I ask the board secretary to do the housekeeping.
Thank you, Chair.
Because there are committee members participating
via teleconference, all votes must be done by roll call,
and each county receives one vote.
Although all directors are encouraged to participate,
only voting members can make a motion
or second the motion on action items.
As a reminder, please speak into the microphone
so the audience and teleconference
and the board members can hear you.
Thank you, Chair, and that concludes housekeeping.
Thank you very much.
Our safety briefing will be given by Frank Castellan, our chief safety security compliance
officer.
Good morning, Chair McCallan, committee members.
As a reminder, in the event of a fire alarm activation, we're going to exit the building,
stage in Patzor's Plaza, do a head count, and advise emergency services if anyone's
missing.
The event of an earthquake, we're going to shelter in place, preferably under a large
object.
We'll do an assessment and at that point make the determination of evacuations necessary.
If a first aid situation is required, I will be the person to administer first aid.
I will ask Michelle to call 911.
And the invent of an active attacker, we use the phrases run, hide, and fight.
As a reminder, I think as everyone knows, it's quite wet outside today, this weekend.
Please make considerations, give yourself enough time, be safe.
Thank you very much, Frank.
Please join me as we pledge allegiance to the flag that represents our republic.
I pledge allegiance to the flag of the United States of America and to the republic for
which it stands, one nation under God.
This is for all.
Mr. Secretary, would you call the roll?
Yes.
Vice-chair Chaffee, second vice-chair Burksen, here.
Director Tremblay, here.
Director Najarian here and chair McCallan here we do have a quorum present
thank you very much do we have any public comment we have not received any
public comment or any request to speak very good thank you we'll go on to our
regular calendar first up is an action item for our meeting minutes of February
there's a need to change anything or pull it or any discussion not could I
I have a motion.
Second.
We have a motion.
We have a motion and second to which you call the roll.
Vice Chair Chafee?
Aye.
Second Vice Chair Burksen?
Yes.
Director Trambly?
Yes.
Director Najarian?
Yes.
And Chair McAllen?
Yes.
That motion carried.
Thank you very much.
On to evaluation of the monthly pass discount.
This is a receiving file presented
by Inning Eichler, our market insights and analytics manager.
Good morning.
Good morning.
Thank you.
Good morning, Mr. Chair, members of the board and presenting item 6B.
You will remember in October, November and December of last year, we lowered our monthly
pass prices by 30 percent.
This item provides an evaluation of this pilot.
Before the pandemic, monthly passes accounted for the majority of trips taken on Metrolink.
They represented the cheapest fare for those frequent riders.
All that changed with the pandemic, as many commuters would only travel maybe two or three
days on Metrolink.
This fare pilot was intended to test how customers would respond to a lower monthly pass price.
if it was lowered from an average of $215 to $150.
At that level, it would correspond to
about two and a half round trips as a break-even point.
The sales data from the pilot shows
that customer response was immediate and it was strong.
The number of passes sold
during the October through December period
increased by 37% compared to the period before the pilot.
Most of that increase reflects existing riders
who switched from other ticket types
to the discounted monthly pass.
However, new customers accounted for 10%
of that increase in pass sales,
and that is quite significant.
The pilot was also successful
in bringing back lapsed riders,
those who hadn't taken Metrolink in a year or more.
Next slide, please.
During the three months prior to the fare pilot,
monthly pass sales averaged 3,551 per month.
During the pilot, that number increased
to 4,868 per month.
Once the monthly pass price reverted back
to the regular fare in January,
monthly pass sales also went down, just as we had expected.
But what's important is that the number of monthly passes
sold in January, that's over 3,900,
was 10% higher than the sales before the pilot.
So it does indicate that we retained
a lot of the new riders who came to Metrolink
in response to the discount.
Also, I want to point out that in February,
monthly pass sales were even higher.
They were, compared to the pre-pilot period, 18% higher.
So it definitely shows a very encouraging trend
just based on the two months since the pilot.
And that concludes my report.
Are there any questions?
Any questions or comments from the committee members?
R.R. Najarian.
Thank you.
Well, that's certainly encouraging.
It's great news and it begs the question,
do we wanna think about continuing such programs,
but not make them too regular,
but still implemented from time to time
to help bring back old writers
and introduce new writers to the system?
This is like, this is the best news
I think we've had in a while.
I think we're intent to look at our overall fare structure
and restructure, some of it maybe,
based on this data and others.
Is that true?
Yes, exactly.
Again, this pilot was a first step to test customer response.
We will be taking a much more comprehensive look
at our fare structure with a fair restructuring study
that we will be conducting, well, probably we will launch it next month and it will continue
into next fiscal year, so we will take a broad view over the ticket types, over the prices
we charge, the discounts we offer, to have a more coordinated restructuring of our existing
fares.
I agree with Director Najarian.
This is really good news.
Glad to see it.
Glad to see it.
Other comments?
Mr. Chair, if I could real quick, anecdotally, as the board knows, I'm a regular user of
our system and I had a lot of feedback from our writers that had not been getting monthly
passes prior to the 30% discount and they took advantage of it and they were very appreciative
of it and said that they will likely continue using it, so I heard that firsthand.
And then to Director Najarian's question about, obviously, we don't want to get ahead
ourselves here but you know I don't know about you but if I need to go to the
half-yearly sale at Nordstrom that's what I plan for so there's certain
elements of things that maybe there's some opportunities where we take
advantage not regularly but it's like what's that is it around maybe
Custer Appreciation Month that there's something I don't know but there are
some things that we are heading and the marketing team are going to be you know
really digging into this and I'll look forward to seeing the results of that
next study. Nordstrom Rack? Exactly right. Absolutely. Director Burksen. Thank you, Mr.
Chair. I did mention something to this effect during our board briefing call
yesterday, but I want to bring it for others to hear. What I want to know is,
geared toward you, Henning, because you're the man that knows numbers like
nobody's tomorrow. I want to know if at the end of the day was the 30% reduction
in price the right target percentage and throw a few other things out here as
well. In the staff report it mentioned other rail agencies are giving up to a
50% discount and so what I'm hoping and Aaron said that you're going to bring
back this whole, the whole study at some point in the near future. So as part of
that I'd like to see if you can analyze how well they did at 50% versus how well
we did at 30% see if we're at the sweet spot if we're you know not you know if
you can analyze what we did what they did we want to know what the right
percentage discount number would be in the future as I certainly like the idea
that we bring it back, maybe periodically, because you don't want to keep it, or it's
a permanent thing. The goal here is to get new ridership, and the next metric I'm interested
in is, what did we expect? Did we expect 10% retention? Did we expect 30% retention? How
well did we do? You know, I'd like to understand, you know, what the expectation was of how
this program was going to work. So we have something to measure based off of. All we
know is it was a success, but was it what we were really seeking? So those kinds are
the things I'm throwing out.
Thank you very much. Any other comments or questions?
Any other unispots to answer?
Yes, I'll be happy to respond to those questions.
We tried to do some homework in about 24 hours in response to your questions from yesterday
morning.
Very much appreciated.
that job description to his numbers beyond whatever it was he said we've
added that to his job description. It's like an on-site reporter in a storm. Exactly right.
So yeah the question was what did we expect? So obviously when we actually
presented the proposal to you a year ago we had some expectations actually our
Fair Policy consultant they gave us some numbers but we should expect in terms of
ridership and revenue. And of course this was based on the fair elasticity model that was developed
prior to the pandemic. So an important purpose of this pilot was to find out, well, could we validate
the assumptions from our fair elasticity model? So in terms of the expectation, we did not expect
attract 10% new riders. Actually, it was closer to about 6%. So it definitely, you
know, exceeded those expectations. Although again, it was not a, you know, a
very hard target that, you know, we tried to reach with the pilot. I think more
important is that it validated that when you lower the fares, any kind of
percent reduction, demand is inelastic, which means you will lose money because
even with a 30% discount you would have to grow ridership by 50% to make up for
the lower fare. Well, nobody is doing that, so that's where, again, the success
of a pilot would depend on how many of those new riders do you keep on, do you
retain after the price goes back up to the normal level.
So the second question, how do other commuter rail agencies,
what was their experience when they reduced
their monthly pass prices?
And the challenge is there's no direct comparison.
We did a three-month sale.
Nobody else did that.
Caltrain, for instance, they lowered their monthly pass
price by 20% and left it there.
So it's a new price.
They still have the same price.
In between, they also had a month of 50% sale.
But that makes it very difficult to compare.
The other example is Metra in Chicago.
Their monthly passes ranged before they
reduced their price, they ranged between $100 and maybe $300.
They replaced their monthly passes
with a flat fare, $100 super saver pass.
It was not distance-based.
It's the same $100 regardless of how far you travel.
It comes to about a 50% discount, if you take that.
And again, they also, they just renewed that one again
for the end of 2023, and it may be extended then again.
So again, all this makes it very difficult to compare
our three-month pilot with something that is ongoing.
I appreciate you doing your homework for us to present.
How do we then come up with a good percentage discount,
more or less, I mean, how do we understand
if a 30% reduction will bring us 10% of new riders
and a 50% reduction could bring us, you know,
50% new riders, I mean, how do we know what's the right thing?
How are you going to be able to tell us
that when we reanalyze this down the road?
Well, fortunately, it's not a matter of trial and error.
It is based on, as I mentioned, fair elasticities
which help us calculate and predict.
With a 20% discount, this is how many riders we get.
With a 30%, this is how many.
So we can, and again, the pilot did validate essentially
the, the fare elasticity. So whether or not we have a, you know, 20 or 30 or 50% discount,
the question is really how much of a hit do we want to take? How much subsidy do we need
to support these lower fares?
I'd like to see this being tracked over the next few months because one month, two months
is good, but we, we want to see if this is going to be long lasting. When it does come
I appreciate what you were talking about where you could bring us with the various percentages to get us this, or this, or this, and then as a body we could, and I appreciate you bringing in the answers.
Well, the good thing is that it seems to be growing at 10% to 18%, hopefully that continues and maybe it'll level off, but I think we're headed in the right direction.
Any other comments or questions?
Aaron, did you have any?
Very good. Thank you, Henning, for a good report. This is a receive and file and without objection, the committee will so order.
Next we have our quarterly compensation report for the second quarter presented by Agavni Bhagdasaryan, our Senior Human Resources Analyst.
Did I murder your name?
Yes, you did.
Would you pronounce it for me?
Agavni Bhagdasaryan.
I have been to Armenia several times.
Good morning chair and members of the committee.
My name is Agarvani Bakdasarian, Senior Human Resources Analyst at Metrolink, and I'm reporting
on item number 6C, the quarterly compensation report, second quarter FY23 from October 1st,
2022, December 31st, 2022, and this is a receive and file report.
In accordance with the Human Resources Policy 2.1, Wage and Salary Program Administration,
the Board requires human resources to report all salary placements for new hires, promotions,
emotions, reclassifications, and other changes in employee compensation to the Board on a
quarterly basis.
Next slide, please.
During the second quarter, a 523 from October 1st
through December 31st, 2022,
there were 17 compensation transactions,
which includes nine new hires, two promotions,
three acting pay, two additional pay temporary,
one return from acting pay and additional pay.
This concludes my report,
and I'm happy to answer any questions.
Thank you very much.
any questions from committee members? Seeing none, thank you so much Agavini and this is
a receive and file and without objection the committee will support her. Next we have our
March legislative update presented by Jeffrey Dunn, Director of Government and Community
Relations and Alex Davis, our Senior Manager of Government and Community Relations. Good
morning Jeff. Good morning Mr. Chair. Thank you. You did my name perfectly. Thank you
also to Mr. Vice Chair, Director Burksen.
Next slide, please.
This month's update, starting with local matters,
we continue to see similar responses
to the community survey that we sent to residents
across the network about six weeks ago
to assess their feedback on our service.
We have sent the notice through the Nextdoor app,
and today we've received about 65,000 views
and 131 written responses.
As noted on the slide, the themes remain the same,
with a great majority of those responding
having a positive impression of Metrolink, over 90%,
with respondents requesting more midday service
and also later evening service to return home
after attending evening work or other events.
There is also the ever-present request
to reduce horn noise wherever possible.
Additionally, as reported last month,
we've been reaching out to raise awareness
of Metrolink's Low Income Fair Program,
which has been in existence since September of last year
which is funded by a state LC TOPS grant to subsidize and offer a 50% discounted pass
to qualified low-income riders.
We have completed direct door-to-door campaigns to thousands of units in low-income housing
near our stations, including the William Mead Housing Project, Pueblo del Rio, Ramona Gardens,
Nueva Maravilla, the Hilda Solis Supportive Housing and Pico Eliso.
This has been a targeted approach to make qualifying residents aware of the program
and how to access it.
We've also worked with LA County Department of Public Services, who has sent notice of
the program to approximately 42,000 qualifying EBT cardholders in LA County, and with the
San Bernardino DPSS, who shared with over 7,000 qualifying cardholders.
We are reaching out to the other counties now to do the same.
efforts with the enhanced efforts of our marketing team to boost sales are
working. They've resulted in a 32% increase in sales of the discounted
passes portion from the months immediately prior. That's approximately
41,000 per month. So it is encouraging news. Finally of note in local matters is
the outreach we've made to over 170 school districts requesting that they
share with students Metrolinx online school safety program that focuses on
rail safety and best practices for schools. We have received response from a
few schools already and are immediately aware of at least two classes in one
high school with approximately 55 students that have gone through the
program and very positively reviewed it. We will have further updates as the
program is shared and more online review is accessed by schools across the
network. The goal as always is to enhance safety as greatly as possible and to
avoid any occurrence of accident or injury. Next slide please. In state
matters. Your report details relevant numbers from the proposed budget released by the governor,
among which I would note a proposed reduction from $2 billion to $1 billion of funding in the
transit and intercity rail capital program, TIRCP. We continue to work with our member agencies and
transportation agencies statewide through our membership on the California Transit Association
Transit Operations Funding Subcommittee, charged with leading advocacy statewide in this area,
including for full funding of TIRCP, and for flexibility of funding to use part of these funds
for operational as well as capital needs for access by agencies like Metrolink,
experiencing acute operational funding shortages arising from the pandemic.
The relevant Assembly and Senate budget subcommittees have begun hearings on this
year's Transport Agent budget, and our CEO has met with the chair of the Assembly subcommittee,
And we'll meet again with him on this subject.
In the Senate, the Budget Subcommittee Chair, Senator Durazo,
has noted the need to restore full funding to TIRCP
in the Subcommittee's first full hearing,
and as well as the need for enhanced transit funding.
MetroLink has previously met with the Budget Committee staff
of both chambers, and to highlight the need
for more operations funding, we will continue to advocate
in conjunction and in parallel with our state transit partners.
With respect to the in use locomotive rule,
consideration by the California Air Resources Board
of final adoption of the regulation
will occur at its April board meeting.
And we are presently in the 15 day comment period
of the rule that was recently released in final form.
Metrolink will be submitting a comment letter
that recognizes the work of CARB
to include an alternate compliance pathway,
rather than the mandatory,
or in addition to the mandatory spending account
that was provided in the draft rule
as a means to achieve the objectives of the regulation, as well as for working with passenger
rail agencies to craft a regulation for all rail operators to move the industry to eventual
zero emissions.
We will also address the need for incentive funding as crucial to implement the adopted
rule.
Next slide.
Jeff, in that letter, comment letter to CARB, will we be complimenting our support that
we've gotten from our CARB people, like Gideon and others, that we got help.
Yes, sir. You have my assurance it will be in the letter.
I think that would be very helpful, thank you, because they did a great job for us.
Fantastic job. On the next slide, Dan, on federal, yes, the federal government, as you
know, hit its debt limit in January. And we will be able to maintain mostly, and we'll
We will be able to maintain mostly current level spending until the summer, but negotiations
centering around the budget and how to achieve a balance between funding essential government
services and functions, as well as real spending reductions, sufficient to forge an agreement
on raising the debt ceiling will take much of the effort and activity in Congress through
the first half of the year.
There will be strong impetus to reduce spending without imposing significant cuts to defense
for Social Security and Medicare as a precondition to raise the debt ceiling and avoid potential
default.
Yesterday, the administration released its proposed fiscal year 2024 budget.
And while the budget proposes $5.4 billion in cuts to congressional priorities out of
annual discretionary priorities, this includes earmarks.
The budget makes no changes in funding levels authorized by the Infrastructure Investment
and Jobs Act, or IIJA, that passed in 2021
that increased the funding authorization
for most federal transportation programs,
including passenger rail.
The proposed budget does, however,
request eliminating the appropriation
for RAISE grants for 2024 fiscal year only,
though RAISE would still get the $1.5 billion
of advance appropriation that was provided
by the IIJA itself for 2024.
So current applications that are selected for award
would still be funding,
even if this budget were to be passed as proposed.
The proposed budget also actually increases funding
for a few other grants versus fiscal year 2023 spending,
including for the FRA federal and state partnership grants
by an additional $460 million,
and for grade crossing grants by an additional $250 million,
as well as modest funding ending,
funding increase request for Amtrak.
There are many other proposed cuts and appropriations
to other USDOT programs such that overall discretionary
appropriations from the budget would be $882 million
below current year funding.
Of course, this is just a proposed budget.
It has to get through the Congress
and where it will be highly scrutinized.
We'll keep you apprised of all relevant developments
as we advocate to preserve existing federal funding levels
for passenger rail in addition to the priorities
identified by you. I want also to advise you as noted on the slide that
Metrelink has submitted again its raised grant application of 45 million
dollars to procure tier 4 locomotives to match the 51 million dollars of state
funds already secured as we seek to replace our remaining older stock with
the cleanest commercially available locomotives today. Finally with regard to
earmarks we are presently in the middle of preparing our house requests for the
congressionally directed spending having submitted our Senate requests
already because the Senate deadlines were first. House member deadlines begin next week
and are rolling throughout March and into early April. Very generally speaking, Senate
earmarks can go up to about $10 million. On the House side, it's up to about $5 million,
unless it's a joint submission by more than one member. Because of the factors addressed
previously in this report, earmarks will be highly scrutinized and very competitive this
this year. Generally, we are seeking earmarks to be funded from the CRISI account because
it will likely be less oversubscribed than the other infrastructure funding and direct
competition with highways and bus at FTA.
Our submissions are based upon our assessment of the exigency of need on our network, as
well as how likely they are to be successfully received in close assessment with our Washington
advocates on the hill.
They will be from all across all areas of our network,
and we will have approximately a half dozen submissions.
We thank our entire board for its support,
and especially our chair and our vice chair,
who have submitted support letters
for the Senate submissions.
We will be coming back to you again very shortly, sir.
We'll provide a full detailed report to you
of these and future reports
as they are compiled and submitted.
Next slide, please.
This concludes my report.
Thank you very much.
happen to answer any questions. Thank you very much Jeff. As I've mentioned before,
the RAISE grant application, I would like to see our Washington lobbyist Rick
Akaldi personally go talk to Pete Aguilar about getting his support
because I think it's critical that we do that. I know he's agreed to talk to DOT
on behalf of SBCTA for their raise grant and I think he would be amenable to
doing it also. Tell him that Darren and I, tell Pete Aguilar that Darren and I would
like very much to have his support. We will certainly do that. We've been in
touch with the office and I feel very confident that we'll be successful there.
Thank you sir. Any other comments, questions? Committee? Go ahead Director
Thanks, Mr. Chair. Jeff, I may have lost the thread on this, but what is the status of
any on the fare box revenue rule relative to for state of California?
You're talking about the waiver for the 25%? Correct.
Yes, sir. Jeff, if I could face this way so that you're actually being photoed that way.
So I know your desire is to turn around and talk to director Tremblay on the monitor,
but we're all over here. You're not the first person.
I'll try to do this, maybe I should have a mirror here.
What I would say is, yes, there is presently a waiver,
and it is part of CTA's platform.
They are actively working to make that waiver,
which I believe expires,
it either expires at the end of the calendar year
or the fiscal year this year.
CTA is working to make that waiver permanent.
So that is very much uppermost,
because not only MetroLink,
there are numerous transit agencies,
including practically every single passenger rail agency
except for one that don't meet that threshold.
And without that waiver would not qualify.
So in recognition of that fact of the pace of recovery
after the pandemic, the CTA is working hopefully this year
to get an extension to permanence for that waiver.
Mr. Chair, just a quick follow-up question, Jeff.
Is there a specific pending bill on that?
No bill that I'm aware of, sir.
But the effort is to make that waiver permanent
from a statutory standpoint?
Yes.
It would need to be a statutory bill.
Utilizing a statutory vehicle.
OK.
Thank you.
Yes, sir.
Any other comments, questions?
Seeing none, thank you, Jeff, for a good report.
And this is a receive and file.
And without objection, the committee will so order.
Next is a highlight of our agenda always, the chief executive officer's report,
and I don't think he has anything to say.
That makes it the highlight, sir.
That's what makes it the highlight.
Nothing to report today, sir.
Very good.
Committee members, any comments?
Seeing none, and I have none other than thank you for those that are attending,
and hopefully you guys out there in video land will come to our next meeting in person.
thank you very much uh... with that we are adjourned
thank you mister chair thanks everybody
thank you
stay uh... stay dry
recording stopped