BOARD ROSTER SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

Transcription

1 BOARD OF DIRECTORS MARCH 23, 2018

2 BOARD ROSTER SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY County Member Alternate Riverside: Andrew Kotyuk (Chair) Brian Berkson* 2 votes Council Member Mayor Pro Tem City of San Jacinto City of Jurupa Valley RCTC Board RCTC Board Debbie Franklin Council Member At Large City of Banning RCTC Board Adam Rush* Council Member City of Eastvale RCTC Board Ventura: Brian Humphrey (Vice-Chair) Ginger Gherardi 1 vote Citizen Representative Mayor VCTC Board City of Santa Paula VCTC Board Los Angeles: Ara Najarian (2 nd Vice-Chair) Walter Allen, III 4 votes Councilmember Mayor Pro Tem City of Glendale City of Covina Metro Board Metro Appointee Kathryn Barger Supervisor, 5 th District County of Los Angeles Metro Board Paul Krekorian Councilmember, 2 nd District City of Los Angeles Metro Board Hilda Solis Supervisor, 1st District County of Los Angeles Metro Board Roxana Martinez Metro Appointee Borja Leon Metro Appointee Vivian Romero Council Member City of Montebello Metro Appointee

3 SCRRA Board of Directors Roster Page 2 San Bernardino: Larry McCallon Jon Harrison* 2 votes Mayor Council Member City of Highland City of Redlands SBCTA Board SBCTA Board Alan D. Wapner Mayor Pro Tem City of Ontario SBCTA Board [CURRENTLY AWAITNG APPOINTMENT]* Orange: Shawn Nelson Laurie Davies* 2 votes Supervisor, 4 th District Council Member County of Orange City of Laguna Niguel OCTA Board OCTA Board Gregory T. Winterbottom Public Member OCTA Board Richard D. Murphy* Council Member City of Los Alamitos OCTA Board EX-OFFICIO MEMBERS San Diego Association of Governments: [CURRENTLY AWAITING APPOINTMENT] Contact: Linda Culp Principal Planner Rail Southern California Association of Governments: State of California: Art Brown Council Member, City of Buena Park Ryan Chamberlain Director, Caltrans District 12 Alternate: Paul Marquez Caltrans Appointee *Alternates represent either member Revised

4 BOARD OF DIRECTORS MEETING FRIDAY, MARCH 23, :00 A.M. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY (METRO) BOARD ROOM ONE GATEWAY PLAZA, 3RD 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 Authority 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 Board Secretary s office at (213) or via holmank@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 Board Secretary, located at One Gateway Plaza, 12 th Floor, Los Angeles, CA 90012, and on the Metrolink website at under the Meetings & Agendas link. PUBLIC COMMENTS ON AGENDA ITEMS AND ITEMS NOT ON THE AGENDA Members of the public wishing to address the Board of Directors regarding any item appearing on the agenda or any item not on the agenda, but within the subject matter jurisdiction of the Board, may do so by completing a Speaker s Form and submitting it to the Board Secretary. All speakers will be recognized by the Chairman and will be considered under Item 4 (Public Comment). When addressing the Board, please state your name for the record. Please address the Board as a whole through the Chair. Please note comments to individual Board members or staff are not permitted when addressing the Board. A speaker s comments shall be limited to three (3) minutes. 1. Call to Order

5 Board of Directors Meeting Agenda Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 2. Pledge of Allegiance 3. Roll Call 4. Public Comment REGULAR CALENDAR 5. Approval of Meeting Minutes (a) February 23, 2018 Budget Workshop and (b) March 9, 2018 Board of Directors Meeting It is recommended that the Board approve the Minutes of the (a) February 23, 2018 Budget Workshop and (b) March 9, 2018 Board of Directors Meeting. Page 1 6. Contract No. H Procurement of Ticket Vending Devices Recommendation to Award Innovation in Transportation, Inc. Procurement of a modern fare collection system comprised of new account-based Ticket Vending Devices (TVDs) is needed and will improve the ease of use and overall customer experience, while improving the Authority s operational efficiency and fiscal sustainability. The current fare collection equipment footprint consists of 123 TVMs and four Ticket Office Machines (TOMs) across 62 stations. It is recommended that the Board authorize the Chief Executive Officer to award Contract No. H to Innovation in Transportation, Inc. (INIT) for: 1) The procurement and installation of a new Ticket Vending Device (TVD) system, in the amount of $11,500,000, plus a ten percent contingency of $1,150,000, for a total not-to-exceed amount of $12,650,000. Award is subject to resolution of any protest timely filed. 2) Concurrently, staff will finalize an Operations and Maintenance (O&M) agreement for a not-to-exceed amount of $19,600,000 for a base period of five years with a single five-year option to be exercised at the Authority s discretion. The O&M agreement will be based on the > 99% Key Performance Indicators (KPIs) specified in the Request for Proposal and will be executed prior to the final acceptance of the new TVD system. The amount of the award, $12,650,000, is included in the Adopted Capital Budget for FY Funding for subsequent years for Operations & Maintenance (O&M) for $19,600,000 will be requested through the FY annual budget or an equivalent process. Page 23

6 Board of Directors Meeting Agenda Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 7. Recommendation of Ticket Vending Device Composition The Authority is procuring a modern fare collection system comprised of new account-based Ticket Vending Devices (TVDs) that can be configured as a cashaccepting or cashless variant within the same physical enclosure. This flexibility allows different compositions of cash/cashless TVDs across the system. The capital and operating costs of various compositions have been quantified, and staff have recommended an option that will maximize the ease of use and overall customer experience, while improving operational efficiency and fiscal sustainability. It is recommended that the Board authorize the Chief Executive Officer to procure a fare collection system comprised entirely of cash-accepting Ticket Vending Devices (TVDs). An all-cash TVD system will provide the most customer convenience, and will also result in lowest overall costs over 10 years. In addition to the customer and financial benefits, an all-cash system provides maximum reliability and eliminates the need for Title VI mitigation measures if an all-cashless system were implemented. There is no budgetary impact as a result of this report. Page Contract No. SP468C-16 Consultant Services for Executive Coaching and Management and Leadership Development Increase Contract Funding Authorization MLC & Associates, Inc. Increased contract funding authorization for Contract No. SP486C-16, Consultant Services for Executive Coaching & Management and Leadership Development, with MLC & Associates, Inc., is required to provide Project Delivery Improvement consulting services. This contract scope of work includes areas for Program Development and Delivery as well as Change Management. It is recommended that the Board authorize the Chief Executive Officer to increase contract funding authorization by $150,00 to fund Project Delivery Improvement consulting services through June 30, This will bring the total approved contract authorization to an amount not-to-exceed $550,000. The amounts for which contract authority is requested are included in the Adopted Operational Budget for FY $150,000. Page Senate Bill 1119 Staff Recommendation Senate Bill 1119 (Newman) seeks to include additional categories for required expenditures of Low Carbon Transit Operations Program (LCTOP) funds. The Low Carbon Transit Operations Program (LCTOP) is one of several programs that are part of the Transit, Affordable Housing, and Sustainable Communities Program established by the California Legislature in 2014 by Senate Bill 862.

7 Board of Directors Meeting Agenda Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 It is recommended that the Board adopt a support position on Senate Bill 1119 to provide LCTOP funding for qualified expenditures. There is no budgetary impact as a result of this report. Page Approval of Amendment to FY Rehabilitation Budget Approval is needed for the additional amount of State of Good Repair (SOGR) Rehabilitation Funding which has now been approved by the Los Angeles County Metropolitan Transportation Authority (Metro) in the amount of $13,297,500. It is recommended that the Board approve a Budget Amendment in the amount of $13,297,500 to reflect action taken by the Los Angeles County Metropolitan Transportation Authority (Metro) Board at its January 25, 2018 meeting to provide additional funding for the FY Rehabilitation Budget. Board approval of this item will increase the FY18 Rehabilitation Budget by $13,297,500. Page FY Budget Development Update Finance Policy 1.1 provides guidelines for the development of the Authority s annual budget to ensure that a balanced budget is prepared in a timely basis and submitted to the Board for adoption prior to the start of each new fiscal year. This report provides a status update on the Fiscal Year (FY19) budget development progress to date. It is recommended that the Board approve a revised FY19 Preliminary Budget for future adoption at an April Board Meeting and transmission to the five-member agencies by May 1 as required in the Joint Powers Agreement. Approval of this item will revise the FY19 Preliminary Budget, which will be presented to the Board for approval to transmit at an upcoming Board Meeting. Page Fuel Hedging Program Update The Authority implemented a formalized a fuel hedging program in FY A consultant from Linwood Capital will deliver an update and provide insight on the program s performance through December 31, 2017 as well as discuss assumptions for the FY fiscal year. There is no written document. The Board may receive and file this report.

8 Board of Directors Meeting Agenda Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page Service Impacts Due to Deferred Maintenance At the request of the Board, staff is providing information on service delays over the last quarter of 2017 attributed to deferred rehabilitation of railroad infrastructure and a general update of the infrastructure rehabilitation program. The Authority is responsible for maintaining rail network assets (track, signals, facilities, rolling stock) over five counties, consisting of nearly 400 miles of track. The Board may receive and file this report. There is no budgetary impact as a result of this report. Page Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Staff is providing an update on the Authority s practice for maintenance and rehabilitation based upon industry standards. It also identifies the needs to keep Metrolink s system in a State of Good Repair for the next 25 years. This report incorporates the findings from a peer review from the American Public Transportation Association (APTA) on maintenance and rehabilitation. The Board may receive and file this report. There is no budgetary impact as a result of this report. Page Tier 4 Locomotive Update and Delivery Status This report is a monthly update to the Board on the status of the Tier 4 Locomotive Program and information during revenue service. The Board may receive and file this report. There is no budgetary impact as a result of this report. Page Antelope Valley Line Fare Reduction Program Evaluation In July 2015 the Antelope Valley Line (AVL) Fare Reduction Program was launched with the funding support from Los Angeles County Metropolitan Transportation Authority (Metro) to help increase ridership on AVL. This item provides the Board with an evaluation of the continued success of this program through December 2017.

9 Board of Directors Meeting Agenda Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 6 The Board may receive and file this report. There is no budgetary impact as a result of this report. Page Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 The Key Performance Indicators (KPI) Quarterly Performance Report provides the latest results for the second quarter of FY (FY18). The second quarter was marked by a continuation of positive economic trends and strengthening performance as indicated by most KPI results close to or better than their performance targets. The Board may receive and file this report. There is no budgetary impact as a result of this report. Page Chief Executive Officer s Report Authority Update 19. Board Members' Comments 20. Chair s Comments CLOSED SESSION 21. Closed Session a. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION Pursuant to Government Code Section (d)(1) Galicia v SCRRA, et al., United States District Court for the Central District of California, Case No. 2:17-cv JFW-JC b. CONFERENCE WITH LABOR NEGOTIATOR Pursuant to Government Code Section Agency Designated Representatives: Patricia Francisco, Rod Bailey and Irma Rodriguez Moisa Employee Organization: Amalgamated Transit Union Local ADJOURNMENT NEXT BOARD MEETING: APRIL 13, 2018

10 MINUTES OF THE BOARD OF DIRECTORS BUDGET WORKSHOP February 23, 2018 ITEM 5a BOARD MEMBERS/ALTERNATES IN ATTENDANCE: Votes RCTC: ANDREW KOTYUK (Chair) 1 (2 votes) DEBBIE FRANKLIN 1 Brian Berkson VCTC: BRIAN HUMPHREY (Vice-Chair) 1 (1 vote) Ginger Gherardi 1 METRO: ARA NAJARIAN (2 nd Vice-Chair) 1.3 (4 votes) KATHRYN BARGER PAUL KREKORIAN 1.3 Walter Allen SBCTA: LARRY McCALLON 1 (2 votes) Jon Harrison 1 OCTA: SHAWN NELSON 2 1 (2 votes) GREGORY WINTERBOTTOM 1 1 EX-OFFICIO MEMBERS SCAG Art Brown State of California -- STAFF/PRESENTERS: ARTHUR T. LEAHY, Chief Executive Officer RONNIE CAMPBELL, Chief Financial Officer SABRINA DAVIS, Senior Manager, Marketing and Digital Programs DON O. DEL RIO, General Counsel 1 Directors Barger, Gherardi and Winterbottom left during the discussion of session IV. 2 Director Nelson arrived during the discussion of session IV. 1

11 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 2 RODERICK DIAZ, Director, Planning and Development JUSTIN FORNELLI, Director of Engineering and Construction STEVE HOLMAN, Senior Manager, Business Operations ELISSA K. KONOVE, Deputy Chief Executive Officer ELISABETH LAZUARDI, Senior Manager, Audit DARRELL MAXEY, Deputy Chief Operating Officer, PTC and Engineering TOM SCHAMBER, Controller JOSE VILLA, President, SENSIS CHRISTINE WILSON, Manager, Budgets and Financial Analysis DAVID YALE, Special Services Employee CHERI SMITH, Assistant Board Secretary KARI HOLMAN, Assistant to the CEO / Board Secretary Meeting minutes are prepared in a format that corresponds with the Board Meeting Agenda, which is incorporated by reference with these minutes. SCRRA Board Agendas are available online at under the Board Agenda link or from the Board Secretary at (213) Call to Order The February 23, 2018 Board of Directors Budget Workshop was called to order by Chair Kotyuk at 10:03 a.m. at Los Angeles County Metropolitan Transportation Authority (Metro), Union Station Conference Room, One Gateway Plaza, 3rd Floor, Los Angeles, California Pledge of Allegiance Vice-Chair Humphrey led the group in the pledge of allegiance. 3. Roll Call The Board Secretary called roll to confirm a quorum of the Board was present. 4. Public Comment At this time, Chair Kotyuk inquired if the Board Secretary had received any Request to Speak forms, and it was confirmed that no requests were received. The Public Comment period was then closed. 2

12 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 3 BUDGET WORKSHOP A workshop was held for Board members, and the five member agency Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), and Technical Advisory Committee (TAC) members to review the FY Preliminary Budget. The workshop focused on the operating budget and the capital/rehabilitation budget. The objective of the workshop was to provide information about the assumptions and cost drivers used to formulate the preliminary budget estimates. Ronnie Campbell, Chief Financial Officer delivered an introduction and overview of the workshop agenda. SESSION I FY (Operating and Capital Program) Christine Wilson, Manager, Budgets and Financial Analysis provided an overview of the operating and capital budgets, including fare revenue, dispatching, maintenance-of-way and other revenue. Steve Holman, Senior Manager, Business Operations provided an overview of the budget development process for rehabilitation projects and Justin Fornelli, Director of Engineering and Construction provided an overview of recent accomplishments of rehabilitation and capital projects. SESSION II FY Total Funding Request Ronnie Campbell, Chief Financial Officer, highlighted the total funding request, by Member Agency needed for operating subsidy, rehabilitation, special rehabilitation projects and new capital. SESSION III FY through FY FIVE YEAR FORECAST Ronnie Campbell, Chief Financial Officer provided an overview of the five-year forecast of the operating, capital, and rehabilitation budgets for years FY SESSION IV TOPICS FOR DISCUSSION Staff addressed items for discussion and possible inclusion into the FY budget, including Senate Bill 1 (SB-1) Revenue, Implementation of Metrolink Infrastructure Rehabilitation Plan (MIRP), the Transit and Intercity Rail Capital Program (TIRCP) Southern California Optimized Rail Expansion (SCORE) Program. 3

13 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 4 Staff reminded the Board and member agency staff that additional meetings would be held both with the Technical Advisory Committee (TAC) members and member agencies as requested. Tom Schamber, Controller discussed grant funding Senate Bill 1 revenues. Chair Kotyuk inquired as to how projects were selected for the initial allocation of SB1, State Rail Account funds. Roderick Diaz replied the selected project is a high priority rehabilitation project involving track and signal improvements at Los Angeles Union Station (LAUS). As such it is an all-share project with benefit to all member agencies. Darren Kettle, Executive Director, Ventura County Transportation Commission (VCTC) commented that there were a lot of questions on how to address state of good repair issues and capital funding with SB1 dollars. He noted that the concern was that these funds would not be available in the future, but appreciated this discussion. Justin Fornelli, Director of Engineering and Construction discussed Implementation of the Metrolink Infrastructure Rehabilitation Plan (MIRP). Director Gherardi inquired if the draft MIRP would include funding options. Justin Fornelli stated that the purpose of the MIRP was to identify the State of Good Repair (SOGR) projects. Director Gherardi suggested that the plan include information on where the funding would come from for the projects. Chair Kotyuk inquired as to how new projects would be funded when existing projects had not yet been completed. Justin Fornelli explained that on an earlier slide he had showed that the Authority had expended more in the past two quarters than in the last few years combined. He noted that staff was in the process of rebuilding and he was confident that staff would continue to get projects completed quickly as the recent trend showed. He added that the funding would be done on a draw down from prior year allocations. Justin Fornelli commented on the allotment of time it takes to obtain grant funding, for example, last week staff received authority from the Federal Transit Administration (FTA) to begin spending grant monies that were awarded at the start of FY18 (July 2017). Arthur T. Leahy stated that staff could provide a summary on the status of projects. Roderick Diaz, Director, Planning and Development and David Yale, Special Services Employee discussed the Transit and Intercity Rail Capital Program (TIRCP) Southern California Optimized Rail Expansion (SCORE) Program. 2 nd Vice-Chair Najarian inquired as to the cost of the SCORE program and if funding was paired in conjunction with federal infrastructure funding. David Yale reiterated that the cost was $10.3 billion (B) and was paired with federal infrastructure and that 4

14 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 5 staff applied for $3.7B for the first five years of the grant. 2 nd Vice-Chair Najarian inquired if success in the SCORE program would obviate agencies obligations concerning SOGR funding. David Yale replied that yes, some capital improvement projects would aid with addressing the backlog as indicated in the MIRP program. Director Winterbottom asked how projects would be prioritized. Roderick Diaz replied that projects were divided into two programs for 2023 and Projects would also be line based and distributed across all lines and the goal was to create periodic double tracking throughout the system to allow for regular headways. Arthur T. Leahy remarked that single track presents issues and that to have double tracking periodically in areas is helpful but the optimal objective would be to have double or even triple tracking throughout. David Yale added that the program had to take a system-wide approach. Chair Kotyuk recessed for a brief lunch break at 11:15a.m. and reconvened the budget workshop at 11:40a.m. Staff then addressed additional topics for discussion and possible inclusion into the FY budget which included the Marketing Program, Holiday Service and Indirect Cost Allocation Plan (ICAP). Sabrina Davis, Senior Manager, Marketing and Digital Programs discussed the marketing program and introduced marketing consultant Jose Villa, President, SENSIS. Director Gherardi inquired if data included ridership loss. Jose Villa confirmed that that information was included. Director Gherardi reiterated that ridership projections over the past several years had decreased across the lines and inquired what the projected net increase in ridership with the marketing campaign was. Jose Villa replied that projections showed a net increase of 2.1% in ridership within twelve months of completion of the marketing campaign. Director Krekorian questioned what the assumptions of the campaign based upon. Jose Villa responded that the assumptions were primarily based on a four-year program of ridership incentives on the Orange County Line (OC). Director Franklin asked what the reliability of the OC line was compared with other lines. Jose Villa replied that a focus group during the Orange County campaign showed that reliability was a major barrier to riders. Arthur T. Leahy stated that having double or triple tracks on all lines would improve reliability. Director Gherardi wondered if the campaign was tailored to line specific demographics. Sabrina Davis replied that the campaign strategy was tailored to 5

15 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 6 individual lines and counties and Jose Villa added that there was demographic data on current ridership per line. Director Harrison inquired as to what extent the campaign included coordination with other providers for first mile/last mile connectivity. Sabrina Davis replied that a major piece of the campaign was rideshare and partnership programs aimed to solve first mile/last mile connectivity concerns. Director Nelson stated that the first step in the marketing plan should be to identify and reach out to the largest employers in the counties and believed government agencies could be one of the keys to promote ridership. He presented an idea of offering discounts to large companies as a way to incentivize employees to take the train. Director Nelson mentioned that the County of Orange had thousands of employees and he would be supportive of a partnership. Director Barger inquired if the Authority had contacted any county agencies that provided transportation subsidies to their employees. Sabrina Davis replied that she had not personally met with the counties and that she would focus on the Authority s Corporate Partnership Program (CPP) as a priority. Chair Kotyuk stated he believed that increased ridership was based on marketing campaigns. Vice-Chair Humphrey stated that he believed that the purpose of a marketing campaign was to change perception and the perception of Metrolink was that the trains were unreliable. He also stated that if the marketing program was not increasing ridership the campaign should be ended sooner rather than later. Arthur T. Leahy replied that based on passenger models and marketing data, Metrolink was the second busiest carrier in Southern California. Director Gherardi stated that she supported the marketing campaign and suggested using employer data of current riders to target new riders. Jose Villa replied that the data regarding the day time working population by line and station was built into the marketing campaign. Director Allen inquired as to how the Authority was reaching out to riders who experienced service delays and disruptions. Sabrina Davis replied that she would like to implement a follow-up campaign targeting affected riders. Director Nelson suggested a mobile ticket incentive campaign that refunds the full amount of the ticket purchased using the mobile app when a rider experiences a delay. Arthur T. Leahy replied that a detailed report would be presented to the Board at a future board meeting. 6

16 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 7 Director Krekorian inquired as to partnerships with airlines. Sabrina Davis replied that the Authority was currently reaching out to Alaska and Southwest airlines and there was a great opportunity for cross promotion. Sabrina Davis, Senior Manager, Marketing and Digital Programs discussed Holiday Service Program. Tom Schamber, Controller discussed Indirect Cost Allocation Plan (ICAP). Carrie Schindler with SBCTA commented that most of the member agencies were sensitive to the ICAP and were concerned that funding might be constrained at some point. Chair Kotyuk stated he believed the number of projects in the ICAP program diffused funds. Tom Schamber replied that rates were influenced by the number of projects in a given year. Elisabeth Lazuardi provided a synopsis of the Open Corrective Actions for Performance and Contract Audits. SESSION V CONCLUSION Ronnie Campbell, Chief Financial Officer, gave a summary of milestones achieved, recapped the budgetary discussions and next steps. Darrell Maxey, Deputy Chief Operating Officer, PTC and Engineering spoke briefly on the increase of homeless encampments along the Authority s right-of-way, and the need for preventative measures. He mentioned that the amount included in the FY18 budget was almost depleted. A copy of the PowerPoint presentations materials for sessions I through V are available upon request from the Board Secretary. 5. Chief Executive Officers Report reported on the following: Positive Train Control (PTC) Reviewed Congress stand on PTC deadlines, interoperability with freight lines and Amtrak s readiness with implementation. Thanked the Board and participants for attending the Budget workshop. 6. Chair s Comments There were no additional comments from the Chairman at this time. 7

17 Board of Directors Budget Workshop Minutes February 23, 2018 Transmittal Date: March 16, 2018 Page 8 7. Board Members' Comments Director Berkson commented on the poor condition of signage at some Metrolink stations and suggested adding funding to the FY budget for signage upgrades. Director McCallon commented that the budget process had improved by 1000% from previous years, and complemented staff for efforts. 8. ADJOURNMENT There being no further business for consideration by the Board, the meeting was adjourned at 12:41 p.m. Respectfully Submitted, Kari Holman Assistant to the CEO/Board Secretary 8

18 MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING March 9, 2018 ITEM 5b BOARD MEMBERS/ALTERNATES IN ATTENDANCE: Votes RCTC: ANDREW KOTYUK (Chair) 1 (2 votes) DEBBIE FRANKLIN 1 Brian Berkson Adam Rush VCTC: BRIAN HUMPHREY (Vice-Chair) 1 (1 vote) Ginger Gherardi METRO: ARA NAJARIAN (2 nd Vice-Chair) 1 (4 votes) KATHRYN BARGER 1 1 Walter Allen Borja Leon 1 Roxana Martinez Vivian Romero 1 SBCTA: LARRY MCCALLON 1 (2 votes) ALAN WAPNER 1 OCTA: SHAWN NELSON 2 1 (2 votes) GREGORY WINTERBOTTOM 1 EX-OFFICIO MEMBERS SCAG Art Brown State of California -- STAFF/PRESENTERS: ARTHUR T. LEAHY, Chief Executive Officer ROD BAILEY, Deputy Chief Operating Officer, Dispatch and Operator Services 1 Director Barger left the meeting during the discussion of item No Director Nelson arrived during the discussion of item No. 4. 9

19 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 2 TRACY BERGE, Assistant Director, System Safety DON O. DEL RIO, General Counsel GEOFFREY FORGIONE, Associate General Counsel PATTY FRANCISCO, Director, Human Resources ANDY LY, Senior Manager, Fare Collections SERGIO MARQUEZ, Director, Dispatching Operations MARGARET MEADOWS, Coordinator, Marketing and Communications WHITNEY O NEILL, Senior Manager, Government and Regulatory Affairs ANNE LOUISE RICE, Assistant Director, Grants TOM SCHAMBER, Controller RORY VAUGHN, Manager, Research and Planning MARYLOU WILLIAMS, Assistant Director, Program Management Office CHRISTINE WILSON, Senior Manager, Finance DAVID YALE, Special Services Employee CHERI SMITH, Assistant Board Secretary KARI HOLMAN, Assistant to the CEO/Board Secretary Meeting minutes are prepared in a format that corresponds with the Board Meeting Agenda, which is incorporated by reference with these minutes. Board Agendas are available online at under the Meetings and Agendas link or from the Board Secretary at (213) Call to Order The March 9, 2018 Board of Directors Meeting was called to order by Chair Kotyuk at 10:08 a.m. at the Metro Board Room, One Gateway Plaza, 3rd Floor, Los Angeles, CA Pledge of Allegiance Director McCallon led the group in the pledge of allegiance. 3. Roll Call The Board Secretary called roll to confirm a quorum of the Board was present. 4. Public Comment At this time, Chair Kotyuk called on members of the public who wished to speak. Pete Sluis, City of San Dimas resident commented on the amount of freight traffic on the San Bernardino line and through his city. He expressed concern on proposed Dodger Trains operating during late night hours and had concerns that both freight and Metrolink trains would be operating after 11:30p.m., and remarked that no trains 10

20 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 3 should operate on any lines during the time period of 10:00p.m. until 6:00a.m unless noise mitigations were in place or an Environmental Impact Study was conducted. He also requested for staff to conduct a community meeting to discuss the additional trains with its impacted residents. 3 There being no further requests to speak, the Public Comment period was then closed. 5. Recognition Sergio Marquez, Director, Dispatching Operations, recognized Dispatcher Rick Browning for his responsiveness to a possible safety concern on the evening of February 19, He noticed that a fellow employee was in distress and notified the Chief Dispatcher and his immediate supervisor of the situation, thus avoiding possible rule and / or safety violations. Sergio Marquez thanked Rick Browning for his service and professionalism. He was presented with a Spike and a Certificate of Recognition. REGULAR CALENDAR 6. Approval of Consent Calendar ACTION: Upon a motion by Vice-Chair Humphrey and seconded by Director Franklin, the Board approved Consent Calendar Items 25, 27 through 32. [Consent calendar items are contained on page 12 of these minutes.] There was no opposition and the motion passed unanimously. Chair Kotyuk pulled item No. 26 for discussion. 26. Approval of the Resolution to Hire Retired Annuitant Michael Rock to Oversee the Security Function Patty Francisco, Director, Human Resources, provided a brief background on this item as detailed in the staff report and requested approval of staff s recommendation. Arthur T. Leahy Chief Executive Officer, commented that Mr. Rock comes highly recommended to the Authority and would temporarily fill the vacancy in the System Safety and Security department. 3 A written copy of the public comment was submitted to the Board Secretary for the record. 11

21 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 4 Upon a motion by Director Wapner and seconded by 2 nd Vice-Chair Najarian the Board approved the recommendation. Director Nelson opposed the motion. The motion passed with a vote of ACTION: The Board adopted Resolution to hire Michael Rock as a retired annuitant to manage the security function, prior to the end of his 180-day waiting period. 7. Contract No. E On-Call Professional Engineering Design Services Exercise Two-Year Option HDR Engineering, Inc., STV/Jacobs Engineering Group, Inc., a Joint Venture, AECOM Technical Services, Inc. Chair Kotyuk inquired if members of the Board had any questions regarding this item. No additional comments or questions were received. Upon a motion by Director Nelson and seconded by 2 nd Vice-Chair Najarian the Board approved the recommendation. There was no opposition and the motion passed unanimously. ACTION: The Board authorized the Chief Executive Officer to: 1) Exercise a single two-year option for Contract No. E740-14, On-Call Professional Engineering Design Services, to a bench of firms as listed below: E740A-14 HDR Engineering, Inc. (HDR) E740B-14 STV/Jacobs Engineering Group, Inc., a Joint Venture (STV/Jacobs) E740C-14 AECOM Technical Services, Inc. (AECOM) 2) Maintain the not-to-exceed contract funding authorization amount of $10 million for each of the three (3) contracts for the 3-year base term and 2-year option. Work under these contracts will be authorized through the Contract Task Order (CTO) process on an as-needed basis. 8. Contract No. MS Ticket Vending Machine and Central Maintenance System Maintenance Increase Contract Funding Authorization and Extend Performance Period Conduent Transport Solutions, Inc. Chair Kotyuk inquired if members of the Board had any questions regarding this item. No additional comments or questions were received. Upon a motion by Director Nelson and seconded by 2 nd Vice-Chair Najarian the Board approved the recommendation. There was no opposition and the motion passed unanimously. 12

22 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 5 ACTION: The Board authorized the Chief Executive Officer to amend Contract No. MS with Conduent Transport Solutions, Inc. (Conduent), formerly Xerox Transport Solutions, Inc., to increase the contract authority by $5,818,187 for a oneyear base period, with a one-year option, to support TVM maintenance services, for a new not-to-exceed contract funding authorization amount of $24,318, Contract No. OP Metrolink Operator Services Increase Contract Funding Authorization National Railroad Passenger Corporation Chair Kotyuk inquired if members of the Board had any questions regarding this item. No additional comments or questions were received. Upon a motion by Director Nelson and seconded by 2 nd Vice-Chair Najarian the Board approved the recommendation. There was no opposition and the motion passed unanimously. ACTION: The Board authorized the Chief Executive Officer to increase contract funding authorization by $300,000 to fund special trains through June 30, This will bring the total approved contract authorization to an amount not-to-exceed $42,664,181 for fiscal year Amtrak Positive Train Control Update Rod Bailey, Deputy Chief Operating Officer (Dispatch and Operation Services) introduced Chris Jagodzinski, Assistant Vice President, Network Operations, Amtrak who delivered a presentation which addressed the status of Amtrak s Positive Train Control (PTC) implementation in Southern California. The Board requested to ask questions rather than discuss the PowerPoint presentation. Director Winterbottom inquired as to when PTC would be operational on Amtrak trains. Chris Jagodzinski outlined the implementation schedule with the Board (slide 7) which was projected to be completed by June 11, Director Leon commented on testimony statements made by Richard Anderson, Chief Executive Officer (CEO), Amtrak in Washington DC in which he spoke about suspended service and significant service delays due to lack of PTC and inquired if there were going to be delays to the Southern California operations. Chris Jagodzinski replied that Amtrak did not expect to suspend service or have any delays to the Southern California operations affecting On-Time-Performance (OTP). Director Leon also inquired as to PTC interoperability between Amtrak, the Authority and freight railroads. Chris Jagodzinski stated that since the Authority already had interoperability with PTC between BNSF Railway (BNSF) and Union Pacific Railroad (UPRR) they did not anticipate any issues. He stated that Amtrak had concerns with their on-board software system regarding the number of track files the system could 13

23 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 6 manage and indicated that would not impede the June 11, 2018 PTC implementation date. Director Franklin requested the Board be kept informed regarding the implementation date. Chris Jagodzinski replied that a series of meetings with the Authority were scheduled and any changes to the schedule would be brought to the Authority s attention. Arthur T. Leahy stated that Amtrak had not been forthcoming with information and appreciated receiving this update. Chris Jagodzinski responded that Amtrak recognized there were shortfalls within their organization as it related to the PTC program and assured the Board that as he was now the PTC program sponsor and would ensure that information would be shared with the Authority. Rod Bailey clarified for the record that the Authority currently had limited PTC interoperability with UPRR. ACTION: The Board received and filed this report. A copy of the PowerPoint presentation is available upon request from the Board Secretary. 11. April and May 2018 Schedule Changes Rory Vaughn, Manager, Research and Planning, provided a brief background on this item as detailed in the staff report. ACTION: The Board received and filed this report. 12. Comparative Operating Statement Actual vs Budget through the Second Quarter of Fiscal Year 2018 and vs Second Quarter Actual of Fiscal Year 2017 Christine Wilson, Senior Manager, Finance, provided a brief background on this item as detailed in the staff report. Director Wapner commented that the San Bernardino County Transportation Authority (SBCTA) and Los Angeles County Metropolitan Transportation Authority (Metro) had entered discussions regarding a potential fare decrease on the San Bernardino Line (SB) with the expectations to increase ridership on that line. Director Nelson inquired if an indicator of lines that were over or under budget was available. Christine Wilson replied that staff would provide the information in the next Board report. 14

24 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 7 Director Romero inquired as to how much revenue was spent on moving homeless encampments that were in the Authority s right-of-way. Christine Wilson responded that those expenses were paid through third party agreements that were individually funded by the member agencies. Chair Kotyuk stated that based on comments at the Budget workshop, the costs to remove homeless encampments was increasing and wanted the Board to be aware of this funding need. Director Barger concurred with Director Nelson and requested to have the budget breakdown by line (over or under budget) to be included in the report. ACTION: The Board received and filed this report. 13. Fuel Hedging Program Update Quarter Ended December 31, 2017 Christine Wilson, Senior Manager, Finance, provided a brief background on this item as detailed in the staff report. Director Winterbottom believed this was a great program and praised staff for implementing the program. Chair Kotyuk commented that the development of a formal fuel hedging program began a few years prior and he thanked the Board for their focus and support of this program. ACTION: The Board received and filed this report. 14. FY Quarterly Accounts Receivable Status Report Quarter Ended December 31, 2017 Tom Schamber, Controller, provided a brief background on this item as detailed in the staff report. Director Franklin inquired as to the invoice timeline. Tom Schamber responded that billing varied and usually took days to process invoices and then an invoice would go through the billing process. He noted that there could be delays on billing larger contract invoices due to volume. Director Franklin wanted to confirm if vendors received notification of upcoming invoices and Tom Schamber confirmed that notification was issued. Director McCallon questioned the timeline for payment on the $2.3 million past due from other agencies over 180 days. Tom Schamber replied that the Indirect Cost 15

25 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 8 Allocation Plan (ICAP) needed Federal Transit Administration (FTA) approval before the state could process invoices, some invoices had recently been approved and payment should be processed soon. Director McCallon inquired if any invoices from member agencies were still outstanding. Tom Schamber responded that the member agencies were not part of the current issue and were up-to-date. Arthur T. Leahy commented that many hours were spent in discussions regarding track maintenance and rehabilitation funding, these items would be included in the FY budget. ACTION: The Board received and filed this report. 15. FY Quarterly Investment Report Quarter Ended December 31, 2017 Tom Schamber, Controller, provided a brief background on this item as detailed in the staff report. ACTION: The Board received and filed this report. 16. Capital Program Status Report Quarter Ended December 31, 2017 Marylou Williams, Assistant Director, Program Management Office, provided a brief background on this item as detailed in the staff report. ACTION: The Board received and filed this report. 17. Overview of Possible New Revenue Sources Anne Louise Rice, Assistant Director, Grants, provided a brief background on this item as detailed in the staff report. Director Leon supported staff conducting a legal analysis on Transportation Network Companies (TNC s) in addition to study additional ways to impose fees with the TNC s. He stated that the TNCs were regulated by the Public Utilities Commission (PUC) and suggested staff work together with the Los Angeles County Metropolitan Transportation Authority (Metro) as they were also looking at these types of options. Director Franklin thanked staff for the report and commented that she would not support a parcel tax and believed that her constituents would not support any new tax measures as well. She wanted to ensure that staff did not spend money on outreach for items that voters would not pass. 16

26 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 9 Anne Louise Rice then introduced David Yale, Special Services Employee who provided a brief update on the financial analysis and modeling of the report. Director McCallon commented that using the Bay area for a model regarding TNC s did not accurately represent Southern California, especially the outlying counties of San Bernardino and Riverside, as an example Director Winterbottom inquired as to the Authority s cost to pursue imposing fees on TNC s. Anne Louise Rice replied that the costs for legal analysis was included in the approved FY18 budget but noted that the exact amount for this analysis was not yet finalized. She further stated that staff would return to the Board to present a proposal for approval. Director McCallon concurred with Director Franklin regarding not pursuing property taxes as a means to increase revenues. ACTION: The Board received and filed this report. 18. Summary of Incidents on Authority Right-of-Way and Safety Outreach Efforts and Response Tracy Berge, Assistant Director, System Safety, provided a brief background on this item as detailed in the staff report. Director Barger stated that she appreciated the outreach efforts with the Los Angeles County Homeless Services and inquired as to what extent staff coordinated with freight railroad law enforcement services and the member agencies regarding trespasser strikes. Tracy Berge responded that the Authority coordinated with freight railroad law enforcement services in addressing homeless encampments and noted that the freight railroads were also dealing with budgetary constraints. Director Barger asked if quarterly meetings were held with stakeholders, such as the coroner s office to ensure the lines of communication were open. Tracy Berge replied that there was a group which included fright railroad law enforcement that met on a regular basis to address right-of-way (ROW) issues which included discussions on homeless encampments and law enforcement response time when incidents occur. Director Barger requested an overview of the Transportation Network Company (TNC) contracts. Arthur T. Leahy responded that staff would provide this information to the Board. Director Barger expressed concerns regarding passenger wait time due to incidents especially in outlying areas and the bus bridge response time. She wanted to know what staff provided to passengers while they were on the trains, like water, for example. Tracy Berge replied that drinkable water was provided on passenger cars and whenever possible, staff have been able to deliver cases of water to incident scenes. Director Barger commended staff on their response to incidents. Arthur T. Leahy responded that the goal was to greatly improve 17

27 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 10 relationships with the Los Angeles Police Department, Los Angeles County Sheriff s Department and coroner s office in an effort to have quicker incident response times. Director Gherardi inquired if homeless encampments fell under the definition of a trespasser. Tracy Berge responded that homeless encampments would fall under the definition of trespasser and clarified that a trespasser was a person on the Authority s ROW. Director Gherardi asked if the Authority was working with local police departments to address homeless encampments. Tracy Berge replied that the Authority does work with local police departments throughout the system. Director Gherardi noticed while riding the train that some of the areas along the ROW were problematic. Director Martinez thanked staff for the report and concurred with Director Barger s comments and requested staff conduct a rider feedback survey in an effort to capture the passengers perspective during incidents and use their responses as a way for improvements. Tracy Berge responded that staff would provide details on the survey and report back to the board. Director Romero suggested staff work with local cities and develop an action plan to reduce homeless encampments. Tracy Berge responded that a plan was in place and it could be shared with the Board. ACTION: The Board received and filed this report. 19. State and Federal Legislative Update Whitney O Neill, Senior Manager, Government and Regulatory Affairs, provided a brief background on this item as detailed in the staff report. State: Transportation remains front and center in the legislature in part due to the repeal effort of Senate Bill 1 (SB1), the Brown administration had accelerated efforts to adopt guidelines and approve discretionary grants. Staff had returned from a trip to Sacramento in which there were productive conversations with newly appointed Secretary of Transportation, California State Transportation Agency (CalSTA) Brian Annis and the newly appointed Caltrans Director, Laurie Berman. At the request of Arthur T. Leahy, Whitney O Neill provided a brief overview of the Southern California Optimized Rail Expansion (SCORE) program. Chair Kotyuk commented that when asking state and federal agencies for funding, one common question raised is about ridership statistics, which proves to be a harder ask when ridership showed to be on the decline. 18

28 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 11 Federal: Congress was currently operating under a continuing resolution which would expire on March 23, There were significant increases to the Transportation Housing Urban Development (THUD) bill, with an additional $10 billion for both Fiscal Year 18 and Fiscal Year 19 for broad infrastructure and water projects. ACTION: The Board received and filed this report. 20. Mobile and Online (Web-Based) Ticketing Project Update Andy Ly, Senior Manager, Fare Collections, provided a brief background on this item as detailed in the staff report. ACTION: The Board received and filed this report. 21. Ramona Pageant by Rail Margaret Meadows, Coordinator, Marketing, provided a brief background on this item as detailed in the staff report. Arthur T. Leahy clarified that funding for the 2018 pageant might not be feasible, but noted that with Board direction funding for the 2019 pageant could be explored. Chair Kotyuk requested staff to include a trip from Los Angeles to Perris, for the 2019 funding request and with future growth of the pageant, he would like to include Ventura, Los Angeles and Orange counties. Director Franklin questioned what the total cost to the passenger would be, including the shuttle transfer costs. Margaret Meadows responded that the cost estimate provided in the report included the shuttle costs. Director Franklin requested clarification on the Metrolink fare of $7.00 or $10.00 included shuttle transportation or was there an additional cost to the passenger. Margaret Meadows replied that staff would report back to the board 4. 4 In response: The Authority proposed using the $10 Weekend Day Pass as valid fare for this special service which would eliminate any additional Ticket Vending Machine (TVM) programming costs. The 91/Perris Valley Line extension does not offer weekend service, however, the Weekend Day Pass fare is programmed into all TVMs and can be turned on with no associated costs. To recoup the cost of running this service at the cheapest route and without backup trains in place, the minimum ridership needed would be 1,466. The proposed train set only seats 750 passengers. At this time, funding for this special service has not been identified or committed by Riverside County Transportation Commission (RCTC) or other funding agencies. 19

29 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page 12 Chair Kotyuk requested a report on costs for a special train on May 6, 2018 which was the last day of the 2018 pageant. He believed that Riverside County Transportation Commission (RCTC) along with local agencies and communities could support and provide funding for the event. He suggested providing service for the last day as a data point for the following years request. ACTION: The Board received and filed this report. 22. Chief Executive Officer s Report - Arthur T. Leahy reported on the following: Move LA Initiative Staff would provide an update to the Board in April regarding the South Coast Air Quality Management District (SCAQMD) sales tax measure, proposed by Denny Zane, Executive Director, Move LA. Director Leon requested staff to invite Denny Zane to attend the Board meeting and discuss the initiative. American Public Transportation Association (APTA) Peer Review Staff would present a report to the Board at the next meeting scheduled for March 23, 2018, regarding maintenance standards and share the results of the APTA Peer Review. Capital Programs He stated that should the Authority receive grant funding from the Southern California Optimized Rail Expansion (SCORE) program there would be future opportunities for programs regarding maintenance and double tracking. He suggested that the Board may want to consider a Construction Oversight Committee should those funding be received. Link Union Station project - Staff was working closely with Los Angeles County Metropolitan Transportation Authority (Metro) regarding track allocation and platform space as part of the LINK US project. Metrolink Stakeholder Summit He announced the first annual Metrolink Stakeholder Summit would take place on Monday, April 9, Board Members' Comments There were no additional comments from the Board members at this time. 24. Chair s Comments There were no additional comments from the Chairman at this time. CONSENT CALENDAR (As Referenced in Item 6) 20

30 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page Approval of Meeting Minutes February 9, 2018 Board of Directors Meeting ACTION: The Board approved the Minutes of the February 9, 2018 Board of Directors Meeting. 27. Approve Updates to Human Resource Policies and Procedures ACTION: The Board approved the following new and updated Human Resource policies: 1) HR Policy No. 2.2, Salary and Wage Administration On-Call/Call-Back Pay (New) 2) HR Policy No. 4.0, Paid Time Off (Updated) 28. Compensation Report FY nd Quarter (October 1, 2017 through December 31, 2017) ACTION: The Board received and filed this report. 29. Ticket Vending Machine Availability and Performance ACTION: The Board received and filed this report. 30. Contract Audit: On-Call Professional Engineering Design Services Contracts No. E (# CA) ACTION: The Board received and filed this report. 31. Performance Audit: Information Technology General Controls (# IA) ACTION: The Board received and filed this report. 32. Internal Audit Department Update ACTION: The Board received and filed this report. CLOSED SESSION The Board convened into Closed Session at 11:17 a.m. to discuss Item No. 33a. and reconvened in Open Session at 11:39 a.m., at which time Counsel indicated there was nothing to report. 21

31 Board of Directors Meeting Minutes March 9, 2018 Transmittal Date: March 16, 2018 Page Closed Session a. THREAT TO PUBLIC SERVICES OR FACILITIES Pursuant to Government Code Section Consultation with Los Angeles County Sheriff s Department; Captain, Metrolink Bureau 34. ADJOURNMENT There being no further business for consideration by the Board, the meeting was adjourned at 11:39 a.m. Respectfully Submitted, Kari Holman Assistant to the CEO/Board Secretary 22

32 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 6 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Contract No. H Procurement of Ticket Vending Devices Recommendation to Award Innovation in Transportation, Inc. Issue Procurement of a modern fare collection system comprised of new account-based Ticket Vending Devices (TVDs) is needed and will improve the ease of use and overall customer experience, while improving the Authority s operational efficiency and fiscal sustainability. Recommendation It is recommended that the Board authorize the Chief Executive Officer to award Contract No. H to Innovation in Transportation, Inc. (INIT) for: 1) The procurement and installation of a new Ticket Vending Device (TVD) system, in the amount of $11,500,000, plus a ten percent contingency of $1,150,000, for a total not-to-exceed amount of $12,650,000. Award is subject to resolution of any protest timely filed. 2) Concurrently, staff will finalize an Operations and Maintenance (O&M) agreement for a not-to-exceed amount of $19,600,000 for a base period of five years with a single five-year option to be exercised at the Authority s discretion. The O&M agreement will be based on the > 99% Key Performance Indicators (KPIs) specified in the Request for Proposal and will be executed prior to the final acceptance of the new TVD system. Alternatives The Board may: 1) Modify the amount of the contract funding authorization; or 2) Reject all bids and direct staff to re-issue the Request for Proposal (RFP) 23

33 Contract No. H Procurement of Ticket Vending Devices Recommendation to Award Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 Legal Notice Regarding Prohibited Ex Parte Communications with Contractors The following restriction has been in effect since the date of the issuance of the RFP: Pursuant to Chapter 5.0 entitled Ex Parte Communications with Contractors of the Authority s Ethics Policy, when procurement is authorized under Section of the Public Utilities Code, staff must notify Board Members/Alternates in bold type of the following communication restriction: No Board Member/Alternate responsible for awarding a contract that is subject to the competitive negotiation provisions of Section of the Public Utilities Code shall engage in any ex parte communication with a potential contractor or representative of that potential contractor except in writing and provided that the communication shall be made public. Strategic Goal Alignment This report aligns with the strategic goal to maintain fiscal sustainability by reducing the annual operating costs of fare collection; invest in people and assets by replacing TVDs that have exceeded their useful life; and retain and grow ridership by making the fare payment experience easier for customers. Background The average lifecycle for a Ticket Vending Machine (TVM) is typically between 12 to 15 years of service. Most of the Authority s TVMs are approaching 20 years of service. The current fare collection equipment footprint consists of 123 TVMs and four Ticket Office Machines (TOMs) across 62 stations. Over the years, customers have consistently commented on the slow performance, unreliability, and difficulty in using the current fleet of TVMs. Staff have been working closely with the current TVM vendor to maintain an average of 98% availability over a 12-month period from February 2017 to January However, these devices have outlived their expected lifecycle and several locations have TVMs that cannot be replaced due to the lack of hardware and spare parts that are expensive to replace, discontinued, or becoming obsolete. The existing fleet of TVMs and TOMs is maintained by Conduent Transport Solutions Inc. (formerly known as Xerox Transport Solutions, Inc., and prior to that known as ACS Transport Solutions, Inc.). The current maintenance contract was awarded by the Board on March 13, On March 9, 2018, the Board extended the contract through June 30, 2019, with a single one-year option, for continuation of services until the new system is deployed. 24

34 Contract No. H Procurement of Ticket Vending Devices Recommendation to Award Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 The estimated timeline for the design, manufacture, installation, testing, and final acceptance of the TVD equipment and back office will be twenty-four (24) months from Notice-to-Proceed (NTP). Procurement Approach On October 14, 2016 the Board approved the evaluation criteria for the procurement of a new fare collection system: Evaluation Criteria: a. Qualifications of Firms 10% b. Project Approach and Understanding 15% c. Technical Approach and Solution 25% d. Demonstration 20% Total Technical Score 70% e. Cost 30% Total Technical + Cost Score 100% To guide the development of the new TVDs and TOMs, the following project goals served as the framework for the fare collection system procurement: Reduce capital costs and ongoing operating costs associated with fare collection Procure a low-cost, simple, and compact TVD that meets technical requirements Reduce capital and operating costs associated with TVDs Reduce TVD maintenance costs and extend useful life Specify both a cash and cashless TVD variant to reduce ongoing operational costs Improve the customer experience and configurability of the station ticket vending device Simplify purchase process and increase ticket issuance speed Reduce TVD waiting lines by improving transaction times and reducing confusion Increase control over TVD configuration Improve maintenance tools to reduce malfunctions and TVD down-time 25

35 Contract No. H Procurement of Ticket Vending Devices Recommendation to Award Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 Quickly replace legacy and malfunctioning TVMs Specify readily available and commercial-off-the-shelf (COTS) components Reduce procurement risk by specifying standard TVD configurations Reduce custom integrations and unproven functionality to improve implementation speed Base new TVD on industry proven designs and open standards Build a system that is flexible and can interface with third-party systems Require configurable TVD with an open architecture Specify unrestricted ownership and access to application programming interfaces (APIs), security keys, data formats, and data Enable back office integration with third parties Improve flexibility and enable enhancements in the future The Authority issued a Request for Proposal (RFP) on May 26, The solicitation was posted on the Authority s online bidding system and advertised in publications in the fivemember counties. Notices were also sent directly to vendors registered in the Authority s online vendor database. Sixty-one (61) vendors downloaded the solicitation and nine (9) vendors attended the pre-proposal meeting held on June 6, Four (4) proposals were received on September 11, 2017 from Conduent, INIT, Parkeon, and Scheidt & Bachmann. The evaluation team consisted of staff from the Fare Collection Services Department, Finance Department, outside evaluator from Los Angeles County Metropolitan Transportation Authority (Metro), and outside evaluator from Orange County Transportation Authority (OCTA). The technical proposals from the four vendors were evaluated and scored. Two (2) technical proposals exceeded the initial minimum technical score of 35 points that was required to advance to technical demonstration. The two (2) qualifying vendors were invited to demonstrate to the evaluation committee and respond to technical questions. After technical demonstration and final technical scoring was completed, both vendors passed the minimum technical score of 49 points. Requests for cost clarifications were sent to both vendors, followed by a request for a Best and Final Offer (BAFO). The two (2) vendors cost proposals were then evaluated during the cost scoring phase. The results of the combined technical and cost scoring are shown below: Vendor Technical Score Cost Score Total INIT CONDUENT

36 Contract No. H Procurement of Ticket Vending Devices Recommendation to Award Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 The proposal submitted by INIT demonstrated strong technical compliance and a proven open architecture, and was unanimously scored higher by the evaluation committee. In addition, the key project staff proposed are experienced and qualified to meet all the requirements as were outlined in the RFP. The work plan proposed by INIT included a detailed approach and demonstrated their abilities to provide personnel and equipment to support a project of this breadth. Furthermore, the INIT proposed total cost was approximately 32% lower than the other proposal. INIT met all the requirements of the RFP, was found to be responsive, and achieved the highest ratings based on the combined technical and cost proposals. Therefore, staff recommends the Board authorize the Chief Executive Officer to award Contract No. H to INIT for the procurement and installation of a new Ticket Vending Device (TVD) system comprised of 155 TVDs, seven Ticket Office Machines (TOMs), and an account-based back office in the amount of $11,500,000 plus a ten percent contingency of $1,150,000, for a total not-to-exceed amount of $12,650,000. In addition, staff drafted a separate Board report that will discuss the TVD analysis and the recommended TVD composition system-wide. Concurrently, an Operations and Maintenance (O&M) agreement for the TVD system for a not-to-exceed amount of $19,600,000 for a base period of five years with a single fiveyear option would be exercised at the Authority s discretion. Disadvantaged Business Enterprise (DBE)/Small Business Enterprise (SBE) Requirements This project is funded in part by grants from the Federal Transit Administration (FTA); therefore, proposers were required to meet a Disadvantaged Business Enterprise goal of three percent (3%). INIT committed to meet the 3% DBE goal for this effort. Budget Impact The amount of the award, $12,650,000, is included in the Adopted Capital Budget for FY Funding for subsequent years for Operations & Maintenance (O&M) for $19,600,000 will be requested through the FY annual budget or an equivalent process. Prepared by: Andy Ly, Senior Manager, Fare Collections Sonny Ibrahim, Senior Contracts & Compliance Administrator Ronnie Campbell Chief Financial Officer Elissa K. Konove Deputy Chief Executive Officer 27

37 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 7 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Recommendation of Ticket Vending Device Composition Issue The Authority is procuring a modern fare collection system comprised of new accountbased Ticket Vending Devices (TVDs) that can be configured as a cash-accepting or cashless variant within the same physical enclosure. This flexibility allows different compositions of cash/cashless TVDs across the system. The capital and operating costs of various compositions have been quantified, and staff have recommended an option that will maximize the ease of use and overall customer experience, while improving operational efficiency and fiscal sustainability. Recommendation It is recommended that the Board authorize the Chief Executive Officer to procure a fare collection system comprised entirely of cash-accepting Ticket Vending Devices (TVDs). An all-cash TVD system will provide the most customer convenience, and will also result in lowest overall costs over 10 years. In addition to the customer and financial benefits, an all-cash system provides maximum reliability and eliminates the need for Title VI mitigation measures if an all-cashless system were implemented. Alternatives The Board may reject the recommendation and direct staff to provide alternative options. Strategic Goal Alignment This item aligns with the strategic goal to maintain fiscal sustainability by reducing the annual operating costs of fare collection; invest in people and assets by replacing TVDs that have exceeded their useful life; and retain and grow ridership by making the fare payment experience easier for customers. 28

38 Recommendation of Ticket Vending Device Composition Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 Background In September 2016, a prior estimate projected significant cost savings by procuring an all-cashless TVD system. After receiving actual cost proposals, those savings did not materialize. In fact, maintenance costs between cash and cashless TVDs were negligible from both vendors. Furthermore, an all-cashless system requires Title VI mitigation measures that were identified in previous studies but never quantified. The costs and negative customer impacts as a result of a Title VI mitigation measures are identified as part of this recommendation. Before finalizing a recommendation, staff evaluated three (3) options with regard to cash/cashless TVD composition. A total quantity of 155 TVDs includes planned future TVDs and spares. 1) 155 all cashless TVDs (all TVDs only accept credit/debit) 2) 155 all cash TVDs (all TVDs accept credit/debit/cash) 3) Mixed [100 cash TVDs, 55 cashless TVDs] (some TVDs accept credit/debit and some TVDs accept credit/debit/cash) Cost proposals were evaluated and cost assumptions were clarified with proposers prior to Best and Final Offers (BAFO). With the BAFO cost information, staff incorporated other fare collection related costs across the three (3) options to determine a comprehensive cost analysis. Results show that the all-cash option would have the overall lowest total cost, and comes with other significant benefits outlined below. Discussion Based on actual proposal costs, the capital and operating cost differences between cash and cashless TVDs were not significant. Vendors were asked during cost clarifications if annual maintenance and operating costs would be impacted by the share of cash and cashless TVDs. They responded that operating costs would not be impacted. Other costs for cashless TVDs (i.e. credit/debit fees) offset any operational cost savings from reduced cash collection and handling. Savings from a shift to cashless TVDs would be in initial capital costs for the TVD hardware only. However, moving to a cashless TVD system would require a system mitigation measure, like a retail vendor network, that would significantly increase costs and greatly inconvenience cash-paying customers. Using proposal costs and other actual fare collection costs, capital and operating and maintenance costs associated with three different compositions of the TVDs was projected in Attachment A. A summary of each composition option is as follows: 29

39 Recommendation of Ticket Vending Device Composition Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page All Cashless System (all TVDs only accept credit/debit): The system will be comprised of devices that only accept credit/debit as a form of payment. The all-cashless TVD option is the highest total cost due to the additional retail network that is required for Title VI mitigation. A five (5) county retail network would require significant administrative, maintenance, operational, and marketing costs that outweigh the costs of cash TVDs. Furthermore, many retail locations will not be open during early morning operating hours, and some stations do not have retail locations nearby. Therefore, this option is the least customer friendly, and may result in higher complaints and/or loss of discretionary ridership All Cash System (all TVDs accept cash/credit/debit): The system will be comprised of devices that all accept credit/debit and cash, similar to today's system. The all-cash TVD has the lowest overall operating costs, which makes up for the slightly higher initial capital cost. This is because cash collection fees are relatively low overall, there are no credit/debit card fees associated with cash transactions, and vendor maintenance costs are not impacted by cash/cashless TVDs. Both vendors were asked if cashless TVDs would result in lower maintenance costs, and both responded that the cost savings would be negligible. The all cash option presents maximum customer convenience and mirrors today s existing all cash-accepting TVD network. 3. Mixed System (100 TVDs accept cash/credit/debit and 55 TVDs accept credit/debit): The system will be comprised of some devices that will accept cash/credit/debit, and some devices that will accept credit/debit only. The mixed system option would relieve the need for Title VI mitigation measures, but there will still be a large customer impact since 40% of transactions are currently made with cash. Since many stations would only have one cash TVD, there is increased risk if that TVD goes out of service. The capital cost savings of a hybrid system over an all-cash system is approximately $580K. The operating cost of the hybrid system is slightly higher than the all-cash system. With an all-cash system, the capital savings from the hybrid option are recouped from operating cost savings in four to five years and does not justify the increased customer inconvenience and potential risk from only having one cash TVD. The all-cash system option has no appreciable shortcomings and offers the following benefits: Lowest Financial Cost: provides the lowest cost over the 10-year contract term (refer to Attachment A) Highest Customer Convenience: customers will not need to change purchase habits Maximum Flexibility: can change composition in the future if conditions change Improved Reliability: cash works even when station network is unavailable 30

40 Recommendation of Ticket Vending Device Composition Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 Highest redundancy: if one cash TVD is out of service, another can accept cash Safety: improved resilience minimizes theft possibility Title VI: all cash TVD removes the possibility for any Title VI mitigation measures Consistency: all cash TVDs will offer consistent user experience across counties For the reasons outlined above, staff s recommendation is option #2, the All-Cash TVD System (cash/credit/debit). The recommendation will have no impact to the mobile or smart device users. Budget Impact There is no budgetary impact as a result of this report. Prepared by: Andy Ly, Senior Manager, Fare Collections Ronnie Campbell Chief Financial Officer Elissa K. Konove Deputy Chief Executive Officer 31

41 Year 1 Year 2 Capital Maintenance Maintenance Attachment A: 10 Year Cost Comparison Year 3 Maintenance Year 4 Maintenance Year 5 Maintenance Year 6 Maintenance Year 7 Maintenance All Cash $ 11,470,016 $ 4,747,834 $ 4,768,055 $ 5,433,995 $ 4,967,244 $ 5,764,634 $ 5,381,746 $ 6,091,207 $ 5,678,356 $ 6,385,127 $ 6,001,663 $ 66,689, Cash/55 Cashless $ 10,893,596 $ 4,891,300 $ 4,906,580 $ 5,512,966 $ 5,124,889 $ 5,874,089 $ 5,570,413 $ 6,207,024 $ 5,874,864 $ 6,525,306 $ 6,207,638 $ 67,588,666 All Cashless $ 11,551,190 $ 5,446,036 $ 5,423,328 $ 5,862,390 $ 5,629,904 $ 6,230,234 $ 6,097,622 $ 6,564,031 $ 6,389,391 $ 6,868,726 $ 6,707,622 $ 72,770,473 Equipment and operating costs for TVMs only $ 9,806,586 $ 2,767,570 $ 2,708,660 $ 3,073,743 $ 2,769,924 $ 3,265,275 $ 3,006,999 $ 3,355,566 $ 3,057,332 $ 3,407,038 $ 3,109,969 $ 40,328,661 Vendor Network Related Costs $ 1,744,604 $ 815,467 $ 786,462 $ 792,955 $ 794,439 $ 827,124 $ 845,896 $ 851,502 $ 857,247 $ 863,136 $ 869,172 $ 10,048,004 Notes: Year 1 maintenance includes vendor maintenance, operations, and warranty; and Metrolink operating costs. Years 2 10 include vendor maintenance and operations, and Metrolink operating costs. Assumes spare parts list turns over every two years under all scenarios at scaled parts list pricing based on number of cash TVDs. Spare parts replaced in their entirety in years 3, 5, 7 and 9. Assumes Sectran increases of 5% in Year 2 (new contract year), Year 5 (Option Year), Year 7 (new contract year), Year 10 (option year). Assumes 10% fare increase in Year 5, increasing credit/debit fees and/or commissions, and cash shortages in Years Assumes commission rate at 4%, and half of cash transactions at TVMs use the vendor network instead of converting to credit/debit at stations. Assumes vendor network maintenance and support provided by the TVM vendor at 35% of annual maintenance cost of supporting the TVM network. Assumes $250,000 annual costs for supporting vendor network with marketing materials, customer information, signage, schedules, and other administrative support by Metrolink staff. Out of scope TVD maintenance and TPV maintenace escalated starting in year 2 based on vendor escalation rate in overall TVD maintenance contract. Year 8 Maintenance Year 9 Maintenance Year 10 Maintenance TOTAL 32

42 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 8 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Contract No. SP468C-16 Consultant Services for Executive Coaching and Management and Leadership Development Increase Contract Funding Authorization MLC & Associates, Inc. Issue Increased contract funding authorization for Contract No. SP486C-16, Consultant Services for Executive Coaching & Management and Leadership Development, with MLC & Associates, Inc., is required to provide Project Delivery Improvement consulting services. Recommendation It is recommended that the Board authorize the Chief Executive Officer to increase contract funding authorization by $150,00 to fund Project Delivery Improvement consulting services through June 30, This will bring the total approved contract authorization to an amount not-to-exceed $550,000. Alternatives The Board may: 1) Modify the amount of the contract funding authorization; and/or 2) Decline to authorize the increase in contract authorization. Strategic Goal Alignment This report aligns with the strategic goal to invest in people and assets and improve communications to customers and stakeholders, by supporting project delivery efforts associated with the new capital and rehabilitation programs critical to maintaining a State of Good Repair (SOGR). 33

43 Contract No. SP468C-16 Consultant Services for Executive Coaching and Management and Leadership Development Increase Contract Funding Authorization Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 Background Contract No. SP486C-16 was awarded by the Purchasing Agent on June 13, 2016 to MLC & Associates, Inc. (MLC), following a competitive Request for Proposal process, for a period of July 1, 2016 to June 20, 2017 with a single one-year option for a total not-toexceed amount of $100,000. This contract scope of work includes areas for Program Development and Delivery as well as Change Management. Under this original agreement, MLC was issued a Contract Task Order (CTO) to perform an assessment of the Project Management Organization (PMO). Specifically, this work focused on evaluation of the existing structure, review of other agencies practices of project management, and how to modify this particular unit to support successful delivery of capital and rehabilitation projects. During the execution of this task it was evident that many cross-departmental processes required assessment due to their support of and impact to the full project cycle. Subsequently, the Project Delivery Improvement Program (PDIP) was undertaken to implement key recommendations included in the assessment: establishment of a new Project Management Office (PMO) Value Proposition, development of the Executive Dashboard for Capital/Rehab Board Reports, revision to the monthly Project Management (PM) Meeting format; and was later modified to include several additional critical issues: o assisting staff with the assembling the FY18 Rehabilitation and Captial Budget request, o assessment of the Contract Task Order process, and o review of the PM assignment process. These were efforts that increased the accuracy of reporting and introduced efficiencies for the delivery of projects. This has lead to increased scrutiny of project risk and management of risk. Effective February 23, 2017, Contract No. SP468C-16 was amended under Purchasing Agent authority to exercise the one year option with a new period of performance through June 30, On June 9, 2017, the Board approved an increase in contract funding authorization for a new not-to-exceed amount of $400,000 for Contract No. SP486C-16. MLC continued work on the PDIP and has performed satisfactorily, accomplishing several more tasks, including: 1) Service Level Agreements (SLAs) The purpose of SLAs is to provide a clear understanding of the internal commitments for processing, reviewing, and/or approving documentation related to projects. Careful assessment was made at each step of the various business processes used to support the project lifecycle. The team evaluated the needs of the organization and 34

44 Contract No. SP468C-16 Consultant Services for Executive Coaching and Management and Leadership Development Increase Contract Funding Authorization Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 potential bottlenecks in the processes in an effort to minimize delays. The SLA recommendation is complete but has not yet been rolled out pending changes to key stakholders. Once established, the objective is to clearly establish the expectation levels and to define the turn-around times for project documentation in order to ensure that projects can proceed in an efficient manner withim expected timeframes. 2) Tracking of Material Ordering A low cost implementation of a tracking system (leveraging Sharepoint) was developed taking into account the needs to the Signal & Communication Department and Materials Management. Specifically this addressed the steps that take place to submit and approve a Bill-of-Materials (BOM) to prepare for requisition entry into the Financial Information System (FIS). Prior to the Sharepoint implementation, delays were reported in this process, and the team found that BOM approval was mostly taking place via phone conversations and , in ways that were not trackable. The Sharepoint solution to date and time stamp every request, and every comment entered into the system, so there is transparency and reportablitity at every step. This helps to ensure accuracy of part numbers and descriptions in an effort to cut down on accidental purchase of incorrect or obsolete material which not only delays a project, but adds to inventory costs. 3) Review project portfolio and establish project definitions and thresholds A review of prior years project portfolios showed a high number of projects with relatively low dollar amounts. The problem with low-dollar projects is in the administration costs. Larger, combined projects, and programmatic approaches to budget requests can cut down on percentage administrative costs, (for example, larger procurements can return efficiencies of scale and lower overall costs). Project thresholds were introduced at the FY19 Capital budget kick-off meeting this past year in an effort to implement larger projects to achieve cost efficiencies. 4) Quarterly Accruals for Rehabilitation projects A review of past quarterly Capital Program Status Report showed that expense information often lagged too far behind to timely update stakeholders on project progress being made across the portfolio. Developing an accrual process with staff, which had never been done on Capital/Rehab projects before, allowed this quartlery report to contain recent and accurate figures on work in the field, and the resulting expense, within a fiscal quarter reporting period. This ensures that the information feeding the new Dashboard, and the rest of the quarterly report, is accurate and timely. The PDIP effort was put on hold during the months of January through March 2018 while staff assessed progress and developed a strategy going forward. Additionally, several developments over the course of FY18 have impacted the PDIP program, including staffing and organizational changes, the development of the Metrolink Rehabilitation Plan (MRP), and potential participation in the Transit & Intercity Rail Capital Program (TIRCP) and Federal Core Capacity Program. 35

45 Contract No. SP468C-16 Consultant Services for Executive Coaching and Management and Leadership Development Increase Contract Funding Authorization Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 Given the progress and accomplishments of this effort outlined above, staff is recommending to continue working with MLC to finalize the program. As the Authority needs to prepare and plan for potential large increases to project portfolios, MLC will be tasked with furthering the Project Delivery Improvement effort in key areas, including: 1) Implementation of structural changes, and project support during transition Consultant will further work that has already been done to refine and define the PMO s role within the Authority and work to rollout the revised list of PMO roles and responsibilities within the Authority. Consultant will work with work with internal stakeholders to refine the PMO structure in order to better meet the current and future needs of the Authority, and document the working structures within the PMO. 2) Revise and improve PMO Standard Operating Procedures based on changes Changes to the organizational structure and responsibilities of the PMO will necessitate a revision and optimization of the Standard Operating Procedures (SOPs). Consultant will work with the PMO and other stakeholders to revise the current SOPs, also taking into account recent audit results. Implementation of revise SOPs to the project managers will serve as training and assist in maintaining consistent compliance, whicle also serving to introduce efficiencies. 3) Establish and implement improved performance-related KPIs and metrics If required, Consultant will work with the PMO and Information Technology (IT), to develop the requirements for implementing KPIs and Metrics and will oversee the implementation process. This will include incorporation of the agreed upon KIPs into project and project-portfolio performance evaluation mechanisms. 4) Finalize and implement an improved internal dashboard The purpose of a dashboard is to allow the intended audience the ability to quickly evaluate the status of projects and health of the overall portfolio. Some of this work on the internal dashboard has been accomplished during the development of the Executive/Board Dashboard that has already been implemented. This internal dashboard will have the Project Managers as the audience to help inform and assist the project work. Consultant will work toward automation as much as feasible. Therefore it is recommended that the Board authorize the Chief Executive Officer to amend Contract No. SP486C-16 for Consultant Services for Executive Coaching & Management and Leadership Development with MLC & Associates, Inc. to increase the contract funding authorization by $150,000 to support the Project Delivery Improvement effort, for a new not-to-exceed contract funding authorization amount of $550,000. Disadvantaged Business Enterprise (DBE)/Small Business Enterprise (SBE) Requirements This project is not federally funded; therefore, the DBE/SBE program is not applicable. 36

46 Contract No. SP468C-16 Consultant Services for Executive Coaching and Management and Leadership Development Increase Contract Funding Authorization Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 Budget Impact The amounts for which contract authority is requested are included in the Adopted Operational Budget for FY $150,000. Prepared by: Steve Holman, Senior Manager, Business Operations Christina Pinkney, Contract & Compliance Administrator Gary Lettengarver Chief Operating Officer Elissa K. Konove Deputy Chief Executive Officer 37

47 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 9 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Senate Bill 1119 Staff Recommendation Issue Senate Bill 1119 (Newman) seeks to include additional categories for required expenditures of Low Carbon Transit Operations Program (LCTOP) funds. A Board position on the amending legislation for required expenditures is requested. Recommendation It is recommended that the Board adopt a support position on Senate Bill 1119 to provide LCTOP funding for qualified expenditures. Alternative The Board may modify the position or adopt an alternative position. Strategic Goal Alignment This report aligns with the strategic goals of maintain fiscal sustainability and improve communications to customers and stakeholders by sharing news, information and the Authority s legislative priorities with elected officials. Background The Low Carbon Transit Operations Program (LCTOP) is one of several programs that are part of the Transit, Affordable Housing, and Sustainable Communities Program established by the California Legislature in 2014 by Senate Bill 862. The LCTOP was created to provide operating and capital assistance for transit agencies to reduce greenhouse gas emission and improve mobility, with a priority on serving disadvantaged communities. Approved projects in LCTOP will support new or expanded bus or rail services, expand intermodal transit facilities, and may include equipment acquisition, fueling, maintenance and other costs to operate those services or facilities, 38

48 Senate Bill 1119 Staff Recommendation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 with each project reducing greenhouse gas emissions. For agencies whose service area includes disadvantaged communities, at least 50 percent of the total moneys received shall be expended on projects that will benefit disadvantaged communities. Senate Bill 862 continuously appropriates five percent of the annual auction proceeds in the Greenhouse Gas Reduction Fund (Fund) for LCTOP. The program has allocated the following amounts since the program s inception in : $25 M $75 M $34.5 M For agencies whose service area includes a Disadvantaged Communities (DAC), at least 50% of the total monies received shall be expended on projects that provide a direct, meaningful and assured benefit to DACs. This has restricted LCTOP funding for transportation services that operate entirely in a DAC. Operators are limited in using LCTOP funding to connect DAC residents to employment centers, education institutions and healthcare centers unless the service occurs within a DAC. This does not take into account passengers that use transit services, communities they reside in or commute from, income levels or transit dependency. Senate Bill 1119 seeks to provide flexibility in the use of LCTOP funding so that transit agencies may seek opportunities to provide additional connectivity options for DACs and reduce emissions. Eligible LCTOP expenditures would be expanded to include investments in student transit pass programs, providing transit connections to major centers of employment, healthcare and education and funding zero-emission technologies. Funded programs would no longer be required to provide transportation services entirely in a DAC. Impacts to the Authority Providing additional categories for qualified LCTOP expenditures could provide additional funding for the Authority and local transportation commissions. Next Steps Upon Board approval, staff will work with both houses of the legislature to encourage passage of the bill. Budget Impact There is no budgetary impact as a result of this report. 39

49 Senate Bill 1119 Staff Recommendation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 Prepared by: Alex Davis, Government Relations Manager Sherita K. Coffelt Acting Chief of External Affairs 40

50 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 10 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Approval of Amendment to FY Rehabilitation Budget Issue Approval is needed for the additional amount of State of Good Repair (SOGR) Rehabilitation Funding which has now been approved by the Los Angeles County Metropolitan Transportation Authority (Metro) in the amount of $13,297,500. Recommendation It is recommended that the Board approve a Budget Amendment in the amount of $13,297,500 to reflect action taken by the Los Angeles County Metropolitan Transportation Authority (Metro) Board at its January 25, 2018 meeting to provide additional funding for the FY Rehabilitation Budget. Alternatives The Board may choose to: 1) Approve an amount other than recommended; or 2) Not approve any amount. Strategic Goal Alignment This report aligns with the strategic goal to maintain fiscal sustainability. Background At the November 18, 2016 Board meeting, a preliminary amendment to the FY Budget for additional Rehabilitation funding was requested. At that meeting the Board subsequently approved that preliminary request in the amount of $49,202,

51 Approval of Amendment to FY Rehabilitation Budget Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 At the April 21, 2017 Board Meeting, the Board approved a revised amount of $34,161,268, to conform to the total amounts approved by Member Agencies, Union Pacific Railroad and Amtrak. The Authority continued to work with Metro following the April 2017 meeting to obtain funding for the final portion of the SOGR Rehabilitation Budget. As a result of this collaboration, the Metro Board approved their staff recommendation to provide an additional $13,297,500 in SOGR Rehabilitation funding at its January 25, 2018 Board meeting. The Metro Board Report is included for reference Attachment A. Budget Impact Board approval of this item will increase the FY18 Rehabilitation Budget by $13,297,500. Prepared by: Christine Wilson, Manager, Budgets and Financial Analysis Ronnie Campbell Chief Financial Officer Elissa K. Konove Deputy Chief Executive Officer 42

52 Metro Board Report Attachment A Los Angeles County Metropolitan Transportation Authority One Gateway Plaza 3rd Floor Board Room Los Angeles, CA File #: , File Type: Program Agenda Number: 22. PLANNING AND PROGRAMMING COMMITTEE JANUARY 17, 2018 SUBJECT: ACTION: ADDITIONAL METROLINK REHABILITATION FUNDING APPROVE RECOMMENDATIONS RECOMMENDATION CONSIDER: A. PROGRAMMING the Los Angeles County Metropolitan Transportation Authority s (Metro) share of Southern California Regional Rail Authority s (SCRRA - operating as Metrolink) FY17 Priority B track and structure rehabilitation work up to $13,297,500; B. APPROVING payment for the City of Los Angeles San Fernando Road Bike Path Three Settlement Costs totaling $59,629; C. REPROGRAMMING prior year SCRRA MOU surplus funds totaling $3,014,089 as listed below for SCRRA s state of good repair projects: 1. FY MOU - $1,038, FY MOU - $791, FY MOU - $471, Capital Project MOUs - $712,752 D. EXTENDING the lapsing dates for funds previously allocated to SCRRA for the Rehabilitation and Renovation Program as follows: 1. FY from June 30, 2017 to June 30, FY from June 30, 2017 to June 30, FY from June 30, 2017 to June 30, FY from June 30, 2017 to June 30, 2018 Metro Page 1 of 5 Printed on 3/14/ powered by Legistar

53 File #: , File Type: Program Agenda Number: 22. E. AUTHORIZING the Chief Executive Officer to negotiate and execute all necessary agreements between LACMTA and the SCRRA for the approved funding and lapsing date extensions. ISSUE Metro s share of SCRRA s urgent track and structure rehabilitation projects for FY 17 is $31,864,316 that were divided into two sets of priority groupings, A and B, where A is a higher priority than B. On April 27, 2017, the Metro Board approved programming funding for the SCRRA s FY17 track and structure Priority A rehabilitation work totaling $18,381,025. Staff is recommending programming approval for the remaining FY17 SCRRA track and structure Priority A and B rehabilitation work up to $13,297,500. DISCUSSION On April 27, 2017, the Metro Board approved funding in the amount of $18,381,025 for SCRRA s Priority A Slow Order highest priority rehabilitation projects determined to require an immediate need for repair and funding. The Priority B rehabilitation projects were assessed during the due diligence field visits as well but were determined to require rehabilitation in later years and were not as urgent. SCRRA has since updated their information (ATTACHMENT A) which enabled staff to further assess the remaining Priority B projects on SCRRA s list. Although it was determined that the remaining rehabilitation projects did not have an immediate funding need, SCRRA s project delivery consists of location groupings in addition to need assessment to realize additional cost savings and economies of scale since some projects are adjacent to each other but may not require rehabilitation until a subsequent time period. As a result, LACMTA staff concurs that additional funding in the amount of $13,297,500 is needed to bring LACMTA owned right of way into a state of good repair and prevent slow orders. Priority A Rehabilitation Work Progress SCRRA has contracted the services of HDR to assist with project delivery, project prioritization and cost estimating. LACMTA now receives monthly project status updates due to SCRRA s collaboration with HDR. During the last eight months since LACMTA s board action in April 2017, SCRRA has shown significant progress as demonstrated on the attached December 2017 State of Good Repair (SOGR) Program Status Update (ATTACHMENT B). As you will note, since approving the Priority A rehabilitation funding in April 2017, SCRRA has completed the replacement of four culverts which in most cases were nearing 100 years, replaced in excess of 16,000 ties, and is nearing completion of the rail top bridge replacement design - all in Los Angeles County and primarily on the Antelope Valley Line. SCRRA has benefitted from economies of scale which has been demonstrated by their ability to complete three culvert replacements from realized savings in the amount of $1,662,500. This savings allowed SCRRA to move forward with rail top bridge design and the purchase of additional materials. Metro Page 2 of 5 Printed on 3/14/ powered by Legistar

54 File #: , File Type: Program Agenda Number: 22. City of Los Angeles San Fernando Road Bike Path Three Settlement Costs SCRRA paid $59,629 in settlement costs to LACMTA s billboard lessee Outfront Media related to the San Fernando Bike Path Phase II project. SCRRA recently informed LACMTA that this balance has remained unpaid for several years because the project was already closed on SCRRA s books and final invoices were generated when SCRRA received the settlement from LACMTA s real estate department. Since this project was not budgeted when the settlement agreement was received, SCRRA paid the expense from their PL/PD account and would like to be reimbursed. Reprogramming Surplus LACMTA MOU Funds SCRRA reconciled the FY11, FY12, FY13 and several closed capital project LACMTA MOUs which identified $3,014,089 available for reprogramming as follows: FY MOU - $1,038,316 FY MOU - $ 791,123 FY MOU - $ 471,898 Capital Project MOUs - $712,752 Staff is requesting that these funds be reprogrammed and applied to the SCRRA rehabilitation project funding requests as outlined in the Financial Impact section. Extend Rehabilitation Funds Lapsing Dates SCRRA is requesting an additional extension for FY11, FY12, FY13 and FY14 rehabilitation funds which lapsed on June 30, SCRRA rehabilitation and renovation projects span over multiple years to maximize economy of scale and take advantage of matching federal funds. As a result, funds programmed over multiple years may not be completely invoiced prior to lapsing and LACMTA does not recognize project completion until we are invoiced. SCRRA has reassured staff that their work is in progress and will be completed and invoiced before the June 30, 2018 fiscal year end. DETERMINATION OF SAFETY IMPACT Approval of this item will have no impact on the safety of LACMTA s patrons and employees. However, maintaining LACMTA owned assets and infrastructure in a state of good repair will eliminate system failures which could result in additional cost to LACMTA or exposure to liability. FINANCIAL IMPACT LACMTA staff is requesting the Board to approve programming $10,340,340 in Measure R 3% funds Metro Page 3 of 5 Printed on 3/14/ powered by Legistar

55 File #: , File Type: Program Agenda Number: 22. for the SCRRA Priority B urgent rehabilitation projects and Bike Path Settlement. However, pursuant to the cash flow provided by SCRRA no funding is needed until FY 19 and future years. Priority B Urgent Rehab Priority A Urgent Rehab Approved April 2017 Total Urgent Rehab Funding Bike Path Settlement Reprogram Surplus Funds Total New Funding Request Costs Programming Cash Flow FY 18 FY19 FY 20 $13,297,500 $10,247,500$3,050,000 $18,381,025 $ 7,000,000$8,000,000 $3,381,025 $31,678,525 $ 59,629 $ 59,629 $ (3,014,089) $ (3,014,089 $10,340,340 $10,340,340 LACMTA staff will budget the necessary funding on an annual basis. ALTERNATIVES CONSIDERED The Board could chose not to approve funding the SCRRA rehabilitation work of LACMTA owned ROW nor approve the lapsing date extensions. This is not recommended since passenger safety and operational efficiency are among our agency s highest priorities. Further, if this rehabilitation work is not funded slow orders could be imposed. If the lapsing dates are not extended SCRRA s funding levels will be decreased. NEXT STEPS 1. Monitor the progress of the SCRRA structure and rehabilitation work and provide updates to the Board as part of the quarterly Regional Rail report. 2. Continue to perform due diligence and work with SCRRA staff to determine the highest priority rehabilitation projects which will be included in the LACMTA 6 Year Funding Plan. ATTACHMENTS Attachment A - Priority A & B Track and Structure Project List Attachment B - December 2017 Priority A Track and Structure Status Report Attachment C - SCRRA December 7, 2017 Surplus Funds Reprogramming Letter Attachment D - SCRRA October 2, 2017 Surplus Funds Reprogramming Letter Metro Page 4 of 5 Printed on 3/14/ powered by Legistar

56 File #: , File Type: Program Agenda Number: 22. Prepared by: Yvette Reeves, Principal Transportation Planner, (213) Jeanet Owens, Sr. Executive Officer, Regional Rail, (213) Reviewed by: Richard Clarke, Chief Program Management Officer, (213) Metro Page 5 of 5 Printed on 3/14/ powered by Legistar

57 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 11 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy FY Budget Development Update Issue Finance Policy 1.1 provides guidelines for the development of the Authority s annual budget to ensure that a balanced budget is prepared in a timely basis and submitted to the Board for adoption prior to the start of each new fiscal year. This report provides a status update on the Fiscal Year (FY19) budget development progress to date. Recommendation It is recommended that the Board approve a revised FY19 Preliminary Budget for future adoption at an April Board Meeting and transmission to the five-member agencies by May 1 as required in the Joint Powers Agreement. Alternatives The Board may provide feedback and direction on the following: 1) Operating Budget adjustments, 2) Rehabilitation request, 3) New Capital request, and 4) Request additional information Strategic Goal Alignment This report aligns with the strategic goal to maintain fiscal sustainability. Development of the annual budget in a timely manner provides the short-term objective of providing an annual funding commitment for basic operations while securing multi-year funding commitments from its member agencies for the needed investments in Rehabilitation and Capital. 48

58 FY Budget Development Update Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 Background The FY19 budget development process began on October 4, 2017 with a Budget Kick- Off Meeting attended by over 50 employees. In keeping with a back-to-basics approach for the budget development, requests were compiled and submitted by all cost center managers. Those requests were analyzed and subsequently reviewed with each cost center manager and their respective chief in a series of one-on-one meetings. The primary purpose of these meetings was to provide justification for each line item budget amount requested taking into consideration such factors as: Historic levels of spending Current levels of spending, Known adjustments for the forthcoming year, and Overarching goal of fiscal sustainability and operational efficiency. These meetings began in October 2017 and concluded by mid-january The FY19 Preliminary Budget for Operations and Rehabilitation/New Capital was reviewed with the Technical Advisory Committee (TAC) Members on the following dates: November 14, 2017 December 5, 2017 January 9, 2018 January 13, 2018 An overview of the FY19 Preliminary Budget for Operations and Rehabilitation/New Capital detailing the Total Request for Funding was reviewed with the Member Agency CEOs on the following dates: January 19, 2018 February 16, 2018 On February 23, 2018, the FY19 Preliminary Budget for Operations and Rehabilitation/New Capital was presented to the Board at its Budget Workshop. Following the February 23, 2018 Budget Workshop, staff has further analyzed FY19 requests considering trending estimated actuals and workload capacity. The revised FY19 Preliminary Budget is as shown on the below. Budget Workshop FY19 Revised ($ millions) FY18 Budget FY19 Budget FY19 vs FY18 FY19 Revised Revised vs Workshop FY19 Revised vs FY18 Revenues * $100.6 $97.9 ($2.8) 2.8% $100.8 $ % $ % Expenditures $243.1 $248.1 $ % $248.4 $ % $ % Net Local Subsidy $142.5 $150.2 $ % $147.6 ($2.6) (1.8%) $ % * Revised from the budget workshop data to include $1.3m AV Line fare reduction subsidy. Totals may not foot due to rounding 49

59 FY Budget Development Update Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 Revised FY19 Preliminary Budget The FY19 Preliminary Budget Revenues have increased $2.8m to reflect the following recommended adjustments: Farebox Revenues: Projected revenues to increase provided by targeted marketing investment to increase ridership Farebox Revenues: Projected decrease due to fare restructuring for Holiday Service $2.9m ($0.1m) The FY19 Preliminary Budget Expenditures have been increased by $0.2m to reflect the following recommended adjustments: Maintenance-of-Way: Vehicle purchase moved from Operating Budget to Capital Program Maintenance-of-Way: Reduction of projected costs for Track Maintenance Contract. Revised budget reflects projected workload to be performed in FY19. Indirect Cost Allocation Plan (ICAP) Assignment of Operations cost to Capital Operations Salaries and Benefits New Position: Public Affairs to focus on digital customer services and marketing. New Position: Operations to coordinate the administration of the Authority s Shared Use Agreements Indirect Administrative Expense: To provide for Employee Recognition Program and succession planning funds inadvertently omitted from Preliminary FY19 Operating Budget Indirect Administrative Expense: To include year 1 of a 5-year operating lease of office furniture as approved by Board on January 26, 2018 Ticket Vending Machine (TVM) Maintenance and Revenue Collection: To provide for ticket stock for TVM machines. This item was inadvertently reduced in the Preliminary FY19 Operating Budget Marketing: To include targeted marketing investment as discussed with the Board during the February 23, 2018 Budget Workshop Operating Subsidy $(0.4m) $(4.3m) $(0.1m) $0.3m $0.2m $0.1m $0.5m $3.9m The net effect of the recommended adjustments to the operating budget revenue and expenditures will result in a decrease of $2.6m to the Operating Subsidy as shown below: 50

60 FY Budget Development Update Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 Revised Operating Subsidy by Member Agency Budget Workshop FY19 Revised ($ millions) FY18 Budget FY19 Budget FY19 vs FY18 FY19 Revised Revised vs Workshop FY19 Revised vs FY18 Total Subsidy $142.5 $150.2 $ % $147.6 ($2.6) (1.8%) $ % Rehabilitation During November and December 2017 and January of 2018, staff met with member agencies both jointly and individually to review the requested Projects for FY19 as per the following schedule: Line Specific, Metro Friday, November 17, 2017 Line Specific, RCTC Monday, November 20, 2017 Line Specific, VCTC Monday, November 20, 2017 Line Specific, OCTA Tuesday, November 21, 2017 Line Specific, SBCTA Wednesday, November 22, 2017 All Share Projects Wednesday, December 13, 2017 During these meetings, staff provided an overview of the call for projects process detailing how we rank, prioritize and then seek to optimize the fiscal request from the Member Agencies that ensures fulfillment of the Authority s strategic goals and annual investment in varied asset classes. Questions regarding proposed scope of the projects were answered, and additional supporting documentation was provided. Following up on the February 23, 2018 budget workshop, staff is recommending the following adjustments, which will add $4.5m to the FY19 Rehabilitation Budget: Vehicle Purchase moved to Capital Program from Operating Budget Arvilla Street Crossing Rehab (New Project requested by Metro) PVL Track Rehabilitation (New Project requested by RCTC) PVL Box Springs Drainage Assessment (New Project requested by RCTC) $0.4m $0.6m $3.3m $0.2m The revised forecast for Rehabilitation requirements over the next three fiscal years are shown below: FY : $200.8m FY : $160.3m FY : $200.3m Completion of rehabilitation projects are multi-year in nature. As such, the funding for the FY19 request is viewed as a four-year funding commitment which would have the following estimated cash flow impacts over the next four fiscal years as shown below: 51

61 FY Budget Development Update Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 FY $ 14.0m 7% FY $ 68.8m 34% FY $ 49.2m 25% FY $ 68.8m 34% Total: $200.8m 100% New Capital Staff met during the months of December 2017 and January 2018 to determine projects to be recommended for New Capital in FY19. Projects are presented that will enhance safety and security, improve system reliability, increase ridership, maximize capacity, improve efficiency, provide environmental benefit, and contribute to the strategic goals of the Authority. New Capital projects are subjected to the same ranking, prioritization and optimization as the Rehabilitation projects described above. New Capital projects proposed for FY19 are in the amounts below: FY : $24.5m FY : $54.4m FY : $65.1m The New Capital Budget remains as presented at the budget workshop. Additional Information A revised Operating Budget by revenue and expense line, by member agency is attached. Next Steps Reports will be provided to the Board each month leading up to the request to transmit to its member agencies. Following are a few key dates and budget milestones yet to be accomplished: March April April 13, 2018 May June June 22, 2018 Staff will meet with Technical Advisory Committee (TAC) and member agency staff Board action Approval to Transmit the FY19 Preliminary Budget to member agencies Staff to present to member agencies committees and boards as requested Board action FY19 Proposed budget for Adoption 52

62 FY Budget Development Update Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 6 Budget Impact Approval of this item will revise the FY19 Preliminary Budget, which will be presented to the Board for approval to transmit at an upcoming Board Meeting. Prepared by: Christine Wilson, Manager, Budgets and Financial Analysis Ronnie Campbell Chief Financial Officer Elissa K. Konove Deputy Chief Executive Officer 53

63 FY Budget Development Update Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 7 ($000s) BOARD WORKSHOP PROPOSED FY BUDGET RECOMMENDED ADJUSTMENTS REVISED BUDGET Operating Revenue Farebox Revenue 82,786 2,850 85,636 Metro Fare Reduction Subsidy Subtotal Pro Forma FareBox 82,786 2,850 85,636 Dispatching 2,120 2,120 Other Revenues MOW Revenues 12,561 12,561 Subtotal Operating Revenue 97,957 2, ,806 Operating Expenses Operations & Services Train Operations 46,872 46,872 Equipment Maintenance 38,133 38,133 Fuel 18,744 18,744 Non Scheduled Rolling Stock Repairs Operating Facilities Maintenance 1,684 1,684 Other Operating Train Services Rolling Stock Lease Security Sheriff 5,889 5,889 Security Guards 2,450 2,450 Supplemental Additional Security Public Safety Program Passenger Relations 1,732 1,732 Holiday Trains TVM Maintenance/Revenue Collection 8, ,055 Marketing 1,480 3,900 5,380 Media & External Communications Utilities/Leases 3,473 3,473 Transfers to Other Operators 6,496 6,496 Amtrak Transfers 2,400 2,400 Station Maintenance 1,806 1,806 Rail Agreements 5,400 5,400 Subtotal Operations & Services 147,751 4, ,129 Maintenance of Way MoW Line Segments 44,751 (4,476) 40,275 MoW Extraordinary Maintenance 1,083 (57) 1,026 Subtotal Maintenance of Way 45,834 (4,533) 41,301 Administration & Services Ops Salaries & Fringe Benefits 13, ,782 Ops Non Labor Expenses 7,635 7,635 Indirect Administrative Expenses 16, ,096 Ops Professional Services 2,579 2,579 Subtotal Admin & Services 40, ,093 Contingency (Non Train Ops) Total Operating Expenses 234, ,727 Insurance Expense/(Revenue) Liability/Property/Auto 11,418 11,418 Claims / SI 1,000 1,000 Claims Administration 1,211 1,211 PLPD Revenue Net Insurance Expense 13,629 13,629 Total Expense 248, ,356 Loss (150,191) 2,641 (147,550) Member Subsidies Operations 136,562 (2,641) 133,920 Insurance 13,629 13,629 Total Member Subsidies 150,191 (2,641) 147,550 54

64 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 13 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Service Impacts Due to Deferred Maintenance Issue At the request of the Board, staff is providing information on service delays over the last quarter of 2017 attributed to deferred rehabilitation of railroad infrastructure and a general update of the infrastructure rehabilitation program. Recommendation The Board may receive and file this report. Alternatives The Board may request additional information. Strategic Goal Alignment This report aligns with the strategic goals to ensure a safe operating environment and retain and grow ridership. Maintaining the railroad in a State of Good Repair (SOGR) ensures assets are operating properly and safely and reduces the likelihood of service delays due to component failures. Background Over the last 16 months the Authority has detailed the need for additional rehabilitation funding and the strategy for completing rehabilitation projects throughout the Metrolink system. The Authority is responsible for maintaining rail network assets (track, signals, facilities, rolling stock) over five counties, consisting of nearly 400 miles of track, in a SOGR. The Board has been advised that if additional funding is not approved, safety considerations would determine slow orders and/or weight restrictions to be applied to affected areas. Failing to provide timely and consistent rehabilitation funding also directly 55

65 Service Impacts due to Deferred Maintenance Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 affects passenger service as trains are delayed when components, overdue for rehabilitation, fail to operate reliably or fail completely. At its December 8, 2017 meeting, the Board requested a report on the number of service delays directly associated with deferred rehabilitation of Metrolink infrastructure over the last 90 days. Table 1 below provides the specific incidents from October through December 2017, detailing the location and component failure, the total delay to all trains in minutes, the number of trains affected in the incident, what Fiscal Year (FY) rehabilitation funding had previously been requested for this component, and if funding had been allocated. TABLE 1 Infrastructure Caused Service Delays (October December 2017) Date Location / Issue Delay # Trains Rehab Funded (min.) Delayed Request Oct. 4 River Sub. West Bank CP None N/A Olympic signal electronic equipment failure Oct. 21 San Gabriel Sub. CP Amar 31 2 None N/A insulated joint failure Oct. 28 Valley Sub. CP Saugus switch machine failure 39 1 FY 16, 17 & 18 No Nov. 3 Valley Sub. CP Currier signal electronic equipment failure Nov. 7 San Gabriel Sub. CP Beech track turnout defect Nov. 14 Valley Sub. CP Crest signal equipment failure Nov. 24 San Gabriel Sub. CP Beech switch machine failure Nov. 28 Valley Sub. MP 50 broken rail Dec. 1 Union Station CP Mission turnout failure Dec. 4 River Sub. CP Dayton signal equipment failure Dec. 7 Olive Sub. Jefferson St. crossing condition Dec. 15 Valley Sub. CP Honby signal equipment failure Dec. 15 Valley Sub. Lang Station Rd. Lang Station Rd. crossing slow order 26 2 FY 16, 17 & 18 No 5 1 FY 18 No 48 2 FY 17 Yes 18 2 None N/A None N/A FY 18 No 22 1 FY 18 No 34 2 FY 17 Yes FY 18 No 36 3 FY 17 Yes, on 1/25/18 56

66 Service Impacts due to Deferred Maintenance Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 Dec. 19 San Gabriel Sub. MP 49 broken rail Dec. 20 Union Station CP Mission turnout failure Dec. 21 Valley Sub. Lang Station Rd. Lang Station Rd. crossing repair Dec. 22 River Sub. CP Dayton signal electronic equipment failure Dec. 28 Union Station CP Mission turnout failure TOTAL ~32 hours None N/A 23 3 FY 18 No 6 1 FY 17 Yes, on 1/25/ FY 18 No 95 8 FY 18 No The total delay time accounts for cascading delays of residual operational effects throughout the Metrolink system. This occurs when one train is delayed and affects the on-time performance of other trains throughout the system due to the need for trains to meet at double track locations or when the delayed train turns at its destination and begins a new trip. It should be noted that speed restrictions, track indications and reported grade crossing malfunctions are all now protected by the Positive Train Control System which has a built- in necessary level of conservatism to train performance and therefore tends to increase the duration of delays. However, continued delays such as these drive riders away from Metrolink, as a reliable service is no longer assured. Eleven of the 18 components that malfunctioned and caused delays in the last quarter had been previously requested for funding as part of the Authority s annual Rehabilitation Budget requests, including in FY 2018, but had gone unfunded. Component failures at Control Point (CP) Mission are especially problematic and impact not only Metrolink trains but also Amtrak, since this location is in the throat area leading into and out of Los Angeles Union Station. Included in the service delays listed above is a slow order on December 15, 2017 located at the Lang Station Road Crossing on the Antelope Valley Line due to the deteriorated condition of the crossing. Emergency repairs to the crossing were completed within a few days after the slow order was placed, however permanent rehabilitation of the crossing is still needed. These types of reactionary emergency repairs are expensive and the costs are ultimately allocated to the Authority s Operating Budget, resulting in an increase in annual operating costs. As reported to the Board on September 23, 2016, staff provided the FY17 High Priority SOGR list of specific projects on the Valley, Ventura, River, and San Gabriel Subdivisions that were identified due to their potential to warrant the implementation of slow orders, which were originally estimated to occur in March 2018 for track components and in 89 57

67 Service Impacts due to Deferred Maintenance Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 September 2019 for bridge components. Starting in November 2016, Los Angeles County Metropolitan Transportation Authority (Metro) Regional Rail staff have worked in coordination with Authority staff to complete site visits and inspections of specific projects and components to validate the rehabilitation need, priority, and approach of projects identified in the High Priority SOGR list, which totaled $45 million. In addition, Metro contracted with an independent consultant to review the High Priority SOGR Projects to provide additional feedback, justification, and suggestions on how to efficiently prioritize and complete the Authority s identified rehab projects. This analysis was the basis for Metro s approval in April 2017 of $18.4 million to fund the urgent projects of the High Priority SOGR list; and after additional efficiencies were identified, Metro s remaining funding allocation of $13.3 million for the less urgent SOGR list in January Metro and Authority staff continue to coordinate on projects listed in the FY18 Rehabilitation Budget that have not yet been funded, which includes $26.8 million for projects on the Valley, Ventura, and San Gabriel Subdivisions; and $6.2 million for projects that have a system-wide benefit, which are funded by all member agencies via the all-share formula. The $6.2 million all-share funding, when combined with other member agencies commitments, would provide a total of $13 million for rehabilitation projects on the River Subdivision, at Union Station, and for system-wide projects. In February 2018, staff began periodic special site-specific condition inspections of the projects listed on both the FY17 High Priority SOGR list and the FY18 Rehabilitation list, to assess the condition of each component and if the implementation of slow orders or weight restrictions are warranted. A number of the FY17 High Priority SOGR projects have lead times for the completion of design documents and procurement of materials before work can begin, therefore the special inspections will continue until the rehabilitation work is compete. Attachment A to this report is a dashboard of the Authority s Capital and Rehabilitation Program, summarizing the program status and expenditures to date. The Authority continues to make improved progress on its rehab projects, which is shown by the level of expenditures for the first two quarters of FY18, equaling the average total year-end expenditures over the last four fiscal years. The Authority is estimating that $35 million will be expended by the end of FY18. Several of the FY17 High Priority SOGR projects that were funded by Metro in April 2017 have already been completed. Three culvert projects on the Valley Subdivision that were not funded in April 2017 were completed in conjunction with the initially funded projects using project surplus funds from economies of scale and construction staging efficiencies where projects were grouped in specific locations. The progress made on the funded projects and cost savings are clear indications of the Authority s ability to expedite the completion of rehabilitation projects and to do so in a cost-effective manner. 58

68 Service Impacts due to Deferred Maintenance Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 Next Steps Staff will continue periodic special site-specific conditions-based assessments, originally started in February 2018, of the FY17 SOGR Priority and FY18 Rehabilitation projects not yet completed to determine if the implementation of slow orders and/or weight restrictions are warranted. Staff will continue to progress and complete infrastructure rehabilitation projects as funding is made available. Budget Impact There is no budgetary impact as a result of this report. Prepared by: Justin Fornelli, Director, Engineering & Construction Darrell Maxey, Deputy Chief Operations Officer (PTC and Engineering) Gary Lettengarver Chief Operating Officer 59

69 Rehab Project Portfolio Status by Program Category Program Category Engineering Equipment Administra ve Office Program FY Budget Schedule Expenditure Billing Signal & Communication Track & Structures Equipment Administra ve Office FY17 G G G G FY16 G G Y G FY15 G G G G FY14 G G G G FY17 G G Y Y FY16 G G G G FY15 G G R G FY14 G G G G FY17 G G R G FY16 G G R G FY15 G G G G FY14 G G G G FY17 G G R G FY16 G G G G FY15 G G G G FY14 G G R Y Project No. Van Nuys Station Center Platform Ticket Vending Devices PTC F125 Locomotive Project Type Station Capital Equipment Train Control Systems Capital Equipment SCRRA Project Portfolio Dashboard December 2017 F125 Locomotive Subdivision Ventura (LA Co) Med CenturyLink agreement has not been signed off between Metro, SCRRA and CenturyLink. All Med Transition plan from current system to new one must be comprehensive and consider all customer and agency impacts. All Major Risks and Issues High All Med High Severity Risk or Issue Mitigation Plan Time and cost impacts likely if agreement not in place by mid February when work is expected to start. Metro and SCRRA legal are leading Technical ff consultant will deliver a transition plan that incorporates a transition for all technical, operational, and policy processes. Timeline to achieve SCRRA staff is working closely interoperable PTC revenue with Amtrak, NCTD, and FRA service with Amtrak and to determine a successful PTC NCTD is uncertain, resulting in deployment plan by increased exposure to the December Authority and potential regulatory implications after Progress Rail has had difficulty maintaining schedule. SCRRA continues to monitor production output from Muncie with onsite inspector. 30,000 25,000 20,000 15,000 10,000 5,000 Year of Adoption: Rehab Expenditures by Fiscal Year and Year of Adoption ($000s) 19,192 25,793 22,537 Attachment A 20,977 FY2015 FY2016 FY2017 FY2018 Prior Years SOGR Reprogrammed Prev 4 Yr Avg New Capital Project Portfolio Status by Program Category Program Category Engineering Equipment On Track trending or actuals within 5% of expected budget, schedule, expenditures, and/or billing completion. Program Signal & Communication Track & Structures Equipment Budget Schedule G G Y G G G G G G R R G Warning trending or actuals between 5% to 15% of expected budget, schedule, expenditures, and/or billing completion. Expenditure Billing Hazard trending or actuals more than 15% of expected, budget, schedule, expenditures, and/or billing completion. State of Good Repair Program Capital Equipment All Med High Locomotive control software and system integration issues have caused failures with the Urea System. When the Urea System fails, SCRRA is unable to use the unit. Structures All Med Bridge contract IFB continues to slip. Issues are being investigated/resolved by EMD. Some issues continue to emerge in service. Continuing risk. Design Package projected to be complete April Working with Contracts ahead of time to minimize time between final package and IFB. Key Accomplishments Planned Activities SCRRA has doubled the amounts expended and committed over SOGR Program/Track & Structures Rehabilitation the last 3 quarters compared to the previous 3 quarters Install 70,000 LF of rail East Bank January March 2018 Interoperable PTC revenue service with BNSF was achieved in October Replace 14,600 ties on the San Gabriel Sub and 6,500 ties on the River Sub January February 2018 Rolled out a train tracker website to provide real time train location information and predictive arrival information for trains Continue turnout material deliveries and begin installation Install 50,000 LF of rail on Orange Sub during January April 2018 at each station NCTD windows SOGR Program/Track & Structures Rehabilitation Ticket Vending Devices Complete cost proposals and plan for Completed tie replacement on Valley (over 5,724 ties) and March 2018 Board Award Ventura Subs (over 10,900 ties); Began tie install on River Sub Interoperable PTC revenue service with UPRR in February March Rail delivery completed in December with 160,000 LF delivered 2018 Bridge designs 60% complete LAUS Canopy Rehabilitation on Platforms 2 & 3 February May Total SOGR is 40% complete, projected to be 70% by June Optical Reader installations complete Van Nuys Station Platform Complete installation of 2 turnouts Ticket Vending Device technical proposal evaluations complete and begin fiber optic relocation Van Nuys construction kicked off and procured Turnouts for the Complete CP 4th Street Project cutover March 2018 upcoming work 70,000 60,000 50,000 40,000 30,000 20,000 10,000 39,631 Capital Expenditures by Fiscal Year ($000s) 55,027 N O T E S 38,635 13,108 FY2015 FY2016 FY2017 FY2018 Capital Prev 4 Yr Avg Rehabilitation expenditures for the first six months of FY 2018 are near the annual expenditures in previous years The previous four year average expenditures for New Capital Projects is $58.8M due to $102.1M spent in FY14. New Capital Expenditures have large variances across Fiscal Years due to large projects. FY14 Projects: Rotem Passenger Cars ($32.8M), Tier 4 Locomotives ($21.5M) & PTC ($42.7M); FY15 Projects: Tier 4 Locomotives ($10.7M & PTC ($24.6M); FY16 Projects: Tier 4 Locomotives ($25.9M), PTC (14.0M) & Vincent Siding ($12.5M); FY17 Projects: Tier 4 Locomotives ($18.2M), PTC ($11.8M) & Vincent Siding ($4.1M). 60

70 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 14 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Issue Staff is providing an update on the Authority s practice for maintenance and rehabilitation based upon industry standards. It also identifies the needs to keep Metrolink s system in a State of Good Repair for the next 25 years. This report incorporates the findings from a peer review from the American Public Transportation Association (APTA) on maintenance and rehabilitation. Recommendation The Board may receive and file this report. Alternatives The Board may request additional information. Strategic Goal Alignment This report aligns with the strategic goals to invest in people and assets and ensure a safe operating environment. Continued investments in the railroad infrastructure will allow the Authority to maintain a State of Good Repair, ensuring assets are operating safely, efficiently and reliably, reducing the likelihood of service delays due to component failures. Background The Authority is responsible for maintaining rail network infrastructure (track, signals, facilities, and rolling stock) over five counties. It consists of 10 support facilities (Dispatch Operations Center, maintenance facilities, etc.), 7 outlying points (remote train service areas), and 7 crew bases where train crews brief and debrief at the beginning and end of 61

71 Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 each run, 411 miles of track, 273 bridges, 6 tunnels, 596 culverts, 553 turnouts, 355 grade crossings, 196 non-revenue Maintenance-of-Way (MOW) vehicles, 113 signal control points, 217 intermediate signals, 190 communications sites, as well as hardware, software and servers to support train control and dispatching. Moreover, the Authority fleet contains 55 locomotives, including three that are leased, and 258 passenger railcars. Of those cars, 57 are cab cars and the remaining 201 trailer cars or older cab cars that are used exclusively as trailers. Currently, there are three Tier 4 locomotives in service as the Authority advances in its replacement of 40 older locomotives with new Tier 4 units. Many of the Authority s infrastructure assets were obtained from the freight railroads in the early 1990s and were already exhibiting deferred maintenance when service began on the Metrolink system. While some of the deferred maintenance has been addressed over the past 25 years, the Authority is currently at a confluence of increasing age of the infrastructure assets, deteriorating condition, and inadequate funding to address the needs. In summer 2016, staff began working on an independent assessment of the infrastructure rehabilitation needs over the next 25 years and developed the Metrolink Rehabilitation Plan (MRP) to identify recommended funding to maintain the system in a State of Good Repair (SOGR). At this time, staff is working to finalize the document, adding an assessment on the Authority s fleet and operating facilities, and broadening the title to Metrolink Rehabilitation Plan (MRP). The MRP effort supplements the Authority s Transit Asset Management (TAM) plan which was adopted by the Board in The standards and criteria that were used for this assessment included Class 1 freight and commuter railroad industry standards and best practices and approaches to replace, upgrade, repair or rehabilitate railroad infrastructure. It also included the Authority s Track Maintenance and Engineering Instructions (TMEI) and design standards. Moreover, staff utilized the American Railroad Engineering and Maintenance-of-Way Association (AREMA) manuals for railway engineering. In addition, staff also followed the Federal Transit Administration (FTA) guidelines in estimating backlogs and SOGR needs which includes Age, Condition, Performance and Comprehensive Assessment (Age, Condition and Performance). Specifically, over the last 18 months staff has used a ground-up, comprehensive (condition, performance and age based) approach to identify all of the rehabilitation backlog, and annual investment needed to keep the Authority s infrastructure in a SOGR for the following assets: Track (Rail, Ties, Ballast, Crossings, and Turnouts) Structures (Bridges, Culverts, Tunnels) Systems (Signal Systems, Crossing Systems, Communication Systems, Centralized Train Control Systems) 62

72 Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 Maintenance-of-Way (MOW) Equipment and Vehicles Per the FTA, State of Good Repair (SOGR) is defined as: 1. An asset that is able to perform its manufactured design function 2. An asset that does not pose an unacceptable identified safety risk 3. Life-cycle investment needs of the asset have been met Based upon the assessment, the key findings of the MRP include condition and cost estimates for: Investment Need to Address Existing Backlog: $ Million (2017 Dollars) Recommended SOGR Annual Investment Need: $57.04 Million (2017 Dollars) The key recommendations of the MRP include clearing the existing rehabilitation backlog with increased funding levels, multi-year funding commitments, increased funding flexibility (by funding larger programs, and not individual projects), project prioritization in the year of expenditure, and to partner with major capital to rehabilitate existing infrastructure with new capital projects. The report provides a funding baseline which will be used to develop future rehabilitation funding requests (including FY ), and provides recommendations on budget needs to clear the backlog and achieve a SOGR by Funding at the levels recommended by the MRP will allow the Authority to proactively manage the condition of the assets, take advantage of economies of scale, and efficiently use member agency funding allocations. The consequences of continuing to defer proper levels of funding in a timely and consistent manner will cause major components of the Authority s vital infrastructure to fail to operate reliably, resulting in relatively frequent and unplanned service outages, and degradation of timely service. These unplanned service outages will drive riders away from Metrolink. Annual operating costs will rise as funds are expended performing unplanned emergency repairs and replacements in a costly, reactive crisis manner. The risk of accidents and incidents will rise as a result of assets performing in a suboptimal state. Since the Metrolink system operates as a network, the poor condition of one component (such as ties) will accelerate the deterioration of other components (such as rail). Many of these issues were also identified and addressed in a recent APTA Peer Review. APTA Peer Review Findings At the April 2017 Board Budget Workshop, the Board recommended that an independent assessment such as a peer review be conducted to evaluate the Authority s current maintenance program. 63

73 Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 In response, staff requested APTA to perform a peer review of the Authority s Maintenance and Rehabilitation practices and standards, focusing on the following questions: What industry best practice techniques should be adopted to improve the Authority s programming, funding, delivery and execution of track, bridge, signals, communication, train control systems, and rehabilitation/state of good repair procedures and projects What are industry best practices regarding third-party review of maintenance planning and how could proposed third-party or other similar external reviews be undertaken in a way that expedites and strengthens the Authority s decision-making process and overall maintenance standards The peer review panel of transit industry leaders performed its assessment in September 2017, followed by a final report in December The report offers a range of observations and recommendations for the Authority to consider for strengthening the effectiveness of the organization s ongoing maintenance, operations, programs and strategies. Highlights from the report are provided in the section that follows. Overall observations by the panel were broadly positive, recognizing the Authority s success in Positive Train Control (PTC) deployment, fare box recovery and other accomplishments. The panel also accurately identified many of the challenges that the Authority faces related to programming, funding, program delivery, contract execution and adopting industry best practices, as well as other areas. Efforts are already well underway in addressing the panel s recommendation that the Authority utilize Union Pacific Railroad (UPRR), BNSF Railway (BNSF) and Caltrain standards (as applicable) to update its track and signal maintenance manuals, which are over a decade old. In June 2017, the Authority s Engineering Department formed a team of expert stakeholders to begin the task of rewriting its track and signal maintenance manuals and rehabilitation standards in accordance with railroad industry best practices, utilizing the maintenance and rehabilitation standards of the cited railroads (and others) as references. The new signal maintenance manual is 90% complete and the track maintenance manual is approximately 70% complete. Both manuals are planned to be issued in summer 2018, along with associated in-house and contractor staff training. On the topic of programming, the panel recommended the Authority shift from a projectfocused to program-focused approach. This recommendation is consistent with an existing initiative underway with staff to improve project delivery, which includes a shift from smaller-scale, piecemeal projects to broader programs to improve efficiency and take advantage of economies of scale. For example, FY rehabilitation projects have commenced and expenditures are exceeding the interim staff goal. Staff strongly 64

74 Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 believes that approaching these rehabilitation projects into a comprehensive program has helped to focus and delivery these projects. Staff will continue to make the case to member agencies (which often set the requirements for finite-level management, tracking and reporting), that efficiencies in project delivery can be achieved through a programmatic approach and consolidation of projects into programs. Similarly, the panel suggested consolidating the track, structures and systems maintenance contracts into a single contract, and to look for other opportunities to consolidate many smaller contracts into fewer, larger contracts. Consistent with this recommendation, staff is developing contract procurement documents for a combined, overall system maintenance contract (including track, structures, signals, communications and systems), to be issued when these contracts are re-competed in the next few years. The panel also recommended that staff update the short- and long-term planning documents, ensuring that they are in sync with the estimate of rehabilitation and maintenance needs and they get the buy-in of member agencies and the Board. The specific planning documents identified include: Strategic Plan Metrolink Rehabilitation Plan (MRP) Capital Improvement Plan (CIP) For these plans, the panel suggested a programmatic approach to securing member agency commitments to these short- and long-term plans, including funding expectations. As noted earlier in this report, staff is currently finalizing the comprehensive MRP document with the inclusion of the Authority s fleet and operating facilities. On the topic of third party review of maintenance planning, the panel simply stated, Metrolink needs to own maintenance planning. Staff is strengthening its rehabilitation and maintenance planning functions and staffing, as indicated by the development of the plans noted above, as well as its oversight of maintenance and rehabilitation contracted work. The need for dedicated, long-term funding for operations, maintenance and rehabilitation was emphasized in the report, including suggestions that the Authority receive the full Federal formula funding attributable to Metrolink and that the Authority solicit additional funding from outside grant programs and consider bonding. The panel also recommended the implementation of a two-year budget cycle to improve efficiency. 65

75 Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 6 Finally, the report includes a number of other observations and recommendations on topics such as contract execution, safety, public outreach and governance. Highlights of those recommendations include: Emphasize the Authority s success and leadership in PTC and Tier 4 locomotive procurement; transfer lessons learned from those programs to the maintenance and rehabilitation programs. Consolidate the Track, Structures, and Systems Maintenance Contract in the next advertisement of these contracts and consolidate other smaller contracts as appropriate. Reevaluate and clarify expectations and responsibilities of JPA member agencies. The full APTA Peer Review report is attached as Exhibit A, as well as a recommendation and response matrix, attached as Exhibit B. Next Steps The MRP has been presented to the Technical Advisory Committee (TAC) and comments have been provided. Staff is working on two additional chapters to the MRP for Rolling Stock and Facilities, and will also address the comments already provided as part of the next version. The new chapters will provide the same level of detail and asset information as covered in this document for the infrastructure. Once the two chapters have been added to the document, the Authority will have a comprehensive 25-year outlook of the needs for all of the Authority s major asset classes. The updated version of the report, including responses to all member agency comments, is anticipated to be presented to the board in the Fall. Staff will continue advancing recommendations of the APTA Peer Review Panel, including updating track and signal maintenance manuals, shift towards a program-focused approach to project delivery and pursue consolidation of contracts with the development of procurement documents for a combined track, structures, signal and systems maintenance contract. Budget Impact There is no budgetary impact as a result of this report. Prepared by: Aaron Azevedo, Principal Engineer, Track and Structures Rehabilitation Justin Fornelli, Director, Engineering and Construction Darrell Maxey, Deputy Chief Operations Officer (PTC and Engineering) 66

76 Metrolink s Rehabilitation Assessment and American Public Transportation Association Peer Review Findings Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 7 Gary Lettengarver Chief Operating Officer 67

77 Exhibit A Ms. Patricia Bruno Chief of External Affairs Southern California Regional Rail Authority One Gateway Plaza, Floor 12 Los Angeles, CA December 6, 2017 Dear Ms. Bruno: At the invitation of Art Leahy, Metrolink Chief Executive Officer, the American Public Transportation Association (APTA) conducted a peer review into the maintenance and rehabilitation standards of the Southern California Regional Rail Authority (Metrolink). The scope of work included two questions related to best practices that Metrolink should adopt to improve various elements of the system such as programming, funding, delivery, and infrastructure etc., and best practices regarding third party review of maintenance planning. The review was conducted over a period of five days (August 22 to 26, 2016) and culminated on Friday August 26, 2016 with an exit conference debriefing to key Metrolink stake holders which included Art Leahy, Elisa Konove, Gary Lattengarver, Ronnie Campbell and several other senior members of staff. The review was conducted by a team of five industry experts from agencies that have some similarities to Metrolink. Attached is our final report dated September APTA and the peer review team is appreciative of the opportunity to be of service to Metrolink. Sincerely, Charles V. Joseph Charles V. Joseph Director Rail Programs 68

78 AMERICAN PUBLIC TRANSPORTATION ASSOCIATION PEER REVIEW FOR METROLINK Southern California Regional Rail Authority Los Angeles, California SEPTEMBER 2017 A Service of the American Public Transportation Association performed by the North American Transit Services Association a wholly owned subsidiary of APTA 69

79 REPORT OF THE NORTH AMERICAN TRANSIT SERVICES ASSOCIATION PEER REVIEW PANEL ON THE BUSINESS PRACTICES FOR MAINTENANCE AND REHABILITATION PROVIDED FOR METROLINK (SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY) PANEL MEMBERS: Michael Allegra John Elsberry Carl Holmes Richard Kindig Joseph Leader Charles Joseph Published by the North American Transit Services Association 1300 I Street, NW, Suite 1200 East Washington, DC Richard White, Acting President & CEO 70

80 TABLE OF CONTENTS INTRODUCTION... 1 Methodology... 2 Scope of Peer Review... 2 OBSERVATIONS AND RECOMMENDATIONS... 4 Opening Comments... 4 Question 1: Programming, Funding, Program Delivery and Contract Execution Programming Funding Program Delivery Contract Execution... 7 Other Observations a. Safety... 8 b. Transit Asset Management... 8 c. Public Outreach... 9 d. Rebranding Metrolink... 9 e. Governance Question 2: Industry Best Practices ADDITIONAL OBSERVATIONS CONCLUDING REMARKS Appendix A - Letter of Request Appendix B - Peer Review Agenda Appendix C List of documents made available Appendix D Maintenance standards from other agencies

81 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) INTRODUCTION In June 28, 2017, Arthur T. Leahy, Chief Executive Officer at the Metrolink/Southern California Regional Rail Authority (SCRRA) contacted the American Public Transportation Association (APTA) to request a peer review of the agency s maintenance and rehabilitation standards. APTA, through its wholly owned subsidiary the North American Transit Services Association (NATSA) and through discussions between NATSA and Metrolink staff, determined the review would be conducted August 27 September 1, A panel of industry peers was assembled comprised of individuals with senior and executive industry leadership skills from within the public transit sector to provide advice, guidance, benchmarking and best practices. The onsite peer review panel consisted of the following individuals and the transit agencies from which they were selected: MICHAEL ALLEGRA Retired General Manager/CEO Utah Transit Authority Salt Lake City, Utah JOHN ELSBERRY Director of Maintenance-of-Way Metropolitan Atlanta Rapid Transit Authority Atlanta, GA CARL HOLMES Engineering Group Manager, Capital Programs Bay Area Rapid Transit Oakland, California RICHARD W. KINDIG Director of Maintenance-of-Way Tri-County Metropolitan Transportation District of Oregon Portland, OR JOSEPH LEADER Chief Operating Officer Washington Metropolitan Area Transit Authority Washington, DC CHARLES V. JOSEPH Director, Rail Programs and Peer Review Facilitator American Public Transportation Association Washington, DC Page 1 of 23 72

82 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) METHODOLOGY The APTA Peer Review process is well established as a valuable resource to the public transit industry. Highly experienced and respected professionals with years in the transportation business voluntarily provided their time and support to address the scope of work to help the transit system and the industry. The panel conducted this review through a review of documentation, field observations and a series of briefings, listening sessions and interviews with Metrolink staff from all levels within the organization. The peer review concludes with a caucus among the peer review team to draw out the opinions of the team members and define a consensus summation of observations taken and their professional judgment as to where areas of improvement could be attained. This information is then presented to the requesting property in an exit conference and followed by a report, if so desired by the requesting property. There are no expectations expressed or implied that the requesting property take any action to satisfy the opinions of the peer review team or to engage any members of the team in any follow up activities as the requesting property may want to undertake as a result of the review. The information provided by the peer review team is consensus based and transferred to the requesting property as a Pro Bono work product which the transit property holds all rights to under the terms of the peer review agreement. SCOPE OF THE REVIEW In a letter from the CEO, Metrolink requested APTA to conduct a peer review into their business practices regarding maintenance and rehabilitation and assess whether they are adequate and effectively implemented and are within industry best practices. Specifically, the scope of the work is divided into two questions: Question 1: What industry best practice techniques should be adopted to improve its Programming, funding, delivery and execution of track, bridges, signals, communication, train control systems, and rehabilitation/state of good repair procedures and projects? Question 2: What are industry best practices regarding third party review of maintenance planning and how could proposed third party or other similar external reviews be undertaken in a way that expedites and strengthens Metrolink s decision making process and overall maintenance standards? Question 1: - Programming 1) Programming 2) Funding 3) Program Delivery 4) Contract Execution 5) Other Observations a) Safety b) Transit Asset Management Page 2 of 23 73

83 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) c) Public Outreach d) Rebranding e) Governance Question 2: - Industry Best practices from other transit agencies 1) Massachusetts Bay Area Transit Authority (MBTA) 2) Utah Authority (UTA) 3) Metropolitan Area Transit Authority (MARTA) 4) Tri County Metropolitan District of Oregon (TriMet) 5) Southeastern Pennsylvania Transportation Authority (SEPTA) 6) Bay Area Rapid Transit (BART) 7) AMTRAK 8) METRA Page 3 of 23 74

84 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) OPENING COMMENTS OBSERVATIONS AND RECOMMENDATIONS Metrolink is an integral partner in the Southern California transportation community and possesses a strong safety culture among its organization and staff. The panel commends Metrolink for implementing the Positive Train Control (PTC) program ahead of most industry partners. A Transit Asset Management (TAM) Plan has been developed in accordance with FTA requirements. An excellent 10-year Strategic Plan ( ) has also been developed. Metrolink has procured Tier 4 locomotives that provide clean power and eliminates 70% current emissions from the older locomotives. Metrolink s fare box recovery is higher than all the agencies in Southern California and Metrolink has introduced a mobile app for purchasing metro tickets. At the panelists initiative, the panel s focus and theme for this review was Is Metrolink positioned for success? The panelists made observations and recommendations on their experience and judgment related to the two questions. Question 1: The five main topic areas addresses questions regarding programming, funding, program delivery, contract execution. As a subtopic, we have also included topics such as safety, transit asset management, public outreach, rebranding and governance which responds to the topic of what are the best practice techniques to improve programming, funding, delivery and execution of track, bridges, signals, communication, train control systems, and rehabilitation/state of good repair procedures and projects. In some cases, observations and recommendations are overlapping and were considered in the context of responding to the question above. Additionally, although some of the comments are broad, the panelists felt like they were specifically applicable to the specifics of track, bridges, signals, etc. Question 2: This topic area responds to the question of best practices regarding third party reviews of maintenance planning etc. etc. APTA has compiled both the peer agency maintenance standards as well as other Commuter Rail systems standards. These documents are listed in Appendix D of this document. The American Railway Engineering and Maintenance-of- Way Association (AREMA) Standards is used by all freight railroads and is considered the primary source for most commuter rail systems. QUESTION 1: PROGRAMMING, FUNDING, PROGRAM DELIVERY & CONTRACT EXECUTION 1. PROGRAMMING OBSERVATIONS The panel felt the Agency appears more project-focused than program-focused. The Strategic Plan is comprehensive outlining a back to basics approach in mission, vision and Page 4 of 23 75

85 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) values and the Metrolink Infrastructure Rehabilitation Plan (MIRP) is detailed and appears to address State of Good Repair (SOGR) if funded and executed. RECOMMENDATIONS a) Continue to update and obtain buy-in for Strategic Plan. b) Provide updated 5-10year Capital Improvement Plan (CIP) to Board and Member Agencies. c) Use lessons learned from PTC project to ensure focus and priority on infrastructure and other program deliveries. d) Adopt IRP as part of the overall CIP. e) Move from a project approach toward program management. f) Ensure TAM, IRP and the Strategic Plans are in-sync and provides consistent backlog costs. 2. FUNDING OBSERVATIONS Integral to a well-managed transit system is a stable and consistent funding of its operation and maintenance. The public and the riders expect a safe, clean, comfortable and reliable service. The panelists observed that the Metrolink s budgeting process made it difficult to focus on running the business. The multiple layers of funding authority lengthened the time for getting budgetary approval. In one instance, when a funding county was unable to contribute its share, Metrolink had to (temporarily) reduce that county s service. Although this provided financial parity, the panelists felt that the integrity of the regional service was compromised. The annual budgeting cycle was much longer that in our respective agencies. Metrolink has an infrastructure (for track/structures/signals, train control system for state of good repair/rehab) funding backlog of approx. $300M. This figure does not include rolling stock, TVMs, buildings. This is an essential component for State of good repair (SOGR). Deferred maintenance has proven to be more-costly in the long run. Most transit agencies in the US are significantly increasing their SOGR budgets. In addition to a consistent annual budget, uncertain funding from Member Agencies makes it difficult to budget for long term needs. Growth and expansion occurring in the Los Angeles region are inevitable. The Strategic Plan provides a good picture of Metrolinks future. Unfortunately, these long-term needs require significant time and budget to develop. A typical time line for a major capital investment is 5-10 years. The Panelists observed that within their own agencies, a commitment to funding an environmental or design process is commensurate with their agencies approval for fully funding that project. Additionally, the panelists observed that Metrolinks financial reporting to the Members Agencies was not always clear. The Panel reviewed the Fiscal Year Adopted Budget and compliments the agency for this effort. RECOMMENDATIONS a) Metrolink should pursue a long term, stable and reliable funding source. The panel felt strongly on this point. This applies to both operations resources as well as Page 5 of 23 76

86 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) maintenance and SOGR monies. As an example, member Agencies should provide Metrolink all Federal Formula funds. The panelists reviewed the Federal Formula allocation that was attributable to Metrolink and felt like this would be a good way to ensure some funding reliability. b) Implement a Two-Year Budget Cycle. A two-year budget was based on the current time and personnel resources it took to prepare and get approvals for the annual budget. c) Prepare and adopt a Ten-Year Financial Plan. Most agencies have a five to ten-year financial plan. In some cases, this long range financial plan superseded a lengthy annual budgeting process. d) Metrolink should solicit additional funds. Metrolink did a good job in soliciting outside funds for PTC and newer locomotives. Metrolink needs to continue to find stable and predictable funds for its $300 Million SOGR backlog. e) Consider Bonding or PPP for large capital items. It appears that Metrolink has some authority to bond or finance through Public Private Partnerships (PPP s). Further legal analysis on this topic is required. f) Need a budget commitment for multiple-year contracts, projects and other obligations. Typically, an agency s approval for funding environmental reports or design is concurrent with a commitment to provide the cash flow for the delivery and execution of the entire project. g) Monthly Financial Reports and Dashboards to the Board. The panelists highly recommend that Metrolink provide monthly financial statements and dashboards to its governing bodies and general public through its transparency tools. 3. PROGRAM DELIVERY OBSERVATIONS PTC is a success story, however the current funding process from the five Member Agencies inhibits, restricts, and delays program delivery. New Tier 4 locomotives have been delivered and 80 out of 270 grade crossings have been upgraded. RECOMMENDATIONS a) Continue emphasis on train control programs. This emphasis should encompass all train control systems both car-borne and wayside. Doing this will continue the momentum of PTC and maintain the current safety culture that is currently evident in the agency. It was witnessed by the group that PTC technology has been absorbed into the agency s safety fabric and is working well. Page 6 of 23 77

87 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) b) Develop and implement a comprehensive Capital Improvement Plan (CIP) which includes all program (locomotives, signals, tracks, infrastructures, etc.). This effort will take planning and analyzing by all divisions of the agency. We would recommend a minimum of five years and maximum of twenty years. Projections after five years are subject to cost impacts, scope changes and agency goals. The document should include cost, scope and impacts to the agency and public that the work will create. The work identified should include campaigns associated with technology advancements, major system repairs and infrastructure improvements that include added system capacity. c) Develop and present the comprehensive CIP to the five Member Agencies with a global view of the organization s funding requirements. When presenting to the Member Agencies the emphasis needs to be on getting concurrence on budgeting beyond one year. This would give the agency the ability to plan and schedule efficiently and reduce the risk of a start/stop behavior that comes with the unknown of confirmed financing of the efforts. The dialog should incorporate the ramifications of the lack of budget confirmation and consistency. 4. CONTRACT EXECUTION OBSERVATIONS The panel found that the verification of work completed was limited at best. There seems to be too many contracts regardless of size of the scope of work which creates an administrative burden and the current contracting method is limited to low-bid procurement. Current maintenance contracts are for systems and track and structures. RECOMMENDATIONS a) Develop comprehensive QA/QC processes for both Contractor and Metrolink forces. Like any largescale construction project, the maintenance efforts by the contracted contractors at Metrolink need to have checks and balances in place throughout all facets of the business. That oversight is in the form of a solid Quality Assurance/Quality Control program. The program touches administrative functions, document control, maintenance performance and activities. The program can be tailored to accommodate QA/QC processes in all aspects of the business. b) Consider use of Construction Management /General Contractor (CMGC) as a contracting method for rehabilitation contracts (in addition to its current use on capital contracts). Construction Management/General Contractor methods of contracting allow flexibility to have the contractor participate in key stakeholder meetings, submit preliminary costs estimates, provide plan/scope reviews prior to issuing for construction, provides owner participation in selection of key subcontracting efforts and overall confidence that scope and cost are accurate and within budget. Procurement of a CM/GC contractor is not lowbid and involves a two-step process with the issuance of a Request for Proposals (RFP) and then development of a short list of qualified contractors followed by interviews then Page 7 of 23 78

88 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) selection. Part of the scoring process should incorporate a value that rates the Fixed Fee portion of the contract. The Fixed Fee is essentially the profit the contractor will add to their Pre-Construction Services and work. c) Consolidate Track, Structures and Systems maintenance contracts for renewal. It is recommended that the upcoming procurement of the Track and Systems Maintenance contracts, which are currently managed separately, be combined for efficiencies and flexibility. The administrative needs of the contract should be streamlined and managed by one Project Manager. Work efficiencies allow combining activities in a team approach between Track and Systems. Work that was coordinated by the agency when Track and Systems contractors worked in the same proximity now becomes work organized and coordinated by the contractor. Combining the two maintenance contracts would be beneficial to the fiscal and work aspects of the maintenance activities. d) Review and combine smaller contracts as appropriate. A thorough review should be undertaken by the contract staff and project managers to look at similarities and efficiencies that can be identified in all contracts and an effort to consolidate is initiated. This will save in administration efforts and be fiscally responsible to the Agency. This review should include all contracts in place in all agency departments. The holistic review may find contracting efforts that are duplicated and products that are similar that are being purchased. OTHER OBSERVATIONS a) Safety OBSERVATIONS The panel witnessed a healthy safety culture during their field visits and could see that Metrolink is resolved to achieve the highest safety standards. RECOMMENDATIONS a) Continue to focus on safety in all aspects of their business. b) Start all meetings with a safety briefing. c) Promote field experience with administrative staff b) Transit Asset Management OBSERVATIONS While it should be noted that Metrolink is ahead of many organizations in the industry by having developed their Transit Asset Management (TAM) Plan, it should be updated. It appears that the original TAM was developed with emphasis on Federal compliance rather than actual usage and does not appear to have organizational buy-in. It was noted that there are different backlog numbers between TAM, Strategic Plan and IRP. Previous peer review recommended Metrolink staff to implement an Enterprise Asset Management (EAM) System along with an Enterprise Resource Planning (ERP) System. Page 8 of 23 79

89 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) This recommendation appears to have mixed support and is stalled. It was also noted that Metrolink has multiple asset management tools for reporting which are labor intensive and prone to error. RECOMMENDATIONS a) Update TAM based on latest federal regulations b) Implement an EAM and ERP for ease of asset management and to support SOGR. c) Develop organizational buy-in and synergy for unified asset management. c) Public Outreach OBSERVATIONS Metrolink is an integral part of Southern California regional transportation and will be an essential element when the city of Los Angeles hosts the Olympics in The Tier 4 locomotives leads the industry in clean transportation. While Metrolink provides transit to its riders, funding is dependent upon approval of Member Agencies. RECOMMENDATIONS a) Metrolink should consider showcasing their accomplishment in designing & installing: New PTC System New Dispatch Operational Control center (DOC) Produce and communicate future funding needs via public-facing summaries of CIP: List Infrastructure Rehabilitation projects for public viewing on website Coordinate Olympic planning with Metrolink planned activities. d) Rebranding Metrolink OBSERVATIONS Metrolink should be proud of their being the 1 st Commuter Rail system in the nation to have Positive Train Control (PTC). Metrolink has turned the corner and should consider rebranding itself for future growth and development. Additionally, as mentioned earlier, Metrolink s Tier 4 locomotives leads the industry in clean transportation. Metrolink has proven that when it has the right resources and adequate funding in its possession, the agency is able to focus on the task at hand. Being the first commuter rail system in the nation to implement PTC is no small feat. In fact, other agencies are still planning to design and implement their PTC systems. RECOMMENDATIONS a) Incorporate lessons learned that made PTC and Tier IV locomotives successful to the rehabilitate its infrastructure b) Report progress to its Member Agencies c) Incorporate success symbols like PTC and Clean Transportation into various mediums of communication like letterheads, website, and other public communications. d) Conduct regular partnering sessions (monthly or quarterly) with Member Agencies to help with funding challenges. Page 9 of 23 80

90 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) e) Set or reset the expectations regarding financial status so that Member Agencies can see Metrolink success. e) Governance OBSERVATIONS Governance is crucial to successful programming, funding and delivery of all Metrolink functions. It appeared that the Funding Counties to Metrolink were requiring a lot of in the weeds analysis. This seemed to be distracting management from the core mission of Metrolink. Metrolink Board s relationship with Member Agencies Board seems cumbersome and should be revisited. Although, the Joint Powers Authority (JPA) states that Member Agencies SHALL contribute to Metrolink, funding levels appear to be variable and highly discretionary especially related to SOGR projects. Typically, these SOGR projects are management decisions. RECOMMENDATIONS a) The JPA should be enhanced to provide more clarity on expectations and responsibilities. The panel felt like an institutional review of the JPA was warranted. b) CEO authority over fiscal and management issues should be increased. All the panel agency CEO s had varying degrees of financial and management authority more than Metrolink s CEO. In light of the current governance structure best practices would give Metrolink CEO more authority and accountability. c) Board packets should be condensed to policy issues. The current Board packets are extremely large and very detailed. Best practices would reduce the size of the packet and make it consistent with the Board members authority and ability to provide policy direction. d) Consider an Annual Equity Analysis. Inherent in any multi-jurisdictional agency, every funding entity requires a good and equitable return on their investment. An Annual Equity analysis may help the funding agencies and reduce the time spent in the budgeting cycle and lead to a more stable funding base. e) A strong chain of command is imperative to an effective governance structure. Question 2 INDUSTRY BEST PRACTICES OBSERVATIONS In accordance with Metrolink s request for review of maintenance planning best practices, they asked the APTA Peer Review team to look at best practices across the industry. Page 10 of 23 81

91 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) The Metrolink model of governance and ownership of the railroad is a unique model in the US. As such, the APTA peer review team was able to show their own transit agency experience in terms of maintenance best practices. Although these are not directly comparable the Metrolink situation, the panel felt it would be helpful to show their agency s documents for Metrolink review. Our observation is that Metrolink has many of the same standards and practices that peer agencies practice. Additionally, APTA has also provided maintenance best practices from other transit agencies that operate commuter rail. The panel felt that these documents would assist Metrolink with specific examples of standards but was not necessarily a third party review of maintenance planning. Because of the unique nature of Metrolink s model, the panel has made some recommendations based on their own agency experience to assist Metrolink with the third party review issue. Although this may require some detailed modifications to Metrolink standards (as provided through other agency documents), that panel felt that the situation of Metrolink requires a unique approach. Additionally, through interviewing staff the review team learned that Metrolink s business model is developed around streamlining staff with operations of the railroad contracted out to include but not limited to train operators and all right of way maintenance and construction work. It is best to say that this business model is not a typical North America as most railroads and large rapid transit systems keep in house most of their operating functions. The review team believes Metrolink may be leading the industry in this school of thought. However, during our interviews with staff, the impression given is that it is the responsibility of the contractor for maintenance and construction. What the review team did not hear or perceive during the interviews and other conversations is that Metrolink as an organization owns the maintenance and construction of their system. The APTA Peer Review members are strong believers in taking ownership of the railroad as accountability is critical in making sure that the customers (riders) can travel to their destination safety and timely. Ownership of the railroad may also require that staff positions lost during recent attrition are replenished so that quality assurance can be increased to a level that is needed for proper operational and maintenance control. With regards to standards and procedures, Metrolink has a strong design criterion for new work. However, we did not find maintenance standards which include wear guidelines in all disciplines. There were various documents with references to assuring work is performed at a level to maintain FRA s Class 5 criteria but that s all. This lack of documented maintenance standards has resulted in Metrolink being over ruled by some of the five-member agencies involved in a unique JPA (Joints Powers Agreement) that was created in The over rule was related to an occasion when Metrolink requested funding to be allocated for rail change-out. After inspecting the location, a member agency informed Metrolink the rail did not require to be changed. A clear standard would have prevented this outcome. Standardized documents Metrolink has good design and specification documents. These documents are given to the contractors when they are performing maintenance planning. The panel believes that Page 11 of 23 82

92 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) maintenance standards (by discipline) by the two freight railroads (BNSF & UPRR) as well as a geographically similar commuter rail agency like Caltrain should be used as reference. These peer agency maintenance standards subsume the AREMA criteria and will allow Metrolink to refine their maintenance standards as well as their design criteria as necessary. As Metrolink staff knows, examples of AREMA Trackwork standards are found in Volume 1 as follows: Chapter 1 Roadway and ballast Chapter 4 Rail Chapter 5 Track Chapter 30 Ties Additionally, standards related to structures such as bridges, etc. are covered in other AREMA documents. APTA has included documents obtained from other commuter rail agencies for use by Metrolink. These agencies include Amtrak, BART, MBTA, MARTA, SEPTA, TriMet, and UTA. RECOMMENDATIONS a) Metrolink needs to own maintenance planning. Metrolink needs to obtain maintenance standards from other agencies and use them as a basis for developing and/or enhancing their own. Metrolink needs to review their auditing process and procedures especially around contract work. We found that staff to be more accepting of what the contractor submits and not thoroughly reviewing and auditing what the contractor said they completed. b) The panel supports Metrolink follow the BNSF, UPRR, and Caltrain standards as applicable to specific requirements of Metrolink. c) Metrolink needs to review their auditing process and procedures especially around contract work. We found staff to be more accepting of what the contractor submits and not thoroughly reviewing and auditing what the contractor said they completed. d) In response to the issue of third party review, the panel strongly recommends that Metrolink takes a programmatic approach to this issue. The role of Metrolink is to own and maintain their facilities according to adopted standards and an approved approach as recommended below. The three components to a programmatic approach is to obtain policy approval from the Metrolink Board for: 1. A 5 to 10-year financial plan and capital budget; 2. The TAM plan that is coordinated with the long-range financial plan, the CIP, and the Metrolink Rehabilitation Plan (MRP). Page 12 of 23 83

93 3. A Maintenance Rehabilitation Plan (MRP; NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) It is the panels opinion that policy approval of such a programmatic approach will greatly assist in getting the financial resources to accomplish the mission. With regards to the question of efficiency and comparability with other agencies, the panel recommends looking to the benchmarking program offered by the Imperial College of London, UK. Many transit agencies in the US have joined this group. Page 13 of 23 84

94 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) ADDITIONAL OBSERVATIONS OBSTACLES FOR METROLINK TO SUCCEED a) We are not in charge of our own destiny b) Concerns over who is final authority c) Need more in-depth audit of contractor work d) Procedures and design criteria exist however maintenance standards need to be identified. CONDITIONS FOR METROLINK TO SUCCEED a) Foster stakeholder relationships through facilitated partnership meetings b) (i) Internal audit is currently conducting several contract audits (as scheduled in the Annual Audit Plan) and will continue to perform those contract audits in the future. Internal Audit has made recommendations to improve the process related to contract management and contract administration. (ii) Increase internal audits on existing contracts and have an annual third-party audit performed on maintenance and construction programs. c) Develop independent maintenance standards d) APTA agencies can help by providing samples e) Metrolink has a strong executive leadership and dedicated staff f) Good knowledge of business model g) Short and long-range programming During the week long review the peer review team deliberated on whether or not Metrolink was set up to succeed. During our many interviews with staff the common theme that appeared was We are not in charge of our own destiny. Their future is constrained from a financial standpoint, always required to ask for funding from the coffers of four other agencies since they have no dedicated funding sources of their own. However, we believe Metrolink is turning the corner in the last two years under strong executive leadership and dedicated staff who are putting into place procedures and processes that will direct their future. One good example is the strategic planning underway identifying in an IRP the future capital needs for both Track and Infrastructure. We commend Metrolink for developing this 25-year look ahead which will now help them build a financial plan that the other agencies will not only be reviewed by but must adopt and funded if Metrolink is going to continue towards a state of good repair. Page 14 of 23 85

95 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) CONCLUDING REMARKS The observations and recommendations are intended to assist Metrolink in strengthening the safety and effectiveness of the organization s on-going rail maintenance, operations, programs and strategies. The panel sincerely appreciates the support and assistance extended throughout the entire peer review process by all personnel. The panel stands available to assist with any clarification or subsequent support that may be needed. Page 15 of 23 86

96 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Appendix A Metrolink request letter Page 16 of 23 87

97 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Page 17 of 23 88

98 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Appendix B NATSA Peer Review for Metrolink Southern California Regional Rail Authority (SCRRA) One Gateway Plaza, Twelfth Floor, Los Angeles, CA August 27 September 1, 2017 Schedule Sunday August 27, 2017 Various times Peer review team to arrive in Los Angeles, CA Members to make their own ground transportation arrangements to the hotel. 6:00 pm Peer review team members meet in hotel lobby for a briefing by APTA 7:00 pm Group dinner Location TBD (Salima Mulji & Kyle Morales will arrange venue) Monday August 28, :00 am Team briefing in the hotel. 7:15 am Breakfast in hotel restaurant. 8:10 am Patricia Bruno and Kyle Morales will meet us at the hotel with transit passes and escort us to SCRRA HQ 8:30 am Check in at SCRRA HQ at One Gateway Plaza, Los Angeles, CA Meeting will be held in the Vanderbilt Conference Room, 12 th Floor Arrangements for security clearance Kari Holman and Salima Mulji Arrangements for coffee and morning snacks Kari Holman, Salima Mulji, and Kyle Morales 9:00 am Welcome and introductions by Metrolink senior staff. Presenters: Art Leahy, Darrel Maxey, Ronnie Campbell 11:30 pm Panel to verify all required documents are available (either hard copy of electronically). See page 5 a list of documents. (Metrolink will make available one hard copy of each document in the room. Kyle Morales will arrange to upload requested documents Kyle Morales will arrange to print one set of documents Kyle Morales will take lunch orders for Traxx 12:00 noon Tour of LA Union Station led by Ken Pratt of Metro. Meet in Gateway lobby 12:30 pm Metrolink will provide lunch at Traxx 1:30 pm Tour of East Bank Tour leaders: Darrell Maxey, Wayne Mauthe, and Aaron Azevedo Tour organizers: Darrell Maxey and Wayne Mauthe 5:30 pm Return to hotel and end of Day 1 7:30 pm Dinner (Location TBD) Peer review members and SCRRA staff Metrolink will select a restaurant Salima Mulji and Kyle Morales Page 18 of 23 89

99 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Tuesday August 29, :45 am Proceed to Union Station to catch the 7:25 am Metrolink train to Pomona. 7:15 am Meet Metrolink staff by the fish tank at the top of the escalators from the Red Line. Metrolink will provide breakfast on the train. 7:25 am Take SB Metrolink train to Pomona North Station Art Leahy, Roderick Diaz and ELT staff Metrolink staff will reserve a car Darrell Maxey Metrolink staff will arrange for box breakfast on train Salima Mulji and Kyle Morales 8:35 am Arrive at Pomona North at 8:35 am. Proceed to O&M Facility (Approx. one block from station) 9:00 am Metrolink staff to be interviewed: Track Maintenance Planning Program Manager Fixed Structures Maintenance Planning Manager Systems Maintenance Planning Manager Darrell Maxey Aaron Azevedo Wayne Mauthe Darrell Maxey Aaron Azevedo Darrell Maxey Jerone Hurst Jaime Romo MaxeyD@scrra.net AzevedoA@scrra.net MautheW@scrra.net MaxeyD@scrra.net AzevedoA@scrra.net MaxeyD@scrra.net HurstJ@scrra.net RomoJ@scrra.net (909) / (213) (909) / (213) (909) / (213) (909) / (213) (909) / (213) (909) / (213) (909) / (213) (909) / (213) CFO for 10-year Ronnie Campbell CampbellR@scrra.net (213) / (213) forecast of expenses TAM Manager Roderick Diaz DiazR@scrra.net (213) / (213) Head of Safety Edward Pederson PedersonE@scrra.net (909) / (213) :30 noon Lunch. Arranged by: Laura Lamarque 1:30 pm Tour of the Metrolink Dispatching Center (Approx. one hour) Arranged by: Darrell Maxey 4:35 pm Walk back to Pomona North Station 4:50 pm Metrolink train back to Union Station which arrives at 5:53 pm 6:30 pm Return to hotel and end of Day 2 7:00 pm Dinner - Location TBD by Metrolink by: Salima Mulji and Kyle Morales Peer review members (Metrolink staff may join us) Strategize work plan for Wednesday Wednesday August 30, :00 am Team briefing in the hotel. 7:15 am Breakfast at hotel 8:30 am Check in at SCRRA HQ. 9:00 am Peer review team deliberation If available, there may is a possibility for further discussion with Art Leahy, Elissa Konove and Gary Lettengarver 12:00 pm Lunch - Metrolink will provide by: Salima Mulji and Kyle Morales 1:00 pm Team review team deliberation 5:30 pm Back to the hotel and end of Day 3 6:30 pm Dinner - Location TBD by Metrolink by: Salima Mulji and Kyle Morales Peer review members (Metrolink staff may join us) Strategize work plan for Wednesday Page 19 of 23 90

100 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Thursday August 31, :00 am Team briefing in the hotel. 7:15 am Breakfast at hotel 8:30 am Check in at SCRRA HQ. 9:00 am Peer review team deliberation 12:00 noon Lunch at meeting location (Metrolink will provide) 12:30 pm Continued peer review team deliberation 5:00 pm Back to the hotel and end of Day 4 7:00 pm Dinner - Location TBD by Metrolink by: Salima Mulji and Kyle Morales Peer review members (Metrolink staff may join us) Strategize work plan for Wednesday Friday September 1, :00 am Team briefing in the hotel. 7:15 am Breakfast at hotel 8:00 am Check in at SCRRA HQ. 9:00 am Peer review team prepare for exit conference presentation 10:30 am Exit conference briefing and Q&A. METROLINK management to determine which staff members should attend. NO MEDIA FOLKS Page 20 of 23 91

101 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) APPENDIX C List of documents made available to the peer review team 1. Organization chart 2. Existing and proposed O&M Contracts: a) Communication and Signal Systems Installation Services Contract b) Track and Tie Rehabilitation Contract FINAL c) Track Rehabilitation Services Contract EXECUTED d) Track Structures and Right-of-Way Maintenance Services Contract e) PTC, CAD, CIS Software and Hardware Maintenance and Support Contract f) Amendment No. 1 to Software License Contract g) Statement of Work for Hardware and Software Services Fully Executed h) Tracks and Tie Rehabilitation Services Contract Fully Executed i) Track and Tie Rehabilitation Contract Fully Executed 2 j) Video Surveillance Systems at Metrolink Stations and Facilities Contract Final Fully Executed k) Communications and Signals Equipment Installation Service Contract l) Communications and Signals Maintenance Services Contract year forecast for 3 rd party funding and fare box revenue year forecast for maintenance expenses including work on state of good repair 5. 3 rd Party Maintenance Standards: a) SCRRA Standard Specifications 6. Program/Project Manual Plan a) Program/Project Control Management Manual b) Program Management Office- Project Initiation c) Program Management Office- Schedule Development and Control d) Program Management Office- Project Management Progress Sheets 7. Master Project Schedule for Maintenance Planning 8. Project Management Plan a) SCCRA Engineers Manual b) SCRRA Project Management Manual c) High Priority SOGR Project Management Plan 9. Maintenance Plan a) Track Maintenance & Engineering Instructions 10. Contract Change Procedure Plan a) Configuration Management Plan 11. Contract Change Procedure a) SCRRA Project Management Manual 12. Financial Plan a) Metrolink 10-year Strategic Plan Design Criteria a) SCRRA Design Criteria Manual b) SCRRA Design Criteria Manual Appendices c) SCRRA Design Procedures Manual 14. Asset Management Plan Page 21 of 23 92

102 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) a) Transit Asset Management Plan 15. Transit Asset Management Systems (TAMS) a) Transit Asset Management Plan 16. Documents that describe performance requirements of Metrolink a) Key Performance Indicators Quarterly Performance Report- Jan to March Current agreements with the freight railroad companies that either infringes on Metrolink s ability to maintain, or operate, or fulfill its obligations a) Shared Use Agreements b) Rules and Requirements for Construction on SCRRA Right-of-Way c) Right-of-Way Encroachments Process 18. Process for Implementation State of Good Repair 19. MAP21 Implementation Plan a) Transit Asset Management Plan Page 22 of 23 93

103 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Appendix D Maintenance standards from other agencies The following documents have been provided by various transit agencies to assist Metrolink. It is recommended that Metrolink staff also establish relationships with other properties and foster a peer-topeer exchange of ideas and build those lines of communications for easy access of information sharing. Due the size of these documents, a ftp site will be created and documents uploaded in parallel with issuing the final report. Metrolink will be notified separately how to access these documents Amtrak General Information about Engineering Practices Structures EP3000 Bridge Management Program EP3002 Facilities Maintenance Management Program (1) Facilities Maintenance Management Program (2) Facilities Maintenance Management Program (3) Signal Testing AMT F-1 Signaling Instructions AMT23 Catenary Inspection Manual Cat Electrical Operating Instructions AMT-2-Nov+1505 Substations Inspection Manual Subst Bay Area Rapid Transit (BART) Book 130 Structures Inspection Manual Book 425 Track Safety and Maintenance Standards Sample Previous Maintenance Frequency by Asset Class Massachusetts Bay Transit Authority (MBTA) Commuter Rail Book of Standard Plans and Roadway March 8, 2008 Rev 1 Commuter Rail Book of Standard Plans and Roadway March 8, 2008 Rev 2 Commuter Rail Design Standards Manual CRail-Matl- Spec Railroad Operations Specifications Guidelines August 2014 CRail -Design- Bridges Metropolitan Area Regional Transit Authority Rev 9-A-1 MARTA Track Inspection Safety Standards pub. Track Safety Standards Automatic Train Control Maintenance Manual METRA They are in the process of updating their documents and will not be able to release them before spring of Page 23 of 23 94

104 NATSA Peer Review Report Business Practices for Maintenance and Rehabilitation/Metrolink (SCRRA) Southeastern Pennsylvania Transportation Authority (SEPTA) Track Department Manual SWW-100 (RRD) Tri-County Metropolitan Transportation District of Oregon TriMet Signals Preventive Maintenance Procedures and Schedule, Switch HW 60 Monthly (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch HW 60 Monthly (Draft 1) TriMet Signals Preventive Maintenance Procedures and Schedule, Interlocking Monthly (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch M-23A - 2-Year (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch M-23A Monthly (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch M-23A Quarterly (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch T-20 - Monthly (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch T-20-2-Year (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch T-20 Quarterly (Draft) TriMet Signals Preventive Maintenance Procedures and Schedule, Switch YM Year (Draft) Chapter 2 Track Maintenance Standards Chapter 4 Signal Maintenance Standards Utah Transit Authority (UTA) UTA Rail Maintenance Standards - Revision Caltrain (PCJPB) Metrolink is in possession of these Maintenance Standards BNSF and Union Pacific Railroads Metrolink is in possession of these western railroad Maintenance Standards Page 24 of 23 95

105 Exhibit B APTA Recommendations SCRRA Responses/Comments QUESTION 1. INDUSTRY BEST PRACTICES FOR MAINTENANCE AND REHABILITATION/SOGR PROGRAMMING, FUNDING AND DELIVERY 1. PROGRAMMING a) Continue to update and obtain buy in for Strategic Plan. Agreed. Staff will continue to keep the Strategic Plan, which was approved by the Board in 2016, current in terms of content, as well as on going input and buy in from the SCRRA Board, member agencies, and other stakeholders in order to guide the Authority s path forward. b) Provide updated five to ten year Capital Improvement Plan (CIP) to Board and Member Agencies. c) Use lessons learned from PTC project to ensure focus and priority on infrastructure and other program deliveries. d) Adopt the Metrolink Infrastructure Rehabilitation Plan (MIRP) as part of the overall CIP. Agreed. Staff will continue to update the Capital Improvement Plan (CIP) incorporating the Metrolink Rehabilitation/State of Good Repair plans and present it to the Board and Member Agencies to ensure concurrence with Metrolink s capital and funding needs. The CIP was previously presented to the Board in Staff will utilize lessons learned from the successful PTC program to achieve similar success in the delivery and agency focus on other high priority infrastructure programs. Agreed. Staff will include the rehabilitation needs over time, which are identified for 25 years out in the MRP (previously MIRP), as programs in the Capital Improvement Program (CIP) to secure multi year funding commitments to address the deferred maintenance backlog and on going rehabilitation needs. Page 1 96

106 Exhibit B e) Move from a project approach toward program management. f) Ensure TAM, MRP and the Strategic Plans are in sync and provides consistent backlog costs. Agreed. Staff has undertaken a number of initiatives to improve project delivery, which includes a shift from smaller scale projects and project management to broader and larger program and program management in order to improve efficiency and take advantage of economies of scale. Staff will continue to make the case to member agencies, which often set the requirements for finite level management, tracking and reporting, that efficiencies in project delivery can be achieved through consolidation of projects into larger and broader programs. Agreed. Different methodologies for estimating costs have been utilized as part of the development of new tools such as the MRP. The MRP utilized a much more detailed approach than the TAM and Strategic Plans. Staff shall coordinate and align the different planning documents. 2. FUNDING a) Metrolink should pursue a long term, stable and reliable funding source. The panel felt strongly on this point. This applies to both operations resources as well as maintenance and SoGR monies. As an example, member Agencies should provide Metrolink all Federal Formula funds. The panelists reviewed the Federal Formula allocation that was attributable to Metrolink and felt like this would be a good way to ensure some funding reliability. b) Implement a Two Year Budget Cycle. A two year budget was based on the current time and personnel resources it took to prepare and get approvals for the annual budget. Agreed but must be coordinated with Member Agencies. Staff will work with member agencies to explore sources for long term, stable and reliable funding, including the full allocation of rehabilitation/state of good repair Federal Formula funds. Agree. A two year budget cycle will improve the efficiency of SCRRA by consolidating the recurring annual request and approval process to alternating years. Page 2 97

107 Exhibit B c) Prepare and adopt a Ten Year Financial Plan. Most agencies have a five to ten year financial plan. In some cases, this long range financial plan superseded a lengthy annual budgeting process. In conjunction with the planning and estimating processes such as the MRP and CIP, staff will prepare a ten year financial plan and seek Board adoption of this plan. d) Metrolink should solicit additional funds. Metrolink did a good job in soliciting outside funds for PTC and newer locomotives. Metrolink needs to continue to find stable and predictable funds for its $300+ Million SOGR backlog. Staff will continue to aggressively pursue funding opportunities as they come available. e) Consider Bonding or PPP for large capital items. It appears that Metrolink has some authority to bond or finance through Public Private Partnerships (PPP s). Further legal analysis on this topic is required Following the attainment of a stable, multi year funding commitment, staff will work with member agencies to explore the option of bonding, low interest FRA loans or PPP. These can be appropriate tools to finance large programs when long term funding streams to pay back the loans are available. f) Need a budget commitment for multiple year contracts, Pursuant to the attainment of multi year funding, staff will establish budget projects and other obligations. commitments for multi year contracts, projects and other obligations. Typically, an agency s approval for funding environmental reports or design is concurrent with a commitment to provide the cash flow for the delivery and execution of the entire project. g) Monthly Financial Reports and Dashboards to the Board. The panelists highly recommend that Metrolink provide monthly financial statements and dashboards to its governing bodies and general public through its transparency tools. Staff has developed new reporting dashboards and began presenting them to the Board on a consistent quarterly cycle. The dashboard reports complement existing financial reporting tools that are presented to the Board. Page 3 98

108 Exhibit B 3. PROGRAM DELIVERY a) Continue emphasis on train control programs. This emphasis should encompass all train control systems both car borne and wayside. Doing this will continue the momentum of PTC and maintain the current safety culture that is currently evident in the agency. It was witnessed by the group that PTC technology has been absorbed into the agency s safety fabric and is working well. b) Develop and implement a comprehensive Capital Improvement Plan (CIP) which includes all program (locomotives, signals, tracks, infrastructures, etc.). This effort will take planning and analyzing by all divisions of the agency. We would recommend a minimum of five years and maximum of twenty years. Projections after five years are subject to cost impacts, scope changes and agency goals. The document should include cost, scope and impacts to the agency and public that the work will create. The work identified should include campaigns associated with technology advancements, major system repairs and infrastructure improvements that include added system capacity. c) Develop and present the comprehensive CIP to the five Member Agencies with a global view of the organization s funding requirements. When presenting to the Member Agencies the emphasis needs to be on getting concurrence on budgeting beyond one year. This would give the agency Agreed. Metrolink will continue its emphasis and leadership role in the advancement of train control technology. Metrolink has established a highly capable and mature PTC organization and infrastructure investments which it will continue to leverage for on going upgrades and advancements in safety, information technology, efficiency and potentially other areas such as capacity. As noted above, staff will expand the CIP to include track, signal and infrastructure rehab needs identified in the MRP, as well as all other divisions of the agency. The MRP is being expanded to include all of Metrolink s long term rehabilitation needs that were not previously included, namely rolling stock (locomotives and passenger cars), building facilities and yards, TVM s, etc. Agreed, the comprehensive CIP will be presented to the Member Agencies in an effort to clearly define its funding needs and secure multi year funding commitments. Page 4 99

109 Exhibit B the ability to plan and schedule efficiently and reduce the risk of a start/stop behavior that comes with the unknown of confirmed financing of the efforts. The dialog should incorporate the ramifications of the lack of budget confirmation and consistency. 4. CONTRACT EXECUTION a) Develop comprehensive QA/QC processes for both Contractor and Metrolink forces. Like any largescale construction project, the maintenance efforts by the contracted contractors at Metrolink need to have checks and balances in place throughout all facets of the business. That oversight is in the form of a solid Quality Assurance/Quality Control program. The program touches administrative functions, document control, maintenance performance and activities. The program can be tailored to accommodate QA/QC processes in all aspects of the business. b) Consider use of Construction Management /General Contractor (CMGC) as a contracting method for rehabilitation contracts (in addition to its current use on capital contracts). Construction Management/General Contractor methods of contracting allow flexibility to have the contractor participate in key stakeholder meetings, submit preliminary costs estimates, provide plan/scope reviews prior to issuing for construction, provides owner participation in selection of key subcontracting efforts and overall confidence that scope and cost are Agreed. Metrolink will expand its policies and procedures to ensure more effective oversight and Quality Control/Quality Assurance contracted work across all disciplines. Projects and contracts will consistently undergo more frequent and in depth internal and external audits performed by subject matter experts to ensure compliance with these processes and industry best practices. Metrolink will explore alternate maintenance and rehabilitation contracting methods including CMGC, Design/Bid/Build, Design/Build, Job Order Contracts, Firm Fixed Price and Unit Price, Fully Burdened Labor Rate, Competitive Negotiated Procurements or hybrids of the above to the extent these are allowable under State and Federal Procurement regulations. Bundling of smaller contracts into larger contracts will be seriously investigated and then implemented. Metrolink anticipates soliciting proposals for a combined contract for maintenance and rehabilitation of the track, structures signal and train control systems and broaden this solicitation to include materials procurement as well as providing maintenance support vehicle and specialized maintenance equipment. Page 5 100

110 Exhibit B accurate and within budget. Procurement of a CM/GC contractor is not low bid and involves a two step process with the issuance of a Request for Proposals (RFP) and then development of a short list of qualified contractors followed by interviews then selection. Part of the scoring process should incorporate a value that rates the Fixed Fee portion of the contract. The Fixed Fee is essentially the profit the contractor will add to their Pre Construction Services and work. c) Consolidate Track, Structures and Systems maintenance contracts for renewal. It is recommended that the upcoming procurement of the Track and Systems Maintenance contracts, which are currently managed separately, be combined for efficiencies and flexibility. The administrative needs of the contract should be streamlined and managed by one Project Manager. Work efficiencies allow combining activities in a team approach between Track and Systems. Work that was coordinated by the agency when Track and Systems contractors worked in the same proximity now becomes work organized and coordinated by the contractor. Combining the two maintenance contracts would be beneficial to the fiscal and work aspects of the maintenance activities. d) Review and combine smaller contracts as appropriate. A thorough review should be undertaken by the contract staff and project managers to look at similarities and efficiencies that can be identified in all contracts and an effort to consolidate is initiated. This will save in Agreed. Staff is moving forward in the development of an RFP for a combined Track, Structures, Signal and Train Control Systems Maintenance contract plus rehabilitation and materials procurement. This contract would allow for efficiencies in management, contract administration, resource allocation and other efficiencies. Agreed. Staff will look for opportunities to combine numerous smaller and piecemeal contracts into fewer broader order to gain efficiencies and economies of scale. This is limited to the extent that funding partners require separate contract authorizations for the purpose of isolating scopes and costs. Page 6 101

111 Exhibit B administration efforts and be fiscally responsible to the Agency. This review should include all contracts in place in all agency departments. The holistic review may find contracting efforts that are duplicated and products that are similar that are being purchased. 5a. SAFETY a) Continue to focus on safety in all aspects of their Agreed. Safety is core to Metrolink s mission and remains at the top of business. Metrolink s values as stated and in practice. b) Start all meetings with a safety briefing. Agreed. The emphasis on safety has been disseminated throughout staff along with the expectation that all meetings start with a safety briefing. c) Promote field experience with administrative staff Agreed. Staff is encouraged to maximize time in the field before during and after maintenance and rehabilitation work is occurring to the greatest extent possible. 5b. TRANSIT ASSET MANAGEMENT a) Update TAM based on latest federal regulations Metrolink s TAM was adopted in December 2016, in advance of, and in compliance with, the latest federal regulations, which require agencies to adopt a TAM by October Metrolink will update the TAM on a regular basis in accordance with the regulation, including potentially updating the document prior to the final federal submittal date of Oct 2018 to increase consistency with data developed subsequently for the IRP. b) Implement an EAM and ERP for ease of asset management and to support SOGR. Staff will proceed with efforts to implement software systems and related tools to support enterprise asset management and resource planning that reflect industry best practices for track, signal, communication, and train control systems. Existing tools and initiatives for managing assets, inventories, assessing condition, age and performance across asset classes will be considered to be consolidated into a single or groups of related functional enterprise tools. Page 7 102

112 Exhibit B c) Develop organizational buy in and synergy for unified asset management. Agreed. A consolidated system for unified asset management will be implemented across disciplines and asset classes with strong support from executive leadership to ensure organizational buy in. 5c. PUBLIC OUTREACH a) Metrolink should consider showcasing their accomplishment in designing & installing: New PTC System New Dispatch Operational Control center (DOC) Produce and communicate future funding needs via public facing summaries of CIP: List Infrastructure Rehabilitation projects for public viewing on website Coordinate Olympic planning with Metrolink planned activities Metrolink will continue to showcase its accomplishments to funding partners and the related benefits to safety and service with its customers to build support for the large rehabilitation/state of good repair programs. Planning will be coordinated to complete the infrastructure and systems $300M + backlog in advance of key upcoming events such as the 2028 Olympics. 5d. REBRANDING METROLINK a) Incorporate lessons learned that made PTC and Tier IV locomotives successful to the rehabilitate its infrastructure Metrolink is proud of the success it has had in the deployment of PTC and procurement of modern low emission Tier IV locomotives, as evidenced by the prominent showcasing of these elements in outreach, marketing and lobbying materials. The focused efforts and resources applied to these programs will be applied on the Rehabilitation/SOGR program. b) Report progress to its Member Agencies Staff reports on progress regularly to Member Agency representatives and the Board, including detailed Monthly Project Status Reports describing the progress on the Rehabilitation High Priority SOGR program. c) Incorporate success symbols like PTC and Clean Transportation into various mediums of communication like letterheads, website, and other public Will take into consideration. Page 8 103

113 Exhibit B communications. d) Conduct regular partnering sessions (monthly or quarterly) with Member Agencies to help with funding challenges. e) Set or reset the expectations regarding financial status so that Member Agencies can see Metrolink success. Staff is in communication with Member Agencies on a frequent basis, including monthly meetings to report on status and needs. An annual Board Workshop retreat is also conducted to foster partnering between Board Members and Executive Leadership. Metrolink will seek clarification from the Board regarding expectations for financial status. 5e. GOVERNANCE a) The JPA should be enhanced to provide more clarity on expectations and responsibilities. The panel felt like an institutional review of the JPA was warranted. b) CEO authority over fiscal and management issues should be increased. All the panel agency CEO s had varying degrees of financial and management authority more than Metrolink s CEO. In light of the current governance structure best practices would give Metrolink CEO more authority and accountability. c) Board packets should be condensed to policy issues. The current Board packets are extremely large and very detailed. Best practices would reduce the size of the packet and make it consistent with the Board members authority and ability to provide policy direction. Staff is supportive of this recommendation to provide greater clarification on the expectations and responsibilities of JPA Member Agencies in order to ensure consistent direction, reduce conflicts, streamline decision making processes and support resource allocation/member agency investments that align with the needs of the system. This recommendation, along with all the others, will be shared with the Board for consideration. Staff agrees with the laudable goal of streamlining decision making and contract authorization processes by increasing the CEO s financial authority, enabling the CEO to respond more nimbly to conditions as they occur. It is acknowledged that it takes time to build the confidence and trust of Member Agencies to increase this authority. Staff suggests that contract authority should be reviewed periodically. This recommendation will be taken into advisement with appropriate representatives of our Board Page 9 104

114 Exhibit B d) Consider an Annual Equity Return on Investment Analysis. Inherent in any multi jurisdictional agency, every funding entity requires a good and equitable return on their investment. An Annual Equity analysis may help the funding agencies and reduce the time spent in the budgeting cycle and lead to a more stable funding base. e) A strong chain of command is imperative to an effective governance structure. This recommendation will be taken into advisement with appropriate representatives of our Board Acknowledged. Clearly defined roles, responsibilities, accountability and authority are required for success. QUESTION 2: INDUSTRY BEST PRACTICES FOR MAIN/REHAB REVIEWS a) Metrolink needs to own maintenance planning. Metrolink needs to obtain maintenance standards from other agencies and use them as a basis for developing and/or enhancing their own. Metrolink needs to review their auditing process and procedures especially around contract work. We found that staff to be more accepting of what the contractor submits and not thoroughly reviewing and auditing what the contractor said they completed. Aspects of Metrolink s operations and maintenance are contracted out, staff functions related to accountability and ownership are being strengthened through oversight as well as strong contract management and administration. Clarification of roles and responsibilities at various levels and between various parties is in process. Maintenance and rehabilitation planning and programing will be led by Metrolink staff and staff will be held accountable. Staff is re writing track and signal maintenance manuals and rehabilitation standards based on industry best practices utilizing freight (primarily UPRR and BNSF) as well as and APTA/Commuter Railroad (Caltrain, NCTD & others) maintenance and rehabilitation standards as reference. Metrolink periodically reviews its processes and procedures to ensure consistency with industry best practices particularly related to effective management of contracted work and best value. Projects and contracts Page

115 Exhibit B consistently undergo internal and external audits to ensure compliance with the Board approved policies and procedures. b) The panel supports Metrolink follow the BNSF, UPRR, and Caltrain standards as applicable to specific requirements of Metrolink. c) Metrolink needs to review their auditing process and procedures especially around contract work. We found staff to be more accepting of what the contractor submits and not thoroughly reviewing and auditing what the contractor said they completed. Agreed. Staff is re writing track and signal maintenance manuals based on industry best practices utilizing freight (UPRR, BNSF) and APTA/Commuter Railroad (Caltrain, NCTD & others) maintenance and rehabilitation standards as reference. Metrolink is strengthening its inspection, oversight and audit processes and periodically reviews its processes and procedures to ensure consistency with industry best practices particularly related to effective and efficient management of contracted work. Projects and contracts consistently undergo inspections, oversight reviews and internal and external audits to ensure compliance with the Board approved policies and procedures. Page

116 Exhibit B d) In response to the issue of third party review, the panel strongly recommends that Metrolink takes a programmatic approach to this issue. The role of Metrolink is to own and maintain their facilities according to adopted standards and an approved approach The three components to a programmatic approach is to obtain policy approval from the Metrolink Board for: 1. A 5 to 10 year financial plan and capital budget; 2. The TAM plan that is coordinated with the longrange financial plan, the CIP, and the Metrolink Rehabilitation Plan (MRP). 3. A Maintenance Rehabilitation Plan (MRP; It is the panels opinion that policy approval of such a programmatic approach will greatly assist in getting the financial resources to accomplish the mission. Metrolink has or will seek to obtain programmatic approvals from the Board for its maintenance and rehabilitation programs, including approval of a current CIP, TAM and MRP. 4. CONTRACT EXECUTION e) Develop comprehensive QA/QC processes for both Contractor and Metrolink forces. Like any largescale construction project, the maintenance efforts by the contracted contractors at Metrolink need to have checks and balances in place throughout all facets of the business. That oversight is in the form of a solid Quality Assurance/Quality Control program. The program touches administrative functions, document control, maintenance performance and activities. The program can be tailored to accommodate QA/QC processes in all aspects of the business. Agreed. Metrolink will expand its policies and procedures to ensure more effective oversight and Quality Control/Quality Assurance contracted work across all disciplines. Projects and contracts will consistently undergo more frequent and in depth internal and external audits performed by subject matter experts to ensure compliance with these processes and industry best practices. Page

117 Exhibit B f) Consider use of Construction Management /General Contractor (CMGC) as a contracting method for rehabilitation contracts (in addition to its current use on capital contracts). Construction Management/General Contractor methods of contracting allow flexibility to have the contractor participate in key stakeholder meetings, submit preliminary costs estimates, provide plan/scope reviews prior to issuing for construction, provides owner participation in selection of key subcontracting efforts and overall confidence that scope and cost are accurate and within budget. Procurement of a CM/GC contractor is not low bid and involves a two step process with the issuance of a Request for Proposals (RFP) and then development of a short list of qualified contractors followed by interviews then selection. Part of the scoring process should incorporate a value that rates the Fixed Fee portion of the contract. The Fixed Fee is essentially the profit the contractor will add to their Pre Construction Services and work. g) Consolidate Track, Structures and Systems maintenance contracts for renewal. It is recommended that the upcoming procurement of the Track and Systems Maintenance contracts, which are currently managed separately, be combined for efficiencies and flexibility. The administrative needs of the contract should be streamlined and managed by one Project Manager. Work efficiencies allow combining activities in a team approach between Track and Systems. Work that was coordinated by the agency when Track and Systems contractors worked in the Metrolink will explore alternate maintenance and rehabilitation contracting methods including CMGC, Design/Bid/Build, Design/Build, Job Order Contracts, Firm Fixed Price and Unit Price, Fully Burdened Labor Rate, Competitive Negotiated Procurements or hybrids of the above to the extent these are allowable under State and Federal Procurement regulations. Bundling of smaller contracts into larger contracts will be seriously investigated and then implemented. Metrolink anticipates soliciting proposals for a combined contract for maintenance and rehabilitation of the track, structures signal and train control systems and broaden this solicitation to include materials procurement as well as providing maintenance support vehicle and specialized maintenance equipment. Agreed. Staff is moving forward in the development of an RFP for a combined Track, Structures, Signal and Train Control Systems Maintenance contract plus rehabilitation and materials procurement. This contract would allow for efficiencies in management, contract administration, resource allocation and other efficiencies. Page

118 Exhibit B 5a. SAFETY same proximity now becomes work organized and coordinated by the contractor. Combining the two maintenance contracts would be beneficial to the fiscal and work aspects of the maintenance activities. h) Review and combine smaller contracts as appropriate. A thorough review should be undertaken by the contract staff and project managers to look at similarities and efficiencies that can be identified in all contracts and an effort to consolidate is initiated. This will save in administration efforts and be fiscally responsible to the Agency. This review should include all contracts in place in all agency departments. The holistic review may find contracting efforts that are duplicated and products that are similar that are being purchased. Agreed. Staff will look for opportunities to combine numerous smaller and piecemeal contracts into fewer broader order to gain efficiencies and economies of scale. This is limited to the extent that funding partners require separate contract authorizations for the purpose of isolating scopes and costs. d) Continue to focus on safety in all aspects of their Agreed. Safety is core to Metrolink s mission and remains at the top of business. Metrolink s values as stated and in practice. e) Start all meetings with a safety briefing. Agreed. The emphasis on safety has been disseminated throughout staff along with the expectation that all meetings start with a safety briefing. f) Promote field experience with administrative staff Agreed. Staff is encouraged to maximize time in the field before during and after maintenance and rehabilitation work is occurring to the greatest extent possible. 5b. TRANSIT ASSET MANAGEMENT d) Update TAM based on latest federal regulations Metrolink s TAM was adopted in December 2016, in advance of, and in compliance with, the latest federal regulations, which require agencies to adopt a TAM by October Metrolink will update the TAM on a regular basis in accordance with the regulation, including potentially updating the document prior to the final federal submittal date of Oct 2018 to increase consistency with data developed subsequently for the IRP. Page

119 Exhibit B e) Implement an EAM and ERP for ease of asset management and to support SOGR. f) Develop organizational buy in and synergy for unified asset management. Staff will proceed with efforts to implement software systems and related tools to support enterprise asset management and resource planning that reflect industry best practices for track, signal, communication, and train control systems. Existing tools and initiatives for managing assets, inventories, assessing condition, age and performance across asset classes will be considered to be consolidated into a single or groups of related functional enterprise tools. Agreed. A consolidated system for unified asset management will be implemented across disciplines and asset classes with strong support from executive leadership to ensure organizational buy in. 5c. PUBLIC OUTREACH b) Metrolink should consider showcasing their accomplishment in designing & installing: New PTC System New Dispatch Operational Control center (DOC) Produce and communicate future funding needs via public facing summaries of CIP: List Infrastructure Rehabilitation projects for public viewing on website Coordinate Olympic planning with Metrolink planned activities. Metrolink will continue to showcase its accomplishments to funding partners and the related benefits to safety and service with its customers to build support for the large rehabilitation/state of good repair programs. Planning will be coordinated to complete the infrastructure and systems $300M + backlog in advance of key upcoming events such as the 2028 Olympics. Page

120 Exhibit B 5d. REBRANDING METROLINK f) Incorporate lessons learned that made PTC and Tier IV locomotives successful to the rehabilitate its infrastructure Metrolink is proud of the success it has had in the deployment of PTC and procurement of modern low emission Tier IV locomotives, as evidenced by the prominent showcasing of these elements in outreach, marketing and lobbying materials. The focused efforts and resources applied to these programs will be applied on the Rehabilitation/SOGR program. g) Report progress to its Member Agencies Staff reports on progress regularly to Member Agency representatives and the Board, including detailed Monthly Project Status Reports describing the progress on the Rehabilitation High Priority SOGR program. h) Incorporate success symbols like PTC and Clean Transportation into various mediums of communication like letterheads, website, and other public communications. Will take into consideration. i) Conduct regular partnering sessions (monthly or quarterly) with Member Agencies to help with funding challenges. j) Set or reset the expectations regarding financial status so that Member Agencies can see Metrolink success. Staff is in communication with Member Agencies on a frequent basis, including monthly meetings to report on status and needs. An annual Board Workshop retreat is also conducted to foster partnering between Board Members and Executive Leadership. Metrolink will seek clarification from the Board regarding expectations for financial status. 5e. GOVERNANCE f) The JPA should be enhanced to provide more clarity on expectations and responsibilities. The panel felt like an institutional review of the JPA was warranted. g) CEO authority over fiscal and management issues should be increased. All the panel agency CEO s had varying degrees of Staff is supportive of this recommendation to provide greater clarification on the expectations and responsibilities of JPA Member Agencies in order to ensure consistent direction, reduce conflicts, streamline decisionmaking processes and support resource allocation/member agency investments that align with the needs of the system. This recommendation, along with all the others, will be shared with the Board for consideration. Staff agrees with the laudable goal of streamlining decision making and contract authorization processes by increasing the Page

121 Exhibit B financial and management authority more than Metrolink s CEO. In light of the current governance structure best practices would give Metrolink CEO more authority and accountability. h) Board packets should be condensed to policy issues. The current Board packets are extremely large and very detailed. Best practices would reduce the size of the packet and make it consistent with the Board members authority and ability to provide policy direction. i) Consider an Annual Equity Return on Investment Analysis. Inherent in any multi jurisdictional agency, every funding entity requires a good and equitable return on their investment. An Annual Equity analysis may help the funding agencies and reduce the time spent in the budgeting cycle and lead to a more stable funding base. j) A strong chain of command is imperative to an effective governance structure. QUESTION 2: INDUSTRY BEST PRACTICES FOR MAIN/REHAB REVIEWS e) Metrolink needs to own maintenance planning. Metrolink needs to obtain maintenance standards from other agencies and use them as a basis for developing and/or enhancing their own. Metrolink needs to review their auditing process and procedures especially around contract work. We found that staff to be more accepting of what the contractor submits and not thoroughly reviewing and auditing what the contractor said they completed. CEO s financial authority, enabling the CEO to respond more nimbly to conditions as they occur. It is acknowledged that it takes time to build the confidence and trust of Member Agencies to increase this authority. Staff suggests that contract authority should be reviewed periodically. This recommendation will be taken into advisement with appropriate representatives of our Board This recommendation will be taken into advisement with appropriate representatives of our Board Acknowledged. Clearly defined roles, responsibilities, accountability and authority are required for success. Aspects of Metrolink s operations and maintenance are contracted out, staff functions related to accountability and ownership are being strengthened through oversight as well as strong contract management and administration. Clarification of roles and responsibilities at various levels and between various parties is in process. Maintenance and rehabilitation planning and programing will be led by Metrolink Staff and Staff will be held accountable. Staff is re writing track and signal maintenance manuals and rehabilitation standards based on and industry best practices utilizing freight primarily Page

122 Exhibit B f) The panel supports Metrolink follow the BNSF, UPRR, and Caltrain standards as applicable to specific requirements of Metrolink. g) Metrolink needs to review their auditing process and procedures especially around contract work. We found staff to be more accepting of what the contractor submits and not thoroughly reviewing and auditing what the contractor said they completed. h) In response to the issue of third party review, the panel strongly recommends that Metrolink takes a programmatic approach to this issue. The role of Metrolink is to own and maintain their facilities according to adopted standards and an approved approach The three components to a programmatic approach is to obtain policy approval from the Metrolink Board for: 4. A 5 to 10 year financial plan and capital budget; 5. The TAM plan that is coordinated with the longrange financial plan, the CIP, and the Metrolink Rehabilitation Plan (MRP). 6. A Maintenance Rehabilitation Plan (MRP; UPRR and BNSF as well as and APTA/Commuter Railroad (Caltrain, NCTD & others) maintenance and rehabilitation standards as reference. Metrolink periodically reviews its processes and procedures to ensure consistency with industry best practices particularly related to effective management of contracted work and best value. Projects and contracts consistently undergo internal and external audits to ensure compliance with the Board approved policies and procedures. Agreed. Staff is re writing track and signal maintenance manuals based on industry best practices utilizing freight (UPRR, BNSF) and APTA/Commuter Railroad (Caltrain, NCTD & others) maintenance and rehabilitation standards as reference. Metrolink is strengthening its inspection, oversight and audit processes and periodically reviews its processes and procedures to ensure consistency with industry best practices particularly related to effective and efficient management of contracted work. Projects and contracts consistently undergo inspections, oversight reviews and internal and external audits to ensure compliance with the Board approved policies and procedures. Metrolink has or will seek to obtain programmatic approvals from the Board for its maintenance and rehabilitation programs, including approval of a current CIP, TAM and MRP. Page

123 Exhibit B It is the panel s opinion that policy approval of such a programmatic approach will greatly assist in getting the financial resources to accomplish the mission. Page

124 TRANSMITTAL: March 16, 2018 MEETING: March 23, 2018 ITEM 15 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Tier 4 Locomotive Update and Delivery Status Issue This report is a monthly update to the Board on the status of the Tier 4 Locomotive Program and information during revenue service. Recommendation The Board may receive and file this report. Alternative The Board may request additional information and detail. Strategic Goal Alignment This report aligns with the strategic goals to ensure a safe operating environment and retain and grow ridership. The Tier 4 locomotives will greatly enhance Metrolink train service by providing safe and reliable service to its passengers. Background As of March 14, 2018, the Authority has received 16 Tier 4 locomotives (see table below). Conditionally Accepted Authority Simulation Testing Post- Production LaGrange/ Pueblo Testing Production Muncie Pre- Production A summary of Conditionally Accepted locomotives and locomotives in Simulation Testing is referenced in the table below: 115

125 Tier 4 Locomotive Update and Delivery Status Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 Locomotive Number Status 907 Conditionally Accepted 908 Conditionally Accepted 905 Conditionally Accepted 910 Simulation Testing*** In Service Start Date October 2017 October 2017 February 2018 Expected week of March 12, 2018 Average Mileage February 2018* Days in Service w/o Mechanical Failure February 2018** 2, Total Days in Service 0 *The average locomotive fleet mileage in February 2018, excluding Tier 4 locomotives, was 4,585 miles. In comparison, on average the three Tier 4 locomotives ran 52 percent of the miles completed by the other locomotives in the fleet. **905 started simulated service February 8, spent six days in planned maintenance, limiting in-service availability. ***910 will be put in Simulation Testing where it will be tested in-service for 2,500 miles while accompanied by another non-tier 4 locomotive. Delivery Overview Sixteen units presently are on property; fifteen are signed off as delivered and are undergoing final preparation for Simulation Testing. As of mid-march 2018, locomotive 910 is being placed in simulated test service. Unit 925 arrived with freeze damage and will be transported to Muncie for repair. BNSF will pick up locomotive 925 from Keller Yard for delivery to Muncie. 20 units are in the production facility. Two stored car-bodies await entry into production. Progress Rail projected 30 units would be delivered by end of 2017 while staff estimated 20 units. However, due to performance concerns, the delivery of additional units has been halted. Update on First Five Months of Revenue Operation On October 12, 2017, locomotives 907 and 908 entered revenue operation coupled with existing locomotives as part of a 1,000-mile shakedown program. During the first 1,000 miles, these two units experienced a number of failures which prompted staff to raise the required shakedown mileage to 2,500 miles. 116

126 Tier 4 Locomotive Update and Delivery Status Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 A status update on reliability issues is provided below: Board Informed November 2017 November 2017 February 2017 March 2018 Issue Identified Urea system failures Load meter malfunction Build quality issues Head-End Power (HEP) on 905 Issue Both in service locomotives displayed fault codes indicated sporadic failures of the Tier 4 emissions system. Load meter in the cab car displays a different value from the meter in the locomotive, and sometimes indicates a higher thanexpected value Issues range from failure to properly clean production debris from tanks, to improper assembly of electrical cable plugs, to use of improper components in production. Unit 905, after completing 1,665 failure-free inservice miles, Corrective Action Three modifications developed and applied to locomotives to address diesel exhaust fluid (DEF) performance. Software applied to improve the scaling of the load. Staff has concluded that most of the issues could be resolved by concentrating on improving inspection procedures and enhancing quality control at the manufacturing plant in Muncie, Indiana. Root cause analysis and repairs completed on Status of Corrective Action and Next Steps Since the last report, two units 907 and 908 demonstrated an acceptable level of reliability while running in revenue service. Staff monitors DEF performance daily. A cutout switch has been added to ten of the legacy units to enable Tier 4 locomotives to operate in the same consist. An alert was provided to mechanical field staff to ensure proper train assembly to avoid this issue. Effective March 6, 2018, the Authority has instructed STV (project technical consultant) to replace their subcontract employee in Muncie with an STV employee with extensive locomotive quality control expertise and experience. Staff has requested a daily inspection summary reports from STV. Staff are investigating and analyzing every failed component and assessing if they are 117

127 Tier 4 Locomotive Update and Delivery Status Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 Board Informed Issue Identified Issue broke down due to a reoccurrence of an issue with the head-end power (HEP). Corrective Action impacted locomotive (905). Status of Corrective Action and Next Steps fleet-wide so that the information can be relayed to the plant so the issues can be properly addressed. In addition to these continuing reliability issues, staff is working with Progress Rail to obtain necessary parts and other components required to complete mandated preventative maintenance (PM) service. Units at the Central Maintenance Facility are due for a required 92-day and 184-day PM, and lack of parts availability has delayed the completion of PM work. On March 1, 2018, staff met with Gary Eelman, Vice President, Progress Rail Services and his project team members to discuss the outstanding issues with locomotive reliability and availability of materials needed to maintain the locomotives. During the meeting Progress Rail committed to assigning a Senior Manager to help expedite completion of open check list items at Keller Yard. Mr. Eelman will attend the March 23, 2018 Board meeting and will be prepared to answer questions from the Board. Next Steps Staff will continue to work with Progress Rail in resolving the issues discussed in this report as well as in identifying potential concerns and provide a status update at the May 11, 2018 Board meeting. Budget Impact There is no budgetary impact as a result of this report. Prepared by: Greg Harrington, Interim Director, Maintenance of Equipment Rod Bailey Deputy Chief Operating Officer (Operations) Gary Lettengarver Chief Operating Officer 118

128 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 16 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Antelope Valley Line Fare Reduction Program Evaluation Issue In July 2015 the Antelope Valley Line (AVL) Fare Reduction Program was launched with the funding support from Los Angeles County Metropolitan Transportation Authority (Metro) to help increase ridership on AVL. This item provides the Board with an evaluation of the continued success of this program through December Recommendation The Board may receive and file this report. Strategic Goal Alignment This report aligns with the strategic goal to retain and grow ridership. Past experience has shown that fare reductions are one of several effective strategies to grow ridership and win market share. Background Between FY and FY , the AVL experienced a ridership decline of 13%, from 5,726 average weekday boardings to 4,978. In an effort to halt ridership losses, on April 10, 2015, the Board approved a pilot program with reduced fares for AVL riders to test how ridership on that line responded to lower fares. Two successive pilot programs were implemented. The first pilot consisted of a 25% fare reduction and a $2 one-way fare to the next station. It was funded through revenue shortfall funding provided by Metro in an amount of up to $2.5 million during FY Only trips with both origin and destination stations on the AVL, which includes the section that overlaps with the Ventura County Line (Los Angeles Union Station to Burbank- Downtown) were eligible for the reduced fares. Fares that included a transfer to another line were not discounted. 119

129 Antelope Valley Line Fare Reduction Program Evaluation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 The second pilot launched in January 2016 and replaced the $2 station fare with a $3 station fare that was launched system-wide. 1 Ridership Response Ridership analysis was conducted based on actual ticket sales for the Antelope Valley Line stations. This allows an accurate evaluation of ridership response to the fare reduction and helps account for ridership on the shared line segment between Los Angeles Union Station and Burbank which is served by Ventura County, AVL, and Burbank Airport Line trains. Following up on prior Board reports with program updates on December 11, 2015 and February 26, 2016, the latest results show that ridership growth has continued into the third year of the program. December 2017, the latest month for which data are available, shows a 37% ridership increase over the same month in 2014 prior to the program launch. Comparing the six-month period July-December 2017 with the same period in 2014, ridership grew by 32.7% which reflects a compounded annual growth rate of 9.9% (Figure 1). Figure 1. Ridership Growth Period Ridership July Dec ,938 July Dec ,759 Compounded Annual Growth Rate 9.9% As indicated above, when the AVL Fare Reduction Pilot was launched it had two program components: a 25% fare reduction and $2 (later $3) station fare. Whereas the station fare was available for one-way tickets only, the 25% fare discount was available on all ticket types (with the exception of already discounted Weekend Day Passes). Of the two promotional discounts, the 25% discount was the more effective one. A 2016 fare study by CH2M determined that the 25% fare discount accounted for 85% of the increase in ridership. Since launch of the program the ridership response has exceeded expectations. Analysis of ticket sales show a strong ridership response during the first several months driven by increases in one-way and roundtrip ticket sales, followed by a flattening in the growth rate (Figure 2). 1 The one-way station fare ticket was replaced July 1, 2016 with restructured short distance fares that reduced the cost of short distance travel for all ticket types throughout the system. 120

130 Antelope Valley Line Fare Reduction Program Evaluation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 Figure 2. Antelope Valley Line Ridership Trend 150,000 ANTELOPE VALLEY LINE RIDERSHIP 100,000 Pre Program Ridership Level (FY15) 50,000 Program Launch 0 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17 Jan 18 Mar 18 May 18 Ridership Pre Program Ridership Level (FY15) Ridership growth started to accelerate again into the second year and continues its upward momentum even in the absence of additional fare promotions. Several key findings have emerged: The strongest response to the lower fares came from infrequent riders: one-way and roundtrip ticket sales increased by 23% during the first year of the pilot. There is some evidence that many of the new riders that were attracted by the pilot have become regular commuters. In FY17 pass ridership grew by 5.9% over the prior year, exceeding the overall ridership growth on the Antelope Valley Line (5.4%) and also matching the rate of growth for one-way and roundtrip tickets (5.8%). Student and youth ridership continued to exhibit the fastest rate of growth in FY17 (up 17.8% from the prior year). That follows a 35% increase in FY16 when the student and youth fare discount was increased to 25%. The growth in short-distance ridership (trips of less than 20 miles one-way distance) reached 12% in FY

131 Antelope Valley Line Fare Reduction Program Evaluation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 Fare Revenue Impact Changes to fares and the resulting ridership change directly impact fare revenue. Given the demand elasticity to changes in fares it was expected that the increase in ridership would not be sufficient to off-set the lower fares. Immediately following the fare reduction in July 2015, fare revenue fell by nearly 20%. But as ridership continued to grow during the following months fare revenue grew as well. Based on the current trend fare revenue is expected to reach the break-even point with pre-program fare revenue levels in Spring 2018 (Figure 3). Figure 3. Antelope Valley Line Fare Revenue Trend $900,000 $850,000 $800,000 ANTELOPE VALLEY LINE FARE REVENUE Pre Program Revenue Level (FY15) Break even point Trend $750,000 $700,000 $650,000 $600,000 Program Launch $550,000 $500,000 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17 Jan 18 Mar 18 May 18 Revenue Pre Program Revenue Level (FY15) When the Board approved the fare reduction pilot in 2015 it also included up to $2.5 million in revenue shortfall funding from Metro during FY Only $866,000 of that was actually required to offset the lower fare revenue on the AVL during the first year. During the following year as ridership continued to grow only $497,000 in fare subsidy was required. In FY the fare subsidy will further decline until no fare subsidy will be required anymore for FY (Figure 4). 122

132 Antelope Valley Line Fare Reduction Program Evaluation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 Figure 4. Shrinking Fare Subsidy Requirement $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Annual Metro AVL Fare Subsidy $866,579 $496,766 $265,000 0 FY15/16 FY16/17 FY17/18 (f) FY18/19 (f) Next Steps Staff is evaluating lessons learned from the AVL Fare Reduction Program and how they may be applied to other lines. Of particular interest is the San Bernardino Line which, like the AVL, has experienced ridership losses since FY But whereas the AVL has seen continued ridership increases since the fare reduction, San Bernardino Line ridership continues to decline (Figure 5). Staff is considering a more customized ridership strategy for the San Bernardino Line that may consist of a multi-pronged approach with: 1. Fare reductions 2. Service enhancements 3. Improving the customer experience 123

133 Antelope Valley Line Fare Reduction Program Evaluation Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 6 Budget Impact There is no budgetary impact as a result of this report. Prepared by: Roderick Diaz, Director, Planning and Development Henning Eichler, Planning Manager II Kimberly Yu Deputy Chief Operating Officer (Planning and Project Delivery) Gary Lettengarver Chief Operating Officer 124

134 TRANSMITTAL DATE: March 16, 2018 MEETING DATE: March 23, 2018 ITEM 17 TO: FROM: SUBJECT: Board of Directors Arthur T. Leahy Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Issue The Key Performance Indicators (KPI) Quarterly Performance Report provides the latest results for the second quarter of FY (FY18). The second quarter was marked by a continuation of positive economic trends and strengthening performance as indicated by most KPI results close to or better than their performance targets. Recommendation The Board may receive and file this report. Strategic Goal Alignment This report aligns with the strategic goal to improve communications to customers and stakeholders. This item supports the measurement and management of all seven of the Authority s strategic goals. Background In March 2016, the Board adopted the Authority s Ten-Year Strategic Plan and seven strategic goals that emphasize a strengthening of the Authority s core functions and balances these with customer needs and the demand for growth within the operational and fiscal context in which that growth will occur. For each of the seven strategic goals, KPIs and performance targets were identified and implemented in a Performance Report that is presented to the Board on a quarterly basis. Discussion The current report provides the Authority s latest performance results for the second quarter of FY18 ended December 31, This report also includes Metrolink s detailed Fare Revenue and Ridership Report for the second quarter of FY18 with a line-by-line breakdown as part of the Fare Revenue KPI section. The Asset Management KPI has 125

135 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 2 been temporarily suspended while the measure and reporting methodology are being refined to provide a more reliable assessment of asset conditions. Economic context Employment Economic growth in Metrolink s service area remains positive with low unemployment. Job creation during the second quarter reached an annual rate of 1.9%, down from 2.0% during the same quarter of the prior year; it reflects nearly 150,000 new jobs. Based on the latest numbers released by the California Employment Development Department (EDD) job growth in 2017 was stronger than originally estimated. Economic forecasts for Southern California call for continued growth for at least the next two years. Health care, social assistance, and administrative/support services are expected to add most new positions. Personal income has been rising as a result of the strong economy. By 2019, per capita income in Los Angeles County is expected to grow to $52,080, up 2.8% from $50,650 in Consumer prices Inflation continues to rise. For the second quarter the Consumer Price Index for the Los Angeles Metropolitan area increased by 3.4% annually. Also, gasoline prices have started to creep up but remain at historically low levels. Despite rising prices, the affordability of Metrolink fares has improved as a result of fare reductions that have been enacted over the last several years. Today, the average fare for a Metrolink ride is the lowest it has been in more than five years. Transit Transit agencies throughout Southern California continue to experience declining ridership. According to the National Transit Database (NTD), second quarter transit ridership in Southern California declined by 2.7% compared to the same quarter a year ago. Nationwide, commuter rail ridership declined by 1.1% year over year, while overall transit ridership was down 2.5%. At the same time, overall driving has increased to a record 63.4 billion vehicle miles traveled on California highways. A recent study by University of California, Los Angeles (UCLA) transportation researchers has identified substantially increased private vehicle access and easier auto financing as key factors. In contrast to these trends, Metrolink ridership remains stable and growing by nearly one percent since the same quarter of last year. 126

136 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 3 KPIs that performed better than their target RIDERSHIP How is Metrolink doing? Second quarter ridership reached 2,917,144 boardings, which is 2.3 percent better than budget projections. With a 0.9% ridership growth year-over-year, Metrolink ridership continues to outperform local and national ridership benchmarks: US commuter rail ridership fell 1.1% during the second quarter, while Southern California transit agencies reported 2.7% ridership losses since the same period of the previous year. Overall US transit ridership was down 2.5%. Metrolink s ridership growth was driven by better performance on most lines. The best performance was reported for the Antelope Valley Line (up 4.2%), which continues to show strong growth that started with the July 2015 fare reduction program. Other lines with strong growth include the 91/Perris Valley Line (up 3.5%), and the Orange County Line (up 1.7%). Better performance was also reported for the San Bernardino, IEOC, Riverside and Ventura County Lines that were able to reduce losses or started growing. It is noteworthy that since fares for short-distance trips of less than 20 miles were reduced in July 2016, short distance ridership has been steadily increasing. The ridership increase during the second quarter can be traced entirely to the growth in short distance trips which are up 26% in three years, compared to 6% growth for long distance trips of 20 miles or more. Key initiatives: Metrolink launched a new website that features a GPS tracking tool to locate trains in real time. Discounted fares have been continued on the 91/Perris Valley Line to maintain ridership growth. Optical readers were installed at the end of the quarter to support mobile ticketing. Staff is evaluating fare and service options for a pilot program to increase ridership on the San Bernardino Line. 127

137 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 4 PASSENGER MILES How is Metrolink doing? Passenger miles during the second quarter exceeded the budget target by 1.1% and increased by 0.7% from a year ago. This is in line with the ridership increase of 0.9% during the same period. The largest increase in passenger miles was reported for the 91/Perris Valley Line with a 5.0% increase over the prior year which reflects the longer trips taken on that line. Key initiatives: In February 2018 the Board voted to freeze promotional fare discounts on the Perris Valley Line to support ridership growth on that line. Staff is currently studying ridership strategies to address ridership losses on the San Bernardino Line. CUSTOMER COMMUNICATIONS How is Metrolink doing? During the second quarter Metrolink saw a significant reduction in the number of customer complaints. Complaints about customer communications decreased by 52% - from 93 complaints in FY17 Q2 to 45 in FY18 Q2. Overall complaints decreased by 8% to 720 complaints, down from 811 during the same period last year, while the overall distribution of complaint types remained the same. The reduction in complaints can be attributed to increased staffing (Communication Desk), a new and improved predictive arrival station messaging system, and a recently launched beta version of Train Tracker, a web based real-time train locator. Key initiatives: Real-time and automated notification / updates via station message boards, social media, website, mobile application. Increase on-board communication from conductors, especially during service delays. 128

138 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 5 KPIs that came close to their performance target ON-TIME PERFORMANCE How is Metrolink doing? During the second quarter, 92.8% of trains operated on-time. Performance improved slightly from the prior quarter, but was down from 94.4% a year ago. The lines with the best on-time performance were the San Bernardino Line (95.5%), and the Riverside Line (95.3%). The lowest on-time performance was reported for the Orange County Line (88.7%) and the IEOC Line (85.9%). Both lines were impacted by third party delays associated with BNSF Railway (BNSF) operations, as well as an increase in PTC-related delays. Key initiatives: Staff continues to work with local jurisdictions to improve response times for coroners during fatal incidents. The Operations Department has launched an initiative to conduct weekly calls with the freight railroads to facilitate information-sharing and to better coordinate responses to incidents. Metrolink is working with other railroads, including North County Transit District (NCTD), Amtrak, BNSF, and Union Pacific Railroad (UPPR), to coordinate schedules and reduce conflicts. 129

139 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 6 FARE REVENUE How is Metrolink doing? Second quarter fare revenue increased by $113,500 (0.6%) from a year earlier, but fell slightly short of budget projections by $69,000, or a third of one percentage point. The revenue increase reflects an 18% revenue increase on the Antelope Valley Line, as well as strong revenue growth on the Orange County and 91/Perris Valley Lines. The Antelope Valley Line is expected to reach parity with preprogram fare revenue levels during the fourth quarter of this fiscal year. The positive result is directly linked to an increase in short distance trips (less than 20 miles). Longer trips of 20 miles or more declined in both revenue and ridership since the same quarter of last year. Metrolink has been experiencing an erosion of the commuter ridership market as indicated by a decline in monthly and seven-day pass sales. It reflects the growing ease of access to a private vehicle for many riders. While the decline in pass revenue an increase was off-set by one-way and roundtrip ticket sales, the decline in regular commuters increases the volatility in fare revenue performance. Key initiatives: Metrolink Marketing staff are studying opportunities to strengthen loyalty and retention among commuters. Metrolink is studying fare and service options for a pilot program on the San Bernardino Line to strengthen ridership. A customer survey is being developed to learn more about changes in customer profiles and behaviors. 130

140 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 7 KPIs that missed their performance target SAFETY How is Metrolink doing? During the second quarter of FY18 Metrolink experienced 1.3 safety incidents per 100,000 train miles. It reflects a significant improvement over the first quarter with an incident rate of 1.9 but still exceeds the quarterly threshold for this indicator. Metrolink experienced a higher number of pedestrian and trespasser strikes during the second quarter: There were six trespasser strikes compared to four trespasser strikes during the same period of the prior year. The number of pedestrian strikes has increased to 1, while there were none a year earlier. The number of vehicle strikes declined to one, from two a year ago. The number of employee injuries per 200,000 work hours increased to 6.3 from 3.1 a year earlier. It reflects six more employee injuries than a year ago, most of them minor. Key initiatives: A new Standard Operating Procedure (SOP) for Right-Of- Way (ROW) issues was developed to reduce response times by requiring accountability and coordination with cities, counties, member agencies, freight operators and elected officials. To increase awareness of the potential dangers that exist around trains and railroad tracks, a first-time geo-fencing technology campaign to deploy digital display advertisements along the San Gabriel subdivision was applied. The digital display ads targeted grade crossings and reached audiences on their smartphones and tablets within a one-mile radius with safety messaging. Additional information with detailed KPI results is provided in Attachment A. Next Steps Staff will provide the next quarterly update in June

141 Key Performance Indicators Quarterly Performance Report Quarter Ended December 31, 2017 Transmittal Date: March 16, 2018 Meeting Date: March 23, 2018 Page 8 Budget Impact There is no budgetary impact as a result of this report. Prepared by: Roderick Diaz, Director, Planning and Development Henning Eichler, Planning Manager (Planning & System Performance Analysis) Kimberly Yu Deputy Chief Operating Officer (Planning and Project Delivery) Gary Lettengarver Chief Operating Officer 132

142 ATTACHMENT A Key Performance Indicators Quarterly Performance Report Southern California Regional Rail Authority TABLE OF CONTENTS Mission, Vision, Values 2 Methodology 3 Performance Summary 4 Economic Conditions 5 Safety 6 Fare Revenue 8 Service Reliability 9 Ridership 11 Passenger Miles 14 Customer Complaints 15 Glossary 16 FY17/18 2 nd Quarter October December

143 MISSION, VISION, AND VALUES MISSION, VISION, AND VALUES Metrolink s Mission, Vision, and Values are at the heart of the Key Performance Indicators and are the foundation upon which the agency s goals and strategies are defined. The MISSION of Metrolink is (as adopted by the Board of Directors on March 11, 2016): To provide safe, efficient, dependable, and on-time transportation service that offers outstanding customer experience, and enhances quality of life. The VISION for Metrolink is: To be Southern California s preferred transportation system built upon safety, reliability, customer service, leading-edge technology, and seamless connectivity. The Metrolink VALUES are: Safety: People: Quality: Safety is foundational. Everything we do demonstrates an appreciation for quality of life, and every act values the lives of our employees, contractor co-workers, customers, and communities. We operate on best practices and principles with a continued focus on providing high-quality service to our customers every day on every ride. Efficiency: As responsible stewards of public funds, we embrace innovative solutions and continuous improvement for the lowest cost and most efficient operations. Growth: We continuously seek creative, progressive, and collaborative solutions to promote investment, develop partnerships, and increase capacity to improve the mobility of Southern Californians

144 Safety Key Performance Indicators KPI Definition Methodology Metric: Incidents / 100,000 train miles Employee injuries / 200,000 work hours Target: 5 year moving average Frequency: Quarterly The metric is calculated based on the number of reported safety incidents per 100,000 train miles operated during the reporting period. Incidents include: accidents involving grade crossing accidents, trespassers, derailments. Suicides, which are outside of Metrolink s control, are not included. Reportable employee injuries are reported per 200,000 work hours and include Metrolink staff and contract employees. Fare Revenue Operating Cost Employee Engagement Condition of Assets On-time Performance Ridership Metric: Fare Revenue Target: Annual Operating Budget Frequency: Quarterly Metric: Operating Cost Target: Annual Operating Budget Frequency: Annual Metric: Employee Turnover Rate Target: National Benchmark Frequency: Annual Metric: Condition of Assets Targets: FTA s State of Good Repair (SGR) target Frequency: Quarterly Metric: Percent of scheduled trains arriving on-time Target: 95% Frequency: Quarterly Metric: Passenger Boardings Target: Annual Operating Budget Frequency: Quarterly Fare revenue represents the total customer revenue received from sales of Metrolink fare media. SCRRA s operating expenses include Train Operations, Maintenance of Way and Insurance/Claims. The employee turnover rate is the ratio of total separations to the average number of employees. Benchmark data is provided from CEB Global, HR Leadership Council, Unified Benchmarking Platform adjusted rates for the Government sector. Percent of asset classes by dollar value meeting FTA s State of Good Repair (SGR) target. Target: 100% of assets by dollar value. Asset classes include: Rolling Stock, Infrastructure, Facilities, Equipment. On-Time Performance, or schedule adherence, is a measure of the percentage of scheduled trains that reach their final destination on time. Passenger boardings correspond to unlinked passenger trips. The metric is calculated based on fare media sales. Passenger Miles Connectivity Customer Communications Complaints Metric: Passenger miles Target: Annual Operating Budget Frequency: Quarterly Metric: Transfers to connecting transit per 100,000 linked trips Target: 60 % Frequency: Annual Metric: Complaints about Metrolink communications to customers per 100,000 boardings Target: 5-year rolling average Frequency: Quarterly The metric is calculated based on ticket sales. It reflects the estimated number of trips taken and the total distance traveled on Metrolink trains. Transfers to connecting transit are calculated based on invoices received for transfers provided by partner agencies, annualized. Linked passenger trips are calculated based on Metrolink fare media sales. The metric reflects the total number of customer complaints about Metrolink communications to passengers that have been received through Metrolink s call center or through online comment. The metric is expressed as complaints per 100,000 boardings which is the industry norm. The target is based on a five year rolling average. Station City Outreach Internal Communication Metric: Stakeholder satisfaction with Metrolink outreach Target: TBD Frequency: Annual Metric: Percent of employees with approved Performance Plans linked to agency goals by Oct. 1 Target: 5% increase annually Frequency: Annual Data collection underway The metric is calculated based on the total number of employees enrolled in the goal setting process (PerformanceLINK Phase 1: Establishing Your IPGs) for the performance period, July 2017 June

145 Key Performance Indicators Performance Summary - FY18 Trend KPI Q1 Q2 Q3 Q4 YTD SAFETY FARE REVENUE OPERATING COST (1) ASSET CONDITION N/A N/A EMPLOYEE TURNOVER (1) ON-TIME PERFORMANCE RIDERSHIP PASSENGER MILES CONNECTIVITY (1) CUSTOMER COMPLAINTS INTERNAL COMMUNICATION (1) (1) Annual measures 136 4

146 Key Performance Indicators Second Quarter FY2018 ECONOMIC INDICATORS Economic Conditions during the Second Quarter Economic growth in Metrolink s service area reached 1.4%, down from 2.2% during the same quarter of the prior year. It reflects a tightening labor market and low unemployment. The Inland Empire grew the fastest (3.3%) and surpassed Los Angeles County in job creation. Gasoline prices increased 13% from a year earlier but continue to be a historically low levels. Inflation (CPI) increased to 3.4%. Transit ridership continued to decline both locally and nationally while overall travel has increased. Shifting demand patterns, the strong economy with virtually full employment, and higher affordability of private vehicles have been identified as important factors for the decline in transit ridership. Yet, Metrolink ridership growth continues to outperform most local transit operators as well as national commuter rail ridership trends. Economic Outlook Economic forecasts for Southern California remain positive for continued growth for at least the next two years, with health care, social assistance, and administrative/support services expected to add the most new positions. By 2019, per capita income in Los Angeles County is expected to grow to $52,080, up 2.8% from $50,650 in % 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% -3.0% $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 Ridership Benchmarks FY18Q2 (% change from prior year) SCRRA 0.9% FY16 Q1 US Commuter Rail -1.1% Gasoline Price (per gallon regular) Q2 Q3 Q4 FY17 Q1 SoCal Transit -2.7% Q2 Q3 Q4 FY18 Q1 Q2 Thousands FY16 Q1 County Job Growth (over prior year) Q2 Q3 Q4 FY17 Q1 Q2 Q3 Q4 FY18 Q1 LA RS-SB OC VC Q2 OC LA VC RS-SB 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% FY16 Q1 Inflation (CPI-U) Q2 Q3 Q4 FY17 Q1 Q2 Q3 Q4 FY18 Q1 Q2 137 Data sources: National Transit Database (NTD), Economic Development Department. (EDD), Bureau of Labor Statistics (BLS), Metrolink, Los Angeles Economic Development Corporation (LAEDC). 5

147 Key Performance Indicators Second Quarter FY2018 KPI: SAFETY Objective: Reduce Incidents KPI Definitions: Incidents per 100,000 train miles (excl. suicides) Target: Five year moving average FY18Q2 Target was not met Train Accidents per 100,000 train miles Quarter FY17 FY18 % Change Q % Q % Q3 0.6 Q4 0.7 YTD % Employee Injuries per 200,000 work hours Quarter FY17 FY18 % Change Q % Q % Q3 2.0 Q4 4.2 YTD % * Includes SCRRA, Amtrak, and contractors from Jacobs, MEC, VTMI, and Bombardier. How is Metrolink doing? During the second quarter of FY18 the rate of safety incidents per 100,000 train miles has increased to 1.3, up 48% from 0.9 a year earlier. Why did performance change? The increase in the incident rate reflects an increase in the number of pedestrian and trespasser strikes. There were six trespasser strikes during the second quarter, compared to four trespasser strikes a year earlier. The number of pedestrian strikes has increased to 1, from none a year earlier. The number of vehicle strikes declined to one, from two a year ago. The number of employee injuries per 200,000 work hours increased to 6.3 from 3.1 a year earlier. It reflects six more employee injuries than a year ago. Key initiatives to improve performance A new Standard Operating Procedure (SOP) for Right-Of-Way (ROW) issues was developed to reduce response times by requiring accountability and coordination with cities, counties, member agencies, freight operators and elected officials. To increase awareness of the potential dangers that exist around trains and railroad tracks, a first-time geo-fencing technology campaign to serve digital display advertisements along the San Gabriel subdivision was applied. The digital display ads targeted grade crossings and reached audiences on their Smartphones and Tablets within a 1 mile radius with safety messaging nd Quarter Safety Incidents per 100,000 Train Miles 3-Year Trend target FY16 Q2 FY17 Q2 FY18 Q

148 SAFETY Key Performance Key Performance Indicators Indicators First Quarter Second FY2016 Quarter FY2018 Strategic Goal: Ensure a Safe Operating Environment KPI: SAFETY Key Performance Indicators Third Quarter FY2016 Strategic Goal: Ensure a Safe Operating Environment Fiscal Year / Quarter Pedestrian strikes (Grade Crossings only) Trespasser strikes (Non- Grade Crossings) Vehicle strikes Derailments Total Accidents Train Miles Accidents per 100,000 train miles FY11 Q , FY11 Q , FY12 Q , FY12 Q , FY12 Q , FY12 Q , FY13 Q , FY13 Q , FY13 Q , FY13 Q , FY14 Q , FY14 Q , FY14 Q , FY14 Q , FY15 Q , FY15 Q , FY15 Q , FY15 Q , FY16 Q , FY16 Q , FY16 Q , FY16 Q , FY17 Q , FY17 Q , FY17 Q , FY17 Q , FY18 Q , FY18 Q ,

149 Key Performance Indicators Second Quarter FY2018 KPI: FARE REVENUE FY18Q2 Performance near target Objective: Increase Fare Revenue KPI Definition: Passenger Fare Revenue from the sale of tickets at ticket vending machines (TVMs), Mobile App, via corporate sales/pass-bymail and at ticket windows. Fare revenue shortfall funding through member agencies is not included. Target: Annual Operating Budget (YTD) Why did performance change? Second quarter fare revenue increased by $113,500 (or 0.6%) from a year earlier. The revenue increase reflects an 18% increase on the Antelope Valley Line, as well as strong revenue growth on the Orange County and 91/Perris Valley Lines. The positive result is linked to an increase in short distance trips (less than 20 miles) which have been growing faster than longer trips of 20 miles or more. How is Metrolink doing? During the second quarter fare revenues increased or 0.6% from a year earlier, but missed the budget goal by 0.3%. FY18 FARE REVENUE BUDGET VS ACTUAL (THOUSANDS) Quarter Budget Actual Diff %Diff Q1 21,329 20,523 (807) -3.8% Q2 20,716 20,647 (69) -0.3% Q3 - Q4 - YTD 42,045 41,170 (875) -2.1% Key initiatives to improve performance In January 2018 the Board approved the continuation of discounted fares on the 91/Perris Valley Line which will help maintain the positive revenue and ridership trend onthat line. Staff is studying service enhancements, including the return of Express train service, for the San Bernardino Line. Continuation of the I-5 marketing campaigns and other marketing initiatives will seek to further attract new riders to Metrolink. Millions $21 $21 $21 $21 $21 $21 $20 $20 Second Quarter Fare Revenue 3 Year Trend $20.9 $20.6 $20.5 FY FY FY

150 Attachment A PASSENGER FARE REVENUE REPORT AND RIDERSHIP REPORT Six Months Ended December 31, 2017 Issued 01/29/2018 by Finance Department Preliminary 141

151 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Systemwide Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 6,699 $ 6,692 $ (7) -0.1% $ 6,561 $ % August $ 7,479 $ 6,968 $ (511) -6.8% $ 7,377 $ (410) -5.6% September $ 7,151 $ 6,862 $ (289) -4.0% $ 7,043 $ (181) -2.6% October $ 7,152 $ 7,248 $ % $ 7,068 $ % November $ 7,113 $ 7,001 $ (112) -1.6% $ 7,060 $ (59) -0.8% December $ 6,451 $ 6,398 $ (53) -0.8% $ 6,406 $ (8) -0.1% January February March April May June Totals Y-T-D Revenue $ 42,045 $ 41,169 $ (876) -2.1% $ 41,515 $ (346) -0.8% Ridership* July % % August (0) 0.0% 1,000 (12) -1.2% September (16) -1.6% 1,002 (29) -2.9% October 1,000 1, % 1, % November % % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership 5,759 5, % 5,833 (11) -0.2% Revenue Per Rider July $ 7.16 $ 7.10 $ (0.05) -0.7% $ 6.99 $ % August $ 7.57 $ 7.05 $ (0.52) -6.8% $ 7.37 $ (0.33) -4.4% September $ 7.23 $ 7.05 $ (0.18) -2.5% $ 7.03 $ % October $ 7.15 $ 7.06 $ (0.09) -1.2% $ 6.95 $ % November $ 7.35 $ 7.05 $ (0.30) -4.0% $ 7.17 $ (0.12) -1.7% December $ 7.36 $ 7.13 $ (0.23) -3.1% $ 7.19 $ (0.06) -0.9% January February March April May June Average Y-T-D Revenue/Rider $ 7.30 $ 7.07 $ (0.23) -3.1% $ 7.12 $ (0.05) -0.6% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 142

152 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report Six Months Ended December 31, 2017 (Thousands) Operating Line FY Budget December 2017 FY Actual Variance FY Budget YEAR TO DATE FY Actual Variance Revenue Weekday San Bernardino $ 1,487 $ 1,436 $ (51) $ 9,669 $ 9,328 $ (341) Ventura $ 474 $ 457 $ (17) $ 3,109 $ 3,016 $ (93) Antelope Valley $ 764 $ 789 $ 25 $ 4,480 $ 5,010 $ 531 Riverside $ 687 $ 685 $ (2) $ 4,424 $ 4,290 $ (134) Orange County $ 1,603 $ 1,570 $ (34) $ 10,520 $ 10,315 $ (205) Inland Empire/OC Line $ 585 $ 527 $ (58) $ 3,859 $ 3,482 $ (377) 91 $ 396 $ 412 $ 16 $ 2,573 $ 2,628 $ 55 Total Weekday $ 5,995 $ 5,875 $ (120) $ 38,634 $ 38,070 $ (564) Weekend San Bernardino $ 167 $ 171 $ 4 $ 1,187 $ 1,005 $ (183) Antelope Valley $ 113 $ 123 $ 10 $ 765 $ 658 $ (107) Orange County $ 112 $ 116 $ 4 $ 865 $ 678 $ (187) Inland Empire/OC Line $ 29 $ 76 $ 47 $ 430 $ 523 $ $ 36 $ 37 $ 1 $ 165 $ 235 $ 70 Total Weekend $ 456 $ 523 $ 67 $ 3,412 $ 3,099 $ (313) Total Fare Revenues $ 6,451 $ 6,398 $ (53) $ 42,045 $ 41,169 $ (876) Ridership Weekday San Bernardino (5) 1,196 1,182 (14) Ventura Antelope Valley Riverside Orange County (1) 1,291 1,280 (11) Inland Empire/OC Line Total Weekday ,176 5, Weekend San Bernardino (17) Antelope Valley Orange County (7) Inland Empire/OC Line (22) (2) (7) Total Weekend (51) Total Ridership ,759 5, *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 143

153 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Systemwide - Weekday Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 5,968 $ 6,054 $ % $ 5,921 $ % August $ 6,894 $ 6,487 $ (408) -5.9% $ 6,873 $ (387) -5.6% September $ 6,568 $ 6,351 $ (217) -3.3% $ 6,541 $ (190) -2.9% October $ 6,583 $ 6,750 $ % $ 6,566 $ % November $ 6,626 $ 6,554 $ (72) -1.1% $ 6,621 $ (68) -1.0% December $ 5,995 $ 5,875 $ (120) -2.0% $ 5,991 $ (116) -1.9% January February March April May June Totals Y-T-D Revenue $ 38,634 $ 38,070 $ (564) -1.5% $ 38,513 $ (443) -1.2% Ridership July % % August % 912 (7) -0.8% September (6) -0.6% 915 (29) -3.2% October % % November % % December % 818 (10) -1.2% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership 5,176 5, % 5,312 (23) -0.4% Revenue Per Rider July $ 7.38 $ 7.29 $ (0.09) -1.2% $ 7.17 $ % August $ 7.75 $ 7.17 $ (0.59) -7.6% $ 7.53 $ (0.37) -4.9% September $ 7.37 $ 7.17 $ (0.20) -2.7% $ 7.15 $ % October $ 7.27 $ 7.17 $ (0.11) -1.5% $ 7.05 $ % November $ 7.49 $ 7.14 $ (0.35) -4.6% $ 7.28 $ (0.14) -1.9% December $ 7.53 $ 7.27 $ (0.26) -3.5% $ 7.32 $ (0.05) -0.7% January February March April May June Average Y-T-D Revenue/Rider $ 7.46 $ 7.20 $ (0.27) -3.6% $ 7.25 $ (0.05) -0.7% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 144

154 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Systemwide - Weekend Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 731 $ 638 $ (93) -12.7% $ 640 $ (2) -0.2% August $ 585 $ 481 $ (104) -17.7% $ 504 $ (23) -4.6% September $ 583 $ 510 $ (73) -12.5% $ 502 $ 9 1.7% October $ 569 $ 499 $ (71) -12.4% $ 502 $ (3) -0.7% November $ 487 $ 447 $ (40) -8.1% $ 439 $ 8 1.9% December $ 456 $ 523 $ % $ 415 $ % January February March April May June Totals Y-T-D Revenue $ 3,412 $ 3,099 (313) -9.2% $ 3,002 $ % Ridership July (16) -12.3% 112 (1) -0.6% August (16) -16.2% 88 (5) -5.5% September (10) -10.4% % October (10) -11.0% 86 (1) -1.6% November (8) -9.5% % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership (51) -8.8% % Revenue Per Rider July $ 5.76 $ 5.73 $ (0.03) -0.5% $ 5.71 $ % August $ 5.89 $ 5.78 $ (0.11) -1.9% $ 5.73 $ % September $ 5.95 $ 5.81 $ (0.14) -2.4% $ 5.74 $ % October $ 5.97 $ 5.88 $ (0.10) -1.6% $ 5.82 $ % November $ 5.83 $ 5.92 $ % $ 5.86 $ % December $ 5.67 $ 5.86 $ % $ 5.74 $ % January February March April May June Average Y-T-D Revenue/Rider $ 5.85 $ 5.82 $ (0.02) -0.4% % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 145

155 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - San Bernardino Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 1,704 $ 1,682 $ (21) -1.3% $ 1,663 $ % August $ 1,944 $ 1,737 $ (206) -10.6% $ 1,904 $ (167) -8.8% September $ 1,841 $ 1,727 $ (114) -6.2% $ 1,803 $ (75) -4.2% October $ 1,846 $ 1,825 $ (21) -1.1% $ 1,807 $ % November $ 1,869 $ 1,754 $ (114) -6.1% $ 1,830 $ (76) -4.1% December $ 1,654 $ 1,607 $ (47) -2.8% $ 1,620 $ (13) -0.8% January February March April May June Totals Y-T-D Revenue $ 10,857 $ 10,333 $ (523) -4.8% $ 10,627 $ (293) -2.8% Ridership July (3) -1.4% 220 (3) -1.5% August (7) -3.2% 235 (9) -3.8% September (13) -5.2% 243 (14) -5.8% October (7) -2.7% 249 (8) -3.2% November % 236 (1) -0.4% December (2) -1.0% 208 (3) -1.5% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership 1,385 1,354 (31) -2.2% 1,392 (38) -2.7% Revenue Per Rider July $ 7.76 $ 7.77 $ % $ 7.57 $ % August $ 8.30 $ 7.67 $ (0.64) -7.7% $ 8.09 $ (0.42) -5.2% September $ 7.61 $ 7.53 $ (0.08) -1.0% $ 7.41 $ % October $ 7.44 $ 7.56 $ % $ 7.25 $ % November $ 7.96 $ 7.45 $ (0.51) -6.4% $ 7.74 $ (0.29) -3.8% December $ 7.99 $ 7.84 $ (0.15) -1.9% $ 7.79 $ % January February March April May June Average Y-T-D Revenue/Rider $ 7.84 $ 7.63 $ (0.21) -2.6% $ 7.63 $ (0.00) 0.0% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 146

156 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - San Bernardino - Weekday Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 1,456 $ 1,478 $ % $ 1,460 $ % August $ 1,753 $ 1,588 $ (166) -9.4% $ 1,746 $ (158) -9.0% September $ 1,651 $ 1,571 $ (80) -4.8% $ 1,641 $ (69) -4.2% October $ 1,641 $ 1,656 $ % $ 1,638 $ % November $ 1,681 $ 1,600 $ (81) -4.8% $ 1,664 $ (64) -3.8% December $ 1,487 $ 1,436 $ (51) -3.4% $ 1,480 $ (45) -3.0% January February March April May June Totals Y-T-D Revenue $ 9,669 $ 9,328 $ (341) -3.5% $ 9,628 $ (300) -3.1% Ridership July % 184 (3) -1.5% August (2) -1.0% 207 (6) -2.8% September (10) -5.0% 214 (15) -6.8% October (0) -0.2% 217 (5) -2.1% November % 211 (0) -0.2% December (5) -2.7% 185 (8) -4.3% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership 1,196 1,182 (14) -1.2% 1,218 (36) -3.0% Revenue Per Rider July $ 8.03 $ 8.13 $ % $ 7.91 $ % August $ 8.63 $ 7.89 $ (0.73) -8.5% $ 8.43 $ (0.54) -6.4% September $ 7.87 $ 7.88 $ % $ 7.67 $ % October $ 7.72 $ 7.81 $ % $ 7.56 $ % November $ 8.11 $ 7.59 $ (0.52) -6.4% $ 7.88 $ (0.29) -3.6% December $ 8.17 $ 8.11 $ (0.06) -0.7% $ 8.00 $ % January February March April May June Average Y-T-D Revenue/Rider $ 8.08 $ 7.89 $ (0.19) -2.4% $ 7.90 $ (0.01) -0.2% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 147

157 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Ventura Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual 15 Amount % Actual Amount % Revenue July $ 489 $ 482 $ (7) -1.5% $ 489 $ (7) -1.5% August $ 540 $ 514 $ (26) -4.8% $ 540 $ (26) -4.8% September $ 535 $ 514 $ (21) -4.0% $ 535 $ (21) -3.9% October $ 539 $ 533 $ (6) -1.2% $ 539 $ (6) -1.1% November $ 532 $ 517 $ (15) -2.9% $ 532 $ (15) -2.9% December $ 474 $ 457 $ (17) -3.5% $ 473 $ (16) -3.5% January February March April May June Totals Y-T-D Revenue $ 3,109 $ 3,016 $ (93) -3.0% $ 3,108 $ (92) -3.0% Ridership July % % August % 92 (0) 0.0% September % 94 (2) -2.0% October % % November % % December % 83 (1) -0.6% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % 540 (0) 0.0% Revenue Per Rider July $ 5.92 $ 5.61 $ (0.31) -5.2% $ 5.76 $ (0.15) -2.6% August $ 6.04 $ 5.60 $ (0.44) -7.3% $ 5.88 $ (0.28) -4.8% September $ 5.86 $ 5.59 $ (0.26) -4.5% $ 5.70 $ (0.11) -1.9% October $ 5.81 $ 5.55 $ (0.25) -4.4% $ 5.65 $ (0.10) -1.8% November $ 5.93 $ 5.57 $ (0.36) -6.1% $ 5.77 $ (0.20) -3.5% December $ 5.89 $ 5.57 $ (0.32) -5.4% $ 5.74 $ (0.16) -2.9% January February March April May June Average Y-T-D Revenue/Rider $ 5.91 $ 5.58 $ (0.32) -5.5% $ 5.75 $ (0.17) -2.9% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 148

158 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Antelope Valley Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 792 $ 946 $ % $ 809 $ % August $ 958 $ 949 $ (9) -0.9% $ 982 $ (33) -3.4% September $ 888 $ 941 $ % $ 909 $ % October $ 825 $ 962 $ % $ 845 $ % November $ 905 $ 959 $ % $ 928 $ % December $ 877 $ 912 $ % $ 900 $ % January February March April May June Totals Y-T-D Revenue $ 5,244 $ 5,668 $ % $ 5,375 $ % Ridership July % % August % % September % % October % % November % % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % % Revenue Per Rider July $ 6.31 $ 6.57 $ % $ 6.11 $ % August $ 7.12 $ 6.35 $ (0.77) -10.8% $ 6.89 $ (0.54) -7.9% September $ 6.54 $ 6.36 $ (0.18) -2.7% $ 6.33 $ % October $ 5.89 $ 6.25 $ % $ 5.70 $ % November $ 6.61 $ 6.34 $ (0.27) -4.1% $ 6.40 $ (0.06) -1.0% December $ 6.84 $ 6.42 $ (0.42) -6.2% $ 6.63 $ (0.21) -3.2% January February March April May June Average Y-T-D Revenue/Rider $ 6.55 $ 6.38 $ (0.17) -2.6% $ 6.34 $ % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 149

159 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Antelope Valley - Weekday Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 624 $ 809 $ % $ 668 $ % August $ 839 $ 859 $ % $ 886 $ (28) -3.1% September $ 772 $ 835 $ % $ 808 $ % October $ 696 $ 858 $ % $ 736 $ % November $ 783 $ 862 $ % $ 817 $ % December $ 764 $ 789 $ % $ 804 $ (15) -1.9% January February March April May June Totals Y-T-D Revenue $ 4,480 $ 5,010 $ % $ 4,720 $ % Ridership July % % August % % September % % October % % November % % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % % Revenue Per Rider July $ 5.96 $ 6.57 $ % $ 6.01 $ % August $ 7.15 $ 6.50 $ (0.65) -9.1% $ 7.10 $ (0.60) -8.4% September $ 6.59 $ 6.45 $ (0.15) -2.2% $ 6.49 $ (0.04) -0.7% October $ 5.87 $ 6.34 $ % $ 5.82 $ % November $ 6.53 $ 6.46 $ (0.08) -1.2% $ 6.41 $ % December $ 6.86 $ 6.52 $ (0.34) -4.9% $ 6.78 $ (0.26) -3.9% January February March April May June Average Y-T-D Revenue/Rider $ 6.50 $ 6.47 $ (0.03) -0.5% $ 6.44 $ % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 150

160 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Riverside Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 699 $ 675 $ (24) -3.4% $ 693 $ (18) -2.6% August $ 786 $ 714 $ (72) -9.2% $ 779 $ (66) -8.4% September $ 738 $ 715 $ (23) -3.2% $ 732 $ (17) -2.3% October $ 760 $ 758 $ (2) -0.3% $ 754 $ 4 0.6% November $ 753 $ 744 $ (10) -1.3% $ 747 $ (3) -0.4% December $ 687 $ 685 $ (2) -0.3% $ 681 $ 4 0.6% January February March April May June Totals Y-T-D Revenue $ 4,424 $ 4,290 $ (134) -3.0% $ 4,385 $ (95) -2.2% Ridership July (1) -0.7% 80 (2) -2.6% August (2) -2.2% 87 (3) -3.9% September % 85 (1) -1.7% October % 88 (1) -0.9% November % % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % 504 (5) -1.0% Revenue Per Rider July $ 8.87 $ 8.63 $ (0.24) -2.7% $ 8.63 $ % August $ 9.17 $ 8.52 $ (0.66) -7.2% $ 8.93 $ (0.42) -4.7% September $ 8.85 $ 8.56 $ (0.29) -3.3% $ 8.62 $ (0.06) -0.7% October $ 8.77 $ 8.68 $ (0.09) -1.0% $ 8.55 $ % November $ 9.00 $ 8.53 $ (0.47) -5.2% $ 8.76 $ (0.24) -2.7% December $ 8.95 $ 8.67 $ (0.28) -3.1% $ 8.72 $ (0.05) -0.6% January February March April May June Average Y-T-D Revenue/Rider $ 8.94 $ 8.60 $ (0.34) -3.8% $ 8.70 $ (0.11) -1.2% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 151

161 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Orange County Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 1,906 $ 1,829 $ (78) -4.1% $ 1,809 $ % August $ 2,001 $ 1,889 $ (112) -5.6% $ 1,928 $ (39) -2.0% September $ 1,936 $ 1,837 $ (99) -5.1% $ 1,860 $ (23) -1.2% October $ 1,937 $ 1,897 $ (40) -2.1% $ 1,871 $ % November $ 1,889 $ 1,855 $ (34) -1.8% $ 1,837 $ % December $ 1,715 $ 1,686 $ (29) -1.7% $ 1,666 $ % January February March April May June Totals Y-T-D Revenue $ 11,384 $ 10,993 $ (392) -3.4% $ 10,971 $ % Ridership July (8) -3.5% % August (3) -1.2% % September (9) -3.8% 239 (4) -1.8% October % % November (2) -0.7% % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership 1,413 1,395 (18) -1.3% 1, % Revenue Per Rider July $ 7.94 $ 7.89 $ (0.04) -0.6% $ 7.84 $ % August $ 8.13 $ 7.77 $ (0.36) -4.4% $ 8.00 $ (0.24) -2.9% September $ 7.94 $ 7.83 $ (0.10) -1.3% $ 7.79 $ % October $ 8.18 $ 7.91 $ (0.27) -3.3% $ 7.99 $ (0.08) -1.0% November $ 8.04 $ 7.95 $ (0.09) -1.1% $ 7.94 $ % December $ 8.11 $ 7.94 $ (0.18) -2.2% $ 7.99 $ (0.05) -0.6% January February March April May June Average Y-T-D Revenue/Rider $ 8.05 $ 7.88 $ (0.17) -2.2% $ 7.92 $ (0.04) -0.6% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 152

162 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Orange County - Weekday Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 1,722 $ 1,691 $ (31) -1.8% $ 1,678 $ % August $ 1,848 $ 1,783 $ (65) -3.5% $ 1,822 $ (39) -2.2% September $ 1,781 $ 1,722 $ (59) -3.3% $ 1,752 $ (30) -1.7% October $ 1,796 $ 1,788 $ (8) -0.4% $ 1,765 $ % November $ 1,769 $ 1,760 $ (9) -0.5% $ 1,761 $ (0) 0.0% December $ 1,603 $ 1,570 $ (34) -2.1% $ 1,575 $ (6) -0.4% January February March April May June Totals Y-T-D Revenue $ 10,520 $ 10,315 $ (205) -1.9% $ 10,353 $ (39) -0.4% Ridership July (6) -2.8% 207 (0) -0.1% August % % September (7) -3.2% 220 (5) -2.2% October % % November % % December (1) -0.6% 195 (1) -0.3% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership 1,291 1,280 (11) -0.9% 1, % Revenue Per Rider July $ 8.08 $ 8.16 $ % $ 8.10 $ % August $ 8.24 $ 7.94 $ (0.29) -3.6% $ 8.21 $ (0.27) -3.3% September $ 8.00 $ 8.00 $ (0.01) -0.1% $ 7.96 $ % October $ 8.19 $ 8.07 $ (0.12) -1.5% $ 8.05 $ % November $ 8.18 $ 8.12 $ (0.06) -0.7% $ 8.19 $ (0.06) -0.8% December $ 8.21 $ 8.08 $ (0.12) -1.5% $ 8.09 $ (0.00) -0.1% January February March April May June Average Y-T-D Revenue/Rider $ 8.15 $ 8.06 $ (0.09) -1.1% $ 8.10 $ (0.04) -0.5% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 153

163 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Inland Empire/OC Line Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 691 $ 627 $ (64) -9.3% $ 669 $ (42) -6.2% August $ 771 $ 680 $ (91) -11.8% $ 753 $ (73) -9.7% September $ 750 $ 662 $ (88) -11.7% $ 731 $ (69) -9.5% October $ 764 $ 760 $ (4) -0.6% $ 760 $ 0 0.0% November $ 699 $ 674 $ (25) -3.6% $ 709 $ (35) -4.9% December $ 613 $ 603 $ (11) -1.7% $ 623 $ (20) -3.2% January February March April May June Totals Y-T-D Revenue $ 4,289 $ 4,005 $ (283) -6.6% $ 4,244 $ (239) -5.6% Ridership July (7) -6.0% 120 (6) -4.8% August (8) -6.2% 128 (9) -7.2% September (9) -7.3% 125 (11) -8.6% October % % November (2) -2.1% 122 (5) -4.3% December % 107 (0) -0.2% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership (19) -2.6% 729 (29) -3.9% Revenue Per Ridership July $ 5.67 $ 5.47 $ (0.20) -3.5% $ 5.56 $ (0.09) -1.6% August $ 6.09 $ 5.73 $ (0.36) -6.0% $ 5.89 $ (0.16) -2.8% September $ 6.09 $ 5.80 $ (0.29) -4.8% $ 5.85 $ (0.06) -1.0% October $ 6.16 $ 5.87 $ (0.29) -4.7% $ 5.98 $ (0.11) -1.9% November $ 5.88 $ 5.80 $ (0.09) -1.5% $ 5.83 $ (0.03) -0.6% December $ 5.87 $ 5.65 $ (0.23) -3.9% $ 5.82 $ (0.18) -3.0% January February March April May June Average Y-T-D Revenue/Rider $ (0.24) -4.1% 5.82 (0.10) -1.8% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 154

164 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Inland Empire/OC Line - Weekday Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 590 $ 517 $ (73) -12.4% $ 554 $ (37) -6.7% August $ 673 $ 586 $ (88) -13.0% $ 652 $ (66) -10.2% September $ 651 $ 569 $ (82) -12.6% $ 639 $ (70) -10.9% October $ 695 $ 678 $ (17) -2.4% $ 677 $ 1 0.1% November $ 665 $ 606 $ (59) -8.8% $ 651 $ (45) -6.9% December $ 585 $ 527 $ (58) -9.9% $ 562 $ (35) -6.2% January February March April May June Totals Y-T-D Revenue $ 3,859 $ 3,482 $ (377) -9.8% $ 3,735 (253) -6.8% Ridership July % 98 (5) -5.2% August (2) -1.7% 112 (8) -7.3% September (5) -4.3% 110 (11) -9.7% October % % November % 111 (5) -4.7% December % 97 (5) -4.8% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % 644 (33) -5.1% Revenue Per Rider July $ 6.39 $ 5.57 $ (0.82) -12.8% $ 5.66 $ (0.09) -1.6% August $ 6.38 $ 5.65 $ (0.73) -11.5% $ 5.83 $ (0.18) -3.1% September $ 6.25 $ 5.71 $ (0.54) -8.6% $ 5.79 $ (0.08) -1.3% October $ 6.36 $ 5.82 $ (0.55) -8.6% $ 5.85 $ (0.04) -0.6% November $ 6.37 $ 5.75 $ (0.62) -9.7% $ 5.89 $ (0.14) -2.3% December $ 6.36 $ 5.67 $ (0.68) -10.8% $ 5.76 $ (0.09) -1.5% January February March April May June Average Y-T-D Revenue/Rider $ 6.35 $ 5.70 $ (0.65) -10.3% $ 5.80 $ (0.10) -1.7% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 155

165 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - 91 Line Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 418 $ 452 $ % $ 428 $ % August $ 480 $ 485 $ 5 1.1% $ 491 $ (6) -1.3% September $ 463 $ 466 $ 4 0.8% $ 474 $ (8) -1.6% October $ 481 $ 514 $ % $ 493 $ % November $ 465 $ 497 $ % $ 476 $ % December $ 432 $ 450 $ % $ 443 $ 7 1.5% January February March April May June Totals Y-T-D Revenue $ 2,738 $ 2,863 $ % $ 2,805 $ % Ridership July % % August % % September % 73 (0) -0.7% October % % November % % December % 71 (0) -0.2% January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % % Revenue Per Ridership July $ 6.17 $ 6.32 $ % $ 6.16 $ % August $ 6.67 $ 6.47 $ (0.19) -2.9% $ 6.58 $ (0.10) -1.6% September $ 6.61 $ 6.44 $ (0.17) -2.6% $ 6.50 $ (0.06) -1.0% October $ 6.66 $ 6.51 $ (0.15) -2.3% $ 6.54 $ (0.03) -0.5% November $ 6.72 $ 6.50 $ (0.22) -3.3% $ 6.59 $ (0.09) -1.4% December $ 6.28 $ 6.36 $ % $ 6.25 $ % January February March April May June Average Y-T-D Revenue/Rider $ 6.52 $ 6.44 $ (0.09) -1.3% $ 6.44 $ (0.00) -0.1% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 156

166 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - 91 Line - Weekday Six Months Ended December 31, 2017 (Thousands) Comparison FY FY Increase (Decrease) FY FY 18 Vs FY 17 Actuals Description Budget Actual Amount % Actual Amount % Revenue July $ 388 $ 403 $ % $ 378 $ % August $ 454 $ 444 $ (10) -2.3% $ 448 $ (4) -0.9% September $ 439 $ 425 $ (14) -3.1% $ 434 $ (9) -2.1% October $ 455 $ 479 $ % $ 458 $ % November $ 442 $ 465 $ % $ 449 $ % December $ 396 $ 412 $ % $ 415 $ (3) -0.8% January February March April May June Totals Y-T-D Revenue $ 2,573 $ 2,628 $ % $ 2, % Ridership July % % August % % September % 67 (1) -0.8% October % % November % % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % % Revenue Per Rider July $ 6.87 $ 6.49 $ (0.38) -5.5% $ 6.31 $ % August $ 7.13 $ 6.51 $ (0.62) -8.7% $ 6.62 $ (0.11) -1.6% September $ 6.97 $ 6.41 $ (0.56) -8.1% $ 6.49 $ (0.08) -1.2% October $ 6.90 $ 6.57 $ (0.33) -4.7% $ 6.54 $ % November $ 6.98 $ 6.55 $ (0.43) -6.2% $ 6.68 $ (0.13) -2.0% December $ 6.78 $ 6.62 $ (0.16) -2.4% $ 6.70 $ (0.08) -1.1% January February March April May June Average Y-T-D Revenue/Rider $ 6.94 $ 6.53 $ (0.42) -6.0% $ 6.56 $ (0.03) -0.5% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 157

167 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Systemwide Six Months Ended December 31, 2017 (Thousands) METROLINK TICKET SALES FY18 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN FY % of AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT YTD Sale SALES CATEGORY: CORP. PASS PROGRAM $ 1,135 $ 1,157 $ 1,165 $ 1,174 $ 1,238 $ 1,125 $ 6, % CORP. PASS PROGRAM (CM) $ (1) $ (20) $ (1) $ (14) $ (74) $ (16) $ (126) -0.3% CSR SALES (LAUS) * $ 357 $ 386 $ 361 $ 384 $ 384 $ 345 $ 2, % TVM CASH SALES * $ 917 $ 890 $ 845 $ 875 $ 827 $ 802 $ 5, % TVM CREDIT CARD SALES * $ 3,598 $ 3,863 $ 3,798 $ 4,079 $ 3,930 $ 3,487 $ 22, % TVM DEBIT CARD SALES * $ 550 $ 562 $ 553 $ 613 $ 552 $ 503 $ 3, % REMOTE SALES PGM 0.0% TICKET REFUNDS $ (22) $ (29) $ (22) $ (26) $ (18) $ (13) $ (129) -0.3% TVM Exchanges $ (26) $ (25) $ (19) $ (22) $ (20) $ (20) $ (132) -0.3% ACCESS RIDERS $ 181 $ 181 $ 181 $ 181 $ 181 $ 181 $ 1, % JURY LINK $ 1 $ 1 0.0% RECREATIONAL GROUP SALES $ 1 $ 1 $ 0 $ 2 $ 1 $ 1 $ 6 0.0% SCHOOL GROUP SALES $ 2 $ 0 $ 2 $ 5 0.0% DEPENDENT PASS $ 1 $ 1 $ 1 $ 1 $ 0 $ 4 0.0% Totals Y-T-D Revenue $ 6,692 $ 6,968 $ 6,862 $ 7,248 $ 7,001 $ 6,398 $ 41, % SALES BY LINE: VENTURA COUNTY LINE $ 482 $ 514 $ 514 $ 533 $ 517 $ 457 $ 3, % ANTELOPE VALLEY LINE $ 946 $ 949 $ 941 $ 962 $ 959 $ 912 $ 5, % SAN BERNARDINO LINE $ 1,682 $ 1,737 $ 1,727 $ 1,825 $ 1,754 $ 1,606 $ 10, % RIVERSIDE LINE $ 675 $ 714 $ 715 $ 758 $ 744 $ 685 $ 4, % ORANGE COUNTY LINE $ 1,829 $ 1,889 $ 1,837 $ 1,897 $ 1,855 $ 1,686 $ 10, % IE/OC $ 627 $ 680 $ 662 $ 760 $ 674 $ 603 $ 4, % 91 LINE $ 452 $ 485 $ 466 $ 514 $ 497 $ 450 $ 2, % Totals Y-T-D Revenue $ 6,692 $ 6,968 $ 6,862 $ 7,248 $ 7,001 $ 6,398 $ 41, % 158

168 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Antelope Valley Weekend Service Six Months Ended December 31, 2017 (Thousands) Saturday Sunday FY 18 Actuals Vs FY 17 Actuals FY 18 Actuals Vs FY 17 Actuals REVENUES FY FY Increase/Decrease FY FY Increase/Decrease Actuals Actuals Amount % Actuals Actuals Amount % July $ 78 $ 80 $ (2) -2.1% $ 59 $ 62 $ (3) -4.9% August $ 52 $ 55 $ (3) -5.8% $ 38 $ 41 $ (3) -6.5% September $ 63 $ 54 $ % $ 43 $ 47 $ (4) -7.6% October $ 52 $ 58 $ (6) -11.1% $ 53 $ 52 $ 1 1.9% November $ 51 $ 56 $ (5) -8.8% $ 46 $ 55 $ (9) -15.8% December $ 69 $ 61 $ % $ 54 $ 35 $ % January February March April May June Totals Y-T-D Revenue $ 364 $ 364 $ 0 0.0% $ 294 $ 291 $ 2 0.8% Total FY $ 364 $ 364 $ 0 0.0% $ 294 $ 291 $ 2 0.8% RIDERSHIP July (0) -3.4% 9 9 (0) -0.6% August % 8 8 (0) -6.1% September % 7 9 (2) -17.4% October 9 11 (2) -20.7% (1) -9.4% November % % December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership (1) -0.9% (0) -0.3% Total FY (1) -0.9% (0) -0.3% REVENUE PER RIDER July $ 6.77 $ 6.68 $ % $ 6.29 $ 6.57 $ (0.29) -4.4% August $ 5.34 $ 5.74 $ (0.41) -7.1% $ 5.05 $ 5.07 $ (0.02) -0.4% September $ 5.71 $ 5.28 $ % $ 5.89 $ 5.26 $ % October $ 5.75 $ 5.13 $ % $ 5.53 $ 4.91 $ % November $ 5.52 $ 6.30 $ (0.78) -12.4% $ 5.46 $ 6.50 $ (1.03) -15.9% December $ 5.93 $ 5.71 $ % $ 5.73 $ 5.34 $ % January February March April May June Totals Y-T-D Revenue per Rider $ 5.86 $ 5.81 $ % $ 5.67 $ 5.61 $ % Total FY $ 5.86 $ 5.81 $ % $ 5.67 $ 5.61 $ % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 159

169 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - San Bernardino Weekend Service Six Months Ended December 31, 2017 (Thousands) Saturday FY 18 Actuals Vs FY 17 Actuals FY 18 Actuals Vs FY 17 Actuals REVENUES FY FY Increase/Decrease FY FY Increase/Decrease Actuals Actuals Amount % Actuals Actuals Amount % July $ 117 $ 114 $ 2 2.0% $ 88 $ 89 $ (1) -1.0% August $ 86 $ 91 $ (5) -5.4% $ 63 $ 68 $ (4) -6.1% September $ 92 $ 87 $ 6 6.7% $ 64 $ 75 $ (12) -15.4% October $ 84 $ 89 $ (5) -6.2% $ 86 $ 80 $ 6 7.7% November $ 81 $ 84 $ (3) -3.6% $ 73 $ 82 $ (9) -11.0% December $ 95 $ 89 $ 7 7.7% $ 75 $ 51 $ % January February March April May June Totals Y-T-D Revenue $ 555 $ 554 $ 1 0.3% $ 450 $ 444 $ 5 1.2% Total FY $ 555 $ 554 $ 1 0.3% $ 450 $ 444 $ 5 1.2% RIDERSHIP July % (1) -5.6% August (2) -12.6% (1) -6.8% September % (2) -14.0% October (2) -11.4% (1) -9.2% November % (1) -7.4% December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership (1) -0.6% (1) -2.0% Total FY (1) -0.6% (1) -2.0% REVENUE PER RIDER July $ 5.56 $ 5.51 $ % $ 6.47 $ 6.18 $ % August $ 5.60 $ 5.17 $ % $ 6.29 $ 6.24 $ % September $ 4.98 $ 5.32 $ (0.34) -6.4% $ 5.64 $ 5.73 $ (0.09) -1.6% October $ 5.33 $ 5.04 $ % $ 6.31 $ 5.32 $ % November $ 5.97 $ 6.39 $ (0.42) -6.6% $ 6.59 $ 6.86 $ (0.27) -3.9% December $ 6.13 $ 5.97 $ % $ 6.17 $ 6.28 $ (0.11) -1.7% January February March April May June Totals Y-T-D Revenue per Rider $ 5.57 $ 5.52 $ % $ 6.25 $ 6.05 $ % Total FY $ 5.57 $ 5.52 $ % $ 6.25 $ 6.05 $ % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* Sunday 160

170 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - Orange County Weekend Service Six Months Ended December 31, 2017 (Thousands) Saturday Sunday FY 18 Actuals Vs FY 17 Actuals FY 18 Actuals Vs FY 17 Actuals REVENUES FY FY Increase/Decrease FY FY Increase/Decrease Actuals Actuals Amount % Actuals Actuals Amount % July $ 78 $ 73 $ 5 7.0% $ 59 $ 57 $ 2 3.8% August $ 61 $ 60 $ 1 0.9% $ 45 $ 45 $ 0 0.2% September $ 68 $ 58 $ % $ 47 $ 50 $ (3) -6.7% October $ 54 $ 56 $ (3) -4.7% $ 55 $ 50 $ 5 9.3% November $ 50 $ 39 $ % $ 45 $ 38 $ % December $ 65 $ 58 $ % $ 51 $ 33 $ % January February March April May June Totals Y-T-D Revenue $ 376 $ 344 $ % $ 302 $ 273 $ % Total FY $ 376 $ 344 $ % $ 302 $ 273 $ % RIDERSHIP July % % August (0) -0.3% 8 8 (0) -2.2% September % 8 9 (1) -10.3% October % % November % 8 9 (0) -4.7% December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % % Total FY % % REVENUE PER RIDER July $ 5.78 $ 5.76 $ % $ 5.39 $ 5.34 $ % August $ 5.73 $ 5.66 $ % $ 5.56 $ 5.43 $ % September $ 6.21 $ 6.11 $ % $ 5.73 $ 5.51 $ % October $ 6.36 $ 7.15 $ (0.79) -11.1% $ 5.72 $ 7.02 $ (1.30) -18.5% November $ 5.81 $ 4.94 $ % $ 5.54 $ 4.42 $ % December $ 6.67 $ 7.00 $ (0.33) -4.8% $ 6.08 $ 5.92 $ % January February March April May June Totals Y-T-D Revenue per Rider $ 6.07 $ 6.06 $ % $ 5.66 $ 5.54 $ % Total FY $ 6.07 $ 6.06 $ % $ 5.66 $ 5.54 $ % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 161

171 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - IEOC Weekend Service Six Months Ended December 31, 2017 (Thousands) Saturday Sunday FY 18 Actuals Vs FY 17 Actuals FY 18 Actuals Vs FY 17 Actuals REVENUES FY FY Increase/Decrease FY FY Increase/Decrease Actuals Actuals Amount % Actuals Actuals Amount % July $ 63 $ 64 $ (2) -2.6% $ 47 $ 50 $ (3) -5.4% August $ 54 $ 58 $ (4) -6.4% $ 40 $ 43 $ (3) -7.1% September $ 55 $ 49 $ % $ 38 $ 43 $ (5) -11.5% October $ 40 $ 44 $ (3) -7.2% $ 41 $ 39 $ 3 6.5% November $ 36 $ 29 $ % $ 32 $ 29 $ % December $ 42 $ 39 $ 4 9.1% $ 33 $ 22 $ % January February March April May June Totals Y-T-D Revenue $ 290 $ 283 $ 7 2.6% $ 233 $ 226 $ 7 3.1% Total FY $ 290 $ 283 $ 7 2.6% $ 233 $ 226 $ 7 3.1% RIDERSHIP July % 9 10 (1) -7.0% August 9 9 (1) -5.5% 6 7 (0) -7.3% September % 6 7 (1) -10.7% October % % November % 5 5 (0) -2.8% December % % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership % % Total FY % % REVENUE PER RIDER July $ 4.88 $ 5.04 $ (0.16) -3.1% $ 5.27 $ 5.18 $ % August $ 6.16 $ 6.22 $ (0.06) -1.0% $ 6.46 $ 6.43 $ % September $ 6.37 $ 6.25 $ % $ 6.42 $ 6.49 $ (0.06) -0.9% October $ 6.45 $ 7.11 $ (0.65) -9.2% $ 6.17 $ 7.41 $ (1.24) -16.7% November $ 6.10 $ 5.04 $ % $ 6.41 $ 5.50 $ % December $ 4.93 $ 6.64 $ (1.71) -25.7% $ 6.36 $ 6.18 $ % January February March April May June Totals Y-T-D Revenue per Rider $ 5.69 $ 5.93 $ (0.24) -4.0% $ 6.10 $ 6.10 $ % Total FY $ 5.69 $ 5.93 $ (0.24) -4.0% $ 6.10 $ 6.10 $ % *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 162

172 SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY Passenger Fare Revenue and Ridership Report - 91 Line Weekend Service Six Months Ended December 31, 2017 (Thousands) Saturday Sunday FY 18 Actuals Vs FY 17 Actuals FY 18 Actuals Vs FY 17 Actuals REVENUES FY FY Increase/Decrease FY FY Increase/Decrease Actuals Actuals Amount % Actuals Actuals Amount % July $ 28 $ 28 $ (0) -1.0% $ 21 $ 22 $ (1) -3.9% August $ 24 $ 25 $ (1) -4.9% $ 17 $ 18 $ (1) -5.6% September $ 24 $ 21 $ % $ 17 $ 18 $ (2) -9.3% October $ 17 $ 18 $ (1) -6.2% $ 17 $ 16 $ 1 7.7% November $ 17 $ 14 $ % $ 15 $ 13 $ % December $ 21 $ 18 $ % $ 17 $ 10 $ % January February March April May June Totals Y-T-D Revenue $ 131 $ 124 $ 7 5.6% $ 104 $ 98 $ 6 6.0% Total FY $ 131 $ 124 $ 7 5.6% $ 104 $ 98 $ 6 6.0% RIDERSHIP July 5 6 (0) -6.1% % August % 3 3 (0) ##### September % 3 3 (0) ##### October % % November % 2 2 (0) -0.4% December 6 7 (1) -18.5% % January - - February - - March - - April - - May - - June - - Totals Y-T-D Ridership (1) -3.2% % Total FY (1) -3.2% % REVENUE PER RIDER July $ 5.24 $ 4.97 $ % $ 5.06 $ 5.58 $ (0.52) -9.3% August $ 5.89 $ 6.25 $ (0.36) -5.7% $ 6.48 $ 6.16 $ % September $ 6.89 $ 6.71 $ % $ 6.63 $ 6.57 $ % October $ 5.87 $ 6.36 $ (0.49) -7.7% $ 5.53 $ 6.57 $ (1.05) ##### November $ 5.59 $ 5.34 $ % $ 6.28 $ 5.53 $ % December $ 3.48 $ 2.38 $ % $ 6.89 $ 7.10 $ (0.21) -3.0% January February March April May June Totals Y-T-D Revenue per Rider $ 5.27 $ 4.83 $ % $ 6.02 $ 6.14 $ (0.12) -2.0% Total FY $ 5.27 $ 4.83 $ % $ 6.02 $ 6.14 $ (0.12) -2.0% *Ridership is calculated based on imputed formula. Actual R2R count is not included in the value, but is covered in the calculation* 163

173 Key Performance Indicators Second Quarter FY2018 KPI: ON-TIME PERFORMANCE Objective: Improve Service Reliability KPI Definition: Percent of scheduled trains arriving at their destination on-time Target: 95% on-time performance How is Metrolink doing? FY18Q2 Performance near target During the second quarter of FY18, 92.8% of trains arrived on-time. ON-TIME PERFORMANCE Quarter FY17 FY18 Change Q1 92.7% 92.6% -0.1% Q2 94.4% 92.8% -1.6% Q3 94.7% Q4 95.1% YTD 93.5% 92.7% -0.9% Why did performance change? Performance improved slightly from the prior quarter, but was down from 94.4% a year ago. The lines with the best on-time performance were the San Bernardino Line (95.5%), and the Riverside Line (95.3%). The lowest on-time performance was reported for the Orange County Line (88.7%) and the IEOC Line (85.9%). Both lines were impacted by third party delays associated with BNSF operations. There was also an increase in PTC-related delays. Key Initiatives to Improve Performance The first of 40 new Tier 4 locomotives have entered service and will help improve service reliability. Staff continues to work with local jurisdictions to improve response times for coroners during fatal incidents. The Operations Department is conducting weekly calls with the freight railroads to facilitate information-sharing and to better coordinate responses to incidents. 100% 95% 90% 85% Second Quarter OTP - Historical Trend Standard, 95.0% 94.4% 92.8% 89.3% 80% 75% FY16 Q2 FY17 Q2 FY18 Q

174 Key Performance Indicators ON-TIME PERFORMANCE KPI: ON-TIME PERFORMANCE Second Quarter FY2018 Strategic Goal: Ensure a Safe Operating Environment Key Performance Indicators Fourth Quarter FY2016 FREQUENCY OF TRAIN DELAYS BY DURATION FY18 Q2 FY18 Q2 VEN AVL SNB BUR RIV OC IEOC 91-LA TOTAL % of Total NO DELAY % 1 MIN - 5 MIN % 6 MIN - 10 MIN % 11 MIN - 20 MIN % 21 MIN - 30 MIN % GREATER THAN 30 MIN % ANNULLED % TOTAL % % OF TRAINS ON-TIME 94.8% 94.7% 95.5% 94.2% 95.3% 88.7% 85.9% 90.0% 92.6% Note: includes weekday and weekend DELAYS BY RESPONSIBLE PARTY FY18 Q2 FY18 Q2 VEN AVL SNB BUR RIV OC IEOC 91-LA TOTAL % of Total Operations % Force Majeure % UPRR % NCTD % BNSF % RED LINE % Inter-City Amtrak % Mechanical % Track % Signal % Crossing % Communications % CAD % PTC % Total % Note: includes weekday and weekend THIRD PARTY DELAYS Responsible Party FY18Q2 INTER-CITY AMTRAK 38 FORCE MAJEURE 3 BNSF 206 UPRR 57 NCTD 14 sum

175 Key Performance Indicators Second Quarter FY2018 KPI: RIDERSHIP FY18Q2 Performance better than target Objective: Increase Ridership KPI Definition: Ticket-based unlinked passenger trips (boardings) Target: Boardings (YTD) assumed in the Operating Budget How is Metrolink doing? Second quarter ridership reached 2,917,144 boardings, which is 2.3% higher than the budget target. It also reflects a 0.9% ridership increase over the same quarter of the prior year. Boardings (Actuals vs. Budget) Quarter Budget FY18 Variance %Var Q1 2,912,060 2,904,071-7, % Q2 2,851,503 2,917,144 65, % Q3 2,852,715 Q4 2,876,010 YTD 5,763,563 5,821,215 57, % Why did performance change? Metrolink ridership increased 0.9% from a year ago, outperforming most other Southern California transit systems, and the US Commuter Rail industry as a whole. Ridership growth was driven by strong performance of the Antelope Valley Line (up 4.2%, the 91/Perris Valley Line (up 3.5%), and the Orange County Line (up 1.7%). Ridership on the San Bernardino Line is stabilizing. Losses during the second quarter were limited to 1.7% compared to the same period of the prior year. The best performance was reported for the Antelope Valley Line, which continues to show robust growth that started with the July 2015 fare reduction program. Key initiatives to improve performance Metrolink launched a new website that features a GPS tracking tool to locate trains in real time. Discounted fares have been continued for riders on the 91/Perris Valley Line. Staff is evaluating fare and service options for a pilot program to increase ridership on the San Bernardino Line. Millions Second Quarter Ridership (3-Year Trend) Estimated boardings based on ticket sales FY16 Q2 FY17 Q2 FY18 Q

176 Key Performance Key Performance Indicators Indicators Fourth Quarter Second FY2016 Quarter FY2018 RIDERSHIP Strategic Goal: Retain and Grow Ridership 3,000 2,000 Ventura County Line Ridership (Change from prior year) 30,000 25,000 Antelope Valley Line Ridership (Change from prior year) 1,000 0 (1,000) 20,000 15,000 10,000 5,000 (2,000) Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q2 0 Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q2 0 (10,000) (20,000) (30,000) (40,000) (50,000) (60,000) San Bernardino Line Ridership (Change from prior year) Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q2 6,000 4,000 2,000 0 (2,000) (4,000) (6,000) (8,000) (10,000) Riverside Line Ridership (Change from prior year) Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q2 60,000 Orange County Line Ridership (Change from prior year) 20,000 IEOC Line Ridership (Change from prior year) 50,000 40,000 30,000 10, ,000 10,000 0 (10,000) Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q2 (10,000) (20,000) (30,000) Q1 FY17 Q2 Q3 Q4 Q1 FY18 Q2 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Q1 FY17 91 / Perris Valley Line Ridership (Change from prior year) Q2 Q3 Q4 Q1 FY18 Q2 120, ,000 80,000 60,000 40,000 20,000 0 (20,000) (40,000) (60,000) Q1 FY17 Systemwide Ridership (Change from prior year) Q2 Q3 Q4 Q1 FY18 Q2 Total Boardings (Unlinked Trips including transfers) Route FY17Q2 FY18Q2 Change % Change Ventura County Line 270, , % Antelope Valley Line 428, ,117 18, % San Bernardino Line 693, ,618-11, % Riverside Line 251, ,436 2, % Orange County Line 674, ,545 11, % IEOC Line 355, ,612-3, % 91/Perris Valley Line 218, ,038 7, % Sum 2,892,087 2,917,144 25, %

177 RIDERSHIP Key Performance Key Performance Indicators Indicators Fourth Quarter Second FY2016 Quarter FY2018 Strategic Goal: Retain and Grow Ridership KPI: RIDERSHIP Key Performance Indicators Fourth Quarter FY2016 Strategic Goal: Retain and Grow Ridership AVERAGE WEEKDAY STATION BOARDINGS STATION FY17Q2 FY18Q2 % Change Change ANAHEIM % -24 ANAHEIM CANYON % -26 BALDWIN PARK % -17 BUENA PARK % -22 BURBANK % 39 BURBANK AIRPORT % 19 CAL STATE LA % -82 CAMARILLO % -3 CHATSWORTH % -34 CLAREMONT % 15 COMMERCE % 5 COVINA % -73 DOWNTOWN PERRIS % 29 DOWNTOWN POMONA % -8 EAST ONTARIO % 2 EAST VENTURA % -6 EL MONTE % 20 FONTANA % 33 FULLERTON 1,632 1,612-1% -20 GLENDALE % 21 INDUSTRY % 12 IRVINE 1,444 1,486 3% 42 JURUPA VALLEY/PEDLEY % -7 LA UNION 13,020 13,192 1% 171 LAGUNA NIGUEL/MISSION VIEJO % -4 LANCASTER % 22 MONTCLAIR % -10 MONTEBELLO/COMMERCE % -16 MOORPARK % 11 MORENO VALLEY / MARCH FIELD % 20 NEWHALL % 1 NORTH MAIN CORONA 1,102 1,009-8% -93 NORTHRIDGE % -4 NORWALK/SANTA FE SPRINGS % 38 OCEANSIDE % -44 ORANGE % -36 OXNARD % -18 PALMDALE % -2 POMONA NORTH % 44 RANCHO CUCAMONGA % -15 RIALTO % -16 RIVERSIDE HUNTER PARK % 7 RIVERSIDE-DOWNTOWN 1,046 1,030-1% -16 RIVERSIDE-LA SIERRA % -39 SAN BERNARDINO % -76 SAN BERNARDINO DOWNTOWN SAN CLEMENTE % -13 SAN CLEMENTE PIER % 2 SAN JUAN CAPISTRANO % -14 SANTA ANA % -22 SANTA CLARITA % 37 SIMI VALLEY % -14 SOUTH PERRIS % 38 SUN VALLEY % -3 SYLMAR/SAN FERNANDO % 15 TUSTIN 40,696 40,569 0% -126 UPLAND 1,228 1,219-1% -9 VAN NUYS % -65 VIA PRINCESSA % -6 VINCENT GRADE/ACTON % 20 WEST CORONA %

178 Key Performance Indicators Second Quarter FY2018 Objective: Increase Service Utilization KPI Definitions: Passenger Miles reflect the total number of miles traveled by ticketed passengers on Metrolink trains between origin and destination stations. Target: Annual operating budget. How is Metrolink doing? FY18Q2 Performance better than target During the second quarter of FY18 total passenger miles traveled on Metrolink trains were 1.1% higher than the budget target. PASSENGER MILES - ACTUALS VS. BUDGET (Thousands) Quarter Budget FY18 Variance %Var Q1 101, , % Q2 99, ,094 1, % Q3 100,019 Q4 100,663 YTD 201, ,729 1, % KPI: Passenger Miles Why has performance changed? Passenger miles during the second quarter increased by 0.7% from a year ago, which is in line with the ridership increase of 0.9% during the same period. The largest increase in passenger miles was reported for the 91/Perris Valley Line with a 5.0% increase over the prior year. Passenger miles on the Antelope Valley Line increased by 3.0% from a year earlier, corresponding to the continued ridership growth on that line. Millions Passenger Miles (Millions) FY16Q2 FY17Q2 FY18Q2 Key initiatives to improve performance In February 2018 the Board voted to freeze promotional fare discounts on the Perris Valley Line to support ridership growth on that line. Staff is currently studying ridership strategies to halt ridership losses on the San Bernardino Line. PASSENGER MILES Route FY17Q2 FY18Q2 Change % Change Ventura County Line 7,045,024 6,887, , % Antelope Valley Line 16,398,075 16,888, , % San Bernardino Line 24,808,020 24,370, , % Riverside Line 8,777,395 8,826,910 49, % Orange County Line 22,979,918 23,363, , % IEOC Line 11,776,237 11,754,563-21, % 91/Perris Valley Line 8,577,443 9,003, , % Sum 100,362, ,094, , %

179 Key Performance Indicators Second Quarter FY2018 KPI: COMMUNICATIONS Objective: Improve Customer Communications KPI Definitions: Customer Complaints about Metrolink communications to passengers per 100,000 boardings. Target: Five year average complaint rate. How is Metrolink doing? FY18 Q2 performance better than target Customer Complaints Year FY17 Q2 FY18 Q2 Change All Complaints % Com. Complaints % Complaints about customer communications per 100,000 boardings decreased 57%, a decline from 93 to 45 complaints. Overall complaints are down 8% from 811 complaints in FY17 Q2 to 720 FY18 Q2. Why did performance change? A reduction in complaints can be attributed to increased staffing (Communication Desk), a new and improved predictive arrival station messaging system, and a recently launched beta version of Train Tracker; a web based realtime train locator. Communications Complaints / 100,000 Boardings Quarter FY17 FY18 % Change Q % Q % Q3 3.1 Q4 5.2 YTD % Key initiatives to improve performance Increase methods of communication to customer, i.e. Mobile App alert integration. Real-time and automated notification / updates via station message boards, social media, website, mobile application. Increase on-board communication from conductors, especially during service delays nd Quarter Communications Complaints per 100,000 Boardings 3-Year Trend 5.4 standard FY16 Q2 FY17 Q2 FY18 Q