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Episode 047: Transit Unplugged Podcast - Jorge Cruz-Aedo
Jorge Cruz-Aedo – Corpus Christi Regional Transportation Authority

“I like to challenge our employees to keep moving forward and keep doing good things for the community.”

Before making his way into the transit industry, Jorge Cruz-Aedo spent 27 years in local government and a little bit of time in the private sector before joining the Corpus Christi Regional Transportation Authority (CCRTA). He spent 5 years as CCRTA’s CFO and is now the CEO. On this episode, Jorge discusses the autonomous vehicle project CCRTA is working on with Texas A&M, Corpus Christi, and the unique way he was able to finance their new 90,000 square foot facility. He also goes into the importance of culture and customer service within the CCRTA.

If you want to know more about CCRTA, check out their website.

Remember to check out transitunplugged.com to learn from top transit professionals and stay up to date to catch all the latest episodes.

Show Transcript

Paul Comfort : Welcome to Transit Unplugged. I'm your host Paul Comfort.

Today we travel to South Texas where we visit Jorge Cruz-Aedo, who is the chief executive officer of the Corpus Christi Regional Transportation Authority. I visited Jorge and his offices in downtown Corpus Christi - got to meet with the staff, actually taught them one of my classes, the Five Hidden Flaws of Most Major Transit Systems, which they seemed to enjoy, and got to tour the operations and spend some time with Jorge and found out that he just finished a celebrating his fifth year as CEO of the agency. He's got a good background in transportation and city management where he was an assistant city manager there for Corpus Christi.

The transit agency serves a large service area of 900 square miles. And I was impressed that they have an intermodal transportation facility right in their main office where Greyhound buses meet passengers there, and they've got an inside facility for the passengers to wait. Very nice how, as part of his culture change, he is making sure that they serve the inner-city transportation needs as well. He also tells us about a new pilot he's working on to bring an autonomous vehicle bus to a local college campus. All of that on this edition of Transit Unplugged.

Intro : What does it mean to be a successful public transit agency? What are you doing to lead the way? It's time to learn from the top transit professionals in North America. This is Transit Unplugged with your host Paul Comfort.

Paul Comfort : I'm Paul Comfort, your host of Transit Unplugged. And today I'm excited to be in Corpus Christi, Texas, to meet with Jorge Cruz-Aedo, who was the CEO of the Corpus Christi Regional Transportation Authority. Thanks so much for having us here today.

Jorge Cruz-Aedo : Paul, welcome to South Texas.

Paul Comfort : Yeah, this is great here. We're in a beautiful office he's got with a good look over the city and a big bridge back there that you told me it's going to be replaced soon.

Jorge Cruz-Aedo : We're going through a $1 billion big bridge replacement that will be completed in about two years.

Paul Comfort : Where does that go to?

Jorge Cruz-Aedo : It goes to San Patricio County, Rock Port, Aransas Pass, Port Aransas, and places further north.

Paul Comfort : So, a lot of people across North America, maybe aren't clear exactly where Corpus Christi is. Kind of position it for us where it's next to and stuff that people may have heard of.

Jorge Cruz-Aedo : Sure. We're located on the Gulf coast, the coastal bend, in south Texas. We are southeast of San Antonio, and southwest of Houston - to give you perspective. We're a very, strong, vibrant community. Heavy into petrochemicals and agriculture. We have the port of Corpus Christi, which is fourth or fifth in exports of crude and agricultural products. So, a very active port, a very community and an area that I'm glad to serve.

Paul Comfort : All right. Padre Island, is that part of your area?

Jorge Cruz-Aedo : To the east is the northern portions of Padre Island going south down to South Padre Island, close to Harlingen.

Paul Comfort : So, your transit agency itself, tell us about the service area, how many people, miles, whatever.

Jorge Cruz-Aedo : We have a service area of a little under 900 square miles, so we have a huge area that we serve, and we serve all of it. We do that with various modes. We have a population of around 400,000 in the area that we are servicing and have annual ridership of around 5.5 million rides per year. An average of around 17,000 rides on a given day.

Paul Comfort : Very good. I noticed here at your headquarters you have a nice integration with inter-city transportation as well as your bus service.

Jorge Cruz-Aedo : We have a true intermodal system. We have Valley Transit, which runs the local Greyhound service that comes into our facility here - allows those riders to be able to connect to our entire system in the Corpus Christi area. So, it's a great unity project that we were able to do, and our community has appreciated those efforts.

Paul Comfort : How long have you been CEO here?

Jorge Cruz-Aedo : I'll be a CEO, in a couple of days, five years for the RTA, and was recently blessed to be given a few more years on my contract. So, things are going well.

Paul Comfort : Congratulations.

Jorge Cruz-Aedo : Well, thank you. Things are going well. Our focus is about the customers, our riders, and most of them are rider dependent, and we stress the customer service with respect and dignity to our riders. They're the ones that need us. About a third of them, of the 5.5 use us to go to work. The other third use us to go to school. Yes. Even elementary school students ride our system. Middle School and our universities. And the other third use us for the general life functions that you need transportation. If we weren't in our community, those 5.5 million rides would not have access to transportation in this community. So, we value that to a great extent, because we want to ensure that we do it timely and that we get them to where they need to be.

Paul Comfort : Tell us about the modes of service that you operate here?

Jorge Cruz-Aedo : We're primarily a fixed route system. We do have paratransit, which is an ever-growing demand for that service. We also have a commuter service. We have-

Paul Comfort : A commuter bus?

Jorge Cruz-Aedo : Commuters. Yeah. We also have park and rides. We also have the vanpools, which are growing in our area. And a kind of a precursor, we are on the verge of implementing an autonomous vehicle schedule at the Texas A&M, Corpus Christi. So, we're quite excited about that. It's scheduled to be operational this fall during the start of the school year for Texas A&M, Corpus Christi.

Paul Comfort : Very nice. So, tell us a little about your story. How did you end up here as CEO? What's your background?

Jorge Cruz-Aedo : Well, I'm a degreed accountant, so I'm a numbers kind of guy. I spent 27 years in local government and rose to the position of assistant city manager here in Corpus Christi - retired from that and did a little bit of work in the private sector. I knew the previous CEO, and he asked if I could come and help him in the finance areas as his finance officer. I did that as a favor to a friend. I enjoyed the service of providing transportation to those in need and continue to try to do a good job. And several transitions later, after serving several times as interim CEO, I was given the opportunity to take over the position. We've enjoyed the five years of CEO and five years as the chief financial officer here at the RTA.

Paul Comfort : So you've been here ten years.

Jorge Cruz-Aedo : Yes, sir.

Paul Comfort : Yeah. That's great. Tell me about some of the things you're proud of that you've been able to accomplish over the last ten years?

Jorge Cruz-Aedo : We took over the agency when the community had begun to lose some confidence in their RTA. And that was because we had some employee situations that we shouldn't have had. We had some managerial issues we shouldn't have done, and we had a political situation that was not conducive to operating an efficient system.

Over the last five years, I'm very proud to say that we've worked with the board to build board relationships. We've cleaned up our house, so to speak, by establishing what the conduct is we want and expect from our employees. I tell my employees, if you do the right things every day, you can get faulted for the way you call me your hair, but they won't fault you for how you do your work. And we've been able to demonstrate that we're very transparent. That's a priority here. We do things the right way.

We recognize when things aren't perfect by taking quick action. They said we were a no-nonsense organization, and we are. We established the conduct that we want for our employees. We establish the benchmarks we want for our system. We look at the data to be sure that we are meeting the needs of the community and evaluating our employees against what they need to be doing. In other words, we make everyone accountable for their roles here and have those expectations, and we measure against that.

Five years ago, if the RTA was doing something, there were many questions about what we were doing. Today, the expectation is the RTA is rolling out something good that the community can experience. So, from being questioned for everything we were doing to being supported in everything we do, we've come a long way, and I'm very proud of that.

Paul Comfort : So, it sounds like, if I were to summarize, tell me if this is right - you focused on improving the culture of the agency, and then you worked on making it more transparent to the community? As you were able to improve that, while at the same time establishing the key performance metrics that you hold yourself accountable to as does the community to make sure your performance is also where it needs to be.

Jorge Cruz-Aedo : That's correct.

Paul Comfort : Now you're in a place to expand, maybe to try some new things.

Jorge Cruz-Aedo : We have the confidence now from the community and our board to begin to offer new innovative solutions to our mobility needs in this community.

Paul Comfort : That's great. So, tell me some about how you're structured. You mentioned the board a couple of times. You have a board and how are they appointed, those kinds of things. What's your governance structure?

Jorge Cruz-Aedo : We have an 11-member board. Five of those members are appointed by the city of Corpus Christi, our largest city. We have three members that are appointed by Nueces County, which is the largest county that we serve. Then we have two members that are appointed by the small mayors. Since we do go into San Patricio County a little bit, and we do have several smaller communities in Oasis County. The committee of mayors, as we call them, they have two seats that they can appoint. So that makes 10, and then from the board themselves, they get to elect a chair. It can be from within or it can be someone external. Then that chair, in essence, comprises the 11th member of this board. It has worked well.

They're not elected to the position - they're appointed. They have two-year terms. And there's a cap of six years of service before they are termed out, so to speak.

Paul Comfort : Do all those jurisdictions contribute financially to the agency?

Jorge Cruz-Aedo : Every entity, small cities, part of San Patricio County, Nueces County, all of Nueces, and the city of Corpus Christi are all contributing 5.5% sales tax to the RTA. That helps us operate the system. So, the sales tax and fares pay for the operation of the system.

We use our federal funding that we become eligible for through formula and or competitive grants for our capital acquisitions that we have. We have a, what I call a small urban system in Texas. We have very good equipment that we give our employees to provide the service. So, the two greatest assets I have is that equipment and those employees that are committed to doing a good job.

Paul Comfort : How many employees do you have?

Jorge Cruz-Aedo : We have 250 authorized positions. I wish I could fill all my operators. But I have 250 authorized, and we are around 210, 220, at any given point in time. And I have 150 employees through MV, our contractor of paratransit and some of our fixed route services. So, in total about 400 employees that we operate.

Paul Comfort : What's your annual operating budget?

Jorge Cruz-Aedo : We operated with around $40 million a year, and we're sustainable. We are able to look at new innovative programs to improve our fixed route services and other services. I'd like to challenge our employees to keep moving forward and keep doing good things for the community.

Paul Comfort : In Texas, do I understand this, right? That you have authority to go up to one full cent on sales tax to support paratransit.

Jorge Cruz-Aedo : We don't here in Corpus because there are several components that other entities can do. I know the city of Corpus Christi through their Seawall, through their crime prevention, through their economic development, have all the slots filled.

Paul Comfort : You make it work with a half-cent?

Jorge Cruz-Aedo : At a half-cent, we're doing good. I'm blessed that we have a dedicated funding source that many in this country do not have.

Paul Comfort : Even in Washington DC, where I used to work at WMATA, the largess of the community has to be determined every year.

Jorge Cruz-Aedo : I joke with some of my peers in the industry because, at 75 cents per ride, I'm one of the lowest fairs in the country.

Paul Comfort : That's your fare?

Jorge Cruz-Aedo : Yeah.

Paul Comfort : Wow. That is great. 75 cents a ride.

Jorge Cruz-Aedo : In fact, I kid with my board that when I was in Thailand visiting some family that I have there, it was cheaper to ride my system in Corpus than it was to ride buses or rail in Bangkok, Thailand.

Paul Comfort : I bet you. So, are your buses diesel fueled?

Jorge Cruz-Aedo : We have diversity. The majority of our fleet, including paratransit vehicles, is compressed natural gas. Texas compressed natural gas.

Paul Comfort : Fort Worth is big on that too. They told me.

Jorge Cruz-Aedo : It's saving us approximately a million and a half a year in our fuel costs. The remaining portion of the fleet around, 25% 30% is still diesel. We like that mix. We will probably introduce a mix of some electric over the next few years to help us have a diverse fleet so that, no matter what the situation is, we are able to provide service.

I say that because one of our primary functions as part of the city's emergency management plan. Since we are hurricane-prone, but not the just solely for that, we participate and have an emergency plan that calls on the RTA to provide emergency evacuations for the entire community. I said, it's 900 square miles we have a huge area to evacuate.

That's why it's important to have a fleet that's diversified. That's why it's important to have a fleet that is also diverse, not only in fuel but in size and capacity. 'Cause we will be called upon as we were during Harvey to implement the service. We take that very seriously because it's extremely important for the safety of our community that we work in tandem with our county and our cities to evacuate the community.

Paul Comfort : That's good. Yeah, that's very important. So, tell me about what you've got, so that's the scope of your service. Tell me about what's coming, like, what's in your capital budget, what new programs do you have come in and maybe a little bit about your new autonomous vehicle?

Jorge Cruz-Aedo : Well, we do have a program with autonomous vehicles that we're looking to implement in an uncontrolled environment. By that, I mean it's not a dedicated pathway, and we're going to have students and cars and traffic to work through. But the autonomous circulator is going to be on campus at Texas A&M, Corpus Christi as part of the Texas A&M system in the state of Texas. That circulator will be able to operate on campus throughout the year. Not only fall and spring but also the summer sessions. It'll operate eight hours a day on campus and provide the students with the autonomous vehicle capacity inside the campus.

In Texas, you don't wanna walk long stretches in the summertime because it gets pretty warm. And we're pretty tropical, so it's important for us to have air conditioning and obviously we'll have heat. So, that'd be a big plus for our ridership. And it's going to add about 80,000 riders to our systems. So, we're excited about that. But that's from a service perspective, and that'll be offered hopefully this fall in August of 2019.

We've already acquired the property, but we're looking to demolish and rebuild our porter station. That's the second largest facility we have in the transfer business here. It's on our west side, which is the area that has a large number of our riders. We've acquired a bank that we're going to be demolishing so that we can expand the transfer station. We're expanding it because the old design provides too many nooks and crannies that are not conducive to providing a safe environment, and it'll be an open side of line to, in essence, provide some additional safety measures for our customers. It also gets us off the public roads so that we can do our transfers in protected areas. We are on the verge of the beginning of the demolition of the bank. So, if anyone looks looking to acquire some safety deposit boxes or a safe, let us know. I happen to have a few. So, we will be doing that. That's about a $6 million project.

We are also working with our local community college, Del Mar. They're going to build a new campus on the south side of the community. Our south side has the highest density of population in the community. It has an untapped number of riders that we want to attract to the system. We've worked with them, they're dedicating the land, and we're going to be putting a substation on campus to help get the students to Del Mar, and also help us with attracting new riders in that area. There'll be two stations that make up the components, partnership with the college. They're not charging us for the land. We will be, in essence, building some new facilities up there that's-

Paul Comfort : Stretch the routes out there and all that?

Jorge Cruz-Aedo : Correct. Allow us to move further south where the density is. That's about a two and a half million-dollar project when all is said and done.

And then on ... I said on good repair, the less glamorous things. We need to look at our maintenance facility and make improvements to the pads we have out there. When we bought that facility about 20 years ago, it had the thickness of the aprons of six inches. For my transit-professional friends out there, you need at least eight, and we're having failures, so we need to go ahead and begin apron work out there, and that's probably about another million and a half or so that we're looking at. But you gotta keep what you got, and you gotta keep it in good working order. Our peak pool is about 57 buses, and I need to get them out and ready to go.

Paul Comfort : You have an annual replacement program for them?

Jorge Cruz-Aedo : We do have replacement programs. Our spare ratio is a little on the high side right now, but we're transitioning a few buses out and working on that.

Paul Comfort : I like, for me as a former CEO, I always had too many spares too. I always felt like it's better to be safe than sorry. You gotta meet pullout.

Jorge Cruz-Aedo : Yeah. Those are the projects that we have, and obviously the equipment on rotation. Again, I always want to give my employees the best equipment to work with, and I ask that they do the best job that they can with the customer focus. They're doing that. I would put my agency up in comparison to any other-

Paul Comfort : I met your staff this morning at your staff meeting. You've got a tremendous team who was supporting you. Your professional team.

Jorge Cruz-Aedo : They're committed, and we joke regularly. They say, these aren't jobs, these are lifestyles because you got to love what you do. If you love what you do, then you do it even better than if it was just an 8:00 to 5:00 job.

Paul Comfort : Yup. Tell me about the safety component of your system? Do you have your own road supervisors or police department, or do you work with the city? How does that work?

Jorge Cruz-Aedo : Good question.

Safety is number one concern whether it'd be for the customer or the employee. We do have our own road monitors that routinely are out there. We also have contracts with individual police officers to staff our needs. We have police officers in all our stations. We have police officers that rove our system. We have police officers that ride our system. And we have police officers that are available to be deployed within the day at any facilities.

So, we spend a lot on law enforcement. We have a great pool of police officers to pick from. Not only do we have the Corpus Christi Police Department, but we have the Oasis County Sheriff's Department. We have the school districts that we use. We use the constables here. We even use Texas Department of public safety officers to do the work. So, we use quite a bit, and we have a good pool that we can draw from.

So, we have individual contracts with the officers to provide safety for us. We're in the downtown area. So, we have the typical problems that people have in downtown. We do have some homeless situations and others, but I view that to be something that we need to work to be sure that we provide safety. Homeless and transit agencies, we provide safe zones for that. If you're homeless, what better place to be than at the RTA. Because we provide police protection, there are facilities here that they can use. And, so long as you provide them the services they need and do it in a respectful way, things tend to work out better than just try to keep them out.

Paul Comfort : I noticed here at your facility, I was here early this morning, and saw out back where you have your, what do you call that? Your bus lane?

Jorge Cruz-Aedo : Correct

Paul Comfort : Yeah. So, you had monitors there who were helping people. That's good. Do you have that ... I mean, is that a regular part of your program where somebody at these bigger hubs explaining to people how to use the system and things?

Jorge Cruz-Aedo : For example, we even run our police officers through customer service training, not through their normal law enforcement initiatives, but what we need in the areas of customer ... we train them on our routes. We train them on our schedules so that-

Paul Comfort : They can provide information.

Jorge Cruz-Aedo : They're not there just to harass people. They're there to help you and provide safety for you. That's, as I said, our focus is customer service. So, the whole organization is centered on providing the best customer service to whoever that rider is.

Paul Comfort : That's great. I'm hoping you're willing to talk about this one, 'cause I think it's so unique that other transit agencies can learn from you. About how you acquired this facility and how you leased out some of it. You built a little bit more if you'd be ready for the future. In the meantime, you've turned it into a revenue center. Can you tell us anything about that? I think that's very unique.

Jorge Cruz-Aedo : We built a 90,000 square foot facility. A building. An office building.

Paul Comfort : We're sitting in it right now.

Jorge Cruz-Aedo : It had a price tag of $34 million. To help finance that, we put together a package that included not only tax-exempt financing but taxable financing. In other words, when you get your interest payment from the RTA, that's a taxable amount that you gotta include in your income tax. Unlike many other tax cuts, where your dividends are not taxable. We did it with the intent of overbuilding the facility. People are going to say, my God, why did you overbuild? Well, that would give us an opportunity to lease portions of it out so that we could help offset some of our costs.

Paul Comfort : Tell them about what you guaranteed, how you guaranteed future revenue for it?

Jorge Cruz-Aedo : In Texas, you can't pledge sales tax. You can't commit sales tax to pay the debt.

Paul Comfort : That's your primary funding source.

Jorge Cruz-Aedo : That is about 85% of our funding. So, I took the other portion and not called it fare, but called it system revenue. All the systems that the ... all the monies I get from everything else. I pledge the system revenue to help repay the debt. That ended up being more than enough because I can even use my lease payments that I get as a forum to repay the debt.

Paul Comfort : Very creative. Only a mind of a CFO will figure that out like you did. It's very good.

Jorge Cruz-Aedo : We took it, and I've leased out about 49% of my building, and I leased it out within months of opening. If you know any commercial building, you know you always have vacancies.

We have a very nice facility. Public transportation is right outside the door. You can access it. City Hall is across the street. The county courthouse is two blocks over. The independent school district is two and a half blocks over. So, we're right smack in the middle of the downtown area. We took what we consider blighted property pieces, put them together, and through this transit development, we were able to build this 90,000 square foot facility.

Paul Comfort : This is where all your administrative staff is.

Jorge Cruz-Aedo : All the administrative operating departments are here. Our maintenance facility and the ops center are at another facility. But we operate it. We take about 51% of the building. I have 49% of the building leased out to tenants.

Paul Comfort : They're paying for the majority of your-

Jorge Cruz-Aedo : They, coincidentally pay for 51%.

Paul Comfort : That's awesome.

Jorge Cruz-Aedo : So, the more than half of my operating costs of this building is paid for by the tenants, and as our need for office space grows over time, then we will be able to take up more of the building. It was a program that we looked at not just for the short term, not just for five years. It's a 50-year program that by the 50th year we will likely be the primary users of this building.

Paul Comfort : I think that's just brilliant that you are planned far. Everybody knows construction costs only continue to go up. And when you have downtown property, it's hard to pull all that together as you go forward. So, getting all that done and pledging future leases to help pay for, that's good Jorge. Very unique. I haven't heard anybody else tell me a story like that, how they got their facilities, so that's great.

Jorge Cruz-Aedo : Yeah, so it has worked well and again, the facility is, as you can tell, a nice facility. They call it a class four building, which has kind of an upper-level building. My comments to our stakeholders were, when they built the White House, they didn't build the White House with the mentality if you wanted a little bit of thing, you built it with marble, you built it with amenities that would last forever. I took that approach here with this community to say ... My critics called it Taj Mahal, but now that we're in it and we're fully occupied, not one criticism from anyone on this building.

Paul Comfort : That's great. As we're wrapping up our time, let's talk a little bit about what the future holds. I mean, I've been very impressed with the state of Texas in their transit systems. I've visited Dallas and a lot of your neighbors, Fort Worth, you have Paul Ballard there, and over to Austin recently and San Antonio, now here. Tell us, do you all work together in an association, or how do you all work together as agencies?

Jorge Cruz-Aedo : Well, we do have in Texas, the Texas Transit Association and it's an association that is mostly made up of CEOs of the hundred or so transit authorities that are here. I mean, many of them are rural, and many of them have different transit needs than the urban. But I have learned a lot from my peers, DART, Houston Metro, and Trinity and Cap Metro and VIA.

Paul Comfort : Great systems.

Jorge Cruz-Aedo : Oh yeah. The CEOs there have shared much of their knowledge with me. I've only been a CEO for five years. I've only been within transit ten years. The knowledge they have voluntarily shared with me. The willingness to hear when I have a concern, and I say, "Hey, I'm dealing with this, how have you dealt with it?" To hear the honest and forward dialogue with my peers in Texas is tremendous. The network here is very strong, and I'm an officer of it and look forward to continuing with them.

Paul Comfort : Well, this is great, Jorge. I think what you've built together with your team here is a real example of a small urban system running at full capacity. You're kinda hitting on all eight cylinders. You've got the culture. I can tell, I spent a couple of hours with your staff this morning. They are engaged, motivated, intelligent people who are working hand-in-glove with you and the city to make this the optimal transit system you could have. I'm very excited for your system here, and the future that you've mapped out and look forward to continuing to watch you grow and improve and be a model for other cities this size across North America.

Jorge Cruz-Aedo : Paul, thank you. You're always welcomed here at Corpus Christi, Texas.

Paul Comfort : Thank you so much.

Outro : You've been listening to Transit Unplugged, powered by Trapeze Group. To stay up to date, subscribe on iTunes or Google Play, or join the conversation at transitunplugged.com. Thanks for listening.

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