Morning, we will go ahead and call the Metro link audit and finance committee meeting of October 13th 2023 to order
May we please have our safety brief briefing by Frank Castellan chief safety security and compliance officer
Morning director Burkson committee members. So this morning safety briefing if we have a fire alarm activation
We will all collectively exit the building go down the stairs and stage in front of Metro's customer service area in the corner of the building
building and await further instructions.
In the event of an earthquake, we're going to drop and cover, wait for the shaking to
stop and then wait for further instructions to make a determination whether or not we
will exit the building.
In the event of a situation requiring first aid and a CPR, I will be your first aid provider.
I will ask Mr. Vadim Grossman to contact 911 or Metro Security.
We always finish our briefings by using the phrase, invent of an active attack or a run
high fight.
I will also say that, as a reminder, if you're in a public space, if you see something abnormal,
say something to somebody else.
Today in particular, there's a lot of news reports talking about the day of rage, a call
to activism for some individuals in some groups.
So I would ask you again to please remind your folks, your friends, your family, to
be vigilant.
If they see something, say something.
That concludes this morning's safety briefing.
Thank you for the safety briefing, appreciate that, and next is the Pledge of Allegiance,
John Deutre, number four is roll call.
Director Middleton?
Present.
Vice Chair McCallin?
Here.
Director Deutre?
Here.
Director Nguyen?
Director Murphy?
Here.
Director Chavez?
Director Krekorian?
Director Najarian?
Here.
Director O'Connor?
Here.
Director Hughes-Leslie, Chair Burksen, we do have a quorum present.
Item five is public comment.
Did we receive any request to speak?
I have not received any written request to speak or any request, or any written public comment or any request to speak from the public.
Okay, and anybody in the audience wish to speak on any non-agendized item?
Seeing none, we will move to our regular calendar, item six.
This will be item 6 a approval of the meeting minutes from September 8th 2023
Any comments
Or on the video screen
Need a second second Murphy, thank you
We are going to have to do a roll call vote today because we do have members attending via zoom
Mr. McCallum
director Murphy
aye
director Najarian
Yes, chair Bergson. Yes that motion carried
Item 6b addition to continuing resolution with four arrow service funding for fiscal year 24
This will be presented by Christine Wilson our senior finance manager
Good morning, Chairman Buksen and members of the committee.
I am presenting IM6B which requests that an additional month be added to the continuing
resolution for Aero Service FY24 funding.
When the SCROP Board approved the MetroLink Operating Budget on June 23, 2023, San Bernardino
County Transportation Authority, SBCTA, requested that the adoption of an FY24 budget for Aero
be deferred, and that a four-month continuing resolution
be approved to fund aero service until such time
as an FY 24 budget was approved.
The SCRAB Board approved that resolution
in the amount of $6,239,915.
SBCTA has now requested that an additional month
of continuing resolution funds be added
in the amount of $1,512,339.
Bringing the total funding to $7,752,254.
Thank you.
SBCTA expects to adopt an FY24 budget
at their December 6th board meeting.
It is our intent to bring that arrow FY24 budget
to a following board meeting for MetroLink for approval.
This item does require action and staff requests that the committee recommended the board that this additional month of continuing resolution be approved
I take it. That's the end of your report. Okay. Thank you. I just want to make sure
With that do we have any questions from any of my colleagues on this item?
Second Nigerian all right any public comments any members of the public wishing to speak on this item
Will we please have a roll call vote?
Certainly.
Vice Chair McAllen?
Yes.
Director Murphy?
Aye.
Director Najarian?
Yes.
Chair Burksen?
Yes.
The motion carried.
Thank you very much.
Performance audit fuel purchase policy,
FIN, 11.1, revision two and revision three.
This will be a receive and file item presented
by Elizabeth Lozwardi and Arnold Hackett.
Please proceed.
the board chairman and members of the committee.
I'm also joined by Jennifer Richards from Crow LLP today.
Next slide please.
The board directed that the fuel purchase program
be audited annually as stated
in the fuel purchase policy in 11.1.
Additionally, the policy also governs
the establishments of the ad hoc committee
for the limited purpose of reviewing the audit results
and reporting to the board.
internal audit engage CRO LLP to perform the audit.
Jennifer Richards here is available today to answer
if there are any audit questions.
The objective of the audit was to determine compliance
to the policy for the audit period of January 2022
through December 2022.
And there is no audit finding
based on the procedures performed.
Next slide please.
The ad hoc fuel hedge program committee
held a meeting in September to review the results
of the external audits.
Directors Tremblay and Marquez represented
the board of directors.
There were in-depth discussions throughout the meeting.
Based on the discussions and the projections
regarding renewable results, the following actions
were recommended by the ad hoc committee.
First, a report to both the ad hoc
and the audit finance committees
to track the development of the market every six months.
And second, given petroleum and renewable,
these prices are separating from a market standpoint.
There will be a need to analyze what is in the current policy
because it must be nimble in an evolving market
where there isn't a spot index price.
There will be a need to look at the separating pricing
as they look into the future.
This concludes my item.
Happy to answer if you have any questions.
Thank you very much for the report
my colleagues have
any questions comments
Seeing any any members of the public wishing to speak?
also not seeing any so this was a
receiving file item
Grants quarterly update for the fourth quarter fiscal year 2023
This is also a receiving file item by Tom Shamber director of our grants program
This is the receiving file item providing an update of grant activities
During the quarter. We acquired one federal grant of seven point six million dollars from the FRA
This grant funded unavoidable cost increases on a safety project at two stations in verbank previously funded by the FRA
2.3 million dollars in grant funding was reprogrammed from closed projects with cost savings to other projects in need of
Four grants totaling 83 million dollars were closed
Two federal grants provided operating assistance under a pandemic relief program and four prevented maintenance activities
Two state grants were closed that funded the acquisition of locomotives
This resulted in a total portfolio of 1.83 billion as of June 20th
I would like to highlight something that did not make it on the written report.
Two weeks ago, we submitted a $44.7 million grant application for the USDOT Reconnecting
Communities and Neighborhoods Program that would complete the funding plan for the procurement
of Tier 4 locomotives.
These locomotives would replace higher tier 2, or replace higher emission tier 2 locomotives.
This grant is under evaluation with the USDOT.
concludes my report very good thank you for the report any of my members have
questions not a question just a comment I'm always amazed that the fact that we
have a two billion dollar portfolio of grant money and my question is when will
let the B turned into a T. When I get more staffing maybe. Thanks. I also was just curious
when we talk about the closed, the ones that were closed, did we fully expend every dime
that was given to us on those closed projects? I know you mentioned a couple were reprogrammed
closed projects that had a budget savings, but I'm just, you know, when you have
closed projects, the question is, did we actually get what we needed out of it
and utilize a hundred percent of the money that was available? Do we have a, I
guess, a different way to put it is, do we have a list of any projects that we've
done or any grants that we've done where we failed to complete the project and
and had to turn the money back.
Call that in recent history.
We may have completed a project with some money
left over in the grant where we move it to another project.
Because of course the scope has to line up with it.
And so maybe we couldn't find another floor
that wasn't allowable in the grant program.
OK, very good.
Any other comments, questions?
Any members of the public wishing to make
a comment on this item?
Not seeing any.
This is a receiving file.
So unless there's objection, we'll go ahead and do that and move to item 6e, the quarterly
DBESBE program update.
This will be a receiving file presented by Lorraine Aldridge, manager two of program
management.
Good morning, Chair and members of the committee.
Next slide, please.
Metrolink has an overall DBE goal of 14 percent and we currently are exceeding that goal with
about 15.7 DBE attainment on our federalized contracts.
The authority monitors all contracts that are federally funded.
Additionally, all contracts that are valued at $25 million or more and have subcontracting
opportunities are reviewed to include a mentor protege program, often referred to as an MPP.
This program aims to further develop our small business vendors, regardless of DBE or SBE
certification status.
Next slide, please.
The authority has implemented its MPP on seven high value contracts.
Currently, five of the MPPs are active and support 16 DBE proteges in the five Metrolink
service areas.
The remaining two MPPs are currently in the solicitation process and are expected to commence
before the end of the calendar year.
Next slide, please.
Currently, Metrolink is partnering with more than 20 certified small businesses as prime
contractors.
small businesses that are actively managing their own Metrolink contracts, and they are
not subcontractors. These small business primes provide a variety of products and services
to Metrolink, and their contracts are valued at more than $36 million. With upcoming procurements,
we expect to continue partnering with small businesses. Next slide, please. This concludes
my presentation, and I'm happy to answer any questions you may have.
you for the presentation. Do we have any comments or questions? Anybody in the
public wishing to speak on this item? Well you're you're free to go. It's a
receive-and-file item and without objection that will be the order of the
committee. We will move on to item 6f. Financial results for the two months
ended August 31st, 2023. Ridership revenue and operating results. Christine Wilson,
Senior Finance Manager.
Good morning again, this is a report on the ridership revenue and operating results for
August 2023. Next slide please. This graph shows our actual ridership recovery which
are the green boxes as compared to the KPMBG Sperry Capital Forecast which is the blue
line over the past seven months. As you can see our forecast does seem to be slightly
conservative. In addition, we are making progress. In August, the forecast was for a recovery
of 41 percent, while the actual recovery is 47 percent. Next slide, please.
This graph shows our recovery for each month over the past four years. The green bars represent
actual recovery. The lightest green is 21. The mid-green is 22. Dark green is 23, and
is 24. From a low of 14% of FY19 ridership as of August 23, we have recovered to 47%
of FY19 ridership. The blue line shows the KPMG forecast for the most recent period.
These look a lot better than they were before, don't they? Next slide, please. This chart
shows the actual revenue compared to budget for July and August. Next slide, please. Excuse
me. This slide shows the total amounts of revenue budget versus actual through August.
The budget through August is 5.4 million or a 42% recovery, while the actual is 5.7 million
or a 43% recovery, producing a revenue
which exceeds a budget by $244,000.
Next slide, please.
This slide shows the ridership for a budget
compared to actual for July and August.
Next slide, please.
As you can see, the forecasted ridership,
it was 824,000 or a 41% recovery,
while the actual ridership is 911,000 or a 45% recovery.
exceeding the forecast by 86,000 boardings.
Next slide, please.
As to the operational performance,
for the two months ended August 2023,
operating revenue is 9.4 million or .9 million over plan.
Expenses total 43 million or 6.6 million below plan.
Please take note the expenses are based on accruals
and not actuals.
Next slide, please.
This slide shows the FY23 budget savings and cost avoidance.
Unaudited, those numbers were for FY23, total amount
of reduction was 33.1 million expenses under budget.
And of those savings were 23.1 million
and cost avoidance was 10.0 million.
You'll recall that we also had an FY23 revenue short fall
that we needed to cover, that was 15.2 million and in addition
to that an FY22 deficit of 2.9 million
that we had committed to covering by savings.
So at the bottom line, adding all these numbers together,
The estimated operating surplus is $15 million.
You can see in the chart below the way the shares spread
out among the member agencies.
Next slide please.
This is, now we're to Arrow Service.
Next slide please.
This slide shows the revenue and ridership for July and August
for the Arrow service.
As you can see, fiscal year to date,
the Arrow service earned $37,000.
The actual boardings were 13, almost 14,000 boardings.
Next slide please.
The first three months here are based
on continuing resolution to cover expenses.
Revenue is 37,000.
The total expenses are 2.1
or .9 million below the continuing resolution.
And so the support is .9 million below plan.
That concludes my report.
Can I answer any questions?
Thank you for the awesome report.
We love that.
Do we have any comments from my colleagues?
Larry?
Thank you, Mr. Chair.
Christine, great numbers.
I like it.
Any idea what September looks like?
Yeah, I think September is even a little better.
A little better, even though?
Gilbert is going to be a lot better, isn't he?
No, I think our, just to say, I really think that our, um, free
rides for, um, the students is really going to be a big deal.
Isn't it, Darren?
Yeah.
Well, I, I, I expect the ridership numbers to go up because we are offering free rides.
My concern is, is that what's our revenue going to do?
Well, remember, we have a grant.
So we will report, although we will report the ridership,
we won't actually report the revenue from the grant
until it's settled, you know, it's actually approved.
Very good, thank you, I love the good news, keep it up.
Any other comments, questions from my colleagues?
Any members from the public wishing to speak on this item?
We might have a speaker card.
I don't know if I've seen one of those in some time.
We have a request from Donald Harlan
to speak for a general comment.
About this particular item?
We've already done general comments.
We are on 6-F, three minutes.
I am Donald Harlan.
About the financial results for ridership.
I know that Metrolink is in the company that's in it to make money.
I realize that.
I'm really concerned about the financial stability of Metro also.
I see that you guys have cut out a lot of the bad deals that people had made trying
to get themselves jobs and cut themselves into different parts of the contracts and
things and people trying to pay themselves for things that aren't
theirs, you know, uh, you know, we've seen many, uh, labor deals in different parts
of Metro and Metrolink where the people in there had a deal with the person who
owned the property and they were going to pay them a bunch of money and that
wasn't their property and it's my property.
And you guys went back and stopped them from paying the money.
That was a good thing.
I appreciate that and I understand you're under pressure because I want you to pay for things that
You guys aren't supposed to pay for and you guys know that they're they don't owe that or not. Oh that they're the things
Sorry, I just ran up here, so I'm winded I
was concerned about the
finances of Metro quite a bit
That there's an attack on the city that there's people in the
political positions
Legals, impostors, actors, different things and they're trying to perpetuate their criminal activity here in the city by
asking law enforcement LAPD and the sheriffs and different law enforcements to not enforce certain crimes and
they have a whole list of crimes they presented to LAPD that was filtered to the county that they don't want them to enforce and
This is going to be a big problem at Metrolink and Metrol too.
A list of crimes included grand theft of cargo exceeding $950, trespassing on railroad, trespassing
on transit-related property, theft, all kinds of things, but included in there, which has
been the main problem is there's crimes like book making, forgery, identity theft, fake
identities, false checks, counterfeit use of counterfeiting corporate seals, embezzlement,
kinds of financial crimes. And I'm going to ask LAPD and pay them to enforce those crimes
to go after those people. So I need you guys here in Metrolink to elect candidates of those
kinds of crimes because...
Your time is up. Thank you, though. Appreciate your comments and...
Mr. Chair, question to the attorney, since most of the comments were directed at Metro,
is it appropriate that we listen to them?
I think it's somewhat unclear if he was referencing Metro or Metro Link, he used the word Metro,
but he may have intended Metro Link. I think he gets his three minutes.
Because other organizations that I'm a member of the board,
we don't allow public comment on items that are not under the purview of that organization.
Anybody else?
Last call.
All right.
Our favorite time of the day, item seven, chief executive officer's report.
Thank you, Mr. Chair.
So in the, trying to keep to the good news of how we started today, just a few things
that we'll speak to on ridership,
as was discussed last week.
We did have clean air day where people were able
to ride Metrolink trains at no charge.
We set a, we didn't just set.
We blew past the record that we had set before
of just about 20,000 riders for the day.
We got 26,000 riders on Wednesday, clean air day.
So good news, but obviously, as you said,
Chair McCallan, free is good.
People ride trains when it's free.
And we certainly saw that on Wednesday.
But we've also seen, to your question about ridership
in September and October, we've steadily
seen increases as we've gotten into the fall.
And with very frequently having a day or two a week,
over 20,000 riders, which had been our prior record when
we had provided free rides.
So there has been steady growth, steady progress,
and between the Student Adventure Pass program,
which started on Monday, and has been,
we've had a lot of positive feedback on that program.
In fact, I spoke with our conductor this morning,
and kids are loving it, so we're really excited about that.
So we're going to continue to track that across the board.
And so, again, positive news there.
And I think starting the 23rd of this month,
we have the additional service on the Antelope Valley line
that was approved in the budget at our last board meeting.
And so with several additional trains on days and weekends,
so I think that will also drive ridership.
Growth as that new service comes online,
and really is sort of that pivot for us
to this real regional rail model
where we provide trains throughout the day
and not necessarily during the peak.
One last, I'm only gonna make this comment
in this committee because we have the representative
at this meeting who will not be in attendance
at our next couple of committee meetings,
but I think it's important that we congratulate
Lisa Middleton, Sunline Transit,
on the announcement of their award
at the APTA annual conference for the outstanding public transportation system, generally called
smaller systems under 3 million boardings.
Sunline Transit was the recipient and Director Middleton was on stage receiving that award.
Just want to acknowledge that one of our sister transit agencies in the region was recognized
by APTA, so congratulations Director Middleton.
you very much and Darren thank you for acknowledging that all of the
congratulations goes to the outstanding staff of Sunline and our new CEO Mr. Chair
that concludes my report thank you very good thank you very much and
congratulations to Sunline all right committee member comments anybody on the
I just have a comment. Anybody out in video land? Anybody with a comment? Okay. Chair's
comments will just be safe out there today, be extra vigilant. It's been a very chaotic
week for many, many families around the world, so keep your own families in your hearts and
be safe out there. This meeting is adjourned.