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could be at our lost and found facility located adjacent to the gold line
heritage square station the facility is open Monday through Saturday again
today's audit and finance committee meeting Friday January 12th 2024 9 o'clock
a.m. calling this meeting to order first we will do the safety briefing know
what's happening with your Metro bus or rail line. Follow at Metro LA alerts on
Twitter for up-to-the-minute bus and rail rider updates. Seniors, customers
with disabilities, and students are eligible for reduced fares. As a reduced
fare rider, you're automatically signed up for free balance protection so you
won't need to worry if your card is lost or stolen. It's free to apply at
tap2go.net slash reduced fares. Stored value is the best way to travel across
L.A. County stored value is money on your tap card just tap when you board and the correct fare will be deducted
You stored value when you're three is Pledge of Allegiance
Lauren what's the Hughes we'll be
Very good, thank you for that and item number four is roll call Adam clerk
director Middleton
Vice chair McCallin here director do tray here
director Nguyen
director Murphy
here
director Krekorian
director Najarian
director O'Connor
director he's Leslie
Chair, Burksen here. We do have a quorum present very good
All right item number five public comments. Do we receive any public comments for today?
I have not received any written public comments or any requests to speak
Okay moving along then item number 6a approval of minutes from the October 13th
2023 audit and Finance Committee meeting were there any comments or revisions that my colleagues would like to see
Seeing none of approval. We have a motion to move
We have a second Murphy Murphy seconds all in. Oh, we have to do roll call because we have by zoom. So
Vice Chairman Callan. Yes. Director Murphy. Yes. Director O'Connor.
Chair Bergson. Yes. That motion carried unanimously. Excellent. Thank you very much. And item 6B
is the fiscal year 2022-2023 annual comprehensive financial report and single audit presented
by Alex Barber, senior manager of finance and Lauren Stapleton from Edie Valley.
Good morning Chair Burks and I am here to introduce Lauren Stapleton with Aide Bailey.
Good morning. I'm Lauren Stapleton senior manager with Aide Bailey. I'm here today on
behalf of Roger Alfaro, the partner on the-
Mr. Chairman.
Have you all been here in one start and ranking the top 50-
Mr. Chairman.
Here Canyon also features Tuesday and back runaways.
Can we get somebody to mute their-
One second, I will get IT on that.
I'm here to present the required communications in relation to the fiscal year 2023 annual
comprehensive financial report and the single audit.
Our scope of work for fiscal year 2023 included an audit over Metrolinx annual comprehensive
financial report, which I'll refer to as financial statements.
We issued an audit report on compliance over major federal programs, the schedule of expenditure
of federal awards, and internal control in accordance with 2 CFR 200.
That all referred to as the single audit.
And we also issued a report on internal control over financial reporting and compliance in
accordance with government auditing standards.
As your auditors, we have the responsibility, you can go to the next slide, to form and
express an opinion about whether the financial statements that have been prepared by management
with your oversight are presented fairly in all material respects in accordance with U.S.
GAAP.
We have the responsibility to express an opinion as to whether Metrolink complied with direct
and material compliance requirements described in the OMB compliance supplement for each
major federal program. We plan and perform our audit to obtain reasonable rather than
absolute assurance about whether the financial statements are free from material misstatements.
We do consider internal controls over financial reporting and over direct and material compliance
requirements for major federal programs however those considerations are solely
for the purpose of determining our audit procedures and not to provide any
assurance. So I am pleased to report we have issued an unmodified opinion on the
financial statement. This is the highest form of assurance an auditor can provide.
If you've reviewed the opinion you'll notice there is an emphasis of matter
paragraph. This paragraph explains that Metrolink implemented a new accounting
pronouncement in the current year which was required by the Government
Accounting Standards Board. We did report a significant deficiency in internal
controls related to the accounting for the advanced funding for capital
projects. We noted no instances of non-compliance. Metrolink's single audit
included one major program, the Federal Transit Cluster, and we issued an
unmodified opinion on compliance. Again, that's the highest form of assurance, and
there were no material weaknesses reported. I'd like to share with you that
we've complied with all relevant ethical requirements regarding independence, and
as I stated previously, Metrolink was required to implement a new accounting
and pronouncement in the current year.
It was GASB number 96,
which is subscription based information
technology arrangements.
This was effective July 1st, 2021,
which is the earliest year presented.
This has been noted in note one in the financial statements
and the effects of implementation are also noted
in note nine.
We're required to disclose to you significant estimates
and sensitive disclosures and we've identified those disclosures related to the net pension
liability and the OPEB liability or the other post employment benefits liability disclosures
to contain significant estimates.
We did identify a misstatement in the current year in the amount of 2.5 million.
An adjustment was proposed and posted by management to reduce accrued receivables and under and
associated with the advanced funding for capital projects. Management has
informed us and to our knowledge there has been no consultations with other
accountants regarding auditing and accounting matters and I am pleased to
report that we did not encounter any significant difficulties in dealing with
management and there were no disagreements that arose that would
required to be reported that concludes my presentation if thank you for having
me today and if you have any questions I'd be happy to thank you for your
report we obviously enjoy when we have benign audit reports that say
everything's pretty much in good shape and the minor notations seem not not in
the I mean everything's important but not in the critical path of how you know
the day-to-day is going. Do any of my colleagues have questions or comments?
I see. I do. Thank you. The significant deficiency, explain that please. So we did
have some advanced funding that came from our member agencies that were dated
that needed to be cleaned up from our financial statements. This is something
that was identified earlier in the calendar year and we began addressing it
before the audit started. By the time the audit was complete we actually did make
all the adjustments that were necessary to clear this off of our financial
statements. So it's pending auditor verification this next year. Thank you.
Any other comments or questions? Okay and this one is action item so we do
have a motion to approve we have a motion and a second may we please have
roll call vote oh before I do that and I appreciate you putting the red box that
I asked you for any public comments members of the public wishing to speak
on this I have not received any written public comments or any public speaker
comment cards on this item okay in the audience so we will now proceed with the
vote certainly vice chair McCallin yes director Murphy yes director O'Connor
chair Bergson yes that motion carried unanimously wonderful thank you for the
report item 6c corrective action status update first quarter ended September 30th
2023 this will be a receive and file item presented by Elizabeth was
Lazzuardi, our director of audit.
Good morning, Chairman and members of the committee.
Thank you.
The board directed until audit to provide quarterly updates
on the corrective action status related
to past internal and external audits.
For the first quarter ended September 2023,
there are eight items implemented and verified
for implemented pending verification of past two items
and 23 items not yet due.
and this concludes my item.
Happy to answer if you have any questions.
Well, thank you, Director, for your comment.
That is her new position, by the way.
Do any of my colleagues have questions, comments?
Any members of the public wishing to speak on this item?
This is a receive and file.
Without objection, we will go ahead and proceed
receiving and filing this and moving along to item 6D,
which is gonna be an internal audit department
quarterly update for quarter one, a fiscal year 2024.
Also a receive and file item presented again
by Elizabeth Bozewardi, Director of Audit.
Thank you, next, thank you.
Staff is reporting the progress
of the board approved fiscal 24 audit plan
for the first quarter and it's September 2023,
as listed on the attachment A to the report.
And internal audit continue to provide assistance
to the contracts department to review contract
proposed labor rates and incurred charges.
On the external audit activities,
there are a few external audits
that occurred during the first quarter,
including the IRS audit, the fiscal 23,
financial and single audit as presented earlier,
the submissions on the NTT NO report,
and the completions of the FDA trial and review.
This concludes my item.
Happy to answer if you have any questions.
Thank you again for that report.
Do we have any comments or questions from my colleagues?
Mr. Komet, if I might, that IRS audit
that was done on Natural Ink has caused a lot of activity throughout all the boards
and commissions that I sit on where they realize that they need to go put all of us on W-2s.
So it was interesting that it initiated from the audit that was done here.
Okay. Well, none of the, almost none of the boards and commissions other than this one
for me have that and and so I guess at some point though they'll probably change
it they're in progress I've got one other board that's okay all right well
it's gonna be the last one probably cuz I have so many board members all right
very good thank you for the comment do we have any additional comments or
questions members of the public wishing to speak on this item seeing none this
This is a receive and file, so without objection,
we will do that.
And move to item 6E, performance audit,
contractors' physical access deactivation,
receive and file item, once again,
presented by Elizabeth Lizzuardi, Director of Audit.
Thank you, internal audit completed
the contractors' physical access deactivation audit.
This audit is included in the physical 24 board
approved annual audit plan.
And the audit objective was to evaluate
the effectiveness of the process for deactivating physical access for inactive contractors in
accordance with the SOP. There are five audit findings and eight audit recommendations as
detailed in the audit report. Management has agreed with the findings and developed the
corrective actions and this concludes my item. I'm happy to answer if you have any questions.
Very good do my colleagues have any questions on this item yeah
It's 30 days
Any additional questions, we've committed to 30 days closing out the items that were found on the audit
We committed to 30 days
Closing out the items that were found during the audit
So we are in line with doing so updating an SOP
Completing some of the corrective actions. We needed to do
post audit
All right, good that will keep our system safer by not allowing access for people who shouldn't be there any longer
And any other comments or questions Larry, please just as usual
Outstanding report. Thank you for your hard work
Alright any members of public wishing to speak on this item?
seeing none we will
without objection receive and file that item and
Move right along to item 6f this is a grants quarterly update for the first quarter fiscal year
2024 it is a receive and file item and will be presented by Tom
Shamberer who is the director of grants good morning. Mr. Chair and members of the committee
This is a receiving file item providing an update of grant activities from July 1 through September 30 2023
During the quarter no new grants were acquired
$100,000 in grant funding was reprogrammed from closed projects with cost savings to
other projects in need of funding.
Ten grants were closed, totaling $135.8 million.
Four grants were federal and consisted primarily of operating assistance under a federal pandemic
relief program.
Six state grants were closed and funded the acquisition of Tier IV locomotives, construction
of a passing sighting in San Juan Capistrano,
implementation of an early earthquake warning system,
a new rider ticket voucher program,
and a multitude of other new capital
and rehabilitation projects.
This resulted in a total portfolio of $1.8 billion
as of September, 2023.
This concludes my report.
I'm happy to answer any questions.
All right, very good.
Larry's already got ready to go.
Go ahead.
I'm always amazed at how much we have in grant money.
It's encouraging that we can get other people to help us out
with all of our expenses.
I did want to note that as far as Tier 4 engines,
I noted coming in today that we're down to six
of the old engines still sitting out on the siding out here.
Used to be about 10.
And I don't know, Justin, if you have an update
on the disposition of those old tier ones.
We are working with, through our procurement division
right now for disposition of those.
We actually have a few that we're trying to potentially
donate with a couple of local railroad museums.
So, but Justin, you may have more information on status.
I think you covered it.
Oh, there we go, okay.
See, my staff trains me well.
Well, I count them every time I come in on the train
And it's now down to six from 10 it used to be.
So hopefully we can.
You should be paying attention to the road, not to the train,
sir.
No, I'm on the train.
I was kidding.
Thank you.
And I will comment and piggyback,
because I think those of you who have been here long enough
have heard me moan and gripe and ask over and over
over the years to try and take some of the original train
engines that we have. I grew up in the San Fernando Valley. I had birthday parties at
Traveltown. I know how amazing it is to have, you know, that is the biggest train museum
I think that I know of, at least. But there are others in, I think, in Paris, has one
in Fullerton. So there are some, and potentially it would be great to see some of these go
to these local train museums rather than just being scrapped because there's historic significance
to the original.
And in some cases there's still value that we'll be able to get out of them.
Now in some of the cases with our tier four locomotive grants we had to put a hole in
the block and the motor so those cannot be used, but early grant awards did not have
that condition and so we'll be able to in some in some way get some return on
that and not just have them be a Hulk. It'd be great to have at some point a
follow-up on the train museum scenario and if we can and if staff has reached
out and to see if that's something that is just an idea still or if we can at
some point make that a reality which would be really nice. Okay I will get off
the soapbox that I like to get on to so with that any other comments on this
item any members of the public wishing to make a comment on this item we will
go ahead and receive and file that moving along to 6g the fiscal year 2024
financial results for the five months ended November 30th 2023 this pertains
to ridership revenue and operating results it will be a receive and file
item presented by Christine Wilson the senior finance manager. Good morning
Chairman Bergson and members of the committee. I am presenting item 6a which
are the agency financial results through November of 23. This slide
shows our ridership increase over the past eight, eleven months. As you can see
we are outpacing the forecasted amounts. We'll talk about the details of this in
the next two slides. Next slide. This slide shows that revenue is outperforming our budgeted
revenue. As you can see by the slide, the black line is our budget and the green lines are our
actuals. Next slide, please. So, year to date, the budget for Fairbox revenue was $14.0 million
or a 43% recovery.
And I remind you that here we are presenting comparisons
to our farebox revenue performance in 2019,
the last full year prior to the pandemic.
The actual farebox revenue is 15.9 million
or a 49% recovery over the budgeted amount by 1.9 million.
I understand there were questions asked
about the amount of student adventure pass.
And yes, those amounts are included in these numbers.
And the student adventure pass has contributed 1.7 million
in Fairbox revenue through November.
By month, SAP, the senior adventure pass in October,
contributed 686,000.
And in November, contributed 1.0 million.
Next slide, please.
Can I ask a question first before you go?
Mm-hmm.
What was the farebox recovery for the student?
What was the number?
Oh, the total year to date?
Farebox recovery for the student, free pass or whatever?
It contributed $1.7 million.
Does that include the grant money?
Oh, yeah.
Yes.
It's all grant money.
It's all grant money.
OK.
So the student adventure pass program is fully funded
from LC top grant dollars to cover it.
So it is all grant money, correct?
Thank you.
I would expect the number to be higher based on the amount
of ridership, but we did have an increase and that's good.
Next slide, please.
This slide shows ridership performance.
Once again, performance is significantly over the forecast.
Next slide, please.
Year to date ridership was forecast as 2.1 million or 42% recovery.
The actual performance is 2.5 million, which is 387,000 over the forecast.
The student adventure pass produced ridership year to date of 264,000 riders.
107,000 of this was in October and 157,000 in November.
Next slide, please.
So onto the operating statement, total operating revenue through November is 26.5 million,
which is 4.6 million over budgeted amounts.
Total expenses at 115.2 million are 11.1 million less than budgeted.
These are based on accrued expenses, not actuals.
Next slide, please.
Here we see the amount of our past due outstanding accounts receivable.
Now you should know some of these amounts to date have already been paid.
Next slide please.
This slide describes Metrolinx available cash.
Our available cash has been below our 50 million threshold for the past four months.
The board has been made aware of this situation as is required by policy.
We can report at this point in time that in December we are slightly
over the 50 million dollar threshold in the month of December.
Next slide.
Arrow service.
Next slide.
This slide shows arrow farebox revenue for the year at 89.2 thousand and ridership at
40 thousand.
Next slide.
I remind you we're still operating on a continuing resolution for arrow, but the operating revenue
94,000. Expenses are 5.4 million or 2.3 million under budget. Student
adventure passions are not yet included here. It took us a while to sort out all
the amounts and who they belong to, but Arrow SAP will be included in the
December statement. Through November, they total approximately an additional
$10,000 in revenue and 7.5 thousand in ridership.
That concludes my report.
May I answer any questions?
Thank you very much for the report.
Do my colleagues have any questions?
Not seeing any.
Do any of the members from the public
wish to speak on this item?
You're off the hook.
Thank you very much for that item.
We will go ahead and receive and file that
and move along to item seven, which is our CEO's report.
Thank you, Mr. Chair.
Just a couple of items to report.
First of all, I want to wish you,
the committee members, a happy new year.
We're excited about 2024,
but I want to close with what happened
at the end of December of 2023 in our system-wide closure
from December 26th through December 29th,
due primarily to the work that was occurring here
at LA Union Station and the throat.
With all of their signal systems,
it was the very last portion of a three-year effort
to do modernization here at Union Station.
It was done on time, actually one day ahead of schedule.
We did have the proverbial moonshot goal
that no one showed up at platforms
expecting to see a train all throughout our system.
We did have some people show up,
but we also had staff there to help them out
to find alternative transportation.
went very smoothly across the board and we were also able to accomplish a few
other projects during during the closure while we were sort of unimpeded by any
other activity so it was a very very successful effort and my you know
massive effort on the part of the operations team, program delivery team
and our communications team to get the word out so again I we will share more
without at the board meeting at the end of the month by just a just a quick
update on that want to share that with you. I have a little bit of disappointing
news I get to share. Metrolink has historically been the place where people
want to come we're the big leagues but evidently we're not the big big leagues
so we have I have to announce the departure of two of our chiefs our chief
people officer Alyssa deCasperas who's been with Metrolink for about two and a
half, three years nearly, is going on to the big, big leagues. She's going to be
the Chief People Officer at LA County Metro. So our colleagues from LA County,
you're welcome. And so that that is news and actually today is Alyssa's last day.
So she will be doing a report at the executive committee. So feel free to
grill her as much as you'd like during that one. The other announcement I have
is Alyssa Cunningham, our chief technology officer, who's been with us
about 14 months, had come to us from the Dallas area regional or rapid
transit agency, and Alyssa is going to be leaving us for also the big, big leagues,
the Southeast Pennsylvania Transportation Authority, SEPTA, which is a
full-service public transit agency that covers both commuter rail, light rail,
subway and bus. So not for the faint of heart for either of those two but I
appreciated the contributions that both have made. Alyssa was here when I got
here, Alyssa was one of my hires, I've really appreciated their efforts and
their work here so they'll be missed. And then just lastly a really quick
reminder to committee members the board meeting is this month is January 26th
it's the Friday it is also going to be our workshop so make sure you work with
the board secretary to if you're going to be able to attend to have all your
arrangements taken care of. Mr. Chair that concludes my remarks. Very
mediocre. I'm always a very sarcastic happy person with that we'll move to item
eight and committee members comments. Uh John to Trey I see your hand up go ahead.
Yes good morning everybody first of all wish everybody a happy 2024. Um I just want to say to
staff on the last item regarding the uh the five months uh financial report. I appreciate the update
on the student venture program it sounds like about 20 percent of the writers and fairs are
now through this program. And I also want to say kudos to Metling staff. During the
shutdown, I heard a lot of advertisement or just public relations come out of news channels,
the newspaper that Metling will be shut down for the last week of the year. Thank you.
Thank you for your comment. Larry, go ahead.
Are we going to, at the board meeting, are we going to have one of those videos which shows
All the work that was done.
We're working on something.
Good.
I mean, the interesting thing about this last project
is it wasn't visually something that is as cool
as the time-lapse stuff.
But we have an idea that relates to the entirety
of the modernization effort, the whole package.
So hopefully we'll be able to put something together like that.
My only other comment is Go Blue.
They won the national championship.
Michigan is now the national champions.
and it was an exciting game.
Excellent, Pam.
And Director McCallum just took my comment, go Blue.
It was a great Rose Bowl game,
and it was great national championship.
Michigan, the winningest record in college football.
But I also wanted to say, so for the,
who's going this after, what's the name?
So that's Alyssa Cunningham.
Alyssa, go ahead and stand up
so that Pam recognizes you.
So, Elisa, I just want to mention they have snow and sub-zero freezing temperatures.
So, we wish you well and remember spasking in the California, Southern California sun.
But still, we wish you well.
It's actually that way right now.
Yeah, I know.
She's heading that way.
I know.
Her last, you will see Elisa at the workshop, I think, or is that the plan or no?
I'm not sure.
So, okay.
She says, yeah, no, I'm out.
But she's got another couple of days with us, so.
And I was at Union Station during the close,
because I was taking the Flix bus to visit a friend in Las
Vegas and watch the Rose Bowl game there.
But it was interesting, because Union Station was still
bubbling, because there's activity with Metro,
et cetera, and the bus services.
But the information there, I was able to observe both
the information there and the staff there who were able and
willing to help folks who might have showed up.
So a really good job.
Thank you guys.
Perfect, and Lauren, please go.
I just wanna say happy new year
and thank you to the entire team.
I remember when I first was appointed to the board
and those graphs and the lines weren't
as promising as they look now.
And we would talk about at what point can we get rid
of these forecasts and see a brighter future
and the time is now.
So I just want to take thank the entire team for all your hard work and dedication and to our two team members that are departing
I just want to thank you for all your hard work and dedication for the team or to the team into the agency and just
remember where you came from that you will always be a part of the family and the team and I
Wish you all the best on your future endeavors and we're always just a phone call away and despite the colder weather that you're going to
Or a phone call away and if you ever need anything, we're here and if we ever need anything, we'll definitely call
So please answer the phone call when we do. Thank you
Thank You Lauren, all right, and that looks like that's it for committee member comments just looking forward to a
nice start to 2024
And hopefully it won't be as rocky as we've seen in the past and we will be smooth sailing and smooth
We'll leave it at that, and we will go ahead and adjourn this meeting at 9.35.
Thank you so much.