for 9 a.m calling the meeting to order and item two is our safety briefing morning chair
berksen committee members so this message is a reminder event the following situations
what we are to do so the event of a fire alarm activation we will all uniformly exit this
location head downstairs and stay just outside the corner of the building where the metro customer
or service is located and wait for further instruction.
The event of an earthquake, I'm gonna ask you to drop,
take cover, wait till the shaking stops,
and then at that point we'll do an assessment
if an evacuation is warranted.
Event of a first aid situation,
I'm gonna be your first aid provider.
I will ask Ms. Paney to contact
the Metro Security front desk where the AED is also located.
And as always, in the event of an active attacker situation,
we remind you to run, hide, fight.
And that concludes this morning's safety briefing.
Chair Bergson, I will turn it back over to you.
Very good, we just had a quick question there
to make sure we were good to go with quorum, and we are.
And thank you for the safety briefing.
The next will be the Pledge of Allegiance
by Mr. Najarian.
Thank you.
Please rise and place your right hand over your heart.
I pledge allegiance to the flag of the state of America
and justice for all.
Thank you very much.
All right, on to item four, roll call please.
Director Middleton, Vice Chair McCallin, Director Dutray,
President, Director Nguyen, Director Nguyen, okay I see you off to the side but
I am president but I just wanted to clarify that Director Murphy will be
voting on behalf of the OCTA today. Sounds good. Thank you. Director Murphy. I'm here
Great. Director Tremblay, Director Krakorian, Director Najarian, Director O'Connor, director
Hughes-Leslie, Chair Burksen, we do have a quorum present. Excellent. Very good. Do we
have any public comments for today's meeting? I have not received any written
public comments or any requests to speak. Okay, we'll move to the regular calendar
then item 6a is an action item this is the approval of meeting minutes from
April 12th 2024 the Audit and Finance Committee meeting do we have any
comments or clarifications revisions seeing none we do have a motion do we
have a second second Murphy okay before we vote do we have any public comments
on this item request to speak okay go ahead and we'll have to do roll call
because we have people participating on zoom director dutee sorry yes director
Murphy yes director Tremblay is absent director Najarian yes chair Bergson yes
that motion passed okay item 6b is the low carbon transit operations program
or LC top resolution presented by Jennifer for harness manager two of
grants morning chair bricks in and members of the committee this is an
action item requesting adoption of a resolution required to be included in
our allocation request for fiscal year 2023 24 LC top funding next slide please
the low carbon carbon transit operations program or LC top is a cap and trade
funded program administered by Caltrans the program is intended to provide
operating and capital assistance for projects that reduce greenhouse gas
admissions, improve mobility, and prioritize serving disadvantaged communities.
Here you can see a history of funding levels since 2015 supported by LC top
funds. This year the program is providing approximately 5 million. This allocation
includes 4.3 million provided directly to Metrolink and 800,000 in supplemental
funds provided by RCTC and SBCTA. Next slide please. This year we're proposing
to continue the Student Adventure Pass offering free travel
for students system-wide.
To run the program for the full academic year,
our member agencies may elect to provide additional funding
in the amount of 2.5 million for a total cost of 7.5 million.
This request is currently going through the budget process
and is not reflected here.
Next slide, please.
The resolution authorizes the authority to request an allocation
from the LC Top Program for the Student Adventure Pass.
It also asks for the board to acknowledge the certification and assurances required by the program and
Authorizes the chief executive officer chief strategy officer and or the chief financial officer to execute all legal
Documents required to receive and administer the else see top funding next slide, please
This concludes my report and I'm happy to answer any question
All right, very good. Do we have any questions from any board members?
Do we have any members of the public wishing to speak or any comment cards? No, okay
This is an action item. We would need a motion here a motion for this. I'll move it. We do have a motion
Nazarian do we have a second?
I'll go ahead and second and can we please go ahead and do roll call
director de tray
Yes, director Murphy
Yes, director. Trumbly is absent director Najarian
Chair Bergson, yes emotion carried excellent. Okay number our item 6c performance audit work
directives
contract number ms 289-22
This will be a receive and file item presented by Elizabeth. Those warty our audit director
Morning chairman and members of the committee. Next slide, please
So internal audit completed the ms 289 22 Herzog contract work directives audit
This audit is included in the fiscal 24 board approved
annual audit plan.
The objective of the audit was to review the efficiency
and effectiveness of procedures and controls
related to the review, payment, and reimbursement
of invoices for work directives,
services under contracts MS 28922 with Herzog.
And there are four audit findings
and eight recommendations as detailed in the audit report.
Management agreed with the findings
and developed the corrective actions.
This concludes my item.
Happy to answer if you have any questions.
All right, very good.
Do we have any comments or questions by the committee members?
No.
Do we have any members of the public wishing to speak
or comment cards?
No?
Okay. Move the item.
This was a receive and file, so we,
unless there's objection,
we'll just go ahead and receive and file it.
All right, item 6D is internal audit department
quarterly update for quarter three fiscal year 2024,
again presented by Liz Wardy.
And this is also a receive and file item.
Next slide, please.
Staff is reporting the progress of the board approved
fiscal 24 audit plan as of the third quarter
and it marched 31, 2024 as listed on the attachment A
to the report.
and during the quarter, internal audit conducted
a CEO request project to assist the safety
and compliance department with the internal
49 CFR safety audits.
And we also continue to provide assistance
to the contracts department to review
contract proposed labor rates and initiated,
also initiated the annual risk assessment process.
This risk assessment process will be utilized
in the development of the proposed fiscal 25 audit plan.
On the external audit activities,
we received a final report from the IRS.
And the fiscal 23 MTA MOU audit
was completed with no findings.
And the OCTA, RCTC, FTA subrecipient
trying out review was recently completed
and we just got the draft report this week.
This concludes my item.
Happy to answer if you have any question.
All right, very good.
Do we have any comments or questions?
Any public comments?
Since it's a receiving file, we'll go ahead and do that
unless there's any objection.
Seeing none, we'll move to item 6E,
Corrective Action Status Update,
third quarter ended March 31st, 2024.
Again, Ms. LaZuardi.
Thank you, and this is also a receiving file item.
Next slide, please.
The board directed internal audit to provide quarterly updates
on the corrective action status
related to pass internal and external audits.
And for the third quarter,
There are 10 items implemented and verified.
Six implemented pending verification.
No pass-through items and 19 items not yet due.
This concludes my item.
Happy to answer if you have any questions.
Okay, very good.
Do we have any comments or questions?
Seeing none, any public comments?
Nope, okay.
Unless there's any objection,
we'll go ahead and receive and file that as well.
And we'll move to item 6F,
fiscal year 2023, 2024 quarterly fuel purchase program
update quarter ended March 31st, 2024.
This will be a receive and file item
presented by Alex Barber,
the assistant director of general accounting.
Good morning.
This is a receive and file report
for the third quarter of FY24 fuel purchase program.
The purpose of the fuel hedge
is to minimize the budget risk,
resulting from the purchase of fuel on the spot basis
and to seek an overall low fuel cost in the long term.
As of March 31st, 2024, the authority's hedging account
had a value of $13.8 million,
an increase of $300,000 from December 31st, 2023.
This includes interest totaling $156,000
during the quarter.
This concludes my presentation,
and I'll be happy to answer any questions you may have.
All right, thank you for the report and update.
Do we have any comments or questions?
Wow, we are rolling today with any public comments
on this item?
We do not, so man, this is getting repetitious.
But, all right, we will go ahead and receive
and file that item unless there's any objection.
And move to item 6G, fiscal year 2023-2024,
preliminary quarterly investment report,
quarter ended March 31st, 2024.
A receive and file item presented by Vivian Ofila,
Assistant Director of Finance.
Good morning, Chair and committee members.
Next slide, please.
So our total estimated cash in our custody at March 31st
was 179 million, which is not substantially different
from the prior quarter.
Next slide, please.
This is a four-month analysis of our available cash.
On the far right column in March,
you can see we had an unrestricted cash balance
before claims of $131 million, comprised of both operating cash and the board reserve.
After offsetting claims on cash, we have total available of $67.6 million.
Glancing to the left at prior months, in January we finished with $78.9 million, which was
a substantial increase based upon the successful collection within that month of nearly all
Q3 member support receivables.
The decline you see thereafter is essentially the use of the member support collected in
January throughout the remainder of the quarter.
Looking past March results, April finished at approximately 62 million.
We anticipate May will be substantially ahead of 50 million.
Looking forward to June, June's cash balances is subject to very significant fiscal year
prepayments, most notably prepayment of insurance premiums.
So in past years, we've typically relied upon an advance payment of a portion of the next
fiscal years, Q1 members support to manage liquidity during the end of the year.
Next slide, please.
So on a very positive note, our interest income increased again to nearly 1.3 million last
quarter for a $330,000 increase from the prior quarter, and we expect Q4 interest to go even
higher and exceed 1.6 million.
While interest rates have not increased in the past six to nine months, we were able
to negotiate with our main operating bank a change in our checking account to provide
interest income starting with the end of February. We've not previously received interest on
that checking account before. So this represents a decent sized incremental revenue stream
that requires no incremental staff time, no cost or no change in terms that could result
in anywhere from an extra $2 to $3 million in the next fiscal year that's now been factored
into the final revised budget.
So that's a win for the agency.
Next slide, please.
Lastly, there were no instances of noncompliance
against our investment policy.
We cannot confirm sufficiency of cash for the next six months
due to our operating model and pre-funding of capital programs.
And we are above $50 million in available cash,
so no disclosure is needed.
So that's the end of my report,
and I'm happy to answer any questions.
Do we have any comments or questions?
Do we have any public comments on this? No, I I would say kudos to the team
for bringing the extra revenue with as minimal effort as it apparently took to do that that's
That's great that that helps every single member agency
So that is very much appreciated and then just a other quick comment on the May
Slash June numbers with the 50 million threshold. You said we would have issues potentially because of
Prepayment of insurance is that going to drop us below that 50 million mark is that the expectation you're planting the seed for?
Typically as I mentioned we would get an advance or a partial advance
Against the next year's q1 member support payment to make sure that liquidity is adequate to pay
What I think I recall from last year is about 15 million dollars up front at the end of June
so we'll assess if that's
You know the process we have to take to ensure
The cash remains over 50 million this year
I'm sure we kept up to date if there's any issues on that
This was a receive and file item unless there's objection or any other questions. We'll go ahead and receive and file it moving to item
26H, fiscal year 2023-24, quarterly accounts receivable
status report quarter ended March 31st, 2024.
A receive and file item presented by Vivian Avila again.
Good morning, committee members.
Next slide, please.
Total receivables were approximately 19 million
at the end of Q3 and about 11 million were passed too.
This is not a substantial change
from the prior quarter overall.
Next slide, please.
So this is a graphical representation of all of our 10.87 million in PAS 2AR.
The member agency amounts primarily relate to quarterly support funded by our federal
preventive maintenance grant that we are not able to fully draw down upon until after the
end of the fiscal year.
Next slide, please.
One of the corrective actions in the internal audit report you heard earlier about this
morning was to provide the committee and the board with more detailed reporting for transparency
on the extent and the aging of our unbuilt balances.
And this is the resulting report we're presenting for the first time.
So unbuilt balances represent capital expenses we have incurred and paid out with Metrolink
dollars, specifically operating dollars, where we now seek reimbursement from federal and
state grantors.
So overall, staff analysis shows the capital program run rate for fiscal year 24 is approximately
100 million, as we have 25 million of unbilleds that translates into a 90-day turn on the
unbilled, meaning we average three months to bill out capital expenses.
This does not include the San Clemente operating projects, which are shown separately in the
AR report and its attachment.
significant reason for this 90-day window and the particularly aged on
bills. As noted in the internal audit report is our grants finance team has
struggled with invoice support documentation. As the report further
detailed, we've made substantial progress in reducing backlog from 2021
and 22 since August of last year, yet we still have approximately 1.3 million on
on one vendor account that is over a year old and represents
unbuilt balances dating back to 2022.
We will continue to pursue corrective actions
and documents required to bill out those age receivables
and continue to update the committee and the board.
That's the end of my report
and I'm happy to answer any questions.
All right, very good, thank you.
Do we have any comments or questions on this?
Do we have any public comments on this?
Okay, this was a receive and file.
So without objection, we'll go ahead and receive
and file this and move to item 6I.
And that is fiscal year 2024, financial results
for the nine months ended March 31st, 2024.
Ridership, revenue, and operating results
and annual forecast to year end for fiscal year 2024.
These are the estimated results through June 30th of 2024.
A receive and file item presented by Christina Wilson,
Assistant Director of Finance.
Good morning Chairman Bergson and members of the committee.
This is item number 6i, the financial results
for the nine months ended March 31st
and a forecast to year end.
This graph shows ridership performance by month
through the third quarter.
The red line is the ridership forecast
while the bars represent actual ridership.
The blue portion of the bar is regular ridership,
while the orange portion of the bar
represents student adventure pass riders.
And we have done this in order to point out
the amount of funds that we are getting
as a result of the student adventure pass program.
Next slide, please.
This is a depiction of the Fairbox revenue for each month.
As you can see, we're over budget on revenue
with the exception of December
when we had our system-wide shutdown.
This slide does include revenue
from the Student Adventure Pass.
Next slide.
Here we have the amounts of Fairbox revenue by month.
Through March, total Fairbox revenue was budgeted
at 26.0 million or a 45% recovery
compared to pre-COVID revenue.
Actual Fairbox revenue through March is 28.6 million
or 2.7 million over budget, or a 50% recovery.
The amounts do include the Student Adventure Pass,
which contributed $1 million in the month of March,
and 4.7 million year to date.
Next slide.
This chart shows the ridership over the past nine months.
Next slide.
Here we see the actual ridership numbers.
Through the third quarter, ridership was forecast
at $4 million, I mean four million riders,
or a 45% recovery.
The actual ridership is 4.5 million,
or a 50% recovery, 489,000 over budget.
Student Adventure Pass riders are included in these numbers
and account for 139,000 in the month
and 677,000 year to date.
In considering Student Pass ridership and revenue,
we need to remember that some of these students
already rode the train and have now switched to the new pass.
Next slide.
Now to the operating statement.
Total operating revenue is $46.9 million,
or $7 million over plan.
Total expenses are $207.4 million,
or $21.3 million below plan.
And you see here some of the major categories
that represent the under budget.
Next slide, please.
This slide shows the revenue section of the operating budget,
displaying pro forma revenue over budget by 3.2 million,
primarily as a result of the student adventure pass.
The other item significantly over budget as described
by Vivian is other revenue which is over budget by 3.2 million driven
by the interest revenue as a result of moving to more favorable rates.
Next slide
Here we see the train train operations expense portion of the operating budget
Showing these expenses are under budget by nine point three million or almost eight percent
next slide
Now we have the section covering maintenance of way which is under budget by two million or five percent
Administration and services which is under eight million or nineteen percent and insurance and legal which is under one point five million or ten percent
Overall, then, expenses are $207.4 million under budget by $21.3 million or a total
of 9%.
Next slide, please.
This section displays the $115,000 we have netted on unbudgeted special trains.
We also see here the total surplus of $28.5 million.
The next slide, the next three slides
display current receivables
that have already been covered by Vivian.
Next slide please, next slide, next slide.
Now we get to Aero Service.
So the total farebox revenue for Aero Service
through the month of March is 177,000
of which 30,000 was generated by the student adventure pass.
Ridership for the nine months is 82,000 with 27,000
coming from the Student Adventure Pass.
Next slide please.
The arrow operating statement shows 185,000
in operating revenue, expenses of 9.2 million
or 2.7 million under the continuing resolution
supporting the FY24 funding.
The expenses are 2.7 million below plan.
Support is three million below plan.
Next slide, please.
Now we move on to the year-end forecast for FY 24.
Next slide, please.
In the third quarter of each year,
staff prepares a forecast a year-end
to provide an estimate of the final performance
for the year.
The forecast we are presenting is constructed
by a submission provided by each area of the authority,
providing the amounts they anticipate
will be spent by year-end.
Next slide, please.
The results of this forecast are as follows.
Total operating revenue is estimated to reach 64.8 million
and be 10.8 million over plan.
Total expenses are estimated to be 290.2 million
or 15.7 million below plan.
This will yield an estimated surplus of 26.6 million.
That concludes my report.
May I answer any questions?
All right, very good.
Thank you for the detailed report.
We appreciate that.
Do we have any comments or questions from my colleagues?
And do we have any comments from the public?
Okay.
Go ahead, Pam.
Good job.
Thank you.
Keep that trajectory going.
Thank you.
All right, this is a receive and file item,
so without objection, that is what we will do,
and we will move to our favorite part of the report,
which is our chief executive officer's report.
You are too kind, Mr. Chair.
Just, we'll keep it brief so it stays that way.
Some positive news over the last couple of weeks,
we've continued to see improving ridership,
as you just heard in Christine's report.
We broke records this week on Tuesday and Wednesday
as far as riders on our trains on that day.
So two consecutive new personal bests
for Metrolink coming out of COVID.
So positive movement.
And then obviously as we look towards
are the new schedule, the optimized schedule
that we hope to introduce in the fall
to continue to see this growth keep happening.
So just real positive strides on the ridership numbers.
As a regular user of the system,
it's becoming more and more noticeable
that more people are on our trains.
So that is, it's a very positive trend.
That's it, Mr. Chair.
All right, very good, thank you.
Committee member comments.
Any members of the committee having any comments to make?
Nope, nope, nope, nope.
Chair comments, I don't have any comments to make.
So with that, we will go ahead and adjourn at 9.28.
Thank you.