Well, good morning everybody. Welcome to the final audit and finance committee meeting
on October 10th, 2025. We'll go ahead and call the meeting to order and we will ask
Hillary, Chief Safety Security Compliance Officer to conduct the safety briefing.
Good morning, committee chairman, Bergson and directors. In the event of an emergency
evacuation. We will exit the room down the escalators. We'll exit the front of
the building and we'll turn right. We will meet in front of the Metro customer
service doors. If anyone needs assistance evacuating, please let us
know and we will get that assistance for you. Also while you're evacuating the
room, please be mindful of tripping hazards, chairs, backpacks, briefcases and
that sort of thing. In the event of a medical emergency, our board secretary
It will dial 911, and we'll notify the security desk
outside of the board room.
There is an AD located at the security desk,
and we have predetermined staff
that will render aid, if necessary.
In the event of an earthquake,
we will take cover under the desks,
wait for the rumbling to stop,
and see if further evacuation is necessary.
And in the event of an active shooter,
we will deploy the Run, Hide, Fight tactic.
Thank you.
All right, very good.
And with that, we'll move to item three,
Pledge of Allegiance that will be directed by Director Molina.
All right, Madam Clerk, roll call please.
Director Molina.
Vice Chair Tremblay.
I see you are here.
You're muted, Tony.
You know what?
It might be the audio in the back.
Mila, can you make sure that the stream
is coming through our speakers?
We acknowledge you're here, Tony.
Director Sandoval?
Here.
OK, Vice Chair Trombley?
Here.
There we go.
Thank you, Mila.
Director O'Conner?
Here.
Director Olsen?
Director Najarian?
Director Chaffee?
Director McAllen?
Director Dutray?
Chair Bergson?
Here.
We do have a quorum present.
Thank you.
And with that we will move to item five, public comments.
Do we receive any requests to speak?
I have not received any requests to speak
and I have received one written public comment
from Michael Mansurian regarding tap cards
that will be emailed to the committee after the meetings.
Anybody in the audience wishing to speak?
Seeing none, we will move to our regular calendar,
item 6A, approval of the minutes for July 11th, 2025.
any revisions need to be made on the minutes?
We have a motion to approve.
I'll go ahead and second.
Any public comments on this item?
Okay, all in favor?
Or we have to do roll call.
Vice Chair Tremblay.
Epstein.
Director Sandoval.
Yes.
Director Chaffee.
Chair Bergson.
Yes.
That motion passes with Vice Chair Tremblay abstaining.
Okay, very good.
M6B, fiscal year 2025, internal quality assessment,
receive and file item presented by Elizabeth Lozuardi,
Director of our Audit Department.
Good morning, Chairman and committee members.
Next slide, please.
The audit standards require internal audit
to perform the internal quality assessment on an annual basis
and external peer review on a triennial basis.
The objective of the quality assessment
is to determine our compliance with the audit standards
and our internal policies and procedures.
Based on our assessments, we found no significant
deficiencies for audits conducted in fiscal 2025.
The external independent peer review is scheduled
to be performed in February 2026.
We will report back the results of the peer review
to the board.
This concludes my item, happy to answer us
if you have any questions.
Any comments, questions?
Yes.
Director Molina.
Good job.
Thank you.
Good news.
Thank you.
Any Director Sandoval or Tremblay?
No.
All right.
That's a receive and file.
Do we have any public comments on this?
All right.
We get to move right along to item 6C, a fiscal year
2026 monthly report of ridership revenue and financial results
for August 2025, presented by Christine Wilson,
Assistant Director of Finance.
And I will start out by saying it is unfortunate
this is our last committee meeting
because now we only get to see one hat per month
instead of two.
But it'll help with my budget, right?
Good morning, Chairman Burksen and members of the committee.
Next slide, please.
Here you see the chart type for ridership
that we've been presenting in previous reports.
The chart shows actual ridership,
the forecast, and the recovery rate.
The actual ridership is the blue columns,
and the forecast is the black line.
Through August, ridership was forecast to be 1.5 million
or a 73% recovery, while the actual is 1.1 million
or a 56% recovery, below forecast by 332,000 riders.
Next slide.
This slide is also the type we've been presenting
in previous reports.
It shows actual revenue, the green columns,
with the recovery rate shown inside the columns,
and the blue line showing the budget.
Year to date through August,
pro forma farebox revenue was budgeted at 8.9 million,
or a 64% recovery, while actual revenue is 7.2 million,
or a 51% recovery, below budget by 1.8 million.
Next slide.
In reviewing our previous presentations,
we thought that a more detailed report would provide a view
that might better assist in analyzing our results.
This slide shows last year 25 ridership,
which is the red column, compared to this year,
which is the blue column with the budget shown as a black line.
Next slide, please.
This slide shows ridership by line as of August 2025.
The red column is FY25.
This year is the blue column.
And the green column is the budget.
As you can see, there is a wide range of results.
Next slide, please.
Next is a slide that shows revenue for each month
compared to the same month last year.
The black line is the budget.
Next slide, please.
This slide shows a revenue by line for year to date through August, for last year the red column,
for this year the blue column, and the budget green column.
You will note that each column has two shades of color.
The bottom portion of the column is unsubsidized, in other words, the fare box revenue.
While the top portion are the subsidies that we receive.
You'll note that subsidies in FY25
are significantly higher than in 26.
This is a reflection of the Student Adventure Pass
subsidies.
Far more collaborative analysis is
needed to identify what insights can
be gained from this information.
We plan to continue to add data and expand the analysis
as indicated by consultation with other disciplines
within the organization.
There was a question at the briefings
about the simplified analysis I presented in the board item.
First, I apologize for my lack of clarity.
I was attempting to point out that there
are significant differences between the lines that
must be taken into account for a more rigorous analysis.
I just took the total of the revenue for the two months
and divided it by the number of trains
on both weekdays and weekends.
To provide a more meaningful number instead of proportions,
I would have needed to calculate the actual number
of daily trains and weekend trains in that month
and use those numbers to divide into the revenue.
This is a situation that highlights the limitations
of these additional details.
We've made available and a caution
that must be taken when analyzing them.
We hope that in the future as well,
we will have meaningful insights into our performance.
Again, I apologize for the lack of clarity.
Next slide.
These next slides, I won't go over individually,
and they merely provide additional information
by line for your review.
Next slide.
Next slide.
Now we're at the operating financial results
for Metrolink.
Operating revenue is 10.7 million,
under budget by 1.3 million or 11%.
The downward pointing arrow is indicating
that it is under budget,
and the red color indicates
that revenue being under budget is unfavorable.
Expenses are 53.9 million under budget by 4.8 or 8%.
This arrow is also pointing downwards
because expenses are under budget,
but it is green because expenses
being under budget is favorable.
Overall member agency support required is in surplus by $3.4 million.
The arrow is downwards for under budget and green because it is favorable.
Now you also see listed on this chart the major expenses categories
that are under budget shown here.
Next slide, please.
The next three slides show the operating budget for the two months end at August 25.
You also have it in your packet,
and so I won't go over it in detail.
Next slide, please.
Next slide.
Next.
Thank you.
As of August 31st, 2025,
past-due accounts receivable totaled 50.35 million,
above the threshold set by our board.
Next slide.
As you can see here, the August cash is 53.9 million.
Can you go back?
I'm sorry.
I just wanted to point out that the accounts receivable
overdue are primarily the result of our billing
the quarterly subsidies to the member agencies.
And we are in the midst of going over all the annual MOUs.
And that's what's holding up the money coming in.
Not the member agencies, but getting the MOUs completed.
Next slide.
So this is the chart that shows the cash we
Of the 53.9 million which is over the 50 million threshold next slide, please
So now we're on to arrow service
Here we show ridership by month with the comparison to last year and the forecast for FY 26
next slide
This is the arrow revenue for each of the first two months with comparisons to last year and the budget for 26
You will know that the student adventure path pass had a significant impact on the arrow revenue
You can see the top part of the column
That's in the reddish color
for last year shows a really big chunk of
student adventure pass
By the way the average claim on student adventure pass was a partially fixed amount and it was considerably higher than the average
subsidized fare for Aero
next life
The financial results for year-to-date August 25 has operating revenue at seventy eight thousand for Aero under budget by
34,000 or thirty point six percent
Total expenses are two point seven million under budget by three hundred and thirty two thousand or ten percent
support is two point six million under budget by
98,000 or 10.2 percent that concludes my report may I answer any questions all
right well thank you for the report comments questions from my colleagues
Victor Molina oh you're lights on right do we have any public comments on this
item Oh mr. chair yes Tony terribly I'm sorry no just a comment Christine thanks
for a good thorough report I really appreciate it I'm hoping that at some
point in the future, my interest was piqued about a pending in-depth analysis relative
to the factors that are impacting our farebox return ratios. So I'm looking forward to hearing
about more information in the future, hopefully, at a board meeting and the methodology that's
utilized in reviewing that issue. So in any event, thanks for a good thorough report.
You're welcome.
Thanks, Mr. Chair.
Right, very good, and then can you pull the slide up that,
toward the very beginning, it showed ridership?
Yeah, so the line on the top is the Sperry forecast?
That's right.
And up until now, I've noticed that the forecast
was always very consistent
with what our ridership numbers were,
And now it's looking like we are way, way spread apart.
What is going on here?
Well, so, Mr. Chair, a handful of things.
You're absolutely correct.
The forecast that we've been operating over the last two
years is generally the trend.
The trend line has pretty much tracked
with our ridership numbers.
There are a few questions that we have.
As we've looked at the forecast, and particularly in August,
you'll see this large spike that we've never seen before
in where we've had that kind of ridership number.
So our team is working with Sperry
to try to better understand their assumptions
in the model that saw this big spike
in that August timeframe.
The other issue, though, is that we
have seen this steady trend.
And this has been a national phenomena
that we saw some good ridership, and then it sort of flattened
out, that the growth in ridership
was starting to flatten a bit across the country.
So I think we're trying to figure out this new normal that we're in at this point.
We had a period where with the new optimized schedule, we were seeing growth happening
in the spring, then we got, in May and June, we had the impacts of the civil unrest, and
a quick drop in ridership, then the summer months are typically a little bit lower for
us.
And of course, we've just launched the new, the fare pilot.
So we're seeing all these different parts play their way out.
And this is to say that right now we
don't have great answers as to what's happened here,
other than knowing that the model that Sperry KPMG has put
together has started to drive some questions in our mind
about what were some of the assumptions.
And so under between Henning Eichler and Tom Shamber,
we are going to be getting a better read on both
the ridership number because ridership drives the revenue.
And we need to get the revenue accurate so that we
can budget well.
And so long-winded answer to your question
and where we've fallen out of alignment
may be in part to some of those factors in the spring.
And we have, to be honest, I've shared with the board last
month, our on-time performance isn't where it needs to be.
Our riders expect reliability.
And if we're not going to be reliable,
we're going to lose riders.
So it's a combination of those factors.
I'm not going to put it on any one thing at this point.
But we are looking at this and saying,
we've got to figure out these solutions to get ourselves back
on track.
Do we track the number of riders that we're losing when
we have train delays, train accidents, train surprises?
Did that information be helpful?
We do surveys of our riders and of riders that we've lost
and get a response.
It's usually done on about an annual basis.
And I don't know, Henning, is that correct about?
Is it an annual rider survey?
Yeah, so we've started a daily survey of our riders.
So we'll have a better understanding
of what their experiences are, and so, Henning, go ahead.
Yes, that's right.
Throughout the year, we conducted a number
of different surveys of our riders.
The most recent one, we just started a daily survey,
an after-ride survey, so to get there,
the most recent experience surveyed.
We've also done a detailed origin destination survey
June and we expect the results back by the end of the month, okay, and then
was
And I know I asked this
Maybe a year ago. We were looking at forecasting and
I wanted to ensure that Sperry was doing
with student venture paths being a primary source of new ridership and
Maybe the numbers reflected that still but I I mean even so we're a hundred thousand riders short in July and
way more than that in August so
Yeah, it would be great if we can kind of figure out what the issues are as why we're seeing this spike
Because I'd certainly like to be at more realistic numbers
Understood, Mr.. Chair it is something that we're looking at and again, Mr.. Shambir's been I'm trying to connect with the folks at
Spirit and Arnold Packet was doing that prior to try to get a better understanding of what their model inputs are that we're driving
Some of that forecast number
Any other comments or questions?
We have any public comments on this item all right. This is a receiving file item, so thank you
With that we move to our most favorite topic of the day our chief executive officers report. Thank you. Mr. Chair
Just briefly for committee members
You're you've all been made aware of the incident that occurred at Union Station two days ago
We're a Ventura County line train 104
Made impact with a parks train at Union Station our investigation
continues our our
Safety security and compliance team and our operations team are working to better understanding get a better full investigation
as well as working with Alstom
looking at both the human element that may or may not have been involved as well as
the the mechanical element so
More to come on that don't have much more to report
Beyond what we've been able to share with the board, but that is the latest and we're continuing the investigation
doing testing and
inspections on the equipment
so that we
Most importantly try to prevent a situation such as what occurred two days ago from happening in the future
That's all I have mr. Chairman. Do we have any indication of the person transported if they've
recovered I
Have not heard anything. I'm looking to our safety security and compliance officer Hillary Consul and he was giving me a head shake
We haven't heard anything yet
But the injuries were minor. They weren't major injuries, but they were minor, but we haven't heard any response. Yeah. All right. Thank you
All right, any other comments or questions for our CEO?
With that we will then move to item 8 committee member comments anybody wishing to address the board. Yes
Dodgers and
I have an alternate perspective
go Cubs. Was that go home Cubs? No, Cubs win tomorrow if they take on Dodgers when
they go the world. You know knowing your audience is good especially when you
know we grow up in Los Angeles. All right with that we wish all the teams
success but most of the Dodgers. So with that we will I don't have any comments
other than just to reiterate our local favorite team, and we will go ahead and
adjourn this final audit and finance committee meeting at 10.09 in the morning.
Thank you. And thank you, Chair. Thank you, Mr. Chair. Have a good weekend.