2017 Annual Budget Report ROCK REGION METROPOLITAN TRANSIT AUTHORITY
2017 Annual Budget Report
Jarod Varner Executive Director
Prepared by: Department of Finance and Administration
Wanda Crawford, Chief Financial Officer Justin Avery, Accounting Manager
TABLE OF CONTENTS
TABLE OF CONTENTS ...... 1
FOREWORD ...... 3
ORGANIZATION OF BUDGET DOCUMENT...... 3
EXECUTIVE SUMMARY ...... 4
SECTION 1: INTRODUCTION AND OVERVIEW ...... 7
METRO AT A GLANCE ...... 8
DESCRIPTION OF SERVICES AND FLEET ...... 8
BOARD OF DIRECTORS ...... 10
MOVE CENTRAL ARKANSAS STRATEGIC PLAN ...... 11
MISSION, AGENCY GOALS, AND ACCOMPLISHMENTS ...... 14
ORGANIZATION CHART AND PERSONNEL ...... 17
ANNUAL SERVICE ENHANCEMENT REVIEW ...... 19
FINANCIAL POLICIES ...... 22
SECTION 2: FUNCTIONAL FINANCIAL PLAN ...... 25
FINANCIAL STRUCTURE ...... 26
OPERATING BUDGET PROCESS ...... 27
BUDGET CALENDAR ...... 29
OPERATING BUDGET SUMMARY ...... 30
SIGNIFICANT OPERATING BUDGETARY ITEMS AND TRENDS ...... 30
METRO LOCAL AND METRO LINKS 2017 OPERATING BUDGET ...... 34
METRO LINKS 2017 OPERATING BUDGET ...... 38
METRO STREETCAR 2017 OPERATING BUDGET ...... 41
SOURCES REVENUE ...... 42
TABLE OF CONTENTS
USES OF REVENUE ...... 45
FIVE YEAR OPERATING FORECAST ...... 48
CAPITAL BUDGET SUMMARY ...... 49
CAPITAL BUDGET PROCESS ...... 50
SIGNIFICANT CAPITAL BUDGETARY ITEMS AND TRENDS ...... 50
2017 CAPITAL BUDGET ...... 53
MAJOR CAPITAL PROJECTS AND DESCRIPTIONS ...... 55
FUND BALANCE ...... 67
SECTION 3: DEPARTMENT INFORMATION ...... 70
DEPARTMENT OVERVIEW ...... 71
EXECUTIVE DEPARTMENT ...... 72
FINANCE AND ADMINISTRATION DEPARTMENT ...... 73
MAINTENANCE DEPARTMENT ...... 75
OPERATIONS AND PLANNING DEPARTMENT ...... 77
PUBLIC ENGAGEMENT DEPARTMENT ...... 79
SECTION 4: GLOSSARY, SUPPLEMENTAL INFORMATION, AND APPENDICES ...... 81
BUDGET GLOSSARY ...... 82
SUPPLEMENTAL INFORMATION ...... 85
SYSTEM MAP ...... APPENDIX A
FLEET REPLACEMENT PLAN ...... APPENDIX B
FOREWORD
The adoptive budget document contains a variety of information regarding Rock Region Metropolitan Transit Authority (METRO). To assist the reader in locating certain subjects of interest, the organization of the budget document is described below. The reader may also refer to the Table of Contents on pages 1 – 3 for further guidance.
An online version of the 2017 budget document can be found on METRO’s website at: www.rrmetro.org/about/learn-more/facts
If you have any comments or questions concerning METRO’s annual budget or have any suggestions for improvement, please contact the Finance and Administration Department at (501) 375-6717. Thank you for your interest in METRO.
ORGANIZATION OF BUDGET DOCUMENT
Throughout the document, the reader will notice references to agency goals (i.e. 2017 AGENCY GOAL #1). It is METRO’s intent to show the reader that each decision made in creating the budget follows the agency’s strategic goals and vision. The following information should assist the reader in finding the most important information about METRO’s budget:
Section 1 (Introduction and Overview) contains historical background information on METRO and summarizes the jurisdictions served along with a description of fleet and services provided. Pictures of METRO’s Board of Directors are also included. METRO’s strategic initiative MOVE Central Arkansas, its mission, accomplishments, organizational goals, and an organization-wide chart are provided in this section. The reader will also find a summary of our annual service enhancements and financial policies in this section.
Section 2 (Functional Financial Plan) provides an overview of METRO’s financial structure. Summaries of the operating and capital budget and the processes and policies that apply to the budget are also contained in this section. Significant budgetary items and trends for both budgets are discussed, as well as METRO’s sources and uses of revenue. This section also includes the approved operating and capital budgets, fund balances, and the descriptions of major capital projects. A Five (5) Year Operating Forecast is also included in this section.
Section 3 (Department Information) is organized by department. Each department section includes a description, functional responsibilities, and the organizational chart. This section also includes each department’s goals and objectives.
Section 4 (Glossary, Supplemental Information, and Appendices) contains a budget glossary, a map of METRO’s service area, a summary of the Fleet Replacement Plan, and supplemental information about the communities METRO serves.
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EXECUTIVE SUMMARY
As the Executive Director of Rock Region Metropolitan Transit Authority (METRO), it is my pleasure to present the 2017 Annual Budget Report. The budget report represents the culmination of a comprehensive process and is rooted in our commitment to improving public transit in central Arkansas for the good of the communities we serve. The funding, goals, and organizational information outlined in this report will allow METRO to provide dependable, safe, accessible, and economical public transportation services for the residents of and visitors to central Arkansas. The 2017 Annual Budget Report aligns with METRO’s agency goals:
Pursuing the implementation of the MOVE Central Arkansas strategic plan recommendations, Initiating studies intended to capitalize on high-profile assets, Improving the customer experience by implementing recommendations from the METRO Links Eligibility and Facility Master Plan study and by installing twenty-five (25) passenger shelters with solar-powered lighting, Participating in the development of a broad-based transportation advocacy group focusing on providing a balanced, multimodal transportation system in central Arkansas, and Focusing on professional development and applying new knowledge and skills to improve performance.
Major Budget Items The 2017 budget calls for approximately $17.6 million in operating expenditures and $9.1 million in capital expenditures. These amounts represent a 2.2 percent and 59.5 percent increase, respectively, from the prior year budget. The following is a summarized list of major budgetary items affecting the operating and capital financial budgets. A full, narrative discussion of the 2017 operating and capital budgets can be found in the Functional Financial Plan section.
Operating Budget Items METRO Local fare revenue is budgeted to be lower than the prior year’s fare revenue by $108,000. Health insurance rates will increase 9 percent from the previous year. This is the first insurance premium increase for METRO in the last forty-three (43) months. The increase in expenses from higher health insurance premiums is budgeted at $88,000 from last year’s budget. Lower diesel fuel prices, as well as METRO’s continued conversion from diesel-fueled buses to compressed natural gas fuel-powered buses, will reduce fuel expenses by $272,000 from the previous year. Wages and benefits expense will continue to have the greatest impact on the operating budget. Expenses for wage progression and annual increases associated with union
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employees is budgeted to increase $324,000 in 2017 compared to the 2016 budget. Benefit expenses will also increase by $223,000 in 2017 as compared to the 2016 budget.
Capital Budget Items Seven (7) compressed natural gas buses and fourteen (14) Links paratransit vans will be purchased for $4.4 million. These revenue vehicles will replace those that have exceeded their recommended useful lives. In 2017, METRO will spend approximately $400,000 on passenger shelters. METRO will continue to purchase and install new bus shelters annually and place them in high- ridership and high-visibility areas in order to improve the customer experience (2017 AGENCY GOAL #4). Major planning studies, which started in 2016, will be completed in 2017, and METRO will commence a streetcar study budgeted to cost $100,000. Maintaining the fleet will continue to be a priority in 2017. Associated capital expenditures are budgeted to cost $750,000 and will be driven by higher costs related to maintaining an aging fleet.
The following chart provides an overview of the 2017 budget with a comparison to the 2016 budget.
2016 2017 $ Difference Budgeted Operating Revenues $ 17,185,412 $ 17,570,215 $ 384,803 Budgeted Operating Expenditures $ 17,185,412 $ 17,570,215 $ 384,803
Budgeted Capital Revenues $ 7,062,257 $ 6,638,538 $ (423,719) Budgeted Capital Expenditures $ 5,697,585 $ 9,087,960 $ 3,390,375
Challenges Facing METRO There are many challenges facing METRO and our customers that were considered throughout the development of the budget. Some of these challenges were:
Revenue Constraints: METRO’s funding structure relies heavily on contributions from local government funding partners and, therefore, METRO is unable to make substantial long-term strategic decisions requiring long-term capital investments due to the uncertainty of funding year-to-year. In order to overcome this challenge, METRO will continue to analyze and pursue new revenue streams. One initiative METRO will consider for the near future is a proposal for a quarter-cent dedicated sales tax. (2017 AGENCY GOAL #1) METRO believes this would raise approximately $18 million per year. These funds would be used to expand service and implement high-frequency routes, among many other improvements. Further detail about the opportunities that a dedicated sales tax would provide to citizens of the surrounding communities can be
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found on pages 11-13. I encourage all readers and citizens of Pulaski County to visit the MOVE Central Arkansas Plan website in order to better understand the full benefits of a dedicated funding source. METRO is also focusing on building strong relationships with local universities and colleges. Currently, METRO is engaging in a pilot program with UA- Pulaski Technical College, in which the college pays a base amount each month to METRO for their students to ride the bus system fare-free. METRO is using the pilot period to gather vital ridership and usage information and plans on expanding the program to other local colleges and universities in the future.
Economic Factors: METRO is also facing economic factors that continue to affect fare revenue and ridership. One major economic factor influencing ridership is historically low gasoline prices. The realization that gasoline prices will stay at low levels has enabled METRO to invest in the customer experience as a way to increase ridership. Along those lines, METRO will install twenty-five (25) new passenger shelters with solar- powered lighting in high-ridership areas and will continue to install ten (10) new passenger shelters annually. (2017 AGENCY GOAL #4) Also, METRO intends to analyze new fare payment technology that will allow riders to pay fares using smartcards or through their smartphones.
Federal Regulations and Rulemaking: Transportation laws (MAP-21 and, more recently, the FAST Act) have increased regulations and reporting requirements related to safety and security. Rulemaking is incomplete; therefore METRO has not yet fully considered the impacts of these new regulations. It is possible that the regulations will increase our administrative burden and expenses associated with developing plans and reporting processes. METRO will continue to invest resources in professional development to ensure that staff is kept up-to-date on important regulations and reporting requirements. (2017 AGENCY GOAL #6)
Though funding availability continues to provide METRO with financial challenges, we fully expect conditions to improve over the long-term. With sound management of resources and continued focus on long-range strategic goals, METRO will continue to adapt to changing conditions and be on a strong foundation for the future.
The following budget is based on a commitment to METRO’s goals of focusing on our most important asset, our people, through passenger amenity upgrades, strategic studies, and increased staff training and professional development opportunities, which will prove invaluable going forward.
Respectfully,
Jarod Varner Executive Director
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SECTION 1: INTRODUCTION AND OVERVIEW
METRO AT A GLANCE
In 1972, Metroplan, as trustee for the cities of Little Rock and North Little Rock and Pulaski County, purchased from Twin City Transit, Inc. all of the existing assets used to operate and maintain the public mass transportation bus system in central Arkansas. In 1986, Central Arkansas Transit Authority (CATA) was chartered by a group of municipalities pursuant to the provisions of Arkansas Code Annotated 14-334-101. Following CATA’s creation, all assets, interest, and obligations incurred by Metroplan, as Trustee, were transferred to CATA. In 2015, the Board of Directors voted to change the agency name to Rock Region Metropolitan Transit Authority. METRO presents its financial statements as if the transit system has been in continuous operation since 1972.
METRO is a public transit agency serving the central Arkansas area, including the cities and communities of Little Rock, North Little Rock, Pulaski County, Sherwood, Maumelle, and Jacksonville. A system map is included in Appendix A for reference.
DESCRIPTION OF SERVICES AND FLEET
METRO manages a fixed-route bus service (METRO Local), demand-response service (METRO Links), and streetcar service (METRO Streetcar).
METRO Links custom-route paratransit system serves 5,000 to 6,000 paratransit-eligible riders per month and covers 12,500 miles weekly. METRO Links riders are certified as paratransit- eligible under the Americans with Disabilities Act and have access to origin-to-destination bus service to and from locations that are within three-quarters (¾) of a mile from a non-express fixed bus route. METRO Links operators drive the twenty-four (24) paratransit vans in the fleet throughout the year, taking riders to their community service providers, jobs, education, health care, shopping and other daily activities.
METRO Streetcar is a 3.4-mile streetcar system connecting the cities of Little Rock and North Little Rock. With ten (10) operators manning three historic replica streetcars along the route, the system serves 100,000 riders annually and covers 1,080 miles weekly. METRO Streetcar is a fun, unique way to take in the downtown sights of central Arkansas’ “twin cities.” Spanning the beautiful Arkansas River, the system links some of the most vibrant destinations in Pulaski County, including the Clinton Presidential Center and headquarters of the global nonprofit Heifer International; North Little Rock’s historic Argenta district; the Little Rock River Market and Creative Corridor; and favorite restaurants, hotels, brewpubs, cultural attractions, shops and more.
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METRO Local maintains a fleet of forty-three (43) diesel buses and fifteen (15) CNG buses for twenty-two (22) regular fixed routes and four (4) express routes. METRO Links and METRO Streetcar maintain a fleet of twenty-four (24) paratransit vans and five (5) streetcars. Figure 1.1 provides a comprehensive list of all revenue vehicles used in service.
Figure 1.1: List of Revenue Vehicles Fuel Capacity/ # of Year and Make Type Length Vehicles METRO Local 2015 Gillig CNG 35 feet 15 2010 Gillig Diesel 40 feet 7 2010 Gillig Diesel 35 feet 11 2008 Gillig Diesel 40 feet 5 2008 Gillig Diesel 35 feet 5 2007 Gillig Diesel 40 feet 3 2007 Gillig Diesel 35 feet 1 2004 Gillig Diesel 30 feet 7 2003 Gillig Diesel 35 feet 4 Total METRO Local 58
METRO Links 2016 Ford Starcraft Gasoline 16 Passenger 4 2016 Ford Starcraft Gasoline 10 Passenger 4 2016 MV-1 Gasoline 2 Passenger 2 2012 Aerotech Diesel 12 Passenger 2 2010 ElDorado Diesel 14 Passenger 12 Total METRO Links 24
METRO Streetcar 2001 Gomaco O/H Electric 80 Passenger 3 2006 Gomaco O/H Electric 80 Passenger 2 Total METRO Streetcar 5
On March 18, 2014, the METRO Board of Directors approved the purchase of fifteen (15) compressed natural gas (CNG) buses. The fifteen (15) CNG buses arrived in July 2015 and were placed into operation in August. It is METRO’s intent to continue to replace diesel buses with CNG buses as grant program funds become available and as old diesel buses reach the end of their useful lives.
Seven (7) more CNG buses were purchased in February 2016 and are expected to be delivered in August 2017. Also, fourteen (14) Links paratransit vans will be purchased in 2017 and will be delivered within four (4) months of executing the contract.
All revenue vehicle purchases are part of METRO’s Fleet Replacement Plan. A summary of METRO’s Fleet Replacement Plan is included in Appendix B for reference.
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BOARD OF DIRECTORS
The twelve (12) member METRO Board of Directors are appointed by the local governments of Little Rock, North Little Rock, Pulaski County, Maumelle, and Sherwood.
Allie Freeman Art Kinnaman Tony Vestal Bruce Moore Chairman Vice Chairman Treasurer Little Rock Little Rock Pulaski County North Little Rock
Sarah Lenehan Jay Freeman Matt Lindsey Bentley Wallace Little Rock Little Rock Little Rock North Little Rock
Lawrence Finn Jimmy Moses John Todd April Broderick North Little Rock Pulaski County Maumelle Sherwood
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MOVE CENTRAL ARKANSAS STRATEGIC PLAN
As central Arkansas positions itself as a great place to live, work, and visit; adapts to growing population and employment; and supports the needs of the community’s most vulnerable people, METRO will be increasingly pressured to provide frequent, comfortable, and convenient transit service. MOVE Central Arkansas (MOVE) is a strategic plan intended to advance METRO, making it a core element of the regional transportation infrastructure. This plan represents the culmination of efforts made by the surrounding communities, large numbers of stakeholders, a set of multidisciplinary consulting firms, and METRO staff. The Strategic Plan Summary Report is available on METRO’s website www.rrmetro.org/move. We urge readers to look over the Strategic Plan Summary Report and we welcome any feedback. The following is a summary of the Strategic Plan Summary Report.
The Plan METRO’s Board of Directors recognize that, in order to achieve the agency’s long-term goals, additional investment in transit will be critical. METRO had taken the step to place a levy on the ballot to voters in Pulaski County in 2016, requesting a one-quarter cent sales tax to support ongoing transit operations and investment in new service. Unfortunately, this measure was voted down, but METRO intends to continue to pursue a dedicated sales tax in the future.
Who Benefits? Whether you use the METRO system or not, you benefit from public transit. Public transit contributes to our area’s economic development by taking people to their jobs, education, health care, shopping, and other activities. It is also a sustainable, environmentally friendly practice that helps reduce carbon dioxide emissions. And, it’s a great way to use your commute time for business or recreational activities (surfing the internet, listening to music, reading), save money, avoid traffic and parking hassles, and even achieve a healthier lifestyle.
MOVE Central Arkansas Plan Highlights Although the plan is not yet set in stone and would still undergo additional input from the community should METRO receive the funding to implement it, this plan represents the most demanded and most feasible solutions to improve the central Arkansas public transit system. It is also important to note that METRO cannot make major service changes without a change to its current funding structure.
Bus Rapid Transit (BRT) This is the backbone of the system. BRT would begin with two (2) identified corridors in areas with heavy demand. Corridor 1: Downtown Little Rock to State Capitol Complex to Markham Street to the University of Arkansas for Medical Sciences and Veterans Administration Hospital to the CHI St. Vincent Infirmary to University Avenue to 12th Street. Corridor 2: Partially overlaps with Corridor 1. Downtown Little Rock to State Capitol Complex to Markham Street to the University of Arkansas for Medical
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Sciences and Veterans Administration Hospital to the CHI St. Vincent Infirmary to University Avenue to the University of Arkansas at Little Rock Eventually, a third corridor could include North Little Rock’s Main Street to JFK to McCain corridor.
Two (2) North Little Rock Crosstown Routes One route would be north of I-40, the other south of I-40. These routes eliminate the need to travel from North Little Rock, to the River Cities Travel Center (the main bus station in downtown Little Rock), and back to North Little Rock for North Little Rock-only departure and destination routes and benefit UA-Pulaski Technical College, the Levy/Amboy neighborhoods, and other areas.
Improved Frequencies on Important Routes Rather than operating on up to 1-hour, 15-minute frequencies, buses would arrive and depart at 15-, 30-, 45- and 60-minute intervals.
Community Shuttles Community shuttles would provide local fixed-route service for the first time to West Little Rock and the cities of Maumelle, Jacksonville, and Sherwood.
Flex Zones Flex zones would provide on-demand service for less densely populated areas and emerging transit markets and feed into nearby mini-hubs.
West Little Rock Express A West Little Rock express route would provide express bus service for West Little Rock residents commuting to downtown Little Rock from a park and ride location near Chenal Promenade, as well as provide access to growing job markets in West Little Rock.
Pulaski County Express Routes Enhancements Enhancements on Pulaski County express routes would include providing midday service.
Modernized Passenger Experience This part of the plan is already underway, but it would be greatly aided by additional funding: Improving the passenger experience involves replacing existing diesel-powered buses with new CNG-powered buses, continuing to provide free WiFi service on all buses in the system, introducing a GPS-based mobile app that provides passengers with real-time bus information, implementing unique-to-location bus stop signs that offer real-time bus arrival information via a texting system, and providing more passenger shelters throughout the system.
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What Are the Costs? The proposed improvements in this plan are estimated to cost $36.9 million annually, which would require the same levels of local, state, and federal funding that the METRO system currently receives, as well as the $18.2 million estimated annual revenue from a quarter-cent sales tax to fund public transit.
What Are Next Steps? Through the help of advocates, the Rock Region Transit Alliance, and a campaign committee, outreach to support future ballot initiatives to fund public transit is underway.
Ultimately, MOVE is about positioning METRO to become an important player in defining how people move throughout the region, how investments are prioritized, and how public transit can become a valuable part of the regional infrastructure, providing critical links for all residents in the region with a focus on reducing congestion, improving mobility, and forging economic progress in the region.
If the public supports the tools and strategies defined in the MOVE plan and votes in favor of a future sales tax initiative, then the outcomes listed above can be started within a year of passage.
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MISSION, AGENCY GOALS, AND ACCOMPLISHMENTS
Our Mission
Rock Region METRO’s mission is to provide dependable, safe, accessible, and economical public transportation services for the residents of and visitors to central Arkansas, creating economic development and environmental benefits for everyone in our service area.
Our Goals
1. Pursue implementation of the MOVE Central Arkansas plan recommendations, including annual service enhancements and the pursuit of a dedicated funding source.
2. Initiate studies intended to capitalize on high-profile assets, including a METRO Streetcar strategic plan and an assessment of the transit-oriented development opportunities at the River Cities Travel Center.
3. Implement recommendations from the METRO Links and Facility Master Plan studies to improve the customer experience for METRO Links customers and plan for future growth.
4. Improve the customer experience through the installation of twenty-five (25) passenger shelters, additional fare payment options, improved customer information, and a new phone system.
5. Actively participate in the development of a broad-based transportation advocacy group focused on promoting a balanced, multimodal transportation system in central Arkansas and throughout the Natural State.
6. Focus on professional development so that staff continues to learn and apply new knowledge and skills to improve performance.
Our Accomplishments 2016 brought with it many successes for METRO. The following are our accomplished goals from the past year, which are sure to build momentum for more milestones to be reached in 2017.
METRO was awarded the FY16 Section 5339 Bus and Bus Facilities competitive grant in the amount of $1.9 million. These funds will be used to finance four (4) of the seven (7) CNG buses that will arrive in 2017. Also, METRO was awarded funding to purchase an Educational Diagnostic Center workbench that will allow mechanics to train in diagnostics. This is the first time METRO has received a Section 5339 competitive grant.
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METRO implemented new service enhancements as part of the Annual Service Enhancements process. METRO was able to make several minor improvements to the system without increasing contributions from the local entities. Also, METRO performed extensive outreach for METRO’s annual service enhancements that included collecting information from drivers and community leaders, as well as a weeklong listening session at the River Cities Travel Center; public information meetings and comment collections; and a separate but related mid-year report customized by local jurisdictions then and sent to elected officials and area chamber leaders.
METRO greatly improved its technical capabilities in the customer service area with the January launch of its new website, rrmetro.org, and the February launch of the MetroTrack mobile app, which provides passengers real-time arrival information for agency bus service (with streetcar service integrated in 2017).
Completed a comprehensive analysis of all routes, schedules, and stops using Intelligent Transportation System (ITS) data and field work. This analysis proved priceless when performing the annual service enhancements.
Installed thirty (30) modern passenger shelters in new sites of high ridership and high visibility. METRO will continue to purchase and install ten (10) new shelters annually, as directed by the Board of Directors. It is METRO’s goal to improve the customer experience, and installing new shelters is just one of the ways METRO will accomplish this goal.
Completed the installation of portable credit card machines onboard the streetcars, which allows passengers to pay with all major credit and debit cards and increases passenger convenience. METRO will continue to actively research new fare technology in order to improve the customer experience.
Partnered with UA-Pulaski Technical College to allow all students and staff to ride the bus fare-free, with UA-Pulaski Technical College paying METRO a fixed monthly rate. This pilot program yielded almost 64,000 passenger trips in 2016 and will allow METRO to analyze the opportunities of partnering with local colleges and universities.
METRO strengthened relationships with groups serving individuals with disabilities and those offering vocational training by attending the Arkansas Disabilities Policy Summit and hosting a disability awareness training session with Arkansas Leaders in Action.
Assisted the Little Rock Port Authority and the University of Arkansas at Little Rock with their Transportation Investment Generating Economic Recovery (TIGER) grants. TIGER grants are highly competitive and support innovative projects, including multimodal projects, which are difficult to fund through traditional federal programs.
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METRO staff received numerous professional certificates that enhanced the agency’s skills and proved METRO’s dedication to providing first class professional development for staff. The Accounting Manager received the Certified Public Accountant license, the Human Resources Manager received the Society of Human Resource Managers – Certified Profession certification, and the Procurement Manager received the Certified Public Procurement Officer certification.
METRO hosted its first National Transit Institute training session, which focused on Effective Supervision in Transit. METRO had twenty-eight (28) participants attend, as well as numerous other participants from transit agencies throughout Arkansas and other surrounding states.
METRO continued to invest in professional development and employee recognition programs. METRO introduced Grovo training to employees, which provides short training videos on topics including sexual harassment, productivity, and leadership, as well as Microsoft Office training.
Employee recognition programs, such as the DRIVE Program, Years of Service pins and awards, and Safe Driving awards, were created to give greater recognition to dedicated and careful drivers.
Increased opportunities to tell the METRO story through direct outlets (website, e- newsletters, social media), speaking engagements, community outreach, and paid and earned media, and fielded several educational opportunities related to the 2016 ballot initiative to establish a dedicated funding source for public transit.
Secured placement of dedicated funding on the March 1 ballot. While the initiative was unsuccessful in the first attempt, getting the initiative in front of the voters was a major accomplishment.
Established a Fare Policy that sets principles and policies that govern fare prices, fare media, and fare payment options. It also lays out METRO’s policy regarding student fares, honored citizen fares, paratransit fares, and public participation requirements for fare prices and fare media changes.
The 901 Maple Facility Master Plan was begun and nearly completed in 2016. The master plan is intended to explore a variety of options based on a thorough assessment of existing facilities and projected growth based on the MOVE plan. The plan will provide a “playbook” of options available to METRO as the system grows and matures.
Completed a long-range capital plan for METRO Streetcar to ensure grant funds will continue to cover capital maintenance needs and determined available resources to be directed toward improving the customer experience.
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ORGANIZATION CHART AND PERSONNEL
Figure 1.2 – Organizational Chart
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Personnel In 2016, METRO employed one hundred five (105) METRO Local operators; twenty-five (25) METRO Links operators; ten (10) METRO Streetcar operators; twenty-six (26) mechanics, service, and utility employees; three (3) customer service staffers; six (6) service supervisors; five (5) dispatchers; and twenty-three (23) administrative employees. Figure 1.3 shows a comparison of personnel from 2015 and 2016 to our budgeted personnel in 2017.
Figure 1.3 – Personnel Count 2015 2016 2017 Personnel Category Actual Actual Budgeted
METRO Local Operator 105 105 105
METRO Links Operator 25 25 25
METRO Streetcar Operator 9 10 10
Customer Service 3 3 3
Mechanics & Service 26 26 26
Supervisors 5 6 6
Dispatchers 5 5 5
Administration 23 23 23
Total Employees 201 203 203
In 2015, METRO experienced turnover at key positions due to retirement. Director of Operations, Bill Adcock, retired after forty (40) years of dedicated service, and METRO promoted Assistant Director of Operations, Donna Bowers, to the position. In 2016, the Assistant Director of Operations position was filled by Oscar Correa, who was hired from Broward County Transit in South Florida.
Also, in 2016, Josh Crawford, former Human Resources Manager, resigned and was replaced by Greg Williamson. Prior to his current role with METRO, Williamson served more than thirty (30) years in human resources departments for Fortune 500 companies.
METRO does not anticipate and did not budget for any personnel increases in 2017.
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ANNUAL SERVICE ENHANCEMENT REVIEW
METRO performs an annual review of the system using data collected from automatic passenger counters. The review allows METRO to identify underperforming routes and areas where demand exceeds supply. These enhancements are typically minor and are low- or no- cost enhancements.
The METRO staff began its annual service review in April. Unfortunately, METRO did not receive the quarter-cent sales tax in March 2016 to fund public transit that would have funded the MOVE bus service improvement plan. Because of this, METRO focused on the low- to no-cost aspect of the strategic plan and make minor improvements within the constraints of our current funding structure. The interlocal agreement that created METRO in 1986, dictates that any service miles within the system must stay within the jurisdiction that funds them. In other words, METRO cannot add service miles to one jurisdiction by removing them from another jurisdiction. This caused METRO to take a holistic approach to service enhancements. Also, during this review, METRO reviewed its bus stop policy and fare policy.
Public comment, including those from bus drivers, community members, businesses, elected officials, and riders were taken into consideration at the review’s onset and influenced proposals at each stage of the process. The following is a summary of the 2016 service enhancements and enhancements made to the bus stop policy and fare policy. A complete, detailed list of the 2016 service enhancements can be found on METRO’s website.
Route 4 Levy/Amboy Approved Enhancement: Added service to Donovan Briley, on the north part of the route, where many multi-family housing properties exist, during peak hours. This enhancement is a MOVE plan recommendation and is among the top three route-related service requests recently collected from riders.
Route 8 Rodney Parham Approved Enhancement: Modified Route 8 to serve the Midtown transfer stop on all trips. Moved service from low-ridership stops along Lee Avenue to the more in-demand Markham corridor, supplementing existing service along Route 5 West Markham. Both of these first two adjustments are recommended in the MOVE plan.
Route 16 UALR Approved Enhancement: Modified the loop at the end of the route to improve efficiencies and avoid unproductive stops.
Route 18 McAlmont Approved Enhancement: Moved service from Ben to Edmonds to improve efficiencies and avoid unproductive stops, as recommended in the MOVE plan.
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Route 21 University Avenue Route 21 split into two routes: One route serves the Riverdale area, including multi-family housing along Riverfront and Rebsamen Park Road, and is interlined with route 12. Another route serves the University Avenue corridor.
Route 12 East 6th Street/Airport Approved Enhancement: Interlined a route called Route 21 Riverdale with Route 12 and included service on Route 12 to downtown hotels, the Clinton Presidential Center, and the Clinton National Airport. Renamed to Route 12 Clinton Center/Airport.
Route 20 Airport/College Station Approved Enhancement: The current airport route, Route 20, uses city streets to serve Hanger Hill, the Little Rock Port Authority, and other areas east of I-30, but not the airport (which is now served by Route 12). Renamed to Route 20 Hanger Hill/College Station.
Route 9 West Central/John Barrow Road Approved Enhancement: Modified Route 9 to serve the new West Central Community Center, added service to the loop inside The Cottages, added service to the Shackleford Wal-Mart, and removed an unproductive portion of service on Colonel Glenn.
Route 14 Rosedale Approved Enhancement: Removed service inside The Cottages’ loop at the request of The Cottages, which does not have roads built to support large buses.
Route 17 Mabelvale-Downtown Approved Enhancement: Moved service from the Meadowcliff neighborhood to Mabelvale Pike, which can better accommodate buses. Removed the loop at the end of Route 17 to provide service directly to Wal-Mart on Baseline Road.
Route 22 Mabelvale-Midtown Approved Enhancement: Switched current service on Route 22 from off-peak service to all-day service and provided service every thirty-five (35) minutes. Replaced service in the Wakefield neighborhood recently served by Route 15. Provided service on University Avenue to Kavanaugh in the Heights and continued to serve Baseline Wal-Mart. Renamed to Route 22 University/Mabelvale
Route 23 Baseline/Southwest Approved Enhancement: Removed the second loop into the Outlets of Little Rock, leaving the outbound loop only to cut down on travel time. Added a loop into the Goodwill Industries of Arkansas campus at Scott Hamilton, which serves individuals with disabilities.
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Route 15 65th Street Approved Enhancement: Route 15 primarily serves two neighbors very far from each other. The change captured the productive areas of Route 15 and reallocated service to those areas along other routes.
Route 11 Dr. M.L.K. Jr. Dr. Approved Enhancement: The proposed change to Route 11 Dr. M.L.K. Jr. Drive modifies the route to provide service to Chester Street.
METRO Streetcar Enhancements Approved Enhancement: Shifted streetcar Sunday service back one (1) hour to better accommodate the downtown attractions, which often open at 12:00 p.m. on Sundays (current Sunday streetcar service begins at 10:41 a.m.).
Stop Enhancements Approved Enhancement: Adopted a bus stop policy that requires all passengers to board or alight buses at bus stop signs. The benefits of a bus stop policy include more efficient travel times and improved data quality from the ITS by reducing the number of “unknown” stops. This data is used to help plan future transit service.
Fare Enhancements METRO has not raised fares since 2009. Although METRO did not propose to increase fares as part of 2016 annual service enhancements, a few fare-related initiatives emerged as part of this planning process:
Proposed Enhancements: Established a fare policy that outlines the agency’s responsibilities and philosophies, defined fare adjustments, defined fare discounts, and confirmed the public participation process in relation to fares.
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FINANCIAL POLICIES
This section outlines METRO’s financial policies as they relate to the operating and capital budgets. METRO recognizes its duty to its stakeholders and other interested parties to vigilantly account for public funds and resources. The following policies establish guidelines for fiscal accountability, full disclosure, and planning. These financial management policies provide a basic framework for the overall fiscal management of the transportation system.
The financial policies represent long-standing principles that have enabled METRO to maintain fiscal stability and are reviewed and approved annually to represent current policy decisions. METRO is currently in compliance with all financial policies.
Long-Term Financial Planning
All METRO departments share in the responsibility of meeting policy goals and ensuring long- term financial health. Future service plans will be developed to reflect current policy directives, projected resources, and future service requirements.
Annually prepare a five-year (5-year) capital budget evaluating projected costs for future major capital projects (purchasing replacement buses, strategic studies, etc.), as well as projecting recurring annual capital costs based off of historical trends and known changes that will occur during the forecast period. The funding and activity of capital programs must be consistent with METRO’s goals and objectives.
The operating budget should take into account current levels of service, as well as known changes that will occur during the forecast. Using historical evidence, current economic factors, and statistical assumptions about the future, METRO will develop a balanced budget focusing on achieving the agency goals and objectives.
A balanced budget is one where budgeted revenues equal budgeted expenses and METRO does not intend for either a deficit or surplus. The 2017 budget presented is a balanced budget.
Revenue Management
METRO must diversify and maximize its revenue streams to raise sufficient revenue to support essential services.
Fares (charges) and advertising are required to generate revenue to offset a portion of METRO’s operating expenses. Any expenses not covered by these two (2) revenue streams are made up by interest income and local, state, and federal contributions.
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METRO must establish a fare structure with due consideration for equitable and consistent fares, effective and cost-efficient fare technology, enhancing mobility and access, and promoting ridership.
Fare policies must take into account the needs of the elderly, disabled, student, and transit- dependent riders.
One-time and unpredictable revenues will be used in the current year. If one-time or unpredictable funds are not used in the current year to finance operations, the funds must be placed into reserves to be used for local match of future capital grants.
Asset Inventory and Condition Assessment
METRO inventories and assesses the condition of all operating and capital assets. Maintenance shall maintain inventories of all major assets including, but not limited to, bus shelters, shop equipment, office equipment, buildings and facilities, bus signs, and revenue and non-revenue vehicles.
Finance tracks capital assets using an inventory tag system and updates the asset inventory worksheet on a periodic basis. The asset inventory worksheet is reviewed biennially and obsolete or disposed assets are removed from the report. The report tracks the asset, asset tag number, cost, location, and condition of the asset.
Cash Management and Investments
Operating and capital funds must be maintained in commercial banks where idle balances are invested to preserve necessary short-term liquidity, while maximizing interest income, and conforming to local, state, and federal statutes governing the investment of public funds.
METRO will maintain written guidelines on cash handling, accounting, segregation of duties, and other financial matters.
METRO will conduct periodic reviews of its internal controls and cash handling procedures.
Expenditure Management
Current expenditures will be funded by current fare revenue, advertising revenue, investment income, and local, state, and federal contributions. No revenues will be dedicated for specific purposes, unless required by law or Generally Accepted Accounting Principles (GAAP).
Monthly financial reports comparing budget to actual numbers shall be prepared and presented to the Board of Directors on a timely basis. The finance department must explain any variances between budget and actual if the variance is greater than or equal to $1,000 and ten percent (10%).
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METRO will maintain all assets at a level that sustains capital investment and minimizes future maintenance and replacement costs.
Budget Amendments
If there is a ten percent (10%) or more amendment to any budget line item, METRO’s Board of Directors must approve the adjustment to the budget.
Capitalization Method
Capital improvement projects are defined as equipment, infrastructure purchases, or construction that results in a capitalized asset costing more than $50 and having a useful (depreciable) life of five (5) years or more.
Associated capital purchases will result in a capitalized asset if such purchase exceeds the Federal Transit Administration (FTA) required calculated associated capital threshold set out at the beginning of the fiscal year.
Reserve Management
Annual operating budgets will include a contingency appropriation in the Reserve Fund (Fund Balance) sufficient to provide for unforeseen needs of an emergency nature for that year. The desired level for each year shall be a percentage of the total operating budget for the year. The percentage is determined by the Board of Directors.
Any surplus at year-end will be part of METRO’s Fund Balance at the beginning of the following year. The funds will be used to help cover METRO’s local match portion of capital grants and fund capital projects during the year as approved by the Board of Directors.
Accounting, Auditing and Financial Reporting
METRO’s accounting and financial reporting systems will be maintained in conformance with GAAP and the standards set by the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA).
An independent public accounting firm will perform an annual audit. The auditor’s opinion will be included with METRO’s Annual Audit Report.
METRO’s Annual Budget Report will be submitted to the GFOA Distinguished Budget Presentation Program. The budget should satisfy criteria as a financial and programmatic policy document, as a comprehensive financial plan, as an operations guide for all organizational units, and as a communications device for all significant budgetary issues, trends, and resources.
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SECTION 2: FUNCTIONAL FINANCIAL PLAN
FINANCIAL STRUCTURE
METRO is a subsidiary of the state of Arkansas controlled by an independent board of directors and is accounted for as a single enterprise fund that reports financial results in accordance with GAAP as promulgated by GASB guidance. All funds are appropriated.
METRO’s operating fund is used to account for all general operations (Local/Express, Links, and Streetcar) and activities. It is METRO’s intent that the costs (expenses) of operations be financed through farebox revenue, investment revenue, grants, and local contributions from supporting municipalities. The majority of operational funding is used to pay employee salaries and benefits. Other operational funding goes to pay for such things as professional services, fuel, insurance, maintenance, and utilities. Operating reserves (fund balance) are used to meet local match requirements for annual grants.
METRO’s capital fund is used to finance capital projects and fixed asset purchases, such as revenue vehicle purchases, facility enhancements, passenger amenity upgrades, tires, and more. Capital funds are accumulated through a variety of Federal Transit Administration grants, including annual Section 5307, 5337, 5339 appropriations. METRO allocates roughly forty-four percent (44%) of federal capital funds toward operations, which is allowed by FTA. These funds are used for preventive maintenance, planning, and paratransit funds. A diagram that shows how METRO’s functional units (departments) interact with each major fund is provided below.
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OPERATING BUDGET PROCESS
This section describes the process for preparing, reviewing, and adopting the operating budget for the coming fiscal year. It also includes procedures for amending the budget after adoption.
Basis of Budgeting METRO uses the modified accrual basis of budgeting, which is the same basis of accounting used in the audited financial statements. Modified accrual accounting recognizes revenues when they become measurable and available. Measurable means that the dollar value of the revenue is known. Available means that it is collectible within the current period or soon enough after the end of the current period to pay liabilities of the current period.
The budget calendar shown on page 29 is used to supplement the following narrative information.
Budget Process METRO’s operating budget process is ongoing and includes the phases of planning, development, adoption, and monitoring. Numerous levels of the organization are included in the budget process during budget meetings, committee meetings, and budget work sessions throughout the year.
Generally, METRO begins the annual budget process in June. The first step of the budget process includes strategic planning discussions within each department. During the strategic planning meetings, department directors and managers discuss and develop departmental goals and objectives for the coming year. Preliminary overall agency goals are then developed from departmental goals.
The financial aspect of the budget development process begins in July, when department directors and managers meet to discuss and develop a preliminary budget that can be used as a basis for the annual staff budget retreat. For Local and Links budgets, farebox and bus pass revenues are typically budgeted at two percent (2%) over the current year’s annualized farebox and bus pass revenues. Budgeted expenses are calculated using current year annualized expenses and are adjusted based on historical trends and future expectations. Once the net budgeted deficit is determined (budgeted operating revenues less budgeted expenses), METRO divides the remaining funds needed to operate (to balance the budget) between the local funding entities based on total service miles operated in each jurisdiction.
METRO Streetcar operating revenues and expenses are budgeted in the same manner as Local and Links paratransit revenues, but the remaining funds needed to operate (net budget deficit) are split evenly between Little Rock, North Little Rock, and Pulaski County funding partners. The funding structure for Streetcar operations was agreed upon by the participating local entities.
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Also in July, the Chief Financial Officer and the Accounting Manager discuss any necessary changes to the budget document for the upcoming fiscal year by assessing short-term factors, such as use of reserves, service level assumptions, federal funding, political trends, inflation assumptions, and the state of the local economy. This is an ongoing process until the document’s submission in February.
During August, department directors and managers gather for a day-long budget retreat to discuss METRO’s internal strengths and weaknesses, external opportunities and threats, departmental needs, strategic initiatives, and goals for the coming year. Also, the Finance Department and other department directors discuss any expected significant increases or decreases to line item expenses in the operating budget and efficiency issues related to processes within their departments, as well as how to improve efficiency in those processes. Capital budget needs are also discussed, as well as any major capital projects for the following year. Departmental and agency goals and objectives are finalized during the budget retreat.
After the retreat, the Finance Department drafts a budget to present to the budget committee, which is made up of five (5) board members. The budget committee meets at least twice during September or early October to discuss, in detail, all revenues and expenditures for METRO’s three (3) modes of transportation and METRO’s strategic goals and objectives for the upcoming fiscal year.
Once the budget committee agrees to the draft operating and capital budgets, the finance department presents the budgets to the Board of Directors during the November board meeting. After discussion, board members vote on approval of the budgets as presented or vote to amend then approve the budgets. The 2017 budget was presented to, and approved by, the board of directors on November 15, 2016.
According to METRO’s financial policies and bylaws, if there is a ten percent (10%) or more amendment to any budget line item, METRO’s board of directors must approve the adjustment to the budget. Also, METRO must provide the board with actual-to-budget variance comparisons during the monthly board meetings.
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BUDGET CALENDAR
Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Strategic Planning Department Strategic Planning Discussions x x
Agency Goals Discussions x x x Budget Development
Preliminary Budget Preparation x Discuss Annual Budget Report Modifications x x x x x x x Budget Retreat with Department Directors x Draft Budget to Present to Budget Committee x
Meet with Budget Committee x x Present Final Budgets to Board of Directors x Budget Adoption Board of Directors Approve Annual Budgets x Finalize Annual Budget Report and Submit to GFOA x Budget Monitoring Monthly Actual to Budget Comparisons x x x x x x x x x x x x
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OPERATING BUDGET SUMMARY
Presented is a summary of major operating revenues and expenditures, as well as other financing sources and uses. The capital budget summary can be found in the capital budget section on page 49.
2015 2016 2017 Revenue: Actual Actual Budget
Farebox and Pass $ 2,130,236 $ 2,002,970 $ 2,042,664 Local Grant 12,488,370 12,339,787 12,864,370 Federal and Miscellaneous 2,712,187 2,631,248 2,663,181
Total Revenue $ 17,330,793 $ 16,974,005 $ 17,570,215
Expenses:
Labor $ 8,008,817 $ 8,514,663 $ 8,820,397 Fringe Benefits 3,692,371 3,693,560 4,023,176 Services 928,575 926,766 1,115,273 Materials and Supplies 2,828,838 2,254,835 2,202,285 Utilities 277,557 286,389 312,700 Insurance 391,369 334,634 405,044 Miscellaneous 723,413 617,691 674,800 Leases and Rentals 17,568 18,001 16,540
Total Expenses $ 16,868,508 $ 16,646,539 $ 17,570,215
Total Surplus/(Deficit) $ 462,285 $ 327,466 $ -
SIGNIFICANT OPERATING BUDGETARY ITEMS AND TRENDS
The adoption of the 2017 budget includes a number of significant budget items and trends. All assumptions made in the operating budget are based off of historical trends and future expectations. Budgeted amounts for 2017 are based off of annualized 2016 figures during preliminary budget preparation. All comparisons made in this section are between 2016 budget and 2017 budget numbers, unless otherwise stated.
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Total expenses for 2017 are budgeted to be $17,570,215, representing a $384,803 or 2.2 percent increase from the 2016 budget. A summary of differences between the 2017 budget and 2016 budget is shown below.
Please note: The reader must combine METRO Local and Links (Figure 2.1) and METRO Streetcar (Figure 2.3) numbers to get the numbers presented below. METRO must split the operating budget into two (2) separate budgets (METRO Local/Links and METRO Streetcar) due to the different funding mechanisms regulating each mode of transportation. METRO Local and METRO Links departments are funded using total service miles, and METRO Streetcar is funded evenly by Little Rock, North Little Rock, and Pulaski County contributions. METRO Links revenues and expenses are included as one line item each in the METRO Local and Links budget (Figure 2.1). The numbers presented in this section are rounded to the nearest thousand for simplicity.
Summary of Budget Changes (rounded to nearest thousand) 2016 Budget 2017 Budget ($)Difference Farebox and Pass $ 2,141,000 $ 2,043,000 $ (98,000) Local Grant 12,430,000 12,864,000 434,000 Federal and Miscellaneous 2,614,000 2,663,000 49,000 Total Revenue $ 17,185,000 $ 17,570,000 $ 385,000
Labor $ 8,496,000 $ 8,820,000 $ 324,000 Fringe Benefits 3,807,000 4,023,000 216,000 Services 981,000 1,115,000 134,000 Materials and Supplies 2,411,000 2,202,000 (209,000) Utilities 370,000 313,000 (57,000) Insurance 413,000 405,000 (8,000) Miscellaneous 690,000 675,000 (15,000) Leases and Rentals 17,000 17,000 - Total Expenses $ 17,185,000 $ 17,570,000 $ 385,000
Revenue One assumption that led to lower budgeted farebox and pass revenue is that ridership will decrease slightly (over 2016 budgeted ridership, not 2016 actual ridership) due to low gasoline prices, which are expected to stay at historically low levels in 2017. Low gasoline prices tend to influence riders to choose private transportation over public transportation. METRO Local budgeted a $108,000 decrease in farebox and pass revenue, an increase in METRO Links pass revenue of $12,000, and a decrease in METRO Streetcar pass revenue of $2,000, for a total budgeted decrease of $98,000 in 2017 as compared to the 2016 budget.
METRO will strive to attract new riders using upgraded passenger amenities, such as bus shelters and new fare technology. METRO will install twenty-five (25) new bus shelters with
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solar-powered lighting in high-ridership areas and will continue to analyze newer, more innovative fare technology that provides customers more payment options and improves the overall customer experience (2017 AGENCY GOAL #4).
METRO Links continues to experience an increase in ridership each year as more elderly and disabled individuals become reliant on affordable transportation for access to their community service providers, jobs, education, health care, shopping, and other daily activities. As METRO Links service is considerably more expensive per rider than METRO Local service, it is METRO’s intent to focus on individuals who are able to ride both Local and Links services. METRO has made it a priority in 2017 to provide travel training to Links customers that are eligible and able to ride Local services. Providing travel training for Local services will hopefully shift some ridership from Links to Local. This is one of many recommendations received from the Links Eligibility Study that METRO intends to implement in 2017. (2017 AGENCY GOAL #3)
Local grant revenue is revenue received from the contributing entities (Little Rock, North Little Rock, Pulaski County, Sherwood, and Maumelle) and is budgeted to increase by $434,000 in 2017 as compared to last year’s budget. This increase is due to a combination of decreasing revenue and increasing expenses. Local entity contributions are contributions needed to balance the budget.
Federal and miscellaneous revenue is budgeted to increase $49,000 in 2017 as compared to 2016. This increase is due to a combination of increasing special contract revenue and advertising revenue. Special contract revenue will increase by $11,000 due mainly to the pilot program with UA-Pulaski Technical College. UA-Pulaski Technical College has agreed to pay METRO a base amount for their students to ride the bus system fare-free. After the pilot period, METRO plans on expanding the program to include other local colleges and universities. Also, METRO continues to increase advertising sales each year. Advertising revenue is budgeted to increase by $95,000 in 2017 as compared to the previous year’s budget. There were other revenue accounts within federal and miscellaneous revenue that are projected to gradually decrease in 2017.
Expenses METRO expects a $385,000 increase in expenditures for 2017 as compared to the 2016 budget. Major budget items include increases in labor, fringe benefits, and services and decreases in materials and supplies, and utilities.
Labor and fringe benefits continue to be significant expenses for METRO. METRO expects labor expenses to increase by $324,000 and fringe benefits to increase by $216,000 in 2017 as compared to the 2016 budget. One assumption that led to the budgeted increase in labor expenses is that union employees will receive a negotiated two percent (2%) cumulative raise, and non-union employees will receive a three percent (3%) cumulative performance-based raise in 2017. Health insurance is the major sub-category of fringe benefits, and METRO expects a nine percent (9%) increase in health insurance premiums for 2017. METRO had experienced forty-three (43) months of no increases in health insurance premiums prior to 2017. The
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budgeted increase in health insurance premiums is expected to raise fringe benefit expenses by $88,000 in 2017 as compared to the previous year’s budget. Other fringe benefit increases include increases in sick pay, holiday pay, and vacation pay. These expense items are expected to grow due to the budgeted wage increases for both union and non-union employees.
METRO is expecting a $134,000 increase in services expenses for 2017 as compared to the 2016 budget. The increase is mainly due to the taxicab service provided to ADA-eligible riders when METRO cannot provide the trip. This typically happens when multiple operators are out on sick, holiday, or vacation leave. It is METRO’s intent to improve operator attendance by implementing a new attendance policy for union employees. Also, METRO expects the Links Eligibility Study to provide guidance on how to better handle the growing demand for Links services. One possible solution is to provide travel training to METRO Links customers that are also eligible to ride METRO Local services. (2017 AGENCY GOAL #3)
Although it will not have a major financial impact on the 2017 budget, METRO intends to focus on and invest more money in professional development of the METRO staff. (2017 AGENCY GOAL #6) Investing in the professional development of staff will reap significant rewards in the future. Remaining informed of legislation changes, new technology, and industry-specific rules and regulations will allow METRO employees to provide better service for customers.
Although increases are visible in major expense categories – such as labor, fringe benefits, and services – some expense line items are budgeted to decrease in 2017. METRO experienced significant savings in fuel expenses thanks to its continued effort to replace diesel buses with CNG buses. Currently, METRO has fifteen (15) CNG buses and forty-three (43) diesel buses. METRO has purchased and will receive seven (7) more CNG buses in August 2017. Natural gas is significantly cheaper than diesel fuel. METRO budgeted for a rate of $.85 per diesel gallon equivalent for CNG fuel and $1.63 per gallon for diesel fuel in 2017. In 2016, METRO budgeted $1.50 per diesel gallon equivalent and $1.72 per diesel gallon. The lower negotiated prices and continued conversion from diesel to CNG buses will save approximately $272,000 in 2017 as compared to the 2016 budget. This figure also includes savings on negotiated gasoline prices.
Utility expenses are also budgeted to decrease in 2017 as compared to the 2016 budget. The expected decrease in utility expenses is $57,000. The main reason this expense is budgeted to decrease in 2017 is due to METRO becoming more aware of the true cost associated with operating the CNG fueling station. When the fueling station was first used, METRO budgeted conservatively to ensure that there would be no shortfall of operating funds. METRO is now in year three of using the CNG fueling station and can more accurately budget expenses related to it.
Figure 2.1 shows the operating budget for METRO Local and METRO Links for 2017. The 2017 budget for METRO Links is shown in Figure 2.2 and the METRO Streetcar 2017 budget is shown in Figure 2.3.
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 33 33 2017 ANNUAL BUDGET REPORT FIGURE 2.1 – METRO LOCAL AND METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 OPERATING REVENUE:
PASS INCOME: PASSENGER CASH REVENUE $ 1,157,487 $ 973,242 $ 1,073,528 $ 993,856 $ (79,672) ADULT TOKENS 18,989 18,724 20,113 19,465 (648) ADULT 10 RIDE PASS 80,014 76,832 81,918 80,779 (1,139) ONE DAY PASS 14,149 107,101 108,319 108,275 (44) MONTHLY RIDER PASSES 406,532 377,241 400,232 373,863 (26,369) HONORED CITIZEN RIDER PASSES 129,416 126,658 127,278 127,007 (271) HONORED CITIZEN 10 RIDE PASS 10,676 10,662 10,610 10,796 186 STUDENT RIDER PASSES 29,556 25,000 29,677 29,757 80
SUBTOTAL PASS INCOME $ 1,846,819 $ 1,715,460 $ 1,851,675 $ 1,743,798 $ (107,877)
CONTRACTS-SPECIAL ROUTE GUAR. $ 62,484 $ 79,079 $ 79,484 $ 90,484 $ 11,000 PARATRANSIT INCOME 256,422 290,308 295,512 266,033 (29,479) MISCELLANEOUS INCOME 10,595 8,473 4,192 7,000 2,808
SUBTOTAL REVENUE $ 2,176,320 $ 2,093,320 $ 2,230,863 $ 2,107,315 $ (123,548)
GRANT INCOME: LOCAL GRANTS - LITTLE ROCK $ 8,357,034 $ 8,237,349 $ 8,237,349 $ 8,523,795 $ 286,446 LOCAL GRANTS - NO. LITTLE ROCK 2,360,764 2,326,954 2,326,954 2,335,010 8,056 LOCAL GRANTS - PULASKI COUNTY 702,788 692,722 692,722 873,111 180,389 LOCAL GRANTS - SHERWOOD 108,834 107,275 107,275 77,004 (30,271) LOCAL GRANTS - MAUMELLE 48,628 47,931 47,931 37,910 (10,021)
SUBTOTAL LOCAL GRANTS $ 11,578,048 $ 11,412,231 $ 11,412,231 $ 11,846,830 $ 434,599
MAINTENANCE CAPITAL SUPPORT (FEDERAL) $ 1,432,000 $ 1,432,000 $ 1,432,000 $ 1,432,000 $ - ADVERTISING 248,109 286,623 150,000 245,000 95,000 FTA PARATRANSIT FUNDING 397,000 397,000 397,000 397,000 - PLANNING (FEDERAL) 221,320 61,074 173,472 74,000 (99,472) PUBLIC TRANSIT TRUST FUND 275,000 275,000 275,000 275,000 - INTEREST INCOME 3,546 7,296 4,000 4,000 - TRAINING CAPITAL SUPPORT 3,872 3,200 2,000 3,500 1,500
SUBTOTAL NON-LOCAL GRANTS $ 2,580,847 $ 2,462,193 $ 2,433,472 $ 2,430,500 $ (2,972)
TOTAL GRANTS $ 14,158,895 $ 13,874,424 $ 13,845,703 $ 14,277,330 $ 431,627
TOTAL REVENUE $ 16,335,215 $ 15,967,744 $ 16,076,566 $ 16,384,645 $ 308,079 METRO LOCAL AND METRO LINKS 2017 OPERATING BUDGET ROCK REGION METROPOLITAN TRANSIT AUTHORITY 34 2017 ANNUAL BUDGET REPORT FIGURE 2.1 – METRO LOCAL AND METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 EXPENSES:
LABOR: OPERATOR'S SALARIES & WAGES $ 4,204,993 $ 4,394,353 $ 4,305,447 4,539,557 234,110 MECHANIC WAGES 682,737 696,030 773,408 746,357 (27,051) SERVICE WAGES 181,979 191,727 207,558 191,145 (16,413) SUPERVISOR'S WAGES 1,068,490 1,172,301 1,215,266 1,252,758 37,492 DISPATCHER'S WAGES 149,177 154,061 160,768 158,450 (2,318) CLERICAL WAGES 251,800 285,478 283,670 305,385 21,715
TOTAL LABOR $ 6,539,176 $ 6,893,950 $ 6,946,117 $ 7,193,652 $ 247,535 % OVER PREVIOUS YEAR BUDGET 3.56%
FRINGE BENEFITS: FICA MATCHING TAXES $ 566,076 $ 595,966 $ 596,881 $ 621,041 $ 24,160 HEALTH INSURANCE 1,061,288 1,058,123 1,099,685 1,164,524 64,839 LIFE INSURANCE PLAN 104,796 115,860 101,879 110,770 8,891 UNEMPLOYMENT INSURANCE TAX 27,782 28,536 26,676 31,104 4,428 WORKMAN'S COMPENSATION INS. 139,404 155,413 150,759 160,000 9,241 SICK LEAVE PAY 290,887 287,907 304,539 335,074 30,535 HOLIDAY PAY 252,299 236,746 257,169 267,663 10,494 VACATION PAY 520,366 460,112 491,325 527,039 35,714 OTHER PAID ABSENCES 12,629 13,383 12,500 15,500 3,000 UNIFORM ALLOWANCE PAID 80,272 72,157 75,000 75,000 - OTHER FRINGE - AUTO ALLOWANCE 8,400 8,400 8,400 8,400 -
TOTAL FRINGE BENEFITS $ 3,064,199 $ 3,032,603 $ 3,124,813 $ 3,316,115 $ 191,302 % OVER PREVIOUS YEAR BUDGET 6.12%
SERVICES: BUILDINGS & GROUNDS MAINT. $ 266,388 $ 220,898 $ 305,000 $ 305,000 $ - PROFESSIONAL & TECHNICAL SERVICE 125,466 76,614 125,000 125,000 - TEMPORARY HELP 593 519 - - - CUSTODIAL SERVICES 103,426 102,705 103,000 103,500 500 SECURITY SERVICE 281,352 275,398 308,500 341,816 33,316 MOVING EXPENSE - 6,500 - - - TRAINING EXPENSE 32,411 27,899 40,000 40,000 - MISCELLANEOUS EXPENSE 4,562 3,217 7,000 6,000 (1,000)
TOTAL SERVICES $ 814,198 $ 713,750 $ 888,500 $ 921,316 $ 32,816 % OVER PREVIOUS YEAR BUDGET 3.69%
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 35 2017 ANNUAL BUDGET REPORT FIGURE 2.1 – METRO LOCAL AND METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 MATERIALS & SUPPLIES CONSUMED: TIRES & TUBES $ 8,174 $ 6,707 $ 7,000 $ 9,000 $ 2,000 GASOLINE 29,148 25,965 35,000 17,974 (17,026) CNG 95,456 219,662 325,000 197,880 (127,120) DIESEL FUEL 1,519,992 829,363 842,451 703,294 (139,157) OIL 34,396 30,066 35,000 40,000 5,000 BODY REPAIR 15,062 14,105 20,000 20,000 - PAINT 7,857 9,910 9,000 9,000 - ENGINES 71,117 137,074 100,000 100,000 - CHASSIS 36,173 46,381 43,000 43,000 - RADIATORS 1,091 - 2,000 2,000 - ELECTRICAL 19,675 15,183 22,000 22,000 - BATTERIES 11,521 15,121 14,000 14,000 - AIR CONDITIONING 22,670 26,426 25,000 27,000 2,000 BRAKE BLOCKS 41,995 59,493 35,000 65,000 30,000 BRAKE DRUMS 39,164 82,751 50,000 85,000 35,000 GLASS 9,530 8,945 12,000 12,000 - FILTER ELEMENTS 33,965 42,015 50,000 50,000 - TRANSMISSIONS 4,342 6,636 7,000 7,000 - FLEET 150,312 80,487 120,000 120,000 - RADIO SERVICE 29,314 27,130 32,000 32,000 - RAGS 6,760 7,255 7,000 7,500 500 SOAP-HAND CLEANER 3,416 3,591 4,000 4,000 - SOAP-MACHINE 7,514 7,901 8,000 8,000 - SOAP-BUS WASH 57,381 60,334 62,000 55,000 (7,000) OTHER SHOP SUPPLIES 157,677 169,537 130,000 150,000 20,000 OTHER CLERICAL SUPPLIES 22,967 26,459 27,500 27,500 -
TOTAL MATERIALS & SUPPLIES $ 2,436,669 $ 1,958,497 $ 2,023,951 $ 1,828,148 $ (195,803) % OVER PREVIOUS YEAR BUDGET -9.67%
UTILITIES: UTILITIES $ 148,642 $ 150,782 $ 216,220 $ 170,000 $ (46,220) TELEPHONE EXPENSE 53,617 60,626 73,184 63,000 (10,184)
TOTAL UTILITIES $ 202,259 $ 211,408 $ 289,404 $ 233,000 $ (56,404) % OVER PREVIOUS YEAR BUDGET -19.49%
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 36 2017 ANNUAL BUDGET REPORT FIGURE 2.1 – METRO LOCAL AND METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 CASUALITY & LIABILITY COST: PREMIUM/PUBLIC LIAB. & PHY. DAMAGE $ 250,657 $ 272,410 $ 262,282 $ 267,684 $ 5,402 CASUAL/LIAB NOT COVERED BY INS 54 - 500 500 - RECOVERY/PUB LIAB & PROP DAMAGE (5,531) (71,502) - - - PREMIUMS/OTHER CORPORATE INS. 18,702 20,024 19,000 19,000 -
TOTAL CASUALITY & LIABILITY $ 263,882 $ 220,932 $ 281,782 $ 287,184 $ 5,402 % OVER PREVIOUS YEAR BUDGET 1.92%
MISCELLANEOUS: PARATRANSIT NET EXPENSE 1,854,266 2,074,224 1,930,209 2,082,190 151,981 COMPUTER EXPENSE 469 1,667 1,000 1,500 500 POSTAGE & SHIPPING 12,135 14,916 11,000 17,000 6,000 BANK CHARGES 6,382 7,990 5,000 6,000 1,000 PRINTING EXPENSE 42,951 64,099 85,000 85,000 - MARKETING & PROMOTION 273,121 260,399 203,000 250,500 47,500 DUES & SUBSCRIPTION 40,576 35,473 34,000 34,000 - TRAVEL & MEETINGS 26,497 21,330 20,000 20,000 - OTHER MISCELLANEOUS EXPENSES 551 568 1,000 1,000 - PLANNING SERVICES 279,164 110,619 216,840 92,500 (124,340)
TOTAL MISCELLANEOUS $ 2,536,112 $ 2,591,285 $ 2,507,049 $ 2,589,690 $ 82,641 % OVER PREVIOUS YEAR BUDGET 3.30%
LEASES & RENTALS: EQUIPMENT LEASE & RENTAL $ 13,495 $ 14,913 $ 12,010 $ 12,600 $ 590 DEPRECIATION-GEN ADM. 2,940 2,940 2,940 2,940 -
TOTAL LEASES & RENTALS $ 16,435 $ 17,853 $ 14,950 $ 15,540 $ 590 % OVER PREVIOUS YEAR BUDGET 3.95% CONTINGENCY $ - $ - $ - $ - $ -
TOTAL EXPENSES $ 15,872,930 $ 15,640,278 $ 16,076,566 $ 16,384,645 $ 308,079 % OVER PREVIOUS YEAR BUDGET 1.92% EARNINGS (LOSS) FROM OPERATIONS $ 462,285 $ 327,466 $ - $ - $ - ROCK REGION METROPOLITAN TRANSIT AUTHORITY 37 2017 ANNUAL BUDGET REPORT FIGURE 2.2 – METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 REVENUE
OPERATING: ADA ONE WAY PASS $ 31,657 $ 35,117 $ 32,072 $ 34,617 $ 2,545 ADA TEN RIDE BOOK 166,504 174,656 167,140 176,219 9,079 MISCELLANEOUS INCOME 4,041 836 500 757 257 PLANNING INCOME 19,220 44,699 60,800 19,440 (41,360) PUBLIC TRANSIT TRUST FUND 35,000 35,000 35,000 35,000 -
TOTAL REVENUE $ 256,422 $ 290,308 $ 295,512 $ 266,033 $ (29,479)
EXPENSES
LABOR: OPERATOR'S SALARIES & WAGES $ 725,298 $ 828,848 $ 738,970 $ 817,520 $ 78,550 MECHANICS WAGES 43,642 52,202 46,674 47,554 880 SERVICE WAGES 12,580 12,692 14,325 14,131 (194) CLERICAL WAGES 68,591 88,748 75,470 77,974 2,504 DISPATCHER'S WAGES 84,420 77,739 78,631 81,280 2,649 SUPERVISOR WAGES 48,885 44,527 48,358 50,460 2,102
TOTAL LABOR $ 983,416 $ 1,104,756 $ 1,002,428 $ 1,088,919 $ 86,491
FRINGE BENEFITS: FICA MATCHING TAXES $ 76,674 $ 84,738 $ 78,486 $ 85,755 $ 7,269 HEALTH INSURANCE 172,057 178,767 185,000 198,727 13,727 LIFE INSURANCE PLAN 14,878 15,304 16,152 16,208 56 UNEMPLOYMENT INSURANCE TAX 5,391 6,262 5,460 5,760 300 WORKMAN'S COMPENSATION INS. 21,049 20,737 22,101 21,359 (742) SICK LEAVE PAY 41,768 33,986 42,036 43,260 1,224 HOLIDAY PAY 33,854 35,779 33,721 35,020 1,299 VACATION PAY 53,671 55,676 55,069 56,678 1,609 OTHER PAID ABSENCES 1,010 400 1,200 1,200 - UNIFORM ALLOWANCE PAID 11,539 12,731 12,000 12,500 500
TOTAL FRINGE BENEFITS $ 431,891 $ 444,380 $ 451,225 $ 476,467 $ 25,242
METRO LINKS 2017 OPERATING BUDGET ROCK REGION METROPOLITAN TRANSIT AUTHORITY 38 2017 ANNUAL BUDGET REPORT FIGURE 2.2 – METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 SERVICES: PROFESSIONAL & TECHNICAL SERVICE $ 69,484 $ 171,850 $ 55,660 $ 140,000 $ 84,340 CUSTODIAL SERVICES 1,372 1,373 3,500 2,000 (1,500) TRAINING 229 425 2,000 2,000 - TEMPORARY HELP - 3,665 - 5,907 5,907 MISCELLANEOUS EXPENSE 961 321 500 500 -
TOTAL SERVICES $ 72,046 $ 177,634 $ 61,660 $ 150,407 $ 88,747
- MATERIALS & SUPPLIES: TIRES & TUBES $ 12,562 $ 15,518 $ 35,000 $ 35,000 $ - GASOLINE - 54,544 11,880 102,995 91,115 DIESEL FUEL 212,126 106,365 147,756 51,042 (96,714) OIL 2,194 1,705 3,000 2,500 (500) BODY REPAIR 5,390 1,397 6,000 6,000 - PAINT 80 - 2,000 1,000 (1,000) ENGINES 5,501 10,415 9,000 12,000 3,000 CHASSIS 5,830 9,820 6,000 12,000 6,000 RADIATORS 12 - 500 500 - ELECTRICAL 3,121 4,726 4,000 4,000 - BATTERIES 2,845 1,441 2,500 2,500 - AIR CONDITIONING 8,285 8,813 10,500 14,000 3,500 BRAKE BLOCKS 10,579 8,917 14,000 14,000 - BRAKE DRUMS 1,136 - 2,000 1,000 (1,000) GLASS 1,775 1,417 2,200 2,000 (200) FILTER ELEMENTS 4,996 4,036 6,000 6,000 - TRANSMISSIONS - 108 500 500 - FLEET 4,367 10,398 7,000 6,000 (1,000) RADIO SERVICE - 188 3,000 3,000 - OTHER SHOP SUPPLIES 89 - 200 200 - OTHER CLERICAL SUPP, MISC. EXP. 4,226 4,117 4,500 4,500 -
TOTAL MATERIALS & SUPPLIES $ 285,114 $ 243,925 $ 277,536 $ 280,737 $ 3,201
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 39 2017 ANNUAL BUDGET REPORT FIGURE 2.2 – METRO LINKS 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 UTILITIES: UTILITIES $ - $ - $ - $ - $ - TELEPHONE EXPENSE 7,451 7,134 9,000 9,000 -
TOTAL UTILITIES $ 7,451 $ 7,134 $ 9,000 $ 9,000 $ -
CASUALTY & LIABILITY COST: RECOVERY OF PHYSICAL DAMAGE $ - $ - $ - $ - $ - PREMIUM/PUBLIC LIAB. & PHY. DAMAGE 42,860 44,995 42,860 42,860 - CASUAL/LIAB NOT COVERED BY INS - - - - - RECOVERY/PUB LIAB & PROP DAMAGE - (15,920) - - - PREMIUMS/OTHER CORPORATE INS. - - - - -
TOTAL CASUALTY & LIABILITY $ 42,860 $ 29,075 $ 42,860 $ 42,860 $ -
MISCELLANEOUS: COMPUTER EXPENSE $ - $ - $ 500 $ 500 $ - POSTAGE & SHIPPING 908 792 1,000 1,000 - PLANNING EXPENSE 22,225 60,194 76,000 24,300 (51,700) PRINTING EXPENSE 7,483 5,606 6,000 6,000 - MARKETING & PROMOTION 592 289 1,500 1,500 - TRAVEL & MEETINGS 280 439 500 500 -
TOTAL MISCELLANEOUS $ 31,488 $ 67,320 $ 85,500 $ 33,800 $ (51,700)
TOTAL EXPENSES $ 1,854,266 $ 2,074,224 $ 1,930,209 $ 2,082,190 $ 151,981
EARNINGS (LOSS) FROM OPERATIONS $ (1,597,844) $ (1,783,916) $ (1,634,697) $ (1,816,157) $ (181,460)
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 40 2017 ANNUAL BUDGET REPORT FIGURE 2.3 – METRO STREETCAR 2017 OPERATING BUDGET 2015 2016 2016 2017 ($) CHANGE ACTUAL ACTUAL BUDGET BUDGET FROM 2016 REVENUE:
OPERATING PASSENGER CASH $ 66,023 $ 52,418 $ 60,016 $ 60,513 $ 497 PASS INCOME 8,170 16,331 18,340 18,707 367 ADVERTISING INCOME - - 1,200 - (1,200) PLANNING INCOME - - - 80,000 80,000 MISCELLANEOUS INCOME - 968 - - - CONTRACT CAR RENTAL 11,063 8,988 11,750 8,810 (2,940) TOTAL OPERATING REVENUE $ 85,256 $ 78,705 $ 91,306 $ 168,030 $ 76,724
EXPENSES: MISCELLANEOUS $ 1,169 $ 766 $ 1,150 $ 1,150 $ - PROFESSIONAL SERVICES 1,062 49 400 400 - MARKETING 2,698 1,683 15,000 15,000 - UTILITIES 62,028 56,017 66,239 64,000 (2,239) SUPPLIES 20,137 18,070 15,500 17,500 2,000 SECURITY 3,836 1,311 2,500 2,500 - JANITORIAL 12,562 14,516 15,000 15,000 - BATTERIES 2,086 1,203 2,500 2,500 - SOAP 7,734 2,522 4,000 4,000 - PRINTING 5,171 2,996 7,500 6,000 (1,500) DUES & SUBSCRIPTIONS 297 297 500 500 - TRAVEL & MEETINGS 169 156 3,000 3,000 - PAINT 273 4,056 500 500 - INSURANCE 84,627 72,884 88,705 75,000 (13,705) WAGES 486,225 515,957 547,269 537,826 (9,443) FRINGES 194,729 216,577 223,783 230,594 6,811 FLEET 28,717 38,047 40,000 40,000 - FREIGHT 1,744 1,118 2,000 2,000 - BUILDING & GROUNDS MAINTENANCE 18,752 18,440 11,500 23,500 12,000 UNIFORMS & TOOLS 1,552 7,484 7,000 7,000 - TELEPHONE 5,819 5,102 5,500 6,700 1,200 ELECTRICAL REPAIRS 47,663 24,237 45,000 25,000 (20,000) RADIO EXPENSE - 2,066 500 2,100 1,600 TIRES - - 1,200 1,200 - AIR CONDITIONING - 259 - - - OIL 38 - 100 100 - TRAINING 4,950 300 1,000 1,000 - GLASS 407 - - 500 500 PLANNING EXPENSE - - - 100,000 100,000 EQUIPMENT RENTAL 1,133 148 1,500 1,000 (500) TOTAL EXPENSES $ 995,578 $ 1,006,261 $ 1,108,846 $ 1,185,570 $ 76,724
INCOME FROM FUNDING CITIES $ 910,322 $ 927,556 $ 1,017,540 $ 1,017,540 $ -
METRO STREETCAR 2017 OPERATING BUDGET ROCK REGION METROPOLITAN TRANSIT AUTHORITY 41 2017 ANNUAL BUDGET REPORT
SOURCES REVENUE
Note: The figures used in comparison are actual 2015, actual 2016, and budget 2017 unless otherwise stated.
In 2017, METRO expects to receive $2.04 million in farebox and pass sales revenue, $2.67 million in federal and miscellaneous funds, and $12.86 million in local government contributions to balance out the budget. Figure 2.4 compares METRO’s sources of revenue for the year 2015 through the budgeted sources of revenue in 2017.
Figure 2.4 – Sources of Revenue
Farebox revenue reached $2.13 million in 2015 and decreased to $2.00 million in 2016. METRO expects agency farebox revenue to slightly increase to $2.04 (or two percent [2%] over prior year actual) million in 2017. The budgeted amount is based off of trend analysis and the assumption that ridership may increase for METRO in 2017 as compared to actual 2016 ridership (not budgeted ridership). Although gasoline prices continue to stay at historically low levels, METRO does anticipate a slight increase in gasoline prices in 2017. METRO’s ridership is influenced by gasoline price levels. Therefore, METRO anticipates an increase in gasoline prices will cause more riders to choose public transportation over private transportation. Not only does METRO anticipate higher gasoline prices to affect ridership, but METRO also anticipates more riders due to a greater focus being spent on improving the customer experience through better fare payment technology, more efficient and effective routes, and upgraded passenger amenities. (2017 AGENCY GOAL #1, #4)
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 42 2017 ANNUAL BUDGET REPORT
Revenue from local governments decreased from 2015 to 2016, but will increase in 2017. Local government revenue is revenue received from the funding partners (Little Rock, North Little Rock, Pulaski County, Maumelle, and Sherwood) in order to balance the budget, and continues to be METRO’s main source of revenue. METRO received $12.49 million and $12.34 million in local government contributions in 2015 and 2016, respectively. In 2017, METRO anticipates receiving $12.86 million in local government contributions. This increase is based on trend analysis and the assumption that increases in expenses from 2016 to 2017 will be more than the increases in revenue from 2016 to 2017. When this happens, METRO must ask for more revenue from the local governments. Also of note, METRO used automatic passenger counters during the annual service enhancement that provided more accurate service miles. During this time, it came to METRO’s attention service miles were incorrectly allocated to Sherwood and Maumelle that should have been allocated to Pulaski County. This is why there is a major decrease in contributions for the two entities and an increase for Pulaski County. The table presented below compares the actual operating contributions from each local governmental entity and the FTA in 2016 to the budgeted operating contributions from each entity for 2017.
2016 2017 Actual Budgeted Change in % City Contributions Contributions Contributions Change Little Rock $ 8,546,534 $ 8,862,975 $ 316,441 3.70% North Little Rock 2,636,139 2,674,190 38,051 1.44% Pulaski County 1,001,907 1,212,291 210,384 21.00% Sherwood 107,275 77,004 (30,271) -28.22% Maumelle 47,931 37,910 (10,021) -20.91% Federal Transit Administration 1,937,973 2,005,940 67,967 3.51%
TOTALS $ 14,277,759 $ 14,870,310 $ 592,551 4.15%
Federal and miscellaneous revenue for 2015 came in at $2.71 million and decreased to $2.63 million in 2016. Even though advertising revenue increased from $248,000 in 2015 to $287,000 in 2016, federal and miscellaneous revenue decreased overall due to less revenue being received from the federal government for planning studies. METRO intended on initiating and completing numerous planning studies in 2016, but due to the timing of these studies, the final payment for the work completed will be in 2017. This caused actual federal and miscellaneous revenue in 2016 to be significantly less than what was budgeted in 2016. This will also cause planning income (and subsequently planning expenses) to be greater than the budgeted amounts in 2017 because the revenue and expenses for these planning studies will be recorded in 2017. METRO is reimbursed eighty percent (80%) of all planning expenses by the FTA. METRO shows both planning income received from FTA for reimbursement of planning expenses (at eighty percent (80%) of total planning expenses) and planning expenses incurred from the planning studies (at one hundred percent [100%]) on its financial statements.
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 43 43 2017 ANNUAL BUDGET REPORT
In 2017, METRO plans to capitalize on its high-profile assets, including a METRO Streetcar strategic plan and an assessment of the transit-oriented development opportunities at the River Cities Travel Center. (2017 AGENCY GOAL #2) Due to this, METRO anticipates federal and miscellaneous revenue to increase to $2.67 million in 2017, up $.04 million from 2016 actual federal and miscellaneous revenue.
In order to illustrate the connection between gasoline prices and ridership, a line graph is included below. As stated before, METRO ridership is influenced, though not entirely, by the average price of gasoline in Little Rock. The following graph (Figure 2.5), from 2012 to 2016, shows both the price of gasoline decreasing and the annual ridership of METRO Local services decreasing. These two variables do not decrease at the same rate, but there is a positive relationship between the two variables. As gasoline prices start to rise in the future, so, too, will ridership.
Figure 2.5 – Annual Ridership and Gasoline Prices
2012 2013 2014 2015 2016 Ridership 2,823,695 2,816,769 2,740,905 2,573,953 2,502,787 Gasoline Prices ($) $3.60 $3.49 $2.75 $2.40 $2.37 Ridership % Decrease - -0.25% -2.69% -6.09% -2.76% Gasoline Price % Decrease - -3.06% -21.20% -12.73% -1.25%
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 44 44 2017 ANNUAL BUDGET REPORT
USES OF REVENUE
Note: The figures used in comparison are actual 2015, actual 2016, and budget 2017 unless otherwise stated.
METRO’s budgeted operational expenses in 2017 will increase over 2016 actual operational expenses by $925,000 or five-and-a-half percent (5.5%). Figure 2.6 illustrates METRO’s actual operational expenses by category for 2015, 2016, and budgeted operational expenses for 2017.
Figure 2.6 – Operational Expenses
Wages and fringes continue to be METRO’s main use of revenues, with wages increasing approximately 6.3 percent from 2015 actual to 2016 actual, and are budgeted to increase by 3.6 percent from 2016 to 2017. Union employees are scheduled to receive a two percent (2%) increase in wages based on the negotiated Collective Bargaining Agreement, and administrative employees are budgeted to receive a three percent (3%) cumulative performance-based raise. The bargaining unit wage increase is part of the Collective Bargaining Agreement that was agreed to in July 2015. The administrative staff wage increase is based on performance, and three percent (3%) is the cumulative total in the budget. The additional wage expenses are due to a number of employees being on short-term disability or FMLA (Family and Medical Leave Act) leave during 2016. METRO expects these employees to return to work and, therefore,
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 45 45 2017 ANNUAL BUDGET REPORT
increase wages in 2017. As mentioned earlier, METRO does not intend to have, and did not budget for, personnel increases in 2017.
In 2016, METRO did not budget for or receive an increase in health insurance premiums. However, METRO budgeted for a nine percent (9%) increase in health insurance premiums for 2017. This was due, in part, to METRO having not received a premium increase in forty-three (43) months. After this long period of no insurance premium increases, METRO expects an increase when the next renewal comes around. Figure 2.7 provides a breakdown of 2016 actual uses of revenue.
Figure 2.7 – 2015 Uses of Revenue
METRO experienced significant increases in professional services related to using the taxicab service more in 2016. METRO Links provides taxicab service to customers when Links cannot provide the ADA-required trips. This usually happens when multiple Links operators are out on sick, vacation, or holiday leave. METRO Links professional services expense increased from $69,000 in 2015 to $172,000 in 2016. In order to reduce the dependence on taxicab services to supplement normal Links paratransit service, METRO plans on relying on the Links Eligibility Study to provide guidance and recommendations on how to handle increasing demand for Links paratransit services. (2017 AGENCY GOAL #3)
Another significant expense category is materials and supplies. The materials and supplies expense category is composed of many different expense items, including: tires, gasoline, diesel fuel, CNG fuel, oil, body repair, paint, engines, chassis, radiators, electrical, batteries, air conditioning, brake blocks/drums, glass, filters, transmissions, fleet, radios, rags, soap, and other shop and clerical supplies. The most dominant sub-categories are diesel fuel and CNG
ROCK REGION METROPOLITAN TRANSIT AUTHORITY 46 46 2017 ANNUAL BUDGET REPORT
fuel, which equal forty-one percent (41%) of the total expenses budgeted for materials and supplies. METRO paid $2.93 per gallon in 2015, $1.72 per gallon in 2016, and enjoys a rate of $1.63 per gallon for 2017. With the continued conversion to CNG buses, METRO budgeted $.85 per diesel gallon equivalent. Included in the price-per-gallon is the maintenance cost of the CNG fueling station. The maintenance cost is approximately $.22 per diesel gallon equivalent. Due to the decrease in price-per-gallon of diesel fuel and natural gas, as well as the continued conversion to CNG, METRO will save more than $150,000 in fuel costs in 2017 compared to actual expenses in 2016.
METRO spent approximately $278,000 on utilities and telephone expenses in 2015, $286,000 in 2016, and is budgeted to spend $312,000 in 2017; representing a $26,000 or nine percent (9%) increase from 2016 to 2017. METRO will have higher utilities expenses related to the CNG fueling station and free Wi-Fi on all streetcars and all buses in 2017.
METRO is expecting its federal planning expense to decrease approximately $125,000 from 2016 to 2017, due to the completion of the Facilities Master Plan and Links Eligibility Study. The impact would have been greater, but METRO will focus on other planning studies in 2017, including a Streetcar development plan and, possibly, a transit-oriented development plan for the River Cities Travel Center (2017 AGENCY GOAL #2). Figure 2.8, below, illustrates METRO’s budgeted uses of revenue in 2017.
Figure 2.8 – 2016 Budgeted Uses of Revenue
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FIVE YEAR OPERATING FORECAST
2017 2018 2019 2020 2021 REVENUE Farebox and Pass $ 2,043,000 $ 2,084,000 $ 2,126,000 $ 2,169,000 $ 2,212,000 Local Government 12,864,000 13,336,000 13,822,000 14,323,000 14,840,000 Preventive Maintenance 1,432,000 1,432,000 1,432,000 1,432,000 1,432,000 Advertising 245,000 257,000 270,000 284,000 298,000 Paratransit Funding 397,000 397,000 397,000 397,000 397,000 Planning 173,000 173,000 173,000 173,000 173,000 Public Transit Trust Fund 310,000 310,000 310,000 310,000 310,000 Contract - Special Route 91,000 93,000 95,000 97,000 99,000 Interest 4,000 4,000 4,000 4,000 4,000 Training 3,000 3,000 3,000 3,000 3,000 Miscellaneous 8,000 8,000 8,000 8,000 8,000
Total Income $ 17,570,000 $ 18,097,000 $ 18,640,000 $ 19,200,000 $ 19,776,000
EXPENSES Labor $ 8,820,000 $ 9,085,000 $ 9,358,000 $ 9,639,000 $ 9,928,000 Fringe Benefits 4,023,000 4,144,000 4,268,000 4,396,000 4,528,000 Services 1,115,000 1,148,000 1,182,000 1,217,000 1,254,000 Materials and Supplies 2,202,000 2,268,000 2,336,000 2,406,000 2,478,000 Utilities 313,000 322,000 332,000 342,000 352,000 Insurance 405,000 417,000 430,000 443,000 456,000 Miscellaneous 675,000 695,000 716,000 737,000 759,000 Leases and Rentals 17,000 18,000 18,000 20,000 21,000 Total Expenses $ 17,570,000 $ 18,097,000 $ 18,640,000 $ 19,200,000 $ 19,776,000 Percent Change from PY 3.00% 3.00% 3.00% 3.00% Surplus/(Deficit) - - - - - Presented above is METRO’s Five (5) Year Operating Forecast. Due to METRO’s funding mechanism, (where local government contributions are heavily relied upon, but are not always guaranteed) it is difficult to project long-range operating financial plans. This forecast follows a few simple assumptions. First of all, farebox revenue and contract revenue will increase by two percent (2%) each year. Secondly, preventive maintenance, paratransit funding, planning, public transit trust fund, interest, training, and miscellaneous revenue will remain at the same levels through 2021. Thirdly, advertising revenue will increase five percent (5%) each year. Finally, all expenses will increase three percent (3%) each year. These are very basic and simplified assumptions for the next five (5) years, and should not be used for comparison with future operating budgets. It is METRO’s intent to only show the reader what future budgets would look like without significant funding increases.
Of course, circumstances could change in the future. If METRO is successful in a future dedicated sales tax initiative, this table would no longer be relevant, as funding for expanding services would greatly increase.
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CAPITAL BUDGET SUMMARY
The 2017 Capital Budget is funded through multiple sources, including Federal Transit Administration (FTA) Section 5307 formula funds, the Public Transit Trust Fund (PTTF), Bus and Bus Facility funds (Section 5339), and State of Good Repair (Section 5337) grants.
Unlike most large transit agencies, METRO allocates a significant portion of federal capital funds toward operations (called Preventive Maintenance), which is allowed by FTA. METRO does not have any current debt obligations and does not intend to enter into any debt obligations in 2017.
Capital expenditures create future benefits and are incurred when capital finances are used to purchase fixed assets with a useful life of at least five (5) years or to add value to an existing fixed asset (i.e. associated capital). METRO’s fixed asset capitalization threshold (excluding associated capital items) is $50 with a useful life of at least five (5) years.
The associated capital threshold is calculated annually using an FTA-mandated formula and was calculated at $691.13 in 2016 and $632.81 in 2017 for METRO Local and Links associated capital items and $2,265.45 and $2,099.55 in 2016 and 2017, respectively, for METRO Streetcar associated capital items. Associated capital items include engines, transmissions, chassis, invertors, compressors, brake drums, and other major bus or streetcar parts. METRO has budgeted $9,087,960 in capital expenditures for 2017.
Presented is a summary of major capital funds and expenditures for 2016 and 2017. 2016 2016 2017 Actual Budget Budget Capital Funding Beginning Capital Funds Balance $ 11,465,098 $ 11,465,098 $ 15,720,216 Section 5307 Formula Funds 5,685,984 5,702,348 5,728,629 Section 5337 State of Good Repair 396,509 396,509 396,509 Section 5339 Bus and Bus Facilities 513,400 513,400 513,400 Miscellaneous Grant Funds 2,395,292 450,000 - Total Capital Funding Balance $ 20,456,283 $ 18,527,355 $ 22,358,754
Capital Expenditures Major Capital Projects $ 999,420 $ 1,584,335 $ 4,901,710 Information Technology 155,808 220,000 185,000 Facilities, Maintenance, and Equipment 574,504 740,000 885,000 Passenger Amenities 234,643 325,000 410,000 Streetcar Maintenance and Equipment 248,199 257,000 140,000 Other Capital Expenditures 140,018 180,000 175,000 Operating Assistance 2,383,475 2,391,250 2,391,250 Total Capital Expenditures $ 4,736,067 $ 5,697,585 $ 9,087,960
Ending Capital Funding Balance $ 15,720,216 $ 12,829,770 $ 13,270,794
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CAPITAL BUDGET PROCESS
As part of METRO’s budgeting process, the Finance Department meets annually with managers responsible for certain activity line items in the grants (Senior Transit Planner in charge of bus shelters and bike racks, Director of Public Engagement in charge of signage, and Director of Maintenance in charge of IT, shop capital, and maintenance items, etc.).
During the meeting, managers are asked about any expected increases or decreases they foresee related to their respective activity line items. Capital projects are considered throughout the year and are approved by the Board of Directors. After the meeting, the Finance Department develops a capital budget based on the input of department directors and managers and presents the capital budget to the budget committee. The capital budget is mainly used to determine if there are enough capital funds to finance future revenue vehicle purchases. Once the capital budget is approved by the budget committee, the Board of Directors approves them during the November board meeting.
The budget calendar shown on page 29 is used to supplement this narrative information.
SIGNIFICANT CAPITAL BUDGETARY ITEMS AND TRENDS
Revenues During the budget development stage, significant assumptions – influenced by current legislative acts, historical trends, and long-term agency goals and objectives – are considered to ensure accuracy of the capital budget document. Although METRO tries to make the document as accurate as possible, estimated numbers may differ significantly from actual expenditures due to timing of capital project expenditures or unforeseen circumstances.
A major assumption is that Section 5307 grant funds will increase approximately three-quarters of a percent (.75%) each year. President Obama signed the Fixing America’s Surface Transportation (FAST) Act on December 4, 2015, and estimates provided by DOT or FTA show a three-quarters of a percent (.75%) increase in Section 5307 formula funds. The estimates were only provided through 2020, but METRO has extended the three-quarters of a percent (.75%) increase through 2022. The Section 5307 funding formula, set by the FTA, uses metrics such as ridership, vehicle revenue miles, vehicle revenue hours, service population, and service population density in order to determine the funding amounts for transportation organizations each year. Because of the funding formula structure, it is difficult to appropriately budget for future years.
Sections 5337 and 5339 were created when MAP-21, the previous transit funding legislation, was passed and signed by President Obama, and both programs are expected to be available until 2020 under the FAST Act. Section 5337 formula funds are budgeted to receive an increase
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of 1.7 percent annually, from 2017 through 2022. The FAST Act provides for a two percent (2%) increase in Section 5339 formula funds starting in 2017. Unfortunately, METRO has seen a decrease in Section 5339 funding over the previous two (2) years and did not budget any increases in Section 5339 funds through 2024. The decrease in Section 5339 funding is due to METRO’s ridership decreasing in the previous years. The funding formula 5339 funds are based off of National Transit Database (NTD) metrics, including bus revenue vehicle miles, bus passenger miles, service area population, and service area population density, among other metrics.
METRO received two (2) competitive grants in 2016. In 2016, METRO applied for, and was awarded, a Transportation Alternatives Program (TAP) grant in the amount of $450,000 ($360,000 – federal, $90,000 – local match). Approximately half of the funds were used in 2016 to purchase twenty-five (25) new bus shelters with solar-powered lighting. Installation of the bus shelters will be performed in 2017, and is part of METRO’s goal to improve the customer experience. (2017 AGENCY GOAL #4) The remaining funds will be used to purchase another twenty-five (25) to thirty (30) bus shelters with solar-powered lighting. The other competitive grant received in 2016 was a Section 5339 discretionary grant. METRO received more than $1.9 million ($1.6 million – federal, $.3 million – local) that will be used to finance part of the 2017 purchases of fixed-route revenue vehicles. This is part of METRO’s ongoing conversion from diesel-powered buses to CNG-powered buses. These competitive grants will also allow METRO to use Section 5307 funds for other capital projects in the future.
Expenditures Revenue vehicles – both buses and vans – are the most valuable capital assets METRO owns and are greatly considered during the development stage of creating the capital budget. Based on agency knowledge and historical trends, METRO expects the cost of CNG buses, Links paratransit vans, and Links minivans to increase approximately three percent (3%) year-over- year. METRO purchased eight (8) Starcraft paratransit vans and two (2) MV-1 paratransit minivans in January 2016 and will purchase fourteen (14) more Starcraft paratransit vans in 2017. Also, in 2017, METRO will purchase seven (7) CNG revenue buses. These buses will replace old, fully depreciated diesel buses. The total budgeted cost for replacement CNG buses is $3,377,474 and the total budgeted cost for replacement Links vans is $943,544 in 2017. A complete Fleet Replacement Schedule is provided in Appendix B.
Planning studies are a major focus each year for METRO. In 2017, METRO will perform a streetcar strategic study that is expected to cost $100,000. (2017 AGENCY GOAL #2) This planning study will be funded using existing planning funds. Also, in 2017, METRO will complete the Links Eligibility study and the Facilities Master Plan study that were started in 2016. Descriptions of each major capital project are provided on pages 55 - 66.
METRO also assumes associated capital expenditures will increase over the next six (6) years due to the expected rise in the cost of associated capital parts (engines, transmissions, alternators, etc.) Although METRO’s associated capital threshold (more information in the Glossary) will increase significantly each year CNG buses are purchased, the unpredictable costs
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of CNG-associated capital items led METRO to be conservative and budget for increases until more information is gathered in the future. METRO expects to spend approximately $600,000 on associated capital maintenance items in 2017. Also, in 2017, METRO will purchase a spare powertrain for CNG buses. The powertrain (engine and transmission) will cost approximately $150,000 and will be paid for using existing grant funds. The total 2017 budget for associated capital items is $750,000.
Another significant budget assumption is that METRO will spend approximately $400,000 on passenger shelters in 2017. METRO Board approved the annual purchase and installation of ten (10) shelters in new locations. On top of this initiative, METRO will use the remaining TAP funds and purchase twenty-five (25) to thirty (30) new bus shelters with solar-powered lighting. Improving the customer experience through upgrading passenger amenities is just one way METRO is trying to increase ridership. (2017 AGENCY GOAL #4)
Computer software costs will continue to increase each year. Many software licenses make up this line item, including annual license fees for Microsoft Office, Trend Micro (virus protection), Watchguard (firewall), Enghouse Transportation, StrataGen (Links software), and eBid (procurement software), as well as an annual contract with PC Assistance for IT support services. In 2017, METRO will complete the interactive voice response system project that is budgeted to initially cost $200,000. The IVR system will greatly improve the customer experience and reduce administrative burdens. Starting in 2018, METRO will pay an annual licensing fee to Syncromatics (ITS) set at approximately $50,000 and approximately $25,000 to an IVR system provider.
On the next page, Figure 2.9 shows METRO’s 2017 Capital Budget with an extended 5-year estimate.
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FIGURE 2.9 – 2017 CAPITAL BUDGET 2016 2016 2017 2018 2019 2020 2021 2022 Actual Budget Difference Budget Estimated Estimated Estimated Estimated Estimated Capital Funding
Beginning Capital Funds Balance $ 11,465,098 $ 11,465,098 $ - $ 15,720,216 $ 13,270,794 $ 16,196,288 $ 18,890,099 $ 17,266,083 $ 20,206,817 Section 5307 Apportionment 5,685,984 5,702,348 (16,364) 5,728,629 5,771,594 5,814,881 5,858,493 5,902,432 5,946,700 Section 5337 - State of Good Repair 396,509 396,509 - 396,509 403,250 410,105 417,077 424,167 431,378 Section 5339 - Bus & Bus Facilities 513,400 513,400 - 513,400 513,400 513,400 513,400 513,400 513,400 TAP Funds - Administered by FTA 450,000 450,000 ------Section 5339 - Discretionary Funds 1,945,292 - 1,945,292 ------Total Sources of Funds for Capital Items 20,456,283 18,527,355 1,928,928 22,358,754 19,959,038 22,934,674 25,679,069 24,106,082 27,098,295
Capital Expenditures Major Capital Projects Revenue Vehicle Purchase - CNG Buses - - - 3,377,474 - - 4,321,954 - 5,731,451 Revenue Vehicle Purchase - Links Paratransit Vans 528,426 513,484 14,942 943,544 - - - - - Revenue Vehicle Purchase - Links Minivans (MV-1) 92,500 92,500 - - - - 147,291 - - Intelligent Transportation System 126,376 153,351 (26,975) ------Facility Master Plan - 50,000 (50,000) 46,542 - - - - - Interactive Voice Response System 699 200,000 (199,301) 191,091 - - - - - Links Eligibility Study 38,994 50,000 (11,006) 9,330 - - - - - Bus Shelter Installation - Solar-Powered Lighting 212,425 450,000 (237,575) ------Streetcar Intelligent Transportation System - - - 68,729 - - - - - Streetcar Install Electric Switch - - - 165,000 Streetcar Strategic Study - 75,000 (75,000) 100,000 - - - - - Total Major Projects 999,420 1,584,335 (584,915) 4,901,710 - - 4,469,245 - 5,731,451
Information Technology Computer Hardware 22,970 20,000 2,970 30,000 20,000 20,000 20,000 25,000 25,000 Computer Software 132,838 200,000 (67,162) 155,000 205,000 215,000 227,000 230,000 235,000 Total Information Technology 155,808 220,000 (64,192) 185,000 225,000 235,000 247,000 255,000 260,000
Facilities, Maintenance and Support Equipment Associated Capital 445,385 600,000 (154,615) 750,000 600,000 650,000 650,000 650,000 700,000 Radios - 20,000 (20,000) 5,000 5,000 5,000 5,000 5,000 5,000 Facilities Repair and Replace 17,042 25,000 (7,958) 20,000 20,000 20,000 25,000 25,000 25,000 Miscellaneous Support Equipment 38,029 30,000 8,029 25,000 25,000 25,000 30,000 30,000 30,000 Miscellaneous Shop Equipment 49,198 50,000 (802) 70,000 20,000 20,000 20,000 20,000 20,000 Security Cameras and Equipment 24,850 15,000 9,850 15,000 15,000 15,000 15,000 15,000 15,000 Total Facilities, Maintenance and Equipment 574,504 740,000 (165,496) 885,000 685,000 735,000 745,000 745,000 795,000
2017 CAPITAL BUDGET
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FIGURE 2.9 – 2017 CAPITAL BUDGET 2016 2016 2017 2018 2019 2020 2021 2022 Actual Budget Difference Budget Estimated Estimated Estimated Estimated Estimated
Passenger Amenities Bike Racks - 25,000 (25,000) 10,000 10,000 10,000 10,000 10,000 10,000 Shelters 234,643 300,000 (65,357) 400,000 150,000 150,000 150,000 150,000 150,000 Total Passenger Amenities 234,643 325,000 (90,357) 410,000 160,000 160,000 160,000 160,000 160,000
Streetcar Maintenance and Equipment Streetcar Associated Capital 224,022 232,000 (7,978) 135,000 135,000 135,000 135,000 145,000 145,000 Streetcar Communication Equipment 24,177 25,000 (823) 5,000 5,000 5,000 5,000 5,000 5,000 Total Streetcar Maintenance and Equipment 248,199 257,000 (8,801) 140,000 140,000 140,000 140,000 150,000 150,000
Other Capital Expenditures Bus Signage 25,730 10,000 15,730 10,000 10,000 10,000 10,000 10,000 10,000 Landscaping 1,628 40,000 (38,372) 10,000 10,000 10,000 10,000 10,000 10,000 Support Vehicles - - - 25,000 - 210,000 75,000 - - Tire Lease 112,660 130,000 (17,340) 130,000 136,500 143,325 150,491 158,015 165,916 Total Other Capital Expenditures 140,018 180,000 (39,982) 175,000 156,500 373,325 245,491 178,015 185,916
Operating Assistance Training 4,000 5,000 (1,000) 5,000 5,000 5,000 5,000 5,000 5,000 Paratransit 496,250 496,250 - 496,250 496,250 496,250 496,250 496,250 496,250 Preventive Maintenance 1,790,000 1,790,000 - 1,790,000 1,790,000 1,790,000 1,790,000 1,790,000 1,790,000 Planning 93,225 100,000 (6,775) 100,000 105,000 110,000 115,000 120,000 125,000 Total Operating Assistance 2,383,475 2,391,250 (7,775) 2,391,250 2,396,250 2,401,250 2,406,250 2,411,250 2,416,250
Total Budgeted Capital Expenditures 4,736,067 5,697,585 (961,518) 9,087,960 3,762,750 4,044,575 8,412,986 3,899,265 9,698,617
Ending Capital Funds Balance $ 15,720,216 $ 12,829,770 $ 2,890,446 $ 13,270,794 $ 16,196,288 $ 18,890,099 $ 17,266,083 $ 20,206,817 $ 17,399,678
Notes: All figures are shown at 100% (Federal reimbursement levels are 83% or 85% for Revenue Vehicles, 95% for Bike Racks, and 80% for the remaining items). The capital budget includes only Federal Transit Administration formula grant fund, or grants administered by FTA. Although not shown on this budget, METRO's Fleet Replacement Plan asks for $23.8 million (33 CNG buses, 22 paratransit vans and 2 paratransit minivans) in revenue vehicle purchases in 2023-2028.
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MAJOR CAPITAL PROJECTS AND DESCRIPTIONS
Generally, capital projects are funded through the annual 5307 formula allocation which requires a twenty percent (20%) local match (fifteen percent [15%] for revenue vehicles), but can be financed through a variety of other capital sources (revenue vehicles purchases are also financed through Section 5339 grant funds, and streetcar associated capital items are financed through Section 5337 grant funds). The PTTF and Arkansas Highway and Transportation Department (AHTD) funds are then used as the local match. Any local match shortfall, or local match not covered by PTTF and AHTD funds, must be taken out of reserves (fund balance). This process requires Board approval and, typically, happens when the Board approves the current year’s Program of Projects.
Illustrated and described on the following pages, METRO’s capital projects are considered significant nonrecurring capital expenditures and must be financed with capital grant funds and must be greater than $50,000 in total budgeted cost.
In this section, the reader will be able to view the project name, project number, a short description of each project, the actual or budgeted capital costs, the future operating costs associated with the capital project, the funding sources, department oversight, and miscellaneous project notes, such as when the project will be completed.
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Project Name: METRO Links Fleet Replacement 2016 Project Number: 1601 Project Description:
The fleet replacement schedule for FY16 included the replacement of ten (10) revenue vans that had reached the end of the useful life. Diesel vans were replaced with eight (8) gasoline-powered vans and two (2) gasoline-powered minivans. The vans were grant funded at eighty-five percent (85%). Year Capital Cost Operating Costs 2015 $ - - 2016 620,926 8,000 2017 - 12,000 Total $ 620,926 $ 20,000 Source(s) of Capital Funding:
State Grants $ - Federal Grants (85%) 527,787 Local Funds (15%) 93,139 Total Funding $ 620,926 Department Oversight: Maintenance Department Finance & Administration
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating cost related to the replacement of revenue vehicles included fuel costs. METRO spent approximately $8,000 in gasoline expenses due to the coversion from diesel engines to gasoline engines. Gasoline costs will increase by approximately $12,000 in 2017 due to the conversion. The minivans were delivered in April, and the vans were delivered in July of 2016.
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Project Name: Intelligent Transportation System Project Number: 1602 Project Description: METRO implemented a real-time intelligent transportation system and installed free Wi-Fi for customers using fixed-route services. Customers are able to download a free app showing real-time bus locations and providing predictive stop information. Customers without a smartphone are able to text METRO and receive the same information through text.
Year Capital Cost Operating Costs 2015 $ 596,649 20,112 2016 126,376 31,208 2017 - 31,208 Total $ 723,025 $ 82,528 Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 578,420 Local Funds (20%) 144,605 Total Funding $ 723,025 Department Oversight: Maintenance Operations
Project Notes:
Operating costs associated with this project include the cost of Wi-Fi on sixty (60) buses. Wi-Fi operating costs in 2016 were $31,208, and METRO does not expect an increase in Wi-Fi costs on sixty (60) buses in 2017.
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Project Name: Facility Master Plan Project Number: 1603 Project Description: As Rock Region METRO improves and expands transit services, existing facilities will be required to support growth in staffing, as well as vehicle storage and maintenance. The facility master plan will focus on efficiency improvements and expansion opportunities within the 901 Maple Street headquarters and surrounding property.
Year Capital Cost Operating Costs 2015 $ - - 2016 - - 2017 46,542 See Project Notes Total $ 46,542 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 37,233 Local Funds (20%) 9,309 Total Funding $ 46,542 Department Oversight: Executive Director Maintenance Finance & Administration Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating costs related to the master facility study are not known at this time. More information on future operating costs will be available at the completion of the study.
This was a 2016 capital project, but due to the timing of work, the expenses do not show up until 2017.
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Project Name: Integrated Voice Response System Project Number: 1604 Project Description: The proposed system will integrate with the existing phone system and paratransit scheduling software and will provide customers with night-before trip reminder calls, arrival notifcation calls, and options to send e-mail messages to clients. The system will also provide web-based dashboard reporting and floodgate messaging features.
Year Capital Cost Operating Costs 2015 $ - - 2016 699 - 2017 191,091 See Project Notes Total $ 191,790 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 153,432 Local Funds (20%) 38,358 Total Funding $ 191,790 Department Oversight:
Operations
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating cost related to the IVR system operations will be minimal and include savings on staff time and the ability to postpone the expansion of administration personnel.
The project is expected to be complete the first quarter of 2017.
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Project Name: METRO Links Eligibility Study Project Number: 1605 Project Description: This project will review the existing ADA eligibility determination process, identify inefficiencies, and recommend best practices and potential partners. The study will also include a review of staffing levels and competencies of existing Links personnel and will review the current relationship with the region's taxi provider and offer recommendations to improve cost effectiveness.
Year Capital Cost Operating Costs 2015 $ - - 2016 38,994 - 2017 9,330 See Project Notes Total $ 48,324 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 38,659 Local Funds (20%) 9,665 Total Funding $ 48,324 Department Oversight:
Operations
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating cost related to the Links eligibility study are not known at this time. More information on future operating costs will be available at the completion of the study.
The project will be completed in the first quarter of 2017.
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Project Name: METRO Passenger Shelter Installment (with Solar-Powered Lighting) Project Number: 1606 Project Description:
METRO will install twenty-five (25) bus shelters in locations with high ridership and high visibility. The shelters will be equipped with solar-powered lighting and will be funded using Transportation Alternative Program funds. This project is federally funded at eighty percent (80%) of the total cost. Year Capital Cost Operating Costs 2015 $ - - 2016 212,425 See Project Notes 2017 - - Total $ 212,425 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 169,940 Local Funds (20%) 42,485 Total Funding $ 212,425 Department Oversight: Maintenance Finance and Administration
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating cost related to the installation of twenty-five (25) bus shelters with solar-powered lighting will be minimal and include maintenance of the bus shelters.
The bus shelters were delivered in 2016 and will be installed during the first quarter of 2017.
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Project Name: METRO Local Fleet Replacement 2017 Project Number: 1701 Project Description:
The fleet replacement schedule for FY17 includes replacement of seven (7) revenue buses that have reached the end of the useful life. Diesel buses will be replaced with compressed natural gas buses. The buses will be grant funded at eighty-five percent (85%).
Year Capital Cost Operating Savings 2015 $ - - 2016 - - 2017 3,377,474 (20,000) Total $ 3,377,474 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (85%) 2,870,852 Local Funds (15%) 506,622 Total Funding $ 3,377,474 Department Oversight: Maintenance Department Finance & Administration
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating savings related to the replacement of revenue vehicles will include fuel. METRO expects to save approximately $20,000 on the coversion of seven (7) buses from diesel to compressed natural gas in 2017.
Delivery of buses is expected to be September 2017.
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Project Name: METRO Links Fleet Replacement 2017 Project Number: 1702 Project Description:
The fleet replacement schedule for FY17 includes replacement of fourteen (14) revenue vans that have reached the end of the useful life. Diesel vans will be replaced with gasoline-powered vans. The vans will be grant funded at eighty-five percent (85%).
Year Capital Cost Operating Costs 2015 $ - - 2016 - - 2017 943,544 16,000 Total $ 943,544 $ 16,000 Source(s) of Capital Funding:
State Grants $ - Federal Grants (85%) 802,012 Local Funds (15%) 141,532 Total Funding $ 943,544 Department Oversight: Maintenance Department Finance & Administration
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating cost related to the revenue vehicle replacements will include fuel and standard maintenance. METRO expects to spend $16,000 more in gasoline expenses due to the coversion from diesel engines to gasoline engines.
Delivery of buses is expected to be Spring 2017.
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Project Name: Intelligent Transportation System (Streetcar) Project Number: 1703 Project Description: METRO will implement a real-time intelligent transportation system and install free Wi-Fi for customers using Streetcar services. Customers will be able to download a free app showing real-time bus locations and providing predictive stop information. Customers without a smartphone will be able to text METRO and receive the same information through text. This is the same system currently on fixed-route services. Year Capital Cost Operating Costs 2015 $ - - 2016 - - 2017 68,729 2,601 Total $ 68,729 $ 2,601 Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 54,983 Local Funds (20%) 13,746 Total Funding $ 68,729 Department Oversight: Maintenance Operations
Project Notes: Operating costs associated with this project include the cost of Wi-Fi on five (5) streetcars. The total budgeted cost for providing free Wi-Fi on five (5) streetcars is $2,601 in 2017. The annual license fee will be approximately $3,840 per year, starting in 2018.
METRO will save more than $20,000 annually in capital costs due to switching from NextBus ($25,000 annually) real-time software to MetroTrack ($4,000 annually) real-time software.
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Project Name: METRO Streetcar Install Electric Switch Project Number: 1704 Project Description:
METRO will install an electric switch operator at 6th and Main in Little Rock. This project is designed to increase the safety of Streetcar operators. This project will be funded using existing grant funds.
Year Capital Cost Operating Costs 2015 $ - - 2016 - - 2017 165,000 See Project Notes Total $ 165,000 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 132,000 Local Funds (20%) 33,000 Total Funding $ 165,000 Department Oversight: Executive Director Operations
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. There is no operating cost related to the installation of an electric switch operator at 6th and Main in Little Rock.
The project is expected to be completed in the first quarter of 2017.
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Project Name: METRO Streetcar Strategic Study Project Number: 1705 Project Description: The METRO Streetcar system was designed and constructed as a starter system with the potential for future expansion. Over the past few years, the region has shown renewed interest in expanding the streetcar into neighborhoods and revitalizing areas. The study will review previous streetcar expansion studies, document development and land use trends, and identify corridors likely to support future streetcar expansion. Year Capital Cost Operating Costs 2015 $ - - 2016 - - 2017 100,000 See Project Notes Total $ 100,000 $ - Source(s) of Capital Funding:
State Grants $ - Federal Grants (80%) 80,000 Local Funds (20%) 20,000 Total Funding $ 100,000 Department Oversight: Executive Director Operations
Project Notes: METRO reviews each capital project for associated operating impacts during the budget process. The operating costs related to the streetcar strategic study are not known at this time. More information of future operating costs will be available at the completion of the study.
The project is expected to be completed by Fall 2017.
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FUND BALANCE
Operating Fund Balance METRO defines operating fund balance as funds available for pledge. METRO’s current year operating fund balance consists of prior year surpluses, less the funds allocated to cover local match requirements of current year grants, and a provision for funding high-priority or emergency situations that may not otherwise be funded.
METRO allocates four percent (4%) of the total current year budget for emergency reserve funds. These funds are not guaranteed to be used, but exist to provide continuity of operations if revenue abruptly decreases. In 2017, the total allocated for emergency reserve funds is $702,809.
METRO’s operating fund balance available for pledge was $205,161 and $354,175 in 2015 and 2016, respectively. In 2016, METRO allocated a total of $427,192 to projects in fund balance funds in order to help cover the local match required for federal grants, including the annual Section 5307, 5337, 5339 capital grants, as well as the Metroplan/FTA ITS grant and the AHTD/FTA TAP grant. METRO utilizes PTTF and AHTD money to help match the annual grant apportionment, but those amounts are not sufficient to cover the full local match required. In 2016, METRO allocated $340,000 in PTTF funds and $59,393 in AHTD funds to cover the local match requirement for a portion of the annual Section 5307 grant. Reserves are used to cover the remaining local match requirements for Section 5307 grant funds and the full local match requirements for Section 5337 and 5339 grant funds. Also, in order to match the Metroplan grant award for the ITS project, METRO allocated $260,000 from the operating fund balance. Although the required local match for the Metroplan grant was $150,000, METRO allocated more money for emergency purposes (i.e. the project costing more than intended). The remaining funds ($110,000) could be used for other purposes in the future.
METRO’s operating fund balance will decrease from $354,175 in 2016 to $244,420 in 2017. The decrease is due to more funds being allocated to the emergency cash flow and to cover local match requirements for capital grants. The increase in funds allocated to the emergency cash flow is due to an increase in the 2017 budget compared to the 2016 budget. The total emergency cash flow reserve in 2016 was $687,416 (four percent [4%] of 17,185,412) and the total emergency cash flow reserve for 2017 is $702,809 (four percent [4%] of 17,570,215).
The other factor that led to a budgeted decrease in available for pledge funds is a greater need for reserves to cover current year local match requirements. Every capital grant METRO receives requires some percentage of local match. Typically, local match is around twenty percent (20%) of the total grant apportionment, but there are different requirements depending on how the money is spent. For instance, replacement vehicles (buses and vans) require a fifteen percent (15%) local match and bike racks only require a five percent (5%) local match. In 2016, METRO allocated a large amount of grant funds ($1.8 million) to purchase replacement buses (seven [7] will be purchased in 2017), which caused the required local
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match to be lower for 2016 than it would have been had METRO allocated the funds to an expenditure that required a higher local match. In 2017, METRO is budgeting only $500,000 (fifteen percent [15%] local match requirement) to the purchase of replacement buses and, therefore, will need more local match funds to match other capital expenditures. In other words, METRO plans on allocating more 2017 grant funds to expenditures that require a twenty percent (20%) local match than to expenditures that require a fifteen percent (15%) local match.
Figure 2.10 illustrates METRO’s cash flow reserve (four percent [4%] of total current year budget), funds available for pledge and funds allocated to projects for 2015, 2016, and projected balances of each for 2017. Following the graph is Figure 2.11, METRO’s fund balance showing the breakdown of use of reserves and amount available for pledge in the future.
Figure 2.10 – Operating Fund Balance
Figure 2.11 - Operating Fund Balance Breakdown Beginning Operating Fund Balance (12/31/2016) $ 1,151,591 Add: 2016 Surplus 327,466 Fund Balance (01/01/2017) 1,479,057 Less: 2017 Cash Flow Reserve (4% of $17,570,215) (702,809) Less: Metroplan Grant Application (110,000) Less: Projected 2017 Section 5307 Local Match (270,527) Less: Projected 2017 Section 5337 Local Match (76,840) Less: Projected Section 2017 5339 Local Match (74,461) Projected Operating Ending Fund Balance (12/31/2017) $ 244,420
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Capital Fund Balance METRO’s “capital fund balance” is defined as the accumulation of prior year grant funds that have already been appropriated (awarded and budgeted for) but not spent. In 2016, METRO had $11,465,098 in the beginning capital fund balance and $15,720,216 in the ending capital fund balance. In 2017, the capital fund balance will decrease by $2,449,422 (more than fifteen percent [15%]) compared to 2016, due, mainly, to METRO purchasing seven (7) CNG revenue vehicles. The total cost of purchasing seven (7) CNG vehicles is $3,377,474. METRO will need significant capital reserves in order to finance revenue vehicle purchases based on the Fleet Replacement Plan. METRO will need $23.8 million from 2023 through 2028 in order to purchase thirty-three (33) CNG buses, twenty-two (22) paratransit vans, and two (2) paratransit minivans.
The main capital funding sources are FTA Section 5307, 5337, and 5339 formula grant funds. When local match is available, METRO will apply for competitive grants that can be used to purchase more replacement vehicles or more passenger shelters. METRO was awarded two (2) competitive grants in 2016. One competitive grant is for the purchase and installation of twenty-five (25) passenger shelters with solar-powered lighting, and another is for the purchase of replacement CNG buses. The total discretionary funds awarded were $2,395,292 in 2016.
Major capital purchases, such as revenue vehicles, will be a major use of grant revenue in the future and, thankfully, METRO has the capital fund balance, as well as future annual grant revenue cash flows to support and finance those purchases. Figure 2.12 illustrates METRO’s capital fund balance for 2016 and 2017.
Figure 2.12 - Capital Fund Balance 2016 and 2017 Beginning Capital Fund Balance (01/01/2016) $ 11,465,098 2016 Actual Sources of Capital Funds 8,991,185 2016 Actual Capital Expenditures (4,736,067) Ending Capital Fund Balance (12/31/2016) $ 15,720,216
Beginning Capital Fund Balance (01/01/2017) $ 15,720,216 2017 Budgeted Sources of Capital Funds 6,638,538 2017 Budgeted Capital Expenditures (9,087,960) Ending Capital Fund Balance (12/31/2016) $ 13,270,794
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SECTION 3: DEPARTMENT INFORMATION
DEPARTMENT OVERVIEW
This section provides an illustration of department organizational charts. Each department sets goals and objectives that are used as a basis for setting annual agency goals. The organization of each department is shown, followed by the department’s goals and objectives for the budget year. At least one department goal must tie to one of the agency goals presented on page 14.
METRO’s financial policies are also presented in the section. The Board annually approves METRO’s financial policies when they approve the annual operating and capital budgets.
During 2017, it is METRO’s intent to hold quarterly progress report meetings with department directors. During this session, department directors will update the Executive Director of the progress achieved for each department goal.
Where are the Department Budgets?
In the past, METRO had been heavily understaffed in the Finance Department and did not have the capacity or time to create and track department budgets. Instead, METRO staff relied on the Chief Financial Officer to analyze actual-to-budget variances for the organization as a whole throughout the year. This method was depended upon due to the understaffing of the Finance Department. Departmental expenses were not individually tracked (at the department level) and department directors were not required to keep track of departmental expenses.
In the future, METRO plans to incorporate department budgets. There are many benefits derived from doing this. For one, it formalizes the coordination of activities between each department, while aligning these activities to the strategic vision of the whole organization. It also enhances the director’s management and decision-making responsibilities and improves performance evaluations, providing a base for discussion on how well the director met his/her goals. Department budgets encourage all departments within the organization to become more efficient, which creates greater efficiency organization-wide.
This is a process that will take considerable time, not only in creating the department budgets, but also in training and preparing department directors. Currently, there is no timetable for when this process will take place, but METRO plans on taking steps each year to eventually incorporate department budgets and department performance measures.
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EXECUTIVE DEPARTMENT
The executive department is made up of the Executive Director and Administrative Assistant. The Accounting Manager reports to the Executive Director on issues related to equal employment opportunities and disadvantaged business entity issues. The Executive Director is charged with executing Board policy decisions and providing direction to METRO staff as they work to fulfill the mission and goals of METRO.
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FINANCE AND ADMINISTRATION DEPARTMENT
The finance and administration department is composed of the Director of Finance and Administration/Chief Financial Officer, Accounting Manager, Procurement Manager, Human Resources Manager, Grants Accountant, and HR Coordinator. This department is responsible for accounting, treasury, payroll, budget, finance and analysis, grant accounting and management, procurement, human resources, benefit management, information technology, facilities management, security, and protection of METRO’s assets.
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GOAL 1: Achieve financial excellence through fiscally sound financial planning and sustainable budgets that reflect stakeholder priorities and values. Objective: Complete the annual audit within three months of year-end without any findings. Progress:
Objective: Submit Annual Budget Report to GFOA Distinguished Budget Presentation Program and receive the award for excellence in budget presentation. Progress:
Objective: Maintain a transparent financial environment by reporting to the Board, on a monthly basis, important information related to the budget, federal/state grants, and procurement. Progress:
GOAL 2: Analyze financial and administrative processes to identify potential opportunities to increase efficiency and productivity. Objective: Research and implement a new capital accounting reporting system that will allow for better decision making and financial reporting. Progress:
Objective: Perform a spend analysis to identify potential opportunities for term contracts in at least five expenditure categories. Progress:
GOAL 3: Ensure proper safeguards over customer credit card information. Objective: Perform monthly vulnerability scans on servers and credit card terminals using TrustKeeper. Progress:
GOAL 4: Provide more employer-sponsored health and wellness programs and encourage greater participation. Objective: Increase participation in the free flu shot program to 50% of total employees. Progress:
GOAL 5: Improve the customer experience by providing additional fare payment options. (2017 AGENCY GOAL #4) Objective: Research available fare technology to provide customers more fare purchasing options. Progress:
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MAINTENANCE DEPARTMENT
The maintenance department is responsible for all maintenance on METRO vehicles from revenue to support, facility grounds and facility maintenance that consists of administration, maintenance building, streetcar, and the travel center. They are also responsible for cleanup of METRO shelters around the service area.
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GOAL 1: Focus on minimizing overtime costs by 5% by the end of the year.
Objective: Ensure maintenance openings are filled in a timely manner that will reduce the need for overtime. Progress:
Objective: Ensure job assignment postings are highly visibile and communicated to each employee. Progress:
GOAL 2: Improve the customer experience by ensuring capital projects are easily implemented and transitioned from the development stage to the long-term operations and maintenance stage. (AGENCY GOAL #4)
Objective: Install 25 passenger shelters with solar-powered lighting in new locations with high ridership and high visibility. Progress:
Objective: Provide training opportunities to employees that focus on maintaining major capital assets. Progress:
Objective: Perform monthly inspections of major capital assets to ensure best practices are being followed. Progress:
GOAL 3: Focus on aesthetically enhancing the River Cities Travel Center to create a more attractive downtown transit hub. (2017 AGENCY GOAL #2)
Objective: Contract with a landscaping organization to focus on enhancing the beautification of the downtown transit hub. Progress:
Objective: Remove broken water fountains to allow more space for vendor carts. Progress:
GOAL 4: Provide first-class training to employees focusing on maintaining major capital assets. (2017 AGENCY GOAL #6)
Objective: Provide training that will focus on maintaining CNG vehicles, CNG fueling station, and the maintenance facility to all maintenance employees. Progress:
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OPERATIONS AND PLANN ING DEPARTMENT
The operations department is responsible for providing safe, dependable, and on-time service to our customers and ensuring the safety of our customers and operators. The planning department is also responsible for increasing the accessibility and mobility of our customers, as well as for supporting the economic vitality of the metropolitan area.
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GOAL 1: Focus on implementing MOVE Central Arkansas plan recommendations. (2017 AGENCY GOAL #1)
Objective: Perform annual service enhancements that align with the strategic plan. Progress:
Objective: Improve transit access through the implementation of bus stop enhancements. Progress:
Objective: Develop a 10-year expansion plan for METRO Streetcar. Progress:
GOAL 2: Focus on improving the METRO Streetcar customer experience. (2017 AGENCY GOAL #4)
Objective: Install new passenger shelters at high ridership locations. Progress:
Objective: Complete the design and implementation of new signage and customer information for all passenger stations. Progress:
GOAL 3: Focus on improving the METRO Links customer experience. (2017 AGENCY GOAL #3)
Objective: Implement recommendations from Links Eligibility study that focus on increasing efficiencies. Progress:
Objective: Provide more travel training opportunities to customers. Progress:
GOAL 4: Improve the safety of the system.
Objective: Install an electric switch in the streetcar yard to increase safety of streetcar operators. Progress:
Objective: Establish a Safety Committee composed of representatives from all safety-sensitive departments and meet once a month to review safety issues. Progress:
GOAL 5: Provide staff with more professional development training opportunities. (2017 AGENCY GOAL #6)
Objective: Establish regularly scheduled instructional/informative Awareness Meetings for operators and staff Progress:
Objective: Supervisors and dispatchers will complete a series of courses through UA-Pulaski Technical College related to computer proficiency and professional development. Progress:
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PUBLIC ENGAGEMENT DEPARTMENT
The purpose of this department is to direct and manage the outreach, advertising, marketing, and promotional activities of METRO, as well as the community relations and government affairs programs.
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GOAL 1: Partner with small urban transit agencies in Arkansas to execute a campaign to inform and educate state leaders on the status of public transit, areas of opportunity, and transit agencies' perspectives on relevant topics. (2017 AGENCY GOAL #1) Objective: Establish potential state-level plicies or action items that benefit public transit agencies. Progress:
Objective: Create educational materials for state elected officials regarding public transit agencies and contributions to the state's overall economic development and quality of life. Progress:
Objective: Participate in the 91st General Assembly state house and senate transportation committee meetings. Progress: GOAL 2: Engage in customized-to-location wayfinding collateral materials development based on new route structure (2017 AGENCY GOAL #4) Objective: Identify signage needs. Progress:
Objective: Engage in creative concepting and produce signage template for all display sign specs. Progress:
Objective: Create customized signage content for each location need. Progress: GOAL 3: Create and implement a house advertising campaign that touts multi-day and multi-ride pass benefits as well as adoption of transit tools, transit etiquette, and agency accomplishments (2017 AGENCY GOAL #4) Objective: Establish house ad products and availability. Progress:
Objective: Engage in related creative concepting and produce campaign materials built to spec. Progress: GOAL 4: Continue developing relationships with opinion leaders, ptential riders and other stakeholders through a multi-media advertising campaign, house channels, speaking engagements, community outreach and earned media, in support of public transit in general (2017 AGENCY GOAL #5) Objective: Create and implement a seasonally adjusted media buy and media relations plan. Progress:
Objective: Create and implement a series of speaking engagements and community event outreach. Progress:
Objective: Create and implement a content plan for enewsletters and toher shareable original content. Progress:
Objective: Create and implement a social media plan. Progress: GOAL 5: Implement a RFP for system ad and sponsorship sales turnkey management to continue and enhance current agency sales that provide a revenue stream for agency use. (2017 AGENCY GOAL #1) Objective: Implement a Request for Proposals (RFP) for system ad and sponsorship sales. Progress:
Objective: Successfully negotiate a contract to benefit METRO and the selected vendor. Progress:
Objective: Monitor ad and sponsorship sales for positive growth and benefit to METRO. Progress:
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SECTION 4: GLOSSARY, SUPPLEMENTAL INFORMATION, AND APPENDICES
BUDGET GLOSSARY
Actual-to Budget A budgetary tool used to evaluate the performance between budgeted Variance amounts and actual amounts. Generally, the CFO must explain any variance greater than ten percent (10%) to the Board of Directors.
ADA Prohibits discrimination and ensures equal opportunity for persons with disabilities in employment. Website Link.
Annualize Recalculate as an annual rate. When METRO performs preliminary budget work, it calculates revenues and expenses to reflect annual numbers.
AHTD Arkansas Highway and Transportation Department. AHTD works with the public, transportation partners, state and federal regulators, and other state and local agencies to provide a safe and efficient transportation system. Website Link.
Associated Capital FTA-required calculation for associated capital items such as engines, Threshold transmissions, chassis, etc. It is calculated at one-half of a percent (.5%) of the net book value of revenue buses and vans. It is calculated separately for revenue buses and streetcars. Website Link.
Automatic Passenger Allows METRO to gather critical information that shows where and Counters when people are riding the bus system.
Bus Rapid Transit The backbone of the MOVE Central Arkansas comprehensive strategic (BRT) initiative. More information.
Compressed Natural Can be used in place of gasoline, diesel fuel, and propane and produces Gas fewer undesirable gases than these fuels.
FTA Federal Transit Administration. FTA provides financial and technical assistance to local public transit systems. Website Link.
GAAP Generally Accepted Accounting Principles. The common set of accounting principles, standards, and procedures that companies use to compile their financial statements. More information.
GASB The independent organization that establishes and improves standards of accounting and financial reporting for U.S. state and local governments. Website Link.
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GFOA GFOA’s mission is to enhance and promote the professional management of governmental financial resources by identifying, developing, and advancing fiscal strategies, policies, and practices for the public benefit. Website Link.
ITS Intelligent Transportation System. Advanced applications that aim to provide innovative services to different modes of transport and enable users to be better informed. More information.
Interlining Allows the use of the same revenue vehicles on more than one route without going back to the garage. To be feasible, two routes must be reasonably in proximate to each other. More Information.
Liquidity The ability to convert assets (such as cash or a certificate of deposit) that are easily converted to cash.
MetroTrack Provides real-time arrival information for passengers. Website Link.
Multimodal Meaning multiple modes (bus, ADA paratransit, streetcar, bikes, ferries, etc.) of transportation. More information.
NTD National Transit Database. The primary source of information on the transit systems in the United States. Recipients of grants from the FTA are required to submit data to the NTD both monthly and annually. Website Link.
National Transit Provides training and educations programs for the public transit Institute industry. Website Link.
PTTF Public Transit Trust Fund. Dedicated state transit funds from a tax on short-term rental cars. More information.
Section 5307 The annual apportionment makes federal resources available to urbanized areas for transit capital and operating assistance. Website Link.
Section 5337 State of Good Repair Grants Program providing capital assistance for maintenance, replacement, and rehabilitation of high-intensity fixed guideway (streetcar, in METRO’s case) systems maintain assets in a state of good repair. Website Link.
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Section 5339 Bus and Bus Facilities. Makes federal resources available to replace, rehabilitate and purchase buses and related equipment and to construct bus-related facilities. Website Link.
Segregation of A basic building block of sustainable risk management that disperses Duties the critical functions of a process to more than one person or department. More information.
TIGER Grant The highly competitive grant program supports innovative projects, including multimodal and multijurisdictional projects, which are difficult to fund through traditional federal programs. Website Link.
Transit Oriented The creation of compact, mixed-use communities centered around Development high quality public transportation systems. More information.
TAP Transportation Alternatives Program. Provides funding for programs and projects defined as transportation alternatives, including infrastructure projects for improving non-driver access to public transportation and enhanced mobility. Website Link.
Travel Training For passengers who are capable of utilizing fixed route bus systems but may require some assistance before doing so. More information.
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SUPPLEMENTAL INFORMATION
METRO’s administrative and maintenance offices are located in downtown North Little Rock at 901 Maple Street. METRO operates and maintains the River Cities Travel Center located at 301 East Capitol in downtown Little Rock. The RCTC serves as a major bus transfer for METRO’s twenty-two (22) fixed-routes and four (4) express routes. The METRO Streetcar operations are located at 100 East Bishop Lindsey Avenue in North Little Rock.
Pulaski County (which includes the cities Little Rock, North Little Rock, Maumelle, and Sherwood) is home to a diverse community. Figure 4.1 provides supplemental information intended to define the community METRO serves. The statistical information was gathered using 2010 U.S. Census Bureau statistics.
FIGURE 4.1 - SUPPLEMENTAL INFORMATION Annual COMPOSITION OF POPULATION Total Median Black or Black or Hispanic or Hispanic or Land Area Household Total White White African American African American Latino Latino Other Other Service Area (Sq. Miles) Income Population % Population % Population % Population % Population Little Rock 119.20 45,135 193,524 48.9% 94,633 42.3% 81,861 6.8% 13,160 2.0% 3,870 North Little Rock 51.50 39,558 62,304 54.0% 33,644 39.7% 24,735 5.7% 3,551 0.6% 374 Maumelle 12.05 82,122 17,163 82.9% 14,228 12.1% 2,077 2.4% 412 2.6% 446 Sherwood 20.61 55,082 29,523 75.3% 22,231 18.5% 5,462 4.0% 1,181 2.2% 650 Jacksonville 28.10 40,257 28,364 57.7% 16,366 32.7% 9,275 6.7% 1,900 2.9% 823
Totals 231.46 330,878 54.7% 181,102 37.3% 123,409 6.1% 20,204 1.9% 6,163
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SYSTEM MAP
ROCK REGION METROPOLITAN TRANSIT AUTHORITY APPENDIX A 2017 ANNUAL BUDGET REPORT
FLEET REPLACEMENT PLAN
TYPE OF VEHICLE FY17 FY18 FY19 FY20 FY21 FY22 FY23 Fixed-Route Buses 7 - - 8 - 10 - Links Paratransit Vans 14 - - - 2 - 5 Links Minivans - - - 2 - - -
Cost of FR Bus 3,377,474 - - 4,321,954 - 5,731,451 - Cost of Links Van 943,544 - - - - - 468,950 Cost of Minivan - - - 147,291 151,710 - - Total Cost 4,321,018 - - 4,469,245 151,710 5,731,451 468,950
TYPE OF VEHICLE FY24 FY25 FY26 FY27 FY28 FY29 FY30 Fixed-Route Buses 6 - 12 - 15 - 7 Links Paratransit Vans 3 14 - - - 2 5 Links Minivans 2 - - - 2 - -
Cost of FR Bus 3,648,298 - 7,740,958 - 10,265,478 - 5,082,301 Cost of Links Van 248,666 1,195,253 - - 192,181 494,866 Cost of Links Minivan 117,176 - - 131,883 - - Total Cost 4,014,140 1,195,253 7,740,958 - 10,397,361 192,181 5,577,167
ROCK REGION METROPOLITAN TRANSIT AUTHORITY APPENDIX B 2017 ANNUAL BUDGET REPORT