PLANNING AND FINANCE COMMITTEE MEETING

Transcription

1 PLANNING AND FINANCE COMMITTEE MEETING A P R I L 2 2,

2 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY ROSTER PLANNING & FINANCE COMMITTEE COUNTY MEMBER Riverside: Daryl Busch (Chair) 1 Vote Mayor City of Perris Karen Spiegel Council Member City of Corona Ventura: Keith Millhouse (Vice-Chair) 1 Vote Council Member City of Moorpark Los Angeles: Michael Antonovich 1 Vote Supervisor, 5 th District County of Los Angeles Richard Katz City of Los Angeles Mayor Appointee Beatrice Proo Appointed by Metro Maureen Micheline Appointed by Metro San Bernardino: Patrick Morris 1 Vote Mayor City of San Bernardino Alan D. Wapner Council Member City of Ontario Orange: Paul Glaab 1 Vote Council Member City of Laguna Niguel Don Bankhead Mayor Pro Tem City of Fullerton 700 S. Flower Street, Suite 2600 Los Angeles, CA

3 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY PLANNING AND FINANCE COMMITTEE FRIDAY, APRIL 22, 2011, 10:00 A.M. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY BOARD ROOM ONE GATEWAY PLAZA, 3 rd FLOOR LOS ANGELES, CALIFORNIA AGENDA DESCRIPTIONS The agenda descriptions are intended to give notice to members of the public of a brief general description of items of business to be transacted or discussed. The posting of the recommended actions does not indicate what action will be taken. The Committee may take any action that it deems to be appropriate on the agenda item and is not limited in any way by the notice of the recommended action. The Chair reserves the right to discuss the items listed on the agenda in any order. A person with a disability may contact the Committee Secretary's office at (213) or via batesc@scrra.net at least 72-hours before the scheduled meeting to request receipt of an agenda in an alternative format or to request disability-related accommodations, including auxiliary aids or services, in order to participate in the public meeting. Later requests will be accommodated to the extent feasible. SUPPORTING DOCUMENTATION The agenda, staff reports and supporting documentation are available from the Committee Secretary, located at 700 S. Flower, 26 th Floor, Los Angeles, CA 90017, and on the Metrolink website at under the Committee Agenda link. PUBLIC COMMENTS ON AGENDA ITEMS Members of the public wishing to address the Committee members regarding any item appearing on the agenda, may do so by completing a Speaker s Form and submitting it to the Committee Secretary. Speakers will be recognized by the Chair at the time the agenda item is to be considered. When addressing the Committee, please state your name for the record. Please address the Committee as a whole through the Chair. Please note comments to individual Committee members or staff are not permitted when addressing the Committee. A speaker s comments shall be limited to three (3) minutes. PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA Members of the public wishing to address the Committee members regarding any item not on the agenda, but within the subject matter jurisdiction of the Committee, will be taken under Item 8 (Public Comment), and will be subject to the same guidelines as noted above. 700 S. Flower Street, Suite 2600 Los Angeles, CA

4 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 2 1. Call to Order 2. Pledge of Allegiance CLOSED SESSION CONFERENCE WITH LEGAL COUNSEL ANTICIPATED LITIGATION Pursuant to Subdivision (b) of Section (1 or more potential cases) REGULAR CALENDAR 3. Approval of Minutes March 25, 2011 Staff recommends the Planning and Finance Committee approve the minutes of the March 25, 2011 Committee meeting. Page 1 4. Evaluation Criteria Request for Proposal No. SP Information Technology (IT) Technical Support Services Proposed evaluation Proposed criteria have been developed to initiate a competitive procurement to retain a technically qualified firm to provide Information Technology (IT) Technical Support Services. Staff recommends the Planning and Finance Committee approve and to recommend that the Board approve the proposed evaluation criteria, detailed in Attachment 1, specifying a weighting of seventy-five percent (70%) technical qualifications and thirty percent (30%) for cost to retain a qualified firm to provide IT Technical Support services. Page FY Budget Versus Actual Results With the publication of the Comprehensive Annual Financial Report (CAFR) this report compares FY09-10 actual results to the amended budget. The Planning and Finance Committee may receive and file this report. Page Contract RM Insurance Brokerage Services Recommendation to Award Marsh, Inc. Insurance brokerage services are needed to assist in assessing the various types and levels of insurance coverage required by the Southern California Regional Rail Authority (SCRRA). Staff recommends the Planning and Finance Committee to approve and recommend that the Board authorize the Chief Executive Officer to award Contract No. RM for Insurance Brokerage Services to the single proposer Marsh/Mercer, Inc. in an amount not-to-exceed $255,000 for the base period. The requested contract term will be for three years with one two-year option. Page Cooperative Agreement for Funding Positive Train Control with Orange County Transportation Authority Cooperative Agreement between Orange County Transportation Authority (OCTA) and SCRRA for funding the Positive Train Control project. Staff recommends the Planning and Finance Committee to approve and recommend that the Board approve and authorize the Chief Executive Officer to finalize and execute the Cooperative Agreement

5 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 3 for Funding Positive Train Control (PTC) with the Orange County Transportation Authority (OCTA). Page Quarterly Investment Report Second Quarter Ended March 31, 2011 Section VII of the Southern California Regional Rail Authority s Annual Investment Policy requires that the Treasurer make a quarterly investment report to the Board of Directors, and Section 53646(b) and (k) of the California Government Code encourages local agencies to file this report. This report covers the third quarter ended March 31, The Planning and Finance Committee may receive and file this report. Page Chief Executive Officer s Report Agency Update Fuel Price Update 10. Public Comment 11. Chair s Comments 12. Committee Member Comments (i.e., Announcements, Requests to Staff, Direction for Future Agenda Items) 13. Adjournment

6 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY MINUTES OF THE SCRRA PLANNING AND FINANCE COMMITTEE MARCH 25, 2011 COMMITTEE MEMBERS IN ATTENDANCE: ITEM 3 RCTC: (1 Vote) VCTC: (1 Vote) DARYL BUSCH (Chair) KEITH MILLHOUSE (Vice Chair) METRO: MICHAEL ANTONOVICH 1 (1 Vote) RICHARD KATZ BEATRICE PROO SANBAG: (1 Vote) OCTA: PATRICK MORRIS PAUL GLAAB COMMITTEE MEMBERS ABSENT: RCTC: METRO: OCTA: KAREN SPIEGEL MAUREEN MICHELINE DON BANKHEAD STAFF: JOHN FENTON, Chief Executive Officer GRAY CRARY, Chief Strategy Officer DREW PHILLIPS, Manager, Budget BRUCE HARTWELL, Chief Information Officer HELEN PARKER, SCRRA Counsel CARRIE BATES, Committee Secretary Meeting minutes are presented in a format that corresponds with the Planning and Finance Committee Agenda, which is incorporated by reference with these minutes. SCRRA Planning and Finance Committee Agendas are available from the Metrolink website ( or by calling the Committee Secretary at Directors Antonovich joined the meeting at 10:09 a.m. during discussion of Item 5 Preliminary FY Budget 1

7 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: March 25, 2011 Page 2 1. Call to Order The SCRRA Planning and Finance Committee Meeting was called to order by Chair Busch on Friday, March 25, 2011 at 10:04 a.m. in the Los Angeles County Metropolitan Transportation Authority Board Room, One Gateway Plaza, 3 rd Floor, Los Angeles, California. 2. Pledge of Allegiance Director Morris led the group in the Pledge of Allegiance. REGULAR CALENDAR 3. Approval of Minutes - February 25, 2011 Staff recommended the Planning and Finance Committee approve the minutes of the February 25, 2011 Committee meeting. Upon a motion by Director Morris, seconded by Director Glaab, the Planning and Finance Committee approved the February 25, 2011, Planning and Finance Committee meeting minutes. There was no opposition to the motion and the motion passed unanimously. ACTION: The Planning and Finance Committee approved the February 25, 2011 minutes. 4. FY Budget Versus Actual Results Drew Phillips, Manager, Budget noted that at this time, the Budgeted vs. Actual results for Fiscal Year , the period July 1, 2009 through June 30, 2010, are not finalized due to the outstanding CAFR. Mr. Phillips noted as the result from reductions in revenues, services were cut. Even though revenues were down, SCRRA finished 2% under budget and had a positive outcome to member agencies subsidies. The published CAFR will be presented at the next Board of Directors meeting on April 8, (Attachment A) The Planning and Finance Committee received and filed this report. 5. Preliminary FY Budget Director Katz instructed members to pay special attention to the amount of money management and staff have saved in the proposed budget and items funded without proposed increases to member agency subsidy or fare increases. He further complimented staff as they have done an incredible job by working with contractors, making operations more efficient to save dollars and reinvesting in the mission, public safety and improvement in services. Director Morris concurred while noting that safety should never be compromised. John Fenton, Chief Executive Officer, provided a presentation on the preliminary FY Budget proposal reiterating that there is no proposed increase from member agency subsidy ($81.7M down to $81.M savings of $600,000) or a fare increase. (Attachment B) Mr. Fenton reviewed goals for the past year noting the Mission to Excellence, and what will be seen in FY such as increased service offerings. 2

8 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: March 25, 2011 Page 3 Mr. Fenton reviewed the operating expense at $173.3M, one-time expenses and the operating budget adjusted one-time at $167.8M. Staff is in negotiations with Amtrak on the fee and cap issues; which could be up to $1M in savings. Fuel uncertainty is an issue ($2.7M over budget); staff may need to make an adjustment if fuel prices jump up significantly noting a presentation on current fuel prices will be presented at the Board of Directors meeting in April Director Morris questioned next year s Maintenance of Way (MOW) expenses, will that affect our safety along the Right of Way (ROW). Mr. Fenton stated that safety is foremost in the procedures staff uses to perform and schedule work; inspection procedures are over staffed and we over inspect items required bi-annually while adhering to industry standards are done monthly. Director Morris asked if Metrolink can share costs with the freight railroads for ROW maintenance; Mr. Fenton replied no though revenue is paid when freight uses Metrolink s track, but maintenance costs on our tracks, are Metrolink s responsibility. Director Morris noted the 8% projection in potential new ridership and asked how staff forecasts a number. Mr. Fenton noted staff has much more information through ridership data; Wild at Work; looking at trends, and reviewing our targeted marketing programs (i.e., Corporate Pass Program). Director Glaab noted the 8% projection in new ridership could be much higher as staff s projections are more detailed and targeted than in the past. Director Morris questioned the price of the new Rotem locomotives noting that staff has presented their possibilities but we need to look into the addition of a surcharge for fuel such as the airlines have done. Mr. Fenton noted that is a possibility and it can be done. Staff is looking at freight models and the mechanics of how to add a fuel surcharge. A fuel surcharge would cover the incremental costs minus the revenues. It is anticipated that if fuel spikes up, so will ridership. Staff did not want to request a permanent rate increase, but would rather ask for a rate increase on an as needed basis. If fuel prices and the market do not stabilize, staff has a fall-back position that could pass on the increase between fuel and revenue. Director Proo noted her concern pertaining to vendors and the possibility of vendors switching out material for less than standard materials to save costs; Mr. Fenton noted SCRRA supplies all our own materials; which are not compromised. We are not substituting; just a re-engineering of how we do our work. Vice Chair Millhouse concurred noting that contractors had gotten comfortable and work level has not been what it should be; by demanding greater efficiencies in the budget we are in a better position. Vice Chair Millhouse also noted if and when fuel prices come down, to ensure that the riders receive a lower fare price to enhance the positive hanging in there of our riders. It is prudent to have a constant dialogue with our riders on the situation of fuel prices. Mr. Fenton reiterated that if the fares are raised due to a spike in fuel prices, any proposed charge would not be a permanent fare increase only temporary. 3

9 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: March 25, 2011 Page 4 Chair Busch raised concerns about bonuses being considered a gift of public funds as bonuses are not permitted in his city as it is construed as gifting of public funds and asked County Counsel for advice. Helen Parker stated that issue only arises if there is no public benefit and the proposal is to structure the program in such as way that it is not a gift of public funds. Mr. Fenton emphasized that it is a Pay for Performance plan which will need to be earned. The basis is to provide good value and to recognize people who are performing at a high level. Chair Busch noted he agrees, but what the public sees can be different and he wants to ensure that we are covered and operating within regulations. Director Glaab agreed with the Pay for Performance Program (4%) noting rail positions are difficult to fill and a Pay for Performance Program is beneficial. He stated the City of Laguna Nigel went through the performance-based exercise with no problems and it is a useful tool with quality for the employees. Chair Busch requested budget information supplied to the member agencies in advance for more time to review. Director Katz commented that there is much more detail than members have seen in the past and now the budget data is in a form that has more indepth information. Mr. Fenton noted the proposed Preliminary FY Budget will go to the full Board of Directors on April 8 th for transmittal purposes. Director Morris congratulated staff on their efforts. Upon a motion by Director Glaab, seconded by Director Katz, the Planning and Finance Committee moved to present the proposed Preliminary FY Budget to the Board of Directors for transmittal purposes to the member agencies. There was no opposition to the motion and the motion passed unanimously. ACTION: The Planning and Finance Committee approved the motion to present the proposed Preliminary FY Budget to the Board of Directors for transmittal purposes. 6. Financial Management System Bruce Hartwell, Chief Information Officer, provided a presentation on the stabilization efforts, both completed and in progress, of SCRRA s Financial Management System; including the estimated timeline of short-term improvements. Mr. Hartwell stated staff will come back at a future Planning and Finance Committee on the next steps for long-term improvements with timing and costs. Mr. Hartwell went over interim solutions, status and reviewed each phase noting the target date for completion of interim efforts is June Director Morris questioned why staff is looking at other software packages for Grants Management while we are putting so much time, energy, and funds into Oracle. Mr. Hartwell noted the interim Grants software being developed is not wasted as the result of the effort will solidify business requirements and provide near term operational relief while the longer term solution is defined and implemented. 4

10 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: March 25, 2011 Page 5 Director Glaab inquired about a reported deficiency on firewalls and if staff has done anything to correct the issue. Mr. Hartwell referred to the Macias Audit where the issue was reported and stated that work has been started to address the audit findings; adding that all security issues will be completed by the June 2011 timeframe. (Attachment C) The Planning and Finance Committee received and filed this report. 7. Chief Executive Officer s Report Mr. Fenton reported on the three-day Financial Management Oversight Entrance Conference (FTA) held March 21-23, 2011, noting the issue of a deficiency in SCRRA s grants process was addressed. SCRRA s process does not track back to one system and does not accrue on a quarterly basis (accrues once a year). SCRRA needs to provide more detailed accuracy on grant data and achieve compliancy; which staff is addressing. Mr. Fenton stated that staff was open and honest as to where we were in the updated process as it is a work in progress. 8. Public Comment At this time Chair Busch inquired if any members of the public wished to address the Committee regarding any items not listed on the agenda, within the subject matter jurisdiction of the Committee. They re being no requests to speak; the Public Comment period was formally closed. 9. Chair s Comments None. 10. Committee Member Comments Vice Chair Millhouse inquired about the status of the High-Speed Rail Authority and what corridors they plan to operate on. Gray Crary, Chief Strategic Officer, stated that meetings have been held with representatives from the California High-Speed Rail Authority pertaining to entering into a MOU in which SCRRA will be compensated for time and effort for project reviews. The High-Speed Rail Authority is currently coordinating with the State of California and Florida and primary decisions are being made by these States as to what projects are to be composed of and from what funding sources. Due to the High-Speed Rail s decision to share the ROW with Metrolink s service areas, much of the initial costs of building the High-Speed Rail project will be to relocated existing Metrolink facilities. Mr. Crary noted one work order is in progress for a shared track usage at Union Station for an analysis of runthrough tracks. Director Morris noted he is aware of their projects and that we need to be partners with the High-Speed Rail Authority as it will be an enhancement to Metrolink s system as well. Vice Chair Millhouse stated he would like to know the High-Speed Rail Authority s plans; i.e., will Metrolink need to be taken out of service; will they perform improvements first as to grade separation; and how are they going to accommodate 5

11 Planning and Finance Committee Agenda Transmittal Date: April 15, 2011 Meeting Date: March 25, 2011 Page 6 Metrolink s service? Director Glaab asked if the initial operating service would be in the San Fernando Valley and Mr. Crary confirmed that it will. Mr. Crary noted staff will come back to the Planning and Finance Committee with an analysis of the status of the High-Speed Rail project and where Metrolink shares the ROW at a future meeting. 11. Adjournment There being no further business for consideration; the meeting was adjourned at 11:10 a.m. Respectfully submitted, Carrie M. Bates Planning and Finance Committee Secretary 6

12 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY (Attachment A) FISCAL YEAR BUDGET OPERATING SUBSIDY ALLOCATION BY COUNTY ($000s) Total LACMTA OCTA RCTC SANBAG VCTC FY Share Share Share Share Share Expenses Train Operations & Services $112,188.7 $58,757.2 $25,104.8 $8,550.6 $14,621.0 $5,155.2 Maintenance-of-Way 26, , , , ,659.4 Administration & Services 23, , , , , ,437.8 Insurance 17, , , , , Total Expenses Incl. MOW $179,675.7 $94,602.9 $39,172.6 $12,969.7 $23,011.3 $9,919.1 Revenues Gross Farebox 81, , , , , ,681.0 Dispatching 2, , Other Operating Maintenance-of-Way 12, , , , Total Revenues $98,524.4 $54,773.5 $20,925.1 $5,848.9 $13,222.7 $3,754.1 Total County Allocation $81,151.3 $39,829.4 $18,247.5 $7,120.8 $9,788.6 $6,165.0 FY Budget 81, , , , , ,107.8 Increase/(Decrease) (634.1) 1,033.0 (1,975.7) Percentage Change (0.78%) 2.66% (9.77%) 0.40% 2.33% 0.94% INCREASE/(DECREASE) FROM FY10-11 BUDGET Total LACMTA OCTA RCTC SANBAG VCTC Variance Share Share Share Share Share Expenses Train Operations & Services $4,924.7 $4,972.7 ($992.9) ($6.9) $903.5 $48.2 Maintenance-of-Way (1,185.8) (941.5) (142.5) 47.5 (71.6) (77.8) Administration & Services 3, , Insurance (1,335.0) (436.9) (518.9) (139.5) (148.7) (90.9) Total Expenses Incl. MOW $6,345.3 $5,587.5 ($935.4) $305.1 $1,092.0 $296.1 Revenues Gross Farebox 5, , Dispatching (56.9) 8.7 (14.8) (15.4) (37.7) 2.4 Other Operating (580.7) (371.5) (101.5) (40.1) (49.5) (18.2) Maintenance-of-Way 1, , (79.5) Total Revenues $6,979.5 $4,554.6 $1,040.3 $276.5 $869.2 $238.9 Total County Allocation ($634.1) $1,033.0 ($1,975.7) $28.6 $222.8 $57.2 NEW SERVICE ADDED IN FY11-12 BUDGET Total LACMTA OCTA RCTC SANBAG VCTC New Service FY Share Share Share Share Share Expense SB Express 1, , AV Express Total Expense 2, , Revenue SB Express 1, , AV Express Total Revenue 2, , New Service Subsidy (45.1) - 7 Copy of Charts Member 4/14/ :01 AM

13 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY FISCAL YEAR BUDGET ANNUAL DISTRIBUTION BY COST COMPONENTS ($000s) Proposed FY10-11 vs FY11-12 FY FY FY FY Increase/ Actual Actual Budget Budget (Decrease) % EXPENSES 162, , , , , % REVENUES 92, , , , , % NET LOCAL SUBSIDY 69, , , ,151.3 (634.1) -0.78% OPERATIONS Revenues Farebox Revenue 73, , , , , % Dispatching 3, , , ,935.3 (56.9) -1.90% Other Revenues 2, , (580.7) % MOW Revenues 11, , , , , % Member Agency Revenues 55, , , , % Total Revenues $143,910.1 $144,890.4 $154, , , % Operations & Services Train Operations 25, , , , % Equipment Maintenance 19, , , ,508.7 (5,132.7) % Contingency (Train Ops) % Fuel 20, , , , , % Non-Scheduled Rolling Stock Repairs (50.0) % Operating Facilities Maintenance % Other Operating Train Services % Rolling Stock Lease 1, (157.9) % Security - Sheriff 5, , , ,045.7 (485.4) -8.78% Security - Guards , % Supplemental Additional Security % Public Safety Program (30.5) -7.82% Passenger Relations 1, , , ,428.0 (53.2) -3.59% Holiday Trains % TVM Maintenance/Revenue Collection 3, , , , % Marketing , % Media & External Communications (85.6) % Utilities/Leases 2, , , , , % Transfers to Other Operators 6, , , , % Amtrak Transfers 1, , , , % Station Maintenance 1, (58.9) -6.02% Rail Agreements 4, , , , % Subtotal Operations & Services 99, , , , , % Maintenance-of-Way MoW - Line Segments 22, , , ,536.0 (1,685.8) -6.19% MoW - Extraordinary Maintenance , , % Subtotal Maintenance-of-Way 22, , , ,536.0 (1,185.8) -4.28% Administration & Services Salaries & Fringe Benefits 7, , , , , % Non-Labor Expenses 1, , , , % Indirect Administrative Expenses 10, , , , , % Professional Services 1, (8.3) -1.34% Subtotal Administration & Services 21, , , , , % Contingency (Non-Train Ops) % Total Expenses Including MoW $143,734.5 $144,890.4 $154, , , % RISK MANAGEMENT Revenues Member Agency Revenues 15, , , ,850.0 (1,335.0) -6.96% PL/PD Revenues 3, % Total Revenues $18,308.2 $21,392.2 $19, ,850.0 (1,335.0) -0.26% Insurance Liability/Property/Auto 13, , , ,800.0 (885.0) -5.64% Claims 4, , , ,750.0 (750.0) % Claims Administration , , % Subtotal Insurance 18, , , ,850.0 (1,335.0) -6.96% Total Expenses $18,483.9 $21,392.2 $19, ,850.0 (1,335.0) -6.96% 4/14/ :01 AM 8 Copy of Charts-Line Item

14 (Attachment B) Proposed FY11-12 Budget Presentation March 25, 2011 John E. Fenton, CEO Planning and Finance Committee 9

15 Our Commitment to the Board and Member Agencies in delivering the FY budget was Not to ask for an increase in subsidy raise fares To enhance safety and security provide more service provide more value to our customers 10 2

16 Our commitment to our customers, stakeholder partners, employees and contractor co-workers has always been: To never compromise on the safety and security of Metrolink passengers, employees and the communities we serve 11 3

17 Promises Delivered We have established a Mission to Excellence for enhanced safety, operational efficiency, financial responsibility and an improved customer experience broken down silos in the organization and with our contractor coworkers to build confidence and create a culture of success realigned the organizational functions for consistency in practices and processes created a customer- and stakeholder- driven focus changed our method of budgeting by using a zero-based budget approach to the FY proposal streamlined internal financial processes and procedures to ensure accountability 12 4

18 What will we see in FY 11-12: Increased efficiencies and cost savings from our major contractors Increased service offerings from 144 to 162 trains o Express Service Pilot (round trip service at peak times) San Bernardino to LAUS Palmdale to LAUS o Restoration of weekend service o Promotional service opportunities Dodgers/Angels Continued focus on Corporate Partner Program (CPP) and revenue growth 13 5

19 Preliminary FY Status $ Millions FY10-11 Adopted Operating Expense $173.3 One-time Cost Impacts: Deferral of MSEP start up ($2.8) Delay in Guardian Fleet car delivery ($1.5) Reimbursement of Legal Fees ($3.0) Organizational assessment / restructuring 1.8 Sub total: One-time Cost Impacts ($5.5) Operating Budget (adjusted for One-time Events) $

20 Preliminary FY Status (continued) $ Millions FY10-11 Adopted Adjusted Operating Expense (from previous) $167.8 Management Action Impacts: Fuel Conservation Program (at budget rate) ($2.2) Negotiated insurance premium reductions ($0.9) Management oversight of major vendors ($3.0) Other discretionary reductions ($0.9) Direct Oversight Reductions ($7.0) Other Market impact of increased fuel prices $2.7 Other cost impacts $0.8 Estimated FY Operating Budget Expenditures $

21 Proposed FY Budget $ Millions Operating Expense FY10-11 Adopted FY11-12 Proposed $ Change Train Operations $107.3 $112.2 $4.9 Maintenance of Way $27.7 $26.5 $(1.2) Admin Services & Insurance $38.3 $40.9 $2.6 Subtotal: Operating Expense $173.3 $179.7 $6.3 Operating Revenue Fares $76.0 $81.7 $5.7 Dispatching $3.0 $2.9 $(0.1) Payments from other RR s (Freight/Amtrak) $11.1 $13.0 $1.9 Other $1.5 $0.9 $(0.6) Subtotal: Operating Revenue $91.5 $98.5 $7.0 Member Agency Contribution (Subsidy) $81.7 $81.2 $(0.6) 16 8

22 Direct Costs of Contract Railroad Operations Train & Engine Crews ($000 s) FY FY11-12 $ Change Base $28,739.2 $28,360.6 $(378.6) New Revenue Service $1,120.5 $1,120.5 Equipment Maintenance Base $27,243.3 $22,056.5 $(5186.8) New Revenue Service $239.0 $239.0 Fuel Base $15,268.1 $21,157.3 $5,889.3 New Revenue Service $1,379.6 $1,379.6 Signal Maintenance $11,990.2 $10,902.0 $(1,088.2) Track & Structures Maintenance $10,823.1 $9,508.6 $(1,314.5) Total $94,063.9 $94,724.1 $

23 Cost Increases within the FY11-12 Budget ($000) Fuel Costs $2.40 / gal to $3.40 / gal $7,606 Utilities / Leases Phone/Electricity/MPLS Network $1,017 Transfers to Operators Ridership/Rate increase $826 Rail Agreements Agreement rate increases/new Service $513 Marketing New Service/Connectivity Marketing $292 Operating Staff Labor Transfers from Contractors/Filling needed vacancies $1,676 New Services Costs excluding fuel $1,458 All Other Increases $2,341 Subtotal $15,729 Total Proposed FY Budget Net Increase $6,

24 ($000 s) Fare Revenues FY Budget FY Proposed Change Ridership Fare Revenues - Base $76,001 $76,161 $160 11,012,508 New Services - Net New Riders - $2,723 $2, ,853 Marketing Support General - $515 $515 74,530 Marketing Efforts - CPP - $2,228 $2, ,242 Restored OC Weekend $110 $110 40,635 Total Fare Revenues $76,001 $81,739* $5,738 11,843,768 Total New Riders 831,260 Projected Farebox Recovery 43.8% 45.5% Total Revenue Recovery 52.8% 54.8% Member Agency Share 47.2% 45.2% Change in Member Agency Share (2%) * Total Excludes MSEP Revenues 19 11

25 SCRRA Positions (Operating / Capital / Administration) Positions FY Budget FY Proposed % Change Adopted FY $27,440 $30, % Contract positions converted to SCRRA FY (12) FY (2) 14 - $1,635 N/A Total FY 11-12* (proposed) 246 $27,440 $31, % *FY includes Pay for Performance Program (4%) 20 12

26 FY Proposed Rehabilitation and Renovation New Authorization Request Infrastructure Category Track and Structures $ 2,347,676 Signal & Communications $6,344,184 Equipment Rolling Stock $7,202,134 Other $2,060,000 Total $ 17,953,994 Allocated by Railroad Subdivision San Gabriel $1,983,930 Antelope Valley $612,719 Ventura $1,464,150 Orange County $1,094,222 Inland Empire / Orange County $182,664 River (Redondo Junction to Burbank) $2,850,000 System-wide (includes Rolling Stock) $9,766,309 Total $ 17,953,

27 22 14

28 Issues and Opportunities The FY budget reflects our actual operation We must manage to the bottom line Rail 2 Rail Program costs/changes MSEP potential revenues Utilities assessment to optimize green efficiencies Amtrak negotiations on fee and cap Uncertainty of fuel prices If fuel prices continue to spike, adjustments may need to be made 23 15

29 Our Pledge: To work toward our Mission to Excellence to ensure a safer, more customer-focused, environmentally friendly, financially accountable, and operationally excellent world-class commuter railroad To Be Southern California s commute of choice 24 16

30 (Attachment C) Financial Management Systems Updated Status Report Bruce Hartwell, Metrolink IT March 25,

31 Timeline Today Assessment Phase: identified system and process challenges Analysis and Quick System Fixes: addressed IT and general systems issues Interim Solutions: incremental upgrades to reduce firefighting Long Term Decision Milestone: strategic plan 26 2

32 Interim Solutions Status Budgeting Automation Automation of current budgeting processes - completed Define/Build interim reporting solution completed Remaining Tasks Interim post budget process reports Process improvement recommendations Funds (Grants) Management Improvement Create interim funds management database In Process Validate grants data In Process Target completion date: June 17 Project Management Improvement Deliver improved project management performance reporting tools In Process Improved use of current project systems/processes In Process Target completion date: April

33 Interim Solutions Status Incremental Oracle Financial System Upgrades Project planning and kick off - completed Business process study reviews - completed Oracle process documentation - completed Oracle hardware and systems software completed Remaining tasks Database and application upgrades Critical fixes technical development User training System testing and user acceptance Target complete: June

34 Strategic Financial Systems Plan (Jun/Jul 2011) Over all Objective: Integrated Enterprise Financial System Solution What Still Needs to be Done? Assess long term needs Grants Module Project Management Solution Long term process improvements and upgrades Integration between Oracle and Assetworks Develop system solution alternatives and Costs/Benefits Develop recommendations 29 5

35 Benefits Interim automation of budgeting processes Improved funds (Grants) data management Improved project reporting tools 14 critical systems and systems related issues addressed Upgrade database and application software to supported versions User training on current financial systems usage 30 6

36 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY TRANSMITTAL DATE: April 15, 2011 MEETING DATE: April 22, 2011 ITEM 4 TO: FROM: Planning and Finance Committee Bruce Hartwell, Chief Information Officer SUBJECT: Evaluation Criteria Request for Proposal No. SP Information Technology (IT) Technical Support Services Issue Proposed evaluation criteria have been developed to initiate a competitive procurement to retain a technically qualified firm to provide IT Technical Support Services. Recommendation Staff recommends the Planning and Finance Committee approve and recommend the Board approve the proposed evaluation criteria, detailed in Attachment 1, specifying a weighting of seventy percent (70%) technical qualifications and thirty percent (30%) for cost to retain a qualified firm to provide IT Technical Support services. Alternatives The Committee may: 1. Request modifications to the proposed evaluation criteria; or 2. Request a delay or direct staff not to go forward with this solicitation. Background Information technologies, systems and tools are central to the Agency s ability to operate efficiency and effectively; communicate with customers; manage, track and forecast costs and operate our trains. The Information Technologies department is responsible for the efficient and cost effective management and support of these information technology tools and the computing environment in which they operate. An internal assessment of the Information Technology department completed by the Chief Information Officer in February 2011 highlighted the growing and changing Information Technology needs of the Agency and a requirement to expand the capacity of the 700 S. Flower Street, Suite 2600 Los Angeles, CA

37 RFP No. SP Evaluation Criteria Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 2 department in certain key technology support areas. The assessment also highlighted the need for flexible and adaptable staffing that can be adjusted as Agency and technology needs change. To provide for this capacity and for the flexibility required, staff recommends that a 3rd party information technology services company be utilized to provide the needed information technology technical support services. Staff recommends that a competitive procurement be undertaken to identify a candidate firm to provide these services. Staff has developed evaluation criteria consistent with Board adopted policy as summarized below and detailed in Attachment 1. The proposed criteria were developed to secure a firm experienced in providing IT Technical Support Services. The proposed contract will be for a period of three years with one two-year option. The estimated value will be $540,000 to $740,000 per year. Evaluation Criteria: Qualifications of Firm 25% Staff Qualifications and Project Organization 25% Understanding and Approach to Services 20% Cost 30% Budget Impact Approval of evaluation criteria has no impact on the budget in the current fiscal year. Prepared by: Bruce Hartwell, Chief Information Systems Officer Lia McNeil-Kakaris, Manager, Strategic Sourcing and Contracts Joseph M. Henderlong, Director, Strategic Sourcing, Contracts and Supply 32

38 RFP No. SP Evaluation Criteria Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 3 ATTACHMENT 1 Request for Proposal No. SP Proposed Evaluation Criteria Proposals will be evaluated based on the following: Qualifications of Firm 25% General experience and qualifications in providing IT technical support services both onsite and remotely in the public sector Demonstrated capability to provided needed technical services, staffing and appropriate measurement and reporting methodologies by which to measure the effectiveness of services provided Financial viability of the firm and demonstrated ability to attract, retain and incent high quality technical services resources Three references where firm has performed or is performing similar services in similar sized or larger organizations Staff Qualification and Project Organization 25% Qualifications and experience of key personnel, extent and relevance of experience with Agency needs, and their availability for SCRRA assignments Proposed organization of services team, location of resources (on site/off site) and ease of communication Service methodology employed by proposed firm, including issue management, status reporting, performance reporting, performance review process Firms proposed staffing management plan/approach Understanding and Approach to Services 20% Demonstrated understanding of the Scope of Services and its components 15 Thoroughness in explaining how the Scope of Services will be implemented 5 Cost 30% Cost in relationship to other proposers 30 33

39 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY TRANSMITTAL DATE: April 15, 2011 MEETING DATE: April 22, 2011 ITEM 5 TO: FROM: SUBJECT: Finance and Planning Committee Robert Turnauckas, Chief Administrative Officer Fiscal Year (FY10) Budget versus Actual Results Issue With the publication of the Comprehensive Annual Financial Report (CAFR) this report compares FY09-10 actual results to the amended budget. Recommendation The Committee may receive and file this report. Background Subsequent to the adoption of the FY10 Budget, the agency faced a combination of increased expenditures and decreased operating revenues that resulted in a projected FY 10 budgetary gap of $ million. Unanticipated expense increases included additional liability premium expense, expenses associated with the transition to a new contract Train and Engine crew provider (Amtrak), and other expenses related to personnel actions taken by the agency. Revenue declines were primarily related to the decline in Fare revenues as a result of the ongoing economic difficulties in Southern California. As detailed in Attachment A, through a combination of actions instituted by agency management and approved by the Board, the FY10 budget was amended to include an increase in Member Subsidies, expenditure reductions, and the use of one time reserves without resort to a general passenger fare increase. Results Agency Operating Revenues As referenced above, the Board was provided information that staff expected fare revenues to be approximately $7.717 million below budget for the period ending June 30, 2010, and further, that Maintenance of Way revenues were expected to fall $0.600 million 700 S. Flower Street, Suite 2600 Los Angeles, CA

40 FY10 Budget versus Actual Results Transmittal Date: April 15, 2011 Meeting Date: April 22,2011 Page 2 below budget leaving an estimated total operating budget revenue shortfall of $8.317 million. Actual fare revenues ended the year an additional $2.456 million, or 3.4% under the revised projection. However, partially offsetting this decline, Maintenance of Way revenues increased from budgeted values by approximately $1.261 million, or 11.6%. Total operating budget revenues, including all sources, were below budget by $1.386 million, or 1.5%. Agency Operating Expenditures In addition to the anticipated decrease in revenues, the Board approved an overall net reduction in expenditures of $2.086 million as a result of actions taken through the Board meeting of January 8, As noted above and detailed in Attachment A, examples of proposed reductions included reductions of overtime costs on the agencies large contracts, reductions resulting from the delay in the delivery of Guardian vehicles, staff vacancies and benefit reductions, reduced administrative expenses, and other identified cost reductions. Total operating expenses for the period ended June 30, 2010 equaled $ million versus the amended budget total of $ million, a reduction of $1.221 million, or 0.7%, and million from the originally adopted FY10 budget. As detailed in Attachment B, significant budget savings were achieved in the areas of Equipment Maintenance, Transfer Payments to other transit operators as a result of lowered ridership, and the SCRRA s Maintenance of Way program. Combined, these three elements of the budget saw a reduction in actual expenses of $6.7 million relative to the amended budget. However, offsetting these savings were increases in other expenses. Examples include Indirect Administrative Expenses as a result of the agency s GASB 43 Other Post Employment Benefits (OPEB), Claims Payments and other SIR related expenses, Staff Salaries, and greater than anticipated transitional expenses. 35

41 FY10 Budget versus Actual Results Transmittal Date: April 15, 2011 Meeting Date: April 22,2011 Page 3 FY10 Capital Outlays For the period ended June 30, 2010, capital outlays totaled $ million. Fiscal Year Capital Program Outlays Total Outlays (000 s) New Capital Projects MSEP in Orange County 39,972.4 Positive Train Control 15,949.2 Eastern Area Maintenance Facility 6,403.7 Keller Street Yard 5,354.1 Pomona Station Improvements 5,042.0 Empire Ave/I-5 Widening 3,446.5 Mail LAUS 2,035.8 MTA Orange Line 1,125.2 Antelope Valley Line Improvements All Other New Capital Projects 2,156.2 Sub-Total New Capital Projects 82,356.7 Rehabilitation and Renovation Projects Rolling Stock 12,961.9 Facilities 11,293.4 Track 11,858.8 Signal 7,606.0 Non-Revenue Equipment 5,122.8 Bridges and Structures 2,146.4 Ticket Vending Machines All Other Rehabilitation Projects 3,300.1 Sub-Total - Rehabilitation and Renovation Projects 54,812.1 Equipment Procurement Projects Passenger Vehicles 20,249.0 Locomotive Procurement 5,920.2 Sub-total Equipment Procurement Projects 26,169.2 Total Capital Outlays July 1 to December 31, ,337.9 Budget Impact There is no budget impact should the Committee choose to receive and file this report. Prepared By: Drew Phillips Manager, Budget 36

42 Attachment A SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY FISCAL YEAR OPERATING BUDGET Calculation of Amendment - FY10 Budget Shortfall (All Values reflect impact on Member Subsidies) Total Metro OCTA RCTC SANBAG VCTC Revenue Revisions MOW Revenues - Lower UP Car Counts Revised Fare Projection 7, , , Sub-total - Revenue Revisions 8, , , Shared Use Agreement Impacts Additional Revenues - AAR (331.8) (184.2) (90.1) (13.1) (44.4) - Rail Agreements - AAR Sub-total Agreement Impacts (38.1) (18.1) 10.6 Other Expense Items - One Time Increasess Insurance (to $250M/$50M TRIA) (11/13 Bd) Insurance (Market Price of Liability) Additional Personnel Actions Transition Expense 1, Sub-total Other Expense items 2, , Rail 2 Rail Reserve Sub-total Issues arising after budget adoption 11, , , , , Board Approved/CEO Directed Actions Expense Reductions MOW - Signal Contract (300.0) (176.7) (51.5) (12.9) (40.9) (17.9) VTMI - Mobilization (162.2) (101.8) (27.2) (5.5) (17.4) (10.3) Connex - Contract U/R (125.0) (67.5) (26.9) (10.1) (15.2) (5.4) Bombardier - Contract U/R (275.0) (139.9) (63.6) (22.3) (34.7) (14.5) Vacancy Management (350.0) (176.4) (63.8) (35.9) (36.9) (37.0) Equipment Maintenance - Rotem Delay (1,100.0) (559.8) (254.4) (89.0) (138.7) (58.2) MOW - Overtime Reductions (700.0) (409.5) (122.2) (32.1) (90.0) (46.1) Marketing/Media Expenses (50.0) (25.5) (10.0) (4.6) (6.3) (3.5) Supplemental Security Changes (41.2) (56.4) (13.7) 36.2 (20.6) 13.4 Reduce Agency Administrative Expenses (150.0) (75.6) (27.4) (15.4) (15.8) (15.9) Increased Staff medical Contribution (100.0) (50.4) (18.2) (10.2) (10.5) (10.6) Operating Crew Vacancies (525.0) (273.5) (123.7) (40.7) (66.0) (21.1) Equipment Maint - Add'l Rotem Delay (300.0) (152.7) (69.4) (24.3) (37.8) (15.9) LETS Vacancies (271.5) (197.3) - (3.0) (55.3) (15.9) TAP Implementation (500.0) (305.3) (80.0) (23.4) (72.5) (18.8) Reduction to Staff TOWP (Proposed) (211.0) (106.4) (38.5) (21.6) (22.2) (22.3) Applcation of Lease Proceeds (2,484.6) (1,314.8) (563.1) (196.2) (307.6) (102.8) Actions Related to Service Changes (529.1) (424.2) (121.1) (158.7) (44.3) Subtotal Expense Reductions (8,174.6) (3,970.3) (1,977.8) (632.1) (1,147.3) (447.0) Revenue Enhancements Eliminate December Discount (625.0) (331.4) (143.6) (43.2) (87.3) (19.5) Remaing subsidy request to Members 3, , (183.6) ITEM #5 - FY BUDGET VERSUS ACTUAL RESULTS 37

43 B-Line Variance SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY FISCAL YEAR BUDGET ANNUAL DISTRIBUTION BY COST COMPONENTS Actual Operating Results ($000s) July 1, 2009 Amended $ Variance % Variance FY FY FY July 1, 2009 Amended July 1, 2009 Amended Budget Budget Actual Budget Budget Budget Budget EXPENSES 169, , ,282.6 (3,307.5) (1,221.3) (2.0%) (0.7%) REVENUES 94, , ,293.9 (6,543.9) (1,385.6) (6.9%) (1.5%) NET LOCAL SUBSIDY 74, , , , % 0.2% OPERATIONS Revenues Farebox Revenue 79, , ,343.0 (9,830.8) (2,456.1) (12.4%) (3.4%) Dispatching 2, , , % 2.6% Other Revenues 1, , , (458.5) (66.3%) (80.0%) MOW Revenues 11, , , , , % 11.8% Total Revenues - Operations $94,837.8 $88, ,711.3 (8,126.4) (1,560.6) (5.4%) (3.2%) Operations & Services Train Operations 28, , , % 2.1% Equipment Maintenance 28, , ,857.3 (4,348.5) (2,587.6) (15.4%) (9.8%) Contingency (Train Ops) No Budget No Budget Fuel 12, , ,669.8 (240.2) (15.1) (1.9%) (0.1%) Non-Scheduled Rolling Stock Repairs (98.3) (98.3) (65.5%) (65.5%) Operating Facilities Maintenance % 50.8% Other Operating Train Services % 43.1% Rolling Stock Lease % 33.7% Security - Sheriff 5, , ,628.2 (292.2) (22.7) (4.9%) (0.4%) Security - Guards 1, , (272.8) (272.8) (22.4%) (22.4%) Supplemental Additional Security % 9.8% Public Safety Program % 3.8% Passenger Relations 1, , ,476.7 (142.9) (142.9) (8.8%) (8.8%) Holiday Trains % 18.9% TVM Maintenance/Revenue Collection 4, , ,914.7 (143.4) (143.4) (3.5%) (3.5%) Marketing 1, , (269.8) (244.8) (23.5%) (21.8%) Media & External Communications (108.6) (83.6) (16.8%) (13.5%) Utilities/Leases 3, , ,931.7 (125.5) (125.5) (4.1%) (4.1%) Transfers to Other Operators 8, , ,701.7 (2,390.6) (1,890.6) (29.5%) (24.9%) Amtrak Transfers 1, , ,272.1 (89.5) (589.5) (6.6%) (31.7%) Station Maintenance (250.8) (250.8) (25.4%) (25.4%) Rail Agreements 3, , , (47.9) 8.0% (1.1%) Subtotal Operations & Services 105, , ,046.1 (7,067.7) (5,109.4) (6.7%) (5.0%) Maintenance-of-Way MoW - Line Segments 26, , ,882.8 (3,888.2) (2,767.0) (14.5%) (10.8%) MoW - Extraordinary Maintenance , % 181.0% Subtotal Maintenance-of-Way 27, , ,287.9 (2,983.1) (1,861.8) (10.9%) (7.1%) Administration & Services Salaries & Fringe Benefits 9, , ,342.3 (241.1) (2.5%) 4.7% Non-Labor Expenses 1, , , % 7.6% Indirect Administrative Expenses 8, , , , , % 18.9% Professional Services % 51.6% Subtotal Administration & Services 20, , , , , % 13.0% Contingency (Non-Train Ops) (330.8) (330.8) (66.2%) (66.2%) Total Expenses Including MoW $153,101.7 $149, ,890.4 (8,211.3) (4,729.7) (5.4%) (3.2%) RISK MANAGEMENT Revenues Lease Proceeds 1, ,407.5 (1,407.5) - No Budget 0.0% PL/PD Revenues No Budget No Budget Total Revenues - Risk Management $0.0 $1, ,582.5 (1,232.5) No Budget 12.4% Insurance Liability/Property/Auto 12, , , ,304.5 (103.1) 10.0% (0.7%) Claims/SIR Expenses 2, , , , , % 153.3% Claims Administration 1, , (233.7) (233.7) (23.4%) (23.4%) Subtotal Insurance 16, , , , , % 19.5% Total Expenses $16,488.4 $17, , , , % 19.5% 38

44 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY FISCAL YEAR BUDGET OPERATING SUBSIDY ALLOCATION BY COUNTY ($000s) C-Member Subsidy Total LACMTA OCTA RCTC SANBAG VCTC FY Share Share Share Share Share Expenses Train Operations & Services 98, , , , , ,732.6 Maintenance-of-Way 24, , , , ,487.1 Administration & Services 22, , , , , ,378.2 Insurance 21, , , , , Total Expenses Incl. MOW 166, , , , , ,457.6 Revenues Gross Farebox 69, , , , , ,139.5 Dispatching 3, , Other Operating* 3, , Maintenance-of-Way 12, , , , Total Operating Revenues 88, , , , , ,223.4 Total County Allocation 77, , , , , ,234.2 FY Contributions Member Contribution 70, , , , , ,694.2 VCTC Swap 3, ,052.1 Jan Amendment - Members 3, , Total Member Contribution 76, , , , , ,174.1 Surplus/(Deficit) (1,023.1) 1,231.8 (1,034.9) (194.3) 34.3 (1,060.1) Adjustements Applied Against Surplus Insurance Claims Accrual (2,300.0) (1,198.2) (541.9) (178.5) (289.0) (92.4) Amtrak Rail-2-Rail Reserve Adjustment Subtotal (1,800.0) (1,040.6) (228.5) (178.5) (289.0) (63.3) Total Member Surplus/(Deficit) ,272.4 (806.3) (15.8) (996.8) VARIANCE TO AMENDED BUDGET OVER/(UNDER) Total LACMTA OCTA RCTC SANBAG VCTC Variance Share Share Share Share Share Expenses Train Operations & Services (5, ) (3, ) ( ) ( ) ( ) ( ) Maintenance-of-Way (1, ) ( ) ( ) ( ) ( ) ( ) Administration & Services 2, , Insurance 3, , Total Expenses Incl. MOW (1, ) (1, ) (3.995) ( ) (73.696) Revenues Gross Farebox (2, ) (1, ) (1, ) (11.123) ( ) ( ) Dispatching (30.256) (27.664) (33.706) Other Operating (1) ( ) ( ) (21.295) (5.359) (3.801) (9.815) Maintenance-of-Way 1, , (59.884) Total Revenues (1, ) (1, ) (46.667) ( ) (74.353) 39

45 D-MOW Subsidy FISCAL YEAR MAINTENANCE-OF-WAY EXPENDITURES Revenue Forecast Allocation FY Line Segment/Territory Actual LACMTA OCTA RCTC SANBAG VCTC Operating Lines 10,870,407 6,789,423 2,374, ,128, ,729 LA - San Bernardino 1,500, , ,128,411 - LA - Ventura (Burbank Jct to Moorpark) 1,460, , ,667 LA - Lancaster 4,120,146 4,120, Fullerton - San Diego County Line 2,231,656-2,231, Olive Subdivision 142, , Riverside Layover Facility River Corridor 1,414,094 1,414, Extraordinary Maintenance (Derailments, Storm Damage) Non-Operating Lines 1,235,643 1,212, ,094 - Sierra Madre - Claremont (Pasadena Sub) 1,212,549 1,212, Baldwin Park Branch (San Bernardino Co.) 23, ,094 - Total 12,106,050 8,001,972 2,374, ,151, ,729 Net Subsidy Allocation FY Line Segment/Territory Actual LACMTA OCTA RCTC SANBAG VCTC Operating Lines 12,438,020 6,787,494 2,165, ,775 1,985, ,374 LA - San Bernardino (1) 3,503,971 2,096, ,407,790 - LA - Ventura (Burbank Jct to Moorpark) (2) 1,773,694 1,140, ,346 LA - Lancaster 1,121,063 1,121, Fullerton - San Diego County Line 1,704, ,793 1,131, ,613 32,435 - Olive Subdivision 281, ,561 94,249 17,309 - Riverside Layover Facility (3) 66,787 31,459 12,026 17,031 6,271 - River Corridor (4) 2,581,594 1,226, , , , ,875 Extraordinary Maintenance (5) 1,405, , ,901 15, ,343 90,153 (Derailments, Storm Damage) Non-Operating Lines (256,179) (336,500) ,320 - Sierra Madre - Claremont (Pasadena Sub) (336,500) (336,500) Baldwin Park Branch (San Bernardino Co.) 80, ,320 - Total 12,181,841 6,450,994 2,165, ,775 2,066, ,374 Total Expenditure Forecast FY Line Segment/Territory Actual LACMTA OCTA RCTC SANBAG VCTC Operating Lines 23,308,427 13,576,917 4,540, ,872 3,114,433 1,487,104 LA - San Bernardino 5,004,144 2,467, ,536,201 - LA - Ventura (Burbank Jct to Moorpark) 3,234,367 2,023, ,211,013 LA - Lancaster 5,241,210 5,241, Fullerton - San Diego County Line 3,936, ,793 3,363, ,613 32,435 - Olive Subdivision 423, ,354 94,249 17,309 - Riverside Layover Facility 67,660 31,874 12,199 17,128 6, River Corridor 3,995,688 2,640, , , , ,875 Extraordinary Maintenance 1,405, , ,901 15, ,343 90,153 (Derailments, Storm Damage) Non-Operating Lines 979, , ,414 - Sierra Madre - Claremont (Pasadena Sub) 876, , Baldwin Park Branch (San Bernardino Co.) 103, ,414 - Total 24,287,891 14,452,966 4,540, ,872 3,217,848 1,487,104 (1) MoW net subsidy split by route miles (59.82% LACMTA and 40.18% SANBAG). (2) MoW net subsidy split by train miles (62.08% LACMTA and 37.92% VCTC). (3) Net subsidy split by train miles of trains using the Riverside Layover, excluding San Diego County (46.98% LACMTA, 17.93% OCTA, 25.72% RCTC, and 9.36% SANBAG). (4) Split is assumed All Share (47.5% LACMTA, 19.8% OCTA, 14.4% SANBAG, 7.2% VCTC, and 11.1% RCTC) of cost in excess of revenues. (5) Split is assumed All Share for derailments ($100,000) and percent of route miles owned (57.55% LACMTA, 24.27% OCTA, 1.07% RCTC, 10.69% SANBAG, and 6.41% VCTC) for storm damage, gate knockdowns, and vandalism. 40

46 E - Fare Revenues FISCAL YEAR FARE REVENUES Amended Variance Line Segments Fare Revenue Metro OCTA RCTC SANBAG VCTC Budget $ (Under)/Over % (Under)/Over San Bernardino 18,906,767 11,310, ,596,170-19,635,477 (728,710) -3.71% Weekend 1,491, ,741-29, ,331-1,485,784 5, % Ventura 5,636,307 3,496, ,139,514 5,937,599 (301,293) -5.07% Antelope Valley 9,959,275 9,959, ,206,785 (247,510) -2.42% Weekend 921, , ,845 (23,983) -2.54% Riverside 8,350,246 5,055,591-1,931,349 1,363,306-7,878, , % Orange County 14,048,031 4,214,547 9,833, ,657,266 (1,609,234) % Weekend 444, , ,567 66, % IEOC 5,176,063-3,321,572 1,600, ,981-5,494,956 (318,893) -5.80% Weekend 284, ,062 68,069 15, ,390 38, % 91 4,124,598 1,412,809 1,325,764 1,372,634 13,392-3,934, , % Total Fare Revenue - Actual Results 69,343,026 37,213,215 15,125, ,001, ,863, ,139, Total Fare Revenue - Amended Budge 71,799,133 38,215,818 16,220,767 5,012,863 10,098,060 2,251,624 $ Variance (under)/over (2,456,107) (1,002,603) (1,095,340) (11,123) (234,931) (112,110) % Variance (under)/over -3.42% -2.62% -6.75% -0.22% -2.33% -4.98% 41

47 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY TRANSMITTAL DATE: April 15, 2011 MEETING DATE: April 22, 2011 ITEM 6 TO: FROM: Planning and Finance Committee Joseph Henderlong, Director, Strategic Sourcing, Contracts and Supply SUBJECT: Contract No. RM Insurance Brokerage Services - Recommendation for Award Marsh/Mercer, Inc. Issue Insurance brokerage services are needed to assist in assessing the various types and levels of insurance coverage required by the Southern California Regional Rail Authority (SCRRA). Recommendation Staff recommends the Planning and Finance Committee to approve and recommend that the Board authorize the Chief Executive Officer to award Contract No. RM for Insurance Brokerage Services to the single proposer Marsh/Mercer, Inc. in an amount notto-exceed $255,000 for the base period. The requested contract term will be for three years with one two-year option Alternative The Planning and Finance Committee may recommend that the Board reject the single proposal and direct staff to re-issue a new Request for Proposal (RFP). Background SCRRA currently contracts for insurance brokerage services under Contract No. RM awarded by the Board in May 2006 as a result of a competitive procurement. The current contract will expire June 30, Under this contract, the services of an insurance brokerage firm are used in assessing the various types and levels of insurance coverage required by SCRRA and to appropriately place these requirements with insurance carriers on an annual basis as well as provide employee benefit services. In February 2011, the Board approved the evaluation criteria for insurance brokerage services, specifying a weighting of 80% for technical qualifications and 20% for cost. SCRRA issued a Request for Proposal (RFP) on February 15, The procurement was posted on the SCRRA website and advertised in publications in the five member 700 S. Flower Street, Suite 2600 Los Angeles, CA

48 Contract No. RM Insurance Brokerage Services Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 2 counties. Notices were also sent directly via fax or to firms registered on the SCRRA website. Eight firms requested the solicitation and two firms attended the preproposal conference that was held on March 2, A single proposal was received on March 15, from Marsh/Mercer, Inc. A market evaluation conducted by staff indicated that AON Risk Services, the other possible proposer discontinued their commuter rail division and therefore did not submit a proposal for these services. The scope of services did not include any unusual requirements that would limit the competition. Historically competition for these services has been limited. An evaluation team comprised of members of the SCRRA staff from Contract Administration and Procurement, Claims Administration and a representative from the Riverside County Transportation Commission met to evaluate the technical proposal. The proposal submitted by Marsh/Mercer demonstrated the firm has extensive experience in insurance placement for heavy railroad and in the public sector, particularly in transit. Marsh/Mercer understanding of the SCRRA scope of services was well demonstrated in a detailed work plan that indicated an excellent comprehension of the SCRRA s insurance requirements and timelines. Proposed staff is located in Southern California and has substantial experience in placing heavy rail and transit insurance. Marsh/Mercer is also staffed in Europe and Bermuda. These locations in particular specialize in placement of government entity and heavy rail insurance. Marsh/Mercer also provided a detailed process for brokering SCRRA s employee health and welfare plans including dental, vision, life, accident, disability, and flexible benefits program. Marsh/Mercer is financially stable and provided a detailed breakdown of transparencies relative to reporting costs, fees and/or commissions associated with insurance placements. Although cost was a part of the evaluation criteria, the evaluation team could not score the cost portion of this project because Marsh/Mercer was the only proposer. The rates submitted by Marsh/Mercer under the new procurement for RM were lower than the current contract with Marsh coming in at $85,000 per year. In accordance with CA&P CON-5, Cost and Price Analysis, an independent cost analysis was performed for the base and option years. The analysis found that the proposed rates for the services to be provided by Marsh/Mercer were reasonable and were properly supported. Marsh has provided satisfactory services for SCRRA under Contract No. RM for insurance brokerage services which expires June 30, Under this contract Marsh/Mercer has successfully placed both general liability and property insurance from 2001 thru Additional references contacted indicated that the quality of services provided by Marsh/Mercer on their contracts was excellent. SCRRA's adopted protest policy, made a part of the competitive solicitation, provides that an interested party, as defined, can protest the terms and content of the solicitation prior to submission of proposals, or can separately protest the evaluation or recommended award. There was no timely protest of the content of this solicitation. And, as there was only one 43

49 Contract No. RM Insurance Brokerage Services Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 3 responsive proposal evaluated, there is no other party with a right to formally protest this recommended award as there is no other candidate that would be in line for an award if a protest were upheld. Staff recommends entering into a contract with Marsh/Mercer for a period of three years with one two-year option for a not-to-exceed contract authority of $255,000 for the base period. Budget Impact Funds for the insurance brokerage services were requested in the FY2011/12 Operating Budget. Prepared by: Greg Graves, Risk Manager Lia McNeil-Kakaris, Manager, Strategic Sourcing and Contracts Joseph M. Henderlong, Director, Strategic Sourcing and Contracts 44

50 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY TRANSMITTAL DATE: April 15, 2011 MEETING DATE: April 22, 2011 ITEM 7 TO: FROM: SUBJECT: Planning & Finance Committee Chief Executive Officer Cooperative Agreement for Funding Positive Train Control with Orange County Transportation Authority Issue Cooperative Agreement between Orange County Transportation Authority (OCTA) and SCRRA for funding the Positive Train Control project. Recommendation Staff recommends the Planning and Finance Committee to approve and recommend that the Board approve and authorize the Chief Executive Officer to finalize and execute the attached draft Cooperative Agreement for Funding Positive Train Control (PTC) with the Orange County Transportation Authority (OCTA). Alternatives The Planning and Finance Committee may: 1. Request changes to the proposed Agreement; or 2. Decline to delegate approval to the CEO to execute the agreement. Background The Rail Safety Act of 2008 required the implementation of Positive Train Control for passenger and freight railroads. SCRRA embarked on an aggressive schedule with the goal of implementing PTC by the end of The current estimated project cost for PTC is $201,600,000. The project costs will be split between all Member Agencies of SCRRA. Under an All-Share arrangement, OCTA is responsible for $38,441,955 of the proposed costs. OCTA quickly identified funds that could be used to fund its share of the PTC program. In fact, they were the first and only member agency to lock in funding to cover their entire share of the project. OCTA programmed the following funds to cover its proposed share: 700 S. Flower Street, Suite 2600 Los Angeles, CA

51 Funding Agreement for PTC with OCTA Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page Proposition 116 Funds $32,715,778 Federal 5307 $ 4,147,427 ARRA Funds $ 1,234,450 Federal FTA 5309 $ 275,800 Local Funds $ 68,950 OCTA provided funds and locked those funding commitments in place prior to the entire funding plan being completed. Subsequent to that action, SCRRA secured other funds for the project. Some of the funds that SCRRA contributed to the project can also be considered All-Share eligible funds. Thus, when the OCTA funds are combined with the 19.8% of All-Share funds that are attributable to OCTA, OCTA has over-subscribed to the funding plan. The attached Cooperative Agreement provides that OCTA should be reimbursed for the funds above their identified share. The reimbursement would be accomplished by applying funds that come to SCRRA, such as Proposition 1B or Proposition 1A bond funds, to meet OCTA s share of future projects. This use of the SCRRA bond funds or other sources, would require concurrence from any impacted Member Agencies. Budget Impact There is no impact to the current year capital or operating budget by this recommendation. Future year Capital projects could be impacted by this agreement. Prepared by: Gray Crary Chief Strategy Officer JOHN E. FENTON Chief Executive Officer 46

52 COOPERATIVE AGREEMENT NO. C BETWEEN ORANGE COUNTY TRANSPORTATION AUTHORITY AND SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY FOR POSITIVE TRAIN CONTROL PROJECT THIS AGREEMENT is effective this day of 2010, by and between the Orange County Transportation Authority, 550 South Main Street, P.O. Box 14184, Orange, California , a public corporation of the State of California (hereinafter referred to as "AUTHORITY"), and the Southern California Regional Rail Authority, 700 South Flower Street, Suite 2600, Los Angeles, California 90017, a joint powers authority (hereinafter referred to as SCRRA ). RECITALS: WHEREAS, AUTHORITY and the SCRRA desire to enter into a Cooperative Agreement to define the roles and responsibilities related to funding between the AUTHORITY and SCRRA for the planning, design, construction, and implementation of a Positive Train Control system along the Metrolink system (hereinafter referred to as PROJECT ); and WHEREAS, SCRRA agrees to act as lead agency for the planning, preliminary engineering, environmental clearance, right-of-way, construction, implementation, and oversight of the PROJECT; and WHEREAS, SCRRA and AUTHORITY agree that the total not-to-exceed budget for the PROJECT including planning, preliminary engineering, environmental clearance, right-of-way, construction and implementation shall be Two Hundred One Million Six Hundred Thousand Dollars ($201,600,000.00), current funding plan is provided in Exhibit No. 1 of which the AUTHORITY s contribution to the PROJECT shall not exceed Thirty Eight Million Four Hundred Forty One Page 1 of 10 47

53 AGREEMENT NO. C Thousand Nine Hundred Fifty Five Dollars ($38,441,955.00) in accordance with the funding schedule attached herein as Exhibit No. 2; and WHEREAS, the AUTHORITY s Board of Directors, on August 23, 2010, approved a funding plan providing Thirty Two Million Seven Hundred Fifteen Thousand Seven Hundred Seventy Eight ($32,715,778.00) of Proposition 116 funds, Four Million One Hundred Forty Seven Thousand Four Hundred Twenty Seven Dollars ($4,147,427.00) of Federal Transit Administration 5307 funds, One Million Two Hundred Thirty Four Thousand Dollars ($1,234,000.00) of American Recovery and Reinvestment Act (ARRA) funds, Two Hundred Seventy Five Thousand Eight Hundred ($275,800.00) of Federal Transit Administration (FTA) Section 5309 funds, and Sixty Eight Thousand Nine Hundred Fifty Dollars ($68,950.00) of Local Funds for the PROJECT; and Whereas, the California Department of Transportation (Caltrans) administers the Proposition 116 funding program on behalf of the California Transportation Commission (CTC) and the CTC approves funding for projects. OCTA is responsible for programming the funds to specific projects within Orange County. Caltrans is responsible for SCRRA compliance with requirements and reimbursement of Proposition 116 funds to SCRRA for project activities. Whereas, the SCRRA receives the ARRA funds and the FTA Section 5309 funds directly from the FTA. OCTA is responsible for programming the funds to specific projects within Orange County. The FTA is responsible for SCRRA compliance with requirements and reimbursement of ARRA and FTA Section 5309 funds to SCRRA for project activities. WHEREAS, the AUTHORITY s Board of Directors approved the allocation of Four Million One Hundred Forty Seven Thousand Four Hundred Twenty Seven Dollars ($4,147,427.00) of Federal Transit Administration 5307 funding to the PROJECT at its July 12, 2010 meeting; and WHEREAS, AUTHORITY shall directly provide or reimburse no more than Four Million One Hundred Forty Seven Thousand Four Hundred Twenty Seven Dollars ($4,147,427.00); and 26 September 21, 2010 Page 2 of 10 48

54 AGREEMENT NO. C WHEREAS, this Cooperative Agreement defines the specific terms and conditions and funding responsibilities between AUTHORITY and SCRRA for completion of the PROJECT. WHEREAS, the AUTHORITY s Board of Directors approved this Agreement on. NOW, THEREFORE, it is mutually understood and agreed by AUTHORITY and SCRRA as follows: ARTICLE 1. COMPLETE AGREEMENT A. This Agreement, including any exhibits and documents incorporated herein and made applicable by reference, constitute the complete and exclusive statement of the terms and conditions of this Agreement between AUTHORITY and SCRRA concerning funding of PROJECT. B. The above-referenced Recitals are true and correct and are incorporated by reference herein. C. AUTHORITY S failure to insist on any instance(s) of SCRRA s performance of any term(s) or condition(s) of this Agreement shall not be construed as a waiver or relinquishment of AUTHORITY s right to such performance or to future performance of such term(s) or condition(s), and SCRRA's obligation in respect thereto shall continue in full force and effect. Changes to any portion of this Agreement shall not be binding upon AUTHORITY except when specifically confirmed in writing by an authorized representative of AUTHORITY by way of a written amendment to this Agreement and issued in accordance with the provisions of this Agreement. D. SCRRA s failure to insist on any instance(s) of AUTHORITY s performance of any term(s) or condition(s) of this Agreement shall not be construed as a waiver or relinquishment of SCRRA s right to such performance or to future performance of such term(s) or condition(s), and AUTHORITY's obligation in respect thereto shall continue in full force and effect. Changes to any portion of this Agreement shall not be binding upon SCRRA except when specifically confirmed in writing by an authorized representative of SCRRA by way of a written amendment to this Agreement and issued in accordance with the provisions of this Agreement. 26 September 21, 2010 Page 3 of 10 49

55 AGREEMENT NO. C ARTICLE 2. RESPONSIBILITIES OF AUTHORITY AUTHORITY agrees to the following responsibilities for PROJECT: A. AUTHORITY shall program PROJECT funding into the Federal Transportation Improvement Program and make any necessary amendments. B. AUTHORITY shall designate the SCRRA as the direct recipient for FTA Section 5309, American Recovery and Reinvestment Act, and Proposition 116 funds. C. AUTHORITY shall develop and execute a team grant for the Federal Transit Administration (herein after referred to as FTA) 5307 funds. D. AUTHORITY shall, reimburse to SCRRA, not more frequently than quarterly, for FTA eligible and allowable PROJECT expenditures. Such reimbursements shall not exceed the sum of Four Million One Hundred Forty Seven Thousand Four Hundred Twenty Seven Dollars ($4,147,427.00). AUTHORITY will not be obligated to pay for any amount beyond what has been identified in this Article. E. AUTHORITY shall verify that such reimbursable expenditures are eligible for FTA funds prior to requesting reimbursement from FTA. No requests for payments from SCRRA shall be processed by AUTHORITY after the federal grant termination date. F. AUTHORITY understands the complex funding of this project and will allow specific funds to be drawn down faster than other to facilitate cashflow and to meet grant expiration date concerns. G. AUTHORITY shall indemnify, defend and hold harmless SCRRA, its officers, directors, employees and agents from and against any and all claims (including attorney's fees and reasonable expenses for litigation or settlement) for any loss or damages, bodily injuries, including death, worker s compensation subrogation claims, damage to or loss of use of property caused by the negligent acts, omissions or willful misconduct by AUTHORITY, its officers, directors, employees or agents in connection with or arising out of the performance of this Agreement. ARTICLE 3. RESPONSIBILITIES OF SCRRA SCRRA agrees to the following responsibilities for PROJECT: September 21, 2010 Page 4 of 10 50

56 AGREEMENT NO. C H. SCRRA will act as the lead agency for the planning, preliminary engineering, environmental clearance, right-of-way, construction, implementation, and oversight of the PROJECT. I. SCRRA agrees to provide One Million Four Hundred Seventy Four Thousand Three Hundred Ninety Five Dollars ($1,474,395.00) of Proposition 1A funds for the PROJECT for final portion of Authority s share of project. J. SCRRA agrees to provide the 20% required match to the FTA funds through local and state project revenues and to clearly define the project match in the reimbursement requests. K. SCRRA agrees to complete PROJECT in accordance with the funding schedule in Exhibit No. 2 of this Agreement. L. SCRRA agrees to abide by all FTA guidelines in the performance of this PROJECT including, but not limited to, those guidelines included in Exhibit No. 3 of this Agreement. SCRRA shall provide certification that it is in compliance, or will comply, with all FTA requirements. M. SCRRA will use funds provided by AUTHORITY only for Federal Transit Administration eligible and reimbursable activities only as described in the federal grant and in the FTA guidelines. If any amounts paid to SCRRA are disallowed, or not reimbursable by the FTA for any reason, SCRRA shall be allowed to provide documentation for other allowable, reimbursement costs or shall remit to AUTHORITY the disallowed or non-reimbursed amount(s) within thirty (30) days from receipt of AUTHORITY invoice. Total reimbursements for federally eligible and reimbursable activities shall not exceed Four Million One Hundred Forty Seven Thousand Four Hundred Twenty Seven Dollars ($4,147,427.00). No requests for payments shall be submitted by SCRRA to AUTHORITY with costs incurred after the federal grant has been closed. N. SCRRA agrees to accept funds recipient designation for Proposition 116, FTA Section 5307, and American Recovery and Reinvestment Act (hereinafter ARRA) funds and will meet the funding requirements for these funds including but not limited to any match, procurement or timely use of funds requirements. O. SCRRA shall provide AUTHORITY a credit of 19.8% of project funding that derives from September 21, 2010 Page 5 of 10 51

57 AGREEMENT NO. C prior, current or future sources of funds other than a Southern California Regional Rail Authority member agency directed fund source to be used toward OCTA s funding share on various projects and/or operations with the approval of OCTA and concurrence of TAC representative from other impacted Member Agency. P. SCRRA is responsible for immediately notifying the AUTHORITY in writing of any changes to the PROJECT schedule that would jeopardize funding of the PROJECT.. Q. SCRRA will comply with all federal, state and local laws and regulations. R. SCRRA agrees to comply with all FTA, third party contracting laws and regulations pursuant to FTA Circular F, including but not limited to federal, state and local laws. S. SCRRA agrees to provide AUTHORITY with a quarterly invoice (sample invoice is provided in Exhibit No. 4) and summary report of the PROJECT by the Fifteenth (15 th ) day of the month following the end of the quarter, as directed in ARTICLE 6. Such annual quarters will begin on January 1, April 1, July 1, and October 1 of each year. An additional copy of each invoice will be submitted to AUTHORITY s Accounts Payable Department. A sample report is provided in Exhibit No. 5 and is to contain, at a minimum, the following information: 1. Agreement Number C ; 2. The time period covered by the report; 3. Quarterly Progress Report which includes a detailed description of the progress of the PROJECT; 4. Summary of expected PROJECT delays including discussion of reason for each delay; September 21, Total quarterly invoice amount; 6. Financial summary of the PROJECT by fund source including accounting for quarterly expenditures of each fund source; 7. Quarterly preview report that details expenditures expected to be realized in the coming quarter; and Page 6 of 10 52

58 AGREEMENT NO. C Such other information as requested by AUTHORITY. T. SCRRA shall indemnify, defend and hold harmless AUTHORITY, its officers, directors, employees and agents from and against any and all claims (including attorney's fees and reasonable expenses for litigation or settlement) for any loss or damages, bodily injuries, including death, worker s compensation subrogation claims, damage to or loss of use of property caused by the negligent acts, omissions or willful misconduct by SCRRA, its officers, directors, employees or agents in connection with or arising out of the performance of this Agreement. ARTICLE 4. DELEGATED AUTHORITY The actions required to be taken by SCRRA in the implementation of this Agreement are delegated to its Chief Executive Officer, or his designee, and the actions required to be taken by AUTHORITY in the implementation of this Agreement are delegated to its Chief Executive Officer. ARTICLE 5. AUDIT AND INSPECTION SCRRA shall maintain a complete set of records in accordance with generally accepted accounting principles. Upon reasonable notice, SCRRA shall permit the authorized representatives of AUTHORITY to inspect and audit all work, materials, payroll, books, accounts and other data and records of SCRRA for a period of four (4) years after final payment, or until any on-going audit is completed. AUTHORITY shall also have the right to reproduce any such books, records and accounts. Contracts with SCRRA's contractors shall include the above provision with respect to audits. ARTICLE 6. TERMS OF AGREEMENT All parties agree to the following mutual responsibilities regarding PROJECT: A. This Agreement shall continue in full force and effect through [insert actual date] or final acceptance of PROJECT and credit per Article 3, Paragraph H, by AUTHORITY whichever is later. This Agreement may only be extended upon mutual written agreement by both parties. B. This Agreement may be terminated by either party after giving thirty (30) days written notice. This Agreement shall not be terminated without mutual written agreement of both parties. 26 September 21, 2010 Page 7 of 10 53

59 AGREEMENT NO. C C. This Agreement may be amended in writing at any time by the mutual consent of both parties. No amendment shall have any force or effect unless executed in writing by both parties. D. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that, by so executing this Agreement, the parties hereto are formally bound to the provisions of this Agreement. E. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered, or certified mail and addressed as follows: To SCRRA: Southern California Regional Rail Authority 700 South Flower Street Los Angeles, CA To AUTHORITY: Orange County Transportation Authority 550 South Main Street P. O. Box Orange, CA Attention: Gray Crary Attention: Grant Gager Chief, Strategy Officer Contract Administrator Cc Anne Louise Rice cc: Dinah Minteer, Rail Adriann Cardoso, Programming Tel: Tel: (714) ; Fax: (714) craryg@scrra.net ggager@octa.net F. The headings of all sections of this Agreement are inserted solely for the convenience of reference and are not part of and not intended to govern, limit or aid in the construction or interpretation of any terms or provision thereof. G. The provision of this Agreement shall bind and inure to the benefit of each of the parties hereto and all successors or assigns of the parties hereto. 26 September 21, 2010 Page 8 of 10 54

60 AGREEMENT NO. C H. If any term, provision, covenant or condition of this Agreement is held to be invalid, void or otherwise unenforceable, to any extent, by any court of competent jurisdiction, the remainder to this Agreement shall not be affected thereby, and each term, provision, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. I. This Agreement may be executed and delivered in any number of counterparts, each of which, when executed and delivered shall be deemed an original and all of which together shall constitute the same agreement. Facsimile signatures will be permitted. J. Either party shall be excused from performing its obligations under this Agreement during the time and to the extent that it is prevented from performing by an unforeseeable cause beyond its control, including but not limited to: any incidence of fire, flood; acts of God; commandeering of material, products, plants or facilities by the federal, state or local government; national fuel shortage; or a material act or omission by the other party; when satisfactory evidence of such cause is presented to the other party, and provided further that such nonperformance is unforeseeable, beyond the control and is not due to the fault or negligence of the party not performing September 21, 2010 Page 9 of 10 55

61 This AGREEMENT shall be made effective upon execution by both parties IN WITNESS WHEREOF, the parties hereto have caused this Agreement No. C to be executed on the date first above written. SOUTHERN CALIFORNIA REGIONAL ORANGE COUNTY TRANSPORTATION AUTHORITY RAIL AUTHORITY 5 6 By: John E. Fenton Chief Executive Officer By: Will Kempton Chief Executive Officer 7 8 APPROVED AS TO FORM: APPROVED AS TO FORM: By: Andrea Sheridan Ordin County Counsel Dated: By: Kennard R. Smart, Jr. General Counsel By: Kia Mortazavi Executive Director, Planning Dated: Page 10 of 10 56

62 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY TRANSMITTAL DATE: April 15, 2011 MEETING DATE: April 22, 2011 ITEM 8 TO: FROM: Planning and Finance Committee Robert Turnauckas, Chief Administrative Officer SUBJECT: Quarterly Investment Report - Quarter Ended March 31, 2011 Issue Section VII of the Southern California Regional Rail Authority s Annual Investment Policy requires that the Treasurer make a quarterly investment report to the Board of Directors, and Section 53646(b) and (k) of the California Government Code encourages local agencies to file this report. This report covers the third quarter ended March 31, Recommendation The Committee may receive and file this report Background SCRRA is currently managing a portfolio of $42 million, which is managed in two parts. The first is leveraged lease proceeds restricted by the Board for the life of the lease(s). The interest earnings generated on these funds produce a revenue stream utilized for the renovation and rehabilitation of rolling stock. The balance of the portfolio is comprised of operating revenue and funds provided by member agencies to subsidize operating and capital programs. We continue to work diligently with our portfolio manager ensuring that our investments remain prudent, and the economic impact to the Agency mitigated as much as can be in this current market. The securities maintained in our portfolio were highly rated at purchase. In the event a security s credit rating falls below Agency policy we will closely monitor the security in order to mitigate risk to the Agency. Under the current investment policy, the Treasurer in consultation with the portfolio manager will determine if these securities require disposition in order to mitigate the risk and manage the Agency s assets. Attachment A provides a listing of the investment portfolio categorized by restricted and unrestricted investments as of March 31, It also provides a summary list of investments including a chart representing the entire portfolio broken down by investment class to indicate compliance with SCRRA s investment policy. The activity of the portfolio in the third quarter is summarized below. 700 S. Flower Street, Suite 2600 Los Angeles, CA

63 Quarterly Investment Report - Quarter Ended March 31, 2011 Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 2 Total Portfolio On March 31, 2011, the total value of SCRRA s investment portfolio was $42 million of which $28 million was in unrestricted investments and $14 million was considered restricted. The restricted funds have been set aside by the Board to produce a revenue stream for rolling stock renovation and rehabilitation. Interest income generated from the portfolio for the third quarter totaled $218,540. Year to date income for the nine months ending March 31, 2011 totaled $767,574 which reflects an annualized yield of 1.97% on an average value of $47 million. Activity on Restricted Investments Restricted investments totaled $14 million on March 31, Total interest earned on restricted investments for the third quarter totaled $137,756 translating into an annualized yield of 2.8% based on an average book value balance of $18.3 million. Year-to-date interest earned on restricted lease proceeds investments totaled $440,091. Activity on Unrestricted Investments Unrestricted investments totaled $28 million on March 31, Interest earnings attributable to unrestricted investments totaled $80,784 for the quarter. This translates into an annualized yield of 2.69% based on an average book value of $10.2 million. Year to date interest income on unrestricted investments totaled $327,483. Portfolio Compliance The composition of the portfolio as of March 31, 2011 is temporarily out of compliance with the diversification guidelines of SCRRA s Annual Investment Policy due to the timing of capital outlays at the end of the quarter. The capital payments caused SCRRA s portfolio to be temporarily out of compliance as it relates to Medium-Term Corporate Securities. In reviewing our cash position during the quarter it was determined that liquidating these securities in order to bring the portfolio into compliance was not a prudent option given those securities are currently earning, on average, a 6% return on investment which is significantly higher than available investment vehicles in the current market. Invoking the prudent person standard as defined in our investment policy; when investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including but not limited to, the general economic conditions and the anticipated needs of the SCRRA, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Liquidating high return securities 58

64 Quarterly Investment Report - Quarter Ended March 31, 2011 Transmittal Date: April 15, 2011 Meeting Date: April 22, 2011 Page 3 and placing them into a money market mutual fund or LAIF would significantly diminish investment returns with no true long term financial benefit to the agency. The chart included in Attachment A displays the composition of the Authority s portfolio at March 31, Cash Sufficiency Staff has reviewed the anticipated cash requirements for the next six months and continues to work with all funding agencies to ensure that the current portfolio provides sufficient liquidity to meet the cash requirement over this period. Budget Impact There is no budget impact arising from this item. Prepared by: Young Jin Paik, Accountant Patricia Kataura, Controller/Treasurer 59

65 ATTACHMENT "A" SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Investment Portfolio March 31, 2011 Credit Ratings Yield to RESTRICTED INVESTMENTS: Maturity Date Book Value Market Value Moodys S&P Maturity Cash Equivalents: Columbia Treasury Reserves Mutual Fund # 351 On Demand 80, , Aaa AAAm 0.13% Columbia Treasury Reserves Mutual Fund # 208 On Demand - - Aaa AAAm 0.00% BofA Money Market Reserves # 4378 On Demand 3,245, ,245, Aaa AAAm 0.13% Investment Pool: 3,326, ,326, Local Agency Investment Fund On Demand 143, , NR NR 0.51% Corporate: 143, , Met Life Global Funding 08/19/ Aa3 AA- 3.80% Arden Realty LP 09/01/11 4,935, ,092, Aa2 AA+ 5.55% Arden Realty LP 09/01/11 2,053, ,037, Aa2 AA+ 4.34% General Electric Capital Corporation 06/15/12 3,178, ,176, Aa2 AA+ 4.39% 10,167, ,306, Total Restricted Investments 13,636, ,775, UNRESTRICTED INVESTMENTS: Cash Equivalents: Columbia Treasury Reserves Mutual Fund # 351 On Demand - - Aaa AAAm 0.00% Columbia Treasury Reserves Mutual Fund # 208 On Demand - - Aaa AAAm 0.00% BofA Money Market Reserves # 4378 On Demand 2,836, ,813, Aaa AAAm 0.13% Supplemental Executive Retirement Plan On Demand - - NR NR 0.00% Premium Checking 03/31/11 2,844, ,844, % 5,681, ,657, Investment Pool: Local Agency Investment Fund On Demand 17,762, ,762, NR NR 0.51% Corporate: General Electric Capital Corporation 02/22/ Aa2 AA+ 5.54% General Electric Capital Corporation 06/15/12 4,238, ,235, Aa2 AA+ 4.39% US Treasury STRIPS 02/15/12 387, , AAA 1.45% US Treasury STRIPS 05/15/12 193, , AAA 1.48% US Treasury STRIPS 08/15/12 190, , AAA 1.78% 5,009, ,036, Total Unrestricted Investments PORTFOLIO TOTAL 28,452, ,456, $ 42,088, $ 42,232, Interest Annualized Earnings Yield Quarter Ended 3/31/11 $218, % Fiscal Year To Date 3/31/11 $767, % Page 1 of 2 60

66 ATTACHMENT "A" SCRRA INVESTMENT POLICY COMPLIANCE Investment Portfolio Investment Instruments Dollar Invested Percentage of Portfolio Investment Policy Maximum Percentages Money Mkt Funds 6,162, % 20.00% Premium Checking 2,844, % 50.00% U.S. Treasuries 771, % % Medium-Term Maturity Corporate Securities 14,405, % 30.00% Local Agency Investment Fund 17,905, % $40 Million Total $42,088, % SCRRA PORTFOLIO COMPOSITION As of March 31, 2011 Local Agency Investment Fund 42% Money Mkt Funds 15% Premium Checking 7% U.S. Treasuries 2% Medium-Term Maturity Corporate Securities 34% Page 2 of 2 61