MEETING OF THE Audit and Finance Subcommittee...VALLEY METRO • 101 N 1ST AVE • STE 1300 •...
Transcript of MEETING OF THE Audit and Finance Subcommittee...VALLEY METRO • 101 N 1ST AVE • STE 1300 •...
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433
MEETING OF THE
Audit and Finance Subcommittee
MEETING DATE
April 14, 2016
TIME 12:00 p.m.
LOCATION Valley Metro 101 N. 1st Ave., 10th Floor Lake Mead Conference Room Phoenix, AZ 85003
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April 7, 2016
Audit and Finance Subcommittee Thursday, April 14, 2016
10th Floor, Lake Mead Conference Room 101 N. 1st Avenue, 10th Floor
12:00 p.m.
For those participating by telephone, please mute your phone when not speaking. Action Recommended
1. Public Comment
A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the AFS on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. Up to three minutes will be provided per speaker or a total of 15 minutes total for all speakers.
1. For information
2. Minutes Minutes from the March 10, 2016 AFS meeting are presented for approval.
2. For action
3. Fiscal Year 2016 Third Quarter Report John McCormack, Chief Financial Officer, will provide the third quarter financial report.
3. For information
4. Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21)
John McCormack, Chief Financial Officer, will provide information regarding the FY17 Budget and Five-Year Preliminary Operating Forecast and Capital Program (FY17 thru FY21).
4. For information
5. Financial Audit Services Contract Award John McCormack, Chief Financial Officer, will provide information regarding the procurement of Financial Audit Services from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP013-046756. The period of service will cover two fiscal years of FY17 and FY18.
5. For information
6. Management Policies and Procedures Update
Scott Smith, Interim CEO, will provide an informational update including progress made on Board directed policy and procedure changes in progress, as well as anticipated next steps for each area.
6. For information
7. Future BFS Agenda Items
Chair Williams will request future AFS agenda items from members and John McCormack will review the proposed future BFS agenda items.
7. For information
8. Next Meeting The next meeting of the AFS is May 12, 2016 at 12:00 p.m.
8. For information
Qualified sign language interpreters are available with 72 hours notice. Materials in alternative formats (large print, audiocassette, or computer diskette) are available upon request. For further information, please call Valley Metro at 602-262-7433 or TTY at 602-251-2039. To attend this meeting via teleconference, contact the receptionist at 602-262-7433 for the dial-in-information. The supporting information for this agenda can be found on our web site at www.valleymetro.org
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433
DATE AGENDA ITEM 1 April 7, 2016 SUBJECT Public Comment PURPOSE A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the AFS on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT None
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433
DATE AGENDA ITEM 2 April 7, 2016
Summary Minutes
Valley Metro RPTA Budget and Finance Subcommittee Thursday, March 10, 2016
Lake Mead Conference Room 101 N. 1st Avenue, 10th Floor
Phoenix, AZ 12:00 p.m.
Members Present Councilmember Thelda Williams, City of Phoenix (Chair) Councilmember Eric Orsborn, City of Buckeye Councilmember Jenn Daniels, Town of Gilbert (via phone) Councilmember Suzanne Klapp, City of Scottsdale Councilmember Skip Hall, City of Surprise Chair Williams called the meeting to order at 12:02 p.m. 1. Public Comment None. 2. Minutes Minutes from the February 11, 2016 BFS meeting were presented for approval. IT WAS MOVED BY COUNCILMEMBER KLAPP, SECONDED BY COUNCILMEMBER ORSBORN AND UNANIMOUSLY CARRIED TO APPROVE THE FEBRUARY 11, 2016 BFS MINUTES. 3. Refunding Bond Issuance Authorization – Third Supplemental Resolution Paul Hodgins, Manager, Revenue Generation and Financial Planning provided a presentation which included the following:
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There were no questions from the BFS. Chair Williams requested a motion and a second to forward this item to the Board for approval. IT WAS MOVED BY COUNCILMEMBER ORSBORN, SECONDED BY COUNCILMEMBER KLAPP AND UNANIMOUSLY CARRIED TO FORWARD TO THE BOARD OF DIRECTORS ADOPTION OF THE THIRD SUPPLEMENTAL RESOLUTION AUTHORIZING THE ISSUANCE OF TAX-EXEMPT, SENIOR LIEN BONDS IN FY 2016 IN AN AMOUNT SUFFICIENT TO REFUND CERTAIN MATURITIES OF THE SERIES 2009A BONDS AND TO PAY COSTS OF ISSUING THE BONDS.
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4. Valley Metro RPTA Budget and Finance Subcommittee Name Change, Scope Expansion, and Inclusion of Valley Metro Rail (VMR) Representation
John McCormack, Chief Financial Officer, provided an overview of the proposed changes to the Budget and Finance Subcommittee. And also showed the committee structure of Valley Metro.
He noted the current responsibilities of the BFS are:
1. Annual operating and capital budget process of the agency 2. Review of budget inputs and assumptions 3. Oversight of the compilation of financial reports for the Boards and member agency
review 4. Review of the annual Transit Life Cycle Program and its financial model 5. Review of the five-year capital plan 6. Provide recommendations to the Board of Directors
He also noted that staff is recommending the expanded policy and agency oversight role for the BFS include:
1. Expand the scope to include oversight of an internal audit function; 2. Change the name to Valley Metro RPTA and Valley Metro Rail Audit and Finance
Subcommittee (AFS); and 3. Representation of VMR by requiring that two members of the Subcommittee
represent both RPTA and VMR.
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Mr. McCormack said expansion of the Subcommittee to include VMR could be attained by maintaining the existing structure for membership, but adding a provision that in addition to the City of Phoenix permanent position, one the remaining four positions must also be a VMR Board member. More than two members of the BFS being members of the VMR Board would violate quorum requirements according to the VMR By-Laws. Mr. Smith commented that two internal auditors are planned for the FY 2017 Budget year. He said this auditing team would be reporting to the Board and would receive their instructions and work scope from the Board. He also noted that the City of Phoenix is continuing their audit of the agency and an expected to be complete in mid-April. He said that he expects to review a draft of the audit prior to it being made public. Chair Williams requested a motion and a second to expand the Budget and Finance Subcommittee as discussed. IT WAS MOVED BY COUNCILMEMBER HALL, SECONDED BY COUNCILMEMBER KLAPP AND UNANIMOUSLY CARRIED TO FORWARD TO THE BOARD OF DIRECTORS THE RESOLUTION DEFINING THE ROLE AND MEMBERSHIP OF THE AUDIT AND FINANCE SUBCOMMITTEE. 5. Future Agenda Item Requests Chair Williams requested information regarding procurement cards. Chair Williams said the next meeting of the BFS is scheduled for April 14, 2016 at 12:00 p.m. at Valley Metro. With no further discussion the meeting adjourned at 12:40 p.m.
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433
DATE AGENDA ITEM 3 April 7, 2016 SUBJECT Fiscal Year 2016 Third Quarter Report PURPOSE To provide the third quarter financial report. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT Third Quarter Financial Report
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Finance DivisionFY16 Q3 Report
April 2016
Valley Metro RPTA Operating Results – Q3
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RPTA Budget vs. Actual Report $ Millions
For the quarter ending March 31, 2016
3rd Quarter Year to Date
Operations Expenditures Budget Actual
Variance
(Unfav.) Budget Actual
Variance
(Unfav.)
Fixed Route Bus 21.5 21.3 0.2 64.6 62.2 2.4
Paratransit 7.9 7.2 0.7 23.6 22.0 1.6
Vanpool 0.3 0.1 0.2 0.8 0.6 0.2
Regional Services 2.8 2.3 0.5 8.3 7.0 1.3
Planning 0.6 0.5 0.1 1.7 1.5 0.2
Administration 0.6 0.4 0.2 1.8 1.4 0.4
METRO Rail (Salary, Fringe, OH) 4.3 4.4 (0.1) 13.0 12.1 0.9
Total Operations Expenditures 38.0 36.2 1.8 113.8 106.8 7.0
Agency FTE's Budget vs. Actual
For the quarter ending March 31, 20163rd Quarter
Valley Metro Integrated Budget Actual
Variance
(Unfav.)
Staff (Full Time Equivalents) 312 288 24
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Open Positions Status
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Valley Metro Integrated Agency
FY 2016 Adopted Positions ‐ Status Update FY16 ‐ Q2 FY16 ‐ Q3
Dec Open Mar Open
Operations and Maintenance 20 14
Human Resources 2 2
Planning & Accessible Transit 1 1
Safety & Security 0 0
Information Technology 4 4
Communication & Marketing 0 0
Design & Construction 0 0
Finance 2 0
Executive 1 1
Legal 2 2
Total Open Positions 32 24
10% 8%
Total Authorized Positions 312 312
Valley Metro RPTA Capital Results – Q3
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RPTA Budget vs. Actual Report $ Millions
For the quarter ending March 31, 2016
3rd Quarter Year to Date
Capital Expenditures Budget Actual
Variance
(Unfav.) Budget Actual
Variance
(Unfav.)
Bus Purchases
Valley Metro 0.1 0.0 0.1 0.4 0.0 0.4
Lead Agency 1.2 0.1 1.1 3.6 0.1 3.5
Paratransit Vehicles
Lead Agency 0.1 0.1 (0.0) 0.2 0.1 0.1
Vanpool Vehicles 0.8 0.0 0.8 2.3 2.1 0.2
Other Capital 1.5 0.5 1.0 4.6 0.9 3.7
METRO Rail 16.4 9.0 7.4 49.1 48.4 0.7
Total Capital Expenditures 20.1 9.7 10.4 60.2 51.6 8.6
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433
DATE AGENDA ITEM 4 April 7, 2016 SUBJECT Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) PURPOSE To provide information regarding the FY17 Budget and Five-Year Preliminary Operating Forecast and Capital Program (FY17 thru FY21). BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Regional Public Transportation Authority (RPTA) FY17 combined operating and capital budget (the budget) is $344.2 million (M) and includes $141.2M in projects funded with Proposition 400 Public Transportation Fund (PTF) revenues. Of the $141.2M PTF revenues, $80.2M is for bus operating and bus capital and $61.0M is for light rail/high capacity transit capital. The preliminary FY17 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards, reserves and bond proceeds. The budget was developed in compliance with Board of Directors’ adopted budget, financial and Transit Life Cycle Program (TLCP) policies. The annual budget is prepared on an accrual basis and adopted by the Board of Directors each fiscal year. The legal level of budgetary control is the total annual appropriated budget. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. The total operating budget of $166.4M represents a $5.6M (3%) increase from the previous year’s operating budget of $160.9M. The total capital budget of $177.8M represents a $51.8M (41%) increase from the previous year’s capital budget of $126.0M. Details and explanations of the major budget changes are discussed in the attached Budget Analysis and Overview document. With the agency integration, the RPTA and Valley Metro Rail (VMR) budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. Salary and overhead charges to bus and rail projects are based on actual time worked on each project. For FY17 there are 310 employees budgeted in the integrated agency, with 131 FTE’s budgeted to RPTA activities and 179 budgeted to VMR activities. Compensation budget based on 2.5%
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increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020: Goal 2: Advance performance based operation
o Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability.
COMMITTEE PROCESS Preliminary Budget Review: Financial Working Group: February 26, 2016 for information RTAG: March 16, 2016 for information TMC: April 6, 2016 for information Audit and Finance Subcommittee: April 14, 2016 for information Board of Directors: April 21, 2016 for information Proposed Budget Adoption: TMC: May 4, 2016 for action Audit and Finance Subcommittee: May 12, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION This item is being presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) Executive Summary
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Valley Metro RPTAFY17
Budget Overview
April 2016
FY17 Baseline Operations
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Passengers Revenue miles Operating Costs Fare RevenuesFixed Route BusFY16 17,263,000 11,403,000 $72,604,000 $13,265,000FY17 17,902,000 12,002,000 $75,561,000 $13,580,000Change 4% 5% 4% 2%
Baseline Trips Trips - Contingency Operating Costs Fare RevenuesParatransitFY16 487,000 $14,103,000 $1,727,000FY17 522,000 10,440 $15,580,000 $1,784,000Change 7% 2% 10% 3%
Passengers Revenue miles Operating Costs Fare RevenuesVanPoolFY16 1,136,000 6,108,000 $1,045,000 $1,148,000FY17 1,192,000 6,414,000 $967,000 $1,069,000Change 5% 5% -7% -7%
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FY17 Strategic Plan Initiatives
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Improve Customer Satisfaction• Development of Fare Smart Card and Smart Phone mobile ticketing $0.4M• Renovation of Website and mobile phone travel aid applications $0.2M
Enhance services & facilities for seniors & people with disabilities• Implement seamless Regional Dial-a-Ride Service $2.5M
Maintain strong fiscal controls • Establishment of Internal Audit Department with direct reporting to Board Audit and
Finance Subcommittee $0.1M
Communicate availability, attractiveness and safety of transit service• Discretionary ridership advertising campaigns to continue to attract riders $0.1M
Valley Metro RPTA FY17 Sources of Revenues: $344.2M
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Valley Metro RPTA Revenues
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Sources of Funds $millions
Funding Sources FY17 FY16 Change $ Change %
Public Transportation Funds $141.2 $133.9 $7.3 5%
Transit Service Agreements $30.8 $30.2 $0.7 2%
Federal Grants $39.8 $33.6 $6.1 18%
METRO Rail Reimbursement $17.1 $16.9 $0.2 1%
Fixed Route Fare Revenues $15.7 $16.3 -$0.6 -4%
AZ Lottery Proceeds $11.3 $11.3 $0.0 0%
Regional Area Road Funds $4.9 $4.8 $0.1 2%
Other Revenues $3.3 $2.0 $1.3 64%
Bond Proceeds $61.3 $0.0 $61.3
Carry forwards and Reserves $18.9 $38.0 -$19.1 -50%
Total $344.2 $286.9 $57.4 20%
Valley Metro RPTA FY17 Expenses: $344.2M
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Carry Forward & Reserves
5%
Lead Agency Disbursements
21%
Transit Service Contracts & Fuel
28%
Personnel8%
Capital Expenditures11%
Bond Disbursements
13%
Bond P & I7%
AZ Lottery3% Other
3%Contracts
1%
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Valley Metro RPTA Expenses
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Uses of Funds $millions
Uses of Funds FY17 FY16 Change $ Change %
PTF Pass-thru Disbursements $72.3 $69.5 $2.8 4%
Transit service contracts & fuel 94.6 89.1 5.5 6%
Capital 36.9 25.9 11.0 42%
RPTA & METRO Personnel Costs 27.2 26.3 0.8 3%
Bond Principal & Interest 25.4 24.2 1.2 5%
Contractual Agreements 3.8 4.0 -0.2 -6%
AZ Lottery Disbursements 11.2 11.2 0.0 0%
PTF Bond Pass-thru Disbursements 43.1 25.0 18.1 72%
Other Costs 11.0 11.2 -0.2 -2%
Carry forwards to Reserves 18.7 0.4 18.5
Total $344.2 $286.9 $57.4 20%
Integrated Agency Budget Assumptions: Staffing Costs
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Staffing cost analysis
FY 17 FY 16 change pct change$ million
Salaries 19.6 18.8 0.8 4%
Fringe Benefits 7.6 7.5 0.1 2%
Total Salary and Fringe Benefits 27.2 26.3 0.9 3%
Analysis of changes Salary Fringe Total
Base Compensation FY16 18.8 7.5 26.3 Base increase 0.5 - 0.5 Position Changes 0.3 0.1 0.4
New Base Compensation FY17 19.6 7.6 27.2
Change FY17 Preliminary Budget vs. FY16 Adopted Budget 0.9 $ million
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Integrated Agency – FY17 Position Changes
Title Division Scope of Work
Manager, Internal Audit Chief Executive Office Agency Internal Controls with primary reporting to Board
Internal Audit Specialist Chief Executive Office Internal Control testing and compliance
Program Representative Planning & Accessible Transit Support East Valley, West Valley, and regional paratransit
Scheduler Operations and Maintenance ‐ RPTA Fixed Route Bus schedule analysis and managementProgram Coordinator Operations and Maintenance ‐ RPTA Fixed Route Bus contractor performance management
FIVE YEAR PLAN OVERVIEWFY 2017 THROUGH FY 2021
Valley Metro RPTA
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5-Year Operating Assumptions• Public Transportation Fund (PTF) - up approximately 5.4% annually
• Federal PM Revenues down from $8.9M to $7.6M in FY18, $7.0M FY21
• TLCP planned route service miles funded by PTF increase 588,000
• Transit service costs up 3% annually plus contingencies
• Fixed route fares up 5% in FY18
• VM operated paratransit ridershipFY17 up 7%FY18 – FY 20 + 5.3% per year overall Regional trips up 9.6%
• Administrative costs up 2% annually
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Five Year Operating Forecast -Revenues
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(thousands)
5-Year
Total
Revenues
Public Transportation Fund (ADOT) 793,606$
Less: AZDOR Assessment (4,973)
PTF Bond Proceeds 61,257
Less: Debt Service Bus & Rail (157,971)
Less: Rail Capital Funding (current) (268,669)
Net PTF for Operations 423,250$
Other Regional Funds 24,725$
Federal Funds 41,973
Transit service reimbursements 182,658
Fare Revenues 92,018
Alternative Fuel Tax Credit 1,228
Interest and other revenue 160
Total revenues 766,012$
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Five Year Operating Forecast -Expenditures
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(thousands)
5-Year
Expenditures Total
Operations
Fixed Route 458,136$
Paratransit - EVDAR 47,350
Paratransit - NWDAR 10,515
Paratransit - Regional Trips 14,549
Paratransit - RideChoice 4,703
Vanpool Service 5,138
ADA 108,312
Total operations expenditures 648,704$
Transportation Demand Management 5,912$
Planning & Administration 24,668
Regional Services 42,018
Safety & Security 1,974
Operations Contingency 18,993
Total expenditures 742,269$
5-Year Capital Program Assumptions• Bus Fleet - $211 Million
– 475 replacement units; 93 expansion units
– 85% Federal /15% PTF
• Vanpool Fleet - $18 Million
– 301 replacement units; 100 expansion units 100% Federal STP
• Facilities and Equipment - $31.6 Million
– Peoria PNR and Transit Center - 80% Federal / 20% PTF
– North Glendale and Laveen Park and Rides - Local match PTF
– Regional Communications System - 80% Federal / 20% PTF
– Fare Collection/Paratransit Software Improvements - 100% PTF
– Mid-Life Bus Rebuilds (194 units) - 80% Federal / 20% PTF
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Five Year Capital Program- Revenues
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(thousands)
5-YearTotal
RevenuesPublic transportation funds 46,696$ FTA - Section 5307 161,448 FTA - Section 5311 456 FTA - Section 5337 1,046 FTA - Section 5339 8,245 FHWA - STP 17,159 Member local match 100 Vehicle/parts proceeds 1,929 Capital assets reserve applied 1,740 Vanpool reserve applied 741 Undesig. Fund Balance Applied (PTF) 20,891
Total Revenues 260,451$
Five Year Capital Program- Expenditures
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(thousands)
5-YearTotal
Expenditures by ProjectIT Infrastructure 2,747$ Standard Bus - Replacement 154,339 Standard Bus - Expansion 50,308 Express/BRT - Expansion 3,168 Rural Fleet - Replacement 1,173 Paratransit Fleet - Replacement 1,915 Vanpool Fleet - Replacement 13,462 Vanpool Fleet - Expansion 4,438 Fleet - Other 1,957 Transit Centers (4-Bay) 2,376 Bus Stop Passenger Amenities 535 Park & Rides 9,233 Vehicle Management/Communications Systems 6,546 Fare Collection Systems 505 State of Good Repair - Fleet Rebuild 7,749
Total Expenditures 260,451$
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Forecasted Reserve RequirementsProposed FY17-21 Five-Year Operating and Capital Forecast $ in Millions
RESERVE FUND FY17 FY18 FY19 FY20 FY21General Fund Operating Reserve $23.4 $23.7 $24.4 $25.2 $26.0Capital Reserve Fund $3.6 $3.0 $1.6 $2.5 $1.5Working Capital Reserve Fund $14.2 $5.9 $7.8 $5.8 $10.5Vanpool Reserve Fund $3.4 $3.5 $3.7 $3.9 $4.1Emergency Reserve Fund $1.0 $1.0 $1.0 $1.0 $1.0Total Reserves (July 1) $45.5 $37.1 $38.5 $38.4 $43.1
Forecasted Fund Balance Bus Fund Balance $86.0 $66.3 $51.8 $48.3 $41.4Rail Fund Balance $39.4 $57.8 $59.3 $53.4 $63.0Total Forecasted Fund Balance (July 1) $125.4 $124.1 $111.1 $101.7 $104.4
Budget Schedule FY17
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Nov 19 FY17 Agency Budget Initiatives presented to Boards for information
Feb 18 Board approves service changes effective April 2016
Feb 26 Preliminary FY17 Budget presented to Fin. Working Group
Mar 1 Executive Summary & 5 year Plan posted to website
Apr 6 Draft Budget delivered to TMC/RMC/AFS
Apr 14 Member City Comments due
Apr 14 Budget presented for information to AFS
Apr 21 Budget presented to Board of Directors for information
May 19 Board Meeting for Budget Adoption
RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 1
FY17 PRELIMINARY ANNUAL OPERATING AND CAPITAL BUDGET Valley Metro Regional Public Transportation Authority (RPTA) provides public transportation services for Maricopa County located in the metro Phoenix, Arizona. The FY17 Preliminary Budget covers the 12-month period between July 1, 2016 and June 30, 2017. Services include fixed route bus, paratransit, Dial-a-Ride, vanpool, regional planning, marketing, customer service, alternative transportation, trip reduction and fiscal management of regional Public Transportation Funds (PTF). FY17 Sources of Funds Total sources of funds for FY17 are $344.2M, an increase of $57.3M or 20% from FY16. For FY17, PTF sales tax revenues are increasing by $7.3M or 5% above last year. Federal grant revenues are increasing by $6.1M (18%) primarily due an increase in 5307 funding used to purchase bus fleet. It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital projects in the spring of 2017.
$0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0
Public Transportation Funds
Transit Service Agreements
Federal Grants
METRO Rail Reimbursement
Fixed Route Fare Revenues
AZ Lottery Proceeds
Regional Area Road Funds
Other Revenues
Bond Proceeds
Carry forwards and Reserves
FY17 FY16 Valley Metro RPTA Sources of Funds FY17 vs FY16
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 2
FY17 Uses of Funds Total uses of funds for FY17 are $344.2M, an increase of $57.3M or 20% from FY16. PTF Pass-thru Disbursements are increasing by $2.8M due to increased light rail construction and purchases of regional bus fleet. Transit service contracts and fuel are increasing by $5.5M or 6% primarily due to increases in contract rates and paratransit ridership. Capital expenditures are up $11.0M primarily due to bus fleet additions and land acquisition and regional fleet purchases. PTF Bond Pass-thru Disbursements are increasing by $18.1M due to increased light rail construction. In FY17, carry forwards to reserves include $18.4M in capital reserve increases.
$0.0 $20.0 $40.0 $60.0 $80.0 $100.0
PTF Pass-thru Disbursements
Transit service contracts & fuel
Capital
RPTA & METRO Personnel Costs
Bond Principal & Interest
Contractual Agreements
AZ Lottery Disbursements
PTF Bond Pass-thru Disbursements
Other Costs
Carry forwards to Reserves
FY17 FY16 Valley Metro RPTA Uses of Funds FY17 vs FY16
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 3
FY17 Uses of Funds – Comparisons of Services Provided Valley Metro RPTA’s primary activities include passenger services, regional services and capital funding. The table below depicts changes in the FY17 plan versus FY16.
FY17 Budget Baseline Service Assumptions Fixed Route Bus Services
East and West Valley routes operated by Valley Metro will increase revenue miles vs. FY16 service levels; fleet of 279 units to deliver 12.0 million vehicle revenue miles serving 17.9 million passenger trips in the coming year.
Bus service includes a combination of local, express, circulator, and rural route service.
Dial-a-Ride and Paratransit Services
East and West Valley demand response ADA and non-ADA services operated by Valley Metro will continue to serve portions of Maricopa County and the cities of El Mirage, Peoria, Sun City, Surprise and Youngtown in the West Valley and Chandler, Gilbert, Mesa, Scottsdale and Tempe in the East Valley.
$0.0 $20.0 $40.0 $60.0 $80.0 $100.0
+ Passenger Services
Fixed Route Bus Operations
Paratransit Operations
ADA Lead Agency Disbursements
Regional Vanpool Service
+ Regional Transit Services
Marketing and Outreach
Call Center
ADA Compliance
Rideshare and Trip Reduction
Service and Capital Planning
+ Capital Activities
Bus Equipment
Paratransit Lead Agency Capital
Vanpool Fleet
Light Rail Lead Agency Capital
Facilities and equipment
+ Fiscal & Administrative Services
Valley Metro Rail Staffing
Arizona Lottery Fund Disbursements
Debt Service
Cash Reserves Carried Forward
Valley Metro Administration
FY 17 FY 16Valley Metro RPTA Uses of Funds FY17 vs FY16
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 4
New for FY17 is seamless Regional ADA Dial-a-Ride service enabling qualified passengers to cross municipal boundaries without transfers, estimated at 47,000 trips.
For eligible ADA passengers, level of service is based on passenger reservation demand within service areas and hours of operation covered by fixed route bus routes.
For non-ADA passengers, service levels are set by member cities. Services are provided on a shared-ride basis by a mixed fleet comprised of taxi cabs,
vans and accessible vehicles; estimated at 522,000 annual passenger trips. Vanpool Services
Service levels are anticipated to increase over FY16 with 440 vehicles delivering 1.2 million passenger trips.
Regional Call Center and ADA Compliance Center
Customer Service levels anticipated to remain similar to FY16 for fixed route bus and light rail.
ADA paratransit eligibility certification levels are anticipated to rise to 5,550 as a result of increasing numbers of seniors, persons with disabilities applying for service and as current customers go through eligibility recertification. Travel training will continue to be provided for individuals with disabilities who wish to take advantage of Valley Metro’s expanding light rail and bus network.
Capital Procurement
101 standard bus replacements (81 units Phoenix, 8 units Scottsdale, 12 units RPTA) and 6 circulator replacements for RPTA
21 expansion buses (8 RPTA for Scottsdale Rd Service, 13 for RPTA) and 7 expansion circulators for RPTA
25 lead agency paratransit fleet vehicles for Phoenix
67 vanpool replacement units
$6.7M in park-and-rides, bus stop amenities and facilities
$3.7M in vehicle communication systems, camera bus upgrade and fare collection system upgrades
48 mid-life rebuilds of engines and transmissions
FY17 Goals and Initiatives In January 2015, the Valley Metro RPTA and Valley Metro Rail Boards adopted the Valley Metro Strategic Plan for FY16 through FY20. The Strategic Plan provides clear definition of the purpose of the organization and establishes realistic goals and objectives for a five-year period. This plan ensures the most effective use of the organization’s resources by focusing those resources on key priorities. Below are the five, overarching goals identified in the Strategic Plan:
1. Increase customer focus 2. Advance performance based operation 3. Grow transit ridership 4. Focus on economic development, regional competitiveness and financial resources 5. Advance the value of transit
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 5
With the initiation of the FY17 budget process, staff has developed a number of initiatives that align with the Strategic Plan and will be incorporated into the FY17 budget, as summarized below.
RPTA Investment
Total Investment
Develop smart card fare program/mobile
ticketing430.0$ 860.0$
Renovate website & mobile site 200.0$ 300.0$
Enhance services & facilities for seniors & people with disabilities.
Develop a more seamless, cost-effective
ADA Dial-a-Ride network with cities as
partners
2,500.0$ 2,500.0$
Improve Customer SatisfactionIntegration of greater, more effective technology, improving
passenger information systems with real time data, such as the
website, facility signage and a Ridekick mobile application, and
implementation of an enhanced fare media solution, including
smart cards and mobile ticketing.
Valley Metro FY17 Investment$ Thousands
FY17 Initiatives1. Increase Customer Focus:
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 6
Total Investment
Operate an effective, reliable, high performing transit system.
Develop an asset management plan for
Valley Metro in conjunction with member
agencies
25.0$ 100.0$
Maintain a culture to recruit and retain a qualified and diverse workforce.
Develop a program to recruit and retain a
qualified and diverse workforce.
Consultant engagement to for
comprehensive training assessment and
new employee orientation programs
20.0$ 40.0$
Maintain strong fiscal controls to support Valley Metro’s
long-term sustainability.Establishing Internal Audit Department with
dual reporting responsibility to the Board of
Directors and VM Executive Office
94.5$ 189.0$
3. Grow Transit Ridership: FY17 Initiatives RPTA Investment
Total Investment
Communicate availability, attractiveness and safety of transit service
Conduct discretionary ridership campaigns
to continue to attract riders105.0$ 210.0$
4. Focus on Economic Development, Regional Competitiveness and Financial Resources: FY17 Initiatives
RPTA Investment
Total Investment
Work with local communities to leverage transit oriented development (TOD) to increase investment in transit
Research and monitor and report regional
trends regarding TOD implementation and
successes
- Support to TOD working group and PNR
utilization study: $100,000
100.0$ 100.0$
Pursue all available funding opportunities for transit projects and services
Aggressively pursue federal transit funding
opportunities at the regional level
- Conducting region-wide ITS study for
federal funds: $100,000
100.0$ 100.0$
5. Advance the Value of Transit: FY17 Initiatives RPTA Investment
Total Investment
Develop and implement a communications plan to inform and educate the public on the value of transit
Continue media campaign to raise greater
awareness of the value of transit63.0$ 126.0$
RPTA Investment
2. Advance Performance Based Operation: FY17 Initiatives
Valley Metro FY17 Investment$ Thousands
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 7
Agency Staff Overview Valley Metro RPTA and Valley Metro Rail budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. For FY17, there are 310 employees budgeted in the integrated agency; 131 FTE’s are budgeted to RPTA activities; 179 to VMR activities. Staffing levels are reviewed on an annual basis with zero-base analysis of level of effort requirements to fulfill work requirements in the five-year period commencing with the beginning of the new fiscal year. Salary and fringe benefit compensation levels are measured against comparable regional agencies, member cities and peer transit agencies located in the western U.S. FY17 Compensation and Fringe Benefit Assumptions Total compensation budget is based on a 2.5% increase. For staff salary changes, merit increases are based on employee performance. Division level control is in place to contain total salary and fringe costs within budget. Agency health care costs will increase. Program design adjustments are in place to hold total agency fringe benefit cost increases to within 3% of FY16 levels.
Five new agency positions are planned to improve agency internal controls and strengthen fixed route bus and accessible transit contractor performance, as noted below.
Staffing cost analysisFY 17 FY 16 change pct change
$ million
FTE 310 312 -2 -1%
Salaries 19.6 18.8 0.8 4%
Fringe Benefits 7.6 7.5 0.1 2%
Total Salary and Fringe Benefits 27.2 26.3 0.9 3%
Analysis of changes Salary Fringe Total
Base Compensation FY16 18.8 7.5 26.3
Base increase 0.5 - 0.5
Position Changes 0.3 0.1 0.4
New Base Compensation FY17 19.6 7.6 27.2
Change FY17 Preliminary Budget vs. FY16 Adopted Budget 0.9 $ million
Title Division Scope of Work
Manager, Internal Audit Chief Executive Office Agency Internal Controls with primary reporting to Board
Internal Audit Specialist Chief Executive Office Internal Control testing and compliance
Program Representative Planning & Accessible Transit Support East Valley, West Valley, and regional paratransit
Scheduler Operations and Maintenance - RPTA Fixed Route Bus schedule analysis and managementProgram Coordinator Operations and Maintenance - RPTA Fixed Route Bus contractor performance management
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 8
FY17 Preliminary Budget Financial Summary In the table below, detailed revenues and expenses are shown with comparisons to the prior year’s preliminary and revised budgets. Amounts of increase or (decrease) are shown from the preliminary budget. The “Note” column (on the far right side) indicates reference to explanations which are provided in the following table.
Valley MetroRegional Public Transportation Authority
FY17 Prelim Operating & Capital Budget
Comparison to FY16 Adopted Budget
(In thousands)
FY17 FY16 FY16 Amount Percent***Prelim Adopted Revised Increase/ Increase/Budget Budget Budget Decrease (Decrease) Note
Sources of funds
Revenues:
Public transportation funds (PTF) 141,165$ 133,866$ 132,121$ 7,299$ 5% (1)
Transit service agreements 30,844 30,181 29,695 663 2%
Federal grants 39,773 33,644 18,114 6,129 18% (2)
VMR staff & administration reimbursement 17,137 16,889 16,889 248 1% (3)
Regional area road funds (RARF) 4,864 4,782 4,782 82 2%
Interest & other revenues 2,772 1,377 3,911 1,395 101% (4)
Local participation 297 199 199 98 49%
State & local grants 261 449 449 (188) -42%
Fixed Route Fare Revenues 15,664 16,265 16,347 (601) -4% (5)
AZ Lottery Proceeds 11,250 11,250 11,250 - 0%
Total revenues 264,027 248,902 233,758 15,125 6%
Bond proceeds 61,257 - - 61,257 100% (6)
Carryforwards & reserves 18,923 37,986 33,768 (19,063) -50% (7)
Total revenues & other sources of funds 344,207 286,888 267,526 57,319 20%
Uses of funds by category
Expenses:
Lead agency PTF disbursements 72,304$ 69,532$ 91,127$ 2,772$ 4% (8)
Transit service contracts and fuel 94,622 89,150 91,751 5,472 6% (9)
Capital outlay 36,850 25,882 7,783 10,968 42% (10)
Salary & fringe benefits 27,231 26,342 26,363 889 3% (11)
Bond principal & interest expense 25,433 24,235 24,235 1,198 5% (12)
Consultants & Maintenance contracts 3,771 3,992 3,754 (221) -6%
Contingency 1,942 1,668 1,418 274 16% (13)
Rent & facility costs 4,988 5,063 5,063 (75) -1%
Advertising 528 530 530 (2) 0%
Transit book, outreach mat. & online serv. 893 746 746 147 20%
Insurance & risk management 205 266 266 (61) -23%
Safety & security - - - - 0%
Lead agency RARF disbursements 500 500 500 - 0%Other administrative costs 1,938 2,432 2,440 (494) -20%AZ lottery Disbursements 11,200 11,200 11,200 - 0%
Lead agency bond disbursement 43,098 25,000 - 18,098 72% (14)
Total expenses 325,503 286,538 267,176 38,965 14%
Carryforwards & contributions to reserves 18,704 350 350 18,354 5244% (15)
Total expenses & other uses of funds 344,207$ 286,888$ 267,526$ 57,319$ 20%
Operating Budget 166,439$ 160,891$ 163,020$ 5,548$ 3.4%
Capital Budget 177,768 125,997 104,496 51,771 41.1%
Total Operating & Capital Budget 344,207$ 286,888$ 267,526$ 57,319$
*** Percentage change is compared to the FY16 Adopted Budget
4/7/16
RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 9
Sources of FundsNote
1
2
3
4
5
6
7
It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital
projects in the spring of 2017.
Consumption of carryforwards & reserves are down by $19.1M due to decreased amount of sales tax
fund balance spending needed in FY17 for LRT capital construction activity
ExplanationPublic Transportation Funds from the Maricopa County Transportation Excise Tax are forecasted to
grow by 5%. Forecast is provided by ADOT. In FY17 the AZ Department of Revenue assessment
charge is estimated at $900K, which is a reduction to PTF revenue forecasted by ADOT. Adequate
reserves are in place should collections fall short of ADOT forecast projections.
Federal Grants overall are up by $6.1M from $33.7M to $39.8M. Primary cause for change is an
increase in 5307 funding used to purchase bus fleet. Planned bus fleet purchases for FY16 were
rescheduled to arrive in FY17.
Contributions from Valley Metro Rail for staff are $0.2M higher in FY 17 primarily due to VMR staff
additions to maintain the 26 mile rail service for the full 12 months. In FY16, VMR operated partial
year service for the Central Mesa and Northwest Extensions. Added 2 FTEs internal audit staff.
Interest and other revenues are expected to increase $1.4M over FY16. Revenues programmed
include alternative fuel tax credit ($1.2M) and increases in proceeds form disposing revenue vehicles
($0.2M)
Fixed route farebox revenue is forecasted to be approximately 4% less than what was budgeted in
FY16. Fare revenue decrease is due to ridership losses attributed to low gas prices and transfers
from bus to rail.
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 10
Uses of Funds by CategoryNote
8
9
10
11
12
13
14
15
Overall staff cost in FY17 of $27.2M is 8% of total budget. 3% Overall Salary and Fringe increase
$0.9M, broken down as follows: 2.5% base salary and fringe increase $0.5M, net cost increase of
position changes $0.3M Salary and $0.1 M Fringe.
Bond principal and interest expense is up 5% to $25.4M due to the series 2017 bond issue to
support funding for increased LRT capital construction activity.
Contingency is up from $1.7M to $1.9M. Primary contingency relates to fixed route bus contract
rates, fuel rates, and paratransit demand.
Lead Agency Bond Disbursements are Public Transportation Funding (PTF) amounts derived from
bond proceeds to Member Agencies and VMR for eligible capital transit expenditures. Lead Agency
Bond Disbursements are up by $18.1M due to increased LRT capital construction activity.
Carryforwards & contributions to reserves increased by $18.4M primarily due to the issuance of
bonds to support funding for increased LRT capital construction activity.
ExplanationLead Agency Disbursements are Public Transportation Funding (PTF) amounts to Member Agencies
and VMR for eligible operating and capital transit expenditures. Increase in PTF Lead Agency
Disbursements of $2.8M is primarily due to an increase in project development and construction
activity for light rail projects and lead agency disbursements for regional bus fleet.
Fixed route bus service levels operated by Valley Metro have increased with approximately 130,000
additional service miles added. Transit service contracts increases primarily reflect contractual rate
increases from fixed route service providers. Paratransit demand is forecasted to increase by 7%.
Capital Outlay was increased by $11.0M primarily due to land acquisition $2.2M and regional fleet
$7.0M; and $1.1M related to computers/software and site improvements $0.3M.
4/7/16
RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 11
FY17 – FY21 PRELIMINARY FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM Valley Metro RPTA has the primary responsibility of implementing the operating and capital components of the transit element identified in the 20-year Regional Transportation Plan (RTP). The operating component includes the expansion of regional fixed route services, high-capacity transit alternatives, vanpools and paratransit services throughout the region. The capital component of the transit element of the RTP includes fleet replacement and expansion as well as the development of new park-and-rides, transit centers, passenger facilities and maintenance and operations facilities over the life of the plan. Construction of the light rail RTP components has been designated to Valley Metro Rail by Valley Metro RPTA and expenditures are shown as Rail Capital Funding in the Operating Forecast. For the Five-Year Operating Forecast, the operations revenues and expenditures are based on current costs, as used for the development of the preliminary FY17 operating budget, with an annual inflation escalation of three percent (3%) for the remaining four years. Other assumptions in the Five-Year Operating Forecast are as follows:
The Public Transportation Fund (PTF) grows by approximately 5.4% annually
Fixed route fares grow by 5% in FY18 with reduction of discounted fares and base fare increase in FY20
Paratransit ridership drives an 7% increase in number of trips delivered
Planning, Administration, Safety & Security, and Regional Services costs have been inflated two percent (2%) for the last four (4) years of the forecast
The proposed service changes within the five-year time period that have been incorporated into the plan as proposed by the Transit Life Cycle Program are as follows: FY17
No service changes FY18
Begin Route 104 Saturday service in Chandler
Begin PTF funding of Route 104 in Mesa FY19
Begin PTF funding of Route 50 in Scottsdale FY20
Begin PTF funding of Route 30 in Tempe
Begin PTF funding of Route 77 in Mesa FY21:
Begin PTF funding of Route 30 in Mesa
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RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 12
FY17 – FY21 Operating Forecast
(thousands)
5-YearTotal
Revenues
Public Transportation Fund (ADOT) 793,606$
Less: AZDOR Assessment (4,973)
PTF Bond Proceeds 61,257
Less: Debt Service Bus & Rail (157,971)
Less: Rail Capital Funding (current) (268,669)
Net PTF for Operations 423,250$
Other Regional Funds 24,725$
Federal Funds 41,973
Transit service reimbursements 182,658
Fare Revenues 92,018
Alternative Fuel Tax Credit 1,228
Interest and other revenue 160
Total revenues 766,012$
(thousands)
5-YearExpenditures TotalOperations
Fixed Route 458,136$
Paratransit - EVDAR 47,350
Paratransit - NWDAR 10,515
Paratransit - Regional Trips 14,549
Paratransit - RideChoice 4,703
Vanpool Service 5,138
ADA 108,312
Total operations expenditures 648,704$
Transportation Demand Management 5,912$
Planning & Administration 24,668
Regional Services 42,018
Safety & Security 1,974
Operations Contingency 18,993
Total expenditures 742,269$
Excess/(deficiency) of revenues
over expenditures - operations 23,744$ Less: Bus Capital Funding (67,585)$
Undesignated fund balance, July 1, 2015 85,950$
Excess/(deficiency) (43,841)
Undesignated fund balance, June 30, 2021 42,109$
The Five Year revenue operating
forecast begins with PTF sales tax
funds, which are estimated by
ADOT team of economists.
One Bond Issue is anticipated in
FY17.
Debt Service and Rail Capital
Funding requirements are
deducted to derive PTF available
for operations.
Operations expenditures for the
five-year period are impacted by
service contract increases and
paratransit demand ridership.
Due to aging population,
paratransit ridership is forecasted
to grow significantly.
Regional Services, Planning,
Safety & Security and Admin
costs are forecasted to grow
about 2% per year.
A $23.7M operating surplus is
projected, which will be used to
fund bus capital purchases along
with existing fund balance. The
current $86.0M balance has
been built to support the cyclical
bus capital drawdown.
Projected Operating Fund
Balance is $42.1M in FY21
4/7/16
RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 13
FY17 – FY21 Capital Program
(thousands)
5-YearTotal
Revenues
Public transportation funds 46,696$
FTA - Section 5307 161,448
FTA - Section 5311 456
FTA - Section 5337 1,046
FTA - Section 5339 8,245
FHWA - STP 17,159
Member local match 100
Vehicle/parts proceeds 1,929
Capital assets reserve applied 1,740
Vanpool reserve applied 741
Undesig. Fund Balance Applied (PTF) 20,891
Total Revenues 260,451$
(thousands)
5-YearTotal
Expenditures by Project
IT Infrastructure 2,747$
Standard Bus - Replacement 154,339
Standard Bus - Expansion 50,308
Express/BRT - Expansion 3,168
Rural Fleet - Replacement 1,173
Paratransit Fleet - Replacement 1,915
Vanpool Fleet - Replacement 13,462
Vanpool Fleet - Expansion 4,438
Fleet - Other 1,957
Transit Centers (4-Bay) 2,376
Bus Stop Passenger Amenities 535
Park & Rides 9,233
Vehicle Management/Communications Systems 6,546
Fare Collection Systems 505
State of Good Repair - Fleet Rebuild 7,749
Total Expenditures 260,451$
Capital program funding sources
include new PTF sales tax and
PTF fund balance that has been
accumulated for cyclical bus fleet
replacement.
Total PTF funding over the five
years is $67.6M or 26% of capital
revenue.
Federal funding will provide
$188.4M or 72% of capital
revenue.
Capital program expenditures for
the upcoming five years are
primarily for fleet replacement and
expansion.
A total of 475 bus units are planned
for replacement and 93 for
expansion.
Vanpool fleet replacements total
301 units, with 100 expansion units
planned.
Paratransit fleet replacements total
164 units.
New transit center and park-and-
ride facilities are planned in the
West Valley. Vehicle
communications and fare collection
systems are also planned.
4/7/16
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433
DATE AGENDA ITEM 5 April 7, 2016 SUBJECT Financial Audit Services Contract Award PURPOSE To provide information regarding the procurement of Financial Audit Services from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP013-046756. The period of service will cover two fiscal years of FY17 and FY18. BACKGROUND/DISCUSSION/CONSIDERATION Valley Metro Rail Inc. (VMR) and the Regional Public Transportation Authority (RPTA) collectively (Valley Metro), requested quotes from qualified firms of certified public accountants that were available for cooperative agreements on the State of Arizona Contract to complete the VMR and RPTA financial statement and Federal Single Audit Act audits for the fiscal years ending June 30, 2016 and 2017. Quotes were requested from four qualified certified public accounting firms on the State Contract with responses received from two firms. The fixed rates per firm are established in the State Contract. Valley Metro will procure the required financial audit services from CliftonLarsonAllen LLP utilizing a cooperative agreement through the State of Arizona contract. Cooperative Agreements are contracts that are solicited and awarded by other public entities and whose cooperative language allows Valley Metro to utilize these contracts for goods and services it requires. This professional services contract will have variable hours at the contracted fixed rates with a not-to-exceed maximum price. Of the two quotes received, Henry & Horne, PLC was determined to be 66% higher than the quote received from CliftonLarsonAllen LLP. The quote from CliftonLarsonAllen LLP had lower fixed rates and lower overall cost and was determined to be fair and reasonable.
These audits are to be performed in accordance with generally accepted auditing standards, as set forth in the General Accounting Office's (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1996 and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. In addition, these audits will include the “agreed upon procedures” for supplemental review of several accounting transaction areas which will include travel expenses, credit card expenditures, reimbursements to employees and contracts & procurement.
2
COST AND BUDGET The cost to procure the financial audit services for Valley Metro from CliftonLarsonAllen LLP on a cooperative agreement on the State Contract ADSP013-046756 is in the amount of $181,650. A 10% contract contingency of $18,165 is recommended for adjustments to scope of work for Supplemental Procedures that is included within the overall budget for the services. The VMR share for the two year contract will be $83,750 and to establish a 10% contract change contingency of $8,375. The FY17 portion is included in the overall budget established for audit services. The RPTA portion for the two year contract will be $97,900 and to establish a 10% contract change contingency of $9,790. The FY17 portion is included in the overall budget established for audit services. Costs for the financial audit services are included within the VMR and RPTA FY17 Operating and Capital Budgets. These costs for VMR will be city funded in the Agency Operating Budget in Project 4020. The costs for RPTA will be funded through the overhead allocation pools 1015 and 1016. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020:
Goal 2: Advance performance based operation o Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-
term sustainability. COMMITTEE PROCESS AFS: April 14, 2016 for information RTAG: April 19, 2016 for information TMC/RMC: May 4, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION This item is presented for information only. TMC and RMC will be asked forward to the Board of Directors authorization for the Interim CEO to procure the required financial audit services for Valley Metro from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP013-046756 for $181,650 with a 10% contract contingency of $18,165.
CONTACT John McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT None
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433
DATE AGENDA ITEM 6 April 7, 2016 SUBJECT Management Policies & Procedures Update PURPOSE To provide an informational update including progress made on Board directed policy and procedure changes in progress, as well as anticipated next steps for each area. BACKGROUND/DISCUSSION/CONSIDERATION In December 2015, the Boards requested a thorough review of, and updates to five priority policy areas. Those included the Credit Card Program; Travel & Entertainment; Ethics; Conflict of Interest; and Procurement. Staff will provide the Board with an update on policy revisions, along with a summary of the attached Policy Development Process which summarizes the approach being used in the development and revision of existing and future policies and procedures. COST AND BUDGET There are no budget impacts at this time. COMMITTEE PROCESS TMC/RMC: April 6, 2016 for information Audit Finance Subcommittee: April 14, 2016 for information Boards of Directors: April 21, 2016 for information RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim-CEO 602-262-7433 [email protected] ATTACHMENT Policy Development Process
POLICY DEVELOPMENT PROCESS
PH
ASE
1
PO
LIC
Y D
EVEL
OP
MEN
TP
HA
SE 2
PO
LIC
Y R
EVIE
W &
AP
PR
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AL
PH
ASE
3C
OM
MU
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ATE
, TR
AIN
, UP
DA
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AR
CH
IVE
IDENTIFY NEED
DRAFT
STAKEHOLDERINPUT
LEGAL REVIEW
POLICY TEAMREVIEW
APPROVAL
COMMUNICATEPOLICY
TRAINING ANDCOMPLIANCE
REVIEW ANDUPDATE
ARCHIVE
• Valley Metro employee, division or department suggests need for policy• At least one responsible Director/Executive agrees to advance potential policy through development and review process• Responsible Director/Executive transmits potential policy to Valley Metro Policy Administrator1 to indicate potential policy is entering development and review process
• Responsible Director/Executive appoints responsible Division/Department to develop policy• Responsible Division/Department consults with Valley Metro Policy Team2 to draft policy in standard Valley Metro Policy Template3
• Responsible Division/Department shares draft with internal Valley Metro stakeholders• Responsible Director/Executive incorporates stakeholder feedback into draft
• Valley Metro Policy Team advances draft policy to General Counsel for legal review• Changes from legal review are incorporated into draft policy
• Valley Metro Team distributes policy draft and needs assessment to Executive Leadership Team (ELT)• Responsible Director/Executive incorporates ELT’s feedback into policy’s final draft for approval
• Team distributes policy draft and needs assessment to ELT• Team solicits Member Agency and Designated Recipient feedback and input• If a Management Policy, CEO approves policy following final input/review from ELT• If an Agency Policy, schedule for management and Policy Board(s) approval > Agency Policy may be made Interim-Agency Policy by CEO pending Board(s) approval
• Valley Metro Policy Administrator posts policy to online policy library and issues agency wide announcement of a new or substantially revised policy
• Responsible Manager/Director delivers additional strategic communication and training• Human Resources integrates new policy into new employee orientation• Responsible Director/Executive establishes support systems to achieve compliance
• Responsible Manager/Director notifies Policy Administrator of routine updates to existing polices• Policy Administrator notifies impacted agency sta�• Policy Administrator initiates review of polices by responsible Division at least every three years
• Policy Administrator maintains central repository/document control of superseded or withdrawn polices.
1 This person will be a designee from Legal or Executive Team. As of March 2016, this individual is Rob Antoniak who reports directly to Interim-CEO. This will likely move into Legal once strategic framework and tasks are completed as outlined by the Board during the CEO transition that began in December 2015
2 Directors or Designee from Legal/Procurement, Human Resources, Finance, Internal Audit or Division Author
3 Please refer to latest Valley Metro Policy Template available on intranet.valleymetro.org
VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433
DATE AGENDA ITEM 7 April 7, 2016 SUBJECT Future Agenda Item Requests PURPOSE For information BACKGROUND/DISCUSSION/CONSIDERATION Councilmember Williams will request future agenda items from members. John McCormack will review planned agenda items for May 12: FY17 Budget & FY17 – 21 Five-Year Plan Adoption 2016 Transit Life Cycle Plan Update Internal Audit Implementation Health Insurance Review
COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT Upcoming Meeting Dates for 2016
2
Budget and Finance Subcommittee
2016 Meeting Schedule
Thursday, May 12, 2016 12:00 PM
FY17 Budget & FY17 - 21 Five Year Plan Adoption
2016 Transit Life Cycle Plan Update
Internal Audit Implementation
Health Insurance Review
(Tentative) Thursday, June 9, 2016 12:00 PM
Management Policies and Procedures Update
Thursday, October 13, 2016 12:00PM
FY16 Year-End Review
FY17 First Quarter Reports