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DRAFT IMPLEMENTATION/BUSINESS PLAN <br />Working Paper of September 30, 1998 -- Page 5 <br /> <br />The full all-route Phase II commuter rail system would generate a 22. 3 °/.o recovery ratio, <br />based upon the stu'cly operating expense calculations and fare collection projections. <br /> <br />Full All-Route System Fare Recovery Ratio for Year 2005: <br /> <br />Farebox Revenues <br />Operating Expenses <br />Recovery Ratio <br />Other Funding <br /> <br />$ 10.8 Million <br />$ 48.4 Million <br />22.3 % <br />77.7 % ($ 37.6 Million) <br /> <br />Note: Some additional operating revenues should be anticipated to come from ancillary <br />sources, primarily from advertising on cars and in stations. Assuming this income at 5% of <br />fare collections would raise the total operating recovery ratio by about 1%. However, <br />advertising income will be dependent upon policies set by the governing agency as well as <br />the marketplace. Policies and practices vary considerably among existing rail operations. <br /> <br />Note: Operating and maintenance expenditures are recurring annual amounts. TheY are <br />expected to rise by the regional rate of inflation for the life of the rail service. Tbev are <br />further anticipated to reflect certain efficiencies from start-up conditions, resulting in <br />savings which would partially offset inflationary effects in the early years of operation. <br />Other recent commuter rail starts have experienced such cost reductions, generally within <br />the first four years of service. <br /> <br />SECTION 2. CAPITAL COSTS FOR PHASE II ROUTES <br /> <br />Capital investment for constructing and equipping a commuter rail system is incurred on a <br />one-time basis. The projected peak year of construction for the Twin Cities commuter <br />facilities will be 2003. Once the capital costs are established for that year, they are fixed <br />for the useful life of the project. The base costs for the full six-route system studied in <br />Phase II, combining costs of materials and labor and reflecting best practices and industry <br />standards nationally, as developed and detailed in the Capital Program Report, constitute <br />the starting point for this section. _- <br /> <br /> <br />