METRO. FY2007 Quarterly Financial & Management Report. First Quarter Ending December 31, 2006 INDEX

Transcription

1 METRO FY2007 Quarterly Financial & Management Report INDEX Page Highlights Route for University Line Narrowed to 3 Alternatives 1 Finalists Selected for METRO Solutions Public Art Program 1 METRO Solutions Phase 2 Plan Proceeds at Full Speed 2 Customer Information Access Enhanced 2 First Batch of New Buses Arrive 2 METRO Wins Award for Annual Financial Report 2 American Diabetes Association is Beneficiary of METRO Fund Raising 3 METROLift Unveils an Automated Call System 3 Bus Operators Spread Holiday Greetings 3 More Police Training to Enhance System Safety 3 Enforcement Initiative on Rail Corridor 4 New Electric Power Contract In Place 4 METRO'S Role Highlighted at Local Event 4 Management Discussion and Analysis Ridership Trends 5 Financial Performance Revenues 8 Operating Expenses 10 General Mobility Expenditures 13 Capital Expenditures 14 Key Performance Indicators 16 Composite Operating and Capital Statement 23 Balance Sheet 24 0

2 Highlights Route for University Line Narrowed to 3 Alternatives The Board, at its December meeting, approved three route alternatives for each of the eastern and western segment of the University Corridor for more refined analyses. METRO staff worked with multiple alignment alternatives, which had been proposed during the scoping of the project and at the initial stage of the Draft Environmental Impact Statement (DEIS) process. METRO held numerous open houses, stakeholder and other meetings, and presentations with the public and elected officials to solicit input on potential corridor alignments. Initially, after staff eliminated alternatives that did not meet the purpose and need of the project, there were still over 50 options left. Narrowing down over 50 options to three on each line segment makes the continuation of the DEIS process more productive. The eastern segment route alternatives are: Alabama (US-59/Alabama/UH): From Wheeler Station to Wheeler under US-59 to Alabama, terminating at Scott (UH Central Campus) Wheeler (Ennis/Elgin/Eastwood TC): From Wheeler Station to Wheeler to Ennis to Elgin, terminating at Eastwood Transit Center (IH-45) Wheeler (Ennis/Alabama/UH): From Wheeler Station to Wheeler to Ennis to Alabama at Scott (UH Central Campus). The western segment route alternatives are: Richmond/Westpark (Cummins): Richmond from Wheeler Station to Cummins to Westpark, terminating at Hillcroft Transit Center Richmond/Westpark (Greenway Plaza): Richmond from Wheeler Station to Greenway Plaza Drive A to Westpark, terminating at Hillcroft Transit Center Richmond/US-59/Westpark (Kirby): Richmond from Wheeler Station to Montrose to north US-59 frontage road (elevated) to Revere (east of Kirby) to Westpark, terminating at Hillcroft Transit Center. Finalists Selected for METRO Solutions Public Art Program Building on the success of the art installations on the Main Street Light Rail Line, METRO has developed a Public Art Program for METRO Solutions Phase 2. The goal of this program is to foster community participation, preserve the character of the different neighborhoods of the METRO Solutions corridors, and encourage local artists to participate in the art installations of the stations. The Open Call to Artists was issued in late October 2006 soliciting artists to collaborate during the design and construction of METRO Solutions Phase 2. Out of 262 artists that submitted their works by the November 30 deadline (108 were local artists), 40 were selected as finalists. The finalists were selected based on artistic merit, professional qualifications, successful completion of public art projects, experience as part of a design team and availability and willingness to meet and work collaboratively with members of a designbuild team. These finalists have been invited to submit formal proposals. Selection of artists to move on to the next phase is expected in mid February

3 Highlights METRO Solutions Phase 2 Plan Proceeds at Full Speed In the first quarter of FY2007, significant progress was made in all areas of METRO Solutions Phase 2. The City of Houston s review of Preliminary Engineering submittal drawings is underway and interim design work for the North, Southeast, East End and Uptown Corridors is complete. The Finding of No Significant Impact for the Intermodal Terminal is complete and was submitted to the Federal Transit Administration (FTA) and acceptance by FTA was received. Permission to circulate the Final Environmental Impact Statement was also received from FTA for the North and Southeast Corridors. The selection process for the Facility Provider Package continues. The notification process of the property requirements to the stakeholders and affected property owners for North, Southeast and East End Corridors has been initiated. On the existing Main Street Corridor, the installation of traffic signal backplates with Light Emitting Diodes (LED) and of new technology in-pavement lighted stop bars were completed at Jefferson and McGowen. Customer Information Access Enhanced In October, METRO started putting a decal on the back of all buses to prominently display METRO s customer service number ( ) and website address ( These decals provide contact information on obtaining bus and schedule information. In addition, METRO customers now have the ability to download the METRORail Red Line map and connecting bus information from METRO s website to their ipods. First Batch of New Buses Arrive Twenty-five suburban 45-foot Park and Ride diesel buses were received from the manufacturer and put into service during the first quarter of Fiscal Year The buses will be used to accommodate new Park & Ride service and to allow the retirement of older buses. In addition, the new buses will improve reliability and reduce operating costs. In other bus purchase news, the first of 40 additional transit low-floor hybrid-electric drive buses went into production in early January. The first bus will be used as a prototype vehicle for the remainder of the 40 foot buses to be built. These buses have lower exhaust emissions and higher fuel economy than buses with standard propulsion systems. Delivery of the additional 40 buses is expected in Spring METRO Wins Award for Annual Financial Report For the 15 th consecutive year, METRO has received the esteemed Certificate of Achievement for Excellence in Financial Reporting for the year ended September 30, This award, presented by the Government Finance Officers Association, is awarded to those institutions that present their Comprehensive Annual Financial Report in a clear and concise manner. METRO s presentation of this report continues to display unparalleled professionalism and commitment to excellence in the area of financial reporting, while meeting the established guidelines of Generally Accepted Accounting Principles and applicable legal requirements. The certificate is the highest form of recognition in governmental accounting and financial reporting. 2

4 Highlights American Diabetes Association is Beneficiary of METRO Fund Raising This fall, METRO employees participated in a variety of fundraising activities in support of the American Diabetes Association. President & CEO Frank Wilson kicked off this year s campaign by noting that diabetes is a disease that affects almost everyone and unfortunately, almost a third of the 20.8 million people with the disease are not diagnosed. In addition to bake sales, auctions, pancake breakfasts, and the like, METRO raised money on foot. On November 18, 2006, many METRO family members joined Mr. Wilson and wore METRO s design-winning tee shirt on a three mile walk around Minute Maid Park. By raising nearly $85,000, METRO was pronounced the top corporate fundraiser in Houston in 2006 by the American Diabetes Association! METROLift Unveils an Automated Call System In late September 2006, METROLift introduced the METROLift Automated Call System (MACS). This interactive voice response system enables METROLift patrons to access the METROLift scheduling computer by telephone, without the need to speak to an operator. The new system allows patrons to better manage their trips and benefits METRO by automating functions that previously required staff hours. MACS allows patrons to confirm or cancel trips, schedule trips based on recent trip history, and obtain the estimated arrival time of the METROLift vehicle. Another feature of MACS will allow drivers to automatically place a call and have MACS alert the patron that their vehicle is approaching their location. This will increase productivity by reducing the driver waiting time and thus improve on-time performance and service efficiency. Bus Operators Spread Holiday Greetings METRO bus operators spread good wishes this holiday season by distributing greeting cards to their passengers in December. The new program was aimed at improving both passenger relations and METRO s image. Each operator received 50 cards to present to their regular riders during the holiday season to wish passengers Season s Greetings and Happy Holidays. More Police Training to Enhance System Safety METRO Police participated in a Transportation Screening Capabilities Workshop in Washington, DC. The workshop was hosted by the Transportation Research Board which supports the development of a national response plan emergency support function. The focus was on the ability to identify and locate potentially harmful individuals, vehicles and/or materials within mass transit systems, assess the associated risk, and then deter, minimize, and/or eliminate the threat. In addition, during the first quarter, a contingent of METRO Police Homeland Security personnel traveled to London and met with British transport police to learn new methods to respond to terrorist threats and actual acts of terrorism, implement police deployment strategies and observe the use of chemical/ biological detection and response technology. This trip was funded with US Department of Homeland Security grant funds. 3

5 Highlights Enforcement Initiative on Rail Corridor Beginning in the last two weeks of November and throughout December, METRO Police conducted an enforcement initiative along the entire Main Street Rail Corridor. The effort was in response to theft, panhandling, and vagrant activity, as well as to look for any seasonal crimes through the holidays. Over 200 enforcement activities were accomplished over this period. Arrests were made for narcotic offenses, thefts, public lewdness, alcohol violations and numerous other City of Houston ordinance violations. Twelve felony warrants and 69 misdemeanor warrants were also cleared as a result of this initiative. New Electric Power Contract In Place With the completion of deregulation in the electric power market, METRO opted to retain an energy consultant through the Texas State Procurement System to take advantage of favorable markets. The consultant already had an exclusive contract awarded by the State of Texas for comprehensive energy management services, including energy procurement, for all state agencies. The consultant was able to help METRO shop the market and quickly secure the most advantageous pricing. METRO was able to enter into a new three year contract that would save over $850,000 in FY2007 compared to the rate assumed in the budget. METRO'S Role Highlighted at Local Event METRO President & CEO Frank Wilson addressed a Greater Houston Partnership luncheon on October 25, 2006 at which he challenged conventional perceptions of METRO as a transportation company and urged the large audience to help METRO spread the facts about its contribution to Houston and the Houston area. He pointed out that if you have never boarded a bus or ridden the rail, you still use METRO every day in many different ways. Wilson talked about the many faces of METRO, METRO services and programs, the technology and tools introduced by METRO, and the business of METRO. Comments received indicated that the event was enormously successful and informative in helping to change the perception of METRO. In addition, the presentation and audio feed were posted on METRO s Intranet and Internet web sites. 4

6 Ridership Trends Ridership Total system ridership year-to-date including fixed route bus and METRORail, METROLift, Special Events, METROVan, and HOV Vanpools/Carpools is 31.7 million boardings, up 1.5% from last year on a calendar adjusted basis. Factors that contribute to the increase are discussed in the next two pages. YTD Total System Ridership Ridership in Millions YTD Total Fixed Route Ridership Ridership in Millions Total System Ridership FY2006 FY2007 Change Fixed Route Bus Service 22,173,371 22,188, % METRORail Service 2,736,006 2,706, % Subtotal Fixed Route Service 24,909,377 24,894, % Special Bus Service 816, , % Subtotal Bus & Rail Services 25,725,909 25,834, % HOV Carpools, Vanpools & Non-METRO Buses 5,504,714 5,870, % TOTAL RIDERSHIP 31,230,623 31,704, % 5

7 Fixed Route Service First Quarter fixed route ridership, comprised of METRORail, Local and Express Bus, and Park & Ride services, is million, down -0.1% from FY2006 ridership of million. METRORail ridership year-to-date is down -1.1%, to 2.7 million. Local and Express Bus service ridership is 20.1 million, up from 20.0 million in FY2006, an increase of 0.3%. Park & Ride service ridership is down -1.9%, to 2.1 million. The majority of the METRORail ridership loss can be almost equally attributed to two factors: decreased ridership attributable to football games at Reliant Park and some weather-related decrease in ridership during holidays. The driving factor relating to the football game ridership drop was the fact that there was one less game (Big XII Championship Game) in FY2007. The majority of the Park & Ride ridership decrease can be attributed to the merging of the 201 North Shepherd Park & Ride and the 108 Veterans Memorial Express route. Over 30,000 boardings for the period were shifted from the Park & Ride to the Express category of ridership. Adjusting for this, Park & Ride ridership would have been down only -0.5% from the first quarter FY2006. METRORail Service Ridership in Millions Fixed Route Bus and Rail Service Ridership in Millions OCT NOV DEC Fixed Route Bus Service Ridership in Millions OCT NOV DEC Local & Express Bus Service Ridership in Millions OCT NOV DEC Park & Ride Service Ridership in Millions OCT NOV DEC 0.6 OCT NOV DEC 6

8 Special Bus Services Special bus services have four components: METROLift (service on-demand), METROVan (special bus service utilizing non-metro operated vans), Special Events bus service and Charter service. These services do not have fixed routes or a set schedule. The total ridership for Special bus Services for the First Quarter is million, an increase of 15.1% from last year. 30 METROLift (0.353 million boardings in the first quarter FY2007) demand has decreased slightly, down 3.2% from last year due to fewer hours of service provided. METROVan services (0.556 million boardings YTD in FY2007) experienced increased demand, up 33.4% from FY2006. This increase was due to the addition of the minipool program. minipool is a demonstration project geared to support vanpools with five to eight persons travelling through major construction corridors. METRO took this project over from the Houston-Galveston Area Council (HGAC) in May Special Event Bus Service including charters shows a decrease of 13.1% from FY2006 primarily due to Hurricane Rita-related boardings in October 2005 that did not occur this year. Special Events Service Ridership in Thousands Special Bus Services Ridership in Thousands Oct Nov Dec METROLift Service Ridership in Thousands Oct Nov Dec METROVan Service Ridership in Thousands Oct Nov Dec 110 Oct Nov Dec 7

9 Financial Performance METRO Revenues FY2007 YTD Budget Actual Differences Fares % Sales Tax (Cash Basis) % Interest & Miscellaneous % Subtotal % Grants % TOTAL % Fares Fares are $12.2 million for FY2007 YTD; $0.4 million or 3.7% above the projection. This increase in actual fare revenue against budget is due to higher ridership than projected in the budget and renewal of annual passes. Compared to the same period last year, fares are 2.2% lower. FY2007 Fare Revenue by Month FY2007 YTD Fares $4.5 $12.5 $4.0 $ $3.5 Oct Nov Dec Budget Actual $ FY2007 Budget FY2007 Actual 8

10 Sales Tax Revenue Sales tax revenue (cash basis) for FY2007 is $112.7 million: $15.9 million or 16.4% above budget. The increase is being driven by employment and population growth. With sales tax growth running higher than inflation, METRO is experiencing real growth. Grant Revenue Grant revenue for the first quarter is $6.97 million or 0.5% above projection. Under FTA policy, METRO only receives grant funds after paying for the funded projects. $45 Actual Sales Tax Revenue by Month - Cash Basis $6 FY2007 Grant Revenue by Month $40 $4 $35 $2 $30 Oct Nov Dec $0 Oct Nov Dec Budget Actual YTD Actual Sales Tax Revenue Cash Basis FY2007 YTD Grant Revenue $115 $7.0 $ $ $95 $6.0 Budget Actual Interest and Miscellaneous Revenues in this category were $0.4 million, or 13.6% over projection mainly due to increases resulting from a larger portfolio size. 9

11 Operating Budget FY2007 OPERATING BUDGET, EXPENSES, AND VARIANCE Expense Category Year-to-Date Budget Year-to-Date Expenses $ Variance % Variance Wages 22,659,109 22,540,982 (118,127) -0.52% Fringe Benefits Union 10,984,516 10,694,878 (289,638) -2.64% Total Union Labor 33,643,625 33,235,860 (407,765) -1.21% Hourly Wages NonUnion 271, ,545 59, % Salaries 16,378,156 15,898,325 (479,831) -2.93% Fringe Benefits Non-Union 7,414,160 7,190,839 (223,321) -3.01% Total Non-Union Labor 24,063,468 23,419,709 (643,759) -2.68% Total Labor and Fringe Benefits 57,707,093 56,655,569 (1,051,524) -1.82% Services 3,803,252 1,617,771 (2,185,481) % Materials and Supplies 4,348,657 4,277,193 (71,464) -1.64% Utilities & Fuel 10,539,564 9,793,686 (745,878) -7.08% Casualty and Liability 837, ,257 (81,079) -9.68% Purchased Transportation 16,516,978 15,706,534 (810,444) -4.91% Leases, Rentals and Miscellaneous 680, ,626 (311,860) % Total Non-Labor 36,726,273 32,520,067 (4,206,206) % Total Labor and Non Labor 94,433,366 89,175,636 (5,257,730) -5.57% Cost Recovery (2,296,796) (1,291,721) 1,005, % Total Operating Expenses 92,136,570 87,883,915 (4,252,655) -4.62% Capitalized Operating Expenses (12,452,985) (12,452,175) % Allocation to Capital & GMP (9,283,277) (8,644,548) 638, % Total Allocation to Capital (21,736,262) (21,096,723) 639, % OPERATING BUDGET 70,400,308 66,787,192 (3,613,116) -5.13% 10

12 Operating Expenses Operating expenses through the end of the first quarter are $ million compared to $ million budgeted, $3.613 million or 5.1% below budget. This underrun in the operating budget is due to the following: $71 $68 FY2007 YTD Operating Expenses Wages are under budget by $118,000 or 0.5%. Underruns in Bus Maintenance and Facilities Maintenance are due to more than 50 vacant mechanic and cleaner positions. Savings have been partially offset by increased use of overtime in Bus Maintenance to make up for the vacant personnel. For the quarter, bus operator wages are over budget due to the use of more overtime than planned; however, the overage has been on the decline over the first two months of the year with wages coming under budget in the third month (December) for the first time this fiscal year. Union Fringe Benefits are $290,000 or 2.6.% under budget mainly due to the more than 50 vacancies discussed above, which produce overall reduced expense in most categories. In addition, there is a temporary variance that will get corrected in the payment of uniform & tool allowance to union personnel. $24 $12 $0 Wages $65 Budget Actual FY2007 YTD Operating Expenses by Category Salaries Fringe Benefits Purchased Trans. Budget Services Materials & Supplies Actual Utilities & Fuel Casualty & Liab. Misc. Non-Union Wages and Salaries are under budget by $420,000 or 2.5% due to vacancies throughout the Authority. As of the end of December, there were 75 vacant salaried positions. Non-Union fringe benefit expenses are under budget by $223,000 or 3.0% due to lower benefit costs primarily resulting from the vacancies discussed above. $20 $19 $18 FY2007 Labor and Fringe Benefits by Month Oct Nov Dec Budget Actual 11

13 Services expenses are under budget by $2.185 million or 57.5%. The slow start of contractual service activity accounts for the large timing variance. Significant components of the underrun include: $671,000 in Operations (underruns primarily in facility maintenance contracts) $600,000 in Communications & Marketing (advertising fees and support services associated with delayed marketing campaigns and billing lags in temporary help) $282,000 in IT (timing in equipment maintenance services) $237,000 in Public Safety (timing in Transtar lease payment, delay in contract payments for HOV ridership estimates and contract security invoices) $191,000 in Human Resources (timing in contracts associated with new hires and DOT physicals) $121,000 in Legal (delays in invoices for outside counsel contract work) Materials & Supplies are under budget by $71,000 or 1.6%. In Operations, Bus Parts cost is $391,000 over budget but is more than offset by underruns in Rail and Facilities Maintenance. The bus parts overrun is the result of higher parts usage than budgeted. Rail savings result from reduced accident costs and less parts used than budgeted. In other areas of the Authority, there are some timing underruns due to fewer magnetic fare media being purchased early in the fiscal year in anticipation of Q-Card and delays in purchasing Police equipment. Fuel & Utilities are under budget by $746,000 or 7.1%. Diesel fuel Is under budget by $330,000 primarily due to savings from better fuel economy than budgeted and using lower priced fuel purchased at the end of FY2006. The balance consists of primarily timing in invoicing for electric power and telephone expenses. $14 $12 $10 FY2007 Materials & Services by Month Oct Nov Dec Budget Actual Casualty & Liability expenses are $81,000 or 9.7% under budget and result from higher than anticipated subrogation recoveries. Purchased Transportation expenses are $810,000 or 4.9% under budget. Of this, METROLift and Special Events are under budget because of less service provided. The balance is primarily due to timing in the receipt of vanpool expenses. Leases, Rentals & Miscellaneous expenses are $312,000 or 45.9% under budget. The majority of this variance is due to delay in receipt of invoices for maintenance contracts for software rental such as Windows software and reduced travel expenses. Cost Recovery is $1.005 million or 43.8% less than budget. This is due to timing in cost recovery for vanpool ($857,000) and Special Events ($162,000) service. For vanpool, a related underrun is shown under Purchased Transportation. Capitalized Operating Expenses budget. are on Allocation to Capital and GMP is $639,000 or 6.9% lower than projected and is mostly driven by capital-related vacancies in the Planning Engineering & Construction, Real Estate, Government Affairs and Communications & Marketing departments. 12

14 General Mobility Expenditures FY2007 first quarter General Mobility Program expenditures are $23.0 million compared to $27.4 million budgeted, $4.3 million or 15.9% lower than projected. $28 $26 FY2007 YTD GMP Expenditures 27.4 $24 $22 Budget 23.0 Actual FY2007 YTD FY2007 YTD Variance Budget Actuals City of Houston Harris County Multi-Cities Area-wide Total General Mobility Program City of Houston project expenditures are on schedule for the first quarter and represent 97.6% of planned expenses. Expenditures for Harris County Projects are $3.284 million less than budgeted so far this year due to slow progress on Future Designated Projects handled by the County. Expenditures for the Multi-Cities projects are on schedule for the first quarter and represent 96.3% of projected expenses. Area-Wide Programs are $0.429 million less than budgeted due to less than anticipated issuance of commercial paper to fund Future Designated Projects (interest on commercial paper is included in this category). 13

15 Capital Expenditures FY2007 year-to-date capital expenditures are $46.8 million compared to $49.2 million budgeted, $2.3 million or 4.8% lower than projected. Major variances in the Capital Budget are identified below. $50 $48 $46 FY2007 YTD Capital Expenditures 49.2 Budget 46.8 Actual FY2007 FY2007 Variance YTD Budget YTD Actuals METRO Solutions Capital Improvement Program Total Capital Budget METRO SOLUTIONS -- Variance Due to Schedule Slippage: Real estate acquisition has been slower than anticipated due to the delay in the receipt of the Final Environmental Impact Statement (FEIS) "Record of Decision" for the North and Southeast corridors. There has also been a delay in receiving the Finding of No Significant Impact (FONSI) decisions. The complexity of the Intermodal Facility design has also delayed commencement of the next stage of design. -$4.1 million 14

16 CAPITAL IMPROVEMENT PROGRAM Variance Due to Schedule Slippage: Implement Bus Smart Card Technology -$4.5 million The implementation date and schedule for Q Card has been modified to allow time for "stress testing" the new hardware and software and phased implementation. Facility Projects Delays in facility projects due to staff re-assessment of operational needs. Total Schedule Slippage Other Projects -$0.7 million -$5.2 million Variance Due to Other Issues: Bus and Support Equipment $10.6 million Current expenditures for 25 new Park & Ride buses reflect a purchase rather than a leasepurchase as planned. Purchase Diesel Storage Tanks -$2.5 million The capital lease of fuel storage tanks has been delayed and is currently under reevaluation. Addicks Ramp Replacement METRO paid for this project from a cash advance account in FY2006. In FY2007, the payment was charged to the capital project. $3.6 million Information Technology (IT) -$3.2 million The underrun in IT projects is due to delays in receipt of equipment for the following projects: METRONet, wireless upgrades of the IVOMS system, wireless installation at 1900 Main to support METRO Solutions and voice communications, and test equipment for the ARCS System radio replacement. Other Miscellaneous Variances Total CIP Variance due to Other Issues TOTAL CAPITAL IMPROVEMENT PLAN VARIANCE GRAND TOTAL CAPITAL BUDGET & METRO SOLUTIONS -$1.5 million $7.0 million $1.8 million -$2.3 million 15

17 Operating Ratio Key Performance Indicators FY2007 Operating Ratio 20% 18% 19.0% 17.4% 16% Goal YTD Actual The Operating Ratio for the first quarter of FY2007 is 17.4%, below the FY2007 annual goal of 19.0%. Fare restructuring, which will not take place until the second quarter FY2007, is a key element in achieving the 19.0% target. 16

18 Key Performance Indicators Mean Distance Between Failures (MDBF) The METRO bus fleet performed well in the first quarter. Actual performance was 9 percent better in October than the FY2007 MDBF minimum of 5,000 miles, 25 percent better in November and 47 percent better in December. MDBF is defined as the miles operated each month divided by the number of verified mechanical road calls. Mechanical road calls exclude accidents, criminal mischief, road damage and electronic farebox events. The improved performance of the bus fleet is due to better investment of repair and maintenance resources in the fleet. The Operations Department is committing funding to major capital components which have a direct impact on bus reliability and safety. In addition, the management of the Bus Maintenance Division is increasing its emphasis on compliance with procedures, adherence to inspections and more aggressive review of repairs. Mean Distance Betw een Failures by Month (m iles) 9,000 6,000 3,000 0 OCT NOV DEC Actual Goal 17

19 Accidents FY2007 Quarterly Financial & Management Report Key Performance Indicators Bus Accidents by Month FY2007 Bus Accidents OCT NOV DEC 100 YTD Goal YTD Actual Goal Rail Accidents by Month FY2007 Rail Accidents OCT NOV DEC 5 YTD Goal YTD Actual Goal In the first quarter, accidents for the bus system are 115, or 52.1% better than the YTD annual goal of 240. Rail system accidents are 6, or 50.0% better than the YTD goal of

20 Key Performance Indicators COMPLAINTS Complaints in the 1st Quarter are 68.4 percent better than the year-to-date goal. METROLift complaints have decreased 29 percent compared to the same period in FY2006. This decrease is due to the stabilization of the performance of the new METROLift van fleet and the introduction of a new reservation system. This system allows patrons to automatically access their scheduling information and better manage their trips with less telephone hold time. 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Complaints by Month OCT NOV DEC Goal The Operations Department has started several initiatives which should further reduce the number of complaints in the coming months. For example, an incentive program has been initiated where bus operators are eligible for monthly and quarterly prizes for meeting certain criteria which includes customer complaints. The Department is also providing customer service refresher training to all operators. In addition, the Operations and Public Safety Departments are working together by jointly meeting with operators and monitoring the bus and the rail system. FY2006 FY2007 Change % Operator Behavior 2,002 2, % Timeliness & Reliability 1,099 1, % Driving Safety % METROLift % Equipment Problems % Crowded Bus % Other % COMPLAINT TOTALS 5,415 6, % FY2006 complaints have been restated to reflect the current methodology which counts all complaints in a call individually. Complaints by Category 2,500 2,000 1,500 1, Operator Behavior Timeliness & Reliability Driving Safety METROLift Equipment Problems Crow ded Bus Other FY2006 FY

21 Key Performance Indicators Major Security Incidents by Category Larc/Theft Robbery Auto Theft Agg. Assault Burglary Arson Forc. Rape Homicide Major Security Incidents by Month OCT NOV DEC Goal Major Incidents are those categories that are listed in the FBI Part 1 Crimes used in national crime reporting requirements. The first quarter 2007 numbers represent a 39 incident a month average and a grand total of 118 Part 1 crimes, a decrease of 21% from the fourth quarter of FY2006, which averaged 50 incidents per month and a total of 149 incidents. METRO experienced a decrease in Park and Ride Part 1 Crime this quarter, from 38 to 29, a 24% decrease. METRO Police continue to support the Information Technology Department as they work to complete the METRONet security project at the Park and Ride lots. There are currently eight lots that have full camera capabilities. In the interim, METRO Police is maintaining Park and Ride task force efforts in combination with the METRONet security project to mitigate criminal activity at the Park and Ride. lots. The current quarter showed a significant drop in robberies, from 64 to 38, a 41% decrease from the fourth quarter of FY2006. However, METRO unfortunately experienced a homicide at the Hiram Clarke Facility in December This homicide was the result of a confrontation between two contract workers. The suspect in this homicide subsequently committed suicide. YTD Part I Crime OCT NOV DEC TOTAL Larc/Theft Robbery Auto Theft Agg. Assault Burglary Arson Forc. Rape Homicide TOTAL

22 Key Performance Indicators 75 Crime by Location OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Bus Rail Parking Lot Although difficult to quantify, this reduction could be attributed in part to a high visibility enforcement initiative that was implemented during this quarter. Uniformed Officers have shown a much greater presence this quarter both on bus and rail. Police fare checks on the rail this quarter increased by 18%, (from 5,620 to 6,628) and bus checks this quarter increased by 88%, (from 18,573 to 34,874). METRO Police initiated a new program of uniformed officers riding buses on routes based upon crime analysis and also integrated this effort at specific transit centers. Both customers and METRO bus operators have given positive feedback on this effort. METRO Police Attacking Crime Trends (MPACT) focused policing initiatives will continue to attack crime trends affecting the system as METRO continues to analyze factors and changing conditions that impact community and system reported crime. 21

23 Key Performance Indicators Customer Service Center The combination of METRO's Interactive Voice Response system (IVR) and enhanced productivity in the Customer Information Center continue to yield good results. The automated system handles many routine customer inquiries for bus and rail schedule times automatically, allowing representatives to focus on more detailed inquiries. New systems and practices for workforce management, real time communications and quality assurance have improved the productivity of our representatives in handling the calls that are routed to them. The IVR provided automated bus and rail times to 73% more callers in the first quarter of FY2007 than were provided in the first quarter of FY2006. Telephone representatives answered 43% more calls in the first quarter of FY2007 than were answered in the first quarter of FY2006. The average wait time for this quarter was 1:26 as compared to 1:48 in the same quarter of last year. Customer Information Center Key Indicators Calls Received (000's) Service Level (%) % 88% 90% % % % 85% % 80% 79% 79% 85% Average Wait Time (min.sec) 0 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec Service Level (%) Average Wait Time (min.sec) Calls Received and Routed to Customer Service (000's) Total Calls 22

24 COMPOSITE OPERATING AND CAPITAL STATEMENT ($000 OMITTED) FY2007 YTD Budget Actual Variance Gross Income Fares 11,738 12, Sales tax income 104, ,281 26,119 Interest Income 3,000 3, Other operating income Total 118, ,892 26,963 Operating Expenses Transit: department & support expenditures 68,672 64,374 (4,298) Traffic Management: department & support expenditures 1,728 2, Expensed Small Capital Purchases Total 70,400 66,787 (3,613) Gross Income Less Total Operating Expenses 48,530 79,105 30,575 + Federal/State Capital Grants Collected 6,940 6, Current Year Cashflow Available for Capital Expenditures 55,470 86,080 30,610 - Capital expenditures made 76,540 69,855 (6,685) Current Year Cashflow for Future Capital Expenditures Including Replacements and Operating Expenses (21,070) 16,225 37,295 All data in year-of-expenditure dollars. Sales Tax is reported on an accrual basis. 23

25 BALANCE SHEET December 2006 December 2005 December 2006 Change ($) Assets Cash 2,227,198 2,749, ,677 Receivables 95,378, ,291,179 27,912,535 Inventory 21,574,783 30,054,997 8,480,214 Investments 104,161, ,941, ,780,045 Other Current Assets 14,802,312 23,826,234 9,023,922 Property Net of Depreciation 1,192,978,242 1,229,069,956 36,091,714 Land & Improvements 299,301, ,615,259 (2,686,366) Rounding 0 (2) -2 Total assets and Other 1,730,424,524 1,967,549, ,124,739 Liabilities Trade Payables 42,520,012 84,294,344 41,774,332 Accrued Payroll 18,778,489 19,752, ,545 Short-term Debt 0 104,000, ,000,000 Other Current Liabilities 29,941,973 23,655,075 (6,286,898) Rounding Total Liabilities 91,240, ,701, ,460,979 Net Assets - Retained 1,639,184,049 1,735,847,810 96,663,761 Total Liabilities and Net Assets 1,730,424,524 1,967,549, ,124,739 (1) On a year to year basis, net assets increased by 5.9% to $1,736 million. 24