Financial Modeling and Analysis

Downeaster Financial Planning

KKO worked with MaineDOT and the Northern New England Passenger Rail Authority (NNEPRA) to define the costs that are generated from the Downeaster service between Portland, Maine and Boston and to determine the funding that will be required to maintain operations.

MBTA/Amtrak Cost Analysis

KKO performed cost analysis of Amtrak’s three-year extension to the 1995 Operating Agreement for the provision of commuter rail services. KKO evaluated the proposed contract extension price with prior year budget and actual data and conducted a cost analysis in accordance with FTA Best Practices Manual guidelines and Federal Acquisition Regulation Sections 15 and 31.

Macedonian Railways Strategic Financial Plan

For the Macedonia Railway, KKO supported a strategic planning effort to establish freight and passenger profit centers within the railway. KKO developed a financial model to assist in the evaluation of 5-year traffic forecasts and a system of Public Service Obligation payments to the Macedonian Railway for unprofitable passenger services which the Government wishes to continue for social reasons.

MBTA Private Carrier Bus Lines Claims Evaluation

KKO worked with the MBTA to evaluate claims by private carriers for damages resulting from introduction of commuter rail into their service areas. KKO evaluated the ridership and financial impact of commuter rail operations, and provided forecasts of ridership, revenue and expense with and without the new service, and with and without the pre-existing MBTA subsidy.

NNEPRA Amtrak Contract Costing Analysis

NNEPRA and MaineDOT asked KKO to work with outside counsel in the analysis of its contract with Amtrak for the provision of the Downeaster service. The contract originally signed in 1996 – well before the operation of the Downeaster service was initiated. KKO also supported negotiations for amendments to the contract. In particular, KKO was asked to audit the operating costs charged to the Downeaster, to assess the appropriate allocations of shared costs between the Downeaster and the rest of the Amtrak services, and to evaluate alternative operating cost assumptions and budgets proposed by Amtrak for the remaining term of the contract

MBTA Labor Relations Support

KKO provided support to the Massachusetts Bay Transportation Authority’s Labor Relations department in costing contract proposals with various bargaining units at the agency. The goal of KKO’s involvement was to provide accurate estimates of costs and/or savings resulting from changes in work rules, benefits, and assignment practices. KKO developed a custom spreadsheet application for quickly evaluating contract proposals during negotiations and assisted the department in budget adherence and service contracts analysis.

South Station Master Lease Audit and Annual Budget Review

For the Massachusetts Bay Transportation Authority, KKO worked to improve the financial performance of the South Station passenger rail terminal as a retail and office center as well as a passenger station. Working with the MBTA private counsel and Transit Realty Associates, KKO developed and recommended a program of lease and management adjustments that resulted in the station’s first positive cash flow for the Authority since the station’s 1988 renovation.

Amtrak Route Profitability System Enhancements Project

KKO provided project direction for a nationwide team of Amtrak analysts and software developers, including a Price Waterhouse team, for a project to upgrade, expand and field deploy a cost reporting tool used by product line managers and analysts to evaluate profitability and performance of routes under their control. Amtrak has 23 product line managers responsible for more than 200 distinct trains (i.e. Vermonter, Sunset Limited, etc.). The “RPS” mainframe/micro tools combine operating costs and revenues with operating statistics (i.e. car-miles, crew hours) to yield accurate estimates of train-level revenues and expenses for the management of service levels and financial performance.

Chicago Transit Authority Commercialization Financial Study

KKO was part of a team that helped the Chicago Regional Transportation Authority (RTA) consider its options for improving the financial performance of its urban bus and rapid transit service board, the Chicago Transit Authority (CTA). The project developed and evaluated alternative, implementable, and achievable strategies to reduce costs and improve financial performance at the CTA. KKO was responsible for the financial analysis of alternatives using a model based on one which KKO developed for a similar assignment in Chicago in 1989.

Chicago Financial Planning Model

KKO developed a financial planning model for the Chicago RTA with Temple, Barker, & Sloane and DRI. This model allows RTA budget staff to predict how changes in economic and demographic forces will effect the financial and operating conditions for the Chicago Transit Authority, Metra, and Pace.

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