Good morning everybody we're gonna go ahead and call the MetroLink audit and
finance committee meeting to order at 9 a.m. Friday March 8th 2024 and first we
will have Frank Castellan our chief safety security and compliance officer
give us a safety briefing please go ahead. Good morning Chair Burksen committee
members as a reminder in the event of a fire alarm activation we're going to
exit the building uniformly together go downstairs and we will stage away from
from the building by the Metro Customer Service Center,
located on the bottom floor.
If we have an earthquake, we're gonna drop, take cover,
and then once the shaking stops, we'll do an assessment
if leaving the building is appropriate at that point in time.
Event of a first aid situation,
I'll be your first aid provider.
I'll ask Ms. Peña to contact Metro Security Front Desk,
advise EMS, and or get an AED if necessary.
And as always, in the event of an active attacker,
we tell you to run, hide, fight.
To conclude with that, Chair Bergson,
I wish you a good trip to Mexico.
I just hope you can do that.
Yes.
You can take us with you as well.
Happy Friday, everybody.
Very good, thank you.
And for the record, that's for dental work,
so it's not really a fun trip, but nonetheless.
Okay, thank you for that.
And with that, we will move to item three,
which is the Pledge of Allegiance,
and Ms. O'Connor is going to lead us today.
Thank you.
Please join me as we salute the flag
Thank you for that. Item number four is roll call.
Director Middleton? Vice Chair McCallum?
Here. Director Dutray? Director Nguyen? Director Murphy?
Here. Director Tremblay? Here. Director Krakorian? Director Najarian?
Director O'Connor, here.
Director Hughes-Leslie, here.
Chair Burksen, here.
We do have a quorum present.
Very good, all right, thank you for that.
Item number five is public comment.
Do we have any public comments today?
I did receive a written public comment
from Lucas Chang addressed to the audit and finance committee.
Is it one that you want to read out loud?
I can read it out loud, if you'd like.
Okay, we'll do that. I think it's short enough.
Okay, Dear Audit and Finance Committee,
I appreciate that the FY25 budget negotiation process
continues to incorporate starting
the optimized service by July 1st.
However, I am still disappointed
that the October 1st start date is still being considered
as proposed in the hybrid budget.
I highly recommend prioritizing the July 1st start date
during the drafting of the FY25 budget.
Starting the new service in October
will only result in mis-ridership potential
from the 4th of July holiday weekend and summer break.
MetroLink stands to reap many benefits
with the new service by July 1st.
With the success and possible extension
of the student adventure pass,
it is vital that service improvements begin
when the students are on their summer break
so they can take full advantage of the new service.
Plus, the 4th of July weekend in Anime Expo
represents the best marketing opportunity
for capturing potential riders by allowing riders
to avoid the hassles of finding expensive parking
and the high risk of driving drunk on the freeways.
Trains are the most efficient form of ground transportation
and Metrolink's route map represents large potential for creating a comprehensive regional rail network in SoCal.
However, the current nine to five commuter focus schedule limits this drastically enforces many potential riders into their cars and onto the constantly congested freeways.
The SoCal region cannot meet its climate goals if the promise for improved service is continually delayed by the funding shortfalls and
contractor delays that constantly plague transit projects in the US while unsustainable freeway expansions continue to get funding priority.
to eventually create traffic jams worse than before due to induced demand.
Our neighbors like Caltrain and Coaster have been able to sustain regular all day service despite a looming fiscal cliff.
We should not let the fiscal cliff detract from expanding rail service since the alternative costs more in construction maintenance and
the economic potential that transit oriented development provides.
Please prioritize starting the optimized schedule by July 1st to capture key ridership potential from the 4th of July weekend.
deliver on our promises to create a world-class transit system without constant delays of
other transit projects in the U.S. Sincerely, Lucas Chang.
Thank you very much. Darren Kettle's going to make a quick comment on that.
Thank you, Mr. Chair. I just want to make sure the board's aware that when we first
started down the optimized schedule path, it was our intent to try to make July 1 happen,
assuming, again, adoption through our budget process. What we encountered was working with
With our train operations contractor, Amtrak, we have to deliver that optimized schedule.
We need 10 additional crews beyond those that we are already contracted to have.
And Amtrak informed us that they would not be able to meet that crew level by July 1,
and they've assured us that they believe October 1 is a doable time.
So that is the reason why we're working off of an October 1 schedule.
It certainly would have been our desire.
Budgets permitting to launch July 1,
workforce issues complicate that.
So thank you, Mr. Chair.
Yeah, thank you.
Do we have any members in the audience
wishing to speak on non-agendized items?
Seeing none, we will go ahead and move on to item six,
which is the regular calendar and approval
of the meeting minutes from February 9th, 2024,
Audit and Finance Committing.
It's an action item.
Do we have any comments from any committee members
wishing any modifications or changes?
We have a motion to move.
We have a second.
Second?
We do have a second.
I see Director Middleton also joined the call,
so please make a note of that if you haven't already.
And can we please have a roll call?
Certainly.
Vice Chair McAllen.
Yes.
Director Murphy.
Yes.
Mr. Tremblay?
Yes.
Director Najarian?
Yes.
Chair Bergson?
Yes.
That motion carried unanimously.
Excellent.
Thank you.
Item 6B is the internal audit department quarterly update for quarter two fiscal year
2024.
It's going to be a receiving file presented by Elizabeth Lizuardi, our audit director.
Good morning.
Next slide, please.
Staff is reporting the progress of the board approved fiscal 24 audit plan as of the second
quarter ended December 2023,
as listed on the attachment A to the report.
During the quarter, internal audit continued
to provide assistance also to the contracts department
to review contract proposed labor rates.
And on the external audit activities,
we are still waiting for the final audit report
from the IRS.
And the fiscal 23 financial and single audit
is already completed and corrective action status
is included in the next item 6C.
Fiscal 23, LACMTA MOU is completed with no audit finding.
And finally, the FDA trailer review corrective action status
is also included and tracked in the next item 60.
Happy to answer if you have any questions.
This concludes my item.
Excellent report, we thank you for that.
Do any of my colleagues have questions?
And are there any public comments on this item?
Anybody wishing to speak?
How about on any of our committee members on Zoom
Have any comments or questions?
Okay.
No, thank you, Mr. Chair.
All right, very good.
With that being the case, it's a receive and file
with no objection.
We will go ahead and do that and move to item 6C.
And as Elizabeth has alluded to,
she will be standing by right now to do item 6C,
which is the corrective action status update
for the second quarter ended December 31st, 2023.
So please go ahead.
Thank you.
Next slide, please.
The board directed into audit to provide quarterly updates
on the corrective action status
related to pass internal and external audits.
And we received more updates from management
between this week and last week.
We now have eight more close corrective actions
or implemented pending verifications
than those shown on the staff report.
The latest update is reflected on this presentation slide
for the second quarter ended December 2023.
There are 11 items implemented and verified
for implemented pending verification, no pass-through items,
and 21 items, not yet two.
I'd like to thank Noelia Rodriguez,
Interim Chief Technology Officer Frank Castrion,
Chief Safety Security Roxanne Randolph,
Interim Chief People Officer and Arnold Hackett, CFO,
for closing those corrective actions.
This concludes my item.
Happy to answer if you have any questions.
Excellent, thank you, and we thank all the rest of the staff
that has concluded those items, appreciate that.
Any additional comments or questions from my colleagues?
Larry, go ahead.
Thank you very much.
Elizabeth, I'm working at attachment A,
which lists all of the corrective actions
and their due dates.
And I notice unless things have changed,
that a lot of them have slipped.
Could you address those?
Yes, the eight more items that came in this week
and last week was related to the batch audit,
the physical access, the physical access,
the activation audit,
and then the other one was related to the FT Tranil
that was passed due on this report related to the EEO
and also the IT software asset inventory.
Now those three remaining items have already closed.
And all of the ones in HR tend to be slipping, moving.
Yeah, the HR, they needed additional time.
They requested for additional time on the HR audit.
That due to the chief being not available or not?
Chair McAllen, it's a combination of factors.
It's not just the fact that Alyssa DeCaspres
has left us as Chief people officer.
We've also had a number of other departures in HR
over the course of the last six to nine months,
and so we were a little thin in that group.
But we are working very hard to fill those positions
to try to make sure we're at full complement of team.
Thank you.
And as I mentioned in the board briefing yesterday,
RCTC board briefing, the issue that stuck out to me
on reading these reports is that in this case,
the report is over two months old.
So some of the items on those charts
show that they're due in February and March.
And to me, I'm trying to say, well, where are they now?
It's already March.
Did the ones in February, did they get completed or not?
So unfortunately, this is, to me, a stale dated report.
And we talked about that.
So staff is going to do their best
to try to get it to us as quickly as they
can after the quarter ends so that we have better and fresher
material to look at.
So I think that was just a comment.
I'm just going to share that with the rest of you with that
Were there any members of the public wishing to speak on this item?
Not seeing any this is a receiving file item
We will go ahead and proceed to receive and file it and move to item 6d
Which is grants quarterly update for the second quarter of fiscal year?
2024 also a receiving file item presented by Tom Shamber or grants director
Good morning. Mr. Chair members of the committee
This is a receive-and-file item providing an update of grant activities from October 1st through December 31st of 2023.
During the quarter, one new state grant of $4 million was acquired from the LC Top Program to fund the Student Adventure Pass pilot program.
$4.1 million in grant funding was reprogrammed from closed projects with cost savings to other projects in need of funding.
One state grant of $5 million was closed.
This grant funded track and signal improvements at LA Union Station,
the project otherwise known as RYRM.
This resulted in a total portfolio of $1.8 billion as of December 31st, 2023.
This concludes my report. I'm happy to answer any questions.
Very quick and good report. Precise, concise. Thank you for that.
Do we have any comments from any of my colleagues?
Not seeing any, do we have any members of the public
wishing to speak on this item?
Also not seeing any, it's a receive and file item,
so without objection, we'll go ahead and do that.
Moving on to item 6E, the fiscal year 2024 financial results
for the seven months ended January 31st, 2024.
This is ridership, revenue and operating results.
We'll be a receive and file item presented by Christine
Wilson, our senior manager of finance.
Please go ahead.
Good morning, Chairman Bergson and members of the committee.
This is the financial reporting for the seven months
ended January 31, 2024.
This slide depicts ridership versus forecast
over the fiscal year.
The green bars are actuals, while the blue line
is the forecast.
As you can see, we were significantly over forecast
for the month of January.
These ridership numbers do include the student adventure
path.
Next slide, please.
This shows Fairbox revenue over the fiscal year.
The green bars are the actual blue line, the budget.
We are over budget on revenue.
This also includes the student adventure pass.
Next slide, please.
These are the budget
and actual Fairbox revenue numbers by month.
Through January, revenue was budgeted at $20 million
or a 45% recovery, while the actual revenue is 21.8 million,
of 48% in recovery and over budget by 1.8 million.
The contribution of the student adventure pass
was 685,000 in the month of January
and 2.9 million year to date.
Next slide please.
This slide shows the ridership for each month
of the fiscal year compared to the forecast.
Next slide.
These are the ridership numbers by month.
Through January, ridership was forecast at 3.1 million
or a 44% recovery, while the year-to-date actual
is 3.4 million or a 49% recovery.
Once again, these do include the student adventure pass.
And as you can see, year-to-date,
they contribute 422,000 riders.
Next slide.
Now the operating statement.
The January operating statement shows operating revenue
of 36.2 million or 5.3 million over plan.
The expenses year to date are 160.3 million
or 16.9 under budget.
These expenses are based on actuals,
I mean based on accruals and not actuals.
Next slide please.
You see here the revenue portion
of the MetroLink operating statement.
You see the student adventure pass shown as a separate line.
The large variance in other revenues in the next section
is a result of improved interest
resulting from revised banking.
Next slide.
This slide shows through train operations
and in total the train operations are under budget 7.4 million
with the largest contributor being train operators
or Amtrak.
Next slide please.
This slide shows expenses, MoW and under budget by 1.4,
administrative under by 6.4 and legal under 1.5.
Next slide please.
Here we have the results of special trains
that we've been running.
And this slide also shows the total support required
by the member agencies which is 124.1 million through January
or 22.2 million under budget.
Next slide.
Here we're showing the past due AR as of January 31st.
Now some of these amounts have been collected as of now.
Next slide.
These are the details of accounts receivable,
but as you can see, most of the past due
are member agency quarterly support payments.
Next slide.
Our CAS position.
As of January, we're significantly
over the $50 million threshold for our cash.
Next slide.
Movie to Aero service.
Next slide.
We see here the revenue and ridership
by month for Aero service.
Year to date through January,
Fairfax revenue is 135,000 and ridership is 59,000.
The student adventure passes contributed 18.4,000
in revenue and 14,000 in boardings.
Next slide, reviewing the arrow operating statement.
Operating revenue is 141,000.
Total expenses are 6.9 million
or 3.3 million below budget.
Support is 3.9 million below budget.
Next slide.
That concludes my report.
May I answer any questions?
Thank you very much for the report.
Do my colleagues have any questions?
Okay.
Are there any public comments on this item?
Members wishing to speak?
Very quiet audience today.
It's early, I get it.
Very good.
With that, thank you very much for the report.
And we will move to item seven.
As usual, our favorite report of the day,
our Chief Executive Officer's Report.
Thank you, Chair Bergson.
Bergson, I appreciate it.
So I just got two items for the committees today.
first of all it's it's a good news report unless Jeff Dunn corrects me I
believe the House and the Senate have acted on the appropriations bill that
includes several earmarks for Metrolink first of all senators Padilla and the
late senator Feinstein included 1.6 million dollars and to implement our
smart crossing technology that's the technology we use it will allow our
gates to go down when trains are coming through and not have ghost trains and
that issue it's forced it was it all started here in Southern California with
the arrow service where we implemented what is known as wireless crossing near
side station stop thank you very good there's a there's a lot of initials in
that so really pleased that's going to add four more crossings in our in our
region we have a prioritized list that we're going to be clicking through on
on that, so good news there, so our thanks to the senators.
Congressman Brad Sherman included $1 million
for prototype track intrusion for the right-of-way
using at grade crossings and will use PTC
in an effort to try to slow or stop our trains,
or at least send a message to our engineers
in the event that we have a trespasser on the right-of-way.
And it will be positioned between,
the Ventura County line between Van Nuys and Northridge, and I think many people are aware
that's one of our hot spots as it relates to trespasser strikes.
And then for RCTC, Congressman Mark Takano included $500,000, half a million for the
Metrolink double track project in Moreno Valley to Paris, and that was at the request of RCTC.
So good news, particularly, as we all know, we're so concerned about safety.
impacts that we have when we have trespasses or strikes on our system, it really impacts
the whole system for many, many hours. So that's good news. And of course, the community
benefit that comes with the Smart Crossing technology is something that we're excited
about implementing throughout the region. So that's one thing. The other, I just want
to mention Happy International Women's Day. If you look around this room, we're surrounded
by amazing, amazing women.
You look at our Metrolink staff.
My thanks to the amazing women on our staff.
If you were to just sort of do a count right now,
we're about 50-50 between Metrolink staff that are men
and Metrolink staff that are women.
So I think we really do believe,
as far as in the audience,
not agency-wide, just in the audience.
We're working on more, but nonetheless,
That is, it's something that we really strive for,
and again, I want to share my thanks
to the women at the dais and on our staff.
Chair, that's it, thank you.
Oh yes, so thank you.
Board Secretary reminded me, please keep in mind,
board meeting is the fifth Friday, it's March 29th,
so please make a note of that on your calendars
if you've not already done that.
So yes, the fifth Friday,
and we'll look forward to having you here for that meeting.
Thank you for the reminder.
Very good, thank you very much.
And with that, we'll move to item eight,
committee member comments.
Do we have any, Larry?
Thank you very much.
As you know, on March 29th, our fifth Friday meeting,
we will be evaluating our chief executive officer.
Legal has sent out an email to everyone
with his self-assessment and an evaluation form
to be returned by the 18th.
So far, we've got four responses.
I encourage all of my colleagues,
please fill out the evaluation form
and send it back to the lawyers so they can tabulate them
and summarize them in an anonymous format
for evaluation on the 29th.
Also on the 29th we will be starting a half hour earlier
because LA is going off site somewhere
and we want to do a closed session immediately
to allow them to participate in the evaluation,
and so make sure you get on the calendars
of your colleagues if you would.
And I would ask that Don, if you would send out
that email again so everyone has it
on top of their email list and not somewhere down.
They can't find it.
Thank you.
I don't know, I keep getting all these reminders
of filing my 700 form.
That's all that's been in my inbox.
Well, I did that in January.
Well, it's not just, it's from all the agencies I sit on.
They're all sending me the third reminder now.
So I'll get it done, but anyway.
Yes, we'll get to your evaluation too, for sure.
Any other comments from our friends on Zoom?
No, thank you, Mr. Chair.
Okay, seeing none, okay.
All right, with that, the good news is, I have no comments,
and we will adjourn this meeting at 9.26.
Thank you, Mr. Chair.