On September 1, 2010, the AC Transit Board of Directors were presented with potential Cost Reduction Strategies by the District's staff. The Short-Term and Long-Term cost reduction strategies included cutting all but major weekend service, eliminating All-Nighter Services and eliminating all weekend service. Additionally, it was proposed that AC Transit's ParaTransit Division (Division 8) be shuttered and contracted out. Presentation: AC Transit

1. Further Cost Reductions Scenarios
Further Cost Reductions Scenarios
Board of Directors
Workshop
September 1, 2010
September 1 2010
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2. Workshop Purpose
Workshop Purpose
• Provide Updated Financial Information
• Receive Board Direction on Short Term
(Immediate) Strategies
(Immediate) Strategies
• Receive Board Direction on Longer Term
Strategies
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3. Current Conditions
Current Conditions
• Financial Realities:
– $56 Million Deficit for FY 2009/10 and 2010/11
• $9 Million – Administrative Reductions
• $15 Million – Anticipated Savings from ATU Agreement
• $22 Million – Anticipated Savings from 2 Service Cuts
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4. Current Conditions
Current Conditions
• Financial Realities:
– FY 2010/11 Budget Deficit Prior to
August 8, 2010: Balanced Budget
– $17.6 Million Deficit through June 2011
• $15.7 Million – Delayed Savings from Labor Agreement
• $1.9 Million – Delayed Savings from August 2010
Service Reductions Implementation
– FY 2011/12 F
FY 2011/12 Forecast Budget Deficit: $11 Million
t B d t D fi it $11 Milli
– Continued Revenue Pressures and Uncertainties
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5. FY 2010/11 Cost Reductions Scenarios
FY 2010/11 Cost Reductions Scenarios
• Short Term: Need to Act Immediately
– Service Reductions
• Represents the maximum that can be done at this point
• Based on previously‐conducted public hearing
• Longer Term: 6 Months to 2 Years
g
– Range of Alternatives – Will require additional
study/review
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6. FY 2010/11 Cost Reductions Scenarios
– Short Term
h
• Service Reductions
– Weekend Trunk and Major Corridor Only Network
• Basic Level of Service to the District
– Li
Lines 1, 18, 20, 22, 40, 51A, 51B, 57, 60, 72, 72M, 73, 88, 97,
1 18 20 22 40 51A 51B 57 60 72 72M 73 88 97
99, 210 and 217 to operate
• Ridership Impacts – ~1/3 of Weekend Ridership
• Preliminary Title VI Review Shows Potential Impact
Areas:
– North Richmond: Solution, retain Line 76
– West Oakland: Solution, retain Line 26
– East Oakland: Solution, retain Line 45
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7. FY 2010/11 Cost Reductions Scenarios
– Short Term
h
• Service Reductions
– All Nighter Core Service Only
• Operate 800 and 801 only – RM 2 Funded
• Di
Discontinue 802, 805, 840, and 851 – Di i F d d
i 802 805 840 d 851 District Funded
• Minimal actual ridership impact, but major to users
• Closure of Division 8 (Paratransit)
Closure of Division 8 (Paratransit)
• AC Transit/BART Operate Consortium (69%/31%)
• Redistribute hours to existing providers
gp
• No Patron Service Provision Impacts
• What do these reductions translate to…
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8. FY 2010/11 Cost Reductions Scenarios
– Short Term
h
Total Platform Hours Historical Trend
Includes Short Term Service Reductions for December 2010
Includes "Short Term" Service Reductions for December 2010
2400000 2320000
2300000 2252000
2230777
2198702
2200000 2110000
2073000 2088000 2124514 2080004 2073567
2100000
1981456
2000000 1965016 1927219
2011000
1956120 1974266
1900000 1947000
1979000
1920855 1808329
1968614
2043995
1790410
1800000
1755306
1782902
1700000 1629410
1600000
1500000
Winter
86‐87
87‐88
88‐89
89‐90
90‐91
91‐92
92‐93
93‐94
94‐95
95‐96
96‐97
97‐98
98‐99
99‐00
00‐01
01‐02
02‐03
03‐04
04‐05
06‐07
07‐08
08‐09
1* Fall
09‐10*
05‐06
10‐11* W
10‐11
0
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9. FY 2010/11 Cost Reductions Scenarios
– Short Term
h
• Implementation Schedule
– 9/22: Board Consideration of Final Plan
• To Include Preliminary Title VI Review
– 10/27 or 11/10: Final Title VI Compliance Review
/ /
– 12/19: Implementation
• Board Questions or Comments?
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10. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Some Depend on Arbitration Results
Some Depend on Arbitration Results
• Scenarios include:
– S i C t ti O
Service Contracting Opportunities – 12 M th
t iti 12 Months
– Further Overhead Reductions – 6 to 12 Months
– Operations Efficiencies – 12 Months
– Further Service Cuts – 6 to 9 Months
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11. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Fixed Route Service Contracting Opportunities
– Transbay and Supplementary
• Peak Only Services – relative higher cost than basic
•DDepending on District costs reduced, could result in
di Di i d d ld l i
anywhere from $5 to $15 Million in savings
• Retains the service, no ridership impacts
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12. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Further Overhead Reductions
– Close Division 3
• Lowest service levels in 25 years
– 1985 AM P k P ll 701
1985 AM Peak Pull = 701
– October 2010 Service AM Peak Pull = 471
• Facility closure is separate from service reductions
• Estimated annual operating savings ‐ $2.8 Million
• Estimated annual costs due to route re‐alignment ‐ TBD
• Estimated one‐time revenues for property sale ‐
Estimated one time revenues for property sale TBD
• Estimated one‐time costs for route re‐alignment ‐ TBD
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13. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Further Overhead Reductions
– Contracting‐Out Strategies
• As Mentioned in the GM Memo
• Operations Department Efficiencies
• As Mentioned in GM Memo
• F
Fare Increase
I
– Completed in connection with Fare Study
– Projected Fare Increase in FY 2012/13
j d i /
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14. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Additional Fixed Route Service Reductions
– Reduced Hours of Operations on Weekends
• Represents an extension of short term 50% reduction
of service
of service
• Reduce Trunk and Major Corridor lines based on
demonstrated ridership demand
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15. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Additional Fixed Route Service Reductions
– Complete Elimination of Weekend Service
• Remaining lines under Short Term
• Major Ridership Impacts
M j Rid hi I
• Not in keeping with an urban area
• Offers flexibility in planning for reductions
Offers flexibility in planning for reductions
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16. FY 2010/11 Cost Reductions Scenarios
– Longer Term
• Additional Fixed Route Service Reductions
– Proportionate Reduction of Lines by Productivity
• As Mentioned in the GM Memo
– Elimination of Weekday Service Before 6am and
f f
After 8pm
• As Mentioned in the GM Memo
As Mentioned in the GM Memo
– Elimination of Transbay and Supplementary Svc
• As Mentioned in the GM Memo
• Contracting Service is a viable alternative to canceling
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17. FY 2010/11 Cost Reductions Scenarios
FY 2010/11 Cost Reductions Scenarios
• Questions or Comments on Longer Term
• Next Steps
Next Steps
– Board Direction on Implementation of Short Term
Strategy
– Board Direction on Development of Longer Term
Strategies
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