HomeMy WebLinkAbout06/15/1993, C-4 - TRIENNIAL PERFORMANCE AUDIT IpI IIt2 MEETING DATE:
Il�l�lllmmmo, City of San LUIS OBISPO June 15, 1993
COUNCIL AGENDA REPORT 'r°'"NUMBER:/J
C_ FROM: Michael McCluskey, Public Works Director
PREPARED BY: Harry Watson, Transit Manager
SUBJECT: Triennial Performance Audit
CAO RECOMMENDATION:
Receive and file
DISCUSSION:
The primary funding source for SLO Transit is the State Transportation Development Act (TDA). The
Act requires that every three years, each recipient of funding shall.undergo an indepth performance audit
conducted by an outside auditing firm selected by the agency managing the Local Transportation Fund
(SLOCOG). At a minimum, each transit operator will be measured by the following performance
indicators:
1. Operating cost per service hour
2. Operating cost per service mile
3. Passengers cost per service hour
4. Passenger cost per service mile
5. Service hours per fulltime equivalent employee
The auditing firm, Nelson/Nygaard, added the following audit objectives:
6. Farebox recovery ratio
7. Average fare per passenger
8. Agency's process for developing goals, objectives, and standards
9. Development of improving service efficiency and effectiveness
During the audit period, the City's transit system expanded in the number of vehicles, routes, and hours.
The City also adopted a five year transit plan. The audit team reported on the City contractor's (Laidlaw)
functions, maintenance, planning, policy adherence, and followup on previous audit recommendations.
Copies of the Triennial Performance Audit are available in the Council office.
PERFORMANCE RESULTS
During the three year period, the audit team identified the following key performance results:
1. The system has achieved a 90% increase in ridership, despite a statewide recession,
unemployment, and substantial cutbacks in student population in the three year period.
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COUNCIL AGENDA REPORT
Triennial
Page Two
2. Fixed route service hours and miles remained relatively constant, except for the addition of the
trolley service. Operating costs increased in direct relation to the amount of added service (trolley
and tandem service). Service hours per fulltime employee declined during the audit period which
is opposite of what is desirable. The auditor dismisses this as being misleading and due to the
contractor's "suspect" data presented.
3. The operating cost per passenger declined steadily during the three year audit period, despite
annual increases in contract operating cost. This is-because ridership increases outpaced cost
increases. "The operating cost per passenger of$0.73 calculated in 1991/92 is among the lowest
in the State for an operation of this type, reflecting high ridership and high productivity. The
costs per passenger were the lowest reported by SLO Transit in six years".
4. The operating cost per hour increases are tied directly to the addition of the trolley service and
increased tandem service, while the cost per revenue mile increased 11% over the three year
period, reflecting both low inflation and a high degree of cost control.
5. Passengers per service mile increased from 2.3 passengers per mile to 3.6 passengers per mile,
representing a 56% increase in this productivity measure, passengers per service hour increased
from 32.5 to 55.4, earning SLO Transit a ranking as one of the most productive systems in the
State.
6. Farebox recovery remained fairly constant over the three years, despite the large number of free
passengers carried by the trolley in its first year of operation. Fare income has not kept pace with
the ridership increases. There has been a consistent decline in the farebox ratio over the past six
years, due to the increased Poly ridership and due to the fact that fares have not risen or kept pace
with system operating costs.
7. Average fare per passenger is arrived at by dividing total passengers by total fare revenue. This
should remain constant. On SLO Transit, the average fare decreased by 24% over the three year
period. Quoting the audit report: "This drop is significant and alarming, because it indicates that
farebox recovery rates will deteriorate significantly if ridership levels off'. (Staff comment -
ridership is expected to level off as we have tapped all of the highest ridership corridors and
demand times).
8. Per passenger fare increases*can be accomplished by: a) increasing fares, b) charging fares on the
trolley, c) increase pass pricing and, d) increasing. Poly subsidy. Per the report, "There is, of
course, an inverse relationship between fares and ridership; and this must also be considered".
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Triennial
Page Three
AUDIT RECOMMENDATIONS
1. Driver counts using manual counters continue to be low, but within 10% of actual boardings
(common on high ridership systems and within acceptable parameters). Continue present practice.
2. Report all service hours, account for deadhead times and accurately include the substantial amount
of tandem service provided by SLO Transit.
3. The contractor is to provide an annual total number of man hours charged to the system, including
all maintenance and support personnel. Additionally,City staff time is to be accurately charged
to transit.
4. Information reporting should combine both bus and trolley systems, as they are part of a unified
system.
5. Review the practice of applying indirect costs to the entire transit budget and consider applying
overhead factors only to the non-contract operation portion of the budget.
6. Review fare policy and make changes to increase average fare.
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7. Develop strategies for increasing rides outside of Poly related trips.
8. Continue to improve lift availability for full accessibility.
STAFF COMMENTS
Staff has reviewed the audit report and found it fair and well done. ,Some of the report comments related
to the City's contractor, Laidlaw, which ceased serving the City on the last day of the audit period of
June 30, 1992. The new contractor, Mayflower, provides a much better management structure and many
of the problems previously identified are no longer evident. Staff will be pursuing implementation of the
audit recommendations during the upcoming fiscal year..
Copies of the Triennial Performance Audit are available in the Council Office
for review.
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