CALIFORNIA PUBLIC UTILITIES COMMISSION
TRANSPOR TATION DI VISION
ENGINEERING ECONOMICS BRANCH
PASSENGER SECTION
ENGINEERING-ECONOMIC REPORT
OF
ESTIMATED RESULTS OF OPERATIONS
FOR STOCKTONCrTY LUES FCR THE
YEAR ENDING SEPTEMBER )0, 196)
APPLICATION NO.
San Francisco, California August 10, 1962
44647
Albert C. Porter Associate Transportation Engineer
STOCKTON CITY LrnES INC. APPLICATION NO. 44647 General Stockton City Lines, Inc. operates a local bus system in the City of Stockton a.nd in adjacent unincorporated areas.
The company is a wholly-owned
subsidiary of National City Lines and is managed and controlled by Pacific City Lines, Inc., which is also a wholly-owned subsidiary of National City Lines. By this applica.tion, the company requests authority to increase fares as shown in the follmving table:
Adult Cash Fare Adult Token Fare School Cash Fare School Ticket Fare
Present
Proposed
20¢ 16-2/3¢(6/$1) 10¢ 8-1/3¢(12/$1)
25¢ Discontinue Discontinue
10¢ (20/2$)
Present fares became effective on March 10, 1960, by Commission Decision No. 59727. Due to a work stoppage, the company conducted no operations from May 1, 1962, to June 10, 1962, inclusive.
Operations were resumed on June 11,
1962, after the company and the Stockton Merchants Association agreed that the Association would provide funds to pay a ten cent per hour wage increase to all contract personnel for a one year period ending June 10, 1963.
A
similar arrangement with the City of Stockton was in effect for the sixmonth period ended April 30, 1962. This report sets forth estimated results of operation for a year in the future (designated as the rate year ending September 30, 1963) under present and proposed fares.
Mileage estimates used herein were furnished by
Associate Transportation Engineer Hilton H. Nichols and reflect the level of
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service establisbed by Decision No. 62750 dated October 31, 1961, in Application No. 43493 under the condition of 4 new 45-passenger buses in operation, which were placed in service on or about August 1, 1962. Passengers and Revenue For the rate year, it is estimated that the level of adult passengers will be 8~ percent of the total for the historical year ended April 30, 1962. This decrease is attributed to three factors, a long term general downtrend of traffic, the reduction in service previously mentioned and the recent forty-one day suspension of service.
Under proposed fares the diminution or loss of
traffic due to resistance to the fare increase is estimated to be one-fift h of the percent increase in fares. The number of school passengers for the rate year is estimated to be the same as for the historical period.
It is estimated that only five percent
of these will pay cash under proposed fares, which represents a token acknowledgment of occasional riding.
No diminution as a result of the school
fare increase is expected. No post office passengers are included for the rate year because the post office contract will be terminated on August 20, 1962. Operating and Maintenance Expenses Operating and maintenance expense estimates contained herein reflect all known price and wage levels to be in effect for the rate year.
Labor costs
as shown for drivers' and mechanics' wages include the ten cent per hour subsidy to be provided by the Stockton Merchants Association.
Appropriate adjustments
for the subsidy are shown as credits to Accounts 4100 and 4200 thereby reflecting net costs to Stockton City Lines.
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The estimate for Account 4520 J Public Liability and Property Damage Insurance, is based on the experience of the company for the actual costs of claims, claims handling and excess liability coverage for the years 1959, 1960 and 1961 adjusted for estimated decreases in passengers carried and bus miles to be operated during the rate year. The estimate for Account 4660, Management, Supervision and Accounting, reflects a staff adjustment to the charge made to applicant by Pacific City Lines for management expense.
Charges assessed by the latter company are on the
basis of a percent of gross revenue.
The estimate contained herein is the
result of a study the staff made of the services performed and the expenses incurred by Pacific City Lines for its various operating companies and is deemed to be a fair measure of the value of these services. Operating Taxes and Licenses Operating taxes and licenses are estimated on the basic current rates with adjustment to certain accounts for known changes to be in effect during the rate year such as the addition of new motor coaches at increased license fees. Rate Base and Depreciation Expense Rate base and depreciation expense estimates conform to the established lives and salvage values used by the staff and adopted by the COmmission in past proceedings involving applicant.
Four new motor coaches
put into service in the early part of August 1962 as a result of Commission Decisions Nos. 62750 and 63950 in Application No. 43493 have been estimated to have a twelve-year life with a $1,500 salvage value. Conclusions and Recommendation Table I contains the estimated results of operations for the rate year under present and proposed fares.
Under present fares it is estimated
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that a loss of $43,720 will result and under proposed fares there will be a net income of $35,130 with an operating ratio of 93.7% and a rate of return of 22 .0%. In line with the results of operations authorized by the Commission for applicant in Decisions Nos. 57109 and 59727 (the last two decisions involving fare increases for applicant), the staff has calculated results of operations based on an alternate adult fare of 25 cents cash with tokens 2 for
45 cents and a school fare of 10 cents cash with a convenience ticket of 20 for $2.00.
The estimated results under this fare system produce a net income
of $22,170 with an operating ratio of 95.8
%and
a rate of return of 13.9%.
It is the staff's conclusion that the present fares are unreasonable and pro足 posed fares are not justified.
It is recommended that the alternate fares
be authorized.
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STOCKTON CITY LINBS
ESTll1:ATED RK)uLTS OF OPSl1.ATION Fan 12 110NTIIS
ENDING SEPTSHBER 30, 1963 UNDER PRESENT, PROPOSED, AND ALTERNATE FllRES
APPLICATIon NO. 44647
~
Line No. 1 2 3 4
VI
5
Item Bus IVJ:i1es Operating Revenue
Passenger Special Bus Advertising Total Operating Revenue
Estimate for Rate Year Ending 9-30-03 : Alternate Fares : Book Record : Present Fares : : Proposed Fares: 22ti Token : 12 Months : (20~ Cash) 2~i Cash :Ended 4-30-61: (Tokens 6/$1.0~: (25~ Cash) : 1,130,599
1,050,200
1,050,200
1,050,200
4;)495,958 10,255 2,L148
~)436,130
:W545,460
10,250 2,450
10,250 2,450
:$519,300
10,250
2,450
~508,661
$448,830
$558,160
~532,000
~461,435
<Ili429,630 11,560 51,370
~~429 ,630
~L~29,630
2,859 48,107
11,560 51,640
11,560
8
Operating Expense
Operating and Maintenance Depreciation Operating Taxes
9
Total Operating Expenses
:WS12,401
!jj)492,560
<lP492,830
~92, 770
10
Operating Income
$ (3,740)
$(43,1)0)
$ 65,330
:w 39,230
11
Income Taxes
~
$ 17,060
12
Net Income
4P 35,130
'lY
13
Rate Base
:jp160,010
$160,010
14
Rate of Return - %
22.0%
13.9%
15
Operating Ratio After Income
Taxes (Lines 9 +11) + Line 5 - % (Red Figure )
93.7%
95.8%
6 7
30,200
51,580
22,170 1-3
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STOCKTON CITY LINES ESTJlI1ATE OF REVENUE PASSENGERS AND PASSENGER REVENUE FOR THE 12 MONTHS ENDING SEPTEMBER 30, 1963 APPLICATION NO. 44647
:Line: No. :
:Historical Year: Rate Year October l z 196~- SeEtember 30z 19b3 Present Fares Proposed Fares May 1, 1961 - : Passenger : Estuated: : Estimated: April 30, 1962: Factor for: Fare Revenue ; Rate Year : Passengers: Fare : ReYenue :passe¥fers: Passengers (3) (4) (8) (2) (~) (7 . (9) (5)
Item (1)
960,972(c)
$240,240
Adult Passengers - Cash
1,169,422
0.865(b)
1,011,550
2
Adult Passengers - Token
1.z199 z881
o .865(b)
lz031z897
16-2/3¢ 172 2980
3
Subtotal - Adult Passengers
2,369,303
2,049,447
$375,290
4
School Passengers - Cash
316,937
LOOO
316,937
10¢
31,690
33, 343( d)
25¢
8,340
5
School Passengers - Token
349 2 922
1.000
349 2 922
8-1/3%
29 2 150
633 l 516{e)
10¢
63d50
Subtotal-School Passengers
666,859
666,859
60,840
666,859
71,690
2,716,306
$436,130
2,561,938
$545,460
I
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7
U. S. P.
8
Grand Total
a) b) c) d) e) f)
1
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Contract
8,506 3,044,688
20¢
$202',310' ,
1
2~4z 107(c)
25¢
25¢(f) ~33~30
1,895,079
$473,770
(a)
U.S.P.o. Contract Ended August 20, 1962. 13t% Reduction in Adult Passengers because of Service Reduction & Strike. Estimated diminution to be 1/5 of the %increase in fares. Estimated 5% of Total School Passengers to pay Cash Fares. Estimated 95% of Total School Passengers to use School Tickets. Use of tokens discontinued, to pay cash fares.
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TABLE III Sheet 1 of 3
STOCKTON CITY LINES OPEHATION AND HAINTENANCE EXPENSES
APPLICATION NO. 44647 Book Record :Esti~ate for: :Historical Year: Rate Year : 4-1-61 to 10-1_62 to:
:Acct.: : No.
Description
5-31-62
1,050,200
1,130,599
Bus Hiles
4100 Equipment l'1aintenance and Garage Expense 4110 Supervision of Shop and Garage 4121 Repairs to Shop and Garage Equipment 4122 Operation and Haintenance of Service Equip. 4128 Repairs to Shop and Garage Buildings & Grnds. 4131 Light,Heat,Power and Water for Shops & Gar. 4132 Other Shop and Garage Expenses 4141 Repairs to Revenue Equipment - labor 4142 Repairs to Revenue Equipment - Material 4144 Repairs to Revenue Equipment - Accident 4145 Re~cirs to Revenue Equipment - Fare Boxes 4151 Servicing of Revenue Equipment - labor 4152 Servicing of Revenue Equipment - ~l,cterial 4153 Servicing of Revenue Equipment - Grease 4160 Tires and Tubes - Revenue Equipment Subsidy by Stockton :/Jlerchants Association Total Account 4100
4200 4210 4220 4230 4240 4264
9-30-63
Expense Supervision of Transportation Drivers' Wages and Bonuses Fuel for Revenue Equipment Oil for Revenue Equipment Other Transportation Expenses Subsidy by Stockton lvicrchants Association Tot[Ll Account 4200
$
$ 3,710 380 320 940 1,980 5,950 24,670 14,990 1,010 480 10,120 440 490 6,960 (1,610 ) $ 70,830
3,659 410 208 754 2,171 5,828 25,654 17,085 (956)
411 11,801 561 581 7,692 $ 75,859
TrQnsport~tion
4400 Traffic, Solicitation and Advertising Expense 4430 Tariffs and Schedules 4440 Tickets and Baggage Checks 4450 Other Traffic ExPenses 4470 Advertising Total Account 4400
13,740 273,650 19,530 960 1,940 1l.1, 920) $297,9 00
$ 13,947
$
284,773 20,446 1,061 1,878 $322,105 $
380 510 610 10 $ 1,510
376 601 507
$
$ 1,484
(Red Figure)
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TAB LE III
Sheet 2 of 3 STOCKTON CITY LINES OPERATION AND MArnTENANCE EXPENSES
APPLICATION NO.
:Account: No.
4500 4510 4520 4541 4570 4580
44647
Book Record : Historical Year '-1-61 to 4~30-62
Description Insurance and Safety Expense Salaries and Expenses - Insurance and Safety Public Liability and Property Damage Ins. Workmenis Compensation Insurance Fire and Theft Insurance Other Insurance Total Account 4500
~600
4611 4612 4613 4620 4630 4640 4651 4652 4656 4660 4673
$
312 20,353 3,079 504 1 1 286
Rate Year 10-1-62 to:
9"'30-63 $
210 16,590 4,030 630 1 1 320
$ 25,534
$ 22,780
$ 6,240
$
Total Account 4600
$ 36,453
$ 36,610
Total Operatibn and Maintenance Expense
$461,435
$429,630
Administrative and General Expense Salaries of General Officers Expense of General Officers Salaries of General Office Employees Law Expenses General Office Supplies and Expenses Communication Service Outside Auditing Expenses Employees Welfare Expenses Other General Expenses Management, Supervision and Accounting Other Regulatory Commission Expenses
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1,214 2,340 1,059 510 8,002 530 16,335 222
6,150 1,210 2,680 860 510 8,000 250 16,850 100
TABlE III
Sheet 3 of 3 STOCKTON CITY LINES ACCOUNT NO o 5200 - OPERATING TAXES
:Account:
: Number:
Description
5200
QI2erating Taxes and Licenses
5210
Fuel and Oil Taxes
5220
:Estimate for Rate Year Book Record 10-1-62 to :Historical Year: 9-30-63 5-1-61 to ~P~r-e-s-'e-n":;'t~";;""'Pr-op-o-s-e~d4-30-62 Fares Fares
$18,250
$18,250
Vehicle License & Registration Fees
6,770
6,770
5230
Real Estate & Personal Property Taxes
4,05 0
4,050
5240
Social Security Taxes
20,140
20,140
5250
other Taxes
2.160
2.430
$51,370
$51,6.40
Total Account 5200
$48,107
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STOCKTON CITY LINES ESTIMATED RATE BASE AND DEPRECIATION EXPENSE FeR RATE YEAR ENDING SEPTEMBER 30, 1963 APPLICATION NO. 44647
ACCOUNT NO. 1221 REVENUE EQUIPlvlENT
No. :-- of : : Units: Model (2) (3)
: Line I Item
: No.:
•
(I)
--:--~tt€
:HontI1Iy: DepreciSR1-: Life: Depree.: ation vRge : (Ho.): Chcwge: Reserve (6) (7) (8) (9)
ES~:Est.
: at : at Original :Blt. : NCL :Stk n. : Cost (4a) (4b) (4c) (5)
Rate BRse (10)
Depreei-: ation Exrense : 11)
Revenue EguiEment
Bus Nos. Passgrs.
1 2
3
4
I
I-'
5 6 7 8
o 9 I
10 11 12
1603 1604 1606-1610 1602 1611-1615 1631-1635 1605 1616-1619 1636-1637 1620-1626 1501-1504 Fare Boxes
36 36 36 36 36 36 36 36 36 36
45
1 1 5 1 5 5 1 4 2 7
4
3'5
1945 6/45 2/59 $ 11,587.00 $ 500 $ 11,087.00 $ 500.00 11,381.00 400 1945 6/45 9/57 10,981.00 400.00 57,930.00 2,000 TD-3609 1945 4/46 4/46 55,930.00 2,000.00 500 TDH-3609 1946 6/46 2/59 13,255.00 12,755.00 500.00 66,410.00 2,500 TD-3609 1946 7/46 7/46 63,910.00 2,500.00 68,355.00 2,500 TD-3609 1946 6/46 8/48 65,855.00 2,500.00 13,088.00 TDH-3609 1946 6/46 9/57 400 12,688.00 400.00 57,624.00 3,600 TD-3610 1947 6/47 6/47 54,024.00 3,600.00 25,790.00 2,000 TDH-3610 1946-47 6/4711/48 23,790.00 2,000.00 TDH-3610 1948 3/48 3/48 102,169.00 7,000 95,169.00 7,000.00 1962 8/62 8/62 110,400.00 6,000 144 $181.25 11,800.00 98,600.00$ 8,700.00 $"537,989.00 $181.25 $417,989.00 $120,000.00$ 8,700.00 945.98 $ 945.98 $"""1"..,.8.....1-,:.2~5 $418,934. 9'8 """$1"""'2~0-",0'""="0-=-0.-=00""" $538,934.98 TDH-3609 I(
Acet. Nos. 13
14
15 16 17 18 19
1201 1211 1231 1241 1251 1511
Land Structures Service Cars Shop and Garage Equipment Furniture and Office Equipment Franchises Materials and Supplies Special Deposits
$ 23,133.62 58,825.98 3,450.09 15,268.41 5,135.98 1,000.00 13,656.42 2;100.00
~obl,505 .liB
USE
~661,510.00
$ 58,705.04 3,450.09 15,268.41 5,135.98
$ 23,133.62 120.94 $ 2,7 J.a. 76
114.45 1,000.00 13,656.42 2, 100.00 r.$l:;or8~l-;O.2:-1"5 $SOl , 494. SO $160,010. 98~11, 502. 21 ~
$501,500 .00 $:; :-:1: -'600::;0:-",O::::-:.1;-:O~'.-':'~"="Q$li, 566 .00: .q