I don't think they have a good sign.
It is 945 right now.
We will go ahead and I will call the AFCOM or Audit and Finance Committee meeting to
order, MetroLink, for February 14, 2025, Valentine's Day.
Happy Valentine's Day.
And Cody Nelson, the Assistant Director of System Safety, is going to be leading the
safety briefing.
All right. Good morning, Mr. Chair, members of the committee. We are at One Gateway Plaza
here in Los Angeles, California, in the Metro boardroom on the third floor. In the event
of a fire, we're going to exit the building here to my left, go down the stairs, and we'll
meet out in front of the Metro's customer service area and wait further instructions.
In the event of an earthquake, we'll want to take cover in the room that we're in until
the shaking stops. We can do an assessment, and then we'll exit the building if necessary.
If we do need to exit, make sure you're aware
of any tripping hazards that may be on the ground,
backs, packs, cords, chairs, things of that nature.
In the event of a first aid situation,
we have security at the front desk there,
as well as an AED that's mounted on the wall
directly across from the security desk.
In the event of an active attacker,
the procedure to follow is run, hide, fight.
And for those online, just make sure
that you're aware of your surroundings
and your place of safety if you do need to evacuate.
That concludes my briefing unless there's any questions.
Thank you very much.
Next item is the Pledge of Allegiance
and Doug Chafee is going to lead us today.
Thank you, Mr. Chair.
Indeed, it's a pleasure.
Please rise if you can.
Place your hand over your heart.
If you have a military background,
please feel free to salute.
Please begin.
I...
I pledge allegiance to the United States of America
and to the United States of America
and to the Republic for which it stands,
one nation under God, indivisible,
under God, indivisible, with liberty and justice for all.
Thank you, sir.
roll call please. Director Molina, Vice Chair Tremblay, Director Najarian. Here.
Director O'Connor, Director Olsen. Here. Director Chaffee, Director Nguyen,
Director McAllen, Director Dutray. Here. Chair Burksen. Here. We do have a quorum
present. Excellent and you've all now heard Eric Olson's name. Welcome aboard.
This is your first committee meeting so I'll turn the microphone over to you if
you just want to introduce yourself. You're from LA Metro or representing LA
Metro. Yes LA Metro I am a council member in the city of Palmdale and I'm very
excited to be joining this group. Thank you so much for having me. Very well
Welcome aboard. Okay we will move to item five public comment. Do we have any
public comments today? I have not received any request to speak or any
written public comment for this committee. Okay we will move right along
and just for for everybody's edification because we have members
participating via zoom all votes will be done by roll call and if you motion or
second please also state your names for the record. Item 6a approval of the
minutes October 11th 2024. This is an action item. Do any of my colleagues have
any comments questions or want any revisions? Seeing none do we have a motion
to approve? Tremblay move. Tremblay moves. Second. And Chafee seconds.
Madame Clerk roll call please.
Vice Chair Tremblay?
Yes.
Director Najarian?
Yes.
Director Chaffee?
Director Dutray?
Yes.
Chair Bergson?
Yes.
That motion carried unanimously.
Very good.
Item 6B, adoption of the investment policy for 2025, presented by Vivian Avila, assistant
director of finance.
Good morning committee members and chair.
Next slide please.
So in accordance with California Code Section 53.607, we're recommending two actions.
The first is to approve the annual investment policy revision, and the second is to facilitate
the continued annual delegation of the treasurer role to the CFO.
Next slide, please.
So we review the current policy revision thoroughly against the code and against additional annual
guidance and circulars that are published by the state treasurer through its debt and
advisory investment commission to ensure compliance.
So there are no material changes proposed and the proposed changes seek to better clarify
related language to our investments, reporting, roles and responsibilities, performance benching.
Finally we did add a provision that adds a measure of diversification to our collateralized
bank deposit holdings.
proposed revision is fully compliant with regulations and guidelines. Next
slide please. So to repeat we recommend approving the proposed annual policy
revision and the annual designation of the CFO as treasurer through February 28,
2026, and that concludes my report. I'm happy to take any questions. Thank you for your
report. Do any of my colleagues have questions on this item? Mr. Chair? Yes sir. I
I have a question and then a request. Vivian, thanks for the report. On page five of the
red line investment policy on negotiable CDs, it indicates that it's stricken the maximum
term of 270 days. It just indicates that they should be code qualified financial institutions.
What is the maximum length of the term of negotiable CDs?
The ones that we can invest in are five years.
Okay, they're five years and that's by and that's by the government code.
Yes, we can invest in CDs up to five years.
Okay, and then finally on page nine, and this is my request at the bottom under the diversification guidelines.
It indicates that we're to maintain no more than 75% of our total cash and investments and any one code qualified financial institution.
institution. There's no definition of code qualified financial institution.
Maybe I missed it, but if there isn't, I would ask that that be included in the
definitions, uh, definition of terms that are at the end of the policy,
beginning with page 10. Did I miss it, Vivian? Was there a definition of it in
there? No, I mean, it's incorporated by reference to the code. Um, but we can,
we can add that. I, I, I would request, Mr. Chair, that we add that just for
Clarification purposes, even though it's incorporated in the code by reference
Absolutely. Sounds like a great idea
Any other comments from any colleagues? Did we have any public comments? I have not received any written or request to speak on this
Okay, we are looking for a motion and maybe mr. Tremblay since you wanted to modify that would you like to make that motion?
Sure. I'll move it as revised mr. Chair
Okay, and do we have a second?
Okay, Chafee seconds Madame clerk roll call, please
Vice chair trembly
Yes, director Najarian
Yes, director chafee
Director do tray. Yes chair Bergson. Yes a motion carries unanimously as revised
Okay, thank you very much item 6c fiscal year 2024 2025 preliminary
quarterly investment report quarter ended December 31st 2024. This is receive and file also being presented
Vivian Avila assistant director of finance
So this is a chart of all of our cash and investments through the end of December 31st the bottom line
You can see our total cash and investments in our custom eat custody was 225 point eight million
Which is a significant increase in prior quarter of almost fifty million dollars
that's based upon the execution of MOUs from our members and we were able to collect the
vast majority of outstanding member support payments.
It also reflects that we are holding operating surpluses from our member agencies for the
last fiscal year and the accumulation year to date of operating surpluses in our total
cash balances.
Next slide, please.
This slide further breaks down our total cash in custody to the available cash as to where
what we can spend. It's a three-month trend as you can see on the bottom.
December available cash to spend is almost 80 million dollars which is above
the board's minimum threshold level of 50 million dollars and that tracks to
the collection of largely member support receivables in that quarter. Next page.
This is a new chart we added that allows the committee members and the board to
to see how our cash is trending against our minimum threshold.
The, I can't see the colors that well,
but the flat line is $50 million, the board threshold.
The top line is our total cash,
just to remind the board that a lot of that money
is other people's money, money that is restricted
or segregated for other purposes.
And so we break it down after those considerations
to the sort of light blue line and that is our available cash.
And you can see it at certain points it does go below the board's threshold,
but we do manage our liquidity on a daily basis.
Next slide please.
This last, I believe it's the last chart now.
This chart shows our interest income received.
It was about 1.6 million in the most recent quarter.
That's a slight increase over the prior quarter.
despite falling interest rates and a lower average yield on our cash and
investments. The interest is based upon the level of the cash balances, so
because we did have higher cash balances that's one of the factors to why we're earnings.
Next slide please. So these are just required disclosures every quarter. We
have to, according to the code, indicate that we are compliant with the
investment policy. We are also required to state if we believe we have sufficiency to
fund the next six months and we cannot provide that assurance based upon our reliance upon
external grants, delays, our capital funding and our capital funding program. And also
I'm confirming that we are above our minimum threshold of $50 million in the investment
policy. Next slide, please. That's the end of my report and I'm happy to take any
questions. Thank you for the report. Any of my colleagues here have questions?
Mr. Chair? Yes, sir. Apparently it's my day to be on a roll. They've been good
report and thank you. With respect to the very last slide, if you could go
back on our inability to confirm sufficiency to fund the next six months,
are there any ramifications of that statutorily from either the state
controllers or state treasurer's office do they routinely correspond with us on
that I'm sure they understand the circumstances but are there any rent
negative ramifications by the non-confirmation of sufficiency the
state treasurer doesn't have a function that audits this so this is sort of a
self-imposed internal requirement that is intended to provide transparency to
the governing body but there is I guess to answer your direct question there is
required remedy for this other than stating to the board that this is a
consideration. Right and so we're complying with 53-646. I just want to
make sure there's no negative ramifications. If it's not from the
treasurer's office either from the treasurer's office or the state
controller's office or any other state auditory or oversight function. That's
what I wanted to know. No there is no direct penalty or audit or ramification.
okay thank you thanks mr. chair excellent and did we have any public
comments on this item I've not received any written public comments or requests
to speak on this item okay then this is a receive and file item so without
objection that is what we will do and move to item 6d fiscal year 2024 through
2025 quarterly accounts receivable status report for the quarter ended
December 31st, 2024, presented again by Vivian Avila,
Assistant Director of Finance.
So this is a breakout of our current receivables.
These are receivables, of course,
that we have already billed out.
The totals as of December 31st,
our total receivable balance is $50 million even,
with 10.8 current and 39.2 past due.
That's an improvement from the prior quarter.
We liquidated receivables based upon,
and as I mentioned, the strong collection of member support and other receivables.
Next slide, please.
So this is a graphical representation of where the past due of 39.2 reside.
Going from left to right, Metro has actually taken care of these receivables since the
publication of this, and so the 2.3, which was a measure R score payment, is collected
and the 29.29, which is working capital fund deposit,
was collected this week.
On VCTC, those represent their portion
of the working capital fund deposit,
as well as past member support,
which remains outstanding,
and the rest are fairly immaterial.
Next slide, please.
So this detailed chart shows you,
we're required now to report our unbilled capital expenses,
which represents our pipeline that we have yet to bill.
So this is essentially cash that we've advanced collecting
and we've done, staff has done a good job,
a very good job of reducing the amount
of very dated receivables associated
with one capital vendor over the past year.
And we're pleased about that.
The second chart is not a capital project
but it is our special limited term
our Sacramento operating project.
That number overall has increased as an update
to over five million at this point.
And once that grant documentation is finalized,
we will hopefully be able to clear that out.
I think that's the last slide.
But next slide, it's the end of my presentation.
I'm happy to answer any questions.
All right, thank you very much.
Any of my colleagues here have questions?
Very quiet except for Tony today.
Madame Clerk, any public comments?
I've not received any written public comments
or any requests to speak on this item.
Okay, very good.
Without further ado, and we saw the applause
from Aria in the background that LA Metro made payment,
so thank you for anything you've done to help that.
And we will receive and file this without objection.
Item 6E, fiscal year 2024-2025 quarterly
fuel purchase program update,
ending December 31st, 2024.
This is a receive and file item
presented by Alex Barber,
Assistant Director of General Accounting.
Good morning, Chair.
This is a receive and file report
for the second quarter of FY25 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
while managing that budget risk.
Next slide, please.
As of December 31st, 2024, the authority's hedging account
had a value of $13 million, an increase of $700,000
from September 30th, 2024.
Because the purpose of the fuel hedge
is not to make money or lose money,
but to make costs predictable,
it is expected that the sale of positions or contracts
may result in a gain or loss,
depending on the movement of fuel prices.
In today's report, we've seen a gain
on the sale of contracts over the last quarter.
During this same time period,
we have seen an increase in the price paid
for a gallon of diesel to fuel our trains.
These two movements will offset each other.
An increase in the value of the fuel hedge position
should and will be offset by the amount
that we're paying for each gallon of diesel fuel
to fuel our trains.
During the last quarter,
the price of a gallon of renewable diesel
increased between twelve cents and twenty-four cents per gallon
next like please
this concludes my presentation and i'll be happy to answer any questions that
you may have
anybody have questions
any public comments
and i received any written public comments or request to speak on this
item
all just throw out one question for you
uh... i'm curious i know we use renewable deep renewable diesel fuel
uh... and i think
believe it's getting more popular in society.
Is that hampering, is that increasing demand,
and is the supply increasing at the same time?
Are we seeing a future crystal ball increase
that's gonna happen because of all the now new demand
for this?
Yes, so we meet with our fuel hedge advisor
on a monthly basis, and that's actually one of the very
first things that we discuss with our fuel advisor,
And he is saying that there are more and more suppliers
entering the market to provide renewable diesel.
And we're keeping a close eye on available contracts
to purchase for renewable diesel to hedge
against our purchases of renewable diesel.
So in short, to answer your question, yes,
we are seeing an increase in activity related
to renewable diesel.
But you're finding enough contracts to hedge against it
to kind of offset and keep us at a balanced rate anyway?
Yes, so we currently hedge against
just our regular diesel contracts.
Those contracts are chemically identical
to renewable diesel.
So they're comparable, and we use them at this point.
We do not have renewable diesel contracts
that we can purchase to hedge
against our renewable diesel at this point.
Very good, thank you for that information.
And again, receive and file without objection,
that is the order, and we will move to item 6F,
this is an internal audit department quarterly update
for quarter two of fiscal year 2025.
A receive and file item presented by Elizabeth Lozwarty,
director of audit.
Good morning, Chairman, committee members.
Next slide, please.
So staff is reporting the progress
of the board approved fiscal 25 audit plan
as of the second quarter ended December, 2024.
That was listed on the attachment A to the report.
Internal audit also provided assistance
to the contracts department
to review contract proposed labor rates.
This is an ongoing activity.
And on the external audit activities,
the annual financial audit was presented
to the board last month.
The annual MTAMOU audit is scheduled
to be completed by the end of this month.
And finally, they have national transit database
and TD annual report was finalized
and submitted timely in October 2024.
And that concludes my item.
Happy to answer if you have any question.
Very good, nice quick report.
Thank you for that.
Anybody have questions or comments?
Any public comments?
This is a receive and file,
so we will receive and file that.
Item 6G, PMO module performance audit 2024-14-1A or IA.
Okay, presented again by Elizabeth Lozwardi,
Director of Audit.
The audit recently issued
the Program Management Office, PMO,
module performance audit report.
The audit is included in the board approved
annual audit plan.
Audit objective was to review the efficiency
and effectiveness of procedures
related to the PMO module with a focus
on identifying control gaps and improvements
to be incorporated into the design
and implementations of the new system,
which is the Program Management Information System,
which we know as PMIS.
The audit period was January 2024 through October 2024,
and there are two findings and four recommendations.
Management agreed with the findings
and developed corrective actions.
The audit will track the status of the corrective actions.
That concludes my item.
Happy to answer if you have any questions.
Excellent.
Thank you very much.
Any comments or questions?
Public comments?
No public comments.
Very good.
That's receive and file.
So that will be the order and we get to move to 6H,
Corrective Action Status Update.
Second quarter ended December 31st, 2024.
Receive and file, presented again by Elizabeth Guisardi,
Director of Audit.
Next slide please.
the board directed internal audit to provide quarterly updates on the corrective action status related to past internal and external audits and
For the second quarter and in December 2024. There are two items implemented and verified
three implemented spending verification now pass to item and 19 items not yet do that concludes my item
If you have any questions, thank you again. Anybody have a question comment?
All right, it's nobody's had you know what I think the problem is
Except for Tony. I think he's the only one on here that went to the to pass out candy
So he's all sugared up and that's why he's talking the rest of us seem like a bunch of you know
People sleep at the wheel. So that's right. Mr. Chair. Don't forget the caffeine
We have two more items today to talk about and we'll see what happens with those six. I
grants quarterly updates second quarter fiscal year 2025 receive and file
presented by Tom Shamber, director of grants.
Morning Chair Burksen, members of the committee. I'm providing an update today on grant activity
between October 1st and December 31st 2024. Next slide please. During the
quarter 49.9 million dollars in new grants were acquired. 44.8 million
came from CalSTA's TIRCP program, funding the design of the EMF facility and
construction of two service and inspection tracks on that site. Another
5.1 million was obtained from Caltrans's LC top program for continued
support of the student adventure pass. $500,000 was reprogrammed from projects
that were completed with savings deferred or canceled to projects that can
and use the funds in a timely manner.
One federal FEMA grant of $1.7 million was closed,
which funded enhancements to the existing audio
and video analytic system at stations and facilities.
This resulted in a total portfolio of two billion
as of December 31st, 2024.
This concludes my report.
I'm happy to answer any questions.
All right, thank you very much.
Good work there.
Anybody have any comments or questions about grants?
Yeah, Mr. Chairman, this is John DeTrey.
Regarding federal grants, are we anticipating
or receiving any difficulties of getting federal grants
currently or going forward?
The answer would be it's anybody's guess.
Right now it's just too vague at this point
to make any decisions on that, so we're launching it closely.
Well, so far, I only put the request in
to receive our federal dollars.
We're not running to any issues for reimbursement,
and it sounds like it.
That's correct.
Okay, anybody else?
Nobody else has coffee.
Okay, thank you for the report.
Any public comments on that?
No public comments on this item.
Okay, with that, we will receive and file item 6J,
financial results for the first six months
of fiscal year 2025 through December 2024,
ridership revenue and operating results
presented by Christine Wilson,
Assistant Director of Finance.
Good morning, Chairman Buksen and members of the committee.
Next slide please.
This slide shows our ridership performance
for each of the six months this year.
The orange line tracks the forecast
while the columns are actuals.
As you can see, the month of December
is very close to the forecast.
Next slide please.
This is a Metro Link ridership forecast
versus actual by month with the forecast displayed
through the end of the fiscal year.
Through six months, ridership was forecast
at 3.5 million or a 59% recovery from pre-COVID times.
Actual ridership for that same period was 3.7 million,
a favorable balance of 195,000, a recovery of 62%.
Next slide.
Here we're looking at the fare box revenue.
Through the six months ended 12-31-24, the budget for Fairbox revenue was 20 million
or a 52 percent recovery.
The actuals were 20.6 million, a $600,000 positive variance of 53 percent recovery.
Next slide, please.
Financial performance through the first half saw expenses under budget by 15.3 million.
agency support is in a surplus of $16.7 million. Total operating revenue was $32.8 million
or a $1.4 million over budget. At $145.9 million, expenses were under budget by $15.3 million.
The major categories contributing to the under budget performance are as shown on the slide.
And this reporting is based on accruals, not actuals.
Next slide please.
I will skip over the items that are included as a standard in this report because Vivian
has already covered them.
So next slide please.
Next slide.
Next slide.
So arrow service.
Next slide.
Through six months, arrow service while forecast at 68,000 has had actual ridership of 74,000.
forecast by 5.6 thousand or 8 percent. Next slide. Here we see the Fairbox Revenue for
Arrow. Through the first six months, Fairbox Revenue was budgeted at 95.7 thousand, while
the actual was 195.3 thousand, 100 thousand, or 104 percent over budget. Next slide please.
Now for the six months ending December, operating revenue was 323,222,000 over budget, expenses
are 7.7 million or 750,000 below budget, while support required is 7.4 million or 1 million
below plan.
Next slide please.
This is a brief overview of the student adventure pass status.
Next slide.
Using both Metrolink and Aero, the total ridership generated by the Student Adventure
passed to date in FY25 is 1.2 million.
These tickets were obtained both through the mobile app and the TVD machines in the ratio
of 42% TVD and 58% mobile app.
Next slide.
This concludes my report.
May I answer any questions?
Thank you for the report.
It definitely shows the ridership of looking at like it's heading in the right direction
with a few little bumps in the road.
Any comments, questions from any board member?
Seeing none, any public comments?
No public comment on this item.
Okay.
This is a receiving file, so we will do that.
Thank you for the report.
And we will move to item seven, which is the chief executive officer's report.
Thank you, Mr. Chair. And first of all, I'd like to welcome Director Olson to the Metrolink
family. You should know, Director Olson, that I would not normally wear a lid to a committee
meeting or any sort of public meeting, but Mr. Tremblay and I, Director Tremblay and
I, are doing what we can to celebrate what we call customer appreciation day. We do it
every year, Valentine's Day. It's the day we go to our stations, pass out to Valentine's
Candy and just show our customers that we appreciate the fact that they are Metrolink
riders. You will see through our social media some other elements of that and so thus we
are a bit more informal today with the CAP. But today is customer appreciation day. We
We had Mr. Trumbly again, Director Trumbly was at Moorpark Station where he greeted
riders, Director O'Connor was here at Union Station greeting riders with Valentine's
Day candy and just saying thank you for being Metrolink customers.
So it's a fun day to be out and talking to our customers and we get a lot of great feedback
from our customers on mornings like today.
Transit Equity Day was earlier this month, February 4th.
We had a high watermark of over 27,000 boardings on our system.
That is a free ride day and is the second highest ridership day we've had besides the
Dodger Parade Day in Los Angeles a few months ago.
quick updates on our on-time performance. The committee members and board were
aware of some challenges we had was we launched a new schedule on the San
Bernardino line. We made some adjustments on that about a week and a half ago and
and we're seeing the actually the results of that being very positive with
far better on-time performance on the San Bernardino line and somewhat of a
commensurate increase in ridership in just the last 10 days. So positive signs
there. And then lastly, Mr. Chair, just a quick introduction again of our new
chief of safety security and compliance, Hillary Consul. Hillary joins us from
Chicago, Metro. He was spared today of having to do the safety briefing, but at
the next public meeting he will be fully trained and know how to do what we do
here at Metrolink, but Hillary brings 35 years of experience in railroad out of
out of Chicago, so he has a great addition
to the MetroLink team.
Thank you, Mr. Chair.
Excellent, thank you.
And again, welcome aboard.
Item eight, committee chair, member comments.
Mr. Chair?
Mr. Chair?
Hang on a second.
Go ahead, Pam.
Yeah, I didn't get a cap.
We'll get you a cap.
But it was fun being out there today at Union Station
and greeting our customers, and also customers of Metro.
So it's always a fun event. Thank you. Very good. Thank you. And from on zoom wanted to speak, Mr. Chair. Okay, go ahead, Tony.
Yeah, I just wanted to do like, as I indicated, the executive committee, I had the privilege of being out on the Moorpark platform this morning with three of our staff, all of them are just wonderful Sabrina Davis, who's our director of marketing and partnerships.
Meredith Yeoman, our public relations manager, and Christopher
Brian, our signal system supervisor. All of them were
outstanding. We had a really good time out there. I was able
to make the last two train or the 620 and the and the 711 am
train. I regret to inform you I couldn't make the 420 am or 520
am trains. But I still at this point empowered by sugar and
caffeine. And I want you to know that this hat will end up being
a collector's item is a very nice hat or marketing people did a great job with it and hats off
to them now I didn't really mean that praise all it you know phrasing is everything but hats off
to them they did a great job and my only request is Darrin you send more chocolates to the Ventura
County way thank you mr. chair thank you very much appreciate you getting upright and early
both of you I did it last year I just couldn't fit it in this year coming driving down here
This morning, but it definitely is something that the customers appreciate and I think all of us can say as board members
We appreciate staff that goes out and and last year was yellow beanies this year
It's a white cap, but nonetheless everybody has a good time doing it and a customer's definitely appreciate it
So with that I have no further comments and we will adjourn this meeting at 10 19. Thank you