Worth a look…

An interesting comment thread going on over at Null Space under the heading “Transit Tuesday.”  As I post, it’s up to 21 comments (and only three of them are from me!)  Bottom line: Designing a transit system depends on the choices you make and what you want the system to do.  A system that’s designed to take the maximum number of cars off the road might look and work completely different than a system that’s designed primarily to provide transportation to people who have no other options.  Which is the “right” system? It depends on what you want the system to do.

We have to keep in mind the fundamental rule for economics: limited resources, unlimited wants and needs. You can never have enough to do everything you want to do, so where do you draw the line?

Looking to the future

Both the Post-Gazette and the Tribune-Review offer a little of the flavor of what the Port Authority is trying to accomplish with its Connect ’09 service redesign process.  The Port Authority’s consultant on Friday outlined some of the problems that contribute to the system’s relative inefficiency, including:

• Too many bus stops.
• Too many confusing routes.
• Too many routes that compete with one another.
• Too many routes that extend too far out from the core service area.

Fixing these problems will require transit riders to change some longtime habits.  But not addressing the problems will only make things worse.

The Allegheny Institute deserves kudos for highlighting the inefficiencies of the Port Authority system, documenting problems through some useful research over the years. But, I think the Institute may be a little overly harsh in criticizing the consultant’s work as a “day late, dollar short.”  Knowing there are inefficiencies is only the first step; redesigning the system to optimize resources is real work.  And it’s probably not fair to blame the current Port Authority management team led by CEO Steve Bland for the problems that were allowed to accumulate over the past 20 years.

Yes, the consultant is receiving $800,000 to help with the redesign.  And if the resulting plan improves the Port Authority’s efficiency by even 10% (or $35 million per year, or an additional 7 million riders per year) that will be money well spent.

Posted by: Ken Zapinski

Visions of transit

The Port Authority, through its Connect ’09 system redesign process, is developing a new transit vision for the region, one that best balances the contemporary development patterns and lifestyle trends with available resources. There are many different ways to provide transit service, and we have to find one that works for us.

Which brings me to a discussion I had with a veteran member of the Pittsburgh planning community last year when the Port Authority was trimming its existing route structure to improve the efficiency of the system. When I asked him what he thought, he told me: “They’re not cutting enough.”

After I recovered from my shock, he explained what he meant.

The Port Authority system spreads out all across Allegheny County, and, according to my planning friend, spreads service too thinly. (If the agency had a map of the network on its website, you’d see that bus routes touch nearly every corner of the county. But it doesn’t, so you can’t.) Nearly everybody has access to some service, but few areas have enough service to make it a robust, convenient, and competitive option to driving.

His suggestion was to eliminate routes traveling through most of the county and concentrate nearly all the service along the busways and two or three other highly traveled corridors. But make the service robust and frequent. So much so that if you lived in the neighborhoods and communities along those corridors, you basically wouldn’t need a bus schedule. You’d just walk to the bus route and something would be along in a few minutes to pick you up.

It’s a different kind of transit service model than what we have now. If you wanted to use transit, you’d be limited in the areas where you could live. But if you lived in those transit-rich communities, service would be so much more frequent and reliable.

There is not a single “right way” to design a transit system. It depends on what a community wants, the choices that it makes, and the amount of resources available. Something to keep in mind as the Connect ’09 process continues. It looks like Joe Grata might be preparing something about it for Saturday’s Post-Gazette.

Posted by: Ken Zapinski

The crushing weight of benefits

I mentioned the other day that the Port Authority is budgeted to spend more on retiree healthcare this year than diesel fuel. Today, let’s take a look at benefits more broadly.

Next year, the Port Authority will start paying more for retiree healthcare benefits than healthcare for active employees. What does that mean?

Four years ago, all benefits expenses (healthcare, life insurance, pension, etc.) equaled 28.2% of the Port Authority’s available revenue.  This year, benefits total 30.2% of the authority’s available revenue.

In four more years, benefit expenses will equal 40.0% of the Port Authority’s available revenue ($144.18 million in benefit expenses vs. $360.361 million in projected available revenue.)  That would mean that 40 cents out of every dollar would go toward healthcare, pensions, insurance, and Social Security/Medicare contributions.

Before a penny goes for wages or to fill up a bus with fuel or to print a monthly pass, 40 cents of every available dollar is already gone.  And the biggest single expense? Retiree healthcare.

The Port Authority literally will not be able to afford that. So, the only thing to do will be to cut bus and rail service. And, unfortunately, the jobs that are associated with that service.

It’s an unavoidable law of economics. The more something costs, the less you can afford to buy of it.

Posted by: Ken Zapinski

The stars align

When the editorial pages of Pittsburgh Post-Gazette and the Pittsburgh Tribune-Review agree on an important public policy issue, the first thing to do is look out the window to see if you can glimpse some flying pigs.

But you also should pay attention, because any idea that has enough merit to appeal to two groups approaching the world from completely different perspectives is worthy of serious consideration. And what do these two ideological cold warriors agree on?

That the contract proposal made by fact-finder Jane Rigler — which offers raises to workers now but limits the extravagant pension and healthcare benefits that those workers would receive when they retire — is fair to workers and addresses the Port Authority’s problems.

“Sounds like the real world to us,” the Tribune-Review said in praising the proposal.

Rigler’s recommendation “didn’t give either side all that it wanted but offered gains to both parties, on the way to securing the transit system’s long-term future,” the PG said in this morning’s editorial.

But Pat McMahon and the transit union leadership won’t even let their members decide for themselves whether it’s a good deal.

The PG editorial sums it up:

For too long, Port Authority and Allegheny County elected officials have reached agreement upon agreement with Local 85 of the Amalgamated Transit Union, buying labor peace in a labor town, only to lead to a day of reckoning for the long-term sustainability of this essential public service. That day is now.

Posted by: Ken Zapinski

Fixing a leaky roof

Based on press reports over the weekend, there seems to be some confusion in understanding the magnitude of savings the Port Authority would have enjoyed had the union not rejected the fact finder’s report. Understandable, given that the issue involves confusing terms like present value and GASB 45. (Jim Ritchie takes a valiant run at it in Sunday’s Tribune Review.) Let me offer my own vastly oversimplified comparison that might shed some light on it.

Suppose you’re living paycheck to paycheck with no savings. Every penny that comes in goes out for food, utilities, gasoline, etc. Yet the roof of your house continues to disintegrate. You will need to replace it by next summer, or your house will collapse. Yet, you don’t have money to set aside each month to save up for a new roof. The only way to pay for the new roof would be to take out a loan and pay for it by cutting your food budget in half, which means you and your family would have to skip dinner every night.

Now suppose someone came along and had a spray treatment you could put on your roof that would not only extend the life of the roof, but would make it cheaper to replace when you eventually had to replace it. The only catch: it would cost $20 cash, right now. Even though you don’t really have an extra $20 available, you’d find it somehow because the benefits of the offer are too good to pass up.

How much money have you saved? Well, you have to spend an extra $20 that you didn’t expect. And from one perspective, there really any “savings” on the roof, because that’s a bill you weren’t paying anyway — yet. And the deal didn’t do anything to solve your immediate problem of living paycheck to paycheck, struggling every day to make ends meet.

But the real question is this: For $20 did you avoid an impending financial disaster? Absolutely.

The Port Authority would not have seen much out-of-pocket cash savings in the early years of the proposed contract, partly because of the 3% wage increases and partly because so many drivers would have retired immediately to preserve the old benefits, immediately increasing payments for pension and retiree healthcare and the like. But the deal would have immediately reduced the Port Authority’s liability for retiree healthcare costs (the “leaky roof”) and made the problem manageable. Over the three year life of the contract, cash savings and avoid liabilities (like the leaky roof, bills that otherwise would have come due eventually) totaled almost $90 million.

That’s serious savings.

One of America’s Great Transportation Writers?

Can anyone tell me why, in Joe Grata’s story in the Post-Gazette this morning, every single quote and comment on the front page is from transit union boss Pat McMahon?

Can anyone tell me why, in Joe Grata’s story in the Post-Gazette this morning, not a single transit rider or taxpayer or anyone outside of government was quoted about the issue?

Posted by: Ken Zapinski

The oppression of free healthcare

Please don’t miss union boss Pat McMahon’s performance on WPXI announcing: ““If this union was to accept this report, it would take this union back 50 years, without a doubt.”

Under the proposal that Pat finds so oppressive, a 60-year-old bus driver with 30 years of service could retire and pay nothing — NOTHING! — for health insurance for the rest of his or her life. The Port Authority would pay for it all.

And if the driver reached 30 years of service even younger, he’d still get Port Authority-provided health insurance — he’d just have to pay a little more than $100 a month to be covered for the rest of his life.

Does anyone else out there have that kind of deal waiting for them when they retire?

Make no mistake. What Pat McMahon is trying to protect — what he is willing to bankrupt the Port Authority over — is the ability for his members to retire in their 40s and 50s after putting in just 25 years of service. He wants them to receive retiree healthcare coverage for the rest of their lives while just paying a token amount for it.

And he wants the taxpayers to foot the bill.

Posted by: Ken Zapinski

Union refuses

It’s a sad, sad day for the Pittsburgh region.

At his news conference tonight, Allegheny County Executive Dan Onorato said that the union’s refusal to accept a new contract puts the future of the Port Authority in question because the agency is essentially bankrupt. “There is a very, very strong likelihood that service won’t exist by the end of the year in Allegheny County,” Mr. Onorato said.

If that happens, re-read the headline above and remember who is responsible.

2,998

We remember.