Notice and Agenda of a Meeting of the Finance and Audit Committee of the METRO Board of Directors

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1 FINANCE and AUDIT Thomas C. Lambert President & CEO COMMITTEE MEMBERS Cindy Siegel, Chair Lisa Castañeda Terry Morales Sanjay Ramabhadran Troi Taylor Notice and Agenda of a Meeting of the Finance and Audit Committee of the METRO Board of Directors Metropolitan Transit Authority of Harris County, Texas Lee P. Brown METRO Administration Building 1900 Main Street, 2 nd Floor Board Room, Houston, TX Wednesday, August 15, 2018 at 4:00 p.m. ACTIONS 1. Request Board approval to accept the monthly committee reports, including the investment report A. Smiley 2. Request Board approval to accept the update of the Investment Policy and authorized signatories G. Fotinos COMMITTEE APPROVAL 3. Review of possible procurement solicitations M. Kyme 4. Request for qualifications solicitation approval for independent financial auditing services W. McHale GRANT NOTIFICATION 5. Notification of submittal of a grant application for the Houston Galveston Area Council s Transportation Improvement Program 2018 Call for Projects A. Lyne BRIEFINGS 6. Monthly Compliance Report J. Garcia 7. FY FY2020 Financing Plan G. Fotinos ACCESSIBILITY AND SPECIAL ACCOMMODATIONS METRO s meetings are held in a facility accessible to persons with disabilities. Request for accommodations should be directed to the Board Office at at least 48 hours in advance of the meeting. SECURITY Individuals attending this meeting will be subject to being scanned with a security wand and/or metal detector walk through. You and your property are subject to being searched.

2 FINANCE and AUDIT Working Committee Meeting Agenda P a g e 2 8. Monthly Financial Reports A. Smiley a. CFO Presentation b. Sales Tax Report c. Investment Report d. Debt Report e. Monthly Performance Report 9. Fixed-route ridership and fare revenue comparison June 2018 and June 2017 J. Archer/ J. Fernandez

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5 Request for Board Action August Finance & Audit Committee of the METRO Board of Directors

6 The Texas Public Funds Act requires the governing body of an entity to adopt a resolution that records any changes that are made to the investment policy METRO's Investment Policy, Schedule 3, List of Money Market Mutual Funds should be updated as follows: 1. Delete Williams Capital Government Fund because the fund was liquidated in 2014 and does not exist 2. Revise AIM STIT Government and Agency Portfolio to Invesco Government and Agency Portfolio to reflect the name change for the existing account The TexPool and LOGIC investment pool accounts, listed in Schedule 3 of the Investment Policy, must be updated to reflect the current investment officers 2

7 Request Board adoption of a resolution to update: Schedule 3 of METRO's Investment Policy The authorized representatives listed on the TexPool and LOGIC investment pool accounts 3

8 Proposed update to Schedule 3 of METRO's Investment Policy (Clean) Schedule 1 Metro Funds Specifically Exempted From Investment Policy Construction Funds and balances in both the General Mobility Escrow and Real Estate Fund are specifically exempted from the maximum allocation guidelines set forth in Section 7.0 of the Investment Policy. Schedule 2 List of Investment Officers Arthur C. Smiley III George Fotinos Philip Brenner Katy Wei Chief Financial Officer Manager, Debt Service & Investments Director of Office of Management & Budget Management Analyst, Debt Service & Investments Schedule 3 Approved List of Investment Pools, Money Market Mutual Funds and Overnight Sweep Fund Investment Pools: TexStar LOGIC TexPool TexasTerm PFM Funds Prime Series Money Market Mutual Funds: SEI Investments Government Fund Invesco Government and Agency Portfolio Wells Fargo 100% Treasury Money Market Fund Goldman Sachs Financial Square Government Fund/Select Overnight Sweep Fund Wells Fargo Public Institutional Bank Deposit Account Schedule 4 Approved List of Federal Agencies and Instrumentalities All indirect obligations of the U.S. such as : Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Corporation Federal Agricultural Mortgage Corporation Federal National Mortgage Association and other federal agency obligations, the principal and interest of which are unconditionally guaranteed or insured by or backed by the full faith and credit of the United States, its agencies or instrumentalities. Direct Obligations of the State of Texas or any county, city, school district or other political subdivision of the State of Texas are also approved investments Page 13 of 14

9 Proposed update to Schedule 3 of METRO's Investment Policy (Marked Up) Schedule 1 Metro Funds Specifically Exempted From Investment Policy Construction Funds and balances in both the General Mobility Escrow and Real Estate Fund are specifically exempted from the maximum allocation guidelines set forth in Section 7.0 of the Investment Policy. Schedule 2 List of Investment Officers Arthur C. Smiley III George Fotinos Philip Brenner Katy Wei Chief Financial Officer Manager, Debt Service & Investments Director of Office of Management & Budget Management Analyst, Debt Service & Investments Schedule 3 Approved List of Investment Pools, Money Market Mutual Funds and Overnight Sweep Fund Investment Pools: TexStar LOGIC TexPool TexasTerm PFM Funds Prime Series Money Market Mutual Funds: Williams Capital Government Fund SEI Investments Government Fund AIM STITInvesco Government and Agency Portfolio Wells Fargo 100% Treasury Money Market Fund Goldman Sachs Financial Square Government Fund/Select Overnight Sweep Fund Wells Fargo Public Institutional Bank Deposit Account Schedule 4 Approved List of Federal Agencies and Instrumentalities All indirect obligations of the U.S. such as : Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal National Mortgage Corporation Federal Agricultural Mortgage Corporation Federal National Mortgage Association and other federal agency obligations, the principal and interest of which are unconditionally guaranteed or insured by or backed by the full faith and credit of the United States, its agencies or instrumentalities. Direct Obligations of the State of Texas or any county, city, school district or other political subdivision of the State of Texas are also approved investments Page 13 of 14

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11 FY2018 ANTICIPATED PROCUREMENT REPORT Solicitations over $50K August Consent List Q4 NO. PROJECT DESCRIPTION PROCUREMENT METHOD (RFP, RFQ, IFB) ANTICIPATED SMALL BUSINESS GOAL ANTICIPATED ADVERTISEMENT MONTH COMMENTS BOARD COMMITTEE PREVIOUS BOARD COMMITTEE CONCUR Y 1 Class 1 & 2 Waste Removal IFB 35% September 3 Year Contract to Remove Class 1 & 2 Waste from METRO Facilities Administration 2 Daily Cleaning Services for Transit Centers and Park & Rides IFB 35% September 3 Year Contract to Clean Transit Centers and Park & Rides as Needed During the Day Administration 3 4 Elevator Preventive Maintenance & Repair at METRO Operating, Support & Public Facilities Healthcare Broker/Consultant IFB N/A September RFP 35% September 3 Year Contract to Maintain and Repair Elevators 3 Year Contract with a two-year option for a Benefits Broker/Consultant Contract (Human Resources) Administration Administration 5 Reconstruction of Cambridge Fannin Street Intersection IFB 35% September Contract for Intersection Improvements Administration 6 Financial Auditing Services RFQ 20% September 5 Year Contract for Financial Auditing Services Finance/Audit 7 METROLift Eligibility Services RFP N/A October 6 Year Contract for Services to Determine METROLift Eligibility Public Safety, Customer Service & Operations Committee 1 of 2

12 FY2018 ANTICIPATED PROCUREMENT REPORT Solicitations over $50K August Consent List Q4 NO. PROJECT DESCRIPTION PROCUREMENT METHOD (RFP, RFQ, IFB) ANTICIPATED SMALL BUSINESS GOAL ANTICIPATED ADVERTISEMENT MONTH 8 Rail Wheel Press IFB N/A September COMMENTS Contract to Purchase a Wheel Press for Rail Maintenance BOARD COMMITTEE Public Safety, Customer Service & Operations Committee PREVIOUS BOARD COMMITTEE CONCUR Y 2 of 2

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15 Finance and Audit Committee August 2018

16 Comprehensive Annual Financial Report (CAFR) Single Audit Report National Transit Database Report Internal Management Reports Technical assistance with new financial reports 2

17 An Annual Independent Financial Audit of METRO financial affairs is required by Chapter 451 of the Texas Transportation Code. The Annual Financial Audit Report, auditor's opinion, and management letter are placed on METRO's website and filed with various oversight organizations. The Texas Public Funds Investment Act requires entities to have their Internal Management Investment Reports reviewed annually by an independent auditor. The audit results for the Investment Reports are presented by the auditor to the Board of Directors. 3

18 The Single Audit Act requires an independent financial auditor to determine METRO s compliance with Federal statutes, regulations and terms of Federal grant awards received and disbursed. An independent auditor is required to review METRO financial and federal funding allocation data for compliance with the National Transit Database requirements. Failure to comply with reporting requirements could result in funding delays or loss of grant funds. 4

19 External Auditing Services are provided by KPMG, LLP under a five year contract with maximum contract amount of $1,854,850. This contract will expire during FY2019 after completion of the FY2018 financial reports. KPMG, LLP has provided independent financial auditing services for METRO since FY1996. KPMG, LLP changes their on-site audit team members every 2-3 years to maintain professional independence and ensure audit quality. 5

20 Rev Page 1 of 1 SOLICITATION EVALUATION PROCESS (Scope MUST be attached) PROJECT NAME: Request for Proposals PROJECT NAME: Financial Audit Services Board Committee: Finance/Audit # of Anticipated Contract(s): 1 Request for Qualifications Solicitation Date: September Approve As Is Modify Technical Evaluation Committee (TEC): Senior Director Accounting/Controller Financial Analyst SAP/FICO Lead Management Analyst Lead Operations Management Analyst Financial Lead Accounting and Reporting Specialist Approve As Is Modify Evaluation Criteria: Qualifications/Experience of Firm 40 pts Qualifications/Experience of Personnel 35 pts Project Mgt./Structure/Methodology 20 pts Small Business Participation: Pass/Fail, Max. 5 pts for exceeding SB criteria Approve As Is Modify SBE Goal: 20% Approve As Is Modify Oral Presentations Committee (OPC): Yes / No Executive Selection Committee (ESC) *: Yes / No Approve As Is Approve As Is Modify Modify Board Selection Committee (BSC) *: Yes / No Approve As Is Modify *An ESC or BSC may be assigned by the President & CEO or Chairman of the Board per METRO s procurement guidelines Approved: Chair Person

21 Scope of Services for Financial Audit Services The Metropolitan Transit Authority of Harris County, Texas (METRO) requires the professional services of an independent certified public accounting firm to perform financial auditing services. The firm must be qualified to conduct financial auditing services for a large governmental organization. 1.0 GENERAL 1.1 Financial audit services will include METRO s Comprehensive Annual Financial Report (CAFR), Single Audit Report, Agreed Upon Procedures for the National Transit Database Report, the Data Collection Form and other related reports required by professional auditing/accounting standards, laws, regulations and agreements. Specific financial and operating information is located on METRO s web page at Audits will be performed in accordance with appropriate auditing standards which include, but not limited to, generally accepted auditing standards, the standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, State Single Audit, Federal Single Audit, and Office of Management and Budget Super Circular. 1.3 The Contractor is employed by The Board of Directors with the Finance Committee providing oversight for the audits. 1.4 The Chief Financial Officer has assigned the Senior Director/Controller as the Project Manager. The Contractor and the Senior Director/Controller will develop work schedules and routinely review progress. Audit issues are to be resolved quickly. 1.5 METRO will prepare and is responsible for financial reporting; however, the Contractor will review all financial reports and make recommendations to ensure adequate presentation of financial information in accordance with accounting/reporting standards including laws, rules and regulations issued by the State of Texas or applicable agencies of the Federal Government. 1.6 Upon completion of the audit work, the auditing firm will prepare a preliminary opinion for each report including related comments. This information will be discussed with METRO s Chief Financial Officer, CEO and other designated members of management. Final opinions will be addressed to METRO s Board of Directors and included in the appropriate reporting package. 1.7 Financial audit services will cover 5 fiscal years as follows: October 1, 2018 to September 30, 2019 October 1, 2019 to September 30, 2020 October 1, 2020 to September 30, 2021

22 October 1, 2021 to September 30, 2022 October 1, 2022 to September 30, The Contractor is responsible for complying with all applicable record retention requirements as established by professional standards including any Federal or State law. 1.9 The Contractor shall comply, at no extra cost, with the Contract Article Audit and Availability of Records. This includes any informational requests or review of the audit firm s documents relating to the audits that may be performed by METRO, grantor, state or federal agencies. 2.0 ASSISTANCE AVAILABLE TO THE CONTRACTOR 2.1 All records will be made available to the Contractor as requested. Management and staff will actively participate to ensure questions are responded to quickly and professionally. The Senior Director/Controller is available to coordinate the informational requirements. METRO s staff is available to prepare schedules, reproduce copies of documents, pull documents, and type client representation letter and confirmation requests. METRO will provide all necessary client representation letters. Office space and work stations will be provided in the Finance Department at METRO s administrative building. 2.2 METRO s Internal Audit staff performs internal and contract audits. They are available to review and discuss their audit approach, programs, findings and reports. 3.0 DELIVERABLES AND DUE DATES 3.1 The Contractor will issue their opinions and coordinate with the Project Manager to ensure compliance with all related financial reporting due dates established by management, rules, regulations, laws and agreements. 3.2 The Contractor will present and discuss the final reports with the Finance Committee and then the Board of Directors during regularly scheduled meetings. 4.0 ADDITIONAL AUDITNG and FINANCIAL REPORITNG SERVICES 4.1 METRO may desire the Contractor to perform additional work beyond what is required in the audit services discussed above. The Contractor shall provide such services on an hourly basis, and at the rates agreed to in the Schedule of Items and Prices upon the request of METRO s Project Manager.

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25 Finance and Audit Committee August 2018

26 The Houston-Galveston Area Council (H-GAC) is seeking proposals from local governments and other eligible project sponsors to implement transportation projects A minimum federal funding request of $500,000 is required for roadway projects and $150,000 for active transportation and transit projects Funds can only be applied in the H-GAC eight county non-attainment areas 2

27 $922 million is made available under a competitive process Awards will provide 80% funding for project costs Transportation Development Credits (TDC) are an allowable source for local match The application deadline is September 28, 2018 The Transportation Policy Council (TPC) will make all project selections and federal funding determinations 3

28 Inner Katy Connect the Inner-Katy and the Downtown connectors using a two-way managed facility along IH-10 Project Cost: up to $325 million Westheimer Service Improvements Bus Operations Optimized Service Treatments (BOOST) Project Cost: up to $50 - $60 million 4

29 West Bellfort Park & Ride Improvements Reconfigure Park & Ride lot to expand surface parking Project Cost: up to $20 million Gessner Service Improvements Bus Operations Optimized Service Treatments (BOOST) Project Cost: up to $7 million 5

30 Downtown Service Improvements Bus Operations Optimized Service Treatments (BOOST) Project Cost: up to $10 - $20 million Universal Accessibility Construct new sidewalks and ADA accessible bus pads & ramps to eliminate barriers to bus stops and facilities Project Cost: up to $30 million 6

31 Fleet IT Upgrade Replace modems and IT infrastructure for high-speed network accessibility by first responders while also supporting METRO s vital data needs Project Cost: up to $3.2 million 7

32 We are seeking your concurrence to propose all seven projects to the Transportation Policy Council 8

33 Attachment: 2018 H-GAC TIP Call for Projects List of Projects Project Name Project Description ROM Costs 1. Inner Katy (Major Investment category) Connect the Inner-Katy and the Downtown connectors using a two-way managed facility along IH 10 to enhance system connectivity between the Northwest Transit Center and Downtown. - Up to $ 325 Million 2. Westheimer (Includes FLM improvements) Implement Bus Operations Optimized Service Treatments (BOOST) improvements, Signature Service overlay, and pedestrian/bicycle improvements along sections of the Westheimer corridor. - Up to $50-60 Million 3. West Bellfort Park & Ride Improvements (Reconstruction) Reconfigure the West Bellfort Park & Ride lot to expand surface parking, serve the Bellaire Uptown Transit Center, and connect to the Keegan s Bayou Trail. - Up to $20 Million 4. Gessner BOOST Corridor (Includes FLM improvements) 5. Downtown Bus Operations improvements (includes FLM improvements) Implement Bus Operations Optimized Service Treatments (BOOST) improvements along the Gessner corridor between US90A and US290. Implement Bus Operations Optimized Service Treatments (BOOST) improvements along three major north-south bus transit corridors in Downtown and Midtown Houston: Smith & Louisiana, Milam & Travis, Fannin & San Jacinto. - Up to $7 Million - Up to $10-20 Million 6. Universal Accessibility Construct new sidewalks and ADA accessible bus pads and ramps that will enhance ridership while eliminating barriers to bus stops and transit facilities. 7. Fleet IT Upgrade Replace modems and IT infrastructure on METRO vehicles so they can access a high-speed broadband network utilized solely by first responders and support METRO s vital backhaul data needs. - Up to $30 Million - Up to $3.2 Million 1

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35 2015 APTA AWARD WINNER MErAD MEMO To: Thomas C. Lambert President & CEO From: Andrea Dennis Auditor IV Date: August 1, 2018 (revised 8/6/18) Subject: Corrective Action Compliance Report as of July 31, 2018 Attached is the Audit Department's Corrective Action Compliance Report as of July 31, There are no past due comments this month. We appreciate the efforts of all departments in continuing to provide timely responses to Audit's recommendations. If you have any questions, please call Attachment

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48 FY FY2020 Financing Plan August 2018 Finance George Fotinos In FY2019 and FY2020, METRO plans expenditures totaling up to $140 million for the following: FY2019 FY2020 Buses $ 45,277,000 $ 42,317,000 Small Equipment (including Farebox Equipment) $ 11,652,000 $ 18,702,000 Light Rail Vehicles $ 22,052,000 Total: $ 78,981,000 $ 61,019,000 METRO plans to fund these expenditures utilizing 100% contractual obligation financing. METRO s financial advisor, Public Financial Management (PFM) has presented the case that one financing in FY2019 will be less expensive than a financing in both FY2019 and FY2020. This is due to the rising interest rate environment and savings from the combined Cost of Issuance expenses. The total estimated savings are as follows: -Cost of Issuance savings of $235,000 -Net Present Value savings of $733,500 Staff is looking for committee guidance on whether to pursue a combined financing strategy for FY2019 and FY2020. Next steps include a Request for Board Action at the September Board Meeting, which would include: -Final parameters of financing -Naming of the bond counsel and other necessary parties -Delegation of authority to execute the transaction and any required legal documentation

49 Finance & Audit Committee August 2018

50 FY2019 FY2020 Buses $45,277,000 $42,317,000 Small Equipment (includes Farebox Equipment) $11,652,000 $18,702,000 Light Rail Vehicles $22,052,000 Total Planned Expenditure: $140MM 2

51 METRO plans to fund these expenditures utilizing 100% contractual obligation financing Proceeds from the financing will be placed in METRO s Construction Fund Funds will be used ( drawn down ) as the various buses, light rail vehicles, and small equipment are purchased and/or delivered 3

52 45' Commuter Bus Small Equipment Financing (in $1,000 s) Light Rail Vehicles (LRV's) (H4) 40' Transit Buses (CNG) 60' Bus Rapid Transit (BRT) Articulated Buses 40' Transit Buses (Diesel) Quantity: 39 Quantity: 14 Quantity: 20 Quantity: 14 Quantity: 35 FY2019 Oct-18 $ 27,922 $ 11,652 Nov-18 $ 12,000 Jan-19 $ 5,425 May-19 $ 7,000 Jul-19 $ 5,965 Aug-19 $ 5,965 Sep-19 $ 3,052 FY2020 Oct-19 $ 18,702 Jul-20 $ 12,568 $ 8,590.5 Aug-20 $ 12,568 $ 8,590.5 Total $ 53,058 $ 30,354 $ 22,052 $ 5,425 $ 11,930 $ 17,181 Total Drawdown: $140MM 4

53 FY2019 FY2020 Total Drawdown: $140MM 5

54 METRO s financial advisor, Public Financial Management (PFM) has presented the case that one financing in FY2019 will be less expensive than a financing in both FY2019 and FY2020: Overall debt service will be less expensive Estimated Net Present Value savings: $ 733,500 Cost of Issuance will be less expensive Estimated savings resulting from only having one issuance in FY2019: $ 235,000 6

55 Staff is looking for committee guidance on the following options: Pursue a combined financing for FY2019 and FY2020 Pursue separate financings covering FY2019 and FY2020 Staff recommends a combined financing in October

56 Request Board Action at the September Board Meeting Request will include: Final parameters of financing Naming of the bond counsel and other necessary parties Delegation of authority to execute the transaction and any required legal documentation 8

57 Monthly Financial Report Finance - CFO's Summary - Sales Tax Report - Investment Report - Debt Report - Monthly Performance Report Arthur C. Smiley III, Chief Financial Officer

58 Finance & Audit Committee August 15, 2018

59 YTD cash received is $688.5 million or $17.9 million (2.7%) more than budgeted $50.4 million (7.9%) more than FY2017 Cash received in August 2018 is $69.0 million or $0.7 million (1.1%) more than budgeted $4.7 million (7.3%) more than FY2017 August sales tax revenue is from June sales activity 2

60 YTD Fare Revenue is $55.6 million or $1.6 million (2.8%) less than budgeted $0.5 million (0.9%) less than FY2017 Fare Revenue in July 2018 is $5.5 million or $0.1 million (1.8%) less than budgeted $0.4 million (7.8%) more than FY2017 3

61 ($ in millions) Actual $55.6 Budget $57.2 Variance: -$1.6M 4

62 FY2018 Annual Operating Budget $ FY2018 Annual Capital Budget $ FY2018 YTD Operating Budget $ FY2018 YTD Capital Budget $ Budget Actual Budget Actual METRORail Completion -92.1% Operating -5.0% $- $125 $250 $375 $500 CIP Program $- $50 $100 $ % FY2018 Annual Debt Service Budget $ 97.0 FY2018 Annual GMP Projected Allocation $ FY2018 YTD Debt Service Budget $ 78.8 FY2018 YTD GMP Projected Allocation $ Budget Actual -0.4% Projected Allocation 1.4% Debt Service GMP Projection $- $20 $40 $60 $80 $- $50 $100 $150 ($ million) 5

63 Fund Beginning Balance, $ millions (6/30/2018) Ending Balance, $ millions (7/31/2018) Earnings Rate Benchmark Rate General $236.2 $ % 2.05% Construction Real Estate General Mobility

64 ($ million) 6/30/18 7/31/18 Sales & Use Tax Bonds $ $ Sales & Use Tax Contractual Obligations Sales & Use Tax Refunding Bonds Sales & Use Tax Refunding Contractual Obligations Commercial Paper Sales & Use Tax Take Out Bonds Sales & Use Tax Refinancing Bonds Total $ 1,143.3 $ 1,

65 FY2017 FY2018 Change Local Bus 48,811,709 49,269, , % METRORail Service 15,618,980 15,781, , % Local Network 64,430,689 65,051, , % Commuter Park & Ride 6,512,235 6,366,486 (145,749) (2.2%) Fixed Route 70,942,924 71,418, , % Customized Service METROLift 1,608,503 1,649,909 41, % METROStar Vanpool 1,692,705 1,594,672 (98,033) (5.8%) 8

66 Ridership (in millions) Revenue (in millions) Feb Mar Apr May Jun Jul $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 Feb Mar Apr May Jun Jul FY17 FY18 FY17 FY18 9

67 Metropolitan Transit Authority Sales & Use Tax Report August 2018 Treasury Services 8/8/2018

68 Metropolitan Transit Authority Sales & Use Tax Net Receipts (Cash Receipts Basis) FY 2018 NET NET GROSS NET VARIANCE CHANGE IN ACTUALS REC'D SALES RECEIPTS ESTIMATE RECEIPTS REBATES RECEIPTS TO FY18 ESTIMATE FY18- FY17 IN IN FY17 FY18 FY18 FY18 FY18 $ % $ % OCT AUG $ 52,412, $ 55,673, $ 50,331, $ 244, $ 50,086, $ (5,586,814.14) % $ (2,326,296.09) -4.44% NOV SEP $ 61,233, $ 64,441, $ 63,175, $ 302, $ 62,872, $ (1,568,541.24) -2.43% $ 1,639, % DEC OCT $ 52,333, $ 56,555, $ 64,423, $ 204, $ 64,219, $ 7,664, % $ 11,886, % JAN NOV $ 53,777, $ 56,093, $ 60,841, $ 191, $ 60,649, $ 4,556, % $ 6,872, % FEB DEC $ 70,386, $ 77,392, $ 78,034, $ 289, $ 77,745, $ 352, % $ 7,358, % MAR JAN $ 54,333, $ 54,636, $ 56,982, $ 294, $ 56,687, $ 2,051, % $ 2,354, % APR FEB $ 55,183, $ 54,177, $ 55,274, $ 138, $ 55,135, $ 958, % $ (47,565.10) -0.09% MAY MAR $ 64,728, $ 68,266, $ 70,285, $ 337, $ 69,948, $ 1,682, % $ 5,219, % JUN APR $ 53,427, $ 56,671, $ 59,094, $ 242, $ 58,851, $ 2,179, % $ 5,424, % JUL MAY $ 56,092, $ 58,486, $ 63,598, $ 217, $ 63,380, $ 4,893, % $ 7,288, % AUG JUN $ 64,262, $ 68,225, $ 69,169, $ 215, $ 68,953, $ 728, % $ 4,691, % SEP JUL $ 53,786, $ 58,573, $ - $ - $ - $ % $ % TOTAL $ 691,957, $ 729,191, $ 691,209, $ 2,678, $ 688,530, $ 17,912, % $ 50,359, % Net Receipts Estimate Net Receipts Net Receipts YTD % Over YTD % Chge YTD FY 18 YTD FY 17 YTD FY 18 FY 18 Est FY Act $ 670,618, $ 638,170, $ 688,530, % 7.89% Treasury Services 8/8/2018 Page 1 of 4

69 Metropolitan Transit Authority Sales & Use Tax Net Receipts (Cash Receipts Basis) Most Recent 12-Month History Including Accrual for Rebates NET NET NET RECEIPTS REC'D SALES FISCAL RECEIPTS FISCAL RECEIPTS CHANGE AMOUNT IN IN YEAR (a) YEAR GROSS REBATES (b) [(b)-(a)] % SEPT JULY FY '16 $ 53,433, FY'17 $ 54,724, $ 938, $ 53,786, $ 352, % OCT AUG FY'17 $ 52,412, FY'18 $ 50,331, $ 244, $ 50,086, $ (2,326,296.09) -4.44% NOV SEP FY'17 $ 61,233, FY'18 $ 63,175, $ 302, $ 62,872, $ 1,639, % DEC OCT FY'17 $ 52,333, FY'18 $ 64,423, $ 204, $ 64,219, $ 11,886, % JAN NOV FY'17 $ 53,777, FY'18 $ 60,841, $ 191, $ 60,649, $ 6,872, % FEB DEC FY'17 $ 70,386, FY'18 $ 78,034, $ 289, $ 77,745, $ 7,358, % MAR JAN FY'17 $ 54,333, FY'18 $ 56,982, $ 294, $ 56,687, $ 2,354, % APR FEB FY'17 $ 55,183, FY'18 $ 55,274, $ 138, $ 55,135, $ (47,565.10) -0.09% MAY MAR FY'17 $ 64,728, FY'18 $ 70,285, $ 337, $ 69,948, $ 5,219, % JUNE APR FY'17 $ 53,427, FY'18 $ 59,094, $ 242, $ 58,851, $ 5,424, % JULY MAY FY'17 $ 56,092, FY'18 $ 63,598, $ 217, $ 63,380, $ 7,288, % AUG JUNE FY'17 $ 64,262, FY'18 $ 69,169, $ 215, $ 68,953, $ 4,691, % TOTAL $ 691,604, $ 745,934, $ 3,617, $ 742,316, $ 50,712, % CURRENT MONTH REBATE ACCRUALS Reliant Stadium $ 63, Baybrook MUD $ 152, Total Rebates $ 215, Treasury Services 8/8/2018 Page 2 of 4

70 Month Allocation State of Texas Metropolitan Transit Authority Sales & Use Tax Net Receipts (Cash Receipts Basis) FY 2018 Rebate Accruals Distribution Net Receipts Baybrook MUD Reliant Stadium Baybrook MUD Total Rebates METRO General Mobility October $ 50,331, $ 131, $ 113, $ 244, $ 50,086, $ 113, $ 36,951, $ 13,022, November $ 63,175, $ 193, $ 109, $ 302, $ 62,872, $ 109, $ 46,832, $ 15,930, December $ 64,423, $ 99, $ 104, $ 204, $ 64,219, $ 104, $ 49,642, $ 14,472, January $ 60,841, $ 66, $ 125, $ 191, $ 60,649, $ 125, $ 46,542, $ 13,981, February $ 78,034, $ 120, $ 168, $ 289, $ 77,745, $ 168, $ 58,862, $ 18,713, March $ 56,982, $ 188, $ 106, $ 294, $ 56,687, $ 106, $ 43,060, $ 13,520, April $ 55,274, $ 37, $ 100, $ 138, $ 55,135, $ 100, $ 41,955, $ 13,079, May $ 70,285, $ 216, $ 121, $ 337, $ 69,948, $ 121, $ 53,326, $ 16,500, June $ 59,094, $ 68, $ 173, $ 242, $ 58,851, $ 173, $ 44,464, $ 14,212, July $ 63,598, $ 96, $ 121, $ 217, $ 63,380, $ 121, $ 48,552, $ 14,705, August $ 69,169, $ 63, $ 152, $ 215, $ 68,953, $ 152, $ 52,432, $ 16,368, September $ - $ - $ - $ - $ - $ - $ - $ - Total $ 691,209, $ 1,282, $ 1,396, $ 2,678, $ 688,530, $ 1,396, $ 522,626, $ 164,507, $ 50,331, $ 131, $ 113, $ 244, $ 50,086, $ 113, $ 37,479, $ 6,246, Treasury Services 8/8/2018 Page 3 of 4

71 Metropolitan Transit Authority Forecast Subsequent Sales Tax Receipts - Net of Rebates Based on Three Months Rolling Average Estimated Net Sales Tax Receipts for the Month(s) of: July 2018 $ 59,321, August 2018 $ 55,102, Treasury Services 8/8/2018 Page 4 of 4

72 METRO INVESTMENT REPORT ALL FUNDS July 2018

73 Metropolitan Transit Authority of Harris County Investment Report For month ended July 31, 2018 Portfolio Summary Management Report The following is a summary of METRO's Investment Portfolios: Fund: General Construction Real Estate General Mobili~ Prior Month End Book Value $236,906,765 $77,110,688 $488,695 $78,727,500 Current Month End Book Value 268,629,277 72,248, ,507 66,740,711 Change $31,722,511 ($4,862,154) $811 ($11,986,789) Prior Month End Market Value* $236,246,487 $77,110,688 $488,695 $78,727,500 Current Month End Market Value* 267,983,502 72,248, ,507 66,740,711 Change $31,737,015 ($4,862,154) $811 ($11,986,789) Interest Receivable $2,438,125 $0 $0 $0 Weighted Average Days Outstanding Weighted Average Years Outstanding Recognized Yield 1.75% 1.90% 1.96% 1.96% Benchmark Yield 2.05% 1.83% 1.79% 1.79% Yield Over/ <Under> Benchmark -0.30% 0.07% 0.17% 0.17% TexStar Wtd Avg. Days Outstanding (as of 07/31 /18) ** N/A N/A TexDaily Wtd Avg. Days Outstanding (as of 06/30/18) ** 38 N/A All Funds are managed in full compliance with the Public F Transit Authority of Harris County and Investment Act, the Investment Policy and Strategy of the Metropolitan the sat ty p rameters set by the Board of Directors. I Philtp M. Brenner, Dire tor of 0MB * Change in Market Value is presented in accordance with the Public Funds Investment Act and primarily reflects receipts, expenditures, securities purchases and maturities and changes in the marketability of securities held at the end of the period. ** This weighted average maturity calculation uses the SEC Rule 2a-7 definition for stated maturity for any floating rate instrument held in the portfolio to determine the weighted average maturity for the pool. This Rule specifies that a variable rate instrument to be paid in 397 calendar days or less shall be deemed to have a maturity equal to the period remaining until the next readjustment of the interest rate.

74 Metropolitan Transit Authority of Harris County Monthly Changes in Position As of July 31, 2018 Maturity Purch Book Value Market Value No. Description Coupon Rating Date Date Par Cost Price YTM Type 6/30/2018 7/31/2018 6/30/2018 7/31/2018 General Fund Wells Fargo Master Account 8/1/2018 7/31/2018 5,843,707 5,843, NA DDA 5,134,938 5,843,707 5,134,938 5,843,707 Wells Fargo HOT Lanes Account 8/1/2018 7/31/ , , NA DDA 13, ,270 13, ,270 Wells Fargo Mobile Ticketing 8/1/2018 7/31/ ,327 17, NA DDA 82,572 17,327 82,572 17,327 Wells Fargo METROLift Online Account 8/1/2018 7/31/ NA DDA TexStar Investment Pool AAAm 8/1/2018 7/31/ ,153,244 35,153, % LGIP 15,654,032 35,153,244 15,654,032 35,153,244 TexDaily Investment Pool AAAm 8/1/2018 7/31/ ,149,422 24,149, % LGIP 23,282,739 24,149,422 23,282,739 24,149,422 Wells Fargo Institutional Sweep 8/1/2018 7/31/ ,700,195 15,700, % DSA 467,710 15,700, ,710 15,700,195 EWBCD21 East West Bank CD 1.100% Coll = Aaa 11/21/ /21/ ,000,000 10,000, % CD 10,000,000 10,000,000 10,000,000 10,000, EGM69 / Federal Farm Credit Banks 1.100% AA+/Aaa 12/5/2018 1/23/ ,000,000 9,966, % A 9,992,181 9,993,725 9,953,300 9,961, A4YA4 / Federal Home Loan Bank 1.050% AA+/Aaa 8/15/2018 2/15/2017 7,000,000 6,993, % A 6,999,462 6,999,833 6,992,020 6,997, G0E33 / Fannie Mae 1.125% AA+/Aaa 7/20/2018 2/15/2017 5,000,000 5,002, % A 5,000,098 Matured/Called 4,998,050 Matured/Called GAGM0 / Freddie Mac 1.040% AA+/Aaa 8/24/2018 2/15/2017 5,000,000 4,992, % A 4,999,269 4,999,689 4,993,350 4,997, G9N60 / Freddie Mac 1.000% AA+/Aaa 7/27/2018 2/15/2017 5,000,000 4,993, % A 4,999,691 Matured/Called 4,996,750 Matured/Called GAKF0 / Freddie Mac 1.110% AA+/Aaa 9/12/2018 2/22/2017 5,000,000 4,996, % A 4,999,600 4,999,770 4,991,400 4,995, G0YM9 / Fannie Mae 1.875% AA+/Aaa 9/18/2018 2/28/2017 5,000,000 5,060, % A 5,008,404 5,005,106 4,999,050 4,998,750 EWBCD22 East West Bank CD 1.500% Coll = Aaa 3/14/2019 3/14/ ,000,000 10,000, % CD 10,000,000 10,000,000 10,000,000 10,000, K48 / Federal Home Loan Bank 2.000% AA+/Aaa 9/14/2018 6/14/2017 5,000,000 5,041, % A 5,006,873 5,004,032 4,999,000 4,999, EQ1 / Tennessee Valley Authority 1.750% AA+/Aaa 10/15/2018 7/18/2017 5,000,000 5,025, % A 5,006,023 5,004,262 4,994,500 4,997, AAM88 / Federal Home Loan Bank 1.625% AA+/Aaa 1/18/2019 7/18/2017 5,000,000 5,010, % A 5,003,668 5,003,102 4,983,000 4,986, A9AE1 / Federal Home Loan Bank 0.875% AA+/Aaa 10/1/2018 7/18/2017 5,000,000 4,973, % A 4,994,436 4,996,311 4,985,700 4,990, AAV62 / Federal Home Loan Bank 1.270% AA+/Aaa 2/27/2019 7/31/2017 5,000,000 4,993, % A 4,997,359 4,997,699 4,967,950 4,971, EHQF3 / Federal Farm Credit Banks 1.350% AA+/Aaa 1/7/2019 7/31/2017 5,000,000 5,000, % A 5,000,344 5,000,288 4,978,750 4,981, EADZ9 / Freddie Mac 1.125% AA+/Aaa 4/15/2019 8/16/2017 5,000,000 4,982, % A 4,991,883 4,992,757 4,953,900 4,957, G0J53 / Fannie Mae 1.000% AA+/Aaa 2/26/2019 8/16/2017 5,000,000 4,973, % A 4,988,602 4,990,074 4,958,500 4,962, ABQ25 / Federal Home Loan Bank 1.360% AA+/Aaa 3/29/2019 9/18/2017 5,000,000 4,997, % A 4,998,757 4,998,899 4,965,000 4,968, EHJG9 / Federal Farm Credit Banks 1.400% AA+/Aaa 5/15/2019 9/28/2017 5,000,000 4,993, % A 4,996,544 4,996,881 4,959,850 4,960, X72S2 / Federal Home Loan Bank 5.375% AA+/Aaa 5/15/2019 9/29/2017 5,000,000 5,312, % A 5,167,809 5,151,451 5,128,950 5,116, EHZF3 / Federal Farm Credit Banks 1.375% AA+/Aaa 6/19/ /21/2017 5,000,000 4,972, % A 4,982,780 4,984,293 4,951,550 4,952, FC2 / World Bank 1.250% AA+/Aaa 4/26/ /21/2017 5,000,000 4,962, % A 4,978,236 4,980,493 4,953,300 4,955, EAEB1 / Freddie Mac 0.875% AA+/Aaa 7/19/ /21/2017 5,000,000 4,928, % A 4,954,820 4,958,477 4,921,000 4,925, EGFU4 / Federal Farm Credit Banks 1.210% AA+/Aaa 6/20/ /21/2017 5,000,000 4,955, % A 4,972,388 4,974,806 4,941,750 4,943, EAEB1 / Freddie Mac 0.875% AA+/Aaa 7/19/ /22/2017 5,000,000 4,924, % A 4,952,100 4,955,977 4,921,000 4,925, G0N33 / Fannie Mae 0.875% AA+/Aaa 8/2/ /20/2017 5,000,000 4,920, % A 4,946,483 4,950,661 4,916,900 4,921, A8Y72 / Federal Home Loan Bank 0.875% AA+/Aaa 8/5/2019 1/3/2018 6,000,000 5,901, % A 5,931,700 5,936,993 5,899,080 5,905, F62 / US Treasury Note 1.500% AA+/Aaa 10/31/2019 2/13/2018 5,000,000 4,950, % T 4,961,435 4,963,890 4,937,900 4,936, FQ1 / World Bank 1.200% AA+/Aaa 9/30/2019 2/13/2018 6,000,000 5,910, % A 5,931,328 5,935,996 5,901,300 5,899, EJAK5 / Federal Farm Credit Banks 2.010% AA+/Aaa 9/25/2019 2/13/2018 5,000,000 4,993, % A 4,995,206 4,995,536 4,974,000 4,971, F62 / US Treasury Note 1.500% AA+/Aaa 10/31/2019 2/16/2018 4,000,000 3,954, % T 3,964,343 3,966,612 3,950,320 3,949, G0ZY2 / Fannie Mae 1.750% AA+/Aaa 11/26/2019 3/21/2018 5,000,000 4,953, % A 4,961,233 4,963,575 4,950,700 4,947, FS7 / World Bank 1.125% AA+/Aaa 11/27/2019 5/17/2018 5,000,000 4,889, % A 4,898,536 4,904,655 4,900,600 4,901, A0JR2 / Federal Home Loan Bank 2.375% AA+/Aaa 12/13/2019 5/16/2018 5,000,000 4,987, % A 4,988,893 4,989,543 4,990,450 4,983, A0JR2 / Federal Home Loan Bank 2.375% AA+/Aaa 12/13/2019 5/16/2018 4,710,000 4,698, % A 4,699,667 4,700,272 4,701,004 4,694, AA3R7 / Federal Home Loan Bank 1.375% AA+/Aaa 11/15/2019 7/23/2018 5,000,000 4,926, % A Did Not Own 4,927,678 Did Not Own 4,923,850 Total General Fund 236,906, ,629, ,246, ,983,502 Notes: AAA is the highest long-term rating. A-1+ is the highest short term rating. DDA: Demand Deposit Account LGIP: Local Government Investment Pool DSA: FDIC-insured Sweep Account TPF: Trust Payment Fund (Cash) MB: Municipal Bond MCP: Municipal Commercial Paper CD: Certificate of Deposit A: U. S. Agency & Instrumentality Bond MMA: Money Market Account T: U. S. Treasuries NA*: Implicit backing of the Federal Government

75 Metropolitan Transit Authority of Harris County Monthly Changes in Position As of July 31, 2018 Maturity Purch Book Value Market Value No. Description Coupon Rating Date Date Par Cost Price YTM Type 6/30/2018 7/31/2018 6/30/2018 7/31/2018 Construction Fund Sales & Use Tax Bonds DSR (TexStar) AAAm 8/1/2018 7/31/ ,385,441 21,385, % LGIP 21,351,052 21,385,441 21,351,052 21,385,441 Contractual Obligations DSR (TexStar) AAAm 8/1/2018 7/31/2018 4,657,929 4,657, % LGIP 4,650,439 4,657,929 4,650,439 4,657,929 Interest & Sinking Fund (2009 & 2010) (TexStar) AAAm 8/1/2018 7/31/2018 4,710,700 4,710, % LGIP 3,840,439 4,710,700 3,840,439 4,710,700 Interest & Sinking Fund 2011A (TexStar) AAAm 8/1/2018 7/31/2018 8,954,147 8,954, % LGIP 7,036,378 8,954,147 7,036,378 8,954,147 Interest & Sinking Fund 2011B (TexStar) AAAm 8/1/2018 7/31/ , , % LGIP 72, ,139 72, ,139 Interest & Sinking Fund 2014 (TexStar) AAAm 8/1/2018 7/31/ ,467,301 13,467, % LGIP 13,445,645 13,467,301 13,445,645 13,467,301 Interest & Sinking Fund 2015A (TexStar) AAAm 8/1/2018 7/31/ ,085,008 10,085, % LGIP 9,134,130 10,085,008 9,134,130 10,085,008 Interest & Sinking Fund 2015B (TexStar) AAAm 8/1/2018 7/31/2018 3,915,621 3,915, % LGIP 3,328,760 3,915,621 3,328,760 3,915,621 Interest & Sinking Fund 2016A (TexStar) AAAm 8/1/2018 7/31/2018 1,580,276 1,580, % LGIP 1,053,445 1,580,276 1,053,445 1,580,276 Interest & Sinking Fund 2016B (TexStar) AAAm 8/1/2018 7/31/ , , % LGIP 208, , , ,419 Interest & Sinking Fund 2016C (TexStar) AAAm 8/1/2018 7/31/ ,918 16, % LGIP 10,287,969 16,918 10,287,969 16,918 Interest & Sinking Fund 2016D (TexStar) AAAm 8/1/2018 7/31/ , , % LGIP 377, , , ,681 Interest & Sinking Fund 2017A (TexStar) AAAm 8/1/2018 7/31/ , , % LGIP 250, , , ,463 Interest & Sinking Fund 2017B (TexStar) AAAm 8/1/2018 7/31/2018 1,628,980 1,628, % LGIP 842,372 1,628, ,372 1,628,980 Interest & Sinking Fund 2017C (TexStar) AAAm 8/1/2018 7/31/ , , % LGIP 400, , , ,510 Proceeds Fund 2017B (TexStar) AAAm 8/1/2018 7/31/ % LGIP 831, ,280 Total Construction Fund 77,110,688 72,248,533 77,110,688 72,248,533 General Mobility Fund TexDaily Investment Pool GMP AAAm 8/1/2018 7/31/ ,740,711 66,740, % LGIP 78,727,500 66,740,711 78,727,500 66,740,711 Total General Mobility Fund 78,727,500 66,740,711 78,727,500 66,740,711 Real Estate Fund TexDaily Investment Pool Real Estate AAAm 8/1/2018 7/31/ , , % LGIP 488, , , ,507 Total Real Estate Fund 488, , , ,507 Grand Total All Funds 393,233, ,108, ,573, ,462,254 Notes: AAA is the highest long-term rating. A-1+ is the highest short term rating. MMA: Money Market Account DDA: Demand Deposit Account T: U. S. Treasuries LGIP: Local Government Investment Pool NA*: Implicit backing of the Federal Government DSA: FDIC-insured Sweep Account TPF: Trust Payment Fund (Cash) MB: Municipal Bond MCP: Municipal Commercial Paper CD: Certificate of Deposit A: U. S. Agency & Instrumentality Bond

76 Description Metropolitan Transit Authority of Harris County Texas General Mobility Escrow Activity Summary As of July 31, 2018 FY2018 Year to Date Escrow Disbursements Interest to Interest Earned Escrow Funding from Escrow General Fund on Escrow Funds Balance Jul-18 Escrow Balance Forward $ 133,003, $ (129,576,508.64) $ (1,555,332.30) $ 767, $ 78,727, Jul-18 Jul-18 Net Sales Tax Received [((Net Sales Tax X 25%) - FY2014 Jul GMP) / 2 ] + FY2014 Jul GMP [(($63,258, X 25%) - $13,596,785.03) / 2 ] + $13,596, ,705, ,433, City of Houston See attached for details (25,006,621.26) 68,426, Jul-18 Jul-18 City of Katy, Humble & Missouri City Monthly Congestion Mitigation and Traffic Management (1,391,862.25) 67,034, City of Bellaire, Hedwig Village, Hunters Creek, Southside Place, Spring Valley & West University Place Monthly Congestion Mitigation and Traffic Management (294,016.14) 66,740, Jul-18 Interest Activity (138,068.18) 138, ,740, Jul-18 Escrow - Fiscal Year to Date $ 147,709, $ (156,269,008.29) $ (1,693,400.48) $ 905, $ 66,740,711.14

77 General Mobility Program Political Jurisdictions of Projects Funded in July 2018 City Invoiced Council City of Houston Projects Amount District 19th Pd: Traffic Signal Maintenance $ 5,763, All 19th Pd: Street Reconstruction Program $ 5,690, All 19th Pd: Street Reconstruction Program $ 5,107, All 19th Pd: Special City Project - Overlay $ 2,411, All 19th Pd: Bridge/Barricade Maintenance Program $ 1,704, All 19th Pd: Concrete Street Repair Program $ 1,266, All 19th Pd: Traffic Signal Maintenance Extended $ 730, All 19th Pd: Traffic Signal Maintenance $ 700, All 19th Pd: Sign Maintenance Program $ 630, All 19th Pd: Bridge Replacement / Special Projects $ 368, Various 19th Pd: Special City Project - Overlay $ 353, All 19th Pd: Pavement Marking Maintenance Program $ 280, All $ 25,006,621.26

78 METRO DEBT REPORT July 2018

79 Metropolitan Transit Authority of Harris County Texas Debt Report As of July 31, 2018 Type of Debt Purpose Issued Par Value Average Rate Issuance Date Maturity / Term Cost of Issuance Interest Earned on Proceeds Disbursements from Proceeds Outstanding Balance Commercial Paper General Mobility $ 169,402,000 Certificates of Participation (COPS) Series 2008A Certificates of Participation (COPS) Series 2008B Sales & Use Tax Contractual Obligations Series 2009D Sales & Use Tax Contractual Obligations Series 2010A Sales & Use Tax Contractual Obligations Series 2011B Sales & Use Tax Contractual Obligations Series 2014 Sales & Use Tax Contractual Obligations Series 2015B 46 Orion HEV Buses 52 MCI HEV Buses 10 Signature Orions 50 MCI HEV 40 Orion HEV Buses 20 MCI HEV Buses Wtd. Avg % Program Inception 10-Jan-06 Wtd. Avg days $ 7,014,204 $ 241,452 $ 169,402,000 $ 95,502,000 $ 62,255, % July 15, 2008 Defeased August 31, 2016 $ 215,568 $ 420,316 $ 61,959,754 $ - $ 45,785, % December 9, 2008 Defeased August 31, 2016 $ 151,402 $ 97,461 $ 41,937,000 $ - $ 35,050, % December 30, 2009 Defeased November 1, 2017 $ 175,686 $ 8,913 $ 35,612,306 $ - 80 Orion HEV Buses $ 40,290, % June 23, Orion HEV Buses $ 49,405, % September 28, Nova Articulated Buses 70 MCI Commuter Buses 40 NABI Transit Buses 75 NABI Buses 50 NABI CNG Buses 25 MCI Commuter Buses Pre Refund: November 1, 2022 Post Refund: November 1, 2021 Pre Refund: November 1, 2023 Post Refund: November 1, 2022 $ 186,496 $ 27,485 $ 41,902,115 $ 6,885,000 $ 93,614 $ 7,784 $ 53,007,784 $ 9,575,000 $ 97,953, % April 22, 2014 November 1, 2029 $ 881,445 $ 11, $ 106,690,895 $ 60,448,750 $ 62,485, % August 28, 2015 November 1, 2028 $ 500,949 $ 8 $ 72,789,714 $ 54,475,000 Sales & Use Tax Series 2015A CP Take Out $ 52,575, % August 28, 2015 August 15, 2020 $ 385,930 $ - $ 60,000,000 $ 52,575,000 Sales & Use Tax Contractual Obligations Series 2016D 80 Nova 40' Transit Buses 20 60' Articulated Buses $ 44,445, % December 1, 2016 November 1, 2028 $ 575,919 $ 49,230 $ 49,580,273 $ 44,445,000 Sales & Use Tax Refunding Contractual Obligations Series 2017B 100 New Flyer 40' Transit Buses 45 45' MCI Commuter Buses Refunded: $4,665,000 of Series 2009B, $13,520,000 of Series 2009D, $12,425,000 of Series 2010A, $18,110,000 of Series 2011B, & $2,000,000 of Series 2014 $ 100,950, % October 18, 2017 November 1, 2029 $ 826,213 $ 153,082 $ 68,985,733 $ 100,950,000 Sales & Use Tax Refunding Contractual Obligations Series 2017C Refunded $21,315,000 of Series 2014 $ 25,200, % December 15, 2017 November 1, 2027 $ 197,926 $ 413 $ 25,124,201 $ 25,200,000 Total Non-METRORail Expansion $ 785,795, % $ 11,205,351 $ 1,017,525 $ 786,991,775 $ 450,055,750 Commercial Paper METRORail Expansion Real Estate $ 20,598,000 Wtd. Avg % Program Inception 10-Jan-06 Wtd. Avg days $ 852,967 $ 29,362 $ 20,598,000 $ 20,598,000 Sales & Use Tax Bonds Series 2009A North and Southeast Corridor Expansion $ 94,465, % June 11, 2009 Pre Refund: November 1, 2029 Post Refund: November 1, 2018 $ 560,859 $ 145,597 $ 96,577,321 $ 4,195,000 Sales & Use Tax Contractual Obligations Series 2009B Rail Vehicles & Set-Up $ 42,780, % June 11, 2009 Defeased November 1, 2017 $ 253,994 $ 83,868 $ 42,161,735 $ - Sales & Use Tax Bonds Series 2009C Build America Bonds Sales & Use Tax Bonds Series 2011A Sales & Use Tax Contractual Obligations Series 2014 Sales & Use Tax Refunding Bonds Series 2016A Sales & Use Tax Refunding Contractual Obligations Series 2016B Sales & Use Tax Bonds Series 2016C Sales & Use Tax Refunding Bonds Series 2017A North and Southeast Corridor Expansion North and Southeast Corridor Expansion 10 East Corridor CAF Light Rail Vehicles Refunded $81,980,000 of Series 2011A & $54,000,000 of Series 2009A Refunded $28,365,000 of Series 2009B Refinanced $29,910,000 of 2008A COPS & $26,525,000 of 2008B COPS Refunded $23,280,000 of Series 2011A & $9,045,000 of Series 2009A $ 82,555, % June 11, 2009 November 1, 2038 $ 440,193 $ 222,578 $ 77,116,267 $ 82,555,000 $ 461,010, % September 28, 2011 November 1, 2041 $ 869,366 $ 285,759 $ 461,301,403 $ 331,575,000 $ 32,651, % April 22, 2014 November 1, 2029 $ 293,815 $ 207,565 $ 35,657,462 $ 27,921,250 $ 126,245, % April 27, 2016 November 1, 2029 $ 937,716 $ 122 $ 159,952,249 $ 126,245,000 $ 25,635, % April 27, 2016 November 1, 2033 $ 295,017 $ 49 $ 31,680,692 $ 25,635,000 $ 55,330, % August 31, 2016 August 1, 2021 $ 179,849 $ 27 $ 59,844,643 $ 44,505,000 $ 29,995, % October 18, 2017 November 1, 2025 $ 332,004 $ - $ 35,039,618 $ 29,995,000 Total METRORail Expansion $ 971,264, % $ 5,015,780 $ 974,927 $ 1,019,929,390 $ 693,224,250 Total Debt $ 1,757,060, % $ 16,221,132 $ 1,992,453 $ 1,806,921,166 $ 1,143,280,000

80 METRO Fiscal Year 2018 Monthly Performance Report Revenue Expense Ridership Performance July 2018 (Third Quarter Fiscal Year-to Date) 8/10/2018

81 MONTHLY PERFORMANCE REPORT July 2018 Table of Contents Section A Section B Section C Section D Section E Section F Section G Section H Section I Section J Sales Tax Revenue Fare Revenue Grant and Interest & Miscellaneous Revenue Budget and Expense Summary Operating Expenses July 2018 Budget vs. Actual FY2018 YTD Budget vs. Actual FY2018 YTD Major Variance Items FY2018 YTD Operating Budget/Expenses by Department Capital and Debt Service Expenditures General Mobility Transfers Ridership by Service Category Performance Statistics Performance Statistics Notes Balance Sheet Quarterly Budget Change Requests

82 MONTHLY PERFORMANCE REPORT August 2018 Sales Tax Revenue millions $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP FY2018 Budget FY2018 Actual FY2017 Actual Total FY2018 Sales Tax budget is $729.2 million Budget to Actual FY2018 ($ millions) Budget Actual Variance % October (5.6) (10.0%) November (1.6) (2.4%) December % January % February % March % April % May % June % July % August % September % FY2018 YTD $ $ $ % Prior Year vs. Current Year ($ millions) Prior Year Current Year Variance % October (2.3) (4.4%) November % December % January % February % March % April (0.0) (0.1%) May % June % July % August % September % FY2018 YTD $ $ $ % Sales Tax revenue for the month of August 2018 is $0.7 million or 1.1% over estimates. Sales Tax revenue for the year-to-date through August 2018 of $688.5 million is $17.9 million or 2.7% over estimates. Section A Page 3

83 MONTHLY PERFORMANCE REPORT July 2018 Fare Revenue millions $7.5 $7.0 $6.5 $6.0 $5.5 $5.0 $4.5 $4.0 OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP FY2018 Budget FY2018 Actual FY2017 Actual Total FY2018 Fare Revenue budget is $68.7 million Budget to Actual FY2018 ($ millions) Budget Actual Variance % October (0.5) (8.3%) November (0.1) (1.8%) December (0.7) (12.5%) January % February % March (0.4) (5.9%) April % May % June (0.6) (10.7%) July (0.1) (1.8%) August % September % FY2018 YTD $ 57.2 $ 55.6 $ (1.6) (2.8%) Prior Year vs. Current Year ($ millions) Prior Year Current Year Variance % October (0.2) (3.5%) November % December (0.2) (3.9%) January % February (0.1) (1.8%) March (0.5) (7.2%) April % May % June (1.0) (16.7%) July % August % September % FY2018 YTD $ 56.1 $ 55.6 $ (0.5) (0.9%) Fare Revenue for the month of July 2018 of $5.5 million is $0.1 million or 1.8% under budget. Fare Revenue for the year-to-date through July 2018 of $55.6 million is $1.6 million or 2.8% under budget. Section B Page 4

84 MONTHLY PERFORMANCE REPORT July 2018 Service Related Grant Revenue Total FY2018 Service Related Grant budget is $76.1 million ($ millions) Budget Actual Variance % October (3.5) (55.6%) November (5.5) (87.3%) December (5.9) (93.7%) January (5.9) (93.7%) February (5.9) (93.7%) March (5.8) (92.1%) April (5.7) (90.5%) May (5.8) (92.1%) June (5.9) (93.7%) July % August % September % FY2018 YTD $ 63.4 $ 46.2 $ (17.2) (27.1%) Service Related Grant Revenue for the month of July 2018 of $39.2 million is $32.9 million or 522.2% over budget. Service Related Grant Revenue for the year-to-date through July 2018 of $46.2 million is $17.2 million or 27.1% under budget. Capital Grant Revenue Total FY2018 Capital Grant budget is $52.2 million ($ millions) Budget Actual Variance % October (3.2) (94.1%) November (2.3) (67.6%) December (2.5) (73.5%) January (3.1) (91.2%) February (3.1) (91.2%) March (2.8) (82.4%) April 3.4 (1.7) (5.1) (150.0%) May (2.5) (73.5%) June (2.5) (73.5%) July (2.9) (85.3%) August % September % FY2018 YTD $ 34.2 $ 4.1 $ (30.1) (88.0%) Capital Grant Revenue for the year-to-date through July 2018 of $4.1 million is $30.1 million under budget. Section C Page 5

85 MONTHLY PERFORMANCE REPORT July 2018 Interest & Miscellaneous Revenue Total FY2018 Interest & Miscellaneous Revenue budget is $19.2 million ($ millions) Budget Actual Variance % October (0.1) (8.3%) November % December % January (0.1) (9.1%) February % March % April % May % June % July % August % September % FY2018 YTD $ 12.9 $ 15.3 $ % Composition of Interest & Miscellaneous Revenue Year-to-Date Actual Current Month Actual $ millions % of Total $ millions % of Total Interest Income % % HOT Lanes Revenue % % Inter Government Revenue % % Other % % Total $ % $ % Interest & Misc. Revenue for the year-to-date of $15.3 million through July 2018 is $2.4 million or 18.6% over budget. Section C Page 6

86 FY2018 Annual Operating Budget $ FY2018 YTD Operating Budget $ MONTHLY PERFORMANCE REPORT July 2018 Budget Summary ($ millions) Operating -5.0% Budget Actual $- $125 $250 $375 $500 FY2018 Annual Capital Budget $ FY2018 YTD Capital Budget $ METRORail Completion -92.1% CIP Program -38.2% Budget Actual $- $50 $100 $150 FY2018 Annual Debt Service Budget $ 97.0 FY2018 YTD Debt Service Budget $ 78.8 Debt Service -0.4% Budget Actual $- $20 $40 $60 $80 FY2018 Annual GMP Projected Allocation $ FY2018 YTD GMP Projected Allocation $ GMP Projection 1.4% Projected Allocation $- $50 $100 $150 Section D Page 7

87 MONTHLY PERFORMANCE REPORT July 2018 Operating Expenses Comparison of Budget to Actual for the Month (July 2018) FY18 Annual July July $ Variance % Variance Budget Budget Actual (favorable)/unfavorable Labor & Fringe Benefits $ 359,548,035 $ 29,637,382 $ 29,740,934 $ 103, % Non-Labor 248,014,965 $ 19,874,948 $ 18,761,971 (1,112,977) (5.6%) Subtotal Labor & Non-Labor 607,563,000 49,512,329 48,502,905 (1,009,425) (2.0%) Contingency 12,500, % Total Operating Budget $ 620,063,000 $ 49,512,329 $ 48,502,905 $ (1,009,425) (2.0%) Comparison of Budget to Actual Year-to-Date July 2018 (10 months) FY18 Annual Year-to-Date Year-to-Date $ Variance % Variance Payroll & Benefits Budget Budget Actual (favorable)/unfavorable Wages $ 139,513,082 $ 116,074,640 $ 115,634,427 $ (440,213) (0.4%) Union Fringe Benefits 81,746,506 63,213,352 62,095,336 (1,118,016) (1.8%) Subtotal Union Labor 221,259, ,287, ,729,764 (1,558,228) (0.9%) Salaries and Non-Union Wages 104,052,017 86,134,854 80,393,413 (5,741,441) (6.7%) Non-Union Fringe Benefits 44,865,100 37,226,412 34,862,655 (2,363,757) (6.3%) Subtotal Non-Union Labor 148,917, ,361, ,256,068 (8,105,198) (6.6%) Allocation to Capital & GMP (10,628,670) (8,870,509) (7,042,956) 1,827, % Subtotal Labor and Fringe Benefits 359,548, ,778, ,942,876 (7,835,873) (2.7%) Total Materials & Supplies Services 62,072,724 45,100,899 32,665,129 (12,435,770) (27.6%) Materials and Supplies 31,083,551 25,399,365 25,219,063 (180,302) (0.7%) Fuel and Utilities 34,896,436 28,458,612 27,570,186 (888,426) (3.1%) 128,052,710 98,958,876 85,454,378 (13,504,498) (13.6%) Administration Casualty and Liability 4,354,609 3,683,588 3,599,069 (84,519) (2.3%) Purchased Transportation 101,982,281 84,518,653 82,622,379 (1,896,274) (2.2%) Leases, Rentals and Misc. 14,255,448 9,428,704 8,012,342 (1,416,361) (15.0%) Allocation to Capital & GMP - Non-Labor (630,084) (472,563) - 472,563 (100.0%) 119,962,255 97,158,382 94,233,791 (2,924,591) (3.0%) Subtotal Non-Labor 248,014, ,117, ,688,168 (16,429,089) (8.4%) Subtotal Labor and Non-Labor 607,563, ,896, ,631,044 (24,264,963) (5.0%) Contingency 12,500, % Subtotal Contingency 12,500, % Total Operating Budget $ 620,063,000 $ 489,896,007 $ 465,631,044 $ (24,264,963) (5.0%) Non-Budgeted Expense Gain/ Loss Disposal - - (339,396) (339,396) 0.0% Grand Total $ 620,063,000 $ 489,896,007 $ 465,291,648 $ (24,604,359) (5.0%) Operating Expenses for the month of July 2018 of $48.5 million are $1.0 million or 2.0% under budget. Operating Expenses year-to-date of $465.6 million through July 2018 are $24.3 million or 5.0% under budget. Section E Page 8

88 MONTHLY PERFORMANCE REPORT July 2018 Major Operating Budget Variance Items - Categories with major variances Expense Type FY2018 Budget FY2018 Actual Payroll & Benefits Union Labor 179,287, ,729,764 $ (1,558,228) Wages & Fringe Benefits - savings from bus operator vacancies offset with workers comp Fiscal Year 2018 $ Variance (under budget) / over budget (4,635,000) Wages & Fringe Benefits - savings from primarily mechanic, technician, cleaners Underrun in health benefit due to lower than expected health care expense Union Vacancies - Fringes driven by underrun in FICA wages (2,800,000) (1,128,000) (537,000) Offset by Union Vacancies - Vacation Buyback 258,000 Sick Leave Cash-out 275,000 Pension Union - DC 465,000 Overtime primarily in METRO rail, bus maintenance & public facilities 2,893,000 Overtime in bus transportation to cover routine vacancies 3,570,000 Non-Union Labor Savings in base salaries Savings in healthcare 123,361, ,256,068 $ (8,105,198) (7,287,000) (1,832,000) Offset by Salaried overtime mainly driven by vacancies 960,000 Total Materials & Supplies 98,958,876 85,454,378 $ (13,504,498) Services Facility Maintenance due to underspending in building & grounds maintenance (-$685,000), BOF maintenance cost (-$549,000), custodial services (-$324,000) and security services (-$170,000). Communications due to underrun in advertising. Legal mainly due to lower than expected legal fees (-$541,000) and legislative coordination (-$330,000). Information Technology mainly due to underrun in equipment repairs & maintenance. Operations mainly due to underrun in building & grounds maintenance. Finance mainly due to underspending in equipment repairs & maintenance. General underspending in other areas Authority wide not mentioned above Underspending in Contract Management throughout the Authority Underrun in Support services Underspending in education and training throughout the Authority (excludes bus operator and other Operations staff related training) (1,728,000) (2,904,000) (871,000) (417,000) (423,000) (169,000) (3,354,000) (1,204,000) (556,000) Authoritywide promotion (274,000) Section E Page 9

89 MONTHLY PERFORMANCE REPORT July 2018 Major Operating Budget Variance Items - Categories with major variances Expense Type FY2018 Budget FY2018 Actual Materials and Supplies Underruns in - Material prices variances on Production/refurbished orders and inventory revaluations mostly for unit overhauls (4,384,000) Minor Tools (374,000) Postage (281,000) Supplies - EDP in IT Special office supplies Tires & Tubes (259,000) (213,000) (208,000) Tech Equip (200,000) Warranty Credits Prod/Refurb O settle (171,000) (159,000) Offset by miscellaneous overruns in - Engine Cooling System 133,000 Transmission 134,000 Chassis 237,000 Bus Parts - Brakes 299,000 Propulsion 339,000 Parts - Exterior Body and Windows 400,000 Parts 1,243,000 Bus Engines - mostly in Unit Overhaul 1,531,000 Bus Batteries - mostly in Unit Overhaul 1,760,000 Fuel and Utilities Lower than expected charges for routine Telephone Services Underrun in Diesel Fuel (including taxes) mainly due to lower prices per gallon on fuel (639,000) (350,000) Other Misc expenses lower than expected (258,000) Underrun in Natural Gas (174,000) Fiscal Year 2018 $ Variance (under budget) / over budget Offset by overruns in - Gasoline 647,000 Administration 97,158,382 94,233,791 $ (2,924,591) Casualty & Liability Higher than expected subrogation 342,000 Lower than expected vehicle liability and premiums Purchased Transportation Northwest Contract (1,049,000) Vanpool leases underrun due to fuel card transition delay and Harvey impacts (491,000) Regional vanpool underrun (282,000) Leases, Rentals, & Miscellaneous Lower than expected IT Rent Software Payments Other Misc expenses lower than expected Underspending in discretionary items (Travel, Memberships, etc.) and other miscellaneous items (491,000) (470,000) (368,000) (427,000) Section E Page 10

90 MONTHLY PERFORMANCE REPORT July 2018 Total Net Operating Budget / Expenses by Department Authorized EOY Headcount Year-to-Date Current Month-- Department Annual Budget Budget Expense Variance Variance 3,568 Oper, Public Safety, & Cust Service 455,904, ,214, ,805,277 (9,409,634) 291,637 3,120 Operations 414,930, ,196, ,045,759 (5,150,779) 666, METRO Police 26,362,579 21,842,284 18,846,023 (2,996,261) (362,498) 42 Safety 8,690,303 7,241,344 6,637,321 (604,023) 48, Customer Services 4,679,935 3,898,480 3,299,530 (598,951) (53,604) 9 EVP Oper Pub Safety & Cust Service 1,240,327 1,036, ,645 (59,620) (6,782) 240 Administration 57,099,869 47,287,149 44,010,950 (3,276,199) 263, IT 23,452,942 19,445,202 16,999,767 (2,445,435) 135, Human Resources 21,611,236 17,879,825 17,528,798 (351,027) 132, Procurement & Materials 11,093,276 9,186,288 8,727,817 (458,470) (10,989) 5 EVP, Administration 942, , ,568 (21,267) 6, Planning, Engineer, & Construction 42,171,654 34,307,076 30,224,580 (4,082,496) 300, Facilities Maint 32,515,829 26,030,145 23,610,160 (2,419,984) 427, Planning 8,320,336 7,083,841 5,755,284 (1,328,558) (104,765) 27 Engineering & Cap Project 1,193,758 1,074, ,817 (212,742) (6,242) 2 EVP PE&C 141, ,531 (2,681) (121,212) (15,646) 80 Finance 10,853,517 9,014,421 8,060,712 (953,709) (38,788) 76 Finance 9,893,311 8,230,234 7,586,290 (643,944) 95,716 4 CFO 960, , ,423 (309,765) (134,504) 18 Govt & Public Affairs 3,212,781 2,763,851 2,021,124 (742,728) (33,913) 10 Public Engagement 1,732,244 1,498,434 1,088,430 (410,004) (22,299) 5 Ridership & Client Services 1,010, , ,923 (260,574) (5,742) 3 Gov't Affairs 469, , ,771 (72,150) (5,872) 18 Legal 5,557,433 4,647,118 3,448,407 (1,198,711) (247,473) 35 Communications 18,963,520 9,401,920 5,574,823 (3,827,097) (1,316,149) 3 EVP, Communications 350, , ,781 (31,042) (33,821) 7 Press Office 698, , ,540 (34,381) (1,956) 25 Marketing & Corporate Communication 17,914,464 8,567,175 4,805,502 (3,761,674) (1,280,372) 13 Executive and Board 2,793,507 2,347,561 2,114,495 (233,066) (118,047) 11 Audit 1,573,529 1,259,256 1,077,418 (181,839) (21,452) 4 Office of Innovation 903, , ,258 (362,660) (91,921) Non Departmental 8,529,749 (3,175) - 3,175 2,782 President & CEO Contingency 12,500, Other (MTA Revenue/Expense) ,229 Total Operating Budget 620,063, ,896, ,631,044 (24,264,963) (1,009,425) Section E Page 11

91 MONTHLY PERFORMANCE REPORT July 2018 Total Net Operating Budget / Expenses by Department as of the end of July 2018 vs. June 2017 U July 2018 July Year-to-Date Year-to-Date Department Budget Expense Variance Budget Expense Variance Operations, Public Safety and Customer Service 378,214, ,805,277 (9,409,634) 368,808, ,951,051 (6,857,837) Operations 344,196, ,045,759 (5,150,779) 338,248, ,983,253 (6,265,591) EVP Oper Pub Safety & Cust Serv 1,036, ,645 (59,620) 968, ,459 4,937 METRO Police 21,842,284 18,846,023 (2,996,261) 19,019,432 19,187, ,775 Safety 7,241,344 6,637,321 (604,023) 6,924,065 6,445,443 (478,622) Customer Service 3,898,480 3,299,530 (598,951) 3,648,025 3,361,690 (286,335) Administration 47,287,149 44,010,950 (3,276,199) 45,463,918 40,923,701 (4,540,217) EVP, Administration 775, ,568 (21,267) 527, ,484 (129,804) IT 19,445,202 16,999,767 (2,445,435) 18,218,854 16,044,069 (2,174,785) Human Resources 17,879,825 17,528,798 (351,027) 17,933,294 16,094,879 (1,838,416) Procurement & Materials 9,186,288 8,727,817 (458,470) 8,784,481 8,387,269 (397,212) Planning, Engineering and Construction 34,307,076 30,224,580 (4,082,496) 30,037,421 27,959,199 (2,078,222) EVP PE&C 118,531 (2,681) (121,212) 42,483 62,893 20,411 Engineering & Cap Project 1,074, ,817 (212,742) 374, , ,454 Planning 7,083,841 5,755,284 (1,328,558) 5,563,033 4,955,754 (607,278) Facilities Maintenance 26,030,145 23,610,160 (2,419,984) 24,057,017 22,394,209 (1,662,808) Finance 9,014,421 8,060,712 (953,709) 8,718,805 7,718,867 (999,938) Finance 8,230,234 7,586,290 (643,944) 8,133,591 7,364,134 (769,457) CFO 784, ,423 (309,765) 585, ,733 (230,481) Gov't & Public Affairs 2,763,851 2,021,124 (742,728) 1,997,076 1,853,878 (143,198) Public Engagement 1,498,434 1,088,430 (410,004) 1,123,796 1,029,629 (94,167) Ridership & Client Services 864, ,923 (260,574) 474, ,511 20,434 Gov't Affairs 400, ,771 (72,150) 399, ,738 (69,465) Legal 4,647,118 3,448,407 (1,198,711) 3,516,724 3,853, ,339 Communications 9,401,920 5,574,823 (3,827,097) 6,399,039 4,651,186 (1,747,853) EVP, Communications 250, ,781 (31,042) N/A N/A N/A Press Office 583, ,540 (34,381) N/A N/A N/A Marketing & Corporate Communication 8,567,175 4,805,502 (3,761,674) 6,399,039 4,651,186 (1,747,853) Executive & Board 2,347,561 2,114,495 (233,066) 2,400,040 2,183,223 (216,816) Audit 1,259,256 1,077,418 (181,839) 1,286,245 1,127,914 (158,331) Office of Innovation 655, ,258 (362,660) 553, ,136 (19,989) Contingency Non-Departmental (3,175) - 3, Other MTA Revenue / Expense ,462 1,462 TOTAL OPERATING BUDGET $ 489,896,007 $ 465,631,044 $ (24,264,963) $ 469,181,280 $ 452,756,678 $ (16,424,601) Section E Page 12

92 MONTHLY PERFORMANCE REPORT July 2018 Capital, and Debt Service Expenses Budget vs. Actual - Month and Fiscal Year-to-Date ($ millions) Capital Budget METRORail Completion Capital Improvement Program Total Capital FY2018 Annual Month of July 2018 Variance Fiscal Year to Date Variance Budget Budget Actual $ % Budget Actual $ % $ 53.3 $ 4.6 $ 0.4 $ (4.2) (91.3%) $ 44.3 $ 3.5 $ (40.8) (92.1%) $ $ 10.0 $ 2.1 $ (7.9) (79.0%) $ $ 88.7 $ (54.8) (38.2%) $ $ 14.6 $ 2.4 $ (12.2) (83.6%) $ $ 92.2 $ (95.5) (50.9%) METRORail Completion expenses for the year-to-date through July 2018 of $3.5 million are $40.8 million or 92.1% under budget. Other Capital Improvement Program expenses for the year-to-date through July 2018 of $88.7 million are $54.8 million or 38.2% under budget. Debt Service Budget Debt Service FY2018 Annual Month of July 2018 Variance Fiscal Year to Date Variance Budget Budget Actual $ % Budget Actual $ % $ 97.0 $ 8.2 $ 7.9 $ (0.3) (3.7%) $ 78.8 $ 78.5 $ (0.3) (0.4%) Debt Service expenses for the year-to-date through July 2018 of $78.5 million is $0.3 million under budget. General Mobility Transfers General Mobility General Mobility Program Projections Projected Funding vs. Actual Allocation - Month and Fiscal Year-to-Date ($ millions) FY2018 Annual Month of July 2018 Variance Fiscal Year to Date Variance Projection Projection Allocation $ % Projection Allocation $ % $ $ 14.1 $ 14.7 $ % $ $ $ % Funds allocated to the General Mobility Fund totaling $148.1 million for the year-to-date through July 2018 are $2.0 million or 1.4% more than the amount projected. Section F Page 13

93 MONTHLY PERFORMANCE REPORT July 2018 Ridership by Service Category YTD % Change Jul-18 Jul-17 Jul-18 Jul-18 Service Category Jul-17 Jul-18 vs. YTD YTD vs. Boardings Boardings Jul-17 Boardings Boardings Jul-17 Fixed Route Services Local Network Local Bus 4,660,848 4,803, % 48,811,709 49,269, % METRORail Red (North) Line 1,257,918 1,256,031 (0.2%) 13,209,021 12,987,472 (1.7%) Green (East) Line 124, , % 1,059,658 1,293, % Purple (Southeast) Line 120, , % 1,260,138 1,482, % METRORail (all lines) 1,503,188 1,538, % 15,528,817 15,762, % METRORail-Bus Bridge 1, % 90,163 18,817 (79.1%) METRORail total 1,504,585 1,538, % 15,618,980 15,781, % Subtotal Local Network 6,165,433 6,342, % 64,430,689 65,051, % Commuter Park & Ride 593, , % 6,512,235 6,366,486 (2.2%) Subtotal Fixed Route Service 6,759,063 6,979, % 70,942,924 71,418, % Special Events 1,885 2, % 227, ,074 (0.5%) Total Fixed Route 6,760,948 6,982, % 71,170,187 71,644, % Customized Bus Services METROLift 167, , % 1,608,503 1,649, % METRO STAR Vanpool 154, , % 1,692,705 1,594,672 (5.8%) Internal Service % % Subtotal Customized Bus 321, , % 3,301,409 3,244,665 (1.7%) HOV/HOT Carpools, Vanpools, and Non-METRO Buses 2,030,720 2,305, % 21,613,138 21,884, % Total System 9,113,322 9,626, % 96,084,734 96,772, % Section G Page 14

94 MONTHLY PERFORMANCE REPORT July 2018 Ridership by Service Category Fixed Route and Total System Ridership FY FY2018 Total System Ridership Millions Fixed Route Ridership FY2017 in Blue FY2018 in Green OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Fixed Route ridership is reported on the same basis as in the National Transit Database The Special Events category of ridership reflects customer service oriented short-term additional motor bus service provided for events at Reliant Park such as football games and RODEO Houston. Total fixed route ridership, excluding special events, for the month of July 2018 of 7.0 million is 0.2 million or 3.3% greater than last year. Total fixed route ridership, excluding special events, for the year-to-date through July 2018 of 71.4 million is 0.5 million or 0.7% greater than last year. METRORail ridership for the month of July 2018 of 1.5 million is 2.3% greater than last year. METRORail ridership year-to-date through July 2018 of 15.8 million is 1.0% greater than last year. Section G Page 15

95 MONTHLY PERFORMANCE REPORT July 2018 Performance Statistics Fiscal Year 2018 Benchmark Met Benchmark Missed Current FY2018 FY2018 Month YTD YTD SAFETY & SECURITY OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Target Actual GOAL Bus Accidents (Includes METROLift) Bus Accidents per 100,000 vehicle miles Rail Accidents Rail Accidents per 100,000 vehicle miles Major Security Incidents - total Major Security Incidents per 100,000 boardings Major Security Incidents - METRO properties Major Security Incidents per 100,000 boardings Current FY2018 FY2018 Month YTD YTD CUSTOMER SERVICE OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Target Actual GOAL Complaint Contacts per 100,000 Boardings < < Commendations , Average Call Center Answer Delay (Sec.) < < 105 Safety & Security The number of bus accidents met the safety goal for both the month and the year-to-date. The number of rail accidents did not meet the safety goal for the month or the year-to-date. Total major security incidents met the benchmark for both the month and the year-to-date. Major security incidents on METRO properties did not meet the benchmark for the month or the year-to-date. Customer Service Complaint contacts per 100,000 boardings met the goal for both the month and the year-to-date. The number of commendations met the goal for the month but not the year-to-date. The average call center answer delay did not meet the goal for the month but not the year-to-date. Section H Page 16

96 Current FY2018 FY2018 Month YTD YTD SERVICE & RELIABILITY OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Target Actual GOAL On-Time Performance MONTHLY PERFORMANCE REPORT July 2018 Performance Statistics Fiscal Year 2018 Benchmark Met Benchmark Missed Local Bus 73.7% 73.7% 74.1% 75.1% 75.4% 74.9% 75.1% 75.1% 76.7% 76.7% 75% 75.1% 75% Park & Ride 76.9% 76.4% 75.4% 76.4% 77.1% 76.1% 76.4% 75.7% 77.6% 78.0% 0.0% 0.0% 75% 76.6% 75% Weighted Average Bus 75.0% 74.8% 74.6% 75.6% 76.1% 75.4% 75.6% 75.3% 77.1% 77.2% 75% 75.7% 75% METROLift 88.8% 90.9% 91.7% 92.6% 90.9% 89.9% 89.4% 90.9% 91.6% 92.0% 0.0% 0.0% 90% 90.9% 90% Rail - Red Line OTP 78.8% 79.0% 74.6% 87.1% 90.8% 80.3% 92.5% 93.1% 94.4% 93.1% 90% 86.9% 90.0% Rail - South East Purple Line OTP 96.6% 98.0% 98.8% 96.9% 98.3% 98.8% 98.1% 97.8% 98.5% 98.1% 95% 97.9% 95.0% Rail - East End Green Line OTP 96.3% 97.8% 98.2% 98.4% 98.9% 99.0% 98.3% 97.8% 98.3% 98.8% 95% 98.1% 95.0% MDBF (Mean Distance Between Mechanical Failures) - All Buses MDBF (Mean Distance Between Mechanical Failures) - METROLift MDBSI (Mean Distance Between Service Interruptions) - METRORail 10,065 12,490 13,045 12,968 12,651 13,157 13,336 10,187 9,767 8,992 7,750 11,414 8,920 22,705 28,567 34,535 15,784 24,212 27,678 22,542 20,858 19,977 21,724 20,000 22,937 20,000 38,547 22,053 18,075 15,575 16,573 19,257 18,946 19,355 18,897 12,453 15,000 18,555 15,000 Average Peak HOT Lanes Speed (miles per hour) I-45 North HOV I-45 South HOV US-290 HOV US-59 North HOV US-59 South HOV On-Time Performance On-time performance for Local Bus routes met the minimum performance standard for both the month and the year-to-date. On-time performance for Park & Ride routes met the minimum performance standard for both the month and the year-to-date. On-time performance for METROLift met the minimum performance standard for both the month and the year-to-date. METRORail On-Time Performance Rail (red line) met the benchmark for the month but not the year-to-date. Rail (purple line) met the benchmark for both the month and the year-to-date. Rail (green line) met the benchmark for both the month and the year-to-date. Service Reliability The Mean Distance Between Mechanical Failures (MDBF) for All Buses met the minimum performance standards for both the month and the year-to-date. The Mean Distance Between Mechanical Failures (MDBF) for METROLift met the minimum performance standard for both the month and the year-to-date. The Mean Distance Between Service Interruptions (MDBSI) for METRORail did not meet the minimum performance standard for the month but did for the year-to-date. HOT Lane Average Speed The average peak speed for all HOT Lanes met the monthly and year-to-date goals. Section H Page 17

97 MONTHLY PERFORMANCE REPORT July 2018 Performance Statistic Definitions Bus and Rail Accidents - An accident is a transit incident with passenger injuries that require immediate medical treatment away from the scene or a collision between a revenue vehicle and an object such that the amount of damage exceeds $1,000. Bus accidents (which include METROLift) and rail accidents are reported separately and in terms of the absolute number of accidents and the relative number of accidents per 100,000 vehicle miles. Rail accidents reflect collisions between METRORail and other vehicles, pedestrians, or bicyclists. This definition has been revised beginning in FY2011 to include pedestrian accidents. Major Security Incidents - The total Major Security Incidents is based on two industry standards: the FBI Uniform Crime Report and the National Transit Database (NTD) Report issued by the Federal Transit Administration (FTA). The eight (8) categories included are: homicide, forcible rape, robbery, aggravated assault, burglary, larceny and theft, motor vehicle theft and arson. This metric is reported both in terms of the absolute number of incidents and the number of incidents per 100,000 boardings. Major Security Incidents - METRO Properties - The total Major Security Incidents - METRO Properties is the number of incidents that occur at Park & Ride lots, Transit Centers, on-board buses and trains and on Light Rail Vehicle (LRV) platforms. This metric is reported both in terms of the absolute number of incidents and the number of incidents per 100,000 boardings. Complaint Contacts - Patrons may contact METRO s Customer Care Center to express dissatisfaction with METRO Operations. Contacts made via telephone and over the internet which result in a complaint record being generated in the Public Comment System are reported as the number of contacts per 100,000 boardings. Commendations - Patrons may contact METRO's Customer Care Center to recognize, compliment or praise a METRO employee or the METRO organization for exemplary work or performance. Contacts made via telephone, internet, or mail which result in a commendation record being generated in the Public Comment System are reported only on the basis of the absolute number of contacts received. Average Call Center Answer Delay - METRO is committed to providing customers with accurate, customer-friendly bus and service information in a timely manner. Customers may obtain bus information over METRO's website and by telephone using an interactive voice response system without speaking to a representative and with no customer wait time. For those customers who prefer to speak with a representative, METRO's goal is to answer their calls in 105 seconds or less. On-Time Performance (OTP) - A local bus is considered on-time if it does not leave early and is within a five (5) minute window after the scheduled departure time. A Park & Ride bus is considered on-time if it does not depart early (except in the morning when a bus can leave from a Park & Ride lot when full) and is within a five (5) minute window after the scheduled departure time, with measurements during peak hours. OTP is measured by the IVOMS system which calculates data to the second, and the five (5) minute window is defined as anything less than six (6) minutes. For METRORail, a train departing from the beginning of the line or arriving at the end of the line less than five (5) minutes after the scheduled time is considered on-time. For METROLift, a trip is considered on-time if the vehicle arrives within 30 minutes of the scheduled pick-up time and no later than the appointment time. Mean Distance Between Mechanical Failures (MDBF) - MDBF reflects any mechanical issue encountered during operation of the vehicle in revenue service that requires a maintenance action resulting from a mechanical failure. Mechanical failures include warranty and fleet defects but exclude accidents. Mean Distance Between Service Interruptions (MDBSI) - Measures total revenue service miles traveled by Light Rail Vehicles (LRVs) between service interruptions that delay LRVs for one minute or more due to mechanical failures. Average Peak HOT Lane Speed - HOT Lane speed is based on an average of measurements conducted during the AM and PM high-volume commuter periods. METRO's 45 mph benchmark is based on Federal statute 23 USC 166: HOV facilities, which sets 45 mph as a minimal acceptable rate of speed. Section H Page 18

98 MONTHLY PERFORMANCE REPORT July 2018 Balance Sheet Assets July 31, 2017 ($) July 31, 2018 ($) Change ($) Cash 2,613,652 3,017, ,014 Receivables 139,378, ,877,998 9,499,922 Inventory 33,619,804 35,448,148 1,828,344 Investments 403,830, ,692,525 8,861,613 Other Assets 9,003,596 6,595,874 (2,407,721) Land & Improvements 352,355, ,292,868 6,937,129 Capital Assets, Net of Depreciation 2,611,662,787 2,497,555,134 (114,107,653) Total Assets 3,552,464,565 3,463,480,213 (88,984,351) Deferred Outflow of Resources 110,710,438 94,282,269 (16,428,168) 3,663,175,002 3,557,762,483 (105,412,520) Liabilities Trade Payables 41,533,731 40,899,184 (634,547) Accrued Payroll 30,626,122 30,786, ,044 Commercial Paper Debt Payable 1,249,325,925 1,267,110,920 17,784,995 Debt Interest Payable Pension and OPEB Liabilities 512,821, ,867,678 22,046,494 Other Liabilities 31,801,400 48,554,482 16,753,082 Total Liabilities 1,866,108,364 1,922,218,431 56,110,067 Deferred Inflow of Resources Net Assets - Retained Earnings 1,797,066,638 1,635,544,051 (161,522,587) Total Liabilities and Net Assets 3,663,175,002 3,557,762,483 (105,412,520) Note: - - * A deferred outflow of resources is defined by the Governmental Accountability Standards Board as a consumption of net assets by the government that is applicable to a future reporting period, and a deferred inflow of resources is defined as an acquisition of net assets by the government that is applicable to a future reporting period. The deferred outflow for FY2018 includes [1] Mark-to-Market (MTM) values of outstanding diesel fuel SWAP agreements at the fiscal year end ($3,805,801), [2] Non Union Pension Plan ($37,419,380), [3] Union Pension Plan ($40,135,541), and [4] Bonds ($12,921,547). These items will be recognized as expenses in future periods to which they relate. Section I Page 19

99 Fixed-Route Ridership and Fare Revenue August 2018 Planning, Engineering, & Construction / Finance Jim Archer and Julie Fernandez This briefing will address questions posed during the July 2018 meeting of the Finance and Audit Committee. Topics will include: - Comparison of ridership and fare revenue between June 2018 and June Comparison of ridership between FY2018 year-to-date (October June 2018) and FY2017 year-to-date (October June 2017) - Differences in measurement and reporting of ridership and fare revenue - Trends in fare revenue

100 Finance and Audit Committee August 2018

101 During the same period, fixed-route ridership increased by 0.5%. 2

102 Time Period Factors Boardings June ,058K June ,022K Change +36K Explanation Gain Summer of Fun ELCA Youth Convention New Hope Housing Weekend Loss Calendar Mix ( - 1 weekday, + 1 Saturday) Dump the Pump +201K - 165K 3

103 Time Period Factors Boardings FY2018 (October June 2018) FY2017 (October June 2017) 5,729K 5,918K Change -189K Explanation Gain 222 Grand Parkway, 248 El Dorado Loss Employment relocation [CBD / TMC] Residence relocation to CBD /Midtown Service unreliability Aging demographic Reduced Friday ridership Infrastructure issues Gulf and Katy Freeway corridor ridership shifts to 222 Grand Parkway, 248 El Dorado 4

104 Difference Ridership Fare Revenue Impact of Each Additional Boarding Same Across All Modes +1 boarding = Anywhere from $0 to +$4.50 Ridership and revenue are strongly related, and Changes in both are expressed in percentages BUT The percentages are not exactly comparable more like apples to pineapples 5

105 Fixed-Route Fares (Bus & Train) Non-Fixed-Route Fares Route Guarantees 6

106 June 2018 June 2017 ($ in millions) $5.0 $6.0 Variance Explanation $ % Decrease in Vanpool Revenue -475K 48% Decrease in Fixed-Route Average Fare -150K 15% Route Guarantees Accounting Adjustment -150K 15% Change in Summer of Fun Program -135K 14% Decrease in Park & Ride Revenue -160K 13% Decrease in METROLift Revenue -30K 3% Increase in Mobile Ticketing; Other Factors +100K -7% TOTAL -1M 100% Variance: -$1.0M The increases in ridership in June 2018, compared to June 2017, were almost entirely free fares. 7

107 $0.60 $0.50 $0.40 $0.30 $0.45 Local Bus Average Fare FY17 FY18 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep METRORail Average Fare $0.35 $0.25 $0.15 FY17 FY18 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 8

108 $3.70 $3.50 $3.30 $3.10 $2.90 $2.70 $2.50 Commuter Average Fare Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep FY17 FY18 This pattern shows a clear effect of seasonality as well as a stable trend. 9