Consolidation Study and Innovative Transit Review Task 1.4B—Evaluation of Functional Areas in a Complete Consolidation
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ATTACHMENT C SAN BERNARDINO COUNTY TRANSPORTATION AUTHORITY CONSOLIDATION STUDY AND INNOVATIVE TRANSIT REVIEW TASK 1.4B—EVALUATION OF FUNCTIONAL AREAS IN A COMPLETE CONSOLIDATION AUGUST 4, 2020 FINAL CONSOLIDATION STUDY AND INNOVATIVE TRANSIT REVIEW TASK 1.4B—EVALUATION OF FUNCTIONAL AREAS IN A COMPLETE CONSOLIDATION SAN BERNARDINO COUNTY TRANSPORTATION AUTHORITY SUBMITTAL (VERSION 4C) FINAL PROJECT NO.: 12771C70, TASK NO. 1.4.B 2020 DATE: AUGUST 2020 WSP SUITE 350 862 E. HOSPITALITY LANE SAN BERNARDINO, CA 92408 TEL.: +1 909 888-1106 FAX: +1 909 889-1884 WSP.COM iii | P a g e PRODUCTION TEAM CLIENT Director of Special Projects and Strategic Beatriz Valdez Initiatives, SBCTA Director of Strategic Development, Jeremiah Bryant Omnitrans WSP Project Manager Billy Hwang Transit Services Update Lead Tom Lichterman Organizational Development Specialist Eryca Dinsdale Labor Costs and HR Lead Miriam Zaki Financial Analyst Ruby Lee Data and Performance Analyst Luke Yang v | P a g e EXECUTIVE SUMMARY ........................................... 1 1.1 Overview ...................................................................................... 1 CASE STUDIES OF COMPLETE CONSOLIDATION 2 2.1 Los Angeles County Metropolitan Transportation Authority (LA Metro) .................................................................................... 2 2.1.1 Background .............................................................................................................. 2 2.1.2 Factors Contributing to the Merger ......................................................................... 2 2.1.3 Challenges after the Merger .................................................................................... 3 2.1.4 Being a CTC and a Transit Operator in a Multi-Operator County ......................... 4 2.1.5 Did Consolidation Work? ......................................................................................... 4 2.2 Orange County Transportation Authority (OCTA) .................. 5 2.2.1 Background .............................................................................................................. 5 2.2.2 Factors Contributing to the Consolidation .............................................................. 5 2.2.3 Challenges after the Consolidation ......................................................................... 6 2.2.4 Being a Funding Agency and a Transit Operator in a Multi-Operator County ...... 7 2.3 Metropolitan Transit Development Board (MTDB) / Metropolitan Transit System (MTS) .......................................... 7 2.3.1 Background .............................................................................................................. 7 2.3.2 Factors Contributing to the Consolidation .............................................................. 8 2.3.3 Challenges after the Consolidation ......................................................................... 9 2.3.4 Being a Funding Agency and a Transit Operator in a Multi-Operator County .... 10 2.4 Key Findings from the Review of Peer Agency Consolidations .......................................................................... 11 2.4.1 Summary of Key Factors in Case Study Consolidations ..................................... 11 2.4.2 Key Findings from Case Studies ........................................................................... 12 ASSESSMENT OF FUNCTIONAL AREAS .............. 14 3.1 Fixed Route, Commuter/Express Bus and Bus Rapid Transit (BRT) .......................................................................................... 16 3.2 ADA and Demand Response ................................................... 16 3.3 Integration with Existing and Future Rail Service ................ 17 3.4 Assets and Maintenance ......................................................... 18 iv | P a g e 3.5 Procurement ............................................................................. 20 3.6 Human Resources .................................................................... 21 3.7 Planning .................................................................................... 23 3.8 Capital Projects ........................................................................ 24 3.9 Finance ...................................................................................... 25 3.10 People Costs ............................................................................. 31 3.11 Other Shared Services ............................................................. 34 3.12 Board of Directors/Committees (Potential Restructure) ...... 35 LEGAL FORMATION OF THE CONSOLIDATED AGENCY .................................................................. 39 SUMMARY OF FINDINGS ....................................... 46 5.1 Case Study Lessons ................................................................ 46 5.2 Areas of Financial Impacts ...................................................... 46 5.3 Areas of Organizational Impacts ............................................ 47 5.4 Areas of Legal/Contractual Impacts ....................................... 47 5.5 Streamlining Opportunities without consolidation............... 48 REFERENCES ......................................................... 49 v | P a g e TABLES TABLE 1: QUESTIONS ASKED IN EACH CRITERION ........................... 1 TABLE 2: SUMMARY OF KEY FACTORS IN CASE STUDY CONSOLIDATIONS ..................................................... 11 TABLE 3. OVERVIEW OF EVALUATION ............................................... 14 TABLE 4. REVENUE SERVICES EVALUATION MATRIX ..................... 16 TABLE 5. ADA AND DEMAND RESPONSE EVALUATION MATRIX ....................................................................... 17 TABLE 6. INTEGRATION WITH EXISTING AND FUTURE RAIL SERVICE EVALUATION MATRIX .............................. 18 TABLE 7. ASSETS AND MAINTENANCE EVALUATION MATRIX ....................................................................... 20 TABLE 8. PROCUREMENT EVALUATION MATRIX ............................. 21 TABLE 9. HUMAN RESOURCES EVALUATION MATRIX .................... 22 TABLE 10 PLANNING EVALUATION MATRIX ...................................... 24 TABLE 11 PROJECT DEVELOPMENT AND CONSTRUCTION MANAGEMENT EVALUATION MATRIX .................... 25 TABLE 12. FINANCE EVALUATION MATRIX ........................................ 29 TABLE 13. PEOPLE COSTS EVALUATION MATRIX............................ 32 TABLE 14. OTHER SHARED SERVICES EVALUATION MATRIX ....................................................................... 35 TABLE 15. SBCTA AND OMNITRANS BOARD MEMBERSHIP ........... 35 TABLE 16. BOARD OF DIRECTORS/COMMITTEES EVALUATION MATRIX ............................................... 38 TABLE 17. ENABLING STATUTES FOR LA METRO, OCTA, AND MTDB/MTS COMPARED TO SBCTA’S STATUTE..................................................................... 41 TABLE 18: FUNCTIONAL AREAS OF FINANCIAL IMPACT ................. 46 TABLE 19: FUNCTIONAL AREAS OF ORGANIZATIONAL IMPACT ....................................................................... 47 TABLE 20: FUNCTIONAL AREAS OF LEGAL/CONTRACTUAL IMPACT ....................................................................... 47 APPENDICES APPENDIX A. FORMER AGENCY STAFF INTERVIEWS iv | P a g e EXECUTIVE SUMMARY 1.1 OVERVIEW The purpose of this chapter is to evaluate the opportunities and challenges for key functional areas of the San Bernardino County Transportation Authority (SBCTA) and Omnitrans under a “complete consolidation” where the two agencies (all functions) are brought together under one organization. Complete consolidation would entail transferring all functions from one agency to a single consolidated agency, which then provides transit and other transportation services. Note that this complete consolidation analysis explicitly excludes the consideration of other transit agencies in San Bernardino County. The 2015 SBCTA County-Wide Transit Efficiency Study1 (2015 Study) analyzed the complete consolidation organizational strategy as one of three organizational approaches for improving efficiencies and reducing costs. The others were cooperative agreements and functional consolidation where certain, but not all, functions are consolidated. The complete consolidation that this study assumes for analysis purposes would integrate Omnitrans into SBCTA. Omnitrans’ operations-related departments would become a new operating department under the current SBCTA organizational structure. In doing so, this analysis assumes that these departments of Omnitrans would continue to operate largely as they do today, while some of Omnitrans’ administrative departments are merged with SBCTA’s administrative units. Complete consolidation underlies this chapter’s analysis due to the fact that the consultant’s task order requires that only complete consolidation be used to provide detailed opportunities and challenges for the key functional areas presented in Section 3 of this chapter. This chapter’s assumption that complete consolidation entails Omnitrans integrated under SBCTA as a separate Transit Operations Division is based on interviews conducted with SBCTA and Omnitrans for this study in January 2020. Staff from both agencies responded that consolidation of Omnitrans into SBCTA as a separate division would be most appropriate if consolidation were found financially advantageous. The opportunities and challenges of this complete consolidation scenario are evaluated using three evaluation criteria – financial, organizational, and legal. Financial