Skyway Merits Debated

[Dog Walker]

Wasn't the "automated" part supposed to save money because there are no drivers required?  How in the world do they spend $14 million per year on that little system?

[JeffreyS]

They don't.

[stjr]

It is still a big number but about 8 million of that is depreciation just written off not money laid out for operating.

I knew someone would bring this up.  Depreciation represents real cash lost due to the wear and tear and general obsolescence over the life of the asset.  So, rather than expense the cash in the initial year (i.e year of acquisition) all at once, a piece of the cost is expensed ratably each year over the estimated life of the asset.

Think of spending $20,000 for a car when its new.  You drive it 5 years and can sell it for $10,000.  Thus, it COSTS you $10,000, or $2,000/year to drive it for five years.  This is what depreciation represents.

This is Generally Accepted Accounting Practices (GAAP) and required in every independently audited financial presentation because it represents the real cost of operating and maintaining an asset.  That's why it's in JTA's own statements. Any other representation would be considered a fraud.  

[stjr]

Do the math:

$14 million/850 riders/day (that's 1,700 trips, 2 per rider) = $16,470/year subsidy PER RIDER.

You could buy each rider a car EVERY year for that money!

Seen another way, using Tufsu's accounting of $12,000 installed per bus shelter, in ONE YEAR, you could buy 1,000 bus shelters  AND, at $1,200 maintenance expense each, pay to maintain 1,667 of them.  Care to poll the voters on their preference for the money?  Where are the inquiring minds of the City Council?

[mtraininjax]

I am not an accountant, but aren't capital assets depreciated over 27 years?

"To tear it down would be removing yet another part of what's ostensibly a piece of uniquely Jacksonville history."

I just love that thinking. Should we demo the Library on Ocean, even though its ugly and the owners will never put anything in it, at least in my lifetime.

[CS Foltz]

Well I would not call the $kyway something historical...........if so then we are all in trouble! Pull the plug on something that cost's the public 14 Million Dollars a year to operate.......in the blink of an eye!! JTA could then afford to put up bus shelters where needed and even maintain them maybe! Fire all of the bus drivers and let the Management people drive them........think of the money we could save right?

[stjr]

I am not an accountant, but aren't capital assets depreciated over 27 years?

Depreciation lives depend on the type of asset, possibly unique or special circumstances, and whether you are are calculating for financial statements, taxes, or regulatory filings.  Also, governmental accounting, along with other specialized entities, can have separate rules.  It can get complex.

As an aside, depreciation expense in these statements represents the total of all the underlying assets for which each may (probably) has its own story.  For example, the track could be given a 30 year life, the cars a 15 year life, the control systems a 5 year life, etc.  If the subject asset has zero salvage and is replaced prior to the end of its depreciation life, in that year, there would be a write-off of the undepreciated balance.  If the asset outlives its depreciated life, there would be zero depreciation during the excess life and a recognition of gain on disposition if there were any proceeds in excess of its depreciated value.

Keep in mind, that if, for example, a car is replaced or a capital addition is made, depreciation starts anew on the newly acquired car or value of the addition.  My guess is the $ky-high-way has lots of ongoing capital improvements given its size and complexity so there will always be depreciable assets no matter how long its around.  Wear and tear is never ending.  Again, that's why depreciation is a real expense.

[mtraininjax]

Thanks for the info. I knew I did not have to get out my Keyso and Weygandt Intermediate Accounting book.

[stjr]

$ky-high-way ridership continues FREEFALL!  Now down to 1,400 rides daily as of second quarter, 2009!  That's about a 21% drop from last quarter, 15% drop over last year.

New cost per rider calculation: $14 million/700 riders (1,400 rides/ 2 trips per rider) = $20,000 subsidy per rider per year!

Folks, how bad does this need to get before we kill it completely? This borders on the absurd in these times with so many community needs that are far more important.

Is the City Council listening?  How hard did the Council Finance committee have to work to find $14 million in savings like this ??!!!??

FL Jacksonville Jacksonville Transp Auth AG 1.4 34.0 36.0 33.1 217.5 44.0 42.3 43.4 256.1 -20.51% -15.07%

From: http://www.apta.com/resources/statistics/Documents/Ridership/2009_q2_ridership_APTA.pdf

[DONTBELIEVETHEHYPE]

And let me further posit these musings on the subject:

Firstly, The Skyway system, be it ever so humble and incomplete, is something unique to Jacksonville.  Other cities have something similar, but not that many.  Therefore, if nothing else, it's a gimmick that should be embraced and lauded rather than disowned and demonized.

As such, love it or hate it, it's a distinct part of Jacksonville lore, culture, discussion, and history.  To tear it down would be removing yet another part of what's ostensibly a piece of uniquely Jacksonville history.  To call for its demolition and destruction is, at least in my opinion, analogous to championing the destruction of historic building stock. 

Is the Skyway as old and historic as those few building still standing?  Absolutely not.  But everything becomes 'historical' some day.  Destruction now versus later is still elimination of something very 'Jacksonville.'

The Skyway is not "Very Jacksonville".  It is basically the same system as you'll find at the Newark, NJ Airport, and several other airports around the country. 

I took it to lunch last week.  Left Kings Avenue at 11:50 or so, waited 10-15 minutes for a train, then rode to Hemming Park with a train switch at Central Station.  Little wait to start, but not awful.  Coming back, waited another 7-10 minutes at Hemming Park, rode to Central Station, then got off as my train was headed to Convention Center.  Next three trains (each at 7 minute intervals) wen't to Convention Center too.  I finally caught the Kings Avenue train after waiting nearly 30 minutes on the Central platform.  It would've been twice as fast to walk across the Main Street Bridge.  Lunch was a 1:40 minute experience, including nearly 50 minutes returning from Hemming to Kings Avenue.  Typical in my experience (I'm an occasional rider), but not acceptable.

Anyone who supports subsidizing this system can't be a person who rides it!

[CS Foltz]

Well for $14 Million a year I would think the scheduling should be consistant at the very least. For what that people moving system is costing the public is this the best that they can do? It is nice that insurance is covering the burnt station but the whole concept is in need of retuning and tweaking. If that can not be done then it might be time to pull its plug!

[thelakelander]

$ky-high-way ridership continues FREEFALL!  Now down to 1,400 rides daily as of second quarter, 2009!  That's about a 21% drop from last quarter, 15% drop over last year.

New cost per rider calculation: $14 million/700 riders (1,400 rides/ 2 trips per rider) = $20,000 subsidy per rider per year!

This isn't anything new.  JTA and the city have left this thing to die.  With Saturdays being eliminated ridership is going to fall even more.  Regardless of how you may feel about it, this is unfortunate.  Completely ignoring the system, because its "taboo" to address, cost us more money and benefits no one. 

[stjr]

This isn't anything new.  JTA and the city have left this thing to die.  With Saturdays being eliminated ridership is going to fall even more.  Regardless of how you may feel about it, this is unfortunate.  Completely ignoring the system, because its "taboo" to address, cost us more money and benefits no one. 

Lake, what's new is the costs keep escalating and the ridership keeps going down.  They eliminated Saturdays because no one rode it on those days.  Now, they need to pull the plug on the rest of the week.  The public has spoken:  They have no need for this mode of transit and would rather ride a bus, car, bike, or walk - anything but take the $ky-high-way.  Original projections for JUST THIS PORTION were some 20 or so times current levels when the Downtown area had only a fraction of the residents it does now so NO EXCUSES.

As I have said before, the $ky-high-way is inherently unnecessary and inconvenient, even if it is expanded, and is thus a flawed concept.  It is cumbersome to use, slow, expensive, travels relatively short distances (again, even if expanded) and not worthy of the service levels people desire.  Add that it is ugly and a blight on the City and there really is no reason to keep pouring BADLY NEEDED dollars down this rat hole. If JTA was a real business, even allowing for the usual mass transit subsidies, it would have killed this off a long time ago, but especially now when it doesn't even have a few shekels for bus shelters.

I am going to say it again:  Use our LIMITED political and financial capital to further other modes of mass transit.  The $ky-high-way is a curse to all other proposals to move forward and needs to be removed.

The answer is COMMON SENSE.  Don't let emotions obscure the obvious.

[Shwaz]

My boat depreciated a few thousand this year... maybe I should just sink it.

[tufsu1]

guess who does ride it...visitors and people attending conventions and trade shows at the Prime Osborn....so I would suggest keeping it if Jax. is at all interested in convention/tourism business.