Good afternoon. We will go ahead and call the Metrolink audit and finance committee meeting Friday May 9th
2025 to order at 945 a.m.
First we will have Hillary Kunskulls chief safety security and compliance officer to conduct the safety briefing
Good morning, Chairman Burks and committee members in the event of a fire
Alarm activation we will exit the room
Meet downstairs or head downstairs and we'll meet in front of the metro
Customer service office which is to the right as you exit the building
In the event of an earthquake we will drop take cover under the desks
Wait for the rumbling to stop and we'll assess the situation to see if further evacuation is necessary
Just be aware of the hazards or some tripping hazards in the room
cases, cords, be mindful of those if you're exiting the room or getting up.
And then also in the event of a first aid situation we do have emergency responders
in the room who will dial 911 and we also have an AAD in the lobby by the security desk
which we will receive to provide aid.
In the event of an active shooter we will deploy the run, hide and fight tactic.
Thank you.
I just have something to add directly for Hilary who is like I from the south side of
Chicago.
Did you ever think we'd say the Pope is a White Sox fan?
No, I never thought we'd have one from the United States.
He is a White Sox fan.
That's okay.
I never...
The Rockies had the worst team in baseball, not the White Sox.
I never thought we'd have a question about the safety breathing so yes, that's all for
our loop.
All right, very good.
Thank you.
How about Mr. Don Del Rio, can you please lead us in the pledge?
And Madam Clerk, can we please have a roll call.
Director Molina.
Here.
Vice Chair Tremblay.
Director Najarian.
Here.
Director Sandoval.
Here.
Director O'Connor.
Director Olsen.
Here.
Director Chaffee.
Director McCallum.
Director Dutray.
Chair Bergson.
Here.
We do have a quorum present.
Excellent, thank you.
All right, and with that, we will move to item five,
public comments, were there any requests to speak?
We have not received any written public comment
or any requests to speak.
Anybody in the audience requesting to speak?
Seeing none, we will move to a regular calendar
and approval of the meeting minutes from April 11th, 2025.
This is an action item.
First, I'll ask my colleagues if anybody had any comments
or wanted any revisions made.
Not seeing anybody, do we have any public comments
on this item?
We have not received any written public comment
or request to speak.
Okay, and the pleasure of the board.
It's an action item.
We need a motion.
Move the item, Najarian.
Okay, we have a motion and a second.
Roll call vote, please.
Director Najarian.
Yes.
Director Chaffee.
Chair Bergson.
Yes.
That motion carries.
Excellent, thank you.
All right, and then item 6B,
Low Carbon Transit Operations Program, or LC TOP Resolution,
presented by Jennifer Vernaris, the Manager of Grants.
This is an action item requesting
that the committee recommend that the board adopt
a resolution required to be included in our allocation
request for fiscal year 2024-25 LC TOP funds.
Next slide, please.
The Low Carbon Transit Operations Program, or LC TOP,
is a cap-and-trade funded program administered by Caltrans.
The program's intended to provide operating
and capital assistance to projects
that reduce greenhouse gas emissions,
improve mobility, and prioritize
serving disadvantaged communities.
You can see here a history of funding levels
and projects supported by LC Top Funds since 2015.
This year, the program's providing
approximately 4.2 million.
Next slide, please.
This year, we're proposing to offer
a new student and youth discount, offering 50% off travel
for students and youth throughout the Metrolink system.
Next slide, please.
This resolution authorizes the authority
to request an allocation from the LC Top Program
for the student and youth discount.
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 interim chief financial officer
to execute all legal documents required to receive
and administer LC top funds.
Next slide, please.
This concludes my report,
and I'm happy to answer any questions.
Okay, thank you very much for the report.
Do we have any questions from anybody on the board?
We have any public comments for this item?
You have not received any request to speak
or any written public comment.
Okay, and this is an action item,
so we would need a motion.
Well, you want to be the motioner, maker?
Now we need us and we need a second. I'll second anyway, please have a roll call vote
Director Najarian
Yes, director chiefy
Chair Bergson. Yes
Question for you sir. Is it just just so I understand this process is it Najarian because he's voting for Los Angeles
Is the voter I?
Haven't been asked to vote so I'm just trying to understand the process
That's correct. Dr. Sandoval. Dr. Najarian is the voting member. Got it understood. Thank you
Okay
All right. We will move to item 6c state rail assistance program resolution presented by Jennifer for an RS manager of Prince once again
This is an action item requesting that the committee
Recommend that the board adopt a resolution required to be included in our allocation requests for state rail assistance
The State Rail Assistance Program or SRA was created by Senate Bill 1 and directs a half of a percent of new diesel sales tax
revenue specifically to inner city and commuter rail
The program is administered by the California State Transportation Agency or CalSTA and is available for rail capital and operations
projects
Metrolink previously utilized SRA funds to support the rail yard rehabilitation and modernization
project at LA Union Station. Next slide please. This year we're proposing to
utilize SRA funds to continue the mobility for all program which offers a
50% discount on any ticket or pass to riders with a valid California EBT card.
Next slide please. This resolution authorizes the authority to request an
allocation from the SRA program for mobility for all. It also asks that the
the board acknowledge the certification
and assurances required by the program
and authorizes the chief executive officer,
chief strategy officer, and or interim
chief financial officer to execute all legal documents
required to receive and administer the funding.
Next slide, please.
This concludes my report,
and I'm happy to answer any questions.
Okay, very good.
Do we have any comments or questions on this?
So this is gonna reach out to an additional group of people
Give them a 50% discount versus it continues the program that we can use this one. Okay
All right, and this is an action item. So again, we need a motion
And we need a second from
Not good. Okay roll call, please
director Najarian
Yes, director Chafee
Chair Burkson. Yes
it is a little weird that we have
Six or seven of us here and only three are being called. But that is the the uniqueness of having a five-county
Partnership. All right moving along to item 6d
Internal audit department quarterly update for quarter 3 of fiscal year 2025
This is a receive and file presented by Elizabeth Lizwardi director of our audit department
Good morning
members next slide, please
Staff is reporting the progress of the board approved fiscal 25 audit plan as of the third quarter ended March
2025 in the attachment aid to the report
next we're also providing the ongoing assistance to the contracts department to review contract proposed labor rates and
We also assisted assisted the safety compliance team performing the 49 CFR safety audit on
security assessment.
On the external audit activities,
the annual MTA MOU compliance audit
was completed in February and the audit report
was included in our staff report.
And next, the California Transportation Development Act,
also known as TDA Triennial Review,
for the period July 2021 through June 2024
was also completed.
And copies of the report were distributed
to member agencies.
Happy to answer if you have any questions.
Well, thank you very much.
Do we have any comments or questions from our members?
Okay, do we have any public comments?
We have not received any written public comment
or requests to speak.
Okay, and we shall receive and file this item
and move to item 6E, corrective action status update,
third quarter ended March 31st, 2025.
This is also a receive and file item,
Again, presented by Elizabeth Losuardi, director of audit.
The board directed internal audit
to provide quarterly updates
on the corrective action status
related to the past internal and external audits.
And for the third quarter ended March, 2025,
there are 14 items implemented and verified
for implemented pending verification,
no pass to items and 18 items not yet due.
This concludes my report.
Happy to answer if you have any questions.
Very good, any comments or questions?
All right any public comments, you've not received any public comment on this item. Okay with that this is a
Receiving file item. So we will go ahead and receive and file this and move to item 6f performance audit invoice submission to accounts payable
2024-03-ia
Another receiving file again presented by Elizabeth Lizordi director of audit. This is my final item
Thank you.
Inter-audit completed the invoice submissions
to accounts payable.
This audit is included in the fiscal 2025
board approved annual audit plan.
The audit objective was to evaluate the timeliness
of invoice submissions to accounts payable
and assess departmental and contractor compliance
with the submission requirements.
Audit period was from May 2024 to October 2025, 2024.
And there are two findings to recommendations
and happy to report that all our findings are closed now
and management has implemented the corrective actions
and this concludes my item.
Happy to answer if you have any questions.
Very good, we appreciate that.
Any, oh.
I just have a comment, it's assuring to know
that we are doing what we're supposed to be doing.
It's assurance for our riders and our.
Very good, any other comments?
Seeing none, any public comments?
We've not received any public comment on this item.
Okay, and this is a receive and file item
And that is what we will go ahead and do and move to 6G,
fiscal year 2024 through 2025,
quarterly fuel purchase program update
for the quarter ending March 31st, 2025,
a receive and file item that will be presented by Alex Barber,
the assistant director of General Accounting.
Thank you, Chair, members of the committee.
This is a receive and file report
for the third 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 a spot basis and to seek an overall low fuel cost
in the long term while managing budget risk.
Next slide please.
As of March 31st, 2025, the authority's hedging account
had a value of 2.3 million,
an increase of 74,000 from December 31st, 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 create a gain or loss,
depending on the movement of fuel prices.
In today's report, we've seen that a gain
on the sale of contracts over the last quarter.
During the same time period,
we have seen an increase in the price paid per gallon
of diesel fuel to fuel our trains.
These two movements will offset each other.
An increase in the value of the fuel hedge position
should and will offset the amount we're paying
for each gallon of diesel to fuel our trains.
During the last quarter, the price of a gallon
of renewable diesel averaged an increase
of 12 cents per gallon.
Next slide, please.
This concludes my presentation,
and I'll be happy to answer any questions you may have.
Well, very good, thank you.
And we're glad that our pricing stays the same,
and I've been an advocate for this program,
but a very keen eye observer of where we go with this.
and glad to see that things are moving
in a good direction right now.
Do we have any comments by any board members?
Any public comments on this item?
We have not received any public comments on this item.
Very good, then we will go ahead and receive
and file this item and move on to item 6H,
the Grants Quarterly Update Third Quarter
for Fiscal Year 2025, another receive and file item
presented by Jennifer Furnarnas, Manager of Grants.
This is a receive and file item
and providing an update of grant activities
from January 1 through March 31, 2025.
Next slide please.
During the quarter, 15.8 million was acquired from the FTA
for preventive maintenance of the Metrolink system.
65,000 was reprogrammed from projects
that were completed with savings
and moved to projects that can utilize
the funds in a timely manner.
One federal grant of 26.7 million from the FTA was closed
also funded preventive maintenance.
This resulted in a total portfolio of $2 billion
as of March 2025.
Next slide please.
This concludes my report
and I'm happy to answer any questions.
Very good.
And just curious, the $2 billion portfolio,
that's money that's available or is it?
It's available to us and we're currently administering it.
Thank you.
or questions from board members?
Any public comments?
We have not received any public comment for this item.
Okay, thank you.
We will receive and file that and move to item 6i,
fiscal year 2024 through 2025,
quarterly accounts receivable status report
for the quarter ended March 31st, 2025.
A receive and file item presented by Vivian Avelina,
Assistant Director of Finance.
Good morning, Chairman, committee members.
Next slide, please.
Slide shows our total accounts receivable of 26.2 million
at the end of the quarter.
That's a reduction from the prior quarter of 50 million.
The primary reason was the collection
of an outstanding member agency working capital fund deposit.
Next slide please.
Past two receivables at the end of the quarter
were 14.35 million and this slide shows a breakdown
by entity and by category.
I'm happy to say that at the end of April
Our past de-receivables have hit a historic low
of $2.7 million, and we were able to resolve
almost all of the past de-receivables,
as well as collect 61 million the fourth quarter.
Next slide, please.
Lastly, this is a slide showing our unbilled balances,
which is our pipeline for our accounts receivable
on the project side.
Our unbilled balances at the end of March were 31 million,
less than 2% of that is in the oldest aging category
of 360 days plus.
We've also made substantial progress on that
and as of the end of April,
we have less than 200,000 in that category.
Lastly, there is a chart of our
un-billed San Clemente operating expenses
that are un-billed.
They are five million dollars at the end of the quarter.
Substantially, all that is related
to the San Clemente 3 project awaiting
Imminent execution of the final program supplement and then we'll be able to build the majority of those expenses out and expect next quarter
to have most of those
eliminated
Excellent report good good to have this kind of report
Any comments or questions from any of our board members?
Okay, any public comments on this item. We have not received any public comment on this item
Excellent, we will go ahead and receive and file this and we will move to item 6J
fiscal year 2024 2025 preliminary quarterly investment report quarter ended March 31st
2025 a receive and file item presented by Vivian Avila assistant director of finance
Please this slide shows our total cash and investments at the end of March was
prior quarter. Next slide please. This slide further breaks down our available
cash which is our cash that we use for daily liquidity. At the end of March we
are above the board threshold of 50 million dollars at 55.3 million. While
you'll note a downward trend, throughout the quarter that's fairly typical of our
cash flow cycle in that we receive the majority of our funding which is our
member support in the first month of every quarter, and then those funds are utilized
within the operations in the last month of the quarter is usually fair.
We're happy to report at the end of April our estimated cash balance is available cash
is 102 million, which again represents the resolution of a large number of past dues
as well as 100 percent on-time payment of our member support of 61 million for the quarter.
Next slide, please.
This is a chart.
It's an eight quarter trend of our total cash balances.
The top line is the total balances,
which is gonna include segregated restricted funds,
unearned grant funds, and our working capital funds.
The second line is gonna be the available cash flow
for day to day purposes,
and it's matched against the board threshold.
We haven't been below the board threshold in almost a year.
Next slide please.
This is a slide of our interest income received
on all balances.
It was 1.8 million in a quarter.
That's an improvement of about a quarter million
from the prior quarter and it's based upon
overall higher cash balances throughout the quarter.
Last slide is we're required by the government code
to make disclosures with our investment report.
One is we are compliant with all provisions
of our investment policy.
Two, we can't confirm the sufficiency to fund the next six months.
And three, the board threshold has been met and we are over $50 million.
That's the end of my report and I'm happy to answer any questions.
All right, very good.
Any comments or questions from my colleagues here?
Just a comment that we're doing well, thank you.
Okay. Any public comments on this?
We have not received any public comment on this item.
Okay. And I just wanted to say, thank you for providing us the,
up-to-date current information as we've known so many times we hear information that is
based on a quarter that ended a month and a half ago and where are we really today.
So knowing that the threshold is at 100 plus million versus just 55, that's – I'm glad
you were able to share that with us.
So thank you for that and we will receive and file this and move to item 6K.
This is financial results for the first nine months of fiscal year 2025 through March,
2025, the ridership revenue and operating results and forecast to year end 2025, receive
and file item presented by Christine Wilson, the Assistant Director of Finance.
Good morning.
Beautiful hat, by the way.
Thank you.
Good morning Chairman Bergson and members of the committee.
I am Chris Wilson, Assistant Director of Finance, presiding item 6K.
This slide shows a graph of FY25 ridership compared to forecast for each month through
March.
The red line is a forecast while the columns show the actual ridership.
The blue portion is regular ridership while the orange portion is the student adventure
pass ridership.
As you can probably see, student adventure pass ridership has reached 35% of our total
ridership.
Next slide, please.
This slide shows ridership by month
as compared to forecast,
and the percent of recovery as compared to FY19,
which is the last full year of ridership
before the COVID pandemic.
As you can see, ridership through March
was forecasted at 5.5 million boardings,
or a 62% recovery as compared to pre-pandemic.
Actual is 5.6 million boardings,
over forecast by 0.1 million or a 63% recovery.
Looking at the third quarter, however,
you can see a significant increase in the forecast
while the actuals are not quite keeping pace.
Next slide, please.
This slide shows revenue,
which presents a somewhat different story.
Budgeted farebox revenue through March totals 32.8
or a 57% recovery, while the actual is 29.3
under budget by $3.5 million, a 51 percent recovery.
Virtually all of the revenue shortfall occurs in the third quarter.
The primary reason for the discrepancy between ridership and revenue performance is the variance
in the amount per passenger we are collecting for regular riders as opposed to student adventure
pass riders.
You will recall that we reduced the amount we would claim from LC Top in order to finish
out 25 with the promotion intact.
We began this reduction in the third quarter.
The average fare per boarding for non-student riders is about $6.
The fare we are currently collecting from LC Top Grant for student adventure pass riders
is approximately $1.75.
That difference of over $4 when multiplied by the number of student events or past riders
creates a shortfall of almost a million dollars per month.
Added to this were discounts that we provided for our recompense of on-time performance.
Thankfully, we have additional LC top funds to use in the fourth quarter, which will allow
us to collect twice as much per boarding in the fourth quarter, which should mitigate
the shortfall.
Next slide, please.
As to the operating statement, before San Clemente, total expenses are under budget
by 21.7 million.
Member agency support required through March is in surplus by 19.4 million.
Trading revenue is $47.5 or $2.3 million under budget.
Expenses are $223.6 million or $21.7 million under budget with the primary drivers shown
on the slide.
Next slide, please.
I will skip the accounts receivable information, which was so adequately covered by my colleague
Vivian.
Next slide.
service. Yeah, thank you. Here is the aero ridership performance as compared to
forecast. As you can see, they are pretty consistently outstripping the forecast.
Through March, the ridership forecast was 105,000 while the actual was 117,000 over
forecast by 11%. More than half the ridership, as you see, is student
Adventure Pass. Next slide. This slide shows the fare box revenue for Arrow.
Through March, the budget is $149,000 while the actual is $267,000. Over budget,
by $118,000, or almost 80%. Arrow does not suffer a shortfall, because Arrow
average fare is about $225,000, while the average collected for the student
Adventure Pass is about $1.75, far less a variance than for Metrolink. When adding the
outperformance of boardings, Arrow actually benefits. Next slide, please. Arrow operating
revenue totals $457,000 or $301,000 over budget. Expenses are $11.4 million or $1.8 million
below budget. Support is $10.9 million or $2.1 million below plan.
With respect to the budget, on April 25, 2025, the board authorized the transmission of the
proposed FY26 budget to the member agencies for their review and adoption. On June 13,
we plan to bring the FY26 budget to this committee, seeking a recommendation to the board to
adopt the budget. And bringing the budget to the board for adoption on June 27th. Next
slide please. You see here the total amount of the FY26 budget request which is 0.2% reduction
as composed to, as compared to FY25. Next slide. Now we have the forecast to year end.
At the third quarter of each year, we bring a forecast to year-end to the committee and
the board.
Now, the operating river for MetroLink – let me go back for a second.
The way we compile this forecast is by surveying every cost center to ask them how much they
were maybe spending by the end of the year.
So you see here MetroLink, the operating revenue for MetroLink is forecast to be 66.1 million
or .3 million, .5 percent under budget, pretty much what the actuals through MARCH displayed.
Expenses are forecast to be 314.7 million, 13.5 million or 4.1 percent over budget.
Surplus is forecasted at 14.1 million.
I just presented the March financial showing statement,
showing an operating statement with expenses of $21.7 million
under budget.
So how did we get from $21.7 million to $13.5 million,
a swing of $8.2 million?
The largest variances in train operations
were additional salaries, staff increases, union retro pay,
and end of contract expenses, including PTO payouts,
totaled almost $5.1 million.
Materials also increased their over budget position by $500,000.
Marketing reduced their under budget position by $800,000,
but still remain under budget.
Admin and services reduced their under position by $1.2 million.
Next slide.
Arrow was forecasted to achieve revenue of 637,425,000 over budget.
Total expenses are estimated at 16.6 million, 1 million to 1 million, or 5.6 below budget.
Surplus is forecasted at 1.4 million.
Next slide, please.
That concludes my report.
May I answer any questions?
Thank you very much for the report.
Any comments or questions from board members?
Okay, any public comments on this item?
We have not received any public comments on this item.
Okay, then we will go ahead and receive and file this
and move to item seven, the chief executive officer's report.
Thank you, Chair Burksen.
As I reported at the executive committee,
just one item to bring to this committee's attention.
The committee's aware that over the course of the last month
we've had to take emergency actions associated
with the protection of the railroad corridor
in the San Clemente area.
We currently have an emergency contract underway
with our contractor Herzog, who is out placing rock
in a very specific way, not just dumping rock on the side
but actually taking each rock and placing it almost,
not hand by hand because these are giant rocks
but piece by piece.
We are making good progress on that project.
We are operating under an emergency permit
from the California Coastal Commission
that was secured by the Orange County
Transportation Authority.
That is, the deadline is June 9th
and we believe we are on track to meet that deadline.
And then just as a side note,
on Wednesday the California Coastal Commission
provided another emergency permit specifically to OCTA
for another project in that same area.
So in all total, there's four projects that are identified
as emergency projects to protect the San Clemente Railroad
Corridor.
That concludes my report, Mr. Chair.
Thank you very much.
Any questions for our CEO?
OK, committee member comments?
Seeing none, Chair's comments, all I have
is to wish all the mothers out there a very happy Mother's Day
and try to stay as cool as you can.
It's going to be a hot one this weekend, so with that,
we will go ahead and adjourn this meeting at 10.18.
Thank you so much for being here.