These days transit agencies with budget shortfalls are a dime a dozen, with the ones that have managed to get back in the black few and far between. New York-based Rochester-Genesee Regional Transportation Authority (RGRTA) can proudly say it is one of the latter after being on the brink of an "economic disaster."
It wasn’t too long ago that the agency was facing a projected shortfall of $27.5 million for the fiscal year beginning on March 1, 2007. "To deal with budget deficits of that scope, you don’t just trim around the edges. You have to go in and literally reinvent yourself as an organization," says RGRTA CEO Mark Aesch.
This reinvention involved instituting a new system of measuring performance in the areas of operations and finance as well as developing a new goal-oriented culture for the organization requiring buy-in from all employees. "Today we have the commitment of the vast majority of our workforce because they’ve seen the turnaround we’ve enjoyed over the last three years," Aesch says.
Looking back at the RGRTA’s economic history, it has never adopted a budget in its 38 years of existence where a net income was expected at the beginning of the fiscal year, according to Aesch. Over the past 10 years or so, the agency has had to pull millions of dollars from cash reserves to balance the budget.
For the 2006-07 fiscal year, the agency projected a $12.5 million deficit but was able to close the year with a net income of $8.3 million. A deficit of nearly $28 million was projected for the following fiscal year, which was reversed, resulting in a net income of $1.3 million. "Each of the last two fiscal years, we’ve adopted a budget where we’ve expected a net income," Aesch says. "That’s pretty significant."
Achieving financial stability
One of the ways the RGRTA was able to regain its financial footing was by reviewing its fixed-route service. "We have a responsibility to run buses at the highest cost recovery possible and to provide as much service to the community as we possibly can," Aesch says. To find out which routes were unnecessary or underserved, the agency developed a measurement process called TSI (trip scoring index). This measurement combines the cost recovery and customer counts (the number of people on the bus) for each route. "What we look at with the TSI is to make those service changes on routes where we have low cost recovery and low customer counts."
As a result of the service changes, RGRTA’s routes are 26% more productive compared to three years ago. "We are able to drive fewer miles and pick up more people in the miles we are driving," Aesch says.
Using the TSI measurements has also resulted in the reduction of driver hours by 11% and maintenance overtime by 24%. "A lot of people in the transit industry will say that’s a fancy way of saying service reduction," Aesch says. He counters this claim by stating that by making changes to operate more efficiently, ridership levels have gone up and customer satisfaction levels have increased.
The second tactic used by the agency to help close the budget gap was to increase its state aid. They argued their case by proposing a formula that would provide aid based on the number of people in the community benefiting from a particular service. "We made it clear to the state of New York we are not looking for and do not want a bailout," Aesch says. "We want to be at equity with the rest of the state."
Over the course of the past three years, says Aesch, the agency demonstrated what it had done to become more efficient and helped advance its argument for equity, which led to 105% increase in state aid.
Another way the RGRTA bolstered its economic standing was by driving up its locally generated revenue by 26%. This was achieved by correcting significant shortfalls the agency was seeing in providing subsidized service to various educational institutions in the community. "We’ve been able to increase the amount of revenue we pick up in each mile that we drive," Aesch says.
To help achieve and maintain this financial stability, the agency instituted key operating measures, which they use to measure how the agency is performing operationally and financially on a monthly basis. "It’s been that commitment to strategic planning and the zeal for constant measurement that has allowed us to close those enormous operating deficits that we were facing," says Aesch, adding, "without raising fares or laying off a single employee."
In addition to putting its finances in order, another part of the RGRTA’s strategic plan is to impart excellence in customer service. "It starts with the mindset of recognizing the difference between a passenger and a customer," says Aesch. "People come and buy a product from us, they make a decision to do that, they are our customer."
This commitment to customer service led to the formation of the agency’s Driving Excellence Campaign in 2004. The campaign has several components, one of which requires all 800 employees to ride the bus at least once a month so that "they can see how we provide service to the customer," Aesch says.
In addition, the agency holds monthly customer town meetings where members of the senior management team listen to what customers have to say about the service. "Sometimes we have five people and sometimes we have 75 who come and tell us how we can make the service better, and sometimes they give us compliments," Aesch says.
Other elements of the campaign have included equipping the transit authority’s Website with a trip planner and making bus pass purchases available online. The RGRTA is also in the midst of changing all 5,000 bus stop signs to a more user-friendly design that would include route maps, phone numbers and Website information. "I always tease folks that the signs we have now say ‘If you stand here, a bus might come,’" Aesch says.
One of the largest components of the Driving Excellence program was the alteration of the existing fare structure. "We had a very complicated six-zone system, where the lowest price in the first zone was $1.25 and it escalated up to $3.10 in the outward-most zone," says Aesch. To make it easier for existing customers and to attract new ones, the agency pared down the fare structure to a one-zone system charging $1.25 for all riders.
In order to measure customer satisfaction, the RGRTA built a customer service index, referred to as the CSI, which they use to gauge 11 different aspects of customer service. On-time performance; how often do buses pass up stops because they are full; how often do buses break down; how helpful are drivers in resolving customer queries; and hold times for the call center are some of the areas that the agency requests customer feedback. Each of these items is tied into the CSI, and is given a score between one and 100 for each quarter. "Let’s say we get our score back and it’s an 82," Aesch says. "So that is a number that the whole workforce can focus on to improve." Since introducing this new customer service tool, the agency has been able to boost its customer satisfaction levels by 26%.
While making necessary changes in the organization to achieve financial stability and improve customer satisfaction is important, they cannot be realized without commitment from employees. Acknowledging that one cannot exist without the other, the agency named "employee participation" as one of the pillars of the agency’s strategic plan.
This entailed shifting the employee compensation program so that it tied into performance initiatives. "So often you treat all employees the same whether they are collectively bargained or not with the same mindset," Aesch says. As part of its incentive program, the agency provides an overall allocation of dollars for salary adjustments. "At the end of the day, there are no two employees who wind up with the same salary adjustment, because people are paid based on their performance."
For example, if the overall customer satisfaction for a particular area goes up by more than 10% from the baseline, the entire management team has a bonus opportunity, Aesch says. Also, if the number of bus breakdowns decreases, there would be an opportunity for the director of maintenance to benefit. "So, it’s possible you could realize both an individual opportunity based on the CSI and a team opportunity, but this allows everyone to focus on what’s important."
The agency’s priority for operations is implementing a new technology program called TIDE (technology initiatives for driving excellence). "It’s a comprehensive approach we are taking to install a number of technology programs to make our customer’s experience better," says Aesch. This program will include a new CAD/AVL system for the fixed-route and paratransit services; NextBus technology on the Website and busiest bus stops; operations software; fleet maintenance software; human resources information software; and a single log-on system, which will allow drivers to swipe a card that will authorize the operation of a vehicle. "TIDE is the drawing together of that entire comprehensive technology program to improve customer satisfaction and to improve data that we receive to operate more efficiently," Aesch says.
The RGRTA is in the midst of procuring all of these technologies from one vendor rather than from individual companies. Aesch believes that by taking this comprehensive approach the agency expects to save about 30% rather than buying the products "a la carte."