Multi Year Budget Plan Development

Transcription

1 Finance & Administration Committee Information Item III-B October 13, 2011 Multi Year Budget Plan Development

2 Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: Resolution: Yes No TITLE: Update on the Multi-year Budget Plan Development PURPOSE: To continue the discussion on the annual budget and strategic plan priorities for the multiyear business plan and FY2013 Operating Budget. DESCRIPTION: The multi-year business plans for the operating and capital budgets incorporate and reflect the organization's strategic and business priorities: Safety, State of Good Repair, Performance/Efficiency and Customer Service. A multi-year budget plan improves coordination between capital projects and operations, increases synergy across departments and allows for evaluation of expense offsets through either increases to revenue or decreases to cost. The basis of the multi-year budgeting effort is an assessment of our core business including defining the essential performance outputs from bus, rail and Access; and the identification of new business initiatives. Each initiative is evaluated based on how it aligns with Metro's strategic goals and the impact on the key performance indicators. The discussion on the multi-year business initiatives provides a preliminary view of the FY2013 budget plan. FUNDING IMPACT: No funding impact at this time RECOMMENDATION: Board discussion

3 Washington Metropolitan Area Transit Authority Multi-Year Budget Plan Development Finance and Administration Committee October 13, 2011

4 Purpose Review the Multi-year budget prepared within the current strategic framework Objective of the Multi-year budget: Identify efficiencies in Metro s operations Evaluate strategic and business plan priorities for more effective Multi-year planning and budgeting Multi-year budget supports Metro s priorities: Safety State of Good Repair Performance/Efficiency Customer Service

5 FY2013-FY2015 Multi-Year Planning Multi-year budget has two components: Baseline - Growth factors and other assumptions applied to FY2012 budget to provide FY2013 pro forma budget Business initiatives Based on assessment of core business, Metro s executive team developed initiatives for FY2013 through FY2015 Approved FY2013 initiatives will be added to the FY2013 baseline budget

6 Drivers of FY2013 Expense Growth 32% increase in pension costs Authority-wide 2008 losses continue to work their way through the accounting process based on the smoothing requirements of the plans Pension expenses should peak and begin flattening in % growth in health care expenses National inflation trend for health care costs is 7% Growth in Metro s health care payrolls from increasing number of retirees 5% growth in casualty & liability insurance costs Insurance claim payouts related to 2009 Fort Totten accident expected

7 FY2013 Pro Forma Expense Budget FY2013 Pro Forma Growth FY2012 FY2013 Assumptions $ In Millions Budget Projection $ % Expenses Labor Salaries & Wages $ $ $ % 1.5% Overtime % Fringe Health % Pension* % 2% Other Benefits % Services % Paratransit % Materials & Supplies % 2.1% Fuel, Propulsion, Utilities % Casualty & Liability % Other Savings Initiatives % Total Expenses $ $ $ % * Authority-wide pension contribution for FY2012 is $112 M and FY2013 is $148 M, 85% is funded by the Operating Budget

8 Multi-Year Planning Process Each initiative was evaluated based on alignment with Metro s strategic framework goals and impact on Key Performance Indicators Over 188 business initiatives evaluated Initiative requirements: Specific deliverables and linkage to Metro s goals Must be incremental to department base budget Initiatives were reviewed for: Cross-departmental synergy Either revenue increase or cost reduction offsets

9 Key Performance Indicators Safety and Security Criteria for Evaluating Initiatives Customer Injury Rate Employee Injury Rate Crime Rate Deliver Quality On-Time Performance Service Mean Distance Between Failure (or Delay) Use Resources Wisely Escalator/Elevator Availability Customer Comment Rate Reduce operating cost or generate revenue

10 Initiative Categories Self Funded Customer Service Performance/Efficiency Safety and Security State of Good Repair Dulles

11 Self Funded Initiatives Program FY2013 FY2014 KPI Business operation and system application efficiencies $0.2-3 M $0.2-6 M Use Resources Wisely Scheduling Efficiencies $2.5 M $1.4 M Use Resources Wisely Labor Cost Efficiencies $0205M $ $0.2-1 M Use Resources Wisely Parking Mobile Payment System $0.1 M $0.1 M Quality Service and Use Resources Wisely Other $0.1 M $0 Use Resources Wisely

12 Customer Service Initiatives Program FY2013 FY2014 KPI Customer & Employee Outreach $0.2-3 M $ M Quality Service Safety & Security Communication for Bus service $0.5-1 M $0.5-1 M Quality Service Customer Friendly Fare payment system $1 M $1 M Quality Service The Customer Service Initiative $0.5 M $0 Quality Service

13 Performance/Efficiency Initiatives Program FY2013 FY2014 KPI Quality inspections and maintenance reliability enhancements $ M $ M Quality Service Quality Service and Bus Service & System Improvements and dpriority it Corridor $0.1-6 M $0.1-9 M Safety & Security Systems to support asset management and operations center $0.2-2 M $0.2-3 M Quality Service Non Revenue Vehicle Maintenance $0.1-2 M $0.1 M Quality Service Rail Fleet enhanced maintenance $1.5 M $15M $1.5 Quality Service Rail Operations Training $0.4-1 M $0.4-1 M Quality Service Workers Comp & 3rd Party Claim Management $0.5 M $0.5 M Use Resources Wisely

14 Safety & Security Initiatives Program FY2013 FY2014 KPI Hours of Service Productivity $4-11 M $5-12 M Quality Service and Safety & Security Mandated by NTSB $7 M $7 M Safety & Security Enhanced police protection and customer security $0.5-6 M $1.5-6 M Safety & Security Bus, Access, and MTPD Security Systems $0.2-6 M $0.2-6 M Safety & Security Safety and Training Certification Programs $0.3-5 M $0.3-5 M Quality Service and Safety & Security New and Existing Facility Requirements $1 M $0 Safety & Security Other $0.4 M $0.5 M Quality Service and Safety & Security

15 State of Good Repair Initiatives Program FY2013 FY2014 KPI New and Existing Facility Requirements $0.1-7 M $0.1-9 M Quality Service Track Repair $0.3-5 M $0.3-5 M Quality Service and Safety & Security Maintenance for Reliability $0.2-2 M $0.2-2 M Quality Service Roadway and tunnel cleaning $1.6 M $1.6 M Quality Service IT Infrastructure Upgrades $0.1-1 M $0.1-1 M Quality Service Mandated Regulatory Compliance $0.5 M $0.4 M Quality Service and Safety & Security

16 Dulles Initiatives Dulles readiness initiatives for mid-fy2014 opening Initial estimate of the transition cost plan for Dulles, figures will be updated and do not include revenue generated by new service FY2013 FY2014 FY2015 $20 M $43 M $44 M Expense initiatives include recruitment and training of personnel and materials for daily operations The initiatives involve the following entities: Rail Operators, Station Managers, Car Maintenance, Escalators, System Maintenance, Track and Structure, Metro Police, Human Resources, Information Technology and Communications

17 Next Steps November 2011 Review proposed initiatives for FY2013 operating budget Revenue forecast Capital program update December 2011 FY2013 Capital Annual Work Plan FY2013 Preliminary Operating Budget January 2012 FY2013 Operating and Capital Budget proposal February 2012 Public input March June 2012 Budget deliberations