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Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

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Page 1: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman
Page 2: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

Dallas Area Rapid Transit

FY 2005 Business Plan

(Including FY 2005 Budget and Twenty-Year Financial Plan)

Page 3: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman
Page 4: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04)

Dallas Area Rapid Transit

Board of Directors

Officers

Huelon Harrison, Chairman City of Dallas

Mark Enoch, Vice Chairman

Cities of Farmers Branch, Garland & Rowlett

Linda Koop, Secretary City of Dallas

Angie Chen Button, Assistant Secretary

City of Garland

City of Dallas Terri Adkisson Scott Carlson

Joyce B. Foreman Beatrice Alba Martinez

Lynn Flint Shaw William M. Velasco

City of Irving Norma Stanton

City of Plano Robert Pope

Cities of Addison, Highland Park, Richardson

& University Park Raymond Noah

Cities of Carrollton & Irving

Randall Chrisman

Cities of Dallas, Plano, Glenn Heights & Cockrell Hill Faye Wilkins

Page 5: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Table of Contents

TABLE OF CONTENTS

FY 2005 BUSINESS PLAN

Section 1 – Introduction/Strategic Alignment Purpose of Business Plan…………………………………………...……...….………. SP-1 Board and Policy Direction………………………………………...……...……..……. SP-1 Exhibit 1.1: DART System Plan Map (Current & Future Services) ……...….………. SP-3 Exhibit 1.2: Interrelationship of System Plan with Other Documents…….….………. SP-4 Overview of DART’s Leadership System………………………….……...….………. SP-5 Exhibit 1.3: Relationship of Financial Standards to Sources and Uses of Cash……… SP-5 Exhibit 1.4: DART’s Leadership System and Strategic Alignment………….….…… SP-6 Management Action Plans and Performance Measurements…………………….……. SP-6 Exhibit 1.5: DART’s Strategic Plan……………………………………………..……. SP-8 Exhibit 1.6: Strategic Performance Measurements……………………………...……. SP-9 Exhibit 1.7: Standard Business Plan Development Schedule…………………...……. SP-10 Employee Performance……………………………………………..…...…...…..……. SP-10 Business Planning Process………………………………………….…...…...…..……. SP-10 Budget and Financial Plan Approval and Amendments………………...…...…..……. SP-12 Budget Basis and Presentation of Amounts and Years…………….…...…...…...……. SP-13 Related Reports……………………………………………………..…...…...……….. SP-13 Acronyms…………………………………………………………...…...…...……….. SP-13 Section 2 – Executive Summary Background………………………………………………………...…...…...….……... EX-1 Business Plan Format…………………………………………………...…...….…….. EX-1 DART-Key Performance Indicators………………………………..…...…...….…….. EX-1 Focus on the Customer – DART’s First Priority…………………...…...…...….…….. EX-2 Exhibit 2.1: DART Scorecard of Key Performance Indicators..……………….…….. EX-2 Exhibit 2.2: Total System Ridership – All Modes……………………………………. EX-3 Exhibit 2.3: Fixed Route Ridership…………………………………………….…….. EX-3 Exhibit 2.4: Strategic Initiatives to Increase Ridership………………………………. EX-4 Exhibit 2.5: Subsidy Per Passenger – All Modes…………………………………….. EX-5 Exhibit 2.6: Subsidy Per Passenger – Fixed Route…………………………….……... EX-5 Exhibit 2.7: Strategies to Improve Subsidy Per Passenger…………………….……... EX-6 Exhibit 2.8: Subsidy Per Passenger Comparison……………………………………... EX-6 Section 3 – Customer – Bus Overview…….…………………………………………………..……..……..……….. BUS-1 Bus Scorecard-Key Performance Indicators…...…………………..……...….……. BUS-1 Exhibit 3.1: Bus Scorecard-Key Performance Indicators……………..……….……... BUS-1 Bus Ridership Trends………….……..….………………………….……..….……. BUS-2 Exhibit 3.2: Trend in Dallas Area Employment…………………….……….……….. BUS-2 Exhibit 3.3: Bus Ridership……………………………………………………………. BUS-3 Service Quality/Customer Satisfaction Initiatives……….………….……..………. BUS-5 Exhibit 3.4: Eight-Year Bus Replacement Schedule………………..……….……….. BUS-7 Subsidy Per Passenger…………………………………………….…………….…….. BUS-8 On-Call Service………..………..………………………………….………….………. BUS-8 Exhibit 3.5: Bus Subsidy Per Passenger………………..…………………………….. BUS-8 Activity Center Shuttles……....…………………………………….…………..……... BUS-9 Bus Cost Model……………..………………..…………………….………….………. BUS-9 Exhibit 3.6: FY 2005 Bus Cost Model….…………..…………………….…………... BUS-9 Exhibit 3.7: FY 2005 DART Bus Transportation Cost Model-Bus Operations Only... BUS-10

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Page 6: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Table of Contents

TABLE OF CONTENTS

FY 2005 BUSINESS PLAN

Section 4 – Customer – LRT Overview………………………………………………………….…………………… LRT-1 Light Rail Scorecard-Key Performance Indicators………………...………………….. LRT-1 Exhibit 4.1: LRT Scorecard-Key Performance Indicators…..………………………… LRT-1 LRT Ridership……………………………………………………...…………………. LRT-2 Exhibit 4.2: LRT Service Map………………………………………..…….………… LRT-2 LRT Expansion…………………………………………….……….…………………. LRT-3 Exhibit 4.3: LRT Ridership…………………………………………………………… LRT-3 Exhibit 4.4: NW and SE Corridors Map……………………………………………… LRT-3 Exhibit 4.5: LRT Revenue Service Date Comparison………………………………... LRT-4 LRT Costs and Subsidy Per Passenger……………….…………….…………………. LRT-5 Exhibit 4.6: LRT Subsidy Per Passenger………….…………………………..……… LRT-6 Exhibit 4.7: FY 2005 Light Rail Cost Model….…………………………..…………. LRT-7 Section 5 – Customer – Commuter Rail & Railroad Management Overview…………………………………………………………...………………….. CR-1 Exhibit 5.1: Map-TRE Corridor……………………………..………………………... CR-1 Commuter Rail-TRE Scorecard-Key Performance Indicators.….… …………………. CR-2 Exhibit 5.2: Commuter Rail-TRE Scorecard-Key Performance Indicators…….…….. CR-2 TRE Ridership…………….…..…………………………………...………………….. CR-3 Exhibit 5.3: TRE Ridership…………………………………………………………… CR-3 Commuter Rail-TRE Costs and Subsidy Per Passenger….………..………………….. CR-5 Exhibit 5.4: TRE Capital Projects……………..……………………………………… CR-5 Exhibit 5.5: Commuter Rail-TRE Subsidy Per Passenger……..……………………... CR-5 Commuter Rail-TRE Cost Model……………………..………….….………………... CR-7 Exhibit 5.6: FY 2005 Commuter Rail-TRE Cost Model….…………………..……… CR-7 Section 6 – Customer – Paratransit Services Overview…………………………………………………………...………………….. PAR-1 Paratransit Services Scorecard-Key Performance Indicators………………………….. PAR-1 Exhibit 6.1: Paratransit Scorecard-Key Performance Indicators……………………... PAR-1 Scheduling/Control Center Service Levels……..………………….………………….. PAR-2 Paratransit Ridership………………………………………………..…………………. PAR-2 Exhibit 6.2: Paratransit Ridership……………………………………..…….………... PAR-2 Paratransit’s Productivity…………………………………………..………………….. PAR-3 Exhibit 6.3: Paratransit Passengers Per Hour.………………………………………... PAR-4 Purchased Transportation Contract………………………………...………………….. PAR-5 Paratransit Costs and Subsidy Per Passenger………………………………………….. PAR-5 Exhibit 6.4: Paratransit Total Costs and Net Subsidy………………………………… PAR-5 Paratransit Cost Model………….………………………………….………………….. PAR-6 Exhibit 6.5: FY 2005 Paratransit Cost Model………….……………………….…….. PAR-6

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Page 7: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Table of Contents

TABLE OF CONTENTS

FY 2005 BUSINESS PLAN

Section 7 – Customer –HOV/General Mobility HOV Overview……….……………………………………………….…………………… HOV-1 HOV Scorecard-Key Performance Indicators………………………………………. HOV-2 HOV Projects...…………………………………………………... ………………… HOV-2 Exhibit 7.1: HOV-Scorecard-Key Performance Indicators………………………… HOV-2 Exhibit 7.2: Interim/Immediate Action HOV Projects……..………..………….….. HOV-2 Exhibit 7.3: Map-Interim/Immediate HOV Lanes…………………..………….…... HOV-3 Exhibit 7.4: Map-Permanent HOV Lanes…………………………………..………. HOV-5 Ensure I-30 HOV Lane Opens on Time………………………….…………………. HOV-6 Stemmons HOV Gates to Improve Safety……………………….………………….. HOV-7 HOV Service Has Lowest Subsidy Per Passenger……………….………………….. HOV-7 General Mobility Overview and Vanpool Scorecard..…………………………….…………………… HOV-8 Exhibit 7.5: General Mobility Scorecard-Key Performance Indicators…………….. HOV-8 General Mobility-Road Improvement Programs……………………………………. HOV-9 LAP/CMS………………………………………………………...…………………. HOV-9 Exhibit 7.6: General Mobility-Road Improvement Programs….…………..………. HOV-9 Exhibit 7.7: Projected LAP/CMS Program…………………………………………. HOV-10 Section 8 – Agency-Wide Overview………………………………………………………….…………………… AW-1 Utilize Market Research to Increase Ridership…………………….…………………. AW-1 Exhibit 8.1: Composite Customer Survey Results……………………………………. AW-2 Provide a Safe/Secure Service……………………………………...…………………. AW-3 Exhibit 8.2: Customer Satisfaction Survey……………………………………….…... AW-3 DART Safe Work Practices Policy………………………………...………………….. AW-5 Provide Customer-Driven Service ……………………………………………………. AW-5 Improving Business Processes and Information………………………………………. AW-6 Exhibit 8.3: Strategic Initiatives to Improve Business Processes……………….……. AW-7 Exhibit 8.4: Scorecard-Improve Business Processes and Information………….……. AW-7 Exhibit 8.5: Sales Taxes for Operations……………………………………………… AW-8 Exhibit 8.6: Administrative Ratio……………………………………………….……. AW-8 Major Technology Projects to Improve Quality and Efficiency…...………………….. AW-9 Satisfied Employees Contribute to Satisfied Customers...………… ………………… AW-11 Exhibit 8.7: Strategic Initiatives to Increase Employee Satisfaction……………..…... AW-11 Promote Employee Development and Alignment………………….…………………. AW-12 Promote Excellence Through Workforce Diversity………………..…………………. AW-12 Stakeholders’ Perceptions are Critical……………………………...…………………. AW-14 Improving Customer Satisfaction/Building Relationships with Stakeholders……..………………………………………………..………………….

AW-14

Exhibit 8.8: Strategic Initiatives to Increase Stakeholder Satisfaction…………... AW-14

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Page 8: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Table of Contents

TABLE OF CONTENTS

FY 2005 BUSINESS PLAN

Section 9 – FY 2005 Budget Overview………………………………………………………….…………………… BUD-1 Sources of Funds – Explanation of Changes……………………….…………………. BUD-1 Exhibit 9.1: FY 2005 Budget……………………………….…….…………………... BUD-1 Exhibit 9.2: FY 2005 Sources of Funds….…………………………………………… BUD-1 Exhibit 9.3: FY05 Other Sources of Funds……………….…………………………... BUD-2 Exhibit 9.4: FY 2005 Uses of Funds…………..……………………..……….………. BUD-2 Exhibit 9.5: Operating Expense Budget Modal Summary………………..…….…….. BUD-3 Exhibit 9.6: FY 2003-2005 Revenue Comparison………………..……………..……. BUD-3 Operating Budget Assumptions.…………………………………… ………………… BUD-4 Exhibit 9.7: Operating Expense Budget by Category………..………………….……. BUD-5 Variance Analysis…………………………………………………..…………………. BUD-7 FY 2005 Capital Budget…………………………………………….………………… BUD-10 Exhibit 9.8: Capital and Non-Operating…………………………...…………………. BUD-10 FY 2005 Net Debt Service Budget……………………………………………………. BUD-11 Exhibit 9.9: Net Debt Service Budget………………………………………………… BUD-11 Organization Chart and Position Summary..……………………… …………………. BUD-12 Exhibit 9.10: Full-Time Salaried Position Summary-By Department………………... BUD-12 Section 10 – FY 2005 Twenty-Year Financial Plan Overview………………………………………………………….…………………… FP-1 Exhibit 10.1: FY05-09 Sources and Uses of Funds Comparison……..………….…... FP-2 Sources of Funds………………………………………………….…………………… FP-3 Exhibit 10.2: FY05-09 Sources of Funds Comparison….…………………….……… FP-3 Exhibit 10.3: Projected Sales Tax Growth Rate Components…………..……..……... FP-4 Exhibit 10.4: Projected Annual Sales Tax Receipts…….……………………………. FP-5 Exhibit 10.5: Financial Plan Cash Availability Profile……………………………….. FP-5 Exhibit 10.6: Estimated Sales Tax Receipts by Financial Plan Comparison…….…… FP-6 Exhibit 10.7: Projected Fixed Route Average Fare..………………….……….……... FP-7 Exhibit 10.8: Anticipated Capital Grant Funding………..……………………..…….. FP-9 Uses of Funds………………………………………………………………………….. FP-10 Exhibit 10.9: Operating Expenses FY05-FY09…………………………………..…... FP-10 Exhibit 10.10: Historic Growth vs. Projected Growth-Operating Expenses…………. FP-11 Capital and Non-Operating……………………………………………………………. FP-12 Exhibit 10.11: 5-Year Capital Expenditure Categories………….…………………… FP-13 Exhibit 10.12: Capital & Non-Operating Project Listing…………………….………. FP-15 Debt Program………………………………………………………………………….. FP-18 Exhibit 10.13: Projected Net Debt Issuances by Fiscal Year………………………… FP-19 Supplemental Financial Information…….…………………………………………….. FP-20 Exhibit 10.14: Debt Assumptions…………………..…..……………………..……… FP-20 Exhibit 10.15: Cash Availability Profile…………….………………………………... FP-22 Major Financial Plan Assumptions……………………………………………………. FP-23 Potential Risks and Opportunities……………….…………………………………….. FP-25

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Page 9: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Table of Contents

TABLE OF CONTENTS

FY 2005 BUSINESS PLAN

Section 11 – Appendix Exhibit 11.1: Resolutions Approving FY 2005 Budget and Twenty-Year Financial Plan………………………………………..…………….……

APX-1

Exhibit 11.2: FY 2005 Financial Standards…………..……………………….……… APX-4 Exhibit 11.3: FY 2004 Financial Plan, As Amended…....……………………..……... APX-9 Exhibit 11.4: FY05-FY09 Changes in Sources & Uses of Cash………………....…... APX-10 Exhibit 11.5: Five-Year Balance Sheet………………………………..………….…... APX-11 Exhibit 11.6: Glossary of Terms/Definitions……..……………………..……….…… APX-12 Exhibit 11.7: Acronyms……………………………………………….……….……... APX-17 Exhibit 11.8: Organization Chart through Assistant Vice-President…………..……... APX-19

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Page 10: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Introduction/Strategic Alignment

Purpose of Business Plan The FY 2005 Business Plan provides the Board of Directors, taxpayers, and elected officials of our region with a comprehensive summary of the Agency's plans and commitments to improve regional mobility, enhance the quality of life, and stimulate economic development. This document consolidates the key elements of the FY 2005 Annual Budget, the FY 2005 Twenty-Year Financial Plan, the System Plan, the Five-Year Action Plan, and the Agency's Strategic Plan. The resolutions adopting the FY 2005 Business Plan (see Exhibit APX.1) approve the funding levels for the FY 2005 Annual Budget and the FY 2005 Twenty-Year Financial Plan as required by DART's enabling legislation. Board and Policy Direction DART History – Dallas Area Rapid Transit (DART) is a regional transportation authority of the State of Texas. DART was created on August 13, 1983, by a voting majority of the citizens to organize and provide regional public transportation to its member jurisdictions pursuant to Article 1118y of Vernon's Annotated Texas Civil Statutes, as amended, and recodified into Chapter 452 of the Texas Transportation Code effective September 1, 1995. The enabling legislation allows DART to collect a one-percent sales and use tax on certain transactions. DART currently consists of the following member jurisdictions: Addison, Carrollton, Cockrell Hill, Dallas, Farmers Branch, Garland, Glenn Heights, Highland Park, Irving, Plano, Richardson, Rowlett, and University Park. The DART Service Area is approximately 700 square miles and includes approximately 2.1 million people. Mission Statement – DART’s mission statement defines the purpose for which the Agency was created:

To build, establish, and operate a safe, efficient, and effective transportation system that, within the DART Service Area, provides mobility, improves the quality of life, and stimulates economic development.

Board Goals – To achieve this mission, the Board has developed five goals which have been consolidated into three focus areas or target groups for purposes of strategic planning.

Customer Focus Provide DART's customers with services that are ever-increasing in quality,

effectiveness, and efficiency. Establish a common vision for transportation that is regionally accepted,

progressively implemented through a comprehensive system plan, and periodically revisited.

SP-1

Page 11: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Internal Focus (Employee) Foster an internal environment that promotes teamwork, empowerment,

accountability, and positive self-image. External Focus (Stakeholder) Sustain a multi-faceted outreach effort to promote dialogue with the public

on DART's goals, services, and accomplishments; and Develop and enhance coalitions with all organizations that have a vested

interest in regional transportation issues. Service Plan/Transit System Plan – DART has a Service Plan and a Transit System Plan. The Service Plan is required by DART’s legislation. It describes, in legal terms, where DART's facilities and rail alignments are physically located. DART’s Transit System Plan is a long-range planning tool that identifies and prioritizes major capital projects needed to improve regional mobility. The Transit System Plan is closely coordinated with development of the North Central Texas Council of Government’s Regional Mobility Plan and is revised every five to six years. The next revision is scheduled for completion in FY 2005 and focuses on transit needs and opportunities within the context of a 2030 horizon. The current Transit System Plan map is located at Exhibit 1.1. The affordability of the Transit System Plan and the timing of service and capital expansion projects are determined by the Twenty-Year Financial Plan, which is approved annually by the Board. Exhibit 1.2 highlights the interrelationships of the Transit System Plan with other key Agency documents. Financial Standards – DART’s Financial Standards (Exhibit APX.2) are divided into three sections: General (FS-G), Business Planning Parameters (FS-B), and Debt Service (FS-D). The purpose of the general standards is to ensure that DART prudently manages its financial affairs and establishes appropriate cash reserves. The Business Planning Parameters (BPPs) provide management with a framework for developing the following year's budget and Twenty-Year Financial Plan and establish future business targets for management to achieve. The purpose of the Debt Service standards is to limit the level of debt that may be incurred and to ensure that debt assumptions are based on financial parameters similar to (or more conservative than) those that would be placed on DART by the financial marketplace. The combination of these two policy documents provides a framework within which management can formulate strategy and action plans to maximize return on investment (i.e., increase ridership and improve subsidy per passenger). Exhibit 1.3 highlights which Financial Standards correlate with the major sources and uses of cash included in the Annual Budget and Twenty-Year Financial Plan.

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Page 12: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Exhibit 1.1 Current & Future Services

SP-3

Page 13: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Exhibit 1.2

Interrelationship of System Plan with Other Documents

DART

LINE SECTION NW-1A30% DESIGN SUBMITTAL

DART

LINE SECTION NW-1A30% DESIGN SUBMITTAL

Transit System Plan

Revis ed June 30, 1995

June 1995

Transit System Plan

Revis ed June 30, 1995

June 1995

DART/City of Dallas

Inter-Local Agreement

Including:

Supplement # 1 – Planning & ZoningSupplement # 2 – Design & ConstructionCouncil Resolution #90-2531 CBD Stations

DART/City of Dallas

Inter-Local Agreement

Including:

Supplement # 1 – Planning & ZoningSupplement # 2 – Design & ConstructionCouncil Resolution #90-2531 CBD Stations

TRANSIT ELEMENT

INTERRELATIONSHIP

IMPL

EMEN

T

CO

MM

ITM

ENT

FUN

DIN

G

FINAL DESIGN INTERLOCAL AGREEMENT BUSINESS PLAN

SERVICE PLAN

REGIONAL MOBILITY PLAN

LONG-RANGEFINANCIAL PLAN

TRANSIT SYSTEMPLAN

OTHER STUDIES

LOCATIO NSPECIFIC

PROJECT

DEFINIT

ION

FINANCIAL

CONSTRAINTS

LONG

-RA

NGE

ELEM

ENT

DART

LINE SECTION NW-1A30% DESIGN SUBMITTAL

DART

LINE SECTION NW-1A30% DESIGN SUBMITTAL

Transit System Plan

Revis ed June 30, 1995

June 1995

Transit System Plan

Revis ed June 30, 1995

June 1995

DART/City of Dallas

Inter-Local Agreement

Including:

Supplement # 1 – Planning & ZoningSupplement # 2 – Design & ConstructionCouncil Resolution #90-2531 CBD Stations

DART/City of Dallas

Inter-Local Agreement

Including:

Supplement # 1 – Planning & ZoningSupplement # 2 – Design & ConstructionCouncil Resolution #90-2531 CBD Stations

TRANSIT ELEMENT

INTERRELATIONSHIP

IMPL

EMEN

T

CO

MM

ITM

ENT

FUN

DIN

G

FINAL DESIGN INTERLOCAL AGREEMENT BUSINESS PLAN

SERVICE PLAN

REGIONAL MOBILITY PLAN

LONG-RANGEFINANCIAL PLAN

TRANSIT SYSTEMPLAN

OTHER STUDIES

LOCATIO NSPECIFIC

PROJECT

DEFINIT

ION

PROJECT

DEFINIT

ION

FINANCIAL

CONSTRAINTS

LONG

-RA

NGE

ELEM

ENT

SP-4

Page 14: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Exhibit 1.3

Relationship of Financial Standards to Sources and Uses of Cash Table

Description Where Covered Sources of Cash Sales Taxes FS-B1 Operating Revenue FS-B2 Federal Funding FS-B10 Debt FS-D1 to D7 Uses of Cash Operating Budget Fixed Route Service FS-B3 & B4 Administrative Costs FS-B6 Total Expenses FS-B5 Capital Budget Gen. Mobility-Road Improvements FS-B7 Start-up/Capital Planning Costs FS-B8 Capital Projects FS-B8 Net Debt Service Budget Debt Standards Cash Reserves FS-G5 & G7 Ending Cash FS-G6

Board Policies – The Board has a number of policies that provide direction to management for implementation. For example, the Board has policies for real estate purchases, advertising on buses, and fare structure. DART's enabling legislation requires the Board to adopt an annual budget prior to the commencement of a fiscal year. It also requires the Board to have a Financial Plan. The Financial Plan details the projected sources and uses of cash for five years and reviews the affordability of DART's currently approved Transit System Plan for a twenty-year period. The Board's Bylaws require a two-thirds vote of the appointed and qualified Board Members to approve or amend the Financial Plan. Budget and Financial Plan amendments are required for new operating programs or an increase to an existing operating program in excess of $500,000 per year and for new capital programs in excess of $1 million. Overview of DART's Leadership System DART's leadership system is based on the concept of strategic alignment. This is the process used to ensure that DART employees understand how their jobs and performance are linked to the Board's mission, direction, and goals. The leadership process is shown in Exhibit 1.4. Performance measurements are critical and are incorporated into "scorecards" at different levels of the Agency. The major components of the leadership system are described in more detail in the remainder of this section.

SP-5

Page 15: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Management Action Plans and Performance Measurements Vision Statement – To help achieve the Board's mission and goals, a vision statement was developed in FY 1997 to address the Agency's three focus groups (customers, employees, and stakeholders). The vision describes what the Agency is trying to achieve. The key statements are incorporated into the Agency's Strategic Plan (see Exhibit 1.5). DART's vision follows:

DART is a welcomed, integral part of our region. We provide quality service. Our innovative accomplishments benchmark DART as a transportation leader which is supported by a thriving internal environment.

DART Organizational Values – As an adjunct to the vision statement, six core values were developed in FY 1998 for DART's management and employees. These values demonstrate where focus and emphasis need to be placed on a daily basis. At DART, employees value being: Focused on Our Customers We are dedicated to meeting our customers’ needs We strive for continuous improvement We deliver quality

Committed to Safety We expect safety to be the responsibility of every employee We are committed to ensuring the safety of our passengers

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Page 16: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Professional We demonstrate a high regard for each other We take pride in our accomplishments We congratulate each other for our successes We honor integrity and honesty

Dedicated to Quality Performance We strive for excellence We have high expectations We hold ourselves accountable for results We coach, reinforce, and recognize our employees

Team Players We are committed and dedicated to DART We support each other We value our diversity

Good Stewards of the Public Funds We responsibly use public funds and property

Other Strategic Input – Annually, the Strategic Plan and Business Plan are modified based on an analysis of business results; the results of employee, customer, and climate surveys; external events (such as issues being considered by the Texas State Legislature); and benchmark comparisons with other transit agencies and private sector companies. Strategic Plan – The Board's mission, goals, and policy direction are integrated with the other feedback discussed above to develop and update the Strategic Plan and Business Plan. The Strategic Plan is shown in Exhibit 1.5. The Strategic Plan identifies the key initiatives that must be completed to achieve the Board's goals and the Agency's vision of success. Management is developing a leadership system whereby strategy and performance measurement drive the achievement of results and are the basis for the creation of the Business Plan. The Strategic Plan identifies what needs to be accomplished; the Business Plan defines how management intends to achieve it. The key to success is the development of performance indicators or "scorecards" that inform management how well their strategies are working. Exhibit 1.6 highlights DART's major strategic performance measurements that are used in the Agency-wide, modal, and departmental scorecards. The leading indicators are the key financial, operational, and employee performance drivers that, if achieved, will yield improved Agency-wide performance. Measurement definitions are included in Exhibit APX.6. Management's goal is to develop business and information systems that provide critical information regarding the leading indicators to key personnel so corrective or preventive action can be taken as soon as possible. The lagging indicators are more traditional in nature and typically are not available until after month-end. They measure results but do not drive performance.

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Page 17: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

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Page 18: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Exhibit 1.6

Strategic Performance Measurements Management

Objectives Key

Leading Indicators Key

Lagging Indicators Customer Focus C1 – Customer Satisfaction

* On time performance * Accidents per 100k miles * Complaints per 100k passengers * Call abandonment rates/service

levels * Response time * Miles between road calls * Missed trips

* Ridership * Passenger per mile/hour * Customer satisfaction surveys

C2 – Manage System Growth

* Revenue miles/hours * Actual schedule vs. plan for system

expansion

* Ridership * Passenger per mile/hour * Customer satisfaction surveys

C3 – Improve Efficiency

* Operator lost time claims * Unscheduled absences * Pay-to-platform ratio * Average system speed * Deadhead ratio * Timely replacement of assets

* Subsidy per passenger * Administrative ratio * Sales taxes for operations * Unused financing capacity

C4 – Improve Business Processes and Information

* Cycle time/process measurements * Project implementation vs. plan * Benchmark comparisons

* Sales taxes for operations * Administrative ratio

Internal Focus – Employee E1 - Promote Employee

Development and Alignment

* Employee verbal feedback * Number of grievances * Corrective disciplinary actions * Retention/absenteeism

* Employee Satisfaction Survey

External Focus – Stakeholder S1 – Build relationships with

Stakeholders * Complaint/commendations * Press clippings

* Climate Satisfaction Survey * Completion of TSP commitments * Joint development created

Business Plan – The Business Plan is the Agency's written document that outlines DART's performance projections and commitments for each mode of service and the Agency as a whole. The Plan includes two-year "scorecards" of key operating, financial, and quality measures and identifies the work program (i.e., initiatives) necessary to improve performance and scorecards of projected passenger and subsidy per passenger targets. The Strategic Plan and Business Plan are the basis for the FY 2005 Budget and the FY 2005 Twenty-Year Financial Plan and for measuring management and employee performance. Executive management monitors key scorecard elements and work program initiatives on a monthly and quarterly basis. Exception reporting for key scorecard elements is provided to the Board on a quarterly basis in a green, yellow, and red format. For more information on performance reporting, readers should obtain a copy of DART's Quarterly Operating and Financial Performance Report.

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Page 19: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Employee Performance A critical part of DART's leadership system is the link between the Business Plan and employee performance. DART's Senior Management Team (assistant vice-presidents and above) is held accountable for achieving or exceeding the operating, financial, and quality targets established in the Business Plan at the Agency-wide and modal levels. Scorecards and work programs are developed and cascaded down from the Agency-wide and modal levels to the department and division levels. Scorecards at the department and division levels tend to focus more on internal process measurement since continuous process improvement is one of the Agency's core values and therefore a major theme for management. The work program elements necessary to improve performance at all levels are then incorporated into individual employee Performance Management Plans (PMPs). Some PMPs may be homogeneous for an entire group and will focus on achieving the expected business results for that section (such as claims processing). Other PMPs will be project specific (or work program specific) and linked directly back to the specific initiatives in the Strategic Plan. Salaried employees review their performance with their supervisors at least two times per year to ensure that schedules are being maintained and targets are being achieved. Exceptions are noted and adjustments are made to schedules. Management places a significant amount of weight on achieving the performance expectations shown in the scorecard. The Agency uses pay-for- performance merit increases, a lump-sum bonus plan, and other incentive programs to reward employees (or groups of employees) who achieve their objectives. See the Agency-Wide section for more detail on these processes. Business Planning Process Exhibit 1.7 highlights the standard business planning compilation and approval process used at DART.

Exhibit 1.7 Standard Business Plan Development Schedule

Date Description Jan – Feb Management reviews Strategic Plan Jan – Apr Management reviews and develops Financial Standards

Apr – May Board reviews and approves Financial Standards May – Jul Staff develops Business Plan (which includes the Annual Budget

and Twenty-Year Financial Plan) for following year Jul Staff presents proposed Budget and Twenty-Year Financial Plan to

Board Aug Board approves issuance of Budget and Twenty-Year Financial

Plan to Member Cities Sep Member Cities provide input Sep Board approves Budget and Twenty-Year Financial Plan

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Page 20: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

DART takes a top-down approach to business planning. It begins with the Board's Financial Standards which establish parameters within which management must operate. The Business Planning Parameters were initiated as part of the Financial Standards in 1997. Targets are established, maintained, and highlighted throughout the document. In January, management reviews the Strategic Plan, performs an environmental scan (see Exhibit 1.4), determines projected funding levels, and establishes expected performance levels for the next several years. Next, the Board reviews the Financial Standards to determine that the business objectives are appropriate based on input from management. Typically, the Board reviews projected business and financial results, including proposed new operating and capital programs beginning in May and June. Departmental targets are set based on projections from the Twenty-Year Financial Plan and other known factors or programs (e.g., increase in health care costs or fuel). Based on the direction of senior management, departments prepare detailed budgets for each of their cost centers within the set targets. If the departments are unable to reach their set targets, a budget hearing is held with the President/Executive Director. The hearing provides an opportunity for the department head, the Executive Vice President, the President/Executive Director, and the Budget Office to discuss the respective budgets as well as any changes. All new proposed programs are evaluated for effectiveness and efficiency. The Finance Department then compiles the numbers, coordinates work programs to achieve strategies, and publishes the Business Plan for the legislatively-required 30-day comment period by DART's member cities. The Board performs additional reviews in August and September, as necessary, before it approves the Budget and Twenty-Year Financial Plan in late September. DART's legislation does not require public hearings. Capital Budgeting – Because of sales tax shortfalls during the FY 2003 Budget process, approximately $1.4 billion in approved capital projects were deleted from the Twenty-Year Financial Plan, and the Light Rail (LRT) Northwest and Southeast extensions were delayed two to three years. During the FY 2004 Budget and Financial Planning process, an additional year was added to the delay of the Phase II LRT Build-out. The FY 2005 Capital Budget and Twenty-Year Financial Plan removes the additional year of delay that was added in FY 2004, accelerates line section SE-1A an additional six months, and accelerates the second line through the Central Business District by four years. During FY 2003, it was determined that changes needed to be made to the capital project submission, review, and approval processes. In order to limit the growth of the capital program, through FY 2004 and FY 2005, any new capital project requires the approval of the President/ Executive Director. The new process is focused on ensuring that DART spends its available capital dollars on projects that provide the most benefit to the region and are done in the most cost-effective manner possible. Capital projects are prioritized based on the following criteria:

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Page 21: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Compliance with government regulations; Safety-related; Interlocal Agreement (ILA) or other prior commitment; Required to maintain existing infrastructure; Cost effectiveness.

Many dimensions of each project are required to be submitted with the project request, including: Consequences of not doing the project; Effect of the project on Customers, Stakeholders, and Employees; Compliance with long-range plans of the Agency, such as the Strategic Plan, Transit System

Plan, Twenty-Year Financial Plan, Information Technology Plan, etc. Time criticality; Life-cycle cost including capital expenditures, operating and maintenance expenses, and

revenue generation in comparison with current operations; Other potential alternatives to the proposed project and associated life-cycle costs of each

alternative; and Concurrence from all affected departments.

For certain classes of expenditures (primarily infrastructure maintenance), discreet projects cannot be specifically identified or the timing of equipment replacement cannot be accurately determined (run-to-failure equipment). In these cases, cash reserves were established for each major capital category based on historic spending patterns and projected levels of new work (see Financial Plan section). Once a specific project is identified that relates to a particular reserve, that project is given its own unique code and the reserve is reduced accordingly. According to current Board policy, any capital project that exceeds $1 million (or gives rise to more than $500,000 in annual operating expenses) requires a Financial Plan amendment (discussed below). Budget and Financial Plan Approval and Amendments The Board generally approves two resolutions prior to the start of each new fiscal year (see APX.1). The Board approves Operating Expense, Capital, and Debt Service budgets in one resolution. The Board approves a Twenty-Year Financial Plan in the second resolution.

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Page 22: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

Any major change to the Financial Plan that occurs outside of the normal approval schedule requires a Financial Plan Amendment. A major change is defined as an increase of $1 million for capital programs and $500,000 per year for operating programs (see APX.2, FS-G9) and requires the affirmative vote of two-thirds of the number of appointed and qualified members of the Board. Budget Basis and Presentation of Amounts and Years DART's Annual Budget and Twenty-Year Financial Plan are presented in the same format as prescribed by Generally Accepted Accounting Principles (GAAP), but do not include depreciation, amortization of Federal grants, or interest income and interest expense from leveraged lease transactions. Each of these non-cash transactions, however, is incorporated into the projected balance sheet included in APX.5. Schedules are presented and rounded to millions and/or thousands (as indicated), but are based on actual raw numbers. Consequently, certain schedules may not tie exactly or add due to rounding. In some cases, prior years' numbers have been restated to conform to the current year's format. All schedules are in fiscal years unless otherwise stated. Related Reports Several related reports are referenced in this document. Readers may wish to refer to these for a more comprehensive understanding of DART's plans and operations. These documents may be obtained from DART's Finance or Planning Departments.

Transit System Plan – provides detailed discussions of light rail, commuter rail, and HOV construction and service schedules, Intelligent Transportation Systems, and General Mobility commitments and time phasing. Five-Year Action Plan – provides detailed discussions of DART's plan to increase bus and rail ridership through service improvements for a five-year period. Quarterly Operating and Financial Performance Reports – provide updates on management's progress against financial and operating projections for the current year and provide status reports on ridership, planning, and capital projects in progress.

Acronyms Exhibit APX.7 is a description of acronyms used in this report.

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Page 23: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Introduction/Strategic Alignment

BLANK PAGE

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Page 24: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Executive Summary

Executive Summary

Background DART began FY 2004 with revenues from the one-cent transit sales tax declining for the third straight year. The DART Board and Management worked hard to strike the proper balance between daily operations and capital projects. Sales taxes rebounded stronger and faster than anticipated during the second half of 2003 and 2004. Between the improving economy and Management’s leadership, DART is able to present the FY 2005 Business Plan which includes:

• A recovery of the one-year delay to the Phase II LRT Build-out which was included in the FY 2004 Twenty-Year Financial Plan;

• Acceleration of SE-1A an additional six months; • The addition of selected capital projects designed to better maintain infrastructure and

benefit DART’s customers; • A restoration of some of the service cuts made in FY 2004; and • Employee compensation.

Business Plan Format The Agency's goals and Strategic Plan are based on satisfying the needs of three key groups: DART's customers, employees, and stakeholders (i.e., taxpayers and elected officials). The FY 2005 Business Plan ("FY 2005 Plan") has been organized in a similar format. Sections 3-7 cover DART's strategic business units or modes (bus, light rail transit, commuter rail, paratransit, and HOV/general mobility). These sections address DART's plans to become more effective and efficient and to provide higher quality services. Section 8 addresses improvements in meeting our customers’ needs, internal business processes and technology, and the Agency's plans to meet its employees' and stakeholders' needs. Section 9 includes variance explanations between the FY 2005 Budget and the prior year, while Section 10 covers the FY 2005 Twenty-Year Financial Plan and affordability of long-range System Plan commitments. DART Key Performance Indicators Exhibit 2.1 is the DART Scorecard of Key Performance Indicators (KPIs). Fiscal Years 2002 and 2003 are the actual values while Fiscal Years 2004 through 2006 are the budget and projected values. FY04 Q2 is a four-quarter rolling average ending March 31, 2004. Each of these indicators is discussed in more detail in this report.

EX-1

Page 25: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Executive Summary

Exhibit 2.1

DART Scorecard of Key Performance Indicators

Strategic Priority - AgencyKPI Measure FY02A FY03A FY04A FY05B FY06P

Total Ridership (M) 93.8 94.4 93.0 95.1 95.9

Fixed Route (M) 58.7 59.6 57.1 59.2 59.9

Subsidy Per Passenger - Total System $2.76 $2.69 $2.61 $2.70 $2.79

Fixed Route Subsidy Per Passenger $3.93 $3.77 $3.72 $3.79 $3.92

Administrative Ratio 11.1% 10.5% 10.0% 11.0% 10.7%

On-Time Performance - Bus 92.8% 91.7% 91.8% 92.0% 92.0%

On-Time Performance - LRT 97.0% 97.4% 97.1% 97.0% 97.0%

On-Time Performance - TRE 97.2% 96.7% 98.1% 96.0% 96.0%

Complaints Per 100,000 Passengers - Fixed Route 34.8 42.6 40.0 36.8 TBD

Complaints Per 100,000 Passengers - Bus 38.8 46.1 53.6 50.1 TBD

Complaints Per 100,000 Passengers - Light Rail 4.3 13.6 9.9 9.5 TBD

Complaints Per 100,000 Passengers - TRE 6.6 11.4 7.9 8.0 TBD

Sales Tax for Operations 77.5% 80.1% 71.3% 73.1% 71.0%

Managed Growth

Ridership

Efficiency

Service Quality

Customer Satisfaction

Focus on the Customer - DART's First Priority The Board's first goal is to improve the quality, effectiveness, and efficiency of the system. Effectiveness is achieved by increasing ridership and the number of passengers carried for each mile operated. Efficiency is achieved by reducing the net cost to move those passengers (i.e., subsidy per passenger). Effectiveness: Total System Ridership Projected to be 96.1 Million by FY 2006 – Exhibits 2.2 and 2.3 illustrate the ridership projections for total system and fixed route service. Ridership information is based on passenger boardings or trips (i.e., if a person transfers, it is counted as two trips). Total system ridership also includes paratransit, vanpool, and HOV ridership. Fixed route service includes bus, light rail, and commuter rail.

EX-2

Page 26: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Executive Summary

Exhibit 2.2

Total System Ridership – All Modes

Exhibit 2.3

Fixed Route Ridership

us system ridership has been trending downward since mid-year 2001. Following the

93.8

94.4

93.0

95.195.9

91.0

92.0

93.0

94.0

95.0

96.0M

illio

ns

FY02A FY03A FY04A FY05B FY06P

58.7

59.6

59.2 59.2

59.9

58.0

59.0

60.0

Mill

ions

FY02A FY03A FY04A FY05B FY06P

BSeptember 11, 2001 terrorist attacks, ridership declined more sharply, mirroring the national and regional economies. The top five factors contributing to continuing downward ridership trends during the past year are: economic climate; changing customer travel patterns; March 2003 fare increase; service reductions; and service quality issues.

EX-3

Page 27: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Executive Summary

Significant reductions were made to the light rail schedule in October 2003, increasing the

xhibit 2.4 is the section of DART's Strategic Plan that highlights the two management

Exhibit 2.4 Strategic Initiatives to Increase Ridership

headways from 15 minutes to 20 minutes, which had a larger impact than anticipated. A slight growth was anticipated when the target was set for FY 2004; however, there continues to be a decline in rail ridership. FY 2005 ridership is projected to grow slightly from FY 2004 actual performance and to grow higher in FY 2006. Eobjectives and nine strategic initiatives related to increasing ridership.

Increase Effectiveness Optimize Ridership

prove service reliability et services to optimize ridership2. Provide a customer friendly environment lti- 2. Develop a seamless, fully accessible mu3. Provide a safe/secure service modal system 4. Provide effective customer communication nsit services 3. Integrate new tra 4. Optimize fare structure 5. Improve passenger amen

Improve Customer Satisfaction (C1.) Manage System Growth (C2.) 1. Im 1. Mark

ities and facilities

ase fixed-route ridership (which excludes ridership from the openings of additional LRT line

fficiency: Subsidy per Passenger

Bsegments) is projected to increase approximately 1.5% per year over the next 10 years due to regional population growth, higher employment densities around stations, and management's focus on strategies C2.1, C2.4, and C2.5. These strategies provide for a seamless, fully accessible multi-modal system, concentrated marketing efforts, and improved passenger amenities and facilities. Additionally, management will focus on strategic initiatives C1.1 through C1.4, which stress service quality that is instrumental in keeping new riders once they try the system. DART's quality improvement initiatives are discussed in the modal sections. E – Subsidy per passenger is defined as operating expenses less operating revenues divided by passenger trips. Exhibits 2.5 and 2.6 compare the projections for system-wide and fixed-route subsidy per passenger. Reducing expenses, increasing operating revenues, and increasing ridership contribute to improving this ratio in FY 2004. The decrease in subsidy per passenger for all modes and fixed route was achieved through reductions of less productive bus routes and reductions to DART’s overall administrative and non-operating functions. The increase is more fully discussed in the Bus and LRT modal sections.

EX-4

Page 28: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Executive Summary

Exhibit 2.5

Subsidy per Passenger – All Modes

Exhibit 2.6

Subsidy per Passenger – Fixed Route

$2.76$2.69

$2.61

$2.70

$2.79

$2.20

$2.45

$2.70

$2.95D

olla

rs

FY02A FY03A FY04A FY05B FY06P

$3.93

$3.77$3.72

$3.79$3.92

$3.00

$3.20

$3.40

$3.60

$3.80

$4.00

Dol

lars

FY02A FY03A FY04A FY05B FY06P

Exhibit 2.7 highlights the two management objectives and ten strategic initiatives designed to improve subsidy per passenger. Management's focus over the next year will be to increase ridership, contain costs, and maximize DART’s revenue sources. These strategies are discussed in more detail in the modal sections.

EX-5

Page 29: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Executive Summary

Exhibit 2.7

Strategies to Improve Subsidy per Passenger

Increase Efficiency Improve Subsidy per Passenger

Manage System Growth (C2.) Improve Efficiency (C3.)

1. Market services to optimize ridership 1. Reduce unproductive service/ improve

productivity 2. Develop a seamless, fully accessible multi-

modal system 2. Improve employee productivity 3. Integrate new transit services 3. Reduce admin/indirect costs 4. Optimize fare structure 4. Maintain assets and improve asset management5. Improve passenger amenities and

facilities 5. Maximize resources Exhibit 2.8 compares subsidy per passenger by mode. Related discussions may be found in the modal sections.

Exhibit 2.8 Subsidy Per Passenger Comparison

Mode FY02A FY03A FY04A FY05B FY06PBus $4.12 $4.01 $3.92 $3.89 $4.07LRT $2.76 $2.95 $2.98 $3.30 $3.30TRE $7.64 $5.53 $5.65 $6.49 $6.64Total Fixed Route $3.93 $3.77 $3.72 $3.79 $3.92HOV $0.13 $0.16 $0.16 $0.16 $0.16Paratransit $41.17 $40.76 $42.14 $45.22 $46.82Vanpool $0.48 $1.07 $0.78 $0.63 $0.78Total System $2.76 $2.69 $2.61 $2.70 $2.79

EX-6

Page 30: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

Customer Focus - Bus Overview This section examines DART's strategic initiatives to improve the quality, efficiency, and effectiveness of the bus system. Each initiative is linked to the Strategic Plan (Exhibit 1.5). A more detailed description of long-term strategies for improving bus service is contained in DART’s Five Year Action Plan (Action Plan). With the customer-driven decrease in fixed-route bus service levels assumed for FY 2004, DART further reduced costs by terminating its contract with a private service provider and bringing the operation and maintenance of those routes previously operated by the contractor in-house. With the change, all fixed-route service is now provided directly by DART out of four DART-owned facilities: East Dallas, Northwest, Oak Cliff, and South Oak Cliff. DART operates a total of 691 buses and maintains a contingency fleet of 53 buses. In addition to bus, light rail, and non-revenue fleet maintenance, DART maintains an extensive passenger amenity and facility infrastructure including: 11,961 bus stops, 450 bus shelters, 1,042 benches, 14 transit centers, 2 passenger transfer locations, 19 enhanced shelters, 35 rail platforms, 5 commuter rail stations, 97 information pylons, and all operating divisions, for a total of approximately 28 million square feet. Bus Scorecard – Key Performance Indicators Exhibit 3.1 highlights the Bus Key Performance Indicators (KPIs) in scorecard format. Fiscal years 2002 thru 2004 are the actual values while fiscal years 2005 through 2006 are the budget and projected values.

Indicators FY02A FY03A FY04A FY05B FY06P

Fixed Route Bus Ridership (M) 42.4 40.3 38.4 39.5 39.9Charter Ridership (M) 0.4 0.4 0.2 0.4 0.4 Revenue Miles (M) 31.2 30.5 28.2 28.0 28.0Passengers per Mile 1.37 1.32 1.36 1.41 1.42Complaints per 100k passengers 38.8 46.1 53.6 50.1 TBDOn Time Performance 92.8% 91.7% 91.8% 92.0% 92.0%Mean Distance Between Service Calls 3,827 4,221 4,566 4,400 4,400 Veh. Accidents Per 100k Miles (All Service) 2.40 2.02 1.99 2.15 2.15Avg # Op Unsch Abs. Days 22.5 20.3 14.9 20.0 19.0

Revenues (M) $27.2 $28.3 $26.6 $28.6 $28.6Expenses - Fully Allocated (M) $205.1 $189.8 $177.2 $183.4 $192.2Net Subsidy (M) $177.9 $161.6 $150.6 $154.8 $163.6Subsidy Per Passenger $4.12 $4.01 $3.92 $3.89 $4.07Cost per Revenue Mile $6.57 $6.22 $6.29 $6.56 $6.86Pay-to-Platform Ratio - Hours n/a 1.30 1.25 1.33 1.33

Exhibit 3.1Bus Scorecard - Key Performance Indicators

Customer/Quality Indicators

Financial/Efficiency Indicators

BUS-1

Page 31: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

Bus Ridership Trends Bus system ridership has been trending downward since mid-year 2001. Following the September 11, 2001 terrorist attacks, ridership declined more sharply, mirroring the national and regional economies. The top five factors contributing to continuing downward ridership trends during the past year are:

• Economic Climate • Changing Customer Travel Patterns • Fare Increase • Service Reductions • Service Quality Issues

These are discussed in more detail in the following sections. Economic Climate: Employment trends significantly impact transit ridership because an average of 73% of all trips are taken for work commute purposes. Employment levels decreased most significantly after September 2001 and remained at lower levels into early 2003, as seen on Exhibit 3.2. Area employment levels have been slowly improving since early 2003, although unemployment rates within the City of Dallas continue to be in the 7% range. During the last period of significant ridership growth for the bus system, unemployment rates were in the 3-4% range. This trend can be seen in Exhibit 3.3. Exhibit 3.2 provides a look at Dallas area employment trends since February 2001.

Exhibit 3.2Trend in Dallas (PMSA) Area Employment

February 2001 - April 2004

91.5%

92.5%

93.5%

94.5%

95.5%

96.5%

97.5%

Feb

Apr

Jun

Aug

Oct

Dec Feb

Apr

Jun

Aug

Oct

Dec Feb

Apr

Jun

Aug

Oct

Dec Feb

Apr

FY 2001 FY 2002 FY 2003 FY 2004

BUS-2

Page 32: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

Exhibit 3.3 shows the trend in bus ridership over a similar period to the unemployment levels in our service area shown in Exhibit 3.2.

Exhibit 3.3Bus R idership

40.239.8

41.641.0

38.640.7

42.8

36.0

37.0

38.0

39.0

40.0

41.0

42.0

43.0

44.0

FY 02A FY 03A FY 04A FY 05B FY 06P

Mill

ions

FP05 FP04

Travel Pattern Changes: Bus system ridership also decreased as a result of rail system expansion. Analyses of ridership changes since the December 2002 extension of the light rail transit (LRT) to Plano and Garland indicate that 46% of the decrease in bus ridership throughout the 2003 calendar year was directly attributable to bus routes eliminated within the new rail corridors. Fare Increase: A third factor having some impact on bus ridership is the change in fare structure and fare levels. In September 2001, free transfers were eliminated and the bus day pass was introduced. While this change had minimal impact on passengers making a round trip, it had some impact on riders making one-direction, multi-bus trips and fare evaders. In March 2003, DART increased base fares by 25%, anticipating a 5% reduction in ridership. However, it appears only 2-3% of the ridership decrease is attributable to the fare change. Service Reductions: Reductions in bus and rail service levels were implemented in October 2003 to meet DART’s Service Standards and to achieve FY 2004 Budget targets. Poorly performing and less efficient routes were targeted for elimination or modification. Bus system miles and hours were reduced by approximately 10%. Because the least efficient service was impacted, ridership was affected much less than the service level itself. A 2% decrease in ridership appears to be attributable to the service reductions, which is consistent with projections made prior to the implementation of the service changes.

BUS-3

Page 33: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

Customer Perception of Service Quality: Levels of customer dissatisfaction, as measured by complaints received per 100,000 riders carried, have increased significantly over the past two years. In the fourth quarter of FY 2002, there were 38.8 bus complaints per 100,000 passengers. In FY 2004, that number increased to 53.6, an increase of 38.2%. Contributing factors include:

• The deterioration of privately operated and maintained buses during the final year of service by the fixed-route service contractor.

• Some decrease in service quality during the transition from contract-provided service to in-house operation.

• More discretionary riders, who have higher expectations in terms of service quality. Ridership Development Action Plan In response to the continuing downward trends in ridership, a comprehensive set of strategies has been developed focused on retaining current riders and developing new ridership. The Action Plan includes:

• Expanded Service • Service Quality/Customer Satisfaction Initiatives • New Fare Payment and Pass Programs • New Marketing and Promotion Initiatives • New Equipment and Facilities

Expanded Service Planned service improvements in FY 2005 include the opening of a new transit center in South Dallas. This transit center facility is scheduled to open in January 2005 near Trunk Avenue and Martin Luther King, Jr. Blvd. The transit center will initially serve as a hub for connecting bus services in the South Dallas area and will become a rail station with the opening of the SE-1 line section of the Southeast LRT Line. In FY 2005, bus routes will be modified to serve the new transit center, and schedules will be adjusted to provide a convenient schedule pulse to minimize passenger transfer wait times. In addition to the service improvements associated with the new transit center, modifications will also be made to improve on-time performance and transfer connections throughout the system.

BUS-4

Page 34: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

Service Quality/Customer Satisfaction Initiatives There are two related efforts underway.

• The customer input sources (customer satisfaction surveys, quality assessments, and customer complaints) have been used to identify the five most critical customer service issues: vehicle operation, bus timeliness, operator courtesy, security, and pass-bys. Cross-departmental teams have developed service quality improvement strategies and instigated an on-going implementation tracking process. Through FY 2005, DART will continue to implement these strategies and measure their impact on customer satisfaction.

• An operating division-level measurement, reporting, and improvement system has been

developed and rolled out to the East Dallas and Northwest Divisions as of June 2004. The remaining divisions are expected to be completed by September 2004. The purpose of the initiative is to provide feedback to all team members about how their division is performing on key indicators – which they have some ability to impact – and to increase employee ownership of organizational objectives (Key Performance Indicators [KPIs]). Descriptions of these strategies are provided below.

Addressing Key Customer Concerns (Strategy C4.4) – DART has three processes to

gather customer feedback: customer complaints, customer satisfaction surveys, and quality assessments. Based on information from these sources, management has developed detailed action plans to address five key customer concerns: vehicle operation, bus timeliness, operator courtesy, security, and pass-bys. Additionally, measurement systems have been created to track action plan implementation and performance improvements. Executive management will monitor progress in these five key areas at monthly Customer Satisfaction Committee meetings and report to the Board through the Quarterly Operating and Financial Performance Report, as well as through periodic briefings.

Division-Centered Performance Monitoring and Improvement (Strategies C1.1; C1.2; C3.1; C3.2) – Improving bus service quality will require the active participation and commitment of front-line employees. While KPIs provide management and the Board with an overall scorecard for Agency performance, it is often difficult for front-line staff to relate their daily job performance to those KPIs. To improve front-line employee ownership and participation in meeting Agency performance goals, performance reporting has been initiated at the operating division level for key areas on which front-line employees have the most impact. These areas include: service reliability/timeliness, courtesy, safety, security, ridership, and efficiency.

BUS-5

Page 35: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

Scorecards tailored to each operating division will be posted monthly to provide feedback on performance to front-line staff. Targeted performance levels have been established at the division level and recognition programs are being developed. Problem-solving teams that include front-line employees, division management, and support personnel from other DART departments focus on developing and implementing strategies to improve division performance.

New Fare Payment and Pass Programs Strategy C1.2; C2.4) – DART is in the process of installing new fareboxes that issue and monitor electronic fare media. The project covered several years and required significant coordination with many different functional areas within DART. The installation process began with the outfitting of all buses operating at the East Dallas facility; the entire fleet is scheduled to be converted by October 2004. The new electronic media will replace the visually validated fare media currently in use. The conversion to the new media will be introduced to the public in phases beginning in 2004 and should be completed by 2006. The new media should not only reduce fare evasion, but should also provide DART with significantly better ridership data. More detailed ridership information will allow DART to be more responsive to customer needs by more effectively monitoring ridership trends and patterns and continually evaluating various programs. The new electronic media will also allow for the introduction of multi-day and weekly passes that provide added flexibility and value for our customers. The new Residential Annual Pass program and the Secondary School Annual Pass program will be officially introduced into the marketplace during the fourth quarter of FY 2004. The photo ID pass programs will be introduced by conducting a direct mail campaign and a telemarketing/ direct sales effort. New Equipment and Facilities (Strategy C2.5)

• NABI Buses – DART started receiving new buses from North American Bus Industries (NABI) in Anniston, Alabama in May 2004. As of mid-August 2004, 75 of the 80 buses have been received. These buses will be configured to support our express service operation, and complete the planned eight-year fleet replacement program.

• Automated Vehicle Locators (AVL) System Upgrade – DART will be upgrading its AVL system as part of a planned upgrade of its current Global Positioning System (GPS). This upgrade of the GPS will provide more frequent and reliable reporting of vehicle location to Central Dispatch, allowing DART to provide improved on-time service to bus riders. This upgrade will also facilitate the future development of systems to provide customers with “next bus arrival time” information.

• On-Street Bus Facilities Program – The on-street bus facilities program, also called the amenities program, includes installation of the following improvements:

1,300 total bus stops and ADA-related pads, curb cuts, and sidewalk improvements

over the next five years.

BUS-6

Page 36: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

250 new bench installations each year for the next five years, the majority of which will be new style metal benches with backs, arm rests, and lumbar support.

The completion of 230 new shelter units by the end of FY 2005, with 115 shelters installed annually in the following four years.

Three additional enhanced/special design bus shelters annually at locations such as Parkland Hospital and other on-street locations with over 1,000 daily boardings. An example of a special design shelter is 912 Commerce, a cooperative project of Belo, DART, and McDonald’s.

Completion of the Elm/Lamar Patron Plaza in FY 2005. Land has been purchased, design is underway, and a $374,000 federal grant has been secured.

Bus Replacement Schedule (Strategy C3.4) – Mechanical failures during operating hours can significantly impact on-time performance. This is measured by "Mean Distance Between Service Calls" (see Exhibit 3.1). DART is working to maintain an average fleet age of six to seven years while attempting to balance the remaining capital program commitments. The FY 2005 average age of the bus fleet is six years. Management Strategy C3.4 (Replace assets on a timely basis) is important from both a cost and quality standpoint. Exhibit 3.4 is the current bus replacement schedule for the next eight years.

Exhibit 3.4 Eight-Year Bus Replacement Schedule

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

0 0 0 23 0 245 0 253 The total active bus fleet is projected to remain steady at approximately 691 buses with a consistent peak pull-out requirement of 575 buses throughout the term of this Plan. In an effort to remain ready to respond to a recovering economic climate and the need for additional service, DART will maintain a fleet of 53 buses in a reserve fleet. This fleet, which will be maintained in a “ready” state, is available for deployment as additional services are warranted. Provide Environmentally Friendly Services (Strategy S1.8) – The Agency is committed to providing environmentally friendly services. DART continues its transit industry leadership by expanding its fleet of clean, reliable, and efficient vehicles. Of DART’s 744 buses, 699 (or 94%) are classified as Texas “clean-fuel” fleet vehicles. All but 45 of these buses exceed state and federal emission standards through the use of liquefied natural gas, ultra-low sulfur diesel, and exhaust-gas recirculation coupled with particulate filters. DART continues to work within the transit industry along with state authorities to develop and deploy other emissions-reducing technologies. Both the Federal Transit Administration, through its bus procurement processes, and the Texas Commission on Environmental Quality have sponsored grants to provide the resources for DART, in cooperation with equipment and fuel suppliers, to deploy technology that has substantially reduced nitrogen oxide (NOx) emissions of its fleet over the last eight years.

BUS-7

Page 37: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus These efforts have eliminated almost 960 tons of NOx emissions annually from the DART bus fleet. DART remains committed to its goal of deploying zero-emissions buses in 2010. Until then, we will continue to deploy technologies that emit the lowest emissions possible while still maintaining the reliability of our service. We will also continue to work with other industry leaders to further refine the infant zero-emissions technologies that exist today. Subsidy Per Passenger Exhibit 3.5 is a comparison of projected bus subsidy per passenger between the FY 2004 and FY 2005 Financial Plans. The increase in subsidy per passenger between the two years plans are related to the projected increases in fuel costs, increased employee wage and benefits costs, and the reduced number of bus passengers.

Exhibit 3.5Bus Subsidy Per Passenger

$4.12

$3.92$4.07

$3.89

$4.01

$3.67

$3.64$3.50

$3.60

$3.70

$3.80

$3.90

$4.00

$4.10

$4.20

FY02A FY03A FY04A FY05B FY06P

Dol

lars

FP05 FP04

Fuel/Energy Costs – DART continues to explore purchasing options for the different types of fuels used in delivering our services. DART has enjoyed favorable pricing of both its liquefied natural gas and electricity through multi-year fixed-price contracts. These contracts, as well as competitively-priced diesel fuel contracts, will expire during FY 2005. While the FY 2005 budget can support increases to current market-price levels, DART continues to explore alternative methods of meeting its energy needs. On-Call Service (Strategy C3.1) On-Call service is provided in areas that do not meet service-planning, ridership, and efficiency standards for traditional fixed-route service. Use of demand response vans instead of larger buses operating on a defined schedule saves more than $2 million annually for the Agency.

BUS-8

Page 38: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus

DART currently has seven DART On-Call zones in operation throughout the Service Area. Five zones are operated by ATC under the oversight of the Paratransit Services staff. Two additional zones are operated through agreements with rural transit providers for Collin County and Hunt County. Activity Center Shuttles (Strategy C3.1) Shuttle services developed in partnership with employers and major activity centers are another cost-reducing way for DART to provide access to the transit network. Under the Board’s Site Specific Shuttle Policy, DART provides up to 50% funding for these shuttle services with employers or major activity centers funding the majority of the service cost. DART has existing shuttle agreements with Southern Methodist University, U.T. Southwestern Medical Center, DFW International Airport, McKinney Avenue Trolley Authority, Texas Instruments, Medical City of Dallas, Campbell Center, and Crescent Real Estate (Galatyn Shuttle). Additional shuttle service opportunities will be pursued in FY 2005. Bus Cost Model Exhibit 3.6 is the cost model for the bus system. Transportation cost is the most significant element of the bus mode. The majority of this cost element is directly related to bus operator pay and benefits. Consequently, many of the strategies to reduce costs revolve around efficient use of bus operators.

$183.4 million*

- Marketing Services

- Quality standards - Materials Management- DART Police

- Scheduling- Real Estate

$82.7 million $68.2 million $6.7 million45.1% of total cost 37.2% of total cost 3.7% of total cost

$25.7 million*Total FY05 Bus costs, which include $19.5 million for administrative overhead allocation. 14.0% of total cost

Bus

- Workers' compensation/Benefits

TransportationVehicle

Maintenance

- Age of fleet

- Number of hours- Average hourly rate- Number of operators

- Work rules

- Fuel Costs

- Scheduled/Unscheduled Work

Cost Drivers Cost Drivers

- Number of supervisors

- Timely asset replacement

- Quality Standards

Cost Drivers- Number of miles- Number of vehicles

Exhibit 3.6

- Customer Service

- Retail Sales

AllocatedCosts

FY 2005 Bus Cost Model

FacilityMaintenance

- Facility type/age- Number of facilities

- Safety/Risk

- Customers served

- Timely asset replacement

Cost Drivers

- Revenue Systems

BUS-9

Page 39: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Bus Exhibit 3.7 is a further refinement of the bus model for transportation only. Management closely monitors the key indicators shown in the blue boxes (shaded). The deadhead ratio (Strategy C3.1) measures the percentage of revenue miles to non-revenue miles scheduled. Scheduled miles per hour measures the average speed of the vehicle. By nature, these measures require long periods of time to adjust. Service Planning attempts to optimize these ratios with each change in service. Pay-to-platform compares the total pay hours to the hours actually operating the vehicle (i.e., "time behind the wheel" or platform time). Total pay hours include platform time, scheduled and unscheduled overtime, absences, and administrative and training time. Average pay rate is total operator pay (including overtime pay) divided by total pay hours. The benefits ratio includes all paid benefits, including workers' compensation, health, and retirement plans, but excludes paid absences (since these are already included in the pay-to-platform ratio). The overall goal is to eliminate inefficiencies.

Deadhead ratio 18.62%

Pay-to-Platform RatioScheduled Miles per HourDeadhead Ratio

1.33 PTP Hours (Bus Only)

- Layover time

- Peak to base ratio

- Facility location

- HOV lanes

- Route planning

10.8% Turnover Rate

$16.68 Avg Pay Rate

1,330 FT Operators & 40 PT Operators

41.8% Benefits Ratio

Exhibit 3.7FY 2005 DART Bus Transportation Cost Model

Bus Operations Only

Revenue Total Pay Total Pay w/BenefitsMiles

TotalMiles

PlatformHours

- No. of employees

HoursTotal Pay

Dollars

15.4 Mph System Avg. Speed

Average Pay Rate Benefits Ratio

- Route planning

- Recovery time

- Workers' comp

- Light Duty

- No. of employees

- Turnover

- Absences

- Incentive Pay

- Training- Bus type/location

Avg Sunday run Time: 10 hours 05 mins

Avg weekday run time: 9 hours 14 mins

Avg Saturday run time: 9 hours 50 mins

- Health Benefits

- Retirement Plans

- Work rules

- Avg run time

- Training/admin

BUS-10

Page 40: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

Customer Focus – Light Rail Transit Overview The purpose of this section is to provide information on DART's strategic initiatives to improve the quality, efficiency, and effectiveness of the Light Rail Transit (LRT) system. References to DART's Strategic Plan are included throughout this section. The 20-mile LRT Starter System opened in three phases from June 1996 through May 1997. The 24-mile extension from Mockingbird Station to Downtown Garland (the Northeast Corridor), and from Park Lane Station to Richardson and Plano (the North Central Corridor), were completed in November 2002 and December 2002, respectively. A 1.5-mile extension to Victory Station (NW-1A) is projected to open in November 2004. DART is in various stages of planning or preliminary design for 48 additional miles of LRT that will extend Southeast from the Dallas CBD through Deep Ellum and Fair Park to the Buckner Station; and Northwest from Victory Station to Farmers Branch, Carrollton, and Irving; as well as extensions from Downtown Garland Station to Rowlett and from Ledbetter Station to I-20 in South Oak Cliff. The Agency currently is operating and maintaining 35 rail platforms and a fleet of 95 vehicles, which is adequate to cover the service needs through FY 2005. An additional 20 cars will be deployed in FY 2006. A map of the current LRT system is included at Exhibit 4.2. DART’s Service & Inspection Facility will be expanding to support and operate the additional fleet required for the new line sections. Construction will commence at the end of calendar year 2004. A new rail operating facility currently is under design to support future vehicle requirements for build-out Phase II. LRT Scorecard – Key Performance Indicators Exhibit 4.1 highlights LRT's Key Performance Indicators (KPIs) in scorecard format. Fiscal years 2002 and 2004 are the actual values while fiscal years 2005 through 2006 are the budget and projected values.

Indicators FY02A FY03A FY04A FY05B FY06P

Ridership (M) 13.7 17.0 16.5 17.2 17.5 Revenue Car Miles (M) 3.9 5.7 5.1 5.2 5.4 Passengers per Car Mile 3.51 3.00 3.25 3.32 3.24On Time Performance 97.0% 97.4% 97.1% 97.0% 97.0%Complaints per 100k passengers 6.6 13.6 9.9 9.5 TBDMean Distance Between Service Calls (000s) 6 37 39 42 42Accidents per 100k Miles 0.37 0.32 0.26 0.36 0.36Avg # of Op. Unsched Absence Days 12.5 28.7 19.2 21.0 21.0

Revenues (M) $9.5 $12.4 $12.5 $13.0 $12.8Expenses - Fully Allocated (M) $47.7 $62.4 $61.6 $69.8 $70.4Net Subsidy (M) $38.2 $50.1 $49.2 $56.8 $57.6Subsidy Per Passenger $2.76 $2.95 $2.98 $3.30 $3.30Subsidy Per Passenger Mile n/a $0.48 $0.37 $0.40 $0.40Cost per Revenue Car Mile $12.20 $11.02 $12.17 $13.45 $13.04Pay- to- Platform Ratio - Hours 1.55 1.35 1.31 1.39 1.39

Exhibit 4.1Light Rail Scorecard - Key Performance Indicators

Customer/Quality Indicators

Financial/Efficiency Indicators

LRT-1

Page 41: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

Exhibit 4.2

LRT Service Map

LRT Ridership Exhibit 4.3 reflects LRT ridership from FY 2002 through FY 2006. The significant increases in ridership in FY 2002 and FY 2003 were related to service expansion to the north and northeast through Dallas to Garland, Richardson, and Plano. Key factors impacting LRT ridership projections for FY 2004 and FY 2005 include the annualization of ridership for the section openings in FY 2003, the October 2003 reduction of midday service frequency from every 15 minutes to every 20 minutes, and the opening of the NW-1A line section that will extend LRT service to Victory Station in November 2004. Overall, LRT ridership in FY 2005 is expected to increase moderately from FY 2004 actual performance and grow higher in FY 2006.

LRT-2

Page 42: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

Exhibit 4.3 LRT Ridership

18.2

13.7

17.0

18.4

16.5

17.517.2

13.0

14.0

15.0

16.0

17.0

18.0

19.0

FY02A FY03A FY04A FY05B FY06P

Mill

ions

FP04 FP05 Plan

LRT Expansion (Strategy C2.3) The next major expansion of LRT to the Northwest (NW) is planned for Dallas, Carrollton, Farmers Branch, Irving, and Southeast (SE) to Deep Ellum, Fair Park, and Pleasant Grove (see Exhibit 4.4). Exhibit 4.5 provides a comparison of the revenue service dates for these two extensions. Ridership forecasts project approximately 60,000 combined daily riders in Year 2025 on the NW LRT line to Farmers Branch and Carrollton and the SE LRT line to Pleasant Grove.

Exhibit 4.4 NW and SE Corridors

LRT-3

Page 43: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

Exhibit 4.5

LRT Revenue Service Date Comparison

Line Section FY04 Financial

Plan Revenue Service

FY05 Financial Plan Revenue

Service Phase II

SE-1 Dec 2010 Jun 2009 SE-2 Dec 2011 Dec 2010

NW-1B Dec 2010 Dec 2009 NW-2 Dec 2011 Dec 2010 NW-3 Dec 2011 Dec 2010 NW-4 Dec 2011 Dec 2010 IRV-1 Dec 2012 Dec 2011 IRV-2 Dec 2013 Dec 2012 IRV-3 Dec 2014 Dec 2013

Rowlett Dec 2013 Dec 2012 NW Op. Facility Jun 2011 Jun 2010

Phase III CBD Jun 2017 Jun 2013

SOC-3 Oct 2018 Oct 2018 The opening dates above are predicated on assumptions that are detailed in the Financial Plan section. Victory Station (Strategy 2.3) – DART’s next LRT extension opens in November 2004 with special-event service to the new Victory Station at American Airlines Center. The projected cost for the station and alignment of $79 million is included in the Financial Plan. These funds have been advanced from the Northwest Corridor budget. Future LRT Expansion Costs (Strategy 2.3) – The future cost of LRT expansion is approximately $3.1 billion. To finance this construction plan, DART projects that it will issue approximately $2.4 billion of long-term debt and receive approximately $700 million of Federal funds. As part of the approval of the NW corridor through Irving, the City of Irving agreed to fund $60 million (in 1999 dollars) of the incremental cost of moving the line from the Mañana Spur to the "University of Dallas/Texas Stadium" alignment. These revenues have been programmed into the Financial Plan from FY 2010 through FY 2012 to coincide with construction of the line. See Financial Plan section for more detail. Love Field – The current LRT build-out plan includes two alternatives near Love Field. One alternative utilizes the existing right-of-way with provisions for a future connection to Love Field. The other alternative shows the LRT alignment running under Love Field at an additional cost of $160 million (in FY 2002 dollars) for a tunnel and station. Of this amount, DART is responsible for $20 million, and $140 million would be funded externally, by the City of Dallas and other sources. DART and the City of Dallas executed an Interlocal Agreement (ILA) outlining conditions that must be met for the Love Field tunnel alternative to be selected. These conditions include commitment of all external funding sources by September 30, 2004 (this date represents an extension of the original June 30, 2004 ILA deadline).

LRT-4

Page 44: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

Light Rail Vehicle Business Systems (VBS) – This initiative includes outfitting the light rail vehicles with GPS, automatic passenger counters, automatic voice announcements, mobile data terminals, wireless LAN, and real-time wireless communications. The VBS will be the infrastructure for providing real-time information to customers and rail operations. Other proposed features of the system include interfaces to the Supervisory Control and Data Acquisition (SCADA) system and the Public Announcement Visual Message Boards (PAVMBs). The first VBS implementation was in Paratransit Services vehicles in 2001. Light rail VBS is the next deployment of on-board intelligent information systems. Transit System Plan – DART’s Transit System Plan is a long-range planning tool that identifies and prioritizes major capital projects needed to improve regional mobility. The Transit System Plan is closely coordinated with development of the North Central Texas Council of Government’s Regional Mobility Plan. The Board of Directors adopted the current Transit System Plan in November 1995. The 1995 Plan was an update of the 1989 Plan, both of which were oriented toward a horizon year of 2010. The Plan was updated in 1997 to allow for the acceleration of the DART North Central and Northeast rail extensions and again in August 2000 following a public vote authorizing long-term financing to accelerate the Northwest and Southeast Corridor extensions. The current update effort focuses on transit needs and opportunities within the context of a 2030 horizon, and is scheduled for completion in FY 2005. LRT Costs and Subsidy Per Passenger Develop and Refine LRT Preventive Maintenance Programs (Strategy C3.4) – DART has extensive vehicle and facility preventive maintenance campaigns in place. Preventive maintenance is an essential component of a strategy, which has allowed the Agency to achieve an average of 39,000 or more car miles without a failure through FY 2004. The FY 2005 Budget includes work programs for light rail vehicle (LRV) brakes, suspension systems, and pantographs. In addition, consistent with the Maintenance Department’s five-year business plan, the Capital Budget includes a five-year schedule for Original Equipment Manufacturer (OEM) required rebuild and overhaul work programs for the entire LRV fleet of 95 vehicles. Develop Strategic Partnerships with Suppliers (fuel, parts, services) (Strategy C4.3) – DART has enjoyed favorable electrical traction power costs over the last three years due to the deregulation of electrical service providers in Texas. As one of the first of the large users to contract for such services, DART was able to secure a fixed-rate cost, saving in excess of $12 million in the last three years over the comparable price-to-beat rate. This contract expires in FY 2005, and DART anticipates a substantial increase in cost, likely to be approximately 27% higher than our current incremental price. However, DART is exploring an Interlocal Contract with the Texas General Land Office (GLO) to be the provider of electricity needs. This item will be brought to the Board for approval in 2004. The pricing options with the GLO are being explored to secure the best balance of price and risk for our electrical energy needs for the next five years.

LRT-5

Page 45: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit Exhibit 4.6 compares subsidy per passenger for LRT for FY 2002 through FY 2006. The increases shown from the FY 2004 Twenty-Year Financial Plan and the FY 2005 Twenty-Year Financial Plan are due to the increased cost of electricity, increased employee wage and benefits costs, and a reduced number of passengers.

Exhibit 4.6 LRT Subsidy Per Passenger

$2.76 $2.81

$3.30 $3.30

$2.98$2.76

$2.95

$2.50$2.70$2.90$3.10$3.30$3.50

FY02A FY03A FY04A FY05B FY06P

FP05 FP04

Exhibit 4.7 highlights the cost structure for LRT. Although LRT and bus have very different cost structures, the cost drivers for each cost category (transportation, vehicle maintenance, and facility maintenance) are similar. LRT is more expensive per mile due to higher fixed costs for facilities, but less expensive per passenger due to the higher capacity of LRT vehicles versus buses. On a relative basis, facility maintenance costs are more significant, while transportation costs are less significant. For example, rail facility maintenance costs represent 36.7% of the total LRT cost structure – versus only 3.6% for bus. Transportation costs, on the other hand, represent only 17.0% of the total LRT cost structure – versus 45.6% for bus. For a full comparison, contrast the bus cost model from Exhibit 3.6 with the LRT cost model (Exhibit 4.7).

LRT-6

Page 46: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

Exhibit 4.7

FY 2005 Light Rail Cost Model

Light Rail$69.8 million *

Cost Drivers Cost Drivers Cost Drivers

$11.9 million $14.3 million $25.6 million17.0% of total cost 20.5% of total cost 36.7% of total cost

AllocatedCosts

Major Allocations- Customer Service - Information Technology Svcs- Retail Sales - Revenue Systems- Marketing Services - Safety/Risk Management- Materials Management - Scheduling- Operations Technology - Real Estate- DART Police and Fare Inspection

$18.1 million25.9% of total cost

* Total FY 2005 LRT costs, which include $7.4 million for administrative overhead allocation.

Vehicle Maintenance ROW & Facility Maintenance

- Number of hours - Facility type/age

- Number of operators/supv- Work rules- Pay-to-platform

Transportation

- Unscheduled absences- Paratransit Services

- Number of miles- Number of vehicles- Quality standards- Timely asset replacement- Traction power

- Average hourly rate

- Timely asset replacement

- Number of facilities- Customers served- Quality standards- Miles/type of track

LRT-7

Page 47: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Light Rail Transit

BLANK PAGE

LRT-8

Page 48: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

Customer Focus – Commuter Rail & Railroad Management Overview The purpose of this section is to highlight the Commuter Rail & Railroad Management Business Plan for the next five years, including the key indicators and strategic initiatives. References to DART's Strategic Plan are included throughout this section. Passenger service is provided jointly with the Fort Worth Transportation Authority ("the T") pursuant to an Interlocal Agreement (ILA) which was restated by the two transit authorities in September 2003. The Trinity Railway Express (TRE) is operated on a rail line that was formerly owned by the Cities of Dallas and Fort Worth (the Cities) and transferred to DART and “the T” in December 1999. Exhibit 5.1 is a map of the TRE corridor. Pursuant to Trackage Rights Agreements, the Burlington Northern Santa Fe (BNSF) railroad and the Union Pacific (UP) railroad pay a fee for operating freight services on the corridor. In May 2000, TRE assumed corridor maintenance responsibilities from BNSF then assumed dispatch responsibilities in January 2001. DART and “the T,” acting as the TRE, have jointly contracted with Herzog Transit Services, Inc. (Herzog) to maintain and operate the commuter rail vehicles and the corridor. The Department’s Railroad Management Division has responsibility for management and maintenance of all DART-owned active freight rail lines, as well as the property management responsibilities for the TRE corridor. The Division is also responsible for administering trackage rights agreements with freight railroads, and coordination with, and oversight of, those freight railroads that are fulfilling DART’s common carrier obligations in DART-owned corridors. The Regional Rail Right-of-Way Company, a wholely-owned subsidiary of DART, holds the common carrier authority, and manages the trackage rights agreements for the DART-owned active freight rail corridors. The Railroad Management Division undertakes management of the trackage rights agreements, and collects the associated fees for these corridors on behalf of the Regional Rail Right-of-Way Company.

Exhibit 5.1 Trinity Railway Express Corridor

CR-1

Page 49: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

Commuter Rail Infrastructure – The TRE is 35 miles and operates between downtown Dallas and downtown Fort Worth with a total of 10 stations, 5 of which are maintained by DART. The vehicle fleet consists of 13 rail diesel cars, 6 locomotives, 10 coaches, and 7 bi-level cab cars. Commuter Rail – TRE Scorecard – Key Performance Indicators Exhibit 5.2 highlights Commuter Rail – TRE’s Key Performance Indicators (KPIs) in scorecard format. Fiscal Years 2002 and 2003 are the actual values while Fiscal Years 2004 through 2006 are the budget and projected values. Fiscal Year 2004 quarter 2 is a four-quarter rolling average ending March 31, 2004. To more accurately depict the true operating costs of TRE, the FY 2005 and 2006 information includes all revenue collected and all expenses incurred. The TRE Revenues line now includes the T’s passenger revenues allocated to the TRE; and the TRE Expenses line includes all direct and indirect costs allocated to TRE including the T’s allocated costs of $1.0 million. By including all revenues and expenses, the information presented will provide the reader with data comparable to all other modes. Currently, ridership is collected and reported for the TRE system and not by each transit authority; therefore, KPIs associated with ridership will be calculated as TRE and not DART. Until we have four rolling quarters of cost experience with this data, the KPIs will require additional detailed explanations of any discrepancies. The decrease in revenues projected in FY 2006 from FY 2005 is due to lower corridor rental income.

Indicators FY02A FY03A FY04A FY05B FY06P

Ridership (M) 2.2 2.3 2.2 2.1 2.2

Revenue Car Miles (M) 1.6 1.6 1.3 1.4 1.4

Passengers per Car Mile 1.4 1.5 1.6 1.5 1.6

Scheduled Train Hours (000's) 16.8 22.0 19.3 20.3 20.3

On Time Performance 97.2% 96.7% 98.1% 96.0% 96.0%

Complaints per 100k passengers 6.6 11.4 7.9 8.00 TBD

Missed Trips 24 9 9 15 15

Veh. Accidents Per 100k Miles 0.11 0.28 0.26 0.31 0.31

TRE Revenues (M) $4.2 $4.9 $5.7 $6.0 $5.5

TRE Expenses Fully Allocated (M)* $21.0 $17.8 $17.9 $19.9 $19.9

Net Subsidy (M) $16.9 $13.0 $12.2 $13.9 $14.5

DART Net Expenses $5.6 $5.1

TRE Subsidy Per Passenger $7.64 $5.53 $5.65 $6.49 $6.64

TRE Subsidy Per Passenger Mile n/a $0.31 $0.34 $0.40 $0.41

TRE Cost per Revenue Car Mile $13.36 $11.45 $13.49 $14.21 $14.23

DART Cost per Revenue Car Mile $8.15 $7.53

* $1.0 million - FWTA allocated costs in FY05 and FY06

Exhibit 5.2

Commuter Rail - TRE Scorecard Systemwide - Key Performance Indicators

Customer/Quality Indicators

Financial/Efficiency Indicators

CR-2

Page 50: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail TRE Ridership Exhibit 5.3 reflects TRE ridership from FY 2002 through FY 2006.

Exhibit 5.3 TRE Ridership

2.182.14

2.34

2.18

2.16

2.23

2.20

2.0

2.1

2.2

2.3

2.4

FY02A FY03A FY04A FY05B FY06P

Mill

ions

FP05 FP04

Since opening in December 1996, actual TRE ridership has more than doubled the original projection. Management attributes this increase to excellent service quality with a special focus on the customer. Ridership grew steadily to more than 8,000 passengers per weekday and 5,000 passengers on Saturdays in FY 2003, but has declined to approximately 7,500 passengers per weekday and 3,000 passengers on Saturday. This downturn in ridership is reflective of the service reductions mandated by cost containment in October 2003. These service reductions resulted in the last evening cross-corridor revenue train departing from both Dallas and Fort Worth at approximately 7:20 p.m. The FY 2005 Budget adds an additional cross-corridor train in each direction later in the evening as a key element of our plan to regain some of this lost ridership. The Ridership Indicator in Exhibit 5.2 reflects this service change and the affects of the cancellation of the special events trains for National Hockey League games. TRE currently operates Monday through Saturday from Fort Worth’s Texas & Pacific (T&P) Station to Dallas' Union Station with seven intermediate stops. TRE also serves an additional special-events temporary platform, which ultimately will be a joint station (Victory Station) with DART’s Light Rail at the American Airlines Center in Dallas. Service at this location is on event-days only, and results in ridership increases of approximately 1,000 passengers per day. Operating efficiencies and acceptable long-term performance will come with the development of a true bi-directional commuter rail service (both Dallas and Fort Worth as destinations), which includes access to the mid-cities market and adequate service to DFW International Airport, commensurate with service requirements of airport users and employees.

CR-3

Page 51: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

Weekend Service (Strategy C1.1) – Saturday service between Union Station and South Irving began in December 1998. Saturday service to Fort Worth began in December 2001. Sunday service cannot be implemented until more double tracking is added. Sundays are currently utilized for required maintenance activities within the right-of-way. Ensure Service Quality with Fort Worth Service Expansion (Strategies 1.3; C3.4) – With the expansion to Fort Worth, the number of railroad on-line "meets" increased dramatically and presents a much greater challenge to maintain on-time service. TRE attained on-time performance of 96.7% in FY 2003 and year-to-date FY 2004 has attained an on-time performance of 99.8% in spite of heavy construction on the corridor. TRE has generated an enthusiastic and loyal ridership base. This has been accomplished with the current 46-train weekday and 22-train Saturday schedule despite the 10 to 15 freight train movements per day on a predominately single-track railroad because of careful coordination with the freight railroads, and the dispatching skills of our contractor. In FY 2005 and FY 2006, on-time performance is targeted at 96% due to continued heavy construction schedules. Constant monitoring of the track and signal systems is the first step to ensure safe and continued operation of a railroad; but eventually, more sidings and double tracking will be required to maintain service reliability and support any service expansion. Exhibit 5.4 highlights the major projects proposed over the next few years for track upgrades, and other items necessary to maintain and improve service quality on the east side of the TRE. Continued service reliability and expansion capability will require similar or greater investments in Tarrant County. Reserves have been set up to provide for projects that have not been specifically identified at this time. These reserves will ensure the timely replacement of TRE assets as well as allow for a certain amount of unexpected future capital requirements.

CR-4

Page 52: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

Exhibit 5.4TRE Capital Projects

(In Millions)

COMMUTER RAIL FY05 FY06 FY07 FY08 FY09 5-Yr TotalBeltline Grade Separation 10.5 6.5 0.0 0.0 0.0 17.1TRE Track Upgrade Medical & Market Ctr Area 4.0 0.0 0.0 0.0 0.0 4.0 Trinity Bridge Elm Fork Repl 2.6 0.0 0.0 0.0 0.0 2.Grade Crossing Improvements 2.1 0.0 0.0 0.0 0.0 2.TRE ROW Maintenance Programs 1.5 0.2 0.2 0.2 0.3 2.Lisa to Perkins Double Track 1.0 0.0 0.0 0.0 0.0 1.CentrePort/DFW Station Double Tracking (Dorothy Sink) 1.0 7.0 7.0 0.0 0.0 15.0 Homeland Security Grant Projects (100% federally funded) 0.8 0.0 0.0 0.0 0.0 0.0 Additional Irving Yard Storage Track 0.5 0.0 0.0 0.0 0.0 0.TRE Station Enhancements 0.5 3.0 1.0 0.0 0.0 4.Valley View to W.Irving Double Tracking 0.4 2.0 2.0 0.0 0.0 4.RDC Propulsion Engines 0.3 0.0 0.0 0.0 0.0 0.Correction of Bi-Level HVAC Deficiencies 0.3 0.0 0.0 0.0 0.0 0.3Reconfigure Head End Power on existing Bi-level fleet 0.2 0.0 0.0 0.0 0.0 0.2 RDC Transmissions 0.2 0.0 0.0 0.0 0.0 0.Bi-Level HVAC Controller Upgrade 0.1 0.0 0.0 0.0 0.0 0.1Locomotive Wheels and Axle Set * 0.0 0.0 0.0 0.0 0.0 0.0 Bi-Level Wheels * 0.0 0.0 0.0 0.0 0.0 0.TRE Vehicle Maintenance Programs 0.0 0.8 0.9 0.9 1.0 3.RDC APU Generator Rebuild Program * 0.0 0.0 0.0 0.0 0.0 0.0 Locomotive Overhaul 0.0 0.0 2.0 0.0 0.0 2.Bi-Level Fleet Overhaul 0.0 3.0 3.3 0.0 0.0 6.Train Dispatching Control System 0.0 0.8 0.0 0.0 0.0 0.Union Station Track Upgrade 0.0 2.5 0.0 0.0 0.0 2.TRE Train Set Phase II 0.0 1.0 7.0 2.0 0.0 10.0

TOTAL COMUTER RAIL $26.0 $26.8 $23.3 $3.2 $1.2 $80.5 *Expenditures for these projects is less than $50,000

6 1 5 0

5 5 4 3

2

0 6

0 3 8 5

Commuter Rail – TRE Costs and Subsidy Per Passenger Exhibit 5.5 provides subsidy per passenger projections. As noted on Page CR-2, revenues and expenses from the T operations have been included in the formula for calculating subsidy per passenger and other KPIs, thus slightly changing the projections over the FY 2004 Plan.

E xhib it 5 .5 C om m uter R ail - T R E Subsidy P er P assenger

$5.53

$6.62$6.49

$7.64

$5.65$6.56

$6.37

$5.25$5.50$5.75$6.00$6.25$6.50$6.75$7.00$7.25$7.50$7.75

FY 02A FY 03A FY 04A FY 05B FY 06P

Dol

lars

FP05 FP04

CR-5

Page 53: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

TRE Fare Structure – The DART and T Boards have adopted a zone fare system for TRE with base fares of $1.25 and $2.25 for one and two zones, respectively. A one-zone fare exists for rides between Downtown Dallas and West Irving or between Fort Worth and CentrePort; a two-zone fare is charged for customers traveling across the zone boundary, located at the Dallas/ Tarrant County line (between CentrePort and West Irving stations). Cost-Sharing Arrangement with the T Based on Revenue Seat Miles – DART’s ILA with the T calls for all revenues that are generated from TRE including fares, advertising, and special services to be used to pay for the service. The remaining subsidy is then allocated to DART and the T based on a revenue seat mile formula. For example, if the shared cost to operate TRE is $100 and TRE collects $25 in fares and $10 from other sources, the remaining $65 would be split based on the number of revenue seat miles operated in the DART service area and the T service area. Except for employees dedicated 100% to TRE, DART and the T separately absorb their own staff, administrative, and station maintenance costs. DART’s share of the subsidy in FY 2004 is approximately 48.8%. The mid-cities agreed through an ILA with the North Central Texas Council of Governments (NCTCOG) to contribute $775,000 per year for three years, which began in FY 2002, for services that their citizens utilize. The contribution from the mid-cities has been retained by the NCTCOG as a substitute for federal capital grants for the TRE. This arrangement resulted in a grant of $2.2 million in federal funds for the purchase of three new cab cars in FY 2003. The ILA is currently being renegotiated by the NCTCOG.

CR-6

Page 54: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

Increase TRE Ridership (Strategy C2.1) – During FY 2003, the Boards of Directors for DART and the T approved a fare increase and TRE service reductions, as cost containment measures. Additional service reductions were implemented in FY 2004 as cost savings measures. DART and the T staff, working together through the TRE Coordinating Committee, will continue to place priority on implementing cost effective joint marketing and public information campaigns to attract new riders to TRE service, as well as the connecting DART and T transit services. A key element of this effort will be to produce marketing products that focus on branding TRE, and reduce or eliminate any customer confusion related to the jointly funded/operated nature of the service. As a result of economic improvement and, as mentioned above, some of the service that was eliminated will be restored in an attempt to recapture that “lost” ridership in FY 2005. Commuter Rail – TRE Cost Model Exhibit 5.6 is the Commuter Rail-TRE Cost Model. Costs are divided between TRE and railroad corridor management. The Department has responsibility for management and maintenance of all DART-owned active freight rail lines, as well as the property management responsibilities for the TRE corridor. The Department is also responsible for the collection of land and signboard rental income (TRE Corridor only), license fees, and trackage rights fees. Total revenues associated with TRE corridor management for FY 2005 are budgeted at $3.1 million. The portion of the total corridor management revenues and property management costs associated with the TRE corridor management are factored into the Commuter Rail-TRE subsidy per passenger calculations. Total expenses below include $1.0 million of indirect costs from the T.

$19.9

$19.3 million $.14 million $.5 million

- Number of employees- Marketing and Customer service - Level of freight operations- Passenger Amenities

$17.3 million $2.0 million $.14 million $.5 million89.6% of TRE costs 10.4% of TRE costs86.9% of total costs 10.1% of total costs 0.7% of total costs 2.3% of total costs

* Total FY 2005 Commuter Rail costs, which include $1.9 million for administrative overhead allocation.

ManagementRailroad

Exhibit 5.6

& Insurance

Management

Costs

FY 2005 Commuter Rail - TRE Cost Model

Trinity Railway Express (TRE)

million *Commuter Rail

Railroad Corridor

Allocations

Contract Service Allocated DARTManagement

- ROW owned- Number of work shifts - Revenue Collection

Cost Drivers- Contract rates - Number of employees- Number of employees - Quality standards

Cost Drivers Cost Drivers

- Insurance requirements- Quality standards

- DART/T rev seat miles - DART Police

CR-7

Page 55: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Commuter Rail

BLANK PAGE

CR-8

Page 56: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Paratransit Services

Customer Focus – Paratransit Services Overview Paratransit Services is responsible for providing accessible, curb-to-curb public transportation in accordance with the Board-approved Accessible Services Policy No. III.14, which complies with the Americans with Disabilities Act of 1990 (ADA). The department oversees planning/ scheduling, dispatching, field supervision, contract compliance, rider eligibility, outreach, travel training, and other administrative functions. The department also oversees the fixed-route Reduced Fare Program for people with disabilities and operates five segments of the DART On-Call services. Service is currently contracted with ATC, which operates and maintains a total of 100 vans and 57 sedans. Approximately 7,680 certified eligible riders are registered for Paratransit Services as of September 30, 2004. The purpose of this section is to explain Paratransit Services’ Business Plan, including strategic initiatives. References to DART's Strategic Plan are included throughout this section. Paratransit Services Scorecard – Key Performance Indicators Exhibit 6.1 highlights Paratransit Services’ Key Performance Indicators (KPIs). Fiscal years 2002 through 2004 are the actual values while fiscal years 2005 through 2006 are the budget and projected values.

Indicators FY02A FY03A FY04A FY05B FY06P

Actual Ridership (000s) 585.7 577.3 589.1 584.4 584.4 Scheduled Ridership (000s) n/a 691.4 683.7 693.0 678.7 Revenue Hours (000s) 417.4 383.7 414.8 416.0 415.1 Paratransit Passengers per Hour - Scheduled 1.71 1.80 1.65 1.67 1.64Paratransit Passengers per Hour - Actual 1.40 1.50 1.42 1.40 1.41On-Time Performance 89.6% 88.1% 87.5% 86.0% 86.5%Accidents per 100K n/a n/a 2.30 2.50 2.50Percentage of Trips Completed 98.4% 100.0% 100.0% 98.0% 98.0%Passenger Canceled Trips Ratio 13.5% 12.7% 10.5% 13.0% 12.0%Passenger No Shows Ratio 4.8% 3.7% 3.3% 4.0% 3.5%Service Level - Scheduling (3 minutes) 88.7% 95% 95% 92% 93%Service Level - Where's My Ride (2 minutes) 87.8% 93% 92% 91% 92%Complaints per 1k Passengers 3.8 4.33 4.52 5.50 5.00Certified Riders 6,560 7,170 7,680 7,600 7,828

Revenues (M) $0.9 $1.1 $1.4 $1.4 $1.5Expenses - Fully Allocated (M) $25.1 $24.6 $26.3 $27.9 $28.9Net Subsidy (M) $24.2 $23.5 $24.8 $26.4 $27.4Subsidy Per Passenger $41.17 $40.76 $42.14 $45.24 $46.82

Exhibit 6.1

Paratransit Scorecard - Key Performance Indicators

Customer/Quality Indicators

Financial/Efficiency Indicators

PAR-1

Page 57: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Paratransit Services

Scheduling/Control Center Service Levels (Strategy C1.1) The KPIs for the Scheduling and Control Center functions are referred to as “call service levels” – the percentage of calls handled (answered or abandoned) within an established time period. The FY 2005 target for call service levels are projected to be higher than FY 2004 targets, but lower than FY 2004 actual. The Paratransit Access Advisory Group, the Board-appointed paratransit customer focus group, helped DART establish these targets. Setting standards helps management to meet service level requirements. X-Press Booking (XPB), an automated scheduling feature, is regularly marketed to eligible customers. Effective January 1, 2004, management reallocated existing resources to peak call volume periods by closing the Scheduling Center on holidays and weekends. Riders wishing to schedule trips when the Scheduling Center is closed may still do so by using either XPB or an automated voice-mail system, which was implemented in FY 2004 and is available from 8 a.m. to 5 p.m. on Saturdays and Sundays. The automated voice-mail system receives an average of 30 calls on Saturdays and 70 calls on Sundays. Our clients have responded positively to the system, find it quick and easy to use, and appreciate the absence of hold times. Paratransit Ridership In accordance with the spirit and intent of the ADA, and due to the high cost of demand responsive service (i.e., Paratransit subsidy per passenger target for FY 2005 of $45.24 versus $3.79 for fixed route services), the Board and management want to transfer riders who can use bus and/or rail service from Paratransit to fixed route. More details on transitioning riders can be found under “Paratransit Eligibility and Travel Training Program” on Page PAR-3. Exhibit 6.2 compares actual and projected ridership from FY 2002 through FY 2006. The decrease in the FY04 Plan and the FY05 Plan is based on actual trends.

Exhibit 6.2 Paratransit Ridership

589.1 584.4

608.0603.0

577.3

585.7

560.0

570.0

580.0

590.0

600.0

610.0

620.0

FY02A FY03A FY04A FY05B FY06P

Thou

sand

s

FY05 Plan FY04 Plan

PAR-2

Page 58: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Paratransit Services

Paratransit Eligibility and Travel Training Program (Strategy C2.2) – The current eligibility program, initiated in July 1999, requires paratransit applicants to be certified in person rather than by mail. As a result, the number of registered Paratransit riders dropped from more than 18,000 to currently just over 7,500, a 58.3% decrease. Management believes that this program is achieving the desired results of providing paratransit service to those who truly need it. In October 2003, the Assessment Center, a leased facility at 7920 Elmbrook, was closed, and staff was relocated to DART Headquarters. Assessments are now conducted on actual buses and trains instead of a controlled environment. In FY 2004, the eligibility assessment and travel training functions were combined. There is a total staff of four performing both functions. As of June 30, 2004 approximately 8,000 trips normally provided by Paratransit Services were transitioned to fixed-route service. For a client to transition to fixed-route services, staff must perform route checks to ensure there are no environmental barriers that would impede the client’s travel. Paratransit's Productivity Productivity (Strategy C3.1) – Passengers per hour is one way to measure Paratransit’s productivity. Exhibit 6.3 provides the actual and projected paratransit passengers per hour for FY 2002 through FY 2006. Compliance with the ADA’s zero denials mandate impacts Paratransit’s efficiency and lowers its productivity. Paratransit’s Trapeze scheduling system is designed to schedule trips efficiently. However, with the ADA’s zero denials mandate, some trips are being scheduled manually, reducing efficiency and adding more unproductive hours, which explains the decline between the FY04 Plan and the FY05 Plan projections as shown on Exhibit 6.3. The Department of Transportation (DOT) tightened its interpretation of the ADA in January 2001, stating that only forces outside the transit agency's control are viable excuses for paratransit trip denials. The DOT has further stated that transit agencies cannot plan for the denial of trips to any ADA-eligible paratransit customer, even if the number of such denials is not substantial. To meet these regulations, management successfully negotiated supplemental transportation service with our current Paratransit service contractor, ATC, to accommodate all trip requests for FY 2004. The estimated cost of these additional services is included in the FY 2005 Budget and Financial Plan.

PAR-3

Page 59: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Paratransit Services

Exhibit 6.3 Paratransit Passengers Per Hour - Actual

1.401.42

1.40 1.411.40

1.50 1.50 1.50

1.43

1.341.361.381.401.421.441.461.481.501.52

FY02A FY03A FY04A FY05B FY06P

FY05 Plan FY04 Plan

Manage No-Shows and Cancellations (Strategy C3.1) – DART’s second challenge for improving productivity concerns cancellations and no-shows. As of June 30, 2004, DART scheduled 1.64 passengers per hour; after cancellations and no-shows were factored in, productivity levels dropped to 1.4. DART has strictly enforced the No-Show Policy since April 2002, resulting in the no-show rate dropping from 5.4% to 3.4% as of June 2004. Based on new ridership projections, the type of supplemental services offered, and a revised and more stringent Cancellation Policy that went into effect in FY 2004, Management estimates the KPI ratio will remain in the 4% range. Vehicle Business System (Strategy C4.1) – The Vehicle Business System (VBS) was installed in January 2001 and updated to a wireless communication system in FY 2004 allowing better utilization of revenue vehicles. The Proposed FY 2005 Capital Projects Budget includes an automatic call-out feature enhancement to the system that will automatically phone patrons when the vehicle is five minutes from the pick-up location. This feature will help reduce no-shows and dwell time of the vehicles, further improving productivity and on-time performance. Call-Back Feature (Strategy C4.1) – Another improvement in the Proposed FY 2005 Capital Projects Budget is a call-back enhancement to the Interactive Voice Response (IVR) System. The call-back feature enhancement will provide more effective and efficient communication with clients providing relevant information such as: registration status, Agency reminders, automated surveys, and upcoming ADA meetings. The call-back feature will have the ability to remind clients of daily scheduled trips, which also will potentially reduce the number of no-shows.

PAR-4

Page 60: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Paratransit Services Purchased Transportation Contract A purchased transportation contract with ATC was implemented in January 2001. Thanks to a close partnership between DART and the contractor, the quality of service improved for paratransit riders. Having learned lessons from previous contracts, management addressed prior deficiencies by placing the proper controls into this contract. Improvements included a minimum hourly wage rate for operators and higher disincentives for non-performance. Additionally, DART staff has daily oversight at the contractor’s facility, which ensures that all contractual obligations are being met. To address FY 2003 budgetary constraints, DART negotiated new rates and decreased service levels with ATC. As a result, the contractor operated 57 sedans rather than the original 70. With the addition of Supplemental Service in FY 2004, the number of sedans returned to 70. The base term of the current contract ends on December 31, 2005, with the provision for two one-year options. The first one-year option has already been approved by the Board of Directors and will be exercised in 2006. In FY 2004, as noted above, Paratransit Services implemented new rates and service levels for zero denials. From calendar year 2004 to calendar year 2005, the fixed rate amount increased 7.25%, the van rate increased 5%, and the sedan and supplemental service rate increased 6%, adding an additional $1.4 million to the budget. Approximately half of the $1.4 million increase was due to contract rate increases. The remainder of the increase was due to a budget transfer from the President’s Reserve for supplemental service. Paratransit Services also oversees the On-Call portion of the ATC contract. There are currently five active On-Call zones, including Lakewood, North Dallas, East Plano, Farmers Branch, and Richardson that are operated through this contract. More detail is provided in the Bus Section. Paratransit Costs and Subsidy Per Passenger Exhibit 6.4 compares paratransit cost and net subsidy actual results for FY 2002 and FY 2003 with budget and projections through FY 2006.

Exhibit 6.4 Paratransit Total Costs

and Net Subsidy

$20.0

$22.5

$25.0

$27.5

$30.0

FY02A FY03A FY04A FY05B FY06P

Mill

ions

Total Costs Net Subsidy

PAR-5

Page 61: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – Paratransit Services

Paratransit Cost Model Exhibit 6.5 is the Paratransit Cost Model.

Paratransit$27.9 million*

Contract In House AllocatedService Costs Costs

- Passenger demand - Oversight and Administration - Customer Service- Service effectiveness of contract - Retail Sales (passengers per hour) - Number of employees - Operations Technology Support- Contract rate per hour - Certification program - Information Technology Support - Quality standards - DART Police Support - Fleet age - Technical Services - Vehicle requirements - Non-revenue vehicle Services

$22.7 million $4.0 million $1.2 million81.3% of total cost 14.3% of total cost 4.4% of total cost

* Total FY05 Paratransit costs, which include $2.9 million for administrative overhead allocation.

Allocations

Exhibit 6.5

Cost Drivers Cost Drivers

FY 2005 Paratransit Cost Model

PAR-6

Page 62: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Customer Focus - HOV

Overview The purpose of this section is to discuss expected business performance and major initiatives for DART's High Occupancy Vehicle (HOV) Transitway services. References to DART's Strategic Plan are included throughout this section. DART’s Transit System Plan calls for implementation of an HOV Transitway program that includes five Interim or Immediate Action Transitways, as well as more than 110 miles of Permanent HOV Transitways. The Board-approved HOV Transitway Policy guides the program’s development by establishing the necessary framework to advance the projects through different stages of project development, construction, operations, enforcement, and maintenance. Currently, DART operates, enforces, and maintains four Interim/Immediate facilities totaling 31.1 miles of HOV lanes. The East R.L. Thornton (I-30) contraflow HOV lane utilizes movable barriers and operates during weekday peak periods from 6:00 a.m. to 9:00 a.m. and 3:30 p.m. to 7:00 p.m. The Stemmons (I-35E), LBJ (I-635), and Marvin D. Love (US 67) concurrent flow HOV lanes are buffer-separated facilities that are open 24-hours a day in both directions. DART also operates reversible HOV lanes along South R.L. Thornton (I-35E)/Marvin D. Love (US 67), and at the Stemmons/LBJ interchange with operating hours similar to the I-30 facility. In response to increasing demand, efforts are underway to revise the operating hours of the HOV lanes to match travel and ridership patterns. A map of DART's Interim/Immediate HOV network is included at Exhibit 7.4. Interim HOV projects are funded by the Texas Department of Transportation (TxDOT), DART, the Federal Transit Administration (FTA), and the US Department of Transportation’s (DOT) Congestion Mitigation/Air Quality (CMAQ) Program, which is administered by the Regional Transportation Council (RTC) of the North Central Texas Council of Governments (NCTCOG). All facilities are jointly planned and designed by DART and TxDOT, and each agency contributes 16.7% of the construction cost. Federal funds provide the remaining 66.6%. Once the facilities are built, DART is responsible for 100% of the operation, enforcement, and management of the HOV lanes, while maintenance is the joint responsibility of DART and TxDOT.

HOV-1

Page 63: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

HOV Scorecard – Key Performance Indicators Exhibit 7.1 highlights HOV Key Performance Indicators (KPIs) in scorecard format. Fiscal Years 2002 thru 2004 are the actual values while Fiscal Years 2005 through 2006 are the budget and projected values.

Indicators FY02A FY03A FY04A FY05B FY06P

Ridership (M) 34.2 33.8 35.0 35.0 35.0

Avg. Weekday Ridership (000s) 104.5 103.9 106.4 105.0 105.0

On-time Performance 98.0% 99.0%

Operating Speed Ratio n/a 1.86 1.65 1.70 1.70

Expenses - Fully Allocated (M) $4.6 $5.4 $5.7 $5.4 $5.6

Subsidy Per Passenger $0.13 $0.16 $0.16 $0.16 $0.16

Exhibit 7.1

HOV Scorecard - Key Performance Indicators

Customer/Quality Indicators

Financial/Efficiency Indicators

HOV Projects Exhibit 7.2 highlights major capital project budgets for the Interim/Immediate HOV Projects. A more detailed description of these projects follows the exhibit. Exhibit 7.3 is a map of the Interim/Immediate HOV lanes.

Exhibit 7.2

Interim/Immediate Action HOV Projects (In Millions)

HOV FY05 FY06 FY07 FY08 FY09 5-Yr Total

East RL Thornton Extension $0.4 $0.0 $0.0 $0.0 $0.0 $0.4 Stemmons 0.7 0.0 0.0 0.0 0.0 0.7Central (Immediate) 3.1 0.0 0.0 0.0 0.0 3.1SH 114 0.5 0.5 0.5 1.6 1.6 4.I-635 HOV West 0.3 1.0 0.0 0.0 0.0 1.3I-635 HOV East 0.9 7.0 8.0 0.0 0.0 15.9I-30 HOV Extension East to I-635 1.0 5.0 5.0 0.0 0.0 11.0 IH 635 (LBJ) 3.0 2.4 2.0 5.5 5.7 18.6IH30 (Turnpike) 1.7 1.7 1.8 0.0 0.0 5.HOV Maintenance Reserve 0.0 0.0 0.0 0.1 0.0 0.1Police Motorcycle Replacements 0.0 0.6 0.0 0.0 0.0 0.HOV Stemmons Reversible Gates 1.6 0.0 0.0 0.0 0.0 1.6

TOTAL HOV $13.3 $18.2 $17.3 $7.1 $7.3 $63.

7

2

6

2

HOV-2

Page 64: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Exhibit 7.3

Stemmons HOV Ramp/Dickerson Blvd. Overpass – Schematics design, environmental studies, and final design for two permanent reversible HOV lanes and a drop ramp from the Dickerson Blvd. overpass will be ongoing through FY 2005. This facility will connect the I-35E HOV lanes to the Trinity Mills LRT Station as well as the President George Bush Turnpike service roads. Final design and preparation of construction documents will commence upon completion of schematics. The ramp will initially serve the Interim, and ultimately the Permanent, Stemmons HOV lanes. Construction completion is expected by mid-2006. North Central (Interim/Immediate) HOV lane – The single reversible HOV lane is the fifth and final Interim/Immediate Action HOV lane of the DART Transit System Plan. DART has completed studies that identify the limits, potential access/egress locations, and coordination with the North Central LRT and the US 75 reversible HOV lane between LBJ and Parker Road in Plano. Project Schematics and Environmental Assessment (EA) documents are also complete. Completion of the initial phase of the single reversible lane, with temporary connection to I-635, is contingent upon resolving the required number and type of HOV lanes. Average weekday ridership is projected at 13,000.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

The City of Richardson is advancing an effort to implement HOV concurrent flow lanes in these corridors instead of the approved single reversible lane. Further development of this project will be contingent on the type of facility to be implemented. TxDOT has requested that the City of Richardson develop schematics of the project for its review. Transit Partnership Program (Strategies S1.6; S1.8) – To take advantage of the Transit Partnership Program offered by the NCTCOG, studies are underway to identify potential locations for additional and/or expanded interim/immediate action HOV lanes. This program was initiated to aid in the region’s plan to comply with the air quality standards requirements by November 15, 2007. Several potential candidate projects have been identified, and their feasibility is being evaluated. A final proposal was made for consideration by all involved agencies and involved extensions to three of the existing HOV lane facilities.

• I-635 Western Extension: The existing eastbound entrance to the HOV lane will be moved closer to Belt Line Road providing approximately two additional miles of HOV lane for commuters.

• I-635 Eastern Extension: The eastern end of the I-635 facility will be extended for another nine miles to I-30. The extended section will be a reversible lane facility.

• I-30 Western Extension: The limits of the I-30 facility will be extended another five miles to I-635. Like the current facility, the extension will be a contraflow facility.

Regional Value Pricing (Strategy 1.6) – A regional value or Congestion Pricing study is underway to evaluate the feasibility of charging single-occupant vehicles to use the existing and future HOV lanes throughout the region. This federally-funded project is led by the NCTCOG, and DART and TxDOT are among the project partners. Federal rules mandate that a study of this type be conducted prior to testing and/or implementing this concept. The study will be completed during FY 2004 and an application to implement the concept in the selected corridor will be advanced to the Federal Highway Administration (FHWA) for FY 2005 funding. Permanent HOV Transitways – DART's Transit System Plan calls for implementation of 110 miles of permanent HOV transitways. DART's share of the construction costs of these facilities is 10%. A map of the permanent HOV projects is included at Exhibit 7.45. Per the Board-approved HOV Transitway Policy and consistent with the Metropolitan Transportation Plan by NCTCOG, all Permanent HOV Transitways will be evaluated for Congestion Pricing.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Exhibit 7.4

Notice of Board Commitment – The Board’s current HOV Policy commits DART to fund up to 100% of the construction cost of the permanent LBJ, Stemmons, and North Central Expressway HOV transitways, if Federal funding is not available. This funding is not included in the FY 2005 Twenty-Year Financial Plan. If DART is required to provide additional funding for these HOV projects, it will have a significant impact on the capital expansion and financing assumptions included in this Plan. Major Investment Studies – In 2001, DART initiated a Major Investment Study (MIS) for the I-30 Freeway Corridor east of Downtown Dallas. All mode alternatives and alignments within the corridor are being studied and evaluated to determine a Locally Preferred Investment Strategy (LPIS) for the corridor. The MIS will be completed in FY 2005, at which time DART will begin advanced planning for elements of the LPIS.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

SH 114 Permanent HOV Transitways – With the completion of the Northwest Corridor Major Investment Study, DART is moving forward with the permanent, barrier-separated HOV lanes along SH 114 from SH 183 to the Dallas County line as identified by the Locally Preferred Alternative. Advanced planning activities including schematic designs, environmental studies, and elements of final design will be ongoing through FY 2005. Final design and preparation of construction documents for the remainder of the project will be completed by FY 2008. The construction phase is expected to be from FY 2009 to FY 2012. I-30 HOV Turnpike – DART is advancing activities to implement a single reversible HOV lane along I-30, west of the Dallas CBD. Preparation of the scope of work for the project is complete, and advanced planning efforts are currently underway. High-Five – Reconstruction of the I-635/US 75 Interchange (High-Five) is underway and expected to be complete by January 2007. The interchange will have five levels of roadway, and the fifth level will be a reversible HOV lane connecting the existing I-635 HOV lane with the US 75 HOV lane that is under design. The project includes an HOV T-ramp at TI Boulevard along with main lanes and frontage road construction. LBJ Corridor – This project is a joint effort between TxDOT, DART, and other partners in the region. The LBJ Corridor project is comprised of two sections: the east section, which includes the Mesquite section (US 75 to US 80), and the west section (from US 75 to Luna Road west of I-35E). The west section includes a tunnel from west of Midway to east of Preston. This project will be designed and constructed in various phases. Target completion is FY 2012. Ensure I-30 HOV Lane Opens on Time (Strategy C1.1) In April 1997, DART privatized the operation and maintenance of the Barrier Transfer Vehicles (BTVs) that are used on the I-30 HOV Lane to ensure that the facility opens on time every day. Since privatization, the HOV lane has been open an average of at least 99% of the time. The purpose of this indicator is to determine if the facility is open as scheduled for the morning and evening operating hours. To date, we have been able to meet the set target. Operating Speed Ratio (OSR) – In FY 2003, a new KPI called Operating Speed Ratio was added to the Business Plan. This efficiency ratio measures the average operating speed of vehicles using the HOV lane versus the speed of vehicles on the freeway main lanes. The target has been set at 70% – that is, HOV traffic traveling an average of 1.7 times the speed of main lane traffic. To date, we have been able to exceed this target. New Barrier Moving Machines Improving Quality and Efficiency – DART procured two new barrier transfer vehicles in 2003 to replace machines that had been in service since 1991. The replacement of the vehicles has had a positive impact on the operating maintenance costs in FY 2004.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Stemmons HOV Gates to Improve Safety (Strategy C1.3) This $2.4 million project will fund the installation of an automatic gate system for opening and closing each of the three ramps on the Stemmons Reversible HOV Lane. Engineering schematics for the project have been completed. Installation of these gates will eliminate the current procedure of manually placing pylons next to high-speed freeway traffic. This project will be 60% funded by the Federal Transit Administration (FTA). HOV Service has Lowest Subsidy Per Passenger HOV is DART's most cost-effective mode of transit with a subsidy per passenger of $0.16 per passenger trip projected for FY 2005.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Customer Focus - General Mobility

Overview and Vanpool Scorecard DART's General Mobility programs include carpool matching, vanpool operations, and support for local Transportation Management Associations (TMAs). General Mobility also includes road improvement programs such as the Local Assistance Program/Congestion Management System (LAP/CMS), the Transit Principal Arterial Street System program (Transit PASS), the Transportation System Management (TSM) program, and the Intelligent Transportation Systems (ITS) program. Exhibit 7.5 highlights Vanpool Key Performance Indicators (KPIs) in scorecard format.

Indicators FY02A FY03A FY04A FY05B FY06P

Ridership (000s) 360 419 379 380 405

Number Of Vanpools 72 73 65 70 70

Revenues (M) $0.8 $0.9 $0.8 $0.9 $0.9

Expenses - Fully Allocated (M) $0.9 $1.3 $1.1 $1.1 $1.3

Subsidy Per Passenger $0.48 $1.07 $0.78 $0.63 $0.78

Exhibit 7.5

General Mobility (Vanpool) - Key Performance Indicators

Customer/Quality Indicators

Financial/Efficiency Indicators

DART currently offers 8- and 15-person vans through a contract with VPSI, Inc. This program is partially funded by the NCTCOG through a Congestion Mitigation/Air Quality grant. NCTCOG provides funding to DART that covers 40% of the total cost of operations. An additional 50% of the total cost of operations is paid by the vanpool customers themselves through fuel expenditures and a flat $488.50 per month per vanpool fare paid to DART. DART recovers approximately 90% of the total cost of operations, with the bulk of DART’s expense being in-kind expenditures and staffing. Management’s goal is to grow the program from 65 vans as of September 2004 to 70 vans during FY 2005. To accomplish this, management is instituting a vanpool incentive program, based upon customer focus group input. The number of vanpools declined in FY 2004 due to the economic downturn and corporate lay-offs. The cost of vanpools has also been cited as a critical factor in declining vanpool sales. DART has conducted extensive benchmarking efforts to try to overcome the cost factor to make vanpools a cost-effective and more affordable option for employers and employees in the Metroplex and surrounding areas.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Management is conducting a cost benefit analysis study on the vanpool program to determine the feasibility of managing the program internally. The study’s areas of focus are as follows:

• Control the escalation of program costs associated with contractual van lease schedules • Determine the ability of DART staff to increase control over service quality to vanpool

customers • Streamline communication with vanpool passengers • Provide additional contracting options and improved competition • Research options to purchase vans through capital funds

Management’s objective is to increase the number of vanpools and the number of employers participating in the program. General Mobility – Road Improvement Programs The Road Improvement Programs shown in Exhibit 7.6 represent all of the Board-approved road programs with member cities and state agencies. Road improvement programs are recorded as non-operating expenses in the Budget and Twenty-Year Financial Plan because DART does not take an ownership interest in most of these mobility improvements.

FY03A FY04B FY05B FY06P FY07P FY08P FY09PLAP/CMS $8.1 $8.6 $0.0 $0.0 $0.0 $0.0 $0.0Transit PASS 3.8 0.0 0.0 0.0 0.0 0.0 0.0TSM (includes street repair) 1.1 4.2 2.1 2.1 2.1 1.0 1.0Regional ITS 0.0 0.6 0.6 0.0 0.0 0.0 0.0DART/TxDOT ITS 0.8 2.9 0.0 0.0 0.0 0.0 0.0 Total $13.8 $16.3 $2.7 $2.1 $2.1 $1.0 $1.0

Note: These values represent program allocations, not actual cash disbursements.

Exhibit 7.6General Mobility - Road Improvement Programs

(In Millions)

Local Assistance Program/Congestion Management System (LAP/CMS) The LAP/CMS agreement returned 15% of DART sales taxes collected in a member city to that city until a contract was awarded for rail construction in that city. Irving was included at a 7.5% funding level because it is served by commuter rail. The program ended for all member cities in FY 2004. DART accrued the appropriate LAP/CMS amount at the beginning of each fiscal year. Cities then request LAP/CMS funds, as necessary, for projects that enhance transit. Exhibit 7.7 reflects the current LAP/CMS payable to each member city.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Exhibit 7.7

Projected LAP/CMS Program (000s)

Member City

06/30/04 LAP/CMS Balance

Addison $4,599 Carrollton 7,617 Cockrell Hill 133 Dallas County* 52 Farmers Branch 2,507 Garland 2,792 Glenn Heights 85 Irving 17,827 Plano 1,428 Richardson 584 Rowlett 1,045 University Park* 5 TOTAL $38,673 * Balance remaining from original LAP program.

Transit Principal Arterial Street System (PASS) – The Transit PASS program is a $115 million program funded by DART ($30 million), TxDOT/FHWA ($55 million), and member cities and counties ($30 million). No new money is being allocated to this program; however, approximately $3.5 million of DART's portion of this program remains unspent from prior years and will be rolled forward. Transportation System Management (TSM) – Total TSM funding has been established at approximately $8.3 million over the next five years. TSM funding is available to repair streets damaged by buses and for minor enhancements such as intersection modifications, bus pads, and traffic studies/signal modifications. The Board authorized funding for the street repair component in FY 1998. Intelligent Transportation Systems (ITS) is an element of DART's Transit System Plan. It includes Smart Vehicle, Smart Traveler, and Smart Intermodal Systems. DART is working with all other regional transportation providers, cities, counties, airports, and national organizations to develop a Regional Comprehensive ITS Program for the Dallas/Fort Worth Region. The program’s purpose is to review and, if necessary, update the completed and in-progress ITS Plans for compliance with the ITS national architecture for interoperability and funding purposes. The program is aimed at prioritized implementation of projects to improve transportation throughout the region focused on ITS elements for the metropolitan areas including: Advanced Traveler Information Systems (ATIS), Advanced Public Transportation Systems (APTS), and Advanced Traffic Management Systems (ATMS). The goal of this project is to facilitate information exchange between the various ITS systems and to create a seamless intermodal transportation infrastructure across jurisdictional boundaries.

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FY 2005 Business Plan (09/28/04) Customer Focus – HOV and General Mobility

Part of the ITS program is DART's ongoing development of the Vehicle Business System (i.e., Smart Vehicle). This effort will be rolled into the overall DART ITS program, but will be funded by DART and the FTA. Please refer to the Agency-Wide section for more information on this program. Regional Comprehensive ITS Program – This program will include the planning, design, construction, implementation, and operation of real-time traveler and transportation system information. This will allow partners in the region to share and provide transit users with traffic information. This much needed exchange will also aid the region in dealing with major incidents. High-level design is underway for both video and data exchange between multiple agencies in the region. DART ITS Plan – DART’s ITS Program will include Smart Vehicles, Smart Travelers, and Smart Intermodal Systems. Ongoing work for Smart Vehicles was incorporated in the DART ITS Plan while the entire ITS effort will be coordinated with the 2030 Transit System Plan. The ITS Plan focuses on the existing transportation facilities, infrastructures, and operations of DART. It identifies the current status of ITS deployment within and outside the Agency; defines near-term ITS initiatives to meet current Agency needs; identifies system deployment costs; presents an internal ITS Architecture which is consistent with the National ITS Architecture; and incorporates an implementation phasing plan to guide the deployment of recommended near-term initiatives. These initiatives also position DART as the dominant provider of public transportation services to support regional ITS initiatives involving multiple transportation providers and inter-modal initiatives. Transit Signal Priority Study for LRT in Dallas CBD – DART is working with the City of Dallas to improve LRT operations in the CBD area without significantly degrading vehicular traffic flow. DART’s desire is to prevent accumulation of trains at downtown Dallas stations and have LRT travel between stations without stops. This project will also provide recommendations to improve performance of DART LRT operations. The final draft was received from the City of Dallas in June 2004. Implementation of Transit Signal Priority is expected in FY 2005.

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BLANK PAGE

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FY 2005 Business Plan (09/28/04) Agency-Wide

Y2 Agency-Wide

Customer, Employee, and Stakeholder Strategies Overview DART's "balanced scorecard" approach to strategic planning focuses on the three groups that the DART Board of Directors identified as key to DART’s success: the customer, the employee, and the stakeholder. The strategic initiatives identified within each core group center on continuously improving processes, technology, and communication to achieve DART’s goals of attaining higher customer satisfaction, increased ridership, and lower subsidy per passenger. The purpose of this section is to address Agency-wide issues and outline DART's strategies, key performance measurements, and major initiatives for the management objectives: (C4) Improve Business Processes and Information; (E1) Promote Employee Development and Alignment; and (S1) Build Relationships with Stakeholders. In 2004, the President/Executive Director made Customer and Employee Satisfaction the top two priorities for the Agency. The following addresses some of the projects and initiatives completed in FY 2004 and those planned for FY 2005.

Customer Focus

It is DART’s goal to provide safe, secure, efficient, and effective services to our customers. DART works toward continuous improvement in these areas through the use of customer surveys, division-level scorecards, Key Performance Indicators, station monitors, systematic review of police deployment, fare inspectors, and agency committees such as Service Planning and Customer Satisfaction. Customer surveys are conducted every six months to monitor the effectiveness of DART’s programs and services. Utilize Market Research to Increase Ridership (Strategies C2.4; C2.5) A benchmark was established in April 2002 to evaluate and monitor customer satisfaction in five areas: service, operations, maintenance, communications, and safety. The latest Customer Satisfaction Survey was conducted in May 2004 (see Exhibits 8.1 and 8.2). Exhibit 8.1 compares the results between the April 2002 and May 2004 surveys.

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FY 2005 Business Plan (09/28/04) Agency-Wide

Exhibit 8.1Composite Customer Survey Results (April 2002 vs. May 2004)

79%87% 85%

80% 79%78%

88% 85%77% 78%

10%

30%

50%

70%

90%

Safety Communications Service Maintenance Operations

Apr-02 May-04

Although DART has generally done well in different areas, especially relating to communications, with the favorable score of 88% (see Exhibit 8.2), the survey results further indicate that there are certain areas needing improvement. These areas are: pass-bys, 60% favorable score; security at Transit Centers and Park & Rides, 59% favorable score; safety at stops and stations, 75% favorable score; bus cleanliness, 66% favorable score; timeliness of buses, 76% favorable score; and bus transfers, 77% favorable score. Due to its importance, the Customer Satisfaction Survey is being conducted every six months. This allows Management to monitor these indicators and address these and other performance issues over time. Additional studies will be conducted during FY 2005 to address both concerns of our riders and non-riders (Stakeholders).

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FY 2005 Business Plan (09/28/04) Agency-Wide

Exhibit 8.2

Customer Satisfaction Survey Index/Description Favorable Unfavorable

Service Index General Satisfaction 90% 10% Better Service Than Last Year 73% 27%

Operation Index Bus On Time 76% 24% Train On Time 95% 5% Transfer on Time 77% 23% Pass-bys 60% 40% Operator Courtesy 80% 20%

Maintenance Index Bus Cleanliness 66% 34% Train Cleanliness 79% 21% Facilities Clean 85% 15%

Communication Index Telephone Information Center Helpful 83% 17% Schedule Readable 91% 9%

Safety/Security Index Bus Safety 88% 12% Train Safety 84% 16% Safety at Stops/Stations 75% 25% Security at Transit Centers/Park & Rides 59% 41%

Provide a Safe/Secure Service (Strategy C1.3) DART Police Overview – Consisting of 246 positions including sworn peace officers, telecommunications personnel, support staff, and fare inspectors, the DART Police Department provides police services for the 700-square mile service area, which traverses thirteen cities and six counties. The police department is made up of three major divisions: Field Operations, Special Services, and Administrative Services. Police officers in Field Operations provide patrol services to DART bus stops and shelters, bus routes, transit centers, transfer centers, LRT and commuter rail stations in Dallas County, transitway mall, tunnel, bridges, HOV lanes, bus/rail operations, and maintenance and administrative facilities. This section also includes police telecommunications, fare inspection, and security guard services. Special and Administrative Services personnel provide support for records management, citation processes, internal affairs investigations, intelligence information, case filings, evidence management, facilities and equipment, hiring processes, planning and research, procurements, and special projects.

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FY 2005 Business Plan (09/28/04) Agency-Wide

Strategic Plan – Consistent and in alignment with the Agency’s vision, mission, goals, and Strategic Plan, the police department operates under a set of initiatives developed specifically for DART Police which is updated annually to reflect new objectives and projects. The vision, mission, commitment, and goals remain constant as cornerstones for the department to focus on handling police matters related to DART. Mission Statement – The mission of the DART Police is to maintain a safe and peaceful environment for DART customers and employees, and to ensure the security of property. Statement of Commitment – To provide safety and security for the transit community and to reduce the perception of crime, the DART Police Department will use best practices, technology, and collaborative enforcement strategies to encourage ridership on the DART system. Goals – To accomplish its mission and vision, the DART Police Department has established the following goals, which are identical to DART's agency-wide goals:

- Increase effectiveness for the customer - Increase efficiency for the customer - Increase stakeholder satisfaction - Increase employee satisfaction

Objectives – To accomplish each of the goals, the DART Police Department defined six objectives for FY 2005:

1. Enhance emergency preparedness initiatives 2. Allocate and deploy resources 3. Enhance DART police performance 4. Improve DART police employee morale 5. Research and develop best practices 6. Support effective external communications

Key Performance Indicators – Beginning in FY 2005, DART Police will use the following metrics as objective measures of deployment effectiveness and efficiency:

• Response Time to Crimes Against Persons – No more than 7 minutes average response

time to calls for service. Measuring officer response time in this area assists management in monitoring responsiveness to major incidents that affect patrons’ perception of safety on the transit system. These statistics are gather by measuring the elapsed time between an initial call for service and the officer’s arrival time at the scene of an alleged incident.

• Crimes Against Persons Ratio – Not more than 3.1% of total incidents. Monitoring Crimes Against Persons in comparison to total incidents provides an overview of patron safety by detailing the frequency of crimes that occur on the DART system. This metric is calculated by comparing Crimes Against Persons to all other incidents (filed incident reports) entered into the Records Management System.

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FY 2005 Business Plan (09/28/04) Agency-Wide

• Crimes Against Property Ratio – Not more than 12% of total incidents. Examining

Crimes Against Property in comparison to total incidents provides an overview of the safety of our customer’s property. This metric is calculated by comparing Crimes Against Property to all other incident types entered into the Records Management System.

• Fare Payment Ratio – Maintain fare payment ratio of at least 97% for LRT ridership. Monitoring of fare payment trends provides a synopsis of how patrons are adhering to fare policy. The metric is calculated by comparing total LRT ridership to total fare evasion violations on a quarterly basis.

DART Safe Work Practices Policy Thirteen standard operating procedures (SOP) were implemented on an Agency-wide basis as part of the DART Safe Work Practices Policy in FY 2001. The policy voluntarily adopts the OSHA standard as DART’s minimum standard for safe work practice. A comprehensive audit of those SOPs was conducted in FY 2003. The Safety Section of the Risk Management Division (Safety) focused on the audit findings during FY 2004 and revised the SOPs in response to the audit findings. Safety is monitoring the implementation of accepted recommendations. A follow-up audit will be conducted in FY 2005 to measure and record improvement with respect to the findings and mitigation implementations. To further support the Safe Work Practices Policy, Safety is initiating a program to improve the investigation and enforcement process for injury accidents. The Maintenance Department will pilot the program, which will be implemented in FY 2005. Transportation Department supervisors are an important resource for accident scene investigation and safety monitoring in the field. DART’s Safety staff is certified to teach the U.S. Department of Transportation accident investigation curriculum. Training was limited in FY 2004 due to budgetary constraints, but the four-day course will be offered to all Transportation Field Supervisors during FY 2005 to enhance their on-scene evidence gathering and interpretation skills. Safety will continue to advocate increased safety training activities for the Field Supervisory positions. Provide Customer-Driven Service (Strategies C1.2; C4.4) World-Class Customer Service (Strategies C1.4; E1.3) – This is a Customer Service strategic initiative with on a two-pronged approach to increase customer satisfaction and ridership. The two prongs are employee motivation/satisfaction and positive customer experiences. Employee motivation/satisfaction focuses on the development of programs that promote a positive work environment, job satisfaction, and job enrichment. Positive customer experiences focus on the customer’s perception of exceptional service and seamless service delivery.

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FY 2005 Business Plan (09/28/04) Agency-Wide

Employer Market Key to Increasing Ridership (Strategies C1.4; C2.1; C2.4) – Route / Service Marketing is a joint effort with Service Planning, Community Affairs, Transportation, Customer Service, and Marketing with a focus on bundled service marketing to all market segments for rail feeders, express and local bus, park & ride, and rail to develop DART’s customer base. This program will also integrate with the development of Transportation Management Associations, the Divisional Measurement Program, and Customer Satisfaction measurements.

The opening for Victory Station will include major partnerships with the American Airlines Center, sports teams, and local businesses and organizations, as well as inclusion in the Dallas Stampede event on November 12, 2004. Use Advertising to Increase Awareness (Strategies C2.1; C2.4) – The DART Destinations Deals program will continue to be a baseline program used to attract new customers, provide added value to current customers, and support new customer development initiatives. New items being incorporated include “Places to Live Near DART” and a key media partnership. Using Baldrige criteria to create a customer-focused culture (Strategies C4.1; E1.1) – In 1996, DART embarked on a quality journey, DART’s Quality in Motion, utilizing the Malcolm Baldrige criteria. The criteria are designed to help organizations enhance their performances through focus on dual, results-oriented goals: delivery of ever-improving value to customers, resulting in marketplace success; and improvement of overall organizational effectiveness and capabilities. Using these criteria, DART began to establish systematic processes for operating the Agency. In 2000, DART participated in the State equivalent to the national Malcolm Baldrige Award (the Texas Award for Performance Excellence) and filed a Level III application. DART received a site visit, a privilege given only to those organizations that are strong contenders to receive the award. After receiving the feedback report from the Quality Texas Foundation, DART management prioritized some of the areas identified for improvement, established teams to address those areas, and developed and implemented processes that are consistent with the criteria. Today, DART has a customer-focused culture and uses the team-based continuous improvement philosophy and process to increase efficiencies within the organization.

Business Processes and Technology Improving Business Processes and Information (Strategy C4.1) The Agency's vision states, "Our innovative accomplishments benchmark DART as a transportation leader." DART has worked diligently to accomplish this vision and has been recognized in the industry as a transportation leader. The commitment to performance excellence and continuous process improvement is ongoing and keeps us on track to make this vision a reality by developing efficient processes that are comparable to best practices used in the private sector. Exhibit 8.3 from DART's Strategic Plan highlights the key strategies for this management objective:

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FY 2005 Business Plan (09/28/04) Agency-Wide

Exhibit 8.3

Strategic Initiatives to Improve Business Processes

Improve Business Processes and Information (C4) 1. Continuously improve business processes and supporting technology 2. Provide critical business information to employees 3. Develop strategic partnerships with suppliers (fuel, parts, services) 4. Use surveys to understand customers’, employees’, and stakeholders’ needs 5. Benchmark performance inside and outside of transit

Exhibit 8.4 is a scorecard of the Key Performance Indicators (KPIs) for key business processes in scorecard format.

M easurem ent FY 02A FY 03A FY 04A FY 05B FY 06P

Sales Taxes for O perations 77.5% 80.1% 71.3% 73.1% 71.0%

A dm inistrative Ratio 11.1% 10.5% 10.0% 11.0% 10.7%

E xhibit 8.4Scorecard – Im prove B usiness Processes and Inform ation

K ey Perform ance M easurem ents – L agging Indicators

Manage the Percentage of Sales Taxes Used for Operating Expenses – Sales taxes are DART’s primary source of funding. The sales-tax-for-operations calculation measures the percentage of sales tax that is required to cover those operating costs not covered by other sources (i.e., operating revenues and interest income). Management strives to keep this measure as low as possible. This measure tends to fluctuate depending on the opening of new services. As new service comes online, the percentage increases, and then begins to trend downward as the growth of sales tax revenue outpaces the growth of operating expenses. The measurement was at an all-time high in FY 2003 due to the recession. As sales tax revenues began to increase in FY 2004, however, the percentage of sales taxes needed for operations began to decrease. Exhibit 8.5 compares the percentage of sales tax used for operating expenses between the FY 2004 Twenty-Year Financial Plan, as amended, and the Proposed FY 2005 Plan.

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FY 2005 Business Plan (09/28/04) Agency-Wide

Exhibit 8.5

Sales Taxes for Operations

77.5%

80.1%

71.3%

73.1%

71.0%70.1%

72.9%

70.0%

72.0%

74.0%

76.0%

78.0%

80.0%

82.0%

FY02A FY03A FY04A FY05B FY06B

FP05 Plan FP04 Plan

Minimize Administrative Costs – Exhibit 8.6 compares the administrative ratio for the period FY 2002 to FY 2006. The administrative ratio measures administrative costs less administrative revenues (primarily advertising income) as a percentage of direct costs. As DART becomes more efficient with its administrative processes, this ratio will improve (i.e., decrease). The objective is for the percentage change in administrative costs to be smaller than the percentage change in direct costs. Due to the significant cuts to administrative costs in FY 2004, the Administrative Ratio shows dramatic improvement. This improvement continues into FY 2005 and FY 2006, which indicates additional operating expenses are directly related to the various modes of service.

Exhibit 8.6

Administrative Ratio

10.5%

10.0%

11.0%10.7%

11.1%

9.0%

10.0%

11.0%

12.0%

FY02A FY03A FY04A FY05B FY06P

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Page 82: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

Major Technology Projects to Improve Quality and Efficiency (Strategy C4.1) Operator Swipe Card – The operator swipe card initiative will change the bus and rail operators’ signing-in process each morning and afternoon. In the future, they will sign-in using a magnetic card which is interfaced with Trapeze. Trapeze is the Agency’s integrated software application used to create routes, assign operators and vehicles to routes, calculate operator pay hours, and maintain operators’ vacation and sick accruals as well as other personal information. The swipe read will automatically provide the operator with his assignment including the bus number and parking location. This will significantly reduce the manual processes currently in place for both the station office supervisors and the spotter’s booth personnel. It will allow the station office and spotter’s booth personnel more time to focus on managing the pull-out instead of signing-in operators and issuing them their vehicle and vehicle location. It will also update Trapeze with the actual sign-in time and eliminate questions regarding late to work. This initiative is being coordinated with the employee photo ID, employee bus pass and facility access card program. Surveillance Cameras – There are three surveillance camera pilot projects that are to be combined into one study along with agency-wide building security and the radio systems. At the direction of the President/Executive Director, a team will be created to ensure that all these systems are coordinated and compatible. The goal is to have a coordinated effort to ensure purchasing, installations, monitoring, maintenance, and training is achieved for this project. Ticket Vending Machine (TVM) Networking – This initiative changes the business process currently in place. Over 50 TVMs are not networked and require Finance’s Revenue personnel and guards to visit each machine weekly to obtain the transactional data, replenish ticket stock, and remove cash. Networking will provide daily transactional data as well as the status of the cash and ticket stock. Revenue personnel will service the TVMs only if necessary. Maintenance personnel will be provided with more information regarding the type of service a machine requires and arrive prepared with the proper tools. Transportation Uniformity Committee – The purpose of this committee is to standardize and re-engineer (if necessary) transit operations internal data processes within the bus and rail divisions (East Dallas, South Oak Cliff, Northwest, Oak Cliff, and S&I). The processes to be addressed in FY 2005 are: Operator Sign-in; Complaints; Absence; Accident/Incident Definitions; and Grievance. During FY 2004, the committee addressed the Lawson-Trapeze personnel data interface and developed procedures for: Shift Assignment Pay; Validating Vacation/Sick Leave Accrual Balances; Vacation Mark-up Process; Validating Operator Pay and Absences; Updating Employee Information; and Validating Operator Driver’s License Records.

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Page 83: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

Computing and Telecommunications Infrastructure – FY 2005 will bring continued maintenance and upgrades of computing and telecommunications technology infrastructure to support administrative and operations services. Notably, this will include the completion of the Information Technology Network Operations Center disaster recovery study and formulation of recommendations for implementation. Additionally, DART will finalize the analysis, requirements and impact of the next major change in core computing technology anticipated for FY 2006-2007. Web Application Development – DART’s Intranet, DARTnet, has proven itself to be a trusted tool for business and a valuable resource for employees. The Web Development and Business Quality employees, along with their clients, have developed several processes in FY 2004 that have assisted in reducing administrative personnel and streamlining agency-wide processes. Those processes include:

• Vendor Portal Process • Fixed Asset Manager • Lock Box Automation • Maintenance Department Overtime Request Process • Project Management Workflow • Random Drug Testing

Key processes that are to be deployed over DARTnet within the next 12 months include:

• Automated travel requests, advance, and reimbursement • Budget services for tracking budget changes • Applicant selection and hiring • Non-revenue vehicle requests

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Page 84: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

EMPLOYEE FOCUS

Satisfied Employees Contribute to Satisfied Customers Exhibit 8.7 from DART’s Strategic Plan highlights the major strategic initiatives for this management objective.

Exhibit 8.7 Strategic Initiatives to Increase Employee Satisfaction

5. Improve labor relations6. Promote excellence through workforce diversity

2. Support personal/professional growth & leadership through training/dev3. Compensate, reward, and recognize excellent performance4. Communicate continuously with employees (relationship of employee organization through supervisor)

Increase Employee SatisfactionDART has a thriving internal environment

Promote Employee Development and Alignment (E1)1. Align Board goals, strategic plan, and employee performance

Increasing Employee Satisfaction – (Recognizing excellent performance, supporting personal/professional growth & leadership through training/development, promoting excellence through workforce diversity – Strategies E1.2; E1.3, E1.5, E1.6) In FY 2005, DART's multidiscipline Internal Communications program will focus support on key objectives in division level measurement, customer satisfaction, employee recognition, and benefits communications. On an ongoing basis, this program will utilize targeted and integrated print, electronic and face-to-face communications. This includes DART's Connections/ Reconnect newsletters, DARTnet intranet, periodic ELT briefings to all divisions, roundtable meetings of randomly selected employees and the President/Executive Director, the President/ Executive Director's Star awards, employee activities and special events.

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Page 85: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

Promote Employee Development and Alignment (Strategies C4.2; E1.2) Motivating high achievers – A pilot program offered to DART's highest performing employees began in FY 2004 and will continue in FY 2005. The President's Forum for Recognition of Achievement is designed to motivate and inspire employees selected to attend based on performance evaluations, commendations, etc. For example, the first forum, "How to Put Yourself in the Top Five Percent," featured a nationally-known motivational speaker, author, comedian, and trainer. Forums will be held throughout the fiscal year to recognize and reward exceptional DART employees, so that all outstanding performers will have an opportunity to participate. Nurturing a mentoring culture – Another program, Mentoring at DART – Making a Difference, will be launched on a pilot basis in FY 2005, and management is hopeful this program will continue beyond its test year and foster a mentoring culture in the Agency. Created by the Executive Women's Roundtable, the program matches mentors and protégées based on established criteria and provides training and a special workbook outlining appropriate tasks and activities. During the first year, the pilot-mentoring program will be open to 40 participants of grade level G and above, male and female, from across the Agency. Training and Development – Employee training and development remains a high priority. Individual development plans will continue to be stressed as part of performance management planning, and Human Resources staff will review the plans for employees whose performance is rated below expectation. The Tuition Reimbursement Program will continue for employees who wish to pursue educational opportunities. Over 350 different training topics are offered by DART’s several training units, ranging from highly-specialized technical training to interpersonal skill development. A core customer service curriculum was launched implemented early in 2004 and will continue in each department during FY 2005. New leadership development and supervisory training opportunities are being planned for the coming year. Reviving the DART Wellness Program – The Wellness Program, which lost all funding and staff in FY 2004, is being revitalized with a newly-convened Wellness Committee. Among the Committee's anticipated recommendations is DART's participation in the Dallas Mayor's race in the fall. Promote Excellence Through Workforce Diversity (Strategy E1.6) DART maintains a strategic advantage by encouraging a culture of inclusiveness and respect for all people. Management's strong belief that diversity is a catalyst for future organizational success has resulted in a more positive climate and a heightened commitment to foster an environment that acknowledges and values the uniqueness of each individual. DART's workforce is multi-cultural and consists of over 30 different ethnic groups.

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Page 86: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

The Department of Diversity and Economic Opportunity (DEO) serves as the "change agent" and promoter of diversity throughout the Agency. DEO is charged with the responsibility of developing, implementing, and monitoring aggressive Equal Employment Opportunity, Affirmative Action, and Diversity programs for the Agency which recognize, respect, and advocate utilization of the full spectrum of diverse knowledge, skills, and abilities of people and businesses in the community and service area. DART will continue to implement, monitor, and carry out the legislative, executive, and operational mandates for equal employment opportunity. In FY 2004, the President/Executive Director appointed a management team to charter the first official DART Diversity Council. The Council's mission is to encourage a positive work environment free from discrimination based on race, color, religion, national origin, sex, age, disability, veteran's status, or sexual orientation. Appointed in July, the inaugural Council is comprised of 20 employees with various backgrounds and experiences representing various departments and levels with the organization. Beginning in FY 2005, the Council will begin meeting to determine the exact nature of its activities, guided by its mission statement and a management facilitator. The primary objectives of the Council are to:

• Increase employee awareness of the value of diversity in general and individual strengths, abilities and personalities in particular.

• Help DART adhere to a "zero tolerance" policy for unlawful discrimination.

• Continuously develop and adopt processes that leverage individual employees' unique characteristics as a way to increase productivity, morale, efficiency and service quality.

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Page 87: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

STAKEHOLDER FOCUS

This section addresses DART’s Stakeholders and how management is addressing their needs. Stakeholders' Perceptions are Critical Exhibit 8.8 from DART's Strategic Plan highlights the key strategies for this management objective.

Exhibit 8.8 Strategic Initiatives to Increase Stakeholder Satisfaction

Increase Stakeholder Satisfaction

DART is a welcomed integral part of the community

Build Relationships with Stakeholders (S1.)

1. Obtain timely public input on DART's service projects

2. Effectively communicate with stakeholders

3. Maximize Federal funding

4. Address requirements of Bond Holders

5. Leverage Federal and State legislative resources

6. Identify and develop strategic partnerships

7. Pursue transit-oriented development opportunities

8. Maintain legal and regulatory compliance

9. Create D/M/WBE economic development opportunity

10. Expand service area Improving Customer Satisfaction/Building Relationships with Stakeholders (Providing effective customer communication, effectively communicating with stakeholders - Strategies C1.4 & S1.2) DART's Internet website, DART.org, continues to attract new and existing transit customers and a variety of stakeholders. By the third quarter of FY 2004, the number of daily unique visitors had grown to approximately 259,000 per quarter. Eighty-five percent of the visitors were seeking route and schedule information or other service-oriented information, which equates to approximately 20,000 potential calls per month to DART Customer Service – about one-eighth of all telephone traffic to the call center. The remaining 15 percent of visitor traffic is spread among stakeholders seeking information about DART’s expansion programs, general agency information, and business and employment opportunities. To enhance the user-friendliness of the site and take advantage of evolving technologies, a user audit was conducted in FY 2004 and customer-driven design changes will continue in FY 2005. The redesign will accomplish these objectives:

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Page 88: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

• Better integrate the online Trip Planner into each page of the site. • Improve the incorporation of "marketing" elements and allow for expansion/contraction

as needed. • Refine site-wide navigation to optimize the use of space on each page.

These changes will encourage current site visitors to spend more time on DART.org and will entice new customers to visit the site as they plan their trip on DART or the Trinity Railway Express. Federal, State, and Local Government Relations (Strategies S1.2; S1.3; and S1.5) – In FY 2004, DART worked with the Dallas area congressional delegation to submit requests for authorization of several projects in the reauthorization of TEA-21. Congress continues to deliberate the legislation and may not complete the task until FY 2005. Government Relations staff, working closely with management and the DART Board, will continue to support the congressional delegation in their efforts to include the DART requests in final public law. Staff will also aggressively monitor the 79th Session of the Texas Legislature as it deliberates changes to the state’s public school finance system, workers’ compensation reform, and regional transportation issues. Staff will also continue to maintain a strong presence in local government activities through regular attendance at council meetings and work sessions, and continue strong communication with member cities’ staff ensuring timely resolution of DART issues. Community Affairs (Strategy S1.1 and S1.2) – The Community Affairs Section of the Marketing and Communications Department will continue to provide ongoing support for DART capital projects included in the NW and SE corridors as well as the 2030 Transit System Plan update. Continue to Build Strong Relationships with Chambers and Business (Strategy S1.6) – The chambers of commerce have proven to be great business partners and have been very supportive of DART. DART will continue its strong communications with area businesses and chambers, contractor associations and community organizations, and will continue to promote DART's employer programs, especially in transit or MIS corridors. Enhance Economic Development (Strategy S1.7) – Two of the objectives of the Agency, as stated in the DART mission statement, are to improve the quality of life and to stimulate economic development through the implementation of the Transit System Plan. While these impacts follow rail development as a rule, it has been both surprising and gratifying to see how quickly rail development has sparked transit-oriented developments along the rail lines. Even before rail opened in Richardson, station-area residential, retail, and office development exceeded DART’s cost by $23 to $1. With the opening of rail service to Plano and Garland in late 2002, the impact of our joint development efforts now exceeds $1.3 billion. Management continues to actively support all transit-oriented development around DART stations for the purpose of increasing transit ridership, reducing car trips on major thoroughfares, and receiving new sources of funds.

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Page 89: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Agency-Wide

Environmental Challenges (Strategy S1.8) – DART’s Environmental Compliance Section of the Technical Services Division of Project Management completed and was awarded ISO 14001 Certification on December 13, 2002 by SGS International Certification Service, Inc. The certification process entailed the development of an Environmental Management System (EMS) that was audited by SGS. While this certification is valid through December 2005, periodic audits confirm that DART’s EMS continues to meet the objective of ISO 14001. DART underwent such an audit in December 2003 which did confirm the ISO 14001 certification. ISO (International Organization for Standardization) is a worldwide, non-governmental organization of 146 national standards institutes that was established in 1947. Various standards have been developed, but the ISO 9000 and ISO 14000 Series are the most widely known and successful. ISO 9000 has become an international reference for quality requirements predominately in the private sector. ISO 14000 provides a mechanism for both the private and public sectors to meet environmental challenges. The most significant of the Series is ISO 14001, which establishes an EMS that serves as a framework for an entity to better manage their environmental compliance obligations. The benefits of ISO 14001 are:

• Emphasis placed on prevention, rather than corrective action • Improved environmental awareness, involvement, and competency • Better communication about environmental issues • Better relationships with regulatory agencies

DART is one of only two transit agencies in the U.S. to obtain ISO 14001 Certification. In addition, DART has been contacted by the Texas Commission on Environmental Quality (TCEQ) to participate in the development of a statewide process, similar to ISO 14001. The Environmental Compliance Section resides organizationally in the Technical Services Division of the Project Management Department. Create D/M/WBE Economic Development Opportunity (Strategy S1.9) – DART’s D/M/WBE program is designed to involve disadvantaged, minority, small and emerging, and women-owned businesses to the maximum extent possible in all facets of DART's contracting and purchasing activities. The Department of Diversity and Economic Opportunity (DEO) positions itself as a bridge between DART and disadvantaged, minority, small and emerging, and women-owned businesses. To increase access to DART procurement opportunities, the DEO Department offers and conducts various modes of technical assistance, outreach, seminars, educational training, and counseling in the understanding of federal and Agency procurement regulations. The DEO Department aggressively seeks integration of D/M/WBEs in all DART procurement and contracting opportunities, and ensures that DART is in compliance with all appropriate federal and state laws, regulations, and executive orders.

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Page 90: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

FY 2005 Budget Overview The FY 2005 Budget of $608.6 million as shown in Exhibit 9.1, is divided into three categories, which are approved individually by the Board: Operating Expense Budget, $306.5 million (excludes $21.1 million for capital planning and development costs and start-up costs); Capital Budget, $272.4 million (includes capital planning and development and start-up costs); and Net Debt Service Budget, $29.7 million.

* (Includes Non-Operating, Capital P&D, & Start-up)

FY04 Actuals Description

FY05 Budget $ Inc/{Dec}

$289,778 Operating Expense Budget $306,537 $16,759156,584 Capital Budget * 272,403 115,819

20,192 Net Debt Service Budget 29,660 9,468$466,555 $608,601 $142,046

Exhibit 9.1FY 2005 Budget(In Thousands)

The purpose of this section is to provide a detailed review of Sources and Uses of funds and variances between the actual FY 2003 Operating Expenses, FY 2004 Actuals, and the FY 2005 Budget.

Sources of Funds – Explanation of Changes Exhibit 9.2 shows sources of funding. Total funding for FY 2005 is projected at $699.1 million, $45.1million (6.9%) higher than the FY 2004 Actuals, primarily due to: a reduction in Federal Funding ($18.0 million), and an increase in Debt Issuances of $45.8 million). The variance in Federal Funding is due to a decrease in carry-forward of prior years’ allocations in formula funds for Capital Maintenance and other formula funds for bus purchases and fareboxes, which were purchased in FY 2004. The changes to Other Sources are related to the Defeased Lease program that is an item that is offset by the Defeased Lease expense in the Debt Service budget. Neither the expense nor the revenue is shown in the Financial Plan.

FY04 Actuals Description

FY05 Budget Inc/{Dec} % Change

$333.3 Sales Tax Revenues $339.3 $6.0 1.8%44.9 Operating Revenues 49.1 4.2 9.4%

3.9 Interest Income 8.5 4.6 117.9%106.4 Federal Funds 88.4 (18.0) -16.9%119.2 Debt Issuances (all CP)* 165.0 45.8 38.4%

46.3 Other Sources 48.7 2.4 5.3%$654.0 Total Sources of Funds $699.1 $45.1 6.9%

Exhibit 9.2FY 2005 Sources of Funds

(In Millions)

* Commerical Paper

BUD-1

Page 91: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

Exhibit 9.3 is a summary of Other Sources of Funds; some of these funds are contingent on capital projects being approved.

xhibit 9.4 is a summary of Uses of Funds. Operating expenses are $16.8 million (5.8%) above

Source Description FY05TERP TERP Emission Reduction Retrofit For 2002 Diesel Engines* $1.7Irving Irving Belt Line Road Contribution $2.5Irving Irving Grade Crossing Improvements* $0.4CMAQ 80%/Developer 20% South Side on Lamar $4.7City of Dallas Bryan Street Bridge Ramp Replacement at US 75* $0.5TxDOT Bryan Street Bridge Ramp Replacement at US 75* $0.5TxDOT Beltline Grade Separation $2.5

The T CentrePort/DFW Station Double Tracking (Dorothy Sink)* $0.1The T TRE Planning/Design/Construction Management Services* $0.1The T Correction of Bi-Level HVAC Deficiencies* $0.1The T TRE Vehicle & ROW Maintenance Programs $1.0The T Operating Expenses for TRE Service Hours $8.3

Defeased Lease Trustee Bank Defeased Lease Program $25.6

Homeland Security Grant Projects Pending Vulnerability Assessment $0.8Other Sources Total $48.7

FY 2005 Other Sources of Funds(In Millions)

Exhibit 9.3

EFY 2004. Details can be found on Pages BUD-5 and BUD-6. The Capital Budget for FY 2005 has increased $115.8 million (74.0%). More details are located in the Financial Plan section. The Debt Service Budget increase of $9.9 million (46%) is attributed to the increase in Principal repayments and Commercial Paper Program Interest and Fees (see Exhibit 9.9).

* (includes Non-Operating & Capital P&D & Start-up)

FY04 Actuals Description

FY05 Budget

$ Inc/{Dec} % Change

$289.8 Operating Expense Budget $306.5 $16.8 5.8%

156.6 Capital Budget * 272.4 115.8 74.0%

20.2 Net Debt Service Budget 29.7 9.5 46.9%$466.6 Total Budget $608.6 $142.0 30.4%

FY 2005 Uses of Funds (In Millions)

Exhibit 9.4

BUD-2

Page 92: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

Exhibit 9.5 shows the modal allocation breakdown of the Operating Expense Budget. This

xhibit 9.6 is a revenue comparison for FY 2003 through FY 2005. Variances are explained in

comparison shows how the Operating Expense Budget (50% of total Agency budget) is allocated over the various modes.

Operating Expense Budget Modal Summary(In Millions)

FY04 Actuals Mode

FY05 Budget

$ Inc/{Dec} % Change

$177.2 Bus $183.4 $6.1 3.5%61.6 Light Rail 69.8 8.2 13.2%17.9 Commuter Rail 18.9 1.0 5.6%

5.7 HOV 5.4 (0.2) (3.9%)26.3 Paratransit 27.9 1.6 6.1%

1.1 General Mobility 1.1 0.1 7.1%$289.8 Operating Total $306.5 $16.7 5.8%

$19.0 Capital P&D $20.7 1.8 9.4%0.5 Non-recurring (start-up) 0.5 0.0 7.1%

$309.2 Total Expenses $327.8 $18.6 6.0%

Exhibit 9.5

Efurther detail following the chart.

FY 2003 - FY 2005 Revenue Comparison (In Thousands)

FY 2003 Actuals Category

FY 2004 Actuals

FY 2005 Budget $ Inc/{Dec} % Change

$33,634 Fixed Route Passenger Revenues $33,567 $36,636 $3,069 9.1%624 Special Events Revenues 387 631 244 62.9%881 Vanpool Revenues 771 805 34 4.5%

1,065 Paratransit Revenues 1,427 1,344 (83) (5.8%)2,738 Advertising Revenue 2,530 2,575 45 1.8%1,103 Rental Income - LRT 1,614 1,504 (110) (6.8%)3,544 Rental Income - TRE 4,403 4,000 (403) (9.2%)

149 Concession/Vending Revenues 133 158 25 18.6%286 Miscellaneous 514 335 (179) (34.8%)

1,587 Grant Revenue (COPS) 1,049 668 (381) (36.4%)257 Grant Revenue (other) 536 460 (76) (14.1%)

$45,868 Total Operating Revenue $46,932 $49,116 $2,185 4.7%

$311,818 Sales Tax Revenue $333,309 $339,335 $6,026 1.8%3,987 Interest Income 5,257 8,500 3,243 61.7%6,826 Other Non-Operating Revenues 12,037 8,912 (3,125) (26.0%)

$322,631 Total Non-Operating Revenues $350,602 $356,746 $6,144 1.8%$368,498 Total Revenues $397,534 $405,863 $8,329 2.1%

Operating Revenues

Non-Operating Revenues

Exhibit 9.6

BUD-3

Page 93: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

Operating Revenues – Passenger revenues are $36.6 million (74.3%) of total operating revenues. Passenger revenues are based on ridership and average fare for fixed route. The projected average fare for FY 2005 is $0.62, the same as projected for FY 2004. As of May 31, 2004 the average fare was $0.60. The average fare is expected to improve with the installation of new fareboxes with magnetic stripe capability. The installation should be complete in the Fall of 2004. Ridership projections for fixed route are down 1.4 million (2.4%) due to the economy and service quality issues that are addressed in further detail in the modal sections. Sales Tax Revenues – FY 2004 sales tax receipts were up $21.5 million (6.9%) over FY 2003. The FY 2005 Budget proposes a 3% increase over the FY 2004 revised budget. Management has modified the short-term projections to include a 5% increase for FY 2006 and thereafter, which is reflected in future Financial Plans (see the Financial Plan section for more detail). Other Sources of Cash – Other Sources of Cash have been included to reflect the FY 2005 contribution made by the Fort Worth T towards Trinity Railway Express operations (estimated at $8.3 million). Other revenue sources are shown in Exhibit 9.3. Operating Budget Assumptions Opening of Victory Rail Station – November 2004 Opening of a new transit center in South Dallas near Martin Luther King, Jr. Blvd –

January 2005 Employee Compensation Increase – 4% Change in health care cost share from 82.8% / 17.2% to 80% / 20% Increase in fuel and utilities cost Reinstatement of 10 positions eliminated in FY 2004 45 new positions to support:

o Additional requirements due to bringing all service in-house and eliminating the service provider contract (5)

o Reduction in response time to incidents in the Field Operations area (4) o New transit center near Martin Luther King, Jr. Blvd. (4) o Customer Service Initiatives (12) o Reduction in overtime for DART Police (9) o Yard Controller responsibilities (11)

Exhibit 9.7 breaks down the Operating Expense Budget by category and compares the FY 2004 Actuals to the FY 2005 Budget. A brief commentary follows the chart providing details about the various categories and the changes that are proposed.

BUD-4

Page 94: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

FY 2003 Actuals Category

FY 2004 Actuals

FY 2005 Budget

$ Inc/{Dec} % Change

$37,501 Operator Wages $47,324 $47,626 $302 0.6%7,583 Operator Leave Wages 8,507 6,940 (1,567) (18.4%)

$45,084 S&W - Operators Payroll $55,831 $54,566 ($1,265) (2.3%)$24,624 Non-Operator Hourly Wages $27,882 $29,581 $1,699 6.1%

1,508 Overtime - Hourly 2,754 1,269 (1,485) (53.9%)$26,132 S&W - Non-Operator Payroll $30,636 $30,850 $214 0.7%$59,447 Salaries $58,407 $62,431 $4,023 6.9%

1,483 Overtime - Salaried 1,876 1,749 (127) (6.8%)529 Part-Time/Temporary 516 326 (190) (36.8%)

$61,460 S&W - Salaried $60,800 $64,506 $3,706 6.1%$132,675 Total Salaries & Wages $147,267 $149,922 $2,655 1.8%$17,394 Health & Life & Disability Insurance $18,778 $19,902 $1,123 6.0%14,069 Pension & 401K Plans 15,136 15,584 448 3.0%10,033 FICA 11,065 11,612 547 4.9%7,363 Workers Compensation 5,104 7,160 2,056 40.3%2,172 Service Incentive Pay 1,882 2,043 0 0.0%

878 Retiree Benefits 1,137 1,289 152 13.4%2,840 Paid Absences Liability 1,703 1,200 (503) (29.5%)

507 Unemployment & Other Benefits 617 544 (73) (11.8%)$55,255 Total Benefits $55,421 $59,335 $3,914 7.1%$10,406 Contract Services $9,488 $10,301 $813 8.6%

5,117 Advertising, Marketing & Public Information 3,306 4,061 755 22.8%2,759 Financial, Legal & Governmental 1,970 2,684 714 36.2%2,166 Administration, Human Resources & MBE 2,388 2,645 257 10.7%2,416 Computer & Communications 2,107 2,675 568 27.0%1,264 Vehicle & Equip Maintenance 1,060 1,755 695 65.6%

495 Engineering & Real Estate Acquisition 338 480 142 41.9%$24,623 Total Services $20,658 $24,600 $3,942 19.1%

Exhibit 9.7 – Operating Expense Budget by Category(In Thousands)

BUD-5

Page 95: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

FY 2003 Actuals Category

FY 2004 Actuals

FY 2005 Budget

$ Inc/{Dec} % Change

$12,064 Motor Vehicle Parts & Supplies - Bus $13,017 $13,473 $456 3.5%6,696 Diesel, NRV, and LNG Fuel & Lube 11,462 12,817 1,356 11.8%4,503 Light Rail Parts 3,562 4,162 600 16.8%1,661 Facilities Operations - Materials & Supplies 1,713 1,840 127 7.4%1,282 Office Equipment & Supplies 1,654 1,819 165 10.0%1,029 Uniforms, Tools & Shoes 1,215 1,206 (9) (0.7%)

$27,235 Total Materials & Supplies $32,622 $35,317 $2,695 8.3%$4,067 Power & Light LRT - Vehicle $4,285 $4,375 $90 2.1%

3,213 Utilities - Facilities 3,175 3,709 534 16.8%1,146 Communications 1,094 1,140 46 4.2%

$8,426 Total Utilities & Communications $8,554 $9,224 $670 7.8%$3,500 Liability & Property Insurance $2,613 $2,288 ($325) (12.4%)

621 Liability Claims 1,189 1,317 0 0.0%$4,121 Total Claims & Insurance $3,802 $3,605 ($197) (5.2%)

$35,409 Suburban Local/Express 329 1,506 DART On-Call Services 1,996 2,170 174 8.7%

$36,915 PT - Bus $2,325 $2,170 ($155) (6.7%)$16,315 Paratransit Services $18,157 $19,076 $918 5.1%

14,871 Trinity Railway Express 14,017 15,215 1,198 8.5%981 TDM - Vanpool 730 901 171 23.4%559 HOV Services 678 815 0 0.0%

$69,641 Total Purchased Transportation $35,908 $38,178 $2,269 6.3%$856 Fuel & Lube/Other Taxes $1,501 $1,513 $12 0.8%

965 Training/Travel 1,046 1,437 391 37.4%1,597 Facilities & Equip - Leases 1,433 1,093 (340) (23.7%)

506 Employee Programs, Dues & Subscriptions 448 754 306 68.3%988 Public Information 562 786 223 39.7%

$4,912 Total Taxes, Leases & Other $4,989 $5,582 $593 11.9% Management Reserve 2,018 2,018 100.0%

$326,888 Total Expenses (w/o Start-up/P&D) $309,222 $327,781 $18,559 6.0% ($18,953) Capitalized P&D ($18,952) ($20,718) ($1,766) 9.3%

(906) Start-Up Costs (492) (526) (34) 7.0% ($19,859) Total Other ($19,444) ($21,244) ($1,800) 9.3%$307,029 Total Expenses $289,778 $306,537 $16,759 5.8%

Exhibit 9.7 – Operating Expense Budget by Category - cont'd(In Thousands)

BUD-6

Page 96: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

Variance Analysis

FY 2005 Operating Expense Budget

Salaries & Wages – This category increased $2.7 million (1.8%) over FY 2004. The primary drivers of this increase are a 4% increase to employee base compensation ($5.7 million), of which $5.1 million was included in the revised FY 2004 budget for a 4% lump sum, the net change of approximately $600,000 is included for overtime and other pay; 55 additional positions ($1.8 million), of which 10 are a reinstatement of 102 positions eliminated during FY 2004; and 45 in support of various projects or initiatives. Included in this category are savings of $538,000 for the annualization of the May 2004 service change, and a change in the average rate for operators due to the addition of approximately 200 new operators in FY 2004 and a slight reduction in hourly overtime ($163,000). For details by department on proposed additions, see the position summary at Exhibit 9.10.

Benefits

• Health Insurance ($19.1 million) remains the major cost driver of all DART

benefits. DART is self-insured and pays all administrative fees and claims. Projected for FY 2005 is a 5% growth in participation to approximately 3,100 employees who will elect DART as their health benefit provider and an increase in the cost share from 82.8% DART and 17.2% employee to an 80% / 20% split. The proposed budget also includes an increase to employee co-pays for office visits and emergency room visits. This implementation would pass the additional cost on to the users. This means an increase to employees of approximately $13 per month for employee-only coverage and $35 per month for employee and family coverage. New hires are not eligible for health benefits until after 90 days of employment. Management is evaluating new providers and a possible Consumer Directed Healthcare program for FY 2006 - 2007.

• Paid Absence Liability – The revised PTO policy states that upon termination of

employment at any age, unused PTO hours remaining in an employee’s leave bank will be paid at the employee’s normal rate of pay in a lump sum based on years of continued service. Employees with 5 to 9 years of employment will receive 25%; 10 to 14 years will receive 50%; 15 to 19 years will receive 75%; and 20+ years will receive 100% of their accrued PTO bank. The amount required to fund this policy for FY 2005 is an additional $300,000. This liability fund is only used when an employee terminates from DART. The remaining dollars in this category are to cover prior years’ accrual of vacation, sick leave, and PTO.

BUD-7

Page 97: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

Services

• The FY 2005 Services budget is a $3.9 million (19.1%) increase over FY 2004. A

reclassification of bus parts previously in Materials & Supplies of $745,000 is partially responsible for the $1.1 million increase in Vehicle & Equipment Maintenance. Other increases include $475,000 for HOV lane striping that was eliminated in FY 2004. For safety purposes, HOV lanes must be re-striped every four years. This is a continuous process since we do not stripe all lanes every year. The Stemmons I-35 HOV lane is scheduled for re-striping in FY 2005. Other service increases or decreases are noted below: Contract Services includes security services for the new South Dallas transit

center and an increase in coverage at stations with high security issues. The increase in Financial, Legal & Governmental is due to an increased usage

of administrative law judges in the procurement dispute process. Computers and Communications increased 27% ($568,000) due in part to the

expiration of warranties on computer software packages that were included in the purchase price.

Materials & Supplies

• Almost 70% ($1.8 million) of the $2.7 million (8.3%) increase in Materials &

Supplies is due to projected price increases for diesel and LNG fuel and the expiration of DART’s fuel hedge contract. Currently, LNG is under contract, limiting the increase; however, we have programmed a 36% increase after the contract expires in June 2005. Based on estimates of futures cost from the Department of Energy (DOE), diesel fuel is expected to increase 20% over the programmed FY 2004 costs. The increase in Motor Vehicle Parts and Supplies can be attributed to an increase in projections for inventory obsolescence ($1.0 million); this is a non-cash item.

Utilities

• Through December 2004, DART has a contract that locks-in favorable rates, allowing

savings in this category. Based on current discussions with market specialists, electricity costs are expected to increase in the range of 26.6%. Also programmed is a slight increase of 4.7% for consumption, resulting in an increase to this category.

BUD-8

Page 98: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

Purchased Transportation

• Management continues to explore the use of DART On-Call services, which are more

cost effective in areas where low ridership does not warrant the use of regular fixed-route bus service. The increase is due to an increase in rates and the annualization of the Richardson service launched during the May 2004 service change. Any additional services for FY 2005 will be reviewed as part of the planning for the February 2005 service change. Comparisons will be made to ensure that the cost for the service is offset by savings from operating miles and hours.

• The Paratransit Services increase for FY 2005 is primarily due to contract increases

and the potential for increased service required in FY 2004 that was budgeted in the FY 2004 Management Reserve for supplemental service. Details on the assumptions for Paratransit Services can be found in the Paratransit Services section of the Business Plan.

• Trinity Railway Express, provided jointly with the Fort Worth Transportation

Authority (the T), offers commuter rail services from Union Station in downtown Dallas to downtown Fort Worth. The current contract with Herzog Transit Services, Inc. expires in September 2005. An estimated $650,000 is included in the FY 2005 Budget to accommodate the deployment of a new contractor over a period of six months if a new contractor is selected. The additional net increase of $200,000 is attributed to the restoration of late-evening service eliminated in FY 2004, resulting in a higher-than-anticipated loss of riders. Estimated revenues of $8.3 million related to services for the T’s contribution to TRE Operating Expenses are budgeted in the revenue section under Other Sources of Cash.

The FY 2005 budget of $5.6 million for Taxes, Leases & Other is $593,000 (11.9%)

higher than FY 2004. During FY 2004, the DART Wellness Program was eliminated due to budgetary restraints, and this initiative is reinstated in the current budget ($72,000). Also, during FY 2004, a new division level measurement, reporting, and improvement system was developed and rolled out to each operating division. The initiative provides feedback to all team members about how their division is performing on key indicators. This program has seen positive results thus far and will be implemented at all bus and rail divisions by the end of FY 2004. To support this effort, $40,000 has been included in the FY 2005 Budget. In addition, $100,000 is included to cover DART’s expenses as the host agency for the 2005 APTA Annual Meeting & International Public Transportation Expo.

Management Reserve

The Management Reserve is for expenses such as contractual increases, additional service, etc. which arise during the year. The President/Executive Director manages this reserve.

BUD-9

Page 99: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

FY 2005 Capital Budget Shown in Exhibit 9.8 is a summary of the FY 2005 Capital and Non-Operating Budget which includes: LRT expansion, bus and light rail vehicle system maintenance programs, scheduled vehicle replacements (including fixed route buses, paratransit vehicles, and non-revenue vehicles), and farebox replacements. A current funding level for FY 2005 has been established at $272.4 million for capital and non-operating activities. A list of major capital projects recommended for inclusion in the FY 2005 Budget is located in the Financial Plan section.

FY 2004 Actuals Category

FY 2005 Budget Variance

$146,713 Total Capital Projects $266,599 $119,88681 Non-Operating 3,104 3,023

Road Improvements/ITS7,816 LAP/CMS Program* 0 ($7,816)1,735 PASS Program* 0 (1,735)

203 TSM (General & Street Repair Program 2,100 1,89736 Regional ITS 600 564

DART/TxDOT ITS* 0 0$9,790 Total Road Improvements/ITS $2,700 ($7,090)

$156,584 Total Capital & Non-Operating $272,403 $115,819

Exhibit 9.8Capital & Non-Operating

(In Thousands)

* Please note that although no further funds will be allocated to these programs, previously unspent fund balances may be spent down.

BUD-10

Page 100: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget

FY 2005 Net Debt Service Budget In August 2000, the voters in DART’s service area approved the issuance of $2.9 billion of long-term sales tax revenue bonds to be issued over several years to accelerate future system expansion. DART also has an approved $600 million commercial paper program. This budget assumes that DART will sell $165 million in commercial paper during FY 2005. Exhibit 9.9 is the FY 2005 Net Debt Service Budget.

FY 2004 Actuals Category

FY 2005 Budget Variance

1,794 Commercial Paper Program Interest & Fees * $6,146 $4,35224,763 Long-Term Debt Program Interest 24,438 (325)

271 Amortization of Issuance Costs 271 0(3,323) Financial Advisor and Other Fees 486 3,80926,022 Defeased Lease Expense 25,541 (482)

$49,527 Total Expenses $56,882 $7,355$1,945 Principal Repayments $6,819 $4,874

$51,472 Total Debt Service Budget $63,701 $12,229

(26,022) Less: Defeased Lease Income ($25,541) 482(5,257) Less: Interest Income** (8,500) ($3,243)

$20,192 Total Net Debt Service Budget $29,660 $9,468

* Assume issuing $165 million in new CP and CP interest rate of 1.75%

** Interest income is shown here because of the interest rate link between interest income and interest expense.

Net Debt Service Budget(In Thousands)

Exhibit 9.9

BUD-11

Page 101: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Budget Organization Chart and Position Summary Exhibit 9.10 summarizes position changes by department. The FY 2005 Operating Expense Budget includes 39 new salaried positions, 16 hourly positions, and one modification for FY 2004 for the return of an employee previously on military leave. Exhibit APX.8 is DART’s organization chart through the Assistant Vice-President level.

FY02 Total

and FY04 Net

FY04 Business

PlanFY04 Mods

FY05 New

FY05 Total

Commuter Rail 7 2 9 - 1 10 DART Police 251 (14) 237 - 9 246 DEO 23 (5) 18 - - 18 EVP Administration 88 (15) 73 - 2 75 EVP Operations 51 (8) 43 - 1 44 EVP Program Development 2 3 5 - - 5 Finance 82 (15) 67 - 14 81 Human Resources 42 (8) 34 - 1 35 Internal Audit 15 (4) 11 - - 11 Legal 25 (5) 20 - - 20 Maintenance 157 - 157 1 - 158 Marketing & Communications 84 (20) 64 - 1 65 Office of Board Support 7 (1) 6 - - 6 Office of the President 4 (1) 3 - - 3 Paratransit 56 (6) 50 - - 50 Planning & Development 68 (13) 52 - - 52 Procurement 50 (10) 40 1 2 43 Project Management 62 (14) 48 - - 48 Transportation 268 (39) 229 - 8 237

Total Salaried Positions 1,342 (173) 1,166 2 39 1,207

EVP Operations - Hourly 42 (2) 40 - 4 44 Maintenance - Hourly 553 58 611 (1) - 610 Marketing - Hourly 48 (7) 41 - 12 53 Paratransit - Hourly 19 (3) 16 - - 16 Planning - Hourly 26 (2) 24 - - 24 Transportation - Hourly 1,108 222 1,330 - - 1,330

Total Hourly Positions 1,796 266 2,062 (1) 16 2,077Grand Total 3,138 93 3,228 1 55 3,284

Exhibit 9.10FY 2005 Budget

Full-Time Salaried Position Summary - By Department

Full-Time Hourly Position Summary - By Department

BUD-12

Page 102: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

FY 2005 Twenty-Year Financial Plan

Overview This section provides an overview of the FY 2005 Twenty-Year Financial Plan (the "FY05 Plan"). The first year of the FY05 Plan corresponds with the FY 2005 Budget, and the first five years of the Financial Plan comprise the FY 2005 Business Plan. The purpose of the final 15 years of the Twenty-Year Financial Plan is to validate the affordability of DART's long-range Transit System Plan, which includes the Agency's commitments for future system expansion, as well as the issuance and repayment of debt. The FY05 Plan demonstrates that DART has the financial capacity to meet the Agency's Transit System Plan commitments and to continue current levels of bus service and expanded rail service as programmed. Each section of the FY 2005 Twenty-Year Financial Plan is described in detail:

1. Sources of Funds a. Sales Taxes b. Operating Revenues c. Interest Income d. Federal Funding e. Debt Issuance f. Other Sources

2. Uses of Funds a. Operating Expenses (by mode) b. Capital and Non-Operating Expenditures c. Debt Program

3. Supplemental Financial Information

This section also provides definitions of terms; discusses changes from prior plans; outlines the major assumptions used to develop the FY05 Plan; and illustrates some potential risks and potential opportunities. On September 23, 2003, the DART Board adopted the FY04 Financial Plan, hereafter referred to as the “Original FY04 Plan.” This Plan was amended on August 10, 2004 to reflect improved sales tax receipts for 2003 and 2004 and to address employee compensation issues. Exhibit 10.1 summarizes the changes in the sources and uses of cash between the FY04 Plan and the FY05 Plan for the five-year period FY 2005 through FY 2009. The Twenty-Year Financial Plan is included as an attachment to the Board resolution, which is located at Exhibit APX.1. A copy of the FY04 Plan, as amended, is included at Exhibit APX.3.

FP-1

Page 103: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.1 FY 2005 – FY 2009 Sources and Uses of Funds Comparison

(In Millions)

SOURCES OF FUNDS1 Sales Tax Revenues $1,768.8 $1,914.8 $1,878.3 ($36.5) (1.9%)2 Operating Revenues 270.0 270.0 263.6 (6.4) (2.4%)3 Interest Income 103.0 128.8 113.9 (14.9) (11.5%)4 Formula Federal Funding 194.9 194.9 321.8 126.9 65.1% 5 Discretionary Federal Funding 321.1 321.1 325.0 3.9 1.2% 6 Debt Issuances 864.0 864.0 1,754.0 890.0 103.0% 7 Other Sources 153.2 153.2 183.5 30.3 19.8% 8 Total Sources of Funds $3,674.9 $3,846.6 $4,840.0 $993.4 25.8%

USES OF FUNDSOperating Expenses:

9 Bus $932.2 $932.2 $993.6 $61.3 6.6%10 Light Rail Transit 332.9 332.9 368.3 35.4 10.6% 11 Commuter Rail/RR Management 104.2 104.2 99.5 (4.6) (4.4%)12 Paratransit 150.8 150.8 153.6 2.8 1.8% 13 HOV Transitways 29.1 29.1 30.5 1.4 4.8% 14 General Mobility - TDM 6.6 6.6 7.0 0.4 6.3% 15 Total Operating Expenses $1,555.9 $1,555.9 $1,652.5 $96.7 6.2%

Capital Projects and Non-Operating:16 Agency-wide* $0.0 $0.0 $53.8 N/A N/A 17 Bus* 71.5 71.5 83.1 N/A N/A 18 Light Rail Transit 1,344.1 1,344.1 2,242.3 898.2 66.8% 19 Commuter Rail/RR Management 22.7 22.7 93.6 70.9 312.1% 20 Paratransit 16.7 16.7 12.8 (3.8) (23.0%)21 HOV Transitways 35.0 35.0 63.2 28.2 80.8% 22 Capital P & D, Start-Up, Non-Operating 112.3 112.3 128.5 16.2 14.4% 23 General Mobility - Road Impr./ITS 9.0 9.0 8.9 (0.0) (0.3%)24 Total Capital and Non-Operating $1,611.3 $1,611.3 $2,686.3 $1,009.7 62.7%

Debt Service25 Principal - LT/ST Debt $47.4 $47.4 $62.4 $15.0 31.7% 26 Interest and Fees - LT/ST Debt 212.3 212.3 $298.0 85.7 40.4% 27 Total Debt Service $259.7 $259.7 $360.4 $100.7 38.8%

28 Total Uses of Funds $3,426.8 $3,426.8 $4,699.2 $1,207.0 35.2%

* Agency-wide Projects were previously included with Bus projects for reporting purposes.

FY05 Plan Variance PercentageLine Description FY04 Original

FY04 As Amended

FP-2

Page 104: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

SOURCES OF FUNDS Total sources of funds for the period FY 2005 through FY 2009 have increased by $993.4 million (25.8%) over the FY04 Plan, due primarily to increased debt issuance for the planned recovery of some of the delay in the LRT Phase II build-out that was contained in the FY04 Plan. Exhibit 10.2 details the sources of funds in the FY05 Plan for the period FY 2005 through FY 2009.

Exhibit 10.2 FY05-09 Sources of Funds Comparison

Sales Tax Revenues40%

Operating Revenues5%

Interest Income2%

Federal Funding13%

Debt Issuances36%

Other Sources4%

Sales Tax Revenues (line 1 of the Financial Plan) Sales tax revenues comprise 40% of DART’s total projected sources of funds through FY 2009 and 77% of those sources once debt issuances and Federal Funding are excluded. DART currently uses the forecasts of two independent economists for its sales tax projections – M. Ray Perryman, PhD. and Jon Hockenyos, PhD. DART has used Dr. Perryman’s models for many years and he has been quite accurate over the long term prior to the economic downturn between 2000 and 2003. However, the Perryman model, the primary drivers of which are personal income in Dallas and Collin counties, the consumer price index for the Dallas Metropolitan Statistical Area, and retail sales for the State of Texas, can be slow to respond to significant short-term changes. Dr. Hockenyos, who specializes in short-term projections, was retained to obtain more reliable short-term forecasts. Hockenyos provides a sales tax forecast that looks forward 18 - 24 months. The Perryman model is received annually, and Hockenyos’ forecasts are received quarterly.

FP-3

Page 105: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

The method for estimating sales tax revenue for financial planning purposes is discussed in Financial Standard B1 (FS-B1), which states:

Sales tax revenue forecasts shall be based on a sales tax model developed specifically for the DART Service Area by an independent economist, except for the most current year, which may be based on management’s best estimate. To ensure a conservative sales tax estimate, the model’s projections may be reduced by 1% for years 6-10 and by 2% thereafter, dependent on current economic trends.

However, DART management has chosen to take a different approach in projecting sales taxes in the FY05 Financial Plan, which is discussed in the rest of this section. Small changes in the near-term can have much greater long-term ramifications than more substantial changes in later years of the Plan. Therefore, in an effort to be conservative, DART is using the Perryman projection of 5.63% for FY 2004 (current growth through June is 6.6%), which ties closely to Hockenyos’ estimate of 5.5%. Going forward, DART Management has chosen to reduce Perryman’s projected growth for FY 2005 from 6.1% to 3% in FY 2005 (Hockenyos is currently projecting 7% growth) and, in the future, from variable rates between 5% and 6% to a flat 5% for the life of the Plan. This ensures a conservative Financial Plan with regard to sales tax collections and provides a safeguard against the impact of future unforeseen negative financial events. Exhibit 10.3 provides historical sales tax growth rates and illustrates the comparison of 20-year sales tax growth rates using different assumptions.

Exhibit 10.3

FP-4

Page 106: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Projected Sales Tax Growth Rates

xhibit 10.4 translates the growth rates shown in Exhibit 10.3 into projected annual sales tax

Exhibit 10.4 Projected Annual Sales Tax Receipts

bit 10.4 translates the growth rates shown in Exhibit 10.3 into projected annual sales tax

Exhibit 10.4 Projected Annual Sales Tax Receipts

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

FY98FY99

FY00FY01

FY02FY03

FY04FY05

FY06FY07

FY08FY09

FY10FY11

FY12FY13

FY14FY15

FY16FY17

FY18FY19

FY20FY21

FY22FY23

FY24

Perryman Perryman + FS-B1 FY05 Plan FY05 Plan + FS-B1

Ereceipts. receipts.

(In Millions) (In Millions)

FP-5

$ 0

$ 20 0

$ 40 0

$ 60 0

$ 80 0

$ 1 ,00 0

F Y 0 5 F Y 06 F Y 07 F Y 0 8 F Y 0 9 F Y 1 0 F Y 11 F Y 12 F Y 1 3 F Y 1 4 F Y 1 5 F Y 1 6 F Y 17 F Y 18 F Y 1 9 F Y 2 0 F Y 2 1 F Y 22 F Y 23 F Y 2 4

P e rrym a n P errym a n + F S -B 1 F Y 0 5 P la n F Y 05 P lan + F S -B 1

Page 107: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Working each different scenario into the affordability analysis, the cash availability profile looks like Exhibit 10.5.

Exhibit 10.5FY 2005 Financial Plan Cash Availability Profile

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

In M

illio

ns

Operating Exp. Capital P&D Phase II Non-Phase II Capital Debt ServiceFY05 Plan BPP-B1 - 3% in 2005 BPP-B1 Pure Perryman

Financial Capacity in Critical Year of 2017

FY05 Plan………..………..……...….$220MBPP-B1 (3% in 2005)…...….......……$344MBPP-B1…………....……....…………$607MPure Perryman…..…....……..………$873M

As Exhibits 10.3 through 10.5 clearly show, this is a conservative sales tax forecast, pulling $1.1 billion in revenues out of the Twenty-Year Plan rather than using the growth rates supplied by the Perryman model. Using the Management-adjusted growth rates also provides a twenty-year total revenue figure that is within $100 million of the Financial Planning Parameter FS-B1; it simply distributes the revenue differently. The Management-adjusted distribution assumes lower receipts earlier in the Plan, which is the more conservative approach. From a long-term affordability standpoint, in the year of lowest Financial Capacity (as defined by unrestricted cash balance plus unissued long-term debt), Management’s assumption has the lowest value (as shown in Exhibit 10.5) in the critical year of 2017. Affordability is discussed in more detail under the Net Available Cash Line on page FP-21. As a point of historical reference, Exhibit 10.6 compares the total sales tax receipts from various financial plans. In the FY04 Plan, sales tax growth rates were projected to be down 7.3% for FY 2003, up 1.3% in FY 2004, and up 5% thereafter. The economic recovery was faster and stronger than anticipated, resulting in FY 2003 receipts only being down 4.2% and FY 2004 projecting to be up 5.6%. Exhibit 10.6 highlights that while the economy has rebounded somewhat from the FY04 Plan, it is still $5.5 billion (33%) below what was projected in the FY02 Plan; and regardless of how strong the economy is over the next few years, those lost revenues can never be recovered.

Exhibit 10.6 Comparison of 20-Year Estimated Sales Tax Receipts by Financial Plan

FP-6

Page 108: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

(In Billions)

$ 1 1 .2

$ 1 6 .7

$ 1 1 .6$ 1 0 .6

$ 1 1 .5

$ 0

$ 5

$ 1 0

$ 1 5

$ 2 0

F Y 0 2 A p p r o v e d P la n F Y 0 3 D r a f t P la n O r ig in a l F Y 0 4 P la nF Y 0 4 P la n a s A m e n d e d F Y 0 5 P la n

Please note the apparent contradiction – sales tax revenues decline from the FY04 Plan as Amended to the FY05 Plan from $11.5 billion to $11.2 billion despite the improving economy. This is due to the fact that the FY 2004 Plan as Amended adjusted sales taxes up for FY 2003 and FY 2004, but did not change the FY 2005 growth rate. The FY05 Plan decreases the FY05 sales tax growth rate from 5% to 3%. This has a $220 million effect over the life of the Plan. Another important point is that these revenues include both inflationary and real growth components. Because expenses and revenues are affected similarly by inflation, the key portion of the sales tax growth rate is the real growth component. Based on the Perryman model, this component is projected at approximately 2.5% for the life of the Plan. Real growth includes both regional population and employment growth as well as productivity growth from current businesses in the region. Operating Revenues (line 2) Operating revenues include passenger revenue, advertising revenue, rental income, CMAQ vanpool contribution, and COPS grant funds for DART police positions. Operating revenues are projected to contribute $263.6 million (5.5%) of DART's sources of funds through FY 2009. This is less than a 2.4% decline from the FY04 Plan. Passenger revenues are the primary component of operating revenues (81%) between FY 2005 and FY 2009. Business Planning Parameter FS-B2 states, "the Board will consider fare modifications from time to time to assist in achieving the Service Plan, ridership, and subsidy per passenger targets and to maintain DART's financial viability." In accordance with this Parameter, the FY01 and FY02 Financial Plans contained assumptions that the average fare would grow by the rate of inflation each year. Because this does not happen, the FY04 Plan was adjusted to accommodate a fare increase every five years of approximately the same magnitude

FP-7

Page 109: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

as the change in FY 2003 (17%). The next programmed fare increase is in 2008. Exhibit 10.7 details the effect of the programmed fare changes on fixed route average fare.

Exhibit 10.7 Projected Fixed Route Average Fare

Year Avg. Fare2004-2007 $0.62 2008-2012 $0.73 2013-2017 $0.85 2018-2022 $0.99 2023-2027 $1.16

Interest Income (line 3) Interest income is projected to contribute $113.9 million, or 2.4% of total sources of funds for the next five years. This represents an increase of $10.9 million (11%) from the Original FY04 Plan. This is due to slowly increasing interest rates as well as higher cash balances early in the Plan. It is a decrease of $14.9 million (12%) from the FY04 Plan as Amended due to the reduction in the FY05 Sales Tax estimate which has the domino effect of reducing interest income.

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Interest income is calculated by multiplying average cash balance for each year, including reserves, by the projected interest rates. These rates are estimated at 75 basis points (0.75%) above the rate that DART pays when it issues short-term debt (Commercial Paper) in FY 2005 and 100 basis points (1.0%) over the Commercial Paper (CP) rate through 2008. This differential increases to 150 basis points (1.5%) as CP interest rates rise above 4.5% in FY 2009. Federal Funding (lines 4 and 5) Federal funds are included in the following line items of the Plan: Formula Federal Funding (line 4) and Discretionary Federal Funding (line 5). Formula funds include dollars received under 49 U.S.C. § 5307, Fixed Guideway Modernization funds, and Congestion Mitigation/Air Quality (CMAQ) projects approved by the North Central Texas Council of Governments (NCTCOG). Discretionary funds are authorized under 49 U.S.C. § 5309 and appropriated by Congress annually. Discretionary funding is provided primarily for New Start bus and rail projects. Formula Federal Funding (line 4) Formula funds are $321.8 million, or 6.6% of total sources of funds through FY 2009. This represents a $126.9 million (65%) increase from the FY04 Plan due primarily to increasing levels of Formula Funding allocations. Under the proposed Surface Transportation Reauthorization Bill, DART has received Federal appropriations of $41.5 million in FY 2004 for §5307 and Fixed Guideway Modernization funding. Projected formula funds have been programmed at the same amount each year thereafter and not adjusted for inflation, in accordance with FS-B10. Projected formula funds through FY 2009 also include $87.2 million of other formula funding including CMAQ funds, the farebox procurement, and the Victory Station construction project. Discretionary Federal Funding (line 5) Discretionary funding comprises $325 million, or 6.7% of total sources through FY 2009, which is essentially the same as the FY04 Plan. This line item is predicated on DART receiving a $700 million Full Funding Grant Agreement (FFGA) for the entirety of the Phase II build-out. Phase II includes the Northwest and Southeast corridors, along with the Irving line to DFW Airport, the Rowlett extension, a CBD rail solution (either a second surface line or subway), and the SOC-3 line segment. This Plan assumes up to 50% federal participation in the federally funded portions of the build-out and 20% participation on the entire Phase II Build-out. By comparison, DART received an 18% Federal share for the Starter System and a 33% Federal share for the Phase I NC LRT build-out. FFGA funds have been programmed based on the expected Phase II cash flows. The Plan also assumes some discretionary funds will be available for bus replacements (30%) and $12.8 million toward new passenger facilities. Exhibit 10.8 details the anticipated receipt of Formula and Discretionary Funds over the life of the Plan.

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.8

Anticipated Capital Grant Funding (In Millions)

$ 0

$ 1 5 6

$ 3 1 2

F Y 0 5 F Y 0 6 F Y 0 7 F Y 0 8 F Y 0 9 F Y 1 0 F Y 1 1 F Y 1 2 F Y 1 3 F Y 1 4 F Y 1 5 F Y 1 6 F Y 1 7 F Y 1 8 F Y 1 9 F Y 2 0 F Y 2 1 F Y 2 2 F Y 2 3 F Y 2 4

F o rm u la F u n d in g D is c re t io n a ry F u n d in g

Debt Issuance (line 6) DART plans to issue $381 million of Commercial Paper (CP) between FY 2005 and FY 2007. This will increase our total outstanding CP to $600 million. Additionally, $1.37 billion in long-term debt will be issued through FY 2009 (see Exhibit 10.13 for detail by year). Total debt issuances are increasing $890 million (103%) from the FY04 Plan. The increase is actually only an acceleration in debt issuance, not a net increase to the total Plan. In fact, the current Plan only calls for the issuance of $2.7 billion in long-term debt versus $2.9 billion in the FY04 Plan. Earlier issuance of debt is required by the recovery of some of the schedule delay that was included in the LRT Phase II build-out in the last two plans. Additional details regarding DART’s Debt Program are shown under Uses of Funds. Other Sources (line 7) Other sources of funds total $183.5 million between FY 2005 and FY 2009 and represent 3.8% of total sources of funds for that same period. This line item is predominantly composed of non-grant contributions from other public entities, such as the Fort Worth T's contribution toward its share of the operating and capital costs of the Trinity Railway Express ($44 million and $6 million, respectively), and the total external contributions for the Love Field project ($111 million through FY 2009, assuming the Airport Tunnel Option) and $23 million in other miscellaneous contributions.

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

USES OF FUNDS Operating Expenses (lines 9 through 15) Total operating expenses for the period FY 2005 through FY 2009 are projected to be $1.65 billion, a $96.7 million (6.2%) increase from the FY04 Plan. This increase is due to a variety of factors including the new programmed openings of HOV lanes in 2007, the recovery of one year in the LRT Phase II build-out schedule moves the operating costs related to SE-1 and start-up costs for the remainder of the Northwest and Southeast forward into 2009, increasing fuel and utilities costs, and increased healthcare costs. Exhibit 10.9 shows the modal distribution of operating expenses for the period FY 2005 through FY 2009.

Exhibit 10.9 Operating Expenses FY 2005-FY 2009

(In Millions)

$993.6

$7.0$30.5

$153.6

$99.5

$368.3

Bus Light Rail TransitCommuter Rail/RR Management ParatransitHOV Transitways General Mobility - TDM

From a policy perspective, changes in operating expenses in future years are controlled by Financial Standards B3, B4, and B5 (see Exhibit APX.2). FS-B3 and FS-B4 relate to fixed route service, which accounts for more than 88% of projected operating costs over the next five years. The primary cost drivers for the variable expenses of fixed route service are the number of miles, hours, and vehicles in service; contract rates for purchased transportation; operator absences; and fuel prices. The key efficiency measurement for DART is subsidy per passenger. Service levels and subsidy per passenger are discussed in detail in the modal sections of this report. FS-B5 places a limit on the total increase in operating expenses to 90% of inflation plus service changes and new programs. Exhibit 10.10 compares the historical and projected future operating budget as well as annual operating expense growth.

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.10 Historic Growth vs. Projected Growth – Operating Expenses

$242.4

$264.2

$304.5 $305.9$294.2

$317.3$326.8

$345.5$356.3

$306.5

15.2%

0.5%

-3.8%

4.2%3.5%

3.0%

5.7%

3.1%

9.0%

5.1%

$0

$100

$200

$300

$400

$500

FY00A FY01A FY02A FY03A FY04B FY05B FY06P FY07P FY08P FY09P

Ope

ratin

g Ex

pens

es (M

illio

ns)

-5%

0%

5%

10%

15%

20%

Ann

ual G

row

th R

ate

Operating Expenses Growth Rates

This perspective shows the budget growth for the past five years and the next five years both in absolute dollars and as a growth percentage. The increases in the first three years (FY 2000 – 2002) show the growth related to opening of the LRT Phase I build-out. The next two years (FY 2003 – FY 2004) show DART’s cost-cutting measures adjusting to the reduced sales tax receipts. The future growth rates include normal inflationary growth and allowance for system expansion such as: the LRT Spur to the American Airlines Center, the transit center at the Martin Luther King, Jr. Station, additional passenger facilities maintenance, new HOV lanes, and other miscellaneous programs. In future years of the Plan, operating expense for each modal line item is based on the prior year’s budgets, plus 90% of the inflation rates projected by the Perryman sales tax model, plus the incremental cost of operating new services, new facilities, and other approved programs. Bus Expenses (line 9) Bus operating expenses for the five-year period ending in FY 2009 are $61.3 million (6.6%) higher than in the FY04 Plan. The level of bus service remains fairly constant over the period; however, the assumption of the service provider contract by DART and the current significant increases in the cost of fuel resulted in the increase in bus service costs. Additional details are included in the Bus modal section.

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Light Rail Transit Expenses (line 10) This line includes the projected annual cost to operate and maintain DART's light rail service. Light rail operating expenses between FY 2005 and FY 2009 are $35.4 million (10.6%) higher than the FY04 Plan because of higher electricity costs and the recovery of some of the delay to the Phase II build-out. More details are included in the LRT modal section. Commuter Rail and Railroad Management Expenses (line 11) This line includes the consolidated cost to operate the Trinity Railway Express (TRE) and railroad corridor management costs for DART-owned active freight rail lines. DART and the Fort Worth Transportation Authority (the T) contract with an outside provider for the TRE service. Projected TRE operating expenses for the next five years are $99.5 million, a 4.4% decrease from the FY04 Plan. Please refer to the more detailed discussion in the Commuter Rail modal section. Paratransit Expenses (line 12) Paratransit expenses are budgeted at $27.7 million for FY 2005 and $153.6 million over the next five years. This is an increase of $2.8 million (1.8%) over the FY04 Plan. These projections are relatively flat after increases in the past several years as DART adjusts to the FTA-mandated policy of zero trip denials. This mandate increases ridership and decreases productivity. DART management is working actively to mitigate the effects of this mandate. Additional details are included in the Paratransit Services modal section. High Occupancy Vehicle (HOV) Transitway Expenses (line 13) HOV costs are projected to be $30.5 million between FY 2005 and FY 2009, $1.4 million (4.8%) higher than the FY04 Plan. The increases are predominantly due to the inclusion of two new HOV lanes into DART’s Capital Program, which are scheduled to be completed in 2007. A more detailed discussion of HOV programs is included in the HOV/General Mobility section. General Mobility (GM) – Transportation Demand Management (TDM) Expenses (line 14) TDM programs consist mainly of vanpool and carpool services and represent less than half of 1% of the total operating budget. Projected costs are $7.0 million over the next five years, which is $400,000 above the FY04 Plan. Additional details on General Mobility programs are contained in the HOV/General Mobility section. Capital and Non-Operating Expenditures (lines 16 through 24) FS-B9 requires that "Timely replacement of assets shall be the highest priority to ensure a safe system,” and that reserve levels shall be based on an independent assessment of asset condition (to be completed at least once every five years)." Such a study was completed in FY 2003 and is the basis for much of the capital program.

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Page 115: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan Capital and Non-Operating expenditures total $2.69 billion through FY 2009. This is an increase of $1.01 billion (63%) over the same period from the FY04 Plan due primarily to the programmed recovery of the one-year delay in the LRT Phase II build-out. Capital projects are organized into four categories: Expansion, Replacement, Maintenance, and Other. Expansion projects include the addition of new facilities and/or passenger amenities (e.g., transit centers), infrastructure for new services (e.g., light rail/HOV/commuter rail), and the addition of new operating facilities. Replacement projects include like-kind asset replacements for vehicles, equipment, and infrastructure. Maintenance projects include major maintenance programs and vehicle and facility rehabilitations that are scheduled at regular intervals. Other projects are those items that do not fit into any other category, such as emission reduction programs, safety equipment, enhanced signage, etc. Exhibit 10.11 details the modal and categorical distribution of capital projects.

Exhibit 10.11 Capital Expenditure Categories FY 2005-FY 2009

(In Millions) Mode Expansion Maintenance Replacement Other Total

Agency-wide $0.0 $2.1 $46.5 $5.2 $53.8Bus 29.5 28.5 22.1 2.9 83.1LRT 2,201.8 18.5 21.7 0.3 2,242.3Commuter Rail 64.0 15.4 12.6 1.5 93.6Paratransit 0.0 0.0 12.8 0.0 12.8HOV 62.6 0.1 0.6 0.0 63.2GM, SU, Non-Ops and P&D 117.0 0.0 0.0 20.5 137.5Total $2,474.9 $64.6 $116.3 $30.5 $2,686.3

Please Note: Any dollars that were allocated to previously approved, unfinished projects and remain unspent as of September 30, 2004, will be rolled forward.

Capital Planning, Start-up Costs, and Non-Operating (line 22) Capital planning and start-up costs are predominantly internal staff costs associated with planning, designing, managing, constructing, and opening new capital projects such as the light rail system. FS-B8 limits capital planning costs to no more than 7% of the total operating budget and start-up costs to no more than 60% of the first year's operating cost. This category of costs has increased from the FY04 Plan, increasing by $5.2 million (4.7%) for the five-year period ending in FY 2009, and almost half of that is for the acceleration of start-up costs for the LRT Phase II Build-out. Non-operating costs relate to projects/programs that are not accounted for as operating costs or capitalized as an asset. These costs are charged through the income statement as a non-operating expense. Examples of non-operating costs are: consulting costs for the Transit System Plan revision, radio frequency utilization study, and the asset condition study. Total non-operating costs through FY 2009 have increased by $11 million for Capital Planning Studies, $8 million in support of the Phase II LRT Build-out, and $3 million for major TRE projects.

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

General Mobility – Road Improvement Programs (line 23) FS-B7 limits General Mobility – Road Improvement Programs to funding allowed under the terms of the approved Interlocal Agreements (ILA). Road improvement programs include the Local Assistance Program/Congestion Management System (LAP/CMS), Principal Arterial Street System (PASS), Transportation System Management (TSM), and Intelligent Transportation System (ITS) projects. These programs have essentially remained the same as shown in the FY04 Plan and are discussed in the HOV/General Mobility section. Capital Reserves Reserves represent dollar amounts that are set aside to fund projects of a specific type, the exact nature, timing, and amount of which is unknown at the present time. When a project is requested and approved which applies to a specific reserve, the new project is put into the capital program and the balance of the reserve is reduced by the budget of the new project. Reserve balances are reviewed on an annual basis to ensure that they are adequate to cover future needs for each expenditure type. Capital Projects Listing Exhibit 10.12 lists all approved and requested capital projects for the twenty-year life of the Financial Plan, including projected expenditures in FY 2005, 5-year totals (2005 – 2009), 20-year totals (2005 – 2024), and external funding related to each project. All reserves in Exhibit 10.12 are shaded in green. All new projects and projects where budget increases have been requested are shaded in blue. Please note: A project that is listed in Exhibit 10.12, but shows a zero value, has a total budget of less than $50,000.

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Page 117: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.12

Capital & Non-Operating Project Listing (In Millions)

AGENCY-WIDE FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DARTExternal

Funds

Administrative Facility Maintanence $0.0 $0.1 $0.3 $0.2 $0.2 $0.8 $5.2 5.2 Install ATS & Back-up Generator 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Repair Slab Cracks, Curtain Walls 0.5 0.0 0.0 0.0 0.0 0.5 0.5 0.5 Replace (3) Federal St. Elevators 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 Replace Portable Radios 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.3 Radio Systems Replacement 0.5 2.0 40.0 2.0 0.0 44.5 105.9 105.9 CAD Automation 0.0 0.0 0.0 0.0 0.0 0.0 1.3 1.3 Police Mobile Data Computers (MDCs) 3.3 0.0 0.0 0.0 1.2 4.5 9.2 9.2 IT Reserves 0.0 0.0 0.0 0.0 0.0 0.0 5.6 5.6 Enterprise Server Upgrade 0.3 0.3 0.0 0.0 0.0 0.5 0.5 0.5 Agency WAN/LAN Upgrade 0.0 0.4 0.4 0.0 0.0 0.7 0.7 0.7 Private Fiber Network 0.0 0.0 0.0 0.5 0.0 0.5 0.5 0.5 Replacement of Copiers with Multifunction Printers 0.6 0.0 0.0 0.0 0.0 0.6 2.4 2.4 Disaster Recovery Plan 0.2 0.6 0.0 0.0 0.0 0.8 0.8 0.8 Scheduled Replacement - Color Plotter for Planning 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Scheduled Replacement - Police Skywatch Towers 0.0 0.0 0.0 0.0 0.1 0.1 0.5 0.5 Scheduled Replacement - Motorcycle Trailer 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

TOTAL AGENCY-WIDE $5.6 $3.3 $40.7 $2.7 $1.6 $53.8 $133.6 $133.6 $0.0

BUS FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DART External Funds

Maintenance Equipment Reserve $0.2 $0.3 $0.2 $0.1 $0.2 $1.1 $4.2 4.2 GPS/AVL System Upgrade 1.0 0.0 0.0 0.0 0.0 1.0 1.0 1.0 20 Bus Surveillance System Pilot 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 Bus Seat Replacement 0.5 0.1 0.0 0.0 0.6 1.2 1.2 1.2 TERP Emission Reduction Retrofit For 2002 Diesel Eng 1.7 0.9 0.0 0.0 0.0 2.6 2.6 0.0 2.6Vehicle Maint Prog.(w/out body program) Reserve 1.5 2.4 4.5 2.6 2.4 13.4 38.0 38.0 Bus Operating Facility Maintenance Reserve 1.3 0.5 0.1 0.8 2.8 5.6 30.6 30.6 Vehicle Lift Rehab (CS) 1.0 0.0 0.0 0.0 0.0 1.0 1.0 1.0 East Dallas Overhead Door Painting 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Oak Cliff Bus Facility Floor Repair Study 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 J.B. Jackson Jr. Blvd. Transit Center 1.3 0.0 0.0 0.0 0.0 1.3 1.3 1.3 Southern Sector Modifications 1.8 0.0 0.0 0.0 0.0 1.8 1.8 1.8 ELM/Lamar Patron Plaza 0.0 1.0 0.0 0.0 0.0 1.0 1.0 0.2 On-Street Passenger Facilities 3.4 2.9 2.9 2.9 2.9 15.0 15.0 3.0 12Northwest Plano Park & Ride 0.0 3.4 0.0 0.0 0.0 3.4 3.4 0.7 2.7BRT Elm and Commerce Bus Lanes Reconstruction 0.0 7.0 0.0 0.0 0.0 7.0 7.0 7.0 Park & Ride Facility Enhancements 0.9 3.0 0.0 0.0 0.0 3.9 3.9 3.9 Facility Upgrade South Irving & Redbird TC 0.6 0.0 0.0 0.0 0.0 0.6 0.6 0.6 North Irving Drain Installation 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Bus Facilities Concrete Replacement 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Farebox Replacement 1.4 0.0 0.0 0.0 0.0 1.4 15.9 14.9 1.0Trapeze OPS Driver Sign-In Application 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Vehicle Business Systems 2.5 0.0 0.0 0.0 0.0 2.5 9.3 9.3 Bus Purchase Program 0.0 0.0 0.0 8.5 0.0 8.5 827.9 578.4 249.5On-Call Van Replacement 0.0 0.7 0.0 0.0 0.0 0.7 4.5 3.2 1.4Sedan / min acces.class1 1.4 1.0 0.4 1.2 0.4 4.6 22.1 22.1 Sedan / Light trucks-class2 0.0 0.3 0.0 0.2 0.3 0.8 6.3 6.3 Heavy Trucks-class 3 0.7 0.0 1.0 0.4 0.0 2.1 5.2 5.2 Equipment registered -class 4 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Equipment/non registered -class 5 0.2 0.4 0.0 0.2 0.0 0.8 2.3 2.3 Police Sedan/Vans- class 6 0.1 0.1 0.3 0.2 0.5 1.2 6.0 6.0

TOTAL BUS $22.1 $24.1 $9.5 $17.2 $10.2 $83.1 $1,012.8 $742.7 $270.0

0.9 .0

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.12 (cont.)

Capital & Non-Operating Project Listing (In Millions)

COMMUTER RAIL FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DARTExternal Funds

TRE Vehicle Maintenance Programs $0.0 $0.8 $0.9 $0.9 $1.0 $3.6 $23.2 $23.0 0.2 RDC Transmissions 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 RDC Propulsion Engines 0.3 0.0 0.0 0.0 0.0 0.3 0.3 0.3 RDC APU Generator Rebuild Program 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Locomotive Wheels Axle Set 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Bi-Level Wheels 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Bi-Level HVAC Controller Upgrade 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Reconfigure HEP on existing Bi-level fleet 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 Correction of Bi-Level HVAC Deficiencies 0.3 0.0 0.0 0.0 0.0 0.3 0.3 0.1 0.1 Locomotive Overhaul 0.0 0.0 2.0 0.0 0.0 2.0 4.7 0.5 4.Bi-Level Fleet Overhaul 0.0 3.0 3.3 0.0 0.0 6.3 14.6 1.5 13.2 TRE ROW Maintenance Programs 1.5 0.2 0.2 0.2 0.3 2.5 7.7 7.0 0.8 Lisa to Perkins Double Track 1.0 0.0 0.0 0.0 0.0 1.0 1.0 1.0 Trinity Bridge Elm Fork Repl 2.6 0.0 0.0 0.0 0.0 2.6 2.6 0.5 2.1 Beltline Grade Separation 10.5 12.4 0.0 0.0 0.0 23.0 23.0 2.9 20.1 Additional Irving Yard Storage Track 0.5 0.0 0.0 0.0 0.0 0.5 0.5 0.5 CentrePort/DFW Station Double Tracking (Dorothy Sin 1.0 15.0 6.0 0.0 0.0 22.0 22.0 2.2 19.Valley View to W.Irving Double Tracking 0.4 2.0 2.0 0.0 0.0 4.4 4.4 0.9 3.5 Train Dispatching Control System 0.0 0.8 0.0 0.0 0.0 0.8 0.8 0.1 0.7 Grade Crossing Improvements 2.1 0.0 0.0 0.0 0.0 2.1 2.1 0.0 2.1 TRE Track Upgrade Medical & Market Ctr Area 4.0 0.0 0.0 0.0 0.0 4.0 4.0 0.8 3.2 TRE Station Enhancements 0.5 3.0 1.0 0.0 0.0 4.5 4.5 0.9 3.Union Station Track Upgrade 0.0 2.5 0.0 0.0 0.0 2.5 2.5 2.1 0.4 Homeland Security Grant Projects - Pending Vulnerabil 0.8 0.0 0.0 0.0 0.0 0.8 0.8 0.0 0.TRE Train Set Phase II 0.0 1.0 7.0 2.0 0.0 10.0 10.0 1.0 9.0

TOTAL COMMUTER RAIL $26.1 $40.7 $22.3 $3.2 $1.2 $93.6 $129.6 $45.8 $83.8

HOV FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DART External Funds

East RL Thornton Extension $0.4 $0.0 $0.0 $0.0 $0.0 $0.4 $0.4 0.4 Stemmons 0.7 0.0 0.0 0.0 0.0 0.7 0.7 0.7 Central (Immediate) 3.1 0.0 0.0 0.0 0.0 3.1 3.1 3.1 SH 114 0.5 0.5 0.5 1.6 1.6 4.7 13.9 13.9 I-635 HOV West 0.3 1.0 0.0 0.0 0.0 1.3 1.3 0.3 1.0 I-635 HOV East 0.9 7.0 8.0 0.0 0.0 15.9 15.9 3.2 12.7 I-30 HOV Extension East to I-635 1.0 5.0 5.0 0.0 0.0 11.0 11.0 2.2 8.8 IH 635 (LBJ) 3.0 2.4 2.0 5.5 5.7 18.6 58.0 58.0 IH30 (Turnpike) 1.7 1.7 1.8 0.0 0.0 5.2 5.2 5.2 HOV Maintenance Reserve 0.0 0.0 0.0 0.1 0.0 0.1 0.1 0.1 Police Motorcycle Replacements 0.0 0.6 0.0 0.0 0.0 0.6 3.6 3.6 HOV Stemmons Reversible Gates 1.6 0.0 0.0 0.0 0.0 1.6 1.6 0.6 0.9

TOTAL HOV $13.3 $18.2 $17.3 $7.1 $7.3 $63.2 $114.8 $91.3 $23.

PARATRANSIT FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DART External Funds

Paratransit VBS Equipment Replacement $0.6 $0.0 $0.0 $0.0 $0.0 $0.6 $3.3 3.3 Van Replacements 0.0 0.0 12.2 0.0 0.0 12.2 61.9 61.9

TOTAL PARATRANSIT $0.6 $0.0 $12.2 $0.0 $0.0 $12.8 $65.2 $65.2 $0.

8

5

0

8

7

2

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FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.12 (cont.)

Capital & Non-Operating Project Listing (In Millions)

LRT FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DART External Funds

NW1A/Pocket Track (Victory Station) $7.6 $0.0 $0.0 $0.0 $0.0 $7.6 $7.6 $2.6 $5.0Love Field 0.5 12.6 25.4 18.9 69.7 127.2 210.5 26.3 184.2LRT Phase II Build-out 117.8 189.2 402.5 673.0 599.6 1,982.1 2,944.3 2,148.2 796.1Walnut Hill Station Parking 0.7 1.5 0.0 0.0 0.0 2.2 2.2 1.1 1.1High Rail Equipment (Vehicles) 0.1 0.0 1.2 0.7 0.1 2.1 6.9 6.9 Revenue System Cargo Van 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Light Rail Maintenance Equipment Reserve 0.0 0.2 0.4 0.5 0.1 1.1 4.3 4.3 LRV Maintenance Prog (w/o Body) Reserve 2.5 2.2 1.2 1.1 3.0 10.1 50.3 50.3 S&I Expansion - Phase II 7.6 13.0 3.9 0.0 0.0 24.5 24.5 16.0 8.5LRT Operating Facility Maintenance Reserve 0.0 1.1 0.0 0.0 0.0 1.2 8.3 8.3 Cedars/Lamar Landuse JV 4.7 0.0 0.0 0.0 0.0 4.7 4.7 0.0 4.7Rail Facilities Concrete Replacement 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Rail HVAC Upgrade/Overhaul 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Escalator Compliance Modification Cityplace and Mock 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 Power-Operated Switch Machine Refurbish 0.2 0.2 0.0 0.0 0.0 0.3 0.3 0.3 LRV/ROW Systems Reserve 0.2 0.2 0.0 0.0 1.5 1.9 5.1 5.1 LRT Passenger Amenities Reserve 0.5 0.0 0.5 0.7 0.3 2.0 5.1 5.1 Communications Reserve 0.0 0.2 0.0 0.0 0.0 0.2 19.3 19.3 Track Six Car and Body Hoist ( In Floor Jack ) 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Tunnel Delamination Study/Project 2.2 0.0 0.0 0.0 0.0 2.2 2.2 0.1 2.Starter System Substation Pressurization 0.5 0.0 0.0 0.0 0.0 0.5 0.5 0.5 TPSS Battery/Charger Replacement 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 OCS Section Insulator 1.8 0.0 0.0 0.0 0.0 1.8 5.0 5.0 Hawkins St. (CBD) LRT Realignment 6.0 6.0 6.0 0.0 0.0 18.0 18.0 18.0 Rail Surveillance System Pilot 0.3 0.0 0.0 0.0 0.0 0.3 0.3 0.3 Tunnel Drain Cleaning 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Portable Generator (Passenger Amenities) 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Messenger Saddle Insulator 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Control Power Transformers 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Portable Generator (TES) 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 Install Ground Fault Detectors 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 Hwy/Rail Grade Crossing LED Flashing Lights 0.1 0.1 0.1 0.1 0.0 0.4 0.4 0.4 Ticket Vending Machine TVM5000 Networking 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 Train Detector & Alert System 0.2 0.0 0.0 0.0 0.0 0.2 0.2 0.2 Bryan Street Bridge Ramp Replacement at US 75 1.0 2.1 3.2 0.0 0.0 6.3 6.3 0.0 6.3 Vehicles (20) 22.0 20.0 2.4 0.0 0.0 44.4 44.4 24.3 20.1

TOTAL LRT $177.7 $248.5 $446.8 $695.0 $674.4 $2,242.3 $3,372.1 $2,344.0 $1,028.1

TOTAL CAPITAL $245.4 $334.8 $548.9 $725.1 $694.7 $2,548.8 $4,828.1 $3,422.6 $1,405.5

CAPITAL P&D, START-UP AND NON-OPERATING

FY05 FY06 FY07 FY08 FY09 5-Yr Total 20-Yr Total DART External Funds

Capital P&D $20.7 $21.4 $22.1 $23.3 $24.1 $111.7 $381.2 381.2 LAP/CMS 0.0 0.0 0.0 0.0 0.0 0.0 $38.1 0.0 Other Road Improvement 2.7 2.1 2.1 1.0 1.0 8.9 $27.6 27.6 Start-up Costs 0.5 0.2 0.0 1.0 3.5 5.3 $34.3 34.3 Non-Operating 3.1 3.1 3.1 2.1 0.1 11.6 $14.1 11.7 2.4TOTAL P&D, START-UP AND NON-OPERATING $27.0 $26.8 $27.3 $27.5 $28.8 $137.5 $495.4 $454.8 $2.4

GRAND TOTAL $272.4 $361.7 $576.2 $752.6 $723.4 $2,686.3 $5,323.5 $3,877.4 $1,407.9

2

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Page 120: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Debt Program (lines 6, 24-26, and 36-39) With the passage of the bond referendum on August 12, 2000, DART received voter authorization to issue up to $2.9 billion of long-term debt backed by future sales tax receipts. DART has established a two-tiered debt structure: 1) commercial paper as the initial financing tool, and 2) long-term bonds. Each of these is discussed below: Commercial Paper Program – On January 23, 2001, the Board approved a Master Debt Resolution, which authorized DART to pledge its sales tax revenues, on a senior subordinated basis, for the issuance of Senior Subordinate Lien Sales Tax Revenue Commercial Paper Notes. On the same day, the Board authorized the issuance of up to $600 million in commercial paper to be issued to: a) fund its capital acquisition program; b) refund $150 million in outstanding North Central Light Rail Project Notes; and c) fund its self-insurance program. Upon the first issuance of Senior Lien Obligations (Long-Term Bonds) the authorized amount of Commercial Paper was decreased to $450 million. The Commercial Paper program is backed by a liquidity facility supplied by Westdeutsche Landesbank, Bayerische Landesbank, Landesbank Baden-Wurttemberg, and State Street Bank and Trust. It is anticipated that the Board will be asked to increase the authorized amount to $600 million in FY 2005 and a fourth bank will be added to the group. The FY05 Plan includes the assumption that DART will issue $82 million of commercial paper in FY 2004 and an additional $165 million in FY 2005 to partially fund its capital program. It is projected that DART will have $384 million in outstanding commercial paper at the end of FY 2005. Over the next two years (FY 2006 – FY 2007), DART will issue another $241 million to bring us to our maximum authorized capacity of $600 million. Long-term Bonds – On January 23, 2001, the Board approved a Master Debt Resolution, which authorized DART to pledge its sales tax revenues, on a senior lien basis, for the issuance of up to $2.9 billion in long-term bonds. The long-term bonds are issued to fund DART’s capital program or refund commercial paper. The FY05 Plan assumes that no long-term bonds will be issued in FY 2005. It is projected that DART will have $489.1 million in outstanding long-term bonds at the end of FY 2004. This is the remaining principal balance of the nearly $498.7 million in bonds that were issued in 2001 and 2002. Exhibit 10.13 shows projected issuances of short-term and long-term debt, and debt outstanding over the twenty-year life of the Plan.

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Page 121: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.13

Projected Net Debt Issuances by Fiscal Year Chart (In Millions)

Net CP Issuance*

LT Debt Issuance

Total LT Debt Issued

EOY Debt Outstanding

FY 2005 $165 $0 $499 $872FY 2006 181 0 499 1,043FY 2007 35 324 823 1,391FY 2008 0 556 1,379 1,933FY 2009 0 493 1,872 2,406FY 2010 0 451 2,323 2,828FY 2011 0 137 2,460 2,930FY 2012 0 101 2,561 2,991FY 2013 0 0 2,561 2,948FY 2014 0 12 2,573 2,914FY 2015 0 15 2,588 2,880FY 2016 0 72 2,660 2,900FY 2017 0 60 2,720 2,905FY 2018 0 0 2,720 2,845FY 2019 0 0 2,720 2,781FY 2020 0 0 2,720 2,714FY 2021 0 0 2,720 2,644FY 2022 0 0 2,720 2,569FY 2023 0 0 2,720 2,490FY 2024 0 0 2,720 2,406

* Excludes repayments and refundings Coverage Ratios (Lines 38-39) Financial Standard FS-D7 requires that DART maintain a debt coverage ratio (the External Coverage Ratio) such that Gross Sales Tax Revenues must be at least two times the amount of annual Debt Service. This is the standard that DART is held to by the marketplace and in its own external debt documents. In those documents, DART agrees that it will not issue additional debt when it does not comply with this standard. DART is easily in compliance with the standard throughout the life of the Plan. The lowest value for this coverage ratio in the FY05 Plan is 2.34, which occurs in 2011 and 2012. DART also has a goal to maintain another coverage ratio (the Internal Coverage Ratio). This ratio states that the sum of Sales Taxes, Operating Revenues (and the T’s contribution to operating expenses), Interest Income, and Formula Funding exceeds Total Annual Debt Service Requirements by a factor of 1.25 for the first five years of the Plan and by a factor of 1.5 for the remainder of the Plan. DART’s FY 2005 Plan does not comply with this standard between 2011 and 2019, dropping to a low value of 0.96 in 2012. Complying with this standard would result in an additional delay to the LRT Phase II build-out of at least three years. While the Internal Coverage Ratio is a goal, it is self-imposed and not a legal or contractual requirement.

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Page 122: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Exhibit 10.14 summarizes the major commercial paper and long-term debt assumptions. For purposes of the Financial Plan, 30-year bonds are assumed; however, shorter-term notes may be sold depending on interest rates and other considerations, as determined at the time of issuance.

Exhibit 10.14 FY05 Financial Plan Debt Assumptions

UPPLEMENTAL FINANCIAL INFORMATION

Commercial Paper Long-Term Debt (LTD)Description FY 2005 Future FY 2005 Future

Term <5 years <5 years 30 years Up to 30 years Interest rates + fees 1.75% 2.5%-5.0% n/a 6.00%Credit enhancement? No No n/a YesPrincipal and interest repayment Refund w/LTD Refund w/LTD Level Debt Level DebtTotal debt issued $359M $241M $0 $2.7BMaximum debt outstanding $359M $600M $489.1M $2.4BYear of maximum debt outstanding n/a FY 2007 n/a FY 2012Cash reserves required? No No No NoIssuance costs n/a n/a n/a 1%Uninsured Debt Rating assumed A1+/P1 A1+/P1 AA- AA- S

et Increase (Decrease) in Cash and Change in Balance Sheet Accounts (lines 29-30) N

ased on each year’s estimated sources and uses of cash, DART has projected its Balance Sheet

he Change in Balance Sheet Accounts line item is used as a compensating factor for the lag

ash Reserves (line 33)

Bfor each year of the Plan. These line items reflect the net change in cash and non-cash working capital balance sheet accounts. Tbetween the occurrence of an accounting transaction which affects the balance sheet and the actual receipt or disbursement of cash. Sales tax receipts, inventory purchases, and LAP program allocations are several examples of these types of transactions. DART’s projected Balance Sheet for each of the first five years of the Financial Plan is included in Exhibit APX.5. C

ART maintains several cash reserves. FS-G5 requires a Master Insurance Reserve for claims

he value in this line item represents the projected end-of-year value.

Dand Board liability exposure ($13.6 million balance as of August 31, 2004). FS-G7 requires that sales tax collections that exceed budget during a year be placed in a "Financial Reserve" account ($22.4 million balance as of August 31, 2004). These funds may be used for any purpose, subject to an affirmative vote of two-thirds of the appointed and qualified Board members. T

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Page 123: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Working Cash Requirements (line 34)

his line is included in the Financial Plan because of FS-G6, which states "since sales taxes are

et Available Cash (line 35)

Treceived on a monthly basis, the unrestricted cash balance at the end of the year shall not be less than one-twelfth of the difference between the subsequent year's total sources of cash (excluding sales taxes) and total uses of cash as projected in the Financial Plan." DART actually reserves two-twelfths of projected annual sales tax receipts; however, the additional month’s reserve is invested in longer-term securities to earn additional interest income. The combination of the Financial Reserve and this working cash balance ensures that DART always has a minimum of approximately three months of net expenditures on-hand. The value in this line item represents the projected end-of-year value. N

his line item represents the projected end-of-year value. It is the bottom-line check regarding

his year of minimum financial capacity is referred to as the Critical Year. Every decision that

xhibit 10.15 graphically depicts DART’s Financial Plan. Each bar on the chart represents total

Tthe long-term affordability of DART’s programs. As long as this value is positive, the Financial Plan is affordable. In the FY05 Plan, the minimum amount of Net Available Cash is $39.7 million in 2017. This amount is cash on hand that is in addition to the reserves in lines 33 and 34 and as such, it represents DART’s unprogrammed cash balance. Tis made, every change to a financial plan assumption or estimate is made with an eye toward that Critical Year. In the Original FY04 Plan, the Critical Year was 2018. At that time in that Plan, DART had $15.3 million of Net Available Cash and no available debt capacity in 2018. In the FY05 Plan, because of the improving economy and the cash flow of the recovery of some of the delay in the Phase II Build-out, the Critical Year accelerates to 2017. However, DART is in much better financial shape in the FY05 Plan than in the FY04 Plan. In the Critical Year of 2017, DART has $39.7 million in Net Available Cash as well as $180 million in available debt capacity. Eexpenditures by fiscal year with each color representing a different type of expenditure. The red line above the expenditure bars shows DART’s total financial capacity including the unrestricted cash balance as of the end of the year and unissued long-term debt ($2.9 billion authorized minus total issued to date).

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Page 124: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

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FP-23

Page 125: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

MAJOR FINANCIAL PLAN ASSUMPTIONS

• Sources of Funds

o Sales taxes up 5.6% (to $329.4 million) in FY 2004; up 3.0% (to $339.3 million) in FY 2005; up 5% thereafter;

o Fare increase of 17% programmed every 5 years; the next increase is programmed in FY 2008 (approximately 11¢ increase in average fare);

o Ridership increases (primarily due to regional population and employment growth):

Bus ridership declines by 1% in FY 2005 from the annualization of service cuts, then increases 1.5% per year through FY 2010, then begins to taper down to 0.5% growth per year in FY 2018 and beyond;

LRT ridership increases by 1.5% per year through FY 2014 (plus new openings), then begins to taper down to 0.5% in FY 2024 and beyond;

Commuter Rail ridership decreases 4.9% in FY 2005 due to annualization of service cuts, then grows by 1.5% for each year of the Plan;

Paratransit Ridership decreases by 3.5% in FY 2005 due to demand control efforts as outlined in the Paratransit Action Plan, then grows by 1% per year through FY 2010, and then begins to taper down to 0.1% in FY 2013 and beyond;

HOV ridership grows by 1.5% (plus new openings) for each year of the Plan;

o Advertising and other miscellaneous operating revenues grow by inflation each year;

o Investment portfolio yields remain 0.75% – 1.5% above the commercial paper rates through the life of the Plan;

o DART receives $41.5 million in Federal Formula money for Capital Preventive Maintenance and Fixed Guideway Modernization every year for the life of the Plan;

o Future Bus and Paratransit revenue vehicle procurements receive 30% Federal Funding;

o DART receives $700 million Full Funding Grant Agreement (FFGA) for the entire LRT Phase II Build-out;

o $140 million in other external capital contributions including the T's contribution to TRE capital, various member city contributions, CMAQ funds, Homeland Security Grants, etc. between 2005 and 2009, and $312 million over the 20-year life of the Plan.

• Uses of Funds

o Operating Expenses

Operating budget (plus Capital Planning & Development and Victory Rail Start-up costs of $21.2 million) of $327.8 million in FY 2005;

Annual inflation remains between 2.3% and 2.7% for the life of the Plan;

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Page 126: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

Operating expense growth by 90% of inflation plus new service and other new programs;

Bus service levels remain constant beyond FY 2005;

LRT service levels remain constant beyond FY 2005, except for Phase II line segment openings;

TRE service levels remain constant beyond FY 2005;

Paratransit contract costs grow by 5% per year including both growth in service demand and contract rate increases;

Vanpool growth is projected at 6.5% through FY 2009 and 5% thereafter;

$10.3 million is included in the budget beginning in FY 2008 to fund post-retiree health benefits.

o Capital & Non-Operating

Delay of two to three years in LRT Phase II build-out, which represents a twelve-month recovery of the delay that was included in the FY04 Plan on all line segments except SE-1A, which is accelerated an additional six months, and the CBD which is accelerated four years;

Annual inflation rate of 4% for LRT build-out costs;

Love Field tunnel option included at $160 million in 2002 dollars, funded with $20 million of DART money and $140 million in external contributions;

Capital Planning & Development budget begins to taper down after major Phase II construction is completed (beginning in FY 2011);

All <30-foot buses are replaced every 7 years (next purchase in FY 2008);

All other buses are replaced with zero-emission vehicles (ZEVs) every 12 years (next purchase in FY 2010).

o Debt Service

$600 million in commercial paper (CP) capacity;

$2.9 billion in long-term debt (up to 30-year) capacity ($2.7 billion issued);

Long-term debt interest rates at 6%;

Use of debt and the type of debt issued will depend on DART’s financial needs and market conditions.

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Page 127: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

POTENTIAL RISKS AND OPPORTUNITIES • Sales tax receipts are unquestionably the most important estimate in the Financial Plan, and

therefore are the largest single area of risk to DART’s ability to meet its goals and objectives. DART is projecting long-term growth rates of 5% per year after 2005. Because DART's service area has been almost fully developed and most of the growth in North Central Texas will occur outside the service area, a 5% long-term growth rate may be difficult to sustain. One factor that will help DART attain its long-term average growth rate projections is the very conservative estimates for FY 2004 and FY 2005. The current plan includes a 5.63% growth rate for FY 2004 and 3% for FY 2005. Through July, FY 2004 growth is trending at 6.7% over FY 2003. Also, it is important to note that any change early in the Plan has a substantially larger impact than even a larger change later in the Plan. Therefore, the conservative projections early in the Plan allow for future soft spots.

• Projected ridership growth rates of 1% to 1.5% for DART's fixed-route services over the next 10 to 15 years may be difficult to sustain for the same reasons discussed above related to sales taxes. Again on this assumption because DART is projecting a cautious baseline for FY 2005, that should help us achieve our targets in the future. Also, the region appears to be in a period of economic recovery that could help reverse the declining ridership trends. However, this gives rise to an additional risk. If ridership increases as projected and if that increase is highly peak intensive, additional unbudgeted capital for expanding vehicle fleets and additional unbudgeted service might be required.

• DART has programmed $700 million in Federal Funding for the LRT Phase II build-out. It is possible that DART's request will not be approved in its entirety. If DART only receives $500 million, an additional delay to the build-out might be incurred from the current schedule. If no Federal funding is received, an additional 4 to 5 year delay will likely be incurred. DART will not know how much money (if any) will be received on the Northwest/Southeast corridor until well into FY 2005 at the earliest, and will not know about any additional funds for years to come.

• However, as a possible offset to the FFGA money, there are unprogrammed opportunities in the arena of federal funding. Currently the Financial Plan projects that DART will receive $41.5 million each year in Formula and Fixed Guideway Modernization Funds and, in accordance with FS-B10, this value is not inflated. Allowing this value to be increased by inflation adds approximately $345 million to the Plan. Even allowing for inflation is a very conservative estimate as these funds have increased by an average of more than approximately 10% per year over the last ten years. If the Plan assumed a 5% annual increase, over $800 million in additional funds would be added to the Plan. Also, it is possible that DART will receive more funds than anticipated for Irving, SOC-3, or CBD line segments, as well as additional NCTCOG funding for specific projects.

• Another opportunity in the federal funding arena relates to future bus purchases that have only been programmed at a 30% federal funding level. Additional money might be available, particularly for zero-emission vehicles (ZEVs).

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Page 128: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) FY 2005 Twenty-Year Financial Plan

• DART is constrained by FS-B5 to grow operating expenses by no more than 90% of the projected inflation rate, plus new programs and service. This limit on operating expenses will be very difficult to attain. Approximately two-thirds of DART's FY 2005 Budget is composed of salaries, wages, and benefits. In the long term, these costs must at least grow by inflation, or DART’s ability to attract and retain quality employees may be adversely impacted. Also considering the highly volatile energy market and the annual double-digit increases in health care costs, this presents a major challenge for DART.

• DART has attempted to identify all foreseeable capital projects, but every year additional new projects are requested. If significant additions to the capital program (and associated operating costs) are required without concurrent operating cost reductions, increases in revenues or deletions of offsetting capital projects, this could cause affordability issues. Also, in the next 12 to 18 months, DART will complete its 2030 Transit System Plan. This Plan may identify additional required capital expenditures or service requirements.

• Based on the Perryman sales tax model (and supported by the last 20 years of experience), inflation is estimated at approximately 2.5% per year for the life of the Plan. Because inflation affects sales tax revenues and both operating and capital expenditures, it has many risks and many potential opportunities associated with it. DART is at risk if either capital inflation is substantially greater than general inflation, if inflation declines, or if the economy enters a period of deflation. Conversely, DART stands to benefit if inflation increases substantially, particularly in the middle years of the Plan after the majority of Phase II dollars have been spent and debt has been issued. This would allow DART to repay its fixed long-term debt obligations with substantially deflated dollars. Also, inflation for the LRT Phase II build-out is programmed in the Plan at 4%. However, over the last 10 years, the average inflation has been fairly consistent with consumer inflation (2.75% construction vs. 2.54% consumer). If inflation remains this slow for construction costs, it could possibly make up for other negative budgetary or economic events.

• Current long-term debt interest rates are 5%, and they are programmed into the Plan at 6%. DART is at risk if long-term rates rise above 6%. Conversely, if interest rates remain at or near their current levels, DART stands to benefit. Clarifying a possible point of misconception, the current and projected future increases in the Federal Funds rate has minimal impact on rates that DART expects to pay on its long-term debt. Short-term rates are far more volatile than long-term rates, and it would take a major upward move in short-term interest rates to substantially affect long-term rates.

• DART may be able to build its sales tax revenue base through the addition of new cities to the service area or through the pursuit of other Legislative changes.

• Preliminary discussions are underway in the Metroplex for a Regional Transit Authority to fulfill the transportation needs of the region for the gaps between DART, the T, and DCTA. This is a highly complex issue that could either have a positive or negative impact on DART. Any such Regional Authority might require a tax restructuring which might benefit DART. It also might provide DART with increased ridership (and therefore revenue) as other areas currently without transit connect with our services. It could also create a risk that DART will receive less of the Federal money that is allocated to this region because it will now need to be spread among more entities or that additional capital and operating costs will be incurred to transport the additional riders.

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Page 129: Dallas Area Rapid Transit · FY 2005 Business Plan (09/28/04) Dallas Area Rapid Transit Board of Directors Officers Huelon Harrison, Chairman City of Dallas Mark Enoch, Vice Chairman

FY 2005 Business Plan (09/28/04) Appendix

FY 2005 Business Plan (09/28/04) Appendix

APX-1

Exhibit APX.1

APX-1

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APX-2

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APX-3

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.2

FY 2005 Financial Standards Resolution No. 040039

The Financial Standards are divided into three sections: General, Debt Service, and Business Planning Parameters. The purpose of the general standards is to ensure that DART prudently manages its financial affairs and establishes appropriate cash reserves. The purpose of the debt service standards is to limit the level of debt that may be incurred and to ensure that debt assumptions are based on financial parameters similar to (or more conservative than) those that would be placed on DART by the financial marketplace. Actual debt covenants may differ from these standards. Where this occurs, the Financial Plan will reflect the actual covenants in the Board-approved debt instrument. The Business Planning Parameters provide management with a framework for developing the following year's budget and the twenty-year Financial Plan and establishing future business targets for management to achieve. Since DART's enabling legislation requires a two-thirds vote on debt and the Financial Plan, approval or amendment of DART's Financial Standards will require an affirmative vote of two-thirds of the appointed and qualified Board members.

Financial Standards – General G1. Complete and accurate accounting records shall be maintained in accordance with

Generally Accepted Accounting Principles as promulgated by the Government Accounting Standards Board. DART's fiscal year-end for financial reporting purposes shall be September 30.

G2. Funds of the Authority shall be invested within the guidelines of the Board's approved

Investment Policy and Investment Strategy, and in compliance with applicable State law, including Section 452.102 of the Texas Transportation Code, Article 717q V.T.C.S., the Texas Public Funds Investment Act, and applicable Federal law. The Board shall approve the signatories for all Agency checking and savings accounts.

G3. An independent accounting firm shall perform an examination of DART's consolidated

financial statements (including Single Audit requirements) and DART's retirement plan financial statements on an annual basis. The Agency's goal is to receive an unqualified opinion on the financial statements and an opinion that DART is in compliance with Federal Single Audit requirements in all material respects.

G4. An annual actuarial analysis shall be performed on the Defined Benefit Plan. This Plan

shall be funded in an amount sufficient to meet current actuarial requirements and to reduce the actuarially determined unfunded liability to zero by 2017.

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Exhibit APX.2 (cont.)

FY 2005 Financial Standards G5. Appropriate insurance coverage shall be maintained to mitigate the risk of material loss.

For self-insured retentions, a separately funded Master Insurance Reserve shall be maintained in an amount equal to the estimated liability for incurred losses and a reasonable allowance for claims incurred but not filed. An actuarial review of self-insured retentions will be made at least once every three years to ensure adequacy of the Master Insurance Reserve.

G6. Since sales taxes are received on a monthly basis, the unrestricted cash balance at the end

of the year shall not be less than one-twelfth of the difference between the subsequent year's total sources of cash (excluding sales taxes) and total uses of cash as projected in the Financial Plan. This reserve will be invested in accordance with the investment strategy for the Operating Fund.

G7. In order to provide a buffer against an unanticipated shortfall in sales tax collections,

DART will maintain a Financial Reserve. The goal of this reserve is to maintain a balance of at least 10% of the current year’s sales tax budget. During periods in which sales taxes exceed the budget, the excess collections will be deposited into the Reserve by January 1 of the following year, up to a maximum fund balance of $50 million. Authorization to spend Reserve funds requires the affirmative vote of two-thirds of the appointed and qualified members of the Board.

G8. The fiscal year of DART shall end on September 30 of each year. Two months before the Business Plan is distributed to the Board, the Board should review and approve a set of Financial Standards that can be used by management as a framework for developing the following year's Budget, Business Plan, and Financial Plan. The Board shall approve the Budget and Financial Plan by September 30 of each fiscal year. The Annual Budget shall be the first year of the Financial Plan.

G9. Financial Plan amendments shall require a two-thirds vote of the number of appointed and qualified Board members. An amendment is necessary when the addition of a new capital project or the cumulative modification of an existing capital project is in excess of $1 million or the addition of a new operating program or increase in an existing operating program is in excess of $500,000.

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.2 (cont.)

FY 2005 Financial Standards

Financial Standards – Business Planning Parameters

B1. Sales tax revenue forecasts shall be based on a sales tax model developed specifically for the DART Service Area by an independent economist, except for the most current year which may be based on management's best estimate. In order to ensure a conservative sales tax estimate, the model’s projections may be reduced by 1% for years 6-10 and by 2% thereafter, dependent on current economic trends.

B2. Passenger revenue forecasts shall be derived from ridership and average fare forecasts

based on the Board's approved fare policy and fare structure. The Board will consider, from time to time, fare modifications to achieve Service Plan, ridership, and subsidy per passenger targets (see B4) and to maintain DART's financial viability.

B3. The Board shall approve annual fixed route service levels by mode for each of the next

five years. Fixed route service levels shall be based on the Five Year Action Plan prepared by the Planning and Development Department. Cost of service will be developed jointly by Finance and Planning.

B4. The Board desires to steadily improve service efficiency over time. It is the Agency's

long-term strategy to achieve this by reducing the subsidy per passenger ratio (operating expenses minus operating revenues divided by passenger boardings). Subsidy per passenger for fixed route service and for all modes may not be higher in FY 2002 than $2.85 for fixed route and $2.47 for all modes, respectively.

B5. For financial planning purposes, total operating expenses may not increase by more than

90% of the projected rate of inflation for the Dallas area, plus the incremental costs associated with the addition of new services, programs, and/or facilities as approved by the Board. The projected incremental cost impact of new services, programs, and/or facilities shall be presented to the Board for approval as part of the Financial Plan assumption process each year.

B6. Management shall use a consistent methodology for computing net administrative costs

and direct costs. The administrative ratio (administrative costs minus administrative revenues divided by direct costs) may not increase for two consecutive years and shall not be higher than 14.0%.

B7. General Mobility programs for road improvement programs such as the Local Assistance

Program (LAP), Principal Arterial Street System (PASS), and Transportation System Management (TSM) and Intelligent Transportation System projects shall be funded according to the terms of the approved Interlocal Agreements and recorded as non-operating expenses in the Financial Plan.

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.2 (cont.)

FY 2005 Financial Standards B8. Capital planning and development costs and start-up costs are the internal staff costs

associated with planning, designing, constructing, and opening new capital projects such as the light rail system. Management shall use a consistent methodology for allocating costs between operating and capital planning. Capital planning and development costs shall not exceed 7% of total operating costs. Cumulative start-up costs for a line section shall not exceed 60% of the first year operating costs of that line section or HOV lane.

B9. The Financial Plan shall include funding for asset replacement and expansion projects.

Capital projects in excess of $1 million shall be approved by the Board. Timely replacement of assets shall be the highest priority to ensure a safe system. Accordingly, the Financial Plan shall include replacement reserves by major asset category to ensure adequate future funding. The reserve levels shall be based on an independent assessment of asset condition (to be completed at least once every five years). Expansion projects shall be prioritized based on the project's cost, impact on ridership, return on investment, available funds, and other relevant factors. An inflation rate of 4% shall be used for capital construction projects. Non-construction capital projects will be increased at the rate of inflation.

B10. DART receives formula and discretionary Federal funding. Formula funding shall be

programmed primarily for bus replacement, capital maintenance (if available), vehicles, and passenger facility construction. Formula funding for future years shall be forecast at the current year's funding level or at the minimum levels included in Federal authorizations to ensure a conservative forecast. Discretionary funding shall be programmed primarily for major system expansion projects (e.g., LRT or new bus maintenance facilities). Discretionary funding levels shall be estimated by project based on Federal criteria and the likelihood of obtaining congressional appropriations and require Board approval during the Budget/Financial Plan process.

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.2 (cont.)

FY 2005 Financial Standards

Financial Standards – Debt Service

D1. DART may not enter into a debt or financing arrangement unless the transaction is in full compliance with all applicable provisions of the Texas Transportation Code and other applicable state and federal laws.

D2. Long-term debt may be included in the Financial Plan; however, no such debt shall be

incurred without the approval by the voters of the Service Area. D3. Debt shall be issued for approved capital projects and insurance reserves. D4. Sinking funds shall be established to ensure that cash is available to make timely debt

service payments on fixed-rate debt issuances that have maturities of one year or more and have periodic semi-annual interest payments. DART shall deposit on a monthly basis a prorated amount sufficient to fund the next principal and interest payment.

D5. Reserve fund(s) that may be required by the financial markets for each debt issuance shall

be maintained. These reserves may be funded by cash and securities, insurance, or surety bonds, but shall not be accessed unless the sinking funds have insufficient money to make the principal and interest payments as due. For financial planning purposes, reserve projections shall be based on the actual requirement on existing debt, plus the lower of maximum annual debt service, 125% of average annual debt service, or 10% of principal outstanding on projected debt.

D6. DART shall establish a legal security structure of liens, agreements, pledged revenues,

and other covenants which will be sufficient to (1) secure a rating of "A" or better on sales tax securities; (2) a MIG1 or SP1 rating on short-term notes; or (3) secure A1 or P1 rating on other short-term debt, or if necessary, secure a credit enhancement from a financial institution with a rating of "AA" or better.

D7. Certain debt service coverage ratios are required to access the financial markets. For

financial planning purposes, annual sales tax revenues must exceed DART’s current year debt service obligations by a factor of at least two (External Coverage Ratio). It is a goal of DART that for financial planning purposes, for long-term debt, sales tax revenues plus operating revenues, plus interest income, less operating expenses (excluding debt service and depreciation), for any twelve consecutive months of the prior eighteen months, must be sufficient to cover maximum annual debt service and financing lease payments by 1.0 to 1.25 times (Internal Coverage Ratio). The same calculation for future years must be sufficient to cover maximum annual debt service and lease payments, including payments on any debt to be issued, by 1.0 to 1.25 times for the first five years and 1.0 to 1.5 times thereafter. However, the DART Board may choose to grant exceptions to this standard in the interest of expediting the completion of the System Plan.

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APX-9

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APX-10

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APX-11

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.6 Glossary of Terms/Definitions

Accidents per 100,000 Miles – Measures vehicle accidents reported (bus and light rail) per 100,000 miles of actual fixed route mileage. Calculation = [(Vehicle Accidents / Actual Mileage) * 100,000] Administrative Ratio – Measures administrative costs as a percentage of direct operating costs. It is management’s objective to reduce this ratio. Administrative costs include (but are not limited to) executive management, finance, purchasing, legal, internal audit, human resources, marketing, board support, and administrative services. Administrative revenues include (but are not limited to) advertising revenue.

Calculation = [(Administrative Costs – Administrative Revenues) / Direct Costs

+ Start-up Costs]

Annulled Trips – The number of trips eliminated from the schedule prior to scheduled departure due to adverse equipment, track, or dispatch conditions. TRE does not include annulled trips as part of the on-time performance calculation. Average Fare – Represents the average fare paid per passenger boarding on fixed route modes of service during the period.

Calculation = [(Fixed Route Passenger Revenues – Commissions and Discounts) / (# Of Fixed Route Passenger Boardings)] Average Speed – Represents the average overall speed of the modal service as reflected in the schedule, with stops and recovery time included. This value reflects the composition of the service (i.e., express and local routes for bus mode) and the efficiency of the schedule (e.g., reducing recovery time in the schedule improves average speed).

Calculation (for bus) = [Scheduled Revenue Miles / Scheduled Revenue Hours]

Calculation (for rail) = [Scheduled Revenue Train Miles / Scheduled Revenue Train Hours] Average Weekday Ridership – The average number of passenger boardings (or HOV users) on a weekday. This measurement does not include ridership on Saturdays, Sundays, or holidays. Certified Riders – Passengers who have been deemed eligible for Paratransit services because their disability prevents them from functionally accessing fixed route services. Eligibility is determined in accordance with the criteria outlined in the Americans with Disabilities Act of 1990. Complaints per 100,000 Passengers – Fixed route quality ratio that measures the number of service complaints per 100,000 passenger boardings. Management’s objective is to reduce this ratio. Calculation = [(Service Complaints Received / Fixed Route Passenger Boardings) * 100,000]

Cost per Revenue Mile – Efficiency ratio that measures the cost of providing a revenue mile of service. This measurement is based on fully loaded costs and excludes operating revenues. Management’s objective is to reduce this ratio. Calculation = [Total Operating Expenses / Revenue Miles]

APX-12

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.6 (Cont.) Glossary of Terms/Definitions

Coverage Ratio – Measures the amount of financing that the market would allow DART to borrow at any point in time based on “times coverage” which is related to DART’s ability to repay. Per Financial Standard #D8, DART must maintain a 1.25 times coverage ratio during the first 5 years of the Financial Plan, and 1.50 thereafter. To be conservative, this ratio is calculated for long-term debt at a 6.5% interest rate.

Calculation = Sales Taxes + Operating Revenue + Interest Income – Operating Expenses

Total Debt Service Demand Responsive – Paratransit passengers call to request service; therefore, that service is provided on demand, and is considered to be demand responsive, rather than scheduled service. In addition, some non-traditional demand responsive service has been added which may not be Paratransit related, such as DART OnCall. Mean Distance Between Roadcalls – Quality ratio that measures the number of miles a vehicle operates before a roadcall occurs. Management’s objective is to increase this ratio. Calculation = [Total Miles Operated / Total # of Roadcalls] Net Subsidy – Financial measurement for determining the tax subsidy required for each mode or combination of modes. Management’s objective is to reduce this number. Calculation = [Operating Expenses – Operating Revenues] On-Time Performance – Quality ratio that measures how often a service is on-time (i.e., at a designated pick-up spot within a predetermined timeframe). The timeframe differs based on mode and frequency of service. Bus operations currently uses 59 seconds early and 4 minutes and 59 seconds late. Light rail and commuter rail use 1 minute early and 3 minutes late. Management’s objective is to increase this ratio.

Calculation = [(# Scheduled Trips Sampled - # of Times Late) / Total # of Scheduled Trips Sampled]

Operating Revenues – Includes the revenues obtained from the farebox, special events service, advertising, signboard rentals, leases, and miscellaneous income. Operating revenues do not include sales tax revenue, interest income, or gain on sale of assets.

Operating Expenses – Includes the expenses required to operate DART’s revenue services, HOV, and general mobility projects. Operating expenses do not include the cost of road improvements or the staff costs associated with DART’s capital programs.

Passenger Canceled Trips Ratio – Measures the percentage of times that Paratransit users schedule a trip, then cancel the trip. Total scheduled trips include actual trips made, cancellations, and no-shows. Calculation = [# of Canceled Trips / Paratransit Total # of Scheduled Trips]

APX-13

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.6 (Cont.) Glossary of Terms/Definitions

Passenger No-Show Ratio – Quality measurement for Paratransit service that measures the number of times a Paratransit user makes a reservation and does not show-up for the ride. This measurement is different from a cancellation. Management’s objective is to reduce this number so that other trips can be scheduled in that timeframe. Users can lose the ability to access the Paratransit system if they have an excessive number of no-shows. Calculation = [# of No Shows / # of Total Scheduled Trips] Passenger per Car Mile - Effectiveness ratio that measures the degree to which the number of rail cars deployed on scheduled trains matches ridership levels. Since power consumption and maintenance costs are driven by car miles, management strives to assure an appropriate balance between the number of cars deployed per train and the ridership level on those trains. Calculation = [Actual Passenger Boardings/Revenue Car Miles] Passenger Trips – See Ridership. Passengers per Hour – Actual – The total number of Paratransit passengers actually carried. Calculation = [Actual Passenger Boardings / Revenue Hours] Passengers per Hour – Scheduled – Quality ratio for Paratransit service that measures the number of passengers scheduled per hour of revenue service. Management’s objective is to increase this number.

Calculation = [Scheduled Passenger Boardings / Revenue Hours] Passengers per Mile – Effectiveness ratio that measures route productivity by comparing the number of passenger boardings to the number of revenue miles. Management’s objective is to increase this ratio. Calculation = [Passenger Boardings / Revenue Miles] Pay-to-Platform Ratio – Hours – This efficiency ratio measures, in hours, the total amount of time for which operators are paid as a percentage of their platform time. Platform time is the time when the operator is on the bus/train operating the revenue vehicle, and includes revenue service, deadheading, and recovery time. Other wage categories that may be paid to the operator include other scheduled time, scheduled and unscheduled absences, unscheduled work, safety and training, and administration. Calculation = [Total Operators Hours Paid / Operators Platform Hours Paid] Percentage of Trips Completed – Quality measurement for Paratransit service that measures the number of times DART does not miss a scheduled passenger pick-up. Management’s objective is to increase this ratio. Calculation = [(# of Actual Trips - # of Trips Missed) / # of Actual Trips] Revenue Car Miles – Total miles operated by LRT or TRE trains in revenue service multiplied by the number of cars operated as part of each train. Power consumption and maintenance requirements are driven by the number of car miles operated. As a result, one area of management focus is to optimize the number of cars operated per train based on ridership and Board-adopted loading standards. Calculation = [# of Revenue Miles operated * # of cars within a train]

APX-14

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.6 (Cont.)

Glossary of Terms/Definitions

Revenue Miles or Hours – Measures the number of miles, or hours, that a vehicle is in revenue service (i.e., available to pick up passengers) and includes special events service. This measure does not include “deadhead miles” which are the miles between the bus maintenance facility and the beginning and/or end of a route. Ridership – For the total system, this is the total number of passengers boarding a DART vehicle plus the number of people in cars or vans using the HOV lanes. Transfers are included in total ridership and passenger boarding counts (e.g., if a person transfers from one bus to another bus or from a bus to rail, this is counted as two passenger boardings). Fixed route ridership counts passenger boardings (including transfers) for bus, light rail, and commuter rail only. Sales Taxes for Operations – Measures the amount of sales taxes required to subsidize operations. The inverse percentage is the amount of sales taxes available for capital and road improvement programs. Historically, the Board and Management have tried to manage this ratio as close to 50% as possible.

Calculation = [(Operating Expenses – Operating Revenues – Interest Income) / Sales Tax Revenues]

Scheduled Miles Per Hour – Represents the average overall speed of the modal service as reflected in the schedule, with stops and recovery time included. This value reflects both the composition of the service (i.e., express and local routes for bus mode) and the efficiency of the schedule (e.g., reducing recovery time in the schedule improves average speed).

Calculation (for bus) = [Scheduled Miles / Scheduled Hours]

Calculation (for rail) = [Scheduled Train Miles / Scheduled Train Hours] Security Incidents per 100,000 Passengers – Quality ratio for fixed route service which measures the number of security incidents reported by the Transit Police per 100,000 passenger boardings. Calculation = [(Security Incidents / Passenger Boardings) * 100,000] Service Hours – Paratransit service hours are also known as revenue hours. They are calculated from the time of the first passenger pick-up until the time of the last passenger drop-off. Travel time to and from the garage is not included. Service Levels – Also known as Telephone Service Factor (TSF), measures the response to calls within a specified period. This measurement is being used to monitor the effectiveness of the main call center (CI: 214-979-1111) within 1 minute, the response to Paratransit scheduling issues within 1 minute, and the response to Where’s My Ride inquiries within 2 minutes.

Calculation = (# of Calls Answered or Abandoned Within the Specified Time Period) / (# of Calls Received Within the Specified Time Period)

Start-Up Costs – Costs associated with the implementation of a major new light rail, commuter rail, or HOV service expansion that are incurred prior to the service implementation (e.g., vehicle and system testing). Subscription Service – Paratransit passengers traveling at least three times per week to the same location at the same time can be placed on “subscription service.” This service is “automatically” scheduled for the passenger, and it is not necessary for the passenger to call and schedule the service.

APX-15

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.6 (Cont.)

Glossary of Terms/Definitions

Subsidy per Passenger – Efficiency ratio which measures the tax subsidy required for each passenger boarding for a mode or combination of modes. Management’s objective is to reduce this ratio. Calculation = [(Operating Expenses – Operating Revenues) / Passenger Boardings] Unscheduled Absences - Occurs when an operator is not available for his or her scheduled/assigned work and has not received prior approval to be absent. Zero Denial – A Federal mandate that, in effect states that a provider cannot systematically deny trips on an on-going basis.

APX-16

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.7 Acronyms

000s Thousands HOV High Occupancy Vehicle (lane) ADA Americans with Disabilities Act of 1990 HVAC Heating, Ventilation, Air Conditioning APTS Advanced Public Transportation Systems ID Identification APU Auxiliary Power Unit IH Interstate Highway ATC American Transportation Corporation ILA Interlocal Agreement ATIS Advanced Traveler Information Systems IRV Irving ATMS Advanced Traffic Management Systems ISO International Organization for Standardization AVL Automated Vehicle Locator IT Information Technology APTA American Public Transportation Association ITC Intermodal Transportation Center AVP Assistant Vice-President ITS Intelligent Transportation System B Billions IVR Interactive Voice Response BNSF Burlington, Northern & Santa Fe Railroad JV Joint Venture BPP Business Planning Parameter K Thousands BRT Bus Rapid Transit KPI Key Performance Indicator BTV Barrier Transfer Vehicle KSA Knowledge, Skills & Attitude CAD Computer-Aided Dispatch LAN Local Area Network CBD Central Business District LAP/CMS Local Assistance Program/Congestion Management

System CI Customer Information LBJ “Lyndon B. Johnson” Freeway CMAQ Congestion Mitigation/Air Quality LED Light Emitting Diode COPS Community Oriented Policing Services (grant) LNG Liquefied Natural Gas CP Commercial Paper LPIS Locally Preferred Investment Study CR Commuter Rail LRT Light Rail Transit CS Central Services LRV Light Rail Vehicle DART Dallas Area Rapid Transit LT or LTD Long-Term Debt DCTA Denton County Transit Authority M Millions DEO Diversity & Economic Opportunity MBE Minority Business Enterprise DFW Dallas/Fort Worth International Airport MDC Mobile Data Computers D/M/WBE Disadvantaged/Minority/Woman-Owned Business

Enterprise MIS Major Investment Study

DOE Department of Energy Mph Miles per hour DOT Department of Transportation NABI North American Bus Industries EA Environmental Assessment NC LRT North Central Light Rail Transit ELT Executive Leadership Team NCTCOG North Central Texas Council of Governments EOY End of Year NOx Nitrogen Oxide EVP Executive Vice President NRV Non-Revenue Vehicle FFGA Full Funding Grant Agreement NW Northwest Corridor FHWA Federal Highway Administration NW-1A Northwest LRT line section (West End Station to

Victory Station) FICA Federal Insurance Contributions Act OCS Overhead Catenary System FP Financial Plan OEM Original Equipment Manufacturer FS-B Financial Standards-Business Planning Parameter OPS Operations FS-D Financial Standards-Debt Service O/S EOY Outstanding End of Year FS-G Financial Standards-General OSHA Occupational Safety Hazard Administration FTA Federal Transit Administration OSR Operating Speed Ratio FWTA Fort Worth Transit Authority PASS Principal Arterial Street System FY Fiscal Year PAVMB Public Announcement Visual Message Boards FYxxA Actual year-end cost for FY(xx) P&D Planning & Development FYxxB Budget cost for FY(xx) PMP Performance Management Plan GAAP General Accepted Accounting Principles PMSA Primary Metropolitan Statistical Area GLO General Land Office PT Part-Time GM General Mobility PTO Paid Time Off GPS Global Positioning System PTP Pay to Platform HEP Head-in Power Q Quarter

APX-17

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FY 2005 Business Plan (09/28/04) Appendix

Exhibit APX.7 Acronyms

RDC Rail Diesel Car The T Fort Worth Transportation Authority ROW Right-of-Way TMA Transportation Management Association RR Railroad T&P Texas & Pacific Station RTC Regional Transportation Council TPSS Traction Power Sub-Station SAP Shift Assignment Pay TRE Trinity Railway Express SCADA Supervisory Control and Data Acquisition TSF Telephone Service Factor SE Southeast Corridor TSM Transportation System Management SH State Highway TSP Transit System Plan S&I Service & Inspection TVM Ticket Vending Machine SOP Standard Operating Procedure TxDOT Texas Department of Transportation ST Short-Term (debt) UP Union Pacific SU Start-Up US United States S&W Salaries & Wages USC United States Code TBD To be determined UT University of Texas TC Transit Center VBS Vehicle Business System TCEQ Texas Commission on Environmental Quality VP Vice President TDM Transportation Demand Management WAN Wide Area Network TEA-21 Transportation Equity Act for the 21st Century XPB X-Press Booking TERP Texas Emissions Reduction Program ZEV Zero Emission Vehicles TES Traction Electrification System

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APX.8

08/06/04

DART MANAGEMENT DART MANAGEMENT ORGANIZATIONAL CHARTORGANIZATIONAL CHART

Sr. VPProject

ManagementMcKay

VPMarketing &

CommunicationBauman

AVPFacilities

EngineeringUgarte

AVPSystem

EngineeringSwindell

AVPReal Estate

Grounds

AVPTechnicalServices

Haenftling

AVPConstruction

Gollhofer-Raines

AVPCommunicationStringfellow

AVPExternal

CommunicationPeña

Boardof

Directors

President/Executive Director

G. Thomas

General CounselR. Angle

Director Board Support

N. Johnson

DirectorInternal Audit

A. Bazis

President/Executive Director

G. Thomas

Exec Vice PresidentAdministration

B. Gomez

Exec Vice PresidentProgram Development

D. Allen

Exec Vice President/Chief of Operations

V. Burke

VPHuman

ResourcesJackson

VPChief of Police

Rodriguez

VPCommuter

RailWaters

VPMaintenance

Hubbell

VPTransportation

Jennings

VPParatransit

Douglas

VPProcurement

Mercer

AVPContractsPritchett

AVPProcurement

SupportMowen

VPCFO

FinanceLeary

VPDiversity &

Economic OppDixon

AVPFreight Rail

Friesner

AVPService

PlanningNewby

AVPMobility

ProgramsOlyai

AVPFleet

ServicesHale

AVP – Ways,Structure &AmenitiesArchibald

AVP Technical ServicesRogers

AVP ParatransitMgmt. Serv.Haenftling

AVP Rail

OperationsGaul

AVP Bus

OperationsMyers

AVP Operations

SupportBurton AVP

RiskManagement

Redding

AVPDiversity

Econ. Opp.Caldwell

AVPMarketingAdvertising

Vacant

AVPTreasurer

Hallett

AVPBusinessSolutionsVacant

AVP ParatransitOperationsThompson

AVPHuman

ResourcesWise

AVPDeputyChiefSpiller

AVP Materials

MgmtSadberry

AVP Operations

Admin.Hetrick

Chief of Staff

J. Davis

AVPCapital

PlanningSalin

AVPInformation

SystemJarrett

AVPPolicy

Topletz

APX-19

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APX-20