Analysis of Operating Revenue Enhancement Opportunities for Miami-Dade Transit
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Analysis of Operating Revenue Enhancement Opportunities for Miami-Dade Transit Phase II. Miami-Dade Citizens ‘ Independent Transportation Trust April 2012. A Report by Infrastructure Management Group & Planning and Economics Group.

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Analysis of Operating Revenue Enhancement Opportunities for Miami-Dade TransitPhase II

Miami-Dade Citizens‘Independent Transportation Trust

April 2012

A Report by

Infrastructure Management Group &

Planning and Economics Group


Operating revenue enhancement opportunities project overview
Operating Revenue Enhancement Opportunities: Miami-Dade TransitProject Overview

  • The Phase 1 Revenue Enhancement report identified the full spectrum of alternatives for increasing operating revenues to MDT and to reduce the gap projected in 2014 in the MDT Pro Forma.

  • This Phase 2 report examines the most promising selected options from the Phase 1 study in further detail.

  • This project developed an implementation plan for the selected potential revenue streams

    • Required steps

    • Responsibilities,

    • Cost

    • Challenges

    • Likely range of revenue for MDT.


Operating revenue enhancement opportunities phase ii potential revenue enhancements
Operating Revenue Enhancement Opportunities – Phase II: Miami-Dade TransitPotential Revenue Enhancements

  • System Revenue

    • Advertising and marketing revenues Naming Rights

    • Right-of-Way Leasing, particularly for billboards and cell towers

    • Premium fares for the new Airport Link

  • Non-System Revenue

    • Business Licensing Fees

    • Tolling

    • Utility Fees


Operating revenue enhancement opportunities methodology
Operating Revenue Enhancement Opportunities: Miami-Dade TransitMethodology

  • Project methodology was based on Phase I research, literature reviews, and discussion with County staff and outside experts.

  • For advertising:

    • Inventory of potential assets not currently being offered to advertisers.

    • Then estimate the media value of new advertising assets based on the number of “impressions”

  • For business fees, tolling, and utility fees:

    • Models developed for each source to estimate the revenue that could be generated by either directing a portion of the revenue to MDT or adding an incremental fee that would be directed to MDT.

  • For all revenue enhancement areas:

    • Legal and political review of implementation issues


Operating revenue enhancement opportunities advertising
Operating Revenue Enhancement Opportunities: Miami-Dade TransitAdvertising

  • MDT advertising revenue is well below the peer average.


Operating revenue enhancement opportunities advertising1
Operating Revenue Enhancement Opportunities: Miami-Dade TransitAdvertising

  • The Miami market is above average in population and density.


Operating revenue enhancement opportunities results advertising and naming rights
Operating Revenue Enhancement Opportunities: Miami-Dade TransitResults- Advertising and Naming Rights

  • Between $3.46 and $13.66 M annual revenue to MDT is possible if all the reviewed advertising assets were applied.


Operating revenue enhancement opportunities results tolling
Operating Revenue Enhancement Opportunities: Miami-Dade TransitResults - Tolling

  • Using a portion of MDX tolls for MDT has significant revenue potential


Operating revenue enhancement opportunities results business fees
Operating Revenue Enhancement Opportunities: Miami-Dade TransitResults – Business Fees

  • Business license fees per transaction vary from $37.50 to well over $100 depending on the business classification.

  • On average, business taxes were $95.64 per transaction in fiscal 2010.

  • Directing 1% of business fees to MDT with the same number of ratepayers as 2010 would yield just under $160,000.

    • At this rate, it would require directing 6.25% to raise an additional $1M annually.


Operating revenue enhancement opportunities results utility fees
Operating Revenue Enhancement Opportunities: Miami-Dade TransitResults – Utility Fees

  • Water, Wastewater, and Electricity Fees are possible revenue sources , but are likely to meet resistance.


Operating revenue enhancement opportunities results implementation issues
Operating Revenue Enhancement Opportunities: Miami-Dade TransitResults – Implementation Issues

  • Legislative action will be required for certain advertising assets, but others are within MDT’s control.


Operating revenue enhancement opportunities results implementation issues1
Operating Revenue Enhancement Opportunities: Miami-Dade TransitResults – Implementation Issues

  • Business fee changes can be implemented locally.

    • One issue with business fees is that any funds, by law, would flow to the County General Fund, and could not be directly sent to MDT. A separate agreement or policy would be needed to provide MDT with funds equal to the amount collected for this purpose. There is a model for this with the County Maintenance of Effort, general funds provided to transit with the passage of the half-penny surtax.

  • Providing tolling revenue from the MDX system to MDT is at the discretion of the MDX board.

    • Indenture and bond covenants may restrict flexibility.

  • Water, wastewater, or electric fees is straightforward and entirely controlled by the County, but there are political issues.


Operating revenue enhancement opportunities conclusions
Operating Revenue Enhancement Opportunities: Miami-Dade TransitConclusions

  • The revenue sources analyzed could potentially generate substantial revenue for MDT.

    • Advertising and tolling, in particular, have the most revenue potential.

  • Implementing many of the revenue sources will be challenging.

    • Administrative, financial, and political obstacles exist.

  • System revenue sources cannot fill the entire projected budget gap. Half or more of the gap must be filled with other sources.

  • Ramping up the potential revenue sources for the 2014 budget year will require immediate action.

  • Tolling is a key potential new source for revenue, with the MDX conversion to open road tolling and the implementation of toll lanes on I-95 in the County by FDOT. However, restrictions in bond covenants will complicate implementation.


Operating revenue enhancement opportunities recommendations and next steps
Operating Revenue Enhancement Opportunities: Recommendations and Next Steps

Recommendations:

  • Focus on tolling and advertising opportunities

  • Business fees are secondary priority

  • Utility fees are likely to be too controversial to implement

    Next Steps:

    1) Report Finalization

  • Integrate OCITT and CITT final comments

  • Finalize report and publish

    2) Implementation

  • Prioritize revenue enhancement actions

  • Introduce concepts to Mayor, MDT, and other key stakeholders

  • Develop implementation strategy for each revenue enhancement


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