Transit Tech Ohio Cost Benefit Analysis Narrative
Executive Summary:
Attached as part of the Transit Tech Ohio TIGER application is a cost benefit analysis
spreadsheet that shows exactly how benefits and costs were calculated for the project. The
summary tab is a summary of the net present value of both benefits and costs. Analysis was
completed with a discount rate of both 3% and 7%.
The benefits of the project are clear and will be discussed in more detail below. Figure 1 shows
a summary of the issues the project solves and the benefits that arise from those solutions.
Figure 1: Project Benefit Matrix:
Current
Change to
Type of
Status/
Baseline/
Impacts
Baseline &
Alternatives
Problem to
be
Addressed
Manual
Automated
Reduced
scheduling of scheduling
vehicle
bus routing
software
operating
cost
Manual
scheduling of
bus routing
Automated
scheduling
software
Staff time
savings
Population Economic
Affected
Benefit
by
Impacts
Summary of
Results (3%
Discount
Rate)
Page
Reference in
BCA
1,768,329:
Population
of counties
served by
Ohio’s
Rural
Public
Transit
Systems
1,768,329:
Population
of counties
served by
Ohio’s
Rural
Public
Transit
Systems
Monetized
value of
reduced
operating
cost
$11,397,860.78 “Operating
Cost
Savings”
Qualitative
Qualitative
Page 2
below
In addition to the benefits of the project, the costs can be seen in the cost benefit analysis
spreadsheet. The total construction cost of the project is $7,339,860 and is broken down by
year in the cost benefit analysis spreadsheet. Maintenance and operations costs estimates are
also shown.
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The useful life of the project was defined as five years, as can be seen in the cost benefit
analysis spreadsheet. The basis for this useful life is ODOT’s Useful Life Standards from the
Office of Transit which states that the useful life for computer hardware and software is five
years.
Measurable Project Benefits:
The measurable benefits of the project fall into one category, Operating Cost Savings. The
monetary values of this benefits can be found in the cost benefit analysis spreadsheet. Based
on discussions with WSOS Community Action, it was determined that the average operating
cost savings of adding scheduling software to an agency that does not already have scheduling
software is 25%. Similarly, the benefit of upgrading scheduling software was found to be 10%
reduction in operating cost. These percentages, as well as the 2013 operating costs for each
agency, were used to calculate the operating cost savings from the Transit Tech Ohio project.
The calculations can be found in the Agency tab of the attached cost benefit analysis
spreadsheet.
The operating cost include fuel savings, maintenance, and labor hours which ultimately allows
the transit agencies to do more with the resources they have. What may have been
accomplished previously through pencil and paper or through a labor intensive excel process,
will now be accomplished through software automation. The software will automatically re-route
a bus schedule to allow for the additional passenger trips. Advanced scheduling is typically
done very well, it’s the day of service is where scheduled fall apart. Vehicles break down, now
shows or cancellations. Dispatchers spend their time firefighting and not proactively improvising
the system. The result will be more people on the bus and less single occupancy vehicles. The
dispatcher can utilize the software to know where exactly any individual bus is and re-route any
bus to accommodate an additional passenger along their existing route and update the driver’s
electronic manifest. A small gain in system productivity will improve system performance
through the number of trips completed per service hour.
Qualitative Benefits:
In addition the benefits that can be measure, Transit Tech Ohio also provides qualitative
benefits that cannot be measures. This benefit is the human element efficiency, which refers to
the amount of time saved by the transit agency staff members by utilizing the software. The
software will be able to optimize routes, but also reduce agency staff time in the development of
contract invoicing/billing and program reports. What would normally be done by pencil and
paper or through excel, will now be automated through the software saving staff time. Most
agencies will end up utilizing the time gained through the increased efficiency of their staff
member to perform additional functions within the agency including safety and asset
management. Because of this complexity it was decided to not perform a cost benefit analysis
on the human element.
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Operations and Maintenance Costs:
Operations and maintenance costs were calculated based on conversations with Ecolane.
Yearly software maintenance cost for a transit agency with 10 demand response vehicles was
$7,000. This value was used as an estimate for all 34 agencies, to estimate software
maintenance costs of $238,000. Additionally, cellular data service was estimated to cost $59 per
vehicle per month after discussions with an existing transit agency about their current service
costs. For 582 vehicles the cellular data service comes to an operations costs of $412,056 per
year.
Benefit Summary:
The Transit Tech Ohio project produces large benefits in excess of cost. At a 3% discount rate,
the benefits of the project exceed the costs by more than $1.7 million while at a 7% discount
rate the benefits exceed the costs by more than $800,000.
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