Recommendations for Revitalization: Saving the Metro Metro Internal Consulting Task Force Neal Dutta - PowerPoint PPT Presentation

1 / 37
About This Presentation
Title:

Recommendations for Revitalization: Saving the Metro Metro Internal Consulting Task Force Neal Dutta

Description:

Fare Hikes, Advertising sales ... 2: Increased Fares. Minimum issuance of ... Increase fares by 5% in 2005 to cover operating budget shortfall. Recommendation ... – PowerPoint PPT presentation

Number of Views:108
Avg rating:3.0/5.0
Slides: 38
Provided by: jonk91
Category:

less

Transcript and Presenter's Notes

Title: Recommendations for Revitalization: Saving the Metro Metro Internal Consulting Task Force Neal Dutta


1
Recommendations for RevitalizationSaving the
MetroMetro Internal Consulting Task ForceNeal
Dutta, Jeronimo de Miguel, Bobby Gautam, Jon Kamin
2
The Mandate
  • To resolve urgent need for capital and operating
    funding.
  • To resolve flawed funding allocation structure.
  • To create and implement a communications strategy
    that supports these initiatives.

3
Objectives
  • Address both immediate and systemic issues in
    Metro funding.
  • Develop a comprehensive communications plan that
    supports this pursuit of funding.
  • Adhere to Metros long-standing core mission,
    values, and planning initiatives.

4
Agenda for Change
  • Analysis -
  • Immediate Needs (Neal)
  • Systemic Funding Allocation (Bobby)
  • Integrated Communications Plan (Jon)

5
Recommendations
  • Bond Issuance to address capital needs.
  • Enhanced Operational efficiency
  • Fare Hikes, Advertising sales
  • Lobby for creation of appropriate long-term
    funding allocation structure.
  • Utilize dormant ad space to rally public support
    for Metro funding.
  • PR initiatives

6
Problem Urgent Funding Needs
  • Capital Crisis
  • Aging infrastructure in disrepair.
  • Passenger safety and security at risk.
  • 1.5 Billion needed over 6 Years - 250
    million/year
  • Operating Budget Shortfall
  • Additional 25 Million in revenue needed to cover
    operating expenses in FY 2005.

7
Analysis Decision Criteria
  • Balances 2005 Operating Budget.
  • Provides immediate capital funding for
    infrastructure renewal.
  • Feasible to implement.
  • Maintains passenger satisfaction with services.

8
Alternative 1 Streamlining
  • Reduce salary, operational expenses by 5 through
    service cuts and related layoffs.
  • Advantages
  • Balanced operating budget for Fiscal Year 2005.
  • Disadvantages
  • Low morale may impact quality of service.
  • Alienation of passengers hit by service cuts.
  • Conflict with labor unions.

9
Alternative 2 Increased Fares
  • Raise all passenger fares by 5
  • Fares are sticky few alternatives.
  • Advantages
  • Balances operating budget for 2005.
  • Relatively small increase.
  • Disadvantages
  • Third consecutive increase riders becoming
    increasingly dissatisfied.

10
Alternative 3 Bond Issuance
  • Minimum issuance of 500M over 2-6 years.
  • Federal backing of interest payments.
  • Advantages
  • Satisfies immediate infrastructure needs.
  • Passenger experience enhanced by new
    infrastructure.
  • Disadvantages
  • Interest expense increases operational shortfall.

11
Alternative 4 Ad Revenues
  • Metro leases just ¼ of potential ad space.
  • This revenue stream can potentially be doubled.
  • Advantages
  • Balances operating budget for 2005.
  • Disadvantages
  • Passenger resentment to bombardment of ads.
  • Reduced aesthetics, contrary to Metro policy.

12
Recommendation
  • Issue 500 million in bonds over two years to
    satisfy immediate capital requirements.
  • Increase sales of ad space by 50 in 2005 and 33
    in 2006 to cover interest expense.
  • Increase fares by 5 in 2005 to cover operating
    budget shortfall.

13
Satisfaction of Decision Criteria
Operating Budget
Passenger Satisfaction
Capital for Infrastructure
Feasibility
Overall
Streamlining
Increased Fares
Bond Issuance
Ad Revenues
Blended Solution
Somewhat
To a great extent
Not at all
14
Projected Cash Flows
15
Problem Lack of Annual Support
  • Negative media coverage has exposed Metros
    serious lack of resources.
  • Two potential reasons for this economic
    shortfall
  • Lack of sufficient levels of government support.
  • Operational mis-management (as suggested by
    negative tone in media).

16
Analysis Not Metros Fault
  • Second-highest cost-recovery ratio.
  • GAO commended Metro management for capital
    investment practices.
  • It is widely recognized that passenger fares are
    insufficient to meet operating expenses.

17
Analysis Not Metros Fault
  • Various Government contributions
  • Do not contribute to operating expenses.
  • 2 of operating revenue comes from dedicated
    sources national average is 33.
  • No longer eligible for Urbanized Area Formula
    Program.

18
Analysis Decision Criteria
  • Equitably incorporate Federal, State assistance.
  • Sustainable, feasible.
  • Consistent with Metro Mission, Objectives, Values.

19
The Proposed Solution
  • Lobby for the tabling of a Bill through Congress.
  • Proposal for a coherent, sustainable source of
    funding.
  • Federal Government should match contributions
    made by each of the three states / regions.
  • Guarantees some quantity of support from Federal
    Government.

20
The Proposed Solution
  • Fixed levels of obligation for each contributor.
  • Regions experiencing extreme fiscal difficulties
    will be able to apply for partial relief.

21
Satisfaction of Decision Criteria
LU/Tokyo
Seoul
TTC
Ours
Equitable Funding
Sustainable / Feasible
Mission
Somewhat
To a great extent
Not at all
22
Funding Strategy 5 Years On
  • Concentrate on consumer-friendly methods of
    increasing passenger-revenues.
  • Allow Metro to sustain greater operating cost
    burden, decrease reliance on governmental
    assistance.

23
Problem Acquiring Funding
  • Efforts to procure funding can be greatly
    enhanced with public support.
  • Public comprehension of problem Pressure
    for funding Government acknowledgement of
    will of constituents.
  • Ability to convince public of need will be
    critical factor in ultimate success.

24
Analysis Metro Riders
  • Many Metro riders are key influencers.
  • Commuter segment dominated by Federal
    Government employees.
  • Media representatives.
  • Target key influencers to re-shape public
    opinion, indirectly secure funding.

25
Analysis Metro Riders
  • Clean, safe, reliable, inexpensive transit.
  • Few viable alternatives
  • Horrendous traffic
  • Rising gas prices
  • Lack of affordable housing in core
  • Therefore, ridership is sticky.
  • Metro riders often have few alternatives will be
    highly receptive to communications.

26
Analysis Negative Exposure
  • Public support may be difficult to secure.
  • Service deterioration has created negative image.
  • Compounded by negative media exposure.
  • The compelling, rational response
  • Lack of funding Infrastructure decay.
  • Management is not part of the equation.
  • Harness negative spotlight into rallying cry.

27
Decision Criteria
  • Generate support amongst key influencers.
  • Will pressure Government to act.
  • Revitalize image.
  • Cost-effectiveness
  • Asking for funding, credibility could be damaged.

28
The Proposed Solution
  • Strategic communications campaign.
  • Central message
  • Lack of funding leading to deterioration - more
    money will fix Metro.
  • Focus on Metros social, economic impact.

29
The Proposed Solution
  • Targeted reach interested parties directly.
  • Transit advertising commands high recall /
    comprehension rates.
  • Cost-effective do not need to pay for space.

30
Expected Outcomes
  • Shift blame from WMATA to Government.
  • Pressure will force Government to consider
    funding proposals.
  • Secure at least some portion of immediate 1.5B
    funding needs.

31
Implementation
  • Internal advertising.
  • Transit ad space.
  • Metro website, sympathetic lobby groups.
  • Only cost is for media development (500K - 2M)
    and opportunity cost of lost ad sales.
  • Extensive PR (through traditional media).

32
Implementation
  • Successful Precedent Toronto Transit Commission

33
Implementation
  • Integration with Web Communications

34
Implementation
  • Integration with Web Communications

35
Implementation
  • Usage of Transit Media Space fully integrated.

36
Implementation
  • Public Relations push need 3rd party support.

37
Implementation
  • Printed material distribution, one-on-one
    conversations.
  • Set-up information booths at key downtown
    stations during evening rush hour.
  • Do not need to speak to every rider!
  • Active citizens will demand information.
  • Will also contact Government representatives.
Write a Comment
User Comments (0)
About PowerShow.com