TRANSPORTATION FEE RATE REQUEST
FOR
FY 2014 AND FY 2015
Submitted By
Raymond W. Vanlanot, Chair
IU Student Transportation Board
Representing the Graduate and Professional Student Organization
Patrick J. Courtney, Vice-Chair
IU Student Transportation Board
Representing Indiana University Student Association
Perry J. Maull, Operations Manager
IU Campus Bus Service
Dewayne J. Pinkney, Lead Student Supervisor
IU Campus Bus Service
October 26, 2012
1
Background
IU Campus Bus Service is requesting a 2% increase in the student transportation fee for FY 2014
and 2.0% for FY 2015. Bus services on and to/from the IU Bloomington Campus have
continued to be an important service provided to IU students.
The mandatory student transportation fee will generate approximately $4.75 million for FY
2013. The IU Student Transportation Fee is the single largest source of public transportation
funding in Bloomington. The IU Student Transportation Fee generates more revenue for public
transportation in Bloomington than is generated from any other single source: federal, state, or
local.
Service Characteristics
Campus Bus Service
Campus Bus Service provides an intensive level of service to the Bloomington Campus on 5
regularly scheduled routes with 19 buses during peak hours. Access to Campus Bus Service is
on a prepaid basis. No fares, passes, or ID’s are required to board a bus which expedites the
boarding process for all passengers which results in more efficient service. IU Students represent
99% of the total ridership of IU Campus Bus Service.
Over the past 6 fiscal years, the trend in productivity as measured by passenger boardings per
hour has increased. Passenger boardings per hour measures the use of each bus per hour of
service provided.
Trips / Service Hour
100
80
60
40
20
0
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
In addition to increased productivity, there has also been a significant upward trend in overall
ridership, as shown in the graph below:
2
2005-2012 Ridership by Fiscal Year
4,000,000
3,500,000
3,000,000
2,500,000
Total Passengers
2,000,000
Total Passenger Average
Trendline
1,500,000
1,000,000
500,000
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Bloomington Transit
IU students have unlimited access to all of BT’s fixed routes. BT’s Route 6, Route 7, and the
Route 9 are the routes most heavily used by IU students. Route 6 serves the North Walnut/North
College corridor as well as East Tenth Street with frequent service to the following apartment
complexes: Colonial Crest, Smallwood Plaza, Fountain Park, Woodbridge, Barrington, Meadow
Park, Bradford Place, and Knightridge. Route 9 serves the College Mall area including the
following apartment complexes: Tulip Tree, Park Doral, Hunter Ridge, Campus Corner,
Covenanter Gardens, Fields, and Latimer. Route 7 serves the South Walnut/South Henderson
streets corridor. The chart shows Bloomington Transit’s total passenger boardings and the
number of IU students and percentage of the total.
3
BT Boardings by Type of Rider
3500000
3000000
2500000
2000000
IU Student Boards BT Bus
1500000
BT Boardings Less IU Students
1000000
500000
0
2006
2007
2008
2009
2010
2011
Challenges
Major Yearly Expenditures
Transfers Out
BT Contract
All Compensation
Fuel
Repair/Maintenance
All other Expenses
Campus Bus is faced with many financial challenges largely outside of its control, because many
of its costs are set externally by either the University or by the market place.
4
The Campus Budget Office annually sets a University Tax and an IU Bloomington Campus
overhead allocation based on total expenses. The transfers-out amounts to almost $300,000 a
year in overhead expenses which is outside of the control of Campus Bus Service.
The Bloomington Transit contract for prepaid IU student fares was increased by 3% for FY 2013
to annualized amount of $953,408. We expect BT to ask for a similar increase in its contract over
each of the next two fiscal years.
Based on trend of wage increases being granted by the University we should be prepared for a
3% increase in wages and salaries for appointed (full-time) employees for each of the next two
fiscal years. Fringe benefit rates have been increasing at an even higher rate over the last 6 years
moving from 27.5% in FY 2007 to 45.5% in FY 2012. Most of the increase in fringe benefit rate
has been caused by increases in employer paid medical insurance and employer paid pensions.
The cost of diesel fuel has been very volatile since 2008 with dramatic spikes in prices and then
much slower price declines. Over the past 4 years diesel fuel has risen to $4.19 per gallon and a
low of $1.52 per gallon. These prices are without any federal or state taxes.
Currently we are able to buy diesel fuel at $3.08 per gallon under a fixed price contract for 66%
of our annual fuel use. In comparison the spot market for diesel fuel the week of August 27 was
$3.45 per gallon. We will still need to buy 34% of our annual fuel use on the spot market over
the balance of FY 2013. We budgeted $3.08 per gallon for diesel fuel for FY 2-13. We have
used an average price of $3.30 per gallon for FY 2014 and $3.53 per gallon for FY 2015.
Campus Bus Service consumes about 130,000 gallons of diesel fuel annually.
Maintenance expenses on the buses will continue to rise as the buses continue to age. Repair
parts expenses have risen from $231,117 in FY 2010 to $297,179 in FY 2012. The expected
minimum lifecycle for a transit bus is 12 years. As the average age of the bus fleet continues to
increase, proportionately more will need to be spent on maintenance to keep the buses in safe
and reliable operating condition.
Recently Congress canceled the Federal Transit Administration’s discretionary capital grant
program from which Indiana University obtained 80% federal funding to purchase all of the
buses in the current fleet. The federal funds will now be allocated by formula to the designated
recipient in each urbanized area. Bloomington Transit is the designated recipient for the
Bloomington urbanized area. As a result Campus Bus Service will now have to rehabilitate the
current bus fleet over the next several years, instead of replacing the current buses with new
buses.
There are a total of 27 buses in the current fleet of that total 18 buses are 1999 models. The
newest bus is a 2005 model. Campus Bus estimates that rehabilitating each of the 27 buses in
the current fleet will cost an average of $175,000 or a total of $4,725,000. Campus Bus does
receive an allocation of $200,000 per year from Parking Operations for bus replacement per year,
however the balance of the funds required for rehabilitating the bus fleet will need to come from
the Campus Bus Service.
5
To date IU Campus Bus Service has not received operating funding from either the Federal
Transit Administration (FTA) or the Indiana Department of Transportation (INDOT). The lack
of a diversified revenue base was felt most severely in 2008 when diesel fuel costs unexpectedly
escalated and Campus Bus Service was forced to scale back bus service so that it could balance
its budget. Every other public transit system in Indiana obtains assistance from the Indiana
Department of Transportation through the Public Mass Transportation Fund (PMTF).
Campus Bus Service has experienced negative financial results for many years. Over the past 14
years Campus Bus Service has ended a fiscal year with both positive net income and positive
cash balance just five times: FY 2003, FY 2009, FY 2010, FY 2011, and FY 2012. As a unit of
Auxiliary Business Services, Campus Bus Service is required to operate in a business-like
manner which means that it should end each fiscal year with both a positive cash balance and a
positive net income. Just breaking even is not an option for Campus Bus Service, because it
needs to have operating reserves to deal with unexpected or uncontrollable increases in expenses.
Campus Bus also needs to set aside funding for the rehabilitation and replacement of buses,
because there is no other source of funding available for this purpose.
Student Transportation Board
The Student Transportation Board (STB) continuously monitors bus services on the behalf of all
IU students. The STB includes representatives from the major student organizations: two
representatives from the IU Student Association (IUSA), two representatives from the Graduate
and Professional Students Organization (GPSO), two representatives from the Residence Halls
Association (RHA), one representative from the Inter-Fraternity Council (IFC), one
representative from the Pan Hellenic Association (PHA), as well as a faculty representative and a
staff representative. In addition a student is appointed by the IU Bloomington Dean of Students.
The STB meets on a regular basis to provide oversight to public transportation services paid for
by the student transportation fee.
The STB Charter calls for it to perform the following:
The purposes of the Student Transportation Board are: to approve all public transportation services
provided by IU Campus Bus Service; to provide student input into the setting of the mandatory student
transportation fee which is used to fund services provided by IU Campus Bus Service; and to provide
student involvement in the management and operations of IU Campus Bus Service.
Proposed Solutions
Currently 98% of the revenue for Campus Bus Service comes from the mandatory student
transportation fee. Other public transportation systems, such as Bloomington Transit, obtain
more operating revenues from combined state and federal grants, than local taxes. If Campus Bus
Service does not obtain sufficient revenue from the mandatory student transportation fee to cover
all operating costs, then ultimately service levels will have to be proportionately reduced to
balance the budget between available revenues and expenses.
6
Summary of Accomplishments
Campus Bus Service has accomplished the following over the past six years:
 Aggressively reduced costs through reductions in force by the elimination of a total of
seven (7) appointed positions over the past 6 years: two support staff (clerical), the
maintenance manager, one mechanic, one vehicle service attendant, four dispatcher
positions replacing them with 2 supervisor positions for a net reduction in two positions.
 As directed by the 2011 CFR absorbed the expenses for the DoubleMap bus tracking
software and hardware that had been developed by IUSA.
 Reduced the number of appointed (full-time) bus operators from 22 to 19 entirely by
attrition over the past 3 years. No appointed bus operator was reduced in force.
 Expanded job opportunities for IU students to become part-time bus operators through
extensive recruitment campaigns and intensive training programs. IU Campus Bus
Service employs 40 IU students as part-time bus operators during the Fall Semester 2013.
This is a major increase in IU student employment compared to FY 2006 when only 1 IU
student was employed as a part-time bus operator. Also, IU students employed as bus
operators have allowed Campus Bus Service to eliminate overtime by appointed bus
operators.
 Created 6 student supervisor jobs to provide upward mobility opportunities for student
bus operators. Students provide all supervision for Campus Bus every weekday evening
and on weekends, including all Night Owl bus service.
 Converted the Midnight Special into the Night Owl which is jointly operated by Campus
Bus and Bloomington Transit. Ridership has more than doubled and the cost of
providing the service was dramatically reduced from the previously contractor provided
minibus service. The service is now reliable providing thousands of safe late night rides,
since it was converted a fixed route operation.
Summary of Proposals
Campus Bus Service proposes the following actions to be taken during the next two fiscal years:
 Requests a 2% increase in the current mandatory transportation fee rate for each of the
next two fiscal years to fund increases in expenses that are not under our control, such as
fuel, salary and wage increases, health care for appointed employees, etc.
 Rehabilitate the current bus fleet to extend the buses useful lives.
 Continue to reduce administrative expenses.
 Continue to reduce appointed bus operator positions through attrition by not filling
appointed bus operator positions when they become vacant. If attrition does not occur to
meet the objective of at least one less appointed bus operator each year over the next ten
years, then one occupied position will be eliminated each fiscal year.
 Continue to evaluate the potential to obtain a fixed cost contract for diesel fuel based on
the experience with current contract.
 Continue to recruit, train, and retain IU students as part-time bus operators to reduce total
compensation expenses.
 Continue to work with the IU Student Transportation Board to continuously monitor,
evaluate, and make recommendations for improvements and cost savings.
7
Rate Proposal
We are proposing a 2% increase in the mandatory transportation fee rate for each of the next two
fiscal years.
Approved FY 2013
FY2014
FY 2015
$61.36
$62.59
$63.84
8