0 1,020,567 TOTAL LRT $866,611 $1,984,202 $6,710,118 $1,441,369 $8,688,646 HOV

Communication/Information Systems $935 $935 $982 $0 $982 Planning - Replacement Reserve 0 0 6,974 0 6,974 Guideway Expansion & Maintenance

2030-General Service Enhancements - HOV $0 $0 $396,310 $0 $396,310 IH 635 (LBJ) 12,671 63,354 63,354 0 64,646 SH 114 HOV 7,802 15,603 15,603 0 22,484 IH30 (Turnpike) 4,600 4,600 4,600 0 6,342 Central (Immediate) 2,490 2,490 2,490 0 6,289 HOV Stemmons Reversible Gates 2,457 2,457 2,457 1,442 2,582 Stemmons 1,122 1,495 1,495 0 1,693 East RL Thornton Extension 815 815 815 0 1,254 Security/Police $60 $807 $4,488 $0 $4,694 TOTAL HOV $32,950 $92,556 $499,568 $1,442 $514,249

BUD-11

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.7 (continued)

FY 2010 Capital / Non-Operating Project Budget List (in $000) (cont'd)

5-Year 20-Year External Total Cost PROJECT NAME: FY2010 Total Total Funding Thru-FY29 COMMUTER RAIL Communication/Information Systems

Positive Train Control $500 $9,500 $9,500 $4,750 $9,500 Communication/Information Systems - 2 Projects 728 728 728 728 728 Guideway Expansion & Maintenance

Cotton Belt $7,164 $15,655 $1,187,578 $298,434 $1,187,578 Cotton Belt - North Dallas Mitigation 0 0 128,303 0 128,303 General Service Enhancements - CR 0 0 11,026 0 11,026 Beltline Grade Separation 16,609 22,747 22,747 16,921 70,472 Valley View to W. Irving Double Tracking 13,431 13,431 13,431 4,373 14,400 TRE Platform Extensions - W & S Irving,& Med/Mkt 3,435 7,721 7,721 0 7,721 Rail Replacement - Madill 324 3,757 9,994 0 10,572 Replace Rail - Madill 1,925 2,192 3,091 0 3,192 Rail Replacement - DFW 309 1,903 9,501 4,750 11,075 Undercutting - DFW 820 1,878 6,066 3,033 6,288 Tie Renewal / Replacement - DFW 508 1,712 9,159 4,580 10,976 Tie Renewal / Replacement - Madill 966 1,645 11,544 0 13,830 TRE ROW Maintenance Programs - DFW 263 1,399 10,567 5,284 10,884 TRE ROW Maintenance Programs - Madill 220 1,168 5,911 0 5,911 Turnout Replacement - Madill 390 1,079 5,282 0 6,126 Guideway Expansion, Maintenance & Replacement - 27 Projects 5,537 7,786 24,481 8,656 29,192 Passenger Facilities/Amenities $973 $1,818 $2,314 $1,572 $3,401 Revenue Vehicles, Maintenance & Replacement

TRE Train Set Phase I $3,500 $3,500 $3,500 $3,212 $14,950 Bi-Level Fleet Overhaul Program 2,788 2,788 23,066 11,533 24,604 Locomotive Overhaul Program 2,150 2,150 8,450 4,225 10,490 TRE - Vehicle Maintenance Programs 663 1,823 6,935 3,468 7,116 TRE Train Set Phase II 1,000 1,000 1,000 4,660 10,000 Revenue Vehicles, Maintenance & Replacement - 15 Projects 480 3,050 19,588 8,598 22,766 TOTAL COMMUTER RAIL $64,683 $110,430 $1,541,485 $388,775 $1,631,102

BUD-12

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.7 (continued)

FY 2010 Capital / Non-Operating Project Budget List (in $000) (cont'd)

5-Year 20-Year External Total Cost PROJECT NAME: FY2010 Total Total Funding Thru-FY29 TOTAL CAPITAL, CAPITAL PLANNING & DEVELOPMENT, START-UP AND NON-OPERATING

TOTAL CAPITAL $1,073,936 $2,610,144 $10,660,929 $2,076,791 $12,785,903 Capital P&D $21,499 $112,618 $537,059 $0 $537,059 Start-up 16,911 25,064 46,907 0 46,907 Non-Operating 5,569 17,204 26,437 450 26,437 Total General Mobility - Road Improvements/ITS 22,102 44,102 44,102 8,791 44,102 TOTAL CAPITAL P&D, START-UP, NON-OPERATING $66,081 $198,988 $654,503 $9,241 $654,503 GRAND TOTAL - CAPITAL & NON-OPERATING $1,140,017 $2,809,132 $11,315,432 $2,086,032 $13,440,407

FY 2010 Net Debt Service Budget

The FY 2010 Net Debt Service Budget shown in Exhibit 2.8 includes the assumption that DART will issue no additional debt during FY 2010. It is projected that DART will have $150 million in outstanding Commercial Paper at the end of FY 2009 and FY 2010, and that there will be $2.6 billion in outstanding long-term bonds at the end of FY 2009. More details can be found in the Financial Plan section under Debt Program.

Exhibit 2.8 Net Debt Service Budget* (In Thousands) FY 2009 FY 2010 Budget Category Budget $ Variance $6,802 Commercial Paper Program Interest & Fees $2,663 ($4,139) 79,976 Long-Term Debt Program Interest 119,265 39,289 377 Financial Advisor and Other Fees 986 609 $87,155 Total Expenses $122,914 $35,759 $14,295 Principal Repayments $17,935 $3,640 $101,450 Total Debt Service Budget $140,849 $39,399 ($29,991) Less: Interest Income** ($17,486) $12,505 $71,459 Total Net Debt Service Budget $123,363 $51,904

* The Net Debt Service budget does not include the offsetting income and expense of defeased lease transactions nor the non-cash amortizations of Bond Issuance costs or Bond Premiums received. ** Interest income is shown here because of the interest rate link between interest income and interest expense

BUD-13

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Position Summary

Exhibit 2.9 summarizes position changes by department. New positions for FY 2010 are predominantly in support of the Light Rail Phase II Build-out (Green Line).

Exhibit 2.9 FY 2010 Budget Full-Time Salaried Position Summary - By Department FY09 FY09 As FY10 New/ FY10 FY 09 Total Reog/Mods Amended Eliminated Budget Total Commuter Rail/RR Mgmt. 12 - 12 - 12 DART Police 322 4 326 38 364 Equal Opport. & Gov. Relations 18 - 18 - 18 EVP Administration 30 1 31 - 31 EVP Operations 32 - 32 2 34 Finance 83 - 83 3 86 Human Resources 38 - 38 - 38 Internal Audit 13 - 13 - 13 Legal 25 - 25 - 25 Maintenance 194 - 194 19 213 Marketing & Communications 69 - 69 - 69 Office of Board Support 6 - 6 - 6 Office of the President 6 - 6 - 6 Paratransit 52 - 52 - 52 Planning & Development 55 2 57 - 57 Procurement 44 - 44 - 44 Project Management 64 - 64 - 64 Technology 72 (3) 69 3 72 Transportation 204 - 204 17 221 Total Salaried Positions 1,339 4 1,343 82 1,425 Full-Time Hourly Position Summary - By Department EVP Operations 44 - 44 8 52 Maintenance 712 1 713 68 781 Marketing & Communications 58 - 58 10 68 Paratransit 16 - 16 - 16 Planning & Development 50 - 50 - 50 Transportation - - - - - Non Operator 50 - 50 3 53 Operators * 1,451 (4) 1,447 7 1,454 Total Hourly Positions 2,381 (3) 2,378 96 2,474 Grand Total 3,720 1 3,721 178 3,899 * Operator positions are based on an Optimal number based on current conditions and are subject to change.

BUD-14

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.10 shows the allocation of the budgeted Agency positions over the various modes.

Exhibit 2.10 FY 2010 Budget Positions by Mode

Mode Salaried Hourly Total

Bus 355 1,789 2,144

LRT 420 420 840

Commuter Rail 20 1 21

Paratransit 58 24 83

HOV 29 58 88

Vanpool 4 - 4

LRT Start-up 127 95 222

Capital Planning & Development 156 71 227

General & Administrative (Ops) 256 16 272

Total 1,425 2,474 3,899

BUD-15

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

DART Key Performance Indicators

Exhibit 2.11 is the DART Scorecard of Key Performance Indicators (KPIs). Fiscal Years 2007 through 2008 are the actual values while Fiscal Years 2009 through 2011 are the budget and projected values. Each of these indicators is discussed in more detail in this report.

Exhibit 2.11 - DART Scorecard of Key Performance Indicators Strategic Priority - Agency KPI Measure FY07A FY08 A FY09 Q2 FY09B FY10B FY11P Ridership Total System (M) 103.8 116.9 122.5 118.9 112.7 121.3 Fixed Route (M) 65.1 67.4 68.3 68.8 64.7 73.2 Efficiency Subsidy Per Passenger - Total System $2.64 $2.50 $2.40 $2.65 $2.97 $2.83 Subsidy Per Passenger - Fixed Route $3.67 $3.73 $3.69 $3.96 $4.50 $4.09 Administrative Ratio 8.3% 8.2% 8.1% 8.3% 8.8% 8.0% Service Quality On-Time Performance - Bus 89.9% 92.0% 92.7% 92.0% 92.0% 92.0% On-Time Performance - LRT 97.0% 96.6% 95.8% 97.5% 97.5% 97.5% On-Time Performance - TRE 97.1% 97.8% 98.0% 97.0% 97.0% 97.0% Customer Satisfaction Complaints Per 100k Passengers - Fixed Route 38.2 40.0 43.7 37.0 40.0 40.0 Complaints Per 100k Passengers - Bus 50.1 52.5 56.7 50.0 51.0 51.0 Complaints Per 100k Passengers - Light Rail 13.2 15.3 19.0 13.5 14.5 14.5 Complaints Per 100k Passengers - TRE 5.2 5.2 5.5 5.5 6.0 6.0 Managed Growth Sales Tax for Operations 63.2% 65.0% 69.8% 66.1% 81.1% 77.3%

Focus on the Customer – DART’s First Priority

The Board's first goal is to improve the quality, effectiveness, and efficiency of the system. Effectiveness is achieved by increasing ridership and the number of passengers carried for each mile operated. Efficiency is achieved by minimizing the net cost to move those passengers (i.e., subsidy per passenger).

Effectiveness: Fixed-Route Ridership Projected to be 64.7 Million in FY 2010 and Total System Ridership Projected to be 112.7 Million – Exhibit 2.12 illustrates the ridership projections for fixed-route service. Fixed-route service includes bus, light rail, and commuter rail. Ridership information is based on unlinked passenger trips (i.e., each time a person boards a vehicle). The projected downturn in ridership in FY 2010 anticipates the impact of a fare increase that took place in September 2009.

BUD-16

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.12 Fixed-Route Ridership

80.0

75.0 73.5 68.8 73.2 70.0 66.0 67.4 67.8 65.0 65.1 64.7 60.0 FY07A FY08A FY09B FY10B FY11P

FY09 Plan FY10 Plan FY09 Q2

Total system ridership (Exhibit 2.13) includes the fixed-route ridership previously discussed, as well as paratransit services, vanpool, and HOV ridership.

Exhibit 2.13 Total System Ridership – All Modes

140.0

124.8 122.0 116.7 120.0 116.9 121.3 118.9 112.7 103.8 100.0

80.0 FY07A FY08A FY09B FY10B FY11P

FY09 Plan FY10 Plan FY09 Q2

BUD-17

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Efficiency: Subsidy per Passenger – Subsidy per passenger is defined as operating expenses less operating revenues divided by passenger trips. Exhibits 2.14 and 2.15 compare the projections for fixed-route and system-wide subsidy per passenger. The changes are more fully discussed in the modal sections.

Exhibit 2.14 Subsidy per Passenger – Fixed-Route

$6.00 $5.00 $4.50 $3.96 $4.09 $3.73 $3.69 $4.00 $3.67 $3.00 $2.00 $1.00 $0.00 FY07A FY08A FY09 FY09B FY10B FY11P Q2

Exhibit 2.15 Subsidy per Passenger – All Modes

$4.00 $3.50 $2.97 $2.83 $3.00 $2.64 $2.65 $2.50 $2.40 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 FY07A FY08A FY09 Q2 FY09B FY10B FY11P

BUD-18

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Exhibit 2.16 compares subsidy per passenger by mode. Related discussions may be found in the modal sections.

Exhibit 2.16 Subsidy Per Passenger Comparison

FY09 Qtr Mode FY07A FY08A 2 FY09B FY10B FY11P Bus $3.70 $3.89 $3.81 $4.13 $4.63 $4.27 LRT 3.18 3.01 2.98 3.11 3.90 3.53 TRE 6.57 6.33 6.60 7.49 6.97 7.47 Total Fixed Route $3.67 $3.73 $3.69 $3.96 $4.50 $4.09 HOV $0.14 $0.18 $0.18 $0.19 $0.20 $0.20 Paratransit 43.79 42.69 42.36 42.51 42.81 42.26 Vanpool 0.56 0.22 0.72 0.74 0.67 0.62 Total System $2.64 $2.50 $2.40 $2.65 $2.97 $2.83

BUD-19

FY 2010 Business Plan (09/22/09) FY 2010 Annual Budget

Activity-Based Costing Initiative (ABC)

DART has committed to the implementation of an Activity-Based Costing system. This process is a new way of looking at budgets and expenditures, with costs being associated with activities and outputs, not just departments and line items. The Activity-Based Budget will not replace the traditional budget, but will be a supplement to it. The benefits of this type of approach include:

Providing context information for the budget. Currently, within the operating budget, there is limited association between costs and outputs. This is particularly the case for administrative activities. DART knows how much it spends, and how that spending is distributed by type of expenditure (labor, materials, services, etc.), but this cost data is often not tied to specific activities or outputs. This makes it difficult to evaluate the efficiency and/or cost effectiveness of programs and processes. Helps prioritize activities and allocate resources. During the budget process, there is always more need for resources than there are resources available. With the information supplied from the ABC system, resources can be better allocated to more essential and highly effective activities and away from more discretionary or less effective activities. Also, with a known cost per output or unit of work, as the outputs or units of work that are required go up or down, the proper level of resources can be allocated to that activity. Helps identify areas for efficiency improvements. The data gained from this process will shed light on activities that may not be as efficient as they should be, and help provide the roadmap toward continuous process improvement. This type of cost data can also aid in benchmarking and provides a starting point for many internal cost analyses.

DART went live with time and cost capture applications on October 1, 2008. Labor and all other costs are now captured by activity. The data captured during the first year will be rough and inconsistent in some areas. This is a multi-year, iterative process. Management will analyze the data that is currently being captured. Based on that analysis, adjustments may be made to the list of activities, coding instructions to employees will be improved where ambiguities exist, and other required tweaks to the systems and improvements to reporting will be made.

As this data becomes more reliable, it will be included in the Business Plan.

BUD-20

Section 3 FY 2010 Twenty-Year Financial Plan Index of Exhibits

Exhibit 3.1 FY10-14 Sources and Uses of Funds Comparison……..…………... FP-5

Exhibit 3.2 FY10-14 Structural Budget Balance……...…………………….….. FP-6

Exhibit 3.3 FY 2010 Financial Plan, as of August 11, 2009……….…….….….. FP-7

Exhibit 3.4 FY10-14 Distribution of Sources of Funds………………….….….. FP-8

Exhibit 3.5 A Five-Year Comparison of Sales Tax Receipts…...……..……….. FP-10

Exhibit 3.6 Projected Fixed-Route Average Fare..………………….……….….. FP-11

Exhibit 3.7 Anticipated Capital Grant Funding………..……………………..…. FP-13

Exhibit 3.8 Operating Expenses by Mode FY10-FY14……………………….... FP-15

Exhibit 3.9 Historic Growth vs. Projected Growth-Operating Expenses……….. FP-16

Exhibit 3.10 Capital Expenditure Categories FY10-FY14…….…………………. FP-18

Exhibit 3.11 FY10 Financial Plan Debt Assumptions………….……..……..…… FP-21

FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

FY 2010 Twenty-Year Financial Plan

Introduction

The purpose of this section is to provide an overview of the FY 2010 Twenty-Year Financial Plan (the "FY10 Plan" or “the Plan”). The first year of the FY10 Plan corresponds with the FY 2010 Annual Budget, and the first five years of the Financial Plan comprise the FY 2010 Business Plan.

The purpose of the final 15 years of the Twenty-Year Financial Plan (through 2029) is to validate the affordability of DART's long-range Transit System Plan, which includes the Agency's commitments for future system expansion and the issuance and repayment of debt. The FY10 Plan demonstrates that, based on current information and assumptions, DART has the financial capacity to meet the Agency's Transit System Plan commitments and to continue the programmed levels of bus, rail, and other transportation services.

Each segment of the FY 2010 Twenty-Year Financial Plan is described in detail:

1. Sources of Funds a. Sales Taxes b. Operating Revenues c. Interest Income d. Federal Funding e. Debt Issuance f. Other Sources 2. Uses of Funds a. Operating Expenses b. Capital and Non-Operating Expenditures c. Debt Program 3. Supplemental Financial Information

This section also provides definitions of terms, outlines the major assumptions used to develop the FY10 Plan, discusses changes from prior plans, and illustrates some potential financial risks and opportunities. References are made throughout this section to DART’s Financial Standards. See the Agency-Wide Overview section for more discussion of Financial Standards, and see Exhibit APX.2 for DART’s approved FY 2010 Financial Standards.

Board Approvals

The approval of the annual budget requires a simple majority vote. Approval of the Twenty- Year Financial Plan requires a super-majority for approval (two-thirds, or 10 votes). On September 22, 2009, the DART Board of Directors approved the FY 2010 Annual Budget and Financial Plan.

FP-1

FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

On November 18, 2008, the Board approved the FY 2009 Financial Plan (the “Original FY09 Plan”). This Plan was subsequently amended on May 26, 2009 (“the FY09 Plan) in response to changing economic circumstances.

Overview

From a financial standpoint, 2008 and 2009 have been challenging years, and these challenges have greatly shaped the FY 2010 Financial Plan.

Fiscal Year 2008 began with the realization of the magnitude to which escalating construction cost prices were going to affect DART’s Light Rail build-out programs. All of the current phase of Light Rail projects (Green Line – $70 million; Irving/Rowlett – $580 million; and CBD- 2/SOC-3 – $196 million) were reviewed, and nearly $850 million of additional capital costs were incorporated into the Financial Plan for the current phase of the Light Rail buildout.

One of DART’s major cost drivers, energy prices, saw a rollercoaster ride in 2008 and 2009. Crude oil began FY 2008 around $70/bbl. Six months later fuel prices were up 50%, to $105, and by mid-July, prices had jumped another 40%, peaking near $145/bbl. As quickly as they had risen, the fall was even quicker. By December, oil was trading at under $40. Such volatility in fuel prices had a significant effect on DART’s financial planning as DART consumes over nine million gallons of diesel fuel for its bus, paratransit, and commuter rail operations. Additional energy costs are incurred for natural gas, gasoline, and electricity.

DART was not hedged for fuel during FY09. Steps have since been taken to stabilize this cost element and as a result, DART is currently hedged for all diesel fuel needs through 2013. There is also a fixed-price contract in place for electricity through December 2013.

Sales taxes, DART’s primary source of funding, were strong during the summer of 2008 as the budget and Original FY09 Financial Plan were being developed. Through July, sales taxes were up nearly 8% over 2007. While some of the economic writing was on the wall and DART was at that time only planning on 2% sales tax growth for FY09, the ferocity of the coming economic recession was clearly not foreseen. It quickly became apparent that not only would sales taxes not increase in 2009, but that there would be a significant decline. Consequently, in addition to the economic forecast DART usually uses for sales taxes (provided by The Perryman Group), DART also contracted with Dr. Terry Clower from the University of North Texas for a five-year economic forecast. Both forecasts called for a sales tax decline of more than 7% for FY09.

With those forecasts in mind, the winter and spring were spent preparing an amendment to the Original FY09 Financial Plan to validate the affordability of DART’s operating and capital programs in the face of the new economy. This Amendment was adopted in May, and a summary of the major adjustments to the Plan are highlighted below:

• Reduction of sales tax forecasts for FY09 from $431 million to $385 million, a reduction of $46 million (11%) from what was included in the Original FY09 Plan. The long-term effects of the current economy resulted in a reduction of over $400 million in 20-year sales tax receipts.

FP-2

FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

• Inclusion of $61.5 million in new funds to the Financial Plan through the American Reinvestment and Recovery Act of 2009 (“ARRA” or “economic stimulus”) to be received in FY09 and FY10. • Acceleration of $78.4 million of funds to be received through DART’s $700 million FTA Northwest-Southeast Full-Funding Grant Agreement (Green Line) from 2014 to 2009. This was not new money, just a positive change in the timing of receipt of these funds. • Adjustment of operating revenues based on the fare structure amendment approved by the Board on May 12, 2009, and on a softer outlook for advertising revenues. • Acknowledgement of an anticipated $60 million in savings on the Green Line Light Rail Buildout. • Incorporation of the $56 million in additional capital expenditures over 20 years related to the two to three year delay in the bus procurement. These amounts include both the additional capital maintenance required to extend the service life of the current fleet and also the inflationary effect of the delay on the two full fleet replacement cycles that fall within the current window of the 20-year plan. • Rescheduling of the opening of the second light rail alignment in downtown Dallas from 2014 to 2016 in order to better position DART to apply for federal funding for this line. • A reduction of operating expenses totaling in excess of $800 million over the life of the Plan. About 40% of this change related to fuel prices. The Original FY09 Plan was developed at a time when fuel prices were at their height in mid-summer 2008. Bringing those prices down to match the current futures market resulted in reductions in excess of $300 million. Additionally, DART committed to finding another $22.5 million in operating expense reductions from the original FY09 target by the 2012 budget, with approximately $7.5 million of those reductions to be found in each of the next three budget years. • Inclusion of $118 million in additional long-term debt and adjustment of interest income and expense rates to reflect more current projections and to match the Board’s Bond Parameters Resolution for the 2009 debt issuance.

Subsequent to that Financial Plan amendment, good news came in the form of favorable interest rates, especially considering the tight credit markets of late 2008. In June 2009, DART issued $1 billion in long-term debt at rates averaging under 4.02% (net of federal subsidy). This resulted in nearly $530 million in savings versus the FY09 Plan over the life of the debt, with more than $120 million of those savings occurring within the twenty-year life of the Financial Plan. The proceeds of this debt will be used to support the light rail build-out and other capital projects. The details of this transaction and DART’s debt program are discussed later in this section.

FP-3

FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

DART has three primary areas of focus in the context of the Financial Plan: 1. Delivering on all the new services over the next five years (Green Line, Orange Line, and the Blue line extension build-outs); 2. Managing through the current economic downturn; and 3. Positioning DART for the next wave of projects (CBD-2, SOC-3, 2030 Projects).

FP-4

FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

Sources and Uses of Funds

Exhibit 3.1 is a summary of the changes in the sources and uses of cash between the FY09 Plan, As Amended on May 26, 2009, and the FY10 Plan, for the period FY 2010 through FY 2014. These sources and uses will be discussed in detail throughout the section.

Exhibit 3.1 DART FY 2010 – FY 2014 Sources and Uses of Funds Comparison (In Millions)

FY09 As Percentage Line Description FY10 FP Variance Amended Change SOURCES OF FUNDS 1 Sales Tax Revenues $2,212.8 $2,212.8 $0.0 0.0% 2 Operating Revenues 464.0 451.1 (12.9) (2.8%) 3 Interest Income 109.8 79.9 (29.9) (27.3%) 4 Formula Federal Funding 331.8 386.1 54.3 16.4% 5 Discretionary Federal Funding 514.6 481.5 (33.2) (6.4%) 6 Debt Issuances 1,080.0 1,220.0 140.0 13.0% 7 Other Sources 96.4 158.4 62.0 64.3% 8 Total Sources of Funds $4,809.4 $4,989.8 $180.3 3.7% USES OF FUNDS Operating Expenses: 10 Bus $1,149.6 $1,154.7 $5.1 0.4% 11 Light Rail Transit 648.5 641.4 (7.1) (1.1%) 12 Commuter Rail/RR Management 145.1 132.1 (13.0) (8.9%) 13 Paratransit 194.8 195.3 0.5 0.2% 14 HOV Transitways 57.1 66.1 9.0 15.8% 15 General Mobility - TDM 14.9 15.2 0.4 2.4% 16 Total Operating Expenses $2,209.9 $2,204.8 ($5.2) (0.2%) Capital and Non-Operating: 17 Agency-wide $64.6 $147.7 $83.2 128.8% 18 Bus 332.1 252.9 (79.2) (23.9%) 19 Light Rail Transit 1,833.7 1,987.9 154.2 8.4% 20 Commuter Rail/RR Management 66.4 106.7 40.3 60.6% 21 Paratransit 22.1 22.3 0.2 1.0% 22 HOV Transitways 54.8 92.6 37.7 68.8% 23 Capital P & D, Start-Up, Non-Operating 138.9 154.9 16.0 11.5% 24 General Mobility - Road Impr./ITS 24.0 44.1 20.1 83.8% 25 Total Capital and Non-Operating $2,536.7 $2,809.1 $272.5 10.7% Debt Service 28 Principal - LT/ST Debt $105.1 $101.7 ($3.4) (3.2%) 29 Interest and Fees - LT/ST Debt 851.5 741.5 (110.0) (12.9%) 30 Total Debt Service $956.6 $843.2 ($113.4) (11.9%)

35 Total Uses of Funds $5,703.2 $5,857.1 $153.9 2.7% * Numbers may not foot properly due to rounding.

FP-5

FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

Structural Balance of the Budget

DART strives to maintain structural balance to its budget, meaning that current period cash inflows match the outgoing cash requirements. During periods of major construction, that is not always possible. This current period has been impacted even further by the substantial declines in expected sales tax receipts.

Over the next four years, DART will spend down existing cash to pay for ongoing operating costs. That is a structurally imbalanced budget. This is a situation that is accepted during the next few years in order to maintain the Light Rail Buildout schedule despite falling revenues, but this situation cannot continue long-term. Exhibit 3.2 shows how DART’s sources of funds will be applied to uses of funds over the next five years. Exhibit 3.3 shows the approved FY 2010 Twenty-Year Financial Plan. Exhibit 3.2 DART FY 2010 – FY 2014 Structural Budget Balance (In Millions)

2010 2011 2012 2013 2014 5-YR Total Sources of Funds $814.8 $1,104.4 $911.7 $1,134.2 $1,024.6 $4,989.8 Sales Tax Revenues $387.8 $409.1 $439.1 $471.2 $505.6 $2,212.8 Operating Revenues $70.8 $82.4 $88.6 $103.8 $105.6 $451.1 Interest Income $17.5 $17.4 $14.4 $13.9 $16.7 $79.9 Formula Federal Funding (incl. CMAQ) $156.1 $60.3 $56.5 $56.8 $56.5 $386.1 Discretionary Federal Funding $93.0 $89.3 $89.7 $102.5 $106.9 $481.5 Net Debt Issuances $0.0 $430.0 $200.0 $370.0 $220.0 $1,220.0 Other Sources $89.7 $15.9 $23.5 $16.0 $13.3 $158.4

2010 2011 2012 2013 2014 5-YR Operating Expenses $402.8 $422.8 $441.6 $460.2 $477.4 $2,204.8 Funding Sources: Operating Revenues $70.8 $82.4 $88.6 $103.8 $105.6 $451.1 Interest Income $17.5 $17.4 $14.4 $13.9 $16.7 $79.9 T/Mid Cities TRE Ops Contributions $8.9 $8.6 $9.1 $9.3 $8.2 $44.1 Formula Funds (Capital Preventive Maintenance) $46.7 $46.7 $46.7 $46.7 $46.7 $233.5 Sales Taxes $247.0 $255.2 $269.1 $286.5 $300.2 $1,358.0 General Operating Fund (existing cash) $12.0 $12.5 $13.8 $0.0 $0.0 $38.3 Total Funding Sources $402.8 $422.8 $441.6 $460.2 $477.4 $2,204.8

Capital/Non Operating Expenditures $1,140.0 $549.4 $299.8 $430.8 $389.2 $2,809.1 Funding Sources: Other Formula Funds/CMAQ $109.4 $13.6 $9.8 $10.1 $9.8 $152.6 Discretionary Grant Funds $93.0 $89.3 $89.7 $102.5 $106.9 $481.5 Current Debt Issuances $0.0 $160.0 $185.9 $306.5 $0.0 $652.3 Other Sources $80.8 $7.3 $14.4 $6.7 $5.1 $114.3 Sales Taxes $0.0 $0.0 $0.0 $5.0 $6.7 $11.6 General Operating Fund/Prior Debt Issuances $856.8 $279.2 $0.0 $0.0 $260.7 $1,396.7 Total Funding Sources $1,140.0 $549.4 $299.8 $430.8 $389.2 $2,809.1

Debt Service Costs $140.8 $154.0 $170.0 $179.7 $198.8 $843.2 Funding Sources: Sales Taxes $140.8 $154.0 $170.0 $179.7 $198.8 $843.2

Total Uses of Funds $1,683.6 $1,126.2 $911.4 $1,070.7 $1,065.3 $5,857.1

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SOURCES OF FUNDS

Exhibit 3.4 details the distribution of DART’s sources of funds for the first five years of the FY10 Plan. Total sources of cash for the period FY 2010 through FY 2014 have increased by $182 million (3.8%) from the FY09 Plan. Each of the sources of funds is detailed in the following section.

Exhibit 3.4 FY 2010 – 2014 Distribution of Sources of Funds

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Sales Tax Revenues (line 1)

Sales tax revenues comprise 44% of DART’s total projected sources of funds through FY 2014 and 76% of all sources, excluding debt issuances and federal funding.

DART currently bases its long-range sales tax growth and inflation factors on a forecast developed by an independent economic analysis firm – The Perryman Group, headed by M. Ray Perryman, Ph.D. DART has used Dr. Perryman’s models (The Perryman Model) for many years.

The method for estimating sales tax revenue for financial planning purposes is discussed in Financial Standard B1 (FS-B1), which states:

Sales tax revenue forecasts shall be based on a sales tax model developed specifically for the DART Service Area by an independent economist. In order to ensure a conservative sales tax estimate, the model’s projections may be reduced from the forecasted levels, but not increased for years 2-20 of the Twenty-Year Financial Plan. The most current year may be based on management’s best estimate. All such modifications shall be approved by the Board during the financial planning process.

Within the parameters of that standard, and because of the uncertain economy as mentioned earlier, DART took the additional step of obtaining a second sales tax estimate from the University of North Texas Center for Economic Development and Research and prepared by Terry Clower, Ph.D. The Clower Moderate scenario and the Perryman projections reflected very similar magnitude in the sales tax decline related to the current recession and the length and shape of the recovery. Therefore, based on those two estimates and DART’s history, DART has made the following assumptions in developing the FY10 Financial Plan:

1) Sales taxes will finish FY09 7.5% below 2008 (11% below budget) and grow by less than 1% in 2010; 2) As the economy begins to rebound, DART sales taxes will recover, returning to the long- term trend line by 2018; and 3) Once sales taxes have returned to trend, future sales tax growth will be incorporated into the Plan at 5% or the Perryman Model minus ½%, whichever is less. This results in a conservative forecast as the Perryman Model shows fairly consistent sales tax growth at approximately 6%. Incorporation of the full Perryman Model rates into the Financial Plan would add nearly $1.1 billion in additional sales tax revenues over the 20-year life of the Plan.

A comparison of sales tax collections for the five-year period between 2009 and 2013 based on the estimates of Perryman, Clower, and the FY10 Financial Plan is shown in Exhibit 3.5.

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Exhibit 3.5 A Five-Year Comparison of Sales Tax Receipts

$550.0

$500.0

Millions $450.0

$400.0

$350.0 FY06 A FY07A FY08 A FY09 B/P FY10 B/P FY11 B/P FY12 B/P FY13 B/P

FY09 Financial Plan Clower Moderate Perryman FY10 Financial Plan

Sales Tax Repayment – The Texas State Comptroller’s Office periodically conducts audits of organizations responsible for the payment of state and local sales taxes. As a result of an audit that was concluded in 2006, the Comptroller determined that DART received an overpayment of sales taxes of approximately $13.2 million over the course of several years. In an effort to mitigate the effects of this repayment on DART’s stakeholders, the Comptroller has agreed to a 16-year interest-free repayment schedule (approximately $824,000 per year through 2022). An additional audit, completed in 2008 resulted in another repayment obligation of $3.6 million. The State Comptroller’s Office agreed to extend the $824,000 repayment plan through 2026, with the balance of this repayment ($335,000) to be repaid in 2027. These repayment obligations have been incorporated into the Plan, and all reported revenues in the Plan are net of these repayments.

Operating Revenues (line 2)

Operating revenues are projected to contribute nearly $451 million (9.0%) of DART's sources of funds through FY 2014.

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Passenger revenues are the primary component of operating revenues, representing approximately $373 million, or 83% of operating revenues. Business Planning Parameter FS-B2 states, "the Board will consider fare modifications from time to time to achieve Service Plan, ridership, and subsidy per passenger targets and to maintain DART's financial viability." The Board has approved a fare increase that will take effect on September 14, 2009.

The Financial Plan assumes future average fare increase of approximately 17% every five years, beginning in 2013. Fare increases will be accomplished by a combination of increases to base fares, monthly passes, employer passes, and/or a restructuring of the fare structure. The exact nature of the changes cannot be known until the alternatives are researched, proposed, and approved by the Board. This magnitude of increase will basically allow DART fares to keep pace with inflation.

Exhibit 3.6 details the anticipated effect of the programmed fare changes on average fixed-route fares. Exhibit 3.6 Projected Fixed-Route Average Fare

Ye ar Fixed Route Average Fare FY 2010 $0.88 FY11 - FY12 $0.90 FY13 - FY17 $1.05 FY18 - FY22 $1.23 FY23 - FY27 $1.44 FY28 - FY29 $1.69

The approved fare structure, as of September 14, 2009 is included at Exhibit APX.7.

Additional operating revenues come from such items as: advertising revenue, rental income, Congestion Mitigation/Air Quality (CMAQ) vanpool contribution, the Emergency Ride Home Program, etc.

The soft economy has had a substantial impact on the advertising market. As a result, 2010 advertising revenues are expected to drop from $5.4 million which was anticipated in the original FY09 Plan, to $2.7 million next year and then, as the economy recovers, to levels approaching pre-recession levels by FY 2012.

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Interest Income (line 3)

Interest income is projected to contribute $80 million, or 1.6% of total sources of funds for the next five years. This is a 27.3% decrease from the amount contained in the FY09 Plan, attributable to interest income rates that are substantially lower than what was included in the FY09 Plan.

Interest income rates are estimated to be approximately 100 basis points (1%) above the rate that DART pays when it issues short-term debt (Commercial Paper [CP]) for 2010, and rising to 125 basis points beyond that.

Federal Funding (lines 4 and 5)

Federal funds are included in the following line items of the Plan: Formula Federal Funding and Discretionary Federal Funding. Formula funds include dollars received under 49 U.S.C. § 5307, Fixed Guideway Modernization funds, and CMAQ projects approved by the North Central Texas Council of Governments (NCTCOG). Discretionary funds are authorized under 49 U.S.C. § 5309 and are appropriated by Congress annually.

Formula Federal Funding (line 4)

Formula funds are $386.1 million (7.7%) of total sources of funds through FY 2014. This represents a $54.3 million (16.4%) increase. Much of this increase relates to the delay in receipt of certain formula fund receipts which were originally anticipated to be received in FY09 but will now be received in 2010. In accordance with allocations made available by the Safe, Accountable, Flexible and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA- LU) for CMAQ funds. Under SAFETEA-LU it is anticipated that DART will receive Federal appropriations of $56.5 million per year for Section 5307, fixed guideway funding, and transit enhancement funding. FS-B10 states that these formula funds must be programmed at the same amount each year in the Plan and not adjusted for inflation. Projected formula funds through FY 2014 also include $103.8 million of other formula funding, predominantly CMAQ funds and formula funds allocated in previous years that have not yet been received.

Discretionary Federal Funding (line 5)

Discretionary funding comprises $481.5 million (9.6%) of total sources through FY 2014, a 6.4% decrease from the FY09 Plan. This is the result of a shift in assumptions. The FY09 Plan was predicated on receiving $123 million in external funding for Irving-3. That assumption has been changed to zero, although DART will continue to pursue external funding for this project. Instead of that funding, the Financial Plan now includes the assumption of $400 million in federal assistance for the CBD-2 project. The timing differences of those projects, and therefore the timing of the external funds have been shifted from the 2011 – 2014 period to 2014 – 2017, mostly outside of the comparative period.

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Exhibit 3.7 details the anticipated receipt of Formula and Discretionary Funds over the life of the Plan. There is very little shown in the way of discretionary federal funding between 2018 and 2024. This is due to a lull in major construction projects between the conclusion of the current phase of light rail expansion and the beginning of the 2030 Transit System Plan projects. DART is assuming 25% federal participation on new rail corridors (except the southern Blue Line extension to Southport).

Exhibit 3.7 Anticipated Capital Grant Funding (In Millions)

$400

$350

$300

$250

$200

$150

$100

$50

$0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

Formula Funding Discretionary Funding

Debt Issuance (line 6)

DART has a Commercial Paper (CP) Program which is the initial funding mechanism to support DART’s capital programs up to a maximum authorized amount of $650 million. When market conditions and cashflows dictate, DART will then issue long-term debt to replace the outstanding CP. This will be a repetitive cycle – initial funding of capital programs with commercial paper to be taken out later with long-term debt.

Over the next five years, DART plans to issue approximately $350 million in additional commercial paper (bringing the balance to $500 million) and $870 million in additional long- term debt.

More detail on DART’s Debt Program is contained later in this section.

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Other Sources of Funds (line 7)

Other sources of funds total $158.4 million between FY 2010 and FY 2014 and represent 3.2% of total sources of funds for that same period. This line item is predominantly composed of non- grant contributions from other public entities, such as the Fort Worth T's contribution toward its share of the operating and capital costs for the Trinity Railway Express (TRE), member city contributions for specific capital projects, and other miscellaneous contributions. This category of funds has increased by $62.0 million (64.3%), the vast majority of which is related to the timing of Irving’s contribution to the Orange Line. These funds were originally anticipated to be received during FY09, but are now expected during FY10.

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USES OF FUNDS

Operating Expenses (lines 10 – 16)

Exhibit 3.8 shows the modal distribution of total operating expenses for the five-year period.

Exhibit 3.8 Operating Expenses by Mode, FY10-FY14 (In Millions)

General Mobility - HOV Transitways TDM 3% 1% Paratransit 9%

Commuter Rail/RR Management 6%

Bus 52%

Light Rail Transit 29%

Total operating expenses for the period FY 2010 through FY 2014 are projected to be just over $2.2 billion, which is essentially flat relative to the FY09 Plan as Amended over the same period of time. It represents a significant reduction ($144 million) from the Original FY09 Plan (see below).

Changes in operating expenses that are built into the Financial Plan for future years are controlled from a policy perspective by Financial Standards B3, B4, and B5 (see Exhibit APX.2). Financial Standards B3 and B4 relate to fixed-route service, which accounts for 87% of projected operating costs over the next five years. The primary cost drivers for the variable expenses of fixed-route service are the number of miles, hours, and vehicles in service, contract rates for purchased transportation, and fuel prices.

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Exhibit 3.9 compares the historical and projected future operating budget as well as annual operating expense growth.

Exhibit 3.9 Historic Growth vs. Projected Growth – Operating Expenses

$600 12.00%

$516 $495 10.00% $500 $475 $477 $460 $451 $442 $423 8.5% $412 $403 8.00% $400 $377 $377 $351 7.3%

$320 $324 6.8% $311 $300 6.00%

5.7% 5.0% 4.4% 4.2% $200 4.00% Operating Expenses (Millions) Expenses Operating 2.8% 3.7%

$100 2.00%

1.2%

$0 0.00% FY05A FY06A FY07A FY08A FY09B FY10B FY11P FY12P FY13P FY14P

Original FY09 Plan FY10 Plan Growth Rates

This perspective shows the expense growth for the past five years, and the projected operating budget over the next five years, both in absolute dollars and as a percentage increase. It also demonstrates DART’s efforts to maintain affordability through the current economy by managing down the growth in operating expenses. While DART is doubling its light rail system over the next five years and operating expenses will increase in real dollars, that increase is substantially lower than was originally anticipated when the original FY09 Plan was adopted in November.

In future years of the Plan, operating expenses for each modal line item are projected using FS- B5, which places a limit on the total increase in operating expenses (for financial planning purposes) to 90% of inflation plus service changes, new programs, Board-approved contracts, actuarial analyses, and fuel prices. This does not necessarily mean the following years’ budgets will be limited by that parameter or match what is included in the Financial Plan. The DART Board has discretion to increase or decrease the budget, as they deem appropriate to most effectively accomplish the goals of the Agency.

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Modal Expenses (lines 10 – 15)

Please note the following details relating to the modal expense line items:

1) Each year, DART Management goes through a modal allocation process. At this time, estimates are made regarding how much of each functional division’s time and resources will be spent in support of each mode, how much will be spent in general and administrative responsibilities, and how much effort will be spent in support of DART’s capital programs. That can lead to some minor fluctuations in cost distribution among the modes from year to year. 2) Bus expenses represent the majority of DART’s operating costs (52% over the next five years) and include DART’s Innovative Services, including On-Call and Flex- Route and site-specific shuttle services. 3) DART currently operates and maintains a 45-mile light rail system. By FY14, that will more than double to more than 90 miles. As such, light rail costs will increase from 23% of the FY10 budget to a projected 32% by 2014. 4) DART’s Financial Plan includes the consolidated costs to operate the Trinity Railway Express (TRE) and railroad corridor management costs for DART-owned active freight rail lines. DART and the Fort Worth Transportation Authority (the ‘T’) contract with a private contractor to provide the TRE commuter rail service. The portion of costs allocated to and paid for by the T is reflected in Other Sources of Funds. 5) DART’s Paratransit operations are provided by a private contractor (Veolia Transportation, Inc). DART retains the determination of rider eligibility, management, and oversight of operations. While Veolia also operates DART’s Innovative Services, these services are more closely related to fixed-route bus service. Therefore, the costs, revenues, and ridership of Innovative Services are included in Fixed-Route Bus mode KPIs. 6) DART operates 84 miles of High Occupancy Vehicle (HOV) lanes across six primary corridors including a nine-mile segment which opened during the summer of 2008. The NCTCOG reimburses costs incurred for the operation of HOV lanes outside the DART Service Area through an Interlocal Agreement with NCTCOG that was approved in December 2008 (Board Resolution #080204). 7) General Mobility programs consist mainly of vanpool services. It is anticipated that DART will have up to 198 in operation by the end of FY09. Passengers and NCTCOG contribute approximately 90% of the cost of this program.

For a more detailed explanation of specific programs and information on the cost drivers for each mode, please see the respective modal section of this Business Plan.

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Capital and Non-Operating Expenditures (lines 17 – 24)

Capital and Non-Operating expenditures are budgeted at $1.14 billion for FY 2010 and $2.8 billion through FY 2014. This is an increase of $273 million (10.7%) over the same period. Approximately $100 million of this increase from the FY09 Plan is primarily due to project funds that were originally expected to be expended in 2009, were not expended, and therefore rolled over into future years. In addition to the rollover effect, there are new capital project additions. DART’s capital program showing the new and existing projects is detailed in Exhibit 2.7.

Capital projects are organized into four categories:

1) Expansion 2) Replacement 3) Maintenance 4) Other

Expansion projects include the addition of new facilities and/or passenger amenities (e.g., transit centers), infrastructure for new services (e.g., light rail/HOV/commuter rail), and the addition of new operating facilities. Replacement projects include like-kind asset replacements for vehicles, equipment, and infrastructure. Maintenance projects include major maintenance programs and vehicle and facility rehabilitations that are scheduled at regular intervals. Other projects are for those items that do not fit into one of those three categories, such as planning studies, emission reduction programs, safety equipment, enhanced signage, etc.

Exhibit 3.10 details the modal and categorical distribution of capital projects over the next five years.

Exhibit 3.10 Capital Expenditure Categories FY10-FY14 (In Millions)

Mode Expansion Maintenance Replacement Other Total Agency-Wide $0.0 $2.0 $116.4 $29.4 $147.7 Bus 0.0 50.6 201.2 1.2 252.9 LRT 1,915.0 58.5 13.6 0.9 1,987.9 Commuter Rail 59.6 42.2 4.5 0.5 106.7 Paratransit 0.0 22.2 0.0 0.0 22.2 HOV 88.4 0.0 0.6 3.5 92.6 Other* 114.1 7.6 14.5 62.8 199.0 Total $2,177.0 $183.0 $350.7 $98.2 $2,809.0 * Other includes Capital Planning & Development Costs, Stat-up, Non-Operating and General Mobility/Road Improvement costs

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Capital Planning, Start-up Costs, and Non-Operating (line 23)

Capital Planning & Development and start-up costs are predominantly internal staff and consulting services costs associated with planning, designing, managing, constructing, and opening new capital projects such as the light rail system. FS-B8 limits capital planning costs to no more than 7% of the total operating budget and start-up costs to no more than 60% of the first year's operating cost. This category of costs has essentially remained consistent with the FY09 Plan.

Non-operating costs relate to projects/programs that are not accounted for as operating costs or capitalized as an asset. These costs are charged through the income statement as a non-operating expense. Examples of non-operating costs are: consulting costs for the Transit System Plan revision, McKinney Avenue Transit Authority Olive Street Extension Design Oversight, and various other capital planning studies. Total non-operating costs through FY 2014 have increased by $9 million primarily due to the inclusion of a $10 million capital planning reserve for FY11 – FY15, $8 million of which are in the comparative period.

General Mobility, Road Improvement and Intelligent Transportation Systems (ITS) Programs (line 24)

FS-B7 limits General Mobility – Road Improvement Programs to funding allowed under the terms of the approved Interlocal Agreements (ILA). Road improvement programs include the Local Assistance Program/Congestion Management System (LAP/CMS), Principal Arterial Street System (PASS), Transportation System Management (TSM), and ITS projects. These programs are discussed in more detail in the HOV/General Mobility section. These programs total $44.1 million over the next five years. That is an increase of $20.1 million over the FY09 Plan and is simply a function of timing. Many of the projects contained within these line items are at the behest of our member cities and as such, are dependent upon their schedules. It was anticipated that over $20 million would be spent in 2009. The current projection is that less than $1 million will actually be spent in 2009, so the remainder of the funds have been rolled forward into 2010 – 2011.

Capital Reserves

Within the capital program are a variety of capital reserves. These reserves represent placeholders within the Financial Plan for either known asset maintenance and replacement cycles, or for funds that are set aside for projects of a specific type, the exact nature, timing, and amount of which is unknown at the present time. When a project is requested and approved that is to be funded from a specific reserve, the new project is given its own specific line in the capital program and the balance of the reserve is reduced by the budgeted cost of the new project. Reserve balances are reviewed on an annual basis to ensure that they are adequate to cover future needs for each respective expenditure type.

Capital Projects Listing

The list of approved capital and non-operating project included in the FY 2010 Financial Plan is shown at Exhibit 2.7.

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Debt Program

With the passage of a bond referendum on August 12, 2000, DART received voter authorization to issue up to $2.9 billion of sales tax-backed long-term debt. A change to DART’s enabling legislation was enacted during the 2009 Texas legislative session allowing DART to pledge multiple sources as a first lien relating to repayment of bonds. This change effectively allows DART to issue sufficient debt to complete its light rail buildout and other capital programs without any specific dollar value cap.

DART has established a two-tiered debt structure: 1) commercial paper notes for initial debt financing; and 2) long-term bonds for ultimate financing. Each of these is discussed below:

Commercial Paper Program – On January 23, 2001, the Board approved a Master Debt Resolution, which authorized DART to pledge its sales tax revenues, on a senior subordinated basis, for the issuance of Senior Subordinate Lien Sales Tax Revenue Commercial Paper Notes (CP). On the same day, the Board authorized the issuance of up to $650 million in Commercial Paper to be issued to: a) fund its capital acquisition program; b) refund $150 million in outstanding North Central Light Rail Project Notes; and c) fund its self-insurance program. The Commercial Paper program is backed by a liquidity facility supplied by WestLB AG, Bayerische Landesbank, Landesbank Baden-Württemberg, and State Street Bank and Trust. This facility is currently $600 million.

The FY10 Plan includes the assumption that DART will use the proceeds from the 2009 bond issuance to fund the FY10 capital program. Therefore, no additional CP issuances are anticipated until FY11. The outstanding CP balance will remain at $150 million. However, should capital spending be greater than forecasted, CP will be used to meet the additional funding demands.

Long-Term Bonds – On January 23, 2001, the Board approved a Master Debt Resolution, which authorized DART to pledge its sales tax revenues, on a senior lien basis, for the issuance of up to $2.9 billion in long-term bonds, which are solely backed by sales tax revenues. Long-term bonds may be issued to fund DART’s capital program or refund commercial paper.

On June 16, 2009, DART issued approximately $170 million in tax-exempt bonds and $830 million in taxable Build America Bonds. The proceeds from this bond issuance will be used before the issuance of additional CP. DART anticipates that the next bond issuance will be in FY11. DART will have approximately $2.6 billion in outstanding long-term debt at the end of FY11.

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Coverage Ratios (lines 31 – 32)

Financial Standard FS-D7 requires that DART maintain a debt coverage ratio (the External Coverage Ratio) such that Gross Sales Tax Revenues must be at least two times the amount of annual Debt Service. This is the standard that DART is held to by the financial marketplace and in its own external debt documents. In those documents, DART agrees that it will not issue additional debt when it does not comply with this standard. As previously discussed, DART anticipates issuing future debt backed by a combination of sales taxes, operating revenues, and federal formula funds. However, the external coverage ratio is calculated solely on the basis of sales tax revenues. Over the life of the Plan, the lowest external coverage value is 2.28. This value is reached in the final year of the Plan, as the 2030 System Plan projects are nearing completion.

DART also has a goal stated in FS-D7 to maintain another coverage ratio – the Internal Coverage Ratio. It is a goal of DART that for financial planning purposes, for long-term debt, sales tax revenues plus operating revenues, plus interest income, less operating expenses (excluding debt service and depreciation), for any twelve consecutive months of the prior eighteen months, must be sufficient to cover maximum annual debt service (ratio greater than 1.0). However, the DART Board may choose to grant exceptions to this standard in the interest of expediting completion of the System Plan. This Internal Coverage Ratio is calculated on all outstanding debt. The internal coverage ratio does not meet this standard for the first three years of the Plan.

Exhibit 3.11 summarizes the major commercial paper and long-term debt assumptions. The exact timing, nature, and amounts of long-term debt issuances may be adjusted from Financial Plan estimates depending on interest rates and other considerations, as determined at the time of issuance.

Exhibit 3.11 FY10 Financial Plan Debt Assumptions

Commercial Paper (CP) Long-Term Debt (LTD) Description FY 2010 Future FY 2010 Future Term <5 years <5 years None Up to 30 years Interest rates + fees 1.25% 1.50%-3.0% n/a 5.25%-6.0% Principal and interest repayment Refund w/LTD Refund w/LTD n/a Level Debt Net CP* / Total Long-Term Debt issued** $0M $350M $0 $5.8B End of Year - Maximum debt outstanding $150M $500M $2.6B $7.0B Year of maximum debt outstanding n/a FY 2013+ n/a FY 2029 Cash reserves required? No No n/a No Uninsured Debt Rating assumed A1+/P1 A1+/P1 AAA/AA- AAA/AA-

* The amounts shown on this line related to commercial paper issuance are net numbers and do not include retirement and re-issuance. The amounts shown on this line item related to long-term debt issuance are gross issuances. ** Amounts shown are for issuances between 2010 and 2029 and are shown at par value.

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SUPPLEMENTAL FINANCIAL INFORMATION

Net Increase (Decrease) in Cash and Change in Balance Sheet Accounts (lines 34 – 35)

Based on each year’s projected sources and uses of cash, DART has projected its Balance Sheet for each of the next five years. These line items reflect the net change in cash and non-cash working capital balance sheet accounts.

The Change in Balance Sheet Accounts line item is used as a compensating factor for the lag between the occurrence of an accounting transaction, which affects the balance sheet, and the actual receipt or disbursement of cash. DART's projected Balance Sheet for each of the first five years of the Financial Plan is included in Exhibit APX.5.

Cash Reserves and Restricted Funds (line 38)

DART maintains several cash reserves. FS-G5 requires a Master Insurance Reserve for claims and Board liability exposure ($13.9 million balance as of June 30, 2009). FS-G7 requires that sales tax collections that exceed budget during a fiscal year be placed in a "Financial Reserve" account ($23.6 million balance as of June 30, 2009). Once this fund balance reaches $50 million, all additional funds will be placed in a Capital Projects Reserve. The Financial Reserve may be used for any purpose, subject to an affirmative vote of two-thirds of the appointed and qualified Board members. This line item represents the projected end-of-year value.

Working Cash Requirements (line 39)

Financial Standard FS-G6 states "since sales taxes are received on a monthly basis, the unrestricted cash balance at the end of the year shall not be less than one-twelfth of the difference between the subsequent year's total sources of cash (excluding sales taxes) and total uses of cash as projected in the Financial Plan." The combination of the Financial Reserve and this working cash balance ensures that DART always has a minimum of approximately two months of net expenditures on-hand. This line item represents the projected end-of-year value.

Net Available Cash (line 40)

This line item represents the projected end-of-year value and is the bottom-line check regarding the long-term affordability of DART’s programs. As long as this value is positive, the Plan is affordable, given the assumptions used to build the Plan. In the FY 2010 Financial Plan, the minimum amount of Net Available Cash is $77.9 million in 2020. This amount is in addition to the reserves described in the previous two paragraphs and as such, represents DART’s unprogrammed cash balance.

DART looks to this year of lowest Net Available Cash as the critical year in terms of affordability. Every decision that is made as well as every change to a Financial Plan assumption or estimate is made with consideration of the effect on that critical year.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

MAJOR FINANCIAL PLAN ASSUMPTIONS

• Sources of Funds o The Amended FY 2009 Twenty-Year Financial Plan includes a 7.53% decline in sales tax receipts to $385 million in FY09. This forms the basis for the FY 2010 Financial Plan. Revenues are expected to remain relatively flat, growing just $3 million in FY10. As the economic recovery picks up speed, DART sales taxes are expected to grow and return to historical trend by 2018. Sales tax growth beyond that is projected at the lesser of 5% or the Perryman Model projections less ½%. This results in 5% growth rates over the remainder of the Plan, as the Perryman projections never drop below 5.5% during the current 20-year window of the Financial Plan. o A fare increase will take effect on September 14, 2009. The approved fare structure along with historical information on DART fares can be found at Exhibit APX.7. Beyond that, periodic increases to fare revenue are generally programmed at five-year intervals. The next fare increase is programmed in 2013. The exact magnitude of the increase and the specifics of the fare structure are subject to public input and Board approval. o Fare revenue increases are also based on ridership projections for each mode. The projections shown below are base growth rates. As fare increases are implemented, reductions in fixed route ridership are programmed into the Plan, netting against the normal projected ridership growth rate for that year to determine the net ridership change. The fare increase affects all fixed-route modes in a similar manner. Future service level decisions on all modes will impact future ridership projections. Fixed-Route ridership has been trending down since early in calendar year 2009, affected by the double-barreled effect of declining fuel prices and rising unemployment. The price for regular unleaded gasoline topped out in excess of $4 per gallon in the summer of 2008. Within six months, prices were below $1.50, before rebounding to over $2.30 during the spring and summer of 2009. Unemployment levels in Texas were below 4.5% through the beginning of 2008. Unemployment began to creep up through the summer of 2008 to approximately 5% before rapid escalation to over 7% this summer. Because more than 50% of trips taken on DART are work related, unemployment levels have a significant bearing on DART’s ridership. The September 14 fare increase and bus service adjustments will have a further depressive effect on fixed route ridership. This will be partially offset by the opening of the first phase of the Green Line in September 2009. Fixed Route Bus ridership (including Innovative Services) is expected to drop to 42.3 million. Beyond that, ridership is expected to grow by an average of 1.3% per year through 2014. LRT base ridership is projected to remain relatively flat for 2010 at approximately 20 million passenger trips, with the increased ridership on the Green Line offsetting reductions related to high unemployment, relatively low gasoline prices, and the fare increase. As new line sections open and the economy recovers, light rail ridership is expected to increase by nearly 70% through 2014.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

TRE ridership is expected to decline by 4.6%, to 2.7 million passenger trips in 2010 and then a further decline of 8.2% as the two phases of the commuter rail fare increases go into effect in September 2009 and October 2010. HOV ridership has slumped significantly, again related to gasoline prices and unemployment rates. Ridership is projected at 45.2 million trips and 1.5% growth for each year thereafter. Paratransit ridership is expected to increase between 2.5% and 3.25% per year through 2014. FY10 ridership levels are projected at 781,500 for FY10. o Advertising income drops from the FY09 budgeted level of $4.8 million to $2.7 million for FY10 because of the economic slowdown, growing back to $3.7 million in FY11 and returning to near the previous trend by 2012. o Other miscellaneous operating revenues grow by inflation each year. o Investment portfolio yields remain at 1.25% above the commercial paper rates through the life of the Plan. o DART receives over $56 million in Federal Formula money for Capital Preventive Maintenance, Fixed Guideway Modernization, and Transit Enhancement funding every year for the life of the Plan. Per Financial Standard B-10, these funds are programmed at the current year’s allocations throughout the life of the Plan, despite a history of growth. o DART is projected to receive $86.25 million of its $700 million Full Funding Grant Agreement (FFGA) for the NW/SE portion of the Phase II LRT Build-out each year through 2013. The remainder of the $700 million FFGA ($2.9 million) would then be received in 2014. o $86.3 million in CMAQ funds will be received in 2010. As additional funds become available and projects are identified to access these funds, additional CMAQ funds will be programmed into the Plan. o DART has assumed the following with regards to major future discretionary grant funding: Future bus purchases will receive 10% funding DART will receive $400 million for the second downtown Dallas light rail alignment Major corridor projects included in the 2030 Transit System Plan (excluding Southport) will receive 25% funding o $148.0 million in other external capital contributions and discretionary grant funding will be received between 2010 and 2014, including approximately $60 million from the City of Irving for their contribution to the Orange Line, the T's contribution to TRE capital programs, member city contributions, Homeland Security Grants, etc.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

• Uses of Funds o Operating Expenses Operating budget of $402.8 million in FY 2010. Annual local inflation rates are anticipated to be approximately 2.3% per year over the life of the Plan. These projections are part of the same economic model that is provided by the Perryman Group each year to estimate sales tax revenue growth. Per Financial Standard B-5, operating expenses are planned to grow by 90% of inflation plus new service, new programs, Board-approved contract increases, and adjustments related to fuel prices and actuarial analyses. As part of efforts to manage costs during the economic downturn, DART has committed to finding $22.5 million in reductions to the growth in operating costs between 2010 – 2012. As a part of this, and also as a natural result of the realignment of DART’s bus service network to better complement the expanding light rail system, bus service levels will be reduced by approximately 1% in FY10, 4% in FY11, and 2% in FY12. New light rail service will be implemented between 2010 and 2018 for the current Phase of the LRT Buildout, including the Green Line (NW/SE), the Orange Line (Irving), the Blue Line extension (east from Garland to Rowlett), a second alignment in downtown Dallas (CBD), and a second Blue Line extension (South from Ledbetter to the UNT Dallas South campus). TRE service levels remain constant beyond FY09, and contract costs are programmed at known contract rates, and are based on current contract negotiations which call for a 3% escalation between 2011 and 2015. This contract extension has not yet been approved by the DART Board. The Board did adopt Strategic Recommendations for the TRE in August of 2007 with expanded service goals once certain double-tracking projects are completed. However, this service is not provided for within the Financial Plan and will be dependent upon many factors including service demand, financial capability, and the DART Board’s direction. Paratransit contract costs are programmed at known contract rates through the end of the option period in 2012. After that, contract rates are projected to increase at 4% per year, and revenue hours are expected to grow by anticipated growth in demand of 2.5% - 3% per year. The number of vanpools grew from a maximum of 145 in 2008 to 198 in 2009. The current Financial Plan calls for the same number of vanpools throughout the life of the Plan. As this program is subsidized at approximately 90% between vanpool users and the North Central Texas Council of Governments (NCTCOG), additional vanpools can be added with minimal financial impact. The actual number of available vanpools is substantially determined by the availability of funds from NCTCOG.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

$4.1 million per year is included in the Plan to fund post-retiree health benefits. This amount is subject to fund earnings and as such, the declines in the stock market in the last two years have increased DART’s required contributions. o Capital & Non-Operating Annual inflation rate of 5% for the current phases of the Light Rail Build-out (the Orange Line to Irving, the Blue Line extensions to Rowlett and South Oak Cliff, and the second alignment through downtown Dallas) from the latest estimates for Capital Construction Costs. For the 2030 Transit System Plan projects, DART contracted with The Perryman Group to provide inflation estimates for heavy construction projects. These range between 4.7% and 4.3% (with the higher inflation rates earlier in the Plan) over the next 20 years. An inflation rate of no less than 3% per year was used for all other capital project costs. Capital Planning & Development budget of $21.5 million in FY10. This grows by 90% of inflation each year (along with operating expenses). Approximately $16.9 million will be spent in FY10 and $25.1 million over the next five years on start-up costs for the new Light Rail lines. Start-up costs are all operating-type costs that are both: 1) incurred solely as a result of the opening of new service; and 2) incurred prior to the start of revenue service. Once revenue service has begun, these costs are incorporated into the operating budget. The next bus purchase will be for heavy-duty, low-floor vehicles. This purchase, originally scheduled for 2010 – 2012, was postponed by the Board based on discussion of fuel types and the economics of each type. Approximately $10.9 million will be spent to extend the life of the current bus fleet to accommodate a revised bus delivery schedule. This schedule calls for a full fleet replacement between 2013 – 2016. Based on the service reductions described above and schedule analysis, it is estimated that DART will require 95 fewer vehicles to run its bus service by the time these purchases are made. This will reduce DART’s fleet from 695 vehicles to 601; 50 of these 95 vehicles are programmed to be re-inserted in 2020. This reserves the financial capacity for bus service expansion if required by passenger demand. This bus fleet replacement (and all future bus purchases) is for ultra low-emission vehicles (ULEVs) which will meet or exceed the applicable Environmental Protection Agency (EPA) emissions standards in the year of purchase. The bus fleet has a 12-year replacement cycle.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

o Debt Service DART has a liquidity facility in place for up to $600 million in Commercial Paper (CP) of the Board-authorized amount of $650 million. The Plan assumes that maximum of $500 million remains outstanding at any given time. A change to DART’s enabling legislation was enacted during the 2009 Texas legislative session allowing DART to pledge multiple sources as a first lien relating to repayment of bonds. This change effectively allows DART to issue sufficient debt to complete its light rail buildout and other capital programs without any specific dollar value cap. All bonds to be issued through 2020 are assumed to have terms of up to 30 years. Debt issued during the heavy construction period (through 2011) will defer principal payments for the first five years. A similar heavy construction period for the 2030 Transit System Plan project occurs between 2025 and 2029. The Plan again assumes a five-year principal deferral for debt issued during this period. The actual terms and structure of the debt will depend on market conditions and DART’s best interest at the time of each specific debt issuance. Through the completion of the current Service Plan elements (through the 2018 Blue Line south extension), DART is anticipated to have issued $4.1 billion in long-term bonds. This is essentially flat as compared to the FY09 Plan. In order to complete the 2030 Transit System Plan projects using the anticipated schedules, additional debt will be required. The Plan assumes nearly $5 billion in additional debt to be issued between 2020 and 2031 in support of the 2030 System Plan and other projects. No long-term debt is programmed to be issued during FY10. The proceeds of the June 2009 debt issuances will be used to fund FY10 capital expenditures. Long-term interest rates are projected at 5.25% in 2011, growing to 6% by 2015. The actual amount, type, and timing of debt issuance may change from the Plan depending on DART’s financial needs and market conditions.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

POTENTIAL RISKS AND OPPORTUNITIES

• Sales tax receipts are unquestionably the single most important estimate in the DART Twenty-Year Financial Plan, and therefore are the largest single area of risk to DART’s ability to meet its goals and objectives. DART’s primary economic consultant, Dr. M. Ray Perryman (and as corroborated by Dr. Terry Clower at the University of North Texas) is projecting a long, strong recovery in sales tax growth beginning in 2011 and lasting through 2016, including four straight years above 8% growth and rates of essentially 6% beyond that. The assumptions included in the Financial Plan are considerably more conservative with generally a 1% reduction per year from the Perryman projections. If the economy does not bottom out this year or the recovery is shorter or weaker than anticipated, that will have a long-term impact on DART’s Financial Plan. • Fuel and energy prices have been highly volatile over the last several years. DART has taken advantage of the recent declines to hedge diesel fuel needs through FY 2013. Staff is currently monitoring the market to do the same with its natural gas supply. And, as soon as the Agency makes a fuel decision regarding the next bus fleet replacement, DART will attempt to lock in fuel prices for an extended time period. Current legislation exists within both the U.S. House and Senate that would extend the excise tax credit for natural gas. If this extension is approved for a significant period of years, it would strongly tilt the economics in favor of natural gas. That will provide additional cost stability to the Financial Plan for one of the most volatile components of operating costs. DART has also locked in diesel fuel prices through most of FY 2010, and has a fixed rate for electricity locked in through 2013. • Currently, the Financial Plan projects DART will receive $56.5 million each year in Urbanized Area Formula Program, Fixed Guideway Modernization, and Transit Enhancement funds. And, in accordance with FS-B10, this value is not inflated in future years. These allocations have historically grown at a rate of greater than 5% per year. Continued growth of that magnitude could provide considerable additional funding that is not currently programmed into the Financial Plan. • DART currently has no external contributions or grant funds programmed for the Irving-3 Light Rail line segment to DFW airport or the South Oak Cliff-3 extension. It is possible that external funding sources may be found to contribute to the cost of those line sections. • DART is constrained by FS-B5 to grow operating expenses by no more than 90% of the projected inflation rate, plus new programs and service. This operating expense target is very difficult to achieve year-after-year. Approximately two-thirds of DART's FY09 Budget is composed of salaries, wages, and benefits. In the long term, these costs must at least grow by inflation, or DART’s ability to attract and retain quality employees may be adversely impacted. Considering the highly volatile energy market (the risk of which DART has substantially mitigated through hedges) and the national trends of double-digit annual increases in health care costs, this presents a major challenge for DART. DART has recently implemented several programs targeting workers’ compensation and health care benefits costs, which have shown substantial improvements and lower increases than the national trend in these areas. Gains of this magnitude will be hard to sustain on a continuing basis.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

• FY08 and the first half of FY09 were very difficult years for the stock market. As such, actuarial liabilities and the required contributions calculated on DART’s defined benefit retirement program (which is a closed program) and retiree health care are likely to grow significantly in the next few years. • DART has attempted to identify all capital projects that can be foreseen, but every year additional new projects are requested. Significant additions to the capital program (and associated operating costs) without concurrent increases in revenues or the deletions of offsetting capital projects, could adversely affect the Financial Plan. As an attempt to mitigate those items, DART’s Financial Plan contains multiple capital reserves, which are placeholders for anticipated expenditures. Also, the FY 2010 Plan includes the 2030 Transit System Plan projects. These projects are at a conceptual level, and as such, may be subject to significant cost adjustments as the scope of those projects becomes better defined in the years to come. • Based on the Perryman Model (and supported by the last 20 years of experience), inflation is estimated to average approximately 2.3% per year for the life of the Plan. Because inflation affects sales tax revenues and both operating and capital expenditures, it has many risks and many potential opportunities associated with it. Recent inflation in the heavy construction arena has substantially exceeded general inflation over the last few years. Specific commodities such as steel, concrete, aluminum, and copper in particular have escalated at unprecedented rates and then fallen again. This caused DART to revise its cost estimates in 2008 on all capital construction projects going forward. These changes were included in the FY08 Plan and are continued at those levels into the FY10 Plan. DART will continue to monitor the construction cost indices closely and assess any impacts on the projects contained in the Financial Plan. • DART placed itself in a positive financial position when $1 billion of debt was issued in June 2009 for FY09 and FY10 capital expenditures. This means that DART will not need to be in the market to issue bonds until 2011. DART’s interest cost on that debt was essentially 4%, net of the federal interest subsidy on the Build America Bonds (BABs). BABs are expected to be available through 2010. If the timing and conditions are favorable, DART may again issue BABs in late 2010 (fiscal year 2011), which would reduce net debt service costs currently contained in the Plan. DART may also explore expanded use of commercial paper in the event that long-term interest rates become unfavorable for an extended period of time.

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FY 2010 Business Plan (09/22/09) FY 2010 Twenty-Year Financial Plan

• DART has entered into ten economically defeased financing transactions. In general, such transactions involve our lease and leaseback of specified, depreciable property to a trustee, acting on behalf of a private investor. Although we retain legal title to the leased property and have the option to purchase the trustee’s interest on or before the end of the sublease term, these transactions were structured to result in a sale of the subject property to the private investor for federal income tax purposes. The rent due for the full term of the leases was prepaid to us. In order to fund the sublease rental payments owed by us over the life of the leases and the purchase option price, we used a portion of the advance rental payments paid to us either: (i) to purchase contractual undertakings from financial institutions pursuant to which the financial institutions assumed or agreed to pay the sublease payments due and owed by us and the purchase option price; or (ii) to make deposits with custodians instructed to purchase direct obligations of the United States Government that mature on dates and in amounts required to pay our sublease rental payments and the purchase option price. For a more detailed description of these transactions, please refer to the section of our Annual Disclosure Statement titled “DART’S FINANCIAL PRACTICES AND RESOURCES-- Lease/Leaseback Transactions” and to Note 10 of the Independent Auditor’s Report attached as Exhibit A to our Annual Disclosure Statement.

When we entered into the economically defeased financing transactions, such transactions were authorized under state and federal law. The United States Department of the Treasury has since added these types of transactions to its list of “prohibited tax shelter transactions,” and we have not undertaken any defeased lease transactions since that time.

During Fiscal Year 2008 “Insurers” (AMBAC and AIG) in these transactions were down- graded. The down-grades affected 9 of the 10 transactions. The down-grade of these insurers required DART to take certain actions to the benefit of the “Equity Investors” required by the controlling transaction documents. In many instances the required actions were now virtually impossible to complete or were economically prohibitive. DART has had discussions with all the Equity Investors. The result of these discussions, to date, has been to terminate three transactions at costs acceptable to DART, negotiate compliance on one transaction, and has received temporary forbearance on the remaining five transactions. DART continues to hold discussions with the Equity Investors on the remaining five transactions. • DART may be able to build its sales tax revenue base through the addition of new cities to the Service Area or through the pursuit of other legislative changes. The nature and timing of such changes would determine the potential financial impact.

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Section 4 Agency-wide Overview Index of Exhibits

Exhibit 4.1 Map-DART Transit System (Current & Future Services)..…………. AW-4

Exhibit 4.2 Interrelationship of System Plan with Other Documents…..……….. AW-5

Exhibit 4.3 Relationship of Financial Standards to Sources & Uses of Cash.…... AW-6

Exhibit 4.4 Standard Business Plan Development Schedule…..………………... AW-7

Exhibit 4.5 DART’s Leadership System and Strategic Alignment……………… AW-10

Exhibit 4.6 Strategic Performance Measurements……………..…………….…. AW-12

Exhibit 4.7 Board Strategic Priority I: Strive to Exceed Customer Expectations. AW-14

Exhibit 4.8 Customer Satisfaction Survey Comparison………………….……… AW-15

Exhibit 4.9 Bus Collision Accidents Per 100,000 Miles (FY08).…………….…. AW-22

Exhibit 4.10 Train Collision Accidents Per 100,000 Miles Operated…………….. AW-22

Exhibit 4.11 DART Construction Safety Program……………………..….……… AW-23

Exhibit 4.12 Board Strategic Priority IV: Drive Change Through Employee Engagement………………………………………………………….. AW-27

Exhibit 4.13 Employee Satisfaction Survey Comparison………………….……… AW-29

Exhibit 4.14 Board Strategic Priority VI: Use Technology to Integrate and Advance Services and Systems…………………….……………….. AW-30

FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Agency-Wide Overview

Purpose of Business Plan

The FY 2010 Business Plan provides the Board of Directors, taxpayers, and elected officials of our region with a comprehensive summary of the Agency's plans and commitments to improve regional mobility, enhance the quality of life, and stimulate economic development. This document consolidates the key elements of the FY 2010 Annual Budget, the FY 2010 Twenty- Year Financial Plan, the Transit System Plan, the Five-Year Action Plan, and the Agency's Strategic Plan. The resolutions shown at Exhibit APX.1 approve the funding levels for the FY 2010 Annual Budget and the FY 2010 Twenty-Year Financial Plan as required by DART's enabling legislation.

Board and Policy Direction

DART History – Dallas Area Rapid Transit (DART) is a regional transportation authority of the State of Texas. DART was created by a voting majority of the citizens on August 13, 1983, to organize and provide regional public transportation to its member jurisdictions pursuant to Chapter 452 of the Texas Transportation Code. The enabling legislation allows DART to collect a one-percent sales and use tax on certain transactions. DART currently consists of the following member jurisdictions: Addison, Carrollton, Cockrell Hill, Dallas, Farmers Branch, Garland, Glenn Heights, Highland Park, Irving, Plano, Richardson, Rowlett, and University Park. The DART Service Area is approximately 700 square miles and includes approximately 2.4 million people.

Mission Statement – DART’s mission statement defines the purpose for which the Agency was created:

The mission of Dallas Area Rapid Transit is to build, establish, and operate a safe, efficient, and effective transportation system that, within the DART Service Area, provides mobility, improves the quality of life, and stimulates economic development through the implementation of the DART Service Plan as adopted by the voters on August 13, 1983, and as amended from time to time.

Board Goals – To achieve this mission, the Board has developed 15 goals for Fiscal Year 2010 which are organized under six Strategic Priorities:

Strategic Priority I: Strive to Exceed Customer Expectations Improve/maintain customer sense of security and comfort Increase ridership

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Strategic Priority II: Manage System Development & Maintain Infrastructure Maintain LRT build-out schedule and budget Maintain established milestones on all other expansion projects Strengthen long-range planning and governance mechanisms Ensure equity and seamless quality of infrastructure and operations, regardless of mode, location, or date of construction

Strategic Priority III: Build & Maintain DART’s Regional Transportation Leadership Develop a leadership strategy to influence regional transportation outcomes o Serve as resource to expanding regional transportation initiatives o Manage the balance between regional demands and DART’s obligations to its member cities Maintain contracting equity, achieving vendor and internal customer satisfaction with the procurement function

Strategic Priority IV: Drive Change Through Employee Engagement Continue to strengthen and formalize succession planning, career development, and performance recognition Ensure employment equity and increase diversity in areas of underutilization Increase employee ownership of overall job/career satisfaction

Strategic Priority V: Maximize Funding Resources Maximize DART’s sources of funds

Strategic Priority VI: Use Technology to Integrate and Advance Services and Systems Apply technology to provide timely, accessible, and reliable services and information to customers Develop and implement an Information Technology (IT) strategic plan, governance, and management structure that enables DART to prioritize and monitor existing and future IT programs Achieve vendor and internal customer satisfaction with the procurement function through automation

Service Plan/Transit System Plan – DART has a Service Plan and a Transit System Plan. The Service Plan is required by DART’s legislation and describes, in legal terms, where DART's facilities and rail alignments are physically located. DART’s Transit System Plan is a long- range planning tool that identifies and prioritizes major capital projects needed to improve regional mobility. The Transit System Plan is closely coordinated with development of the North Central Texas Council of Governments’ Regional Mobility Plan and is revised every five to six years. The most recent revision to the Transit System Plan, the 2030 Plan, was approved by the Board in early FY 2007 and focuses on transit needs and opportunities within the context of a 2030 horizon. The current Transit System Plan map is located at Exhibit 4.1.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

2030 Transit System Plan – DART’s Transit System Plan is a long-range planning tool that identifies and prioritizes major capital projects needed to improve regional mobility. The Transit System Plan is closely coordinated with development of the North Central Texas Council of Government’s Metropolitan Transportation Plan. In October 2006, the DART Board adopted the 2030 Transit System Plan. The 2030 Transit System Plan includes recommendations for DART's core services (bus, light rail, commuter rail, and HOV) and includes a discussion of issues such as land use and economic development, system accessibility, bicycle and pedestrian integration, and policies relative to DART's role in regional transit initiatives. Five new rail recommendations are included in the 2030 Transit System Plan, all of which would open in the 2025 to 2030 timeframe, including: DART Rail extensions toward West Dallas, in West Oak Cliff, toward the Dallas Logistics Hub area in South Dallas, and along Scyene Road in southeast Dallas, and a less frequent express rail service along the Cotton Belt corridor which could introduce a new non-electrified technology to the system. In FY 2009, DART issued a Request for Information (RFI) for firms that may be interested in working with DART through a Public/ Private Partnership (PPP) to design, build, operate, maintain, and finance the Cotton Belt corridor on an accelerated schedule. This PPP process will continue through FY 2010.

The affordability of the Transit System Plan and the timing of service and capital expansion projects are determined by the Twenty-Year Financial Plan, which is approved annually by the Board. Exhibit 4.2 highlights the interrelationships of the Transit System Plan with other key Agency documents.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Exhibit 4.1 DART Transit System Map

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Exhibit 4.2 Interrelationship of System Plan with Other Documents

TRANS IT EL EM EN T

REGIONAL T RANSIT SYSTE M MOBILITY PLAN PLAN

C FI O N N A T S N EC N T C J IO R IA O T A L R I IN P IN T EF S D EL EM EN T LO NG - RANG E

LO C A TIO N SPECIFIC

LONG-RANGE OT HER STUDIES SERVI CE P LAN FINANCIAL PLAN

INTERRELATIONSHIP FUNDING IMP LEM EN T COMMITMENT

DART DART DART/City of Dallas

LINE SECTION NW-1A Inter-Local Agreement LINE SECTION NW-1A 30% DESIGN SUBMITTAL 30% DESIGN SUBMITTAL

Including:

Supplement # 1 – Planning & Zoning Supplement # 2 – Design & Construction Council Resolution #90-2531 CBD Stations

FINAL DESIGN INTERLOCAL AGREEMENT BUSINESS PLAN

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Financial Standards – DART’s Financial Standards (Exhibit APX.2) are divided into three sections: General (FS-G), Business Planning Parameters (FS-B), and Debt Service (FS-D). The purpose of the General Standards is to ensure that DART prudently manages its financial affairs and establishes appropriate cash reserves. The Business Planning Parameters (BPPs) provide management with a framework for developing the following year's budget and Twenty-Year Financial Plan and establish future business targets for management to achieve. The purpose of the Debt Service Standards is to limit the level of debt that may be incurred and to ensure that debt assumptions are based on financial parameters similar to (or more conservative than) those that would be placed on DART by the financial marketplace.

The combination of these policy documents provides a framework within which management can formulate strategy and action plans to maximize return on investment (i.e., increase ridership and improve subsidy per passenger). Exhibit 4.3 highlights which Financial Standards correlate with the major sources and uses of cash included in the Annual Budget and Twenty-Year Financial Plan.

Exhibit 4.3 Relationship of Financial Standards to Sources and Uses of Cash Description Where Covered Sources of Cash Sales Taxes FS-B1 Operating Revenue FS-B2 Federal Funding FS-B10 Debt FS-D1 to D7 Uses of Cash Operating Budget Fixed Route Service FS-B3 & B4 Administrative Costs FS-B6 Total Expenses FS-B5 Capital Budget Gen. Mobility-Road Improvements FS-B7 Start-up/Capital Planning Costs FS-B8 Capital Projects FS-B8, FS-B9 Net Debt Service Budget FS-D1 to D7 Cash Reserves FS-G5 & G7 Working Cash Requirement FS-G6

Board Policies – The Board has a number of policies that provide direction to management for implementation. For example, the Board has policies for real estate purchases, advertising, and fare structure. DART's enabling legislation requires the Board to adopt an annual budget prior to the commencement of a fiscal year. It also requires the Board to have a Financial Plan. The Financial Plan details the projected sources and uses of cash for twenty years and reviews the affordability of DART's currently-approved Transit System Plan. The Board's Bylaws require a two-thirds vote of the appointed and qualified Board Members to approve or amend the Financial Plan. Budget and Financial Plan amendments are required when DART’s share of a new operating program or increase to an existing operating program is in excess of $500,000 per year; or when DART’s share of a new capital program or the cumulative addition to an existing capital program is in excess of $1 million.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Business Planning Process

Exhibit 4.4 highlights the standard business planning, compilation and approval process used at DART.

Exhibit 4.4 Standard Business Plan Development Schedule Date Description Management reviews Strategic Plan every three years Dec – Feb Management reviews and makes recommendations for changes to Financial Standards Feb – Mar Board reviews and approves Financial Standards May – Jul Staff develops Business Plan (which includes the Annual Budget and Twenty-Year Financial Plan) for following year Jul Staff presents proposed Budget and Twenty-Year Financial Plan to Board Aug Board approves issuance of Budget and Twenty-Year Financial Plan to Member Cities Sep Member Cities provide input Sep Board approves Budget and Twenty-Year Financial Plan

DART takes a top-down approach to business planning. The approach begins with the Board- approved Financial Standards which establish parameters within which management must operate. Targets are established, maintained, and highlighted throughout the document.

Typically, the Board reviews projected business and financial results, including proposed new operating and capital programs, beginning in May and June. Departmental targets are set based on projections from the Twenty-Year Financial Plan and other known factors or programs (e.g., increase in health care or fuel costs). Based on the direction of senior management, departments prepare detailed budgets for each of their cost centers within those targets. These budgets are in turn reviewed during meetings with the department head, the Executive Vice President, the President/Executive Director, and the Budget Office to discuss the respective budgets as well as any changes. All new proposed programs are evaluated for effectiveness and efficiency.

The Finance Department then compiles the numbers, coordinates work programs to achieve strategies, and publishes the Business Plan, including the Annual Budget and Twenty-Year Financial Plan, for the legislatively-required 30-day comment period by DART's member cities. The Board performs additional reviews in August and September, as necessary, before it approves the Budget and Twenty-Year Financial Plan in late September. DART's legislation does not require public hearings on the Budget or Twenty-Year Financial Plan.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Capital Budgeting – DART’s capital budgeting processes are focused on ensuring that DART spends its available capital dollars on projects that provide the most benefit to the Service Area and are done in the most cost-effective manner possible. Capital projects are prioritized based on the following criteria:

Compliance with government regulations; Safety-related; Interlocal Agreement (ILA) or other prior commitment; Required to maintain existing infrastructure; Cost effectiveness.

Many dimensions of each project must be submitted with the project request, including:

Consequences of not doing the project; Potential ridership generated; Effect of the project on Customers, Stakeholders, and Employees; Compliance with long-range plans of the Agency, such as the Strategic Plan, Transit System Plan, Twenty-Year Financial Plan, Information Technology Plan, etc.; Time criticality; Life-cycle cost including capital expenditures, operating and maintenance expenses, and revenue generation in comparison with current operations; Other potential alternatives to the proposed project and associated life-cycle costs of each alternative; and Concurrence from all affected departments.

For certain classes of expenditures (primarily infrastructure maintenance), discrete projects cannot be specifically identified or the timing of equipment replacement cannot be accurately determined (run-to-failure equipment). In these cases, capital reserves are established in the Twenty-Year Financial Plan for each capital project category based on historic spending patterns and projected levels of new work. These reserves act as placeholders for anticipated future capital expenditures. Once a specific project is identified that relates to a particular reserve, that project is given its own unique identification number, and the reserve is reduced accordingly.

Budget and Financial Plan Approval and Amendments

The Board generally approves two resolutions prior to the start of each new fiscal year (see APX.1). The Board approves Operating Expense, Capital, and Net Debt Service budgets in one resolution and requires a simple majority for approval. The Twenty-Year Financial Plan is approved in a second resolution and requires an affirmative vote of two-thirds of the Board Members for approval.

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Any major change to the Twenty-Year Financial Plan that occurs outside of the normal approval schedule requires a Financial Plan Amendment. A major change is defined as when DART’s share of a new operating program or increase to an existing operating program is in excess of $500,000 per year; or, when DART’s share of a new capital program or the cumulative addition to an existing capital program is in excess of $1 million (see APX.2, FS-G9). These changes require the affirmative vote of two-thirds of the number of appointed and qualified members of the Board.

Budget Basis and Presentation of Amounts and Years

DART's Annual Budget and Twenty-Year Financial Plan are presented in the same format as our audited financial statements, but do not include depreciation, amortization of Federal grants, or the interest income and interest expense from leveraged lease transactions. Each of these non- cash transactions, however, is incorporated into the projected balance sheet included in APX.5.

Schedules are presented and rounded to millions and/or thousands (as indicated), but are based on actual raw numbers. Consequently, certain schedules may not tie exactly or add due to rounding. In some cases, prior years' numbers have been restated to conform to the current year's format. All schedules are in fiscal years unless otherwise stated.

Related Reports

Several related reports are referenced in this document. Readers may wish to refer to these for a more comprehensive understanding of DART's plans and operations. These documents may be obtained from DART's Finance or Planning Departments.

Transit System Plan – provides detailed discussions of light rail, commuter rail, and HOV construction and service schedules, Intelligent Transportation Systems, and General Mobility commitments and time phasing.

Five-Year Action Plan – provides detailed discussions of DART's plan to increase bus and rail ridership through service improvements for a five-year period.

Quarterly Operating and Financial Performance Reports – provide updates on management's progress against financial and operating projections for the current year and provide status reports on ridership, planning, and capital projects in progress.

Acronyms

Exhibit APX.9 in the Appendix is a description of acronyms used in this report.

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Overview of DART's Strategic Alignment Structure

DART's leadership system uses a framework of aligned strategic planning tools to ensure that DART employees understand how their jobs and performance are linked to the Board's mission, direction, and goals. The leadership matrix is shown in Exhibit 4.5. Performance measurements are incorporated into tracking and reporting processes at all levels of the Agency. The major components of the leadership system are described in more detail in the remainder of this section.

Management Action Plans and Performance Measurements

Vision Statement – To help achieve the Board's mission and strategic priorities, a revised vision statement was approved by the Board in FY 2007 to address DART’s customers and stakeholders.

DART: Your preferred choice of transportation for now and in the future…

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DART Organizational Values – In FY 2009, DART executive management updated the Agency’s values statement. At DART, employees value being:

Focused on Our Customers We are dedicated to meeting our customers’ needs. We strive for continuous improvement. We deliver quality. Committed to Safety and Security We expect safety and security to be the responsibility of every employee. We are committed to ensuring the safety and security of our passengers and employees. Dedicated to Excellence We demonstrate a high regard for each other. We are committed to innovation and learning from our experiences. We hold ourselves accountable. We coach, reinforce, and recognize employees. We foster an environment promoting diversity of people and ideas. Good Stewards of the Public Trust We responsibly use public funds and property. We maintain open communication with customers and stakeholders. We respect the environment. We strive to mitigate risk. We demand integrity and honesty.

Strategic Plan – In FY 2009 DART’s executive management created a new Strategic Plan to identify, integrate, and align DART’s priorities, goals and tactical objectives for Fiscal Years 2010 through 2014. The Plan provides a dynamic structure for staying on track with long-term financial, development and operational commitments within a rapidly changing political and economic context.

The Strategic Plan identifies what needs to be accomplished; the Business Plan defines how management intends to achieve it. The key to success is the development of performance indicators by which to measure how well the Plan’s priorities are progressing.

Key Performance Indicators – Exhibit 4.6 highlights DART's major strategic performance measurements that are used in the Agency-wide, modal, and departmental scorecards. The leading indicators are the key financial, operational, and employee performance drivers that, if achieved, will yield improved Agency-wide performance. Measurement definitions are included in Exhibit APX.8.

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Management's goal is to develop business and information systems that provide critical information regarding the leading indicators to key personnel so corrective or preventive action can be taken as soon as possible. The lagging indicators are more traditional in nature and typically are not available until after month-end. They measure results but do not drive performance.

Exhibit 4.6 Strategic Performance Measurements Management Key Key Objectives Leading Indicators Lagging Indicators Customer Focus Customer Satisfaction * On-time performance * Ridership * Accidents per 100k miles * Passengers per mile/hour * Complaints per 100k passengers * Customer satisfaction surveys * Call abandonment rates/service levels * Response time * Miles between road calls * Missed trips Manage System Growth * Revenue miles/hours * Ridership * Actual schedule vs. plan for * Passengers per mile/hour system expansion * Customer satisfaction surveys Improve Efficiency * Operator lost time claims * Subsidy per passenger * Unscheduled absences * Administrative ratio * Pay-to-platform ratio * Sales taxes for operations * Average system speed * Unused financing capacity * Deadhead ratio * Timely replacement of assets Improve Business Processes * Cycle time/process measurements * Sales taxes for operations and Information * Project implementation vs. plan * Administrative ratio * Benchmark comparisons Internal Focus - Employee Promote Employee * Employee verbal feedback * Employee satisfaction survey

Development and Alignment * Number of grievances * Corrective disciplinary actions * Retention/absenteeism External Focus - Stakeholder Build Relationships with * Complaints/commendations * Climate satisfaction survey Stakeholders * Press clippings * Completion of TSP commitments * Joint development created

Business Plan – The Business Plan is the Agency's written document that outlines DART's performance projections and commitments for each mode of service and the Agency as a whole. The Plan includes five-year "scorecards" showing two past years, the current budget year, and forecasts for the next two years. The scorecards address key operating, financial, and quality measures and identify the work program (i.e., initiatives) necessary to improve performance and scorecards of projected passenger and subsidy per passenger targets.

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The Strategic Plan and the events and initiatives contained in the Business Plan are the basis for the FY 2010 Annual Budget and the FY 2010 Twenty-Year Financial Plan and for measuring management and employee performance. Executive management monitors key scorecard elements and work program initiatives on a monthly and quarterly basis. Exception reporting for key scorecard elements is provided to the Board on a quarterly basis in a green/yellow/red format. For more information on performance reporting, readers should obtain a copy of DART's Quarterly Operating and Financial Performance Report.

Employee Performance

Alignment of individual employee performance to organizational direction and goals is attained by the structure illustrated in Exhibit 4.5.

At least once a quarter, department heads comprising the Executive Management Team review the agency’s goals to ensure each department is achieving the performance needed to successfully accomplish DART’s goals. Each leader in turn tracks performance within the department or division, meeting at least twice annually with each salaried employee to ensure that targets are being met.

Since salaried employees’ Performance Management Plans (PMP) became paperless in 2007, each annual objective on an employee’s PMP must be tied to a Board Strategic Priority. The majority of performance objectives are directly related to departmental work plans or vice presidents’ performance plans, which are drawn from the Agency’s strategic priorities and goals.

This alignment is reinforced by DART’s pay-for-performance philosophy, under which salaried employees’ annual merit increases are tied to PMP evaluation scores. Similarly, hourly employees participate in the Division Level Measurement program through which their individual and team performance is recognized with quarterly incentives.

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Customer Focus

DART’s recently-adopted Board Strategic Priorities and Goals include initiatives for exceeding customer expectations (Exhibit 4.7).

Exhibit 4.7 Board Strategic Priority I: Strive to Exceed Customer Expectations 1. Improve/Maintain customer sense of security and comfort 2. Increase ridership

It is DART’s goal to provide safe, secure, efficient, and effective services to our customers. DART works toward continuous improvement in these areas through the use of customer surveys, division-level scorecards, Key Performance Indicators (KPIs), station monitors, systematic review of police deployment, fare inspectors, and Agency committees such as Service Planning and Customer Satisfaction. Customer surveys are conducted to monitor the effectiveness of DART’s programs and services.

Use Surveys to Understand the Needs of Customers, Employees, and Stakeholders

DART evaluates and monitors customer satisfaction in five areas: service, operation, safety, maintenance, and communication. Exhibit 4.8 is a comparison of the October 2006 and August 2008 Customer Satisfaction Surveys. Significant improvements were reflected in several key areas related to the quality of bus service delivery, including: on-time performance, operator courtesy, customer sense of security, as well as vehicle and facility cleanliness. Each of these areas that are showing improvement have been the focus of significant improvement initiatives over the past two years. Following the 2006 survey, DART adjusted the frequency of cleaning of vehicles and facilities, as well as emphasized the effect that cleanliness has on customer perceptions of other system factors such as safety and security. While this effort did come at a cost, the results were an average of 10% improvement in the perception of our customers of this key element. Safety and security was another focus following the 2006 survey.

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Exhibit 4.8 Customer Satisfaction Survey Comparison October August Category 2006 2008 Service DART riders are generally satisfied 90% 94% Riders find service better than last year 79% 87% Riders would recommend DART to others 85% 98% Operation Riders find buses running on time 77% 86% Riders find DART Rail trains running on time 84% 95% Riders have experienced pass-bys 54% 61% Riders make transfers on time 79% 90% Riders find operators courteous 84% 89% Safety/Security Riders find DART operators driving safely 89% 93% Riders feel safe at bus stops and rail stations 78% 87% Riders feel safe at transit centers and park and rides 79% 87% Riders feel safe on buses 86% 92% Riders feel safe on trains 85% 91% Riders see DART Police on Trains 61% 78% Riders see uniforms as adding sense of security 84% 88% Maintenance Riders find buses clean 69% 79% Riders find trains clean 79% 87% Riders find DART facilities clean 84% 88% Ridership Trends Riders make transfers 75% 81% Riders begin their trips at a transit center or rail station 73% 77% Riders take DART more than three times a week 93% 93% Riders use DART to get to work 90% 92% Riders have a car available 64% 74% Riders use DART during rush hour 90% 91% Communication Riders find the DART Customer Information Center 74% 90% staff answering calls promptly Riders find bus schedules readable 90% 92% Riders find adequate notification of service disruptions --- 82%

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Safety/Security

DART POLICE

The mission of the DART Police Department is to maintain a safe and peaceful environment for DART customers and employees and to ensure the security of property. To accomplish this mission, DART Police are responsible for enforcing laws, deterring crime, and providing a sense of security through their presence.

Major Functions and Duties

• Rail Operations – DART Police are responsible for providing police services aboard light rail and Trinity Railway Express (TRE) vehicles, at all rail stations, including parking lots, and along DART-owned rights-of-way. This group also includes DART’s fare enforcement officers. To more efficiently patrol the rail system, the department divided the rail system into 10 sectors. o Fare Enforcement Officers – Provide fare inspection services to the light rail and commuter rail. There are a total of 32 fare enforcement officers assigned to rail sectors. These are non-sworn personnel that have no police powers of arrest. The primary duty of these officers is to inspect for proper fare throughout the rail system. Fare Enforcement Officers issue fare evasion citations when necessary and report disruptive behavior to DART Police officers for police action. Though Fare Enforcement Officers possess no police power, they do provide a uniformed presence on DART transit services and it does provide ample deterrence to crime. o Rail Police Officers provide police visibility and take enforcement action on the trains within their assigned sectors and provide police services to rail stations, including the platforms, facilities, and parking lots to ensure the safety and security of DART’s patrons and their property. o During non-peak transit hours a police or fare enforcement officer is assigned to each light rail vehicle consist. During peak transit hours police and fare enforcement officers are assigned to rail sectors.

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• Patrol Operations – DART Police Patrol officers provide police services to the bus and paratransit systems, aboard vehicles, along bus routes, at transit centers, passenger transfer locations, and park and ride facilities, as well as at all DART Administration and Operations facilities. To more efficiently patrol the transit system, the department divided the system into five patrol zones. o Northwest – North of I-30 & West of US 75 o Northeast – North of I-30 & East of US 75 o Southeast – South of I-30 & East of I-35E o Southwest – South of I-30 & West of I-35E o Dallas Central Business District

Plainclothes officers and mobile surveillance units (skywatch towers and camera surveillance) are used by both the Rail and Patrol Operations sections at stations, parking lots, and platforms for the safety and security of DART’s patrons and their property. The mobile surveillance units are proactive crime deterrents, visible to DART patrons.

• Emergency Preparedness – The department’s Emergency Preparedness Section is responsible for planning and preparing for emergencies, to include developing security actions for different Homeland Security Alert threat levels; applying for and overseeing Homeland Security grants; conducting multi-jurisdictional exercises; performing needs and threat analyses; providing security awareness training for all DART employees. The section also manages the canine handler program, telecommunications, security guards, and DART employee identification cards and facility access programs. o Security Services – The department has contracted for armed and unarmed security guards at specified locations to provide security for customer vehicles, transit centers/facilities, administrative and operational facilities, and to accompany revenue agents who retrieve monies from ticket vending machines and bus fare boxes. o Police Telecommunications – The Police Telecommunicators are responsible for receiving requests for police services, dispatching calls for service to DART Police Officers, monitoring the police radio transmissions, and processing requests for National Criminal Information Center (NCIC) and Texas Criminal Information Center (TCIC) reports through the Texas Law Enforcement Telecommunications System. • Training – The Training Section is responsible for providing State-mandated and other job-related training to department personnel. Additionally, the section ensures compliance and coordination for all DART-required training. • Hiring & Recruiting – The Hiring & Recruiting Section is responsible for complying with all State requirements in the hiring of department personnel, as well as recruiting to fill vacant positions. The section also manages the records section and all criminal investigations.

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o Records Section – The department’s Records Section maintains and processes all offense reports, accident reports, and citations. They also file citations with the appropriate courts and submit reports to state and federal agencies as required. o Criminal Investigations – The department’s Criminal Investigation Section is responsible for processing crime scenes; conducting criminal investigations; interacting with the medical examiners offices; gathering, preparing, and distributing intelligence information; and preparing cases for court presentation. • Administrative Support – This Administrative Support Section develops and monitors the department’s budget; procures the department’s equipment needs; manages the fleet vehicles and acts as a liaison between building management and the department.

DART Police FY 2010 Goals, Programs, and Capital Projects

FY 2010 Department Goals

In support of primary Agency strategic goals and initiatives, the DART Police Department plans to exceed customer expectations in the following areas of service:

• Maintain an 82.5% customer “sense of security” rating on periodic safety/security surveys. • Reduce crimes against persons and property by 8% each. • Reduce incidents per 100,000 passengers by 10%. • Hire 30 more police officers to increase visibility and safety within the DART system, along with 12 other administrative or professional personnel to support Agency goals. • Maintain an 80% “presence-for-duty” rate for on-duty personnel on a daily basis. • Ensure a LRT fare evasion rate no greater than 3.75%.

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Existing Programs

To complement the ongoing duties and functions, the DART Police Department implemented the following programs:

• Canine Handlers (K-9 Unit) – Through a Transportation Security Administration (TSA) cooperative agreement, the department has three explosives detection canines, along with three Ford Expeditions to facilitate K-9 deployment. Additionally, TSA approved a fourth canine team that will attend a K-9 training course in August 2009. Explosives detection canine teams greatly increase the Agency’s responsiveness to explosive threats on buses, trains, and other DART property and facilities.

• Surveillance Project – Through a pilot project cameras were installed at the Ledbetter, Downtown Garland, Spring Valley, 8th & Corinth and Zoo Stations. The pilot project also provided surveillance cameras aboard DART buses. Currently, surveillance systems are now being installed in new and existing rail stations with a combination of DART and Homeland Security grant funding. DART funding will also provide for surveillance systems on the super light rail vehicles (SLRVs). • Security Training – The department is responsible for ensuring all department and other required staff personnel receive National Incident Management System (NIMS) training. Through a training grant received from the Department of Homeland Security, DART Police provided transit security courses for our employees and representatives from our member cities. • Facility Access Systems – The department is responsible for the administration of the access system for all DART facilities, which also includes issuance of ID/Access cards and the management/maintenance of requisite hardware and software systems. • Benchmarking Best Practices Among Peer Agencies – The department continues to maintain visibility and relevance among other large police organizations, collaborating on campaigns and benchmarking industry best practices for the benefit of DART patrons, employees, and stakeholders. In keeping with this goal, command staff members participate in a variety of activities in conjunction with such organizations as: the North Texas Police Chiefs Association, the Federal Bureau of Investigations (FBI) Academy, the Greater Dallas Crime Commission, and the International Association of Chiefs of Police (IACP) among others.

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DART Police – Approved Capital Programs

In FY 2010, the department plans to implement the following new projects to address the Agency’s goal of increased perception of public safety and sense of security:

• New Surveillance Camera System Project – $5 Million was approved to purchase, configure, and install cameras for 5 bus routes, 10 DART stations, and 15 light rail vehicles as an expansion of the pilot surveillance program conducted earlier. This should help to deter crime at monitored facilities, and decrease response time to crime and service quality issues. In addition to DART funding, $1.067M of Homeland Security grant funding has been awarded for installation of surveillance systems at passenger facilities along DART’s Blue Line. Installation at Akard and Morrell Stations are complete and awaiting validation by DART Police. • Mobile Data Computers (MDCs) – The department is nearing completion of integrating the updated computer aided dispatch (CAD), with the recently purchased and installed Mobile Data Computers (MDC) and records management system (RMS). This new updated system greatly improves efficiency and effectiveness in assigning officers to calls and reporting incidents. This new system allows mobile dispatching of officers, National Criminal Information Checks (NCIC), Texas Criminal Information Checks (TCIC), and CAD/RMS queries for quick access to pertinent law enforcement information by officers in the field. Additionally, the updated CAD, MDC, and RMS allow officers to complete reports in the field, spend less time writing reports at headquarters and increase visibility to DART patrons. • In-Car Camera System – The installation and implementation of an in-car camera system for police squad cars to help protect patrons, officers, and the Agency while providing police services is nearing completion. This system will help the Agency comply with Texas racial profiling mandates regarding the collection (and retention) of pertinent traffic-stop data, and also serve as a means to protect the Agency against allegations of abuse or profiling. • Other Vehicle Fleet Additions – The department is supplementing the existing police vehicle fleet with two SUVs, one for the department’s Criminal Investigations Division and another for the new K-9 handler. These additional vehicles will increase visibility in support of the department’s growth. • Security Strategist Consultation – By means of this initiative, the department sought to identify and evaluate current organizational structure, personnel deployment, equipment and technology resources, provide the current security Strategic Dependency model, and identify strengths and weaknesses in the current model. This project/consultancy identified opportunities to share technologies across departments, developed a new security Strategic Model, and provided integration planning assistance for requisite systems. • New Police Headquarters – This ongoing project’s aim is to obtain timely facility needs assessment, architectural/engineering design, and construction services for a new DART Police headquarters building, along with applicable satellite locations as deemed necessary.

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Safety Programs

DART Safe Work Practices Policy

The DART Safe Work Practices Policy voluntarily adopts the Occupational Safety and Health Administration (OSHA) standard as the minimum standard for safe work practice. Audits covering at least 2 of the 13 original Standard Operating Procedures are conducted each year to measure and record improvement with respect to the findings and mitigation implementations.

To further support safe work practices, the Safety Section has greatly increased its training activities, with over 4,000 class completions through June 2009. Training includes Professional Operators Enhancement Training (bus and rail) every other month, Rail Safety Orientation (on demand), Safety Training for Maintenance four times each year, Police Rail Training, and many others. Additionally, the Safety Section does outreach training by presenting Operation Lifesaver classes to groups outside DART. Over 200 persons have received this training thus far in FY 2009.

The Safety Section:

• Performs audits on various components of the system on a regular basis, performs audits based on safety rules, operating practices, and traffic laws for the Maintenance and Transportation Departments, and other audits as requested. • Performs an annual light rail safety audit as mandated by Federal Transit Administration (FTA). • Performs Job Safety Analyses upon request to recommend mitigation for risk potential inherent in performing specific tasks. This, in turn, affects the safety requirements written into Standard Operating Procedures and Work Instructions. • Participates in all integrated testing accomplished prior to the opening of new light rail sections. A Safety Specialist was assigned to the Green Line for testing beginning July 1, 2009.

Exhibit 4.9 shows DART’s bus accident experience from October 2007 through June 2009 and shows that DART enjoyed a 10% decrease in the accident rate in FY 2008 over FY 2007. The average rate of 1.79 accidents per 100,000 miles operated through June 2009 is trending slightly upward. DART experienced a 15.6% reduction in rail collision accidents in FY 2008 compared to FY 2007 (see Exhibit 4.10). In each of those two years, DART had seven months in which no collision occurred. Fiscal Year 2009 is trending slightly upward with an average rate through June 2009 of .17 per 100,000 miles.

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Exhibit 4.9 Bus Collision Accidents per 100,000 Miles FY08 (not-to-exceed goal: 2.0)

2.60

2.40 2.20

2.00

1.80

1.60

1.40

1.20

1.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YTD FY07 2.42 2.20 2.01 1.85 1.13 2.30 2.29 1.65 1.62 1.95 2.15 1.78 1.95 FY08 2.54 2.35 2.10 1.28 1.62 1.70 1.71 1.69 1.41 1.07 1.58 2.01 1.75 FY09 2.40 1.42 1.24 2.04 1.69 1.52 1.96 1.74 2.07 1.79 MONTHS

Exhibit 4.10 Train Collision Accidents per 100,000 Miles Operated (not-to-exceed goal: .30)

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep YTD FY07 0.20 0.67 0.22 0.00 0.23 0.00 0.00 0.21 0.00 0.00 0.00 0.00 0.13 FY08 0.00 0.23 0.00 0.21 0.00 0.00 0.00 0.22 0.00 0.21 0.43 0.00 0.11 FY09 0.20 0.00 0.00 0.22 0.25 0.22 0.44 0.00 0.23 0.17 MONTHS

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Rail Program Development Safety Program

The Rail Program Development (RPD) safety program integrates construction safety and security and systems safety which includes workforce education/training in the management of the light rail build-out program. These structured programs include:

• Employee screening and “ID” badges • Safety Education and Training • On-Site Job Safety Assessments • Integrated Testing and Systems Reliability • Fire Life Safety • Comprehensive Industrial, Construction, and System Element Safety

As a direct result of these major programs, DART has achieved an extremely low recordable accident history rate which translates to a cost loss ratio of approximately $0.17 per man-hour. The associated dollar costs when considering that over eight million man-hours have been worked has resulted in an exceptional project safety record that exceeds both the published national averages and departmental goals. Through a departmental team of highly skilled and seasoned professionals, we have successfully combined all safety elements to create a specialized safety culture that addresses every aspect of work being performed, all of which has clearly elevated our integrated safety program to “World Class” status. Exhibit 4.11 is a history of DART’s construction safety results.

Exhibit 4.11 DART Construction Safety Program Starter System Phase I Phase II Total Injury Claims 982 321 23 “Lost Time” Accidents 271 46 19

National “Lost Time” Rates (BLS*) 12.7 4.1 5.4 DART “Lost Time” Rates 8.13 1.4 0.54

Man-Hours Worked 8,115,525 6,372,080 8,030,422

Workers’ Compensation Costs per Man-Hour (Construction Industry) National Average Cost (BLS*) $1.61 $1.68 $1.65 DART, Incurred Cost $1.31 $0.58 $0.17

*BLS – Bureau of Labor Statistics

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Provide Customer-Driven Service

Enhance Customer Satisfaction and Rider Retention – This Customer Service strategic initiative is a two-pronged approach to increase customer satisfaction and ridership. They are: 1) employee motivation/satisfaction; and, 2) positive customer experiences. Surveys indicate that one-quarter to one-third of customers describe themselves as “new” riders on the system. This proportion of new riders has been steadily increasing as a result of last year’s high fuel prices. A customer’s first experience with DART service is a significant factor in building long-term ridership, and employee motivation/satisfaction impacts the degree to which employees focus on creating a positive first-time customer experience.

The Division Level Measurement Program is described in the Bus and LRT sections of the Business Plan. It is targeted at increasing front-line employee ownership of the goals of the Agency, with the ultimate objective of increasing employee motivation and satisfaction. The Division Level Measurement Program also targets improvements in service quality through enhanced data analysis, communications, and problem solving.

The Customer Satisfaction Priorities Initiative focuses on two key elements affecting an individual’s decision to try transit for the first time – service reliability and the perception of personal security. This initiative brings together management staff from across the organization to formulate and implement strategies for improvements in these two areas. Strategies may include improving communication with employees and customers, improving processes, implementing new technologies and/or improving coordination among DART and its member cities or other agencies. The Customer Satisfaction Priorities and the Division Level Measurement initiatives are cornerstones of the Agency-wide goal of enhancing customer satisfaction and building ridership.

Using Baldrige criteria to create a customer-focused culture – In 1996, DART launched its quality journey utilizing the Malcolm Baldrige criteria for Performance Excellence. The criteria are designed to help organizations enhance performance through focus on dual, results-oriented goals: delivery of ever improving value to customers, resulting in marketplace success; and improvement of overall organizational effectiveness and capabilities. Using these criteria, DART began to establish systematic processes for operating the Agency.

In 2000, DART participated in the Texas Award for Performance Excellence process, equivalent to the national Malcolm Baldrige Award. DART received a site visit, a privilege given only to those organizations that are strong contenders to receive the award. After receiving the feedback report from the Quality Texas Foundation, DART management prioritized some of the areas identified for improvement, established teams to address those areas, and developed and implemented processes that are consistent with the criteria.

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Today, DART has a customer-focused culture and has institutionalized the team-based continuous improvement philosophy and process to increase efficiencies within the organization. Numerous cross-functional teams with employee participation at all levels, who have embraced this role, are actively involved in identifying efficiencies to ensure DART attains the highest level of performance excellence. In the coming year, DART plans to reassess its Baldrige-based performance excellence progress.

DART uses cross-functional process teams to identify efficiencies in areas across the Agency. There are currently in excess of 20 teams addressing areas that impact DART’s customers, employees, and stakeholders. Examples of some of the teams are:

• Customer Satisfaction Committee – The Committee, chaired by the President/Executive Director, is responsible for tracking Agency efforts directed toward reducing customer complaints and increasing customer satisfaction. • On-Time Performance Task Force – The On-Time Performance Task Force is a cross- departmental group that has been chartered as a subcommittee reporting to the Customer Satisfaction Committee. This task force develops and tracks the implementation of strategies targeted at reducing customer complaints related to on-time performance. • Customer Feedback Process Team – The Customer Feedback Process Team is an ad hoc subcommittee that reports to the Customer Satisfaction Committee. This team has been chartered to review and re-engineer the customer feedback process as it relates to the Transportation Department. It is anticipated that once the team finalizes and implements its process re-engineering recommendations, the team will be dissolved. • Service Planning Committee – This Committee is chaired by the President/Executive Director and meets to discuss service planning, ridership, and related issues. • Customer Response Team – This is a team of DART administrative employees who are called to help communicate with DART customers during major rail service disruptions that affect a significant proportion of our ridership group. • Route Monitoring Task Force – This formal staff task force addresses service issues involving planning, scheduling, and transit operations, meets monthly, and offers a forum for operating employees to speak to issues with routes and schedules. Representatives from Service Planning & Scheduling staff review and report back on progress. The group also reviews major planning initiatives from an operating perspective and includes Operators appointed by each operating Division, plus representatives from Service Planning & Scheduling, Transportation, and Paratransit. • Systemwide Accessibility Committee – This new committee will plan, budget, implement, and track accessibility improvements for the DART system and will consist of representatives from various departments that deal with aspects of accessibility.

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• Division Level Measurement (DLM) Steering Committee – This Committee recommends goals and provides guidance to the Division Level Measurement Program which focuses primarily on hourly employees who are predominantly in operational departments. • Division Level Measurement Problem-Solving Teams – Under the Division Level Measurement Program, each participating operating division is responsible for forming and maintaining a Problem-Solving Team that includes representation from the hourly employees, management staff and representatives from appropriate support departments. Problem-Solving Teams meet monthly to review the DLM Scorecard results and to develop strategies to improve performance in those areas where the Division’s performance does not meet established goals. • Employee Communication Committee – This committee was formed in response to previous employee survey findings. The committee is comprised of employees from throughout the organization who serve as departmental representatives and the voices to communicate information to their respective groups on a timely basis. • Green Line Start-Up SE-1A Task Force - This cross-functional task force meets on a monthly basis to review every aspect impacting the opening of the Green line from contracts and contract interface to testing, training, turn-over, start up, ticket vending machines, maintenance issues, and media communications to ensure a successful opening of the line.

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Employee Focus Employee Engagement

Satisfied Employees Contribute to Satisfied Customer

DART’s recently-adopted Board Strategic Priorities and Goals include major initiatives for increasing the Agency’s return on its investment in human resources (Exhibit 4.12).

Exhibit 4.12 Board Strategic Priority IV: Drive Change Through Employee Engagement 1. Create a learning organization committed to innovation 2. Brand DART as a performance-based employer-of-choice 3. Foster an inclusive environment where diverse perspectives are valued in the pursuit of DART’s mission 4. Ensure successful integration of employees into the culture

In FY 2009 DART’s executive managers refreshed the Agency’s Employee Values and developed organizational change strategies that balance the expectations and needs of the organization and its employees.

The refreshed commitment has been a guiding principle for the Executive Leadership Team to provide strategic direction in three critical areas:

• Develop and align the organization’s Work Force Plan with its Board Strategic priorities • Use technology to integrate and advance services and systems to maximum benefit to the Agency and Stakeholders • Implement initiatives that reflect efforts to increase employee satisfaction and drive change through employee engagement

Create a Learning Organization Committed to Innovation

Given the rapid pace of change in today’s business environment, employees must continually learn throughout their careers. This requires the Agency to make an ongoing investment in human resource development to ensure the skills, knowledge, abilities, and performance of the workforce meet current and future organizational needs.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

The Agency will expand its support of individual ownership of career development and performance by the following actions: • Continue to strengthen and formalize succession planning, leadership development, career development, and performance recognition • Continue to transition to a performance-based organization by strengthening Performance Management Planning and pay-for-performance systems • Explore partnerships with community colleges and area universities.

Brand DART as a Performance-Based Employer-of-Choice

The Agency is striving to position itself as an “employer of choice.” This “employer brand” will create an image that appeals to the talented, productive employees needed to achieve the Agency’s goals. To be an “employer of choice,” DART needs to communicate an accurate picture of employment for employees and candidates that is aligned with DART’s new external brand, “IT’S ALL CONNECTED®.” As an “employer of choice,” the Agency will be challenged to consistently demonstrate great people practices that attract, retain, and motivate current and future employees.

Foster an Inclusive Environment Where Diverse Perspectives are Valued in the Pursuit of DART’s Mission

In FY 2010, DART will refine its Diversity & Inclusion strategy to ensure it continues to align with the Agency’s strategic priorities and core values. DART is committed to ensuring an inclusive respectful work environment where all employees are able to perform successfully and contribute to the overall success of the Agency. For DART to continue to be the preferred choice of transportation, we must value and respect not only the diversity of our employees, but also our stakeholders, customers, communities, and business partners.

As such, DART will continue to foster new and existing external relationships with external recruitment sources, local minority and women’s organizations, and community agencies and leaders. These ongoing relationships will ensure DART’s commitment to diversity and inclusion resonates in the communities we serve and engages those entities in the vast opportunities available at DART.

Internally, DART will reengage the Diversity Council, to ensure a positive work environment and increase employee awareness of the value of diversity, where opinions are valued regardless of differences. In addition, the employee heritage/affinity groups and their network of members will be reengaged as an internal partner and champion of Diversity.

The Office of Diversity & Equal Employment Opportunity has oversight for the strategy and will serve as the Agency liaison for any related programs and training.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Ensure Successful Integration of New Employees into the Culture

Special focus will be given to the programs and practices used to bring new employees into the Agency and current employees into new jobs. The first-day orientation at DART Headquarters and the quarterly “New Employee Orientation,” and “New Supervisors’ Orientation” will be updated to be more welcoming and motivating. Structures will be identified, implemented, and tracked to ensure positive new employee experiences during the first year on the job. A formal mentoring program with a mutual goal of preparing high-potential leaders for future opportunities and effectively updating senior management staff’s knowledge in the Agency will be continued.

Employee Satisfaction Survey Comparison

DART performs periodic employee satisfaction surveys. Exhibit 4.13 compares the results of the 2006 survey with the one completed in 2009. Management is evaluating the results of the survey and will take steps to address the areas where the survey data shows areas for improvement.

Exhibit 4.13 Employee Satisfaction Survey Comparison

Employee Engagement Questions 2006 2009 You are satisfied with your job at DART 79% 86% When you do a good job, you receive the praise and 45% 53% recognition you deserve You like the kind of work you do 92% 95% Your work gives you a sense of accomplishment 80% 86% Your immediate supervisor treats you with respect and 78% 77% fairness You plan to be working at DART a year from now 87% 93% Overall, how satisfied are you with executive 50% 64% management sharing information within DART? You are proud of DART’s contributions to and 86% 86% reputation in the community You understand how your job contributes to DART’s 87% 89% overall mission You believe that you have opportunities for career 50% 66% advancement at DART

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Technology Governance, Customer, and Stakeholder Initiatives

DART’s Agency-Wide Technology Resources were the focus of a recent comprehensive consulting study. A key conclusion was that consolidation of technology resources under a Chief Information Officer would provide more effective management. DART appointed a Chief Information Officer in FY 2009. Exhibit 4.14 highlights the Board’s Strategic Priority relating to technology.

Exhibit 4.14 Board Strategic Priority VI: Use Technology to Integrate and Advance Services and Systems 1. Apply technology to provide timely, accessible, and reliable services and information to customers 2. Develop and implement an Information Technology (IT) strategic plan, governance, and management structure that enables DART to prioritize and monitor existing and future IT programs. 3. Achieve vendor and internal customer satisfaction with the procurement function through automation

Information Technology (IT) Governance

A Technology Steering Committee (TSC) has been formed with a charter to review all significant investments in technology, whether originated within the Information Technology function or in other departments or divisions. Members of the TSC are from the Executive Management Team (EMT) to ensure that the body has the authority to recommend or reject projects for investment.

A Technology Strategic Plan is in development which will be sanctioned by the TSC and endorsed by the EMT. The initial draft of the Plan will be completed by the beginning of FY 2010 and will describe three major aspects of technology deployment in the Agency: Technology Governance, Customer Service and Information Delivery, and Leveraging Technology for Maximum Benefit to Agency and Stakeholders. The Technology Department has been reorganized to align staff with the services needed, and processes and metrics will be implemented to ensure the quality of service and deliverables.

Customer Service and Information Delivery

The Agency will apply technology to provide timely, accessible, and reliable services and information to customers.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Customer transportation services will be optimized by improving the systems used on DART’s vehicles to create and adhere to schedules and make Operator assignments more efficient and equitable. The systems will deliver management information to leadership and supervisors that show trends in data to facilitate proactive adjustments that improve schedule adherence, Operator training, and mitigation of accident risks. A comprehensive Technology Needs Assessment will be conducted in conjunction with the Transportation Department to identify and implement solutions to support the department’s business plan.

Traffic Signal Prioritization – The recently-implemented Traffic Signal Priority system in the Dallas Central Business District will be tuned and monitored to ensure schedule adherence for the high train volumes through that corridor when service increases with the expansion of the Green and Orange Lines over the next few years.

Radio System Replacement – Deployment of a new radio system will improve transportation operations. The system includes on-vehicle computers that will register the Operator and assigned route at pull-out time, configure the head signs and stop announcements for the route, and monitor schedule adherence using a global positioning system (GPS) and radio communications for schedule adherence monitoring and reporting. The system will also provide more communications capacity between the dispatch centers and rail and bus operators.

Integrated Voice Response (IVR) – A new digital IVR system will be implemented to improve service to customers who call into the Customer Service Center for information. It will have improved prompts and instructions, automated bulletins for incidents, and built-in redundancy to guarantee availability. The new system will replace the systems currently in use for the Customer Service call center and the Paratransit call center.

Smart Card Technology –This is a multi-year project that will include other agencies in the region and will replace existing magnetic fare media with a proximity integrated circuit card (PICC), also known as a . Requiring new means of distribution and smart card readers on buses and train stations, the system will eventually allow more flexibility in fare structures and provide ease of use for riders, from adding value to the card to faster boarding of DART vehicles.

Where’s My Bus?® – Information will be delivered to customers in new and innovative ways, to advise them of travel options and update them during their journey. The “Where’s My Bus?®” capability has been deployed to enable riders to use a browser on a desktop computer or a hand- held device such as a cell phone to learn if their bus is on schedule, the current location of the bus, and when it will arrive at their stop, and includes a map of the bus route. This use of near real-time bus location information will be extended to display screens at transit centers to keep riders informed of variations to schedules.

The same underlying vehicle location technology will be deployed on the light rail system and the Trinity Railway Express (TRE) to update information on station signs, advising waiting passengers of the arrival time of the next train.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Social Networking – New social networking technologies are being deployed for targeted customer advisories. These include a Facebook page and the use of Twitter for brief messages. These and similar techniques, already familiar to much of our ridership, will be used more in the future to deliver meaningful information to DART’s customers. Web access will be expanded to include ride requests on Flex routes and the Paratransit system, submission of compliments and complaints, and for conducting customer surveys.

Surveillance Cameras – Additional surveillance cameras will be deployed to more stations, transit centers, and eventually onto vehicles. Communications will be improved to facilitate remote monitoring of video images, and emergency notification alarms will be tied to cameras and the dispatch centers so that monitoring of an incident in progress becomes possible.

Leveraging Technology for Maximum Benefit to Agency and Stakeholders

Most of the Agency’s business is conducted using some type of computer system. There are four major “mission critical” system suites, including the Lawson ERP set of systems, Trapeze scheduling and transit operations systems, the SPEAR systems for maintenance and materials management, and the Novell GroupWise email messaging and calendaring system. Approximately 120 other systems make up the total portfolio.

Availability of these systems is critical to the operation of DART’s daily business. The systems are hosted on servers in the corporate data center. To ensure that the systems are functional in the event of a disaster at the headquarters building, a secondary data center (SDC) is being commissioned. The SDC will provide continuity of all major systems, including telephone, call center, voice and data networking, and other important technology components.

The systems will be well-maintained and brought into and sustained at current software versions, to maximize functionality and ensure security. Systems that have been built in-house to custom specifications will be continually reviewed and enhanced where additional value can be gained. A new procurement system will be acquired and implemented to improve the efficiency of that critical function, so that procurements can be processed more quickly, with less manual clerical intervention while improving sourcing and deliveries.

The TRE operations will be made more efficient with the implementation of a Maintenance of Way Information System (MOWIS) that will better manage track and asset inspections and maintenance. The system may be extended to the DART light rail system if it meets the functional requirements of that operation.

Paratransit certification of mobility impaired riders will be made more efficient by the implementation of a new Trapeze system module, which will also enable standardized certification across multiple agencies in the region, eliminating the need for a customer to have to undergo multiple certification processes.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

The voice and data networks that interconnect the DART facilities will be replaced with a modern multi-protocol label switching (MPLS) network that will combine voice and data on the same digital circuits, while offering higher bandwidth capacity and greater reliability at lower cost.

An information management function has been created within the Technology Department, charged with making information available to managers and others for greatly improved intelligence about DART’s business. Today, most data is locked within specific application systems and it is a tedious, inexact process to collect data from multiple sources and convert it into useful information. By addressing this need comprehensively and using tools and techniques to standardize data and make it “visible” to decision makers, it will be significantly more practical to produce management information reports, trends, and analyses for informed decisions.

Future System Improvements

There will be continuous evaluation of the Agency’s technology needs and opportunities. There are opportunities to reduce the volume of paper and redundant data, and for more automated workflow processes to improve transaction processing velocity and accuracy. There are opportunities for improving vehicle-based systems, for the benefit of the customers, operators, Transportation management, and Service Planning and Scheduling..

All of these will be pursued, and more will be revealed, as the technology governance process becomes routine, customer feedback and needs are evaluated, and management continues to innovate in how the business is run.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

STAKEHOLDER FOCUS

Federal, State, and Local Government Relations – Government Relations encompasses all interactions between DART and its external political environment. DART’s Government Relations staff plans and implements the Agency’s advocacy efforts and ensures that the exchange of information between DART and its 13 member cities, the U.S. Congress, the U.S. Department of Transportation, and the Texas Legislature is accurate, consistent, and timely. In addition to providing tours and briefings to elected officials and their staffs, Government Relations also actively participates in transportation-related organizations such as the American Public Transportation Association, Texas Transit Association, Partners in Mobility, and Dallas Regional Mobility Coalition. Government Relations staff also oversee the day-to-day administration of DART’s contracted legislative consultants in Washington, D.C., and Austin, Texas, working with these consultants to develop appropriate advocacy strategies for securing Agency objectives both operationally and for capital projects.

In FY 2010 DART will work with the Dallas area congressional delegation to submit an $86 million request for the FY 2010 appropriation cycle. Staff will monitor the 111th Congress for developments relating to potential funding for projects identified in DART’s Twenty-Year Financial Plan. Staff will continue to work actively with the Austin team to monitor activities that could impact DART’s mission and operations in the next Texas Legislative Session in 2011. In addition, staff will continue to monitor and provide expertise for potential legislation filed relating to the Regional Rail initiatives of the Regional Transportation Council. Government Relations will also continue to maintain a strong presence in local government activities through regular attendance at council meetings and work sessions, and continues strong relationships with the staffs of DART’s member cities, ensuring timely resolution of DART issues. Staff will also be engaged in the development and implementation of a non-member cities policy for future membership in DART.

Community Affairs – The Community Affairs Section of the Marketing and Communications Department serves as the liaison between DART and the community during the planning, construction, design, and operational phase of a project. By facilitating community meetings and public hearings, Community Affairs ensures that DART meets legal and/or government regulations while developing and maintaining long-standing relationships with diverse communities throughout the DART Service Area. Staff works to promote public participation in DART Capital Planning & Development and DART Project Management projects as well as major and minor bus service modifications. Community Affairs also works to implement corridor safety initiatives as part of the Agency’s system expansion. During FY 2010, Community Affairs staff will be working closely with impacted and potentially affected residents, businesses, and stakeholders as construction for capital expansion continues.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

Continue to Build Strong Relationships with Chambers and Business – External Outreach develops, implements, and markets community outreach programs. Designed to educate and inform customers and stakeholders throughout DART’s diverse Service Area, staff interfaces with both public and private educational entities, senior citizens, member-city organizations, and special and civic interest groups. Staff conducts tours, briefings and presentations, and utilizes various methods to promote the DART message including corridor safety. Strengthening relationships with chambers of commerce throughout the DART Service Area is included in this effort.

The chambers of commerce have proven to be great business partners and have been very supportive of DART. DART will continue its strong communications with area businesses and chambers, contractor associations, and community organizations and will continue to promote DART’s employer programs, especially in transit or major investment study corridors.

Enhance Economic Development – Two of the objectives of the Agency, as stated in the DART mission statement, are to improve the quality of life and to stimulate economic development through the implementation of the Transit System Plan. Since the opening of DART Rail, it has been both surprising and gratifying to see how quickly transit-oriented developments have been constructed along the rail lines. With the opening of rail service to Plano and Garland in late 2002, the impact of our joint development efforts now exceeds $3.3 billion, per a study by the University of North Texas. An updated study completed during July 2009 shows that for the period from FY 2009 – FY 2013, DART’s Light Rail construction activities have or will generate over $4 billion in local economic activity, including 32,100 employment years (one job for one year equals one employment year). Its ongoing operations generate another $543 million in economic activity on an annual basis, and nearly 5,000 jobs.

Management continues to be proactive in using DART’s transit facilities as a catalyst to create transit oriented development opportunities which result in vibrant, livable communities, increasing transit ridership and generating new sources of revenue.

Provide Economic Opportunity for Disadvantaged, Minority, and Woman-Owned (D/MWBE) Business Enterprises – DART’s D/MWBE Enterprise Programs are designed to involve disadvantaged, minority, small and emerging, and women-owned businesses to the maximum extent possible in all facets of DART's contracting and purchasing activities. The Department of Economic Opportunity and Government Relations (EOGR) positions itself as a bridge between DART and disadvantaged, minority, small and emerging, and women-owned businesses. To increase access to DART procurement opportunities, EOGR offers and conducts various modes of technical assistance, outreach, seminars, goal setting, educational training, and counseling in the understanding of federal and Agency procurement regulations. EOGR aggressively seeks integration of D/M/WBEs in all DART procurement and contracting opportunities, and ensures that DART is in compliance with all appropriate federal and state laws, regulations, and executive orders.

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FY 2010 Business Plan (09/22/09) Agency-Wide Overview

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Section 5 Customer Focus – Bus Index of Exhibits

Exhibit 5.1 Bus Overview……………………………………..……..…………. BUS-1

Exhibit 5.2 Bus Scorecard-Key Performance Indicators……………..…………. BUS-2

Exhibit 5.3 Bus Ridership…………..….……………..…………….……….…... BUS-3

Exhibit 5.4 Eight-Year Bus Replacement Schedule………………..……….…... BUS-9

Exhibit 5.5 Bus Subsidy Per Passenger………………..………………………... BUS-10

Exhibit 5.6 FY 2010 Bus Cost Model….…………….…………………….…… BUS-12

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Customer Focus – Bus

Overview

This section examines DART's strategic initiatives to improve the quality, efficiency, and effectiveness of the bus system. A more detailed description of long-term strategies for improving bus service is contained in Section 6.3 of DART’s 2030 Transit System Plan.

DART’s fixed-route bus service operates from three DART-owned facilities: East Dallas, Northwest, and South Oak Cliff. DART operates a total of 674 buses and maintains extensive passenger amenity and facility infrastructure including approximately: 12,500 bus stops, 765 bus shelters, 1,500 benches, 15 transit centers, 2 passenger transfer locations, 22 enhanced shelters, 35 rail platforms, 5 commuter rail stations, 100 information pylons, and all operating divisions and corporate offices, for a total of approximately 35 million square feet.

Exhibit 5.1 is an overview of the uses of the funds and allocated operating positions for the Bus mode of service.

Exhibit 5.1 Bus Overview

Overview FY08A FY09B FY10B

Allocated Operating Budget (M) $216.7 $225.0 $233.6

Capital Budget (M) 11.4 12.7 17.7

Allocated Operating Positions 2,143

Bus Scorecard – Key Performance Indicators

Exhibit 5.2 highlights the Bus Key Performance Indicators (KPIs) presented in scorecard format. Fiscal years 2007 and 2008 indicate actual values, while figures for fiscal years 2009 through 2011 represent the budget and projected values. Fiscal Year 2009 Qtr 2 is a four-quarter rolling average ending March 31, 2009.

BUS-1

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Exhibit 5.2 Bus Scorecard - Key Performance Indicators FY09 Indicators FY07A FY08A Qtr 2 FY09B FY10B FY11P Customer/Quality Indicators Fixed Route Bus Ridership (M) 44.7 45.2 45.6 45.4 42.1 42.8 Charter Ridership (M) 0.2 0.2 0.2 0.3 0.3 0.3 Revenue Miles (M) 27.1 27.4 26.9 31.7 26.5 26.5 Passengers per Mile 1.66 1.66 1.70 1.44 1.60 1.63 13.3% 14.3% 14.1% 14.2% 15.9% 17.4% Complaints per 100k passengers 50.1 52.7 56.7 50.0 50.0 50.0 On Time Performance 89.9% 92.0% 92.7% 92.0% 92.0% 92.0% Mean Distance Between Service Calls 4,572 6,592 7,506 6,772 7,493 7,493 Veh. Accidents Per 100k Miles 1.77 1.75 1.65 1.76 1.76 1.76 Financial/Efficiency Indicators Revenues (M) $30.4 $41.0 $42.1 $37.7 $40.2 $43.3 Expenses - Fully Allocated (M) $195.8 $216.7 $216.4 $225.0 $233.6 $224.9 Net Subsidy (M) $165.5 $175.7 $174.3 $187.3 $193.4 $181.6 Subsidy Per Passenger $3.70 $3.89 $3.81 $4.13 $4.56 $4.21 Cost per Revenue Mile $7.22 $7.92 $8.05 $7.10 $8.82 $8.49

Bus Ridership Trends

After the economic recession that began the decade, consistent increases in bus ridership began in January 2005 and continued through FY 2007 and FY 2008. The upward trend coincided with DART’s five-year, cross-departmental ridership development program. It was given a strong upward push by the surge in fuel prices that began in August 2005 and again in 2007 and 2008.

Exhibit 5.3 provides an overview of bus ridership. Fiscal years 2007 and 2008 indicate actual values, while figures for fiscal years 2009 through 2010 represent the budget and projected values. Fiscal Year 2009 Q2 is a four-quarter rolling average ending March 31, 2009. Projected declines in ridership for FY 2010 anticipate the impact of fare increases and bus service reductions that will become effective September 14, 2009.

BUS-2

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Exhibit 5.3 Bus Ridership

50.0

47.5 45.8

45.0 45.4 45.7 44.9 43.3 43.7

42.5 42.8 42.1 40.0 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

Support the First Phase of System Build-out

Service will be initiated on the first section of the Green Line between MLK, Jr. Station and Victory Station in September 2009. Bus service in the South Dallas and East Dallas areas served by this section of the Green Line will be restructured to enable passengers to connect to the new rail stations, and DART will implement a system wide fare change.

The September 2009 openings of four new stations, the startup of regular Green Line service to Victory Station at the American Center and the first urban rail service to the State Fair of Texas in more than 50 years, and the fare change, are expected to have a significant impact on the Marketing & Communications Department’s Customer Service Section during the first quarter of FY 2010. It is anticipated that Center representatives will handle four million calls throughout FY 2010, compared to approximately 3.6 million in FY 2009. Open every day except Thanksgiving and Christmas day, the Center provides trip plans for bus and rail, route, schedule, and general information.

In preparation for the grand opening of the entire Green Line in December 2010 (FY 2011) and related bus system modifications, Community Affairs will conduct a series of public meetings/hearings. DART also will deploy volunteers to assist customers during the implementation of the new service and route changes. Customer Service will review and implement improved internal processes as well as new technologies to enhance dissemination and accessibility of information for improved customer relations. This includes the review of the First Call Resolution initiative, Integrated Voice Response (IVR) system upgrade, implementation of DART’s Where's My Bus?® mobile PDA (personal digital assistant) capability, implementation of a Workforce Management system, and the call recording system.

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FY 2010 Business Plan (09/22/09) Customer Focus – Bus

In order to prepare for these significant system changes, modifications will need to be made to our existing training programs, standard operating procedures, service recovery strategies, and field supervisor deployment plans. These management and process changes will be planned and implemented throughout FY 2010 and into early FY 2011.

Ridership Development Action Plan

Ridership development continues to be a major area of focus in FY 2010. Strategies to increase ridership on the Bus Mode are aimed at retaining current riders, bringing new riders into the system, managing ridership trends driven by volatile fuel prices, and encouraging rail passengers to use bus feeder services rather than accessing stations through personal vehicles.

For FY 2010, DART will focus first on maintaining ridership following a September fare increase. DART’s market research continues to point to a significant level of “turnover” in the composition of bus ridership on an annual basis. As new riders are attracted to the system, we also experience attrition among existing riders. In FY 2010, attrition will be tied to a number of factors, including a systemwide fare increase in September 2009. Other factors driving attrition include changes in residence, changes in employer or employment location, changes to the transit network, or dissatisfaction with service levels or service quality. Apartment tear-downs and redevelopment have had significant recent impact upon ridership levels in certain areas. Strategies that reduce the level of rider attrition within the system will result in overall ridership increases.

FY 2010 Strategies for Ridership Development fall into the following major categories:

Bus Service Restructuring On-Time Performance Initiatives Where's My Bus?® Complaint Reduction/Customer Satisfaction Initiatives Employee Engagement Initiatives Employee Satisfaction Focus New Marketing and Promotion Initiatives New Equipment and Facilities On-Street Bus Facilities Program Bus Replacement Schedule Service Standards Revisions Systemwide Accessibility Initiative

BUS-4

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Bus Service Restructuring

While the initial Green Line rail opening in September 2009 will not have a significant impact on the bus system, preparations will begin in FY 2010 for the major system changes that are planned for December 2010 (FY 2011) when the remaining sections of the Green Line are scheduled for service implementation. The bus system modifications that will accompany the December 2010 Green Line opening are expected to be the most significant one-day change in DART’s history. Significant portions of the bus route network in Pleasant Grove, South Dallas, Northwest Dallas, Farmers Branch, and Carrollton will be modified from a radial structure to a feeder route network, tying into the new Green Line stations. In addition, new crosstown express routes are planned to provide high quality transit connections between the radial rail corridors. Apart from the significant changes in our transit network, we will also introduce a new digital radio communications system in FY 2010.

To prepare for these significant system changes, modifications will need to be made to our existing training programs, standard operating procedures, service recovery strategies, and field supervisor deployment plans. Many of these management and process changes will be planned and implemented during FY 2009 in preparation for the system changes in 2010.

On-Time Performance Initiatives

A cross-departmental On-Time Performance Task Force has been created to develop plans to enhance bus on-time performance and reduce the number of timeliness complaints that DART receives. Key elements of those plans include: o Adjusting bus schedules to provide adequate runtime and recovery time. o Equipping field supervisor vehicles with mobile data computers (MDCs) that will reduce unproductive office time and increase the amount of time in the field for each employee, as well as provide the field supervisor with up-to-date information from DART’s Trapeze Operating Software and upgraded Automatic Vehicle Location (AVL) System. o Modifying work assignment procedures to improve the consistency of operators working the same assignment throughout the week – affording a more consistent service for the customer. o Utilizing the upgraded Automatic Vehicle Location System to improve the monitoring and real-time service management of bus on-time performance, as well as providing critical information for complaint resolution and improved scheduling. o Providing clear and timely information to customers regarding DART’s operating policies, service schedules, and service delays.

BUS-5

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Where's My Bus?®

This new application was developed in-house by DART’s Technology Department to provide customers with “near” real time information regarding the arrival of their bus at their . This application utilizes the GPS/AVL equipment currently installed on buses, together with map applications from Google to provide customers with an estimate of arrival times, as well as the current location of the bus. The intent is to reduce customer frustration, particularly when waiting for a bus that has experienced a delay. The information will be available to customers through their BlackBerry or other web-enabled devices and will also be available on the Internet via their personal or laptop computer.

Complaint Reduction/Customer Satisfaction Initiatives

New criteria for the recruitment and selection of bus operators have been implemented that emphasize customer service experience and reduce the emphasis on commercial driving experience. Ongoing enhancements to the recruitment and selection of bus operators will continue into FY 2010. The Bus Operator training curriculum has been significantly revised to focus on customer service skills training. In addition, a Customer Service training class has been developed to retrain operators who are experiencing an excessive number of “discourteous” or “unacceptable conduct” complaints. A Mystery Rider Program has been implemented to provide service quality monitoring and to target those service delivery issues that can only be observed while riding on the vehicle. A new Customer Feedback Process is being implemented to target investigation and corrective action toward the highest priority complaints. Software modifications will be implemented to support the trending of complaints and to identify the areas where management intervention may have the most impact. Customer complaint information, particularly in regard to timeliness issues, will be routed to Field Supervisors based on their service territory and shift, within a day ore two of the complaint call or contact. The Mobile Data Computers (MDCs) in Field Supervisor cars will allow them to receive the targeted complaint information and will support them in being proactive in resolving the underlying service issues.

Employee Engagement Initiatives

The Division Level Measurement Program is a measurement, reporting, and process improvement system. The program has been implemented for all departmental areas with hourly employees, including: three Bus operating divisions; the Rail Division; Materials Management; Central Support; NRV Shop; Transit Center Operations; Customer Service; Paratransit Scheduling; and HOV Operations. This initiative provides feedback to all team members about how their division is performing in key areas – which they have some ability to impact – and increases employee ownership in the organizational goals (Key Performance Indicators [KPIs]).

BUS-6

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Through the Division Level Measurement Program, scorecards tailored to each operating division are posted monthly to provide feedback on performance to front-line staff. Targeted performance levels are established at the division level and a formal recognition program celebrates success in achieving established performance targets. Problem- solving teams that include front-line employees, division management, and support personnel from other DART departments focus on developing and implementing strategies to improve division performance while managing incremental costs.

Beginning in FY 2008, the Division Level Measurement Scorecards became a central element of a new hourly employee performance incentive program. Participants can receive a team award based on the performance of their Division relative to the Scorecard, as well as an individual award based on their meeting safety and procedure compliance criteria. One-half of the cost of this incentive is programmed into the FY 2010 Budget, while the other half is funded through savings. If sufficient savings are not realized, then only the budgeted portion of the incentive is paid out.

Employee Satisfaction Focus

The Transportation Department initiated an annual Transportation Employee Satisfaction Survey in FY 2008. Approximately 30% of employees participated in the survey, which included questions on general job satisfaction, quality of the work environment, and perceptions about management. Strategies have been developed to focus on making improvements in those areas that employees have cited as falling below their expectations. One specific employee satisfaction strategy to be implemented in FY 2010 is an innovative Supervisor/Operator Teams program in the Bus and Rail Operations areas called PACE (Professionals Achieving Communication Excellence). The objectives of the program are to strengthen supervisor and operator relationships; provide operators with consistent, comprehensive feedback on their performance; and increase the opportunities for feedback from operators to management staff.

New Marketing and Promotion Initiatives

Major marketing efforts for FY 2010 will focus on the following ridership development initiatives: o A major media campaign will focus on the benefits of riding DART. In addition, communications will be developed to inform our riders, stakeholders, and affected parties of the build-out and opening of the new Green Line and associated construction projects. o Other marketing and promotion initiatives will include special event marketing participation in more than 125 events in FY 2010 including new rail service to the Texas State Fair, and Mavericks and Stars games, etc.

BUS-7

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

o Another major initiative that will continue in FY 2010 targets diversity/segment marketing to the African-American, Hispanic, Asian, and Seniors markets. Elements include targeted monthly advertising to specific segments, partnering with key media on promotional opportunities, roundtable discussions, educational outreach, and targeted collateral/web pages in various languages. o Promotion of DART’s employer programs will continue as well in FY 2010. Specific programs will be improved and expanded. In addition, DART will continue its partnership with the North Texas Clean Air Coalition by participating in the Ozone Season Incentive Program.

New Equipment and Facilities

Park-and-Ride Enhancement – Significant growth in rail and express bus ridership has led to a growing parking demand at many DART facilities. Parking expansions at Parker Road Station and Bush Turnpike Station were completed in FY 2009, and the expansion at the Glenn Heights Park & Ride will be completed during early FY 2010.

Paid Parking Feasibility Study – DART will complete a study of the feasibility of paid parking to manage parking availability at high demand park and ride lots in FY 2010. It is anticipated that the expansion of light rail on the Green and Orange Lines will increase the demand for convenient parking at existing park and ride lots and a number of the future park and ride facilities. Pending approval of a Board policy authorizing the timing, location, and conditions for implementing paid parking, implementation would be possible no earlier than December 2010. Communications Systems – A contract to replace all internal DART radio communications systems was let during FY 2009, and infrastructure installation will begin in FY 2010 with complete system conversion completed during FY 2011. The equipment installed will: o replace aging obsolete radio communications equipment used by all operational work units; o provide for integrated computer-aided dispatching (CAD) for bus; o allow for interface of existing CAD systems in other departments; o support critical inter-governmental agency disaster communications; o improve voice and data reception; o expand automatic passenger counting; and o allow substantial expansion to meet future needs through 2020.

On-Street Bus Facilities Program – This federally-funded on-street bus facilities program, formerly called the amenities program, includes installation of the following improvements each year from FY 2010 through FY 2013:

234 new bench installations each year, the majority of which will be new style metal benches with back, arm rests, and lumbar support. The addition of 115 net new standard blue shelters each year.

BUS-8

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Addition of 31 new double/modular shelters. Six additional enhanced and special design/CBD bus shelters annually at locations like Baylor Hospital and other on-street locations with over 1,000 daily boardings (an example of a special design CBD shelter is 912 Commerce, a cooperative project of Belo Corporation, DART, and McDonald’s). Rosa Parks Plaza – This downtown facility was completed in FY 2009 and provides four additional bus bays, passenger waiting areas, and other facilities near the existing West Transfer Center and West End Station. A $374,000 federal grant was secured, as well as capital contributions from the City of Dallas ($50,000), Downtown Dallas, Inc. ($10,000), and Cushman-Wakefield ($10,000). Trash pickup, litter control, and graffiti removal will be provided daily from 8 a.m. to 7 p.m. by Downtown Dallas, Inc. Planning for (BRT) will begin in FY 2010. Capital improvements associated with Bus Corridor and BRT programs will be implemented as justified by BRT planning studies.

Bus Replacement Schedule – Mechanical failures during operating hours can significantly impact on-time performance. The rate of failure is measured by "Mean Distance Between Service Calls" (see Exhibit 5.2). The average age of the bus fleet will be eleven years in FY 2010. Replacement of assets on a timely basis is important from both a cost and quality standpoint. Exhibit 5.45 is the current bus replacement schedule for the next eight years. During FY 2010, DART anticipates awarding a contract for purchase of either diesel or compressed natural gas fueled buses to be delivered beginning in FY 2013. These new buses will feature low-floor design to allow for easy passenger boarding and to reduce dwell time. Some of the buses will be shorter in length (30’) to support the circulator services supporting the opening of the additional LRT lines opening in the next several years. Based on a redesign of the bus system over the next several years to better serve the expanding light rail system, the total active bus fleet will be reduced from 696 to 601. Accommodation for an additional 50 buses has been included in the Financial Plan in 2020, should service demands require service expansion and financial capacity allow it.

Exhibit 5.4 Eight-Year Bus Replacement Schedule

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 0 0 0 205 188 138 70 0

Service Standards Revisions – DART Service Standards consist of Board-adopted policies governing planning and evaluation of fixed-route services, ensuring that DART services are provided in an efficient, effective, and equitable manner. With new service initiatives such as On-Call and Flex, the existing standards are in need of revision. DART conducted a major update of the standards document during FY 2009. The new document, including new sections for the flexible service family and significant modernization of sections on bus stops and amenities, should be adopted by the DART Board and become effective for FY 2010.

BUS-9

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Systemwide Accessibility Initiative – DART has committed to designing and operating transit services in a way that maximizes accessibility to the customers we serve, including the general public, seniors, people with disabilities, and others that may have special needs. In order to forward this commitment to accessibility, DART completed work on development of a Systemwide Accessibility Plan, a document that describes accessibility issues and identifies potential improvements. In FY 2010, efforts will focus on accessibility improvements that are a part of the On-Street Bus Facilities Program.

Subsidy Per Passenger

Exhibit 5.5 is a comparison of projected bus subsidy per passenger between the FY 2009 and FY 2010 Financial Plans. The increase in subsidy per passenger between the two plans is related to the programming of higher fuel prices into the FY09 Plan and projected decreases in ridership related to the approved fare increase.

Exhibit 5.5 Bus Subsidy Per Passenger

$4.70 $4.56 $4.50 $4.52 $4.30 $4.21 $4.10 $4.13 $4.11 $3.90 $3.89 $3.81 $3.70 $3.70 $3.50 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

Fuel/Energy Costs – Energy costs are a major cost driver in the delivery of DART services. DART continues to focus on stabilizing the cost for the different types of fuels used in delivering our services. DART has secured continued favorable pricing of its electricity through a multi- year fixed-price contract through 2014. DART has a fuel hedge in place for the projected amount of diesel fuel to be consumed in the fixed-route bus, paratransit, commuter rail operations, and major light rail construction for FY 2010 through FY 2013. Management will continue to monitor available options for longer-term price stabilization beyond FY 2012 once a decision is made on the fuel technology for this upcoming bus purchase.

BUS-10

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Service Efficiency – The continued use of the Trapeze Blockbuster® software will enable Planning and Scheduling staff to prepare more efficient operator assignment packages. The software utilizes sophisticated algorithms to identify the most efficient operator work assignments. This software also has the ability to generate many alternative packages of runcuts in a short amount of time, allowing Management to select the package that achieves the best operational and efficiency outcomes.

Significant management focus over the past year has resulted in reduced unscheduled absences among operators and other operational staff. These efforts will continue into FY 2010.

DART Innovative Services

DART On-Call service is provided in areas that do not meet service-planning, ridership, and efficiency standards for traditional fixed-route service. Use of demand response vans instead of larger buses operating on a defined schedule continues to save the Agency money each year. For example, changes that were implemented in February 2009 saved the Agency approximately $600,000 annually.

DART currently has eight On-Call zones throughout the Service Area, including: Farmers Branch, Glenn Heights, Lakewood, Lake Highlands, North Dallas, North Central Plano, Richardson, and Rowlett.

Flex service, a new variation of the On-Call service approach, has been in operation over the past two fiscal years. Flex service combines aspects of conventional fixed-route service with demand-responsive characteristics of On-Call. Passengers may choose to board Flex service at regular bus stops along a designated path. Passengers also have the option of requesting pick- ups and drop-offs in a zone around the designated path for a premium fare. The service began with two new routes in South Irving and the Telecom Corridor of Plano and Richardson. Flex services were expanded significantly in Plano in FY 2009, replacing the East Plano On-Call zone and several fixed-route services. No new Flex or On-Call services are planned for FY 2010.

Innovative Services are managed by the Paratransit Services Department through the contract with Veolia Transportation, Inc.

Activity Center Shuttles

Shuttle services developed in partnership with employers and major activity centers are another cost-reducing way for DART to provide access to the transit network. Under the Board’s Site Specific Shuttle Policy, DART provides up to 50% funding for these shuttle services with employers or major activity centers providing the remainder of the service cost. DART has existing shuttle agreements with Southern Methodist University, UT Southwestern Medical Center, DFW International Airport, McKinney Avenue Trolley Authority, Texas Instruments, Medical City of Dallas, Campbell Center, and the City of Richardson (Galatyn Shuttle).

BUS-11

FY 2010 Business Plan (09/22/09) Customer Focus – Bus

Ridership on the various shuttles saw strong growth in FY 2009, especially the university- oriented shuttle services serving the University of Texas-Dallas. Staff is exploring other future shuttle service options, although none are expected to occur until FY 2011.

Bus Cost Model

Exhibit 5.6 is the cost model for the bus system. Transportation cost is the most significant element of the bus mode. In the past years, the gap between Transportation costs and Vehicle Maintenance was much higher. However, the gap has decreased due to the rapidly rising cost of energy affecting both fuel and material expenses.

Exhibit 5.6 FY 2010 Bus Cost Model

Bus $233.6 million*

Vehicle Facility Allocated Transportation Maintenance Maintenance Costs

Cost Drivers Cost Drivers Cost Drivers Cost Drivers - Number of hours - Number of miles - Facility type/age - Customer Service - Average hourly rate - Number of vehicles - Number of facilities - Marketing Services - Number of operators - Fuel Costs - Customers served - Retail Sales - Number of supervisors - Quality Standards - Quality standards - Materials Management - Work rules - Age of fleet - Timely asset replacement - DART Police - Scheduled/Unscheduled Work - Timely asset replacement - Revenue Systems - Workers' compensation/Benefits - Scheduling - Real Estate $100.2 million $89.2 million $8.8 million - Safety/Risk 42.9% of total cost 38.2% of total cost 3.8% of total cost $35.4 million *Total FY10 Bus costs include $20.4 million for administrative overhead allocation. 15.2% of total cost

BUS-12

Section 6 Customer Focus – LRT Index of Exhibits

Exhibit 6.1 Light Rail Overview……………………………………..………… LRT-1

Exhibit 6.2 LRT Scorecard-Key Performance Indicators…..…………………… LRT-2

Exhibit 6.3 Map – LRT Service……………………………………..…….……. LRT-3

Exhibit 6.4 LRT Ridership……………………………………………………… LRT-4

Exhibit 6.5 LRT Subsidy Per Passenger………………………………………… LRT-5

Exhibit 6.6 Map – Green Line (NW and SE Corridors)………..………………. LRT-6

Exhibit 6.7 Map – Orange Line (Irving Corridor)………………………………. LRT-7

Exhibit 6.8 Map – Rowlett Corridor (Blue Line extension)……………………. LRT-8

Exhibit 6.9 LRT Revenue Service Dates………………………..……………… LRT-9

Exhibit 6.10 LRT Construction Schedule………………………………………… LRT-10

Exhibit 6.11 FY 2010 Light Rail Cost Model….…………………………..…….. LRT-14

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Customer Focus – Light Rail Transit

Overview

The purpose of this section is to provide information on DART's strategic initiatives to improve the quality, efficiency, and effectiveness of the Light Rail Transit (LRT) system.

DART currently operates 45 miles of light rail. The Agency is in various stages of planning, design, and construction for the Phase II and Phase III Build-out, which includes 48 additional miles of LRT. Phase II includes the Green Line, extending southeast from the Dallas Central Business District (CBD) through Deep Ellum and Fair Park to the Buckner Station; and northwest from Victory Station to Farmers Branch and Carrollton; the Orange Line to Irving and DFW Airport; as well as a Blue Line extension from Downtown Garland Station to Rowlett. Phase II also includes one in-fill station on the Blue Line in the Lake Highlands area of Dallas. The Phase III Build-out includes a Blue Line extension from Ledbetter Station to the University of North Texas campus near I-20 in South Oak Cliff, as well as a second DART Rail alignment in Downtown Dallas, for which planning is underway.

The Agency currently is operating and maintaining 35 rail stations and a fleet of 115 vehicles. A map of the current LRT system is included at Exhibit 4.2. DART’s Service & Inspection Facility has been expanded to support and operate the additional fleet required for the new line sections. A new rail operating facility, located along the Northwest alignment, currently is under construction and will be commissioned during FY 2010 to support future vehicle requirements for the Phase II Build-out.

Exhibit 6.1 is an overview of the uses of the funds related to the Light Rail mode and allocated operating positions.

Exhibit 6.1 Light Rail Overview Overview FY08A FY09B FY10B Allocated Operating Budget (M) $73.4 $79.4 $91.4 Capital Budget (M) 470.9 971.9 906.9 Allocated Operating Positions* 1,063 * includes positions allocated to Startup Light Rail

LRT Scorecard – Key Performance Indicators

Exhibit 6.2 highlights LRT's Key Performance Indicators (KPIs) presented in scorecard format. Fiscal years 2007 and 2008 indicate actual values, while figures for fiscal years 2009 through 2010 represent the budget and projected values. Fiscal Year 2009 Qtr 2 is a four-quarter rolling average ending March 31, 2009.

LRT-1

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.2 Light Rail Scorecard - Key Performance Indicators FY09 Qtr Indicators FY07A FY08A 2 FY09B FY10B FY11P Customer/Quality Indicators Ridership (M) 17.9 19.4 19.7 20.5 19.6 27.7 Revenue Car Miles (M) 5.3 5.3 5.4 5.5 5.4 8.2 Passengers per Car Mile 3.36 3.64 3.68 3.72 3.60 3.36 Farebox Recovery Ratio 18.8% 18.2% 18.0% 18.3% 18.9% 20.7% On Time Performance 97.0% 96.6% 95.8% 97.5% 95.5% 95.5% Complaints per 100k passengers 13.2 15.3 19.0 13.5 19.0 19.0 Mean Distance Between Service Calls (000s) 31.2 30.9 27.5 32.0 28.2 28.2 Accidents per 100k Miles 0.13 0.11 0.15 0.25 0.25 0.25 Financial/Efficiency Indicators Revenues (M) $12.2 $14.8 $14.7 $15.7 $18.2 $26.3 Expenses - Fully Allocated (M) $69.2 $73.4 $73.3 $79.4 $91.4 $121.9 Net Subsidy (M) $57.0 $58.6 $58.7 $63.8 $73.2 $95.7 Subsidy Per Passenger $3.18 $3.01 $2.98 $3.11 $3.74 $3.46 Subsidy Per Passenger Mile $0.39 $0.37 $0.37 $0.38 $0.46 $0.43 Cost per Revenue Car Mile $13.00 $13.73 $13.70 $14.38 $16.80 $14.81

LRT-2

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.3 LRT Service Map

LRT-3

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

LRT Ridership

Exhibit 6.4 reflects actual and projected LRT ridership from FY 2007 through FY 2011. Ridership for FY 2007 declined by 3.7% as fuel prices retreated from their FY 2006 highs. Fiscal Year 2008 ridership increased by over 8.6% in response to unprecedented increases in the price of gasoline, especially in the third and fourth quarters. Ridership for FY 2009 was forecast to exceed the FY 2008, but precipitous drops in gasoline prices in the first and second quarters and a significantly higher level of unemployment, driven by the world-wide economic slump, combined to produce lower-than-expected ridership.

Fiscal Year 2010 ridership is expected to remain relatively flat from 2009 as ridership gains related to the opening of the first phase of the Green Line in September 2009 (from downtown Southeast to Fair Park and Martin Luther King, Jr. Station) are offset by ridership losses generated by a scheduled fare increase. The expansion parking lots at the Parker Road and President George Bush Turnpike stations will be completed late in FY09. Theses lots have been at overflow levels. The additional parking will remove another factor that was constraining the ridership growth on the Red Line. The opening of the remainder of the Green Line in December 2010 accounts for the strong ridership growth indicated on the chart in FY 2011. The opening of the remainder of the Green Line in December 2010 is expected to result in a 41% LRT ridership increase in FY 2011.

Exhibit 6.4 LRT Ridership 30.0 27.7 28.0 26.0 27.4 24.0 22.0

Millions 19.4 20.5 20.6 20.0 17.9 18.0 19.7 19.6 16.0 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

LRT-4

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Subsidy Per Passenger

Exhibit 6.5 compares subsidy per passenger for LRT for FY 2007 through FY 2011. The changes shown from the FY 2009 Plan to the FY 2010 Plan are a result of downward revisions to ridership estimates. The ridership gains from the opening of the first phase of the Green Line are expected to be offset by ridership losses related to the slow economy and the impact of the September 2009 fare increase during the same time period. Therefore, a relatively flat system ridership combined with the increased cost to operate the new service results in a higher subsidy per passenger in FY 2010.

Exhibit 6.5 LRT Subsidy Per Passenger

$4.00 $3.74 $3.75 $3.49 $3.50 $3.58 $3.18 $3.46 $3.25 $3.01 $3.11 $3.00 $2.98 $2.75 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

LRT Expansion

The next major expansion of LRT is the Green Line. This line will extend DART Rail to the Northwest (NW) to serve portions of Dallas, Farmers Branch, and Carrollton, and to the Southeast (SE) to serve sections of Dallas including Deep Ellum, Fair Park, and Pleasant Grove (see Exhibit 6.6).

Following completion of the Green Line, the next LRT expansion effort will be the Orange Line to Irving, Las Colinas, and DFW Airport (see Exhibit 6.7) and the Blue Line extension to Rowlett (see Exhibit 6.8). In addition to the LRT expansion, a new Lake Highlands Station will be opened on the Blue Line in northeast Dallas. Future Phase III expansion includes the extension to UNT in South Oak Cliff and a second LRT alignment through Downtown Dallas.

In coordination with Denton County Transportation Authority (DCTA), DART’s Green Line expansion along the northwest corridor is being designed to accommodate a connection point at the terminal station for a direct-connect transfer to DCTA’s commuter rail line.

LRT-5

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.6 Green Line (NW and SE Corridors)

LRT-6

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.7 Orange Line (Irving Corridor)

LRT-7

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.8 Blue Line Extension (Rowlett Corridor)

LRT-8

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.9 provides a comparison of the revenue service dates for the Phase II and Phase III expansion projects. Ridership forecasts project approximately 60,000 combined daily riders in 2030 for the Green Line, Orange Line, and Blue Line extensions.

Exhibit 6.9 LRT Revenue Service Dates DART Rail Corridor Length Corridor (in miles) Opening Date Existing DART Rail System Miles in Operation 44.7 Starter System (Red & Blue Lines) 20.0 1996-1997 Red Line Extension (North Central) – Park Lane to Parker Road 12.3 2002 Blue Line Extension (Northeast) – Mockingbird to Downtown Garland 11.2 2001-2002 Victory Station (special events only)* 1.2 2004 * daily service in September 2009 Phase II Green Line (Southeast) – Downtown to Pleasant Grove 10.2 Downtown to Fair Park (SE-1A) 2.7 Sept 2009 Fair Park to Hatcher (SE-1B) 1.4 Dec 2010 Hatcher to Buckner Blvd. (Pleasant Grove Transit Center) (SE-2) 6.0 Dec 2010 Green Line (Northwest) –Victory Station to Carrollton 16.4 Victory Station to Inwood Station (NW-1B) 2.8 Dec 2010 Inwood Station to Northwest Highway (NW-2) 3.2 Dec 2010 Northwest Highway to Valley View (Farmers Branch) (NW-3) 4.9 Dec 2010 Valley View to Frankford Rd. (North Carrollton) (NW-4) 5.5 Dec 2010 Orange Line (Northwest) – Northwest Hwy to DFW Airport 14.2 Northwest Hwy. to Las Colinas Urban Center (I-1) 5.4 Dec 2011 Las Colinas Urban Center to State Hwy. 161 (I-2) 3.8 Dec 2012 State Hwy. 161 to DFW Airport (I-3) 5.0 Dec 2013 Northwest Rail Operating Facility --- Jun 2010 Blue Line (Northeast) – Downtown Garland to Rowlett Park & 4.8 Dec 2012 Ride (R-1) Blue Line (Northeast) – Lake Highlands Station --- Dec 2010 Phase III Central Business District – New line through Downtown Dallas TBD Dec 2016 South Oak Cliff – Ledbetter Station to UNT South Campus (SOC-3) 2.7 Dec 2018

Total miles in planning, design, construction 48.3

Total miles by 2018 93.0

The opening dates above are predicated on assumptions that are detailed in the Financial Plan Section. Exhibit 6.10 provides the construction schedule for the Phase II LRT Build-out.

LRT-9

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.10 LRT Construction Schedule

Design/Procure/ROW/Utils Construction Revenue Service FFGA Approval 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 FFGA Preparation

SE-1

SE-2

NW-1B

NW-2 NW-3

NW-4

NWROF

I-1

I-2

I-3

R-1 FFGA APPROVAL

August 3, 2009 Interim Service to Fair Park by September 2009

In addition to the continued progress on new light rail line sections, a number of interim improvements are scheduled to begin or continue in FY 2010 relative to light rail vehicles, facilities, and operations.

Level Boarding Initiative – The process of converting existing light rail vehicles to super light rail vehicles (SLRVs) through the addition of a low-floor middle section began in FY 2006 and will continue through the early part of FY 2010. Vehicle and station conversions should largely be completed by the end of FY 2010. Level boarding will eliminate the use of high-blocks for boarding and alighting of passengers using wheelchairs or strollers and will facilitate the operation of tighter schedules along the CBD Transitway Mall that will be required for the Phase II LRT Expansion.

LRT-10

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

LRT VBS – The Vehicle Business System is an on-board data management system reporting train location and status information to the Train Control Center and DART Customers. It is an integrated system that announces real-time train status information on the vehicle and feeds information to station platforms such as estimated time of arrival, train direction of travel, end of line. The system includes a dispatch application, on-board VBS equipment with GPS, Automatic Vehicle Locations (AVL), Automatic Voice Announcements (AVA), station sign interface, and data reporting module. The first phase of implementation involves the retrofit to the existing fleet of 115 rail cars, with the second phase implemented with DART 48-car fleet expansion related to the Green, Orange and Blue Lines. Forty (40) vehicles in the original fleet, and all of the 48 expansion vehicles will be equipped with Automatic Passenger Counters (APCs).

Light Rail System Start-Up – DART is embarking on a six-year program of LRT service expansion beginning in FY 2009. While construction is ongoing, staff has begun to implement the necessary recruitment efforts to support the subsequent daily operation, maintenance, and ongoing security of the additional 48 miles of LRT system that will begin operation over the next few years. Staff has partnered with several technical, trade, and police educational facilities across the country, participated in community outreach programs, and briefed military veteran affairs units to help recruit over 600 new team members necessary to support this additional service.

Park-and-Ride Enhancements – A comprehensive evaluation of parking demand has been completed at all of DART’s park-and-ride facilities. Near-term and long-term strategies for addressing areas where parking demand exceeds current capacity are being developed and implemented. Strategies include improved communication to customers on locations with available parking, implementation of parking spaces at park-and-ride facilities, negotiation of interim parking agreements with retail or other private property owners, and identification of capital projects to purchase property and construct additional parking spaces. Expansion projects at both the Bush Turnpike Station and the Parker Road Station were completed in FY 2009.

Paid Parking Feasibility Study – DART will complete a study of the feasibility of paid parking to manage parking availability at high demand park and ride lots in FY 2010. It is anticipated that the expansion of light rail on the Green and Orange Lines will increase the demand for convenient parking at existing park and ride lots and a number of the future park and ride facilities. Pending approval of a Board policy authorizing the timing, location, and conditions for implementing paid parking, implementation would be possible no earlier than December 2010.

Division Level Measurement Program – The division-level measurement, reporting, and improvement system will continue during FY 2010 in the Rail Transportation, Rail Fleet Maintenance, and Ways, Structures, and Amenities operating groups. This initiative provides feedback to all team members about how their division is performing in key areas – which they have some ability to impact – and increases employee ownership in the organizational goals (Key Performance Indicators [KPIs]).

LRT-11

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Through the Division Level Measurement Program, scorecards tailored to each operating division are posted monthly to provide performance feedback to front-line staff. Targeted performance levels are established at the division level and a formal recognition program celebrates success in achieving established performance targets. Problem-solving teams that include front-line employees, division management, and support personnel from other DART departments focus on developing and implementing strategies to improve division performance while managing incremental costs.

In FY 2010, the Division Level Measurement Scorecards will continue to be the central element of an hourly employee performance incentive program. Participants are eligible to receive a team award, based on the performance of their Division relative to the Scorecard as well as an individual award based on meeting safety and procedure compliance criteria. One-half of the cost of this incentive is programmed into the FY 2010 Budget, while the other half is funded through savings. If sufficient savings are not realized, then only the budgeted portion of the incentive is paid out.

Marketing Initiatives – Marketing efforts will focus on the opening of the first phase of the Green Line from Victory Station to MLK Station. Advertising and community outreach efforts will continue to build recognition of the newly-opened stations and the remaining build-out of the Green Line. The ongoing effort will continue to promote the Green Line build-out and safety around DART construction sites. Elements in the campaign target community groups, businesses, schools, and diverse communities.

Security Cameras – DART is working to enhance passenger security along the light rail system through the implementation of surveillance cameras throughout the system. This is being done through a multi-phase approach: pilot program, retrofit, and new construction.

• Pilot Program – The five stations in the initial pilot program (Ledbetter, Downtown Garland, 8th & Corinth, Dallas Zoo, and Spring Valley) were all completed and in operation by the end of Fiscal Year 2008. • Retrofit – All other existing stations are expected to be outfitted with cameras and on-line by the end of 2010. • New Construction – All new light rail stations that are in design or construction will include surveillance camera equipment.

LRT-12

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Traffic Signal Priority for LRT in Dallas CBD – DART is working with the City of Dallas to improve LRT operations in the CBD area without significantly degrading vehicular traffic flow. This project will help DART prevent accumulation of trains at Downtown Dallas stations and have light rail vehicles travel between stations with minimum stops. The project will implement LRT study recommendations to improve performance of DART LRT operations. The DART Board approved a contract for the train detection system and related train/traffic interconnect communications as part of the Dallas CBD Traffic Signal Priority (TSP) Project in October 2008, and work has begun on the train detection system and related train/traffic interconnect communications. Total contract award was $2.7 million. This project is to be implemented in stages, the first two coinciding with the Green Line Openings in September 2009 and December 2010. The third stage will be the implementation of a new downtown traffic control system by the City of Dallas, which is currently expected in the spring of 2011.

LRT Costs

Adjust LRT Service Schedules to Match Ridership Demand – LRT service schedules were modified in FY 2007 to respond to increasing ridership levels. Minor adjustments to LRT running times were implemented in FY 2008; however, no significant changes in LRT service levels are planned for FY 2009 until the first phase of the Green Line opens in September 2009. While this is a significant service change, it has a minimal impact on the operating budget and subsidy per passenger because it occurs so late in the fiscal year. DART is incorporating a Vehicle Business System (VBS) into all new and existing light rail vehicles. The VBS provides a platform through which station arrival announcements are made and the system is expandable to incorporate the future additional features such as Automatic Passenger Counters (APC). Once incorporated, the APCs will provide accurate ridership data for DART’s light rail system.

Develop and Refine LRT Preventive Maintenance Programs – DART has extensive vehicle and facility preventive maintenance campaigns in place. Preventive maintenance is an essential component of a strategy. The FY 2010 Budget includes work programs for super light rail vehicle (SLRV) brakes, suspension systems, and pantographs. In addition, consistent with the Maintenance Department’s five-year business plan, the Capital Budget includes schedules for Original Equipment Manufacturer (OEM) required rebuild and overhaul work programs for the entire SLRV fleet of 115 vehicles.

LRT Cost Model

Exhibit 6.11 highlights the cost structure for LRT. Although LRT and Bus have very different cost structures, the cost drivers for each cost category (transportation, vehicle maintenance, and facility maintenance) are similar. LRT is more expensive per mile due to higher fixed costs for facilities and vehicle maintenance, but less expensive per passenger due to the higher capacity of LRT vehicles versus buses. On a relative basis, facility maintenance costs are more significant, while transportation costs are less significant. For example, rail facility maintenance costs represent 23.1% of the total LRT cost structure – versus only 3.8% for bus. Transportation costs, on the other hand, represent only 16.4% of the total LRT cost structure – versus 42.9% for bus. For a full comparison, contrast the bus cost model from Exhibit 5.6 with the LRT cost model (Exhibit 6.11).

LRT-13

FY 2010 Business Plan (09/22/09) Customer Focus – Light Rail Transit

Exhibit 6.11 FY 2010 Light Rail Cost Model Light Rail $91.4 million *

Transportation Vehicle Maintenance ROW & Facility Maintenance

Cost Drivers Cost Drivers Cost Drivers - Number of hours- Number of miles - Facility type/age - Average hourly rate - Number of vehicles - Number of facilities - Number of operators/supv - Quality standards - Customers served - Work rules - Timely asset replacement - Quality standards - Pay-to-platform - Traction power - Miles/type of track - Unscheduled absences - Timely asset replacement $15.0 million $33.1 million $21.2 million 16.4% of total cost 36.2% of total cost 23.1% of total cost Allocated Costs

Major Allocations - Customer Service - Information Technology Svcs - Retail Sales - Revenue Systems - Marketing Services - Safety/Risk Management - Materials Management - Scheduling - Operations Technology - Real Estate - DART Police and Fare Inspection $22.2 million 24.2% of total cost * Total FY 2010 LRT costs include $7.9 million for administrative overhead allocation.

LRT-14

Section 7 Customer Focus – Commuter Rail Index of Exhibits

Exhibit 7.1 Commuter Rail Overview………….…………..…………………… CR-1

Exhibit 7.2 Commuter Rail-TRE Scorecard-Key Performance Indicators……... CR-1

Exhibit 7.3 Map – TRE Corridor…………………………..…………………… CR-2

Exhibit 7.4 TRE Ridership……………………………………………………… CR-3

Exhibit 7.5 TRE Subsidy Per Passenger……………………...………………… CR-5

Exhibit 7.6 Railroad Management Revenue..…………………………………… CR-7

Exhibit 7.7 April 2006 Oil & Gas Lease Agreement…..……...………………… CR-9

Exhibit 7.8 FY 2010 Commuter Rail and Railroad Management Cost Model…. CR-11

FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

Customer Focus – Commuter Rail

Overview

The purpose of this section is to highlight the Commuter Rail (Trinity Railway Express-TRE) business plan for the next five years, including key indicators and strategic initiatives, and a discussion of how this Department contributes to the Agency’s goals and objectives. Exhibit 7.1 is an overview of the uses of the funds and allocated operating positions for the Commuter Rail mode of service.

Exhibit 7.1 Commuter Rail Overview Overview FY08A FY09B FY10B

Allocated Operating Budget (M) $22.1 $26.2 $27.2

Capital Budget (M) 38.2 47.0 56.9

Allocated Operating Positions 21

Commuter Rail – TRE Scorecard – Key Performance Indicators

Exhibit 7.2 highlights Commuter Rail – TRE’s Key Performance Indicators (KPIs) presented in scorecard format. Fiscal years 2007 and 2008 indicate the actual values, while figures for fiscal years 2009 through 2011 represent the budget and projected values. Fiscal Year 2009 Qtr 2 is a four-quarter rolling average ending March 31, 2009.

Exhibit 7.2 Commuter Rail - TRE Scorecard Systemwide - Key Performance Indicators FY09 Indicators FY07A FY08A Qtr 2 FY09B FY10B FY11P Customer/Quality Indicators Ridership (M) 2.5 2.7 2.9 2.9 2.7 2.4 Revenue Car Miles (M) 1.5 1.6 1.9 1.9 1.9 1.9 Passengers per Car Mile 1.7 1.8 1.5 1.5 1.4 1.3 Scheduled Train Hours (000s) 18.2 17.3 17.1 18.5 17.2 17.2 Farebox Recovery Ratio 7.1%8.5%8.3%7.9%8.6%7.8% On Time Performance 97.1% 97.8% 98.0% 97.0% 97.0% 97.0% Complaints per 100k passengers 5.2 5.2 5.5 5.5 6.0 6.0 Veh. Accidents Per 100k Miles 0.29 0.22 0.21 0.29 0.25 0.25 Financial/Efficiency Indicators TRE Revenues (M)* $4.2 $4.7 $4.6 $6.3 $6.2 $6.5 TRE Expenses Fully Allocated (M)* $20.5 $22.1 $23.6 $26.2 $27.2 $28.4 TRE Net Subsidy (M) $16.3 $17.4 $18.9 $19.9 $21.0 $21.9 TRE Subsidy Per Passenger $6.57 $6.33 $6.60 $6.85 $7.86 $9.04 TRE Subsidy Per Passenger Mile $0.38 $0.36 $0.38 $0.39 $0.45 $0.52 TRE Cost per Revenue Car Mile $13.83 $14.12 $12.52 $13.92 $14.44 $15.08 *includes the T's passenger revenues ** includes the T's expenses

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

To more accurately depict the true operating costs of TRE, the FY 2007 and FY 2008 and FY 2009 through FY 2011 columns include all budgeted revenue and expenses for DART and the Fort Worth Transportation Authority (the T). For FY 2009, the TRE Revenues line includes the T’s passenger revenues allocated to the TRE of $1.1 million, and the TRE Expenses line includes all direct and indirect costs allocated to TRE, including the T’s allocated costs of $1.2 million. By including all revenues and expenses, the information presented will provide the reader with data comparable to all other modes. Ridership is collected and reported for the TRE system; therefore, KPIs associated with ridership are calculated as TRE totals and not only DART’s totals. The T’s projected FY 2010 revenues and indirect allocations are $1.3 million each.

Exhibit 7.3 is a map of the TRE Corridor.

Exhibit 7.3 Trinity Railway Express Corridor

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

TRE Ridership

TRE ridership for FY 2008 was 2.75 million, a 9.6% increase over FY 2007. Ridership for the six months ending March 31, 2009 is 1.5 million, and FY 2009 year-end ridership is projected to be 2.8 million. FY 2010 ridership is projected to be 2.7 million. The decreased ridership projection is due to the fare increases in September 2009 and October 2010, as explained below. Exhibit 7.4 reflects actual and projected TRE ridership from FY 2007 through FY 2011.

Exhibit 7.4 TRE Ridership 3.2 2.9 3.0 2.9 2.7 2.8 2.87

2.6 2.7 2.5 2.4 Millions 2.4 2.4 2.2 2.0 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

In response to increased ridership, incremental adjustments to the service have been made over the past few years. Although ridership has been increasing over the years, the record ridership levels in FY 2007 and FY 2008 are attributable primarily to the rise in gasoline prices and, to a lesser extent, an increase in the number of sporting and other events at the American Airlines Center (AAC) served by DART and the TRE at Victory Station. TRE service at Victory Station in support of events at AAC results in ridership increases of approximately 1,000 passengers per event day. While passenger growth has been strong over the last several years, the fare increases in 2009 and 2010 will potentially have a negative effect on TRE ridership for FY 2010 and beyond.

TRE Fare Structure. The DART and T Boards have adopted a zone fare system for TRE which went into effect on October 1, 2007. The base fares for a one-way trip are $1.50 and $2.50 for one and two zones, respectively. A one-zone fare exists for travel between downtown Dallas and the West Irving Station as well as between Fort Worth and the CentrePort/DFW Airport Station. A two-zone fare is charged for customers traveling across the zone boundary in either direction. This zone boundary is at the Dallas/Tarrant County line, located between the CentrePort and West Irving stations. A fare increase was approved by the DART Board in May 2009. The fare structure change will take effect over two years; the first increase will be effective September 14, 2009. TRE fares will be $2.50 and $3.75 for one and two zones, respectively. The second fare increase will take effect on October 1, 2010, and will raise the one and two-zone fares to $3.50 and $5.00, respectively.

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

Operating efficiencies and improved long-term performance will come with the development of a true bi-directional commuter rail service (both Dallas and Fort Worth as destinations). This service includes access to the mid-cities market and service to DFW International Airport, commensurate with service requirements of airport users and employees.

Weekend Service – A limited-schedule Saturday service operates between Dallas and Fort Worth. Sunday service cannot be implemented until more double tracking is added because required maintenance activities within the right-of-way are currently performed on Sundays. The majority of these double-tracking projects are not in DART’s Twenty-Year Financial Plan, as the costs will be incurred by the T for projects in Tarrant County.

Ensure Service Quality. There is a large number of railroad on-line "meets" which presents a challenge to maintaining on-time service. TRE has consistently maintained an on-time performance of between 97% and 98%. Additionally, the TRE has generated an enthusiastic and loyal ridership base with the current 53-train weekday and 21-train Saturday schedule. DART has a commitment to its freight customers utilizing the corridor to move as much freight traffic as can be done in a safe manner without disrupting TRE passenger service. There are currently 20 to 30 freight train movements per day along the corridor despite this being a predominantly single-track railroad. This is accomplished through careful coordination with the freight railroads and the dispatching skills of the contractor. From FY 2010 through FY 2012, on-time performance is targeted at 97%.

Constant monitoring of the track and signal systems is the first step to ensure safe and continued operation of a railroad; but eventually, more sidings and double tracking will be required to maintain service reliability and support any service expansion. The major capital projects proposed over the next few years for track upgrades, and other items necessary to maintain and improve service quality on the east side of the TRE are listed in the Budget section and include such projects such as the Belt Line Grade Separation project and the Valley View to West Irving double-tracking project, both of which are in the City of Irving. Continued service reliability and expansion capability will require similar or greater investments in Tarrant County.

• Belt Line Grade Separation – This project involves the grade separation of TRE over the intersections of Belt Line Road, Briery Road, and Story Road, and replacement bridges over Dry Branch Creek and West Irving Creek. The TRE tracks will be elevated and double-tracked from Gilbert to Rogers Road, for a length of 2 ¼ miles. The project also includes an 8,236-foot long bridge and a 1,000-foot long retaining wall and is 3.2 miles in length. The first bridge and tracks were placed into revenue service in December 2008. The projected completion date is September 2010.

• Valley View Double-Tracking – This project upgrades the existing TRE line by double- tracking between the Dallas/Tarrant County Line and the existing siding west of West Irving Station. The length is 7,392 feet of double track. A new bridge will also be constructed over Bear Creek. It is anticipated that this project will be completed in FY 2011.

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

The Rail Safety Improvement Act of 2008 defines Positive Train Control (PTC) and mandates its implementation by December 2015. PTC is defined as a system designed to prevent train-to- train collisions, over-speed derailments, incursions into established work zone limits, and the movement of a train through a switch left in the wrong position. PTC is required for intercity rail passenger or commuter rail passenger main lines and will further enhance safety on TRE. An implementation plan is required to be submitted to the Federal Railroad Administration (FRA) by April 2010.

Reserves have been established within DART’s Financial Plan to provide for both right-of-way and vehicle maintenance projects that have not been specifically identified at this time. These reserves will ensure the timely replacement of TRE assets as well as allow for a certain amount of unanticipated future capital requirements.

Commuter Rail – TRE Costs and Subsidy Per Passenger

Exhibit 7.5 graphically depicts subsidy per passenger trending and projections. The changes between the FY 2009 and FY 2010 Financial Plans are the result of two assumption changes: 1) the September 2009 fare increase which increases TRE fares but will have a dampening effect on ridership; and 2) reduction in the cost of the contract from the FY09 Plan. Contract negotiations are ongoing, but costs are expected to be significantly less than what was assumed in the FY09 Financial Plan. The anticipated outcome of these negotiations have been reflected in the FY 2010 Budget and Twenty-Year Financial Plan.

Exhibit 7.5 TRE Subsidy Per Passenger $10.00

$9.37 $9.00 $9.04 $9.12

$8.00

Dollars $7.86 $6.85 $6.57 $7.00 $6.33 $6.60

$6.00 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

Revenue Contributions from the Mid-Cities. In FY 2002, the cities of Arlington, Bedford, Colleyville, Euless, Grand Prairie, Grapevine, Haltom City, Hurst, and North Richland Hills (the Mid-Cities) agreed through an Interlocal Agreement (ILA) with the North Central Texas Council of Governments (NCTCOG) to contribute $775,000 per year for three years, for services that their citizens utilize. None of the Mid-Cities currently belong to either DART or the T. A new Mid-Cities ILA was negotiated by the NCTCOG and approved by the DART and T Boards, and was in effect until September 2007. Under this second Mid-Cities ILA, TRE obtained $4.5 million in additional federal capital funding to which it would not have otherwise been entitled in support of the double-tracking project at the CentrePort/DFW Airport Station. A third Mid- Cities ILA was negotiated and presented to the two Boards for approval in December 2008. Under the third Mid-Cities ILA, the cities contributed $793,000 annually, or $2.379 million over the life of the term, which is October 2007 through September 2010. The NCTCOG leveraged the local funds and has allocated $5.2 million to address station parking limitations at two Tarrant County stations and to provide supplemental funding toward the purchase and overhaul of three used locomotives.

Departmental Overview

• The Commuter Rail Division is responsible for the management of the Trinity Railway Express (TRE) commuter rail service between Dallas and Fort Worth. TRE passenger service is provided jointly with the Fort Worth Transportation Authority (the T) pursuant to an Interlocal Agreement as restated by the two transit authorities in September 2003. TRE operates on a rail line that was formerly owned by the Cities of Dallas and Fort Worth (the Cities) and transferred to DART and the T in December 1999.

o Contract operation. DART, on behalf of the T, has contracted with Herzog Transit Services, Inc. (Herzog) to maintain the commuter rail rolling stock and right-of-way (including signalization), provide dispatching services for the corridor, and operate the commuter rail service on the corridor. o Service. TRE service operates Monday through Saturday between downtown Dallas and downtown Fort Worth. This line covers a distance of 34 miles and includes a total of 10 stations, 5 of which are maintained by DART. o Operating Fleet. The operating fleet consists of 13 rail diesel cars (owned by DART), 6 locomotives, 11 bi-level coaches, and 10 bi-level cab cars (all jointly owned by DART and the T). In 2009, DART contracted with Bombardier to purchase four new bi-level coaches which are scheduled to be delivered in the first quarter of 2010. In addition, three used locomotives were purchased in 2009 from GO Transit in Toronto, Canada. The locomotives will be overhauled beginning in the fourth quarter of 2009, and be completed and in service in 2010.

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

o Sharing of Costs. The DART/T ILA specifies that revenues arising from operation of the TRE service are joint revenues and are to be applied against TRE operating costs. After the application of these revenues, the remaining net costs are allocated to DART and the T based on revenue seat miles operated in each county. In FY 2008 and FY 2009, DART’s share of the allocated costs was 47.86% and 47.29%, respectively. As a result of slight modifications to the service, DART’s share for FY 2010 is projected to be 47.10%. Except for employees that are 100% dedicated to TRE, DART and the T separately absorb their own staff, administrative, and station maintenance costs. o TRE Strategic Plan. A TRE Strategic Plan was completed in FY 2006, with significant policy input from the DART and T Boards, as well as appropriate DART, T, and TRE staff members. Out of this planning process, a strategic goal for TRE was adopted by both Boards as policy direction for the current service and how to address service growth on the TRE Corridor. The goal is to have 25-minute headway service in both directions during the peak morning and afternoon rush hours in place by 2011, including one express train operating eastbound in the morning and another operating westbound in the afternoon. Ridership would be expected to increase by 50% as a result of this service improvement. DART’s Twenty-Year Financial Plan does not currently include this service change which is contingent on funding availability.

• The Railroad Management Division is responsible for management of all DART-owned active freight lines (215 miles), including the administration of trackage rights agreements with freight railroads and coordination with, and oversight of, those freight railroads that are fulfilling DART’s common carrier obligations on those corridors.

The Division is also responsible for the property management of the TRE Corridor, which includes the collection of land, oil, and gas leases, signboard rental income, license fees, and trackage rights fees. The potential impact of revenue generated from the oil and gas industry (wells and pipelines) is discussed further in the “Departmental Emphasis of FY 2010 Goals” section. In total, the Division manages approximately 2,700 licenses on the TRE Corridor and other active freight lines. Exhibit 7.6 provides a recap of revenue and projected revenue from all activities for FY 2007 through FY 2011, excluding an Oil and Gas Lease, which is discussed separately.

Exhibit 7.6 Railroad Management Revenue Fiscal Year 2007 $4.1M 2008 $4.3M 2009 (6 months) $2.1M 2009 (projected) $4.1M 2010 (projected) $4.2M 2011 (projected) $4.8M

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

The Regional Rail Right-of-Way Company, a wholly-owned subsidiary of DART, holds the common carrier authority, and manages the trackage rights agreements for the DART-owned active freight rail corridors. The Division undertakes management of the trackage rights agreements, and collects the associated fees for these corridors on behalf of the Regional Rail Right-of-Way Company.

Departmental Emphasis on FY 2010 Board Goals. Goals that will be the subject of special emphasis during the year: Strive to Exceed Customer Expectations; Maximize Funding Resources; and Use Technology to Integrate and Advance Services and System; and Build and Maintain DART’s Regional Transportation Leadership.

• Strive to Exceed Customer Expectations. In FY 2008, TRE achieved historically high monthly ridership in 10 of the 12 months. To address the challenge of maintaining this high level of ridership growth and increasing it by 3% at the same time that a fare increase was implemented, a service change was implemented which made the service more efficient by turning deadhead moves into revenue service. The service change also added additional rush hour and evening service. These changes were in response to customer requests (workers, students, and tourists). o Since FY 2008, all Saturday TRE trains stop at Victory Station. All TRE trains will stop at Victory Station when the DART Light Rail Green Line opens in September 2009. These stops will not increase costs and will impact the schedule by less than two minutes. o TRE initiated Wi-Fi service in FY 2009, which has been an additional ridership incentive. o TRE has some major projects that will improve equipment reliability and appearance and extend the life of the equipment and at the same time will create a more positive traveling environment for customers. o A seat-refurbishment project was completed in FY 2009, and a contract was awarded in April 2009 to overhaul four locomotives. The locomotive overhaul is projected to be completed in summer 2010. In June 2009 a solicitation was issued to overhaul twelve coaches to “like-new” appearance. Award is anticipated for late FY 2009 with work to begin in early FY 2010. o TRE Next Train includes procurement and installation of an integrated Wireless Passenger Information System. The system will visually display and announce real-time train status information at five station platforms such as estimated time of arrival, train direction of travel, end of line. The major deliverables for this project includes a dispatch application, display signs and on-board VBS equipment including GPS, Automatic Vehicle Locations (AVL), Automatic Voice Announcements (AVA) and Automatic Passenger Counters (APC) (optional).

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

• Maximize Funding Resources. The Commuter Rail and Railroad Management Department strives to increase license and contract revenue, through consistent management and enhancement of existing agreements. o April 2006 Oil & Gas Lease Agreement – this agreement brought a bonus payment in FY 2006 of $1,441,180 to TRE. The bonus was paid individually to the TRE owners; therefore, only one-half of the bonus is reflected in the revenues shown in the Cost Model (Exhibit 5.8). This lease has also generated total bonus and royalty revenues through June 2009 of $1,212,000 ($720,590 of the bonus in FY 2006 is accrued over the three-year lease period). o Royalty and bonus revenue from the lease, from FY 2006 through FY 2011, is shown in Exhibit 7.7.

Exhibit 7.7 April 2006 Oil & Gas Lease Agreement Fiscal Year 2006 $100,290 2007 $347,415 2008 $507,008 2009 (projected) $285,931 2010 (projected) $148,072 2011 (projected) $463,203 Total – actual and projected revenue $1,851,919

o TRE Oil & Gas Lease – Madill Subdivision. A five-year lease on 69.65 acres was signed in June 2009, and a bonus was paid to TRE in the amount of $107,957. Because this area of the TRE is on the eastern edge of the Barnett Shale, royalty revenues from successful gas wells are speculative at this time.

• Use Technology to Integrate and Advance Services and System. TRE is implementing a real-time customer information service that is GPS-based and will provide customers with train arrival information at the Dallas County platforms. The system will also allow real-time ad hoc information and messaging to customers at the platforms when service delays or other incidents occur. Contract award is expected in early 2010, and implementation is projected to be complete in 2011. TRE will implement a Maintenance-of-Way Information System (MOWIS) in FY 2010. This information system will enhance TRE’s ability to manage right-of-way (ROW) assets and be a tool for capital planning forecasting. The MOWIS will include inventory management, mobile field inspection capability, track chart, and asset tracking and management.

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

• Build and Maintain DART’s Regional Transportation Leadership. DART owns 54 miles of the Cotton Belt rail corridor from north Fort Worth to downtown Wylie, Texas. The Cotton Belt will link with the Orange Line (at DFW Airport), the Green Line (in downtown Carrollton), the Red Line (in the Richardson/Plano area), and the Addison Transit Center, which provides extensive bus connectivity in the north part of the DART Service Area. The Cotton Belt Rail Line extends to the existing TRE stations in downtown Fort Worth and then continues on to Southwest Fort Worth. The Cotton Belt Rail Line would also connect in downtown Carrollton with the planned Denton County Transportation Authority (DCTA) passenger rail service between Denton and Carrollton, and the TRE line at the Intermodal Transportation Center and the T&P Stations in Fort Worth. The DART Board, through Resolution No. 080114, directed staff to immediately begin the definition, development, and implementation of the business opportunity on the Cotton Belt corridor. Therefore, a Request for Information was solicited on May 21, 2009, to identify individuals and firms interested in a Public Private Partnership (PPP) for the Cotton Belt Commuter Rail Line. Denton County Transportation Authority – The DCTA is a coordinated county transportation authority, created by law in 2001, and approved by the voters in Denton County in 2002. DCTA’s priority project for the future is the construction of a regional passenger rail line connecting Carrollton and Denton, called the “A-Train.” The A-Train will meet growing transportation demands in eastern Denton County and will also provide a logical extension of DART’s Northwest Corridor line (Green Line). DCTA plans to connect to the Green Line in Carrollton at the Trinity Mills Station, in December 2010. An Interlocal Agreement between DART and DCTA was signed in September 2007 to modify the DART design for the Trinity Mills Station in order to provide alignment of the DART and DCTA tracks. An additional Interlocal Cooperation Agreement was signed by DART and DCTA in March 2009 to allow DART’s construction contractor to perform the changes necessary to the platform and track at Trinity Mills Station to accommodate the A-Train service. Lastly, DART and DCTA continue to work on the agreements for corridor access, operation, and maintenance of the proposed A-Train service.

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

Commuter Rail and Railroad Management Department Cost Model

Exhibit 7.8 is the Commuter Rail and Railroad Management Cost Model. Costs are divided between TRE, railroad management, and railroad corridor management divisions of the Department. Total revenues associated with TRE corridor management for FY 2010 are budgeted at $2.5 million and $1.6 million for the DART-owned active freight rail lines. The portion of the total corridor management revenues and property management costs associated with the TRE corridor management are factored into the Commuter Rail-TRE subsidy per passenger calculations. Total expenses for FY 2010 include $1.3 million of indirect costs from the T.

Exhibit 7.8 FY 2010 Commuter Rail and Railroad Management Cost Model

Commuter Rail $27.2 million *

Trinity Railway Railroad Railroad Corridor Express (TRE) Management Management $25.8 million $1.0 million $.4 million

Revenue Generated $2.9 million Contract Service & Insurance Allocated Costs DART Management

Cost Drivers ** Allocations Cost Drivers Cost Drivers - Contract rates- Number of employees - Number of employees - Quality standards - DART/T rev seat miles/train hours - DART Police - ROW owned - Number of work shifts - Revenue Collection - Number of employees - Insurance requirements - Marketing and Customer service - Level of freight operations - Quality standards - Passenger Amenities

$24.2 million $1.6 million $1.0 million $.4 million 93.9% of TRE costs 6.1% of TRE costs 89.0% of total costs 5.8% of total costs 3.7% of total costs 1.5% of total costs

* Total FY 2010 Commuter Rail costs include $2.3 million for administrative overhead allocation and includes expenses incurred by the T. ** inherent in some of these cost drivers is compliance with FRA requirements.

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FY 2010 Business Plan (09/22/09) Customer Focus – Commuter Rail

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Section 8 Customer Focus – Paratransit Index of Exhibits

Exhibit 8.1 Paratransit Overview…………………………………..…………… PAR-1

Exhibit 8.2 Paratransit Scorecard-Key Performance Indicators………………… PAR-2

Exhibit 8.3 Paratransit Ridership……………………………………..…….…… PAR-3

Exhibit 8.4 Paratransit Passengers Per Hour-Actual….………………………… PAR-5

Exhibit 8.5 Paratransit Services Productivity…………………………………… PAR-6

Exhibit 8.6 Paratransit Cost and Subsidy per Passenger..………………………. PAR-7

Exhibit 8.7 FY 2010 Paratransit Cost Model………….………………………... PAR-7

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

Customer Focus – Paratransit Services

Overview

The purpose of this section is to explain Paratransit Services’ business plan, including strategic initiatives. Exhibit 8.1 is an overview of the uses of the funds and allocated operating positions for the Paratransit mode of service.

Exhi bi t 8 .1 Paratransit Overview

Overview FY08A FY09B FY10B

Allocated Operating Budget (M) $33.3 $34.2 $36.4

Capital Budget (M) 0.7 1.7 0.2

Allocated Operating Positions 83

Paratransit Services provides accessible, curb-to-curb public transportation in accordance with the Board-approved Accessible Services Policy No. III.14, and the Americans with Disabilities Act of 1990 (ADA). The department is responsible for planning/scheduling, dispatching, field supervision, contract compliance, rider eligibility, outreach, travel training, and other administrative functions. The department also oversees the Fixed-Route for People with Disabilities and operates DART Innovative Services, which includes On-Call and Flex Services (see the Bus Section for more information on Innovative Services). As of September 30, 2008, approximately 10,600 riders were certified for Paratransit Services.

Service is provided through a contract with Veolia Transportation, Inc., which operates and maintains a total of 186 Paratransit vans and 23 Innovative Services vans.

DART manages trip scheduling and dispatching through two centers, Scheduling and Control. The Scheduling Center’s primary function is to schedule trips for riders. Representatives take telephone calls Monday through Friday, 8 a.m. to 5 p.m. During weekends and holidays, scheduling calls are taken through an automated voicemail system, which is available from 8 a.m. to 5 p.m. X-Press Booking (XPB), an automated scheduling feature, is available 24 hours a day, 7 days a week.

The Control Center staff dispatches paratransit vehicles, field supervision, and Parkland Hospital shuttle operations. The center is also responsible for answering, “Where’s My Ride?” calls, monitoring on-time performance, and handling passenger incidents/accidents. The Control Center operates 21 hours a day, 7 days a week.

PAR-1

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

Paratransit Services Scorecard – Key Performance Indicators

Exhibit 8.2 highlights Paratransit Services’ Key Performance Indicators (KPIs). Fiscal years 2007 through 2008 indicate actual values, while figures for fiscal years 2009 through 2011 represent the budget and projected values. Fiscal Year 2009 Qtr 2 is a four-quarter rolling average ending March 31, 2009.

Exhibit 8.2 Paratransit Scorecard - Key Performance Indicators FY09 Indicators FY07A FY08A Qtr 2 FY09B FY10B FY11P Customer/Quality Indicators Actual Ridership (000s) 677 737 746 758 781 801 Scheduled Ridership (000s) 789 849 840 864 891 913 Revenue Hours (000s) 445 438 445 462 462 471 Paratransit Passengers per Hour - Scheduled 1.77 1.94 1.89 1.87 1.93 1.94 Paratransit Passengers per Hour - Actual 1.52 1.68 1.68 1.64 1.69 1.70 On-Time Performance 86.9% 90.8% 88.8% 87.0% 87.0% 87.0% Accidents per 100K 2.1 1.7 1.2 2.0 2.0 2.0 Percentage of Trips Completed 99.9% 99.9% 99.9% 98.0% 98.0% 98.0% Passenger Canceled Trips Ratio 9.3% 9.7% 10.4% 10.0% 10.0% 10.0% Passenger No Shows Ratio 3.4%3.5%3.5%4.0%4.0%4.0% Service Level - Scheduling (3 minutes) 95.0% 94.0% 84.0% 92.0% 85.0% 85.0% Service Level - Where's My Ride (2 minutes) 94.4% 93.9% 82.7% 93.0% 80.0% 80.0% Complaints per 1k Passengers 4.7 3.2 3.6 4.5 4.5 4.5 Certified Riders 10,036 10,626 10,850 10,769 11,824 12,500 Financial/Efficiency Indicators Revenues (M) $1.7 $1.8 $2.1 $2.0 $2.1 $2.2 Expenses - Fully Allocated (M) $31.4 $33.3 $33.8 $34.2 $36.4 $36.3 Net Subsidy (M) $29.6 $31.5 $31.6 $32.2 $34.3 $34.2 Subsidy Per Passenger $43.79 $42.69 $42.36 $42.51 $43.93 $42.64

KPIs for the Scheduling and Control Center are referred to as Service Levels and represent the percentage of calls answered or abandoned within the established time.

Throughout FY 2009, on-time performance has deteriorated. In an effort to maintain quality of service, Paratransit is exploring alternate strategies to manage future growth while continuing to provide eligible customers with Paratransit service as required under the ADA. Costs are currently being managed through the use of a variable-end contract. This allows unproductive revenue hours to either be moved to make a run more efficient or removed from the manifest completely. More cost reducing/saving strategies are discussed in the next section.

Paratransit Ridership

One of Paratransit Services’ goals is to increase productivity and efficiency while delivering excellent customer service. Paratransit has been able to constrain the growth in revenue hours, and therefore costs, at a rate lower than ridership growth through increasing productivity (more passengers transported per hour).

PAR-2

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

As the data in Exhibit 8.3 indicates, ridership has grown an average of almost 5% annually over the last five years, while revenue hours only have increased 1.2% per year on average. This resulted in improved actual productivity of 1.51 passengers per hour in FY 2006, rising to 1.68 passengers per hour in FY 2008. The system is reaching its limits in terms of the ability to continue to accommodate additional riders without increasing revenue hours. Exhibit 8.3 compares actual and projected ridership from FY 2007 through FY 2011. Ridership projections have remained the same from the FY09 Plan to the FY10 Plan.

Exhibit 8.3 Paratransit Ridership 850 781 804 800 758 737 801 750 781 746 700 Thousands 677 650 600 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

Several factors, such as regional population increases resulting in commensurate increases in the number of certified riders, as well as increases in the number of personal care attendants and guests contributed to the higher demand for service. By straining available resources, this increased demand impacts on-time performance and passenger ride times. To mitigate the impact of increased ridership, staff has adjusted the scheduling system parameters. Staff is also evaluating tools to manage demand through analysis of sub-regional travel patterns to deploy resources more effectively.

Some examples of potential strategies to divert Paratransit trips to less expensive alternatives include:

• “Paratransit Shopper trips” and “Excursion trips” – Identify discretionary trips to major retail outlets and offer group trips at a time/location where it will be possible to group several customers, thereby reducing demand for individual Paratransit trips.

• “Circulators” – Analyze trips that circulate within a geographic area with a high number of discretionary destinations and residences, and develop a fixed Paratransit route that circles among the origins/destinations within the area to meet Paratransit demand collectively instead of on an individualized Paratransit trip basis.

• Identify means to expand the existing feeder fare program to entice more Paratransit customers to use the service to travel to the nearest practical transit center or rail station and use fixed-route service. This has the potential to greatly reduce average Paratransit trip lengths for these customers.

PAR-3

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

In all cases, care will be taken to target market the alternatives to customers already using Paratransit for these discretionary trips. The intent is to reduce demand on current Paratransit services, and not to create new demand for the proposed service. At the same time, DART Paratransit will become more rigid in enforcing conditional eligibility criteria. Conditional customers affected by this will be offered opportunities to use one of the alternatives described above whenever possible. The objective of the combined impact of these alternatives to full Paratransit services is to continue to provide customers with trips to meet their travel needs and wants while reducing the financial and time burden on regular Paratransit service.

Paratransit Eligibility and Travel Training Program – Per the ADA, passengers must be certified by DART to use Paratransit, and passengers’ certifications are updated every one to three years. DART certifies passengers in person, providing the most accurate assessment of passengers’ ability to use buses and trains. The eligibility process determines whether a person is capable of using fixed-route services, or if a disability precludes that passenger, unconditionally or under certain circumstances, from using fixed-route service. Due partially to the overall population growth in the DART Service Area, the number of registered riders increased in FY 2008 to approximately 10,600 (5.6%) during the fiscal year. As of June 30, 2009 the number of certified riders reached 10,860. This represents a 3.7% increase over the same period last year.

Eligibility and Training Specialists assess applicants’ ability to use fixed-route services and provide travel training. Travel training enables DART to transition individuals from Paratransit to less costly fixed-route service; however, time available for travel training is limited. For a rider to transition to fixed-route services, staff must perform route checks to ensure there are no environmental barriers that would impede the rider’s travel. During FY 2008, approximately 5,600 trips normally provided by Paratransit Services were transitioned to fixed-route service, which resulted in approximately $211,000 in cost avoidance. The number of clients travel- trained as of June 30, 2009 is trending down from June 30, 2008, dropping 33.3% from twelve clients in the same period last year to eight this year.

Staff is in the early phases of exploring the potential of a person-centered “Mobility Management” approach to providing transportation. This service would apply to Paratransit customers as well as other populations with disabilities and mobility constraints. “Mobility Managers” seek to coordinate the various private, non-profit, and public transportation resources in the community to provide high quality transportation services to populations that cannot easily use fixed-route service and have no access to private automobiles. This would include coordination with, and possible improvement of, feeder trips to transit facilities to assist conditionally eligible passengers in making trips that are more efficient, both for the passengers and DART. Mobility Management has the potential to alleviate pressures and increased demand for Paratransit services while providing customers with more choices in their time and mode of travel. Implementation of trip diversion strategies will begin as early as 2010 with improvements to feeder service and potentially some special-purpose trips. Additional steps will be introduced incrementally over the next four to five years to continually offset expected growth rates.

PAR-4

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

Paratransit's Productivity

Productivity – KPIs for productivity include actual and scheduled passengers per hour, as well as rates of passenger cancellations and no-shows. Exhibit 8.4 shows actual and projected Paratransit passengers per hour for FY 2007 through FY 2011. Compliance with the ADA’s zero denial mandate impacts Paratransit’s efficiency and lowers productivity by requiring all legitimate trip requests (trips requested by certified riders during applicable service hours) be accommodated. While productivity has improved, constrained resources are resulting in an increase in longer trips and late trips.

Exhibit 8.4 Paratransit Passengers Per Hour - Actual

2.00

1.74 1.75 1.69 1.68 1.68 1.70 1.52 1.69 1.64 1.50

1.25 FY07A FY08A FY09B FY10B FY11P

FP09 Plan FY10 Plan Qtr 2 FY09

Manage No-Shows and Cancellations – The difference between scheduled and actual trips is attributed to no-shows (when a customer fails to show for a trip), and customer cancellations (which can happen any time up until the van arrives for a passenger). For FY 2008, DART scheduled 1.94 passengers per hour, but actually transported only 1.68 passengers per hour. The no-show ratio came in below the FY 2008 target at 3.5%, while the cancellation ratio increased slightly from 9.3% in FY 2007 to 9.7% in FY 2008. The cancellation ratio for FY 2009 is trending at 10.4%. The number of cancellations is higher than usual due to inclement weather during the first and second quarters of FY 2009. The no-show ratio is trending to finish FY 2009 at 3.6%. Management estimates the KPI ratio for no-shows will remain in the 4% range, and the KPI ratio for cancellations will remain in the 10% range, which is consistent throughout the transit industry. Exhibit 8.5 shows a comparison of scheduled productivity with actual productivity from FY 2006 through FY 2008 and budgeted and projected productivity for FY 2009 and FY 2010.

PAR-5

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

Exhibit 8.5 Paratransit Services Productivity

2.00 1.94 1.87 1.93

1.77 1.75 1.68 1.73 1.64 1.69

1.55 1.51 1.50

1.25 FY06A FY07A FY08A FY09B FY10B

Scheduled Productivity Actual Productivity

Vehicle Business System – A Vehicle Business System (VBS) is installed in all Paratransit vehicles. The wireless communication system allows optimal utilization of revenue vehicles through GPS-based vehicle tracking and improved communications.

Purchased Transportation Contract

A purchased transportation contract with Veolia Transportation, Inc. was implemented in June 2007. The base term of the contract is scheduled to end September 30, 2011, with the option year scheduled to end September 30, 2012. This contract is based on variable-end pricing and allows Paratransit Services to cut unproductive revenue hours on a daily basis. This has resulted in savings, which allowed Paratransit Services to absorb increased ridership without increasing revenue hours.

PAR-6

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

Paratransit Costs and Subsidy Per Passenger

Exhibit 8.6 compares Paratransit cost and net subsidy actual results for FY 2007 and FY 2008 with budget and projections for FY 2009 through FY 2011. Improved productivity has resulted in a slight downward trend in subsidy per passenger, despite cost increases.

Exhibit 8.6 Paratransit Cost & Subsidy per Passenger $40.0 $45.00 $30.0 $44.00 $43.00 $20.0 $42.00 Millions $10.0 $41.00 Dollars $0.0 $40.00 FY07A FY08A FY09B FY10B FY11P

Total Costs Net Subsidy Subsidy per Passenger

Paratransit Cost Model

Exhibit 8.7 is the Paratransit Cost Model.

Exhibit 8.7 FY 2010 Paratransit Cost Model

Paratransit $36.4 million*

Contract In House Allocated Service Costs Costs

Cost Drivers Cost Drivers Allocations - Passenger demand - Oversight and Administration - Customer Service - Service effectiveness of contract - Retail Sales (passengers per hour) - Number of employees - Operations Technology Support - Contract rate per hour - Certification program - Information Technology Support - Quality standards - Dispatching - DART Police Support - Fleet age - Scheduling - Technical Services - Vehicle requirements - Non-revenue vehicle Services

$28.6 million $5.3 million $2.5 million 78.5% of total cost 14.6% of total cost 6.8% of total cost

* Total FY10 Paratransit costs include $3.2 million for administrative overhead allocation.

PAR-7

FY 2010 Business Plan (09/22/09) Customer Focus – Paratransit Services

BLANK PAGE

PAR-8

Section 9 HOV and General Mobility Index of Exhibits

Exhibit 9.1 HOV Overview…………………………….…………..…………… HOV-1

Exhibit 9.2 HOV Lane Operating Hours and Miles………………..…………… HOV-2

Exhibit 9.3 HOV-Scorecard-Key Performance Indicators……………………… HOV-2

Exhibit 9.4 Map – 2010 HOV/Managed HOV Lanes...…..………..…………... HOV-3

Exhibit 9.5 Map – 2030 Transit System Plan/Managed HOV Lanes.……..……. HOV-4

Exhibit 9.6 Vanpool Overview………………………………………..…..……. HOV-8

Exhibit 9.7 General Mobility (Vanpool) Scorecard-Key Performance Indicators……………………………………………………………. HOV-8

Exhibit 9.8 Operating Vanpools……………………………………….…..……. HOV-9

Exhibit 9.9 General Mobility/Road Improvement Program…...…………..……. HOV-10

Exhibit 9.10 Projected LAP/CMS Program………………………………………. HOV-10

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Customer Focus - HOV

Overview

The purpose of this section is to discuss business performance expectations and major initiatives for DART's High Occupancy Vehicle (HOV) Transitway services. Exhibit 9.1 is an overview of the uses of the funds and allocated operating positions for the HOV mode of service.

Exhibit 9.1 HOV Overview

Overview FY08A FY09B FY10B

Allocated Operating Budget (M) $8.7 $10.8 $12.4

Capital Budget (M) 7.3 29.6 34.3

Allocated Operating Positions 87

DART’s Transit System Plan calls for an HOV Transitway program that includes Interim or Immediate Action facilities, as well as more than 116 miles of Permanent HOV Transitways. The Board-approved HOV Transitway Policy guides the program’s development by establishing funding commitment and the necessary framework to advance the projects through different stages of project development, construction, operations, enforcement, and maintenance.

Interim HOV projects are funded by the Texas Department of Transportation (TxDOT), DART, the Federal Transit Administration (FTA), and the Federal Highway Administration (FHWA) Congestion Mitigation/Air Quality (CMAQ) Program. This program is administered by the Regional Transportation Council (RTC) of the North Central Texas Council of Governments (NCTCOG). All facilities are jointly planned and designed by DART and TxDOT, and each agency contributes 16.7% of the construction cost. Federal funds provide the remaining 66.6%. Once the facilities are built, DART provides for the operation, enforcement, and management of the HOV lanes, while maintenance is the joint responsibility of DART and TxDOT. DART is responsible for all operating costs within the DART Service Area. The operating costs for lanes outside of the DART Service Area are reimbursed by NCTCOG.

HOV-1

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Currently, DART operates, enforces, and maintains 84 miles of HOV lanes. Exhibit 9.2 shows the currently operating facilities and their operating hours.

Exhibit 9.2 HOV Lane Operating Hours and Miles Centerline HOV Facility Hours of Operation Miles I-30 (East R.L. Thornton) 6-10 a.m. & 3:30-7 p.m. Weekdays 11 I-35E (Stemmons) 6-9 a.m. & 3:30-7 p.m. Weekdays 9 US 75 (Central) 24 hours a day 14 I-635 (LBJ) 24 hours a day 24 I-35E/US67 (South R.L. Thornton/Marvin D. Love) 6-10 a.m. & 2:30-7 p.m. Weekdays 11 I-30 (Tom Landry) 6-9 a.m. & 3-7 p.m. Weekdays 15

HOV Scorecard – Key Performance Indicators

Exhibit 9.3 highlights HOV Key Performance Indicators (KPIs) presented in scorecard format. Fiscal Years 2007 and 2008 indicate actual values, while figures for Fiscal Years 2009 through 2011 represent the budget and projected values. Fiscal Year 2009 Qtr 2 is a four-quarter rolling average ending March 31, 2009. Ridership is projected to decrease as lanes on I-635 West are taken out of service in June 2010.

Exhibit 9.3 HOV Scorecard - Key Performance Indicators FY09 Indicators FY07A FY08A Qtr 2 FY09B FY10B FY11P Customer/Quality Indicators Ridership (M) 37.6 48.1 52.6 48.5 46.3 47.0 Avg. Weekday Ridership (000s) 115.2 144.5 157.8 161.3 137.9 138.0 Lane Availability 99.2% 99.8% 99.9% 99.0% 99.0% 99.0% Operating Speed Ratio 1.53 1.72 1.51 1.53 1.53 1.53 Complaints per 100k passengers 0.20 0.52 0.36 0.30 0.32 0.30 Financial/Efficiency Indicators Revenues (M) $0.0 $0.0 $0.0 $1.5 $1.6 $1.6 Expenses - Fully Allocated (M) $5.4 $8.69 $9.4 $10.8 $12.4 $12.9 Subsidy Per Passenger $0.14 $0.18 $0.18 $0.19 $0.23 $0.24

HOV Projects

In response to increasing air-quality concerns in the region, the first phase of the Tom Landry Freeway (I-30) West Managed HOV lane opened to traffic on July 31, 2007 as a two-lane barrier-separated concurrent flow facility. Once additional phases open, this will become the region’s first Managed HOV lane. Also, the US 75 HOV lanes and extensions to the existing I- 635 and I-30 HOV lanes opened in FY 2008. Changes to operating hours of the HOV lanes to match travel and ridership patterns are implemented as needed. A map showing all facilities that are operational this fiscal year is included as Exhibit 9.4.

HOV-2

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Exhibit 9.4

HOV-3

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Permanent HOV Transitways – DART's Transit System Plan calls for over 116 miles of permanent HOV transitways. DART's share of the construction costs of these facilities is 10%. The 2030 Managed HOV Lane map is included at Exhibit 9.5. Per the Board-approved HOV Transitway Policy and consistent with the Metropolitan Transportation Plan by NCTCOG, all Permanent HOV Transitways will be evaluated for Congestion Pricing.

Exhibit 9.5

HOV-4

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Notice of Board Commitment – The Board’s current HOV Policy commits DART to fund up to 100% of the construction cost of the permanent LBJ, Stemmons, and North Central Expressway HOV transitways, if Federal funding is not available. The FY 2010 Twenty-Year Financial Plan only includes DART’s anticipated participation in each project, not the total project value. If DART is required to provide additional funding for these HOV projects, it will have a significant impact on the capital expansion and financing assumptions included in the Twenty-Year Financial Plan.

I-30 Permanent HOV Transitway

In 2001, DART initiated a Major Investment Study (MIS) for the I-30 Freeway Corridor east of Downtown Dallas. All alternatives and alignments within the corridor were studied and evaluated to determine a Locally Preferred Investment Strategy (LPIS) for the corridor.

The East Corridor MIS was completed in January 2004. This transportation corridor is roughly bounded by Garland Road/Santa Fe Railroad/Ferguson Road in the north, Dallas County Line in the east, Scyene Road/Military Parkway in the south, and Downtown Dallas in the west. The study’s recommendations included: 1) managed and general-purpose lanes for I-30 and US 80; 2) commuter rail and light rail investigation; and 3) Bus Rapid Transit (BRT) on Ferguson Road. Each of these objectives is being advanced by the respective implementing agencies. Specifically, TxDOT has begun schematic design and the environmental process for managed lanes on I-30 and US 80.

DART will be advancing BRT on Ferguson Road. The City of Dallas, in support of that effort, has designated Ferguson Road as a BRT Corridor in its Transportation Plan and in its Vision Plan.

SH 114 Permanent HOV Transitways –With the completion of the Northwest Corridor Major Investment Study, DART is advancing permanent, barrier-separated Managed HOV lanes along SH 114 from SH 183 to the Dallas County Line as identified by the Locally Preferred Alternative.

Advanced planning activities including schematic designs, environmental studies, and public involvement were completed during FY 2009. The project will be advanced to preliminary engineering and final design in FY 2010. The western end of the project terminus was redrawn to conform to recently identified demand volumes. Preliminary Engineering/Plan Specifications & Estimates (PS&E) for the remainder of the SH 114 Corridor will be underway during FY 2010 through FY 2015, and utilities relocation/coordination and right-of-way acquisition will be advanced concurrently.

HOV-5

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Pending funding availability, the construction phase is expected to occur between FY 2015 and FY 2020. Total estimated construction cost for 13 miles on SH 114 is $750 million. The contract for the reconstruction of SH114/Loop 12 Interchange (Diamond Project) including 1.6 miles of the Orange Line under Loop 12 and along SH114 toward DFW Airport including the station at Tom Braniff Drive was awarded in October 2008 for $224.2 million. The DART LRT portion of the project is expected to be complete in late 2010. Project limits are from Texas Stadium to west of the TRE Railroad overpass including the LRT station at Tom Braniff Drive.

The Loop 12 limits are from just north of SH 183 to the south end of the Elm Fork Bridge. The DART Board approved an Interlocal Agreement with TxDOT for funding DART’s share of the LRT and Managed HOV lanes. DART’s share of the cost for LRT and Managed HOV lanes is $62 million or approximately 30% of the total project cost.

Regional Value Pricing – A regional value or Congestion Pricing Study was completed to evaluate the feasibility of charging single-occupant vehicles to use the existing and future HOV lanes throughout the region. This federally-funded project was led by the NCTCOG, and DART and TxDOT are among the project partners. Federal rules mandate that a study of this type be conducted prior to testing and/or implementation. The study was completed during FY 2005, and an application to implement the concept in the selected corridor was advanced to the FHWA for funding. The application was approved and the I-30 corridor was selected to become the region’s first Managed Lane project. Phase I of this project was opened to traffic in 2007.

I-30 Managed HOV Lane – Development of the first Managed HOV Lane project in Dallas began in 2006, and one phase was opened to traffic in 2007. Implementation of the remaining phases is underway. The Managed HOV lane facility will be implemented in the median of I-30 from the Dallas/Tarrant County Line to Downtown Dallas. Ultimately, the reversible HOV lanes will operate 20 hours a day, and will comprise a two-lane Managed HOV facility from the Dallas/Tarrant County Line to Downtown Dallas.

Limits of the initial phase of the project are from the Dallas/Tarrant County Line to Sylvan Avenue. This six-mile project will be limited to two reversible HOV lanes from Dallas/Tarrant County Line to Mountain Creek, and a single reversible HOV lane from Mountain Creek to Chalk Hill Road. For westbound traffic only, the single HOV lane will extend beyond Chalk Hill Road to Sylvan Avenue.

In the eastbound (inbound) direction, the facility is entered at the Dallas/Tarrant County Line with an exit available at Mountain Creek (to allow access to the Loop 12 and Cockrell Hill Rd. exits). The facility terminates into an additional general-purpose lane at Chalk Hill Road (to allow access to the Westmoreland exit, and all other exits east). In the westbound (outbound) direction, the facility is entered at Sylvan Avenue (for traffic coming from Downtown Dallas) and Mountain Creek (to allow access from Loop 12 and all other roadways east) with termination into two additional general-purpose lanes at the Dallas/Tarrant County Line.

The facility will typically have three general-purpose lanes in each direction from Tarrant County Line to Chalk Hill and four general-purpose lanes in each direction from Chalk Hill to Sylvan. Future phases will be initiated upon availability of regional funds.

HOV-6

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

LBJ Corridor – This project is a joint effort between TxDOT, DART, and other partners in the region. The LBJ Corridor project is comprised of two sections: the east section (US 75 to US 80) and the west section (from US 75 to Luna Road west of I-35E). The west section includes a depressed section from west of Midway to east of Preston. This project will be designed and constructed through a Comprehensive Development Agreement (CDA). Construction duration is five years. DART will not participate in funding the Mesquite section which is outside the DART Service Area. These efforts are expected to begin in FY 2010.

Ensure I-30 HOV Lane Opens on Time

This HOV lane is open an average of at least 99% of the time. The purpose of this indicator is to determine if the facility is open as scheduled for the morning and evening operating hours. To date, we have been able to meet the established target.

Operating Speed Ratio (OSR) – This efficiency ratio measures the average operating speed of vehicles using the HOV lane versus the speed of vehicles on the main freeway lanes. The target has been set at 50%; that is, HOV traffic traveling an average of 1.5 times the speed of main lane traffic. To date, we have been able to exceed this target.

Stemmons HOV Gates to Improve Safety

This $2.4 million project, which was scheduled to open in 2008 to fund the installation of an automatic gate system for opening and closing each of the three ramps on the Stemmons Reversible HOV Lane, has been put on hold pending TxDOT’s plans for the interchange. Engineering schematics and Environment Assessment (EA) documents for the project have been completed and approved by the Federal Highway Administration (FHWA) and TxDOT. Final design is underway. Installation of these gates will eliminate the current procedure of manually placing pylons next to high-speed freeway traffic. This project will be 60% funded by the Federal Transit Administration (FTA) through the Fixed Guideway Modernization program. Plans at the 60% engineering level are being reviewed by TxDOT. This project is presently on hold pending TxDOT’s plans for reconstruction of the I-635/I-35E interchange.

LBJ and Central HOV Operations

In order to improve operations along LBJ (East) and Central Expressway, DART is working with TxDOT to improve flexible pylon performance concerns.

HOV Service has Lowest Subsidy Per Passenger

HOV is DART’s most cost-effective mode of transit with an actual subsidy per passenger of $0.19 and $0.22 budgeted for FY 2010.

HOV-7

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Customer Focus – General Mobility

Overview

DART's General Mobility programs include carpool matching, vanpool operations, and support for local Transportation Management Associations (TMAs). General Mobility also includes road improvement programs such as the Local Assistance Program/Congestion Management System (LAP/CMS), the Transit Principal Arterial Street System program (), the Transportation System Management (TSM) program, and the Intelligent Transportation Systems (ITS) program.

DART and the NCTCOG have worked together to identify strategies for reducing emissions in the Metroplex. The vanpool program has been identified as a critical component of the State Implementation Plan for improving air quality. Employers in the Metroplex have also discovered that vanpools are a viable transportation alternative for their employees and are subsidizing passenger fares to help with escalating fuel costs. Exhibit 9.6 is an overview of the uses of the funds and allocated operating positions for the Vanpool mode of service.

Exhibit 9.6 Vanpool Overview Overview FY08A FY09B FY10B Allocated Operating Budget (M) $1.8 $2.6 $2.9 Capital Budget (M) - - - Allocated Operating Positions 4

Vanpool Scorecard

Exhibit 9.7 highlights Vanpool Key Performance Indicators (KPIs) presented in scorecard format. Fiscal Years 2007 and 2008 indicate actual values, while figures for Fiscal Years 2009 through 2011 represent the budget and projected values. Fiscal Year 2009 Qtr 2 is a four-quarter rolling average ending March 31, 2009.

Exhibit 9.7 General Mobility (Vanpool) - Key Performance Indicators FY09 Indicators FY07A FY08A Qtr 2 FY09B FY10B FY11P Customer/Quality Indicators Ridership (000s) 492 697 811 850 953 1,025 Number Of Vanpools 106 145 168 198 198 198 Financial/Efficiency Indicators Revenues (M) $1.0 $1.6 $1.6 $2.0 $2.3 $2.3 Expenses - Fully Allocated (M) $1.3 $1.8 $2.2 $2.6 $2.9 $2.9 Subsidy Per Passenger $0.56 $0.22 $0.72 $0.74 $0.69 $0.62

HOV-8

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

DART currently offers 7- to 15-person vans through a third-party contractor (Enterprise Rent-a- Car DFW). This program is partially funded by the NCTCOG through a Congestion Mitigation/Air Quality grant. Over the past few years, NCTCOG has provided funding to DART that covers up to 40-50% of the total cost of operations. Through monthly fees and fuel payments, users paid approximately 40% of the program costs. DART covered the remaining 10% of program costs, with the bulk of DART’s expenses being in-kind services such as program management.

For FY 2010, it is expected that NCTCOG will maintain their share of overall funding at 40%. User fees, currently $270 for small vans and $290 for a large van, may require adjustment at some time during FY 2010, with the amount dependent upon final details of NCTCOG funding and anticipated fuel costs.

During the past three years, DART has managed a substantial expansion of the vanpool program, with as many as 172 vanpools in operation during FY 2009. Management expects this growth rate to slow in future years, with relatively slow growth anticipated for FY 2010 (no more than 198 vans if full NCTCOG funds are available for that level of expansion).

In FY 2008, the number of vanpools surpassed the FY 2007 vanpool operating numbers by 26.2%. The program has increased another 25.6% from May 2008 to May 2009 (see Exhibit 9.8). Fuel prices and economic conditions continue to attract the long-distance commuter, typical of those participating in vanpools.

Exhibit 9.8 Operating Vanpools 180

160

140

120

100

80

60

40

20

0 OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP 2008 109 111 110 123 123 125 128 140 145 145 145 145 2009 145 148 149 149 161 168 169 168 0 0 0 0

2008 2009

HOV-9

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

General Mobility – Road Improvement Programs

The Road Improvement Programs shown in Exhibit 9.9 represent all of the Board-approved road programs with member cities and state agencies. Road improvement programs are recorded as non-operating expenses in the Budget and Twenty-Year Financial Plan because DART does not take an ownership interest in most of these mobility improvements.

Exhibit 9.9 General Mobility / Road Improvement Program (in millions) FY07A FY08A FY09B FY10B FY11P LAP/CMS* $2.5 $0.0 $0.0 $0.0 $0.0 Transit PASS** $0.0 $0.2 6.9 7.5 10.0 TSM (includes street repair)** 0.3 0.3 9.8 10.7 9.0 ITS** 0.3 0.3 3.9 3.9 0.0 Total $3.2 $0.8 $20.6 $22.1 $19.0 * Note: for FY09 and beyond, the budgeted column reflects new allocations. Actual expenditures in past years may also include unspent program allocations from prior years.

** For the other general mobility programs, much of the money reflected in the FY10 and FY11 represents monies that were budgeted but will not be spent during FY09 and are therefore contained in multiple columns.

Local Assistance Program/Congestion Management System (LAP/CMS)– This agreement returned 15% of DART sales taxes collected in a member city to that city until a contract was awarded for rail construction in that city. Irving was included at a 7.5% funding level because it is served by commuter rail. Additional allocations to the program ended for all member cities in FY 2004. Member cities with remaining balances may request the programming of LAP/CMS funds, as necessary, for projects that enhance transit. Exhibit 9.10 reflects the current LAP/CMS payable to each member city.

Exhibit 9.10 LAP/CMS Program (000s) 06/30/09 06/30/09 LAP/CMS LAP/CMS Member City Unspent Balance Committed Amount Addison $307 $307 Carrollton 2,267 1,969 Cockrell Hill 122 0 Dallas County * 23 0 Farmers Branch 857 815 Garland 0 0 Glenn Heights 0 0 Irving 11,603 11,350 Plano 645 645 Richardson 0 0 Rowlett 0 0 University Park * 5 0 TOTAL $15,829 $15,086 * Balance remaining from original LAP Program.

HOV-10

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

Transit Principal Arterial Street System (PASS) – The Principal Arterial Street System (Transit PASS) is a $150 million program that is funded by DART ($30 million), TxDOT/FHWA ($52 million), TRE ($10 million), and eligible DART member cities and counties ($28 million). Several projects in Addison, Carrollton, Dallas, Farmers Branch, Plano, and Richardson have been completed. A total of $17.9 million in PASS funding is available for the remaining few projects in the Cities of Dallas and Garland. Additional money is being requested from NCTCOG for this program in the 2010-2013 Transit Improvement Program (TIP).

Transportation System Management (TSM) – A total of $22.1 million TSM funding is available for the initial and second phases of the Street Repair Program as well as General TSM projects over the next five years. TSM funding is available to repair streets damaged by buses and for minor enhancements such as intersection modifications, bus pads, and traffic studies/signal modifications.

Intelligent Transportation Systems (ITS) – ITS is an element of DART's Transit System Plan. It includes Smart Vehicle, Smart Traveler, and Smart Intermodal Systems. DART is working with other regional transportation providers, cities, counties, , and national organizations to develop a Regional Comprehensive ITS Program for the Dallas/Fort Worth Region. The program’s purpose is to review and, if necessary, update the completed and in-progress ITS Plans for compliance with the ITS national architecture for interoperability and funding purposes. The program is aimed at prioritized implementation of projects to improve transportation throughout the region. It focuses on providing metropolitan areas ITS elements including: Advanced Traveler Information Systems (ATIS), Advanced Public Transportation Systems (APTS), and Advanced Traffic Management Systems (ATMS). The goal of this project is to facilitate information exchange between the various ITS systems and to create a seamless intermodal transportation infrastructure across jurisdictional boundaries. This effort will lead to the implementation of the Regional ITS system being designed by the regional partners.

As part of the ITS program, DART continues to develop the Vehicle Business System (i.e., Smart Vehicle). This effort will be rolled into the overall DART ITS program, but will be funded by DART and the FTA.

Regional Comprehensive ITS Program – This program will include the planning, design, construction, implementation, and operation of real-time traveler and transportation system information. This will allow partners in the region to share and provide transit users with traffic information. This much needed exchange will also aid the region in dealing with major incidents. High-level design is underway for both video and data exchange between multiple agencies in the region. Also, the regional effort is directed toward completing the regional database to share traffic-related information among the agencies. NCTCOG will host the database and provide support to all regional partners with data storing and sharing needs. Regional partners are evaluating video standards and creating a list of requirements for video and data sharing.

HOV-11

FY 2010 Business Plan (09/22/09) Customer Focus – HOV and General Mobility

DART ITS Plan – DART’s ITS Program will include Smart Vehicles, Smart Travelers, and Smart Intermodal Systems. Ongoing work for Smart Vehicles was incorporated in the DART ITS Plan, while the entire ITS effort will be coordinated with the 2030 Transit System Plan. The ITS Plan focuses on the existing transportation facilities, infrastructures, and operations of DART. It identifies the current status of ITS deployment within and outside the Agency; defines near-term ITS initiatives to meet current Agency needs; identifies system deployment costs; presents an internal ITS Architecture consistent with the National ITS Architecture; and incorporates an implementation phasing plan to guide the deployment of recommended near- term initiatives. These initiatives also position DART as the dominant public transportation services provider to support regional ITS initiatives that involve multiple transportation providers and inter-modal initiatives. DART management recently approved the creation of the DART ITS network to interconnect all DART centers to share and exchange incident management information.

Traffic Signal Priority for LRT in Dallas CBD – DART is working with the City of Dallas to improve LRT operations in the CBD area without significantly degrading vehicular traffic flow. This project will help DART prevent accumulation of trains at Downtown Dallas stations and have light rail vehicles travel between stations with minimum stops. The project will implement LRT study recommendations to improve performance of DART LRT operations. The DART Board approved a contract for the train detection system and related train/traffic interconnect communications as part of the Dallas CBD Traffic Signal Priority (TSP) Project in October 2008, and work has begun on the train detection system and related train/traffic interconnect communications. Total contract award was $2.7 million. This project is to be implemented in stages, the first two coinciding with the Green Line Openings in September 2009 and December 2010. The third stage will be the implementation of a new downtown traffic control system by the City of Dallas, which is currently expected in the spring of 2011.

Integrated Corridor Management (ICM) – The Integrated Corridor Management (ICM) concept was created by the U.S. Department of Transportation (US DOT) to deal with corridor traffic congestion. A Corridor is defined as an entire geographical area that consists of highway, city arterials, tolling systems, and transit services such as HOV, Express Bus, and Light Rail systems. FHWA, FTA, and RITA selected Dallas US 75 as one of eight national Pioneer Sites for an ICM project. As a result of development submission of Concept of Operations (ConOps) and Systems Requirements required as part of phase one, DART’s application for the second phase was selected by US DOT for Analysis, Modeling, and Simulation (AMS). This work is currently underway. DART has submitted an application for the third or the deployment phase of the program and US DOT is anticipated to select up to three sites this summer and work be initiated in FY 2010.

The ICM team is comprised of representatives from DART, TxDOT, NTTA, NCTCOG, and the cities of Dallas, University Park, Richardson, and Plano, and the Town of Highland Park. TTI, UTA, and SMU are also members of the Dallas ICM Team. The corridor network consists of about 3,000 intersections, 8,000 links, 250 zones, and one million travelers.

HOV-12

Section 10 Appendix Index of Exhibits

Exhibit APX.1 Resolutions Approving FY 2010 Annual Budget and FY 2010 Twenty-Year Financial Plan………………………………………... APX-1

Exhibit APX.2 FY 2010 Financial Standards…………..……………………….….. APX-4

Exhibit APX.3 FY 2009 Financial Plan, As Amended 05/26/09…….…………..…. APX-9

Exhibit APX.4 FY10-FY14 Changes in Sources & Uses of Cash………………...... APX-10

Exhibit APX.5 Five-Year Balance Sheet………………………………..…………... APX-11

Exhibit APX.6 Sales Tax History – FY 1999-FY 2009…………….………………. APX-12

Exhibit APX.7 DART Fare Collection…………………..……………..…………... APX-13

Exhibit APX.8 Glossary of Terms/Definitions……..……………………..………... APX-20

Exhibit APX.9 Acronyms……………………………………………….……….….. APX-24

Exhibit APX.10 DART Management Organization Chart………………………..….. APX-26

FY 2010 Business Plan (09/22/09) Appendix

Exhibit APX.1

APX-1

FY 2010 Business Plan (09/22/09) Appendix

Exhibit APX.1

APX-2

FY 2010 Business Plan (09/22/09) Appendix

APX-3

FY 2010 Business Plan (09/22/09) Appendix

Exhibit APX.2 FY 2010 Financial Standards Resolution No. 090052

The Financial Standards are divided into three sections: General, Debt Service, and Business Planning Parameters. The purpose of the general standards is to ensure that DART prudently manages its financial affairs and establishes appropriate cash reserves. The purpose of the debt service standards is to limit the level of debt that may be incurred and to ensure that debt assumptions are based on financial parameters similar to (or more conservative than) those that would be placed on DART by the financial marketplace. Actual debt covenants may differ from these standards. Where this occurs, the Financial Plan will reflect the actual covenants in the Board-approved debt instrument. The Business Planning Parameters provide management with a framework for developing the following year's budget and the twenty-year Financial Plan and establishing future business targets for management to achieve. Since DART's enabling legislation requires a two-thirds vote on debt and the Financial Plan, approval or amendment of DART's Financial Standards will require an affirmative vote of two-thirds of the appointed and qualified Board members.

FY 2010 Financial Standards – General

G1. Complete and accurate accounting records shall be maintained in accordance with Generally Accepted Accounting Principles as promulgated by the Government Accounting Standards Board. DART's fiscal year-end for financial reporting purposes shall be September 30.

G2. Funds of the Authority shall be invested within the guidelines of the Board's approved Investment Policy and Investment Strategy, and in compliance with applicable State law, including Section 452.102 of the Texas Transportation Code, Article 717q V.T.C.S., the Texas Public Funds Investment Act, and applicable Federal law. The Board shall approve the signatories for all Agency checking and savings accounts.

G3. An independent accounting firm shall perform an examination of DART's consolidated financial statements (including Single Audit requirements) and DART's retirement plan financial statements on an annual basis. The Agency's goal is to receive an unqualified opinion on the financial statements and an opinion that DART is in compliance with Federal Single Audit requirements in all material respects.

G4. An annual actuarial analysis shall be performed on the Defined Benefit Plan. This Plan shall be funded in accordance with guidance received from the actuaries.

APX-4

FY 2010 Business Plan (09/22/09) Appendix

FY 2010 Financial Standards – General (cont.)

G5. Appropriate insurance coverage shall be maintained to mitigate the risk of material loss. For self-insured retentions, a separately funded Master Insurance Reserve shall be maintained in an amount equal to the estimated liability for incurred losses and a reasonable allowance for claims incurred but not filed. An actuarial review of self- insured retentions will be made at least once every three years to ensure adequacy of the Master Insurance Reserve.

G6. Since sales taxes are received on a monthly basis, the unrestricted cash balance at the end of the year shall not be less than one-twelfth of the difference between the subsequent year's total sources of cash (excluding sales taxes) and total uses of cash as projected in the Twenty-Year Financial Plan. This reserve will be invested in accordance with the investment strategy for the Operating Fund.

G7. In order to provide a buffer against an unanticipated shortfall in sales tax collections, DART will maintain a Financial Reserve. The goal of this reserve is to maintain a balance of at least 10% of the current year’s sales tax budget. During periods in which sales taxes exceed the budget, the excess collections will be deposited into the Reserve by January 1 of the following year, up to a maximum fund balance of $50 million. Once the $50 million maximum balance is reached, all interest from the reserve and all future sales tax collections that exceed the budget will be placed into a Capital Project Reserve to help ensure that DART can meet its capital program commitments. Authorization to spend Reserve funds requires the affirmative vote of two-thirds of the appointed and qualified members of the Board.

G8. The fiscal year of DART shall end on September 30 of each year. At the beginning of the budget and financial planning process each year, the Board should review and approve a set of Financial Standards that can be used by management as a framework for developing the following year's Budget, Business Plan, and Twenty-Year Financial Plan. The Board shall approve the Budget and Twenty-Year Financial Plan by September 30 of each fiscal year. The Annual Budget shall be the first year of the Twenty-Year Financial Plan.

G9. Twenty-Year Financial Plan amendments shall require a two-thirds vote of the number of appointed and qualified Board members. An amendment is necessary when DART’s share of the addition of a new capital project or the cumulative modification of an existing capital project is in excess of $1 million or DART’s share of the addition of a new operating program or increase in an existing operating program is in excess of $500,000.

APX-5

FY 2010 Business Plan (09/22/09) Appendix

FY 2010 Financial Standards – Business Planning Parameters

B1. Sales tax revenue forecasts shall be based on a sales tax model developed specifically for the DART Service Area by an independent economist. In order to ensure a conservative sales tax estimate, the model’s projections may be reduced from the forecasted levels, but not increased for years 2-20 of the Twenty-Year Financial Plan. The most current year may be based on management’s best estimate. All such modifications shall be approved by the Board during the financial planning process.

B2. Passenger revenue forecasts shall be derived from ridership and average fare forecasts based on the Board's approved fare policy and fare structure. The Board will consider, from time to time, fare modifications to achieve Service Plan, ridership, and subsidy per passenger targets (see B4) and to maintain DART's financial viability.

B3. The Board shall approve annual fixed route service levels by mode for each of the next five years. Fixed route service levels shall be based on the Five Year Action Plan prepared by the Planning and Development Department. Cost of service will be developed jointly by Finance and Planning.

B4. The Board desires to steadily improve service efficiency over time. Subsidy per passenger will continue to be monitored and managed. Management will continue to report the subsidy per passenger in the Quarterly Operating and Financial Performance Report. Items that impact subsidy per passenger will be reported in the Financial Considerations section of Agenda Reports.

B5. For financial planning purposes, total operating expenses may not increase by more than 90% of the projected rate of inflation for the Dallas area, plus the incremental costs associated with the addition of new services, programs, and/or facilities as approved by the Board, as well as Board-approved contract increases, actuarial analyses, and fuel prices. The projected incremental cost impact of new services, programs, and/or facilities shall be presented to the Board for approval as part of the Twenty-Year Financial Plan assumption process each year.

B6. Management shall use a consistent methodology for computing net administrative costs and direct costs. The administrative ratio (administrative costs minus administrative revenues divided by direct costs) may not increase for two consecutive years and shall not be higher than 14.0%.

B7. General Mobility programs for road improvement programs such as the Local Assistance Program (LAP), Principal Arterial Street System (PASS), and Transportation System Management (TSM) and Intelligent Transportation System projects shall be funded according to the terms of the approved Interlocal Agreements and recorded as non- operating expenses in the Twenty-Year Financial Plan.

APX-6

FY 2010 Business Plan (09/22/09) Appendix

FY 2010 Financial Standards – Business Planning Parameters (cont’d)

B8. Capital planning and development costs and start-up costs are the internal staff costs associated with planning, designing, constructing, and opening new capital projects such as the light rail system. Management shall use a consistent methodology for allocating costs between operating and capital planning. Capital planning and development costs shall not exceed 7% of total operating costs. Cumulative start-up costs for a line section shall not exceed 60% of the first year operating costs of that line section or HOV lane.

B9. The Twenty-Year Financial Plan shall include funding for asset replacement and expansion projects. Capital projects in excess of $1 million shall be approved by the Board. Timely replacement of assets shall be the highest priority to ensure a safe system. Accordingly, the Twenty-Year Financial Plan shall include replacement reserves by major asset category to ensure adequate future funding. The reserve levels shall be based on an independent assessment of asset condition (to be completed at least once every five years). Expansion projects shall be prioritized based on the project's cost, impact on ridership, return on investment, available funds, and other relevant factors. Capital construction projects shall be increased at annual inflation rates no less than the greater of those: (i) contained in projections developed specifically for DART by an independent economist; or (ii) based on the current available data from construction contract awards. Inflation rates will be reviewed annually and as construction contracts are awarded to determine if the assumptions are reasonable. Non-construction capital projects will be increased at rates no less than general inflation (Consumer Price Index).

B10. DART receives formula and discretionary Federal funding. Formula funding shall be programmed primarily for bus replacement, capital maintenance (if available), vehicles, and passenger facility construction. Formula funding for future years shall be forecast at the current year's funding level or at the minimum levels included in Federal authorizations to ensure a conservative forecast. Discretionary funding shall be programmed primarily for major system expansion projects (e.g., LRT or new bus maintenance facilities). Discretionary funding levels shall be estimated by project based on Federal criteria and the likelihood of obtaining congressional appropriations and require Board approval during the Budget/Twenty-Year Financial Plan process.

APX-7

FY 2010 Business Plan (09/22/09) Appendix

FY 2010 Financial Standards – Debt Service

D1. DART may not enter into a debt or financing arrangement unless the transaction is in full compliance with all applicable provisions of the Texas Transportation Code and other applicable state and federal laws.

D2. Long-term debt may be included in the Twenty-Year Financial Plan; however, no debt secured by a pledge of sales and use tax revenues and that has a maturity longer than five years from the date of issuance shall be incurred without the approval by the voters of the Service Area.

D3. Debt shall only be issued for approved capital projects and insurance reserves. Specific debt issuances are not tied to specific projects. Any project included in the Budget or Twenty-Year Financial Plan may be funded from the General Operating Fund or with debt, as needed.

D4. Sinking funds shall be established to ensure that cash is available to make timely debt service payments on fixed-rate debt issuances that have maturities of one year or more and have periodic semi-annual interest payments. DART shall deposit on a monthly basis a prorated amount sufficient to fund the next principal and interest payment.

D5. Reserve fund(s) that may be required by the financial markets for each debt issuance shall be maintained. These reserves may be funded by cash and securities, insurance, or surety bonds, but shall not be accessed unless the sinking funds have insufficient money to make the principal and interest payments as due. For financial planning purposes, reserve projections shall be based on the actual requirement on existing debt, plus the lower of maximum annual debt service, 125% of average annual debt service, or 10% of principal outstanding on projected debt.

D6. DART shall establish a legal security structure of liens, agreements, pledged revenues, and other covenants which will be sufficient to (1) secure a rating of "A" or better on sales tax securities; (2) a MIG1 or SP1 rating on short-term notes; or (3) secure A1 or P1 rating on other short-term debt, or if necessary, secure a credit enhancement from a financial institution with a rating of "AA" or better.

D7. Certain debt service coverage ratios are required to access the financial markets. For financial planning purposes, annual sales tax revenues must exceed DART’s current year debt service obligations by a factor of at least two (External Coverage Ratio). It is a goal of DART that for financial planning purposes, for long-term debt, sales tax revenues plus operating revenues, plus interest income, less operating expenses (excluding debt service and depreciation), for any twelve consecutive months of the prior eighteen months, must be sufficient to cover maximum annual debt service (ratio greater than 1.0). However, the DART Board may choose to grant exceptions to this standard in the interest of expediting the completion of the System Plan.

APX-8

FY 2010 Business Plan (09/22/09) Appendix

APX-9

FY 2010 Business Plan (09/22/09) Appendix

Exhibit APX.4 Dallas Area Rapid Transit FY 2010 Financial Plan As Approved September 22, 2009 Changes in Sources and Uses of Cash from FY2009 Financial Plan As Amended 05-26-09 ($ Millions - Inflated Dollars)

Line Description 2010 2011 2012 2013 2014 Total

SOURCES OF FUNDS 1 Sales Tax Revenues $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2 Operating Revenues (4.4) (2.3) (1.5) 2.8 (7.5) (12.9) 3 Interest Income (10.5) (3.7) (5.7) (7.6) (2.4) (29.9) 4 Formula Federal Funding 76.2 (14.2) (7.6) 0.0 0.0 54.3 5 Discretionary Federal Funding 3.5 (20.0) (55.0) (40.0) 78.3 (33.2) 6 Debt Issuances (160.0) (10.0) (40.0) 130.0 220.0 140.0 7 Other Sources 66.1 (2.3) 6.0 (2.2) (5.6) 62.0

8 Total Sources of Funds ($29.0) ($52.6) ($103.9) $83.1 $282.8 $180.3

USES OF FUNDS 9 Sales Taxes for Operations 3.64% 0.69% 1.22% 1.19% 1.94% n/a Operating Expenses: 10 Bus ($0.8) ($1.0) ($0.0) $3.6 $3.3 5.1 11 Light Rail Transit (1.5) (1.4) (1.4) (1.4) (1.4) (7.1) 12 Trinity Railway Express (1.1) (2.5) (2.8) (3.1) (3.5) (13.0) 13 Paratransit 0.8 (0.1) 0.5 (0.1) (0.6) 0.5 14 HOV Transitways 1.7 1.8 1.8 1.8 1.9 9.0 15 General Mobility - TDM 0.1 0.1 0.1 0.1 0.1 0.4

16 Total Operating Expenses ($0.8) ($3.3) ($1.8) $0.8 ($0.1) ($5.2) Operating+P&D+Start Up Capital Projects and Other Non-Operating 17 Agency-Wide $47.7 $12.0 $14.4 $6.8 $2.2 $83.2 18 Bus 2.4 15.6 (78.8) 45.6 (63.9) (79.2) 19 Light Rail Transit (6.5) 17.7 (1.7) 67.7 74.6 151.8 20 Commuter Rail/RR Management 20.4 4.7 8.1 9.4 0.0 42.7 21 Paratransit 0.2 0.1 0.0 (0.2) 0.1 0.2 22 HOV Transitways 12.3 0.3 (0.3) 12.7 12.7 37.7 23 Capital P & D, Start-Up, Non-Operating 3.8 3.5 3.8 2.1 2.8 16.0 24 General Mobility - Road Impr./ITS 8.1 12.0 0.0 0.0 0.0 20.1

25 Total Capital & Non-Operating $88.5 $65.9 ($54.5) $144.0 $28.4 $272.5

Debt Service 26 Total Debt O/S Beginning-of-Year ($108.8) ($268.8) ($278.8) ($318.8) ($425.9) n/a 27 Total Debt O/S End-of-Year (268.8) (278.8) (318.8) (425.9) (205.5) n/a 28 Principal - LT/ST Debt 0.0 0.0 0.0 (2.9) (0.4) ($3.4) 29 Cost of Debt (Interest and Fees) (15.2) (15.2) (25.8) (32.3) (21.4) (110.0)

30 Debt Service ($15.2) ($15.2) ($25.8) ($35.2) ($21.8) ($113.4) 31 External Coverage Ratio 0.30 0.35 0.37 0.49 0.31 n/a 32 Internal Coverage Ratio (0.06) 0.04 0.04 0.11 0.02 n/a

33 Total Uses of Funds $72.5 $47.5 ($82.2) $109.6 $6.5 $153.9

34 Net Inc (Dec) in cash ($101.6) ($100.1) ($21.7) ($26.6) $276.3 $26.4 35 Change in Balance Sheet Accts 33.9 10.1 (18.6) 33.5 (39.6) 19.4 36 Cash, Beg of Period (8.9) (76.6) (166.5) (206.8) (199.8) n/a 37 Cash, End of Period (76.6) (166.5) (206.8) (199.8) 36.9 n/a 38 Less Cash Reserves & Restricted Funds (2.8) (2.9) (3.0) (3.1) (3.3) (15.2) 39 Less Working Cash Requirement (8.3) (1.8) (2.2) 23.0 (1.6) 9.0

40 Net Available Cash ($87.8) ($171.3) ($212.0) ($179.9) $32.0 n/a

APX-10

FY 2010 Business Plan (09/22/09) Appendix

Exhibit APX.5 FY 2010 Financial Plan As Approved September 22, 2009 Five Year Balance Sheet ($ Millions - Inflated Dollars)

Line Description 2010 2011 2012 2013 2014 ASSETS

1 Cash and cash equivalents $527.2 $375.0 $298.4 $362.0 $307.2 2 Sales taxes receivable 67.5 71.2 76.4 82.0 88.0 3 Transit revenue receivable, net 2.5 2.9 3.1 3.6 3.7 4 Due from other governments 12.5 7.5 7.3 8.0 8.2 5 Material and supplies inventory 28.7 28.7 30.4 31.8 33.0 6 Interest Receivable 0.1 0.1 0.1 0.1 0.1 7 Net Prepaid Financing Costs 13.5 17.4 16.8 18.2 19.7 8 TOTAL CURRENT ASSETS $651.9 $502.7 $432.5 $505.7 $459.9

9 Restricted Assets & Long-Term Investments $73.0 $74.4 $72.6 $85.1 $89.7 10 Property, Plant & Equipment, Net 5,016.4 5,393.2 5,531.2 5,797.4 6,015.8 11 Long-Term Investments for Capital Lease Liabilities 406.0 406.0 406.0 406.0 406.0 12 Net Pension Asset 4.4 4.4 4.4 4.4 4.4

13 TOTAL ASSETS $6,151.7 $6,380.7 $6,446.8 $6,798.6 $6,975.8 LIABILITIES AND EQUITY

14 Accounts payable and accrued liabilities $268.4 $169.2 $129.0 $155.0 $150.8 15 Current portion of long-term debt payable 17.9 18.8 19.7 20.8 24.5 16 Local Assistance Program payable 7.2 0.0 0.0 0.0 0.0 17 Retainage payable 82.6 63.0 30.8 26.9 30.6 18 Other 10.2 10.2 10.2 10.2 10.2 19 TOTAL CURRENT LIABILITIES $386.3 $261.1 $189.7 $212.8 $216.1

20 Sales Tax Revenue Commercial Paper Notes Payable $150.0 $130.0 $330.0 $500.0 $500.0 21 Senior Lien Sales Tax Revenue Bonds Payable 2,563.1 2,993.5 2,972.8 3,151.0 3,342.8 22 Capital Lease Liabilities 406.0 406.0 406.0 406.0 406.0

23 TOTAL LIABILITIES $3,505.5 $3,790.7 $3,898.6 $4,269.9 $4,465.0

24 NET ASSETS (EQUITY) $2,646.2 $2,590.0 $2,548.2 $2,528.6 $2,510.9

25 TOTAL LIABILITIES & NET ASSETS $6,151.7 $6,380.7 $6,446.8 $6,798.6 $6,975.8

APX-11

FY 2010 Business Plan (09/22/09) Appendix

APX.6 Sales Tax History 1999 - 2009 (in millions) FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Oct $23.8 $32.1 $27.6 $25.9 $23.2 $24.5 $25.7 $27.2 $28.6 $31.4 $30.2 Nov 22.4 26.4 26.9 23.5 22.3 24.3 25.5 27.3 28.9 31.6 27.3 Dec 43.1 42.0 43.1 40.3 36.2 37.7 36.9 40.3 42.8 44.8 43.5 Jan 23.5 25.1 26.0 22.1 22.5 24.2 24.6 27.0 28.3 31.4 27.2 Feb 23.0 26.2 25.0 22.6 20.3 22.9 24.1 26.2 28.2 29.5 27.0 Mar 34.7 37.8 36.7 31.1 30.2 33.3 33.8 35.3 37.7 37.9 35.8 Apr 24.4 27.8 26.2 25.1 25.1 25.2 25.5 28.7 29.5 32.0 29.7 May 24.4 27.9 27.3 24.2 23.5 24.4 26.5 29.9 30.2 33.9 29.6 Jun 36.8 36.0 34.0 31.1 31.4 33.8 34.5 35.5 37.2 41.6 37.3 Jul 24.8 28.2 26.6 25.4 23.4 25.1 25.2 28.3 30.7 33.3 28.8 Aug 22.8 28.4 26.0 23.8 22.3 24.7 26.3 29.0 30.2 31.4 27.7 Sep 28.8 35.8 32.5 30.5 31.3 32.3 33.1 35.8 36.8 37.4 FY Total $332.7 $373.8 $357.9 $325.5 $311.8 $332.4 $341.8 $370.5 $389.1 $416.1 $344.2

APX-12

FY 2010 Business Plan (09/22/09) Appendix

APX.7 DART Fare Collection

DART entered into an interlocal agreement with the City of Dallas to manage and operate the public transportation services known as Dallas Transit System (DTS), empowering the DART Board to establish fares for any and all services provided. On September 18, 1983, the interim DART Board called for a public hearing to reduce the base fare to $0.50. The Board approved this fare reduction December 6, 1983, making it effective January 1, 1984. The next fare increase was recommended and approved on December 16, 1986. It was approved as a two-year fare increase with the first increase to $0.75 becoming effective February 1, 1987. The second year of the fare increase was to take effect January 1, 1988, with the fare increasing $0.05 to a base fare of $0.80. However, on December 8, 1987, the Board rescinded the second phase of the fare increase. DART and DTS merged into one transit authority on February 8, 1988. Twelve years later, after completion of a fare study, a recommendation for a base fare increase to $1.00 was approved on October 25, 1994, and was effective on January 23, 1995. There were no increases to the base fare for another eight years until approval on November 26, 2002 to increase the fare to $1.25 effective March 3, 2003. The increase of the base fare to $1.50 was approved on April 24, 2007 and became effective October 1, 2007. On May 12, 2009, the Board approved an increase to the base fare to $1.75, which went into effect September 14, 2009.

DART Fare Structure History As of September 30, 2009 Approval Effective Base Board Date Date Rate Resolution Comments Multiple fare rates for different cities December 6, 1983 January 1, 1984 $0.50 830026 and routes December 16, 1986 February 1, 1987 $0.75 860106 Two-year phased-in fare increase Rescinded second year rate increase December 8, 1987 February 1, 1987 $0.75 870100 approved in Resolution No. 860106 Consolidated all fares and increased June 10, 1997 August 1, 1997 $1.00 970101 some fare types including Paratransit November 26, 2002 March 3, 2003 $1.25 020192 Across-the-board fare increase with a two-year phased-in approach for April 24, 2007 October 1, 2007 $1.50 070064 Paratransit Fare increase for all base fares, May 12, 2009 September 14, 2009 $1.75 090067 excluding Paratransit

APX-13

FY 2010 Business Plan (09/22/09) Appendix

FARE STRUCTURE Effective – September 14, 2009

Effective Effective Effective 09/14/09 10/01/09 10/01/10 BASE SINGLE RIDE FARE Local Service $1.75 Commuter Rail (CR) & Express Bus CR 1-Zone & Express Bus $2.50 $3.50 CR 2-Zone & Express Bus $3.75 $5.00 Reduced Fare* $0.85 Paratransit – Demand Response Van/Sedan Service $2.75 $3.00 Paratransit trips to fixed-route stops $0.75 Paratransit eligible riders on fixed route services FREE

PREPAID MULTI-RIDE FARES Annual Pass: - Local $650.00 - Commuter Rail & Express Bus CR 1-Zone & Express Bus $750.00 $1,000.00 CR 2-Zone & Express Bus $1,050.00 $1,200.00 Monthly Pass: - Local $65.00 - Commuter Rail & Express Bus CR 1-Zone & Express Bus $75.00 $100.00 CR 2-Zone & Express Bus $105.00 $120.00 - Reduced * $32.00 Weekly Pass: - Local $20.00 - Commuter Rail & Express Bus CR 1-Zone & Express Bus $25.00 $35.00 CR 2-Zone & Express Bus $37.50 $50.00 Day Pass: - Local $4.00 - Commuter Rail & Express Bus CR 1-Zone & Express Bus $5.00 $7.00 CR 2-Zone & Express Bus $7.50 $10.00 - Reduced * $2.00 - Reduced High School Fare ** $2.00 Day Pass Book of Ten *** $25.00 10-Ticket Paratransit Coupon Book $27.50 $30.00

APX-14

FY 2010 Business Plan (09/22/09) Appendix

FOOTNOTES:

* Reduced Fares are applicable on bus and rail for the following:

(a) Seniors, Non-Paratransit Disabled, and High School students with valid ID (b) Children, elementary through junior high school (Children under 5 – see Free Fares) (c) DART Shuttle Bus Routes

** Reduced High School Fare for students with valid ID

*** Day Pass Book of 10 is available only to government and non-profit institutions

APX-15

FY 2010 Business Plan (09/22/09) Appendix

FREE FARES

The following categories of riders may ride bus, light rail, or commuter rail without fare payment. (This section is not applicable to charters nor to paratransit service, except as noted.)

(a) Paratransit-eligible riders on fixed-route services with a valid paratransit identification card.

(b) ADA paratransit-eligible individuals who are authorized to have one personal care attendant (PCA) may have the PCA travel with them on fixed-route service, at no charge, provided a proper ID indicating that an attendant is required, is displayed.

(c) Children under the age of five (maximum of two per trip) when accompanied by an adult (age 18 or older) paying the appropriate local, premium, or reduced fare. Any additional child under the age of five traveling with that adult, or any child accompanied only by person(s) younger than age 18, shall be charged the reduced fare.

(d) Voters showing a valid voter registration card during the hours of 6:00 a.m. to 8:00 p.m. on a state or national primary or general election day in accordance with Board Resolution No. 900232.

(e) Uniformed police officers and plain-clothes police officers displaying badges issued by DART member cities.

(f) Uniformed parking enforcement officers.

(g) Downtown Safety Patrol personnel when in uniform and when traveling within the CBD.

(h) Active and retired DART employees and their spouses, or other designated family member, who display valid DART photo ID cards. (Also honored on paratransit service with appropriate paratransit certification and identification).

(i) Part-time DART employees with DART photo ID card. (Also honored on paratransit service with appropriate paratransit certification and identification.) Temporary employees do not qualify for this benefit.

(j) Current and former DART Board members and their spouses with valid DART photo ID card. (Also honored on paratransit service with appropriate paratransit certification and identification.)

(k) Employees of contractors who operate fixed-route or demand responsive service in DART's behalf and certain engineering consultants, including the GEC, System Design, and Design Contract Integration consultants domiciled in the DART headquarters, who have been provided with valid DART photo ID cards. (Also honored on paratransit service with appropriate paratransit certification and identification.)

(l) McKinney Avenue Trolley employees or operators with valid Trolley ID card.

APX-16

FY 2010 Business Plan (09/22/09) Appendix

SPECIAL PROGRAMS

I. Customer Promotions:

The President/Executive Director, Executive Vice President/General Manager- Operations, or their designee may approve the free distribution of prepaid media, VIP passes, or special coupons as needed for the following purposes:

(a) to support marketing programs, including but not limited to special route promotions, introductory shuttles, air quality improvement programs, and focus group or survey participation.

(b) to provide inbound travel to jury duty on all DART service, including bus, rail, and paratransit, to all individuals showing a jury summons with the current date displayed. A pass valid for outbound travel on all DART service, including bus, rail, and paratransit, will be distributed by Court Services upon request to those individuals reporting for jury duty. (Effective 02/01/10)

(c) to compensate customers for inconvenience or system problems.

(d) to allow courtesy access to the system for special tour groups, non-local DART visitors, or consultants involved in DART system planning. As a tax-supported governmental agency, DART does not contribute free transportation or offer special discounts on fare media to other governmental agencies, social service agencies, or charitable organizations.

II. Convention and Special Event Passes:

Day passes for the dates specified on the ticket for convention registrants and special event participants will be priced at the appropriate (local, system, or regional) day pass rate. A sliding scale with discounts ranging from 10% to 50% of the convention and special event base rate will be available on advanced bulk purchase of 2,000 or more passes.

Passes Purchased Discount 2,000 – 4,999 10% 5,000 – 9,999 20% 10,000 – 14,999 25% 15,000 – 19,999 30% 20,000 – 24,999 35% 25,000 – 39,999 40% 40,000 – 49,999 45% 50,000 and above 50%

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III. Corporate Programs:

(a) Annual passes, known as Employee Preferred annual passes, may be purchased by businesses, companies, or other employer organizations. Minimum purchase requirement is 25 passes. Pricing will be based on the amount of service provided to specified locations as follows:

Service Level Local Annual Pass Premium Annual Pass Commuter Rail Plus Normal Service Level $312 $480 $576 High Service Level $468 $720 $864

(b) Emergency Ride Home (ERH) program, administered by DART, will be made available to employees registered in the Employee Preferred Annual Pass Program.

IV. Residential Annual Pass Program

Annual passes, known as the Residential Preferred annual passes, may be purchased by apartment/condominium complexes. Minimum purchase requirement is 25 passes. Pricing will be as follows:

Service Level Local Annual Pass Premium Annual Pass Commuter Rail Plus Normal Service Level $312 $480 $576 High Service Level $468 $720 $864

V. College Programs

Annual, semester, and quarterly passes may be purchased for 100% of all full-time students by colleges, universities, trade schools, and technical schools. Pricing will be based on the level of service provided to a specific location. The following table represents minimum pricing levels.

College Program Pricing Trips per Peak Hour Quarter Semester Annual 1-50 $15 $20 $60 Over 50 $23 $30 $90

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VI. High School and Junior High School Program

Annual passes may be purchased by high schools and junior high schools for 100% of all students. Pricing will be based on the amount of service provided to each high school and its student population. The following table represents the minimum pricing levels, and may be adjusted as necessary to cover additional service.

Minimum Junior High & High School Program Pricing

Student Population Trips per Hour 25-150 151-300 301+ 1-50 $45 $40 $35 Over 50 $60 $55 $50

VII. Route Promotion Pass

The Route Promotion Pass has been produced through Consumer Programs to support DART’s public awareness and outreach efforts. Marketing will negotiate with Special Events where DART could benefit from the exposure the event media and attendance could provide; and the event organizers are interested in including DART Day Passes for their attendees. The parameters of the negotiation are as follows:

(a) The event is within a member city in the DART Service Area.

(b) DART must receive a minimum of a 2 to 1 ratio based on the value of the passes DART is willing to provide to the event. This can be through barter, cash, or any combination of the two.

(c) The media provided by the event must promote using DART.

(d) A simple agreement is signed by both DART and the event organizer/chair.

(e) The President/Executive Director or his designee may sign the agreement. Concurrence from the Treasurer or Chief Financial Officer must be received before presenting the agreement for signature.

(f) The Marketing Department will provide documentation to the Finance Department, within 90 days after the conclusion of the special event, that supports the value of the barter used to pay for the passes.

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Table of Fares by Types:

The following table identifies the fares by types that DART customers can purchase based on the approved fare increase. This also provides the estimated sales and revenue by fare types.

FY09 Proposed Sales FY10 Proposed Sales FY11 Proposed Sales Proposed Yearly Proposed Proposed Yearly Proposed Proposed Yearly Proposed Type of Fare Units Revenue Units Revenue Units Revenue Single Fare Local 1,838,101 $ 2,757,152 2,021,930 $ 3,538,377 2,244,342 $ 3,927,598 Premium 36,924 92,310 35,595 88,987 39,510 138,286 Reduced 720,302 540,226 694,371 590,215 770,752 655,139 CR - 1 Zone 742 1,113 715 1,788 794 2,779 Paratransit Coupon 43,904 1,207,367 42,324 1,269,711 46,979 1,409,379 Total Single Fare 2,639,974 $ 4,598,169 2,794,935 $ 5,489,079 3,102,378 $ 6,133,182 Day Passes Local 5,926,432 $ 17,779,295 5,588,080 $ 22,352,321 6,202,769 $ 24,811,076 Premium 233,109 2,487,640 224,717 2,398,085 249,436 3,019,276 Reduced 2,164,732 3,247,098 2,086,802 4,173,604 2,316,350 4,632,700 CR - 1 Zone 23,111 69,334 22,279 111,397 24,730 173,110 Total Day Passes 8,347,384 $ 23,583,367 7,921,878 $ 29,035,406 8,793,285 $ 32,636,162 Monthly Passes Local 165,220$ 8,260,997 159,272 10,352,681 176,792 11,491,476 Premium 20,970 1,677,564 20,215 1,516,098 22,438 2,243,825 Reduced 78,812 1,970,309 75,975 2,431,204 84,332 2,698,637 CR - 1 Zone 5,914 295,724 5,702 427,617 6,329 632,874

GRAND TOTAL GRAND Total Monthly Passes 270,916$ 12,204,594 261,163$ 14,727,601 289,891$ 17,066,812 7-Day Passes Local 18,202 273,031 17,547 350,936 19,477 389,539 Premium 410 10,239 395 9,871 438 15,339 CR - 1 Zone 192 2,887 186 4,638 206 7,208 Total 7-Day Passes 18,804$ 286,158 18,127$ 365,445 20,121$ 412,086 Annual Passes Local 153 42,709 77 51,744 96 62,400 Premium 171 78,950 95 71,351 120 120,000 Corporate Program 78,209 5,620,236 20,083 8,052,744 22,292 8,938,546 CR - 1 Zone - 273 157,260 708 727,325 Total Annual Passes 78,533 $ 5,741,896 20,529$ 8,333,099 23,216$ 9,848,271 11,355,611 $ 46,414,184 11,016,632 $ 57,950,631 12,228,891 $ 66,096,513

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Ticket Vending Machines (TVMs)

DART began using TVMs when light rail became operational in 1996. These machines are installed at all light rail and commuter rail stations and can be installed at transit centers if there is a business necessity.

History of TVMs

TVM 5000s Manufactured by Schlumberger, the TVM 5000 ticket vending machines (TVMs) were placed along the DART Starter System from 1996 – 1999. There are currently 60 of these TVMs in service at Red Line stations south of Park Lane, Blue Line stations south of LBJ, and all TRE stations (except Victory). There are two TVM 5000s each installed at all stations south of the CBD, at Lovers Lane, and along the TRE line. There are three or four TVMs at all CBD stations, CityPlace, and Mockingbird. The 5000s were connected to the DART network in 2005 via modems.

The TVM 5000s are only capable of shorter period passes (single ride or day pass) because the tickets do not include an electronic ID mechanism (like magnetic encoding). The passes must be visually validated. Schlumberger no longer makes ticket vending machines and has discontinued supporting the machines. The TVM 5000s do not accept credit cards or smart cards.

TVM 6000s Also produced by Schlumberger, the TVM 6000s were placed at Phase I build-out stations in 2001 – 2002. These TVMs are located at Victory Station, Red Line stations north of Park Lane, and Blue Line Stations from LBJ north. There are 64 machines in total with four TVMs at all stations except Parker Road and Garland which have six. These TVMs are all connected to the DART network via high-speed fiber lines.

Like the 5000s, these machines can only issue short period passes to protect against counterfeiting and they must be visually validated. These TVMs run on Microsoft Windows NT software, which is no longer supported by Microsoft. The BNA57 bill acceptor from MEI is still supported, but based on the phase timing of the BSN385, MEI may stop supporting them after 2012. As stated above, Schlumberger no longer makes TVMs and does not support the TVM 6000. Schlumberger contracted with Parkeon to provide TVM support to DART. Parkeon currently provides limited support to DART.

Current TVM Status: New TVMs were needed for the Green Line, Orange Line, and Blue Line extension. DART also needed to begin replacement of the Starter System machines. As the Green Line TVM contract was being developed, the Rail Program Development Department worked with Finance, Maintenance, Marketing & Communications, and other departments as needed to develop specifications that would meet current and future needs. A contract was approved by the DART Board on July 10, 2007 to purchase TVMs from GFI Genfare for the Phase II Build-out. The Board approved purchase of replacement TVMs for the Starter System on December 11, 2007. The following outlines the new machine’s capabilities and the plan to install and replace the TVMs.

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GFI Vendstar 3

This new TVM was developed and manufactured by GFI Genfare, a company that has been designing, manufacturing, and supporting fare collection equipment for decades. The TVM issues magnetic encoded tickets that can be swiped on our current GFI fareboxes to validate authenticity. Electronic validation is much more efficient for bus operators and customers and has been used on most of DART’s fare media. Customers will be able to buy longer period passes (weekly and monthly) on these machines. The GFI TVMs will also be configured to process credit card transactions. The magnetic encoding will provide enhanced ridership data for those who buy a ticket at a TVM and transfer to a bus as we will now be able to follow card movement from rail to bus. The TVMs provide configurable change-making options that will better support nickel/dime based fare adjustments.

The GFI TVMs will have contactless smart card reading devices in them which would be put to use if DART chooses to implement a smart card fare media system in the future. DART currently has an outstanding procurement for a feasibility study for a regional smart card system. The GFI TVMs will be installed at the Green Line stations, with the first phase ready for revenue service in September 2009.

These machines will also be used in the TVM replacement program which is still under review. The number of machines installed will depend on the usage patterns documented over the life of the current machines. End-of-line and CBD stations usually have the highest TVM usage; therefore, up to six machines could be installed at each of these stations. For stations with less TVM demand, two to four machines would be installed. The following deployment plan is based on the maximum number of TVM installations and may change once all data is compiled and reviewed. The plan is also dependent on all contract options and funding sources moving forward as projected.

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GFI TVM DEPLOYMENT PLAN

Station Vendstar Total per *Est Start Est Revenue Name per Station Station Installation Service by: Southeast Corridor Deep Ellum 2 2 3-Aug-09 31-Aug-09 Baylor 2 2 5-Aug-09 31-Aug-09 Fair Park 2 2 7-Aug-09 31-Aug-09 MLK 2 2 10-Aug-09 31-Aug-09 5000 Replacement CBD #1 Pearl Station 3 3 1-Nov-09 31-Dec-09 St. Paul Station 4 4 1-Nov-09 31-Dec-09 Akard Station 4 4 1-Nov-09 31-Dec-09 West End Station 4 4 1-Nov-09 31-Dec-09 Victory Station 2 4 1-Nov-09 31-Dec-09 5000 Replacement CBD #2 Union Station 4 4 15-Jan-10 31-Dec-09 Convention Center Station 2 2 15-Jan-10 31-Dec-09 Cedars 2 2 15-Jan-10 1-Sep-10 8th & Corinth Station 2 2 15-Jan-10 1-Sep-10 Mockingbird Station 4 4 15-Feb-10 1-Sep-10 Cityplace Station 2 2 15-Feb-10 1-Sep-10 5000 Replacement Southwest Corridor Dallas Zoo Station 2 2 15-Feb-10 1-Sep-10 Tyler/Vernon Station 2 2 15-Feb-10 1-Sep-10 Hampton Station 2 2 15-Mar-10 1-Sep-10 Westmoreland Station 2 2 15-Mar-10 1-Sep-10 5000 Replacement North Corridor Parker Road Station 2 6 15-Mar-10 1-Sep-10 Downtown Plano Station 1 4 15-Mar-10 1-Sep-10 Bush Turnpike Station 1 4 15-Mar-10 1-Sep-10 Galatyn Park Station 1 4 15-Mar-10 1-Sep-10 Arapaho Center Station 1 4 15-Mar-10 1-Sep-10 Spring Valley Station 1 4 15-Apr-10 1-Sep-10 LBJ/Central Station 1 4 15-Apr-10 1-Sep-10 Forest Lane Station 1 4 15-Apr-10 1-Sep-10 Walnut Hill Station 1 4 15-Apr-10 1-Sep-10 Park Lane Station 1 4 15-Apr-10 1-Sep-10 Lovers Lane Station 2 2 15-Apr-10 1-Sep-10 5000 Replacement South Corridor Morrell Station 2 2 15-May-10 1-Sep-10 Illinois Station 2 2 15-May-10 1-Sep-10 Kiest Station 2 2 15-May-10 1-Sep-10 VA Medical Center Station 2 2 15-May-10 1-Sep-10 Ledbetter Station 2 2 15-May-10 1-Sep-10

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GFI TVM DEPLOYMENT PLAN - continued

Station Vendstar Total per *Est Start Est Revenue Name per Station Station Installation Service by: 5000 Replacement Downtown Garland Station 2 6 15-Jun-10 1-Sep-10 Forest/Jupiter Station 1 4 15-Jun-10 1-Sep-10 LBJ/Skillman Station 1 4 15-Jun-10 1-Sep-10 White Rock Station 1 4 15-Jun-10 1-Sep-10 Lake Highlands TBD TBD TBD TBD 5000 Replacement TRE Medical Market 2 2 15-Jul-10 1-Sep-10 South Irving 2 2 15-Jul-10 1-Sep-10 West Irving 2 2 15-Jul-10 1-Sep-10 Southeast Corridor Hatcher 2 2 15-Aug-10 1-Nov-10 Lawnview 2 2 15-Aug-10 1-Nov-10 Lake June 2 2 15-Aug-10 1-Nov-10 Buckner 4 4 15-Aug-10 1-Nov-10 Northwest Corridor Market Center 2 2 15-Aug-10 1-Nov-10 SWMC/Parkland 2 2 15-Aug-10 1-Nov-10 Inwood 2 2 15-Aug-10 1-Nov-10 Love Field 2 2 15-Aug-10 1-Nov-10 Bachman 2 2 15-Sep-10 1-Nov-10 Walnut Hill/Denton 2 2 15-Sep-10 1-Nov-10 Royal Lane 2 2 15-Sep-10 1-Nov-10 Farmers Branch 2 2 15-Sep-10 1-Nov-10 Downtown Carrollton 2 2 15-Sep-10 1-Nov-10 Trinity Mills 2 2 15-Sep-10 1-Nov-10 N. Carrollton/Frankford Road 4 4 15-Sep-10 1-Nov-10 Irving Line Loop 12 University of Dallas 2 2 15-Sep-11 1-Nov-11 South Las Colinas Las Colinas Urban Center 2 2 15-Sep-11 1-Nov-11 Irving Convention Center 2 2 15-Sep-11 1-Nov-11 Irving Line 2 Las Colinas Carpenter Ranch 2 2 15-Sep-12 1-Nov-12 North Lake College 2 2 15-Sep-12 1-Nov-12 Beltline 4 4 15-Sep-12 1-Nov-12 North East Rowlett Downtown Rowlett 4 4 15-Sep-12 1-Nov-12

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GFI TVM DEPLOYMENT PLAN - continued

Station Vendstar Total per *Est Start Est Revenue Name per Station Station Installation Service by: TVM 6000 Replacement North Corridor Parker Road Station 6 6 15-Nov-12 1-Sep-13

Downtown Plano Station 4 4 15-Nov-12 1-Sep-13

Bush Turnpike Station 4 4 15-Nov-12 1-Sep-13

Galatyn Park Station 4 4 15-Nov-12 1-Sep-13

Arapaho Center Station 4 4 15-Nov-12 1-Sep-13 Spring Valley Station 4 4 15-Jan-13 1-Sep-13 LBJ/Central Station 4 4 15-Jan-13 1-Sep-13 Forest Lane Station 4 4 15-Jan-13 1-Sep-13 Walnut Hill Station 4 4 15-Jan-13 1-Sep-13 Park Lane Station 4 4 15-Jan-13 1-Sep-13 TVM 6000 Replacement Northeast Corridor Downtown Garland Station 6 6 15-Feb-13 1-Sep-13 Forest/Jupiter Station 4 4 15-Feb-13 1-Sep-13 LBJ/Skillman Station 4 4 15-Feb-13 1-Sep-13 White Rock Station 4 4 15-Feb-13 1-Sep-13 Victory Station 4 4 15-Feb-13 1-Sep-13 Irving Line 3 DFW Airport 4 4 15-Sep-13 1-Nov-13 * Indicates more TVMs are removed than will be replaced do to ticket purchase history Color Legend -Green Line -Red Line -Blue Line -Orange Line -CBD and Combined -TRE Stations

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Exhibit APX.8 Glossary of Terms/Definitions

Accidents per 100,000 Miles – Measures vehicle accidents reported (bus and light rail) per 100,000 miles of actual fixed route mileage.

Calculation = [(Vehicle Accidents / Actual Mileage) * 100,000]

Administrative Ratio – Measures administrative costs as a percentage of direct operating costs. It is management’s objective to reduce this ratio. Administrative costs include (but are not limited to) executive management, finance, purchasing, legal, internal audit, human resources, marketing, board support, and administrative services. Administrative revenues include (but are not limited to) advertising revenue.

Calculation = [(Administrative Costs – Administrative Revenues) / (Direct Costs + Start-up Costs)]

Annulled Trips – The number of trips eliminated from the schedule prior to scheduled departure due to adverse equipment, track, or dispatch conditions. TRE does not include annulled trips as part of the on-time performance calculation.

Average Fare – Represents the average fare paid per passenger boarding on fixed route modes of service during the period.

Calculation = (Fixed Route Passenger Revenue - Commissions & Discounts) /(Fixed Route Passenger Boardings)

Average Weekday Ridership – The average number of passenger boardings (or HOV users) on a weekday. This measurement does not include ridership on Saturdays, Sundays, or holidays.

Certified Riders – Passengers who have been deemed eligible for Paratransit services because their disability prevents them from functionally accessing fixed route services. Eligibility is determined in accordance with the criteria outlined in the Americans with Disabilities Act of 1990.

Complaints per 100,000 Passengers – Fixed route quality ratio that measures the number of service complaints per 100,000 passenger boardings. Management's objective is to reduce this ratio.

Calculation = [(Service Complaints Received / Fixed Route Passenger Boardings) * 100,000]

Cost per Revenue Mile – Efficiency ratio that measures the cost of providing a revenue mile of service. This measurement is based on fully loaded costs and excludes operating revenues. Management's objective is to reduce this ratio.

Calculation = [Total Operating Expenses / Revenue Miles]

Crimes against persons – Monitoring provides an overview of patron safety by detailing the frequency of crimes that occur on the DART system. Management's objective is to reduce this ratio.

Calculation = [Crimes Against Persons/Total Incidents]

Crimes against property – Monitoring provides an overview of the safety of our customer’s property. Management's objective is to reduce this ratio.

Calculation = [Crimes Against Property/Total Incidents]

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Glossary of Terms/Definitions (Cont.)

Demand Responsive – Paratransit passengers call to request service; therefore, that service is provided on demand, and is considered to be demand responsive, rather than scheduled service. In addition, some non-traditional demand responsive service has been added which may not be Paratransit related, such as DART OnCall.

Farebox Recovery Ratio – the proportion of operating cost that is generated by passenger fares.

Calculation = [Fixed-route Passenger Revenue/Fixed-route Operating Expense]

Mean Distance Between Service Calls – Quality ratio that measures the number of miles a vehicle operates before a service call occurs. Management's objective is to increase this ratio.

Calculation = [Total Miles Operated / Total # of Service Calls]

Missed Work Days – Occurs when an operator is not available for his or her scheduled/assigned work and has not received prior approval to be absent.

On-Time Performance – Quality ratio that measures how often a service is on time (i.e., at a designated pick-up spot within a predetermined timeframe). The timeframe differs based on mode and frequency of service. Bus Operations currently uses 59 seconds early and 4 minutes and 59 seconds late. Light rail uses 1 minute early and 4 minutes late. Commuter rail uses 5 minutes late as required by FRA. Paratransit uses 20 minutes early and late. Management's objective is to increase this ratio.

Calculation = [(# Scheduled Trips Sampled - # of Times Early or Late) / Total # of Scheduled Trips Sampled]

Operating Speed Ratio -- This efficiency ratio measures the average operating speed of vehicles using the HOV lane as compared to the speed of vehicles (SOVs) on the freeway main lanes. Management’s objective is to increase this ratio above the 1.50 percent target.

Calculation = (Average HOV operating speed / Average SOV operating speed)

Operating Revenues – Includes the revenues obtained from the farebox, special events service, advertising, signboard rentals, leases, pass sales, operating grants, shuttle services, other rental income (mineral rights), and miscellaneous income. Operating revenues do not include sales tax revenue, interest income, or gain on sale of assets.

Operating Expenses – Includes the expenses required to operate DART's revenue services, HOV, and general mobility projects. Operating expenses do not include the cost of road improvements or the staff costs associated with DART's capital programs.

Passenger Canceled Trips Ratio – Measures the percentage of times that Paratransit users schedule a trip, then cancel the trip. Total scheduled trips include actual trips made, cancellations, and no-shows.

Calculation = [# of Canceled Trips / Paratransit Total # of Scheduled Trips]

Passenger No-Show Ratio – Quality measurement for Paratransit service that measures the number of times a Paratransit user makes a reservation and does not show-up for the ride. This measurement is different from a cancellation. Management's objective is to reduce this number so that other trips can be scheduled in that timeframe. Users can lose the ability to access the Paratransit system if they have an excessive number of no-shows.

Calculation = [# of No Shows / # of Total Scheduled Trips]

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Glossary of Terms/Definitions (Cont.)

Passengers per Car Mile – Effectiveness ratio that measures the degree to which the number of rail cars deployed on scheduled trains matches ridership levels. Since power consumption and maintenance costs are driven by car miles, management strives to assure an appropriate balance between the number of cars deployed per train and the ridership level.

Calculation = [Actual Passenger Boardings/Revenue Car Miles]

Passenger Trips - See Ridership.

Passengers per Hour - Actual – The total number of Paratransit passengers actually carried, divided by the total hours of revenue service.

Calculation = [Actual Passenger Boardings / Revenue Hours]

Passengers per Hour - Scheduled – Quality ratio for Paratransit service that measures the number of passengers scheduled per hour of revenue service. Management's objective is to increase this number.

Calculation = [Scheduled Passenger Boardings / Revenue Hours]

Passengers per Mile – Effectiveness ratio that measures route productivity by comparing the number of passenger boardings to the number of revenue miles. Management's objective is to increase this ratio.

Calculation = [Passenger Boardings / Revenue Miles]

Pay-to-Platform Ratio - Hours – This efficiency ratio measures, in hours, the total amount of time for which operators are paid as a percentage of their platform time. Platform time is the time when the operator is on the bus/train operating the revenue vehicle, and includes revenue service, deadheading, and recovery time. Other wage categories that may be paid to the operator include other scheduled time, scheduled and unscheduled absences, unscheduled work, safety and training, and administration.

Calculation = [Total Operators Hours Paid / Operators Platform Hours Paid]

Percentage of Trips Completed – Quality measurement for Paratransit service that measures the number of times DART does not miss a scheduled passenger pick-up. Management's objective is to increase this ratio.

Calculation = [(# of Actual Trips - # of Trips Missed) / # of Actual Trips]

Revenue Car Miles – Total miles operated by LRT or TRE trains in revenue service multiplied by the number of cars operated as part of each train. Power consumption and maintenance requirements are driven by the number of car miles operated. As a result, one area of management focus is to optimize the number of cars operated per train based on ridership and Board-adopted loading standards.

Calculation = [# of Revenue Miles operated * # of cars within a train]

Revenue Miles or Hours – Measures the number of miles, or hours, that a vehicle is in revenue service (i.e., available to pick up passengers) and includes special events service. This measure does not include "deadhead miles" which are the miles between the bus maintenance facility and the beginning and/or end of a route.

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Glossary of Terms/Definitions (Cont.)

Ridership – For the total system, this is the total number of passengers boarding a DART vehicle plus the number of people in cars or vans using the HOV lanes. Transfers are included in total ridership and passenger boarding counts (e.g., if a person transfers from one bus to another bus or from a bus to rail, this is counted as two passenger boardings). Fixed route ridership counts passenger boardings (including transfers) for bus, light rail, and commuter rail only.

Sales Taxes for Operating Expenses – Measures the amount of sales taxes required to subsidize operations. 100% minus this percentage is the amount of sales taxes available for capital and road improvement programs.

Calculation = [(Operating Expenses - Operating Revenues - Interest Income) / Sales Tax Revenues]

Scheduled Miles Per Hour – Represents the average overall speed of the modal service as reflected in the schedule, with stops and recovery time included. This value reflects both the composition of the service (i.e., express and local routes for bus mode) and the efficiency of the schedule (e.g., reducing recovery time in the schedule improves average speed).

Calculation (for bus) = [Scheduled Miles / Scheduled Hours]

Calculation (for rail) = [Scheduled Train Miles / Scheduled Train Hours]

Service Hours – Paratransit service hours are also known as revenue hours. They are calculated from the time of the first passenger pick-up until the time of the last passenger drop-off. Travel time to and from the garage is not included.

Service Levels – Also known as Telephone Service Factor (TSF), measures the response to calls within a specified period. This measurement is being used to monitor the effectiveness of the main call center (CI: 214-979-1111) within 1 minute, the response to Paratransit scheduling issues within 1 minute, and the response to Where's My Ride inquiries within 2 minutes.

Calculation = (# of Calls Answered or Abandoned Within the Specified Time Period) / (# of Calls Received Within the Specified Time Period)

Start-Up Costs – Costs associated with the implementation of a major new light rail, commuter rail, or HOV service expansion that are incurred prior to the service implementation (e.g., vehicle and system testing).

Subscription Service – Paratransit passengers traveling at least three times per week to the same location at the same time can be placed on "subscription service." This service is "automatically" scheduled for the passenger, and it is not necessary for the passenger to call and schedule the service.

Subsidy per Passenger – Efficiency ratio, which measures the tax subsidy required for each passenger boarding for a mode or combination of modes. Management's objective is to reduce this ratio.

Calculation = [(Operating Expenses - Operating Revenues) / Passenger Boardings]

Zero Denial – A Federal mandate that in effect states that a provider cannot systematically deny trips on an on- going basis.

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Exhibit APX.9 Acronyms 000s Thousands FT Full-Time AAC American Airlines Center FTA Federal Transit Administration ABC Activity-Based Costing FWTA Fort Worth Transportation Authority ADA Americans with Disabilities Act of 1990 FY Fiscal Year APC Automatic Passenger Counters FYxxA Actual year-end cost for FY(xx) APTA American Public Transportation Association FYxxB Budget cost for FY(xx) APTS Advanced Public Transportation Systems FYxxP Projected cost for FY(xx) APU Auxiliary Power Unit GAAP General Accepted Accounting Principles ARRA American Reinvestment & Recovery Act of 2009 GASB Government Accounting Standards Board ATIS Advanced Traveler Information Systems GFI GenFare, Inc. ATMS Advanced Traffic Management Systems GLO General Land Office AVA Automated Voice Announcements GM General Mobility AVL Automated Vehicle Locator GPS Global Positioning System AVP Assistant Vice-President HOV High Occupancy Vehicle (lane) B Billions HQ Headquarters BBL Barrel HVAC Heating, Ventilation, Air Conditioning BNSF Burlington, Northern & Santa Fe Railroad ICM Integrated Corridor Management BPP Business Planning Parameter IH Interstate Highway BRT Bus Rapid Transit I-1 Irving LRT Line Section – Northwest Hwy. To Las Colinas Urban Center BTV Barrier Transfer Vehicle I-2 Las Colinas Urban Center to State Hwy. 161 CAD Computer-Aided Dispatch I-3 State Hwy. 161 to DFW Airport CBD Central Business District ILA Interlocal Agreement CCTV Closed Circuit Television IRV Irving CMAQ Congestion Mitigation/Air Quality IT Information Technology COPS Community Oriented Policing Services (grant) ITC Intermodal Transportation Center CP Commercial Paper ITS Intelligent Transportation System CPU Central Processing Unit IVR Interactive Voice Response CR Commuter Rail JV Joint Venture CS Central Services K Thousands DART Dallas Area Rapid Transit KPI Key Performance Indicator DCTA Denton County Transportation Authority KSA Knowledge, Skills & Attitude DCURD Dallas County Utility and Reclamation District KWH Kilowatt Hour DFW Dallas/Fort Worth International Airport LAN Local Area Network DGNO Dallas, Garland, and Northeastern Railroad LAP/CMS Local Assistance Program/Congestion Management System DLM Division Level Measurement LBJ “Lyndon B. Johnson” Freeway DMWBE Disadvantaged, Minority, and Woman-Owned LED Light Emitting Diode Business Enterprise DOE Department of Energy LNG Liquefied Natural Gas DOT Department of Transportation LPIS Locally Preferred Investment Study EA Environmental Assessment LRT Light Rail Transit EAP Employee Assistance Program LRV Light Rail Vehicle ED East Dallas Operating Facility LT or LTD Long-Term Debt EEO Equal Employment Opportunity M Millions ELT Executive Leadership Team MBE Minority-Owned Business Enterprise EMS Emergency Management System MDC Mobile Data Computer EMT Executive Management Team MDT Mobile Data Terminal EOY End of Year MIS Major Investment Study EPA Environmental Protection Agency MLK Martin Luther King, Jr. EVP Executive Vice President MOWIS Maintenance of Way Information System FFGA Full Funding Grant Agreement MPH Miles Per Hour FHWA Federal Highway Administration MPLS Multi-Powered Label Switching FICA Federal Insurance Contributions Act NCIC National Criminal Information Center FP Financial Plan NC LRT North Central Light Rail Transit FRA Federal Railroad Administration NCTCOG North Central Texas Council of Governments FS-B Financial Standards-Business Planning Parameter NIMS National Incident Management System FS-D Financial Standards-Debt Service NOx Nitrogen Oxide FS-G Financial Standards-General NRV Non-Revenue Vehicle

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FY 2010 Business Plan (09/22/09) Appendix

Exhibit APX.9 Acronyms NW Northwest Corridor SIP Service Incentive Pay NW-1A Northwest LRT Line Section (Downtown to SLRV Super Light Rail Vehicle American Airlines Center/Victory Station) NW-1B Victory Station to Inwood Station SOC South Oak Cliff LRT Line Section-Loop 12 to LBJ Frwy. NW-2 Inwood Station to Northwest Highway SOP Standard Operating Procedure NW-3 Northwest Highway to Valley View (Farmers SS Support Services Branch) NW-4 Valley View to Frankford Rd (North Carrollton) ST Short-Term (debt) NWROF Northwest Rail Operating Facility STD/FMLA Short-Term Disability/Family Medical Leave Act OC Oak Cliff SU Start-Up OCS Overhead Catenary System S&W Salaries & Wages OCIP Owner-Controlled Insurance Program TBD To be determined OEM Original Equipment Manufacturer TC Transit Center Ops Operations TCEQ Texas Commission on Environmental Quality O/S EOY Outstanding End of Year TCIC Texas Criminal Information Center OSHA Occupational Safety Hazard Administration TDM Transportation Demand Management OSR Operating Speed Ratio TES Traction Electrification System PASS Principal Arterial Street System The T Fort Worth Transportation Authority PAVMB Public Announcement Visual Message Boards TIP Transportation Improvement Program P&D Planning & Development TLETS Texas Law Enforcement Telecommunications System PEC Passenger Emergency Call TMA Transportation Management Association PMP Performance Management Plan T&P Texas & Pacific Station PMSA Primary Metropolitan Statistical Area TPSS Traction Power Sub-Station PPP Public/Private Partnership TRE Trinity Railway Express PT Part-Time TSA Transportation Security Administration PTO Paid Time Off TSM Transportation System Management PTP Pay to Platform TSP Transit System Plan or Traffic Signal Priority Q Quarter TTI Texas Transportation Institute R-1 Rowlett LRT Line Section-Downtown Garland to TVM Ticket Vending Machine Rowlett Park & Ride RDC Rail Diesel Car TxDOT Texas Department of Transportation RFI Request for Information ULEV Ultra Low-Emission Vehicles RITA Research and Innovative Technology Administration UNT University of North Texas RMS Records Management System UP Union Pacific ROW Right-of-Way UPS Uninterruptible Power Supply RR Railroad US United States RRM Railroad Management USC United States Code RTC Regional Transportation Council UT University of Texas SAP Shift Assignment Pay UTA University of Texas at Arlington SAFETEA- Safe, Accountable, Flexible, Efficient Transportation VBS Vehicle Business System LU Equity Act: A Legacy for Users SE Southeast Corridor VP Vice President SE-1A Southeast LRT Line Section – Downtown to Fair WBE Women-Owned Business Enterprise Park SE-1B Fair Park to Hatcher WOC West Oak Cliff SE-2 Hatcher to Buckner Blvd. WSA Ways, Structures & Amenities SH State Highway XPB X-Press Booking S&I Service & Inspection ZEV Zero Emission Vehicles

APX-31

FY 2010 Business Plan (09/22/09) Appendix

APX.10

Board of DART MANAGEMENT General Directors Director Director Board Counsel Internal Audit Support ORGANIZATIONAL CHART H. Simmons A. Bazis N. Johnson

President/ Executive Director G. Thomas Chief of Staff Media Relations Vacant Lyons

Exec Vice President/ Exec Vice President EEO Sr. VP Sr. VP Chief of Operations Administration Officer Rail Prog Dev CFO Gamez V. Burke Leininger B. Gomez McKay

VP VP VP VP VP VP VP VP VP VP VP VP VP Human Econ Opp & Planning & Maintenance Procurement Marketing & Commuter Rail Finance Chief of Police Paratransit Transportation Communications CIO Dev Hubbell Resources Rail Planning Gov Rel Leary Spiller Douglas Jennings Adler Bauman Steele Franklin Plesko Jackson Friesner Salin

AVP AVP AVP AVP AVP AVP AVP AVP AVP AVP AVP Mobility AVP Econ Opp Treasurer Paratransit Rail Fleet Risk Procurement Marketing Info Facilities Programs Hallett Operations Commuter Rail & Gov Rel Operations Services Management Joe Ramirez Advertising System Eng Olyai Navarro Muhammad Thompson Gaul Coker Redding Mochon Jarrett Ehrlicher

AVP AVP AVP AVP AVP AVP AVP Service Budget & Paratransit Bus Technical AVP Construction Contracts Planning Financial Mgmt. Srv. Operations Services External Mgmt Interim Smith Planning Haenftling Newby Rogers Affairs Gollhofer Levitan Hammond Pena AVP Transit AVP AVP Operations Ways, Systems Eng Reynolds Structures & &Int Amenities Hernandez Archibald AVP Materials Mgmt AVP Sadberry Real Estate Grounds AVP Operations AVP Admin. Rail Prog Hetrick Supp Masters

8/09

APX-32