Transcript DART’s Financial Status - Transit Finance Learning Exchange

DART’s Financial Status
T-FLEx Spring Conference
Las Vegas
April 5, 2006
1
Purpose of the Financial Plan
To validate the affordability of DART’s
long-range Transit System Plan,
including the Agency’s commitments for
future expansion and the issuance and
repayment of debt.
2
Illustrated View of the
Financial Plan
Inflation
Service
Levels
Ridership/
Operating
Revenues
Financial
Plan
Operating
Expenses
LRT
Phase II
Debt
Service
Capital
Programs
Federal
Funds
Sales Taxes
Interest
Rates
3
Sales Taxes
Year
Growth
Rate
FY96-FY00
+8.2%
FY01-FY03
(5.8%)
FY04
+6.6%
FY05
+2.8%
FY06(FP06)
+4%
FY07-25(FP06)
+5%
Components of
Future Sales Tax
Growth



Inflation
Regional Population
Growth
Real Economic
Growth
4
Projected Sales Tax Receipts
(2005 – 2024)
$25
$20
$5.8 B
$17.5
Billions
$15
$12.2
$11.1
$11.8
$11.7
$10
$5
$0
FY02 Approved Plan
FY03 Draft Plan
FY05 Plan
FY06 Plan
Original FY04 Plan
5
Other Sources of Funds
Operating Revenues
Interest Income
Federal Funds (Formula & Discretionary)
Debt
Other (Contributions)
6
Uses of Funds
(In Millions)
FY06
20-Years
Operating Expenses
$324
$9,722
Capital & Non Operating
$396
$5,231
$50
$3,663
Debt Service
Total
$770 $18,616
7
Impact of a $1 Million Increase in
Fiscal Year 2006 ($ in millions)
Category
20-Year Direct
Effect
20-Year Net
Cash Impact
Capital Project
$1.0
($3.2)
Operating
Expenses
$24.8
($47.1)
Sales Taxes
$33.1
$59.2
8
FY04 Financial Plan
Affordability
FY04 Financial Plan - As Approved
Cash Availability Profile
$4,000
Notes:
- Sales Tax dow n 7.3% in FY03, up 1.3% in FY04, up 5%
thereafter
- 3-4 Years Delay in LRT Phase II Build-out
- $600M in Commercial Paper
- $2.9B in Long-Term Debt (up 30 years)
- $20 Million for Love Field
- Total Available= Beginning Cash - Reserves + Total Revenue +
Unissued Long-Term Debt
$3,500
In Millions
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Operating Exp.
Capital P&D
Phase II
Non-Phase II Capital
Debt Service
Total Available
9
FY05 Financial Plan
Affordability
Exhibit 10.15
FY05 Financial Plan
Cash Availability Profile
$4,000
Notes:
- Sales Tax up 5.63% in FY04, up 3% in FY05, up 5% thereafter
- 2-3 Years Delay in LRT Phase II Build-out
- $600M in Commercial Paper
- $2.7B in Long-Term Debt (up 30 years)
- Total Available = Beginning Cash + Total Revenue + Unissued Long-Term
Debt - Reserves
$3,500
$3,000
In Millions
$2,500
$2,000
$1,500
$1,000
$500
$0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Operating Exp.
Capital P&D
Phase II
Non-Phase II Capital
Debt Service
Total Available
10
FY06 Financial Plan
Affordability
Exhibit 10.15
FY06 Financial Plan
Cash Availability Profile
$4,000
Notes:
- Sales Tax up 4% in FY06, up 5% thereafter
- $600M in Commercial Paper
- $2.75B in Long-Term Debt (up 30 years) issued
- Total Available = Beginning Cash + Total Revenue + Unissued Long-Term
Debt - Reserves
$3,500
$3,000
Millions
$2,500
$2,000
$1,500
$1,000
$500
$0
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
Operating Exp.
Capital P&D,SU,Non-Op
Phase II
Non-Phase II Capital
Debt Service
Total Available
11
Operational Cost Drivers
12
FY 2006 Operating Budget
$323.9 Million
Direct Service Costs: (66% - $215M)
Costs directly related to providing transportation
service to the customer
Indirect Service Costs: (25% - $81M)
Costs that are one step removed from direct
costs; generally impact service quality
General & Administrative (G&A): (9% - 28M)
Costs not directly related to service but provide
essential business functions
13
Direct Service Costs
Primary Cost Driver: Service Levels


Hours – operator wages & benefits
Miles – maintenance wages & benefits, fuel,
parts, maintenance service contracts
14
Direct Service Costs
(Continued)
• Secondary Cost Drivers:

Service Characteristics –
Schedule Efficiency
 Deadhead Ratio (18.5%)
 Peak-to-Base Ratio (2.3 to 1)
 Span of Service (3:30 AM –
1:50 AM)


Age of Fleet (5-6 years)
Quality Standards






Wage Rates
Benefits
Fuel Prices
Position Vacancy Rates
Work Rules
Absenteeism
(Extraboard)
15
Direct Service Costs
(Continued)
Purchased Transportation Contract
Rates (CR, Para, HOV)
Acceptable Load Factor (LRT)
Cost Sharing with FWTA (CR)
Zero Trip Denials (Para)
Certification Process (Para)
Type of Facility (HOV)
16
Indirect Service Costs
Primary Cost Drivers:


Service Levels
Service Quality
Components:










Transportation Ops & Field Supervision
DART Police / Security
Maintenance Supervision & Facility Maintenance
Direct Customer Marketing
Materials Management
Paratransit (scheduling, dispatch, etc.)
Planning (service planning & scheduling)
Risk Management/Safety/Insurance
Finance (revenue collection, yard control, pass distribution)
Other (IT Ops, Ops Tech, Commuter Rail Ops, Project Mgt, etc.)
17
General & Administrative Costs
Primary Cost Drivers: number of
transactions, processes, and projects
Major Components:









Agency-wide information systems
Marketing & Communications
Human Resources
Executive, DEO, Audit, Board Support
Procurement
Finance
Legal
Risk Management
Other (EVP Ops, EVP Program Development, Commuter
Rail Admin)
18
Compensation &
Benefits
19
Salaries, Wages and Benefits
as a Percentage of the Budget
Other - 33%
($106.3 M)
Salaries &
Wages - 46%
($150.1 M)
Benefits - 21%
($67.5 M)
20
Operator, Non-Operator and
Salaried Wages
Capital P&D
Salaries
G&A Salaries
7%
9%
Indirect
Salaries
26%
Hourly Wages
59%
21
Hourly vs. Salaried
Compensation – FY04
$49,205 - Median Hourly Compensation
$52,366 - Median Salaried Compensation
Employees with at least 1872 pay hours (90% of
2080)
Includes all pay including OT, Bonuses
Does not include such things as tuition reimbursement,
uniform and tool allowances, etc.
The Median is the center value. Half of the employees are above
the median, half are below the median.
22
FY06 Budget – Benefits
($67.5 million)
6%
Life & Health Ins
14%
39%
Retirement
FICA
Workers' Comp
17%
Other
24%
23
Consumer Price Index
5%
4%
3%
2%
1%
0%
1995
1996
1997
1998
1999
2000
Consumer Price Index (CPI)
2001
2002
2003
2004
90% of CPI
24
Wage Inflation vs. CPI
5%
4%
3%
2%
1%
0%
1995
1996
1997 1998
1999
90% of Consumer Price Index
Private Industry Wage Inflation
2000
2001 2002
2003
2004
S&L Govt Wage Inflation
25
Benefits Escalation Summary
Average Annual
Growth Rate
(FY01-05)
Annual Growth
Adjusted for
Agency Growth
Life and Health
20.4%
12.5%
Retirement
10.3%
3.1%
FICA
6.1%
0.0%
Workers’ Comp
12.7%
5.3%
Other
0.0%
(6.5%)
12.1%
6.6%
Line Item
Total Benefits
Budget
26
Purchased Transportation (PT)
Escalation
$20.5 M - Paratransit contract (including OnCall) - 4% for FY06, re-bid after that; exact
escalation unknown
$14.8 M - TRE contract – No Escalation for
FY06 & FY07; 4% per year thereafter
Combined PT Budget - $35.3 M
27
Budgetary Example
Description
Amount
(millions)
FY06 Budget (incl. Capital P&D)
FY06 Inflation (per Perryman)
Less 10% (per FS-B5)
Allowed Growth
FY06 Target
$323.9
2.72%
(0.27%)
2.45%
7.9
$331.8
28
Budgetary Example
(Millions)
Description
FY05
Budget
Est.
Growth Amount
FY07 Allowed Growth
Salaries & Wages
$7.9
$150.1
3.2%
$4.8
Benefits
$67.5
6.6%
$4.5
Purchased Transportation
$35.3
4.0%
$1.4
Sub-total
Remaining Budget
$252.9
$71.0
$10.7
(3.1%)
($2.2)
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The Transit Environment –
Recent Headlines
“Transit fares to rise by 25 cents” San Diego (3/03)
“Warning of Budget Gap, M.T.A. May Pare Metrocard
Discounts” New York (10/03)
“Despite fare increases, BART faces big deficit” San
Francisco (BART) (2/04)
“SEPTA Details Proposed Cuts” Philadelphia (11/04)
“Muni chief suggests increase in taxes to cut agency
deficit” San Francisco (Muni) (12/04)
“Pittsburgh rail transit fares become nation’s most
costly” Pittsburgh (12/04)
“Budget Gap Threatens Chicago Transit” Chicago
(4/05)
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Competing Priorities
Address Employee
Compensation /
Satisfaction
Cut the Operating
Budget
Increase
Stakeholder
Satisfaction
Minimize
Fare Increases
Accelerate LRT
Build-out
DART’s
Challenges
Increase Ridership /
Expand Services
Improve Service
Quality / Safety /
Security
Enhance Internal
Controls
Minimize/Eliminate
Debt
Maintain Existing
Infrastructure
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