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PRESIDENT AND GENERAL MANAGER’S MESSAGE

Dear Friend of RTA:

In 2005, RTA tempered the effects of rising petroleum prices on the lives of Northeast Ohio residents by offering a cost-effective alternative to driving. This resulted in more seats being filled on trains and buses. And through a passion to deliver responsive, reliable service to the community, the people in those seats experienced a truly impressive performance.

Efficiency gains highlighted the year. A multi-year district consolidation initiative aimed at reducing overhead costs by moving from four to three major bus facilities was capped off by the opening of the Triskett Garage. This modern 225,000 square-foot facility is capable of maintaining all buses servicing western Cuyahoga County routes, and will help reduce operating expenses by more than $2 million annually.

Additional streamlining and savings were achieved last year through the integration of the Maple Heights and North Olmsted municipal bus lines into the RTA system. Residents in both communities were understandably proud of their hometown bus lines. But with all levels of local government searching for ways to become more efficient through regionalism, the savings to taxpayers could not be ignored. The integration offers a more efficient utilization of manpower and equipment, allowing the same level of service to be provided for $3 million less per year.

Savings were also realized from ongoing cost-cutting efforts initiated by RTA’s Board of Trustees and management team over the past several years. These include a planned reduction of the bus fleet, the elimination of positions through attrition, tighter control of healthcare costs, and enhancements in productivity at all levels of the organization. Combined, these efforts have reduced operating expenses by more than $25 million.

Tight fiscal control by RTA in 2005 was countered by an energy market that was out of control. Diesel fuel prices skyrocketed, and for every penny increase, RTA’s fuel expense grew by $54,000. Despite this significant and unexpected jump, the price the rider paid was unaffected — remaining unchanged since 1993.

While transit users still enjoyed unlimited trips and transfers around town for $3, pump prices rose above $3 for a single gallon of gas. This caused more Northeast Ohio commuters to make the switch from driving to riding, pushing RTA ridership up by 2.9 percent, the third consecutive year of ridership gains.

Offering riders real value was also the focus behind capital and service enhancements made in 2005. On the rail, the first of 28 rebuilt light-rail cars rolled out. Rebuilding, instead of purchasing new vehicles, saved $61 million and extended the useful life of the cars by 15 years.

Complementing the rebuilt cars were several rail station improvements. At the Shaker Square Station, work began on ADA upgrades and new landscaping to make the facility more accessible and attractive. Ground was also broken on a new West 117th Street Station; and at the East 105th Street & Quincy Station, ground was broken and a new station opened within 10 months to support redevelopment efforts in the Fairfax neighborhood.

Off the rails, RTA’s bus network became more connected. Construction began on the Parmatown Transit Center, which when completed, will provide a hub for six bus routes and a convenient link for thousands of residents. In the Northwest Corridor, the 55F Gold Line was introduced in response to the residents’ desire for a different type of bus flyer. And to prepare for disruption caused by the Innerbelt construction, state funding was approved for expanding the popular North Olmsted, Strongsville, and Westlake Park-n-Ride lots by a total of 700 spaces.

The world events of last year highlighted the pressing need for developing alternative modes of travel, such as Bus Rapid Transit (BRT) utilized on the Silver Line. Tightly coordinated construction management moved this project forward with speed and efficiency. Work on the downtown Transit Zone is now complete, and construction on the second and third phases is well underway. So too is the construction of the hybrid Rapid Transit Vehicle that will service the line, designed to be a model of fuel efficiency.

2005 will be remembered as a year when individual passions made a difference in Northeast Ohio. And as a time when residents in the region came together — taking a stand against high gas prices by taking RTA.

Sincerely,
George F. Dixon, III President, RTA Board of Trustees	Joseph A. Calabrese Chief Executive Officer, General Manager/Secretary-Treasurer

RIDERSHIP

LOIS MOSS AND RYAN MCKENZIE

Local biking enthusiast Lois Moss and RTA Citizens Advisory Board member Ryan McKenzie share a passion for the freedom that cycling provides. Their focus to make Northeast Ohio a more bike-friendly place has resulted in collaboration with RTA to integrate cycling with public transportation. This includes the installation of bike racks on the entire bus fleet and the inclusion of bikes on trains during designated hours.

As energy prices soared out of control during the past year, large numbers of commuters in Northeast Ohio were ready to break their oil dependence through hybrid fuel technology and alternate forms of transportation — making RTA a vehicle in demand.

In 2005, ridership grew to 57 million passenger trips; this is a third consecutive year of ridership gains that represents a combined growth of more than 4 million trips. Among those filling available seats on RTA trains and buses in 2005 were accountants, postal workers, and lawyers, as PricewaterhouseCoopers, the U.S. Postal Service, and Baker & Hostetler LLP joined 264 other Northeast Ohio employers in RTA’s Commuter Advantage program. They traveled alongside seniors, families, and college students who enjoyed special discounts and programs to keep the cost of commuting affordable. These commuters were joined by middle school students from the Cleveland Municipal School District who made it to homeroom and back home safely on RTA.

Others also joined the movement, as cyclists, runners, and community groups worked with RTA to promote the benefits of public transportation. Their efforts led to the organization of car-free tours, bike-and-bus-to-work drives, and downtown rallies that encouraged work-trip commuters to “Pass on the Pump.” RTA helped get the message out with the “Take a Stand” campaign that included giving away two-trip farecards.

Those who made the switch from driving to riding RTA discovered the transit authority had been almost completely reengineered. Complementing a new fleet of low-emission buses, the first of 28 refurbished light-rail cars rolled out in 2005. These cars were rebuilt from the wheels up, with many added features to enhance the riding experience. And by rebuilding the cars instead of purchasing new vehicles, RTA saved $61 million, allowing it to offer commuters that “new car” smell for less.

Part of RTA’s ridership success can also be attributed to being in the right place at the right time. This meant providing more convenient access to the RTA system through Park-N-Rides and Transit Centers that are strategically placed throughout the region. Last year, ground was broken to expand this network with the creation of a Parmatown Transit Center. And with concern over the traffic congestion that will be created by the massive Innerbelt construction project, RTA received funding from the Ohio Department of Transportation to increase the capacity of the North Olmsted, Strongsville, and Westlake Park-N-Ride lots.

In 2005, more Northeast Ohio commuters realized that riding RTA was a smart choice. If this movement continues, and Americans use public transportation for just 10 percent of their daily travel needs, the nation could reduce its dependence on imported oil by more than 40 percent — offering true freedom on the open road.

FARE PROGRAMS

FRED NANCE AND PAT KEARNEY

Nobody is a bigger defender of Cleveland than Fred Nance, managing partner at Squire, Sanders & Dempsey, L.L.P. He helped save our Browns. He was instrumental in saving a deal for a much-needed runway expansion at Hopkins International Airport. And most recently, he led the effort to save more than 1,000 jobs at DFAS. Squire Sanders also saves its employees on the cost of commuting to work through RTA's Commuter Advantage program, something RTA marketing supervisor Pat Kearney recommends to all area employers.

Deals were hard to come by in a year when pump prices exceeded $3 per gallon and the cost of heating homes literally went through the roof. This caused some to do without, and others to make changes in their lives. Those who decided to incorporate a train or bus into their daily commute were pleasantly surprised to find RTA offering many ways to save.

Many residents in Northeast Ohio discovered additional savings through Commuter Advantage. The program allows employees to purchase monthly fare passes through their employers using pretax dollars — for a total savings of up to $5,000 per year on the cost of a commute. Employers also saved through reduced payroll taxes. In addition, riders participating in the Commuter Advantage program received a guaranteed ride home to cover those unexpected situations requiring early and late departures from work. With this service, riders are reimbursed cab fare when transportation through RTA is not available.

Another initiative that gained traction in 2005 was the Smart Commute. The program helps residents in Northeast Ohio realize the dream of homeownership through extra purchasing power for homes near public transportation routes. To qualify, the home must be located within a quarter mile of an RTA bus stop or a half mile of an RTA rail station. More than 60 percent of Cuyahoga County residents live within a quarter mile of an RTA transit stop.

New riders found making the switch from the car to RTA was easy, especially with the many new improvements made in 2005 to access information. This included a Trip Planner program on www.rideRTA.com. The program allows riders to plan their commute by simply entering their origin and destination, and provides back a path listing the most convenient RTA service routes.

At RTA stops, scrolling Next Connect digital signage gave riders incoming bus and train information, while programmable digital signage at major stations offered riders updated schedule information along with important news updates. RTA also upgraded its customer service capabilities with a new voice response telephone system to ensure that riders can quickly access the information they need for services they require.

Last year, RTA continued to offer special service to popular destinations in and around Greater Cleveland. This included special rail service to Cavaliers, Indians, and Browns games, as well as other special events — helping riders bypass traffic gridlock and high parking prices. And airport service along the Red Line continued to be an easy way for riders to get to and from Hopkins International Airport without needing to pay for parking.

In 2005, RTA was an advocate for low-cost transportation. Making the decision to ride easy, simple and smart.

TRANSIT ORIENTED DEVELOPMENT

JAMIE DEROSA, BOB STARK, AND VICKIE EATON JOHNSON

Individuals with vision are changing the landscape of Northeast Ohio. People like Vickie Eaton Johnson, executive director of Fairfax Renaissance Development Corporation, who is spearheading the rebirth of Quincy Avenue. And Bob Stark, CEO of Stark Enterprises, who brought urban-style living into a suburban setting with the opening of Crocker Park. And Jamie DeRosa, deputy project manager of real estate for the Euclid Corridor Transportation Project, who is creating a path that will reinvent travel and bring new life to Euclid Avenue.

In a year that marked its 30th anniversary of transporting people, RTA demonstrated that it could also serve as a vehicle for sparking development. Transportation infrastructures are the catalyst of healthy communities. And as Northeast Ohio redefines itself, transit will play a vital role in connecting the region. The realization of this fact has given rise to Transit Oriented Development. Examples of this kind of collaboration between RTA and others were plentiful in 2005.

Crocker Park in Westlake has become a model for good use of space, combining urban-style living with retail. It also serves as a model of how transit and suburban-style development can come together to create more opportunities. The developer, Bob Stark, collaborated with RTA during the planning phase, seeking ways to link bus routes with Crocker Park. RTA responded with the introduction of the new Southwest Circulator and the integration of the Gold Line in 2005, creating express bus service between downtown and the growing Northwest Corridor. The result is a thriving center that’s connected to the community.

Many areas within the city of Cleveland are being redefined as well. This includes the historic Fairfax neighborhood, which has developed a master plan to achieve sustainable community and economic growth. Rebirth of Quincy Avenue is a critical component of this plan, and the RTA rail station at Quincy and East 105th has for years been a linchpin — connecting residents and providing a link to other parts of town. In 2005, this station was completely rebuilt to tie together the many new investments in housing and retail.

Transit Oriented Development might be a new term, but it’s a concept that has been around for some time. There is no finer example in the nation of one of the first such collaborations as Shaker Square. Last year, RTA began to make a number of improvements to the historic station at Shaker Square as part of a larger redevelopment effort. Upgrades included new landscaping along the light-rail and ADA enhancements. And in Shaker Heights, the transit authority is working with developers of Avalon Station to bring the residents of the luxury lofts convenient access to trains, just as the Van Sweringen brothers did in 1913.

On the west side, ground was broken on a new West 117th Street Station. For years, this station was the stop for thousands of factory workers at Glidden Paint, Union Carbide, and White Sewing Machine. In the future, it will be a connection point for retail, entertainment and upscale living complexes, as the cities of Lakewood and Cleveland explore new industries for the area.

Last year, Northeast Ohio made progress reinventing itself. And along many of the new paths taken, RTA was integrally connected.

SERVICE/EFFICIENCY

WARREN JOHNSON AND MARY VERDI-FLETCHER

Mary Verdi-Fletcher, founder and artistic director of Dancing Wheels, is always in motion. Whether it's educating students on integrated dance, engaging an audience during a performance, or working with RTA to ensure equal access to public transportation, she's on the move. And her passion has also moved others, to which RTA Paratransit Training Supervisor Warren Johnson can attest, as more residents with disabilities gain freedom of movement throughout the community.

Behind the scenes, RTA has created a much different type of transportation system than the one that hit the streets 30 years ago. It’s a system that employs technology to track the exact position of its vehicles, operates buildings constructed with smart engineering materials, and uses wireless communications, the Internet, and computer programs to get people where they need to go.

Case in point: the advanced scheduling software implemented for Paratransit. The $1.4 million investment has streamlined the process of picking up and dropping off thousands of individuals every week. It also has provided RTA customer service representatives more time to ask riders important questions about their transportation needs. This has resulted in a dramatic improvement in the number of customers served, evident from the 27 percent increase in Paratransit ridership in 2005.

RTA’s expertise in mobilizing vehicles throughout the county was called upon last year to create a coordinated dispatch service for seniors. Through the development of the Senior Transportation Network, resources between municipalities and other organizations were brought together to better meet the transportation requirements of the elderly. It’s a perfect example of regionalism at work.

Efficiency created through regionalism was the idea behind the integration of the Maple Heights and North Olmsted municipal bus lines into the RTA system. Service provided by both lines was excellent. But it was determined that this high level of service could be maintained without the duplication of facilities and administrative personnel. The move is saving $3 million per year.

Buses serving the North Olmsted routes as well as all routes in Western Cuyahoga County got a new home in 2005. The 225,000 square-foot Triskett Garage opened with the fanfare of a naval ship launch, but with good reason. Along with advanced bus washing equipment, articulated lifts, and a full-power backup generator, the garage will generate additional savings. It completes RTA’s district-wide consolidation plan that called for moving from four to three major bus facilities, lowering overhead costs by $5 million a year.

But more than brick and mortar was necessary for RTA to deliver exceptional service. RTA employees — mechanics, operators, dispatchers, customer service representatives — made getting riders to their destinations safely, on-time, a priority. It was all part of the TEAM (Together Everyone Achieves More) incentive program, initiated five years ago. This resulted in steady increases in customer satisfaction levels, improved reliability, and greater safety. All of which brought more riders. In 2005, RTA’s employees were rewarded for their hard work with a one-time cash payment.

Like Mary Verdi-Fletcher, RTA was in constant motion last year. This led to a performance that deserved applause.

SILVER LINE

DANIELLE WILLIS, JERRY WAREHAM, AND ART J. FALCO

Restoration of the theaters at Playhouse Square was inspired. So too, was the collaboration between Art Falco, president and CEO of the Playhouse Square Foundation, and Jerry Wareham, president and CEO of ideastream, in creating Idea Center at Playhouse Square. All of which supports a belief by Danielle Willis, project officer for Euclid Corridor, that one good idea follows another, with the opening of the Silver Line in 2008.

Visionary thinking has defined our region. Some of the best examples: the forethought of William Stinchcomb in protecting acres of land around the city to create the Cleveland Metroparks, Dr. George Crile’s belief that teams of physicians can offer better care, leading to the Cleveland Clinic, and John Severance’s passion to build a structure equal to the perfection of the Cleveland Orchestra with Severance Hall. In the future, the idea of connecting the region’s intellectual and cultural assets will be among them.

In 2005, much progress was made in turning this vision into reality. RTA’s Silver Line took shape on a multiple of fronts, including the creation of a prototype vehicle to propel the line and passengers. The 60-foot articulated Rapid Transit Vehicle was manufactured by New Flyer Industries. It is powered by a GM/Allison internal combustion engine and hybrid transmission, consisting of two 100 kW motors and a 600-volt nickel metal hydride battery pack. This unique powertrain reduces particulate emissions by 90 percent and offers a 30 percent improvement in fuel efficiency. The dual diesel/electric power and combination bus/rail features make the Silver Line vehicle the ultimate hybrid. After several months of testing by the Federal Transit Administration, the prototype will move into production.

Work was also completed last year on the Downtown Transit Zone. The zone will permit the efficient orchestration of bus routes through downtown and off Euclid Avenue to make room for the Silver Line. In 2005, reinforced bus pads, new curbing, and ADA ramps at intersections were constructed within the zone. Bus-only lanes were also created on Superior and St. Clair Avenues. In the future, buses will flow through the zone to a Transit Center at Cleveland State — serving as a central hub for all downtown routes.

With the transit zone finished, attention has now shifted to the first and second phases of construction along Euclid Avenue. Bids have been received, contracts have been awarded, and construction has commenced. Special attention will be given to minimize disruption to residents and businesses, with through traffic maintained during construction. Along the entire Silver Line route, property is also being acquired to create the stations and other passenger facilities that will transform a road into the look and feel of rail.

Equal to the progress made on the line is the development occurring around it. In Midtown, 15 acres of land are being redeveloped as part of a plan to support new businesses. University Hospitals of Cleveland and others are exploring satellite offices downtown. And all along Euclid Avenue, new entertainment venues like House of Blues and complexes such as Idea Center are popping up. It’s estimated that, in total, the Silver Line will spur more than $1.3 billion in private development.

Building a stronger region and breaking our nation’s oil dependence requires new thinking. An idea to address both is on its way.

COMMUNITY INVOLVEMENT

DICK GODDARD, DAVID PLATE, AND VICTORIA STEELE

Life can be stormy at times. It's something Dick Goddard, WJW Fox 8 News chief meteorologist, knows all too well. When the blood supply in Northern Ohio became life-threateningly low, Goddard, RTA, and David Plate, CEO of the American Red Cross Northern Ohio Blood Services Region, came together to hold the Books for Blood drive. Victoria Steele, an RTA customer service representative, did her part by getting the word out through the distribution of 250,000 special farecards.

Roadways and rail lines take people from place to place. But it’s community that brings residents together. This was seen in the tremendous response by Americans toward people devastated by a tsunami and displaced by a hurricane. In 2005, there were also many cases of Clevelanders coming together.

When the local blood supply became critically low, the community responded, donating en masse during the Books for Blood drive kicked off by RTA. All those who gave blood received discounts off a selection of Cleveland-themed books at Borders. RTA provided the extra incentive of meeting a local legend in person, Dick Goddard, and receiving a free copy of his Weather Guide for Northeast Ohio — a must read for snow belt residents.

Art is something that binds and defines us. With the world-renowned collection of the Cleveland Museum of Art being placed in storage during a $258 million renovation, a source for inspiration would be temporarily lost. CMA@RTA, a partnership between CMA and RTA, kept the spirit of the works alive. In 2005, it included a special Red Line Tour, featuring photographs of classic artwork in available advertising boards at stations — providing a little Van Gogh to Go.

Offering riders a different perspective of the world was the concept behind Moving Minds: The Verse & Vision Project. 2005 was the second year RTA sponsored this art and poetry initiative, which displays the work of local poets and artists on interior bus and train cards. Moving Minds came about through a collaboration between RTA, the American Institute of Graphic Arts, and the Poets’ and Writers’ League of Greater Cleveland.

In 2005, RTA buses and trains doubled as the family minivan, with several events to bring moms and dads, sisters and brothers, together. RTA Family Fest in the Flats put the fireworks into view, while RTA Family Day at the Zoo allowed kids to experience elephants and kangaroos.

RTA’s involvement in the community expanded in other ways as well. Like offering convenient service within communities through Community Circulators. In 2005, a 12th route was added with the Southwest Circulator, serving the growing needs of residents in Rocky River, Fairview Park and Westlake. Downtown, the transit authority will be adding a bit of nostalgia and fun with vintage trolleys. The trolleys, complete with cow catchers, wooden rails, and brass bells, were purchased in 2005 and will replace Loop buses this year.

RTA’s Citizens Advisory Board is another way in which transit responds to the community. This group is a sounding board of ideas and feedback to the transit authority, and has offered numerous ways for RTA to add comfort and convenience for commuters. As much as Wooly Bear Festivals and Dawg Pounds, RTA is part of the fabric of Northeast Ohio. Which is why it’s only natural for the transit authority to be involved in improving the quality of life for area residents.

BOARD OF TRUSTEES		RTA EXECUTIVE MANAGEMENT TEAM
George F. Dixon, III President Restaurateur		Joseph A. Calabrese Chief Executive Officer, General Manager/Secretary-Treasurer
Beverly Burtzlaff Vice President Former Staff Director, U.S. Senate Subcommittee on Government Information and Regulation		Sheryl King Benford General Counsel, Deputy General Manager, Legal Affairs
Jesse O. Anderson President, Disabled Rights Task Force, Inc.		Stephen J. Bitto Director, Marketing & Communications
Dennis M. Clough Mayor, City of Westlake		Grace Gallucci Executive Director, Office of Management and Budget
Jerry N. Hruby Mayor, City of Brecksville		Anthony Garofoli Executive Director, Internal Audit
Edward J. Kelley Mayor, City of Cleveland Heights		Bruce Hampton Deputy General Manager, Human Resources
Allan C. Krulak Vice President-Director of Community Affairs, Forest City Enterprises; Vice Mayor, City of Pepper Pike		Loretta Kirk Deputy General Manager, Finance & Administration
Francisco Molina Former Executive Director, Spanish-American Committee		Michael J. Schipper Deputy General Manager, Engineering & Project Management
Charles L. Patton Director of Public Policy and Government Affairs, The MetroHealth System		Taras G. Szmagala Executive Director, External Affairs
Shari Weir Program Director, Ohio Citizen Action		Michael York Deputy General Manager, Operations
BOARD OF TRUSTEES (Back row left to right) George F. Dixon, III; Edward J. Kelley; Jerry N. Hruby; Allan C. Krulak (Middle row left to right) Jesse O. Anderson; Beverly Burtzlaff; Francisco Molina; Charles L. Patton (Front row left to right) Shari Weir and Cody; Dennis M. Clough		EXECUTIVE MANAGEMENT TEAM (Back row left to right) Grace Gallucci; Michael J. Schipper; Michael York; Stephen J. Bitto (Middle row left to right) Joseph A. Calabrese; Sheryl King Benford; Anthony Garofoli; Bruce Hampton (Front row left to right) Loretta Kirk; Taras G. Szmagala

YEAR-END FINANCIAL REPORT

In light of a substantial and unexpected rise in fuel costs, RTA maintained a solid financial position in 2005. This was accomplished through an aggressive action plan developed in the second quarter to offset unforeseen pricing and charges for expenditures that far exceeded budgeted levels. Quick response in managing these costs, coupled with tight control of all expenditures and positive growth in revenue from new riders, allowed RTA to finish the year with a higher-than-anticipated ending balance of $16.0 million.

Evidence of the Authority’s improved fiscal health can be seen in the Financial Indicators. The Operating Ratio grew to 19.3 percent, exceeding both budget expectations and last year’s posting. This can be attributed in part to a gain in ridership and fare revenue. Operating Reserve surpassed budget estimates and was just slightly under the one-month policy target at 0.9 month. RTA’s ability to cover its debt structure also expanded with the Debt Service Coverage ratio reaching 2.07, significantly above the 1.38 budget projection. All but two of the remaining indicators performed better than budget expectations as well. The one notable exception was Cost per Hour of Service, which was affected by higher diesel and natural gas fuel costs and a lower-than-projected total number of service hours.

For the first time in five years, operating revenue was up and exceeded budgeted goals. This positive turn came about from a third consecutive year of ridership gains, resulting in a $2 million boost in fare revenue over the prior year. The last increase of any kind in this revenue category was in 1997. Sales tax, the largest revenue source, ended the year within one tenth of one percent of the budget at $168.9 million. Compared to 2004, however, sales tax revenue was up by $3.5 million, or 2.15 percent, in 2005. Other revenue categories were mixed, with some categories up and others down, contributing to a general fund revenue of $247.3 million.

World events created many challenges in managing the Authority’s operating expenditures in 2005. The primary area of concern was fuel cost. Large increases in the price paid by RTA for diesel fuel and natural gas to power its bus fleet resulted in a significant negative variance by the end of the third quarter. To address this situation, a supplemental appropriation and a series of budget transfers were made to the Fuel/Utilities budget category in the fourth quarter. These actions permitted this expense to stay within budget. But a year-to-year comparison highlights the true magnitude of skyrocketing energy costs. In the last two years, 2004 to 2005 and 2003 to 2004, the expenditure category grew 17.3 percent and 22.9 percent, or $3.5 million and $3.8 million respectively.

In the category of Personal Services, savings generated by staff reductions, efficiencies in service delivery, and lower-than-anticipated fringe benefit payments were offset by higher overtime charges. Most other categories realized modest positive variances to keep total expenditures with budget expectations.

Capital expenditures remained relatively close to budgeted levels in 2005. Year-end commitments totaled $235.5 million, including expenditures of $169.1 million and encumbrances of $72 million. The many projects underway will enhance RTA’s ability to provide efficient and reliable service, as well as offer residents in Northeast Ohio a faster and more convenient transportation alternative for continued ridership growth.

FINANCIAL INDICATORS
Operating Ratio (Revenues) Policy: An Operating Ratio (operating revenue divided by operating expense) of at least 25 percent measures RTA's ability to pay its operating expenses from revenue generated by its services, most notably fare revenue.	Fare Subsidy/Net Cost per Passenger (Revenues) Policy: The net cost per passenger shall not exceed three times the average fare. This measure indicates the level at which the transit authority is subsidizing the actual cost of a ride.	Operating Reserve (Expenditures) Policy: An Operating Reserve equivalent to at least one month's operating expenses is required to cover unforeseen or extraordinary fluctuation in revenue or expenses.	Overhead Cost vs. Total Cost (Expenditures) Policy: As an additional assurance of cost containment, RTA's overhead shall not exceed 15% of total cost.
Growth in Cost per Hour of Service (Expenditures) Policy: The Growth in the Cost per Hour of Service is expected to be kept at a rate at or below that of inflation, to ensure that costs do not grow faster than RTA's major sources of revenue, which are also sensitive to inflationary growth.	Debt Service Coverage (Expenditures) Policy: Total operating revenue minus operating expenditures divided by debt service requirements shall be kept to a minimum of 1.5 to ensure that debt service payments can be comfortably supported by the organization without jeopardizing general operations.	Sales Tax Contribution to Capital (Expenditures) Policy: A Contribution to Capital of an amount equivalent to at least 10 percent of sales tax revenue ensures the continued rehabilitation and replacement of capital assets and allows for expansion of the system.	Capital Maintenance to Expansion (Expenditures) Policy: Recognizing that the capital program requires a critical balance between maintenance of existing assets and expansion efforts, the percent of capital maintenance outlay to capital expansion outlay will be a minimum of 33 percent and a maximum of 67 percent.

FINANCIAL STATEMENTS
General Fund	2004 actual	2005 actual	$ change	% change	% of total
Revenue
Passenger Fares	$ 37,289,919	$ 39,300,036	$ 2,010,117	5.4%	16%
Advertising	1,538,473	1,705,176	166,703	10.8%	1%
Investments	168,759	443,225	274,466	162.6%	0%
Total Operating Revenue	$ 38,997,151	$ 41,448,437	$ 2,451,286	6.3%
Sales Tax	$ 165,433,059	$ 168,997,361	$ 3,564,302	2.2%	69%
Grants	1,781,466	3,678,039	1,896,573	106.5%	1%
Other	32,673,950	32,466,221	(207,729)	(0.6%)	13%
Total Non-Operating Revenue	199,888,475	205,141,621	5,253,146	2.6%
Total Revenue	$238,885,626	$ 246,590,058	$ 7,704,432	3.2%	100%
Expenditures
Labor/Fringe	$ 157,419,534	$ 163,934,412	$ 6,514,878	4.1%	68%
Materials/Supplies	10,432,662	11,159,781	727,119	7.0%	5%
Fuel/Utilities	20,201,832	23,701,487	3,499,655	17.3%	10%
Services	7,606,931	8,369,156	762,225	10.0%	3%
Purchased Transportation	5,857,142	4,714,778	(1,142,364)	(19.5%)	2%
Liabilities	12,329,769	6,282,112	(6,047,657)	(49.0%)	3%
Other	2,210,816	1,187,954	(1,022,862)	(46.3%)	0%
Total Operating Expenses	$ 216,058,686	$ 219,349,680	$ 3,290,994	1.5%
Transfer to Insurance Fund	$ 0	$ 0	$ 0	0.0%	0%
Transfer to Pension Fund	150,000	206,000	56,000	37.3%	0%
Transfer to Bond Retirement Fund	11,304,006	14,703,000	2,768,994	24.5%	6%
Transfer to Capital Improvement Fund	7,728,022	6,626,560	(1,101,462)	(14.3%)	3%
Total Non-Operating Expenditures	19,182,028	20,905,560	1,723,532	9.0%
Total Expenditures	$ 235,240,714	$ 240,255,240	$ 5,014,526	2.1%	100%
Revenue/Expenditures	$ 3,644,912	$ 6,334,818
Balance Jan. 1	$ 6,004,903	$ 9,649,815
Balance Dec. 31	$ 9,649,815	$ 15,984,633

Capital Fund	2004 actual	2005 actual	$ change	% change	% of total
Revenue
Federal Capital Grants	$ 47,691,764	$ 55,888,368	$ 8,196,604	17.2%	81%
State Capital Grants	3,675,597	3,177,747	(497,850)	(13.5%)	5%
Local Sources
(Gen. Fund and Debt Proceeds)	45,734,694	6,626,560	(39,108,134)	(85.5%)	10%
Other	2,905,205	3,000,000	94,795	3.3%	4%
Investment Income	139,302	707,924	568,622	408.2%	1%
Total Revenue	$ 100,146,562	$ 69,400,599	$ (30,745,963)	(30.7%)	100%
Expenditures
RTA Development Fund Projects	$ 74,781,731	$ 88,675,870	$ 13,894,139	18.6%	98%
RTA Capital Fund Projects	2,353,484	1,857,342	(496,142)	(21.1%)	2%
Other	65	7,481	7,416	N/A	0%
Transfer to Bond Retirement Fund	131,000	370,000	239,000	0.0%	0%
Transfer to Insurance Fund	0	0	0	0.0%	0%
Total Expenditures	$ 77,266,280	$ 90,910,693	$ 13,644,413	17.7%	100%
Revenue/Expenditures	$ 22,880,282	$ (21,510,094)
Balance Jan. 1	$ 8,913,481	$ 31,793,763
Balance Dec. 31	$ 31,793,763	$ 10,283,669

MISSION STATEMENT
RTA enhances the quality of life in Greater Cleveland by providing outstanding, cost-effective public transportation services.