Transit Management Committees

MEETINGS OF THE Transit Management Committees

Transit TMC/RMC Management Rail Management Joint Meeting Committee (TMC) Committee (RMC)

Date Wednesday, May 3, 2017

Starting time 11:00 a.m.

Meetings to occur sequentially

Location Valley Metro Lake Powell Conference Room (10A) 101 N. 1st Avenue, 10th Floor Phoenix

If you require assistance accessing the meetings on the 10th floor, please go to the 13th floor or call 602-262-7433.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

April 26, 2017

Joint Meeting Agenda Transit Management Committee and Rail Management Committee Wednesday, May 3, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor 11:00 a.m.

Action Recommended

1. Items from Citizens Present (yellow card) 1. For information

An opportunity will be provided to members of the public at the beginning of the meeting to address the Board on non-agenda items. Up to three minutes will be provided per speaker or a total of 15 minutes for all speakers.

2. Chief Executive Officer’s (CEO) Report 2. For information

Scott Smith, CEO, will brief the TMC/RMC on current issues.

3. Minutes 3. For action

Minutes from the April 5, 2017 Joint TMC/RMC meeting are presented for approval.

4. Public Comment on Agenda Action Items (blue card) 4. For information

The public will be provided with an opportunity at this time to address the Board on all action agenda items. Up to three minutes will be provided per speaker to address all agenda items unless the Chair allows more at his/her discretion. A total of 15 minutes for all speakers will be provided.

5. Fiscal Year 2017 Quarterly Reports 5. For information

Quarterly Reports for Valley Metro RPTA and Valley Metro Rail are provided as an informational update of Valley Metro activities.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

6. Travel, Expenditures and Solicitations 6. For information

The monthly travel, expenditures and solicitations for Valley Metro RPTA and Valley Metro Rail are presented for information.

7. Future Agenda Items Request and Report on Current 7. For information Events

Chairs Zuercher and Methvin will request future agenda items from members, and members may provide a report on current events.

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.

DATE AGENDA ITEM 1 April 26, 2017

SUBJECT Items from Citizens Present

PURPOSE An opportunity will be provided to members of the public at the beginning of the meeting to address the TMC/RMC on non-agenda items. Up to three minutes will be provided per speaker or a total of 15 minutes for all speakers.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT None

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

DATE AGENDA ITEM 2 April 26, 2017

SUBJECT Chief Executive Officer’s Report

PURPOSE Scott Smith, Chief Executive Officer, will brief the TMC/RMC on current issues.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT None

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

DATE AGENDA ITEM 3 April 26, 2017 Minutes of a Joint Meeting of Transit Management Committee and Rail Management Committee Wednesday, April 5, 2017 11:00 a.m.

Transit Management Committee Meeting Participants Ed Zuercher, City of Phoenix, Chair Gina Montes, City of Avondale Roger Klingler, City of Buckeye Ryan Peters for Marsha Reed, City of Chandler James Shano, City of El Mirage Marc Skocypec, Town of Gilbert Kevin Link for Kevin Phelps, City of Glendale Rob Bohr for Brian Dalke, City of Goodyear Chris Brady, City of Mesa Jeff Tyne, City of Peoria Mike Nevarez for Steven Methvin, City of Tempe

Members Not Present Sara Allred, ADOT Reed Kempton, Maricopa County Paul Basha, City of Scottsdale Nicole Lance, City of Surprise City of Tolleson

Rail Management Committee Meeting Participants Mike Nevarez for Steven Methvin, City of Tempe, Chair Chris Brady, City of Mesa, Vice Chair Marsha Reed, City of Chandler Kevin Phelps, City of Glendale Ed Zuercher, City of Phoenix

Chair Zuercher called the joint meeting to order at 11:05 a.m.

Good morning and welcome to the joint meeting of the Transit Management Committee and the Rail Management Committee. We will start with Item 1, which is Items from Citizens Present. And I have one card from Mr. Blue Crowley. Mr. Crowley, good morning.

1. Items from Citizens Present

Mr. Crowley said being that this is for the non-action items and -- or for not on the agenda and action, the thing I want to bring up to your attention and try to find out some

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433 things about is the travel expenses and such. And what they did and how that comes back to the agency.

You know, the account manager getting leadership training is a positive. And John going to the Washington, D.C., for the legislative conference.

But as I was talking to Paul, where is our agenda, what was he doing, because he's just as much of a lobbyist, and what drum is he banging, or is it just there to find out what they're going to give and get and it doesn't matter what we're doing.

And the general counsel going to Savannah, Georgia, for a legal affairs seminar. How does, you know, it help him, that's good for his own self, but what is it that that does for this agency. And if it's just to improve him and his legal abilities and that, why are we paying the dime. The safety and security director, I asked her in the hall did she go to Washington. And she went, she didn't go to D.C., but she did go to Washington State.

Now I asked Paul, and I believe that's for a mandated thing, but if not, why are we sending her to Seattle to just observe their system or such, because this is here, that is there, and the seventeen different agencies that work on that one and the abilities of the Seattle system compared to us it's like we're on a tricycle and they do have actual locomotives.

And marketing distribution signage assistant, a marketing conference. We only paid fifteen hundred, but that's the total, it's not, you know, just getting there and such, but what are we getting for it.

And with that, I'll go to the next topic of non-agenda and that's the intermodal that you all aren't doing. I'd like to see a better commitment from any of your communities. Starting with Wickenburg, is there a reason they're not sitting at the table being that the elected does come to the table. And when you don't have one of you sitting there, how is it that things that are sensitive to them are done.

And then the rest of you, we'll start with Mesa, 60 percent of your community has no transit. Do you want me to keep on going and point out that some, because you only consider the bus operations in your city that are actual bus routes -- how many of you have -- absolutely zero.

I was one of the ones that put together the Prop 400 that was to get all of you together and with circulators. I wish that you would understand and get that done in your communities. I know you're not the electeds, but you're the ones that do get things done.

2. Chief Executive Officer’s Report

Scott Smith provided an update on the following items:

 Final Four Weekend

 Streetcar Coalition meeting

3. Minutes

Minutes from the March 1, 2017 Joint TMC/RMC meeting were presented for approval.

IT WAS MOVED KEVIN PHELPS, SECONDED BY CHRIS BRADY AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 1, 2016 JOINT TMC/RMC MEETING MINUTES.

4. Travel Expenditures and Task Order Changes

This item was presented for information.

5. Future Agenda Items Request

None.

With no further discussion the meeting adjourned at 11:17 a.m.

DATE AGENDA ITEM 4 April 26, 2017

SUBJECT Public Comment on Agenda Action Items

PURPOSE The public will be provided with an opportunity at this time to address the TMC/RMC on all action agenda items. Up to three minutes will be provided per speaker to address all agenda items unless the Chair allows more at his/her discretion. A total of 15 minutes for all speakers will be provided.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT None

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

DATE AGENDA ITEM 5 April 26, 2017

SUBJECT Fiscal Year 2017 Quarterly Reports

PURPOSE To provide an informational update of activities at Valley Metro.

BACKGROUND/DISCUSSION/CONSIDERATION Quarterly Reports are provided as an informational update of Valley Metro activities

• Operations • Communication & Marketing • Safety and Security • Finance • Capital and Service Development

COST AND BUDGET None

COMMITTEE PROCESS TMC/RMC: May 3, 2017 for information Boards of Directors: May 18, 2017 for information

RECOMMENDATION This item is presented for information only.

CONTACT Ray Abraham Hillary Foose Operations and Maintenance Director Director, Communication & Marketing 602-262-7433 602-262-7433 [email protected] [email protected]

Adrian Ruiz Paul Hodgins Director Safety and Security Chief Financial Officer 602-262-7433 602-262-7433 [email protected] [email protected]

Wulf Grote, P.E. Director, Capital and Service Development 602-322-4420 [email protected]

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433 4/26/2017

Operations & Maintenance FY17 Q3 Report May 2017

Regional Ridership

6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - July Aug Sept Oct Nov Dec Jan Feb Mar Bus 3,341,716 4,259,040 4,326,018 4,352,671 4,276,931 4,125,767 4,204,020 4,127,769 4,495,970 Light Rail 1,215,447 1,403,213 1,431,383 1,458,675 1,387,584 1,335,413 1,395,420 1,333,557 1,478,554

FY17 Q2 FY16 Q3 FY17 Q3 Bus 12,755,369 12,531,778 12,827,759 Light Rail 4,181,672 4,003,244 4,207,531 Total 16,937,041 16,535,022 17,035,290 2

1 4/26/2017

Fixed Route Bus – East Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

On-Time Performance ≥ 92% 92% 91% 91% Complaints Per 100,000 ≤ 45 47 56 49 Boardings Mechanical Failures Per ≤ 12 9 13 5 100,000 Revenue Miles Revenue Service ≥ 99.85% 99.91% 99.80% 99.94% Completed Preventable Accidents per ≤ 0.90 0.76 0.59 0.45 100,000 Miles

Ridership -- 3,703,184 3,939,611 3,699,278

Fixed Route Bus – West Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

On-Time Performance ≥ 92% 90% 92% 90% Complaints Per 100,000 ≤ 45 39 42 44 Boardings Mechanical Failures Per ≤ 12 6 3 8 100,000 Revenue Miles Revenue Service ≥ 99.85% 99.97% 99.90% 99.96% Completed Preventable Accidents per ≤ 0.90 0.38 0.00 0.76 100,000 Miles

Ridership -- 127,061 125,259 133,017

2 4/26/2017

Light Rail

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

On-Time Performance ≥ 95% 92% 92% 94%

Complaints Per 100,000 Boardings ≤ 3.0 0.6 0.4 0.4

Preventative Maintenance ≥ 80% 100% 100% 100% Inspections - % On-Time (LRV) Preventative Maintenance ≥ 80% 100% 95% 100% Inspections - % On-Time (Systems) Preventable Accidents per 100,000 ≤ 0.90 0.20 0.00 0.37 Miles

Ridership -- 4,181,672 4,003,244 4,207,531 5

Customer Service – Call Center

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

Calls Received -- 308,325 355,006 307,382

Complaints Processed -- 6,888 7,095 6,582

NextRide Inquiries Handled by Interactive Voice Response -- 309,963 325,868 296,667 (IVR) NextRide Inquiries Handled by -- 510,870 499,806 485,252 Text Messaging Average Talk Time -- 2:21 2:17 2:08

Average Speed of Answer ≤ 1.00 :22 0:54 0:18

3 4/26/2017

Safety, Security & Quality Assurance FY17 Q3 Report

May 2017

Bus Accidents

Total NTD 100 92 85

FY17 Q2 FY16 Q3 FY17 Q3 Total 100 85 92 NTD 173

These include all contacts made

1 4/26/2017

Dial-a-Ride Accidents

Total NTD

5 No NTD 4 3 Reportable Incidents 01

FY17 Q2 FY16 Q3 FY17 Q3 3

Police Incidents - Bus

13 10 8 7 5 3

FY17 Q2 FY17 Q3 Total Incidents Criminal Damage Other

2 4/26/2017

Rail Accidents

16 15

12 12 11 11

FY17 Q2 FY16 Q3 FY17 Q3 Total 12 11 16 NTD 12 11 15 5

Fares Inspected 14%15% 13.36% 613,488 588,153 562,062

FY17 Q2 FY16 Q3 FY17 Q3

% of total ridership 6

3 4/26/2017

Fare Inspections and Fare Evasions

Inspected and Fare Evasion Percentage 20.0%

18.0%

16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0% Jun‐16 Jul‐16 Aug‐16 Sep‐16 Oct‐16 Nov‐16 Dec‐16 Jan‐17 Feb‐17 Mar‐17 Percentage Inspected Fare Evasion

Fare Compliance Total Inspections for Q1= 647,591

94% 94% 94%

FY17 Q2 FY16 Q3 FY17 Q3 8

4 4/26/2017

Citations Issued by Allied Barton

304 273

217

FY17 Q2 FY16 Q3 FY17 Q3

Top Violations

250

200 207

150

100

81 61 50

0 Occupy Any Transit Vehicle Without Paying Fare Disobey Traffic Signals, Security notice Fail to Exhibit Proof of Fare Payment

5 4/26/2017

Fare Sweeps Total Activity

Total Contact: 2477 • Fare Recovery: 178 • Citations: 108 • Arrests: 29

The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 11

Criminal Activity in Q3 2017 Specific to AUS-Contract Security known incidents

2357

187 164 195 19 0 3 14 0

PROPERTY CRIMES CRIMES AGAINST PERSONS TRESSPASING & OPEN MEDICAL RESPONSES WARRANT ARREST CONTAINER

Platform Park N' Ride 12

6 4/26/2017

Quality Assurance

• TSC: Prepared future audits • NWE: TPSS Audit Open, Verification Report is with ADOT/SSO • CME: TPSS One item needed •50th Street: Performed the 90% Design deliverables Audit • GRE: Performed the Contractors Buy America Audit and contract deliverables Surveillance • QA Audit: Preparing for the COM • FTA Quarterly Update provided March 30, 2017

Criminal Activity in Q1 2017* (Platforms and Trains)

413

149 133

8 3 5 7 12 6

PROPERTY CRIMES CRIMES AGAINST PERSONS TRESSPASING & OPEN MEDICAL RESPONSES WARRANT ARREST CONTAINER

Platform Park N' Ride 14

7 4/26/2017

Criminal Activity in Q2 2017 (Platforms and Trains)

2388

184 194 19 5 24 0 4 13 0

PROPERTY CRIMES CRIMES AGAINST PERSONS TRESSPASING & OPEN MEDICAL RESPONSES WARRANT ARREST CONTAINER Platform Park N' Ride

Fare Sweeps*

January 11, 2017 – 19th Ave & January 17, 2017 – 19th Ave & Montebello Montebello

The teams made contact with 237 The teams made contact with 186 passenger/patrons: passenger/patrons: • 9 Fare Recovery Actions Conducted • 12 Fare Recovery Actions Conducted • 7 Citations Issued • 17 Citations Issued By Allied • 4 Arrests Universal • 0 Arrests

The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 16

8 4/26/2017

Fare Sweeps*

January 18, 2017 – 9th Ave. & January 24, 2017 – 19th Ave & Montebello Montebello

The teams made contact with 195 The teams made contact with 160 passenger/patrons: passenger/patrons: • 21 Fare Recovery Actions Conducted • 7 Fare Recovery Actions Conducted • 12 Citations Issued • 5 Citations Issued • 3 Arrests by PHX PD • 2 Arrests

The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 17

Fare Sweeps*

February 22, 2017 – 19th Ave. & February 9, 2017 – 19th Ave & Montebello Montebello

The teams made contact with 270 The teams made contact with 200 passenger/patrons: passenger/patrons: • Fare Recovery Actions Conducted • 33 Fare Recovery Actions Conducted • 1 Citations Issued • 19 Citations Issued • 1 Arrests • 1 Arrests

The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 18

9 4/26/2017

Fare Sweeps*

February 13, 2017 – 7th Ave & February 14, 2017 – 19th Ave & Camelback Montebello

The teams made contact with 110 The teams made contact with 160 passenger/patrons: passenger/patrons: • 3 Fare Recovery Actions Conducted • 6 Fare Recovery Actions Conducted • 8 Citations Issued • 4 Citations Issued • 3 Arrests by PHX PD • 3 Arrests

The purpose of a fare sweep is to ensure Fare Compliance and Revenue Recovery 19

Fare Sweeps* • February 14, 2017 – 19th Ave & • February 22, 2017 – 19th Montebello Montebello

The teams made contact with 160 The teams made contact with 270 passenger/patrons: passenger/patrons: • 6 Fare Recovery Actions • 0 Fare Recovery Actions Conducted Conducted • 4 Citations Issued • 6 Citations Issued • 3 Arrests by PHX PD • 2 Arrests by PHX PD

10 4/26/2017

Fare Sweeps* • March 7, 2017 – 7th Ave & • March 8, 2017 – 19th Ave & Camelback Montebello

The teams made contact with 140 The teams made contact with 170 passenger/patrons: passenger/patrons: • 7 Fare Recovery Actions • 16 Fare Recovery Actions Conducted Conducted • 2 Citations Issued • 7 Citations Issued • 1 Arrests by PHX PD • 0 Arrests by PHX PD

Fare Sweeps* • March 15, 2017 – 7th Ave & • March 20, 2017 – 7th Ave & Camelback Camelback

The teams made contact with 179 The teams made contact with 240 passenger/patrons: passenger/patrons: • 17 Fare Recovery Actions • 17 Fare Recovery Actions Conducted Conducted • 10 Citations Issued • 16 Citations Issued • 3 Arrests by PHX PD • 2 Arrests by PHX PD

11 4/26/2017

Fare Sweeps* • March 22, 2017 – 19th Ave & Dunlap

The teams made contact with 190 passenger/patrons: • 44 Fare Recovery Actions Conducted • 4 Citations Issued • 4 Arrests by PHX PD

12 4/26/2017

Capital and Service Development FY17 Q3 Report May 2017

Transit Service Development FY17 Q3 Report

1 4/26/2017

Transit Planning Projects

Project/Study Name Name Completion Completion DateDate Status Status

Mesa Five-Year Transit Plan September 2017 • ConductedDraft under review field safetyby Mesa training. staff Transit Stop Inventory and • Field data collection is 60% complete. June 2017 AccessibilityLight Rail Incident Study Hot Spot GIS • VerifyingDeveloped bus concept stop with amenities Safety and and Security locations for use in on-line July 2017 Mapping • maps.Completed reporting structure and update schedule

ShortTransit RangeStop Ridership Transit Data May • CompletedHistoric data draftupload final complete report. back to April 2015. July 2017 ProgramPortal 2017 • SubmittedFY17 Q3 data draft uploaded. report to Board process for acceptance.

Grand Avenue Transit May • Developed revised short-term recommendation options. • Inter-agency study team agreed to move forward without Feasibility Study 2016 use of the Mircrosimulation traffic modeling tool.

Transit Planning Projects

Project/Study Name Completion Date Status

• Conducted field safety training. Transit Stop Inventory and • Field data collection is 60% complete. June 2017 Accessibility Study • Verifying bus stop amenities and locations for use in on-line maps. Short Range Transit May • Completed draft final report. Program 2017 • Submitted draft report to Board process for acceptance.

2 4/26/2017

Transit Planning Projects

Project/Study Name Completion Date Status

April 2017 Fixed-Route April 2017 • Prepared for implementation Service Changes

October 2017 Fixed Route • Presented proposed changes to Valley Metro Board October 2017 Service Changes • Scheduled public input process for April-May

Regional Transit Framework June 2018 • Fulfilled data requests from the consultant Study Update

Accessible Transit Services FY17 Q3 Report

3 4/26/2017

Dial-a-Ride – East Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

One-Way Trips -- 69,727 77,043 69,222

On-Time Performance ≥ 95% 96% 96% 95%

Complaints Per 1,000 Trips ≤ 1.5 2.2 2.5 2.3

Cost Per Trip -- $26.72 $26.62 $26.72

Dial-a-Ride – West Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

One-Way Trips* -- 26,575 26,566 29,006

On-Time Performance* ≥ 95% 96% 97% 96%

Complaints Per 1,000 Trips* ≤ 1.5 .60 .34 .90

Cost Per Trip* -- $27.08 $25.36 $27.65

*Mobility Center trips are included in this data

8 8

4 4/26/2017

Dial-a-Ride – Regional

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

One-Way Trips -- 33,588 N/A 37,696

On-Time Performance ≥ 95% 97% N/A 97%

Complaints Per 1,000 Trips ≤ 1.5 1.67 N/A 1.76

Cost Per Trip -- $45.45 N/A $46.66

9 9

Other Accessibility Services

Performance Indicator FY17 Q2 FY 16 Q3 FY17 Q3 RideChoice Trips 12,117 12,145 10,028 Cost Per Trip $10.57 $11.21 $11.06 Platinum Pass Trips 31,750 33,600 32,500 Cost Per Trip $0.74 $0.75 $0.74 ADA Applicants 1,328 976 1,338 Unconditional 72% 66% 74% Conditional 17% 21% 14% Temporary 9% 10% 10% Denials 2% 3% 2% 10

5 4/26/2017

Accessible Transit Services Highlights • Awarded contract to Transdev for operation of all Valley Metro paratransit services. – Service transitions on July 1, 2017 – All-new 100% wheelchair-accessible fleet – Partnership with AAA Transportation for taxi service – New technology will increase convenience for customers and accountability for agency, and will integrate with existing mapping functions • Implementing enhancements to RideChoice program – Will encourage shift of trips to RideChoice from more costly paratransit service. – Lower cost for shorter trips – Improved ability to manage RideChoice account by phone

– Expanding service to Surprise 11

Accessible Transit Services Highlights • Valley Metro Accessibility Advisory Group Activity – Paratransit and RideChoice program changes – 50th Street Station design – Tempe Streetcar project – LRV and streetcar interior configuration

6 4/26/2017

Capital Planning, Design & Construction FY17 Q3 Report

South Central LRT

Project Complete Current Phase Phase Complete

2023 Project Development Fall 2017

Status

. Continued coordination with PMOC on project readiness . Issued RFQs for final design and CM@R . Final design consultant negotiations underway . Public artist RFQ to be issued in Q4 . Completed Preliminary Engineering . Subsurface utilities engineering to begin in Q4

7 4/26/2017

Northwest LRT Extension Phase II

Project Phase Current Phase Status Complete Complete

2023 Environmental/ Fall . Submitted draft EA to FTA and continued preliminary engineering Preliminary 2017 . Submitted request to FTA to enter New Starts Project Development in Engineering April 2017 . Continue coordination with ADOT & MAG

Capitol/I-10 West LRT Extension Project Phase Current Phase Status Complete Complete 2023 (Phase I) Environmental Spring . ADOT, County and City coordination on-going Assessment (EA) 2018 . Revising the EA based on construction phasing . Anticipate public review of EA by Early 2018 . Finalizing the I-17 Change of Access Report

8 4/26/2017

West Phoenix/Central Glendale Project Phase Current Phase Status Complete Complete 2026 Alternatives Spring 2018 . Continued coordination with ADOT, GCU and other stakeholders Analysis . Continue to identify options to cross I-17, transition into Downtown Glendale and crossing Grand Avenue.

OMC Expansion

Project Phase Current Phase Status Complete Complete . Conducting a needs assessment based on future vehicle procurements, system operation and maintenance requirements 2017 Study Summer 2017 . Developed a conceptual design for the full build-out of the OMC . Began developing scope and budget for Preliminary Engineering

9 4/26/2017

Peoria Park-and-Ride

Project Current Phase Phase Complete Complete

Summer 2019 Environmental Spring 2017

Status

• Developed conceptual site plans • Request for categorical exclusion to environmental requirements is under FTA review • Completed preparation of a Design & Construction agreement

Fiesta-Downtown Chandler Transit Corridor Study Project Current Phase Phase Complete Complete 2017 Feasibility Study Spring 2017

Status • Completed traffic segment analysis technical memo • Submitted final report to Project Management Team for review

10 4/26/2017

Northeast LRT Feasibility Study

Project Current Phase Phase Complete Complete 2034 Feasibility Study Fall 2017

Status • Reviewed existing conditions • Analyzed engineering feasibility for the two corridors

I-10/I-17 Direct Access Bus Ramp Project Complete Current Phase Phase Complete TBD Planning Fall 2017

Status . Revising Categorical Exclusion . Revising Interstate Change of Access Methods and Assumptions document for ADOT, FWHA, and Phoenix approval . Coordinating with ADOT and Phoenix on next steps

11 4/26/2017

50th Street Light Rail Station

Project Phase Current Phase Status Complete Complete 2019 Final Design Ongoing • Public Artist, Design Consultant and CM@Risk contractor worked together to deliver 90% design • Real estate acquisition has begun • CM@Risk Contractor began preparing Guaranteed Maximum Price (GMP)

50th Street Project Cost and Budget

Description Budget Expended % Forecast ($M) ($M) Earned ($M)

Contracted Services $ 15.4 $ 1.2 7.8% $ 15.4 Right of Way $ 0.7 $ 0.1 14.3% $ 0.7 Professional Services $ 3.7 $ 0.9 24.3% $ 3.7 Total Contingency $ 3.2 $ 0.0 0% $ 3.2 Total $ 23.0 $ 2.1 9.1% $ 23.0

12 4/26/2017

50th Street Project Schedule Description Baseline Current % Complete

Construction 03/05/19 02/19/19 0%

Utilities 05/01/18 05/01/18 30%

Right of Way 10/13/17 02/01/18 21%

Public Art 7/18/18 11/19/18 20%

Design/Mgt. 7/03/19 7/29/19 45%

Test and Startup 05/03/19 05/29/19 0% 25

Gilbert Road Extension

Project Phase Current Phase Status Complete Complete 2018 Construction Spring 2019 • Design - 100% completed during this quarter • Early Construction Activities (GMPI) - 99% complete • Full Construction Activities (GMP II) - beginning water & joint trench • Artwork – per public comment, switched art between Gilbert Rd. and Stapley stations

13 4/26/2017

GRE Project Cost and Budget

Current Expended Forecast Description %Earned Budget ($M) ($M) Contracted Services $134.7 $17.8 13.2% $134.7 Light Rail Vehicles $16.9 $0.0 0.0% $16.9 Right of Way $13.0 $0.5 3.8% $13.0 Professional Services $10.7 $4.2 39.2% $10.7 Total Contingency $10.7 $.9 8.4% $10.7 Total $186.0 $23.4 12.6% $186.0

GRE Project Schedule

Description Baseline Current % Complete

Construction 09/17/18 04/15/19 15.0% Utilities 08/15/18 07/15/18 10.0% Right of Way 12/25/17 12/29/17 25.0% Public Art 07/19/18 06/19/18 15.0% Vehicles 09/14/18 02/28/20 0.0% Design/Mgt. 03/16/19 07/17/19 20.0% Test and Startup 11/19/18 05/17/19 0.0% 28

14 4/26/2017

Tempe Streetcar

Project Phase Current Phase Status Complete Complete 2020 Final Design and Spring 2018 . Issued Notice to Proceed to begin final design Pre-Construction . 30% design milestone anticipated in Q4 . Selected a vehicle manufacturer and CMAR contractor . Requesting Letter of No Prejudice from FTA to purchase special trackwork

Tempe Streetcar Project Schedule

Description Baseline Current % Complete Construction 12/26/19 02/05/20 0.0% Utilities 12/10/18 02/06/19 0.0% Right of Way 7/31/18 7/31/18 0.0% Public Art 8/30/19 8/30/19 3.0% Vehicles 2/20/20 2/20/20 0.0% Design/Mgt. 5/19/21 5/19/21 17.0%

Test and Startup 8/20/20 9/21/20 0.0% 30

15 4/26/2017

Tempe Streetcar Project Cost and Budget Budget Expended % Forecast Description ($M) ($M) Earned ($M) Contracted Services $ 80.2 $ - 0.0% $ 80.2 Vehicles $ 28.1 $ - 0.0% $ 28.1 Right of Way $ 3.6 $ - 0.0% $ 3.6 Professional Services $ 36.8 $ 2.2 5.9% $ 36.8 Total Contingency $ 37.4 $ - 0.0% $ 37.4 Total $ 186.1 $ 2.2 1.2% $186.1

16 4/26/2017

Communication & Marketing FY17 Q3 Report

May 2017

Communications Update • Developed communication plan for 6/1 fare adjustment – Removing on-board premium at farebox • Supported MOD Grant/Ridekick Phase I development & beta testing plan • Created front-line staff recognition for 3/18 national Transit Driver Appreciation Day • Created training videos for security team • Supported neighborhood clean-up events with 19North and RouteMatch 2

1 4/26/2017

Community Relations Update • Organized 75+ volunteers to support NCAA Final Four • Received good participation in two youth art contests – 550+ – Jeremy Jackrabbit Hops on Board book – 160+ – 18th annual Design a Transit Wrap • Finalized the business assistance program for Gilbert Rd. Ext. – Refreshed program branding • Executed public meetings: – 50th Street station design – Peoria park-and-ride 3

Commute Solutions Update • Launched ShareTheRide.com mobile site, app, Facebook page & quick match feature – As of 3/31, STR has 36k active users • Organized Valley Bike Month pledge, team challenge and annual artist design – In addition, supporting execution of 28 events • Updated creative for the “Change Your Game Plan” ad campaign – Winter campaign resulted in: • 22.6M impressions & 650 tons of pollution saved • Created vanpool campaign to encourage steering wheel lock use 4

2 4/26/2017

Marketing Update

• Developed materials supporting April 2017 service changes – i.e. Transit Book, Guide-a-Rides, kiosk posters, customer notification materials • Created plan & materials for NCAA Final Four visitors/riders • Advanced website re-design project – Incorporated stakeholder feedback & initiated development

• Conducted “Rail Ride” promotion with Mega 104.3 5

3 4/26/2017

Finance Division FY17 Q3 Report

May 2017

Valley Metro RPTA Operating Results – Q3

RPTA Budget vs. Actual Report $ Millions For the quarter ending March 31, 2017 3rd Quarter Year to Date

Variance Variance Operations Expenditures Budget Actual (Unfav.) Budget Actual (Unfav.) Fixed Route Bus 22.2 21.4 0.8 66.5 64.1 2.4 Paratransit 9.1 8.9 0.2 27.3 24.8 2.5 Vanpool 0.2 0.2 0.0 0.7 0.7 0.0 Regional Services 3.0 2.4 0.6 8.9 7.0 1.9 Planning 0.6 0.4 0.2 1.7 1.1 0.6 Administration 0.6 0.5 0.1 1.9 1.4 0.5 METRO Rail (Salary, Fringe, OH) 4.4 4.1 0.3 13.2 11.9 1.3 Total Operations Expenditures 40.1 37.9 2.2 120.2 111.0 9.2

1 4/26/2017

Valley Metro RPTA Capital Results – Q3

RPTA Budget vs. Actual Report $ Millions For the quarter ending March 31, 2017 3rd Quarter Year to Date

Variance Variance Capital Expenditures Budget Actual (Unfav.) Budget Actual (Unfav.) Bus Purchases Valley Metro 4.2 0.0 4.2 12.7 4.3 8.4 Lead Agency 1.9 2.9 (1.0) 5.7 2.9 2.8

Paratransit Vehicles Lead Agency 0.1 0.0 0.1 0.2 0.0 0.2 Vanpool Vehicles 0.5 0.0 0.5 1.6 0.8 0.8 Other Capital 3.1 0.5 2.6 9.4 0.9 8.5 METRO Rail 21.5 6.6 14.9 64.5 17.9 46.6 Total Capital Expenditures 31.3 10.0 21.3 94.1 26.8 67.3 3

Valley Metro Rail Operating Results – Q3

VMR Budget vs. Actual Report $ Millions For the quarter ending March 31, 2017 3rd Quarter Year to Date

Variance Variance Operations Expenditures Budget Actual (Unfav.) Budget Actual (Unfav.) Rail Operations 11.2 9.8 1.4 33.7 28.8 4.9 Future Project Development 3.0 2.8 0.2 8.9 7.1 1.8 Agency Operating 0.3 0.3 (0.0) 0.8 0.8 0.0 Total Operating Activities 14.5 12.9 1.6 43.4 36.7 6.7

2 4/26/2017

Average Rail Fare FY 2016 History / FY 2017 3rd Quarter Average Fare - 12 Months Rolling by Quarter $1.00 Budget $0.95 $0.92 $0.90 $0.86 $0.85 $0.85 $0.85 $0.84 $0.82 $0.80 $0.75 $0.70

Average Fare Per Ride $0.65 $0.60 $0.55 $0.50 FY16‐Q3 FY16‐Q4 FY17‐Q1 FY17‐Q2 FY17‐Q3

Q3 Q3 Fare Revenue Budget $4,193,000 Fare Recovery Budget 37.4% Fare Revenue Collected $3,324,000 Fare Recovery Actual 33.1% Variance ($869,000) 5

Valley Metro Rail Capital Results – Q3

VMR Budget vs. Actual Report $ Millions For the quarter ending March 31, 2017 3rd Quarter Year to Date

Variance Variance Capital Expenditures Budget Actual (Unfav.) Budget Actual (Unfav.)

Rail Projects Central Mesa 1.9 0.3 1.6 2.8 0.5 2.3 Northwest Extension PH1 1.1 0.1 1.0 3.2 0.7 2.5 Tempe Streetcar 5.1 1.1 4.0 10.2 1.8 8.4 Gilbert Rd 13.7 7.7 6.0 32.0 13.5 18.5 50th St LRT Station 1.7 1.0 0.7 5.0 1.9 3.1 South Central 0.0 0.0 0.0 0.0 0.0 0.0 System‐wide Improvements 5.7 0.2 5.5 11.2 0.6 10.6

Total Capital 29.2 10.4 18.8 64.4 19.0 45.4 6

DATE AGENDA ITEM 6 April 26, 2017

SUBJECT Travel, Expenditures and Solicitations

PURPOSE The monthly travel, expenditures and solicitations are presented for information.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Paul Hodgins Chief Financial Officer 602-262-7433 [email protected]

ATTACHMENTS Valley Metro Travel Reimbursement Report Valley Metro RPTA and Valley Metro Rail Monthly Accounts Payable over $25,000 Active Requests for Proposals, Qualifications and Invitations for Bids

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433 Valley Metro Travel Reimbursement Report For Travel Completion Dates March 26, 2017 through April 25, 2017 Total Travel Other Job Title Purpose of Travel Location Dates Traveled Airfare Lodging Meals Misc. Cost Transport Chief Executive Officer P3C Conference Dallas, TX 2/26/17-2/28/17 $761.88 $289.40 $34.92 $336.56 $101.00 $0.00 Chief Executive 1 Officer APTA Conference Washington, DC 3/11/17-3/15/17 $2,853.92 $860.40 $105.06 $1,570.96 $262.50 $55.00 Manager, Accessible Transit APTA Conference Washington, DC 3/10/17-3/13/17 $1,867.89 $663.40 $78.72 $831.27 $224.50 $70.00 1 Design Manager Streetcar Summit Cincinatti, OH 3/26/17-3/29/17 $1,312.00 $480.00 $78.10 $479.40 $174.50 $100.00 Community Rail-volution Relations Manager Committee Meeting Denver, CO 3/14/17-3/17/17 $1,351.62 $265.40 $0.00 $775.72 $310.50 $0.00 Chief Operating FTA MOD Officer Practitioner's Wkshp Washington, DC 4/19-21/17 $1,318.65 $634.10 $61.31 $450.74 $172.50 $0.00 Report reflects Out of State (AZ) Travel 1Airport Parking Valley Metro Regional Public Transportation Authority Monthly AP Payments over $25,000 March 21, 2017 to April 20, 2017

Effective Document Numb Name Transaction Description Date Transaction Amount 20170324W004 FirstGroup America, Inc. Feb. 2017 Fixed Route Bus Service 3/24/2017 4,635,005.39 36641 City of Phoenix April 2017 FR Bus Service, DAR, FR Svc Op Supp 4/19/2017 2,197,669.80 36532 City of Tempe EVBOM Lease Agreement Oct -Dec 2016 O & M, Fuel 3/22/2017 1,254,453.00 20170331W004 Total Transit Enterprises, LLC Jan 2017 East Valley ParaTransit Services 3/31/2017 631,157.40 20170414W004 Total Transit Enterprises, LLC Feb 2017 East Valley Paratransit Services 4/14/2017 592,485.60 20170414W004 Total Transit Enterprises, LLC Feb. 2017 Feb. 2017 Regional Transportation 4/14/2017 557,822.86 20170331W004 Total Transit Enterprises, LLC Jan. 2017 Regional Transportation 3/31/2017 545,446.91 20170414W006 ADP PPE 4/9/17 Wages Payable - Reverse Wire 4/14/2017 469,031.18 20170331W006 ADP PPE 3/26/17 Wages Payable - Reverse Wire 3/31/2017 435,632.80 20170407W005 United Healthcare April 2017 Healthcare Premiums-United Healthcare 4/7/2017 312,247.15 20170414W004 Total Transit Enterprises, LLC Feb. 2017 NW Valley Paratransit Services 4/14/2017 221,601.91 20170331W004 Total Transit Enterprises, LLC Jan. 2017 NW Valley ParaTransit/Mobility Center Services 3/31/2017 220,906.95 20170414W006 ADP PPE 4/9/17 Federal, State, SS/Med EE/ER Tax - ACH 4/14/2017 202,821.64 20170331W006 ADP PPE 3/26/17 Federal, State, SS/Med EE/ER Tax - ACH 3/31/2017 186,550.55 36655 Moses, Inc. 1/13-2/22/17 Marketing and Advertising 4/19/2017 180,876.18 20170407W004 Total Transit Enterprises, LLC Feb. 2017 Zoom (Avondale) Bus Run 4/7/2017 117,390.41 36655 Moses, Inc. Feb-March 2017 Marketing and Advertising 4/19/2017 109,297.03 20170407W004 Total Transit Enterprises, LLC Feb. 2017 Glendale Express Bus Run and PM 4/7/2017 103,213.09 20170414W007 ASRS PPE 4/9/17 ASRS Contributions Employee 4/14/2017 84,544.82 20170414W007 ASRS PPE 4/9/17 ASRS Contributions Employer 4/14/2017 84,544.82 20170331W007 ASRS PPE 3/26/17 ASRS Contributions Employee 3/31/2017 79,375.09 20170331W007 ASRS PPE 3/26/17 ASRS Contributions Employer 3/31/2017 79,375.09 36655 Moses, Inc. Feb.-March 2017 Marketing and Advertising 4/19/2017 73,486.12 20170407W004 Total Transit Enterprises, LLC Feb. 2017 Vee Quiva Bus Run 4/7/2017 69,561.98 20170331W12 City of Mesa March 2017 Utilities 3/31/2017 56,989.87 20170324W001 CopperPoint Mutual Insurance Co April 2017 Rent Mobility/Call Center 3/24/2017 47,768.41 36599 Steer Davies & Gleave Inc. Jan. 2017 Website Redesign & Development 4/6/2017 46,628.01 20170331W004 Total Transit Enterprises, LLC Jan. 2017 VM Mobility Center Transportation 3/31/2017 41,198.34 04152017 Wells Fargo Bank March 2017 Wells Fargo Credit Card Purchases 4/15/2017 38,734.57 36599 Steer Davies & Gleave Inc. Feb. 2017 Website Redesign & Development 4/6/2017 31,566.61 20170414W004 Total Transit Enterprises, LLC Feb. 2017 Mobility Center Transportation Services 4/14/2017 30,995.72 13,738,379.30 Valley Metro Rail, Inc. Monthly AP Payments over $25,000 March 21, 2017 to April 20, 2017

Document Number Name Transaction Description Effective Date Transaction Amount 20170331W006 Stacy and Witbeck-Sundt JV GRE Feb. 2017 Stacy and Witbeck Gilbert Rd Extension 3/31/2017 1,810,689.89 20170324W001 Alternate Concepts Inc. Jan. 2017 Transportation Services 3/24/2017 766,400.90 028489 Stantec Consulting Services, Inc. Feb 2017 Tempe Streetcar Design Services 4/13/2017 532,448.39 20170324W004 HDR/SR Beard & Associates Dec 2016 HDR Planning and Community Relations 3/24/2017 483,085.20 028327 Motorola Solutions Hand Held Portable Radios 3/22/2017 457,445.45 028330 Stantec Consulting Services, Inc. Jan. 2017 Tempe Streetcar Design Services 3/22/2017 300,358.51 20170331W004 Jacobs Engineering Jan. 2017 Gilbert Road Extension Design Svcs 3/31/2017 270,854.72 20170331W008 APS March 2017 Utilities 3/31/2017 219,400.32 20170407W002 DMS - Facility Services, Inc. Feb. 2017 Facilities and LRV Cleaning Services 4/7/2017 171,905.44 20170324W004 HDR/SR Beard & Associates Dec. 2016 Planning Support Services - Pymt #6 3/24/2017 158,329.76 20170407W004 PB-Wong Joint Venture Feb. 2017 Project Mngt Construction Mngt TO 19 GRE 4/7/2017 127,267.31 20170331W003 Gannett Fleming, Inc. Feb. 2017 50th St. Design Services 3/31/2017 127,162.63 20170324W003 City of Mesa Feb. 2017 Gilbert Road Extension 3/24/2017 118,746.83 028329 SRP Miscellaneous Accts Receivable May-Sept. 2016 Gilbert Rd Extension Utilities 3/22/2017 101,825.48 20170414W002 City of Mesa March 2017 Gilbert Rd Extension Pymt #18 4/14/2017 83,614.60 028322 Hill International, Inc. Jan. 2017 PMCM Services 50th St. Station 3/22/2017 70,086.89 20170324W006 Stacy and Witbeck 50th St/Tempe SC Feb. 2017 Preconstruction Pymt #6 - 50th St. Station 3/24/2017 64,964.00 20170407W004 PB-Wong Joint Venture Feb. 2017 Project Mngt Construction Mngt To 1C 4/7/2017 63,343.27 20170414W001 URS Corp Oct 2016 Planning Conceptual Engineering Capital I-10 4/14/2017 52,130.85 20170414W001 URS Corp Nov 2016 Planning Conceptual Engineering Capitol I-10 4/14/2017 47,969.24 028389 Chapman Ford 2017 Ford F-250 VIN 1F17W2B67HEB93191 N-181 4/5/2017 42,626.40 20170414W001 URS Corp Dec 2016 Planning Conceptual Engineering Capitol I-10 4/14/2017 41,374.43 028469 Hill International, Inc. Feb 2017 PMCM Services Tempe Streetcar 4/13/2017 38,708.41 028457 Centennial Contractors Enterprises, Inc. Station Pavers Replacement 4/13/2017 37,645.46 04152017 Wells Fargo Bank March 2017 Wells Fargo Credit Card Purchases 4/15/2017 33,426.23 028342 City of Phoenix March 2017-Fare Handling Fee 3/29/2017 33,400.00 028469 Hill International, Inc. Feb 2017 Task 1 50th St Station PMCM Services 4/13/2017 32,307.17 028322 Hill International, Inc. Jan. 2017 PMCM Services Tempe Streetcar 3/22/2017 32,008.17 20170331W012 City of Mesa March 2017 Utilities 3/31/2017 31,358.44 028437 United Right-of-Way Feb 2017 Facilities Landskeeping Services 4/5/2017 30,219.21 028368 Sanderson Ford, Inc. N-187 2017 Ford Explorer Ingot Slvr Mtlc 3/29/2017 29,145.81 028368 Sanderson Ford, Inc. N-188 2017 Ford Explorer Ingot Slvr Mtlc 3/29/2017 29,145.81 028488 SRP Miscellaneous Accts Receivable NW Extension Prop 400 Utilities 4/13/2017 28,769.99 028322 Hill International, Inc. Jan. 2017 Program Management 3/22/2017 28,219.05 028460 Corrpro Companies, Inc. Corrosion Control Services Payment 4 4/13/2017 27,028.00 028338 Camelback Ford N-185 Ford Escape Ingot Silver 3/29/2017 25,418.20 028338 Camelback Ford N-186 2017 Ford Escape Ingot Silver 3/29/2017 25,418.20 6,574,248.66 Valley Metro Monthly RTAG Solicitation Update ACTIVE SOLICITATIONS

Solicitation Type Solicitation Title Release Date Proposal Due Date Targeted Board Award Date

RFP Streetcar Vehicles 5/16/2016 9/14/2016 4/20/2017 RFP Light Rail Vehicles 1/27/2016 10/17/2016 5/18/2017 RFQ South Central LRT Extension - Design 1/25/2017 2/15/2017 5/18/2017 RFP Heavy Duty Transit Buses 7/21/2016 1/19/2017 5/18/2017 RFQ/RFP South Central LRT Extension - CM@Risk 2/9/2017 3/30/2017 8/17/2017 RFQ/RFP Northwest Extension CM@R 3/22/2017 4/27/2017 8/17/2017 RFQ Northwest Extension Design 4/25/2017 6/7/2017 8/17/2017

UPCOMING SOLICITATIONS

Solicitation Type Solicitation Title Release Date Proposal Due Date Targeted Board Award Date

RFP JOC/Construction Contract 5/3/2017 7/1/2017 8/17/2017 RFP Transit Book Printing 5/4/2017 5/30/2017 8/17/2017 RFQ South Central LRT Extension - Artwork 4/28/2017 6/14/2017 8/17/2017 RFQ System Design Services May June 8/17/2017

DATE AGENDA ITEM 7 April 26, 2017

SUBJECT Future Agenda Items Request and Report on Current Events

PURPOSE Chairs Zuercher and Methvin will request future agenda items from members, and members may provide a report on current events.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT Pending Items Request

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

Pending Items Request

Item Requested Date Requested Planned Follow-up Date

April 26, 2017

Transit Management Committee Wednesday, May 3, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor 11:00 a.m.

Action Recommended

1. Public Comment on Agenda Action Items (blue card) 1. For information

2. Minutes 2. For action

Minutes from the April 5, 2017 TMC meeting are presented for approval.

CONSENT AGENDA 3A. Farebox Software Maintenance and Support Contract 3A. For action Award

Staff recommends that the TMC forward to the Board of Directors authorization for the CEO to execute a three-year contract with Scheidt & Bachmann USA, Inc. for software support and maintenance agreement for an amount not to exceed $474,920.

3B. Vehicle Management System (VMS) Hardware Support 3B. For action Services Contract Award

Staff recommends that the TMC forward to the Board of Directors authorization for the CEO to execute a two-year contract with Conduent (formally Xerox Transport Solutions, Inc.) for hardware support services agreement for an amount not to exceed $234,468.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

3C. 2017 Transit Life Cycle Program - Bus Update 3C. For action

Staff recommends that the TMC forward to the Board of Directors approval of the 2017 Transit Life Cycle Program – Bus Update.

REGULAR AGENDA 4. Valley Metro Fiscal Year 2018 (FY18) Operating and 4. For action Capital Budget and Five-Year Operating Forecast and Capital Program (FY18 thru FY22)

Scott Smith, CEO, will introduce Paul Hodgins, Chief Financial Officer, who will provide information regarding the Valley Metro Fiscal Year 2018 (FY18) Operating and Capital Budget and Five- Year Operating Forecast and Capital Program (FY18 thru FY22).

5. Future Agenda Items Request and Report on Current 5. For information Events and discussion

Chair Zuercher will request future agenda items from members, and members may provide a report on current events.

6. Next Meeting 6. For information

The next meeting of the Board is scheduled for Wednesday, June 7, 2017 at 11:00 a.m.

DATE AGENDA ITEM 1 April 26, 2017

SUBJECT Public Comment on Agenda Action Items

PURPOSE The public will be provided with an opportunity at this time to address the Board on all action agenda items. Up to three minutes will be provided per speaker to address all agenda items unless the Chair allows more at his/her discretion. A total of 15 minutes for all speakers will be provided.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT None

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

DATE AGENDA ITEM 2 April 26, 2017

Summary Minutes Valley Metro RPTA Transit Management Committee Wednesday, April 5, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor Phoenix, AZ 11:00 a.m.

Members Present Ed Zuercher, City of Phoenix, Chair Gina Montes, City of Avondale Roger Klingler, City of Buckeye Ryan Peters for Marsha Reed, City of Chandler James Shano, City of El Mirage Marc Skocypec, Town of Gilbert Kevin Link for Kevin Phelps, City of Glendale Rob Bohr for Brian Dalke, City of Goodyear Chris Brady, City of Mesa Jeff Tyne, City of Peoria Mike Nevarez for Steven Methvin, City of Tempe

Members Not Present Sara Allred, ADOT Reed Kempton, Maricopa County Paul Basha, City of Scottsdale Nicole Lance, City of Surprise City of Tolleson

Chair Zuercher called the meeting to order at 11:05 a.m. And we will move directly to the Transit Management Committee. And we will start that meeting with Public Comment on Agenda Action Items. I have one card from Mr. Blue Crowley.

1. Public Comment on Agenda Action Items

Mr. Crowley said I believe that the short range transit program is more than just some of these sheets, and I'd like to get a copy of that. But one of the things that I did note in here is Litchfield Road. It's not there. In the document that you have put out back in '06, it said west side was going to be getting the Litchfield Road and that it would also connect all the routes that are east west in that area as in Bell Road would be going to Litchfield at the Thunderbird at the Greenway, but I don't see any of that in here. That's the first one of your action items.

Just a thought y'all since what it was that you were going to be doing is supposedly putting mass-transit with rubber-tired buses. And I also didn't see in that short range

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

transit plan any of your communities doing anything about getting to a hundred percent bus stops covered. All I see is, well, maybe in the future we might get around to doing some things.

Now I could have gone off on the East Valley and shown all the ones there that are also inadequately being represented, but with the limited amount of time, the design on the park-and-ride and the amount of money that we're doing that, Peoria, could you show me an equal number of bus stops in your community that are covered shelters.

Because at that park-and-ride, if it's covered, each one of those units cost the same as a bus stop. And I would rather you be spending the money to cover people and the ones using our system rather than a single-occupant vehicle. Oh, yeah, it's owned by somebody that's using our system, so rather than cover cars, you need to put a little more emphasis on covering people.

And with the intergovernmental reimbursement, I'm so amazed that who's doing what. Y'all need to just be getting the job done. And why is it I'm going to take from Peter and we're going to pay Paul, and then we're going to have -- and that's you, Paul, you do get a good salary -- that if it's not a more succinct and flowing thing. I understand you guys got to keep on saying this, that, and the other thing about the budget and how you're doing it, but for just being an old country boy, it confuses me. Thank you and I'll see you on the next one.

2. Minutes

The minutes from the March 1, 2017 TMC meeting were presented for approval.

IT WAS MOVED BY CHRIS BRADY, SECONDED BY KEVIN PHELPS AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 1, 2017 TMC MEETING MINUTES.

3. Consent Agenda

The following items were presented on the consent agenda:

A. FY18-22 Short Range Transit Program B. Peoria Park-and-Ride Design and Construction Agreement C. Intergovernmental Agreement with the City of Peoria for Reimbursement of Capital Projects

IT WAS MOVED BY KRISTEN MYERS, SECONDED BY JEFF TYNE AND UNANIMOUSLY CARRIED TO APPROVE THE CONSENT AGENDA.

4. Valley Metro Fiscal Year 2018 (FY18) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY18 thru FY22)

Mr. Smith said Mr. Chair, thank you. Paul Hodgins, our Chief Financial Officer, will be presenting the latest of a series of analyses that started literally last fall. He's been working with your staffs and others to come up with this, so this is the first time we will present a preliminary budget. And he'll explain to you the processes that it goes through the next couple of months, so I will turn it over to Paul.

Mr. Hodgins provided a presentation which included the following:

 FY18 Preliminary Budget Overview  FY18 Baseline Operations  FY18-20 Proposed Staffing Levels

Ms. Myers said I can't remember if in the additional information online on the proposed RPTA side, does it spell out which of the twelve positions are between the different categories, or are they still a lump sum in there?

Mr. Hodgins said they're generally lumped. A lot of the positions are not -- they're not discrete. They're either VMR or RPTA. Some of them, for instance, the finance and HR they're RPTA positions, but they end up in the overhead so they get allocated across both agencies. So it's maybe a little hard to define exactly the percentage. We do note there's some supplemental materials that we'll be sending out in the next day or so that will detail what each position -- what the functions will be, what we'll get for the position that we're not getting now. And it will kind of at a high level say what the funding is whether it's regional funds or member city contributions.

I do want to note that of the positions proposed, there's really only one that impacts operating projects and member city contributions. It's about a $30,000 increase that the members fund in terms of the staffing. On the rail side it's a little more. There's about a $650,000 increase to the member city contributions for rail operations, primarily to support the expanded service, the soon-to-be expanding fleet.

I think we'll see some awards in the next agenda. But we have some support positions in Valley Metro Rail that are included in the operating budget. It's not in addition to what was sent out in October, but the support information will define kind of at a high level where each position is funded.

Mr. Brady said so the question I have is in the decision to bring in-house many of the capital-related task positions. So, you've been able to reallocate dollars that were in your contractual services/professional services to now creating these new positions with some realized savings.

As you evaluate the decision to bring in-house staffing, what's kind of the current, I guess, perspective of the pipeline of work that the staff, the new staff your bringing on, will be able to -- you know, you have to assume you're going to have so much work in the pipeline for capital projects to make this decision. So what's kind of that view, because one of the reasons we often use professional services is because the surge

and change of capital projects, you know, having to deal with the project at that time, not having to build into that into your base operations.

So what's the current thinking at least looking out? As it stands today, how long the project would be sustained with the current level staffing you're bringing on now?

Mr. Hodgins said thank you, Mr. Chair, Mr. Brady, there are a number of projects -- and I'll focus primarily on the rail side because that's where the major capital projects are. We have a number of them that are moving forward concurrently.

In looking at the projects we have in the regional plan, there's through the end of Prop 400 over the next ten years, we do see at least a certain amount of work that's needed for engineers, designers, those types of things. We don't envision completely replacing consultants. We'll never be able to completely replace consultants. We'll hire them for the peaks. But we do see a need over the next ten years for a base level of work in these different areas that we feel is more cost-effective to use in-house rather than use consultants. But it doesn't eliminate any future consultants but, maybe, provide some savings for those positions that are more longer term.

The other thing we may look at for positions that really are project based that are maybe a little more technical, if it's at least a three-year commitment, we'll look to bring it in-house. It could be hired as a term position where it's only three or four years as opposed to a permanent full-time position.

Mr. Brady said well, you'll make that distinction in these positions at some point for us to know that?

Mr. Hodgins said yes.

Mr. Smith said and if I could add a little bit to that, what we did is working with Wulf Grote, we sat down and put a master schedule of all of our timing of our projects and the staffing flow.

Because as you move out of one project, you move into another one and that's how we determine the three to five-year commitment. If something's less than three years, then we basically probably stay with a consultant type of thing. If it's three to five years, we look and see what that flow is. And that's all been scheduled out through the next -- through the ten years or actually the eight years -- eight to nine years that we have left in trying to get in a flow and then determine which level of in-house hiring. We also have some other ones that are basically carry overs. In the original twenty miles -- Paul, what was it? 75 - 80-plus percent of those who worked on it were contract. This was basically built by contract. And there's a lot of carry over.

We actually had some administrative positions, things like that, that just because of past history had carried over and were still handled by our consulting firms. We're moving out of those because those will be long-term and are better served with the labor pool

with an in-house employee.

We want to maximize the use of our consultants, use them for what they're good for: the surges, the short-term, and their expertise, and their specialty. And so we looked at it from both levels.

The level of long-term, as Paul said, three to five years was the minimum we looked at, but also the type of function they were doing to try and find that mix where we could maximize consultant, but also bring people on board and with the idea that these are project-related positions.

Chair Zuercher said thank you. Other questions on this? I would just express, to sort of piggyback on Chris, I talked to my elected member of the Board and she is seeking more information. And my comments are not to be negative, but just to be skeptical.

I get the desire to bring -- it's not -- we don't want to unnecessarily have consultants, because they are generally more expensive. I guess my skepticism is that our assumption is that we're going to get the person with the expertise and the thing that we need who is willing to work (a) for a government entity and (b) for a government entity's wages. I'm not sure that's always the case in some of the specialties that we seek, so I get the concept, but I'm not sure that it works that way.

And then if we are, I'm also skeptical, because I keep an eye out for all of a sudden we have -- in order to get people with these specialties - we have to raise our wage scale internally, which throws us into internal equity problems. Then we come back and say we got to raise everybody because these people aren't in line. So that's the eye that I bring to it and my sort of skepticism as I want to see more information about it.

Mr. Smith said no, you've hit the main issues. We're asking for the positions with the realization that some of those, maybe all of those, may not transition. We've already had a couple of situations where we had planned to transition and we found out that the market was not there to provide us with that level of expertise and those positions will stay as consultants.

So we're looking on a position by position, and understanding that reality will soon slap you in the face. We are not going to change our salary schedule just to match that and basically replace higher paid consultants with higher paid in-house. We recognize that. The other one that you didn't mention, which we're also skeptical of, we also don't want to build a staffing level that we then cannot reduce. That's the other thing that we're worried about is with a consultant, it's easy just to say I don't need that person next week and they're gone. So we're very sensitive to the fact that the kind of positions that we add are project-based that we don't give of expertise and we're not -- we're going to pay what we can pay.

So, the reality is that some of those that we've included in this budget may not pan out. We've already seen this. Some we've been able to hire. Some we will not be able to

hire. And we're fine with that. But we thought we'd give it a try.

And we know it's not a perfect system, but there's a couple of reasons that we want to try it. One being there is a potential for significant financial savings. The other one is just, you know, a matter of having people that have some consistency. The one thing with the consultants, you don't control exactly who is on your job. And with these multiple projects we wanted to ensure that we could have a level of consistency.

And we -- everything you said is exactly -- you're right in your skepticism. We recognize that. We're going to have to manage this very carefully to make sure those things don't pan out.

(Mr. Hodgins continued the presentation)

 Valley Metro RPTA FY18 – Sources of Revenues: $310.7M

Mr. Smith said some of the federal moneys in the federal grants in there, just to differentiate, most of the ones that come into our transit come out of the trust fund, Federal Highway Trust Fund. Those were not touched. They cannot be touched by Congress.

It's the discretionary funds or the capital, the CIG, the Capital Improvement Grant program, which is not funded by the trust fund. It is funded out of the general fund of the federal government. Those were the ones that have been specifically impacted. So many of the things we have here as far as transit related bus are out of the trust fund and, therefore, are not subject to the same risk that we have on the capital side.

(Mr. Hodgins continued the presentation)

 Valley Metro RPTA Revenues  Valley Metro RPTA FY18 Expenses: $310.7M  Valley Metro RPTA Expenses  5-Year Operating Assumptions  Five-Year Operating Forecast – Revenues  Five-Year Operating Forecast – Expenditures  5-Year Capital Program Assumptions  Five-Year Capital Program – Revenues  Five-Year Capital Program – Expenditures  Upcoming Budget Schedule – FY18

Chair Zuercher said thanks, Paul. Other questions or input or comments?

I just would say you're going to hear this from my elected member, I know. I think you need to take a little time and go back and look at the staffing from this perspective.

We're now at three -- moving from three hundred to almost four hundred over a three-year period.

And I think there's some value to going through and examining, particularly where you have vacancies, whether there are opportunities to reduce or reallocate positions. And maybe it's as simple as making your target of, you know, you're close, you're at 820 million versus 818 million revenues, as trying to find a way to balance your five-year expenditures and revenues by looking at whether every position that's vacant today is still needed for what it was originally created fifteen years ago. Just some of those could be useful, and you'll probably hear a little bit of that from, as a preview, from, at least, from Phoenix's mayor.

Mr. Hodgins said yes, thank you. And, in fact, that is one of the strategic initiatives we talked about was to do a complete review over the next year of the staffing and whether there are any positions like that that could be reallocated. Thank you.

Chair Zuercher said you might want to do it a little sooner than over the next year. That would be my encouragement.

Mr. Smith said and, Mr. Zuercher, I appreciate that. And one of the things that Paul is -- remember, Paul's only been on board since December. And one of the first things that he came to me with was this plan on his detailed review, understanding we're in a massive transition.

With all these projects coming on with expansion of service, it's a massive transition. We’ve got to do two things. Number one is meet the needs of all these new projects and multiple projects, but also review and recognize that our in whole operation - everything's changing.

And so, one of the first things Paul did in December when we first met was he presented this plan. And when he says a year, it's an ongoing process to do exactly what you're saying. And so I have complete confidence that he's going to look through, with each of the directors, each of these positions that they have currently, and not looking at the past as to that you have it, but what are you going to need them for next year, three years, five years from now. So do a top to bottom and align those with -- when he's talking about the strategic initiatives that's basically here's our mission, here's what we're doing, what do you need to accomplish that. And looking at that.

So he's well beginning that process. And that will be an ongoing discussion with your staff with our staff also, so I appreciate that comment.

Mr. Zuercher said okay. Thanks. And I have complete confidence in Paul, too. He knows everything about our finances here, which is why he's a good choice for this job.

5. Transit Life Cycle Program – Bus Update

Mr. Hodgins said thank you. As mentioned, this is an information item. I would characterize this as minor updates from last year. We do have a few things. And this does cover just the bus program. We'll cover the rail program in the Rail Management Committee.

Mr. Hodgins provided a presentation which included:

 Prop 400 Revenues  Program Changes  Expenditures  Revenues  Cash Flow Summary  Jurisdictional Equity Summary

6. Future Agenda Items Request and Report on Current Events

None.

With no further discussion the meeting adjourned at 11:52 a.m.

DATE AGENDA ITEM 3A April 26, 2017

SUBJECT Farebox Software Maintenance and Support Contract Award

PURPOSE To request authorization for the Chief Executive Officer (CEO) to execute a three-year contract with Scheidt & Bachmann USA, Inc. (S & B) for software support and maintenance agreement for an amount not to exceed $474,920.

BACKGROUND/DISCUSSION/CONSIDERATION The S & B farebox system was purchased in Fiscal Year 2005 (FY05). The annual cost of the software maintenance includes upgrades, tariff maintenance, statistical reporting, help desk support, and allows for transfer of data from the farebox to Valley Metro’s fare revenue systems. This contract is for Valley Metro’s operations and fareboxes installed on the East Valley buses being operated by First Transit and the West Valley buses being operated by Total Transit.

The award of a three-year contract is for the period of July 1, 2017 through June 30, 2020. Due to the proprietary nature of the software, there is no other vendor that can supply the software support. This is not a federally funded procurement. Staff negotiated a three-year fixed fee agreement with S & B.

COST AND BUDGET The total contract amount for the three-year software support and maintenance agreement is an amount not to exceed $474,920. Cost for first year of the contract is $158,310 and is included in the RPTA Proposed FY18 Operating and Capital Budget. Contract obligations beyond FY18 are incorporated into the RPTA Proposed Five-Year Operating Forecast and Capital Program (FY2018 thru FY2022).

COMMITTEE PROCESS RTAG: April 18, 2017 for information TMC: May 3, 2017 for action Board of Directors: May 18, 2017 for action

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors authorization for the CEO to execute a three-year contract with Scheidt & Bachmann USA, Inc. (S & B) for software support and maintenance agreement for an amount not to exceed $474,920.

CONTACT Ray Abraham Chief Operations Officer 602-652-5054 [email protected]

ATTACHMENT None

DATE AGENDA ITEM 3B April 26, 2017

SUBJECT Vehicle Management System (VMS) Hardware Support Services Contract Award

PURPOSE To request authorization for the Chief Executive Officer (CEO) to execute a two-year contract with Conduent (formally Xerox Transport Solutions, Inc.) for hardware support services agreement for an amount not to exceed $234,468.

BACKGROUND/DISCUSSION/CONSIDERATION The Xerox VMS was installed in 2005 on all fixed route buses operating region wide in the Valley Metro bus system. This system tracks vehicle locations in real time, provides the necessary technology for automated annunciation of major streets and connecting bus routes, and provides scheduled time estimates for the NextRide system.

The VMS technology allows Valley Metro to monitor on time performance and alert the Operations Control Center and Customer Service Center of late running vehicles. The VMS system is also tied into the farebox system which enables Valley Metro to track jurisdictional boardings for all bus routes. This information is used to report ridership by route and by city, and to allocate fare revenue to member cities.

The annual cost of the hardware support services includes repair, testing and return of all hardware related to the VMS system. Services are performed at Xerox’s depot repair center. This contract is for Valley Metro’s operations and the VMS installed on the East Valley Unification buses being operated by First Transit and the West Valley buses being operated by Total Transit.

The award of a two-year contract is for the period of July 1, 2017 through June 30, 2019. A new Clever Device VMS system will be installed in the next 2 years and this contract period coincides with the end of life of the current Xerox system. Due to the proprietary nature of the VMS system, there is no other vendor that can supply the hardware support services. This is not a federally funded procurement.

COST AND BUDGET The total contract amount for the two-year hardware support services agreement is an amount not to exceed $234,468. Cost for first year of the contract is $114,372 and is included in the RPTA Proposed FY18 Operating and Capital Budget. Contract obligations beyond FY18 are incorporated into the RPTA Proposed Five-Year Operating Forecast and Capital Program (FY2018 thru FY2022).

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

COMMITTEE PROCESS RTAG: April 18, 2017 for information TMC: May 3, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors authorization for the CEO to execute a two-year contract with Conduent (formally Xerox Transport Solutions, Inc.) for hardware support services agreement for an amount not to exceed $234,468.

CONTACT Ray Abraham Chief Operations Officer 602-652-5054 [email protected]

ATTACHMENT None

DATE AGENDA ITEM 3C April 26, 2017

SUBJECT 2017 Transit Life Cycle Program - Bus Update

PURPOSE To present the draft 2017 TLCP Bus Update for approval.

BACKGROUND/DISCUSSION/CONSIDERATION The TLCP was developed in 2005 to provide guidance for the implementation of the transit component of the Regional Transportation Plan. The TLCP includes Guiding Principles, policies, procedures and financial forecasts to ensure that the program can be balanced.

The draft 2017 Rail TLCP Update is being discussed through the Valley Metro Rail Board process. The bus and rail programs will be merged into a single item for action on the joint agenda for June.

The most recent update to the TLCP was in June 2016. Since that time, the official forecast has projected a small decrease in revenues for the Transportation Excise Tax. The forecast of PTF for the bus program is approximately $26.9 million lower for the remaining years of the TLCP (FY2017-2026).

The current Short Range Transit Plan (SRTP) has identified some service and/or funding changes that are recommended to be incorporated into the bus program within the TLCP, along with some associated fleet expansion needs. The SRTP was developed cooperatively with member city transit staff and includes service improvements that are ready to be implemented in the next two years. It also includes many potential improvements that are not quite ready for implementation. These improvements will continue to be analyzed and developed and could be recommended for regional funding in a future TLCP Update.

Bus Program

Capital Program In the 2017 TLCP update, there are some minor adjustments to the replacement fleet and facilities projects related to timing and federal funding. In addition, the SRTP has identified some expansion buses that may be required for planned service enhancements. Although some of these enhancements are still in the development phase, a number of expansion buses have been included in this TLCP update as placeholders to be ordered once the service enhancements have been finalized. There is a total of 68 expansion buses programmed in the next 5 fiscal years.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

Operating Program Valley Metro planning staff developed the SRTP to guide the implementation of new service improvements, including those funded with PTF. The current SRTP includes some service enhancements which are eligible for TLCP funding. Eligible proposed enhancements are included in this update for regional funding.

In 2016, the Valley Metro Board of Directors authorized the implementation of a new regional ADA paratransit overlay service which eliminates the need for transfers among current paratransit providers. The new service was implemented in FY2017. The 2017 update includes additional ADA PTF funds to accommodate the growth, as requested by member agencies.

The fund balance at the end of the program is anticipated to be about $25.7 million, down from $42.2 million in the 2016 update. The following table summarizes the changes in fund balance.

2017 2016 Comparison of Net Revenues Update Update Change Operations Revenue $2,063.7 $2,076.6 ($13.0) Capital Revenue $1,040.8 $1,039.4 $1.3 Total Revenue $3,104.4 $3,116.0 ($11.6)

Operations Expenditures $1,757.6 $1,754.4 $3.2 Capital Expenditures $1,321.1 $1,319.5 $1.6 Total Expenditures $3,078.7 $3,073.9 $4.8

Net Revenues less Expenditures $25.7 $42.2 ($16.4)

The TLCP Guiding Principles require that jurisdictional equity be maintained for the bus program. The policy allows that each sub-region can be within 2.5 percent above or below their policy allocation. In the current model, the East and West sub-regions are within this policy allowance, but the Central sub-region is not. Additionally, the policy allows that regardless of sub-regional percentages, no jurisdiction can be under- allocated by $7.5 million or more. In the current model one jurisdiction, Phoenix, meets that condition. Phoenix is in the process of identifying potential projects that could be programmed to bring them within the policy guidelines.

Jurisdiction Equity Summary by Sub-Region (millions of dollars) April 14, 2017

Total JE Total Percent of Policy Under Jurisdiction Calculated JE PTF (JE PTF Calculated Allocation Over) Central $433.3 $441.9 $8.7 2.0% East $783.0 $789.3 $6.3 0.8% West $163.6 $161.3 ($2.3) -1.4% $1,379.8 $1,392.5 $12.7 0.9%

COST AND BUDGET Some of the proposed changes to the TLCP bus model have been incorporated into the proposed FY2018 Operating and Capital Budgets and the Five-Year Operating and Capital Forecasts. Revenues and expenditures forecast within the TLCP are balanced as required by State Statute.

COMMITTEE PROCESS RTAG: March 21, 2017 for information TMC: April 5, 2017 for information AFS: April 13, 2017 for information Board of Directors: April 20, 2017 for information

RTAG: April 18, 2017 for information TMC: May 3, 2017 for action AFS: May 11, 2017 for action Board of Directors: May 18, 2017 for action

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 • Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability

Goal 3: Grow transit ridership • Tactic A: Expand and improve transit services to reach new markets • Tactic B: Improve connectivity of transit services for greater effectiveness

RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors approval of the 2017 Update to the Transit Life Cycle Program.

CONTACT Paul Hodgins Chief Financial Officer 602-523-6043 [email protected]

ATTACHMENT ADOT Revenue Forecast – PTF for Bus Program Jurisdiction Equity Summary by Jurisdiction

Transportation Excise Tax Revenues PTF for Bus Program Comparison of 2016 and 2015 Forecasts (millions of dollars)

2016 Annual 2015 Annual Fiscal Year Forecast Growth Forecast Growth 2016 $75.0 3.8% $75.8 4.9% 2017 $77.8 3.7% $80.6 6.4% 2018 $82.5 6.1% $85.4 5.9% 2019 $87.2 5.7% $90.1 5.6% 2020 $92.0 5.6% $94.8 5.2% 2021 $96.9 5.3% $99.6 5.0% 2022 $101.7 5.0% $104.3 4.7% 2023 $106.4 4.6% $108.9 4.4% 2024 $111.3 4.7% $113.8 4.6% 2025 $116.0 4.2% $118.9 4.4% 2026 $70.9 $72.3 Actuals 06-16 $693.4 $694.2 Forecast 17-26 $942.5 $968.6 20 Year Total $1,635.9 $1,662.8

Jurisdiction Equity Summary (millions of dollars) April 14, 2017

Total Total Calculated Policy PTF JE Under (JE JE Calculated JE Policy Jurisdiction PTF Allocation Over) Percent Percent Avondale $19.5 $21.4 $2.0 1.41% 1.54% Buckeye $4.7 $1.0 ($3.7) 0.34% 0.07% Chandler $131.0 $131.8 $0.8 9.49% 9.46% County $16.4 $9.1 ($7.4) 1.19% 0.65% El Mirage $1.5 $3.1 $1.6 0.11% 0.23% Fountain Hills $0.9 $1.2 $0.3 0.06% 0.09% Gila Bend $0.0 $1.9 $1.9 0.00% 0.14% Gilbert $87.9 $85.2 ($2.7) 6.37% 6.12% Glendale $78.9 $79.1 $0.2 5.72% 5.68% Goodyear $4.0 $3.6 ($0.4) 0.29% 0.26% Guadalupe $3.6 $0.1 ($3.5) 0.26% 0.01% Litchfield Park $0.0 $3.2 $3.2 0.00% 0.23% Mesa $267.6 $270.7 $3.1 19.39% 19.44% Paradise Valley $3.3 $7.4 $4.1 0.24% 0.54% Peoria $28.1 $30.9 $2.7 2.04% 2.22% Phoenix $433.3 $441.9 $8.7 31.40% 31.74% Queen Creek $0.0 $0.8 $0.8 0.00% 0.06% Salt River Reservation $0.8 $0.0 ($0.8) 0.06% 0.00% Scottsdale $140.8 $144.9 $4.1 10.21% 10.41% Surprise $5.3 $3.2 ($2.1) 0.39% 0.23% Tempe $147.1 $147.1 ($0.0) 10.66% 10.56% Tolleson $4.4 $4.3 ($0.1) 0.32% 0.31% Wickenburg $0.0 $0.3 $0.3 0.00% 0.02% Youngtown $0.6 $0.2 ($0.4) 0.04% 0.02% $1,379.8 $1,392.5 $12.7 100.00% 100.00%

DATE AGENDA ITEM 4 April 26, 2017

SUBJECT Valley Metro Fiscal Year 2018 (FY18) Proposed Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY18 thru FY22)

PURPOSE To request approval of the FY18 Budget and Five-Year Operating Forecast Capital Program (FY18 thru FY22). Approval of the budget provides funding for Board- approved TLCP projects and allows RPTA to implement capital and operating projects approved by voters in Proposition 400. Arizona State statutes require Board adoption of an annual budget.

BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Regional Public Transportation Authority (RPTA) FY18 combined operating and capital budget (the budget) is $311.4 million (M) and includes $55.1M of expenses for light rail/high capacity transit capital.

The preliminary FY18 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards and reserves when needed. 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 $184.8M represents a $13.5M (8%) increase from the previous year’s operating budget of $171.4M. The operating budget includes expenses incurred by RPTA on behalf of Valley Metro Rail (VMR) and which are reimbursed by VMR. Those expenses are primarily related to staff working directly on VMR projects and RPTA overhead. The operating budget for VMR expenses is $21.9M, up from $17.8M in FY17, which represents an increase of 23 percent. The remaining operating budget for RPTA is $162.9M, up from $153.5M in FY17, an increase of 6.1 percent.

The total capital budget of $126.6M represents a $42.5M (25%) decrease from the previous year’s capital budget of $169.0M. The capital budget also includes expenses incurred on behalf of VMR, primarily pass-through of PTF for rail capital projects included in the Transit Life Cycle Program. The capital budget for VMR expenses is VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

$33.2M, with $10.3M in rail PTF revenues added to the fund balance for future use. The remaining budget for RPTA capital projects is $83.1M, up from $64.8M for FY17, an increase of 28.2 percent.

Details and explanations of the major budget changes are discussed in the Executive Summary attached and on the detailed budget posted on the website.

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 FY18 there are 360 employees budgeted in the integrated agency, with 151 FTE’s budgeted to RPTA activities and 209 budgeted to VMR activities. Compensation budget based on 3.0% 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 C: Deliver projects and services on-time/on-budget. o Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability.

COMMITTEE PROCESS Preliminary Budget Review: Financial Working Group: March 21, 2017 for information RTAG: March 21, 2017 for information TMC: April 5, 2017 for information AFS: April 13, 2017 for information Board of Directors: April 20, 2017 for information

Proposed Budget Adoption: TMC: May 3, 2017 for action AFS: May 11, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION Staff recommends that the TMC forward to the Board of Directors approval of the Fiscal Year 2018 Budget (July 1, 2017 thru June 30, 2018) and accept the Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022).

CONTACT Paul Hodgins Chief Financial Officer 602-523-6043 [email protected]

ATTACHMENT Valley Metro FY18 Preliminary Executive Summary

Valley Metro Fiscal FY18 Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY18 thru FY22) (posted on VM website)

2 4/27/2017

Valley Metro RPTA FY18 Proposed Budget Overview

May 2017

FY18 Highlights

• Growth in services operated

• Increase in number of capital projects

• Personnel increases to address growth – RPTA is the employer for all Valley Metro staff – Staff work effort is allocated between RPTA and VMR

1 4/27/2017

Valley Metro RPTA FY18 Revenues: $311.4M

Valley Metro RPTA Operating Revenues

Source of Funds FY17 FY18 Change $ Change % Public Transportation Funds $76.5 $77.5 $1.1 1.4% Regional Area Road Funds 4.9 4.9 0.0 0.7% Transit Service Agreements 32.2 38.8 6.6 20.5% Federal Grants 11.9 10.9 (1.0) -8.2% Fare Revenues 15.0 15.1 0.2 1.0% Other Revenues 2.0 1.1 (0.9) -45.2% Carry forward and Reserves 0.3 3.7 3.4 1028.6% Sub-Total RPTA Operating $142.8 $152.2 $9.4 6.6%

METRO Reimbursements 17.3 21.4 4.1 23.7% AZ Lottery Funds 11.3 11.2 (0.1) -0.4% Sub-Total Pass-Through Funds $28.6 $32.6 $4.0 14.2%

Total Operating Revenues $171.4 $184.8 $13.5 7.9% 4

2 4/27/2017

Valley Metro RPTA Capital Revenues

Sources of Funds FY17 FY18 Change $ Change % Public Transportation Funds $24.6 $24.3 ($0.4) -1.5% Federal Grants 18.1 38.0 19.9 109.9% Other Revenues 0.6 0.2 (0.4) -65.8% Carry forward and Reserves 21.5 20.7 (0.9) -4.1% Sub-Total RPTA Capital $64.8 $83.1 $18.3 28.2%

PTF Rail Program 40.1 43.5 3.4 8.5% PTF Bond Proceeds 61.3 0.0 (61.3) -100.0% Carry forward and Reserves 2.9 0.0 (2.9) -100.0% Sub-Total VMR Capital $104.2 $43.5 ($60.7) -58.3%

Total Capital Revenues $169.0 $126.6 ($42.5) -25.1%

Valley Metro RPTA FY18 Expenses: $311.4M

3 4/27/2017

Valley Metro RPTA Operating Expenses

Uses of Funds FY17 FY18 Change $ Change % Fixed Route Operations $87.5 $93.3 $5.8 6.7% Paratransit Operations 36.3 37.5 1.1 3.1% Vanpool Operaitons 1.0 1.0 (0.0) -1.7% Planning 2.1 2.5 0.5 21.6% Commute Solutions 1.2 1.3 0.1 8.5% Administration and Finance 3.2 4.6 1.3 41.6% Regional Services 11.1 11.6 0.5 4.5% Sub-Total RPTA Operating $142.3 $151.7 $9.4 6.6%

METRO Personnel Costs 17.3 21.4 4.1 23.7% METRO RARF Disbursements 0.5 0.5 0.0 0.0% AZ Lottery Funds Disbursements 11.2 11.2 0.0 0.0% Sub-Total Pass-Through Funds $29.0 $33.1 $4.1 14.1%

Total Operating Expenditures $171.4 $184.8 $13.5 7.9% 7

Valley Metro RPTA Capital Expenses

Uses of Funds FY17 FY18 Change $ Change % Regional Fleet 19.7 38.5 18.8 95.5% Regional Facilities 2.3 5.9 3.5 151.5% Other Regional 4.8 2.6 (2.3) -46.4% Lead Agency Disbursements 12.5 11.9 (0.6) -4.7% Debt Service 25.4 24.2 (1.2) -4.9% Sub-Total RPTA Capital $64.8 $83.1 $18.3 28.2%

Lead Agency Disbursements 86.0 33.2 (52.8) -61.4% Reserved for Capital 18.2 10.3 (7.9) -43.3% Sub-Total VMR Capital $104.2 $43.5 ($60.7) -58.3%

Total Capital Expenditures $169.0 $126.6 ($42.5) -25.1%

4 4/27/2017

Service Operated by Valley Metro

Revenue Miles Operated 18.0

16.0

14.0

12.0

10.0 millions 8.0

6.0

4.0

2.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Fiscal Year

Fixed Route Paratransit Vanpool Light Rail 9

LRT Capital Project Schedule

5 4/27/2017

Staffing Assumptions

• Staff v. Consultant – 22 positions are in lieu of consultants/contract staff – Long term needs (minimum 3 years) – Annual estimated savings of $1.3 million – Positions for capital projects hired as term, for specific time or project • Strategic Initiatives – Adopted Strategic Plan – IT Strategic Plan • General growth – Support positions in Human Resources, Finance, Procurement

FY18-20 Proposed Staffing Levels

Adopted Mid‐Year Proposed Preliminary Preliminary Division 2017 Additions 2018 2019 2020 Capital and Service Development 38 4 11 4 Communication & Marketing 29 8 3 Executive Office 10 1 2 Finance 20 2 3 Human Resources 8 2 Information Technology 9 2 3 3 Internal Audit 2 Legal 12 2 Operations and Maintenance ‐ RPTA 58 7 1 Operations and Maintenance ‐ VMR 118 4 2 Safety and Security 6 1 3 Total Positions 310 15 35 15 3 RPTA 129.3 8.6 12.8 8.2 3.0 VMR 180.7 6.4 22.2 6.8 0.0

6 4/27/2017

FY18 Proposed Staffing Costs and Funding

FY18 RPTA Base Additions % Change Planning and Capital Projects (PTF/RARF) $1.24 $0.09 7.0% Administrative and Regional Projects (PTF/RARF) $8.90 $0.62 7.0% Operations ‐ Regionally Funded (PTF) $1.30 $0.05 3.8% Operations ‐ Member City Contributions $0.93 $0.03 3.5% Sub‐total RPTA $12.37 $0.79 6.4%

FY18 VMR Base Additions % Change Planning/Project Development (PTF/RARF) $4.14 $0.74 17.8% Capital (Project funded) $4.37 $1.76 40.3% Operations ‐ Member City Contributions $12.61 $0.65 5.2% Sub‐total VMR $21.11 $3.15 14.9%

Estimated fully burdened costs, including wages, fringe benefits and overhead ($ millions) 13

Valley Metro RPTA

FIVE YEAR PLAN OVERVIEW FY 2018 THROUGH FY 2022

7 4/27/2017

5-Year Operating Assumptions

• Public Transportation Fund (PTF) - up approximately 5.4% annually • Federal PM Revenues up from $8.2M to $8.8M in FY18, $7.9M in FY19, 1% escalation annually • Transit service costs up 3% annually plus contingencies • Fixed route fares up 1.5% annually • VM operated paratransit trips FY18 up 4% over FY17 FY19 – FY 22 + 5% per year overall • Administrative costs up 2% annually

Five Year Operating Forecast - Revenues

(thousands) 5-Year Total Revenues Public Transportation Fund (ADOT) $ 810,755 Less: Debt Service Bus & Rail (120,413) Less: Rail Capital Funding (current) (254,179) Net PTF for Operations $ 436,163

Other Regional Funds $ 25,182 Federal Funds 52,039 Transit service reimbursements 219,959 Fare Revenues 78,103 Interest and other revenue 3,716 Total revenues $ 815,162 16

8 4/27/2017

Five Year Operating Forecast - Expenditures

(thousands) 5-Year Expenditures Total Operations Fixed Route $ 495,804 Paratransit and ADA Programs 220,745 Vanpool Service 5,054 Total operations expenditures $ 721,603

Transportation Demand Management $ 6,415 Planning & Administration 31,483 Regional Services 46,514 Safety & Security 1,590 Operations Contingency 7,288 Total expenditures $ 814,892

Excess/(deficiency) of revenues over expenditures - operations $ 270 17

5-Year Capital Program Assumptions

• Bus Fleet - $178 Million – 400 replacement units; 68 expansion units – 85% Federal /15% PTF • Vanpool Fleet - $20 Million – 316 replacement units; 125 expansion units 100% Federal STP • Facilities and Equipment - $22 Million – Peoria PNR - 80% Federal / 20% PTF – North Glendale and Laveen Park and Rides - Local match PTF – Regional Communications System - Local match PTF – Fare Collection upgrades/Facility - 100% PTF – Mid-Life Bus Engine Rebuilds (192 units) - 80% Federal / 20% PTF

9 4/27/2017

Five Year Capital Program- Revenues

(thousands) 5-Year Total Revenues Public transportation funds$ 37,288 FTA - Section 5307 138,373 FTA - Section 5311 456 FTA - Section 5337 1,042 FTA - Section 5339 4,786 FHWA - STP 18,324 Vehicle/parts proceeds 860 Capital assets reserve applied 1,576 Vanpool reserve applied 764 Undesig. Fund Balance Applied (PTF) 21,070 Undesig. Fund Balance Applied (RARF) 553 Total Revenues$ 225,092 19

Five Year Capital Program- Expenditures (thousands) 5-Year Total Expenditures by Project IT Infrastructure$ 2,073 Standard Bus - Replacement 145,970 Standard Bus - Expansion 28,557 Express/BRT - Expansion 3,168 Rural Fleet - Replacement 537 Paratransit Fleet - Replacement 2,038 Vanpool Fleet - Replacement 14,156 Vanpool Fleet - Expansion 5,634 Fleet - Other 860 Bus/Paratransit O/M Facilities 611 Bus Stop Passenger Amenities 1,558 Park & Rides 7,045 Vehicle Management/Communications Systems 4,500 Fare Collection Systems 507 State of Good Repair - Fleet Rebuild 7,878 Total Expenditures$ 225,092 20

10 4/27/2017

Recommendation

Staff recommends that the TMC forward to the Board of Directors approval of the Fiscal Year 2018 Budget (July 1, 2017 thru June 30, 2018) and accept the Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022).

DATE AGENDA ITEM 6 April 26, 2017

SUBJECT Future Agenda Items Request and Report on Current Events

PURPOSE Chair Zuercher will request future agenda items from members, and members may provide a report on current events.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT Pending Items Request

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

Pending Items Request

Item Requested Date Requested Planned Follow-up Date

April 26, 2017

Rail Management Committee Wednesday, May 3, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor 11:00 a.m.

Action Recommended

1. Public Comment on Agenda Action Items (blue card) 1. For information

2. Minutes 2. For action

Minutes from the April 5, 2017 RMC meeting are presented for approval.

CONSENT AGENDA 3A. South Central Light Rail Extension Design Contract Award 3A. For action

Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to award a contract for South Central Light Rail Extension design services with AECOM Technical Services, Inc. for an amount not to exceed $32,383,580 and to authorize staff to hold $3,238,358 (10%) for use as a contingency for unforeseen circumstances.

3B. Tempe Streetcar Construction Manager at Risk Contract 3B. For action Amendment”

Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to execute a contract amendment for the Tempe Streetcar Construction Manager at Risk contractor, Stacy and Witbeck, to provide an early utility construction package for an amount not to exceed $2,143,920 and to authorize staff to hold $214,392 (10%) for use as a contingency for unforeseen circumstances.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433

3C. Transit Life Cycle Program – Light Rail Update 3C. For action

Staff recommends that the TMC forward to the Board of Directors approval of the 2017 Transit Life Cycle Program – Light Rail Update.

3D. Contract with RouteMatch to develop an application 3D. For action associated with FTA Mobility on Demand Sandbox Grant

Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to enter into an agreement with RouteMatch for an amount not to exceed $800,000 ($600,000 direct payments and $200,000 in-kind services).

REGULAR AGENDA 4. Light Rail Vehicles Contract Award 4. For action

Scott Smith, CEO, will introduce Ray Abraham, Chief Operations Officer, who will request that the RMC forward to the Board of Directors authorization for the CEO to execute a seven-year contract with Siemens Industry Inc. to purchase an initial quantity of 11 S70 light rail vehicles in an amount not to exceed $57.9 million with options for up to an additional 67 S70 light rail vehicles over the seven-year term and to establish a contract change contingency of $5,790,000 that is included in the overall budget established for the project.

5. Valley Metro Rail, Inc. Fiscal Year 2018 (FY18) Operating 5. For action and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022)

Scott Smith CEO, will introduce Paul Hodgins, Chief Financial Officer, who will provide information regarding the (FY18) Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022).

6. Future Agenda Items Request and Report on Current Events 6. For information

Chair Methvin will request future RMC agenda items from members and members may provide a report on current events.

7. Next Meeting 7. For Information

The next meeting of the RMC is scheduled for Wednesday, June 7, 2017 at 11:00 a.m.

DATE AGENDA ITEM 1 April 26, 2017

SUBJECT Public Comment on Agenda Action Items

PURPOSE The public will be provided with an opportunity at this time to address the RMC on all action agenda items. Up to three minutes will be provided per speaker to address all agenda items unless the Chair allows more at his/her discretion. A total of 15 minutes for all speakers will be provided.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT None

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

DATE AGENDA ITEM 2 April 26, 2017

Minutes from the Rail Management Committee Wednesday, April 5, 2017 Lake Powell Conference Room 101 N. 1st Avenue, Suite 1000 Phoenix, AZ 11:00 a.m.

Members Present Mike Nevarez for Steven Methvin, City of Tempe, Chair Chris Brady, City of Mesa, Vice Chair Marsha Reed, City of Chandler Kevin Phelps, City of Glendale Ed Zuercher, City of Phoenix

Chair Brady called the meeting to order at 11:52 a.m.

1. Public Comment on Agenda Action Items

Mr. Crowley said the action item I will be addressing is 3A, the utility. I tried to find out from Mr. Santana over here what SRP is going to be spending $300,000 on irrigation since the integrity is the term that they use mostly when it comes to moving or dealing with any of their things -- the integrity of the flow and that.

And I don't know or see where $300,000 worth of moving conduit or just ditches themselves. They should already be to that point being that Central Avenue has been expanded and done, I mean, how many times.

I'd also like to do on No. 6. Yours is an action and over at the bus it was just for information.

Chair Brady said Mr. Crowley, I think you're correct that will be just for information. We will not be taking action on No. 5.

Mr. Crowley said it's $2 billion dollars, when I'm looking at it, that you guys are using over the next five years for both capital and operations and supposedly it's a 60-40, 60 percent of all funding on the transportation side is to go to bus and 40 percent to rail. Well, when I add up the ones on the bus over the five years, it only comes to less than -- well, it's three hundred million for one and eight hundred for the other, so it's just under a billion. So the 60-40 turns out to be 40 percent for the bus and 60 percent to the rail. That's not the way it's supposed to be. And with that, I'll give you back a minute of your lives. Have a pleasant.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

2. Minutes

Minutes from the March 1, 2017 RMC meeting were presented to approval.

IT WAS MOVED BY ED ZUERCHER, SECONDED BY KEVIN PHELPS AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 1, 2017 RMC MINUTES.

3. Consent Agenda

The following items were presented on the consent agenda:

A. South Central Light Rail Extension Third Party Utility Agreements B. Intergovernmental Agreements (IGAs) with the City of Phoenix C. Gilbert Road Light Rail Extension Assignment and Assumption of Lease Agreement D. Contract Change Order for Non-Revenue Fleet Maintenance Services

IT WAS MOVED BY KEVIN PHELPS, SECONDED BY MARSHA REED AND UNANIMOUSLY CARRIED TO FORWARD CONSENT AGENDA ITEMS A THRU D TO THE BOARD OF DIRECTORS FOR APPROVAL.

4. Tempe Streetcar Vehicle Contract Award

Mr. Smith said thank you, Mr. Brady. And we weren't planning on a presentation unless there are specific questions, although I did want to go over a couple of items as it relates to the memo that went out and to make you aware of some things that we're going to change in the Board presentation.

This was a unique procurement because of the -- not only because it was a streetcar, but specifically because of the desire of Valley Metro and the City of Tempe to make at least a portion of the Tempe Streetcar off wire, which means that the streetcars would have to have battery propulsion options.

What that did was it created certain technical challenges and it also put us into where this was certainly not a low bid. It was a best value kind of proposition. We had to be sure that the car that we select will be able to meet the demands of whatever off-wire option Tempe and Valley Metro arrive at in the final design. Through this included -- because it went that way, it included two separate analyses.

The first analysis was with our group that went over the -- the panel that went over all the technical issues and that included a representative from the City of Tempe. They evaluated the two respondents and scored them. And you can see the score on there.

The second one was with our independent cost group. Now, you have a price point on that and that's really, that should not have been included in there because this was not 2

a price-driven procurement.

What that price scoring does is that it takes the two bids, the low and the high of the two bids, and it tries to create some sort of numerical score, which really isn't an accurate representation because it's an irrelevant factor in this except for whether -- except for the findings of the independent cost committee.

We need to let you know that after all the analysis, Inekon was actually a lower bid. It was about five million dollars below what Brookville was for the entire program. That's almost $34 million -- versus $29 million. That seems like a lot, but you're not really -- it is apples to oranges, I mean. It's not apples to apples.

You need to know that the review panel unanimously selected Brookville because of its superior technical and their findings that Brookville was much more suited and was a much more better fit for the demands of the Tempe Streetcar.

The separate independent estimate determined that the Brookville price was a reasonable price. That it was a price that did not exceed their expectations and, therefore, that's why Brookville was the one chosen by the committee because it fit into that standard.

I just wanted to let you know that this has those rankings on it. We will not include that for the Board because it's really not a -- it creates confusion in there. And it creates the idea that somehow that the price was a comparison price as opposed to a reasonable price information because of the best value. Did I just completely confuse the situation, or did I help you to understand the process that we went through?

Chair Brady said so effectively, the first -- the evaluation was done on the technical elements first, without looking at price?

Mr. Smith said yes without looking at price.

Chair Brady said and you determined then with -- and when was it determined technically unacceptable, so it was really between two.

Mr. Smith said yes.

Chair Brady said so the evaluation was done between the two which one met the technical -- and I'm assuming, it's not only which one exceeded, but was it acceptable at the same time. You could be better than the other proposal but still not meet the price.

Mr. Smith said exactly. The baseline was: can you deliver a car which will meet the expectation of the off-wire operations that we're planning for Tempe.

Chair Brady said so they were able to meet the technical points -- I mean, you're comfortable they're not only exceed the other proposal, but they do meet the requirements that are expected.

Mr. Smith said yes. The findings of the committee, which were unanimous, was that Brookville exceeded the requirements, Inekon did not meet the requirements.

Chair Brady said okay. And then following that, a separate evaluation was done. How is that done to determine whether their pricing is, I guess, within a certain range, I guess, is what you're looking -- what are you looking for in the pricing? You don't have anything to compare it to, I guess, so how do you get to that point.

Mr. Smith said we hire a specific consultant -- LTK was our price consultant. And this is what their specialty is, is in cars, streetcars, and in light rail vehicles.

They take the whole body of information that they have based on what they would believe, based on our standards, a car would price out to be within the market, as they understand it, the worldwide market. And they define a range that a price between this range and this range will be deemed to be reasonable. And the Brookville price fell within that range.

So the first group doesn't take the second group into consideration at all. They don't look at price or anything. They just look at technical capabilities. The second group looks at fairness. And then our procurement staff combines the two and says, okay, you have this selection. Does it then meet the price -- the reasonable price; therefore -- and that's based on the best and final offer that's submitted by the proposers.

And then the determination is made whether the combination of those two present the best value. We're taking very much a low cost not a low price.

So basically if you combine the technical capabilities and the risk that's related to whether they can meet the demands, the technical demands plus the price you come up with a cost -- a total cost estimator. And in that analysis Brookville was by far the best value, hence, the lower cost overall cost of the two proposers.

Mr. Zuercher said where is it that Tempe is going off wire?

Mr. Smith said yet to be determined. We know at least they'll be off wire down Mill Avenue between just south of University and 9th Street, which is south of University over to Hayden's Ferry on Rio Salado. That is the baseline.

We're meeting with -- we're presenting to the Tempe City Council tomorrow, I believe, different options, because there are desires by some members of the city council that we extend off-wire to Ash, either all of Ash or a portion of Ash. 4

There also was a request by the Tempe City Council that we, if we could, keep wires away from the intersections of Mill and Rio Salado and off of University and Mill. So there's a variety of those options as it relates to how much will be on wire and off wire.

So we are planning for a car that will be able to operate at least about a mile, up to a mile and a half off wire of the whole three miles. That option has not yet been formally decided.

Mr. Zuercher said and an off-wire vehicle, off-wire capable vehicle is more expensive than an on-wire vehicle?

Mr. Smith said: Is more -- yes, it is. It's more expensive. Now, one thing that is not yet known, even though there's a difference, is the savings that might be earned by not building a wire. You know, you don't put catenaries in, you don't put wires in, obviously you don't have that cost. So there might be a saving as we design the final system, a trade-off between the additional cost of the vehicles and a lower cost to the capital cost because you're not putting in as much infrastructure -- potentially not as much infrastructure.

That all depends on the final alignment because you may have to put in an extra power station. You may have to do some other things. But there is that potential that there will be a trade-off.

We expect there could be some trade-off. It might be small, might be large. So the additional cost of the vehicle may be offset to a small degree or large degree by the savings by not having to put the wires up.

Mr. Zuercher said and the extra cost is paid for by what? By who?

Mr. Smith said the extra cost is within the overall project budget. It is over what the initial line item projection was, so it would be covered within the contingency portion of the budget.

And the net difference and the net cost of the higher cost vehicle will somehow be applied against the overall the contingency. So it doesn't increase the overall project budget, but it will, depending on the size, will shrink the overall contingency that's available to us.

Mr. Zuercher said and if the project were to go over budget because other things needed contingency that's not there who pays that?

Mr. Smith said well, there won't be federal funds and there won't be regional funds, so that would be a discussion we'd have with the City of Tempe.

Chair Brady said okay. And has Inekon done vehicles in any other places? We talked about where Brookville has done vehicles, which is helpful. Has Inekon done vehicles anywhere?

Mr. Smith said they have done vehicles, mostly in Europe. They're a Czech firm in the U.S. Brookville has done off wire in Dallas, in Detroit -- which is in final testing now and will open up and is much more aggressive. Oklahoma City will also, which is also under development right now.

Mr. Zuercher said okay. And Tempe's comfortable with this?

Mr. Nevarez said yes, we are.

Chair Brady said are there any other questions, comments? Very good. All right. So this is Item No. 4 for action for approval. Do I have a motion?

IT WAS MOVED BY MIKE NEVAREZ, SECONDED BY KEVIN PHELPS AND UNANIMOUSLY CARRIED TO FORWARD TO THE BOARD OF DIRECTORS AUTHORIZATION FOR THE CEO TO EXECUTE A CONTRACT WITH BROOKVILLE EQUIPMENT TO MANUFACTURE AND SUPPLY SIX OFF-WIRE BATTERY PROPULSION STREETCAR VEHICLES, PLUS RELATED SPARE PARTS FOR THE TEMPE STREETCAR PROJECT IN AN AMOUNT NOT TO EXCEED $33,034,422 MILLION PLUS $3,303,442 (10 PERCENT) FOR CONTINGENCY.

5. Light Rail Vehicle Contract Award

Mr. Smith said I'd like to introduce Ray Abraham who will give you an update as to the award, which is the first part of a much larger long-term light rail car procurement.

Mr. Abraham provided a presentation that included:

 Background  Process  Evaluation and Scoring  Recommendation

Mr. Brady said “Best Value” approach. Help me understand, it's kind of a two- part process or maybe three. But this first part, the technical evaluation how did the two bidders do?

Mr. Abraham said technical evaluation Kinki Sharyo scored a bit higher, and I could tell you that they scored higher primarily because of the interfaces. Their car would be identical to our present car.

So, as you can see in your memo, they ranked 436 on the technical score. And Siemens was 427. Because Siemens builds a quality car, you know, there was really no technical reasons to disqualify Siemens. They build a quality car. They have to make some adjustments for our system. They're willing to do it. And then the price side, once we got into the price side, there was an enormous difference.

Mr. Brady said and so I see the score. Show me the dollars. I see the point differential. So I see price point, so help me understand that. So I'm looking at the memo. So you're saying they're, 436 versus 427 on the technical points; is that correct?

Mr. Abraham technical. That's correct.

Mr. Brady said and then price points -- so a higher points is that a lower cost or is that a -- what does that mean?

Mr. Abraham said that's lower cost. So the lowest cost sets the bar at 400 points.

Chair Brady said okay. So you get all points for the lowest cost. Mr. Abraham said yes.

Chair Brady said and how do you weight a point to go from 400 to 303. What is the difference?

Mr. Abraham said based on the price difference calculation, the percentage of how much higher the other car was.

Chair Brady said okay. So what was the dollar -- help me -- walk me -- show me where the difference in dollar value is?

Mr. Abraham said we don't have the dollar value in the memo. Paul was on the committee.

Mr. Hodgins said it's about $2 million per vehicle.

Mr. Abraham said the Siemens price is coming in at approximately $5.3 million per vehicle including training, support for testing, and spare parts.

Chair Brady said so for this group, this would be about a $22 million difference total. It's $2 million per vehicle?

Mr. Abraham said yes, for these first eleven, yes.

Mr. Smith said but for the whole entire contract -- the price differential was well over a $100 million.

Mr. Abraham said it was just hard for us to accept that.

Mr. Smith said and because of the nature of, once again, we don't have the same situation we had with the off wire. Really they scored about the same, as Ray said, the only difference is it's obviously easier to integrate an existing car with your existing system which is all Kinki Sharyo cars.

But the difference between the two is almost negligible other than those things. But the price differential was significant.

Mr. Zuercher said that's really where I was headed. It appears that we're sort of arguing opposite of what we argued last time.

Mr. Abraham said you mean for each car?

Mr. Zuercher said yeah, so it looks like the scoring system worked well here because the point -- the pricing piece is so dramatic that how would you -- I wouldn't be comfortable if we were doing the other thing and walking away from a million dollars in savings, but we're saying here a little bit lower in technical but better in price, so we're going to go there.

On the previous ones, it was better technical and lower in price, but we're going to go with them because they're better. You know, I'm saying it feels inconsistent.

Mr. Smith said I know exactly what you're saying. Well, it doesn't work on either one actually. It just fell out this way.

What we're trying to do is we're trying -- and this is the problem with any procurements whether it's in your cities or ours where you're trying to take in many ways a subjective process and try and make it an objective score.

How do you make the difference between 400 and 303? Well, it's mathematical. Well, we're 28 percent lower, so we're going to make the point differential 28. Is that really an accurate way to score? I would say no.

I would say you look at the raw dollar numbers, you look at the technical side, and then you look at what potentially is the overall cost. So in actuality the system worked exactly the same on this process as it did the other, but there is a fatal flaw in this two-part scoring that we're going to have to reevaluate.

And we will reevaluate it, because it really pointed it out in these two issues, because you can't assign a numerical number for the pricing and have it really be an accurate depiction as to what those differences are. We tried and procurement departments all over the place tried to do it. This is one of those places where frankly it just doesn't work. 8

Chair Brady said and a concern I would have is based on your points. I know this is not -- this is just taking a strict reading of this. There were 600 points available on the technical side and neither one of them scored over 500.

So it almost suggests that neither one of them were technically, you know, meeting your expectations, because your schedule, your 600, and your highest is 436 and that sounds like a long ways from 600, so my question is are either one of them, you know, but I don't think that's what you were trying to do.

Mr. Smith said I hate -- this is a crude thing, but I was watching Dancing With the Stars. What's the difference between a nine dance and a seven dance. You know it's what Bruno says.

I don't want to be flippant about that. But this process is a very extensive detailed process. I mean, our technical, our committee spends a lot of time and the technical advisors spend a lot of time going over these proposals and literally tearing them apart down to the minutia.

Then they're asked to subjectively assign a score and add those scores. It's not that you score against the 600. You score against each other, because you're trying to compare, first of all, the baseline, does it really meet the bottom line. And that isn't defined by does it score above this number or that. It's whether the technical advisors and the committee, all of whom are seasoned experts or have worked in this area, looking at the different proposals. And the second says, will this match the needs of our system. Then you're asking them to assign a point value to that. And that in and of itself is an inexact science.

We feel comfortable based on what our committee said, what our evaluators said who have worked in this, and the fact that you have an existing system that pretty well defines what you need from a car. It's not like Tempe where you're trying to figure out what you might need because it's somewhat new technology. This is pretty well established.

And so these scoring tables, I understand what we're trying to accomplish, but in reality it doesn't accurately define the process, nor does it accurately define the recommendations. I think on both cases the recommendations of all participants in the panel and the technical were unanimous.

With the Tempe one, because the difference in technological capabilities was so great, they believed that the risk was much lower with the Brookville. On this one it came the other way because the price was so different, and technologically they believed that the two proposers were so close that, once again, on a lower cost, best value they couldn't overcome that price differential. It was just too much.

And, believe me, when you're dealing with cars and you're looking at changing providers, which creates some unique challenges for us, we can't hook those two cars together and run them in the same train. We have to set up separate parts departments. There are some challenges to having two different providers.

But the committees write a consensus memo. At the end of the time the committee writes a consensus memo where they layout the rationale without the scoring, but they layout the rationale, they give the background. And in that case they just -- they believed -- and that's what we really follow. And then we try to score it so we can present it in a memo that hopefully people – like I said, I don't want to be flippant. But it really doesn't accurately define the process.

Chair Brady said I think that's a problem.

Mr. Smith said well, it's a problem with all procurement.

Mr. Zuercher said I got that, but we do lots of procurements in Phoenix and I would never sit in front of council and say I got a problem with my procurement. It doesn't accurately reflect what I'm telling the council, so I think we got to work on that.

Mr. Smith said we are. And, like I said, for example, if we're doing the best value, I would propose in the future that this price scoring, which really isn't the main factor, should not be included. It should be more technically driven. And the consensus memo should be the thing that we rely on in presenting this. I would agree with you.

Mr. Zuercher said but I think to correct the price is critical, because you would, I would think, sort of going in that the incumbent in this case would have an advantage because of what you said about two different vehicles two different types of engineering, two different part shops.

But the price was so overwhelming that it's worth it. I get that in this case. I just have little qualms about how we're describing our procurement process.

Mr. Smith said it's not -- and I'm having this discussion with you asking for some guidance as well. You're an advisory group, and I'm hoping you can give us some advice also. I'm not saying the pricing isn't important. Obviously, it is important.

Chair Brady said well, it's the deciding factor in this one, because if it was any closer it wouldn't be worth it.

Mr. Smith said it was. The question is how do you score that and present that. That's where the problem is.

Chair Brady said I think the price scoring is the thing that makes the most sense to me.

Mr. Smith said it worked -- well, it worked here because it fell out the way it does. Like you said, it didn't fall out in the Brookville because the pricing was because there were different factors because the difference was on the other side was on the technical side.

So I'm not saying that the procurement process worked any differently in those two procurements. I trust our procurement process. It's just in the presentation. And this is one weird thing where it created what appears to be a contradiction. And that's all I'm saying is that the way that the pricing is scored and presented, lends the possibility that we'll present what appears to be a contradiction and really doesn't impact the process that was -- that we went through or the decision that was made. But it certainly does impact the visual, the optic of the presentation.

Mr. Phelps said so I want to follow back up on the issue operationally. When you looked at the cost analysis, did you factor in the fact you'll have duplicative of parts, warehouse space, the training. I assume you're going to have to people certified -- I don't know if you'll divide your team into two or if they'll be cross-trained.

What level of detail did you look from an operational cost of now doubling everything you're doing right now on the O&M side the type of equipment that's needed, because they will probably need certain kinds of equipment? There's probably less than 3 or 4 percent similar parts on these things. So it's a fairly significant body when you talk about your par level of inventory you want to have. So what level of detail did you put a cost value on the fact you now have two significantly different vehicles you're going to have to maintain.

Mr. Smith said those were absolutely considered. And, I don't know, Ray, if you can answer that as to what detail went into that. Those absolutely were considered, those long-term costs.

Mr. Abraham said yes. We factored in that we are going to have -- we're in a process of an OMC expansion right now. So that fell into play with this award.

We understand now that we're going to have to instead of just creating a little bit of extra space for extra parts, we're going to have to double the space. We also took into consideration the training of the staff. I don't know that it will be a complete increase in staff, because we're pretty lean as we are, so the technicians are going to have to learn how to work on both trains.

The operational issues, there's no real cost to it. It's just the provision of service that's going to be complex for the first several years, until we grow this fleet, assuming that we're going to continue to exercise our option and bring in thirty or forty or fifty more LRVs to where we could separate them. And we could have for -- just as an example, a South Central line that goes up to Metrocenter. And then we got the east-west line, so we can keep Kinki Sharyo cars on one line, Siemens on the other. But that was all factored in. 11

And the financial side of it, it just was a cost that was just cost prohibitive to us. We just couldn't justify, you know, believe me, from on operations perspective, if we could have found a way to justify staying with the same car, I would definitely have been up for it. But we just couldn't do it.

Mr. Phelps said and I tend to agree with the comments by Ed that this was, you know, it's pretty clear there's a huge differential.

On the other end, that's usually a light bulb going out for me, because they're similar technology, they're similar vehicles and for there to be that large of a differential, I'm wondering, really, what's driving that. Which is a little bit of an alarm going off for me then you, you know, because at the end of the day, sometimes what, you know, what you're promised and the quality of a product you get delivered to you doesn't always pan out.

We do have a history with Kinki Sharyo. I'm just wondering, again, in the analysis, do we find that their existing vehicles, do they meet or exceed our prior expectation from an O&M and cost overhead. And, again, if so, was that factored into the overall cost analysis?

Mr. Abraham said I know there was a lot of discussion about added space at the OMC, about training costs, spare parts cost.

Mr. Smith said the other thing, too, is that one thing one benefit we did have here is that there's a couple of other procurements going on at the same time. There was a major one in Seattle, for example. And KI and Siemens were the two finalists. And the same thing happened. Basically, KI did not win it.

Siemens won in San Diego. They're replacing their whole fleet with Siemens cars. And so we do have a history for this particular provider -- recent history, so we can look at the reasonableness of the pricing and say how does this compare to what Seattle priced, how the other priced and factor that in to make sure that this isn't a low-bid type of a deal.

It's Siemens also, which does have a history throughout the country and throughout the world, and we can look at those. And those were looked at. You know, are they low-balling this, or is KI higher. How does this relate to what just happened in Seattle where they both bid similar cars, similar types of things and those prices did fall in line.

We can't comment on why KI did what they did. We asked some people as to why they have not been successful in the last couple things. There are people who think it’s management structure is how they choose to price certain other things like support functions that seem to be out of whack.

Remember, the total cost is hard cost and soft cost. And it seemed like KI's were much higher on the soft cost than they were on the hard cost. And the pricing for the vehicles was somewhat similar. It's just in those other type of costs at KI and that seemed to be consistent with the experience in other recent bids in other areas.

Mr. Brady said I think what would be helpful, because I understand the magnitude of the difference seems very overwhelming, I mean, it's pretty obvious, but I think in something like this, because if I'm a representative for the other group, I'm going to make a lot of hay, and it's going to be difficult. Because at the end of the day, all of this has to be shown and you only get a sound bite to explain the decision and people look at numbers and rankings.

I think what would be helpful, because I think that would become my biggest argument is, yes, we're a little bit more, but it could be because Siemens doesn't get it. And the question then becomes is -- and you're touching to this -- is this is going to take a lot of work on your part -- and I'm not trying to advocate for one side. I'm just trying to say I think there's a piece missing here in the evaluation.

I think it would be helpful to quantify that more than we have today other than just to say we're going to have to build out more warehousing space. There has -- I think you could without overreaching it, I think you need to say, listen, the difference is going to be, you know, whatever the number is, a hundred million or whatever at some point, but to accommodate this new car, yes, we're going to have to change things, but that will -- the worst-case scenario would only cost -- is going to cost us X. I don't know that number -- I don't want to pretend I know a number, but I think it gives room for you to do that assessment.

And I think it behooves you to do that, because then it becomes -- it's almost like what's so obvious that, you know, the number is so different that it's just so obvious that that cost would never be there. But I think it helps to have that number.

And I know it's a kind of theoretical, but at some point you can imagine you're going to have to do this. You're going to have to build out. You're going to have to have this number, because somewhere you're going to come back and say we need to build out this space and whatever -- I don't know if it's more staff or staff is going to -- you're going to spend more overtime because they're going to be training two different things.

So I think it would be a good idea to give to us and for the Board in that decision, yes, because we're going with someone else and that's okay, but there is cost. And so they did have a higher threshold to meet because of that. Does that make sense?

Mr. Smith said and just so you know, those were included, but we did not drive it down to the specific details. For example, we did do a facilities analysis. What do we do as far as maintenance? What do we have to do differently if we have these cars as opposed if we just have KI's or different equipment. We did do that analysis. What 13

about the parts. Where are we going to store the additional parts. Do we have to build another building. Can we accommodate those in our existing facilities. Those were done.

We did, you know, frankly because the price differential was so much, we did not drive down into the specific details as far as training, because, you know, when you're looking at a hundred thirty million difference over the life of the contract, I'll admit, we did not give -- we did do the major ones to try and figure out whether the operational and the capital specific needs offset that because if we have to go out and build a whole new facility, a whole new OMC that obviously factors into it, so we did do that analysis

Chair Brady said I just think you've even said, well, the worst-case scenario that would cost us $15 million -- on average $15 million. Fifteen versus a hundred it still looks good, but at least, we've done it. We have something.

Mr. Smith said we went through that process. We just didn't document it for you. Nor did we take it to some of the detail that you're talking about as far as, for example, staff training and things like that. We more or less eyeballed that.

Chair Brady said well, and then I would force that into your price point scoring. Because it's not necessarily what they submitted to you costs, but it's what it's going to cost you to choose the other one.

Mr. Smith said and that we did -- we didn't do formally. So we will prepare that specifically and include that in the analysis for you and your staff and for the Board. It will be included in there, but I would agree with you on that.

Mr. Zuercher said I'm not prepared to vote on this until I see that information.

Chair Brady said okay. So where are we? Can we wait a while on this?

Mr. Abraham said we would have to wait another cycle?

Mr. Zuercher said are you okay? Can we do that?

Mr. Abraham said it will push it out a month? I could also add we don't have it in the memo, but Paul just informed me we did an independent cost estimate. Siemens was about two and a half to three percent under. Kinki Sharyo was 30 percent over.

Mr. Smith said we'll prepare -- if you want us to prepare like we've done -- with the OMC and those kind of things, we'll do that. And add to it some of the details as it relates to staff training, things like that.

Chair Brady requested a motion to continue this item to the May RMC meeting agenda.

IT WAS MOVED BY ED ZUERCHER, SECONDED BY KEVIN PHELPS AND UNANIMOUSLY CARRIED TO CONTINUE THE LIGHT RAIL VEHICLE CONTRACT AWARD TO THE MAY RMC MEETING AGENDA.

6. Valley Metro Rail, Inc. Fiscal Year 2018 (FY18) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022)

Mr. Smith introduced Paul Hodgins, Chief Financial Officer, who provided a presentation which included the following:

 Baseline: Light Rail Operations  Valley Metro Rail Expenses - Operating  Valley Metro Rail Revenues – Operating  Bassline: LRT Capital Project Schedule Calendar Year View  Valley Metro Rail Expenses – Capital  Valley Metro Rail Revenues – Capital  5-Year Operating Assumptions  LRT Project Development 5-year Project Expenditure Plan – Uses of Funds  5-Year Operating Uses and Sources  5-Year Capital Projects Uses of Funds  5-Year Capital Projects Source of Funds  Upcoming Budget Schedule FY18

Chair Brady said okay. Thank you. This was for information only. Any questions? Yes, Ed.

Mr. Zuercher said just one observation, so, first of all, I'll start out by saying I'm an English major, so you've got to bear with me a little bit.

I think I'm not sure how to advise my elected official on this, because I think we're doing three things at once, and it makes it difficult for me, at least, to kind of figure out where we can focus.

So I think a five-year forecast is valuable and the assumptions are valuable, but it sort of detracts from the immediate thing, which is the budget for next year, which we all have to plan for.

And then within the immediate thing, the capital is a different animal than the operating, because the capital's little easier to grasp in terms of -- well, yeah, what Chris and I were talking, we're all into nineteen because South Central's coming online. So that's a big chunk. But even in that, for example, on slide 6, systemwide improvements has gone from $17 million to $28 million. That's a big jump that we're all, I guess, signing on for.

I don't know what that is. And there was not a description of what that is that I could explain what are we spending eleven million more on systemwide. I'm sure it's all very important and necessary, but that's like a place where we ought to have some information and some conversation.

And being when we get into the operating we're going -- where is it -- so future project development is the big driver here that's going up by a third. I don't know what that is. I don't know what's driving what. I don't know how to explain that: what we're getting for that, why that's important, is that all staff, do we need all that staff. You know, basically, I'd say, it's actually a 50 percent increase -- that's pretty dramatic -- and there was nowhere here to kind of figure out what that is.

So I think we've got to figure out, as we move forward, what best way to present this thing, because we're getting in the middle of three different buckets of information. And as a result of it, I don't feel like I have anything on any of the buckets beyond just taking your word for it.

So that's more of a general overall thought that we ought to think about as we move forward. Maybe it has to be next year as we look at how we do the budgeting.

Chair Brady said but I would say at a minimum -- I think we all understand a specific project that's defined, you know, beginning and end. So I don't think there's many questions on those. But there were these kind of larger kind of broader items,and I get it. You kind of have to consolidate it at some point to get -- maybe some more detail and what definition of what those might be would be helpful.

Mr. Hodgins said certainly the detail is posted on the Website. It's in there the executive summary. But then there is also detail by project that highlights a lot of what's going on. This is really intended as more of a high-level overview. And I get there are different things. The operating is different from capital, I understand.

Mr. Zuercher said so what would just help me on that, Paul, is we're saying something's going on in future project development where we are proposing a 50 percent increase in that. What is it? What's the supplement? What are we supplementing the existing baseline budget? What are we doing differently? Call it out as a program, it's capital design and construction staffing, and explain what that is, but what is it?

I guess the question is, what is driving a 50 percent increase in future project development.

Mr. Hodgins said I think slide 9 which shows the five-year plan for project development has the detail or, at least, by project for fiscal '18.

So a couple of large ones: Northwest Phase II is about $2.7 million. We have $2 million for the I-10/I-17 bus ramp design, the Fiesta Downtown Chandler Study, 16

Capitol/I-10 West. So some of these projects that are still in kind of the conceptual phase before we move into design and construction. So we do have some of the detail at least from a project level.

Mr. Zuercher said so, Paul, what I would do, and I don't know if this helps, but just when we do our budget for our council do the forecast first. Then we say okay, here's what's coming ahead, so that they can kind of say, yes, we're going to talk about the annual budget. Before we do that, we're going to tell you the environment in which we're looking at it, not just for this year but like you've done for the five years.

I think if you maybe put that first, because then it kind of -- it's a perspective of now they think in terms of five years and they can see what's happening.

And then the one year is just saying okay, we're taking that five year, but we're telling you here's what you are actually going to approve. And some of those things are explained by the five year.

I think by doing it in reverse, you kind of raise the question and I don't think people -- it's hard to make that link sometimes. So I think maybe just flipping the order of things would help out, too, and knowing, I think, this is what we kind of pick up on. We pick on big differences, right. We get it. You're responsible for detail. So these kind of reports, we're always going to focus on that larger, you know, something that has a significant increase.

And I think when that happens, it would be helpful to supplement some information and say well, listen, we acknowledge that's a 50 percent increase, so let me just give you a little detail on that or maybe we can do the five year and say, hey, when we come to the annual increase, here's what's going to drive one of those numbers or something like that.

I think it's just -- I think it's in here again, but it just -- recognizing there may be some questions and some explanation. On some of these items where there's a big difference, this would be helpful.

Mr. Hodgins said okay. Thank you.

Chair Brady said you mentioned that one. What was the other one you mentioned though? It was the future and then it was the systemwide improvements.

Mr. Hodgins said right, those are primarily milestone payments for the light rail vehicles. That's what's driving the large number for fiscal '18.

Chair Brady said so, I think, even a slide that even shows -- because that's a big deal. We just have it showing that schedule, because that's a big part of your, you know, impacting your budget is when those are being delivered over the -- which are matching 17

up obviously with your projects; correct?

Mr. Zuercher said what does that mean a milestone payment? Is that the ones we've already received we're paying over time, or is it this?

Mr. Hodgins said it's the ones we're hoping to award, the 11 LRVs. Three are being charged to the Gilbert Road extension, eight are for expansion. So we -- there are milestone payments. We don't take all eight and then pay the hundred percent. There's an amount when we place the order, there is an amount when – progress is being made.

Mr. Zuercher said also, each one of those is tied to the extension to Gilbert Road -- extending the line, extending the system; right? I mean, there's a payment, but every time you extend the system, that puts demand for operations -- right?

Mr. Hodgins said right. Each of the capital projects, each of the extensions have vehicles built in. So those are the options that are discussed in the contract.

Chair Brady said so Gilbert Road extension is listed as a separate item, but in addition to that -- there are vehicle -- other vehicles in the systemwide improvements.

Mr. Hodgins said yes. There are eight expansion vehicles in the systemwide improvements for -- full capacity services.

Mr. Smith said the 11 cars are -- split between two budget lines. Three of the cars are reported under Gilbert Road. The eight are in the systemwide improvements.

Mr. Zuercher said okay. And you're saying that three of the expansion vehicles are being paid for in the '18 budget, FY18 budget, as part of the rollout of getting us these eleven cars?

Mr. Hodgins said we expect a large number of the progress payments to happen in fiscal '18 for the vehicles.

Mr. Zuercher said that are not attributable -- that are in addition to what's attributed to Gilbert Road -- there's others. Got it.

Thank you. But I think to that giving us some description of what's in there, as Chris said, we do focus on what the big things that are moving, and that would be helpful to know.

Chair Brady said just knowing that ahead of time. And including that in the report would be helpful.

Mr. Hodgins said okay. Thank you. 18

Mr. Phelps said so I don't want to speak on behalf of the committee, because I know I can say with assurance that each of us up here have way too many meetings, and we're not looking for additional meetings.

But I can also say with some assurance that, I think, where the hesitancy comes from is the amount presented here, at which to give up a thumbs-up/thumbs-down, is nothing that we would be able to take to our jurisdictions without a whole lot more discussion on.

And so the challenge for me is that -- we would workshop -- we are in the middle of workshopping our budget to a great degree with our elected body. And so they -- they all have more information in front of them to make better decisions.

And maybe looking forward down the road, it just seems to me that to do this in a business meeting with the limited amount of information, high-overview, which I understand and I get.

There may be, you know, a better way to do this from my perspective. I may be the only one -- to where we get a chance maybe to workshop a budget so we can have these kinds of questions and be better prepared to support our elected officials.

Again, I don't want to speak for the members up here. There is just not enough here for me to be able to sit down in a lot of detail with the people who will be making the decision and they'll say this has been fully vetted. It's not an issue of trust or understanding what's there; just not much information here. And from my past experience in Seattle, you know, it just seems very, very, high level from what I was used to up there.

Mr. Smith said and I will agree with you. I mean, believe me, I'm in your sort of position, because I get these things too. But this is part of a process. And I think we need to define that process. This goes through -- there's a financial working group, which includes the finance people from your cities that get into more of the detail with Paul.

We have the RTAG, which also goes through this, where your transit professionals have a chance to do that. And apparently we're missing something and your staff needs to do a better job of raising specific issues and challenging us to make sure that we explain to them so, hopefully, they can explain to you before you get here. Because I agree with you, showing up here and having these items, that's not the way to do it. We shouldn't be answering those questions. And it doesn't work to say well, you have this here.

This goes through -- it does go through a very specific process where it should work that the information should flow up. It doesn't seem to me like that's happening on either, on our side and on your side. Because I'm not getting the feedback from my team that your team raised specific issues. You're not getting the feedback of issues that should 19

have come up in previous meetings. So we need to do a better job of making sure that that process works as it’s intended to work, but I think it's not working to its best ability.

Chair Brady said that's fair. I think it's both sides. So we need to make sure we're sitting down with our staff and asking questions so that you can be prepared to answer those. And you'll get that feedback from us so you'll know kind of what we expect.

And I think what your hearing from us -- this is the point where we kind of help, even for our own staffs, translate here's what we think -- well, here's what were comfortable with first in our positions and, too, how best it would be communicated to elected officials who are not going to have the time.

Mr. Smith said our goal is twofold. Our goal is to get to this meeting and, hopefully, you don't have to ask us the kind of questions you're asking. If that's the case, then the system's fallen down.

When we get to the elected -- the Board, there should be no unanswered questions. I mean, we should, between the various reviews this has gone through and the briefings that we do before the meet with your individual council members, hopefully, those issues will have been raised so we can at least be able to answer and know where there's gaps. So, we need to refine that system.

Chair Brady said but I don't think anybody should be alarmed by it. But maybe there are some areas where we could get -- we need to work on our processes, how the information is presented, to make us more informed. But you're right. I think it works either way. But either way, this is also very informative and I appreciate it.

Mr. Smith said thank you for the -- no, like I said, we treat this as our feedback, too, and I think we've fallen short in giving the kind of detail to your staff that we should have and could have given.

Chair Brady said okay. All right. Any other questions on Item 6? No, okay. We're ready to move to Item 7 for information. 2017 Transit Life Cycle Program Rail Update.

7. 2017 Transit Life Cycle Program – Rail Update

Mr. Hodgins provided a presentation which included the following:

 Prop 400 Rail Revenue  High Capacity Transit Map  Capital Projects (3 slides)  Capital Revenues Assumptions (2 slides)  2017 Proposed Corridor Costs  2017 Proposed Other Capital Costs  2017 Proposed Capital Revenues 20

 2017 Proposed Cash Flow Summary

Chair Brady said this is just for information. Any questions? All right, Paul, thank you very much.

8. Future Agenda Items Request and Report on Current Events

Chair Brady said Item No. 8. Future Agenda Item Request and Report on Current Events. I don't have any items. None?

All right. Our next meeting is set for -- is scheduled for Wednesday, May 3, 2017.

With no further discussion the meeting adjourned at 12:58 p.m.

21 DATE AGENDA ITEM 3A April 26, 2017

SUBJECT South Central Light Rail Extension Design Contract Award

PURPOSE To request authorization for the Chief Executive Officer (CEO) to award a contract for South Central Light Rail Extension design services with AECOM Technical Services, Inc. for an amount not to exceed $32,383,580 and to authorize staff to hold $3,238,358 (10%) for use as a contingency for unforeseen circumstances.

BACKGROUND/DISCUSSION/CONSIDERATION The South Central Light Rail Extension is approximately five miles long, begins at Washington Street in downtown Phoenix and extends southward along Central and First avenues from downtown Phoenix. South of downtown First and Central avenues merge and the alignment proceeds on Central Avenue under Interstate 17, over the Salt River and ends at Baseline Road.

The project includes four major procurements: design services, systems engineering services (which will be for multiple corridor projects), Construction Manager at Risk (CM@Risk) services and public artists. The CM@Risk has been advertised. The selection processes for Design is complete. Systems engineering services is anticipated to be advertised in April and solicitation for public artists will begin in May. The procurement process for the CM@Risk Services is underway and will require Board action at later date.

The design services contract will include all civil design elements required to build the project. During the design period, the consultant will collaborate with the CM@Risk contractor, systems engineering consultant, artists, Valley Metro and the city of Phoenix to determine the best means and methods for design and construction of the project. This design consultant will also provide design services needed during the construction period and a separate Board action will occur for this effort prior to initiating construction.

A Request for Qualifications (RFQ) for South Central Light Rail Extension design services was issued on January 4, 2017. Statements of Qualifications were received on February 15, 2017. Three submittals were received and deemed responsive and all were interviewed on February 28, 2017. The selection committee was comprised of three city of Phoenix employees and four Valley Metro employees.

AECOM Technical Service, Inc. was selected for this process using a qualifications- based selection process in accordance with Title 34-603 of the Arizona Revised Statutes. Per ARS Title 34, Valley Metro is not to release the scoring of proposers until a contract has been awarded. Upon completion of interviews, the selection committee completed their final ranking results as reflected below.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433

Proposers in Ranked Order AECOM Technical Services, Inc. Ranked #1 Jacobs Ranked #2 Parsons Corporation Ranked #3

COST AND BUDGET The South Central Light Rail Extension is funded by a combination of federal, regional and City of Phoenix funds. The cost for the contract with AECOM Technical Services, Inc. for design services was negotiated for an amount not to exceed $32,383,580 and staff will hold an additional 10% for use as a contingency for unforeseen circumstances.

All costs identified herein are within the South Central Light Rail Extension’s project cost forecast and expenses expected within FY17 are included in the Valley Metro Rail adopted FY17 Operating and Capital Budget. Contract obligations beyond FY17 are incorporated into the Five-Year Operating Forecast and Capital Program (FY17 thru FY21).

STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan: o Goal 2: Advance performance based operation • Tactic C: Deliver projects and services on-time/on-budget. o Goal 3: Grow transit ridership • Tactic A: Expand and improve transit services to reach new markets. • Tactic B: Improve connectivity of transit services for greater effectiveness.

COMMITTEE PROCESS RTAG: April 18, 2017 for information RMC: May 3, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to award a contract for South Central Light Rail Extension design services with AECOM Technical Services, Inc. for an amount not to exceed $32,383,580 and to authorize staff to hold $3,238,358 (10%) for use as a contingency for unforeseen circumstances.

CONTACT Wulf Grote, PE Director, Capital and Service Development 602-322-4420 [email protected]

ATTACHMENT None 2

DATE AGENDA ITEM 3B April 26, 2017

SUBJECT Tempe Streetcar Construction Manager at Risk Contract Amendment

PURPOSE To request authorization for the Chief Executive Officer (CEO) to execute a contract amendment for the Tempe Streetcar Construction Manager at Risk (CM@Risk) contractor, Stacy & Witbeck, to provide an early utility construction package for an amount not to exceed $2,143,920 and to authorize staff to hold $$214,392 (10%) for use as a contingency for unforeseen circumstances.

BACKGROUND/DISCUSSION/CONSIDERATION The Tempe Streetcar project is approximately three miles in length extending along Rio Salado Parkway, through a one-way couplet loop in downtown Tempe on Mill and Ash Avenues, then on Mill Avenue south of University Drive, and east on Apache Boulevard to the current Dorsey Lane Light Rail Transit (LRT) station. Full construction of this project is not anticipated to start until early 2018. However, per coordination efforts between the design team, the construction contractor, Valley Metro and the city of Tempe, it was determined that it would be advantageous to initiate early utility relocation construction (sewer and water) on Mill Avenue and Ash Avenue within downtown Tempe, between Rio Salado Parkway and University Drive, during the summer of 2017 while Arizona State University’s attendance is reduced, to minimize disruption to the community.

This early work package will have the following benefits: • Confines Stacy & Witbeck construction activities on Mill and Ash Avenues within downtown Tempe to three summers. • Reduced need for double work shifts (day and night) during construction. • Minimizes project schedule and cost risks.

Starting in early June 2017, crews will work on Mill Avenue Monday through Wednesday from approximately 1 a.m. to 10 a.m. and Thursday and Friday from 3 a.m. to 10 a.m. A majority of the traffic restrictions will be lifted outside of construction hours. • North and southbound through lanes will largely remain open with occasional left/right turn restrictions. • Access to on-street parking and bike lanes will be restricted at times.

Construction activities will be sequenced to occur on Mill Avenue first, followed by Ash Avenue, through early August. This will avoid impacting both streets at the same time. Work on Ash Avenue will start in late July and will occur Monday through Friday from 7 a.m. – 7 p.m.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

Tempe and Valley Metro staff are actively communicating with downtown Tempe stakeholders, businesses, Tempe City Council members and the Downtown Tempe Authority to raise awareness regarding this summer’s work activities and schedule to assure successful and efficient execution of this early construction package.

Stacy and Witbeck initially entered into a CM@Risk contract with Valley Metro in January 2017. This contract involves two primary phases: pre-construction services, which occurs parallel to the project’s design process, and the construction phase. Stacy and Witbeck is working closely with the design consultant to coordinate design, minimize risks and assure constructability. Design is approximately 30% complete.

Stacy and Witbeck has negotiated an initial Guaranteed Maximum Price (GMP) for early utility relocation construction in cooperation with the design consultant and Valley Metro staff. This initial GMP is the subject of this memorandum. Staff will request Board authorization for the full construction GMP near the completion of design.

COST AND BUDGET The Tempe Streetcar project is funded by the federal government, the city of Tempe, and regional Public Transportation Funds (PTF). The negotiated price for the CM@Risk contractor’s initial utility relocation construction package is $2,143,920. A 10% contingency, to be held by staff, is also needed to address unforeseen changes and circumstances that may arise during the project’s design.

All costs identified herein are within the Tempe Streetcar’s project cost forecast and expenses expected within FY17 are included in the Valley Metro Rail Adopted FY17 Operating and Capital Budget. Contract obligations beyond FY17 are incorporated into the Five-Year Operating Forecast and Capital Program (FY17 thru FY21)

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 C: Deliver projects and services on-time/on-budget. • Goal 3: Grow transit ridership o Tactic A: Expand and improve transit services to reach new markets. Tactic B: Improve connectivity of transit services for greater effectiveness.

COMMITTEE PROCESS RTAG: April 18, 2017 for information TMC: May 3, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to execute a contract amendment for the Tempe Streetcar Construction Manager at Risk contractor, Stacy and Witbeck, to provide an early utility construction package for an amount not to exceed $2,143,920 and to authorize staff to hold $214,392 (10%) for use as a contingency for unforeseen circumstances.

CONTACT Wulf Grote, PE Director, Capital and Service Development 602.322-4420 [email protected]

ATTACHMENT None

DATE AGENDA ITEM 3C April 26, 2017

SUBJECT 2017 Transit Life Cycle Program - Rail Update

PURPOSE To present the draft 2017 TLCP Rail Update for approval.

The draft 2017 Bus TLCP Update is being discussed through the Valley Metro RPTA Board process. The bus and rail programs will be merged into a single item for action on the joint agenda for May.

The most recent update to the TLCP was in June 2016. Since that time, the official forecast has projected a modest decrease in revenues for the Transportation Excise Tax. The forecast of PTF for the rail program is approximately $20.5 million lower for the remaining years of the TLCP (FY2017-2026).

Rail/High Capacity Transit Program

The baseline rail model has some changes from the adopted 2016 TLCP Update. Among the changes are changes in completion dates for Tempe Streetcar and Gilbert Road Extension, updates in cost estimate for the Operations and Maintenance Center Expansion project and an update to the cost for the West Phoenix/Central Glendale project.

Below is a summary of the proposed changes to the projects.

Gilbert Road Extension – The project is completion has been moved to 2019. In addition, the baseline project budget has been increased to $181.5 million, exclusive of finance costs and costs for the transit center and operator facility. The extension project is funded by the City of Mesa with federal and local funds. Finance costs would be incurred by the City if Transportation Project Advancement Notes need to be issued to complete the project. TPANs are currently projected to be needed in late calendar 2018. The transit center and operator facility is budgeted at $2 million and is funded with regional PTF and federal funds.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

Tempe Streetcar – The Streetcar project has been recommended for a $75 million Small Starts grant and has been incorporated into the President’s Budget for federal FY2017. Currently, no funds have been allocated to the project through the FY2017 continuing resolution. Staff expects some allocation of funds once a full year appropriation is made by Congress. Staff is currently working toward a Small Starts Grant Agreement, which may not be signed until early in FY2018. The completion year for the project is now 2020.

Operations and Maintenance Center – The project is proposed to move forward in a phased approach. There will be some early work completed to accommodate expansion light rail and streetcar vehicles that are expected to be ordered in late FY17. Additional space for spare parts, offices and maintenance activities will be required. The project is estimated at $35 million, plus an additional $5 million in contingency. Funding will come from the South Central Extension project, federal CMAQ and regional PTF. Allowances for the OMC expansion will be removed from future corridors to ensure that there is minimal impact to the TLCP.

West Phoenix/Central Glendale – This project continues to move forward, with several options for the alignment and western terminus. Although no specific alignment is being proposed for adoption, all indications are that the project budget will be higher than what is currently in the TLCP. As such, the TLCP budget for the project is proposed to be increased to $837 million from $550 million to accommodate the alignments currently being reviewed. Funding is assumed to come from federal section 5309 (New Starts), federal CMAQ, regional PTF and local funds from the cities of Glendale and Phoenix.

2017 TLCP 2016 TLCP Corridor Open Year Open Year Gilbert Road * 2019 2018 Tempe Streetcar * 2020 2019 Capitol/I-10 West Phase I 2023 2023 Northwest Phase II 2023 2023 South Central 2023 2023 West Phoenix/Central Glendale 2026 2026 Capitol/I-10 West Phase II 2030 2030 Northeast Phoenix 2034 2034

* schedule changes from 2016 TLCP

Currently, the rail program baseline financial model is balanced, with a surplus of $79.8 million remaining. The rail program currently anticipates financing needed. The financing needs are driven by the construction of four projects in the Cities of Phoenix and Glendale. The financing needs will likely change as those projects advance. Because the regional PTF tax expires in 2025, financing with revenue bonds becomes challenging, so any cash flow needs for the projects are assumed to be provided through financing other than PTF revenue bonds, with PTF funds used “pay-as-you-go”.

COST AND BUDGET The proposed changes to the TLCP rail model have been incorporated into the proposed FY2018 Operating and Capital Budgets and the Five-Year Operating and Capital Forecasts. Revenues and expenditures forecast within the TLCP are balanced as required by State Statute.

COMMITTEE PROCESS RTAG: March 21, 2017 for information RMC: April 5, 2017 for information AFS: April 13, 2017 for information Board of Directors: April 20, 2017 for information

RTAG: April 18, 2017 for information RMC: May 3, 2017 for action AFS: May 11, 2017 for action Board of Directors: May 18, 2017 for action

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 • Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability

Goal 3: Grow transit ridership • Tactic A: Expand and improve transit services to reach new markets • Tactic B: Improve connectivity of transit services for greater effectiveness

RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors approval of the 2017 Update to the Transit Life Cycle Program.

CONTACT Paul Hodgins Chief Financial Officer 602-523-6043 [email protected]

ATTACHMENT ADOT Revenue Forecast – PTF for Rail Program Light rail and high capacity corridor system map

Transportation Excise Tax Revenues PTF for Rail Program Comparison of 2016 and 2015 Forecasts (millions of dollars)

2016 Annual 2015 Annual Fiscal Year Forecast Growth Forecast Growth 2016 $57.1 3.8% $57.7 4.9% 2017 $59.2 3.7% $61.4 6.4% 2018 $62.8 6.1% $65.0 5.9% 2019 $66.4 5.7% $68.7 5.6% 2020 $70.1 5.6% $72.2 5.2% 2021 $73.8 5.3% $75.8 5.0% 2022 $77.5 5.0% $79.4 4.7% 2023 $81.0 4.6% $82.9 4.4% 2024 $84.8 4.7% $86.7 4.6% 2025 $88.4 4.2% $90.6 4.4% 2026 $54.0 $55.1 Actuals 06-16 $528.2 $528.8 Forecast 17-26 $718.0 $737.9 20 Year Total $1,246.2 $1,266.7

Light Rail and High Capacity System Map With updated completion dates

* Projects programmed after calendar year 2026 are outside of the Transit Life Cycle Program (TLCP). Priority of projects for new future funding is yet to be determined.

DATE AGENDA ITEM 3D April 26, 2017

SUBJECT Contract with RouteMatch to develop the application associated with FTA Mobility on Demand Sandbox Grant

PURPOSE To request authorization for the Chief Executive Officer (CEO) to enter into an agreement with RouteMatch for an amount not to exceed $800,000 ($600,000 direct payments and $200,000 in-kind services) paid for by the FTA Mobility on Demand Sandbox Grant

BACKGROUND/DISCUSSION/CONSIDERATION Valley Metro Rail was formally awarded a Federal Transit Administration (FTA) grant for a Mobility on Demand (MOD) Demonstration Program in January 2017. The grant will be used for development of a regional mobile ticketing and trip planning platform. The project includes integrating mobile ticketing and multi-modal trip planning to include a range of mobility providers, including bike-sharing and car-sharing companies, allowing all levels of income, age and people with disabilities to have access to an integrated, connected multi-modal transportation system.

FTA waived the requirement for a competitive procurement of third-party contractors if they were designated as key partners in the grant application. The competitive process was performed or introduced via the proposal review and evaluation process. FTA did this to reduce the amount of time needed for sites to implement their MOD solutions. RouteMatch was named as a key partner and therefore approved by the FTA.

COST AND BUDGET The funding for this activity is provided by the FTA Mobility on Demand Sandbox Grant And passed through Valley Metro Rail to RouteMatch, our co-applicant for the grant.

Fiscal impact is not to exceed $800,000 ($600,000 direct payments and $200,000 from RouteMatch’s in-kind match). This amount is included in the overall project budget, shown below.

STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020.

• Goal 1: Increase customer focus. o Tactic A: Improve customer satisfaction.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433

COMMITTEE PROCESS RMC: May 3, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to enter into an agreement with RouteMatch for an amount not to exceed $800,000 ($600,000 direct payments and $200,000 in-kind services).

CONTACT Rob Antoniak Chief Operating Officer 602.495.8209 [email protected]

ATTACHMENT None

DATE AGENDA ITEM 4 April 26, 2017

SUBJECT Light Rail Vehicles Contract Award

PURPOSE To request authorization for the Chief Executive Officer (CEO) to execute a contract with Siemens Industry Inc. to purchase an initial quantity of 11 S70 Light Rail Vehicles (LRV) over a seven-year period at an estimated contract value of $57.9 million plus $5,790,000 (10 percent) for contingency, and with options for up to an additional 67 S70 LRVs over the seven-year term.

BACKGROUND/DISCUSSION/CONSIDERATION In January 2016, Valley Metro issued a federally compliant Request for Proposals (RFP) for the purchase of Light Rail Vehicles based on a specific technical specification prepared by Valley Metro. The solicitation planned for an intial purchase of 11 LRVs and the option to purchase up to 67 additional LRVs over a seven-year period. The first three vehicles are for the Gilbert Road extension and the other eight vehicles initially will be used for service improvements such as possible 10-minute headways or additional vehicles for special events. The additional 67 LRVs are planned for the South Central, Phase 2 Northwest, Phase 1 Capital I-10, and West Phoenix/Central Glendale Extensions. The recommended LRV manufacturer will design, manufacture, test, deliver, complete performance testing and warranty support for all vehicles ordered under the contract.

Due to the unique nature of the equipment specifications, Valley Metro staff decided to utilize a “Best Value” selection process pursuant to Federal Transit Administration (FTA) procurement guidelines, and notified all proposers of such in the RFP. In a Best Value process, a three-part evaluation is as follows: 1. Technical Review, 2. Best Value Trade Off Analysis (to determine the actual cost and risks associated with the findings of the Technical/Commercial Reviews), and 3. Independent Analysis of Pricing.

The RFP included the following evaluation criteria:

Evaluation Criteria Compliance to the Technical Specifications 300 Points Past Performance and Capability of the Firm 75 Points Qualifications and Experience of LRV Manufacturers/Suppliers 75 Points Approach to Design and Quality Assurance 100 Points Delivery and Production Schedule 50 Points Price 400 Points TOTAL POINTS AVAILABLE 1,000 Points

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

Two firms submitted proposals prior to the proposal closing date on October 17, 2016.

The selection process consisted of three committees: Technical, Commercial and Price Evaluation. The members included representatives from Valley Metro, the City of Mesa, and two non-voting Technical Advisors from a consultant firm retained by Valley Metro to specifically provide support related to the vehicle specifications, technical clarifications, and answer questions related to the LRV manufacturer’s response to the RFP.

The selection committees entered into discussions with both vehicle manufacturers Kinkisharyo International LLC (Kinkisharyo) and Siemens Industry Inc (Siemens) and deemed them technically acceptable and eligible to participate in the Best and Final Offer (BAFO) phase. The BAFO Phase allowed both firms to clarify the selection committees’ technical concerns, and submit revised proposals, including a final pricing of the vehicles. Upon receipt of the BAFO submittals, the committees collectively concluded their technical scoring and ranking and determined that both firms met the technical specifications requirements, demonstrated delivery and performance, and showed capacity to produce the optional vehicles if the option was exercised. The selection process proceeded to the second phase called the Best Value Trade-off Analysis.

The Best Value Trade-off Analysis considered both the technical/commercial factors and the manufacturer’s BAFO price to determine which of the two offers provided the greatest value to the project. The trade-off analysis identified the strengths, weakness, and risks associated with each proposal and considered a different manufacturer of LRVs as compared to the type that Valley Metro currently operates. Since both LRV Manufacturers either met or exceeded the RFP minimum requirements , then under Best Value, the firm with the lowest overall cost for both initial and optional vehicles is recommended for contract award. Siemens is the firm with the lowest overall cost.

Challenges to operating/maintaining a different manufactured LRV include compatibility between current and new LRVs that cannot be electrically coupled together for inter-car communications with exisisting fleet. This will require another layer of communications between Maintenance and Operations on a daily basis to ensure the assignment of trains for revenue service that are from the same manufacturer. However while there are challenges and maintainence costs associated with operating and maintaining the new Siemens LRV’s, other Agencies have sucessfully added different vehicles to their fleet with miminal disruptions.

Valley Metro proceeded with a cost-reasonableness analyisis of both price proposals. FTA and agency procurement procedures require that an independent cost estimate (ICE) be prepared by a third party consultant to assist the Selection Committee with negotiations and to determine whether the final light rail vehicle pricing was “fair and reasonable”. FTA’s Best Practices Procurement Manual states, “Prices should be evaluated and brought alongside the technical proposal scores in order to make the 2

necessary trade-off decisions as to which proposal represents the best overall value to the agency.”

The proposed price for the 11 LRVs from Siemens was $57.9 million which was in the acceptable range by the price determined by the ICE.The proposed price from Kinkisharyo was $76.1 million which was 34.6% higher than the independent cost estimate. The significant difference between the two price proposals was $18.2 million.

Using a different manufactured LRV comes with additional requirements and costs, including an estimated additional cost of $2.2 million (see attached) for: • New maintenance equipment; • Expanded parts room storage space; and • Maintenance technician and operator training.

However, the price differential of $18.2 million more than offsets the $2.2 million in additional costs.

The Selection Committee determined that Siemens Industry Inc.’s proposal provided the “best overall value” to Valley Metro for its LRV program.

Combined Technical and Price Comparision Technical Points Price Points Total Points Siemens Industry Inc. 530 400 930 Kinkisharyo International LLC 546 303 849

COST AND BUDGET The light rail vehicle contract for approval is an amount not to exceed $57.9 million. The total contract cost includes 11 vehicles, engineering management, training, manuals, field support, spare parts and special equipment. In addition, a contract contingency not to exceed $5,790,000, (10 percent) is established for the project for unanticipated changes. The light rail vehicle options will be brought back to the Board for approval as they are exercised.

For Fiscal Year 2017, the VMR contract obligation is $15,415,000, which is fully funded within the VMR Adopted FY17 Operating and Capital Budget. Contract Obligations beyond FY17 are incorporated into the Valley Metro Rail Five-Year Operating Forecast and Capital Program (FY2017 thru FY2021).

The source of funding is Federal CMAQ funds, Prop 400, and member cities.

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 A: Operate an effective, reliable, high performing transit system

COMMITTEE PROCESS RTAG: March 21, 2017 for information RMC: May 3, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to execute a seven-year contract with Siemens Industry Inc. to purchase an initial quantity of 11 S70 light rail vehicles in an amount not to exceed $57.9 million with options for up to an additional 67 S70 light rail vehicles over the seven-year term and to establish a contract change contingency of $5,790,000 that is included in the overall budget established for the project.

CONTACT Ray Abraham Chief Operations Officer 602-652-5054 [email protected]

ATTACHMENT Additional Requirements and Cost

Life Cycle Incremental Cost Analysis

One-Time Cost for initial 11 Vehicle Purchase:

Additional Technical Training for Siemens Vehicle Current Maintenance Staff $730,000

Maintenance Equipment $330,000

Parts Storage – Construction of Mezzanine in Stock Room $520,000 Elevator, Shelving, Pallet Racks, Cabinets

Administrative, MMIS Database Enhancements, SOPs $150,000

Additional Operations Training for Siemens Vehicle Current Operator and Supervisor Staff $440,000

Total Estimated Costs $2,170,000

One-Time Costs – Purchase of LRV Options:

Additional Shelving, Narrow Aisle Forklift for Basement $250,000

On-Going Cost of 20-Year Life Cycle:

Technical Training – New Hire – Maintenance Staff $3,200,000

Operations Training – New Hire – Operator and Supervisor $1,400,000

Price Difference (Millions)

Quantity Kinkisharyo Siemens Difference 11 Vehicles - Initial $76.1 $57.9 $18.2 67 Vehicles - Options $384.3 $285.2 $99.1 Total $460.4 $343.1 $117.3

DATE AGENDA ITEM 5 April 26, 2017

SUBJECT Valley Metro Rail, Inc. Fiscal Year 2018 (FY18) Proposed Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022)

PURPOSE To request Board approval of the Fiscal Year 2018 Budget (July 1, 2017 thru June 30, 2018) and acceptance of the Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022).

BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Rail, Inc. (VMR) FY18 combined operating and capital budget (the budget) is $270.6 million (M) and includes $31.5M in projects funded with Proposition 400 Public Transportation Fund (PTF) revenues for light rail/high capacity transit capital.

The preliminary FY18 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 a modified 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 $67.1M represents a $9.3M (16%) increase from the previous year’s operating budget of $57.8M. The total capital budget of $203.5M represents a $104.6M (106%) increase from the previous year’s capital budget of $98.9M. Details and explanations of the major budget changes are discussed in the Executive Summary on the website.

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 FY18 there are 360 employees budgeted in the integrated agency, with 151 FTE’s budgeted to RPTA activities and 209 budgeted to VMR activities. Compensation budget based on 3.0% increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget.

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020:

COMMITTEE PROCESS Preliminary Budget Review: Financial Working Group: March 21, 2017 for information RTAG: March 21, 2017 for information RMC: April 5, 2017 for information AFS: April 13, 2017 for information Board of Directors: April 20, 2017 for information

Proposed Budget Adoption: RMC: May 3, 2017 for action AFS: May 11, 2017 for action Board of Directors: May 18, 2017 for action

RECOMMENDATION It is recommended that the RMC forward to the Board of Directors approval of the Fiscal Year 2018 Budget (July 1, 2017 thru June 30, 2018) and accept the Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022).

CONTACT Paul Hodgins Chief Financial Officer 602-523-6043 [email protected]

ATTACHMENT Valley Metro Rail, Inc. FY18 Preliminary Executive Summary

Valley Metro Rail, Inc. FY18 Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY 2018 thru 2022) (posted on VM website)

4/27/2017

Valley Metro Rail FY18 Proposed Budget Overview May 2017

FY18 Preliminary Annual Budget

1 4/27/2017

Baseline: Light Rail Operations FY17 FY18 Change Passenger Boardings 16,807,000 16,824,000 0% Vehicle Revenue miles delivered 3,323,000 3,330,000 0%

Boardings per Revenue Mile 5.06 5.05 0% Operating cost per passenger $2.67 $2.85 7%

Operating Costs $44,890,000 $47,943,000 7% Fare Revenues $14,160,000 $14,300,000 1% Fare Recovery 32% 30% Avg Fare $0.84 $0.85 1%

Valley Metro Rail Revenues - Operating

Sources of Funds $millions Funding Sources FY17 FY18 Change $ Fare Revenue $15.9 $14.3 ($1.6) Advertising Revenue 1.1 1.1 0.0 Federal 5307 PM 1.2 1.4 0.2 Federal 5339 0.0 1.6 1.6 Federal CMAQ 0.0 1.4 1.4 TIGER 0.2 0.0 (0.2) Member Cities 31.1 35.1 4.0 MAG / RPTA (RARF) 1.0 1.0 0.0 PTF Sales Tax Revenue 7.3 11.2 3.9 Operating Revenue Totals $57.8 $67.1 $9.3

2 4/27/2017

FY18 Operations Changes

• Increased staffing levels to support operations

• Systemwide Wi-Fi on light rail

• Additional security costs approved by the Board

• New costs for ACI operations contract

• Increased vehicle and facility maintenance

FY18 Project Development Changes

• Increased activity for corridor planning – Completion of preliminary engineering phase (30% design) • South Central Extension • Northwest Extension Phase II • Capitol/I-10 West Extension Phase I – Continued feasibility and alignment studies • West Phoenix/Central Glendale Corridor • Northeast Corridor • Fiesta/Downtown Chandler Corridor • OMC Expansion Master Plan – New design activity for I-10/I-17 Ramp

3 4/27/2017

I-10/I-17 Ramp

Valley Metro Rail Expenses - Operating

Uses of Funds $millions Uses of Funds FY17 FY18 Change $ Revenue Operations $44.9 $47.9 $3.1 Future Project Development 11.9 17.6 5.7 Agency Operating Budget 1.1 1.6 0.5 Operating Activity Uses $57.8 $67.1 $9.3

4 4/27/2017

Baseline: LRT Capital Project Schedule Calendar Year View

Valley Metro Rail Revenues – Capital

Sources of Funds $millions Funding Sources FY17 FY18 Change $ FTA - Section 5309 $0.0 $29.2 $29.2 Federal CMAQ $65.3 $104.3 $38.9 Federal 5337 SOGR 0.3 1.3 1.0 Federal 5312 MOD 0.5 0.5 0.0 Member Cities 14.0 48.0 34.0 Less Repayment NW Advance (60.0) 0.0 60.0 PTF Bond Revenue 43.1 0.0 (43.1) PTF Sales Tax Revenue 35.6 20.2 (15.4) Capital Revenue Totals $98.9 $203.5 $104.6 10

5 4/27/2017

FY18 Systemwide Improvements

• Increased costs

– Milestone progress payments for 8 expansion light rail vehicles (LRV)

– Major LRV component overhauls

– TVM door modifications

– Station lighting retrofits (LED lights)

Valley Metro Rail Expenses – Capital

Uses of Funds $millions Capital Uses of Funds FY17 FY18 Change $ Northwest Extension $3.2 $0.0 ($3.2) Central Mesa Extension 4.7 2.0 (2.7) Gilbert Road Extension 43.7 75.2 31.6 Tempe Streetcar Extension 15.3 51.0 35.6 50th Street LRT Station 6.1 10.0 3.9 South Central Extension 3.1 33.6 30.5 OMC Expansion 0.0 3.2 3.2 Non-Prior Rights Utilities 4.4 0.0 (4.4) CNPAs - Mesa Extension 0.2 0.0 (0.2) CNPAs - Gilbert Road 1.5 0.0 (1.5) CNPAs - Tempe Streetcar 0.0 0.3 0.3 Systemwide Improvements 16.9 28.3 11.4 Capital Uses Totals $98.9 $203.5 $104.6 12

6 4/27/2017

FY18-22 Preliminary Five-Year Forecast

5-Year Operating Assumptions:

• 1.9 mile Gilbert Rd opens revenue service in May 2019 • 3.0 mile Tempe Streetcar opens revenue service in September 2020 • Transportation and Security to service new extensions • Maintenance increases per preventive maintenance schedule • Fare Revenue – FY18 changes to fare discount structure and enforcement – average fare $0.85 Rail and $0.43 Streetcar • Federal PM revenue level per MAG forecast • Member contributions grow with Gilbert Road Ext., Tempe Streetcar Ext.

7 4/27/2017

LRT Project Development 5 Year Project Expenditure Plan – Uses of Funds

FY18 FY19 FY20 FY21 FY22 TOTAL USES OF FUNDS ($,000) Capitol/I-10 West$ 1,786 $ - $ - $ - $ - $ 1,786 Capitol/I-10 West Phase II - 85 157 301 301 844 South Central 683 - - - - 683 West Phoenix/Central Glendale 940 2,270 1,375 - - 4,585 Northeast Phoenix 228 - - - - 228 I-10/I-17 Bus Ramp Design (FTA) 2,000 - - - - 2,000 Fiesta/Downtown Chandler 1,362 100 - - - 1,462 Northwest Phase II 2,577 - - - - 2,577 16th Street Advanced Feasibility Study 60 - - - - 60 West Glendale Feasibility Study - 1,394 - - - 1,394 OMC Master Plan and Phasing Study (PTF) 748 - - - - 748 Systems Planning & Project Development 5,962 6,141 6,325 6,515 6,710 31,651 Capital Project Development Administration 1,245 1,282 1,321 1,360 1,401 6,610 Total Uses$ 17,592 $ 11,272 $ 9,178 $ 8,176 $ 8,412 $ 54,629

5-Year Operating Uses and Sources

USES OF FUNDS ($,000) FY18 FY19 FY20 FY21 FY22 TOTAL Operations & Maintenance$ 47,943 $ 49,944 $ 53,374 $ 58,520 $ 61,846 $ 271,627 Project Development Planning 17,592 11,272 9,178 8,176 8,412 54,629 Agency Operating Budget 1,585 1,633 1,681 1,730 1,781 8,410 Total Uses$ 67,120 $ 62,849 $ 64,233 $ 68,426 $ 72,039 $ 334,666

SOURCES OF FUNDS ($,000) FY18 FY19 FY20 FY21 FY22 TOTAL Fare Revenues$ 14,300 $ 14,842 $ 15,180 $ 15,600 $ 15,894 $ 75,816 Advertising 1,100 1,100 1,100 1,100 1,100 5,500 Phoenix 21,129 20,673 20,737 20,800 21,869 105,206 Tempe 7,295 7,469 7,509 12,126 13,675 48,074 Mesa 5,964 6,074 8,942 8,974 9,366 39,320 Glendale 48 1,439 46 43 45 1,620 Chandler 661 45 46 43 45 839 Regional 13,658 9,778 9,178 8,176 8,412 49,201 Federal 2,966 1,429 1,495 1,564 1,635 9,089 Total Sources$ 67,120 $ 62,849 $ 64,233 $ 68,426 $ 72,039 $ 334,667

8 4/27/2017

5-Year Capital Projects Uses of Funds

FY18 FY19 FY20 FY21 FY22 TOTAL USES OF FUNDS ($,000) Central Mesa$ 1,961 $ - $ - $ - $ - $ 1,961 Gilbert Rd 75,245 39,742 12,044 - - 127,031 Tempe Streetcar 50,955 56,418 40,045 9,726 2,386 159,530 50th Street Station 9,998 2,969 349 64 - 13,380 South Central 33,557 96,726 120,955 87,757 175,891 514,886 OMC Expansion 3,197 8,076 5,612 2,895 - 19,780 Northwest Extension Phase II - 70,740 50,191 54,725 51,312 226,968 Capitol I-10 West Phase I - 14,521 29,698 37,000 46,374 127,593 West Phoenix Central Glendale - - 22,703 129,204 147,500 299,407 Subtotal HCT Corridors 174,913 289,192 281,597 321,371 423,463 1,490,536 CNPA Projects 279 - - - - 279 Systemwide Improvements 28,304 24,598 4,375 3,521 2,567 63,365 Total Uses$ 203,496 $ 313,790 $ 285,972 $ 324,892 $ 426,030 $ 1,554,180

5-Year Capital Projects Source of Funds

FY18 FY19 FY20 FY21 FY22 Total SOURCES OF FUNDS ($,000) Phoenix$ 43,555 $ 95,614 $ 34,735 $ 68,721 $ 99,316 $ 341,940 Tempe 125 6,606 6,607 - - 13,338 Mesa 4,289 1,022 - - - 5,311 Glendale - - 4,656 37,162 43,961 85,779 Subtotal 47,969 103,242 45,998 105,882 143,277 446,368

PTF Sales Tax Revenue (Allocation 43.24%) 32,258 38,282 42,746 47,431 50,690 211,407 PTF (Reserve) / Bond Borrowing (12,032) 29,290 32,234 12,359 13,008 74,860 PTF Regional Revenue - Demand 20,226 67,572 74,980 59,790 63,698 286,266

TPAN - 21,815 12,044 - - 33,859

Federal Revenues: FTA 31,005 75,113 138,604 123,717 169,659 538,098 CMAQ 104,296 46,048 14,346 35,503 49,396 249,588 Subtotal Federal 135,301 121,161 152,950 159,220 219,055 787,686 Total Sources$ 203,496 $ 313,790 $ 285,972 $ 324,892 $ 426,030 $ 1,554,180

9 4/27/2017

Recommendation Staff recommends that the RMC forward to the Board of Directors approval the Fiscal Year 2018 Budget (July 1, 2017 thru June 30, 2018) and accept the Five-Year Operating Forecast Capital Program (FY 2018 thru 2022).

DATE AGENDA ITEM 6 April 26, 2017

SUBJECT Future Agenda Items Request and Report on Current Events

PURPOSE Chair Methvin will request future agenda items from members, and members may provide a report on current events.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

CONTACT Scott Smith Chief Executive Officer 602-262-7433 [email protected]

ATTACHMENT Pending Items Request

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433

Pending Items Request

Item Requested Date Requested Planned Follow-up Date