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<br />III. OPERATING COST FUNDING <br /> <br />. <br /> <br />Most commuter rail systems rely on farebox revenues and state or local sources of funding to <br />cover expenses associated with operations and maintenance. TEA-21 does not authorize <br />federal operating assistance for commuter rail operations; one exception is CMAQ funds for <br />new starts for a period of up to three years. Few new-start commuter rail systems recover <br />more than one-half of their operating expenses through passenger fares. A fare box recovery <br />ratio around 25 percent is more common; a strong determinant of this ratio is the adopted fare <br />policy. This preliminary feasibility study does not explicitly forecast farebox recovery ratios <br />for the Northstar service. <br /> <br />Table 2 summarizes the sources of funding for each of the peer group commuter rail systems. <br />Ongoing capital expenditures are not included in the operating costs. <br /> <br />Table 2: OPERATING COST FINANCING SOURCES <br />OPERATING COST FINANCING SOURCES <br /> <br />System Farebox Other (1) Federal State Local <br />North Coaster <br />San Diego, CA 20% 71% 0% 0% 9% <br />Tri-Rail . <br />Miami, FL 29% 0% 0% 36% 36% <br />Virginia Railway Express <br />Washington, DC 55% 6% 0% 18% 18% <br />Trinity Railway Express <br />Dallas, TX 10% 0% 0% 0% 90% <br />Seattle Sounder (2) <br />Seattle, W A n/a n/a n/a n/a n/a <br />(1) Other revenues include operator-generated income, such as interest, advertising, and <br />right-of-way access fees, such as fiber optic bandwidth and trackage rights. <br />(2) Seattle Sounder is scheduled to begin operations in late 1999, the forecast prepared <br />in 1996 is 23%-32% for the farebox recovery ratio. <br />(3) Figures derived from SEMCOG commuter rail study, 1996 <br />and agency contacts. All percentages are approximate. <br /> <br />In general, federal grants are more available for ongoing capital expenditures than for initial <br />capital. The Federal Transit Administration Section 9 formula grant program makes statutory <br />allocations of funds to systems based on route-miles in operation. As a result, federal funds <br />become relatively more available after initial start-up. In addition, peer group systems have <br />used funds from various federal grant programs designed to support public transportation <br />improvements, including railroad crossing safety improvements, CMAQ-related (congestion <br />mitigation and air quality) improvements, such as additional rolling stock, track capacity . <br /> <br />Northstar Commuter Rail Feasibility Study <br />March 23. 1999 <br /> <br />9-10 <br />Financial Analysis <br />