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 AC TRANSIT DISTRICT GM Memo No. 09-217dBoard of Directors
Executive Summary Meeting Date: November 18, 2009
Committees:
Planning Committee Finance and Audit CommitteeExternal Affairs Committee Operations CommitteeRider Complaint Committee Paratransit Committee
Board of Directors
 
Financing Corporation
 
SUBJECT: Consider Receiving Report on Draft Revised 2009 Service AdjustmentsPlan
 
RECOMMENDED ACTION:Information Only Briefing Item Recommended MotionReceive Report and Provide Direction to Staff on Revised Service ProposalsFiscal Impact:
Implementation of the Draft 2009 Revised Service Adjustments Plan (RevSAP) would resultin an estimated annualized District-wide savings of approximately $9.6 Million, net ofanticipated fare revenues. Final adoption of this plan would result in an overall reduction of8.4% platform hours, District-wide.
Background/Discussion:
This memorandum will provide a comprehensive overview of the history, process andservice proposals associated with the 2009 Service Adjustments Plan, in its original andproposed form. The first section details the processes and steps involved in thedevelopment of the Draft 2009 Service Adjustments Plan (SAP). The second sectionprovides information on the steps and rationale of how the SAP was revised (RevSAP) to re-incorporate approximately 140,000 platform hours of restored service, using the samerouting structure developed during the SAP process.Background Information and ContextIn January 2009 the AC Transit Board of Directors received a report outlining an 18 monthfinancial projection that indicated a $57 Million deficit by the end of June 2010.Subsequently, the District Board of Directors declared a Fiscal Emergency on June 24,2009.District Budget ProcessAfter a comprehensive review of all aspects of the District’s operations, including supportand other non-core activities, District staff proposed a biennial budget that incorporatedservice cuts and a reduction of expenses in FY 2009-10 and FY 2010-11. With the intentto restore the District’s fiscal balance, staff developed a plan to manage through thechallenging times ahead. There were three parts to the plan: (a) Preserving the budgetbase; (b) Protecting new initiatives; and (c) Guiding budget cuts that will occur:
Rev. 6/09
 
GM Memo No. 09-217dMeeting Date: November 18, 2009Page 2 of 16
Preserving the Budget Base 
– After working with all District departments in the budgetdevelopment process, total operating expenses on a net proforma basis for FY 2009-10are projected to be $323.4 million dollars (after service cuts, and including loss of faresand grant reimbursement of certain project labor). This would represent a $2.7 milliondollar decrease from previously projected FY 2009-10 operating expenses, on a netproforma basis of $326.1 million dollars.Preserving the base means controlling costs. When compared to anticipated annualincreases in expenses, staff actually produced $12.9 million dollars in cost savings in FY2009-10 through service cuts and other operating efficiencies. Also, operating costsavings projected by staff for FY 2010-11, compared to anticipated annual increases inbaseline operating expenses, are $25.4 million dollars.
Protecting New Initiatives 
– In order to remain a viable operation, the District must focuson core transportation and maintenance operations, rather than support business andservices. Staff is committed to identifying more efficient ways to provide service. Thefollowing list of initiatives has been developed and is in the early stages of design andimplementation:
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Developing an indirect cost rate
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Developing a “force” account
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Maximizing the use of Grants
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Using the new FHR system for finance and operational control
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Revenue Service Restructuring
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Tracking on-time service
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Tracking Ridership
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Maintenance cost reduction programs
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Improved work rules utilization
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Compensation and Benefits Restructuring Program
Guiding the Budget Cuts That Will Occur 
– 1,944 positions are authorized in the FY2009/10 budget, and 1,921 are authorized FY 2010-11. This does not include Paratransitstaff, reported separately in a budget for that unit, but it does include the RetirementDepartment staff. Had the original SAP been approved by the Board, the followingpositions would have been subject to layoff by the end of FY 2009-10:
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Management Positions (net) 25
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Drivers 150
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Maintenance mechanics and technical staff 36
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Other ATU/IBEW employees 22
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Total positions eliminated 233Should the Board adopt the Revised Service Adjustments Plan, it is intended that no busdrivers will be laid off and that the resulting reduction in maintenance employees will belimited to approximately 12 temporary service employees and 3 temporary janitors. Thenumber of positions will be proportionately reduced but the actual layoffs will be primarilyoffset by attrition.
 
GM Memo No. 09-217dMeeting Date: November 18, 2009Page 3 of 16On August 26, 2009 the AC Transit Board of Directors approved the Biennial Budget forthe District for Fiscal Years 2009/10 and 2010/11. This was further ratified by Resolution09-048 passed by the Board on September 9, 2009, which provided the District with abalanced budget, as required by Board Policy 312. The budget passed was predicated onsavings from service reductions totaling $18 Million, net of fares. Service Developmentstaff then prepared a series of service reductions, adjustments and re-alignments inaccordance with direction to reduce District services 15% (315,000 Platform Hours).Currently the District operates approximately 2,070,000 annual platform hours. Theimplementation of the Service Adjustments Plan would result in operations of 1,755,000annual platform hours.2009 Service Adjustments PlanStaff developed the 2009 Service Adjustments Plan (SAP) in accordance with Board-adopted principles:
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Allocation of service must reflect some consideration of geographic equity, butultimately productivity and usefulness of the service should be given greater weight – Strategic Plan
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Service must be prioritized to those areas with the greatest potential for transit use,with good patronage rewarded by better service and shorter waits – GuidingPrinciples
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The District should maintain minimum route spacing/coverage – ServiceDeployment PoliciesOn June 24, 2009 the Board received a detailed report (GM Memo 09-161) andpresentation of the SAP that included routing, frequency and span changes. At that time,staff had estimated that the plan would reduce the daily platform hours to 5,700 per day forweekdays and just fewer than 2,900 per day for weekends. These targeted savings wereconfirmed through a run cut, developed by the Schedules Department. A final set ofproposals was presented to the Board on August 26, 2009 (GM Memo 09-161a), whichincluded three (3) minor revisions to the original SAP. Information regarding ridershipmethodology, preliminary Title VI screening and related matters is available in GM Memo09-161.
Public Outreach and Public Comments Process 
The development of the SAP process involved an extensive and comprehensive publicoutreach process. Please refer to Attachment A1 for a brief narrative on the process aswell as Attachment A2 for a complete report detailing the nature and scope of commentsreceived. Additionally, the Districts External Affairs, Marketing and Media AffairsDepartment have provided a report (Attachment B) of the Summary of Publicity andOutreach for the Community Workshops and Public Hearings on the AC Transit 2009Service Adjustments Plan.Transfer Policy – as stated in the public comments report, over half of the commentsreceived proposed changes to the District’s transfer policy. This issue will be the subjectof a December 2009 Board presentation.
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