TMC/RMC Joint Meeting

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1 MEETINGS OF THE Management Committees Transit Management Committee (TMC) MEETING DATE Wednesday, May 4, 2016 TMC/RMC Joint Meeting MEETING DATE Wednesday, May 4, 2016 Rail Management Committee (RMC) MEETING DATE Wednesday, May 4, 2016 TIME 11:00 a.m. TIME 11:15 a.m. TIME 11:45 a.m. LOCATION Valley Metro RPTA Lake Powell Conference Room 101 N. 1 st Avenue, 10 th Floor Phoenix VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

2 April 27, 2016 Transit Management Committee Wednesday, May 4, 2016 Lake Powell Conference Room 101 N. 1 st Avenue, 10 th Floor 11:00 a.m. Action Recommended 1. Public Comment 1. For information A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the TMC on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. Up to three minutes will be provided per speaker or a total of 15 minutes total for all speakers. 2. Minutes 2. For action Minutes from the April 6, 2016 TMC meeting are presented for approval. 3. Authorization to Issue a Request for Proposals (RFP) for Operation of East Valley, Northwest Valley and Regional Paratransit Services 3. For action Scott Smith, Interim Chief Executive Officer, will request that the TMC forward to the Board of Directors authorization for the Interim CEO to issue a federally compliant RFP for a total term of 10 years (five-year base contract plus five one-year renewal options) to operate East Valley, Northwest Valley and regional paratransit. 4. Contract Change Order with First Transit, Inc. for Fixed Route Bus Services 4. For action Scott Smith, Interim CEO, will introduce Ray Abraham, Chief Operations Officer, who will request that the TMC forward to the Board of Directors authorization for the Interim Chief Executive Officer (CEO) to execute a contract change order with First Transit, Inc. for three years only of the seven-year option in the amount of $187,500,000 with a contingency established at $9,500,000 for, but not limited to, additional revenue service, VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

3 enhanced service for special events, transit education and bus bridges or for any other unanticipated costs. 5. Valley Metro Fiscal Year 2017 (FY17) Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) 5. For action Scott Smith, Interim CEO, will introduce John McCormack, Chief Financial Officer, who will provide information regarding the FY17 Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21). 6. FY17-21 Short Range Transit Program 6. For information Scott Smith, Interim CEO, will introduce Wulf Grote, Director, Planning and Accessible Transit, will provide and update on the second iteration of the Short Range Transit Program. 7. Transit Life Cycle Program (TLCP) Update 7. For information Scott Smith, Interim CEO, will introduce Paul Hodgins, Manager, Revenue Generation and Financial Planning, who will present the draft 2016 Bus TLCP Update for information. 8. Future Agenda Items Request and Report on Current Events 8. For information and discussion Chair Fitzhugh will request future agenda items from members, and members may provide a report on current events. 9. Next Meeting 9. For information The next meeting of the TMC is scheduled for Wednesday, June 1, 2016 at 11:00 a.m. Qualified sign language interpreters are available with 72 hours notice. Materials in alternative formats (large print, audiocassette, or computer diskette) are available upon request. For further information, please call Valley Metro at or TTY at To attend this meeting via teleconference, contact the receptionist at for the dial-in-information. The supporting information for this agenda can be found on our web site at 2

4 DATE AGENDA ITEM 1 April 27, 2016 SUBJECT Public Comment PURPOSE A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the TMC on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim Chief Executive Officer ATTACHMENT None VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

5 DATE AGENDA ITEM 2 April 27, 2016 Summary Minutes Valley Metro RPTA Transit Management Committee Wednesday April 6, 2016 Lake Powell Conference Room 101 N. 1 st Avenue, 10 th Floor Phoenix, AZ 11:00 a.m. Members Present Kristen Taylor for David Fitzhugh, City of Avondale, Chair Ed Zuercher, City of Phoenix, Vice Chair Sean Banda, City of Buckeye Dan Cook, City of Chandler Jorge Gastelum for Dr. Spencer Isom, City of El Mirage Marc Skocypec, Town of Gilbert Brent Stoddard for Kevin Phelps, City of Glendale Brian Dalke, City of Goodyear Scott Butler for Chris Brady, City of Mesa Jeff Tyna, City of Peoria Madeline Clemann, City of Scottsdale David Kohlbeck, City of Surprise Steven Methvin, City of Tempe Members Not Present Sara Allred, ADOT City of Tolleson Maria Hyatt (standing in for Vice Chair Zuercher) called the meeting to order at 11:03 a.m. 1. Public Comment Mr. Crowley said I love that you have the current bus book, but on, what is it, the 24th of this month there's gonna be a new one. And what effort will there be to get it and distribute it, or will you be able to say, hey, we didn't put any of the bus books out, but that shows that that many people didn't use it. I've got your favorite map here, which is the bus routes. Over here we got Chandler and Tempe and Mesa and Guadalupe, and you see that there aren't a whole lot of lines there. And you go, well, why don't they have the buses going there. Because when I look at the bicycle map, see all those blue lines. Those are all bike routes. That means it's on a road painted. So it ain't open fields, bunny rabbits, and cactus. That's all our VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

6 metro area. So when I look at it, I go, Queen Creek, you're not even here. Gilbert, where's your buses. Chandler, is there a reason Ray Road doesn't have a bus on it and Chandler, is it that there are no people that's not a part of the system. Or is it that your citizenry or your electeds or yourselves none of you feel that that's a part of what you're supposed to be doing, which is maturate the metropolitan area to a functional bus system that, in my opinion, should be twenty-four hours and seven days a week, since on every one of those bike routes those people have been also paying the sales tax to get themselves a bus too. Now, I know that each of your communities has been reluctant other than Tempe and somewhat of Phoenix, but I really look at Mesa and go, boy, when it comes to the bus, what, you know, you've got that brand new Wrigleyville, can you get there by bus from Scottsdale or Tempe or Phoenix or off the rail. Well, there's, yeah, one there, but in actuality why isn't it that you can't transfer there at Tempe and ride the Rio Salado, because the bus doesn't go into Mesa on the Rio Salado. You're supposed to be a regional entity. When I look at parasite valley (Paradise Valley) and, yes, I did say parasite, and look at Lincoln and go, is the reason that we don't have a bus on there is what. Because if you look at Lincoln and Glendale Road they're the same thing and it runs all the way from the reservation to Luke Air Force Base. Now you can ride the bus to Luke, but you can't ride it from Scottsdale there. I need you to start improving the routing. I need you to start doing the grid. And I know that it takes money, so your communities need to come up with that. It's just the same as when you're paying for the rail operations. Take it out of your general funds. It's one of your jobs. 2. Minutes Minutes from the March 2, 2016 TMC meeting were presented for approval. IT WAS MOVED BY SCOTT BUTLER, SECONDED BY DAN COOK AND UNANIMOUSLY CARRIED TO APPROVE THE TMC MEETING MINUTES FROM MARCH 2, Consent Agenda The following items were presented on the consent agenda: A. Video Surveillance System Contract Award B. Intergovernmental Agreement with Maricopa Association of Governments (MAG) 2

7 on Regional Community Network (RCN) Public Comment Mr. Crowley said I love it, we got to upgrade surveillance equipment. Has there been any problems out there that the equipment that we already have, you know, is it not catching them. When I see the amounts that we pay for this stuff, I go, well, is there that much of a threat that with this contract I'm going why, you know, is our equipment not that good. Now when I have had problems on the rail that was supposedly filmed, so is it now you're actually going to put recording devices in operation at some of these facilities and are you gonna do it throughout the system so that it's being used for those who, what, oh, yeah, pay for it. So I see that, you know, the maintenance facility needs to be protected, but is the technology that far behind that what we've got ain't right. Thank you. IT WAS MOVED BY MADELINE CLEMANN, SECONDED BY DAVID KOHLBECK AND UNANIMOUSLY CARRIED TO APPROVE THE CONSENT AGENDA. 4. Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) Mr. Smith introduced John McCormack, Chief Financial Officer, who provided a presentation which included the following: FY17 Baseline Operations FY17 Strategic Plan Initiatives Valley Metro RPTA FY 17 Sources of Revenues Valley Metro RPTA Revenues Valley Metro RPTA FY17 Expenses Valley Metro RPTA Expenses Integrated Agency Budget Assumptions: Staffing Costs Integrated Agency FY17 Position Changes 5-Year Operating Assumptions Five-Year Operating Forecast: Revenues Five Year Operating Forecast: Expenditures 5-Year Capital Program Assumptions Five-Year Capital Program Revenues Five-Year Capital Program Expenditures Forecasted Reserve Requirements Budget Schedule Vice Chair Zuercher said John, is the reserve fund a subset of the fund balance? Is that $45.5 million total reserves contained in the 125.4? 3

8 Mr. McCormack said yes, it is. Vice Chair Zuercher said I mean, spread between bus and rail but. Mr. McCormack said the top part is really the fund requirement. Based on our policy that's the fund requirement. And what we're showing at the bottom is the fund projection what it actually is. Vice Chair Zuercher said Questions or comments from the committee? So this is not an action item; it's our information? Mr. McCormack said it's for information today. Vice Chair Zuercher said the burden is on cities now to get back to you with individual comments, questions, or issues by a week from tomorrow? Okay. Now when does it go to the Board? Mr. McCormack said it goes to the Board on the 21 st and then we would be bringing it back for adoption. Vice Chair Zuercher said the comments you get from us on the 14th, are you gonna have time to incorporate those into whatever you present to the Board on the 21st? Mr. McCormack said yes, we will. Mr. Smith said Mr. Chair, for example, we had comments from the RTAG group that were included in these things. That your staff came and gave comments from sort of a ground-up approach. Those were included in this. Now we may have to do what we did with you where we sent out a preliminary in the packet -- and then update it. That probably ends up having to do the same thing with the Board. That's okay. They'll have the final numbers. Vice Chair Zuercher said very good. All right. Seeing no other comment, thank you, John. 5. Proposed October 2016 Transit Service Changes Mr. Smith introduced Jorge Luna, Service Planning Manager who provided a presentation which included the following: Overview Proposed Changes Phoenix T2050 Improvements Proposed LINK Service Changes Ridership Before Central Mesa Extension Ridership After Central Mesa Extension 4

9 Vice Chair Zuercher said the point here is you're changing LINK because light rail has changed how people are riding? Mr. Luna said the performance, that is correct. Mr. Smith said now they're riding the bus. And it's, you know, once we open up CME, the LINK which was actually established to drive train ridership by providing, you know, quasi -- not really express service, but, you know, limited stop, those kind of things, actually we found in real practice had almost the opposite effect. The ridership on the local route which overlaid the LINK route actually went up. And the LINK route went down. So it was the opposite rider behavior that we would have expected, so we're adjusting to the realities of what rider behavior is. Other Trip/Frequency Changes Minor Route Modifications Next Steps This item was presented for information only. 6. Implementation of Regional Dial-a-Ride Service Mr. Smith introduced Ron Brooks, Accessible Transit Services Manager, who provided a presentation which included the following: Implementation Approach Start-Up Schedule (2 slides) This item was presented for information only. 7. Future Agenda Items Request and Report on Current Events None. With no further discussion the meeting adjourned at 11:45 a.m. 5

10 DATE AGENDA ITEM 3 April 27, 2016 SUBJECT Authorization to Issue a Request for Proposals (RFP) for Operation of East Valley, Northwest Valley and Regional Paratransit Services PURPOSE To request authorization for the Interim Chief Executive Officer (CEO) to issue a federally compliant RFP for a total term of 10 years (five-year base contract plus five one-year renewal options) to provide paratransit in the East Valley, in the Northwest Valley and for regional trips. BACKGROUND/DISCUSSION/CONSIDERATION In October 2010, the Valley Metro RPTA Board of Directors awarded a 10-year contract to Total Transit for operation of demand-response paratransit services in the Northwest Valley, and in January 2012, the RPTA Board of Directors awarded a two-year contract with three one-year options to Total Transit for operation of paratransit services in the East Valley. Although both contracts are with Total Transit, and although both contracts are for the same type of paratransit services, the two contracts have very different compensation approaches, performance standards, subcontracting requirements as well as other differences which have resulted in a number of operational and administrative challenges for Valley Metro and the contractor alike. In addition, demand for service is growing, and Valley Metro is implementing regional paratransit trips a change in service which will add an additional layer of complexity into the program. For all of these reasons, staff, in consultation with our member cities, determined that it is in the agency s best interest to consolidate all services under one unified contract. This approach will require an early termination of Total Transit s contract in the Northwest Valley. There is a clause in the contract allowing for early termination without penalty. In August 2015, staff advised Total Transit of the recommendation to terminate the Northwest Valley contract early and consolidate all paratransit services under one contract. Total Transit expressed no opposition to the early termination and expressed support for consolidation of the two current paratransit contracts, and is eligible to propose in response to the planned RFP. In addition to the foregoing, Valley Metro and member city transit staff have identified a number of improvements which will benefit customers, Valley Metro and its member agencies: More trip-sharing as a means of better managing the cost of service VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

11 A more diverse fleet which includes not only sedans and small vans but also vehicles which will allow for more trip-sharing Better scheduling and telecommunications technology which will support a variety of operational and administrative needs More detailed managerial, operational, maintenance, customer service and administrative requirements Performance standards which are better aligned with agency and member city goals Because of the size and complexity of Valley Metro s paratransit program, and given the importance of these services to our member cities, Valley Metro established a Paratransit Procurement Working Group (PPWG) which comprised key staff from Valley Metro and participants from each of our member jurisdictions. The PPWG met three separate times to discuss ideas for strengthening the contract and to refine the Scope of Work. With participation of the PPWG, Valley Metro staff conducted a formal industry review of the draft Scope of Work and other key contractual terms and conditions using the Request for Expressions of Interest (RFEOI) method. This approach gave private firms, who might be interested in proposing on the RFP, the opportunity to learn more about the project, to review and comment on the draft Scope of Work and other contractual terms and conditions, and to advise Valley Metro on the steps that will ensure the RFP is comprehensive and that it is geared to ensure strong competition. The RFEOI was issued to approximately 100 firms and individuals in February. Valley Metro and the PPWG conducted formal face-to-face meetings with seven firms. Input from firms who responded to the RFEOI process has been incorporated into the RFP which staff now wishes to issue. The RFP is scheduled for release in late May 2016 with a contract award recommendation anticipated for Board approval in November The start date for the new contract will be July 1, COST AND BUDGET Contract obligations will be incorporated into the FY18 Valley Metro Operating and Capital Budget and the Five-Year Operating Forecast and Capital Program. At this time the ten-year cost and budget is an order of magnitude estimate of $239.6 million. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 1: Increase customer focus o Tactic A: Improve customer satisfaction. o Tactic C: Enhance customer service to member cities. o Tactic E: Enhance service and facilities for seniors and people with disabilities. 2

12 Goal 2: Advance performance-based operations o Tactic A: Operate an effective, reliable, high performing transit system. COMMITTEE PROCESS RTAG: April 20, 2016 for information TMC: May 4, 2016 for action Board: May 19, 2016 for action RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors authorization for the Interim CEO to issue a federally compliant RFP for a total term of ten years (five-year base contract plus five one-year renewal options) to operate East Valley, Northwest Valley and regional paratransit. CONTACT Wulf Grote Director, Planning and Accessible Transit ATTACHMENT None 3

13 DATE AGENDA ITEM 4 April 27, 2016 SUBJECT Contract Change Order with First Transit, Inc. for Fixed Route Bus Services PURPOSE To request authorization for the Interim Chief Executive Officer (CEO) to execute a contract change order with First Transit, Inc. for three years of the seven-year option in the amount of $187,500,000 with a contingency established at $9,500,000 for, but not limited to, additional revenue service, enhanced service for special events, transit education and bus bridges or for any other unanticipated costs. BACKGROUND/DISCUSSION/CONSIDERATION In January 2013 the Board authorized the CEO to execute a contract with First Transit, Incorporated for fixed-route bus operations and maintenance that unified Valley Metro and City of Tempe services under a single contract. The contract was awarded for an initial three-year base term with an option for an additional seven years. During the initial three-year base term, Valley Metro has worked closely with First Transit to improve on-time performance, customer satisfaction, and overall quality of service. First Transit has committed to increase the number of operators, road/radio dispatch supervisors and maintenance technicians to achieve a higher quality of service. Contract language has been revised, as part of the change order, which reflects updated performance indicators and associated liquidated damages. At the inception of the contract with First Transit on July 1, 2013, the annual revenue miles were 10,652,000. At the beginning of the change order, July 1, 2016, the estimated annual revenue miles will be 11,006,000. The costs associated with the annual increase of 354,000 revenue miles is included in the change order amount. Changes to service costs over the three-year change order are included in the following table. Original Proposed Annual Costs (Millions) FY 17 FY 18 FY 19 Total $53.7 $55.4 $56.8 $165.9 Cost per Mile (CPM) $5.04 $5.20 $5.33 Revised Annual Costs (Millions) $57.0 $59.3 $61.1 $177.4 Revised Cost per Mile (CPM) $5.35 $5.57 $5.74 Increased Costs (Millions) $3.3 $3.9 $4.3 $11.5 VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

14 Increased CPM $0.31 $0.37 $0.41 % Increase vs. Original 6% 7% 8% 7% Valley Metro prepares a five-year mid-life engine rebuild program to maintain the bus fleet in a state of good repair. The program focuses on buses with a 12-year life expectancy (heavy duty buses) whereas upon reaching either six years or 300,000 miles the engines are rebuilt. First Transit subcontracts the rebuilding of these engines to local qualified maintenance vendors and passes through these costs to Valley Metro without any markup. The contract with First Transit states that mid-life engine rebuild costs are the responsibility of Valley Metro. These costs are included in the proposed change order amount. COST AND BUDGET Cost for the first year of the three-year option period is estimated at $60.0 million and is included in the RPTA Proposed FY17 Operating and Capital Budget. Contract obligations beyond FY17 are incorporated into the Proposed RPTA Five-Year Operating Forecast and Capital Program (FY2017 thru FY2021). A contract contingency of $9.5 million is also requested for unanticipated costs. Below are the contractor costs for each year of the three-year option period and the proposed change order amount: Three-year Option Proposed Change Order Amount (Millions) FY 17 FY 18 FY 19 Total Annual Proposed Costs $57.0 $59.3 $61.1 $177.4 Increase in Revenue Miles $1.7 $1.7 $1.9 $5.3 Total Revenue Service Costs $58.7 $61.0 $ Engine & Transmission Rebuilds $1.3 $1.4 $2.1 $4.8 Total Change Order $60.0 $62.4 $65.1 $187.5 STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 1: Increase Customer Focus o Tactic A: Improve Customer Satisfaction Goal 2: Advance performance based operation o Tactic A: Operate an effective, reliable, high performing transit system 2

15 COMMITTEE PROCESS RTAG: April 19, 2016 for information TMC: May 4, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors authorization for the Interim Chief Executive Officer (CEO) to execute a contract change order with First Transit, Inc. for three years of the seven-year option in the amount of $187,500,000 with a contingency established at $9,500,000 for, but not limited to, additional revenue service, enhanced service for special events, transit education and bus bridges or for any other unanticipated costs. CONTACT Ray Abraham Chief Operations Officer ATTACHMENT None 3

16 4/27/2016 East Valley Fixed Route Service Change Order - First Transit May 2016 Purpose Execute a contract change order with First Transit, Inc. for 3 years of the seven-year option in the amount of $187,500,000. A contingency established at $9,500,000 for, but not limited to, additional revenue service, enhanced service for special events, transit education and bus bridges or for any other unanticipated costs. 2 1

17 4/27/2016 Included in Change Order Increase in revenue miles operated Engine & Transmission Mid-Life Overhaul Expenses Contract Language Changes Revised Contract Terms 3 Year Extension 4 Year Option 3 Contract Language Changes Added work stoppage clause which requires contractor to provide Saturday service levels within 5 days after work stoppage has occurred. Revised Performance Standards Each performance standard will be measured monthly and contractor s overall performance must meet minimum service quality standards 4 2

18 4/27/2016 Contract Language Changes Continued Revised Liquidated Damage clauses which focus on most critical performance deficiencies Deferred maintenance Preventative Maintenance Inspections Missed trips due to manpower issues Early departures 5 Contractor Service Costs FY 17 FY 18 FY 19 Total Original Proposed Annual Costs (Millions) $53.7 $55.4 $56.8 $165.9 Cost per Mile (CPM) $5.04 $5.20 $5.33 Revised Annual Costs (Millions) $57.0 $59.3 $61.1 $177.4 Cost per Mile (CPM) $5.35 $5.57 $5.74 Increased Costs (Millions) $3.3 $3.9 $4.3 $11.5 Increased CPM $0.31 $0.37 $0.41 % Increase vs. Original 6% 7% 8% 7% 6 3

19 4/27/2016 Proposed Change Order Amount (Millions) FY 17 FY 18 FY 19 Total Annual Proposed Costs $57.0 $59.3 $61.1 $177.4 Increase in Revenue Miles $1.7 $1.7 $1.9 $5.3 Total Revenue Service Costs $58.7 $61.0 $ Engine & Transmission Rebuilds $1.3 $1.4 $2.1 $4.8 Total Change Order $60.0 $62.4 $65.1 $ Recommendation Staff recommends that the TMC forward to the Board of Directors authorization for the Interim CEO to execute a contract change order with First Transit, Inc. for three years of the seven-year option in the amount of $187,500,000 with a contingency established at $9,500,000 for, but not limited to, additional revenue service, enhanced service for special events, transit education and bus bridges or for any other unanticipated costs. 8 4

20 DATE AGENDA ITEM 5 April 27, 2016 SUBJECT Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) PURPOSE To request Board approval of the FY17 Budget and Five-Year Operating Forecast Capital Program (FY17 thru FY21). Approval of the budget provides funding for Boardapproved TLCP projects and allows RPTA to implement capital and operating projects approved by voters in Proposition 400. Arizona State statutes require annual Board adoption of the budget. BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Regional Public Transportation Authority (RPTA) FY17 combined operating and capital budget (the budget) is $344.3 million (M) and includes $141.2M in projects funded with Proposition 400 Public Transportation Fund (PTF) revenues. Of the $141.2M PTF revenues, $80.2M is for bus operating and bus capital and $61.0M is for light rail/high capacity transit capital. The preliminary FY17 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards, reserves and bond proceeds. The budget was developed in compliance with Board of Directors adopted budget, financial and Transit Life Cycle Program (TLCP) policies. The annual budget is prepared on an accrual basis and adopted by the Board of Directors each fiscal year. The legal level of budgetary control is the total annual appropriated budget. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. The total operating budget of $166.4M represents a $5.6M (3%) increase from the previous year s operating budget of $160.9M. The total capital budget of $177.8M represents a $51.8M (41%) increase from the previous year s capital budget of $126.0M. Details and explanations of the major budget changes are discussed in the attached Budget Analysis and Overview document. With the agency integration, the RPTA and Valley Metro Rail (VMR) budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. Salary and overhead charges to bus and rail projects are based on actual time worked on each project. For FY17 there are VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

21 310 employees budgeted in the integrated agency, with 131 FTE s budgeted to RPTA activities and 179 budgeted to VMR activities. Compensation budget based on 2.5% increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 2: Advance performance based operation o Tactic E: Maintain strong fiscal controls to support Valley Metro s long-term sustainability. COMMITTEE PROCESS Preliminary Budget Review: Financial Working Group: February 26, 2016 for information RTAG: March 16, 2016 for information TMC: April 6, 2016 for information Audit and Finance Subcommittee: April 14, 2016 for information Board of Directors: April 21, 2016 for information Proposed Budget Adoption: TMC: May 4, 2016 for action Audit and Finance Subcommittee: May 12, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION It is recommended that the TMC forward to the Board of Directors approval of the Valley Metro Proposed Fiscal Year 2017 Budget (July 1, 2016 thru June 30, 2017) and acceptance of the Five-Year Operating Forecast Capital Program (FY 2017 thru 2021). CONTACT John P. McCormack Chief Financial Officer ATTACHMENT Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) Executive Summary 2

22 4/28/2016 Valley Metro RPTA FY17 Budget Overview May FY17 Baseline Operations Passengers Revenue miles Operating Costs Fare Revenues Fixed Route Bus FY16 (Forecast) 17,263,000 11,403,000 $72,604,000 $13,265,000 FY17 17,902,000 12,002,000 $75,561,000 $13,580,000 Change 4% 5% 4% 2% Baseline Trips Trips - Contingency Operating Costs Fare Revenues Paratransit FY16 (Forecast) 487,000 $14,103,000 $1,727,000 FY17 522,000 10,440 $15,580,000 $1,784,000 Change 7% 2% 10% 3% Passengers Revenue miles Operating Costs Fare Revenues VanPool FY16 (Budget) 1,136,000 6,108,000 $1,045,000 $1,148,000 FY17 1,192,000 6,414,000 $967,000 $1,069,000 Change 5% 5% -7% -7% Valley Metro RPTA operated services 2 1

23 4/28/2016 Valley Metro RPTA Revenues Sources of Funds $millions Funding Sources FY17 FY16 Change $ Change % Public Transportation Funds $141.2 $133.9 $7.3 5% Transit Service Agreements $30.9 $30.2 $0.7 2% Federal Grants $39.8 $33.6 $6.1 18% METRO Rail Reimbursement $17.1 $16.9 $0.2 1% Fixed Route Fare Revenues $15.7 $16.3 -$0.6-4% AZ Lottery Proceeds $11.3 $11.3 $0.0 0% Regional Area Road Funds $4.9 $4.8 $0.1 2% Other Revenues $3.6 $2.0 $1.6 77% Bond Proceeds $61.3 $0.0 $61.3 Carry forwards and Reserves $18.7 $38.0 -$ % Total $344.3 $286.9 $ % 5 Valley Metro RPTA Expenses Uses of Funds $millions Uses of Funds FY17 FY16 Change $ Change % PTF Pass-thru Disbursements $72.4 $69.5 $2.8 4% Transit service contracts & fuel % Capital % RPTA & METRO Personnel Costs % Bond Principal & Interest % Contractual Agreements % AZ Lottery Disbursements % PTF Bond Pass-thru Disbursements % Other Costs % Carry forwards to Reserves Total $344.3 $286.9 $ % 7 2

24 4/28/2016 Valley Metro RPTA FIVE YEAR PLAN OVERVIEW FY 2017 THROUGH FY Five Year Operating & Capital Program FY Operating Revenues Total Revenues $ 1,192.5 Less: Debt Service Bus & Rail (158.0) Less: Rail Capital Funding (268.7) Net Operating Revenues $ $millions Operating Expenses $ Surplus Operating Revenues vs. Expenses $ 23.8 Capital Revenues Federal $ PTF 67.6 Other 4.5 Total Capital Revenues $ Capital Expenses Fleet $ Other 29.7 Total Capital Expenses $

25 4/28/2016 Forecasted Reserve Requirements Proposed FY17-21 Five-Year Operating and Capital Forecast $ in Millions RESERVE FUND FY17 FY18 FY19 FY20 FY21 General Fund Operating Reserve $23.4 $23.7 $24.4 $25.2 $26.0 Capital Reserve Fund $3.6 $3.0 $1.6 $2.5 $1.5 Working Capital Reserve Fund $14.2 $5.9 $7.8 $5.8 $10.5 Vanpool Reserve Fund $3.4 $3.5 $3.7 $3.9 $4.1 Emergency Reserve Fund $1.0 $1.0 $1.0 $1.0 $1.0 Total Reserves (July 1) $45.5 $37.1 $38.5 $38.4 $43.1 Forecasted Fund Balance Bus Fund Balance $86.0 $66.3 $51.8 $48.3 $41.4 Rail Fund Balance $39.4 $57.8 $59.3 $53.4 $63.0 Total Forecasted Fund Balance (July 1) $125.4 $124.1 $111.1 $101.7 $ Budget Schedule FY17 Nov 19 FY17 Agency Budget Initiatives presented to Boards for information Feb 18 Board approves service changes effective April 2016 Feb 26 Mar 1 Apr 6 Apr 14 Apr 14 Apr 21 May 19 Preliminary FY17 Budget presented to Fin. Working Group Executive Summary & 5 year Plan posted to website Draft Budget delivered to TMC/RMC/AFS Member City Comments due Budget presented for information to AFS Budget presented to Board of Directors for information Board Meeting for Budget Adoption 20 4

26 4/26/2016 FY17 PRELIMINARY ANNUAL OPERATING AND CAPITAL BUDGET Valley Metro Regional Public Transportation Authority (RPTA) provides public transportation services for Maricopa County located in the metro Phoenix, Arizona. The FY17 Preliminary Budget covers the 12-month period between July 1, 2016 and June 30, Services include fixed route bus, paratransit, Dial-a-Ride, vanpool, regional planning, marketing, customer service, alternative transportation, trip reduction and fiscal management of regional Public Transportation Funds (PTF). FY17 Sources of Funds Total sources of funds for FY17 are $344.3M, an increase of $57.4M or 20% from FY16. For FY17, PTF sales tax revenues are increasing by $7.3M or 5% above last year. Federal grant revenues are increasing by $6.1M (18%) primarily due an increase in 5307 funding used to purchase bus fleet. It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital projects in the spring of FY17 FY16 Valley Metro RPTA Sources of Funds FY17 vs FY16 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 Public Transportation Funds Transit Service Agreements Federal Grants METRO Rail Reimbursement Fixed Route Fare Revenues AZ Lottery Proceeds Regional Area Road Funds Other Revenues Bond Proceeds Carry forwards and Reserves RPTA FY17 Preliminary Budget Executive Summary Valley Metro 1

27 FY17 Uses of Funds Total uses of funds for FY17 are $344.3M, an increase of $57.4M or 20% from FY16. PTF Pass-thru Disbursements are increasing by $2.8M due to increased light rail construction and purchases of regional bus fleet. Transit service contracts and fuel are increasing by $5.5M or 6% primarily due to increases in contract rates and paratransit ridership. Capital expenditures are up $11.0M primarily due to regional fleet additions and land acquisition. PTF Bond Passthru Disbursements are increasing by $18.1M due to increased light rail construction. In FY17, carry forwards to reserves include $18.4M in capital reserve increases. FY17 FY16 Valley Metro RPTA Uses of Funds FY17 vs FY16 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 PTF Pass thru Disbursements Transit service contracts & fuel Capital RPTA & METRO Personnel Costs Bond Principal & Interest Contractual Agreements AZ Lottery Disbursements PTF Bond Pass thru Disbursements Other Costs Carry forwards to Reserves RPTA FY17 Preliminary Budget Executive Summary Valley Metro 2

28 FY17 Uses of Funds Comparisons of Services Provided Valley Metro RPTA s primary activities include passenger services, regional services and capital funding. The table below depicts changes in the FY17 plan versus FY16. FY 17 FY 16 Valley Metro RPTA Uses of Funds FY17 vs FY16 $0.0 $20.0 $40.0 $60.0 $80.0 $ Passenger Services Fixed Route Bus Operations Paratransit Operations ADA Lead Agency Disbursements Regional Vanpool Service + Regional Transit Services Marketing and Outreach Call Center ADA Compliance Rideshare and Trip Reduction Service and Capital Planning + Capital Activities Bus Equipment Paratransit Lead Agency Capital Vanpool Fleet Light Rail Lead Agency Capital Facilities and equipment + Fiscal & Administrative Services Valley Metro Rail Staffing Arizona Lottery Fund Disbursements Debt Service Cash Reserves Carried Forward Valley Metro Administration FY17 Budget Baseline Service Assumptions Fixed Route Bus Services East and West Valley routes operated by Valley Metro will increase revenue miles vs. FY16 service levels; fleet of 279 units to deliver 12.0 million vehicle revenue miles serving 17.9 million passenger trips in the coming year. Bus service includes a combination of local, express, circulator, and rural route service. Dial-a-Ride and Paratransit Services East and West Valley demand response ADA and non-ada services operated by Valley Metro will continue to serve portions of Maricopa County and the cities of El Mirage, Peoria, Sun City, Surprise and Youngtown in the West Valley and Chandler, Gilbert, Mesa, Scottsdale and Tempe in the East Valley. RPTA FY17 Preliminary Budget Executive Summary Valley Metro 3

29 New for FY17 is seamless Regional ADA Dial-a-Ride service enabling qualified passengers to cross municipal boundaries without transfers, estimated at 47,000 trips. For eligible ADA passengers, level of service is based on passenger reservation demand within service areas and hours of operation covered by fixed route bus routes. For non-ada passengers, service levels are set by member cities. Services are provided on a shared-ride basis by a mixed fleet comprised of taxi cabs, vans and accessible vehicles; estimated at 522,000 annual passenger trips. Vanpool Services Service levels are anticipated to increase over FY16 with 440 vehicles delivering 1.2 million passenger trips. Regional Call Center and ADA Compliance Center Customer Service levels anticipated to remain similar to FY16 for fixed route bus and light rail. ADA paratransit eligibility certification levels are anticipated to rise to 5,550 as a result of increasing numbers of seniors, persons with disabilities applying for service and as current customers go through eligibility recertification. Travel training will continue to be provided for individuals with disabilities who wish to take advantage of Valley Metro s expanding light rail and bus network. Capital Procurement 101 standard bus replacements (81 units Phoenix, 8 units Scottsdale, 12 units RPTA) and 6 circulator replacements for RPTA 21 expansion buses (8 RPTA for Scottsdale Rd Service, 13 for RPTA) and 7 expansion circulators for RPTA 25 lead agency paratransit fleet vehicles for Phoenix 67 vanpool replacement units $6.7M in park-and-rides, bus stop amenities and facilities $3.7M in vehicle communication systems, camera bus upgrade and fare collection system upgrades 48 mid-life rebuilds of engines and transmissions RPTA FY17 Preliminary Budget Executive Summary Valley Metro 4

30 FY17 Goals and Initiatives In January 2015, the Valley Metro RPTA and Valley Metro Rail Boards adopted the Valley Metro Strategic Plan for FY16 through FY20. The Strategic Plan provides clear definition of the purpose of the organization and establishes realistic goals and objectives for a five-year period. This plan ensures the most effective use of the organization s resources by focusing those resources on key priorities. Below are the five, overarching goals identified in the Strategic Plan: 1. Increase customer focus 2. Advance performance based operation 3. Grow transit ridership 4. Focus on economic development, regional competitiveness and financial resources 5. Advance the value of transit With the initiation of the FY17 budget process, staff has developed a number of initiatives that align with the Strategic Plan and will be incorporated into the FY17 budget, as summarized below. 1. Increase Customer Focus: FY17 Initiatives Valley Metro FY17 Investment $ Thousands RPTA Investment Total Investment Improve Customer Satisfaction Integration of greater, more effective technology, improving passenger information systems with real time data, such as the website, facility signage and a Ridekick mobile application, and implementation of an enhanced fare media solution, including smart cards and mobile ticketing. Develop smart card fare program/mobile ticketing $ $ Renovate website & mobile site $ $ Enhance services & facilities for seniors & people with disabilities. Develop a more seamless, cost-effective ADA Dial-a-Ride network with cities as partners $ 2,500.0 $ 2,500.0 RPTA FY17 Preliminary Budget Executive Summary Valley Metro 5

31 2. Advance Performance Based Operation: FY17 Initiatives Valley Metro FY17 Investment $ Thousands RPTA Investment Total Investment Operate an effective, reliable, high performing transit system. Develop an asset management plan for Valley Metro in conjunction with member agencies $ 25.0 $ Maintain a culture to recruit and retain a qualified and diverse workforce. Develop a program to recruit and retain a qualified and diverse workforce. Consultant engagement to for comprehensive training assessment and new employee orientation programs $ 20.0 $ 40.0 Maintain strong fiscal controls to support Valley Metro s long-term sustainability. 3. Grow Transit Ridership: FY17 Initiatives Establishing Internal Audit Department with dual reporting responsibility to the Board of Directors and VM Executive Office $ 94.5 $ RPTA Investment Total Investment Communicate availability, attractiveness and safety of transit service Conduct discretionary ridership campaigns to continue to attract riders $ $ Focus on Economic Development, Regional Competitiveness and Financial Resources: FY17 Initiatives RPTA Investment Total Investment Work with local communities to leverage transit oriented development (TOD) to increase investment in transit Research and monitor and report regional trends regarding TOD implementation and successes - Support to TOD working group and PNR utilization study: $100,000 $ $ Pursue all available funding opportunities for transit projects and services Aggressively pursue federal transit funding opportunities at the regional level - Conducting region-wide ITS study for federal funds: $100,000 $ $ Advance the Value of Transit: FY17 Initiatives RPTA Investment Total Investment Develop and implement a communications plan to inform and educate the public on the value of transit Continue media campaign to raise greater awareness of the value of transit $ 63.0 $ RPTA FY17 Preliminary Budget Executive Summary Valley Metro 6

32 Agency Staff Overview Valley Metro RPTA and Valley Metro Rail budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. For FY17, there are 310 employees budgeted in the integrated agency; 131 FTE s are budgeted to RPTA activities; 179 to VMR activities. Staffing levels are reviewed on an annual basis with zero-base analysis of level of effort requirements to fulfill work requirements in the five-year period commencing with the beginning of the new fiscal year. Salary and fringe benefit compensation levels are measured against comparable regional agencies, member cities and peer transit agencies located in the western U.S. FY17 Compensation and Fringe Benefit Assumptions Total compensation budget is based on a 2.5% increase. For staff salary changes, merit increases are based on employee performance. Division level control is in place to contain total salary and fringe costs within budget. Agency health care costs will increase. Program design adjustments are in place to hold total agency fringe benefit cost increases to within 3% of FY16 levels. Staffing cost analysis $ million FY 17 FY 16 change pct change Salaries % Fringe Benefits % Total Salary and Fringe Benefits % Analysis of changes Salary Fringe Total Base Compensation FY Base increase Position Changes New Base Compensation FY Change FY17 Preliminary Budget vs. FY16 Adopted Budget 0.9 $ million Five new agency positions are planned to improve agency internal controls and strengthen fixed route bus and accessible transit contractor performance, as noted below. Title Division Scope of Work Manager, Internal Audit Chief Executive Office Agency Internal Controls with primary reporting to Board Internal Audit Specialist Chief Executive Office Internal Control testing and compliance Program Representative Planning & Accessible Transit Support East Valley, West Valley, and regional paratransit Scheduler Operations and Maintenance RPTA Fixed Route Bus schedule analysis and management Program Coordinator Operations and Maintenance RPTA Fixed Route Bus contractor performance management RPTA FY17 Preliminary Budget Executive Summary Valley Metro 7

33 FY17 Preliminary Budget Financial Summary In the table below, detailed revenues and expenses are shown with comparisons to the prior year s preliminary and revised budgets. Amounts of increase or (decrease) are shown from the preliminary budget. The Note column (on the far right side) indicates reference to explanations which are provided in the following table. Valley Metro Regional Public Transportation Authority FY17 Prelim Operating & Capital Budget Comparison to FY16 Adopted Budget (In thousands) Sources of funds Revenues: Public transportation funds (PTF) 141,162 FY17 FY16 FY16 Amount Percent*** Prelim Adopted Revised Increase/ Increase/ Budget Budget Budget Decrease (Decrease) Note $ $ 133,866 $ 132,121 $ 7,296 5% (1) Transit service agreements 30,868 30,181 29, % Federal grants 39,773 33,644 18,114 6,129 18% (2) VMR staff & administration reimbursement 17,137 16,889 16, % (3) Regional area road funds (RARF) 4,864 4,782 4, % Interest & other revenues 3,020 1,377 3,911 1, % (4) Local participation % State & local grants (189) -42% Fixed Route Fare Revenues 15,664 16,265 16,347 (601) -4% (5) AZ Lottery Proceeds 11,250 11,250 11,250-0% Total revenues 264, , ,758 15,393 6% Bond proceeds 61, , % (6) Carryforwards & reserves 18,705 37,986 33,768 (19,281) -51% (7) Total revenues & other sources of funds 344, , ,526 57,369 20% Uses of funds by category Expenses: Lead agency PTF disbursements $ 72,365 $ 69,532 $ 91,127 $ 2,833 4% (8) Transit service contracts and fuel 94,622 89,150 91,751 5,472 6% (9) Capital outlay 36,858 25,882 7,783 10,976 42% (10) Salary & fringe benefits 27,231 26,342 26, % (11) Bond principal & interest expense 25,433 24,235 24,235 1,198 5% (12) Consultants & Maintenance contracts 3,771 3,992 3,754 (221) -6% Contingency 1,946 1,668 1, % (13) Rent & facility costs 4,988 5,063 5,063 (75) -1% Advertising (2) 0% Transit book, outreach mat. & online serv % Insurance & risk management (61) -23% Safety & security % Lead agency RARF disbursements % Other administrative costs 1,915 2,432 2,440 (517) -21% AZ lottery Disbursements 11,200 11,200 11,200-0% Lead agency bond disbursement 43,098 25,000-18,098 72% (14) Total expenses 325, , ,176 39,015 14% Carryforwards & contributions to reserves 18, , % (15) Total expenses & other uses of funds $ 344,257 $ 286,888 $ 267,526 $ 57,369 20% Operating Budget $ 166,417 $ 160,891 $ 163,020 $ 5, % Capital Budget 177, , ,496 51, % Total Operating & Capital Budget $ 344,257 $ 286,888 $ 267,526 $ 57,369 *** Percentage change is compared to the FY16 Adopted Budget RPTA FY17 Preliminary Budget Executive Summary Valley Metro 8

34 Sources of Funds Note 1 Explanation Public Transportation Funds from the Maricopa County Transportation Excise Tax are forecasted to grow by 5%. Forecast is provided by ADOT. In FY17 the AZ Department of Revenue assessment charge is estimated at $900K, which is a reduction to PTF revenue forecasted by ADOT. Adequate reserves are in place should collections fall short of ADOT forecast projections Federal Grants overall are up by $6.1M from $33.7M to $39.8M. Primary cause for change is an increase in 5307 funding used to purchase bus fleet. Planned bus fleet purchases for FY16 were rescheduled to arrive in FY17. Contributions from Valley Metro Rail for staff are $0.2M higher in FY 17 primarily due to VMR staff additions to maintain the 26 mile rail service for the full 12 months. In FY16, VMR operated partial year service for the Central Mesa and Northwest Extensions. Added 2 FTEs internal audit staff. Interest and other revenues are expected to increase $1.6M over FY16. Revenues programmed include alternative fuel tax credit ($1.2M), increases in proceeds form disposing revenue vehicles ($0.2M), and interest earnings ($0.2M). Fixed route farebox revenue is forecasted to be approximately 4% less than what was budgeted in FY16. Fare revenue decrease is due to ridership losses attributed to low gas prices and transfers from bus to rail. It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital projects in the spring of Consumption of carryforwards & reserves are down by $19.3M due to decreased amount of sales tax fund balance spending needed in FY17 for LRT capital construction activity RPTA FY17 Preliminary Budget Executive Summary Valley Metro 9

35 Uses of Funds by Category Note 8 Explanation Lead Agency Disbursements are Public Transportation Funding (PTF) amounts to Member Agencies and VMR for eligible operating and capital transit expenditures. Increase in PTF Lead Agency Disbursements of $2.8M is primarily due to an increase in project development and construction activity for light rail projects and lead agency disbursements for regional bus fleet Fixed route bus service levels operated by Valley Metro have increased with approximately 138,000 additional service miles added. Transit service contracts increases primarily reflect contractual rate increases from fixed route service providers. Paratransit demand is forecasted to increase by 7%. Capital Outlay was increased by $11.0M primarily due to land acquisition $2.2M and regional fleet $7.0M; and $1.1M related to computers/software and site improvements $0.3M. Overall staff cost in FY17 of $27.2M is 8% of total budget. 3% Overall Salary and Fringe increase $0.9M, broken down as follows: 2.5% base salary and fringe increase $0.5M, net cost increase of position changes $0.3M Salary and $0.1M Fringe. Bond principal and interest expense is up 5% to $25.4M due to the series 2017 bond issue to support funding for increased LRT capital construction activity. Contingency is up from $1.7M to $1.9M. Primary contingency relates to fixed route bus contract rates, fuel rates, and paratransit demand. Lead Agency Bond Disbursements are Public Transportation Funding (PTF) amounts derived from bond proceeds to Member Agencies and VMR for eligible capital transit expenditures. Lead Agency Bond Disbursements are up by $18.1M due to increased LRT capital construction activity. Carryforwards & contributions to reserves increased by $18.4M primarily due to the issuance of bonds to support funding for increased LRT capital construction activity. RPTA FY17 Preliminary Budget Executive Summary Valley Metro 10

36 FY17 FY21 PRELIMINARY FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM Valley Metro RPTA has the primary responsibility of implementing the operating and capital components of the transit element identified in the 20-year Regional Transportation Plan (RTP). The operating component includes the expansion of regional fixed route services, high-capacity transit alternatives, vanpools and paratransit services throughout the region. The capital component of the transit element of the RTP includes fleet replacement and expansion as well as the development of new park-and-rides, transit centers, passenger facilities and maintenance and operations facilities over the life of the plan. Construction of the light rail RTP components has been designated to Valley Metro Rail by Valley Metro RPTA and expenditures are shown as Rail Capital Funding in the Operating Forecast. For the Five-Year Operating Forecast, the operations revenues and expenditures are based on current costs, as used for the development of the preliminary FY17 operating budget, with an annual inflation escalation of three percent (3%) for the remaining four years. Other assumptions in the Five-Year Operating Forecast are as follows: The Public Transportation Fund (PTF) grows by approximately 5.4% annually Fixed route fares grow by 5% in FY18 with reduction of discounted fares and base fare increase in FY20 Paratransit ridership drives an 7% increase in number of trips delivered Planning, Administration, Safety & Security, and Regional Services costs have been inflated two percent (2%) for the last four (4) years of the forecast The proposed service changes within the five-year time period that have been incorporated into the plan as proposed by the Transit Life Cycle Program are as follows: FY17 No service changes FY18 FY19 FY20 FY21: Begin Route 104 Saturday service in Chandler Begin PTF funding of Route 104 in Mesa Begin PTF funding of Route 50 in Scottsdale Begin PTF funding of Route 30 in Tempe Begin PTF funding of Route 77 in Mesa Begin PTF funding of Route 30 in Mesa RPTA FY17 Preliminary Budget Executive Summary Valley Metro 11

37 FY17 FY21 Operating Forecast (thousands) 5-Year Total Revenues Public Transportation Fund (ADOT) $ 793,606 Less: AZDOR Assessment (4,973) PTF Bond Proceeds 61,257 Less: Debt Service Bus & Rail (157,971) Less: Rail Capital Funding (current) (268,669) Net PTF for Operations $ 423,250 Other Regional Funds $ 24,716 Federal Funds 41,973 Transit service reimbursements 182,574 Fare Revenues 92,008 Alternative Fuel Tax Credit 1,228 Interest and other revenue 160 The Five Year revenue operating forecast begins with PTF sales tax funds, which are estimated by ADOT team of economists. One Bond Issue is anticipated in FY17. Debt Service and Rail Capital Funding requirements are deducted to derive PTF available for operations. Total revenues $ 765,910 (thousands) 5-Year Expenditures Total Operations Fixed Route $ 458,136 Paratransit - EVDAR 48,046 Paratransit - NWDAR 10,736 Paratransit - Regional Trips 13,580 Paratransit - RideChoice 4,703 Vanpool Service 5,128 ADA 108,312 Total operations expenditures $ 648,642 Transportation Demand Management $ 5,903 Planning & Administration 24,548 Regional Services 42,003 Safety & Security 1,984 Operations Contingency 18,993 Total expenditures $ 742,073 Excess/(deficiency) of revenues over expenditures - operations $ 23,836 Less: Bus Capital Funding $ (67,596) Undesignated fund balance, July 1, 2015 $ 85,950 Excess/(deficiency) (43,759) Undesignated fund balance, June 30, 2021 $ 42,191 Operations expenditures for the five-year period are impacted by service contract increases and paratransit demand ridership. Due to aging population, paratransit ridership is forecasted to grow significantly. Regional Services, Planning, Safety & Security and Admin costs are forecasted to grow about 2% per year. A $24.0M operating surplus is projected, which will be used to fund bus capital purchases along with existing fund balance. The current $86.0M balance has been built to support the cyclical bus capital drawdown. Projected Operating Fund Balance is $42.2M in FY21 RPTA FY17 Preliminary Budget Executive Summary Valley Metro 12

38 FY17 FY21 Capital Program (thousands) 5-Year Total Revenues Public transportation funds $ 46,967 FTA - Section ,448 FTA - Section FTA - Section ,046 FTA - Section ,245 FHWA - STP 17,159 Member local match 100 Vehicle/parts proceeds 1,929 Capital assets reserve applied 1,740 Vanpool reserve applied 741 Undesig. Fund Balance Applied (PTF) 20,631 Total Revenues $ 260,462 Capital program funding sources include new PTF sales tax and PTF fund balance that has been accumulated for cyclical bus fleet replacement. Total PTF funding over the five years is $67.6M or 26% of capital revenue. Federal funding will provide $188.4M or 72% of capital revenue. (thousands) 5-Year Total Expenditures by Project IT Infrastructure $ 2,750 Standard Bus - Replacement 154,347 Standard Bus - Expansion 50,308 Express/BRT - Expansion 3,168 Rural Fleet - Replacement 1,173 Paratransit Fleet - Replacement 1,915 Vanpool Fleet - Replacement 13,462 Vanpool Fleet - Expansion 4,438 Fleet - Other 1,957 Transit Centers (4-Bay) 2,376 Bus Stop Passenger Amenities 535 Park & Rides 9,233 Vehicle Management/Communications Systems 6,546 Fare Collection Systems 505 State of Good Repair - Fleet Rebuild 7,749 Total Expenditures $ 260,462 Capital program expenditures for the upcoming five years are primarily for fleet replacement and expansion. A total of 475 bus units are planned for replacement and 93 for expansion. Vanpool fleet replacements total 301 units, with 100 expansion units planned. Paratransit fleet replacements total 164 units. New transit center and park-andride facilities are planned in the West Valley. Vehicle communications and fare collection systems are also planned. RPTA FY17 Preliminary Budget Executive Summary Valley Metro 13

39 DATE AGENDA ITEM 6 April 27, 2016 SUBJECT FY17-21 Short Range Transit Program PURPOSE The purpose of this memo is to provide an update on the second iteration of the Short Range Transit Program (SRTP). The SRTP documents future transit modifications for the next five years. BACKGROUND/DISCUSSION/CONSIDERATION The SRTP identifies transit service improvements needed during the next five years and builds upon previous and ongoing Valley Metro efforts. The SRTP identifies regional and local transit service improvements programmed in the Transit Life Cycle Program (TLCP) as well as local operating budgets. The SRTP is based on input submitted by individual member agencies, as well as concepts developed by Valley Metro staff in conjunction with the Board approved Transit Standards and Performance Measures (TSPM). The SRTP serves as input for processes such as the Transit Life Cycle Program, Fleet Management Plan, bi-annual service changes and the Transportation Improvement Program. The SRTP is divided in two planning periods, the short-term (one to two years), known as production years, and the long-term (three to five years), known as the development years. Service improvements listed under production years must have committed funding sources and an implementation schedule. Service improvements under development years may require further analysis. For the production years, the SRTP analyzes all potential regionally funded modifications through a set of guiding principles and member agency feedback; the recommendations are shared with the TLCP update process. For the complete list of production and development year improvements regardless of funding source see Appendix 1. Guiding Principles: The performance-based guiding principles were developed to prioritize the regionally funded production years in the SRTP. The guiding principles are built around the TLCP and 2014 Board adopted TSPM effort. The guiding principles take into consideration the TSPM adopted service provision goals for new and existing service, such as the level of service by day of the week. Based on FY15 Transit Performance Report (TPR), routes that were within the top 25% or bottom 25% on any two of the five performance measures were identified for further evaluation (listed in Appendix 2 for reference) and potential inclusion in the SRTP. The quartiles are embedded in the SRTP guiding principles and are considered when prioritizing improvements by fiscal year. The principles are used in significant service VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

40 changes such as route extensions or new routes. The principles are not meant to analyze minor modification such as trip modifications or weekend adjustments. SRTP Process: Staff worked with member agencies through discussions at several SPWG and three sub-regional SRTP meetings to document service modification requests and analyzed, if applicable, the service requests using the guiding principles described above. Analysis included committed funding, fleet needs and assessment of services in terms of Board adopted TSPM efforts. Service improvements indicated in the production years of the SRTP will serve as an input into the bi-annual service change process as well as the annual TLCP updates. Following review by the SPWG, proposed service changes will be brought before the Board for action through the bi-annual service changes process (April and October). This will include any actions necessary for public outreach, Title VI impacts, further analysis, and adjustment of affected transit service operating contracts and Intergovernmental Agreements with member agencies. COST AND BUDGET Costs for proposed service changes identified in the SRTP will be vetted through the appropriate TLCP or service change processes and will be included within the agency budget starting with the year that the change is implemented. STRATEGIC PLAN ALIGNMENT This item addresses three goals in the Board-adopted FY16-20 Strategic Plan: Goal 2: Advance performance based operations o Tactic A: Operate an effective, reliable, high-performing transit system Goal 3: Grow transit ridership o Tactic A: Expand and improve transit services to reach new markets Goal 4: Focus on economic development, regional competitiveness and financial resources o Tactic B: Pursue all available funding opportunities for transit projects and services COMMITTEE PROCESS RTAG: April 19, 2016 for information TMC: May 4, 2016 for information Board of Directors: May 19, 2016 for information RECOMMENDATION This item is for information only. 2

41 CONTACT Wulf Grote, P.E. Director, Planning and Development ATTACHMENTS Appendix 1 - SRTP Database Appendix 2 - Transit Performance 2

42 Appendix 1: SRTP Database Route Service Type Impacted City/Town 50 Local Scottsdale 51 Local Phoenix, Glendale Production Years Change Type Change Month Service and Modification Change Year Fiscal Year October 2016 FY17 Service October 2016 FY17 Potential Service Change Match Phoenix span of service weekdays and weekends; modify routing along Scottsdale and Drinkwater Improve weekend service to 30 minutes 72 Key Local Scottsdale Service October 2016 FY17 Add Peak Trips from Thunderbird PnR to Camelback Rd. 81 Local Scottsdale, Tempe Service October 2016 FY17 Improve weekend frequency to 30 minutes 170 Local Scottsdale Modification October 2016 FY17 30, 45, 61, 77, 56 Local Phoenix Service October 2016 FY17 30, 77, 108 Local Phoenix Service October 2016 FY17 ALINK/112 All Phoenix Operated Routes Local Local, Key Local Mesa/ Gilbert/ Chandler Consolidation October 2016 FY17 Phoenix Service October 2016 FY17 Change routing at Frank Lloyd Wright to use Northsite Blvd insead of Hayden Span of Service: M-F 4am to midnight Improve Saturday and Sunday frequency to 30 min. Improve service in the corridor by merging ALINK and 112. Span of Service: M-F 4am to midnight; Sat/Sun 5am to 10pm Weekday & Weekend: All routes minimum of 30 minutes BUZZ Circulator Mesa Service October 2016 FY17 Revisit routing

43 Route Camelback Trolley Miller Road Trolley Service Type Impacted City/Town Production Years Change Type Change Month Change Year Fiscal Year Circulator Scottsdale Service October 2016 FY17 Potential Service Change Reduce service from 15 to 30 minutes on weekends Circulator Scottsdale Service October 2016 FY17 Improve frequency MLINK/40 Local Mesa Consolidation October 2016 FY17 Improve service in the corridor by merging MLINK and Route Key Local Chandler Service April 2017 FY Local Chandler Modification April 2017 FY17 All Phoenix Operated Routes Local, Key Local Phoenix Service April 2017 FY Local Mesa Cost Allocation July 2017 FY18 17 Key Local Scottsdale/ SRPMIC Extension October 2017 FY18 44 Local Phoenix Service October 2017 FY18 83 Local Glendale, Phoenix, Peoria Extension October 2017 FY Local Chandler Service October 2017 FY Local Mesa Service October 2017 FY18 Serve the Chandler PnR on every trip. Modify southern end-of-line to serve current Route 112 end-of-line. Span of Service: M- Th 4am to midnight; Friday 4am to 2am Saturday 5am to 2am Sunday 5am to 11pm Begin PTF funding of route in Mesa Extend Route 17 to Casino Arizona Extend Route 44 from 44th St/Washington to 48th St/Baseline Rd Extend 83 to Arrowhead Town Center. Add Saturday service and some weekday evening trips Improve service and connect to Baseline Rd.

44 Route Service Type Impacted City/Town Production Years Change Type Change Month Change Year Fiscal Year 184 Local Mesa Modification October 2017 FY18 Holiday Service New - Cactus Trolley New - Orbit Saturn Local, Key Local, Circulator All Service October 2017 FY18 Circulator Scottsdale New Route October 2017 FY18 Potential Service Change Reroute south end of line to enter/exit Phoenix Mesa Gateway Airport via Chandler Blvd. Restore holiday service for select holidays on Local, Key Local, Circulator routes New Trolley Circulator Tempe New Route October 2017 FY18 New Orbit New - Zoom North Circulator Avondale New Route October 2017 FY18 New Zoom 140 (Ray Road) Local Chandler/ Phoenix/ Gilbert New Route October 2017 FY18 Proposed Route to serve Ray Road west of Gilbert Road

45 Development Years Route Service Type Impacted City/Town Change Type Change Month Change Year Fiscal Year 50 Local Scottsdale Cost Allocation July 2018 FY19 30 Local Mesa Modification October 2018 FY19 45 Key Local Mesa Modification October 2018 FY19 59 Local Phoenix Elimination October 2018 FY19 77 Local Mesa Extension October 2018 FY19 81 Local Chandler Extension October 2018 FY Local Mesa Service October 2018 FY Local Mesa/ Gilbert/ Chandler Service October 2018 FY Local Mesa Modification October 2018 FY19 Airpark Trolley Circulator Scottsdale New Route October 2018 FY19 New Loop202 RAPID RAPID Phoenix New Route October 2018 FY19 30 Local Tempe Cost Allocation July 2019 FY20 77 Local Mesa Cost Allocation July 2019 FY20 45 Key Local Mesa Reduction October 2019 FY20 48 Local Tempe/ Mesa Extension October 2019 FY20 77 Local Gilbert/ Mesa Extension October 2019 FY Local Chandler/ Gilbert Extension October 2019 FY Local Mesa Modification October 2019 FY Local Surprise/ County/ El Extension October 2019 FY20 Mirage 156 Local Chandler Service October 2019 FY20 New Express Gilbert/ Phoenix New Route October 2019 FY20 Scottsdale Limited Limited Service Scottsdale New Route October 2019 FY20 Val Vista Local Gilbert New Route October 2019 FY20 81 Local Chandler/ Tempe Service April 2020 FY21 96 Local Chandler Service April 2020 FY Local Chandler Extension April 2020 FY Local Chandler/ Mesa/ Gilbert Service April 2020 FY20 30 Local Mesa Cost Allocation July 2020 FY21 3 Key Local Goodyear/ Avondale Extension October 2020 FY21 29 Key Local Avondale/ Phoenix Extension October 2020 FY21 41 Key Local Avondale Extension October 2020 FY21 60 Local Phoenix Service October 2020 FY21 67 Local Phoenix Service October 2020 FY21 75 Local Peoria/ Glendale Extension October 2020 FY21

46 Development Years Route Service Type Impacted City/Town Change Type Change Month Change Year Fiscal Year 80 Local Peoria/ Glendale Extension October 2020 FY21 90 Local Peoria Extension October 2020 FY Local Gilbert/ Chandler Extension October 2020 FY Local Chandler/ Phoenix/ Gilbert Service October 2020 FY Local Surprise/ Glendale/ Extension October 2020 FY21 Peoria/ County ALEX Circulator Phoenix Service October 2020 FY21 MARY Circulator Phoenix Service October 2020 FY21 New Circulator Surprise New Route October 2020 FY20 New - Peoria Circulator Circulator Peoria New Route October 2020 FY21 New Circulator Local Phoenix Service October 2020 FY (Ray Road) Local Chandler/ Phoenix/ Gilbert New Route October 2020 FY21 Route 56A Local Phoenix Service October 2020 FY21 Route 59 Local Phoenix Service October 2020 FY21 Route 60 Local Phoenix Service October 2020 FY21 Route 67 Local Phoenix Service October 2020 FY21 SMART Circulator Phoenix Service October 2020 FY21 Thomas Rd BRT BRT Phoenix Service April 2021 FY21

47 Appendix 2: Transit Performance

48 4/27/2016 FY17-21 Short Range Transit Program May 2016 Overview Purpose is to identify regionally and locally funded transit service change concepts for the next five years FY SRTP builds on previous and ongoing VM efforts In accordance with TLCP adopted policies Based on input from member agencies and VM staff SRTP to be reviewed every two years at a minimum 2 1

49 4/27/2016 Objectives of SRTP Documents region-wide near-term transit service improvements Provide inputs to: Transit Life Cycle Program Fleet Management Plan Bi-annual service change process Identify future capital needs Transportation Improvement Program 3 SRTP Process Develop service concepts with inputs from member agencies Prioritize service concepts for production years using the guiding principles, if applicable Document final list of TLCP and locally funded service concepts production years with inputs from member cities Production year fleet prioritization applied, if applicable 4 2

50 4/27/2016 SRTP Planning Periods Short-term Years 1-2, or production years A service modification has committed funding and an implementation schedule Long-term Years 3-5, or development years A service modification with no committed funding and/or requires further analysis 5 FY17-21 SRTP Concepts Region-wide service change concepts include: Cost allocation (change in funding source) Route extensions Service enhancements Span of service Route modifications New services Service reduction (e.g., duplicate service segments) 6 3

51 DATE AGENDA ITEM 7 April 27, 2016 SUBJECT Transit Life Cycle Program (TLCP) Update PURPOSE To present the draft 2016 Bus TLCP Update for information. BACKGROUND/DISCUSSION/CONSIDERATION The TLCP was developed in 2005 to provide guidance for the implementation of the transit component of the Regional Transportation Plan. The TLCP includes Guiding Principles, policies, procedures and financial forecasts to ensure that the program can be balanced. The draft 2016 Rail TLCP Update is being discussed through the Valley Metro Rail Board process. The bus and rail programs will be merged into a single item for action on the joint agenda for June. The most recent update to the TLCP was in June Since that time, the official forecast has projected a modest increase in revenues for the Transportation Excise Tax. The current Short Range Transit Plan (SRTP) has identified some service and/or funding changes that are recommended to be incorporated into the bus program within the TLCP, along with some associated fleet expansion needs. The SRTP was developed cooperatively with member city transit staff and includes service improvements that are ready to be implemented in the next two years. It also includes many potential improvements that are not quite ready for implementation. These improvements will continue to be analyzed and developed and could be recommended for regional funding in a future TLCP Update. Bus Program Capital Program In the 2016 TLCP update, there are some minor adjustments to the replacement fleet and facilities projects related to timing and federal funding. In addition, the SRTP has identified some expansion buses that may be required for planned service enhancements. Although some of these enhancements are still in the development phase, a number of expansion buses have been included in this TLCP update as placeholders to be ordered once the service enhancements have been finalized. There is a total of 68 expansion buses programmed in the next 5 fiscal years. VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

52 TLCP Fleet Acquisition 2016 Update 2015 Update Change % Change Fixed route buses 1,503 1, % Paratransit buses % Rural route buses % Vanpools 1,541 1, % Total Fleet 3,670 3, % Operating Program Valley Metro planning staff developed the SRTP to guide the implementation of new service improvements, including those funded with PTF. The current SRTP includes some service enhancements which are eligible for TLCP funding. Some of these proposed enhancements are included in this update for regional funding. The proposed changes to TLCP funded service are listed below along with the estimated annualized cost impact for the fiscal year in which the improvement is implemented. Route Scheduled Date Annualized Impact to Jurisdictional Equity Jurisdictions Other Project Information 40 Main Street Oct 2016 $680,000 Mesa LINK Main Street Oct $980,000 Mesa Increase frequency on weekdays, Saturday and Sundays Replaced with increased service on Route Hayden/McClintock Oct 2016 $250,000 Scottsdale, Tempe Increase frequency on Saturdays and Sundays 112 Country Club/ Arizona Avenue Apr 2017 $875,000 Chandler, Gilbert, Mesa Increase frequency on weekdays, Saturday and Sundays LINK Country Club/ Arizona Avenue Apr $975,000 Chandler, Gilbert, Mesa Replaced with increased service on Route Broadway Road Oct 2017 $380,000 Mesa Increase frequency on Saturdays, add Sunday service 136 Gilbert Road Oct 2018 $870,000 Chandler, Gilbert, Mesa Increase frequency on weekdays and Saturdays, add Sunday service 156 Chandler Blvd Apr 2021 $390,000 Chandler 45 Broadway Road Jul 2021 $1,100,000 Mesa 83 83rd Avenue Jul 2024 $1,175,000 Peoria Increase peak frequency on weekdays Replace local funding, existing service levels Replace local funding, existing service levels In 2016, the Valley Metro Board of Directors authorized the implementation of a new regional ADA paratransit overlay service which eliminates the need for transfers among current paratransit providers. The new service will be implemented in FY2017. The incremental cost for the service has been budgeted as a local cost. However, some cities have asked that their ADA PTF allocations be increased to pay for the incremental 2

53 costs. The 2016 update includes an additional $14.3 million ADA PTF funds to accommodate the requests. The fund balance at the end of the program is anticipated to be about $43.2 million, up from $35.2 million in the 2015 update. The following table summarizes the changes in fund balance. Comparison of Net Revenues 2016 Update 2015 Update Change Operations Revenue $2,076.2 $2,035.2 $40.9 Capital Revenue $1,039.4 $1,004.9 $34.5 Total Revenue $3,115.6 $3,040.1 $75.4 Operations Expenditures $1,752.9 $1,726.3 $26.7 Capital Expenditures $1,319.5 $1,278.6 $40.9 Total Expenditures $3,072.4 $3,004.9 $67.5 Net Revenues less Expenditures $43.2 $35.2 $7.9 The TLCP Guiding Principles require that jurisdictional equity be maintained for the bus program. The policy allows that each sub-region can be within 2.5 percent above or below their policy allocation. In the current model, the East and West sub-regions are within this policy allowance, but the Central sub-region is not. Additionally, the policy allows that regardless of sub-regional percentages, no jurisdiction can be underallocated by $7.5 million or more. In the current model one jurisdiction, Phoenix, meets that condition. Phoenix is in the process of identifying potential projects that could be programmed to bring them within the policy guidelines. Jurisdiction Equity Summary by Sub-Region (millions of dollars) April 26, 2016 Total Calculated PTF Total Policy PTF Allocation Percent of JE Calculated JE Under Jurisdiction (JE Over) Central $433.5 $449.4 $ % East $788.8 $802.7 $ % West $165.0 $164.1 ($0.9) -0.57% $1,387.3 $1,416.2 $ % 3

54 COST AND BUDGET Some of the proposed changes to the TLCP bus model have been incorporated into the proposed FY2017 Operating and Capital Budgets and the Five-Year Operating and Capital Forecasts. The increase in ADA PTF reimbursements are not in the proposed budget and may require a mid-year budget adjustment and amendments to current IGAs. Revenues and expenditures forecast within the TLCP are balanced as required by State Statute. COMMITTEE PROCESS RTAG: April 19, 2016 for information TMC: May 4, 2016 for information AFS: May 12, 2016 for information Board of Directors: May 18, 2016 for information STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 2: Advance performance based operation Tactic E: Maintain strong fiscal controls to support Valley Metro s long-term sustainability Goal 3: Grow transit ridership Tactic A: Expand and improve transit services to reach new markets Tactic B: Improve connectivity of transit services for greater effectiveness RECOMMENDATION This item is presented for information only. CONTACT Paul Hodgins Manager, Revenue Generation and Financial Planning ATTACHMENT ADOT Revenue Forecast PTF for Bus Program Jurisdiction Equity Summary by Jurisdiction Powerpoint Presentation 4

55 Transportation Excise Tax Revenues PTF for Bus Program Comparison of 2015 and 2014 Forecasts (millions of dollars) Fiscal Year 2015 Forecast Annual Growth 2014 Forecast Annual Growth 2015 $ % $ % 2016 $ % $ % 2017 $ % $ % 2018 $ % $ % 2019 $ % $ % 2020 $ % $ % 2021 $ % $ % 2022 $ % $ % 2023 $ % $ % 2024 $ % $ % 2025 $ % $ % 2026 $72.3 $67.4 Actuals $618.4 $617.6 Forecast $1,044.4 $ Year Total $1,662.8 $1,

56 Jurisdiction Equity Summary (millions of dollars) April 26, 2016 Total Calculated PTF Total Policy PTF Allocation JE Under (JE JE Calculated JE Policy Jurisdiction Over) Percent Percent Avondale $19.8 $21.8 $ % 1.54% Buckeye $4.7 $1.0 ($3.7) 0.34% 0.07% Chandler $131.3 $134.0 $ % 9.46% County $16.5 $9.2 ($7.3) 1.19% 0.65% El Mirage $1.5 $3.2 $ % 0.23% Fountain Hills $0.6 $1.2 $ % 0.09% Gila Bend $0.0 $1.9 $ % 0.14% Gilbert $87.3 $86.6 ($0.7) 6.29% 6.12% Glendale $79.7 $80.4 $ % 5.68% Goodyear $4.1 $3.7 ($0.4) 0.30% 0.26% Guadalupe $3.6 $0.1 ($3.5) 0.26% 0.01% Litchfield Park $0.0 $3.2 $ % 0.23% Mesa $269.9 $275.3 $ % 19.44% Paradise Valley $3.2 $7.6 $ % 0.54% Peoria $28.6 $31.4 $ % 2.22% Phoenix $433.5 $449.4 $ % 31.74% Queen Creek $0.0 $0.9 $ % 0.06% Salt River Reservation $1.1 $0.0 ($1.1) 0.08% 0.00% Scottsdale $142.2 $147.4 $ % 10.41% Surprise $5.0 $3.3 ($1.7) 0.36% 0.23% Tempe $149.6 $149.6 $ % 10.56% Tolleson $4.5 $4.4 ($0.1) 0.32% 0.31% Wickenburg $0.0 $0.3 $ % 0.02% Youngtown $0.6 $0.2 ($0.4) 0.04% 0.02% $1,387.3 $1,416.2 $ % % 6

57 4/28/2016 Transit Life Cycle Program 2016 Model Update May 2016 Bus Program Summary 2 1

58 4/28/2016 Transportation Excise Tax Revenues $240.0 $220.0 $200.0 $180.0 $160.0 $ millions $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $ Forecast 2014 Forecast RTP Forecast 3 Source for Changes Short Range Transit Program Five-year program of improvements Projects eligible for regional funding Meet or support Transit Standards/Performance Measures Funding availability Regional ADA Paratransit Plan 4 2

59 4/28/2016 Program Changes Operating program changes Improved service Increased funding for current service ADA funding Fleet plan changes 5 Operating Program Route Scheduled Date 40 Main Street Oct 2016 $680,000 Mesa Annualized Impact to Jurisdictional Equity Jurisdictions Other Project Information Increase frequency on weekdays, Saturday and Sundays LINK Main Street Oct $980,000 Mesa Replaced with increased service on Route Hayden/McClintock Oct 2016 $250,000 Scottsdale, Tempe Increase frequency on Saturdays and Sundays 112 LINK Country Club/ Arizona Increase frequency on weekdays, Saturday and Avenue Apr 2017 $875,000 Chandler, Gilbert, Mesa Sundays Country Club/ Arizona Avenue Apr $975,000 Chandler, Gilbert, Mesa Replaced with increased service on Route Broadway Road Oct 2017 $380,000 Mesa Increase frequency on Saturdays, add Sunday service 136 Gilbert Road Oct 2018 $870,000 Chandler, Gilbert, Mesa Increase frequency on weekdays and Saturdays, add Sunday service 156 Chandler Blvd Apr 2021 $390,000 Chandler Increase peak frequency on weekdays 45 Broadway Road Jul 2021 $1,100,000 Mesa Replace local funding, existing service levels 83 83rd Avenue Jul 2024 $1,175,000 Peoria Replace local funding, existing service levels 6 3

60 4/28/2016 Operating Program Funding for ADA Additional PTF funding/reimbursements Chandler, Gilbert, Mesa, Surprise 7 Capital Program Fleet changes Updated fleet replacement plan Updated fleet expansion plan Based on projected SRTP improvements Placeholders for future expansion 8 4

61 4/28/2016 Fleet Acquisition 2016 Update 2015 Update Change % Change Fixed route buses 1,503 1, % Paratransit buses % Rural route buses % Vanpools 1,541 1, % Total Fleet 3,670 3, % 9 Expenditures 2016 Update 2015 Update Change % Change Operations Expenditure Fixed Route Operations $1,011.6 $997.2 $ % ADA & Alternatives $497.2 $482.9 $ % Regional Expenditures $244.1 $246.1 ($2.1) 0.8% Sub Total Operations Expenditures $1,752.9 $1,726.3 $ % Capital Expenditure Debt Service $72.1 $72.1 $ % Fleet $979.7 $938.3 $ % Facilities $267.7 $268.2 ($0.5) 0.2% Sub Total Capital Expenditures $1,319.5 $1,278.6 $ % Total Expenditures $3,072.4 $3,004.9 $ % 10 5

62 4/28/2016 Revenues 2016 Update 2015 Update Change % Change Revenue Operations PTF $1,662.8 $1,613.4 $ % RARF $84.7 $86.5 ($1.8) 2.12% Fares $234.7 $243.6 ($8.9) 3.64% Federal $68.8 $71.3 ($2.5) 3.53% Other revenues $25.2 $20.5 $ % Sub Total Operations Revenue $2,076.2 $2,035.2 $ % Revenue Capital Federal Capital $960.2 $925.7 $ % Financed Revenue $58.3 $58.3 $ % Other revenues $20.9 $20.9 $ % Sub Total Capital Revenue $1,039.4 $1,004.9 $ % Total Revenue $3,115.6 $3,040.1 $ % 11 Cash Flow Summary Bus Program TLCP Totals Funding Surplus / Shortfall Total Program Revenues $3,065.6 Total Operating Costs ($1,752.9) Funding surplus before capital and financing $1,312.7 Total Capital Costs ($1,246.5) Financing Needs anticipated: Proceeds Debt Service Series 2009 $50.0 ($73.0) Total Financing $50.0 ($73.0) ($23.0) Total Program Cost 2026 ($3,022.4) Net Fund Balance $

63 4/28/2016 Jurisdictional Equity Summary Calculated Policy Percent Sub region Allocation Allocation Difference Difference Central $433.5 $449.4 $ % East $788.8 $802.7 $ % West $165.0 $164.1 ($0.9) 0.57% $1,387.3 $1,416.2 $ % 13 Timeline SPWG information April 19, 2016 TMC information May 3, 2016 AFS information May 11, 2016 Board information May 18, 2016 RTAG May 17, 2016 TMC action June 1, 2016 Board action June 16,

64 DATE AGENDA ITEM 8 April 27, 2016 SUBJECT Future Agenda Items Request and Report on Current Events PURPOSE Chair Fitzhugh will request future agenda items from members, and members may provide a report on current events. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim Chief Executive Officer ATTACHMENT Pending Items Request VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

65 Pending Items Request Item Requested Date Requested Planned Follow-up Date 2

66 April 27, 2016 Joint Meeting Agenda Transit Management Committee and Rail Management Committee Wednesday, May 4, 2016 Lake Powell Conference Room 101 N. 1 st Avenue, 10 th Floor 11:15 a.m. Action Recommended 1. Chief Executive Officer s (CEO) Report 1. For information Scott Smith, Interim CEO, will brief the TMC and RMC on current issues. 2. Minutes 2. For action Minutes from the March 2, 2016 Joint TMC and RMC meeting are presented for approval. 3. Financial Audit Services Contract Award 3. For action Scott Smith, Interim CEO, will request authorization to procure Financial Audit Services from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP The period of service will cover two fiscal years of FY17 and FY Passenger Wi-fi Update 4. For information Scott Smith, Interim CEO, will introduce Bill Tsuei, Chief Technology Officer, who will provide an update on the status of Passenger wi-fi on buses and light rail. 5. Chief Executive Officer Recruitment Update 5. For information Scott, Smith, Interim CEO, will provide an update on the CEO recruitment process. VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

67 6. Fiscal Year 2016 (FY16) Third Quarter Reports 6. For information Quarterly Reports for Valley Metro RPTA and Valley Metro Rail are provided as an informational update of Valley Metro activities. 7. Travel and Expenditures 7. For information The monthly travel and expenditures for Valley Metro RPTA and Valley Metro Rail are presented for information. 8. Future Agenda Items Request and Report on Current Events 8. For information Chairs Fitzhugh and Zuercher will request future agenda items from members, and members may provide a report on current events. Qualified sign language interpreters are available with 72 hours notice. Materials in alternative formats (large print, audiocassette, or computer diskette) are available upon request. For further information, please call Valley Metro at or TTY at To attend this meeting via teleconference, contact the receptionist at for the dial-in-information. The supporting information for this agenda can be found on our web site at 2

68 DATE AGENDA ITEM 1 April 27, 2016 SUBJECT Interim Chief Executive Officer s Report PURPOSE Scott Smith, Interim Chief Executive Officer, will brief the TMC and RMC on current issues. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim Chief Executive Officer ATTACHMENT None VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

69 DATE AGENDA ITEM 2 April 27, 2016 Minutes of a Joint Meeting of Transit Management Committee and Rail Management Committee Wednesday, April 6, :45 a.m. Transit Management Committee Meeting Participants Kristen Taylor for David Fitzhugh, City of Avondale, Chair Ed Zuercher, City of Phoenix, Vice Chair Sean Banda, City of Buckeye Dan Cook, City of Chandler Jorge Gastelum for Dr. Spencer Isom, City of El Mirage Marc Skocypec, Town of Gilbert Brent Stoddard for Kevin Phelps, City of Glendale Brian Dalke, City of Goodyear Scott, Butler for Chris Brady, City of Mesa Jeff Tyna, City of Peoria Madeline Clemann, City of Scottsdale David Kohlbeck, City of Surprise Steven Methvin, City of Tempe Members Not Present Sara Allred, ADOT City of Tolleson Mitch Wagner, Maricopa County Rail Management Committee Meeting Participants Ed Zuercher, City of Phoenix, Chair Steven Methvin, City of Tempe, Vice Chair Scott Butler for Chris Brady, City of Mesa Dan Cook, City of Chandler Brent Stoddard for Kevin Phelps, City of Glendale Chair Zuercher called the joint meeting to order at 11:46 a.m. 1. Chief Executive Officer s Report Mr. Smith provided an update on the following items: Visit by Secretary Ray LaHood 2016 Valley Metro Bus Rodeo Streetcar Coalition Meeting VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

70 2. Minutes Minutes from the March 2, 2016 Joint TMC and RMC meeting were presented for approval. IT WAS MOVED BY SCOTT BUTLER, SECONDED BY BRIAN DALKE AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 2, 2016 JOINT TMC AND RMC MINUTES. 3. Fare Technology Improvements Mr. Smith said Mr. Chair, members of the committees, for many months Maria Hyatt of the City of Phoenix and John McCormack our CFO have been working with working groups on fare technology improvements. Our goal is to try and both bring our revenue our collections up, but also more importantly to add to our customer experience by making fare collection as easy as reliable for all of our riders as possible. So I'm going to turn it over to Maria right now who will lead the discussion on where we are on this effort. Ms. Hyatt, Public Transit Director, City of Phoenix, provided a presentation which included the following: Fare Collection Machine photo National Trends Process Overarching Goals Objectives Next Steps Our Customers Public Comment Mr. Crowley said isn't it nice that you say that customer satisfaction on this fare collection when right now the technology that you do have doesn't satisfy the customer needs or uses. When I go to get on the bus and am chastised, having to pay the extra money by buying my ticket on the bus, if I'm going to buy for myself and another individual and I don't have the exact change as in if I went to put a ten and two ones in, it doesn't work. It doesn't show repeats. It doesn't show added up. It doesn't give change. And as both -- all of you know, what it does do is it's predatory to the bus user that doesn't know that he's being manipulated into, quote, not using it, not knowing that there's a $2 extra fee. 2

71 I love that on your national trends and peer cities we've got old Salt Lake there which is, oh, yeah, smaller than Mesa. So we're comparing ourselves rather than to the largest communities and using the excuse that they're old, we're the fifth largest city, so wouldn't we be comparing ourselves to Los Angeles, Seattle, Portland, but no, we do Salt Lake City for what reasons I don't know. As I stated, right now your system if I use cash and I notice that in everything that she was communicating, even though cash may be king, and it's the money that you're going for, it was all the other parts of it, which I also understand that if you were to be using your smart card, you're not chastised that $2 extra because you're using electric money or you're not one of the minority or economically challenged. What's the reason? It needs to be uniform. It needs to be stopped the way that you are doing it now and make it a uniform collection method. Also, with those 800 vendors, they make 10 percent. What is their real use other than, well, we don't want you to use the bus. Thank you for your time. And I will be going to the Attorney General's, because you are a different entity and each time you become an entity, I get a whack at the apple. Thank you. This item was presented for information. 4. Chief Executive Officer Recruitment Mr. Smith said Mr. Chair, members of the committee, thank you very much. Now this presentation is a little bit out of sync, but we thought it important to bring it to you today so that we not lose track of the time that -- the time schedule, but also that we make sure that the management committees are involved in this process as obviously they have an important role in this. Staff was given instructions at their last board meeting to engage, or proceed with the CEO recruitment and specifically to engage with the Maricopa County Human Relations Department. We have with us today HR Director MaryEllen Sheppard, and HR Deputy Director Andrew Mesquita. I can tell you I've met with them a couple of times to go over, as have other staff, to go over a plan for this process and they've been amazing. I'll tell you. They have been responsive. They've been creative. And I feel we're in good hands with Maricopa County involved. What's gonna happen is that this is the Board also made this process the purview of the joint subcommittee which doesn't meet till next week. So we give you this for information purposes with the understanding that the joint committees have not heard this yet. 3

72 That's not normally how we would do it, but we wanted to make sure that the information was out there. The other thing is, there's a couple of items that Andrew will include in his presentation where the Board did not give us specific instruction, they gave us general guidance. We made some basic decisions and assumptions, understanding that as we went back to the subcommittee for the specifics that there would be perhaps some changes. The most notable thing that you'll see is in the how we are going to work with an outside headhunter. We have, in the presentation, Andrew will show that the headhunter becomes involved, but we don't know exactly when that will happen. Whereas, we've heard from some of you and some of your staff that that will probably be refined as part of the subcommittee basis, so this -- there are some things that could change simply as far as the timing for the involvement of a headhunting firm in this. So with that, I'd like to introduce you to MaryEllen Sheppard, HR Director. And we're gonna run through where we are right now and their basic frame work and time schedule for the CEO recruitment. Ms. Sheppard said Chairman Zuercher, committee members, first of all, please allow me to express our gratitude for the privilege to partner with you in this executive recruitment and assure you that the County stands truly as a partner and serves you, and we are prepared to do that in whatever fashion you deem most appropriate. As Mr. Smith mentioned, we have met twice in the last two weeks, and it's been a very intensive couple of weeks. We have overviewed your materials, which provided history of your organization, the structure of your organization, your priorities, what's important to you, the complexities of the Boards and the Committees, so we have a general understanding of that. We also reviewed surveys that were completed by members of the organization sharing what's important to you and your new executive director or CEO. We reviewed your Website and are familiar with your vision, your mission, and your tactics, and we've incorporated those in the materials you're going to see shortly. We reviewed similar positions across the country and similar recruitments that are being undertaken to get a sense of what this industry is looking for, what's important. We heard clearly that you're looking for strong management leadership experience. We're not naive to some of the challenges you face, so those were in the forefront as we moved forward. We drafted a timeline that would take us from this point to the actual selection of the position. I'll be honest, it's an aggressive timeline and it takes us to the end of the year, but it's built around your meetings and board meetings to ensure at the core that input is asked for, sought, provided in this process, and that your voice is heard. 4

73 We also developed a draft recruitment brochure that Andy's going to share with you today. Again, just to give you something to react to. And we know that oftentimes it's helpful if you have a baseline or something, you can say yes, you're on the right track, or no, you're not. We're here to learn that from you today. The goal today is to share a fairly high-level overview of what the process may look like and then what the competencies and attributes that we believe we heard you were seeking. And Andy will go through those and go in far more detail. But I wanted to briefly discuss that this boils down to four phases. The first of which is defining position needs and desired candidate attributes. And this is really where the ask will come in and Mr. Smith will be coordinating this, but the ask is, again, what is important to you, what are the attributes and the priorities that are critical for this position. And then what's most important are what are your priorities. What are the top three to five attributes, so as those applications come in, we're able to do our job and sort through them and group them in a way that makes sense so your time and attention is spent on the most qualified candidates. We envision that that will take place from today through approximately April 21st. Phase two is the actual recruitment. Let me back up. And defining position needs and desired attributes, the qualifications, the competencies and, again, the feedback to Mr. Smith. Phase two is the recruitment of applicants. And this is also a very important process. Again, Andy will go in more detail, but how does that recruitment take place. The brochure creation is a critical foundation, but who we reach out to, what are the advertising vehicles that are important to you, is this where we engage the executive search firm, that's options and opportunities available to you. What we're envisioning is approximately a 60-day recruitment period with a mid-period review, so we have -- and candidates would be aware of that, so we have an opportunity to look at the applications you received at that point and then make a decision -- do you have the level and qualifications of candidates that you believe are necessary to successfully support you. If not, we can make a mid-term shift and go a different direction if that's necessary. After the recruitment closes, assuming we get the quality candidates that you're looking for, so a selection can begin, then phase three begins the assessment and the evaluation of candidates. All of this is still to be flushed out, who will be sitting in on interviews, whether you have multiple interviews, a first-tier process to whittle down the group into a smaller group for Board consideration. Then the final phase is a selection of the desired candidate and the Board deliberation interview, and then that perfect person to carry this group forward in a way that meets 5

74 your vision and your mission and make sure that you accomplish what, as a committee's and a board that you intended to do. And if I may now, let me turn it over to Andy. And he's going to get into the detail, but I wanted to take the time to meet with you today to, again, express our commitment to support you and provide whatever service that we can to get you to the right candidate to do the right job for the cities and Maricopa County. Thank you. Mr. Mesquita provided a presentation which included: Proposed Recruitment Timeline Example Qualifications Example Candidate Attributes Example Critical Duties & Responsibilities of the CEO/Executive Director Potential Advertising Sources Example Recruitment Brochure Chair Zuercher said thanks Andy. Say thank you to MaryEllen and to Tom, too, for us. We appreciate you guys stepping into this. Questions or feedback from committee members? I'd encourage you to -- you said NACo -- which is fine, because I think NACo is a good place to go. I also think that there's some organization of council of governments, something that people who are looking for job in the council of government's world would read in addition to ICMA or NACo, we should go there, too, because I think we need to emphasize that this job is as much like a MAG type of job as it is some typical transit job. So I think trying to cast a net into that world of city, county, local government management or council of governmental management, we'd like to see what yields as well. Mr. Mesquita said okay. Absolutely. Chair Zuercher said the other thing I might mention, just a little thing, if you have a place to put the logos of the member cities on there. I think that's good because it communicates that Valley Metro is both its own agency, but it is also a council of governments and we need someone who understands that particular setup of Valley Metro. Anything else? So opportunities -- you said people touch base with Scott. Mr. Smith said touch base with me. And we will communicate with Andrew and MaryEllen. How we will proceed now, we have a meeting of the joint subcommittee next on the 15th, so what is today, the 6th, so a week from now we'll have a meeting of the joint 6

75 subcommittee. We will expect some specific instruction on it. There's some housekeeping we have to do as far as the actual setup and the authorization of that committee, but the idea is that through the discussion in the subcommittee, there will be some very specific proposals that will go forward to the board meeting on April 21st to be acted upon and approved. We envision that the Board will give formal approval to move ahead with -- they'll make the decision on, you know, when to engage a headhunter, when and if to engage a headhunter, and to give specific instructions and authority to go ahead and post or start recruiting for this job. Now, some of you, I mean, I know if you look at that and I think MaryEllen says, you know, this is aggressive. We want to be as expeditious as possible. You look at it and say, my gosh, aggressive. We're looking in December. I trust them. And then we went over very, very carefully what they believe it would take to hire the right and the best person. And to give some context, I know there were two transit agencies just this last week or two, Denver and one in central Washington that announced that after Denver over a year and a half they finally had it, and they ended up hiring the person on staff, but they went through a year and a half, because they wanted to make sure they had the right person. Central Washington was over a year. So we are being expeditious and this is somewhat of an aggressive schedule. But we intend to keep to it and to make it work. And I'd especially like to thank Maricopa County because if you're unaware, they are also right in the middle of their own executive search. Tom Manos is retiring as County Manager, and they were so gracious to offer the full resource of their office while in the middle of this recruitment of Mr. Manos' successor, which also, I believe, gives them really pretty current and almost real-time experience on the process now this works through. So we appreciate their involvement. And that's the time frame. So the 15th, the 21st, and then we're in business. Okay. Chair Zuercher said thank you. Thank you. Appreciate that. 5. Management Policies and Procedures Mr. Smith said Mr. Chair, I just wanted to give you a brief update. We've talked a lot about how we are working at improving the policies and procedures. With what these Valley Metro combined has gone through, it's easy to reach into and grab low hanging fruit. We've looked at travel and entertainment. We are continuing to look at that. We've also looked at our credit card policies, how we process things in procurement. And what we realized is as we were looking at these individual policies is that we really needed to do something that was more substantive than simply put a Band-Aid on. And we think that if we change something, while it would be significant and certainly would be worthwhile, we really wanted to enhance the overall control system and management system in Valley Metro. 7

76 And so I believe each of you have been given in front of you a policy development process. We realize that we really needed to establish a formal process on policies. A policy, you might say, to implement policies. And it's been very, very good for us to go through and as we've looked at these different areas to review how we identified the things that needed to be changed and then the process we went through to make that change. And then when those changes are made, to actually go into implementation and making those policies part of our not only the check the box, but really part of our culture. So what you have in front of you is something which was developed. I'd like to thank Rob Antoniak who has been working with me on this special project. And it's really a three-phase process for how we are going to evaluate and implement all of the relevant policies at Valley Metro. Many on your staff have been involved in this process. Rob has reached out on almost everything we've done. We've looked at peer organizations. We have many of your city policies and procedures, whether it relates to credit cards or some other area, and we're looking at those to make sure that we have something that is a best practice but also is consistent with what people are used to doing so that we're not creating a separate culture or a unique culture. We're creating a culture that fits in yet works. We gave this to you to show you how we are proceeding. We will probably next month have some very specific proposals for you and you may have them before then because we'll work either directly through you or through your Intergovs to give things such and we're almost -- we're very clear -- close on things like credit card and travel and entertainment to come up with some very specific policies and we're working on procurement. But I wanted to give you this update to let you know exactly how we are proceeding with this process. And I feel very good about what we've done so far. I feel good about the team here at Valley Metro who has stepped up and really, you know, change is hard. Especially change under these circumstances. There's no doubt that when change is somewhat forced upon you, and let's be honest, you know, we're in a forced change situation, but it's been a good cleansing although at times difficult process. We'll come out of this a much stronger, better organization, better prepared and set up to serve you who are our clients. You know, we're here to serve you to accomplish common goals, but basically to make sure that you and your cities and your elected officials get the level of service that they deserve from Valley Metro. So I don't want to go into detail. If you read, if you have any specific questions what we're doing. Couple of things that I will talk about when we look about -- down about the middle of the page, the end of phase two, you'll notice we talk about management policies and agency policies. The difference of that is that management policy -- agency policy will 8

77 be why we do things, and then management policy will be what we do. And so the difference is that the management policy, and you may have things in your own cities and organizations that you call differently. These are the two terms we came up with where management is basically how we do specific things and agency is the Board will decide whether we are going to do it or not. You know, I would say credit card is a good example. The Board by policy will decide if that is a viable, acceptable form of payment. We will then -- and that will be an agency policy. A management policy will then be what controls we actually have. And we'll obviously need your input and feedback and assistance as we develop both of those, but specifically the management policies, because that's what you do every day. So we thank you in advance for that help and actually in arrears because, as I said, many of your staff have already been involved deeply in these discussions and helping us. That's it. Chair Zuercher said Thank you, Scott. Questions or feedback comments? Well done. Really appreciate it. 6. Travel and Expenditures This item was presented for information. 7. Future Agenda Items Request and Report on Current Events None. With no further discussion the meeting adjourned at 12:33 p.m. 9

78 DATE AGENDA ITEM 3 April 27, 2016 SUBJECT Financial Audit Services Contract Award PURPOSE To request authorization for the Interim Chief Executive Officer (CEO) to procure Financial Audit Services from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP The period of service will cover two fiscal years of FY17 and FY18. BACKGROUND/DISCUSSION/CONSIDERATION Valley Metro Rail Inc. (VMR) and the Regional Public Transportation Authority (RPTA) collectively (Valley Metro), requested quotes from qualified firms of certified public accountants that were available for cooperative agreements on the State of Arizona Contract to complete the VMR and RPTA financial statement and Federal Single Audit Act audits for the fiscal years ending June 30, 2016 and Quotes were requested from four qualified certified public accounting firms on the State Contract with responses received from two firms. The fixed rates per firm are established in the State Contract. Valley Metro will procure the required financial audit services from CliftonLarsonAllen LLP utilizing a cooperative agreement through the State of Arizona contract. Cooperative Agreements are contracts that are solicited and awarded by other public entities and whose cooperative language allows Valley Metro to utilize these contracts for goods and services it requires. This professional services contract will have variable hours at the contracted fixed rates with a not-to-exceed maximum price. Of the two quotes received, Henry & Horne, PLC was determined to be 66% higher than the quote received from CliftonLarsonAllen LLP. The quote from CliftonLarsonAllen LLP had lower fixed rates and lower overall cost and was determined to be fair and reasonable. These audits are to be performed in accordance with generally accepted auditing standards, as set forth in the General Accounting Office's (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1996 and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. In addition, these audits will include the agreed upon procedures for supplemental review of several accounting transaction areas which will include travel expenses, credit card expenditures, reimbursements to employees and contracts & procurement. VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

79 COST AND BUDGET The cost to procure the financial audit services for Valley Metro from CliftonLarsonAllen LLP on a cooperative agreement on the State Contract ADSP is in the amount of $181,650. A 10% contract contingency of $18,165 is recommended for adjustments to scope of work for Supplemental Procedures that is included within the overall budget for the services. The VMR share for the two year contract will be $83,750 and to establish a 10% contract change contingency of $8,375. The FY17 portion is included in the overall budget established for audit services. The RPTA portion for the two year contract will be $97,900 and to establish a 10% contract change contingency of $9,790. The FY17 portion is included in the overall budget established for audit services. Costs for the financial audit services are included within the VMR and RPTA FY17 Operating and Capital Budgets. These costs for VMR will be city funded in the Agency Operating Budget in Project The costs for RPTA will be funded through the overhead allocation pools 1015 and STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 2: Advance performance based operation o Tactic E: Maintain strong fiscal controls to support Valley Metro s longterm sustainability. COMMITTEE PROCESS AFS: April 14, 2016 for information RTAG: April 19, 2016 for information TMC/RMC: May 4, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION Staff recommends that the RMC and TMC forward to the Board of Directors authorization for the Interim CEO to procure the required financial audit services for Valley Metro from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP for $181,650 with a 10% contract contingency of $18,165. CONTACT John McCormack Chief Financial Officer ATTACHMENT None 2

80 DATE AGENDA ITEM 4 April 27, 2016 SUBJECT Passenger Wi-Fi Update PURPOSE To provide an informational update on the passenger Wi-Fi deployments in the region. BACKGROUND/DISCUSSION/CONSIDERATION As a follow-up to the Board presentation in September 2015, Valley Metro continues to make progress on deploying passenger Wi-Fi across the light rail line in partnership with Cox Communications. Cox has invested and installed, at no cost to the agency, Wi-Fi infrastructure at 32 of the light rail station platforms; the new stations along the Northwest Extension are in progress. This effort provides the baseline infrastructure to eventually provide Wi-Fi from on board the vehicles. Full Wi-Fi capability along Valley Metro Rail, on board and at stations, is expected in late 2016/early A marketing partnership with Cox will be developed to support their return on investment. For bus service, City of Phoenix is leading a CAD-AVL procurement. With this effort, a mobile router will be added to all buses to support vehicle management communications. A portion of the capacity could be used for passenger Wi-Fi. Operating costs and viability will be discussed regionally as part of the overall CAD-AVL project. Costs per bus would be similar to an individual cell phone bill at approximately $40 - $60/month, depending on carrier and usage. Per the FY15 System Fact Sheet, the region has 892 buses in its fleet. If deployed across the full fleet, the monthly cost would range between $35,000 - $53,000. COST AND BUDGET To be determined. COMMITTEE PROCESS RTAG: April 19, 2016 for information TMC/RMC: May 4, 2016 for information Boards of Directors: May 19, 2016 for information STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 1: Increase customer focus o Tactic A: Improve customer satisfaction o Tactic C: Enhance customer service to member cities Goal 2: Advance performance based operation o Tactic A: Operate an effective, reliable, high performing transit system VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

81 Goal 5: Advance the Value of Transit o Tactic B: Collaborate with member agencies to advance the value of transit RECOMMENDATION This item is presented for information only. CONTACT William Tsuei Chief Technology Officer ATTACHMENT None 2

82 4/28/2016 Passenger Wi-Fi Update May 2016 Wi-Fi Solution Introduction 2 1

83 4/28/2016 Light Rail WiFi Update - Station Platform WiFi - Partnering with Cox Business Communication - 32 Stations has WiFi devices installed and tested - Working on new Northwest Extention stations - COX is working on portal landing page - Rail Car WiFi - Mesh network will be deployed - Station platform WiFi will be used as the backend infrastructure to support the rail car passenger WiFi deployment - Target Date - Late 2016/early Fixed Route WiFi Update - Cellular based solution will be deployed - Partnering with City of Phoenix on the new CAD/AVL procurement to standardize on the fixed route infrastructure - Monthly cellular data network is approximately $40 60 per vehicle - Cost Analysis Total Number of Revenue Vehicle (VM Fleet only) 342 Dual Cellular Carriers Monthly Charge per Vehicle $ 90 Monthly Data Subscription Fees $ 30,780 Annual Data Subscription Fees for Bus Fleet Operating Expenses $ 369,360 Total Number of Retro-Fit Revenue Vehicle (VM Fleet only) 342 Hardware Capital Expenses per vehicle $ 2,500 Total Retro-Fit Capital Expenses $ 855,

84 DATE AGENDA ITEM 5 April 27, 2016 SUBJECT Chief Executive Officer Recruitment Update PURPOSE To provide an informational update regarding the Chief Executive Officer recruitment process. BACKGROUND/DISCUSSION/CONSIDERATION Scott Smith, Interim CEO along with MaryEllen Sheppard, Assistant County Manager and Andy Mesquita, Deputy Director, Human Resources, with Maricopa County will provide an update on the recruitment process. COST AND BUDGET None COMMITTEE PROCESS TMC/RMC: May 4, 2016 for information Boards of Directors: May 19, 2016 for information RECOMMENDATION This item is presented for information. CONTACT Scott Smith Interim Chief Executive Officer ATTACHMENT None VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

85 DATE AGENDA ITEM 6 April 27, 2016 SUBJECT Fiscal Year 2016 (FY16) Second Quarter Reports PURPOSE To provide an informational update of activities at Valley Metro. BACKGROUND/DISCUSSION/CONSIDERATION Quarterly Reports are provided as an informational update of Valley Metro activities Operations Safety and Security Capital Projects Planning Communication & Marketing Finance COST AND BUDGET None COMMITTEE PROCESS RTAG: April 19 19, 2016 for information TMC/RMC: May 4, 2016 for information Boards of Directors: May 19, 2016 for information RECOMMENDATION This item is presented for information only. CONTACT Ray Abraham Operations and Maintenance Director Adrian Ruiz Director Safety and Security Rick Brown Chief Engineer Wulf Grote, P.E. Director of Planning & Development Hillary Foose Director, Communication & Marketing John P. McCormack Chief Financial Officer ATTACHMENT Quarterly Reports VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

86 4/27/2016 Bus Operations & Maintenance FY16 Q3 Report May 2016 Regional Ridership 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - July Aug Sept Oct Nov Dec Jan Feb *March Bus 4,102,136 4,727,400 4,877,391 4,977,536 4,414,888 4,405,458 3,722,124 4,331,362 4,746,000 Light Rail 1,012,071 1,169,454 1,373,224 1,438,683 1,291,298 1,198,892 1,314,309 1,290,616 1,398,319 FY16 Q2 FY15 Q3 FY16 Q3 Bus 13,797,882 14,249,225 12,799,486* Light Rail 3,928,873 3,895,835 4,003,244 Total 17,726,755 18,145,060 16,802,730 *Estimate 2 1

87 4/27/2016 Fixed Route Bus East Valley Performance Indicator Target FY16 Q2 FY15 Q3 FY16 Q3 On-Time Performance 93% 91% 91% 91% Complaints Per 100,000 Boardings Mechanical Failures Per 100,000 Revenue Miles Preventative Maintenance Inspections - % On-Time % 100% 100% 100% Ridership -- 4,118,744 4,205,133 3,939,611 3 Fixed Route Bus West Valley Performance Indicator Target FY16 Q2 FY15 Q3 FY16 Q3 On-Time Performance 93% 92% 92% 92% Complaints Per 100,000 Boardings Mechanical Failures Per 100,000 Revenue Miles Preventative Maintenance Inspections - % On-Time % 100% 98% 100% Ridership , , ,

88 4/27/2016 Customer Service Call Center Performance Indicator Target FY16 Q2 FY15 Q3 FY16 Q3 Calls Received , , ,006 Complaints Processed -- 7,092 7,397 7,095 NextRide Inquiries Handled by Interactive Voice , , ,868 Response (IVR) NextRide Inquiries Handled by Text Messaging , , ,806 Average Talk Time -- 2:17 2:21 2:17 Average Speed of Answer :40 0:35 0:54 5 3

89 4/27/2016 Light Rail Operations & Maintenance FY16 Q2 Report May 2016 Regional Ridership 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - July Aug Sept Oct Nov Dec Jan Feb *March Bus 4,102,136 4,727,400 4,877,391 4,977,536 4,414,888 4,405,458 3,722,124 4,331,362 4,746,000 Light Rail 1,012,071 1,169,454 1,373,224 1,438,683 1,291,298 1,198,892 1,314,309 1,290,616 1,398,319 FY16 Q2 FY15 Q3 FY16 Q3 Bus 13,797,882 14,249,225 12,799,486* Light Rail 3,928,873 3,895,835 4,003,244 Total 17,726,755 18,145,060 16,802,730 *Estimate 2 1

90 4/27/2016 Light Rail Performance Indicator Target FY16 Q2 FY15 Q3 FY16 Q3 On-Time Performance 95% 93% 92% 92% Complaints Per 100,000 Boardings Mechanical LRV Failures Per 100,000 Revenue Miles Mechanical Systems Failures Per 100,000 Revenue Miles Ridership -- 3,928,873 3,895,835 4,003,244 3 Light Rail (cont.) Performance Indicator Target FY16 Q2 FY15 Q3 FY16 Q3 Preventative Maintenance Inspections - % On-Time (LRV) Preventative Maintenance Inspections - % On-Time (Systems) 80% 100% 100% 100% 80% 91% 96% 95% Employee Injuries

91 4/27/2016 Customer Service Call Center Performance Indicator Target FY16 Q2 FY15 Q3 FY16 Q3 Calls Received , , ,006 Complaints Processed -- 7,092 7,397 7,095 NextRide Inquiries Handled by Interactive Voice , , ,868 Response (IVR) NextRide Inquiries Handled by Text Messaging , , ,806 Average Talk Time -- 2:17 2:21 2:17 Average Speed of Answer :40 0:35 0:54 5 3

92 4/27/2016 Bus Safety & Security FY16 Q3 Report May 2016 Bus Accidents FY16 Q2 FY15 Q3 FY16 Q3 Total NTD 2 1

93 4/27/2016 Dial-a-Ride Accidents No NTD Reportable Incidents 8 No NTD Reportable Incidents FY16 Q2 FY15 Q3 FY16 Q3 5 No NTD Reportable Incidents Total NTD 3 Police Incidents Bus FY-16 Q2 4 incidents with damage under $500 (Cat II) 0 NTD reportable FY-16 Q3 5 Incidents with personal injury or report (Cat III) 4 NTD reportable Category I: Criminal Damage 500$ or higher, with no follow-up. Category II: Criminal Damage under 500$, with follow-up. Category III: Any other police incidents where a report is authored. 4 2

94 4/27/2016 Light Rail Safety & Security FY16 Q3 Report May 2016 Rail Accidents FY16 Q2 FY15 Q3 FY16 Q3 NTD 2 1

95 4/27/2016 Fares Inspected 650, , , , , , , , , , , ,000 50, ,360 15% 428,361 12% 613,488 15% % of total ridership FY16 Q2 FY15 Q3 FY16 Q3 3 Actions with Passengers Not Cited 50% 40% 30% 20% 10% 37% 35% 23% 25% 40% 40% 0% Left Area Warnings Rev Recovery FY16 Q2 FY16 Q3 4 2

96 4/27/2016 Citations Issued by Allied Barton FY16 Q2 FY15 Q3 FY16 Q3 5 Fare Compliance 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 94% 95% 94% FY16 Q2 FY15 Q3 FY16 Q3 6 3

97 4/27/2016 Fare Sweeps January 22, 2016 ( ) 19 th & Montebello The teams made contact with 97 passenger/patrons: 25 Fare Recovery Actions Conducted Retrieved 14 reduced fare passes, no ID or expired 4 Citations Issued 5 Written Warnings Issued 2 Arrests Initiated by local PD 1 for outstanding warrants in Tempe & drug paraphernalia 1 on STOP program (S. Yellowhair) drunk and sleeping on train The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 7 Fare Sweeps February 16, 2016 Price & Apache The teams made contact with 35 passenger/patrons: 13 Fare Recovery Actions Conducted 6 Citations Issued 0 Arrests Initiated by local PD February 17, 2016 ( ) 1 st & Van Buren The teams made contact with 100 passenger/patrons: 5 Fare Recovery Actions Conducted 1 Citations Issued 1 Arrests Initiated by local PD Warrant The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 8 4

98 4/27/2016 Fare Sweeps February 23, 2016 ( ) 19 th & Montebello The teams made contact with 50 passenger/patrons: 9 Fare Recovery Actions Conducted 1 Citations Issued 0 Arrests Initiated by local PD Officer Wilson February 23, 2016 ( ) 19 th & Montebello The teams made contact with 80 passenger/patrons: 9 Fare Recovery Actions Conducted 2 Citations Issued 3 Arrests Initiated by local PD 1 on STOP Program 2 Warrant Sgt. Hanania The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 9 Fare Sweeps March 16, 2016 ( ) 19 th & Camelback The teams made contact with 225 passenger/patrons: 22 Fare Recovery Actions Conducted 2 Citations Issued 2 Warnings Issued 3 Arrests Initiated by local PD All warrants Sgt. Hanania and his team March 25, th & Montebello The teams made contact with 350 passenger/patrons: 12 Fare Recovery Actions Conducted 1 Citations Issued by PD (no fare, no ID) 0 Arrests Initiated by local PD The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 10 5

99 4/27/2016 Staff Additions Additional Mobile Security Approval for contract security to add the PNR/Platform Rover to the contract RFP for Security Services has been released 11 6

100 4/27/2016 Gilbert Road Extension FY16 Q3 Report May Project Progress Design Partnering Meeting with Jacobs Group, Stacey Witbeck Sundt JV, City of Mesa, and Valley Metro held on January 6, % Early Work/Procurement Package Submittal received on March 18, 2016 Value Engineering Report finalized on March 16, potholes completed 2 1

101 4/27/2016 Potholing Progress 3 Project Cost and Budget Description Current Budget Expended ($M) % Earned Forecast ($M) Construction $ 62.6 $ % $ 62.6 Utilities $ 12.7 $ % $ 12.7 Right of Way $ 14.8 $ % $ 14.8 Public Art $ 0.8 $ % $ 0.8 Vehicles $ 20.1 $ % $ 20.1 Design/Mgt. $ 36.0 $ % $ 36.0 Finance Costs $ 5.7 $ % $ 5.7 Total $152.7 $ % $

102 4/27/2016 Project Contingency Description Dollars ($M) Allocated Contingency $6.3 Executed Change Orders $0.0 Allocated Contingency Remaining $6.3 Unallocated Contingency $11.0 Total Project Contingency Remaining $ Project Schedule Description Baseline Current % Complete Construction 09/17/18 08/16/18 0.0% Utilities 08/15/18 07/08/18 1.0% Right of Way 12/25/17 09/25/17 1.0% Public Art 07/19/18 06/17/18 2.0% Design/Mgt. 03/16/19 02/12/ % Vehicles 09/14/18 09/01/19 0.0% Test and Startup 11/19/18 11/19/18 0.0% 6 3

103 4/27/2016 Northwest Extension FY16 Q3 Report May Project Progress Construction Roadway, curb, gutter, and sidewalk construction completed Station construction completed Artwork installation completed TPSS s and Signal Building s completed System Integration Testing continued Pre-Revenue Service commenced and completed Revenue Service began on March 19,

104 4/27/2016 Train Testing at the Dunlap Curve Train Testing at the Tuckey Signal Building WiMAX Antenna Installation at the Glendale Station 3 TVM Shade Canopies at the Glendale Station Artwork on the Lawrence TPSS 4 2

105 4/27/2016 Opening Celebration Dunlap Station 5 Project Schedule Description Baseline Current % Complete Construction 4/26/16 3/18/ % Utilities 6/30/14 7/15/ % Right of Way 10/30/13 8/15/ % Public Art 11/30/15 2/29/ % Design/Mgt. 7/30/15 6/30/ % Test and Startup 7/25/16 3/19/ % 6 3

106 4/27/2016 Project Cost and Budget Description Budget ($M) Expended ($M) % Earned Forecast ($M) Construction $ $ % $ Utilities $ 38.0 $ % $ 38.0 Right of Way $ 76.4 $ % $ 76.4 Public Art $ 1.0 $ % $ 1.0 Design/Mgt. $ 60.5 $ % $ 60.5 Total $ $ % $ Project Contingency Description Dollars ($M) Total Project Contingency $10.0 Executed Change Orders/Budget Transfers $9.9 Total Project Contingency Remaining $

107 4/27/2016 Planning and Accessible Transit FY16 Q3 Report April 2016 Name Transit Planning Projects Type Project Complete Status Transit Standards / Performance Measures Agency Standards Summer 2016 Continued Phase III work (fleet allocation) Buckeye Transit Plan Study Summer 2016 Began work on final task: detailed transit operations and capital plan Regional Paratransit Study Study March 2016 Board approved recommendations (February 2016) Implementation for July 1, 2016 is underway 2 1

108 4/27/2016 Transit Planning Projects Name Peoria Park-and-Ride Site Assessment 2015 Origin and Destination Study Short Range Transit Program Type Study Survey Regional Update Project Complete June 2016 March 2016 May 2016 Status Reviewed concept designs for parkand-ride layout Agreed to phased implementation Presented to Board March 2016 Report distributed and posted on-line Project complete Gathered data from member agencies Held coordination meetings Prepared Board information item 3 Grand Avenue Transit Feasibility Study Project Complete Current Phase 2017 Feasibility Study Status Discussion of transit service concepts for short, mid and long term transit service along the corridor 4 2

109 4/27/2016 Accessible Transit Services FY16 Q3 Report April 2016 Dial-a-Ride East Valley Performance Indicator Target FY16Q2 FY15 Q3 FY16 Q3 One-Way Trips -- 79,625 75,574 78,487 On-Time Performance 95% 97% 96% 96% Complaints Per 1,000 Trips Cost Per Trip -- $26.62 $25.28 $

110 4/27/2016 Dial-a-Ride West Valley Performance Indicator Target FY16Q2 FY 15 Q3 FY16 Q3 One-Way Trips -- 25,596 23,024 25,518 On-Time Performance 95% 97% 96% 97% Complaints Per 1,000 Trips Cost Per Trip -- $25.10 $23.90 $ Other Accessibility Services Performance Indicator FY16Q2 FY 15 Q3 FY16 Q3 RideChoice Trips 12,145 12,676 12,151 Cost Per Trip $11.21 $14.45 $11.22 Platinum Pass Trips 33,600 29,720 30,382 Cost Per Trip $0.75 $0.76 $0.78 ADA Applicants 1, ,036 Unconditional 66% 73% 62% Conditional 21% 15% 23% Temporary 11% 11% 12% Denials 2% 1% 3% 8 4

111 4/27/2016 Accessible Transit Services Highlights Continued developing the next paratransit contractor RFP. Held a series of industry interviews as a part of the Request for Expressions of Interest process. Refining the RFP and scope of work in preparation for a late May release. Posted the application for the VM Accessibility Advisory Group. Regional DAR implementation plans are underway. Developed public outreach strategy. Clarified local preferences for non-ada service questions. Developed regional operating procedures. 9 5

112 4/27/2016 RPTA Planning and Accessible Transit FY16 Q3 Report May 2016 Future Transit Corridors 2 1

113 4/27/2016 Tempe Streetcar Project Complete Current Phase 2019 FTA Project Development Phase Complete Summer 2016 Status Received LONP approval to begin vehicle procurement Continuing with Preliminary Engineering activities FTA provided a medium-high overall project rating Project included in President s FY17 budget 3 Capitol/I-10 West LRT Extension Project Complete Current Phase 2023 Environmental Assessment (EA) Phase Complete Fall 2016 Status ADOT, County and City coordination on-going Revising the per FTA comments and proposed project phasing Anticipate public review of EA by Spring

114 4/27/2016 West Phoenix/Central Glendale Project Complete Current Phase 2026 Alternatives Analysis Phase Complete Status End 2016 Identified a 7-mile leading alternative Continued study of options to cross I-17, transition into Downtown Glendale and cross Grand Avenue. 5 Northwest LRT Extension Phase II Project Complete Current Phase Phase Complete Status 2026 Environmental Assessment Summer 2017 Refining project design and cost estimate Continue to engage with project stakeholders 6 3

115 4/27/2016 South Central LRT Project Complete Current Phase Phase Complete 2034 (tentative) Project Development Fall 2016 Status Continued Environmental Assessment and Preliminary Engineering Submitted notification of intent to FTA to request entry into Engineering phase Requested preliminary project rating from FTA 7 50 th Street Light Rail Station 50th Street Station 8 4

116 4/27/ th Street Light Rail Station Project Current Complete Phase 2019 Conceptual Engineering Phase Complete Spring 2016 Status Completed preliminary engineering Initiated Design, artist and CMAR procurement 9 Fiesta-Downtown Chandler Transit Corridor Study Project Complete Current Phase Phase Complete 2017 Feasibility Study Spring 2017 Status Refined preliminary conceptual designs for potential high-capacity transit options. Developed short-, mid-, and long-term transit options. 10 5

117 4/27/2016 Communication & Marketing FY16 Q3 Report May 2016 Communications Update Supported Transdev work stoppage communication Jan Supported industry conferences Southwest Transit Association APTA Marketing Workshop Extended Safe Place to new 19th Ave. stations 2 1

118 4/27/2016 Community Relations Update Conducted NW Extension Opening Celebration Honoring 19th Ave community 70 local exhibitors 2,100+ free rides 3 advanced tours for staff, media and ADA customers 3 Commute Solutions Update Reached 40k users of ShareTheRide.com Conducted Me Time commuter challenge Jan teams participated 4,300+ alt mode trips logged Hosted 17 Be Bright bike safety events 4 2

119 4/27/2016 Marketing Update Executed media campaign for NW Ext. ridership Initiated beta testing for Ridekick TM accessibility features Produced April 16 Transit Book supplement 5 3

120 4/27/2016 Finance Division FY16 Q3 Report May 2016 Valley Metro RPTA Operating Results Q3 RPTA Budget vs. Actual Report $ Millions For the quarter ending March 31, rd Quarter Year to Date Operations Expenditures Budget Actual Variance (Unfav.) Budget Actual Variance (Unfav.) Fixed Route Bus Paratransit Vanpool Regional Services Planning Administration METRO Rail (Salary, Fringe, OH) (0.1) Total Operations Expenditures Agency FTE's Budget vs. Actual For the quarter ending March 31, rd Quarter Valley Metro Integrated Budget Actual Variance (Unfav.) Staff (Full Time Equivalents)

121 4/27/2016 Open Positions Status Valley Metro Integrated Agency FY 2016 Adopted Positions Status Update FY16 Q2 FY16 Q3 Dec Open Mar Open Operations and Maintenance Human Resources 2 2 Planning & Accessible Transit 1 1 Safety & Security 0 0 Information Technology 4 4 Communication & Marketing 0 0 Design & Construction 0 0 Finance 2 0 Executive 1 1 Legal 2 2 Total Open Positions % 8% Total Authorized Positions Valley Metro RPTA Capital Results Q3 RPTA Budget vs. Actual Report For the quarter ending March 31, rd Quarter Capital Expenditures Budget Actual Year to Date Variance (Unfav.) Budget Actual $ Millions Variance (Unfav.) Bus Purchases Valley Metro Lead Agency Paratransit Vehicles Lead Agency (0.0) Vanpool Vehicles Other Capital METRO Rail Total Capital Expenditures

122 4/27/2016 Finance FY16 Q3 Report May 2016 Valley Metro Rail Operating Results Q3 VMR Budget vs. Actual Report $ Millions For the quarter ending March 31, rd Quarter Year to Date Operations Expenditures Budget Actual Variance (Unfav.) Budget Actual Variance (Unfav.) Rail Operations Future Project Development Agency Operating Total Operating Activities Agency FTE's Budget vs. Actual For the quarter ending March 31, rd Quarter Valley Metro Integrated Budget Actual Variance (Unfav.) Staff (Full Time Equivalents)

123 4/27/2016 Open Positions Status Valley Metro Integrated Agency FY 2016 Adopted Positions Status Update FY16 Q2 FY16 Q3 Dec Open Mar Open Operations and Maintenance Human Resources 2 2 Planning & Accessible Transit 1 1 Safety & Security 0 0 Information Technology 4 4 Communication & Marketing 0 0 Design & Construction 0 0 Finance 2 0 Executive 1 1 Legal 2 2 Total Open Positions % 8% Total Authorized Positions Average Rail Fare FY 2015 History / FY rd Quarter Average Fare - 12 months Rolling by Quarter $0.95 Average Fare Per Ride $0.90 $0.85 $0.80 $0.89 $0.89 $0.86 $0.88 $0.86 Budget $0.88 $0.75 FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 FY16 Q3 Q3 Q3 Fare Revenue Budget $3,597,000 Fare Recovery Budget 38.2% Fare Revenue Collected $3,479,000 Fare Recovery Actual 38.9% Variance ($118,000) 4 2

124 4/27/2016 Valley Metro Rail Capital Results Q3 VMR Budget vs. Actual Report For the quarter ending March 31, rd Quarter Capital Expenditures Budget Actual Year to Date Variance (Unfav.) Budget Actual $ Millions Variance (Unfav.) Rail Extensions Central Mesa (1.7) Northwest Extension PH (2.9) Tempe Streetcar Gilbert Rd Concurrent Non Project Activities Central Mesa (0.1) (0.1) Non Prior Rights Utilities Relocation System wide Improvements th St Station Total Capital

125 DATE AGENDA ITEM 7 April 27, 2016 SUBJECT Travel and Expenditures PURPOSE The monthly travel and expenditures are presented for information. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John McCormack Chief Financial Officer ATTACHMENT Valley Metro Travel Reimbursement Report Valley Metro RPTA and Valley Metro Rail Monthly Accounts Payable over $25,000 VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

126 Valley Metro Regional Public Transportation Authority Monthly AP Payments over $25,000 March 21, April 20, 2016 Document NumberName Transaction Description Effective Date Transaction Amount W004 FirstGroup America, Inc. Feb 2016 Fixed Route Bus Service - East Valley 4/8/2016 4,191, W002 FirstGroup America, Inc. March 2016 Fixed Route Bus Service - East Valley 3/25/2016 3,551, W003 City Phoenix (Transit Dept) April 2016 Fixed Route Service, Dial-a-Ride, Monthly Regional Service 4/14/2016 1,642, W009 FirstGroup America, Inc. Contract C.O.#1 - CBA Health Benefits Adjustment 4/14/2016 1,600, W010 Total Transit, Inc. Feb East Valley ParaTransit Services 4/14/ , W001 ADP PPE 4/10/16 ADP Wages Payable 4/14/ , W001 ADP PPE 3/27/16 ADP Wages Payable 4/1/ , W004 United Healthcare April 2016 Employee Dental, Medical & Vision Coverage 4/1/ , W010 Total Transit, Inc. Feb Northwest Valley ParaTransit Services 4/14/ , W001 ADP RPTA Payroll PPE 4/10/16 Taxes and Garnishments 4/14/ , W001 ADP RPTA Payroll PPE 3/27/16 Taxes and Garnishments 4/1/ , W002 ASRS PPE 4/10/16 ASRS 4/14/ , W002 ASRS PPE 3/27/16 ASRS 4/1/ , W002 Valutrans, Inc Feb 2016 Zoom - Avondale 4/8/ , W002 Valutrans, Inc Feb 2016 Vee Quiva Bus Run 4/8/ , vride, Inc. Dec 2015 Vanpool Services 3/24/ , W002 Valutrans, Inc Feb 2016 Glendale Express Run 4/8/ , CHK America, Inc Feb 2016 Map Design & Updates 4/7/ , W005 Second Generation, Inc. dba Ajo Transportation March 2016 Rural Connector Route 4/14/ , W004 FirstGroup America, Inc. Feb 2016 Engine Rebuild 4/8/ , W001 Second Generation, Inc. dba Ajo Transportation Feb 2016 Rural Connector Route 3/25/ , W009 CopperPoint Mutual Insurance Company April 2016 Rent for Call Center and Mobility Center 4/1/ , Wells Fargo Bank March 2016 Wells Fargo Credit Card Purchases 4/15/ , W004 City of Mesa March 2016 CNG Fuel Expense 3/31/ , Moses, Inc. Nov 2015 Marketing & Advertising 4/7/ , C.A.R.E Evaluators, Inc. Feb Valley Metro In-Person Assessment Services 3/31/ , W010 Total Transit, Inc. Feb Mobility Center Transportation Services 4/14/ , Creative Software Solutions/MJM Feb Electronic Fare System & Mngt Services 3/31/ , Extreme Integration, LLC Video Conferencing Equipment 4/13/ , Don Sanderson Ford, Inc. New 2016 Ford Escape VIN 1FMCU0F77GUB for Mobility Center 3/24/ , ,483,395.48

127 Valley Metro Rail, Inc. Monthly AP Payments over $25,000 March 21, April 20, 2016 Check Number Vendor Name Transaction Description Check Date Check Amount W001 Sundt/Stacy & Witbeck Joint Venture NWX February 2016 NWE Phase 1 Rail Construction 4/8/ , W006 Alternate Concepts Inc. Feb Transportation Services 4/8/ , W Valley Transit Constructors/Kiewit-Mass Joint Venture Dec 2015 to Feb 2016 CME Rail Construction 4/8/ , W006 Stacy and Witbeck-Sundt JV GRE 12/25/16 to 1/26/16 GRE Light Rail Extension 3/25/ , W007 Jacobs Engineering Feb Pymt 7 Gilbert Road Extension Design Svcs 4/8/ , W007 PB-Wong Joint Venture Feb 2016 NWE Project Management / Construction Management 4/15/ , W003 Stacy and Witbeck-Sundt JV GRE Feb 2016 Phase 1 Preconstrution GRE Light Rail Extension 4/1/ , W005 City of Phoenix- Public Transit Feb 2016 NWE Project Funding Agreement 4/15/ , City of Phoenix- Public Transit Jan Northwest Ext. ROW, Signal Equip, Staff Costs 3/23/ , W005 DMS - Facility Services, Inc. Feb Facilities and LRV Cleaning Services 4/8/ , W001 HDR/SR Beard & Associates Feb 2016 Public Involvement Consulting Services 4/15/ , W010 USBC Real Estate LLC May Bldg Rent 4/15/ , W008 Stacy and Witbeck-Sundt JV GRE March 2016 GRE Light Rail Phase 1 PreCon 4/15/ , W006 Knorr Brake Corporation (KBC) LRV Brake Equipment Overhaul 4/15/ , W001 HDR/SR Beard & Associates Jan 2016 Public Invovement Consulting Services 4/15/ , W012 PB-Wong Joint Venture Feb TO 19 GRE 4036 Project Mngt 4/8/ , W009 AECOM Technical Services Jan-Feb NWE - Eng Services 4/8/ , World Wide Technology Cisco Smartnet Maintenance 3/30/ , W012 PB-Wong Joint Venture Feb TO 2 & TO 20 CME/4027 Project Mngt 4/8/ , W003 DMS - Facility Services, Inc. March 2016 Facilities Maintenance Services 4/15/ , W001 Enterprise Technology Services March 2016 IT Services Consultant 4/1/ , City of Phoenix- Public Transit March 2016 Fare Handling Fee 3/30/ , Penn Machine Company, LLC Rubber Block, Tire Mounting Kits 4/6/ , Merge Conceptual Design LLC Fabrication - NWE Artwork Design Glendale Station 4/6/ , Wells Fargo Bank March 2016 Wells Fargo Credit Card Purchases 4/15/ , Chapman Ford New 2016 Ford Escape FWD 4 DR VIN 1FMCU0F73GUB99789 OMC Pool Vehicle 3/23/ , Chapman Ford New 2016 Ford Escape FWD 4 DR VIN 1FMCU0F79GUB38740 OMC Pool Vehicle 3/23/ , Report Total 4,607,978.71

128 Job Title Purpose of Travel Location Dates Traveled Interim CEO Community Streetcar Coalition Valley Metro Travel Reimbursement Report For Travel Completion Dates March 26, 2016 through April 25, 2016 Total Travel Cost Airfare Other Transport Lodging Meals Misc. Kansas City, MO 4/4/16-4/6/16 $1, $ $86.67 $ $96.00 $22.00 * Manager, Capital Development Community Streetcar Coalition Kansas City, MO 4/4/16-4/7/16 $ $ $35.40 $ $ $36.00 Environmental Program Manager Fleet and Facility Coordinator Quality Assurance Program Coordinator Nat'l Assoc of Environmental Professionals Chicago, IL 4/12/16-4/13/16 $1, $ $10.00 $ $ $81.94 ** Bus Inspection Hayward, CA 4/4/16-4/7/16 $1, $ $ $ $ $0.00 Bus Inspection Hayward, CA 4/4/16-4/17/16 $ $ $0.00 $ $ $0.00 Report reflects Out of State (AZ) Travel * Misc. cost includes airport parking. ** Misc. cost includes luggage and parking

129 DATE AGENDA ITEM 8 April 27, 2016 SUBJECT Future Agenda Items Request and Report on Current Events PURPOSE Chairs Fitzhugh and Zuercher will request future agenda items from members, and members may provide a report on current events. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim Chief Executive Officer ATTACHMENT Pending Items Request VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

130 Pending Items Request Item Requested Date Requested Planned Follow-up Date 2

131 April 27, 2016 Rail Management Committee Wednesday, May 4, 2016 Lake Powell Conference Room 101 N. 1 st Avenue, 10 th Floor 11:45 a.m. Action Recommended 1. Public Comment 1. For information A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the RMC on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. Up to three minutes will be provided per speaker or a total of 15 minutes total for all speakers. 2. Minutes 2. For action Minutes from the April 6, 2016 RMC meeting are presented for approval. 3. Operations and Maintenance Center Emergency Backup Generator 3. For action Scott Smith, Interim CEO, will request that the RMC forward to the Board of Directors authorization for the Interim CEO to execute a contract with Cannon and Wendt Electric for an amount of $566,000 to design, purchase and install an emergency generator at the Valley Metro Operations and Maintenance Center and to establish a 10% contract change contingency of $56,000 that is included in the overall budget established for the project. 4. Valley Metro Rail, Inc. Fiscal Year 2017 (FY17) Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2017 thru 2021) 4. For action Scott Smith, Interim CEO, will introduce John McCormack, Chief Financial Officer, who will provide information regarding the FY17 Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21). VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

132 5. Transit Life Cycle Program (TLCP) (Rail Portion) Update Scott Smith, Interim CEO, will introduce Paul Hodgins, Manager, Revenue Generation and Financial Planning, who will present the draft 2016 TLCP update th Street Station Project Train Operations/Construction Interface 5. For information 6. For information Scott Smith, Interim CEO, will introduce Rick Brown, Chief Engineer, who will provide an informational update regarding the 50 th Street Station Project as it relates to construction of the project while light rail train operations continue through the project site. 7. Future Agenda Items Request and Report on Current 7. For information Chair Zuercher will request future RMC agenda items from members and members may provide a report on current events. 8. Next Meeting 8. For Information The next meeting of the RMC is scheduled for Wednesday, June 1, 2016 at 11:45 a.m. Qualified sign language interpreters are available with 72 hours notice. Materials in alternative formats (large print, audiocassette, or computer diskette) are available upon request. For further information, please call Valley Metro at or TTY at To attend this meeting via teleconference, contact the receptionist at for the dial-in-information. The supporting information for this agenda can be found on our web site at 2

133 DATE AGENDA ITEM 1 March 30, 2016 SUBJECT Public Comment PURPOSE A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the RMC on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim Chief Executive Officer ATTACHMENT None VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

134 DATE AGENDA ITEM 2 April 27, 2016 Minutes from the Rail Management Committee Wednesday, April 6, 2016 Lake Powell Conference Room 101 N. 1 st Avenue, Suite 1000 Phoenix, AZ 11:45 a.m. Members Present Ed Zuercher, City of Phoenix, Chair Steven Methvin, City of Tempe, Vice Chair Scott Butler for Chris Brady, City of Mesa Dan Cook, City of Chandler Brent Stoddard for Kevin Link, City of Glendale Chair Zuercher called the meeting to order at 12:34 p.m. 1. Public Comment Mr. Crowley said with the rail committee being what it is, I reiterate, again, when are we gonna start looking at the heavy rail as a way of connecting these communities. I know that the money is a major part of it. And I also enjoyed during that last presentation, you know, none of you make less than six figures and you're gonna be spending a quarter of million dollars on this new guy. I just have a problem that when it was supposedly a joint committee and you're doing the outreach that on those advertisements the first thing it showed was a big rail. And I'm trying to figure out other than to keep on existing, you know, how any of an agency does, that the most important thing is its existence, not necessarily doing what its job is. I wonder why we have this melded position being that when it comes to being multimodal rail, how are you. Where is the rail multimodal. What efforts have been done. And when I come back on three, I'll be bringing that up on 16th Street. I see that you sit there, you're there every month, and I look at all the communities that have, what, when it comes to transit, because you don't have the money, you haven't reached out to your citizenry, whatever, but back when we wrote this document that you get your funding from it was to make the grid pattern functional and then put the rail in as a supportive that they would be working together. When I look at your planning for the 10 and the Glendale and the 16th Street in this month's agenda, where's the multimodal part of it. VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

135 On 16th Street, you're gonna be doing that new alignment, but how are you going to make it so that it works with the bus, because on 12th Street, how many times, Ed, have I had to point out to you that when you put that together why didn't you make it so you could go from the bus to the rail and the rail to the bus. You have not taken care of the infrastructure around 12th Street and many of the others. Where is the connectivity between the rail and the bus. You're the rail committee. Where is your efforts to do that part of the job making it multimodal and a part of the whole system. It was interesting when you were talking about funds and collections, you can't get on the bus without paying. Just a thought. 2. Minutes Minutes from the March 2, 2016 RMC meeting were presented for approval. IT WAS MOVED BY SCOTT BUTLER, SECONDED BY DAN COOK AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 2, 2016 RMC MEETING MINUTES. 3. Consent Agenda The following items were presented on the consent agenda: A. Renewal of Safety and Security Agreement with the City of Phoenix, Public Transit Department B. Network Video Recorder Upgrade C. Amendment of Planning, Conceptual Engineering and Environmental Studies Consultant for the I-10 West and Glendale High Capacity/Light Rail Transit Corridors, Contract No. LRT A-PCES D. City of Tempe Streetcar Project Agreements E. 16 th Street Light Transit (LRT) Station Advanced Feasibility Study: Phoenix Funding Agreement F. Valley Metro Operations and Maintenance Center Security Fence Mr. Smith said we're gonna have to pull 3F. That actually was meant to be a two-phase project. Somehow only the first phase got put on. And we combined them. And as we cut and paste the agenda only the first phase got put on that. That will be fencing completely around the operations center, the Rail Operations Center, which we do not have right now. And that only includes what was originally scheduled as the first phase. We found other money so we could do it all at once in this fiscal year, but that is an incorrect item, so we're gonna have to pull Item 3F. 2

136 Chair Zuercher said are you going to then have to delay a month to get done? Mr. Smith said no. We will, just for here, we'll talk about it, but we anticipate taking it to the Board. Chair Zuercher said you'll go straight to the Board from here? I think that's fine. Good. I was just gonna say don't -- don't let this slow that down. Public Comment Mr. Crowley said I'll start with E, like I said, on the 16th Street alignment it'd be nice when you get that place in that the 16th Street bus have connectivity rather than abuse. In the Tempe streetcar project agreement, why did you take the money out of the bus. Remember, I brought that up. I said, hey, this streetcar, you guys are using bus funds. You're doing this in rail. Why wasn't the rail moneys of Prop 400 used to cover this. Just a thought, not that the bus has way too much money already that well, no. No. It's the only way around. Rail's got more money than God and bus has to try to get it every moment. But then, we fund that how. And then going to B, with the engineering for the west end at Glendale. The alignment for the I-10 one, that's for Phoenix, isn't it. The region is one thing, but that alignment's Phoenix. Nothing to do with Avondale, Tolleson, Goodyear, Buckeye, because that alignment is in the City of Phoenix. Now it's supposed to be a west side alignment, why does it need to be in the same routing as the freeway. Why aren't we extending this spine, as you're calling it, and it isn't a spine; it's a web. And the reason that you have it as a spine is because there's a mountain that stops you from going east and west on 19th Avenue. So when I see that the western part of what we're doing and going into Glendale and the other western communities, I wonder why we're not looking at the Union Pacific alignment, why we're not thinking and considering that those multiple cities are just as congested as -- oh, no, they're more because they don't have the freeway running through the middle of it that you need to start looking this as a region, not just parochially. And the last alignment that I'd like to point out is that when I was at the County Board meeting today, they were dealing with the I-17 and the flood control district. Oh, yeah, the alignment that I've been told more than once, Ed, what's the reason we're going across that freeway and not going to the bus facility. Is that because it's easier to get to ASU west. When you're coming across that freeway why aren't you going to the Transit Center and what would be the best and easiest way to do that to build it in the AC/DC. I brought it up before the County. They can see where that would be happening right. 3

137 You go through the AC/DC right to the Transit Center and, what, the 17 million that we spent on that center and the -- what was it -- $23 million that you put into the park-andride there at the Transit Center. Wouldn't it be nice if the rail went there. Thank you. IT WAS MOVED BY SCOTT BUTLER, SECONDED BY DAN COOK AND UNANIMOUSLY CARRIED TO APPROVE CONSENT AGENDA ITEMS A THROUGH E. 4. Valley Metro Rail, Inc. Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2017 thru 2021 Mr. Smith said thank you, Mr. Chair, members of the committee. We're going to -- John's going to do a very, very abbreviated budget report. But one thing I want to mention, you'll notice some things showing up in our budget in our items as we talked about the fencing, we talked about video surveillance. We have a renewed emphasis and an accelerated and enhancement for security and safety. With the opening of both central Mesa and Northwest, we have almost 30 percent more track. We're getting more diverse ridership, but also we live in a different world. And so we've undergone analysis -- Adrian Ruiz back there, of our safety and security person, has been for many months doing a complete overall safety and security evaluation working with your police --with Mesa, Tempe, and Phoenix Police Departments on both ridership security but also asset security. So you will be seeing as part of this budget and some things that we're going to -- we're going to propose to you over the next couple of months, both inside and outside the budget, because a lot of these things came up after the initial budget, some things to enhance security as we see the need to make some changes, so, John. John McCormack, Chief Financial Officer, provided a presentation which included the following: Baseline: Light Rail Operations Baseline: LRT Capital Project Schedule Calendar Year View Valley Metro Rail Expenses Operating Valley Metro Rail Revenues Operating Valley Metro Rail Expenses Capital Valley Metro Rail Revenues Capital 5-Year Operating Assumptions LRT Project Development 5-Year Project Expenditure Plan Uses of Funds 5-Year Operating Uses and Sources 5-Year Capital Projects Uses of Funds 5-Year Capital Projects Source of Funds 4

138 Budget Schedule FY17 Mr. Smith said if I could, going back to that, just so everyone understands, I mean, it's great to talk about these five-year plans and everything. But as Leslie Rogers from the FTA made it very clear to us, those $184 million dollars, that's a lot of projects coming from the federal pipeline at the same time, and none of those are committed as of yet. So while we're gonna move ahead and be as aggressive as possible at these things and act as though we're gonna get it, he very, very, gently said, I see a lot of 2023 to 2026 projects on that. And Tempe's the only one that's in a budget. So it's the first thing we're gonna work diligently to make sure the others get in there, but there's a lot of competition for moneys. Every project -- every capital program in the federal budget is oversubscribed. So just want to make sure we understand what we're up against in making these things all go through. Chair Zuercher said Thank you, John. Any questions from the committee? Hearing none. We will move on to Item Future Agenda Items Request and Report on Current Events Mr. Butler said Mr. Chairman and Mr. Smith, I know there was some discussion at the Valley Metro -- at the rail board meeting in January when Chair Williams and Board Member Kavanaugh were discussing the impacts of 50th Street and 16th Street station on travel times between Tempe and Mesa to central Phoenix. And we continue to be, the City of Mesa, continues to be very supportive of both projects. We just want to understand the impacts from an operations standpoint on that and what design elements could be incorporated into both of those stations during the construction phase or after that could ensure that we still have great commute times for all of those traveling into central Phoenix from our communities or vice versa and would love to see that brought back both to the management committee and to the board and with an operations view on how those impacts will impact the system. Mr. Smith said Mr. Chair, Mr. Butler, and I apologize that we haven't given formal presentation, I obviously wasn't here in January, not that that's an excuse, but on the other hand, we have been having those discussions both with Phoenix staff and with our staff internally, and we will be in the next month's meeting we'll be prepared with a formal report and presentation not on both -- as much as we can, construction period, operations, and then long-term operations and the potential impact on those, too, because I am -- and we've voiced our -- not concerns, but questions as to, especially on the 50th Street since we're now getting ready to actually start that process. And in the contract that we let, it will require the contractor, the manager, to make sure that operations are run unimpeded, but there are no details. We're basically waiting or 5

139 hoping --not hoping. We're relying on them to come up with our processes. We're gonna have more vigorous discussions internally and with the City of Phoenix about what we can anticipate to make sure that we understand exactly what the contractor would propose and make sure that we don't get halfway down that road and find out that their processes aren't working. So we're gonna have those, and we'll have that presentation ready for you in May. Mr. Butler said thank you, Mr. Chair. Chair Zuercher said good. I look forward to that. Any other items for the committee? Hearing none, we stand adjourned. Thank you. With no further discussion the meeting adjourned at 12:57 p.m. 6

140 DATE AGENDA ITEM 3 April 27, 2016 SUBJECT Operations and Maintenance Center Emergency Backup Generator PURPOSE To request authorization for the Interim Chief Executive Officer (CEO) to execute a contract with Cannon and Wendt Electric for an amount of $566,000 to design, purchase and install an emergency generator at the Valley Metro Operations and Maintenance Center and to establish a 10% contract change contingency of $56,000 that is included in the overall budget established for the project. BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Operations and Maintenance Center (OMC) consists of maintenance/shop buildings, light rail vehicle service areas, administrative office space, and the Rail Operations Control Center. The Rail Operations Control Center consists of the central operating system that provides control of the light rail vehicles and other equipment along the rail alignment. The OMC currently has a backup battery system for the Rail Operations Control Center in case of a power outage but for only a maximum of two hours. The OMC also has emergency lighting located throughout the facilities. Valley Metro is in need of a backup emergency generator in case of a power outage that lasts longer than two hours for an uninterrupted power supply to keep the Rail Operations Contol Center operational. The generator will also provide power to the emergency lighting throughout the facility. Valley Metro issued an Invitation for Bid (IFB) in January 2016 soliciting bids from qualified firms to design, purchase and install an emergency generator that shall support the load demand at the OMC with some ability for additional load growth. Valley Metro received a single bid from Cannon and Wendt Electric. After review of the bid responsiveness, technical requirements and pricing, Cannon and Wendt Electric was deemed a responsive and responsible bidder. The price is deemed fair and reasonable when compared to an independent cost estimate prepared by staff. COST AND BUDGET The cost for the design, purchase and installation of an emergency generator from Cannon and Wendt Electric is in the amount of $566,000 and is included in the METRO Proposed FY17 Operating and Capital Budget. A 10% contract contingency of $56,000 is established that is included within the overall budget for the project for unanticipated changes. This project is funded with Public Transportation Funds (PTF) and is part of the systemwide improvements program. VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

141 STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 2: Advance performance based operation o Tactic A: Operate an effective, reliable, high performing transit system COMMITTEE PROCESS RTAG: April 19, 2016 for information RMC: May 4, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors authorization for the Interim CEO to execute a contract with Cannon and Wendt Electric for an amount of $566,000 to design, purchase and install an emergency generator at the Valley Metro Operations and Maintenance Center and to establish a 10% contract change contingency of $56,000 that is included in the overall budget established for the project. CONTACT Ray Abraham Chief Operations Officer ATTACHMENT None 2

142 DATE AGENDA ITEM 4 April 27, 2016 SUBJECT Valley Metro Rail, Inc. Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2017 thru 2021) PURPOSE To request Board approval of the Fiscal Year 2017 Budget (July 1, 2016 thru June 30, 2017) and acceptance of the Five-Year Operating Forecast Capital Program (FY 2017 thru 2021). BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Rail, Inc. (VMR) FY17 combined operating and capital budget (the budget) is $196.9 million (M) and includes $83.6M in projects funded with Proposition 400 Public Transportation Fund (PTF) revenues for light rail/high capacity transit capital. The preliminary FY17 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards, reserves and bond proceeds. The budget was developed in compliance with Board of Directors adopted budget, financial and Transit Life Cycle Program (TLCP) policies. The annual budget is prepared on a modified accrual basis and adopted by the Board of Directors each fiscal year. The legal level of budgetary control is the total annual appropriated budget. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. The total operating budget of $56.9M represents a $5.1M (10%) increase from the previous year s operating budget of $51.9M. The total capital budget of $140.0M represents a $56.6M (68%) increase from the previous year s capital budget of $83.5M. Details and explanations of the major budget changes are discussed in the attached Executive Summary document. With the agency integration, the RPTA and VMR budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. Salary and overhead charges to bus and rail projects are based on actual time worked on each project. For FY17 there are 310 employees budgeted in the integrated agency, with 131 FTE s budgeted to RPTA activities and 179 budgeted to VMR activities. The compensation budget based on 2.5% increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget. VALLEY METRO 101 N 1ST AVE STE 1300 PHOENIX AZ

143 STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY : Goal 2: Advance performance based operation o Tactic E: Maintain strong fiscal controls to support Valley Metro s long-term sustainability. COMMITTEE PROCESS Preliminary Budget Review: Financial Working Group: February 26, 2016 for information RTAG: March 16, 2016 for information RMC: April 6, 2016 for information Board of Directors: April 21, 2016 for information Proposed Budget Adoption: RMC: May 4, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION It is recommended that the RMC forward to the Board of Directors approval of the Fiscal Year 2017 Budget (July 1, 2016 thru June 30, 2017) and accept the Five-Year Operating Forecast Capital Program (FY 2017 thru 2021). CONTACT John P. McCormack Chief Financial Officer ATTACHMENT Valley Metro Rail, Inc. Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2017 thru 2021) Executive Summary 2

144 4/28/2016 Valley Metro Rail Preliminary FY17 Budget Overview May Valley Metro Rail Expenses - Operating Uses of Funds $millions Uses of Funds FY17 FY16 Change $ Revenue Operations $44.9 $39.4 $5.5 Future Project Development (0.5) Agency Operating Budget Operating Activity Uses $56.9 $51.8 $

145 4/28/2016 Valley Metro Rail Revenues - Operating Sources of Funds $millions Funding Sources FY17 FY16 Change $ Fare Revenue $15.9 $14.0 $1.9 Advertising Revenue Federal 5307 PM Federal CMAQ (1.5) TIGER (1.3) Member Cities MAG / RPTA (RARF) PTF Sales Tax Revenue Operating Revenue Totals $56.9 $51.8 $5.1 5 Valley Metro Rail Expenses Capital Uses of Funds $millions Capital Uses of Funds FY17 FY16 Change $ Northwest Extension $3.2 $49.2 ($46.0) Central Mesa Extension (10.9) Gilbert Road Extension Tempe Streetcar Extension th Street LRT Station South Central Extension Non-Prior Rights Utilities CNPAs - Mesa Extension (0.3) Systemwide Improvements Capital Uses Totals $140.0 $83.4 $

146 4/28/2016 Valley Metro Rail Revenues Capital Sources of Funds $millions Funding Sources FY17 FY16 Change $ Federal New Starts $0.0 $7.1 ($7.1) Federal CMAQ Federal SOGR Member Cities Less Repayment Phoenix NW (60.0) 0.0 (60.0) PTF Bond Revenue PTF Sales Tax Revenue (25.8) Capital Revenue Totals $140.0 $83.4 $ Year Operating Uses and Sources $millions Uses of Funds - Operating Budget FY Operations & Maintenance $ Project Development Planning Support 44.0 Agency Operating Budget 5.8 Total Uses $ Sources of Funds - Operating Budget FY Fare Revenues $ 95.1 Advertising 5.8 Phoenix 90.8 Tempe 34.9 Mesa 26.3 Glendale 1.2 Chandler 0.4 Regional 40.1 Federal 6.9 Total Sources $

147 4/28/ Year Capital Projects Uses of Funds $millions FY USES OF FUNDS Northwest Extension Phase 1 $ 3.2 Central Mesa 8.6 Gilbert Rd Tempe Streetcar South Central th Street Station 17.7 Northwest Extension Phase Capitol I-10 West 64.3 West Phoenix Central Glendale Subtotal HCT Corridors 1,075.3 Non-Prior Rights Utilities Relocation 23.7 Systemwide Improvements 64.3 Total Capital Costs $ 1, Year Capital Projects Source of Funds $millions SOURCES OF FUNDS Phoenix $ Less Repayment Phoenix NW Advance (60.0) Tempe 13.0 Mesa 3.6 Glendale 14.7 Subtotal PTF Sales Tax Revenue (Allocation 43.24%) PTF (Reserve) / Bond Borrowing 52.8 PTF Regional Revenue - Demand TPAN 71.0 Federal Revenues: FTA CMAQ Subtotal Federal Total Revenues $ 1,

148 4/28/2016 Budget Schedule FY17 Nov 19 FY17 Agency Budget Initiatives presented to Boards for information Feb 18 Board approves service changes effective April 2016 Feb 26 Mar 1 Apr 6 Apr 14 Apr 14 Apr 21 Preliminary FY17 Budget presented to Fin. Working Group Executive Summary & 5 year Plan posted to website Draft Budget delivered to TMC/RMC/AFS Member City Comments due Budget presented for information to AFS Budget presented to Board of Directors for information May 19 Board Meeting for Budget Adoption 15 5

149 4/25/16 FY17 PRELIMINARY ANNUAL OPERATING AND CAPITAL BUDGET Valley Metro Rail, Inc. (VMR) is a public non-profit corporation whose members are the cities of Chandler, Glendale, Mesa, Phoenix, and Tempe. VMR plans, designs, constructs and operates light rail/high-capacity transit system in metro Phoenix, Arizona. FY17 Operating Activities Total Operating Activities for FY17 are $56.9 million, an increase of $5.1M or 9.8% from FY16. Primary sources of funds are $56.9M as detailed below: Public Transportation Fund (PTF) sales tax revenue is $6.4M. PTF funding requirements for project development activities are up by $0.9M. Member city funding of $31.1M is up from $26.3M due to operating 12 months of the 26-mile line, additional $1.3M future project development activities and $0.2M increase for agency operations. Fare revenue is $15.9M, which is up due to addition of six miles of service for a full 12 months. Primary uses of funds are also $56.9M as detailed below: Future project development is $11.0M, down primarily due to completion of project development for the Tempe Streetcar and South Central capital projects. Revenue operations is $44.9M, up due to operating 12 months of the 26-mile line, increased maintenance costs to maintain a state of good repair and increased fare inspection and security resources. VMR FY17 Preliminary Budget Executive Summary Valley Metro 1

150 FY17 FY16 VMR Operating Sources of Funds FY17 vs FY16 PTF Sales Tax Revenue MAG / RPTA (RARF) Member Cities TIGER Federal CMAQ Federal 5307 PM Advertising Revenue Fare Revenue $0.0 $10.0 $20.0 $30.0 $40.0 FY17 FY16 VMR Operating Uses of Funds FY17 vs FY16 Agency Operating Budget Future Project Development Revenue Operations $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 VMR FY17 Preliminary Budget Executive Summary Valley Metro 2

151 FY17 Capital Activities Total Capital Activities for FY17 are $140.0 million, an increase of $56.6M or 68% from FY16. Primary sources of funds are $140.0M as detailed below: PTF sales tax revenue is $34.1M, down from $59.9M last year due to completion of Central Mesa and Northwest Phoenix light rail extensions. PTF bond revenue is $43.1M with series 2017 bond issue to fund upcoming rail projects. Federal CMAQ is $73.2M, up from $14.5M primarily for Gilbert Road Extension, Tempe Streetcar and LRV acquisition. Primary uses of funds are $140.0M as detailed below: Systemwide Improvements $16.3M Non- Prior Rights Utilities $3.2M South Central Extension $39.4M 50th Street Station $5.8M Tempe Streetcar $9.5M Gilbert Road Extension $57.9M Central Mesa Extension $4.7M Northwest Extension $3.2M FY17 FY16 VMR Capital Sources of Funds FY17 vs FY16 Member Cities Member City revenue includes payment of $60.0M advance to Phoenix. PTF Sales Tax Revenue PTF Bond Revenue Federal SOGR Federal CMAQ Federal New Starts $0.0 $20.0 $40.0 $60.0 $80.0 VMR FY17 Preliminary Budget Executive Summary Valley Metro 3

152 FY17 FY16 VMR Capital Uses of Funds FY17 vs FY16 Systemwide Improvements CNPAs - Mesa Extension Non-Prior Rights Utilities South Central Capital Project 50th Street LRT Station Tempe Streetcar Extension Gilbert Road Capital Project Central Mesa Extension Northwest Extension $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 VMR FY17 Preliminary Budget Executive Summary Valley Metro 4

153 FY17 Baseline Service and Capital Plan Assumptions Passenger Services Rail Operations Service Frequency Plan Weekday trains will run with two to three cars at 12-minute intervals during peak hours and 15 to 20-minute intervals off peak. Weekends do not require peak service trains and will operate with one or two cars at 15 to 20-minute headways. Ridership and Fare Revenue Total ridership is forecasted at 17.3M passengers for FY17 with fare revenues generating $15.9M The estimate includes an increase of an estimated 2.7M rides due to the Central Mesa and Northwest Extensions, which are commencing revenue service in FY16. Over the course of the FY17, average weekday boardings are forecasted at 52,000 while Saturday and Sunday average ridership are forecasted at 43,000 and 30,000 per day respectively. Project Development High-Capacity Transit Projects The Regional Transportation Plan (RTP), adopted by the Maricopa Association of Governments (MAG) and financed under the one-half cent sales tax extension, identifies 66 miles of light rail/high-capacity transit corridors to be implemented by The 1.9-mile Gilbert Road Extension, to serve east Mesa, is in final design. The 3-mile Tempe Streetcar project progresses into final design. City of Phoenix voters approved Proposition 104 (Transportation 2050), a 35-year transportation plan that would expedite several miles of light rail/high-capacity transit and add additional corridors to the regional high-capacity transit system. Under the plan and timing as shown on table below, additional service areas are identified: o 5-mile South Central Extension o 1.7-mile NW Extension Phase II o 5-mile West Phoenix/Central Glendale transit corridor o 1.5-mile Capitol/I-10 West Extension (Phase I) o 9.5-mile Capitol/I-10 West Extension (Phase II) o 12-mile Northeast Phoenix transit corridor VMR FY17 Preliminary Budget Executive Summary Valley Metro 5

154 The timing of the projects in the program is depicted on the following schedule shown below: VMR FY17 Preliminary Budget Executive Summary Valley Metro 6

155 FY17 Goals and Initiatives In January 2015, the Valley Metro RPTA and Valley Metro Rail Boards adopted the Valley Metro Strategic Plan for FY16 through FY20. The Strategic Plan provides clear definition of the purpose of the organization and establishes realistic goals and objectives for a five-year period. This plan ensures the most effective use of the organization s resources by focusing those resources on key priorities. Below are the five, overarching goals identified in the Strategic Plan: 1. Increase customer focus 2. Advance performance based operation 3. Grow transit ridership 4. Focus on economic development, regional competitiveness and financial resources 5. Advance the value of transit With the initiation of the FY17 budget process, staff has developed a number of initiatives that align with the Strategic Plan and will be incorporated into the FY17 budget, as summarized below. 1. Increase Customer Focus: FY17 Initiatives Valley Metro FY17 Investment $ Thousands VMR Investment Total Investment Improve Customer Satisfaction Integration of greater, more effective technology, improving passenger information systems with real time data, such as the website, facility signage and a Ridekick mobile application, and implementation of an enhanced fare media solution, including smart cards and mobile ticketing. Develop smart card fare program/mobile ticketing $ $ Renovate website & mobile site $ $ Evaluate and enhance passenger safety and security. Increasing rail fare inspection and security resources $ $ VMR FY17 Preliminary Budget Executive Summary Valley Metro 7

156 2. Advance Performance Based Operation: FY17 Initiatives Valley Metro FY17 Investment $ Thousands VMR Investment Total Investment Operate an effective, reliable, high performing transit system. Develop an asset management plan for Valley Metro in conjunction with member agencies $ 75.0 $ Enhance Valley Metro s role in sustainability and the environment. Implement the Sustainability Action Plan with focus of updating of design standards and urban design guidelines. $ $ Deliver projects and services on-time/on-budget. Advance projects and services in the current regional transportation plan and Transit Life Cycle program. Expediting S Central Corridor: $2,109,000 Expediting Northwest Phase II: $907,000 Advancing Northeast Corridor feasibility study: $291,000 $ 3,307.0 $ 3,307.0 Maintain a culture to recruit and retain a qualified and diverse workforce. Develop a program to recruit and retain a qualified and diverse workforce. Consultant engagement to for comprehensive training assessment and new employee orientation programs $ 20.0 $ 40.0 Maintain strong fiscal controls to support Valley Metro s long-term sustainability. Establishing Internal Audit Department with dual reporting responsibility to the Board of Directors and VM Executive Office $ 94.5 $ With the recent passage of Transportation 2050 in the City of Phoenix, rail service to North, South and West Phoenix neighborhoods are being moved forward. Planned completion dates are shown. VMR FY17 Preliminary Budget Executive Summary Valley Metro 8

157 FY17 Goals and Initiatives 3. Grow Transit Ridership: FY17 Initiatives Valley Metro FY17 Investment $ Thousands VMR Investment Total Investment Improve connectivity of transit services for greater effectiveness. Analyze the region s transit system to optimize connectivity between transit services, including new LRT extensions - Fiesta Downtown Chandler Study: $250,000 - West Glendale Feasibility Study: $657,000 $ $ Communicate availability, attractiveness and safety of transit service Conduct discretionary ridership campaigns to continue to attract riders $ $ Focus on Economic Development, Regional Competitiveness and Financial Resources: FY17 Initiatives VMR Investment Total Investment Work with local communities to leverage transit oriented development (TOD) to increase investment in transit Research and monitor and report regional trends regarding TOD implementation and successes - Support to TOD working group and PNR utilization study: $100,000 $ $ Advance the Value of Transit: FY17 Initiatives VMR Investment Total Investment Develop and implement a communications plan to inform and educate the public on the value of transit Continue media campaign to raise greater awareness of the value of transit $ 63.0 $ VMR FY17 Preliminary Budget Executive Summary Valley Metro 9

158 Agency Staff Overview Valley Metro RPTA and Valley Metro Rail budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. For FY17, there are 310 employees budgeted in the integrated agency; 131 FTE s are budgeted to RPTA activities; 179 to VMR activities. Staffing levels are reviewed on an annual basis with zerobase analysis of level of effort requirements to fulfill work requirements in the five-year period commencing with the beginning of the new fiscal year. Salary and fringe benefit compensation levels are measured against comparable regional agencies, member cities and peer transit agencies located in the western U.S. FY17 Compensation and Fringe Benefit Assumptions Total compensation budget is based on a 2.5% increase. For staff salary changes, merit increases are based on employee performance. Division level control is in place to contain total salary and fringe costs within budget. Agency health care costs will increase. Program design adjustments are in place to hold total agency fringe benefit cost increases to within 3% of FY16 levels. Staffing cost analysis $ million FY 17 FY 16 change pct change Salaries % Fringe Benefits % Total Salary and Fringe Benefits % Analysis of changes Salary Fringe Total Base Compensation FY Base increase Position Changes New Base Compensation FY Change FY17 Preliminary Budget vs. FY16 Adopted Budget 0.9 $ million Five new agency positions are planned to improve agency internal controls and strengthen fixed route bus and Accessible transit contractor performance, as noted below. Title Division Scope of Work Manager, Internal Audit Chief Executive Office Agency Internal Controls with primary reporting to Board Internal Audit Specialist Chief Executive Office Internal Control testing and compliance Program Representative Planning & Accessible Transit Support East Valley, West Valley, and regional paratransit Scheduler Operations and Maintenance - RPTA Fixed Route Bus schedule analysis and management Program Coordinator Operations and Maintenance - RPTA Fixed Route Bus contractor performance management VMR FY17 Preliminary Budget Executive Summary Valley Metro 10

159 FY17 Preliminary Budget Financial Summary In the table below, detailed revenues and expenses are shown with comparisons to the prior year s amended budget. The Note column (on the far right side) indicates reference to explanations which are provided in the following table. Uses of Funds ($,000) FY16 Amended FY17 Prelim Budget Analysis Note # Change Operating Activities: Revenue Operations 39,415 44,890 5,475 1 Future Project Development 11,541 10,967 (574) 2 Agency Operating Budget 909 1, ,864 56,938 5,074 Capital Projects: Northwest Extension 49,178 3,203 (45,975) 3 Central Mesa Extension 15,549 4,673 (10,876) 4 Gilbert Road Extension 11,516 57,984 46,468 5 Tempe Streetcar Extension 1,198 9,476 8, th Street LRT Station 747 5,780 5,033 7 South Central Extension - 39,417 39,417 8 Non-Prior Rights Utilities Relocations 1,467 3,185 1,718 9 CNPAs - Mesa Extension (321) 10 Systemwide Improvements 3,497 16,305 12, Subtotal Capital before Debt Service 83, ,023 56,551 Total Uses of Funds 135, ,961 61,625 Note Budget Analysis - Uses of Funds 1 FY17 rail operating costs increase by 14% over FY16 levels. In FY17, 26 miles of service will be operated for the full year. Maintenance costs rise with scheduled preventive maintenance activities to maintain the system in a state of good repair, and increased fare inspection and security resources are being deployed. 2 Future Project Development costs are down by $0.6M due to decrease in planning activities related to future corridors and system planning; primarily due to completion of project development for the Tempe Streetcar capital project. 3 Northwest Extension Phase I base project costs are down by $46.0M due to completion of the construction portion of the project and commencement of passenger operations in March of Central Mesa Extension base project costs are down by $10.9M. Remaining activity in FY17 is related to the train signal control system upgrade. 5 Gilbert Road LRT Extension project construction to commence in FY17, along with the purchase of Light Rail Vehicles. Annual expenditures forecasted at $58.0M. 6 Tempe Streetcar design and pre-construction activities commence. Annual expenditures forecasted at $9.5M. VMR FY17 Preliminary Budget Executive Summary Valley Metro 11

160 Note Budget Analysis - Uses of Funds 7 50th Street LRT Station preliminary design and ROW acquisition work continues with construction to commence in FY17. 8 South Central Capital Project pre-construction activities to begin in FY17. Annual design and project management expenditures forecasted at $39.4M. 9 Non-prior rights utilities relocations up by $1.7M due to increased activity for construction projects. FY17 amounts include Tempe Streetcar ($0.5M), 50th Street LRT Station ($0.6M), and Gilbert Road Extension ($2.0M). 10 No FY17 City of Mesa funding for Central Mesa Extension Concurrent Non-Project Activities (CNPA). 11 Systemwide Improvements include the purchase of 8 light rail vehicles for future extensions ($6.0M), LRV overhauls ($4.7M), improvements for station lighting and railing, security camera component upgrades, ticket vending machine upgrades and other activities ($5.6M). Sources of Funds ($,000) FY16 Amended FY17 Prelim Budget Analysis Note # Change Operating Activities: Fare Revenue 14,019 15,909 1, Advertising Revenue 876 1, Federal 5307 PM 1,143 1, Federal CMAQ 1,451 - (1,451) 13 TIGER 1, (1,313) 14 Member Cities 26,324 31,139 4, MAG / RPTA (RARF) 1,000 1,000 - PTF Sales Tax Revenue 5,564 6, ,864 56,938 5,074 Capital Projects: FTA - Section ,084 - (7,084) 17 Federal CMAQ 14,491 73,232 58, Federal 5337 SOGR Member Cities 1,665 49,237 47, Less Repayment Phoenix NW Advance - (60,000) (60,000) 20 PTF Bond Revenue - 43,099 43, PTF Sales Tax Revenue 59,891 34,113 (25,778) 22 83, ,023 56,551 Total Sources of Funds 135, ,961 61,625 VMR FY17 Preliminary Budget Executive Summary Valley Metro 12

161 Note Budget Analysis - Sources of Funds 12 Fare revenue increases from $14.0M to $15.9M; assumes 17.3 million rides with an average fare forecasted to be $0.92 per ride in FY17. Ridership grows with addition of 6 miles of service for full 12 months. Average fare increase due to fare pricing adjustment anticipated in late 2017, pending Board approval. 13 With Tempe Streetcar project moving into capital phase, no Federal CMAQ project development funds programmed for FY Project Development Federal TIGER funds down by $1.3M due to South Central entering into preconstruction activity in FY17, which will be funded by City of Phoenix within the capital project budget. 15 Member City contributions for Operations are up from $26.3M to $31.1M in FY17 due to operating 12 months of the base service along with the Central Mesa and Northwest Extensions ($3.3M net of revenues), an additional $1.3M of future project development activities, primarily related to South Central Corridor project in Phoenix, and $0.2M increase for agency operations. 16 PTF Sales Tax revenue funding requirements for project development are up by $0.9M, primarily related to Northwest Phase II, West Phoenix-Central Glendale and Phoenix I-10 Capitol projects. 17 No Federal New Starts funds programmed for FY17. Activity in FY16 was to complete the Central Mesa Extension project. New Starts funds for the Tempe Streetcar are anticipated in FY Federal CMAQ increasing by $58.7M due to increasing funding requirements for construction activity. FY17 programmed activity includes Central Mesa Extension SCADA ($3.7M), Gilbert Road ($54.7M), Tempe Streetcar ($7.6M), Systemwide Improvements ($4.9M), and Non Prior Rights Utilities ($2.3M) 19 Member City contributions for Capital Projects total $49.2M for FY17. Project amounts for FY17 include South Central funding by Phoenix ($39.4M), 50th Street Station funding by Phoenix ($5.8M), Gilbert Road Extension funding by Mesa ($3.3M), and Non Prior Rights Utilities ($0.7M). 20 In June of 2017, the City of Phoenix will be repaid $60.0M in advances the City made in FY 13 and FY 14 to accelerate completion of the NW Extension. Funding is from Public Transportation Funds. 21 It is anticipated that RPTA will issue $60.0M series 2017 bonds to support rail capital projects in the spring of Consumption of bond proceeds is estimated at $43.1M in FY PTF Sales Tax funding will be reduced from $59.9M to $34.1M primarily due to construction activity winding down for Northwest and Central Mesa Extensions, offset by increased funding requirements for Tempe Streetcar and Systemwide Improvements. VMR FY17 Preliminary Budget Executive Summary Valley Metro 13

162 FY17 FY21 PRELIMINARY FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM The Valley Metro Rail Five-Year Operating and Capital Program identifies anticipated operating costs, capital projects and costs and the associated funding sources. The FY17 FY21 Five- Year Operating and Capital Program is submitted to the Board of Directors along with the FY17 Operating and Capital Budget. Five-Year Operating Assumptions 1.9-mile Gilbert Road Extension opens revenue service in November th Street Station opens revenue service in May mile Tempe Streetcar opens revenue service in December 2019 The Operations & Maintenance (O&M) costs are projected based on current cost history with a general inflation escalation factor of 3.0%. Anticipated structural changes to staffing, contract and materials expenses are forecasted to meet customer demand and maintain the system in a state of good repair. System-wide and specific light rail corridor project development activities are included in the operating budget. Once a project alignment has been approved by local and regional policy makers and federal environmental approvals are secured the project costs are recorded in the capital program. Agency Operating costs include those costs not directly allocable to capital projects or to passenger operations. Included are costs of annual audit, federal and state legislative representation and memberships to transportation related organizations. Fares Effective March 2013, the current Regional Fare Policy is as follows: *Reduced Fare Youth (6 18), seniors (age 65 and over) and people with disabilities In accordance with the regional fare policy to achieve a 25% fare recovery ratio, fare discount structure changes are projected for FY17 to increase average fare by 5%. Within the 5 year plan, a base fare increase is anticipated in FY20. VMR FY17 Preliminary Budget Executive Summary Valley Metro 14

163 FY17 FY21 Operating Uses and Sources of Funds Operating costs and funding planned for the FY17 FY21 planning horizon are summarized as follows (in year of expenditure ($,000): TOTAL USES OF FUNDS Operations and Maintenance $ 44,890 $ 46,484 $ 49,390 $ 53,940 $ 56,996 $ 251,700 Project Development Planning Support 10,967 11,532 7,087 6,953 7,474 44,013 Agency Operating Budget 1,081 1,115 1,148 1,183 1,219 5,746 Total Uses 56,938 59,131 57,625 62,076 65, ,459 SOURCES OF FUNDS LRT Fares: Phoenix 9,828 11,028 11,264 11,945 11,847 55,911 Tempe 3,751 3,677 3,756 5,214 6,139 22,537 Mesa 2,331 2,551 3,463 4,161 4,126 16,631 Subtotal Fares 15,909 17,257 18,482 21,320 22,112 95,079 Other Revenues: Phoenix 20,318 17,599 17,815 17,300 17,786 90,818 Tempe 5,699 6,015 6,092 7,747 9,333 34,886 Mesa 4,175 4,206 5,563 6,111 6,271 26,326 Glendale ,155 Chandler Advertising 1,100 1,133 1,167 1,202 1,238 5,841 Subtotal Local Revenues 32,239 29,370 30,700 32,419 34, ,420 Capital Planning Funds - PTF 6,417 8,536 6,087 5,353 5,274 31,667 MAG ,500 RPTA ,500 TIGER Federal 5307 PM 1,197 1,329 1,356 1,383 1,412 6,679 CMAQ - 1, ,200 3,440 Total Sources $ 56,938 $ 59,131 $ 57,625 $ 62,076 $ 65,689 $ 301,459 VMR FY17 Preliminary Budget Executive Summary Valley Metro 15