Related to Agenda Item W1 Contracts Administration Management Action Plan Status June 20, 2013
Background In January 2012, the Board authorized an on-call management and consulting services contract with SC&H for the following services: Assessment of internal controls Financial planning and analysis Business management practice documentation Evaluation of document management needs Other financial and business management reviews At NCTD s request, SC&H performed an analysis of the contracts administration function at NCTD. SC&H documented 19 findings and provided recommendations for improvement through proposed management action. NCTD was already advancing some of the improvements Areas of risk have been stabilized to mitigate risk 2
Management Action Plan Major Remaining Activities 11 of the 19 recommended improvements are complete. Remaining Activities: Ongoing Staff Development and Training Enhancement of Procurement and Contracts Administration Manual by December 2013 Implementation of Document Management System by December 2013 Implementation of JDE Report Writer by December 2013 Implementation JDE Time and Attendance System by December 2013 3
Management Action Plan Status 1. Contract compliance monitoring Observation: NCTD lacks communication regarding monitoring of contracts for compliance. Recommendation: Establish procedures that address monitoring contract compliance. Management Action: Comprehensive Compliance & Oversight Program Plan has been implemented for all service operations contracts Project Management Office has been established & a Project Management Handbook (January 2013) has been developed Remaining Management Action(s): None 4
Management Action Plan Status 2. Regulatory compliance Observation: Regulatory compliance is not centrally monitored. Recommendations: Establish procedures. For labor costs, reconcile certified payrolls to daily reports. Management Action: Hired General Counsel, Compliance Officer, and Civil Rights Officer Established centralized compliance program in Office of General Counsel Established Comprehensive Compliance & Oversight Program Remaining Management Action(s): None 5
Management Action Plan Status 3. Evaluation panel member selection Observation: NCTD lacks guidelines regarding panels. Recommendation: Devise and implement guidelines. Management Action: Procedure for panel selection and scoring has been developed Guidance is being provided by General Counsel Remaining Management Action(s): Training of staff 6
Management Action Plan Status 4. Evaluation panel scoring Observation: Evaluation score sheets are inconsistently completed and lack supporting information to justify the selection of the vendor. Also, there is no clear guidance for procurements under $100,000. Recommendation: Contracts and Procurement Department should reject incomplete evaluations. Additionally, escalation procedures should be added for panel issues and scoring criteria should add a fifth rating. Finally, revise PM handbook to require PM s to evaluate and rank selection criteria to include in the solicitation documents. Management Action: Updated Procedure for panel selection and scoring Guidance is being provided by General Counsel Project Management Handbook has been developed 7
Management Action Plan Status 4. Evaluation panel scoring Remaining Management Action(s): Training of staff 8
Management Action Plan Status 5. JD Edwards (JDE) Observation: System is inefficient, labor intensive, and not user friendly. Recommendation: Work with IT to improve system efficiencies related to notifications and report generation. Management Clarification: JDE does provide work breakdown schedules JDE does provide budget to actual spending Management Action: NCTD executed a contract with New Horizons Computer Training that supports the provision of training to improve proficiency with JDE 9
Management Action Plan Status 5. JD Edwards (JDE) Remaining Management Action(s): JDE Time and Attendance module has been procured and will be operational by December 2013 Report Writer for JD Edwards is pending Board action in July 2013. This system will allow the development of custom reports thereby improving efficiency. Estimated date to fully implement Report Writer is December 2013. 10
Management Action Plan Status 6. Business case justification Observation: Requirements regarding submission of justification need improvement. Recommendation: Management should implement clearly defined guidance and develop a form that indicates the required information and approvals necessary for a justification. Management Action: Updated business justification process to provide clear guidance Remaining Management Action(s): Training of staff 11
Management Action Plan Status 7. Task order/purchase order review Observation: Lack of controls to prevent duplicate tasks or purchase orders. Recommendation: Procurement and Contracts Administration Manager should confer with steering committee to ensure no duplication. Management Action: Monthly Procurement Review Committee has been established oversight of procurement Capital Projects Steering Committee has been implemented Sole Source Procurement Review Committee has been established to review requests for sole source procurement Remaining Management Action(s): None 12
Management Action Plan Status 8. Memorandum of understanding (MOU) Observation: District does not actively monitor MOUs for compliance or potential duplication. Recommendation: Contracts and Procurement Department should assign staff to monitor active MOUs. District should enforce policies. Management Action: Updated MOU process has been completed All MOUs must be approved by General Counsel Management Analysts have been added to support monitoring of MOUs Remaining Management Action(s): Training of staff Assignment of specific staff to MOUs 13
Management Action Plan Status 9. Avoidance of competitive procurement Observation: Sole source procurements are overused without justification. Recommendation: Management should institute greater oversight of sole source procurements and utilize steering committee to evaluate justifications. Management Clarification: On-call contracts are competitively procured and rates are established as part of the final contract 14
Management Action Plan Status 9. Avoidance of competitive procurement Management Action: In September 2012, Executive Director restated FTA guidance and District s position on competitive and sole source procurements. Sole Source Procurement Review Committee has been established. Updated Sole Source Procurement Request process and form Remaining Management Action(s): None 15
Management Action Plan Status 10. Invoice review process Observation: Manual process is inefficient and prone to errors. Recommendation: Management and IT should automate process. Management Action: Assessed automated invoice review process systems. Remaining Management Actions: Board action is scheduled for June 20, 2013 to support the procurement of Document Management System with functionality to automate invoice review process. System will be in place by December 2013. Procedure will be finalized by August 2013 that addresses responsibilities related to invoice review process. 16
Management Action Plan Status 11. Project Manager Guidance Observation: Project managers do not have accurate guidance for procurement process. Recommendation: Management should update Project Management Handbook and institute project management training within three months of hire and annual refresher training. Management Action: Project Manager Handbook has been developed. Remaining Action(s): Training of staff 17
Management Action Plan Status 12. Quality assurance Observation: NCTD does not conduct quality assurance (QA) reviews prior to sending solicitations and contracts to vendors. Recommendation: Management should implement a formalized QA review process. Management Action: General Counsel is reviewing and approving all solicitations and contracts prior to sending to vendors for proposal or execution. Remaining Management Action(s): General Counsel will develop updated procurement and contract templates by December 2013. 18
Management Action Plan Status 13. Supporting documentation Observation: Inaccurate or incomplete documentation accompanies requisitions. Recommendation: Use checklists to enhance the work flow, and add staffing ensuring all required documentation is submitted. Management Action: Checklist has been updated. Three Management Analyst positions were added and one additional will be added in FY 14 with the responsibility of ensuring that requisitions are submitted consistent with checklist requirements. Remaining Management Action(s): None 19
Management Action Plan Status 14. Collaboration Observation: Inadequate collaboration occurs between Contracts and Procurement Department staff and stakeholders. Recommendation: Management should institute kick-off meeting with all stakeholders, including Contracts and Procurement staff. Management Action: Monthly Procurement Review Committee meetings have been implemented. Project Management Handbook has been developed Remaining Management Action(s): None 20
Management Action Plan Status 15. PM/CA roles and responsibilities Observation: Roles and responsibilities of project managers (PMs) and contract administrators (CAs) are unclear. Recommendation: District policies and procedures should contain roles and responsibilities of PMs and CAs. Management Action: On-going guidance is being provided by Chief Financial Officer and General Counsel Remaining Management Action(s): Updated procedure will be developed and incorporated into Procurements and Contracts Administration Manual which will clarify roles and responsibilities. This procedure will be included in the Procurement and Contracts Administration Manual by December 2013. 21
Management Action Plan Status 16. Contracts and Procurement resources Observation: The Contracts and Procurement Department has inadequate resources to maintain the current workload. Recommendation: Management should add a data entry position to allow Contracts and Procurement Department time for more technical matters. Management Action: Three new Management Analyst positions have been assigned responsibilities to ease workload of Procurements and Contracts Administration Department. Remaining Management Action(s): None 22
Management Action Plan Status 17. Contracts and procurement staff inconsistencies Observation: Contract administrators and buyer perform respective duties inconsistently. Recommendation: Management should remediate inconsistencies. Management Action: Ongoing guidance is being provided by Chief Financial Officer and General Counsel to reduce inconsistencies. Remaining Management Action(s): Updated Procurements and Contracts Administration Manual will be completed by December 2013. Training of staff to ensure consistency by providing more detailed guidance and standardized forms. 23
Management Action Plan Status 18. Policies and procedures Observation: Current Procurement Manual is out of date. Recommendation: Management should update Procurement Manual to include all Contracts Administrator duties. Management Action: Manual was updated and subsequently reviewed by FTA as part of its Triennial Review. The manual is compliant with FTA requirements. General Counsel is providing guidance, reviewing and approving all procurement activity. Remaining Management Action(s): Non-FTA related enhancements are being made to Procurement and Contracts Administration Manual. This work will be complete by December 2013. 24
Management Action Plan Status 19. Manual paperwork and document storage Observation: Staff demonstrate an over-reliance on processing manual paperwork. NCTD lacks central storage space for Contracts and Procurements documents. Recommendation: Management should automate process and institute formal methodology for storing all critical documents. Management Action: Draft Document Management Policy has been developed Remaining Management Action(s): Recruitment of Document Control Coordinator underway Document Management System is scheduled for board action on June 20, 2013. System will be fully operational by December 2013. 25
Questions 26
Related to Agenda Item W2 POSITIVE TRAIN CONTROL (PTC) June 20, 2013
PTC Project Overview Federal Mandate: Rail Safety Improvement Act of 2008 Project Budget $87.3 Million Completion Milestone: December 31, 2015 2
NCTD Directed Program Management Assessment by IBI / ICF NCTD Initiated Assessment Industry Practices Internal Compliance Program Internal Project Management Manual Objectives Strengthen Project Review Processes Assess Opportunities Propose Improvements 3
NCTD Directed Program Management Assessment by IBI / ICF Assess PTC s Program Management Plan PMI Project Management Body of Knowledge (PMBOK) 49 Code of Federal Regulation (CFR) 633.25 (Contents of a project management plan) Consultant s experience Reviews as requested by NCTD Organizational Structure Requirements Management Risk Management Recommend Improvements 4
Program Management Assessment Recommended Improvements 5
Program Management Assessment Improvements Increase Use of Subject Matter Experts Subject matter experts throughout the District have been designated Better Define Costs Updated scope & cost definitions for all 15 items Public Outreach for All Phases Finalized Public Outreach Plan Launched website, www.gonctd.com/ptc_about Implemented strategies to mitigate noise and construction activity 6
Program Management Assessment Next Steps Enhanced Program Management Clarified role of project management consultant Project Manager and Scheduler by July 31, 2013 Create Configuration Management Plan Initial report from contractor by July 1, 2013 Create Enhanced Monthly Report First Report for July 2013 available mid August 7
Summary/Next Steps Project is reaching critical milestones with FRA inspections scheduled for August 2014 The public will be seeing work related to the communication system with the installation of towers Project budget and schedule are on track to meet mandates Critical issues remain related to items that are known unknowns 8
Related to Agenda Item 16 NCTD FY 2014 BUDGET June 21, 2013
2009 5-Year Budget Outlook $120 $100 2009 Budget Outlook $95.6 $98.8 $102.1 $87.9 $90.4 Millions of Dollars $80 $60 $40 $20 $0 $83.2 -$4.7 $74.0 $76.1 $77.9 $79.9 Deficit Revenue Expenses -$16.4 -$19.5 -$20.9 -$22.2 -$20 -$40 FY 10 FY 11 FY 12 FY 13 FY 14 2
2009 Outlook Assumptions SANDAG FY 2010 local sales tax projections were reduced from $52.2 million as of May 2007 down to $34.3 million as of July 2009. STA was eliminated reducing operating revenue projections by over $4.1 million annually. CMAQ funding of $4.5 million for SPRINTER operations extended only through FY 2010. 3
2014 5-Year Budget Outlook 2014 Budget Outlook $120 Millions of Dollars $100 $80 $60 $40 $91.5 $94.2 $90.5 $91.9 $97.4 $95.7 $100.9 $98.3 $103.9 $100.9 Surplus Revenue Expenses $20 $0 $1.0 $2.3 $1.7 $2.6 $3.0 FY 14 FY 15 FY 16 FY 17 FY 18 4
2009 vs. 2014 Deficit/Surplus $5 $1.0 $2.3 $1.7 $2.6 $3.0 $0 Millions of Dollars -$5 -$10 -$15 -$20 -$25 -$4.7 -$16.4 -$19.5 -$20.9 -$22.2 Year 1 Year 2 Year 3 Year 4 Year 5 2014 2009 5
FY 2014 Budget Highlights and Goals Increase Ridership & Revenues Service levels will increase by 5.5%, with no planned fare increases Sustainability 5-Year balanced Operating Budget Other Key Initiatives Advance Positive Train Control Project Ridership and revenues are projected highest in history Capital Improvement Program is funded $12 million above annual goal of $15 million Advance Camp Pendleton rail station and service enhancements with Amtrak and Metrolink Advance Solana Beach and Oceanside Transit Center Joint Development Projects 15% Operating Reserve has been achieved and Pension Plan is 94.3% funded Complete testing related to SPRINTER Express Trains 6
Five-Year Projection (in thousands) Fiscal Year 2014 2015 2016 2017 2018 Revenues for Operations: Fare and Other Revenues $30,227 $30,619 $31,034 $31,853 $32,285 Operating Grants 61,243 63,631 66,326 69,026 71,636 Total Revenues for Operations 91,470 94,250 97,360 100,879 103,921 Operating Expenses 90,470 91,930 95,692 98,320 100,894 Surplus/(Deficit) Before Contingency $1,000 $2,320 $1,668 $2,559 $3,027 7
FY 2014 Budget REVENUES Passenger Fares and Other Revenues $ 30,227,832 Operating Grants 61,242,605 TOTAL OPERATING REVENUES 91,470,437 TOTAL OPERATING EXPENSES BEFORE CONTINGENCY 90,470,437 CONTINGENCY 1,000,000 TOTAL OPERATING EXPENSES 91,470,437 SURPLUS/(DEFICIT) $ - 8
Grant Revenues (in thousands) State, $5,772 TDA, $31,645 Federal 5307, $11,970 TransNet, $11,484 Federal 5309, $372 9
Ridership Mode FY 2014 Budget FY 2013 Forecast FY 2013 Budget Change from FY 2013 Forecast Change from FY 2013 Budget BREEZE 8,256,711 8,521,165 8,198,369-3.1% 0.7% COASTER 1,665,680 1,633,020 1,722,260 2.0% -3.3% SPRINTER 2,527,901 1,745,093 2,543,392 44.9% -0.6% LIFT 156,870 145,250 130,533 8.0% 20.2% FLEX 20,567 16,399 0 25.4% Total Boardings 12,627,729 12,060,927 12,594,554 4.7% 0.3% FY 2014 ridership is projected to be the highest ridership in the history of NCTD. 10
Fare Revenue Mode FY 2014 Budget FY 2013 Forecast FY 2013 Budget Change from FY 2013 Forecast Change from FY 2013 Budget BREEZE $8,470,236 $8,745,365 $8,345,744-3.1% 1.5% COASTER 7,392,153 7,247,206 7,309,933 2.0% 1.1% SPRINTER 2,780,736 1,930,443 2,792,461 44.0% -0.4% LIFT 606,708 561,766 527,945 8.0% 14.9% FLEX 45,167 54,501 13,094-17.1% 244.9% Total Fare Revenue $19,295,000 $18,539,281 $18,989,177 4.1% 1.6% FY 2014 fare revenue is projected to be the highest fare revenue in the history of NCTD. 11
Expenses Top 4 Categories 1. Purchased Transportation $43.8 million or 48% of budget expense fund 4 service contracts for bus, rail, and ADA paratransit contracts. Service levels are primary driver of costs for these contracts These contracts also include 3% annual increases on annual basis 2. Professional Services - $18.0 million or 20% of budget expense fund services for security, information systems, engineering, financial, legal, and outreach. 12
Expenses Top 4 Categories (cont d) 3. Salaries & Wages, and Employee Benefits - $12.5 million or 14% of budgeted expense fund staffing for operations oversight and administration. 4. Materials and Supplies (Fuel) - $9.5 million or 11% of budgeted expense primarily funds fuel. - Fleet of 161 buses fueled by natural gas, unleaded, and diesel - Commuter and light rail vehicles fueled by diesel * These expense categories comprise 93% of the NCTD operating budget. 13
Capital Improvement Program The NCTD Capital Improvement Program funding levels for FY 2014 and FY 2013 are $27.4 million and $26.3 million, respectively. 14
Other Matters In addition to adopting the FY 2014 operating budget and FY 2014-2018 CIP, staff request that the Board take action on related items: Employee Classification and Compensation Schedule Cost Recovery Fee Schedule Disadvantaged Business Enterprise Goal 15
Classification and Compensation Disclosure of the classification structure by category including compensation range. The classification and compensation schedule has been enhanced by Fox Lawson, and is being implemented for FY 2014. 16
Cost Recovery Fee Schedule Schedule has been updated to reflect fees that NCTD charges to recover estimated costs incurred to accommodate other entities conducting business on NCTD property. 17
DBE Goal The current FY 2011-2013 Disadvantaged Business Enterprise Goal of 5.2% has been provided. Staff is currently developing the DBE goal for FY 2014-2016, and will provide for Board approval in September 2013. 18
FY 2014 Budget Status Current Status February 21, 2013: NCTD Board approved proposed CIP, and forwarded a recommendation to the SANDAG Board of Directors to approve the FY 2014 for updates in the 2012 RTIP February 22, 2013: SANDAG Board of Directors approved FY 2014 transit revenue apportionments May 16, 2013: NCTD Board opened the public hearing June 3, 2013: NCTD staff released the FY 2014 draft budget for public review and comment June 20, 2013: Staff requests NCTD Board to conduct public hearing and adopt the FY 2014 budget June 21, 2013: Staff requests SANDAG Transportation Committee approve the NCTD FY 2014 operating budget for funding 19
Public Comment Staff has received no public comments regarding: Proposed FY 2014 Operating Budget and FY 2014-2018 CIP Employee classification and compensation schedule Cost recovery fee schedule DBE goal 20
Staff Recommendation Staff recommends that the Board: Conduct the public hearing on the proposed FY 2014 Operating Budget and FY 2014-2018 CIP Adopt the FY 2014 Operating Budget and FY 2014-2018 CIP Approve Employee Classification and Compensation Schedule Approve the Cost Recovery Fee Schedule Approve the Disadvantaged Business Enterprise Goal 21
Questions? 22
Related to Agenda Item 17 Comprehensive Strategic, Operating, and Capital Plan June 20, 2013 1
Plan Highlights Service design guidelines Performance standards Capital and operating investment priorities Economic-based cost containment and cost allocation strategies to guide capital and operating budget development Short-range transit plan FY 2014 Service Implementation Plan (SIP) Ridership forecasts Service improvements 10 year capital and operating budgets for three grant revenue forecasts 2
BREEZE Performance Standards 4 types of BREEZE routes: Corridor, core, local, and commuter NCTD will monitor routes for the period of a service change, which is three times/year NCTD will measure each route against the average in its category using four metrics A route will be found deficient if it fails three or more of the measures Corrective actions will be taken to improve performance on routes deemed deficient for three consecutive bids Measure Definition Watch Fail Pass Passenger/hour Passengers per revenue hour <50% of average <40% of average >50% of average Passenger/mile Passengers per revenue mile <50% of average <40% of average >50% of average Cost/passenger Cost per trip per passenger >140% of average >150% of average <140% of average Farebox recovery Operating cost divided by passenger revenues <50% of average <40% of average >50% of average 3
Rail Performance Standards COASTER Station Spacing Average Distance Average distance between rail stations 5.0 Miles Load Factor Peak Special Events Other Times Load Factor (ratio of passengers to seats) 1.10 1.25 1.00 New Service Weekday Saturday Sunday % of Cost Recovery from Passenger Fares 35% 35% 35% SPRINTER Station Spacing Average Distance Average distance between rail stations 1.5 Miles Load Factor Peak Special Events Other Times Load Factor (ratio of passengers to seats) 1.70 1.70 1.10 New Service Weekday Saturday Sunday % of Cost Recovery from Passenger Fares 20% 20% 20% 4
Capital and Operating Investment Priorities Service improvements and capital projects prioritized to ensure system sustainability Economic-based contingency plans developed based on cost containment strategy to include: Internal cost containment New revenue sources Fare changes Service modifications 5
FY 2014 Service Implementation Plan (SIP) BREEZE Implement remaining Mobility Plan changes New weekday Naval Hospital route COASTER Execute enhanced Amtrak Rail2Rail Program Continue advancing Metrolink cross county pilot service SPRINTER Continue advancing the possibility of an hourly express train without any infrastructure improvements 6
10-year Operating Budget Scenario Assumptions Three budget scenarios based on grant revenue forecasts ranging from the low-, mid-, to high-range Service level increases only in the mid- and high-range budgets Low-range budget utilized internal cost containment measures to balance budget; service levels remain at FY 2014 level In mid- and high-range budgets, surplus revenues are moved into the Capital Program for one-time expenditures and state of good repair projects 7
Capital Budget 10-year CIP Low-range budget: Minimum $15 million/year; primarily includes bus replacements, ROW improvements, IT enhancements, and bridge engineering and design Mid-range budget: Hovers around $17-18 million/year, includes same type of projects as low-range budget High-range budget: $20 million +/year, includes same type of projects as other budgets and allows for one-time expenditures Unconstrained budget: Varies in cost/year; includes remaining projects, such as station redevelopment, that require other funding sources (e.g., federal) to complete 8
Public Review and Comment Document released for public review and comment from June 4, 2013 through June 19, 2013 One Public Comment referencing the lack of information on NCTD s procedure to respond to COASTER rail outages with replacement bus service. Staff will finalize a Service Disruption Procedure in Mid-July, which outlines the procedure for managing service during rail disruptions on COASTER and SPRINTER lines. Customer information will be supplemented to explain operations when the COASTER and SPRINTER are out of service. 9
Staff Recommendation Approve the Comprehensive Strategic Operating and Capital Plan for FY 2014 to FY 2023 10
Related to Agenda Item 18 Solana Beach Joint Development June 20, 2013
Development Goals & Objectives Increase Ridership Community Placemaking Long-Term Revenue Stream Provide additional long-term parking Minimize traffic congestion 2
Key Facts About Potential Joint Development Proposed Joint Development Site 1.5 acres Possible conversion of existing transit station building to restaurant or retail Up to 75 additional transit parking spaces Transit ticketing & waiting relocated to platform level NCTD grant funding of $2.25M for new transit parking and platform level station 3
Solana Beach Joint Development Existing 4
Solana Beach Joint Development Existing 5
Solana Beach Joint Development Phase 1 6
Solana Beach Joint Development 7
Solana Beach Joint Development Coordination with City of Solana Beach 2 members of City Council, City Manager, and 3 Citizens Key Discussion Topics Neighborhood aesthetics Adjacent streets Impact to residents RFP to include Solana Beach Development Standards 8
Solana Beach Joint Development Milestones 1. City of Solana Beach Jul/Jun 2013 Council Meeting 2. RFP Issuance Jul 2013 3. Development Contract Dec 2013 4. Construction Complete Dec 2015 9
Questions? 10