Horizon, Host: Ted Simons

March 31, 2010


Host: Ted Simons

Valley METRO Light Rail


  • Learn about proposed changes to light rail service from METRO Light Rail CEO Stephen Banta.
Guests:
  • Stephen Banta - CEO,METRO Light Rail
Category: Business/Economy

View Transcript
Ted Simons: The valley's light rail system is funded primarily with sales tax revenue from valley cities. And because that revenue is down, cities are struggling to maintain light rail funding at current levels. In May the metro light rail board of directors is scheduled to adopt a new operating budget. Here with more on that and more, is metro light rail CEO Steve Banta. Welcome to town. You're new on board.

Steve Banta: Yeah, eight weeks on the ground.

Ted Simons: What are you seeing as far as light rail in Phoenix compared -- I know were you in Portland, and other areas. What do you see here?

Steve Banta: I worked for a number of different transit properties. What has to be talked about is the effort that went into this 20-mile light rail system. Through three cities, the major city being Phoenix. A great street running light rail system. It was constructed over roughly an eight-year period, and now we are transitioning into operations. So my vision, my goal, is to transition this organization, metro, from a construction entity to an operator of quality Service.

Ted Simons: How do you do that when so much of city budgets are just getting hammered right now, and that impacts the light rail Service?

Steve Banta: Funding is a big issue. Our member cities make up 75% of our operational funding. We get 25% from the fare box. That's not to be alarming. That's standard throughout the U.S., roughly 20-25% come from the fare box. When tax revenues are down, you've got to make tough decisions you’ve got to tighten your belt in certain ways to manage to a lesser budget, but also keep the customer in mind and impact them the least.

Ted Simons: You talk about fares and such. A quick detour, there are concerns on uncollected fares. People aren't paying, or those who have U-passes, either aren't figuring out how to use them properly, it's -- something is not working. What are we seeing out there?

Steve Banta: I think a lot of it is perception. As we know, perception is 100%. I don't believe we have a big issue with fare evasion here. The U-pass, for example, that was an opportunity for us to partner with ASU, 20% of our ridership comes from ASU. And ASU actually provides a benefit to their students by subsidizing that transit pass. But what they did is they timed the expiration of that transit pass with the school year instead of the semester. They communicated heavily with the students, if you didn't register for the next semester, your pass would be deactivated, so at the end of the day, the passes are deactivated, our fare inspectors have a device that can read the pass to see if it's valid, and if they're using a pass that's not valid, it's just like fare evasion.

Ted Simons: Interesting. As far as proposed changes now to light rail, let's talk about three of them in particular. Reducing peak time frequency from 10 to 12 minutes. What does that mean?

Steve Banta: Right now our trains run every 10 minutes during the peak service. Usually from about 4:30 in the morning, 5:30 in the morning, excuse me, to 9:30 in the morning, and in the evenings, 4:00 in the afternoon to about 6:30. We'll reduce that from 10-minute frequency to 12-minute frequency. And we would be able to take one to three trains out of rotation, which is a cost savings to us, but I think minimally impacts the customer when you wait for a train for 10 minutes versus 12 minutes. So that's what we're trying to look at.

Ted Simons: And combine that maybe perhaps with shortening the peak hours you just mentioned by a couple hours, correct?

Steve Banta: One in the morning and one in the evening, yes.

Ted Simons: And that saves how much do you think?

Steve Banta: That's about $200,000 savings. The three options, the one option for the 10 to 12 minutes is a half million dollar savings.

Ted Simons: Interesting. Running holiday Service for maybe five more days or something along those lines. What are we talking about here and how much do we save?

Steve Banta: It's about $125,000 worth of savings. What we're doing is running a reduced Service on holidays like the day after Thanksgiving. The Christmas Eve. Labor Day. So it reduces the amount of trains we put out. Monday through Friday, we have a large number of trains outs, the weekends it's less Service. So it's less cost to operate.

Ted Simons: As far as ridership is concerned, I thought it read that ridership on the weekends was down a bit. Is that --

Steve Banta: I think a lot of times when the economic conditions are there, discretionary funding is limited. So people go out to recent view -- venues less on the weekends, they don't shop as much, they don't go to the ball game or the events they typically do on a weekend. Ridership all in all, even with the downturn this year on weekends, is up over last year or the original projections. Ridership was projected at about 26,000 a day weekday. And we're up to 34, 35,000 a day. So we're doing very well as it relates to ridership.

Ted Simons: We talked about the options as far as saving money and these sorts of things. The three we mentioned, most likely you think to get through?

Steve Banta: 10 to 12 minutes.

Ted Simons: That's the most likely?

Steve Banta: M-hmm.

Ted Simons: How about the others?

Steve Banta: Well, the one we didn't talk about was late-night weekend Service. We think that's a benefit. To actually the community. It's one thing we instituted last October, last November – September sorry, and it provides opportunities not only for people to have late-night Service options till 3:00 in the morning Friday and Saturday night, it also provides opportunities for workers to get to these establishments. So we think that's going to be --

Ted Simons: That's going to stay?

Steve Banta: I think so.

Ted Simons: What about advertising? Is that going to stay, is there going to be more of it?

Steve Banta: I think so. We're in our infancy in advertising. We documented a policy last year. Early this year we signed a deal with CBS outdoors. We're going to generate 60% of the advertising sales. They will go out with a framework of what can and can't be advertised and we're looking to expand that.

Ted Simons: There's still an aversion though to advertising. Is that -- has that pretty much been thrown out considering the revenues?

Steve Banta: One thing we did here at metro and the board, they didn't want to mess their brand. They've got a nice-looking train, they've branded the system, and what they've done is adopted advertising only on 20% of our fleet. So you'll only see 10 trains out of 50 that have wrapped advertising on them.

Ted Simons: As far as inside, how much could we see?

Steve Banta: Inside could be all the cars. But it's on floors.

Ted Simons: On the floor -- but could you always do the walls like you see in subways and buses?

Steve Banta: It would have to be discussed. Today we've determined just floors.

Ted Simons: What about stations?

Steve Banta: Stations there is advertising. One is central and Washington, as a station advertising for I believe one Lexington, on Osborn street.

Ted Simons: You came from Portland, obviously mass transit there, very different beast. Somewhat different beast than it is here in Phoenix. Are we ready? Is the valley ready for mass transit, or is it still a learning process?

Steve Banta: I think it's a learning process. I think mass transportation in the valley is in its infancy. That was one of the exciting things that drew me to the valley. Is to be able to affect that footprint for generations to come. As we expand, as we provide expansion opportunities, we have to think about transit as a regional asset, and not a city asset.

Ted Simons: Are those expansion ideas on hold, are they going forward considering the economy?

Steve Banta: There's a 20-year transportation plan that was approved by the voters for the prop 400 sales tax, and with that plan, we're actually moving some of the needs to the right, because of the downturn. We're looking for ways to move them to the left, but as this -- at this point in time we're extending them some three to five years.

Ted Simons: So a little delay there.

Steve Banta: Yes.

Ted Simons: It's great to meet you. Thank you so much for joining us.

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