Good morning. Everyone and thank you for joining an hour earlier than our usual board time
I'm going to ask to start the meeting with our usual safety briefing from Hilary Konzal our chief safety security clients officer
Good morning. Chairman, Chafee board of directors in the event of an evacuation will evacuate the room
Take the escalators down to the lobby. We will meet in front of the Metro customer service office
Just be mindful when you're exiting the room that you'd watch out for tripping hazards,
bags, push your chairs and that sort of thing.
In the event of a medical emergency, we do have our LA County sheriffs in the back of the room.
They will be performing assistance for a medical emergency.
We also have an AAD located outside of the room, which will be retrieved as well if necessary.
In the event of an earthquake, we'll take cover under the desk
and wait for the rumbling to stop
to see if further evacuation is necessary.
And in the event of an active shooter,
we'll deploy the run-hide fight tactic.
Thank you.
Thank you, directors.
Any questions?
Seeing none, thank you for the briefing.
If you would join us, if you would rise.
And directors, people will lead us in the Pledge of Allegiance.
As we begin, the 31 words that represent
the flag of the United States of America,
the flag that's recognized worldwide.
Let us recall that this was 250th anniversary
just next week to celebrate our freedoms.
Do never forget those who sacrifice their lives,
their time, their families,
so that we could have those freedoms.
And make sure we remember those that are out there
continuing daily, even today.
I pledge allegiance.
Thank you, Director Spiegel.
Madam Clerk, would you do a roll call
so we may establish a quorum?
Certainly.
Director Nguyen?
Director Goh?
Director Tettimer?
Present.
Vice Chair Burksen?
Here.
Director Spiegel?
Here.
Director Vargas?
Here.
Director Molina?
Second, Vice Chair Tremblay?
Here.
Director Engler?
Director Barger?
Here.
Director Najarian?
Here.
Director Sandoval?
Here.
Director Solis?
Director Olsen?
Director Allen?
Director O'Connor?
Director Camacho?
Here.
Director McAllen?
Here.
Director Wapner?
Director Dutray?
Here.
Director Marquez?
Here.
Chair Chaffee?
Present.
We do have a quorum present.
Thank you, Madam Clerk.
Now we're going on to our public comment.
Due to the large number of public commenters
We received, we're going to reduce the time for comment
to two minutes this morning.
Madam Clerk?
We received 31 written public comments which have been added
to the folder that the board has had access
to throughout the week but will be sent to the board
after the meeting and I believe all of our requests
to speak are under item 7A for the public hearing
if you'd like to hear them then.
No public commenters at this time?
I don't have any general public comment requests to speak.
All right but then we do have a large number
for those other items for 7a yes all right thank you okay outcomes our
consent calendar I've had one request that we hear 12 a separately terms an
H was it H I got the wrong one sorry okay H that there any requests in the
public to hear an item separately see none so we do have a direct request who
Have that one item 12 H separately with that as to the balance may have a motion for approval the balance
Second any objection the balance is approved. Now. Let's go to that one item 12 H
Look, I'll just ask a few questions mr.. Chair. I don't need a full report on on this
It's good that we did have this audit
There were findings, and I'm glad that
some
items were found
Management has agreed with the recommendations, but my question is regarding inventory control
Would any of these controls have prevented the spider shaft
Issues that we had a month or two ago that caused some service disruptions
so director Najarian the
The nature of this we we've had or certainly had our parts challenges spider shafts you raise those fuel manifolds have been another
Where we have struggled is having adequate inventory for those fortunately as it relates to spider shafts
We're now back in a place where we are not having they're not one
they're not breaking as frequently and we have them in in the inventory and
We have made modifications to the other problem part, which was the fuel manifolds over the last several months
So while we will occasionally have a mechanical issue associated with those parts. We do have inventory now available
And solutions in place to limit the amount of time. We have locomotives parked because we can't get parts. So
That is that's we we've made great progress in that as it relates to the audit that
the Miss Lizardi's team put together it was looking at at
obsolete
types of the parts their issues and again management agrees with the
The recommendations that came out of that for corrective action
inventory control is a very I
Mean it's part art part science you have to forecast what your parts are gonna
Be needed and make sure that they don't become obsolete as there are new models
Coming on board, so let's keep a good eye on that and implement those
Recommendations as as soon as we can
Thank you. That's all I have mr. Chair. I'll move the item. It's actually received and file
But we appreciate the comments nonetheless
No objection on the item will be received and filed
Now we move on to our next item, which is a public hearing
Which is item 7a Madam clerk. Would you read the item and we'll declare the?
I've been mixed up with my own board
this is a
This is item 7a adopt fair structure pilot approve limited fair increases and
Receive results of the public comment presented by a Henning Eichler
All right. This is a public hearing the public hearing is open, but we'll start with a staff report
So before public members speak they'll have an opportunity hear what's in the staff report
Please mr. Eichler. Thank you. Good morning
Chair members of the board,
Henning Eichler, senior manager of marketing,
market insights and analytics.
The public comment period,
which ends today with a public hearing,
was opened on May 1st.
During that time, we have received
over 1,500 completed survey responses.
And I just want to comment that the written board item
has two numbers, 1,500 and 1,700.
The 1,500 refers to the fully completed surveys.
The 1,700 includes surveys that were left
with some questions unanswered.
In addition to the survey responses,
we have also received hundreds of comments
through our Metrolink website as well as on social media.
Also, we have had two online public community meetings
with about 100 attendees.
Next slide, please.
The customer feedback that we have received
provides strong support for the adoption
of our current existing simplified fare structure,
which was launched last year in July as a pilot program.
The pilot has proven very popular with our riders
and has also translated into higher fare revenue,
growing monthly pass sales and less customer confusion.
And most of all, we have seen ridership increase
despite the end of the free student fare program.
This fare pilot will end on June 30th,
after which it will revert back to the old fare structure,
unless adopted as part of our regular fare structure.
In contrast to the pilot, we have received
strongly negative comments about the
proposed service reductions.
This has been consistent across all the platforms.
There's strong opposition to those proposals.
In regards to the proposed fair increases,
of course, we've also seen negative comments.
However, those comments have been more nuanced.
When forced away high affairs against service reductions,
customers overwhelmingly chose the high affairs.
I just want to comment that that actually
isn't a unique result of the public hearing.
It is actually consistent with the historic ridership data,
which shows that Metrolink customers
are more sensitive to service frequency
than to higher fares.
Next slide please.
So at this point, we recommend that the board adopt
the current simplified fare structure,
which includes the 50% student fare discount.
And secondly, we recommend the board adopt
a limited fare increase by raising the price
of the one-way tickets by 14%,
and raising the price of the SoCal Day pass
from 15 to 19 dollars on weekdays,
and from 10 to 12 dollars on weekends.
Next slide, please.
Just a quick note on the equity analysis,
which was part of our due diligence required under Title VI.
Of course, as mentioned, we have not raised fares in 13 years.
These proposed fare changes are in full compliance
with Title VI requirements, as is also
detailed in your written board item.
Next slide, please.
So with that, the next steps are, as mentioned,
on June 30, our existing fare pilot
will end, which is why we're asking the board today
to adopt those changes and make it part
of the regular fare structure.
And on October 1st, this is the earliest launch date
for the fare increase if adopted by the board.
That completes my presentation.
I'd be happy to take your questions.
If we can, I'd like to take public comments at this time
and then invite you back for questions from the board
and as well as any questions from the public
because we may encounter.
So, again, two minutes, please.
We have a large number of speakers for this morning.
Madam Clerk, would you begin with the calling of the speakers?
Sure.
Mariela Beltran.
Can I just start speaking?
Well, my name is Mariela Beltran.
I recently graduated high school, and I'm 17 years old.
So looking around the room, I can kind of
tell that I'm some of the younger people here.
So this may give perspective to the young people
in the Orange County community with the fare increase.
I know that the 50% student discount for me
has personally helped me travel a lot more
and I really appreciate that.
Considering the spike in gas prices
and the spike in car prices,
I can't really travel anywhere else
without public transport.
This fare increase would really affect me and my sister,
considering that we ride the metro link almost every week.
And I know that we don't really advertise
to teenagers much about the train
and how we can take it all the way to LA.
Whenever I tell my friends that,
they think it's really cool
and wonder why they didn't know about it before.
If we want more ridership,
we shouldn't increase fare prices
because I know if it increased this much
for a SoCal Day Pass,
I don't know if I would ride with Metrolink anymore.
So I urge you guys to please advertise more to the youth
to get more ridership with them.
That would help the deficit.
If we increase the fare prices to up to $40 for two people
to buy the SoCal Daypass,
I know it would decrease a lot of ridership.
Thank you for your comments.
May we have the next speaker please?
Nate Taylor.
Hello, I'm Nate Taylor.
I'm also a longtime user of Metrolink.
I've written on every single line and the Amtrak ride share.
I also started riding in high school as well
and have since carried on using it
now as a Cal State Northridge student.
I'll also note that I do think we should be reaching out more to the youth because a lot
of young people don't know how to ride the Metro link, like how to access it, where to
go, or how to get to the stations.
And then just to note on my personal experience, at Northridge we only have one shuttle for
Northridge students to go to the station.
There's no Metro LA bus that goes there.
There's an LA dot bus that's like a very short loop, but it's very inconvenient for most
people to get on there.
And I know a lot of elderly folks don't feel comfortable going to the station because there
there isn't a bus that goes directly there.
So I think reaching out and making sure we're coordinating
with like other LA Metro stuff would be important
to make sure people can actually get to the station on time.
Cause time is also an issue too.
A lot of the times the bus isn't making it there
to get there to the station.
It's been a godsend to have MetroLink.
And like I said, I've used almost every single line
to visit OC, LA, Riverside County.
I've even used the Amtrak ride share as well.
So it decreased in service, especially on weekends
would eliminate a lot of your ridership
and I think be a detriment to an increase
in the maintaining of your ridership.
Thank you.
Thank you for your comments.
Tom Janowitz.
Good morning, Chair and Board members.
Tom Janowitz, Manager for Transportation and Parking
at Cal State University, Northridge.
We understand the challenges Metrolink faces.
We all know that running a transportation operations
is not a profitable venture,
but they are vital services for our community.
We are grateful for the services Metrolink provides,
enabling our diverse population to commute
and pursue their education at a lower cost than driving
and keeping more cars off the road.
CSUN is comprised of more than 45,000 students,
faculty, and staff who rely heavily on Metrolink services
at the Northridge Station for access
to education and employment.
CSUN has and is enrolling future Metrolink riders
and maybe even a future board chair here.
CSUN has a 20-year partner with Metrolink
and has participated in the current version
of the corporate program since 2022.
Over the course of this program,
more than 100 CSUN employees have enrolled in the program.
To further support the transit access,
CSUN invests $250,000 a year in a free shuttle service
between the Northridge Metrolink Station
and the CSUN campus.
The shuttle runs year-round when university offices
are open and schools in session.
We essentially bring riders from the station in the morning
and riders back to the station in the afternoon.
We have over 1,250 passengers a week riding this
with peak weeks exceeding 1,400 riders.
And these figures demonstrate the critical role
that Metrolink plays in connecting
the CSUN community to the university.
And many CSUN students who depend on Metrolink
come from low-income backgrounds.
Fair increases in service reductions
would create significant financial
and transportation barriers,
potentially affecting their ability to pursue
and complete their education.
And these impacts would also affect faculty and staff.
So for these regions, I respectfully urge Metrolink
to avoid system-like fare increases and service reductions,
particularly on the Ventura County line.
Many riders to CSUN also use the Antelope Valley line
and connect at Los Angeles, Glendale, and Burbank.
We urge Metrolink to explore alternative cost-saving measures
or less severe adjustments before implementing changes
that would affect our community.
Thank you.
Thank you, sir.
Emmanuel Campos.
Good morning, everybody.
My name's Emmanuel.
I'm Director of Parking and Transportation
for the university, similar to Tom's role.
So we are your partners.
We see a lot of students and I was a little surprised
because we've been, ridership has been up.
We actually had to invest more money in the shuttles.
And I say invest because we're all investing
to our future here.
So many pieces to the puzzle.
You guys know this.
We have the saying of no student left behind.
So this is the next person who's going
to solve some of these issues that we're facing right now.
They are writing it daily.
They're getting educated.
They're going to solve these issues.
We're in this industry together.
MetroLink does great things for our students, faculty,
and staff, we know we're in a tough place.
Let's continue to invest in these resources.
It takes a village and we're all doing this together.
We know we have some tough decisions to be made
and hopefully the right one is done pretty quickly.
And we know we're gonna get through this.
What I guess I'm saying is that CSUN is your partners.
We're here to invest in alternative method of transportation
with the kind of last mile to help your riderships.
You guys are a key member to our success
and we want to also be a key member of your success.
This 50% discount is huge, so thank you.
The students are really our future
and I think you guys know that.
These students are really taking advantage of this.
Our riderships that we have increasing
since the pandemic continue to trend in the right direction.
we also subsidize employee passes it looks like my time is up but again we
will be your partners please invest in our future do the right thing thank you
Nathan Mustafa good morning chair board members and measuring staff my name is
Nathan Mustafa city of Riverside's Public Works director thank you for the
opportunity to speak on an issue that is critically important to our residents we
recognize the financial pressures facing the agency and the difficult decisions
that must be considered, including potential fair changes.
However, we remain concerned about the potential impacts
of fair increases when combined with service reductions.
While these actions may provide short-term financial relief,
they could also create long-term challenges
by discouraging ridership at a time
when Southern California should be investing
and growing regional transit usage.
Riverside recently launched a pilot autonomous shuttle service
at our municipal airport
that may one day serve our Metrolink station.
As a young professional, I relied on Metrolink
for several years to provide cost effective transportation.
More importantly, Metrolink allowed me
to save time and traffic so that I could be with my family.
Metrolink is a vital service that helps make
the American dream possible for many other residents.
Service is already limited on the Riverside line.
The next train that I can catch home is at 3.30.
And yet, for Riverside, reliable commuter rail service
is more important than ever.
Riverside County is expected to experience
the largest increase in population and job growth
in Southern California by 2050.
The city of Riverside remains committed
to being a partner in Metrolink's success.
We are all in on Metrolink and we stand ready
to assist with advocacy efforts, funding discussions,
and collaborative problem solving
to help identify sustainable solutions
that minimize service impacts
and support long-term ridership growth.
We respectfully encourage the board to carefully consider
the long-term regional impacts of any service reductions
and to continue pursuing solutions that preserve
and strengthen rail service for our residents.
Thank you.
Thank you, sir.
Paul Balinski.
I ride the Metrolink almost every day
just to come down here and go to my doctor's appointments.
I think if you get rid of some of the trains, it's wrong.
I think you need to bring more trains back.
Because I got to wait.
If we miss the train, I got to wait for another one.
Then I'm late to my appointments.
Because I come all the way from Fontana out this way.
I think it's a bad idea.
And the trains need more work on them.
Because the bathrooms aren't working.
You got flat spots on the wheels.
When I'm on the trains, you hear them all the time.
So you need to start working on the trains more.
because they're not working right.
Thank you, sir.
Zina Heinemann.
Fair hikes.
Raising the rates is really bad because there's
a lot of us that are disabled who
have very, very limited income.
And we don't have a chance to be able to pay that raise.
And that will drop the riderships down
for the disabled or for people that have welfare.
They need to get to one doctor or appointment to another.
I go to Casa Colina.
And because you guys dropped the 530 train,
I barely make it to my physical therapy appointment.
And because the physical therapy for me
is because I have fibromyalgia and it helps me out.
And because when I miss my appointment,
that means I have to wait for another whole week to go.
And to me, it would be a very hardship,
especially for a lot of people that are disabled.
Thank you.
Thank you, ma'am.
Michael Smith?
It's a common name, so I hope I'm
to write Michael Smith called up here.
So my name is Mike Smith, and I appreciate the opportunity
to be able to give comment to you guys.
I'm a longtime Metrolink writer.
I've been writing Metrolink not super frequently,
but for over 20 years.
So back when there was still an F40 diesel pulling
in some of our trains.
And I'm a transplant to the Los Angeles area.
I came from an area up in Washington state
that has no rail transit at all.
And I've always been very much in favor of rail transit,
just as a concept.
And the fact that it exists in a fashion like it does here
is quite amazing.
And on that same note, this is not
the time to contemplate stepping backward.
There are definite problematic aspects to fare increases,
though the need to increase fares incrementally over time,
I think, is quite understandable.
But service reductions, I think, are a complete non-starter
with Metrolink riders.
As one of them, the line that I ride the most frequently
is the San Bernardino line, partly because,
even if it doesn't go exactly where I need it to go,
it has the most frequent service.
And the availability of service is
what can drive ridership.
And someone else mentioned our Deer Riverside line,
which is super helpful if you happen
to have a travel itinerary that will work with it.
But in many cases, things are not quite as usable
as they need to be to get over the threshold of people
using it.
And service reductions are not going
to get us any closer to that.
So I urge you to do what you can to protect what we have
and hopefully improve it in the future.
Thank you, sir.
Thank you.
Rachel Arredondo.
Hello.
My name is Rachel.
I'm also a college student.
I just wanted to say public transportation is
vital for everybody as a whole.
I've noticed, along with many other people,
that there has been a reduction on daily trains,
and this is not something anybody has asked for.
Even now, looking at the train schedule
and seeing that the last train leaves from Unions Station
to Anaheim at 540 is a huge inconvenience.
It's not taking into consideration people's schedules
and or a lack of flexibility in these schedules,
especially for people going to school or work,
which is your most prominent demographic.
Everybody knows how bad traffic can get.
Therefore, public transportation is so important
to not only a quick but sustainable transportation.
It's also important to remember that not everybody
has the privilege of owning or being able to operate a car.
So what about them?
By cutting trains short and raising the ticket price,
It's an injustice and an inconvenience to the people.
Thank you.
Thank you.
Juliana Lucio Hernandez.
My name is Juliana Lucio Hernandez.
I'm 20 years old, and I go to Cal State Fullerton
in Orange County.
I actually woke up extra early to take the train from Anaheim
Station to be here.
That's why it's very difficult for me
to understand why we're even having a meeting about investing
less in public transit when the answer seems so obvious to me
and to everyone else here.
We're constantly encouraged to use public transportation.
We're told it's better for the environment,
cheaper than driving, and essential as Southern California
prepares for things like the World Cup or the Olympics.
But every time Metrolink or Opta has an opportunity
to encourage ridership, we're instead faced
with service fairs, or service cuts and higher fairs.
You're calling this effort a proposal
to align service with demand, but that logic is backwards.
If you want demand to grow, then you have to give people
reason to ride public transit. You don't build ridership by making trains less
frequent and more expensive. You'll build it by making service dependable,
affordable, and convenient. As a Cal State Fullerton student, I can tell you
firsthand just how much students use the train to get to school. Whenever I'm at
Fullerton station, I see students with backpacks. I see government workers with
briefcases. I see parents traveling with their children. When you choose not to
invest in public transportation you choose you're choosing not to invest in
them. We exist in a car-dependent society that is rooted in years and years of
racism, redlining just being one example, classism, and has very real consequences
on our citizens. The obesity epidemic in America is in part because of our lack
of walkable cities. It's not so much about convenience as it is wanting our
citizens to be healthy both mentally and physically. Students struggle to get to
class workers struggle to get there to their jobs people lose access to health
care community events and civic engagement even being here today I had
to take public transportation to share my opinions with you all further isn't
it interesting how we're always told that you know we don't have the budget
for things like public transportation health care just anything that really
benefits working-class people but suddenly the narrative becomes that we
We just don't have the budget for that, but then we go and do things like...
Thank you ma'am.
Okay, thank you.
I haven't received any more written requests to speak, but now would be an opportunity
for anyone wishing to speak who has not filled out a speaker card to come to the podium.
Okay, if there were anyone who would like to speak, even though you've not filled out
a card, please come to the podium.
You don't see anyone else so I'd like to bring Mr. Eichler back and I'll start
with any questions that board members may have. Thank you thank you and thank
everyone who got up early and came down here to testify today. With the fare
restructuring and the increases of fares for one-way and day passes, what did the
Title VI analysis show on disproportionate impact to riders by
region? We've done the Title VI equity analysis at the system level and found
there was no disparate impact or disproportionate burden. So for a rider
that's coming from Lancaster or San Bernardino to downtown how much more
would they have would they be spending for a one-way ticket? Again I would have
look those numbers up for those specific destinations. However, the 14% increase
on the one-way ticket would be the same 14% across the system. So you didn't
take into consideration, for example, in the Antelope Valley where they have fewer
transportation options available? Well, we actually, I appreciate that question.
We know that affordability is a priority for the board and for us the
Antelope Valley line. Ten years ago in 2015 the board lowered the fares on the
Antelope Valley line by 25%. That same policy is still in effect. Over the years
we've added discounts, we have 50% discounts for seniors, for students, for
disabled riders. So all that results in, for the Antelope Valley Land we know, the
fares that riders on that line pay are the lowest in the system. So the fare
increase is not going to change that. They will still have the lowest
fares in the system. So let me ask I mean because I heard some comments made
about the cut in services and then the increase are we going to revisit if
we're going to increase fare are we going to look at schedules and and
address the issues that some of the riders have brought up today in terms of
convenience? Director Barger I mean that is all part of the conversation we're
having is it relates back to the budget which is the schedule drives the budget
sort of a chicken-and-the-egg kind of thing, and so it will be evaluated through that.
The current schedule we're operating today, I'm getting ahead of ourselves a little bit,
but that is what we are looking at running for the, at least for now, and potentially
longer, but that really is, that's where we stand today.
And then can we explore the idea of capping costs for the end-of-the-line communities
so that they are less affected by the price increases?
Is that something that can be at least looked at?
You know, I think, yes, short answer is yes.
What the board would like to look at,
we have not done fair capping in our past, in our history,
but that's not something that shouldn't preclude us
from giving it consideration.
I just would like to explore all options,
and then last but not least,
which doesn't have anything to do with the fair,
but do we have individuals that go onto our trains
to do inspections on the restrooms and all
to make sure that everything's in working order.
Our conductors will typically do that,
and if we have something that is out of place
that gets called in, and we have maintenance crews,
cleaning crews on both ends of the line,
either in Los Angeles or at the end of the line.
So, and occasionally, the CEO actually goes
and checks out the bathroom
and makes sure it's in operating order too, so yes.
Okay, thank you, thank you.
Director Speichel.
I can't remember which speaker said,
But create short-term relief, but long-term fill in the blank.
And that's exactly what I've been saying for months.
This is just going to make things turn backwards.
I don't see the relief.
It's very short-term.
And in the big scheme of things, it's the nail in the coffin.
That analogy, just look at how long we have been since COVID.
And we still aren't back to pre-COVID.
I don't see this being helpful other than maybe a couple
of months getting us back.
It was almost like somebody lined all these speakers up.
Just curious, because it was awesome.
The representation of writers, students.
I started writing them all down.
There's students, there was disadvantaged,
there's disabled senior writers, senior writer
with disabled, city of Riverside came all the way out here.
You had the colleges out here, university.
It's like every entity.
And if we would all have them band together,
there was conversation about trying to get the state
to the governor to give us extra funding
or special funding or somehow to keep it going.
This is what we need to hear beyond us
and to work with all of writers sharing the importance
of having a public transit system such as Metrolink.
And I've said this before, everybody knows,
you don't wait 13 years and then do a big increase.
If you do little increases along the way,
it's kind of like before an election,
nobody wants to put anything on the ballot, right?
Well, it's the same thing here.
You can't wait until you have to.
it should be ongoing so that it's not felt
in a dramatic way like this.
You can come up with an extra 50 cents over time,
but to make it five bucks is a big difference.
Director Dutry?
So Darren, this is about 1.3 million
regular projection.
Darren?
Henning, you've done all the calculations.
That sounds about right on one of the programs.
Well, the recommended fee increase
would generate 1.7 million in FY27 based on the current schedule.
If there's going to be additional service reduction, the amount would be less.
Between the fair forecast being adjusted this fiscal year, what is the difference?
How much money we're talking about there?
So under our, I want to make sure I answer your question correctly, Director Dutray.
So under the current year, we are about $15 million short of our fair revenue in the current
fiscal year.
Okay.
All right.
And then we go, when we go to LA Metro and OCTA, their reduction, what's that dollar
amount again?
Those two combined?
About nine and a half million.
Nine and a half million plus the, as long as the fair, which, okay.
I guess in the back of my mind right now is we haven't the next jet item is to discuss service
Reductions or discuss actually the continuing resolution against October 1
So my question right now is do we have to do this fair increase today can this wait until we get?
We can deal with the other item
Because we're you know, we're possibly talking about maybe a scenario for
You won't know until July
So can this hold on to the July meeting until we get better information on the other item?
The the board can take action on this at any point now going forward unless it waited too long
And we would have to go back through another title six analysis
I wouldn't expect that we would need that kind of time
we did have a time frame that we were trying to aim for with a
Adjust a fair increase that would be effective in the fall in October
So we would just delay any sort of any delay in an action should there be an action would would delay when we would implement
The fair pro goes into effect October 1 the fair increase so we wait until July
Zagat look delayed
Can that still happen October 1?
If we waited till July I would I don't have to turn to Henning or any member of our staff
I don't know if our chief of customer experience Lisa bar or
What have the time you worked John on that let me?
Handing yeah from a title six perspective there would be no problem. And again, we said in the item that
October implementation would be the earliest it can be later
So the only question of course it you know, it would delay the additional revenue
That we would gain
Sounds like to me. Maybe we should wait until July. So we get a better perspective
on costs especially we're gonna be able to give directions on scenario 4 and then
we'll have a you know you know July will be a better time to do this in my
opinion and we get a chance to have supervisors questions to have answered
her questions as well I see the light on here so either way no rush first of all
I appreciate my fellow Matadors, I am a CSUN graduate and so is my eldest daughter, so
long time CSUN fans and definitely Metrolink fans of course, so we appreciate you coming
out.
The comments that Director Dutray had made are sticking with me right now.
I think the biggest problem I have with this is, you know, it goes with what Karen Spiegel
has said.
You can't throw a huge raise all at once, and 14% ticket hike on a one-way fare seems
to me to be pretty extreme because those tickets for a one-way fare can jump up into, you know,
not super expensive, but when you add a 14% on a, let's say it was a $10 ticket or $15
ticket you're talking about some money and for all of the people that have
come out here justifiably so with a variety of good just causes on why you
know it's gonna really hit the pocketbook we don't want to lose riders we
don't want to go backwards we've been working our tails off to try to get us
back to pre pandemic and and above numbers and we still are struggling I
think the student adventure pass was one of the biggest keys that we had that
brought new riders to the table and I hope we don't lose those riders but
every time you raise the fare of especially a 14% fare on a single ticket
it seems to me like that is going to push more people away and and I know we
have a huge issue with the five county member agency group that we are on who's
going to be able to support in the future in what ways, that's a stressful situation
for all of us, but I think as long as we can get through that part and see where the five
agencies are with the budget, that will give us a better clue as to what our true needs
are in regards to what kind of a fair increase, because I do believe it's time, we've waited
too many years so a fair increase should happen but it should be reasonable and I think this
is a little bit beyond reasonable or those potentially would be armed the most by a higher
fair.
So I would also concur with what Director Betrayed said about potentially if it isn't
going to kill us we can wait another month or two and bring it back when we get the budget
sorted out, I think that would help really guide us to a better direction
and hopefully that way we can you know provide the best possible pricing to the
people that use the service the most. Thank you. Director Sandoval. Thank you
chair. I think all of us can agree that it was incredibly powerful to hear from
the students, to hear from people who the Metrolink and public transportation is
a lifeline for them. They have to take the system out of necessity. They don't
have the luxury of, in some cases, having a car. Having a system like Metrolink is
a critical part of their daily life. And so, Chair, thank you for starting off
with their words as part of this process. Several of the board members here have
raise the point of incremental increases
versus a more dramatic 14% increase.
And I understand the politics of it.
But what prevents us as we move forward?
And I'm thinking in terms of a solution
so that we don't find ourselves in this situation,
where we have to dramatically raise rates
because we're trying to address a fiscal issue around whether we
can provide service or not.
It's having to choose between what we know
to be not a solution, which is to reduce services,
and at the same time having to raise rates.
So my question is, 13 years go by,
what do we have as part of this board policy
to regularly look at incremental fare increases
as opposed to raising at 14%?
Director Sandoval, the board doesn't have
an established policy as to when we would,
if there was a regular check-in on fair adjustments.
And I think there is, we do have a fair policy,
but that doesn't say the board shall consider
every two years a reevaluation or anything along those lines.
The board would be open to it.
I'd like to at least ask the chair
to at least allow us to have that conversation
and then make a determination
based on the pros and the cons.
But it seems like to me that when we have a moment
like this it sort of reveals that we know that costs go up virtually
everywhere each year. Cost of housing, cost of gas, cost of food, cost of our own
projects, our own capital improvement projects in our cities and so I think
it's important for us to at least work to having a policy. It doesn't mean that
in the process that we say well let's just raise it. We'll take in the
information and hopefully make a good sound decision obviously with input from
the community. So I'd like to encourage us to do that. The second thing that I
would just simply ask is to Director Dutre's point about delaying this, what
can I understand the thought process, what will, we're talking
about 1.3 to 1.6 million dollars here, what will waiting reveal in the budget
discussion that is critical in other words he's saying we need more
information for the budget process I'm on the fence on this one right it's
before us the deadline ends June 30th right we're gonna lose some revenue part
of the reason we're even considering raising the fair increases because we
need revenue can you speak to that so I am gonna ask Kenning to respond
because as we said we are operating under the pilot through June 30th. So
should there not be an action here the pilot goes away as of June 30th unless
it's extended. Question mark? Henning what's what's your take on it? Yes yeah
yeah I think it's important to see these are two separate recommendations they
you know they can be voted on separately. So postponing the fair increase would
not impact the pilot, but the pilot will end in a few days, so that's why we
recommend we should adopt the pilot, which clearly has shown positive results
and is very popular with the riders. So we would bifurcate, potentially bifurcate
in that regard. Now to your other question, Director Sandoval, keeping in
mind that right now our fare box recovery at Metrolink is around 13%. So when we start
talking about our overall operating budget and as a percentage of our operating budget,
one way ticket sales and day passes generate revenue certainly, but our large revenue generators
our monthly passes so the amount of revenue as to how it will affect our
operating budget is pretty de minimis it's you know it's not zero but it's
it's not a lot so couldn't we just extend it for one more month the fair
increase I'm sorry the the the pilot well I think as opposed to dropping it
at least as it relates to the pilot fair increase.
Yes, so the fair increase, certainly the board
could delay that action and again,
the lost revenues would not be significant.
The pilot would continue,
because we operated the pilot by some of the modifications.
So the pilot would, the board could take action
on the pilot, making it permanent.
The increases would be a second action
that would be the board could take at another meeting.
I understand, I understand, okay, pretty good.
Thank you, thank you Chair.
Director Twombly.
Thanks Mr. Chair.
So first of all, I wanted to say thank you directly
to all of the speakers and particularly the students
who are here.
When I went to school at UC Davis,
I tried to avoid Friday morning classes like the plague.
So for you to give up that and be here
is really appreciated.
I think Director Dautry, I agree with Holy.
When I read the comments and I read the emails,
the two policy issues of fair increases versus service
reductions are inextricably linked.
They're just, as a matter of, to me, common sense.
And I'm not saying it isn't.
I just think that they need to be looked at together,
because I think that provides additional assurances
or reassurances to our passengers.
I think we need to couple those two decisions together.
I would like to know, I mean our 13% farebox recovery
is awful, it's very, very low.
My understanding, and I could be incorrect
and I'd like to have more information on this,
is that the state is thinking again about
putting that back into place.
It has been on a hiatus, as I understand it, since COVID.
In terms of the Fairbox recovery requirements
and the penalties associated with it,
I had heard, and maybe this is a Mr. Dunn question
or a question for Mr. Dunn, but I heard that those,
it was being considered reinstating those,
which I think is,
I'm not gonna express an opinion on that at this point.
A little stunned that we've gone for 13 years
without a fair increase.
To me, that's not responsible on the part of the board.
And I'm not pointing any fingers.
And I haven't reached any opinion yet
on what the amount of the fair increase, if any,
ought to be.
But I agree wholeheartedly with Director Sandoval
that we should be looking at this periodically.
I'm hoping that we will take a separate,
take an action in association with us to look at this.
And in fact, I would even put it into board policy
and say every, you know, either biannually,
every year or annually, this will be an item on our agenda
to take a look at.
I don't think we need more information, necessarily,
on this.
I do think that the two policy decisions go together.
So I would be in favor of, if we can,
defer most of these recommendations
until we have our hands around the budget,
and we are deciding on that budget,
and we are deciding on the service reduction course
we're going to go.
but in the interim for the next 30 days,
extend that pilot program,
which I think I heard we can do,
and take it from there.
Thank you, Mr. Chair.
Thank you, I thank Director Camacho.
Yes, thank you.
This is a significant increase without a doubt,
but from staff's recommendation necessary,
and I would concur that I think we should be
doing incremental fare increases to lessen
the impact of the ridership.
But I would doubt to hear that we have not
had a policy on this, again, in those price.
So I would support that we definitely
look into the future of having this fare increase policy
in place so we don't have to be impacting
the ridership dramatically.
There's policies for water rate increases
in other areas as well.
But my question then would be is what's the amount of ridership
that we will lose based on this fair increase that we looked at?
So as recommended, the fair increase would reduce ridership
by 3.5%.
I see, yes, Dr. Najari.
Is done.
Well, I'm going to give you my perspective on this.
And I was around 13 years ago, when
we did go through the fare hike process.
We didn't like it back then.
We said the same sort of thing.
These should be incremental increases.
So I've been there.
I know how difficult it was.
I want to applaud and thank all the riders, the students,
the commuters, those coming in for their health
and other business needs.
And we clearly owe a duty to you
in maintaining a clean, safe, affordable transit system.
But I also have another duty,
and that duty is to the agency itself,
to keep it solvent and to keep it operating
for the years to come.
When I started on this board in 2006,
our fare box recovery was close to 50%.
50%, that means that fares covered 50%
of our operating expenses.
Think of that.
I just learned, I just heard, we all just heard
that right now it's 13%.
The fares that we collect only cover 13%
of our operating expenses.
So, what that means is the additional burden to cover that operating expense,
et cetera, comes from our member agencies.
And believe me, it has been a strain on our member agencies.
We may hear this in one of our next items, that certain agencies, Metro,
has balked at maintaining its current level of funding, other counties as well.
What hasn't gone up in price in the last 13 years?
What has not gone up in price?
Gas, diesel, or gasoline was probably $3,
below $3 a gallon.
Right now, we're looking at close to $6,
almost 100% increase.
Labor costs, every year we sit down and we,
not every year, every few years we sit down and negotiate
with our labor unions.
We have contractors that every time the contract comes around
ask for more and more money.
We spend a lot of money and we continue to invest
a lot of money in our positive train control system,
which was the country's leading safety device
and operation system to keep our trains safe.
The trains themselves that we've invested in
are the top tier, low emission, diesel, biofuel, trains.
I shouldn't say diesel.
That's a bad word.
Biofuel, renewable fuel, locomotives.
So costs have gone up incredibly.
In certain instances, the individual counties
have objected to some of the high prices.
And that's what happened with our Antelope Valley line.
Because it's a line that starts in LA County
and ends in LA County, LA Metro decided to buy down
to subsidize some of those fares.
And that's, Henning, you referred to the 25% discount
that we had implemented maybe four, five,
maybe even more years.
How many?
10, see?
10 years ago.
So I don't see how we cannot implement this.
This is 14%.
The cost of inflation, let's just go back four years,
is going to be 14%.
We have maybe 4% this year, the year previous with three,
two and a half, three.
Just in those four years, to keep up with inflation,
it's gone up 14%.
But we've gone 13 years without an increase.
I think we have to bite the bullet.
I'm not saying that the 14% increase is going to solve everything.
I do know that we have a generous subsidy program where the student passes, we've got
a generous weekend pass from $10 to $12.
That's not a lot of increase for the weekend pass.
I just think it's something we need to do and we can't just kick this down the road.
As a municipal official, a city leader, I know the pain that occurs when you don't increase
your electric rates for 10 years.
You don't increase your disposal, solid waste rates for a period of time.
At the end, you have to raise it, and you always say, let's do incremental increases.
Perhaps that's what we need to do going forward, but I think we have to have an increase that
is near the 14% that's provided by that's recommended by staff. Thank you
director do I see well yes thank you very much. R and I have been here a long
time I was there when we went through the last fair increase also but I do
think it's it's important I'd look at at service reduction along with fair
increases is a death spiral, as far as I'm concerned. And I think it's important that
we need to get the budget decision made before we talk about fair increases. And I, you know,
that's why I agree with a lot of people that have said, well, why can't we put this off
until July and so I think if I might make a motion that we go ahead and
approve the recommendation one which deals with the with the pilot and put
it on permanent take care of that issue that we put off the rest of the
discussion on the fair increase until July after we've had a look at our
budget and bring that back them so that would be my motion
I died a little early to take a motion if I may let me see the any of the
directors I have my own two cents to put in here in a minute all right first I
need to close the public hearing we've not had any more public commenters
Public hearing is closed now. It's come back to the board for consideration
discussion and then motion if we may I've heard a lot of things here and I
do agree 13 years is too long I think an annual review is something should be put
on the board's agenda I know I serve on other boards as well one in particular
it always takes a cola whether it needs it or not and it has avoided major
increases that I see other similar agencies and other places take. And they
have wonderful equipment, wonderfully funded, and employee benefits are top
drawer as well. So I would note a couple of things here. We do not have a separate
dedicated funding source. Everything that we have now comes from our five-member
agencies. And that's a burden, as Director Najarian points out, is a big
burden that the agencies have to bear.
So with that, I would suggest and appreciate all of the people who came here to speak.
I'd ask you to do one other thing, if you can.
Please contact your state legislative representatives.
We have a request in the legislature to help fund us through the next year.
And the more that we contact our legislature, the more likely we'll get some of that funding
coming back here, which will help us carry forward hopefully without any kind of service
reduction.
It doesn't get us beyond a year, but it gets us a year closer to the Olympics, and I think
some other things can happen positively at that point.
So I would suggest that my agency, OCTA, is one of those that is looking at cutting back
its commitment.
And to go back and say that this board is not even taking a modest increase to help
with the burden, is not a good message I can take back.
So I would ask the question, Mr. Eichler, we're talking about the day fare passes going
from $5 to $6 and week, weekdays, $15 to $19.
a discount apply to those 50% discount? Yes, all additional discounts apply so if
you are a student you still get a 50% on those passes and if you are also EBT
card holder for low-income discounts you get an additional 50% so all the
discounts can be applied to those passes. So really the $10 to $12 increase is
actually a five to six dollar increase if we apply the dismount and the 15 to
19 dollar increase is really going 750 to 850 for some people with the
discounts applied. Correct. So and I do appreciate the need I hear that a lot
and I'm concerned about cutting back service. The surveys have shown that
that that's more detrimental than modest fare increases.
And so the service is really the key
to going forward, increasing our ridership.
And I think modest increases are needed.
I don't know what we gain
by postponing the fare discussion in a single month.
I know the budget discussion will have it,
my sponsoring board would be more difficult
if we don't at least take a modest step
or at some fair increase.
And so I regret that.
But we hit 13%, it doesn't work.
Our costs go up every year, we can't help that.
And so we need at least an annual look-see at that
and to do a little bit more to help cover that difference
that we have.
So I'd like to go forward, I'd like to increase our schedule.
But we're not going to get there unless there
are some fair increases.
So with that, we can bifurcate this, if that's appropriate.
And first, I think the first item one
is the continuation of the pilot program.
I'm not sure how long it is.
It should be continued on maybe indefinitely.
Or are we talking another year?
What's the timing on this?
Well, FTA allows a six-month extension.
Now the problem is we have already extended the pilot for six months.
So this is the second, you know, six month period.
We would have to request another waiver from FDA for another extension.
So this starts that process if we extended ourselves
or request a six month extension taking us to the end of this calendar year?
Yes.
Okay. Well, we can bifurcate, consider that first.
I sense there is a consensus on continuing the pilot.
Director McAllan, would you like to make your motion?
I will withdraw my original motion
and move the staff recommendation.
I'm sorry, I did.
I said I withdraw my original motion
and move the staff recommendation.
That would include all of the items?
That's right.
All right, do we have a second for that?
There is a second.
All right, in case there's a split vote,
Madam Clerk would you call the roll. Certainly. Director Tettomer, Vice Chair
Bergson, Director Spiegel, Vice Chair, second Vice Chair Tremblay, Director
Barger. I'm gonna abstain. Director Najarian. Yes. Director Sandoval. Yes.
Director Camacho? Yes. Director McAllen? Director Dutray? Chair Chafee? Aye. Let me
just count really fast. Is that a tie vote? It'll be a month. In LA County it takes us a
month to count the votes so see you in July. What? But today's the last? We
have we have six yeses four noes and one abstention council does that pass it
all right that actually completes the item as there is not a bifurcation in
this case all right I thank all of you and appreciate the public input you were
heard as you can tell by the split vote I thank you for that now let's go on as
Is to our next item on our agenda?
Which is item 8b?
This is our annual renewal insurance program. I miss one. I'm sorry. I missed
Okay
So here we go to a day. This is our
collective bargaining agreement with the amalgamated Transit Union Local
and would
Alberto Lara our chief people officer and Rodriguez Moisa our label counsel make any comments at this time
Briefly well, Chair Chafee and members of the board. Good morning
We're here to introduce the next item, which is a newly negotiated collective bargaining agreement between the Southern, California
Regional Rail Authority and the magma mater transit local 1277
The CVS for one year. It will go from July 1 of this year to June 30th of 2027
To go over the highlights of the agreement. I am pleased to introduced Labor Council Irma Rodriguez Moza Irma
Thank you so much and nice to see you all of you. Good morning
All righty, so I'm here to happy to report on behalf of your bargaining team that we have reached a one-year agreement with our labor
partner, Amalgamated Transit Union, local 1277.
It is for a one-year term.
We had hoped for a longer term, but in light
of the circumstances, we went with a one-year term.
We did have, quite frankly, a lot more bargaining sessions
than you would think for a one-year session, one-year term,
but we did also reach agreement on some other very
important provisions.
So who is covered by the collective bargaining agreement?
In essence, it's your rail traffic operations, staff members,
along with your communications coordinators
and customer relations representatives.
So you've got your train dispatchers,
your chief dispatchers,
and your customer relations representatives,
senior customer relations representatives,
and your communications coordinators,
your folks who have a lot of contact
with the members of the public that you serve.
Next slide, please.
All right, so I'm going to start with the economic item.
The agreement calls for a 3% increase in base wages
to be effective July 1.
We did reach an agreement with the union
to provide what we call a Me Too provision.
And the Me Too provision is important for a union,
primarily in an area where you have
some potential economic challenges,
because they don't want to reach agreement that says we get x.
And then later on during the same term,
we provide another set of employees
a number that's greater than that X.
And so we agreed on this one year term
that if during the term of this one year agreement
we provide an across the board cost of living adjustment
to non bargaining union employees
that is greater than 3% then ATU represented employees
will get that greater amount as well.
As an FYI this is your only union at Metrolink
And so that's why it refers to non-bargaining employees.
So that's what the Me Too provision is.
The approximate financial impact for this group of employees
is $143,538.
Next slide, please.
So we ended up reaching about 14 other tentative agreements
that related to non-economic items.
I've only listed a few here that I want to just highlight
for you that were important for us operationally for our team,
but obviously that we reached, that our labor partner agreed to.
The first one is a relief pilot program for dispatchers.
This is a program that will allow us to assign two dispatchers
to be specifically assigned to be available when an employee calls
out unexpectedly ill or for whatever the reason,
but an unexpected absence.
It will create efficiencies for us.
We're hoping we will do so.
It is a six month pilot program that'll occur at some point during the period of the agreement.
We also agreed with the communications coordinators who currently work for our 10 schedules
for a pilot telecommute program where they can telecommute, they come in every day right now,
one shift a week, and of course we have provisions provided therein
that require a minimum staffing in person, but this was important to them,
and we're doing it as a pilot program to see if, in fact,
given the nature of the work they do,
whether we can make this happen or not,
and it'll be evaluated.
As a point of information,
both of these pilot programs expire on their own.
They would have to be renegotiated
if we were to continue them at the next go-around.
Also importantly, we reached agreement with ATU
to allow us to hire temporary employees
to assist with our customer employment,
customer relations function.
There was legislation passed in the state of California last year
that requires us, if we were to contract
out any work conducted by bargaining unit members,
that we have to discuss that with our bargaining partners
and we reached agreement with them
to cover the FIFA World Cup.
I think this will be a very interesting process to see
if it helps us with respect to the Olympics
in a couple years to see if the manner
in which we reached this agreement is working,
will work for us at that point in time.
We also did agree to modify the dress code
to allow for business casual,
and that would allow for a genes in good condition.
The Federal Railway Agency is contemplating some changes
to how it is that they want us to process
Denial or revocation of certification
for our rail employees.
We simply agreed that we would reopen
at that point should the FRA, in fact,
decide to implement proposed regulations
with respect to certifications.
We removed one step from the grievance procedure
to simplify it.
Right now we have, I think it's five steps.
We're going to go down to four.
We still think it'll be very efficient.
It'll allow us to address issues in a more expedited manner.
We agreed to have a searchable electronic collective bargaining agreement.
And we also agreed to make some changes to vacation bidding processes
for our dispatch operations, which are very important for us operationally.
It'll streamline the process for the employees, but also allows us to say
that if an employee does not have sufficient vacation hours on the books at the time
of their bid of vacation, we can deny the vacation and they can come into work.
Again, that would allow other employees
to take vacation as well.
There had been a concern
that we were scheduling training on holidays.
We've agreed that that would not happen.
Again, remember, you have a 24-7 operation.
You operate whether there's a holiday or not.
And then flex time use
for our communications coordinators for holidays.
All employees at Metrolink receive eight hours
of holiday pay per holiday.
But the communication coordinators are on a 10-hour
schedule which means that they normally use two hours of vacation time if they
want to get paid the full ten hours. We have allowed them at the option of
management if they want to use those two hours as flex time during the same pay
period that we would allow that. Next slide please. And so at this point in
time are the professional staff. On behalf of your professional staff and
the negotiating team we would request that the board adopt this collective
bargaining agreement that would be for a one-year time period July 1 2026 through
June 30 2027 and we can answer any questions you might have. Thank you.
Other question to Director Spiegel. Two questions. One is on the me too. I'm
trying to understand what that really is. There's our employees that you're
bargaining with, and if outside employees that are having, I'm trying to understand,
what's the Me Too?
Absolutely.
So a Me Too provision, in this case, provides, right now we've provided to ATU, a 3% across
the board general wage increase.
If during the course of July 1 through June 30, the board passes a resolution to pay its
non-employees and across the board,
cost of living adjustment.
Not the normal maybe step increases
that people might get or a merit increase,
but an across the board wage increase,
then that is more than 3%,
you will also have to provide that to ATU.
And I do apologize, I did forget,
there is a provision that if you do provide a merit increase,
because you also, in your historical context,
have provided merit increases
for your unrepresented employees.
That's based on the reviews every year.
You set aside a pot of whatever monies you are.
We represented to them that in light
of the economic circumstances of the agency
that we would not be providing
the merit program this year.
So should you choose to provide the merit program,
you would also then provide to ATU
a 1% wage increase across the board.
And then the second question,
just confirming the holidays are the ones
We've declared as paid holidays, right? That is correct. I just want to confirm it. Thank you. Thank you
director Sandoval. Oh
I saw you
Okay
Thanks, mr. Chair, um, I don't
Not sure that I heard you correctly when you responded to director speakers question. You said that it applied to non-employees
Didn't you meet didn't you mean non bargaining unit or non represented employees? I did. Thank you so much
underrepresented employees within Metro link yes got it thanks for that
clarification thank you are there any other questions are there any public
commenters madam clerk on this item I haven't received any request to speak or
written public comments on this item okay I'll move the item I'll move the
idea okay I knew your light was on for some reason all right I will second it
And I want to thank our bargaining team for working out all these issues
Is there any objection?
Disagree, I see none. So the item is approved. Thank you. Thank you very much
now 8b
That's our insurance renewal
And we're going to have
Raymond Barrera senior council and risk manager will present the item
Good morning, chair chafee and board members Raymond Barrera senior council risk manager along with sharing castaneda legal
Council and associate risk manager also with us today as Jackie a from marsh USA
our longtime insurance broker
next slide
The authority requires insurance to mitigate its operating and major risks and board approval is needed to ensure
to renew the insurance programs policies of insurance for fiscal year 26-27. Next
slide. This year we have successfully negotiated insurance coverage for the
insurance program at a total cost not to exceed $17,277,480. A
2.62 percent increase from last year's premium and within the budgeted amount
or fiscal year 26-27.
That total cost consists of operating general liability
and other liability-related coverages in the amount
of $10 million, $33,089, which is a 5.5% increase in costs
from last year, and is largely due
to the federal passenger liability cap increase.
I'll discuss the liability cap on the next slide.
In response to Director Bergson's question
at the committee meeting, the quotes received
did take into account projected ridership decrease of 5%.
I wanted to address that.
Next part of the cost is the all property risk insurance
and related coverages in the amount of $5,838,682.
And that cost is flat compared to last year's premium.
and miscellaneous coverages, including auto, workers' comp,
crime, public officials, errors and omissions,
and cybersecurity at a cost of $1,405,709,
which is a 6.5% decrease from last year's premium.
Next slide.
The operating general liability insurance coverage
protects the insurance in the event
of a catastrophic incident, causing bodily injuries
and property damage to third parties.
This year, the Federal Rail Passenger Liability Cap
is set to adjust upward for inflation from $323 million
to $402 million in the next 30 days.
To comply with federal law and contractual obligations
to maintain operating general liability limits up to the cap,
we are being proactive on this front
and procuring at this time the additional limits needed
to meet the new cap amount.
Next slide.
This slide depicts the operating general liability
tower and the amount of coverage with a primary layer
of $20 million at the bottom, which
sits on top of a $5 million self-insured retention, followed
by four excess layers of insurance totaling $402 million
in coverage.
Next slide.
Here's a summary of the market conditions
for the operating liability market.
Re-insurance markets costs have increased
due to the frequency and severity
of insured casualty losses.
And has led to insurance carriers
reducing capacity or leaving the market.
The continuing occurrence of extreme jury awards
and increased litigation costs are pushing up claim values.
And lastly, the increase to the federal passenger
Liability cap potentially requires non-incumbent
insurer participation who typically command higher pricing.
Despite these conditions, we have successfully
constructed the liability tower at the higher required limits
at a total not to exceed amount of $10 million, $33,089.
Next slide.
Other liability coverages include terrorism,
employment practices, and pollution.
The cost of these coverages are shown in the slide.
Terrorism liability costs increase 14%
after several years of nearly flat increases.
Employment practices, costs came in nearly flat
from last year, and pollution liability
came in nearly flat as well.
Next slide.
Next part of the insurance program
consists of property insurance coverages,
which protects the authority's assets
such as maintenance and office facilities and rolling stock
in the event of significant damage or destruction,
the property market continues to be favorable to buyers
due to increased competition, expanded capacity of insurers
and growing flexibility with terms and conditions.
At this time, the authority's property coverage
of 100 million is almost finalized
with full commitment from the market
and will be in place for timely renewal
on the best terms and conditions
and not to exceed $5,600,000.
Additional property coverages include stand-alone terrorism
at a cost of $101,448, and boiler and machinery,
also known as equipment breakdown coverage,
at a cost of $137,233.
The total not to exceed for property renewal premium
is $5,838,682, nearly flat from last year's cost.
Next slide.
The final part of the insurance program
includes coverages for fleet auto, workers compensation,
public officials, errors and omissions, commercial crime,
and cybersecurity and privacy risk.
The total cost for these five coverages is $1,405,709.
With regards to the auto and worker's comp,
based on receipt of and its outstanding proposal
from the Hartford, we are moving these lines
from Liberty Mutual to Hartford.
The Hartford proposal was significantly better on price
and included improved terms and conditions for auto coverage
from the expiring policy as our high rail vehicles
are no longer excluded from coverage.
The change in carriers will result in savings
of approximately $100,000 in premium costs.
Next slide.
It is recommended that the board authorize
the purchase of insurance for the $26,000, $27,000
insurance share for a total premium cost
not to exceed $17,277,480, consisting
of liability-related insurance and a not to exceed cost
of $10,033,089, property-related insurance
for a not to exceed cost of $5,838,682
and other insurance coverages identified at a cost
of $1,405,709.
I did want to note, Chair Chafee,
you had asked if we get updated data with regards
to projected ridership due to future schedules.
We can take that information and submit that
through our broker directly to the underwriters
to evaluate if that would affect the premiums in our favor.
Next slide.
That concludes my presentations and can take any questions.
Director Norjorian.
I have a question, and that is how much coverage
do we require our consultants like Halstom to carry?
Quite a bit.
I would say I'd have to pull that contract up,
But I was involved in setting those limits.
And so I can get that for you.
But I don't have that in front of me.
And so does that in any way result
in any cost saving to our premiums,
in the sense that if they've got coverage that
could be tapped into those higher tiers that we're buying,
maybe should be less expensive because they would pop in.
It's a factor when we submit our applications.
It's all based on information.
And the underwriters do want to know the major contracts
that we have, like with Alstom and Herzog.
So it is taken into account to what
degree that gets into their calculation of rates
and so forth.
But that is a positive to see that that insurance is
in place from the folks that are doing major work for us.
Director Spiegel.
So if we waited any longer, would it go lower?
Because you first started down at $17,678.205.
And then you said the new price as printed in the agenda
is $17,478.592.
And now you're down $200,000 more.
Yes.
Why don't you just not do it yet?
We could have maybe.
Well, the board meeting is today.
There's only a couple of days left in the insurance here.
But I'm glad you pointed that out.
Because I would love for the property to be finalized today.
And it's just about to be finalized.
But I did receive an email late last night
that it's actually getting a little better at the property.
So it does help to be a little patient with this process,
even though it's a little bit stressful.
And we were just talking.
and I think, Ari, you'll remember this,
we used to not have the elected official on there,
and we were having some issues 20 some odd years ago,
so I make sure that's on there.
Yes, yes, I did see that history.
Yeah.
Are you looking at me for?
Absolutely you.
Boy, I'm getting it from all sides.
Director Teterberg.
Thank you very much.
So, it sounds like Chair Chafee asked about ridership
and how that might influence these rates.
Is that the only driver of it, or is it train or train miles,
or how does that work?
That's the number one metric for liability.
They also like to see our train counts.
Presumably, they're going to be down.
So that will be also information that we
will supply to our broker and underwriters
to let them evaluate, to see if that's going
to affect the premium.
So is it possible it could go down
if we made some reductions or we locked
into a one year arrangement?
I'll repeat what was told to me by our liability broker.
No guarantee, but if it's significant,
that can move the needle.
But no guarantee.
And this is typically provided to the market in February
so that we can be at this point.
We can't submit it during the policy term,
or wait for the next renewal.
OK.
Thank you.
I'll move the item.
Director Spiegel, anything further?
Oh, OK.
Yes.
OK, and we've got a second from Director McCowell.
All right.
All right, is there any objection?
Thank you for working on this, and hopefully the stats
will give us they got to be good stats you know help us with a reduction
possibly all right this item is approved there being no objection now item eight
see you're talking about the budget that has been the mystery we've been sort of
talking about and we have Tom Schammer our chief financial officer or you're
on good morning chair chafee members of the board I'm providing an update on
development of our FY27 budget. It goes without saying this has been a
challenging year and we're eager to bring this budget process to a close so
we can focus on providing the best possible service to our riders. I hope
that this presentation will and the conversation that follows it will
provide greater transparency and a clearer understanding of our path to
delivering the budget. Next slide please. Okay there are several factors that have
created what I call the perfect storm we find ourselves in today. They're not
isolated factors they are all additive to the shortfall we're facing. It all
started with a realization in the middle of the current fiscal year that
ridership projections were overly optimistic. A budgeted year-over-year
growth of 26% was not achievable despite an actual growth rate of 24% from the
prior year. In January we engaged our forecasting consultant to reevaluate
their modeling approach and to produce a refreshed forecast. The result was a 27%
decrease in forecasted ridership and that resulted in a 14.8 million dollar
reduction and anticipated fair revenue. This then becomes the baseline in which
we start the fiscal year 27. Second, we began developing an estimate of
our operating cost for FY27 which factored in contractual increases and
general inflationary increases. Assuming a 3% escalator on an FY26 budget of
of $352 million in expenses.
That's roughly a $10.6 million increase.
Finally, two of our member agencies
communicated financial constraints
that would require a reduction in their operating support
of $9.4 million in total from the FY26 levels.
At a macro level, when these three factors are combined,
we get to a shortfall of $34.8 million,
and there you have the perfect storm.
Next slide, please.
On to the details.
Next slide, please.
Let me provide a little context for the trends
that have brought us to this point,
starting with fair revenues.
This is an eight-year history of fair revenues
paid directly by our writers, excluding subsidies.
COVID obviously caused a massive hit,
but from our low point in fiscal 21,
we saw steady growth through fiscal 24,
and then you can see the flattening
from 24 to the 2026 projected actual.
This is not a trend unique to Metrolink.
This pattern shows up in commuter railroads
across the country.
Nonetheless, without an increase in revenue
to offset increasing costs,
the budget shortfall begins to develop.
Next slide.
As fair revenue is flattening,
our operating expenses have continued to increase,
particularly starting in FY23.
I won't be covering all the details
behind these increases today,
but one unavoidable increase
was the $7.9 million mobilization cost
to transition our train operator
and equipment maintenance provider in FY25.
That alone increased our year-over-year operating expense
growth by 3%.
The increase from 23 to 24 was 8%,
from 24 to 25 was 9.7%,
which included the mobilization, and from 25 to fiscal 26,
it's just over 5%.
Of course, when you pair that
with the trend in operating revenues,
member agency support grows by 9.2%, 5.7%,
and 9.5%, respectively, from 2023 through 2026.
With our current funding model,
It is unsustainable to expect our member agencies
to fulfill this entire need on their own.
Next slide please.
There's been a lot of discussion
about how the budget shortfall could result
in such a significant cut in service, as is being proposed.
Keep in mind the three elements of the perfect storm
I spoke of earlier, and it's important to understand
that in the context of Metrolinx cost structure.
This chart shows how a large portion of our costs
are fixed in blue, meaning they don't vary much or at all
with a reduction in service.
The categorizations could be debated,
but you'll ultimately end up with still a large chunk
of fixed costs that will not change materially
based on changes proposed to the service schedule.
Maintenance of way, shown up there as MOW,
a good example of a fixed cost. The tracks must still be maintained regardless of how
many trains Metrolink runs. Therefore service cuts must be significant enough to reduce
variable costs by enough to close the budget gap. Next slide please. Okay, I'd like to
talk about the budget development timeline. There have been some very recent developments
that are going to modify this timeline that you see in your packet. I'll try to point
these out as we go. This first slide touches on the major milestones from the
beginning of the budget process until now. Work on the budget began in September
of 2025. Original budget submissions were based on the optimized service schedule
which we had been running since October of 2024. This work continued into January.
However, in December, OCTA's CEO told CEO Kettle that he would likely provide written
notice of their intent to limit their support for Metrolink to 10% below their FY26 level.
That letter was indeed received in early January.
It was pencils down in finance while operations began developing a service schedule to accommodate
OCTA's request.
Since being appointed CFO in August of last year, I was closely watching ridership and
revenue performance.
It became clear over several months that projections used for FY26 were overly optimistic.
I requested that our ridership forecasting consultant revise their methodology and produce
the new forecast.
This was accomplished in February of 2026.
Unfortunately, that result came in $15 million
below the adopted budget.
It also meant that FY27 would start at a lower level
than we had assumed when this budget process began.
Further, the plateauing of ridership
that I just showed you a moment ago
suggested that we should be conservative
in our growth expectations for FY27.
In early spring, Metro shared that their CEO
was mandating 3% budget costs,
budget cuts across the agency.
It was not clear at that time whether the mandate applied
to Metro's support of Metrolink.
Budget development therefore continued based on the scenario
driven by OCTA's notice.
Then in early April, Metro provided written confirmation
that they would indeed be expecting a 3% cut
in their support from the FY26 level.
At that time, it was pencils down again in finance
and the budget process began anew with exploration
of a new service scenario that would produce reductions
requested by both our member agencies.
In mid-April, at a meeting of the member agency CEOs,
Metrolinx CEO was asked to prepare two additional scenarios
at the member agency's choosing.
The Metrolinx member agency advisory committee
convened to develop these scenarios.
Based on the above feedback, Metrolinx operations team
began working with Alstom, our train operator,
to develop viable schedules
that preserve the best possible rider experience,
while also achieving sufficient cost savings
to resolve our budget shortfall.
This work continued iteratively
through the first week of June.
On June 15, a special meeting of the MAC was convened,
and two of the three scenarios under consideration
to that point were eliminated.
A new scenario, continuing our current service level,
was added.
Finance began developing the two remaining scenarios
in tandem to the degree possible.
On Wednesday, June 24th,
VectorLink CEO was informed
that one of the two remaining scenarios
had been removed from consideration.
As of yesterday, all budget development
is focused on a single scenario
that assumes the service levels we operate today.
Next slide.
Okay, this period of evolving directives
put the budget process significantly behind
and my team is working hard to deliver a budget
as quickly as possible.
Our budget tools are somewhat rudimentary
and number crunching is slow and tedious.
In fact, our system wasn't even initially capable
of handling multiple scenarios simultaneously
and we had to enlist the help of our IT department
to reprogram the tool.
I've initiated a project to procure
a comprehensive automated budget tool in the future
that will enable us to respond more effectively
to circumstances like this.
Until that system is online, we must be very methodical
to ensure that our output is completely accurate.
And that is as frustrating for all of us
as it is for all of you.
This look ahead part of the timeline
has changed very recently.
It was based on assumptions from a couple of weeks ago
that have not played out as planned.
The preliminary budget will not be available to the MAC
on July 9th or to the Budget Audit and Finance
Committee on July 10th.
However, this doesn't impact the budget adoption date of August
14th at a special meeting.
The timeline is still aggressive,
And that's because my team and I are driven
to provide information to the member agencies
and this board quickly.
Adopting a budget under this timeline
and finalizing a service schedule with Alstom
is necessary to maximize the FY27 cost savings.
This schedule worked backward from the desired date
for any service modifications based on scheduled
board committee and MAC meeting dates.
Meeting this timeline will require shorter than normal MAC and member agency review periods,
which is understandably not ideal.
Should the board wish for more breathing room in the schedule, the decision should be made
with the understanding that service reductions could be delayed due
to all some notification requirements and that an extension
of the continuing resolution may be required.
The same is true, if a new scenario is requested,
other than the one that's currently being developed.
Next slide.
Okay, looking at the budget assumptions
we are currently using,
we are no longer evaluating two scenarios,
we are down to one,
and that scenario assumes the service levels
we're operating today.
On the revenue side, we've bought ridership
and revenue forecasting in-house,
So we can shorten the timeline required for this task
and using a consultant would have taken weeks longer
and cost quite a bit.
Ridership growth is assumed to be 1%
over FY26 ridership under today's schedule.
The budget includes fare increases to one-way tickets
and the SoCal day passes.
No new fare promotions are planned.
The student youth discount will remain at 50%
with 25% of that discount covered by an LC Top grant.
We will also retain the mobility for all 50% discount program
subsidized with state funds as well.
On the expense side, generally budget increases
were limited to 3% unless contractual increases
were greater.
No new headcount has been requested.
Salaries and budget, salaries are budgeted at 90%
of the employees scale instead of at 100%
as has been past practice.
There will be a 3% COLA but no merit increase.
All discretionary training and travel was cut 33%
from FY26 levels.
No special trains are budgeted.
Any special trains operated should be self-supporting
like the holiday train.
Next slide, please.
Okay, and again, last minute late breaking news
from a couple of days ago,
so this slide is a little out of date.
But we are now down to looking at one scenario,
which is the scenario four in green.
Some of them have nicknames,
some of them don't, we're at scenario four at this point.
So you can ignore the pink column.
The gray column is the optimized service level,
So that is the service we had been running
since October of 2024 and ran up until the point
in late March where we had to reduce service
due to mechanical issues we were facing.
So it's my hope, as I'm sure it's the hope of all of you,
that a solution is found that prevents these cuts
from being enacted.
But for now, we face the very difficult task
of delivering a balanced budget with the facts as they stand.
Next slide.
Here's a list of reductions we identified as an example
from the initial budget we compiled back in December
and January in direct response to the shortfall we face.
Some of these are reflected in the assumptions
I just shared with you and some are examples
of fiscal conservatism acknowledging
that we can make do with less
or delay non-essential initiatives
until more budget-friendly years.
Roughly $11 million in cuts represent about a 3% reduction
from the overall requests made by the various departments
at the beginning of the process.
This list is still in flux as the budget is still
being developed, and factors such as fuel prices
have evolved quickly due to world events
and may ultimately require adjustment.
Next slide, please.
Okay, let's talk about operating surplus.
Next slide please.
An operating surplus is generated when revenues exceed
the budget or expenses are below budget.
It's the net of the budget versus actual variances.
This five year history shows a range of results.
There are outliers like the $2 million deficit in FY22
and the $32 million surplus in FY24.
Because it's attention grabbing,
I've listed the driving factors
in the unusually large surplus in FY24.
I won't go through them all,
but you will see at the top of the list,
7.5 million was due to grant revenues
for the student adventure pass
that weren't budgeted due to the uncertainty
of that grant funding at the time the budget was prepared,
but it ultimately came through.
And another $5 million was simply due to unexpected
favorable interest rates.
Those alone explain nearly 40% of that surplus in that year.
That said, in my role and during the development of the FY27
budget and ongoing, as I have the opportunity to dig in,
I can commit to you that I will be looking closely
at all of the agency's budgeting and spending
to identify areas where we can do that more conservatively.
In recent board meetings, the directors
have discussed the possibility of retaining operating
surplus.
Can we go to the next slide, please?
Sorry.
We've talked about retaining the operating surplus
to create a reserve for tough economic times
like we're facing today.
Over the last five years, each member agency
has handled their surplus differently.
But it's always at their discretion
how Metrolink handles these funds.
In some cases, member agencies have requested refunds.
In other cases, and quite frequently,
they request that we apply the funds we have on hand
to current invoices such as their regular
quarterly support payments.
In a recent discussion with the MAC,
we learned that several of the member agencies
have already earmarked the funds you see on this schedule
to apply to their standard FY27 commitments
rather than to use them to increase their contribution
towards the current shortfall.
Next slide, please.
Okay, what are the near term solutions for our dilemma?
Next slide, please.
Our CEO continues to lobby for state funds
to reduce or eliminate the shortfall.
There is no formal commitment of funds at this time.
I don't know, Darren, if you'd like to add to that.
Nope, nope.
That's the latest and greatest.
I'm sorry, did you?
Yes, yeah, no, Miss Spiegel is gonna give me a hard time.
I'd love to be able to respond with some good information.
At this point, in spite of our efforts,
of course you all know we do have a state budget,
but we do not have state budget trailer bills yet.
State budget trailer bills will be where we would
experience any funding that may come from the state,
so we are in a wait and see mode at this point,
likely until after the legislature's summer recess,
so we wouldn't hear anything
until early August at the soonest.
Thank you, and I'll just add it's not on the slide,
but I'm sure it's on all of your minds right now
how tenuous the funding structure of Metrolink is.
There's a growing need to pursue a dedicated funding source
to relieve the strain placed on our member agencies.
We've presented several options to you in the past,
and we can bring them to you again if you wish.
Right now, the immediate focus should be on resolving
the FY27 budget issue, but it might be good to follow up
with a discussion of a long-term solution
that will preserve the essential regional amenity
Metrolink offers to nearly 20 million
Southern California residents.
Next slide, please.
Okay, that concludes my discussion
of the operating budget.
I have a single slide on the capital budget.
Next slide, please.
The overall FY27 capital budget stands at 162 million
as indicated on the slide.
Based on the board's advice, the team
has held successful meetings with all member agencies
and presented this budget and its associated projects.
Staff have answered all questions
from the member agencies.
The current budget aligns with their contribution thresholds
conveyed during those meetings.
There are a handful of outstanding member agency requests
that are still being addressed,
but we don't expect a material change to the overall budget.
The final proposed capital budget will come to the board
in August along with the operating budget.
Next slide.
That concludes my presentation.
I will do my best to answer any questions.
Director Barger.
Thank you for the presentation
and I'm looking at slide 11,
where you say that you're leaning towards scenario four,
is that correct?
We are working only on scenario four today, yes.
So it's safe to say that scenario one is off the table, correct? Okay. That's good
And are you working with the member agencies on scenario four as it relates to at least with Metro?
Moving forward because I I look at this and this seems like
Movement in the right direction and I want to make sure that our member agency there's communication taking place at staff level
director Barger, so
The we are trying to
Finalize based on scenario for a budget and how then that spreads out amongst these the five member agencies
When we have that it is our intent to share that immediately so they know what that looks like until we've run
the
Scenario for all the way through the budget model. We do not know what the various shares are for each of the five
I understand that but you kind of have a
framework and I don't want what happened last time where there's a reaction to
versus working with and that's why I'm I'm concerned about that and then having said that our
books close on
when
Each year we adopt a budget
The books close on June 30, but we are operating under this continuing resolution for the additional three months
So, I mean, understand that we're up against a wall.
I mean, that's, and we still don't have a budget.
I mean, and I appreciate your opening remarks,
explanation in terms of some of the challenges you've had.
But at the same time, I think we should,
I would ask, and I'd be happy to facilitate
a dual path working with our metro agency.
Because, Darren, I mean, being very candid,
I don't want what happened when it was a reaction
two, these significant cuts and writers with a lot of angst
and concern about elimination of some of the service.
And I would just ask that we work in concert
or work together, not understanding
there's going to be no commitment,
but at the same time, dialogue so that no one's blindsided.
And I'm speaking from Metro now.
I can't speak for the other member agencies.
But when I look at the AV line, and I
know that our CEO made it clear in terms of the expectation,
and I know I've made it clear in terms of the expectation
for the AV line, because many people depend
upon that to come down, there has to be a give and take.
And I'm saying that for Metro too.
There has to be a give and take.
And so that was my ask.
And Director Barger, it's absolutely our intent.
as soon as we have that information,
because we've had this back and forth,
we certainly know what scenario four looks like.
It is gonna be a matter of, okay,
what does this mean for each of the five counties?
And ultimately, given what we have here
in the request to just proceed with scenario four,
we're also taking an assumption
that hopefully all four county, all five counties agree
that that is going to be the plan moving forward.
So that is our intent is to make sure that that is available
as soon as it's completed in Tom's shop.
And I appreciate that.
I know that, and I'm assuming that the Orange County
still has a 10% on the table and Metro still has three.
Other agencies have promised status quo or equal or,
I mean, how does that work?
We have communications from generally increases,
well from Riverside and San Bernardino
over the current fiscal year
of somewhere between five and six percent.
So when you say increases, it's to cover the actual costs,
not an increase for services,
it's just an increase in their contribution
to cover actual costs.
Their availability of additional revenues, yes.
So I do see, I think I see where you're going,
Director Barker, we do have this question
As we've started crunching numbers,
scenario four is certainly not as expensive
as our optimized schedule that we had been operating,
but there is a concern about what that number looks like
and how we'll hit the OCTA or LA Metro targets.
Yeah, and then just for point of clarification,
on the rollover dollars, I mean,
I think that Director Najarian had brought it up
at the last meeting.
I may be giving you credit for what credit's not due,
but in terms of just rolling it over and using it
rather than giving it back to the agency.
When you talk about that,
you're saying the agencies say
they've already programmed it in?
Or explain that, dummy it down for me, what do you say?
Yeah, so they're still keeping their threshold
for Metro and OCTA and the expectation of the others,
though not a specific mandate of a target.
But they are keeping those expectations
for the next fiscal year.
So the intention is when they get an invoice next week
to pay their support, they will use these funds
we have on hand to pay that support.
It's not necessarily saying we're lifting our ceiling
and expectations for how we will fund MetroLink,
so it's not extra money as a reserve might be tapped
for raising it.
And that's the way it's been done in years past, correct?
That has been the practice.
So what I would ask, and I think, and again,
I'm gonna put words in Director Nisharian's mouth,
but I think that from our standpoint,
We were okay with rolling it over to cover,
not necessarily, I mean, to roll it over.
So that that is actually monies that you all keep
versus deducting from the following year,
which is what it sounds like they're doing.
They're just saying, next year we're gonna,
instead of giving you $10, we're gonna give you $8
because you had two leftovers.
Just don't give new money.
Right, and so I would, respectfully as a Metro board member,
that we discuss changing how that occurs rather than have it be a rollover that
is applied to the next year's that it be a rollover that you all keep and apply
toward yeah who said that yes see yeah that's right a change is something that
our board is going to have to discuss but I don't think that's unreasonable
because if we've allocated that money, that money should be used.
And if it's going to better facilitate services for at least
Metro's use, I'm happy with that.
Thank you.
Thank you.
I see Director McKellan.
Thank you very much.
I'm very pleased to see that the doomsday scenario is not
being pursued anymore, and it seems to me
that scenario four provides.
Director McAllen, I'm sorry to interrupt you, sir.
Before the legend leaves the room, though.
Yeah, nice trying, Jerry.
I'm sorry, Director McAllen.
But we have, we are, this was during my CEO remarks.
And we just, we have a meeting in July, but.
All right, then you can go ahead and leave
and I'm sorry, Director McAllen.
It's just too important.
In the event he's not back,
we're losing a legend for the moment, maybe.
I'll come back one day.
The legend is leaving the room.
The legend has left the room.
So I was saying that you know, this scenario number four
would provide the fastest path to budget adoption
because we already should have the associated costs
should be known and capable of being quickly quantified
and it aligns with our current ridership which we know
and so my question is,
is there any way that we can get this
to the budget committee in July,
expeditiously working that so we get it
to the budget committee in July,
along with member agency allocation,
so that we can look at it then and see where we're at.
As Tom had said, that certainly was our intent.
We, it took some time to get some information from Alsom.
Our finance team is literally burning the midnight oil.
If there's any way, Director McAllen,
the team will do what it can, but it is,
and because there are other factors that go into it,
particularly as we start running it through
the All Share component of it, that takes more time.
And so I've had this conversation with Tom,
I know the desires to try to get there,
but just the schedule of being able to do it
may be problematic.
It's certainly our hope.
I understand and appreciate all the work that finance is doing on this and it's a big job,
but it certainly would be most helpful if we could expedite it as quickly as possible.
The goal being to get it to the July budget meeting.
We are in high gear and I will keep the board informed as to in the committee about our
status of being able to make that you know I want us to be accountable to
trying to make that happen it certainly was our intent we just had some couple
things go not in this timely a fashion as we'd expected from people that with
the agencies we needed information from and that delayed us by five days which
literally can change things so but director McAllen we will do everything
we can I will do everything I can to try to ensure that it happens thank you
We have more comments, Director Tediver.
Thank you, so following up on that,
I hear that the July 9th MAC is in question,
as well as the July 10th Budget Committee
is in question in terms of bringing it to that,
those two groups?
That is correct, although our hope is in particular
with the MAC who does go through this
with the fine tooth comb after we've had a chance
to do the all share formula elements,
There will still be several weeks for the Mac to review it
before it would go to the full board.
So there will be time, it just wouldn't be in time
because of the budget committee.
We're operating under such a compressed schedule
that we won't be able to make the Mac, question as to,
but certainly a desire to make the budget committee.
And then we would have several weeks
before it would go to the July board
and an August special meeting.
So make sure I'm clear.
There will be some MAC review and a committee review
or this is possibly going straight
to the regular board meeting on the 24th?
The latter, there will be MAC meeting,
there will be MAC review before the July board meeting.
Tom, chime in if I'm getting any of this
because you and I just talked schedule yesterday, so.
try to keep it straight too, the world's been spinning.
But yes, that's correct.
It would go to the Mac, and then a couple of weeks later,
it would go to the full board.
OK.
And so we would approve a tentative budget,
and then it goes out for approval by everyone else
and comes back?
Or August?
Go ahead, Tom.
Yeah, it would come back in August for adoption
at the August 14th meeting.
the presumption that if I'm clear is that between July 24th and August 14th
all the other agencies are to approve and so that it becomes finalized here on
the 14th? Correct. They would they wouldn't adopt necessarily they all each
agency has their own timeline for adopting Metrolinx budget but sort of
getting max blessing and and maybe informing all of you as to your agency's
position on the budget that would happen so we would adopt and if the other
member agencies any of the member agencies haven't adopted on their own
side then our adoption would be contingent upon their their subsequent
adoption okay it's a little confusing yeah okay and then regarding the state
money is I'm assuming there's a hard and hard deadline where we're past the point
where state help is gonna be difficult to incorporate.
Is there a drop dead in there somewhere?
Generally, yes.
We've looked at the middle part of August
is when we would need to have something from the state.
And then, secondarily though,
just because of the uncertainty that we have out there,
no matter what we do if we wanna go back
to higher levels of service, say the optimized schedule,
We have we have lost conductors and engineers during this time of uncertainty. So if it's for us to bring back
Not optimized schedule should the funding flow will take several months to try to bring crews
Back on board to operate that service. So it would look at something in
Later in the year early part of 2027
Generally speaking to without causing massive disruption mid-august is when you sort of think we have to have a clear direction from we have
Have a really good idea. Yes. Okay, so I make sure I understood that and on the reserve issue
I I would benefit since I'm one of the new ones here in terms of understanding what the JPA says about any of that
I got the impression there may be some language on our reserves are to be dealt with and
It'd be helpful for me and maybe there are other board members
I don't know as to what the JPA provides for or speaks to on this issue
County Council of JPA does not address surplus issues. All right. Do I see another lights?
Thank you chair, I am glad to hear that we are focused in on scenario four
It's a step in the right direction
I know a number of my colleagues are speaking more specifically about
What is going to happen between now and in the next few months next or next few weeks?
I should say. But I want to speak more broadly about just our budget process. It is my understanding
that, and I raise it because this has been arguably a mess. It is not, we've had people
here obviously worried deeply about whether Metrolink is going to exist because of what
we've experienced and the rhetoric over the last few months. It is my understanding that
as part of our budget process,
we typically provide a preliminary budget
to our member agencies.
And it's an iterative process
where there's a back and forth that happens
over several months that allows us ultimately
to pass a budget.
It is my understanding we did not provide,
even after we heard that there would be a potential reduction
from both Metro as well as Orange County,
that we still don't have a budget
that we have been able to show our member agencies.
Am I understanding that correctly?
And I'm not talking about, you know, slides.
I'm talking about actual real numbers
that our teams look at from both the Metro side
in this case and Metro.
Director Sandoval, so I think that was absolutely our intent
from the way we, when we started the budget development
process, as we always do in September, October
of the fiscal year.
And that was what we were working on when we got the
notice from Orange County that they were going to come in
with a number that we were going to have to try to
address as a reduction target.
So as Tom said, we were going along with the budget, just as
we normally do every year.
And we put pencils down because we had to go back to
our operations team and say, how are we going to build?
Now we have to come up with a schedule
that can meet Orange County's target reduction.
So we had to stop mid course.
And coupled with that, the issue related to,
and we were accounting for the escalations.
We did know about those.
So we had factored those into our process.
So then we get the OCTA issue.
But then what was another curveball for us
was the ridership forecast that we had to,
that became very clear was gonna be a problem.
So until we had a new ridership forecast
that shows revenue, we again had to put the budget process
on ice while we got those new numbers.
And then, so set it down again.
And then thirdly, when we got the information
from LA County Metro, we had to do that same process again
where we had to settle it.
We had to go back to operations, say,
okay, now we have this number that we have to try to get to.
What schedule can we develop?
That was the schedule that when we had all of those inputs
is what led to the doomsday scenario.
The schedule one, scenario one.
That, as soon as we had that information
and we had been able to develop that budget
and had an idea that we were gonna be able to meet
our agency balance budget requirement,
the OCTA target reduction and the LA Metro target reduction.
That was what led us to a high-level budget
that was the doomsday scenario.
That was what was gonna get the three items.
When I shared that with the member agency CEOs,
the reaction we got was, we don't like it,
we certainly did not like it at MetroLink.
And this member agency CEO said, well, we would like you to go to the MAC and come up
with two additional scenarios that meet the needs of the various agencies.
That's, as Tom was alluding to, we locked the MAC in a room with our staff for seven hours
out in Pomona and we came up with two additional scenarios.
We have to take those scenarios then to Alstom to figure out how do we crew these scenarios.
So, this has been an extraordinary unprecedented year,
and it's only been coupled by the fact
because of how this information has come out,
and the fact that there's really difficult decisions
that have to be made because of dollars.
This is not our standard process.
It is absolutely not.
But we have tried to be responsive.
As a member agency, when I got the word
that OCTA was gonna have this number,
Even before I got the official letter in writing
from Mr. Johnson at OCTA, I told the operations team,
we're gonna expect the $5.2 million reduction here.
How do we start scheduling now?
How we would factor that in?
And then we had these other elements
that I described earlier.
So we have done everything we can to try to be transparent
and clear and responsive as we get information
from the member agencies and as we've got an input.
This has just been an extraordinary situation
that none of us at all like,
and it's not a process we're proud of,
the way that this transpired this year,
but what we have tried to do was to be responsive
when member agencies have brought their information to us
and we try to make sure we're gonna be able
to meet that requirement of the member agency.
I can appreciate that.
I would just ask that as we go into the next year,
there's always the possibility that member agencies may
have to reduce their contributions.
There may always be the possibility
that our forecasts may not be accurate,
but you still have to be able to produce to the best
that you can a budget on time for consideration.
So I just ask that whatever lessons learned from this year,
being the perfect storm as we call it,
is that we try to minimize any of these issues
that have arisen.
I think a part of it, at least from what I can gather,
is that communication has been an issue.
And I'm not suggesting that it's easy
when you have so many challenges
that you're trying to confront.
but we have to do better next year
as we approach the budget process.
I believe the step that this board took
to bring back the committee is important
because I can tell you on Metro,
we have multiple meetings leading up to our final budget.
One could argue perhaps too many,
but I'd rather do too many than too few
so that we don't find ourselves in a situation
where we're trying to figure this out.
here we are in June, and at least for my city,
and I think probably for your cities,
you've already passed the budget for the next year.
And so I just, I raise that.
I understand that this is a very collaborative,
this is a partnership.
We wanna make sure we get this right,
but I think it's important for us to learn from
this past year as we go into the next year.
Thank you, Chair.
Thank you Mr. Chair just inquiry of Don of general counsel having sat here now
over two hours working through this and I really applaud everybody's efforts I
have three specific macro fiscal initiative motions that I would like to
make regarding this whole process but this is a receiving file item so may I
proceed with those or would you recommend or over the Brown Act can I
not do that or can I hold it till 8d but I would really like us to I would like
to propose some motions this morning coming out of this coming out of these
discussions even though the item is marked as a receiving file you can make
a motion provided it's related to that item as to your other two or three
motions if they're more related to a future item on the agenda I would hold
for those the last one would be related to the fair structure issue that we took
care of earlier in the meeting but if I can go Mr. Chair then I would like to
proceed if I can and then you can veto me relative to Brown Act if you think
I've gone astray. I'm looking at you and Jeff going okay. The first one is that I
would move that consistent with Director Sandoval's remarks that we ask staff to
report you know informed by this experience I'd like us to look at
consideration of structural changes and how we go about preparation, presentation, and
adoption of the budget, specifically from a timeline standpoint, informed by this experience.
And I'm, in context, you know, two-thirds of our expenses are fixed, one-third is variable.
We've got to get to a better process structurally, so my motion to cut to the chase, number one,
that we task staff with a report back to the board on how we can for suggestions
on structural changes to this budget process and we have that as a board
agenda item on or before December 31 of 26. That would be my motion. Is that going to
have more work or is that doable for you? By December? Yes, absolutely. We've
definitely got lessons learned from this process and as Darren said it's not
Business as usual. This is not our normal process or the one I intended when when we embarked on this back in September
So yeah, we can definitely talk about those things
That's number one
here
It's been moved in a seconded
My mic I would comment that this whole process depends on the agencies providing us where they are at at an early time
in not
Changing or coming up with some different thing over not going to fund as much as we did that needs to be known
further in advance
Yeah, that that has caused some of the differing scenarios here
So I think that needs to be in part of that process a deadline by which agencies can
Give us their sight of where they're at
All right, they moved in second as any objection to the motion
any abstention
All right, no motion number two, wait, wait a minute just
Just a comment
you know we have
At our agency we have short-term transit plans that cover five years that the various
Agencies agree to
And it would I think be very helpful if we had a short-term
Plan here looking out five years that every of our member agencies and Metro link
Review and agree to that would include include our you know our schedule and all of that
Plus our monies that that are will be available in those five-year periods so
That five-year look ahead in a strategic kind of plan
Short-term plan would be very helpful
it would
And it have to be agreed upon by by all the member agencies and metro
That's something that I think we ought to do
Yeah, thank you for that. But let's finish with the motion
Is there any objection to that? Okay that motion carries you have a second motion like to me. Sorry number two
Specifically, it's a segregable issue, but it's related
Supervisors Spiegel and burger talked about
directors
Talked about this before but it's the consideration of rollovers here-to-year and the retention of surplus funds
I would move that we direct staff to bring back a specific agenda item to the board for
Resolution discussion and resolution of this issue on or before December 31 of 26 so we can talk about it and get it done
Okay, any objection to that one all right it carries also third one
Please and final and general counsel may cut me off at the shoe tops on this one
So let me know but it has to do with fair increases and it's the same
It's another agenda item that we direct staff to do honor before December 31 to 26
that we
places an agenda item the annual consideration by the board for potential fair changes and
Discussion of placing that into policy so that each and every year this board considers
or potential fair changes and have a report
from the applicable committee
or coming back to the full board.
So we look at that every year.
So we're not faced with this.
Now I'm gonna editorialize the large,
huge increases each year.
So I would ask for that.
Don, I don't know if that can be part of this agenda item.
I'll second it.
Fares are no doubt on today's agenda
and I would leave it to the discretion of the chair
since you've already heard that item,
whether to accept it,
I would recommend accepting just don't want to lose this
Thread based on what director sound of all's comments were a while ago, so I make that motion
Okay, there's been moved in a second any objection to that
Like I think an annual look as part of the budget process actually needs at the fairs
and how it relates to service whether you're losing or
Service by raising the fairs or it's the net result
I think that's part of we need to look at all right in the objection to that motion
Thank you for your patience. You know okay, all right chair. Chief. He may I
Chair may I ask just a clarification so staff is tasked to come back and or report out on structural changes
Understand there's three things. That's one is to say look at the structural changes
It could be considered for the body to come back and discuss those structural changes. Mr. Chair. Yes relative to the budget process
Yes, I just want to clarify like the rollovers
We're not pre determining anything other than to say we're gonna have a conversation about it. You're directing staff
That's correct number two. The last one is to similarly. Let's have a conversation about fair increases
Whatever frequency whatever way that's all part of a policy conversation up ahead
Just a slight variation we would actually have an agenda item where we could consider and adopt
Fair increases each year. It wouldn't be just a discussion. It would be an actual. I'm sorry an action item
Just want to make sure I was clear. Thank you very much. Okay. Thanks
I think that would first be presented to new finance and budget committee so they can chew on it a little bit
I think that's the idea too. I'm all for chewing on things
A lot of big mouthful. All right
All right. Now I think this item is completed as a receiving file item. Although we had some motions
And with that, let's move on and if we can move a little more quickly
I was just going to suggest Mr. Chair the next two items are action items
They are approval of the three-month continuing resolution for both the operating budget and the capital budget
You can we can certainly have Tom do this
we've had we've had responses from the various member agencies that proceeding with the
Continuing appropriations resolution is that they're there's a they're amenable
So we're asking for your approval on both
I'll murder both items
We've this all involves what we've been talking about this last hour
So I and there's any need for any further staff and put on these items
See any so it's been moved and seconded on these items and it being known objection. The items are approved
we come I think to our
legislative update
So you Jeff you did hear the what the chair said about moving expeditiously
Just a good nose. I prepared remarks for only an hour and 35 minutes. Okay. Good morning chair
Next slide please. It's noted in the report Metrolink legislative delegation leaders senator Maria Elena de Rosso of Los Angeles
Senator Catherine Blake Spear of Laguna Hills and
Assemblyman one Korea Korea of Palmdale lead our request for 35 million dollars of state assistance to fund the operational short
fall in Metrolinx FY26-27 budget. The shortfall, as you know, is due to a number of ventilated
factors, including outsized operating cost increases due to inflation and vendor supply
costs, member agency subsidy reductions, lagging farebox recovery, and lack of a dedicated
funding source at the state or local level for passenger rail operations. In addition
to the organizations providing on-record support of our ask, in your report, this week the
Valley Industry and Commerce Association, also known as VICA, submitted a letter of
support to legislative leadership and the governor. Chair Chaffee, too, as board
chair, has submitted a letter urging legislative passage of this request for
which we are sincerely grateful. Metrolinx advocates are fully engaged
with the administration and leadership on this request, as of today, although it
does not look as though a budget trailer bill containing supplemental funding for
any transit purposes will pass by July 3rd when the legislature breaks for a
month for summer recess returning August 3rd. We will continue to advocate this
priority for inclusion into the first moving trailer bill on return of the
legislature from recess and we'll keep you apprised. Regarding cap and invest
program amendments covered in your report, CTA has enlisted the support of
transit agencies statewide to urge the legislature to adopt into legislation
and pass changes to the amended regulation adopted by CARB last in May,
which Metrolink testified in opposition to, by the way, with between two and three
300 other impacted organizations, and to actively advocate with state legislatures and administration
officials in an email and phone campaign to urge their action to restore at least a portion
of the funding to tier three programs like TIRCP and LC Topps, which Metrolink has relied
upon heavily to sustain its service from being completely defunded going forward as the CARB
action has effectuated.
That process is ongoing, Metrolink is supportive, and we are participating, and we hope the
effort will result in at least some of the funding lost to be restored for these programs.
Next slide, please.
As noted in the report, the Build America 250 Act, H.R. 8870, is a five-year surface
transportation authorization bill aimed at funding and setting policy for U.S. highways,
transportation, and public transit, including public rail.
On May 22nd, the House T&I Committee approved the $580 billion package by an overwhelming
bipartisan 62-to-2 vote.
For next steps in the House, other committees of jurisdiction must still combine their specific
portions into the package before it heads to the floor, and we may see a four vote in
mid to late summer.
However, in the Senate, the action is much less far along.
It's neither introduced nor released its version of the bill, and our advocates advise that
there remain deep party divisions on certain policy issues as well as top-line numbers.
There are many other things, too, occupying floor time and attention of the Senate during
the summer, including passing all of the appropriations bills, of which there are 12, the National
Defense Authorization Bill, the Iran War Powers Resolution, and the Affordable Care Act Health
Insurance Premium Subsidies.
So, in this election year, it appears increasingly likely that the current reauthorization law,
the IIJA will proceed by continuing resolution
when it expires on September 30th,
likely a new authorization bill will pick up
after that next year.
This, while not certain, is not necessarily a bad thing
because the funding levels of the IIJA
are generally at historic highs for formula funding
and also for grant program funding like Chrissy.
Also, I would say that in the bill
does provide $875 million for Olympics mobility,
largely uses the same structure
that was provided in funding this past year,
which means that the Olympics funding
runs through the MPO for us, GAG,
and the County Transportation Commission.
The commuter rail is an eligible recipient,
so any of Metrolinx funding would be passed
through the commission and considered in conjunction
with its overall needs.
This funding structure, though,
is only in the House bill.
In the Senate, the Appropriations Committee
was scheduled to mark up its first four FY27 bills yesterday,
but that was postponed until after July 4
due to the absence of Senator McConnell.
There remains significant division
among Senate leaders on top-line funding for appropriations.
It's uncertain how this will play out,
but it's presumed that a compromise
to pass an appropriations package will prevail
over a government shutdown in an election year.
Finally, regarding earmarks, your report lists four
Metrolink-related projects making it
into the House T-Hud bill, including two applications
that we submitted through Representatives Aguilar
and Luz Riva's office, and a project submitted by OCTA
through Representative Dave Minh and RCTC
through Representative Mark Takano.
We sincerely thank the congressional members
and our two partner member agencies for their partnership
in getting these four projects into the House bill.
In the Senate, we are pleased to inform
that Senator Padilla has included
Metrolinx community project request of five million dollars to fund the Arroyo
Seco bridge deck replacement project among his final submissions into the
Senate bill yet to be introduced. Likewise we are deeply appreciative of
the senators efforts on our behalf and we'll keep you apprised as the bill is
introduced and moves through the Senate. Thank you, includes my presentation. Take
any questions. All right does any director dare ask a question at this
point thank you for your continued eyeballing all of the legislative things
we appreciate that. All right now the report we've been waiting for the brief
report we've been waiting for very brief report yes sir let it rip all right a
World Cup working it's really been a great learning experience for us these
first couple of weeks we're seeing some we're seeing a lot of positivity and of
Of course, we want to get everybody out to the fan zone today here at LA Union Station.
But it has been a good experience.
You can see what we've had.
We have had our staff volunteering at various locations throughout the system helping spectators.
And in fact, I will be in helping out at Union Station later today.
Next slide.
And so every year we get to have some summer interns that join our, through the Construction
Management Association of America, they join our project delivery team or program delivery
team. These are three of four. I don't know if we had all four, but this meeting went
long, and maybe someone had to go back to class. But we have three students from Cal Poly
Pomona, and there we go. And while a local from Altadena, Sophia Brown is at the University
of Washington. So I guess you say go Huskies there. So they join us for the summer. We
We get a great experience having some engineering students helping out our program, and they
get a valuable experience in working with us and seeing a little bit about what happens.
So boy did you guys get a chance for a really cool board meeting that you got to attend
today.
What doesn't happen on the engineering side.
So glad to have you guys on board.
I hope you have a great summer.
So thank you.
And the next slide.
And that's it because we dealt with the legend earlier because that's what we were going
to talk about.
Thank you, Mr. Chair.
That concludes my remarks.
Thank you.
Board members, any further remarks?
Mr. Chair, very, very briefly because if I did another motion, it's like thrice-cursed
and quadruple even more so.
I won't make this a motion, but I express the fervent hope since Director Wapner and
I on the LA-28 ad hoc committee have not met for several months, and I am really concerned
about that.
hope is that staff will carry a specific agenda item on LA-28 back to this board
on or before the October regular board meeting because by then staff will have
been informed by our World Cup and FIFA ridership experience. I would hope that
that agenda item include LA-28 preparation, federal potential for
hopefully some kind of federal funding, not banking on state funding, and what
our service levels looking ahead now based on what we're doing from a budget standpoint
would look like. So that is my fervent hope. I'm not going to make that a motion. Thank
you, Mr. Chair.
You probably get a unanimous vote. All right. That I see no further comments and thank everyone
for your attendance and being patient today. You're adjourned.