Skyway Merits Debated

[stjr]

you first stjr.

If you bothered to read my post, you would see I have already responded.  I am not the one saying to give it more time, you are.  How much time to accomplish what level of success?  Go on record, Stephen.  You say you are the expert.

[thelakelander]

What are your desired put up or shut up annual O&M numbers for the skyway and other forms of mass transit?  Would you be against the implementation of a plan that gets you to that place with the skyway intact?

Lake, the Skyway long ago failed my standard for put up or shut up so my opinion isn't what counts here.  What remains is the opinion of those who think it should still keep operating.

You're opinion is very valid because you started the thread.  What's your standard for put up or shut up?  Not just for the skyway, but all modes of transportation.

Why don't you ask JTA this question?  They are (1) supposed to be the "experts", (2) are the ones that bushwhacked the taxpayers into building the thing with $200 million of OUR money so they should have to show US a proper "return on investment" [not to be confused with making money but with providing value to our community commensurate with its cost], (3) are the ones saying to give them an indefinite period of more than 20 years to prove the thing is worthwhile, (4) are in a position to make or break the case for keeping it, whatever the standard is, (5) should be held accountable for some OPERATIONAL measure to say it is or is not a success, and (6) have some basis in their mind for keeping it going.

This isn't my argument.  These are the questions you raise.

What is YOUR standard for your continuing support?

My standard is operating and integrating complementing land uses around the system in a manner that best utilizes its assets.  That's my standard for all modes of mass transit in general.  At this point, we still have a long way to go with the skyway and the buses in the arena of maximizing their potential.  Now, what's yours?

What have I always said I looked for? My standard is that the Skyway produces value for the dollar equal to or in excess of other mass transit projects that are being deprived of those same dollars but could serve the same purpose.

Operational cost only?  How about other forms of revenue?

[stjr]

I can wait for as long as you like

LOL, that sounds like JTA's slogan for losing money on the Skyway!    Nice duck but I understand your reluctance to stick your neck out for the Skyway and JTA.  Can't really blame you on this.  

[stjr]

What are your desired put up or shut up annual O&M numbers for the skyway and other forms of mass transit?  Would you be against the implementation of a plan that gets you to that place with the skyway intact?

Lake, the Skyway long ago failed my standard for put up or shut up so my opinion isn't what counts here.  What remains is the opinion of those who think it should still keep operating.

You're opinion is very valid because you started the thread.  What's your standard for put up or shut up?  Not just for the skyway, but all modes of transportation.

I gave it at the end of the subject post, Lake.  What more do you want?  Why aren't proponents of the Skyway who are asking the taxpayers to keep feeding this beast not accountable for telling us what they think "success" is in a MEASURABLE, OBJECTIVE way?  

Why don't you ask JTA this question?  They are (1) supposed to be the "experts", (2) are the ones that bushwhacked the taxpayers into building the thing with $200 million of OUR money so they should have to show US a proper "return on investment" [not to be confused with making money but with providing value to our community commensurate with its cost], (3) are the ones saying to give them an indefinite period of more than 20 years to prove the thing is worthwhile, (4) are in a position to make or break the case for keeping it, whatever the standard is, (5) should be held accountable for some OPERATIONAL measure to say it is or is not a success, and (6) have some basis in their mind for keeping it going.

This isn't my argument.  These are the questions you raise.

So, you are OK with JTA having NO MEASURABLE, OBJECTIVE standards to offer for the Skyway's success?  How do we know we have "won" the game if we don't know the score?

What is YOUR standard for your continuing support?

My standard is operating and integrating complementing land uses around the system in a manner that best utilizes its assets.  That's my standard for all modes of mass transit in general.  At this point, we still have a long way to go with the skyway and the buses in the arena of maximizing their potential.  Now, what's yours?

Lake, can you measure objectively "operating and integrating complementing land uses around the system in a manner that best utilizes its assets"?  Is your measure ridership?  And, at what cost per passenger mile?   If so, how many riders and what costs make this a worthwhile venture?  Do you have some other measures?  What would you benchmark these measures against to see if they are superior or inferior?   I noticed the other day someone posted a report from a State public transit agency that developed its idea of measurables. Would you follow that model?

What have I always said I looked for? My standard is that the Skyway produces value for the dollar equal to or in excess of other mass transit projects that are being deprived of those same dollars but could serve the same purpose.

Operational cost only?  How about other forms of revenue?

Lake, why do you and Stephen keep thinking I am hung up with revenue?  I hardly mention the subject.  What I would expect to look at is the net cost (revenue less cost and if revenue is zero, then it is pure costs, but whatever) per passenger mile vs. what alternative modes can move that same passenger per mile for.  To be fair, costs must include all costs (not just direct operating costs, but environmental and societal costs) and I have stated this before, including measuring against transit by automobile.

Common sense tells me that mass transit should almost always be less costly but, within the world of mass transit, we have many options.  The available data to date and another dose of common sense says the Skyway is not the optimal choice for mass transit.  To date, I have not seen a substantive argument to convince me otherwise unless one accepts that we simply can't walk away from the existing investment AT ANY PRICE.  I say everything has a price and at some point it does pay to walk away.  Honest people can disagree but I seem to get skewered here for disagreeing.  I can handle it because outside of these boards, the vast majority of the community sees it my way more than the proponents way and because I feel principled in my belief as much as you do yours.  I don't begrudge proponents and they should not begrudge me.  That's all.

[Ocklawaha]

What are your desired put up or shut up annual O&M numbers for the skyway and other forms of mass transit?  Would you be against the implementation of a plan that gets you to that place with the skyway intact?

Lake, the Skyway long ago failed my standard for put up or shut up so my opinion isn't what counts here.  What remains is the opinion of those who think it should still keep operating.

Why don't you ask JTA this question?  They are (1) supposed to be the "experts", (2) are the ones that bushwhacked the taxpayers into building the thing with $200 million of OUR money so they should have to show US a proper "return on investment" [not to be confused with making money but with providing value to our community commensurate with its cost], (3) are the ones saying to give them an indefinite period of more than 20 years to prove the thing is worthwhile, (4) are in a position to make or break the case for keeping it, whatever the standard is, (5) should be held accountable for some OPERATIONAL measure to say it is or is not a success, and (6)6.

I'm your Huckleberry!

1. "Supposed to be the experts?" My opinion is probably about like yours, highway experts maybe, mass transit experts, just follow the wreckage of the last 50 years.

2. "bushwhacked the taxpayers..." No argument here except to say you are giving the bushwhackers of Southern Lore a very bad rap linking them as you do to JTA. Should you see a violent old ghost in a red shirt, with a Santa Claus face and beard whilst you sleep his name is Uncle Sant and you've probably pissed him off!

3. "...saying to give them an indefinite period..." I believe this is where you and I are on opposing trains. I believe 20 years is more then enough time to prove the patent but only after the system is completed to the original studied perimeters.

4. "in a position to make or break the case for keeping it..." No case can be accurately made either way until we have a whole-studied system with which to judge.

5. "should be held accountable for some OPERATIONAL measure..." In transportation "operations" are a or division of the whole, in this case the operations appear to be fairly successful with little down time based on the funds they allocate to maintain the thing. The original goal was 99% dependability and I'd just guess this is really somewhere around 80% in real life practice. This would give it a mediocre score but frankly it is probably still superior to the % on the bus side.

6. "have some basis in their mind for keeping it going..." 2k persons per day on a route that is only 2 miles long isn't really too bad as it comes down to 1k per mile. If that holds true, then expansion a mile or so in each direction bringing the whole system up to around 5 miles should produce 7k riders per weekday. I actually believe the ridership is half again as many riders as they are counting as I have NEVER been on it when the fare system was working! They could be losing 50% of their true riders simply by shoddy maintenance, frankly they don't have a clue.

Suggesting that it is a total failure is like trying to offer an opinion on half of a cat, it WON'T PURR until all of it's pieces are in place. Do I think it will vindicate the planner (Steve Arrington) for this fiasco? NOT! If Arrington had any culpability in pushing this thing forward in the beginning he should have long since been looking for a job. At it's best the Skyway MIGHT be expanded to a point where the passenger per mile raises enough to silence the lynch mobs forming below the stations. At it's worst, it has set back all fixed rail transportation in North Florida by a good 20 years. No doubt the streetcar proposal, had it been built, would have overwhelmed the downtown core with an unprecedented building and economic boom. Streetcars with five digit daily ridership numbers from the start. We can say this not as mere opinion, but as FACT based on every other streetcar build out in the country and keeping in mind that we could have been FIRST.



OCKLAWAHA

[simms3]

It is a capital asset with a useful life, therefore it has to be depreciated using one of many different methods.  Judging by the number, I agree it seems really high since it has been 2 decades, but didn't the thing cost around $200M?  If so, then maybe they are using a very basic straight-line depreciation, which is very common in regular financial statements (and hardly used for tax purposes).

Looks like a very basic income statement.  Hate accounting, but I'll take a non-professional stab at it?  A depreciation expense is the increase in accumulated depreciation.  Basically, an accountant would debit the income statement with an entry for "depreciation expense" and credit the balance sheet for "accumulated depreciation."  A depreciation expense reduces the expenses (debit to a liability is a reduction).  The resulting credit to the accumulated depreciation allows anyone who examines the balance sheet to determine the original cost of the asset and the remaining "useful" life (depreciating an asset has many benefits depending on the asset and how it's depreciated) and does not mean that we can only use it for x more years (obviously, I think everyone knows that).

How was the financing for the skyway provided?  Is that in another thread?  Was it provided largely with the sale of bonds?  I almost completed my accounting degree, but I hate accounting and I am so bad at it...just stuck with finance, so someone else is probably going to have to correct me, but nothing looks out of the ordinary except for the lack of operating revenue and the total of the net assets (if depreciation is $7M and original cost is $200M spread over many years 2 decades ago and total net assets is still over $100M, something doesn't add up).  Also, I am assuming their capital contributions were in the form of loans meant to be repaid?  Does anyone know about that?

For most of these questions the answers must be noted in the footnotes, so we can find out what method of depreciation they use, what the makeup of the capital contributions is, etc.  We can find out their method of valuation for the assets, and plenty more.

[Charles Hunter]

IIRC the capital expense was in the form of Federal grants, with local (and maybe state) matching funds. No loans.  Although, if the oft repeated meme that "if JTA tears it down, they have to repay the Feds" is true, would depreciation have anything to do with that?

[tufsu1]

depreciation should be considered a capital loss...not an operational loss

[stjr]

depreciation should be considered a capital loss...not an operational loss

Clearly, we need an accounting course for some MJers.  Depreciation is an operating expense Tufsu!  That's why JTA's GAAP accounting (posted above) factors it in "OPERATING losses" and the always stingy IRS accepts it as a tax deduction.  It represents the ongoing "wasting away" of an asset over time and usage and is incurred commensurate with a given operating period.  Maybe you better stick to transit issues.  The lack of common understanding of the measurement and accounting of an operational enterprise such as this may help explain why I am at opposite ends with some MJ'ers in my perspective of the Skyway.

Depreciation is not a "CURRENT cash flow" item but it represents the amortization of the UP FRONT cash flow invested in the project.  Thus, it does represent real cash expenses, just with a timing difference between the flow and the expense.  This is the same for accruals and reserves for other items in the financial statements.

Stephen posted JTA's statements here but failed to say what is misleading.  I guess he is implying JTA is providing misleading financial statements.  I won't argue that possibility given JTA's history of using numbers to mislead in other respects.  At face value, as I have always said, in JTA's own words, the Skyway has "OPERATING LOSSES" of nearly $14 million, at least as of TWO years ago.  Apparently, JTA isn't interested in giving us updated information and one can only wonder what their motives are for failing to do so.

[stjr]

The difference is, STJR, you arent really that interested in finding out the truth.  Just ranting.

The truth of what, Stephen?  I sure can't do battle with the demons populating your mind so why try.  

how much 'Depreciation Loss' would occur if you tore down the system?

How would you pay for that?

I suppose you really mean to ask what is the "undepreciated costs" of the Skyways assets.  Without seeing a detailed depreciation schedule and knowing what lives and depreciation methods they are using, I can't tell you.  You know people at JTA.  Why don't you find out and post the info here for all of us to analyze and discuss.

I would look at the CURRENT value of what I am walking away from (i.e. my investment at this moment in time) versus the total future and ongoing operating costs I would be avoiding plus the value of the greater benefits I would attain by redeploying those operating costs in something more productive (the total of these two items being my "return on investment" at this moment in time).  Got that?

[stjr]

Ive made the missing information abundantly clear, and will post it shortly, once its found.

Let's see, the information is "abundantly clear" but you haven't posted it yet?  LOL.

Until the facts are on the ground I shall endeavor not to make any crazed suggestions.

Smart.

Psst!  Did you know that the Independent Life Building is depreciating?  Should we tear it down?

While we are at it, shouldnt we tear all those skyscrapers down?

Stephen, depreciation is your hang up, not mine.  It's just one of many expenses in assessing the whole enterprise.

Not sure what the Skyway has to do with skyscrapers?  They both begin with "sky"?....... LOL.

[stjr]

Isnt half of your 14 million dollar 'operating losses' from 'depreciation'?

Uuuuhh.... excuse me, but that would be JTA's (not mine) "operating losses" of $14 million.  Seems you have a mental block on this one.    Have a good day, Stephen. 

[tufsu1]

Do other transit projects depreciate over time?

how about roads?
parks?
wasterwater treatment facilities?
power plants?
schools?
other buildings?

Maybe we shouldn't build anything!

[stjr]

Do other transit projects depreciate over time?

how about roads?
parks?
wasterwater treatment facilities?
power plants?
schools?
other buildings?

Maybe we shouldn't build anything!

Of course, Tufsu.  Everything depreciates.  What's your point?  That it's not an expense?  I guess if you don't like the expense numbers for utilities, supplies, maintenance, salaries, cost of goods sold, etc., you just ignore those at will too? 

Do you not get that depreciation is part of measuring your performance?  Does not the magnitude of your initial investment and its gradual wasting away not require an accounting?

If I buy a piece of equipment for $10,000 that five years later is worth zero and during that five years it generates a profit of $10,000 (not counting the time value of money which would make this an even worse deal), did I come out ahead or just tread water?  Well, if you ignore the depreciation as you and Stephen desire to do, you would be foolish enough to think you actually made money.  But, if you look in your pockets, you will see you are right back where you started.  So, you ignore depreciation at your own financial peril (and without regard to the fundamentals of accounting).

[stjr]

The problem is that you understand this, and yet are deliberately trying to mislead people into thinking that somewhere along the way someone wrote a check for 7 million dollars that was expended 'operating' the skyway.

A check was written....not for $7 million.... actually, it's reported at $200 million as I recall.  It was paid up front.  But, it's accounted for ratably over time as it wastes away. You and Tufsu seem to be unable to comprehend that just because there is an interval between the cash expended and the accounting for it that its not a real cash outflow.

Think of it as a PREPAID expense.  Like paying for a service agreement for the next 5 years up front.  You don't  deduct the prepayment in full up front but rather one year at a time with the unexpended balance capitalized as an asset until the time has come for another year to be "sliced" off and expensed.  Does that help?