Good morning. We will go ahead and
call the
audit and finance committee meeting
for friday, march 14, 2025 to order
at 9:45 --
9:45 a.m.
may we please have a safety briefing.
this will be done by
system safety.
>>
good morning. We are at one gateway
plaza at the l.a. Metro board room
on
the third floor. If we do need to
evacuate the room here, we will effectively
out to my left. We will go down the
escalators and meet out
at the metro customer service area.
for accident --exiting the
room, make sure you are aware
of the tripping hazards, chairs, backpacks,
things of that nature. In the event
of
an earthquake, we will huddle under
the tables until the shaking stopped
to do an
assessment to see if we need to evacuate.
in the event of a first-day situation,
there is an aed across from the security
desk. We have first responders in
the room from internet county --san
benito county. In the event of an
active
attacker, run, hide and fight. 20th
online, make sure you're familiar
with your surroundings. Make
sure you're familiar with your place of
safety and exit route. That concludes
my briefing.
>> thank you very much.
with that, we are going to
move to the pledge of allegiance.
>>
[ inaudible ]
>>
thank you very much. And now,
madame secretary, roll call.
>> [
roll call ]
we do have a quorum present.
>> very
good. Do we have any public
comments today?
>> I have not received
any request to
speak or any written comment.
>> okay.
we get to move
to item ,
approval of the minutes from february
14, 2025.
any of my colleagues have any request
to modify
or make any comments about it?
if not, do we have a motion
to approve ?
>> I move for
approval.
>>
approval by chaffee. Must be
a separate county. Yeah.
>> dutrey
seconds .
>> that
sounds great. Thank you. Roll call please.
>> [ roll call ]
motion carried unanimously.
>>
excellent. Next will be
fiscal year 2025 midyear operating
budget review amendment
presented by christine wilson,
assistant director of finance.
a very lovely hat and outfit for
st. Pattie's day.
>> thank you. Good morning,
chairman and members of the committee. I'm
assistant director of
finance presenting item number 6b,
the
fy 25 midyear operating budget review amendment.
it is a
practice of metrolink to perform a review
of the annual budget at midyear to
identify any revisions that may be needed
to the
operating budget as a result of changed circumstances.
our review indicates
that an amendment is required this year.
the amendment we are presenting is
driven by the following. Changes to
ridership, changes to the service
schedule, a change to the cost of
mobilization, and
a member agency request. This slide
shows the details of the amendment
staff is recommending for adoption
by the member agencies.
the box at the top of the
screen shows the budget as it currently
exists. Revenue of
68 million, expensive 332 million,
and support of 264
million. In the next box
we see the
amendments. The revenue adjustments
consist of a reduction of the revenue
based on
a re-forecast of the revenue
by capital kpmg. Because the lc top
funding
was not confirmed at the time we did
the budget, the original budget forecasted
student
ridership in the numbers
as a
25% discount. This re-forecast to
takes into account that students ride
free.
in addition to
the most current changes in ridership,
this reduced revenue by
7.9 million. The second change
that the revenue is to include the
student adventure pass pilot budget
. Once again, because we were unsure
of funding, it was not included in
the budget. Including the student
adventure
pass funding , it adds
6.3,000,002 revenue that produces
a net revenue change of
1.6 million. The next amendments relate
to expense. First we have the removal
of four
42 laguna trades originally included
in the optimized
service budget. Next, another in just
a
moment --adjustment is the removal
of 20 laus
to convene a trains replaced by the
addition of 10
laus to montclair trains.
you also see here at the request of
sp cta, the
addition of cause for san bernardino
sharers added to san bernardino
county. This is funded in
its entirety by sp cta. Finally, the
negotiation of the mini bundle
has
reduced the original estimate budgeted
for mobilization by 2.5 million
. All these amounts create, in that,
a reduction to member agency required
support by $896,000.
the boxes
at the bottom of the slide show the
amounts of the fy 25 budget if
this recommended amendment is excepted.
all the following slides show the
proposed amended budget by category
and member agency, including changes
to the individual
lines in the operating budget.
you see here
the individual items that have been changed.
at the bottom, as I said, it creates
a
reduction to the amount we are asking
for member agencies by
$896,000. That concludes my report.
can I answer any questions?
>>
thank you very much for the report.
attorney to my colleagues here.
and online. A quiet bunch
again. Linda
.
>> thank you for your great explanation
of the numbers.
>> thank you. >>
everybody knows what the numbers are,
but you explained them so clearly.
thank you
for that.
>> thank you. >> all right.
with that,
this is actually an action item.
we need to first asked for public
comments.
>> mr. Chairman,
john dutrey. I have a couple of questions.
on the sharers contract
, obviously, sbcta is
covering that cost. Is that also in
the budget?
>> yes, that
it started
--added to
the budget by this amendment.
>> all
right, them. I move for approval.
>>
okay. We do have a motion.
before we do that, do we have any
public comments?
>> I have
not received any written public comment
or request to speak on this item.
>> okay.
emotion on the floor to approve. Do
we have a second? We have a second.
different county. [ laughter ]
roll call, please.
>> [ roll call
]
motion carried unanimously.
>> very good.
item one to
six see -- 6c.
performance audit
, deactivation of badges for employees,
board
members, and idts.
presented by the director of the audit
department.
>> good morning, chairman
and committee
members. Internal audit completed
the deactivation the badges for employees,
board members and
integrated digital and technology
services, also
known as idts, contractors. The audit
is included in the fiscal 25 board
approved
audit plan. The objective was to evaluate
the effectiveness of the agency's
badge deactivation process
for secure access control for employees,
board members and idts contractors.
the audit
period was january 2023 through
july 2024. There are three findings
and
three audit recommendations. Management
agreed with the findings and developed actions.
audit will
track the status of the corrective
actions. This concludes my item. Happy
to answer any
questions.
>> for such a long stretch
of
time to deal with this, that was a
quick report. I will open it
up to questions. I don't have
any questions.
any public
comments?
>> I have not received any
written public comments or requests
to speak on
this item.
>> okay. So then, I will
make a few comments. I asked
for this item to come to the audit
committee some time ago for the mere
fact that
my badge was supposedly expired
in the year 2020, and it was 2022
or 2023 and still working just fine.
I thought, at the time, there was
a lot of disgruntled ex-employees
using things like old keys or badges
to
get into
other
facilities. Not metrolink, but just, in
general, on the news. I thought, well,
we don't want
people with expired badges to be able
to come in and, you know, get
access to our facilities to cause harm.
and so, this started
this process.
I have learned that we
have one more little tweaks we are
going to have to add to this.
I am still getting comments from board members
, easy that even
as of today, that the old badges are
still working. What I have now
learned over the last many months
on this is that
our
badges are programmed twice, at least
board members, and anybody who has
access to this
building here at union station. The
expired badges, I believe, will not work,
will not work
at the wilshire building or any of
our facilities because they have been
turned off.
but what if it turned off are the
access to this building here by ellie
metro. Somehow we
have got to communicate to ellie metro that
--l.a. Metro, that when board members
change out
or expired badges, et cetera, anybody
who has access to this building,
they should be
notified to deactivate those badges
as well. I think that is the one thing
we
have to add to this to make sure that
gets accomplished, and we should
be good. I will leave it at that.
this is a receive and file. Appreciate
the audit
department's long-term deal to get
this resolved and figured out. It
will
lead to the much safer
work environment for
all of the metrolink family. With
that, we moved to item 6d,
financial results for the first seven
months of
fiscal year
2025 through january 2025 ridership,
revenue and operating results. Presented
by christine wilson, assistant director
of finance.
>> good morning, again.
this slide
shows the actual
versus forecast ridership by month.
the redline is the budget,
the columns are actual
with the blue portion regular ridership
in the orange portion the student
adventure
pass ridership. As you can see, where
below the forecast ridership.
much of this has
to do with the devastating fires in
the month of january. Reductions
went from 2.5% on the ventura line to
9%
on the antelope valley line.
this graph shows the
current ridership forecast for the
entire year. Looking at the most
recent month,
january is historically a recovery from
december holidays. This year was different.
the fires
had a real effect
. Through january, ridership was forecasted
at 4.2 million or 60% while actuals
work 4.3 or 62%. The student adventure
pass pilot provided 1.3 million writers
--riders year to date.
we see here a graph of farebox revenue
by month and the current forecast
for the rest of the year.
through the month of january, revenue
was budgeted at
24.4 million or 54% recovery,
while the actual is 23. 4 million
or a 52% recovery.
1.1
1.1 million
under budget. What are we so far under
forecast? The 25% monthly pass discount
offered systemwide for the poor on-time
performance account
--accounts for 170,000 of the shortfall.
the reduction of the student adventure
pass reimbursement
to
25% accounts for another 600,000.
free rides for
fire victims added
to the reduction in revenue. There
were fewer
passengers as a result of the fire.
for total financial results in january,
before san clemente, total expenses
were under budget by 17.6 million
, and member agency support is in
surplus
by 21 point 4. Total operating revenue
is 37.6, less than
0.1 million under budget. Total expenses
at 169.8 million are 17.6 million
under budget. Categories under
budget hour as shown on the slides.
these expenses, I remind you, are
based on
accruals, not actuals. This slide
shows
that we had
passed two receivables of
almost 40 million. In truth, by now,
we actually have received 30 of it.
this
is way out of date, --
, just because we have received the
money. This
is the operating cash that we are presenting
our cash position at metro. As you
know, there
is a $50 million threshold we are
to maintain
. You see here that the threshold
, the amount we're at
right now, is 86.1.
moving to
arrow. This is the ridership
by month.
through january, the
ridership was forecasted at 81,000
and actual ridership is at 85,000.
over forecast by 4000.
year to date, the student adventure
pass attributes over half of the ridership.
this is the arrow farebox revenue
by month compared to budget. Through
january, farebox revenue was budgeted
at 113,000 and the
actual is 217,000, over budget by
102,000. With the student adventure
pass contributing half
of the revenue. Financial
results for
arrow through january show operating
revenue at 365,000, or 264,000 over
budget.
expenses are 8.9 million, or 1.1 billion
--million over budget. Support is
required at 8.6
million, or in surplus by 1.3 million.
this is the student
adventure pass update. As you
can see, this slide shows the
amount of the student
adventure pass ridership that we
have obtained both through tvd
and the mobile app.
as you can see, it has added
1.4 million riders to the system,
including
arrow.
this is an update on the fy 26
budget development schedule. We have
,
thus far,
the budget presented to member agency
cfos three
times, and to the membership agency
ceos on february 21. We continue to
be in daily discussions with the member agencies
on fy 26 budget
, and we feel that we are on track
to bring
a budget as required to this
committee next month.
that concludes my report. May I answer
any
questions?
>> did any of the agencies
that you have been --of
the member agencies have any issues
with what the 26
budget is looking like?
>> at the
beginning, but
by now, almost everyone is --
there are certain things we still
have to work out.
>> no
huge hurdles
that will cause any --
>>
we will work them out.
>> any questions
or comments by anybody? Okay. This
one is receive and file. Do we have
any
public comments on that
?
>> I have not received any
written public comments or request
to speak on that item.
>> okay. Our
most
favorite part of the day
, ceos report.
>>
I will make sure it is brief so it
stays your favorite. Very quickly,
we
mentioned this in the executive committee meeting
. I think it is important to share
here
today as well as it
relates to some financial issues.
we are all
looking towards 2028 in our ability
to be ready to move
so many people for the olympic games.
the most
--most recently, we had an earmark
in a senate appropriations bill that
was going
to set aside $200 million to the region
4 --region for
olympics preparedness. And 25 million
was identified
for metrolink. With what is expected
to happen today in the senate,
that they will act on the house's
version of the
continuing resolution
, that will effectively
eliminate the earmarks that were identified
in that senate appropriations package
in the
appropriations bill.
besides losing the money, the other
element it did
is that that action, that earmark,
was creating a
special account for
the olympic games so there
was this place you could put money
over the
next appropriations cycles. The action where
the cr will eliminate the ability
of having that
account also available for us for
future efforts. Where now --the royal
we,
collectively, will have to identify
another way of securing funding
from the federal government. Is a
big deal.
is a huge disappointment. We had other
earmarks in both house and senate
packages,
as probably some of your own home
agencies had. On top of
that, we've also lost other earmarks
as well
through what is happening in washington d.c.
thought I would share that with the
group is
the only other item is that I want
to call back your attention to the
announcement I made earlier this week
that on friday of last week our chief
financial
officer let me know that he was going
to be moving on to
new activities
, new things. He
is going to be leaving us here at
metrolink in early april.
this is why
christine wilson felt so confident
in saying we will have the budget
all worked out.
it is because arnold has committed
to making sure it is done before he
rides
off into the sunset.
that is why christine said, sure,
we have got no problem. In any
event, I said it earlier, my thanks
to arnold for his service here at
metrolink. He
has been --it has been six or seven
years he served in
various capacities.
he has helped us to get
through this challenging time of coming
out of covid and metrolink reimagined
and a
few other elements. It took his steadfast leadership
in that regard to
help us navigate that
, and working with
her member agencies. My thanks, again,
to arnold for his service. You will
hear me
talk about this. We have a couple
more meetings where I get to embarrass
him
in public. You will hear more on that
too. They could, mr. Chair. That
concludes my remarks.
>> appreciate
your comments. Follow-up question
for you. With the cr, is
it passes today, that keeps the government
open for a couple more months. What
about,
at that point, are these earmarks
potentially able to
be put back into a final resolution
? How does that work?
>> so what
we're hearing, in fact, the timing
right now is that the members are,
many members
from southern california, are now putting
out the notice that
we are accepting new earmark requests.
we have a few already lined up that
we
will be looking at. This 200 million
one was a movement of funding from
one
program that was
stepped back and put this 200 million
into the special account. I think
we will go back after it. We will
be looking at fy 26. The appropriations
package that was being done today,
that will be done today, was actually
fy 25
, the year we are in right
now, and the can has been kicked down
the street a few different times.
now --
they want to appropriate, appropriators
want to appropriate --
the fact that the cr will move forward
means we keep things
business as usual. Then we will likely
see some level of continuing resolution
as we
get into federal fiscal year
, september 30. We will see what happens
as to whether
we see continuing resolutions for
fy 26
as well.
theoretically, congress should
act over the summer, and we should
have a full appropriations package
by the
end of september. That has not happened
emma doesn't
happen all the time. So
we will likely see some continuation
of the fy 26, but we will all be making
requests, and
certainly metrolink will be through
earmark requests in future appropriations
packages.
>>
okay. Thank you.
committee member comments. Anybody
have anything on their mind?
pam? But I just want to add about
arnold. In addition
to his technical abilities, he has
always been a very genial and kind
person. I
appreciate that.
>> anybody else?
you ought to see him when the
member agencies aren't cooperative.
that he is not so congenial.
>> that
is because he
knows when to pull his punches and
be the tough guy.
>> you've got it.
absolutely.
>> but to still maintain
good relationships.
>> no doubt. Are
right. Chair's comments.
arnold, I hope this is a retirement,
not l.a. Metro stealing somebody else
from
us . I will also point out that, before
darren, you filled
the shoes as the ceo, interim ceo
for a bit. You have had a variety
of roles
. You know, your reports are always
very
well presented . We appreciate all
that you have done here at metrolink.
hopefully, you are going fishing
and not fishing for something down
the
street. [ laughter ]
we will have to find that out. All right.
with that, we're going to go ahead and adjourn.