november 4, 2015 - fiscal year 2015 (fy15) year - end...

® ""'"•'"' c'""" M et r 0 M•hopoHt•" T~".,.,,,i;." '"'"•'"' One Gateway Plaza Los Angeles, CA 90012-2952

213.922.2000 Tel metro.net

October 30, 2015

TO:

THROUGH:

FROM:

BOARD OF DIRECTORS ~

PHILLIP A. WASHINGTON ~ CHIEF EXECUTIVE OFFICER

NALINI AHUJA \ ~~. EXECUTIVE DIRE~OR, FINANCE T

SUBJECT: FISCAL YEAR 2015 (FY15) YEAR-END BUDGET FINANCIAL PERFORMANCE

ISSUE

This is the year-end budget financial performance report for FY15. This report demonstrates that Metro is able to deliver safe and reliable transportation services within budget.

DISCUSSION

Summary of Revenues and Expenses

For the period of July 1, 2014 to June 30, 2015, the Combined Net Revenues and Expenses for the agency was $654.4 million under budget. Total expenditures were $5,035.6 million, or 90.7%, of the $5,554.5 million budget, representing $518.8 million under budget. The higher than expected sales tax revenue, other income and capital reimbursement impacted revenues received by Metro. Because of these, total revenues were $4,544.8 million, or 103.1 %, of the $4,409.2 million budget, representing $135.6 million above budget. Please refer to detailed sections of this report for additional information pertinent to these overall variances.

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Revenues/ Expenses($ in rrillions)

Total Carryover Revenues from Prior Year Total Current Year Revenues Total Expenses/Expenditures Revenue Over/(Under) Expenses

Budget

$ 1,145.3 4,409.2 5,554.5

$ -

YTD June 30, 2015 %of

Actual Variance Budget

$ 1,145.3 $ -4,544.8 135.6 103.1% 5,035.6 518.8 90.7%

$ 654.4 $ 654.4

1 The FY15 final year-end c losing will not be available until December 2015. Therefore,

actuals in this report are based on Accounting's year-end 2nd preliminary closing.

FY15 Year-End Financial Performance

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November 4, 2015

Summary of Revenues

• Sales Tax, TOA & STA Revenues

Sales Tax, TOA and STA revenues ended the year slightly higher than budgeted , at $22.8 million above budget or 100.8% of budget. Growth of sales taxes was slightly higher than originally forecasted, reflecting continued local economic recovery.

State Transit Assistance (STA) revenue is dependent upon actual consumption of diesel fuel. The information presented below reflects actuals for the year end , which translates into slightly higher than expected diesel fuel usage and related revenue.

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YTD June 30, 2015 Over/

(Under) %of Source ($In rrillions) Budget Actual Budget Budget

Sales Tax, TOA & STA Revenues

Proposition A $ 740.0 $ 745.7 $ 5.7 100.8%

Proposition C 740.0 745.7 5.7 100.8%

Measure R 740.0 746.0 6.0 100.8%

Transportation Development Act 370.0 374.0 4.0 101 .1%

Subtotal Sales Tax & TOA Revenues 2,590.0 2,611 .3 21 .3 100.8%

State Transit Assistance Fund 104.7 106.1 1.4 101.4%

Subtotal Sales Tax & TOA Revenues 1 $ 2,694.7 $ 2,717.5 $ 22.8 100.8%

Operating & Other Revenues

Passenger fares $ 351 .1 $ 343.6 $ (7.5) 97.9%

Toll Revenue 30.7 58.1 27.4 189.2%

Advertising 21.5 21 .6 0.1 100.5%

Investment Income 5.1 18.6 13.5 366.4%

Other Income 2 31 .7 73.5 41 .8 231 .8%

Subtotal Operating & Other Revenues $ 440.1 $ 515.4 $ 75.3 117.1%

Total Sales Tax & Operating Revenues $ 3,134.8 $ 3,232.9 $ 98.1 103.1%

Capital Reimbursements

Federal Grants $ 624.8 $ 639.2 $ 14.4 102.3%

State Sources including Prop 1 B & Other 632.1 630.5 (1 .6) 99.8%

Local Grants and contributions 17.5 42.3 24.7 241 .1%

Subtotal Capital Reimbursements $ 1,274.4 $ 1,312.0 $ 37.5 102.9%

Total New Revenues $ 4,409.2 $ 4,544.8 $ 135.6 103.1%

Carryover Revenue from Prior Year 1, 145.3 1,145.3 - 100.0%

Total Revenues $ 5,554.5 $ 5,690.1 $ 135.6 102.4%

1 The actual Proposition A , Proposition C, Measure R, and TOA Revenues represent actual amount

released by the State Board of Equalization for the year. The actual for STA represents actual amount

released by State Controller's office. 2 Includes CNG tax credits , lease revenues, vending, and other miscellaneous revenues.


• Passenger Fare Revenue

Passenger fare revenue of $343.6 million was under budget by $7.5 million, primarily due to lower than expected boardings. At the end of the first quarter of FY15 (September 15, 2014), Metro implemented a new fare structure, allowing riders free two-hour transfers with the payment of the base fare, using a TAP card. This new fare structure projected an increase in fare revenues of $20 million in FY15, with an expected temporary ridership decline. However, Metro was experiencing a decline in boardings even before the implementation of the new fare structure. This decline in boardings has been trending down for the last 17 months, beginning in April 2014. The FY15 boardings was 20.2 million, or 4.3%, below the budgeted boardings of 473.4 million.

While boardings are declining, the new fare structure has proved to be successful and beneficial to our riders. As expected, riders are now using their TAP cards to take advantage of the new two-hour transfer policy. While fare revenues came in under budget by 2%, the fare per boarding exceeded the target of 74¢. The FY15 fare per boarding is 76¢, representing a 7¢ increase from last year's (FY14) fare per boarding of 69¢.

• Toll Revenue

Toll revenue of $58.1 million exceeded the budget by $27.4 million as a result of better than anticipated ridership of the Metro Expresslanes projects. There were 461,000 transponders in circulation currently, representing a 161,000 increase over FY14. State law requires the net toll revenues generated from the Metro Expresslanes be reinvested in the corridor from which they were derived, pursuant to a board approved expenditure plan.

• Advertising Revenue

Metro's advertising revenue finished FY15 on budget based on the terms of the new contract. The small variance is due to the prior year-end accrual.

• Investment Income

Investment income of $18.6 million exceeded the budget by $13.5 million due to greater than anticipated cash balances. The higher than anticipated balances are the result of slower than expected draw-downs for capital projects, call for project, transit operations and planning subsidies during the period. Metro continues to invest unused funds according to the Board approved investment policy.

• Other Income

Other income of $73.5 million exceeded the budget by $41.8 million due to several factors:

FY15 Year-End Financial Performance Page3

o The amount of $19 million CNG tax credit received in FY15 was not budgeted because the legislative action was taken and renewed retroactively for one calendar year (2014) after the FY15 budget was approved.

o Metro received one-time ground lease revenue of $6 million in FY15 for Taylor Yard and 151/Boyle Heights. An additional $4 mill ion of ground lease revenue was also recognized in FY15.

o Gross revenue of $8.6 million was recognized in FY15 and will be offset by the expenditures also recognized in FY15, as a result of an Accounting change.

o Ground lease deferred revenues of $2.4 million was recognized in FY15, but budgeted in FY14.

• Capital Reimbursement Revenues

Capital reimbursements are comprised primarily of federal , state and local grant revenues which ended the year above budget by $37.5 million, or 102.9% of budget. Capital grants are recognized on a reimbursement basis driven by related capital and planning expenditure activities. Federal grant revenue is over budget by $14.4 million due to higher than budgeted expenditures. State grant recognized $1.6 million less revenues and related expenses than budgeted. Details of the related capital expenses can be found in the "Summary of Expenditures" section of this report.

Summary of Expenditures

Overall, the expenditures totaled $5,035.6 million, or 90.7%, of the $5,554.5 million budget, representing an underrun of $518.8 million of the budget. Variance explanations are discussed below.

• Summary of Expenditures by Program

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Expenditure ($in rrillions)

State of Good Repair Bus Rail Other

Subtotal State of Good Repair Construction Expansion Metro Bus & Rail Operations

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Union Station, Expresslanes and Parking Operation Subsidies Planning, Highway and Other Projects Debt Service Total Expenditures

FY15 Year-End Financial Perfonnance

Budget

$ 229.4 $ 85.6 79.3

394.4 1,674.9 1,415.3

34.7 1,287.8

411 .4 336.1

$ 5,554.5 $

YTD June 30, 2015

Under I (Over) %of

Actual Budget Budget

285.3 $ (55.9) 124.3% 80.9 4.7 94.5% 51.2 28.1 64.6%

417.4 (23.1) 105.9% 1,545.3 129.6 92.3% 1,426.3 (11 .0) 100.8%

22.4 12.3 64.5% 1,083.6 204.1 84.1%

188.6 222.8 45.8% 352.0 (15.9) 104.7%

5,035.6 $ 518.8 90.7%

• Summary of Expenditures by Department

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Expenditure ($in nillions)

Program Management

Highway Project Delivery

Program Control

Program Management, Transit

Regional Rail

Subtotal Program Management

Chief Executive Office

Chief Executive Office

Chief Policy Office

Labor/Employee Relations

Lamps

Risk/Safety And Asset Management

Subtotal Chief Executive Office

Board of Directors

Communications

Congestion Reduction

Finance And Budget

Information Technology

Operations

Planning And Development

Vendor/Contract Management

Total Expenditures

Budget

$ 219.2 $

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1,692.6

135.9

2,057.3

84.2

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36.0

124.0

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277.6

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1,089.8

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1,565.2

295.0

53.2

5,554.46

YTD June 30, 2015

Under I (Over) %of

Actual Budget Budget

11 7.0 $ 102.2 53.4%

9.5 0.1 98.6%

1,561 .5 131 .1 92.3%

77.9 58.0 57.3%

1,765.9 291.3 85.8%

64.7 19.5 76.8%

1.6 0.6 71.4%

41 .5 (5.5) 115.2%

116.6 7.4 94.0%

37.1 (5.9) 119.0%

261.4 16.2 94.2%

25.3 4.1 86.0%

49.2 1.2 97.6%

54.7 31.8 63.2%

1,063.3 26.5 97.6%

47.1 3.0 93.9%

1,535.1 30. 1 98.1%

184.9 110.1 62.7%

48.8 4.4 91.8%

5,035.65 $ 518.8 90.7%

• Metro Bus and Rail Operating Expenses

Metro Bus and Rail operating expenses is $1,426.3 million for FY15, or 101.2%, of the $1,415.3 million budget, representing an unfavorable variance of $11 .0 million.

The largest unfavorable variance is attributed to a full reconciliation of our Federally approved indirect Cost Allocation Plan (CAP). The CAP is adjusted on a rolling 2-year reconciliation and redistribution basis.

The main factors contributing to unfavorable variances are related to labor and fringe benefit charges in our Facilities, Rail Fleet Services, and Rail Maintenance of Way (MOW) functions. Reprioritization of facility cleanliness campaigns as well as increased MOW efforts related to capital projects has required additional staffing and related overtime hours. It is Metro Operations management's intention to reevaluate


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and reduce overtime usage in future periods. Favorable variances are attributed to contract execution delays as well as invoice payment/aging provisions of Contract and Professional Services, as well as lower than planned natural gas prices and vendor billing receipt for rail propulsion power invoices.

Under/ '. .· '. .. (01ler) %'of .. , :

ExDense Category($ In mllllons) • Budget .:'Actual .Budaet· .Budget' Comnierit5 ·'

Labor & Fringe Benefits Operations Department:

Maintenance $ 308.5 $ 324.5 $ (16.0) 105.2% Majority of the negative variance is due to overtime for mechanics ($9. 7M) and fringe benefits that follow total wages ($4.3M). Total Rail line operations experienced a negative variance of $18M which is slightly offset by a positive total Bus Une operations variance of $2M. Many factors contribute to the negative variance, but regardless of the specific reasons, the amount Is considered excessive and an effort has been initiated to cut the O/T by 25%

........................................................... ................. ..................... ~i:i.f.'!'.~~· ............•....................................................................................... Strategic Planning Rail 2.4 7.2 (4.8) 295.0% Overage caused by employees transferred to Rail Strategic Planning for

operational start-up and systems integration activities associated with Expo Line Phase 2 and Gold line Foothill Extension Phase 2A. Those expenses

........................................................... ............... . ................... ............. ~~.C?~!~.~-~.~-~~rR~-~.~~-~~~.~P.!!!!~!.':'.~.~: ................................•........•......•..•..... Service Development 11.6 9.0 2.6 n.9% Positive variance due to vacancies including the associated fringe benefits

.......................................................... .............. . ................. ··············· ············· ~.~~-~~!!~f-~~r~~!.~.~-'!-~P.-~~.i.~!: ........•.•..•..•..•........................................... Transportation Bus 415.0 411.0 4.0 99.0% Favorable variance is attributed to vacancies associated with wages and

fringe benefits resulting from conversions of bus operators to train operators and bus operator recruiting difficulties.

Transportation Rall 63.7 6L2 2.5 96.1% Favorable variance mainly due to the train operators positions not being filled completely until the opening of the Pasadena and Expo line extensions.

Operations Executive Office 2.5 2.0 0.4 82.3% Positive variance resulting from use of fewer than expected As Needed and

.......................................................... .............. .................. ............... .............. ~r:i.~~-~i:i.P.~~~-~!!~!: .........................•..•........................................................ Vehicle Engineering & Acquisition 2.6 3.2 (O.S) 120.6% Negative variance resulting from much greater use of mechanics than

anticipated for supportinR eauipment failures and warranty campaigns. Operations Department Sub-Total $. 806.3 $ '818.1 $ d1l.81 101.5% All Other Metro Departments Sub-Total 76.1 68.9 7.3 90.5% Above average number of vacancies created a large positive variance

including wages and associated fringe benefits. Chief Executive Office with $1.0M, Information Technology with $1.7M, Finance & Budget with $2.SM and Vendor/Contract Management with $2.2M account for almost all of the variance.

Total'labor&'Frf111e:~nefltS · L882.5 $'.. , ,, 887.o '$'' : (4.6) 100.5% ·: ·.' .\ ,_ .. _'"·./;'.:·. •, ··. ·'

Non·Labor Expenses Contract & Professional Services $ 193.5 $ 175.4 $ 18.1 90.6% The positive variance is primarily the result of timing issues with late Invoices

and project delays. The Chief Executive Office with $5.7Mand Finance & Budget with $10.2M accounted for most of that variance.

Materials, Parts & Supplies 94.6 95.0 (0.3) 100.3% Positive variances resulting from new operating vehicles performing better than the retired ones were offset by increased costs for maintaining an aging non-revenue fleet.

Fuel, Propulsion Power & Utilities 82.2 77.7 4.5 94.5% lower than budgeted natural gas prices coupled with sporadic Invoicing for rail propulsion power as well as fuel conservation initiatives all contributed to the positive variance.

Purchased Transportation 40.7 40.2 0.5 98.7% Results closely mirrored plan. Insurance & Pl/PD 47.5 45.0 2.5 94.8% The positive variance resulted from favorable renewal rates with our

insurance carriers. Allocated Overhead 58.9 9L3 (32.4) 155.0% Timing differences between fiscal years. Reconciliation and redistribution is

part of the rolling 2 year Federally approved indirect cost plan approved by the FTA.

Other Expenses 15.4 14.7 0.7 95.7% Relatively small offsetting variances to a number of expense categories. Finance & Budget made the largest positive contribution to the variance with $3.4M which was budgeted for regional fare equipment, but the transaction wasn't completed In FY15. The Chief Executive Office had the largest negative contrl bution to the variance with -$2.2M for a OHS Transit Security Grant Program which wasn't budgeted, but had to be completed by August 31, 2014 to be eliRlble for the funds.

Total Non·l.abOr Expenses -·. .$ 532.8 $ ;539.3 $ (6.4) .101.2%, ,. ,·

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rotaleu• &: Rall Operatlnli Expenses $,1,415;3 $:" 1;426;3 $ '(11.0) . 100.8": . - •':", ...

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FY15 Year-End Financial Perfonnance Page6

• Union Station, Expresslanes and Parking Operation

Other Metro Operations category of expenses is related to the operation of Union Station, Metro Parking Program, and operation of the 1-10/1-110 Expresslanes. These expenses show $22.4 million, or 64.5%, of the $34.7 million budget. The $12.3 million variance is the result of billing delays with Operating and Maintenance contractor for Expresslanes. Additionally, there were various delays in completing the design work improvements on the Expressl anes.

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Other Metro Operations ($in millions)

Metro Expresslanes 1-110

Metro Expresslanes 1-10

Parking Program

Union Station Operations

Total Expenditures

Budget

$ 15.9

16.0

0.8

2.0

$ 34.7

• Metro Capital/Construction

YTD June 30, 2015

Under I (Over)

Actual Budget

$ 100 $ 5.9

10.1 5.9

0.7 0.1

1.7 0.4

$ 22.4 $ 12.3

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%of Budget Conments

Year-end billing has been improved from 42% of the

62.8% budget in the last quarter to 63% at year-end. The variance is due to the slow billing for O&M acti\ites and only 30% in the completion of the Express lanes

63.1% impro1.ement that designed in budget.

S 1 OOk variance is due to contract pending of Cal trans 85.8% park and ride lot transfer.

Program with Los Angeles Homeless Ser\ice Authority to minimize the transient encampment and interference with transit operations by not transit persons deferred

80.6% and included in FY16 capital project proposal.

64.5%

The FY15 Capital Program totaled $1,962.7 million, or 94.9%, of the $2,069.2 million budget. The $106.5 million underrun is due to contract award I notice-to-proceed delays, invoice processing delays, and project schedule slips. Project underruns from large Capital, Measure R, and Construction Administration projects totaled $129.6 million, while State of Good Repair (SGR) Projects exceeded the budget by $23.1 million, primarily in the bus acquisition area.


.. .·:·lt·-. .. YIJ) June.30,0 20'5 , . '· ; Ui:sd~r/

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· proJeCtfCat.eooty,; <- " : .·. %~f/' co~m~nts ... : .'

.. ($' 1n::mf1uons)· c:·, :~:·. e~_dget Actu~I ... (OV..er)_· · .Bud~et_- "

·'•. '•· • r .. ; · . ·Budget : '.: .. ..

: .•.:. '/,

Variance associated with the 550 40 foot Bus Buy procurement Bus Acquistion $ 156.4 $ 193.2 $ (36.8) 123.5% Project exceeded FY 15 budget but w iD rerrain within approved

Life of Project (LOP) budget.

Bus Facility lmprowments Div13 expenditures Increase associated with an approved ITid-73.0 92.1 (19.0) 126.1% year LOP increase; increased efforts on Bus Md!ife & Bus Fae

and Maintenance Def Maint projects but all projects w Ill rerrain within LOP.

Bus Total $ 229.4 $ 285.3 $ (55.9) 124%

Rail Fae lmprowments & IVBL Stn Refurbs ahead of schedule offset by delays to LRr Stn

Wayside Systems 64.7 67.6 (2.9) 104.5% Sound Enclosures, PknRide Demo, SCADA, Fiber Optic Loop

Upgrade, WOL/MRL Ped Underpass & ,Vertical System projects

Rail Vehicle Pree & Rail Variance driven by P3010 Light Rail Vehicle invoicing delays.

Vehicle Maintenance 20.9 13.3 7.6 63.6% Also delayed progress for Heavy Rail Veh procurement, P.2000

Signal Sys Upgrades & P865 / P.2020 LRV Mdlife projects.

Rail Total $ 85.6 $ 80.9 $ 4.7 94.5%

Project delays for various systems upgrades including HASTUS,

ITS I Communications $ 17.6 $ 14.4 $ 3.2 81.9% FIS R12, TAP NFC, Customer Rel M;r TAP App development, UFS Security & Customer Svc Help Desk projects.

Non Rewnue Vehicles & Contract delays & invoice tilTing issues w Ith Vertical Lift

Warehouse 16.0 5.7 10.3 35.9% IVbdules, Monrovia Hi density Storage Equipment, ASRS Mni

Load Project & a variety of delays to Non Rev Veh procurements.

Delayed progress for Union Stn Renov Ran, Bus Aaza Paver

Regional Projects 34.0 23.0 11.0 67.6% Retrofit, Regional Rail Signage, & New lVM Acqns. Acceleration for USG Generators, Union Stn ReRoofing & l'vRL Gating project

Delayed Security Kiosk instaUations & EOC progress & delayed Safety and Security 11.6 8.0 3.6 69.0% procurement for lklion Stn Smart HD CCTV. Transit Passenger

Info System project grant funding delay.

Other Total $ 79.3 $ 51.2 $ 28.1 64.6%

SGiU~~OJEgTS , .

$ 394.4 '$ 417.4' :$· (23.1) ..

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''. . . ..-... Pre Meas R Large Capital Design & construction delays with UC Pad bridge & unprocessed

Project Closeouts & $ 28.1 $ 18.9 $ 9.2 67.2% closeout bilfings for Gold Line Eastside Ext rail vehicles. Mnor

Orange Line offset due to Lankersh!m Transit Center change orders.

Crenshaw LAX Transit I Crenshaw Design/Build (Q'S) contractor progress less than

Southwestern Yard 311.9 266.0 45.9 85.3% planned coupled w Ith a delay to the SW Yard contract award.

Underrun was identified in Q2 and realized thru year end. RC Design/Build (ll'B) Contract award delay resulted in

Regional Connector 229.4 298.4 (69.0) 130.1% understated cash flow plan at FY15 budget subrrittal. Shifts in Gen Reqs, Sitework & U'G activities resulted in greater than plan expenditures.

Westside Purple Line 351.1 378.9 (27.8) 107.9% Year end overrun due to invoicing from the ll'B Contractor to

Extension Sec I support General Requirements.

Westside Purple Line 62.0 53.6 8.4 86.4%

Less than anticipated progress to date for prelirrinary

Extension Sec II engineering activities thru year end.

Expo I 19.5 (0.1) 19.6 -0.4% Design efforts suspended for the Washington Siding project Alternatives under consideration to detemine path forward.

Expo II 333.9 256.0 77.9 76.7% Construction progress on schedule for planned Revenue Service Date, Variance due to invoice billing delays. Construction progress on schedule for planned Revenue Service

Foothill 256.2 210.2 46.0 82.0% Date. Underrun largely due to invoicing delays for TPSS and light poles.

Measure R Light Rail Vehicle production largely on schedule: Per contract 4 LRVs

Vehicle Procurement 58.5 49.8 8.7 85.1% have been shipped to Metro. Underrun due to delayed invoice

sublTittals from the vendor.

Meas R Planning & Project Measure R Transit Aanning variance due to invoice tilTing and

24.3 13.7 10.6 56.4% progress delays. Overhead allocated costs to be expensed in Administration the current FY period.

IY!~a~J~ ·~i'..L;a.ooe ;qa_p1~_1, :.$1~.6'14.9 $1,545.3 . $.12~.6 ·9~ •. 3% .. ; . .>. :,,, ·; '.)< -~.:•·

: .• .· .a~i:l?rot-N:- ,$.2;0~~·.2 .~$1',962.T .$106.5, ,.'.:94.9~ A.~a·is.antic!pated at 95% OflJIJdQet tOt~al:Y~iJ:ij~·~~~:c' .; "

FY15 Year-End Financial Perfonnance Pages

• Subsidies

Subsidies totaled $1 ,083.8 million, or 84.2%, of the $1 ,287.9 million budget. The $204.0 mil lion underrun is primarily due to delays in draw-down of programmed funds by non-Metro operators.

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Cateqorv (S In niloos) Budget Transit

YTO Juno 30, 2016

Under I (Over)

Actual Budqet %of

Budget Cornnents

Commuter Rail 88. 7 62.5 26.2 70.5% -A-cc- e·s--s ·-S-eN-.·c-e_s ________ ,_ __ 73:2

54.9 18

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- 75.0% Delayed municipal operator drawdowns, project delays and year end

_P_rop_A_lne_en_t_h_e ______ -+----12.- 1 t---7.-9+---4-.2- 1---65-.3-1% accrual reversal.

Fare Assistance 10.5 7.7 2.8 73.3%

Congeslion Reduction 2.5 2.5 0.0% No municipal operator draw down from Toll Revenue Subsidy.

Caltrans has been slow to bil l as project, HOV Extension from the terminus

1----0_1he_r T_ra_n_s_i1 ________ t-__ 2_.9-+-___ 1._9+-__ 1_.o-+-__ 65_ .5_%-i·t_o_2_8_th_S_t_or:_l·l10 ~_orth~~E!!rienced many delays.

Transit Total S 623. 7 S 429. 7 S 94.0 82.1%

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Freeway

Local Traffic System

Regional Surface Trans

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64.8 s 29.3

24.2 s 13.1

63.2 s 47.5

Cal trans i nvoices were rejected for re-submittal due to i ncorrect billings.

Some reversals of accruals are not yet billed which contributed to larger

s 35.5 45.2% variance. s 11.1 54.2% Cities delaying i nvoicing, some projects deferred until next fiscal year.

s 15.7 75.2% 91 call projects budgeted under the RSTI mode, 9 call projects under

·- Transit Capital mode and 15 project.sunder TOM mode. Cities incur

-~-~~-~.P!!~~_?E!_~_lions ______________ ..... 3.4 o.o 3.4 0.3% multiple delays such as envi ronmental clearances, right-of-way

··-·······-·· -·····---····· ·-·---···-·-· acquisi tions, etc. Staff are working with the Cities to expedite the delivery

15 Transportation Demand Mgml 3.0 0.5 2.5 17.7% and billing of the projects.

------------+-----+---- - Events w ere held on schedule. A total of four open streets planned in

FY15. Ciclavia· The Valley and Heart of LA, Beach Streets-Grand Prix and

16 Open Streel 2.0 0 1 1.9 3.5% Pasadena. BillinR is del ayed and no accrual.

11 ,___M_ls_c_~_1aneou __ s_Ca1_1 _For_P_roi~·ec_1s __ -4-___ o_._9~ __ o_44-__ o_.5-+-__ 4_3_.9%--1------------- - --- - ------1 18 Call For Projects Total s 161.6 s 91.0 s 70.6 66.3%

19 ~~~~~~~~---·--·----·---······ ··-.. •••••••••• ··---·······- . ............... ····-· -····-· ·········--··························-·······-···· ·-···-· ·······--··-········--·······--·· ·· · ·· · · · 20 Local Relum s 427.5 s 430.9 s (3.4) 100.8% Municipal operators' draw down based on actual tax revenues which were

21 ·5·i,;;ei·&-·H,:;y5····---·-···········-·········· ==~2.4~6· :==:J~ ~-- ·····(2~3) _:_09.3% h_i_gh __ e_r_th_a_n __ b_u_dg~e __ t_. ---------------·-----i 22 Pedeslrians & Bikes 7.8 4.7 3.1

23 Population Total S 469.9 S 462.6 ~ (2.6)

24 Federally Funded

25 Very Small Wilshire Bus lane 23.7 s 11 .5 s 12.2

26 E~.9.~~~~ . .P.-~~~---·--·········· -·-···---~·-~- ·---------~~ 2.4

3.3 1.2 2.1

3.1 1.1 2.0

2.1 (2.1)

10.2 9.8 0.4

s 46.2 s 29.2 s 17.0

·----- ------ ----

10.0 1.4 8.6

s 96.3 $ 71.2 s 26.1

s 0.2 s 0.3 s (0.1)

s 0.2 s 0.3 s (0.1)

$ 1,287.9 $ 1,083.8 s 204.0

FY1 5 Year-End Financial Performance

60.3% Project are moving slowe~_!h~_n_e~xp~e_ct_e_d_. --.. - - -------1 100.6%

48.5% Project and billing delayed.

Remaining budget for Bus Shelter implementations (City of Monterey

Park) started laterthan anticipated. The City released RFP for construction

59.3% ~! .!~!.~!!~-~-~~!!~~.!~_g~-~9.!.S.:. _________________________________________ ···-·-· Funds were budgeted for the design, fabrication, and installation of

Countywide BRTshelters. The fi rst invoice of $63,933 was paid, however,

the remaining Invoices will be charged to project/ task 405401/01.02 In

36.4% FY16.

35.5% Invoice is delayed by a quarter.

Federally funded pass through projects. Sub-grantee's implementing and

NIA moving projects forward.

73.9%

142.8%

142.8%

84.2%

• Planning, Highway and Other Project Expenses

10

Planning, Highway and Other Project expenses totaled $188.6 million, or 45.8%, of the $411.4 million budget. The variance is primarily due to underrun of Highway Planning Projects, Measure R Planning Projects, and prior year over accrual/unallocated overhead.

YTD June 30, 2015 , ;. -. , Under/

·.·. ·· ·:1~.r)' :'.;·::.: PraJectl~i~gor} ($1n mllllo~) .. ·~eudgit'.. ~ .. 'Attual ~ ~; B~drtet';

;: '

Congestion Management $ 58.8 $ 44.2 $ 14.6

General Planning and Programming 25.5 20.9 $ 4.6

Governmental & Oversight Activities 33.4 27.2 $ 6.2

Highway Planning Projects 119.4 65.9 $ 53.5

Measure R 108.8 48.0 $ 60.9

Property Management & Developmen 20.2 16.8 $ 3.3

Regional Transit Planning Projects 22.6 9.7 $ 12.9

Regional Activities and Others 1.2 (56.8) $ 58.1

Active Transportation 14.9 8.1 $ 6.8 Policy/Sustainablllty Projects

Pass Through 0.9 1.1 $ 10.21 Other Planning Programs and Studies 5.8 3.6 $ 2.2

.. ,L' '

:%'of~~.: , ' . '. . BUdRet•;; . . .: "; I .·• comments'~; .. : ' ' '././ }/ .: .. /{ ;,

75.2% Majority of the variance Is related to the Freeway Service Patrol (FSP) Project and Kenneth Hahn Call Box Program. FSP's budget variance Is due to 1) vacancies In three tow service contracts and the use of lower cost contracts to partially fill the vacant service; 2) contingency funds not utilized In a number of contracts; 3) delays In the procurement of the FSP communications system upgrade and regional evaluation projects; 4) delays to award 19 new FSP contracts. The Kenneth Hahn call Box Program's variance Is due to 1) Invoice delays; 2) a decision to withhold on the development activities for the current 511 system and refocus on the development of a new 511 system.

82.0% This project number Is used by various cost centers In Planning Department for other planning and programming activities, both labor and non labor expenses. Budget variance In primarily In Grants Management, Strategic Financial Planning & Programming, Active Transportation cc4320and Metro Research Program. A scope of work Is being developed to conduct a Bus/Bike Interface study and build from the guidebook that was developed In coordination with Operations to highlight best practices. RFP will only be released in FY16 Q1. $sm: Contract to prepare Benefit/Cost Analysis for TIGER grant applications Is on hold until FTA announces funding cyde. $400K contract to develop grants database and $300K consultant assistance contract to develop Grants Polldes, Procedures, Training, Organizational Review In response to Regional Grants Management audit. Dept. only Initiated procurement for database system in Aug 2015 (too late for FYlS).

81.4% Variance Is due to less labor cost and works spent on Planning project by Operations, leaal, OIG and Civil Rights Departments.

55.2% The majority of the variance Is related to the 1-405 Sepulveda Pass Improvements Project. Project doseout is taking longer than origlnally planned due to project complexity, slowing the rate of actual expenditures and billing. Also, PPP projects were placed on hold during the year.

44.1% Refer to the table under "Measure R Expenses" section of this report for variance explanations. Measure R projects listed indude Plannlna costs defined here.

83.5% Union Station Master Plan SCRIP Coordination, sustainability pilot and entitlement coordination deferred to FY16. Economic Advisor, Design Consultants and environmental work contracts for Joint Development projects are pending contract selectlon. Westlake JD deferred.

42.8% Strategic Advisor Services were not needed during FY15. Systemwlde station mock-up canceled due to staffing shortage, work slower than anticipated. Customer Facility State of Good Repair project was delayed due to staffing and board decision on letter Designation Update. letter Designate Update project deferred to FY16. Two BRT technical study contracts were not awarded until August 7, 2015 (of FY16 ·not FYlS).

-4613.3% Final FYlS book has not been dosed vet by Accounting. Current variance is due to prior year overhead accrual reversal and unallocated current year overhead using the Federal Approved Cost Plan Rates. The overhead will reconcile and be allocated as part of the normal rolling two year Federal Cost Plan Approval Process.

54.5% Majority of the variance Is related to Active Transportation Polley (ATP), carbon Emissions Greenhouse, Substanability Environment and Energy Conservative Initiative. Variance is due to Proiect award and billina dealvs.

120.9% 62.0% CMP deficiency plan updates has not taken place due to state guldellnes not being

released as previously told. Data collection program to validate Bicyde Model Development is pending due to Input from jurisdictions. Procurement for bicyde and pedestrian model development started in FY16 Ql. Contract for Coordinated Plan was

11 delayed in procurement process. 12~To-u~l-P-la-nn-ln-1L-.H-1-im·-,wa-1~v&-.Oth~e-r-,.-•• -1-$-•_4_11.4_.-1-$-.-.-188.~6-1-$-.~222.~8-1-~-4-~-8%-t-.-............... _._ .......... ..-.. ........ "'""'"'~.:;,;,._~~~-.-_-:~-.. ~~ .... -.~--...--~~ .• -~,....,...~

FY15 Year-End Financial Perfonnance

• Debt Service Expenses

For FY15, there was a cost overrun of $15.9 million representing the net of several separate transactions including:

o Payoff of commercial paper which had not been budgeted (approximately $51 .2 million)

o Lower interest rates than budgeted combined with delays in issuing Measure R short-term financing (savings of approximately $12.8 million)

o Interest costs that were capitalized (instead of expensed) as a result of changes in government accounting requirements (approximately $22.8 million)

• Summary of Unspent Budget (by Program)

~~ .. ~ - !o!ilil!l.11 - ·- ·-

......... -""-- _,.. b" -.11111.-.11. ...... ,. ... II f \I ~1111 I . ' U''Ulllltli:Utt.; - ~-

Metro Bus & Rail Operations s (11.0) $ (18.7) $ 7.7 Shortage in fare re..enue and Grant reimbursement.

Metro OlHER Operations 12.3 12.3 Restricted to Express Lanes & Union Station Properties

Metro Capital/Construction 106.5 s 106.5 Local funds; Moslly MR 35% and Bond Proceed and others funds used as match to State or Federal Grants. These funds \'viii remain v.ith the grant funded capital projects.

Subsidies 204.1 (11.0) s 215.1 Primarily Local Relum, Call For Projects, and Muni Shares of Sales Tax dollars allocated based on tax ordinances.

Planning, Highway & Other Projects 222.8 90.0 s 132.8 Rental, lease, Street & Highway other miscellaneous re..enues, plus indirect costs not yet allocated to projects.

Debt Ser.Ace (15.9) (10.3) s (5.6) Result of Accounting reconciliation and reporting changes.

Total E:Jlpenses/Expendltures $ 518.8 $ 50.0 $ 468.8

Measure R Expenses

Measure R projects ended the reporting year with $2,003.8 million spent, or 88.9% of the $2,253.3 million annual budget. The following table provides a consolidated view of the Measure R expense activities. The expense data presented below is also integrated in the "Summary of Expenditures" section previously presented in this report.


10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

, -

Measure R Fund (S 1o rriiions)

Administration (1.5%)

Admin-Measure R

Administration (1.5%) Total

Debt Service

Debt Ser.ice- Measure R

Debt Service Total

Highway Capita l (20%)

Good Mo'lements, 1-5 N Truck Lanes, SR 71

County1'tide Soundwall Pr~ects ---------·---1-605 Corridor "Hot Spots" ---Highway Operating lmpr01ements Arroyo Verdugo

Highway Operating lmpro'lements Virgenes/Malibu

1-710 South ~~~L~'.~-~~~j~~~---···--·----High Desert Cooidor

1-710 North Gap Closure ---------

l-405, 1-110, 1-105, SR91 Ramp & Interchange

Phase II Alameda Corridor E Grade Separation

Other Highway Capital Subsidies

Highway Capita l (20%) Total

Loca l Return (15%) --

Measure R 15% Local Retum

Local Return (15%) Total

Operatlo~~~us (20%) _______

Measure R 15% Local Return

Metro Bus

Operations. Bus (20%) Total

Operations. Rall (5%) Total

Transit Capital· Metro Rall CP (2%) --

Crensha.v

Gold Line Foothill

Transit Oriented De'lelopment

Metro Blue Line Station Refurbishments

Other Tranist Capital 2% Projects

Transit Capital · Metro Rall CP (2%) Total


YTD June 30, 2015

Under I (Over) %of

Budaet Actual Budaet Budget

12.0 5.2 6.8 43.2%

12.0 $ 5.2 $ 6.8 43.2%

59.5 46.0 13.5 77.4%

59.5 $ 46.0 $ 13.5 77.4%

-·-1----1-·

18.6 0.5 18.1 2.8%

15.0 2.4 12.7 15.7% ,.... __ ----- -------

18.4 7.3 11.0 39.9%

15.5 7.1 8.4 45.6%

16.3 9.6 6.7 59.0% ----L---·--- ---

14.0 7.6 6.4 54.3% r-..------9.8 4.7 5.1 47.8%

10.1 5.8 4.2 58.1% ~---- ----- ·--- ·

12.5 19.1 (6.7) 153.4%

0.0 21.6 (21.6) 74864.7%

8.5 8.2 0.3 96.9%

138.7 94.0 44.7 67.8%

l---- -----

108.5 109.5 (1 .0) 100.9%

108.5 $ 109.5 $ (1.0) 100.9%

-- . ------47.8 47.8 100.0%

107.8 107.B 0.0 100.0%

155.6 $ 155.6 $ 0.0 100.0%

27.6 28.2 (0.6) 102.1%

-·------· ------- ---

28.0 11.9 16.1 42.6%

69.4 64.8 4.6 93.4%

5.3 2.1 3.3 38.4%

9.3 21.4 (12.1) 229.5%

17.4 13.0 4.4 74.9%

129.5 113.2 $ 16.3 87.4%

- - - T

Variance Explanation

Lower than expected labor cost and allocation. Highway study

contracts put on hold as department reviews needed.

Variance is due to the Measurer R commercial paper not issued

yet. ·-

ARTI project cancelled in FYlS.

Soundwall projects will be completed under LOP budget.

Favorable variance is due to contracts were awarded below

cost estimates. -------------------·------ ----The project started late and only received two quarters

invoices.

Variance is due to subsidy. Delays in invoicing from cities and

delays in con~truction and groundbreaking.

Project delays in Funding Agreement, as well as invoicing

~!~Y2!!2.~~~~~-'--·····-----·----------·······-·-·-·· Cal trans invoice delays.

Billing ~!!~~!ect delayed. --------·-··· Several projects progressed faster than budgeted. Projects are

within what was approved by the board.

Cities current year draw down from prior year allocations. Costs

are within MOUs.

- - - - -- -- - - -·

··- -.. --

Cities' draw down were based on actual tax revenues which

were higher than budget.

·-----~----------------·

Total Bus Ops Is on budget. -- ·-- -

Total Rail Ops is on budget. -

·------ -Underrun is due to the longer procurement time required for

initiating the design-build contract which delayed by at least

five months the actual start of design and early construction

activities. With notice-to-proceed not issued until June 29, 2015, payments for mobilization and general requirements as

well as professional services were delayed and shifted into

FY16.

Underrun is du~~~ggressive planned cash flow.

Projects and invoices delay.

Exceeding FYlS budget due to OMB reductions prior to budget

adoption. All stations are completed. Project ahead of schedule

and will be under LOP budget. Close-out in progress.

Mises projects. Variance considered not significant.

35

36

37

38

39

40

41

42

43

44

45

46

47

46

49

50

51

52

53

54

SS

56

57

56

(Continued)

Measure R Fund (S iurilons)

Transit Capital · Metrolink (3%)

Metrolink Transit Capital

BOB Hope Airport

Metrolink Rail Capital Plan

Doran St. Grade Seperalion

Raymer to Bernson Double Track Project

Lancaster Station

LA County Grade Crossing

Other Transit Capital • Metrolink 3% Projects

Transit Capital · Metrollnk (3%) Total

Transit Capital · New Ra il (35%)

Expo II

Gold Line Foothill

Crenshaw ·-

Expo I

Vehicle

Regional Clean Fuel Bus Capital

Airport Metro Connector

Seput1eda Pass Transit Collidor

Westside Purple line

Regional Connector

Other Tranist Capital Projects

Transit Capital· New Rail (35%) Total

Grand Total


Budget

18.7

7.8

7.9

4.0

6.5

2.0 ·--·~

2.0

15.1

64.0

334.6

194.6

278.4

16.1

58.5

7.4

6.1

3.9

413.6

229.7

15.0

1,558.0

2,253.3

YTD June 30, 2015 Under I

(Over) %of

k tual Budget Budget Variance Explanation

2.6 16.1 14.0% Subsidy claims by Metrolink delayed. 0.4 7.3 5.3% Project is on hold due to consultant and 3rd party issues. 1.5 6.4 - 18.8% Project delays and will carryover to FY16. 0.1 3.9 1.9% Project delays due to the alternative analysis changes. 4.5 2.0 69.0% Several procurement delays. - ..

2.0 0.0% City of Land caster has not request the fund yet --- --·-0.0 2.0 1.5% Procurement delays 9.0 6.2 59.3% Misc Nine projects.

18.1 $ 45.9 28.2%

.. Construction progress on schedule for planned Revenue

251.2 83.4 75.1% Service Date. Variance due to invoice billing delays.

Construction progress on schedule for planned Revenue

Service Date. Underrun largely due to invoicing delays for lPSS 144.6 50.0 74.3% and light poles.

Underrun is due to the design-builder's design and construction

activities being behind schedule. The contractor's delays have

decreased the planned payment to the design-builder for 248.8 29.6 --- · 89.4% excavation of materials from underground stations.

Design efforts suspended for the Washington Siding project. 0.2 15.9 1.4% Alternatives under consideration to determine path forward.

The vehicle builder, Kinkisharyo (Kl), continues to make

meaningful progress per contract requirements and has

demonstrated to be on track with meeting the key milestone

deliveries. The variance is due to Ki 's incomplete and delays in 45.2 13.3 77.2% submitting invoices and requested supporting documentation.

Timing variance. All five buses were accepted by Metro in the

June 2015. The remaining two vehicle invoices were received 2.6 4.8 35.1% and paid in early FY16.

Start of environmental delayed so as to align schedule with

LAWA APM project. Possible changes to the Crenshaw/LAX

design to accommodate the future AMC transit station. Board

directives were only made in July 2015 approving design costs 2.3 3.8 37.4% for modifications to the Crenshaw/LAX station design

f----· .. -·--- - ·--->--·-----·-·· Release of the study and additional environmental work has

been placed on hold by Deputy CEO. A traffic and revenue 0.3 3.5 9.0% study wi ll be performed in FY16.

Year end overrun due to invoicing from the D/B Contractor to 432.7 (19.1) 104.6% support General Requirements.

RC D/B Contract award delay resulted in understated cash flow

plan at FYlS budget submittal. Shifts in Gen Reqs, Sitework & 298.9 (69.2) 130.1% U/G activities resulted in greater than plan expenditures.

7.1 7.9 47.2% Misc six projects. Variance considered not significant.

1,434.0 $ 124.0 92.0%

2,003.8 $ 249.5 88.9%

...

Outlook for FY16

Staff will continue to monitor the financial performance of the agency in FY16 and provide quarterly updates to the Board.


november 4, 2015 - fiscal year 2015 (fy15) year - end...

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