A Transportation Enterprise
Denver mass transportation isn't just a public service; it's a business.
Posted: July 8th, 2008 05:26 PM EDT
I walked into Cal Marsella's office and barely had time to turn on my tape recorder before he began talking about his agency. It's not that he isn't willing to talk about himself, he just has so much energy and enthusiasm about the Denver Regional Transporation District (RTD) and its FasTracks program that he just can't wait to tell you about it.
FasTracks is RTD's 12-year plan that will add to the system 119 miles of commuter and light rail, 18 miles of BRT and a whopping 21,000 new parking spaces at rail stations along the new lines. Marsella breaks down the plan easily into its constituent parts, but the ones he's most excited about are those currently underway.
Denver's Dinosaur
RTD first explored the light rail realm with a small, five-mile section bisecting the downtown, then it opened up an 8.7 mile southwest corridor in 2000 and ridership went through the roof.
"We projected 8,400 riders a day," says Marsella, "We opened with over 12,000 and now we're up to about 18,000 on this line. We started with 14 vehicles and we had to order 12 more within four weeks of opening because we just got blown away."
Denver followed up this stunning success with its southeast corridor, better known by its name T-Rex (short for Transportation Expansion Project), which is on pace to open Nov. 17 this year, on time and on budget.
Originally the plan just called for a light rail investment, but a gubernatorial change created a desire to see expansion of the highways as well and soon a deal was struck between RTD and the Colorado DOT. Now this $1.7 billion project includes additional lanes on the highway, rebuilt bridges, utilities and drainage — oh yeah, and that little matter of 19.5 miles of light rail.
"The partnership was extraordinary," says Marsella. "We originally projected a startup date of 2008, but the bid came in 22 months earlier than we anticipated.
"And now we're beating that by a month. We're very pleased."
With public support fully behind it, RTD plans to expand the stations on the southeast corridor from three- to four-car stations and immediately exercised an option doubling its initial 34-car fleet.
However, the devil is in the details they say, and for T-Rex those details were a matter of parking.
"What people want, the product they love, is park-n-ride. They want to drive to the station and take the train. So we've really made extraordinary parking provisions for way over what the model would indicate because our experience says that we are underestimating parking demand."
RTD boasts parking facilities holding more than 2,000 cars, which belies the image of Denver being a town full of vehicles. So why is there such a demand for park-n-ride? Marsella thinks it's all about the details as well.
"It's the same everywhere, but the difference is that if you build a better mousetrap they are going to use it. This is a better mousetrap.
"It's a matter of adapting your product to what the public wants."
The next line will be light rail along the west corridor, followed by commuter rail from downtown to Denver International Airport and more commuter rail along a north metro corridor with more light rail going out to surrounding communities like Golden.
"We are capitalizing on the existing rail infrastructure and what we're doing is not using that track…we're building right next to it," says Marsella.
"Typically the railroads have enough right of way, we can buy our 40 feet or so that we need and build it right next to them. So we're not tearing up highways, we're not tearing up neighborhoods."
So how does all of this track come together in downtown? Marsella has a plan for that as well.
Travel by Train
Purchased four years ago, Denver's Union Station is something to see with its sign proclaiming "Travel by Train" for all to see. It is as beautiful inside as out with much of the original architecture still intact, plus Marsella gave me a tour of the facility and said RTD was working on replacing the light fixtures with copies of the original facility's fixtures.
"That was a risky investment," says Marsella. "It was in private hands and there were rumblings in the community that it was going to be developed into a downtown shopping center."
Marsella's worry came from a discussion with the mayor of Salt Lake City. Faced with much the same choice as RTD, but it didn't get the centralized station. Now the original building still stands, but all the tracks have been removed and replaced with a shopping center, completely nullifying its effectiveness as a transit locale.
Marsella went to the RTD board and convinced them to put up the $50 million to purchase the station and 19.5 acres surrounding it. Marsella would take shots from board members and public alike for purchasing what was considered a white elephant, but with the passing of the FasTracks measure to make RTD a regional rail system all that changed.
"The vision was that we needed someplace for everything to come together and there's no better place than that location," points out Marsella.
"So we went out on a limb and we bought it. Now everyone says, well, of course you should own that, it's the center piece of the system. But it was not that way when we bought it. That gets lost through history."
Marsella says the agency is now working on a master plan where all modes of mass transit will come together at Union Station, connecting the agency's mall shuttle, petty cabs, bus lines, light rail and commuter rail lines. Amtrak still has service to Union Station and Greyhound is looking at relocating to that site.
"It will be the western hub of the Midwestern United States right there at Union Station. It was a risky move by the board to go ahead and buy it, but we did it and boy did that pay dividends for us in the long run," says Marsella.
Free Transit
No matter where you go or what system you ride, there are always passengers who complain about ticket prices. Not so when it comes to Denver's Mall Shuttle service — it's free. And if Union Station is the transit agency's hub, this is the city's.
Cal Marsella has a picture hanging in his office with a throng of people all hovering around a couple of buses. You would think someone the likes of the Beatles were playing on those buses from the crowd size. It is actually a photo taken in October of 1982 on the opening day of Mall Shuttle service.
Receiving a grant from the FTA to create a pedestrian bus only mall, RTD built these CNG/Electric hybrid buses with fiberglass bodies from the ground up in Denver. And that's not all.
"The really neat part is we've built the entire transit system around that investment," says Marsella. "So the rail system, Denver Union Station and all of our bus operations all integrate perfectly with the Mall Shuttle. So it's really coalesced as a well-coordinated system."
The shuttle has been an immediate and thriving success with an average daily ridership of between 65,000 to 70,000 people. These ultra-low emission buses have become an integral part of the downtown area, says Marsella.
"It's become so inculcated into the fabric of downtown it's just as natural as taking an elevator in your building. We run every 70 seconds during the peak periods."
Did I mention that the shuttles running along this little over a mile-long run are free? Marsella knows that, but he also knows they are worth every penny not spent in the farebox.
"A lot of times when you model ridership you pay a transfer penalty. Here you don't pay a transfer penalty because it's not perceived as a transfer. [The Mall Shuttle buses] are so regular you'll see people pouring out of their bus at the Market Street station [one end of the shuttle run] and there is a Mall Shuttle taking off, and they just walk — they know there is another one on the way."
A Little History
Giving me a brief chance to ask about him instead of his system, Marsella was as open about his past as he was about his agency. Starting out as an intern for the state DOT while a student at the University of Connecticut, Marsella saw his internship blossom first into a summer job and soon into a growing love for a new industry.
"It was an emerging area, there were not a lot of people running to it, but I liked it," Marsella says, "And as fate would have it, they liked me. So they asked me to stay on part time while I went to grad school."
Marsella would stay on with the Connecticut DOT while he finished his graduate degree, until transit came calling.
"I got a call from the city of Hartford. The city called and I had done some work with them. They said hey we have an opening here. We are building and expanding our transit program and would [I] be interested in coming over and managing it."
Marsella would work for the Hartford transit agency for the next three years until transit came calling again. Marsella oversaw the 15-bus operation for elderly and handicapped with a reverse commute program taking people from the inner city out to suburban job opportunities.
In this time he had established a relationship with UMPTA (now the FTA), which kept sending people to this agency to view it, which Marsella found amusing.
"Being new I didn't really know what I was doing except running my program every day."
One of the groups sent by UMPTA to visit his agency was from the Dade County Florida transit agency. Having seen his system in action, they called up a week later and offered him the chance to do the same thing in a much larger area with a quickly growing transportation program.
Marsella would take that position and head up the Dade agency for the next 12 years.
"I basically managed their contracted services operation, fixed-route schedule and door-to-door for the disabled. A very sizable operation — $35 to $40 million a year — back when that was real money."
Leaving Dade in 1992, Marsella became a co-partner in a transit operation in Fort Meyers, Fla., of which he was a 25 percent owner. Doing that and consulting full time kept his hands full until he got a call from a search firm.
"[They said] there was an opening in Denver. They needed somebody who was entrepreneurial, who understands contracts, they have this contracting mandate and they would like to talk to you.
"One thing led to another, I interviewed and ended up coming here in 1995 and I have been here ever since."
Settling into Denver's Regional Transportation District over the next 11 years, Marsella put his stamp on the agency with his own style of transit agency management — a style predicated on running the agency like a business.
A Transportation Enterprise
Cal Marsella has plenty of reasons why RTD has become such a success, but the one he likes to point to the most is that he runs RTD like any other businessman would run his own company.
"This is not a social program," says Marsella, "This is a transportation enterprise and we operate it accordingly. And I think that builds a lot of support when you go to the ballot box."
Marsella points out that all of their building projects are on time and on budget and that the recent strike might have slowed down the system, but it didn't stop it. Denver's RTD has differentiated itself from other transit agencies through having the largest private fleet (48 percent) of any major system in the country. Marsella attributes that to a lot of their success.
"If you look at our costs per hour and compare it to the other transit properties, we're very low because we've been able to get cheaper costs through the contractors, but also because we contain our internal costs. So I do think that we distinguish ourselves by having the best business model of most transit properties around the country," says Marsella.
The business model he talks about is one wherein a private sector presence has been injected into the delivery marketplace. Marsella has been asked by other transit agencies how he accomplishes this, but he points out that it is their own failings and not a unique vision on his part that stymies them.
"They are having a hard time because they are so one-dimensional in their thinking and their experience. They can't really envision a multiple provider marketplace. But, personally, I think it's imperative that the whole industry moves in that direction. Because if it were my business, I would never want to be hostage to a one-dimensional system."
And Marsella notes that one need only look at major U.S. manufacturers like General Motors to see how this one-dimensional thinking has created a structure doomed to fail. In these megalithic companies thousands of lay-offs have become necessary to survive bearing the weight of contracts, pensions and health insurance plans that have become so massive they threaten to break the company's back.
"I look at places like Cleveland," says Marsella, "They recently laid off 300 people and they are cutting service because costs are continuing to increase on an uninterrupted rate and the only way you can continue to do that with a static revenue stream is to cut the product that you provide and that is just a bad model."
Other than a service reduction of unproductive routes in 2001, Marsella says that RTD has seen its costs increase at a much slower rate without any decline in service. In fact, in his 11 years at its helm, the agency has never laid off a single individual.
Privatization
Colorado instituted a mandate, which required RTD to contract out 20 percent of its fleet in 1992. With a good experience with this privatization of its fleet and an overall reduction in costs, RTD soon increased the amount of its contracted fleet to 30 percent and then to 35 percent with a subsequent state requirement. Now that requirement is 50 percent and RTD CEO Cal Marsella wouldn't have it any other way.
"I've always advocated for a diversified delivery system and we do it now to the tune of 50 percent," says Marsella.
According to numbers attained from RTD, the costs for the privatized portion of its fleet are $63.55 an hour while the unionized fleet costs are $85 an hour. And Marsella states that this $22 an hour savings is also without fuel tax, property tax, sales tax and vehicle registration fees, all of which the private companies pay for.
"We've been able to make tremendous strides in being able to make our contracts more business like. And we've been able to extract great cost savings because we have a private sector counterpart," says Marsella.
RTD has three fixed-route contractors — First Transit, Laidlaw and MV Transportation — and five paratransit contractors. Marsella says that having these other options for its service minimizes risks because if any one fails the others can back it up.
After the strike, which totally shutdown RTD's light rail service, Marsella said there was a great call to privatize at least 50 percent of that fleet as well.
"We're actually working on a plan to [privatize our light rail service]. Right now it is all internally operated. But when the union struck it was a good thing in a way because my board said we never want to be in a position where we are hostage to anyone. So they asked me to put together options for contracting a percentage of our rail service," says Marsella.
One of RTD's and Marsella's biggest hot buttons right now is the privatization of the rail fleet. He points to it as an example of a one-dimensional delivery system he intends to change as more and more of the system's rail lines open. As more and more people migrate to the rail stations, it will have a much larger impact on the system.
"You never want to put yourself strategically into a position where somebody can put a gun to your head and close you down," Marsella notes.
STRIKE!
As I prepped for this story the rumblings of labor unrest did begin to foment around RTD. Having seen what had happened with the New York MTA, I wasn't uncertain as to what would happen in Denver. And then it happened, two weeks before I was set to travel to meet Cal Marsella and tour RTD the union went on strike. But almost as soon as it had started, the strike was over.
It took Marsella and his team only a week to get a new contract signed and the union members back to work, but that isn't what he is most proud of. For Marsella, his crowning achievement during the strike was that the system never stopped running.
"Frankly, the strike was not real devastating to the region," Marsella notes. His team at RTD had a plan of action in place in case the union chose to strike and it moved swiftly to put the plan into place as soon as the workers walked.
"[The union] struck at 2 a.m. on a Sunday and we had the whole plan running like a top on Monday morning. That is a credit to the really good staff people here. We did a lot of homework," says Marsella.
That homework included designating which routes absolutely had to be maintained, preparing and posting alternate schedules and training its people on what they would be called on to do in case of the strike. Most importantly, Marsella notes that RTD successfully educated the public on what changes would be taking place due to the strike.
RTD's rubber tire service is 50 percent contracted out and this helped keep 43 percent of the fixed routes up and operating during the strike. Three of those contractors who stepped up to the plate in RTD's time of need were MV Transportation, Laidlaw and First Transit.
"The FlatIron Mall, located in Broomfield, has more than 150 employees that use RTD regional buses daily to commute to and from work. When the strike occurred, many of these employees were left without transportation. RTD and mall personnel requested that MV assist by operating modified RTD routes to provide basic commuter service for these employees. While this service met some basic needs for the passengers, we were pleased to see the labor situation resolved to get the regular drivers and service back on the road," says Keith Whalen, MV Transportation's executive vice president.
"RTD asked the private contractors to redeploy service to meet transit dependent ridership needs during the strike. RTD contracts 45 percent of its bus service and First Transit operates 40 percent of that amount of service. We were happy to help maintain service to the general public, but in particular to the transit dependent who needed bus service the most," says Nick Promponas, senior vice president, general manager, West Region First Transit.
Doug Gies, Laidlaw's area general manager, agrees, "We really appreciate our long-standing partnership with RTD and we work very hard to satisfy RTD employee and passenger needs. A high level of communication and trust has been established between RTD and Laidlaw and has allowed us to really tackle anything that comes our way."
Marsella admits that you never want to see a strike. They are disruptive to both the agency and the region it serves, but he also notes that it's part of the price you pay for running your agency like a business as he has done with RTD.
"There are times when the union would say we have to make a stand, well there are times when management has to make a stand — and we've done that," Marsella says.
A Superior Product
Transit finds itself at a crossroads in the modern era. With gas prices skyrocketing people are seeing transit as a viable alternative, but agencies are faced with those same gas prices themselves as well as trying desperately to gain federal funding, all the while maintaining their fleets and putting out not just a viable, but also an attractive product.
Marsella told me that he was approached at a marketing conference and told flat out that the problem with transit was that it is an inferior product. Transit asks its ridership to give up the ease and availability of their personal vehicles for a system that makes them face the elements, a longer travel time and the hassle of multiple connections.
Marsella says that what he is building with RTD's growing system isn't just a great agency — it's a desirable alternative.
"Many people take their cars from their home to their local station, but for the most congested part of your trip we're taking you on an absolute certain travel time," Marsella says.
"What would take you 45 minutes by car and the parking cost downtown is now going to be a 28- to 30-minute trip by train all day, every day.
"We need to start thinking in terms of repositioning the product we provide in the marketplace so that it is a superior alternative," he notes.
"It's very hard to sell a service that doesn't work as an alternative.
"We are actually able to increase the level of service significantly with every rail investment we make."
So when it's all said and done, what is the secret to the success of Denver's growing transit system?
Marsella points to the system map on his office wall showing the various FasTracks expansions and overall RTD growth plan and says, "We have a superior product — and people are beating a path to our door."
Prev
and the cost of resources over the next 20 years, then government at all levels will become more involved in transporting us. I suspect that a more European model where private and public money are both used in transportation will evolve, and, if so, an intercity grid covering much of the US makes long term sense.
I agree we should focus on the regional corridors first. But when we can get HSR to average 250 mph to Chicago, rail becomes more viable. The flight takes 2.5 hours plus getting there about 2 hours early to get through security, making it about 4.5 hours not including delays. Chicago by HSR at 250 mph would take 4.5 hours every time RELIABLY. Let's say the ticket is double what California's bullet train from SF to LA is supposed to be. Would you rather pay $100 for reliable train service or $550 for a plane that could be delayed by winter storms?
Linear Mode
