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City of Eugene City Council Page 2 September 12, 2012 ZĞƐƉŽŶƐĞ: ny further reductions in service hours and in the long term it anticipates the ability to expand service hours. LTD is funded through a payroll tax and this tax is sensitive to swings in the local economy. In the late 1970's LTD and the community faced the areas deepest recession. Over 30 percent of LTD's service was cut. Recessions in 2001 and the most recent recession have led to reductions in operating revenues and subsequent cuts in materials and services, personnel, and in bus service. The District's Board of Directors is evaluating maintaining larger reserves in order to bridge these downtowns in the future. LTD allocates funding each year to address running time issues that result from increased ridership and additional traffic on our roads. The addition of these funds is a priority and the Board of Directors is committed to funding these additional hours of service. Overall system performance, based on indicators such as on-time performance and ridership, remains high. As our economy continues to improve, LTD will have additional funds to invest in the system. How these funds are prioritized will involve feedback from current riders and from residents who live in areas not currently served. osts are underestimated in the EA, the REMI analysis submitted by OMOT incorrectly assumes that the 2031 bus miles in Table 2.2 of the EA are what LTD would operate in 2017. The bus miles in table 2.2 of the EA reflect an operating scenario for the 2031 Regional Transportation Plan which includes increases to regular bus service throughout the system that would be operated by 2031. This operating scenario is financially feasible in 2031 based on the current analysis. However, it is not feasible and should not be used to develop operating costs for 2017. At this point in time, LTD is planning to maintain regular bus service hours in 2017, and to consider service expansion based on available resources. Additionally, the REMI estimate uses cost factors from the Fully Allocated Cost Model (FACM) to estimate the cost of the increment of service that would be added with EmX starting in 2017. The FACM factors are not the appropriate factors to use in estimating the cost of an increment of service. Because of economies of scale, the increment of service LTD would add with the WEEE project can be provided for much less cost. The FACM factors are too high. Rather, a more direct-cost approach should be taken to identify the incremental costs of actual changes that would occur in implementation of the additional service. That is the approach used to estimate operational costs in the EA. If the annual operating cost was $4M LTD would share their concern, however it clearly will not for the reasons noted above. Regarding the potential cost and supply impacts of peak oil, activities this region can use in preparing for peak oil and GHG emissions reduction. This is due to its ability to use existing technologies to provide a more cost effective operation combined with its significant success in attracting new riders. As events unfold around the peak oil and GHG issues, BRT gives this region the nimbleness to readily adapt as more sustainable technologies are developed.