Good morning everybody. Welcome to the MetroLink audit and finance committee meeting, Friday
April 12th, calling the meeting to order at 9 a.m. And we will ask first for the safety
briefing from our Chief Safety and Compliance Officer Frank Kestalow.
Good morning Chair Burksen, committee members. This is a reminder in the event we have a
fire alarm activation, we are all going to uniformly exit this building, and we're going
to go downstairs. We will stage just outside the Metro customer service office located
on the side of the building, wait for the all clear or further instructions. The event
of an earthquake, we're going to drop, take cover, wait till the shaking stops, do an
assessment and determine whether or not we want to exit the building at that point. In
the event of a situation requiring first aid, I'm going to be your first aid provider.
Our AED is located at the front desk
along with building security.
I'll ask Miss Peña to contact them,
and then we'll also contact EMS if necessary.
In the event of an active attacker,
we're going to run a height fight.
And just as a reminder for those of us having surgery
in the near future, listen to your doctor
and your physical therapist.
Make sure your recovery will go swimmingly.
That concludes your morning safety briefing.
Thank you for that and for the advice.
Appreciate that we will move to the Pledge of Allegiance and we've asked our board secretary Michelle Pania to lead us today
Thank you, please stand and place your right hand over your heart
Ready begin
Thank you, and we'll move to roll call
director Middleton
Vice-chair McCallum here director do tray
here director Nguyen
director Murphy
here director Tremblay here director Krakorian director Najarian director
O'Connor director Hughes Leslie here chair Buerksen here we do have a quorum
present thank you do we have any public comments today I did receive a written
public comment that will be emailed to the board after the meet or the
committee after the meeting and I received a written public comment for
Item 6B that I will also email,
because it is a little lengthy.
Okay, and do we have any members of the public
wishing to speak that haven't turned in a speaker card yet?
Seeing none, we will move to our regular calendar.
This is item 6A, approval of the minute, excuse me,
approval of the meeting minutes from March 8th, 2024.
Do we have any comments or clarifications,
revisions by colleagues?
Approval.
Okay.
McAllen.
moves the item we have a second set Murphy second we do have a second do we
have any public comments on this item seeing none we can move to roll call
vote Vice Chairman Callan yes director Murphy yes director Tremblay yes
director Najarian chair Burksen yes motion carried unanimously
Excellent. Okay item 6b
proposed fiscal year 2024 2025 budget request to transmit presented by Arnold Hackett our chief financial officer
Good morning chair Burksen and members of the committee Arnold Hackett chief financial officer
This is just the agenda
Next slide, please and this is the high-level proposed schedule. We're here at the
AFCOM for April. The authority is required under the joint powers authority to provide to its member
agencies on or before May 1st of each year a proposed budget for the coming fiscal year
for individual agencies consideration and approval. As a reminder
this is our preliminary budget and we continue to work with the member agencies to finalize the FY 25 budget.
Next slide please.
So this is our challenges that remain since the pandemic.
Our operating expenses are growing faster
than our ridership and our revenue.
We continue to depend on the member agencies
at about 80% of our operating expenses.
Next slide please.
So this chart clearly shows our challenges.
Our operating expenses, which is the blue line,
are increasing, our revenue, which is the dark blue bars,
you can see it's creeping up, but slowly,
and we continue with the light blue bars
for the member agency's support.
Next slide, please.
This chart I shared with you at the board workshop,
it shows our operating funding sources.
The green represents the member agency's provided support
and grants while the dark blue represents income sources
from Metrolink.
Next slide, please.
So we are looking at ways to contain our costs.
Grewtizing our vendor costs is a big item
that the CEO has tasked us all with.
Crew and equipment optimization, that's
part of this optimized service that we keep talking about.
Utilizing private security versus shares,
because the cost is drastically different when we can.
And then we're moving out on a fuel efficiency study I think
that we talked to you about previously.
That's not going to impact us in 25 because we need
to do the study itself and then implement the feedback
from the study, so we probably will see that in 26.
But the range I believe is somewhere from 18 to 15 percent
of savings on fuel.
Next slide, please.
So here are the assumptions used to develop the FY25 budget.
Again, the hybrid service starting in October, we will continue
on the current service from July through September.
No fair increases.
The mini-bundle mobilization estimated cost is included in this budget.
And remember, the mini bundle is our combining the train operations,
facilities, and equipment maintenance into one contract.
And that's out today.
The procurement is out on the market today.
Next slide, please.
Here is the Sperry Capital KPMG ridership forecast.
They're reviewing, they're currently reviewing additional data that will result
in a positive update for FY26 through FY29
for the optimized service.
They think it's going to take us a year to really get it going.
And then we'll start to see changes in year two.
Next slide, please.
So the proposed preliminary FY25 operating budget,
the operating revenue is at $67 million,
an increase of $13 million over FY24.
Our total expenses are 341 million, and this includes the 10.3 million for the mini bundle,
that estimate, and that's an increase of 35 million over FY24.
The total member agency support required is 274 million, and that's an increase
of 22 million over the FY24, and again, 10.3 of that 22 million is our estimate
for the mobilization.
Next slide, please.
This slide depicts the distribution
of the total operating support required
by each member agency.
So that 274 million, this is the preliminary number
but we're working to review these numbers
and look at where can we slice these.
Next slide.
This is just our expense trends from FY19 pre-pandemic
through FY 25.
Next slide.
Again, the operating trends, again, FY 19 through 25.
Next slide here.
So here you're looking at the top operating expense drivers.
There's seven categories that represent 74%
of our proposed operating expenses.
So this is a look at the top fixed drivers
of our operating expenses.
And they, this represents 57% of our operating expenses.
Next slide, please.
And again, these are variable costs that represent 40%.
And that difference is the mobilization.
Next slide.
Here's a comparison.
Next slide.
Here again is the FY23 actuals versus the 24 budget and the 25
for operating expenses, our top drivers, just a comparison again.
Next slide.
Now shifting to the capital program,
the proposed preliminary FY25 capital program budget,
state of good repair, the request is 183 million.
That's an increase of 54 million dollars.
The new capital is $7 million.
That's a decrease of $14 million from FY24.
Next slide.
And again, this is the distribution
of the capital program, state of good repair,
new capital requests from the member agencies.
Here we show the total fund request
from the member agencies including operating
and the capital programs.
So the total request is 464 million dollars.
And your package includes the details of all the items
that we're discussing today.
Next slide.
Again, this is a breakdown looking at by member agency,
their share as compared to FY24.
This is looking at the budget.
If we stay where we are on the current, what that cost would be
versus shift to the hybrid.
So, you'll see 138.4 million if we stay
where we are including the mobilization.
142 million by going to the hybrid
and that includes mobilization as well.
Next slide.
Again, this is just the same chart extracting
out the mobilization.
What if we didn't have the mobilization chart?
So, this is those same numbers by member agency.
Next slide.
So in summary, this budget will help us do the transformation
from commuter rail to regional rail as part
of the re-imagining the Metrolinx service.
And as I stated early, we continue to work with the member agencies
on finalizing the FY25 budget.
So staff recommends that the committee recommend
that the board approves the transmittal
of this preliminary FY25 budget
to the member agencies for their review.
So thank you for your time
and may I answer any questions for you?
Your last sentence sounded like a tongue twister.
Do we have any comments or questions for staff?
Larry.
Questions for Murphy when appropriate.
Okay, well noted.
Thank you very much, Mr. Chair.
We're being asked to submit a preliminary budget.
And I'm concerned about that because, you know, we go through our committees
and our board with a preliminary budget and then it gets changed.
We have to go back through that process.
And I'm just concerned what's the reason we have a preliminary budget at this point
and not something that's a final budget that we can submit to our agencies.
So so we're still working with them so the member agencies have seen this budget
So this is the official but we've been working with them since February on the budget
And so we're working to get to a number that is acceptable to all five member agencies for not only
Operations, but looking at the capital the projects that we've picked. I understand that
But why is it taking us so long do we need to start the budgeting process in August?
rather than October?
Yeah, we could move it back and we're looking at always the opportunity to start the budget early
But it's a big challenge to get first is the new service. We're introducing the optimized service
So we have to all get our heads around what is the optimized do I like it don't I like it?
So it took a little period of time to get everyone through.
We presented that at the board workshop,
but then you have to go through with each member agency
to work your way through there.
And then once you get there,
now we have an optimized service that everyone agrees.
Then you have to develop the budget around that
because remember our model that we use for budgeting,
track miles, train miles, you know the other different,
you know, UP, when we're using their tracks, all of those agreements, so shared use agreements,
all add up into what the budget is. And then we start talking about special trains, what
trains are we looking at, what are those things. So there's a lot of pieces, Director, that,
you know, go into making up this budget.
And I'd like just to follow up. I mean, this year we started the budget process, a good
two and a half to three months, excuse me,
ahead of where we were last year.
Recognizing that proceeding with the optimized schedule
was going to take a lot of care
trying to work through the five counties.
And that's, so we started in plenty of time.
I think what's complicated is that the fact
that we are looking at an entirely new model
in a challenging budgeting environment
without federal COVID relief money that's able to be there.
Everybody challenged from a budget perspective
throughout the region, and we continue to work through it.
Now, under our JPA, ideally we come in
with an absolute final.
We're given a little bit of leeway through the JPA
to provide a preliminary.
It's not ideal.
We've been able to work with the member agencies.
We still don't have them completely on board.
They love the member agencies have told us,
the CEOs of the member agencies have told us,
we love the optimized approach.
We see this as our model for the future.
And you have to apply the dollars to that conversation.
And that gets more difficult for everybody.
And so Arnold and I myself have been trying to drive
that number to a point where when we get to a final,
we have everybody on the same page.
Chair McAllen, it is an absolute challenge
to make this happen in the environment
that we're in today.
We believe that the optimized schedule
is the best opportunity for our future.
And with that, it's taken a whole lot more work.
We knew it was gonna take a lot of work.
It has taken even more work than we had anticipated
to try to get all five counties on board with this concept.
I think the optimized schedule is fantastic
as far as I'm concerned.
just I understand all of the problems associated with this and it's I'm not
sure we've had a budget final budget put together transmitted to the member
agencies in a long time. I think you're correct in that we are trying to you
know given the latitude within the JPA to send a preliminary budget we're
trying to do meet the test of the JPA rather than ask for the extension which
which is what we have done in the past.
I think we do this in full transparency.
We've shared with the member agencies
exactly our approach to this,
both with the CEOs and the CFOs
of each of the member agencies.
So this is not gonna come as a surprise
the way we're approaching it.
Thank you.
If I can just tack on real quickly to Larry's question.
When you say that it's preliminary
And there's some leeway here to make modifications.
What, are we talking about major or very minor dollar amounts that could shift?
It could be, it's major because we're also looking at a capital thing that if they're saying,
we're saying here's the things we need to do, I'll give an example for capital.
Here's the things we need to do, we recommend you do for state of good repair.
And then the member agencies come back and say,
oh, can't afford that, right?
So for all shared projects, it impacts not only
one member agency, it changes the landscape.
So for example, if RCTC is OK with the budget
and the capital budget, but one other member isn't,
it impacts RCTC as well.
So we're now having to go back and re-talk to everybody.
So any changes we make, I have to go back and talk to every member agency.
So you can't make, and the way we do the budget, and the way our model is set up,
that any impact to one member agency impacts all.
So if we're bringing the number down to meet a number for a member agency,
it will bring the number down for all member agencies.
And so just as a quick follow-up to Arnold's comment,
I think that last statement is important,
as we work on fine tuning and sharpening a pencil
on this preliminary budget,
the numbers are going to go down,
and they're gonna go down for everybody.
And so, and because of the communications we've had
with particularly the CEOs of the five counties,
we know where we need to drive down the number,
which then will again drive it down for the other four.
And that being said, I don't wanna suggest
that the CEOs of the member agencies
have given a complete thumbs up across the board.
They're generally supportive.
But again, they're keeping their cards close to the vest also
about what's this final going to look like.
It is going to be lower than what it is
and what was presented to them in the last few weeks.
OK, so it would have been nice to just say that.
The numbers are only going to go down, then I think that I told
Arnold to lead with that, but now all right, director Murphy,
you had a question. Thank you.
Recognizing obviously that it's preliminary is mentioned, we're
certainly supportive of moving it forward, but there are still
concerns has been commented on related to the costs involved of
service optimization and the budgetal contract mobilization costs. Our schedule once received
is to bring it forward to the finance in a minute on the 24th of April and to the board
of the directors on May the 13th. So hopefully have full answers by then from our agency.
But I have a curiosity question and that is the transmitted budget and Arnold I saw on
on your slide a note saying that the student adventure pass
is not listed as a part of the budget.
And for us, that's about three quarters of a million dollars
our contribution share as currently envisioned.
I'm certainly supportive of the past,
but just curious as to that strategy,
why it's not included as a part of the budget.
Is that for hoping that there's funding outside
to support that effort and making it more marketable
or is there something else I don't understand?
No, you're correct.
What we did was we separated that,
but the feedback from the member agency.
So another thing we'll be adding
is a sort of below the line item
of the member's agency's contributions
to the Student Adventure Pass.
So once you get the final one, it will be in there as well.
I gotcha.
So in essence, that's sort of an opportunity
for the budget to go up rather than down based on that.
So I just wanted to make sure I understood it
so I could communicate it back.
But OCTA, we're certainly supportive
of moving this transmittal forward
and appreciate the opportunity
to have the ability to fine tune a bit
because there are still some concerns.
Very good, thank you.
Do we have any public comments on this item?
You mentioned there was a public comment that is lengthy.
I don't know what it's related to, but this is.
It is related to this item
and it can be emailed to the committee after the.
Does anybody here want to hear three minutes of that
or is everybody okay with the email?
Okay, we'll do the email, thank you.
And anybody else in the room wishing to speak on this item?
Director Dutray has his hand raised.
Okay, we'll get right back to,
Director Dutray it's your turn.
I don't know if you can hear that
but question on slide 17.
This is slide 17 that shows $90 million for security versus $76 million last year.
What is this increase in security cost?
We pay more costs for sharers, we're enhancing services for security.
Slide 17.
That's not at the, I apologize, mine says slide 17.
But I don't know, do you see the FY 24, 25 total operating expenses?
one here. Not that one. There's one more. Oh, that's okay. There it is. Oh, no. So
that 90 million is not security. That's the other category. There's a bunch of
there's a bunch of items in there for the other category. I'll have to play
with the colors on the charts when they're being protected. All right, thank
you. And obviously, pre-pandemic, the members subsidy was about 50% of total
budget. Now it's almost 75 percent. Obviously, fairs were close to a pre-pandemic. And I
think this is a very difficult process, the situation we're in right now. And I understand
the difficulty the staff has put into this budget, including the optimizing the services.
But really, if we can't solve that issue, the subsidy, sustainability of the system
because even more risky in the future
as member agencies are being asked
to cover additional costs.
So I'm hoping that with the optimizing services
and we'll begin to see some improvements,
we're gonna see increase in fares in the future,
but that is a serious problem
as we move forward in the future.
I wanna appreciate staff trying to put this together.
It is very difficult budget, thank you.
All right, thank you for your comments on that.
Do we have any additional comments?
All right, this is an action item.
Do we have a motion?
We do have a motion by McCallum.
We have a second by Krakorian.
So, may we please have a roll call vote?
Vice Chair McCallum.
Yes.
Director Murphy.
Yes.
Director Tremblay.
Yes.
Director Krakorian.
Chair Bergson.
Yes.
That motion carried unanimously.
Thank you.
Thank you.
Item 6C, proposed fiscal year 2024-2025,
arrow service budget, request to transmit,
presented by Christine Wilson,
the assistant director of finance.
Thank you.
Let me start with the fact that this is only gonna go down.
So, I would first like to point out that as Arnold Hack
is advised regarding the Metrolink budget,
we are working to, we are continuing to work with,
both internally and with SPCTA to refine this budget.
Next slide, please.
Next slide.
The assumptions used in developing this budget
include a service level at no change from FY24,
revenue and ridership based on forecasts
from Sperry Capital KPMG, no fair increases,
student adventure passes not included here,
Expense, new FTEs and expense only is mandated by existing contractual agreements.
Next slide please.
Now, we are getting a forecast from Sperry Capital KPMT, but it's in progress.
They gave us, they came back to us with some information but had some questions
and we're now answering those questions and expect to have something back from them.
What we used in the budget that you're gonna see
is just taking the ridership and revenue from 24
and extrapolating it to year-end and just use that.
So it's extremely conservative
because it's for sure that next year it'll be bigger.
Next slide.
Next slide, please.
Okay, so the operating budget for revenue
reflects operating revenue at 196 million,
I mean 196,000,
which, as I explained to you, is just an extrapolation from the actuals for FY24.
The expenses are 16.3 million, and the member agency support of 1.1 million.
That doesn't make any sense.
Sorry, it's 15.1 million.
Next slide, please.
This slide shows the aero operating expenses over the period 23 to 25.
23 is actual and 24 and 25 are estimates.
As I said, we're expecting this number
to come down substantially.
Next slide, please.
This slide shows operating revenues over that period.
Next slide.
This slide shows top drivers of the 16.3 operating expense.
These are the fixed drivers.
Next slide, please.
Go ahead, a couple of slides.
keep going, the capital program.
The capital program consists of a single project
to purchase some simulators for DMUs
that are required by the training plans
which have been approved by the FRA.
And it totals 1.5 million.
Next slide please.
Next slide.
This shows the amounts of the budget,
revenue and expense and support.
Next slide please.
So we are continuing to work with SBCTA
on finalizing the 25 Arrow service budget.
And actually we're speaking to them again,
either this afternoon or Monday morning.
So while we work on continuing with this budget,
the staff request that the committee recommend to the board
that the preliminary budget be transmitted to SBCTA.
Thank you very much, Christine.
I already see Larry's mic on, so go ahead.
Thank you very much.
I expect the budget to go down by a million dollars or so,
and I'll move the item.
Do we have a second?
Just so I can get that out of the way.
Second, Murphy.
Okay, now do we have any questions on this from anybody?
Do we have any public comments on this item?
Okay, now we can go right to roll call.
Vice Chair McCallum.
Director Murphy. Yes. Director Tremblay. Yes. Director Krakorian.
Chair Burksen. Yes. That motion carried unanimously. All right, fantastic.
Item 60, the working capital fund policy presented by Arnold Hackett, our chief
financial officer. Good morning Chair Burksen and members of the committee.
Again, Arnold Hackett, chief financial officer. So MetroLink has no reserve
funds. The majority of the funding for capital projects are from grants. These
grants require that the funds be spent and subsequently reimbursed by the
grantor. This has created and continues to create a negative cash flow which is
not sustainable for the agency. We have been discussing the working capital fund
as a solution. One of the member agencies requirements for establishing the
working capital funds, is development and approval of a policy to govern the management
of these funds.
As described in the attached working capital policy, FEN 9.7, working capital funds provided
by the member agencies will be sequestered in a separate bank account, reserved for capital
transactions only.
We'll be segregating operating funds from capital funds.
This to the vendors and other charges related to capital will utilize those funds in this
account.
Reimbursement from the grantors will be deposited back into the working capital fund account.
So it will be like a credit card that allows us to front the money until we get it back.
Details of the strategies, the governance, and the maintenance of the working capital
fund are described in the policy that's included in your package.
The staff recommends that the committee recommend the board adopt the working capital policy.
May I answer any questions?
Thank you very much.
Do we have any questions on this item?
Thank you.
And how is the initial fund established, where does that money come from?
So each of the member agencies have agreed in their FY24 budget this fiscal year to fund
the $50 million.
Well, it's already agreed to by the agencies.
Thank you.
Yes.
And just a quick question, assuming we have the $50 million and our policy says we have
to have $50 million, as soon as you put out the first amount of money that you're going
to be waiting for however long to get that to come back, we're going to be short.
How are we going to address the delta there?
Oh, no.
That's okay.
Because we're using that to front the money.
So as money comes back, we keep putting money back in, you know,
so it'll be like a revolving credit card.
But is, well, I mean, at the beginning, at least, it's going to short us and we'll have less
than 50 million, which means after the 90 days, it comes back to the board to tell us
that we're short.
Oh, no, that's, this one's different than our other policy.
This one's just to establish a fund so that we have the money.
Arnold, stay in front of the microphone.
Oh, sorry.
Yeah, so this one is different than the policy that says we have to have 50 million of operating
funds.
This is totally different.
It's not that same type.
All right.
I'm sorry.
I misunderstood your question.
You've clarified it for me.
With the operating funds, we still have to maintain 50 million dollars, and if any time
we go beyond two months, we have to come back to the board.
And the reason why we had to come those months is because we were utilizing for operations
and for capital.
So something it wasn't intended for in the beginning.
Okay.
Very good.
Do we have any other questions on this item?
Mr. Chair?
Yes.
Go ahead.
Thanks.
Thank you for the presentation and thanks to staff for the work.
So with respect to VCTC, I know that VCTC and I know you know those two, Arnold and
and Darren has repeatedly expressed concerns
about the capital invoice processing
and the delays in the capital invoice processing.
And it's created some, I'll just say,
consternation and frustration.
And I know that VCTC staff is working with you
on pre-programming of funds
and overall holding of VCTC funds.
and there should be some resolution on that soon.
But I think the point here is that
even though we have working capital,
that'll take the pressure off capital cashflow issues.
It's incumbent upon Metrolink
to continue to improve the billing process
and specifically improving the accuracy
and billing more regularly.
It's taking Metrolink usually more than four years
to spend capital funds.
And that accumulates in the VCTC budget over time.
So what I was hoping to see
was some at least aspirational language
in this working capital fund.
And I'm on page 148 of the agenda and 149.
And I'd like to see some aspirational language in here
at a minimum aspirational with a maximum cap
on the amount of time it's gonna take to do,
to state that it's gonna be regular billing
and it's going to be more timely.
That would be my suggestions for some rephrasing
or some additions to this policy.
I don't have specific language,
but I wanted to run it past you, Arnold and Darren
and my colleagues on the committee
because it has created an issue for VCTC.
So, director, we have, and Darren has put forth for us to be able to bill monthly as
fast as we can.
So one of the things that the challenges that we have, and it's across, and I've talked
to the CFOs from all of our member agencies, is that when we get work done, we're requiring
invoices and backup information from vendors.
We have to get that.
then we have to review it and it's hundreds of pages of documents.
So on the billing side, we're billing as fast as we can,
and in actuality, it's creating some issues
for us with even member agencies, because some member agencies
want us to bill quarterly, because it helps them with cash flow,
and we're pushing back and saying, no, we've got to bill you monthly,
so that we can get the funds going.
So, we recognize that was a problem in the past, and we, there is a focus on that.
Darren has asked me to drive that, and that's what we've been working
on over the last 15 to 18 months.
I guess my response, Arne, will be thank you for that,
and I really appreciate your work.
What I would like to see is some aspirational language in the policy that phrases that,
and sets that, and says this is what we intend to do.
So I, okay, well certainly Director Tremblay, it's Darren.
Let us take some time in coming up
with some aspirational language.
This is a recommendation to the board
that will go to the board and give us a couple of weeks
to see how we might gel some language.
If to put that together,
recognize the variety of moving parts here
so that we can bring something ultimately back
to the board that may satisfy that concern or that point.
that that would define it and I'm in no way minimizing the amount of work it's taken to
get to this point and I really appreciate Arnold your efforts and Darren your efforts and staff's
efforts on this I just would like to see something a little bit more robust in the policy from a
minimum aspirationally and everybody is different and there's you know that I'm I can speak only
with respect to vctc and everybody else I know may have may may see it a little bit differently
but I do think that we've got to have some language
in the policy that speaks to this.
Thank you, Mr. Chair.
Very good.
Do we have any public comments on this item?
Seeing none, this is an action item
and with Director Tremblay's comments,
I mean, my assumption is we should move this
to the full board and that aspirational language
can be discussed at that time
unless we have objection to that.
I'll second your motion.
Okay, roll call vote, please, on that.
Vice Chair McCallin.
Yes.
Director Murphy.
Yes.
Director Tremblay.
And with a thank you, Mr. Chair, I'm good with that.
My response is yes, thank you.
Director Krakorian.
Yes.
Chair Bergson.
Yes.
That motion carried unanimously.
All right, thank you.
Item 6E is the Performance Audit,
Shared Use Agreements Revenue Billing Process 2024-02-I-1-A,
I'm not sure, presented by Elizabeth Lozwardy,
our audit director.
Good morning, Chairperson, members of the committee.
This is a received end file item, next slide, please.
So internal audit completed the shared use agreements
revenue billing process audit.
This audit is included in the fiscal 24
board approved annual audit plan.
The objective of the audit was to evaluate
the effectiveness of the railroad use revenue billing process
in accordance with the shared use agreements and the SOP.
The audit period is from January 2021 through December 2023.
Next slide, please.
There are two audit findings and two audit recommendations
as detailed in the audit report.
Management has agreed with the findings
and developed corrective actions,
and internal audit will be tracking
the corrective actions implementation.
Next slide, please.
This concludes my item.
Happy to answer if you have any questions.
Thank you for your report.
Do we have any questions or comments?
Do we have any public comments on this item?
This is a receive and file,
so unless there's any objection,
we'll go ahead and do that.
Okay, item 6F.
This is the fiscal year 2024 financial results
for the eight months ended February 29th, 2024.
Ridership revenue and operating results receive and file and this will be presented by Christine Wilson the assistant director of finance
Good morning again chairman Burke chairman Burkson and members of the committee
this is the
Ridership versus forecast by month. Oh, sorry by month
For FY 24 the columns are the actual performance while the red line is the forecast each column
We're now showing the regular ridership, which is the blue, and the student adventure
pass contribution, which is the orange.
As you can see, the student adventure pass has contributed significantly to our ridership.
We see, next slide, we see here revenue, actual as compared to budget by month.
We are over budget in every month with the exception of the month of December which included
our system-wide shutdown.
Next slide, please.
These are the actual numbers for revenue.
Through February, revenue was budgeted at $22.7 million, or a 45% recovery, while actuals
achieved $25 million, or a 49% recovery.
This is $2.2 million over budget.
The student adventure pass contributed approximately $3.7 million of that amount.
Next slide.
This slide depicts the ridership as compared to the forecast for each month through February.
Next slide.
This slide shows the amounts through February which shows 3.5 in ridership as forecasted
or a 44% recovery while the actual is 3.9 million of 49% recovery and 424,000 over forecast.
The student adventure pass contributed 537,000 to this amount.
Next slide.
Onto the operating statement.
Our operating statement for the eight months ended February showed an operating revenue
of $41.2 million or $6 million over budget.
Total expenses are $184.3 million or $18.2 million under budget with the major categories
under budget being admin and services, train operations,
equipment maintenance, maintenance of way, and legal.
I remind you that these expenses are based
on accruals and not actuals.
Next slide, please.
Here we see the revenue portion of the operating statement.
As you see, regular fare box revenue at 21.3% and student
adventure at 3.7% and other subsidies.
The significant amount over budget on other revenue line,
as I've told you in the past,
is a result of enhanced interest earnings.
Next slide please.
This is the train operations portion of the statement.
As you can see, in total it is 8.4 million under budget.
Next slide please.
This next section shows the maintenance of way
admin and services and insurance and legal.
They are also all under budget.
and total expenses are under budget by 18.2 million or 9%.
Next slide.
This section shows the results
of our special trains and the totals.
The total loss is $143 million
or an amount requiring support from member agencies
is 24.3 million less than budgeted.
Next slide.
This slide shows the receivables for this through February 29.
Some of this, of course, has already been collected.
Next slide, please.
These are the details of the receivables.
Next slide.
So this is the Scross Cash position as of February.
And as you see, we are over the $50 million threshold level
that we maintain.
Next slide.
Arrow service, Arrow service through February,
the revenue is $154,201.
And as you can see, the student adventure pass
contributed $23,000, almost $24,000 of that money.
The boardings are $69,000
and student adventure pass contributed
$21,000 of those boardings.
Next slide.
So the total operating revenue for the Arrow Service is $69,000,
while total expenses are $8 million or $3.1 million less than the continuing resolution for expense support.
Total support required is $7.9 million or $3.3 million below plan.
That concludes my report.
May I answer any questions?
We thank you for your report.
Do we have any comments or questions?
Seeing none, do we have any public comments on this item?
None.
This is receive and file, so without objection,
that is what we will do.
And move to item seven, our CEO's report, Aaron Kettle.
Thank you, Mr. Chair.
Just one item to share with the committee today.
Next week I'll be in Washington, DC,
testifying before the House Transportation Infrastructure Committee's Railways, Pipelines,
and Hazardous Materials Subcommittee, with four of my colleagues from throughout the
country.
Generally, we're going to be talking about a few things.
Our testimony will include issues related to our excess liability challenges that we're
encountering in the commuter rail sector.
I'll be speaking specifically to our preparations for LA-28, the Olympic Games, our connections
to the high-speed rail in Rancho Cucamonga
with Brightline West and then our hope
to initiate our new MetroLink reimagined model
of serving trains, having trains serving the region
throughout the day, moving away
from the commuter rail model.
So really privileged to represent our agency
before this committee and that's it, Mr. Chair,
that concludes my remarks.
Very good, do we have any committee member comments?
Mr. Chair?
go ahead. Just really quickly. Darren, just give us a two sentence status report
update on San Clemente right now. Well the good news is with San Clemente is
we're running trains at full speed through the slide areas that we've
experienced over the last two and a half years. Orange County, OCTA and ourselves
are both working on an effort to try to identify hot spots which actually
already have been identified and I say hot spots where there appears to be risk
of additional landslides and trying to identify how we're able to try to get
ahead of them rather than react to them working with the California State
Transportation Agency and the California Transportation Commission and some of
the resource groups that play a role in protecting the the coastline. So good
news is we're moving trains but we still have plenty of work ahead of us.
In other words, we're back to full service, but we're looking with an eye toward the future
in terms of our forward planning, right?
That is correct.
All right.
And best of luck in DC.
Thank you, Mr. Chair.
Thank you.
Very good.
Any committee member comments?
Other than that?
Okay.
The chair has no comments today.
And with that, we will adjourn the meeting at 9.49.
Thank you.