Finance Committee Meeting May 2019 Committee Members L. Schwartz, Chair S. Feinberg, Vice Chair A. Albert* N. Brown* F. Ferrer R. Herman D. Jones K. Law M. Lynton H. Mihaltses J. Samuelsen* P. Trottenberg V. Tessitore* V. Vanterpool N. Zuckerman Finance Committee Meeting 2 Broadway, 20th Floor Board Room New York, NY 10004 Monday, 5/20/2019 12:45 - 2:00 PM ET 1. PUBLIC COMMENTS PERIOD 2. APPROVAL OF MINUTES – APRIL 15, 2019 Finance Committee Minutes - Page 4 3. 2019 COMMITTEE WORK PLAN 2019 Work Plan - Page 14 4. BUDGETS/CAPITAL CYCLE BudgetWatch (Handout available in the Exhibit Book and MTA.Info) Finance Watch Finance Watch - Page 22 5. MTA HEADQUARTERS & ALL-AGENCY ITEMS Action Items (No Items) Report and Information Items Metro North Metrics and Fare Evasion Report - Page 34 Long Island Rail Road Metrics and Fare Evasion Report - Page 38 NYCT Performance Metrics - Page 42 Station Maintenance Billing - Page 47 Draft MTA Financial Satements Fiscal Year-End Twelve Months Ended December 2018 (Available in the Exhibit Book and MTA.Info) - Page 52 Procurements MTAHQ Procurement Report - Page 53 MTAHQ Non-Competitive Procurements - Page 56 MTAHQ Competitive Procurements - Page 58 6. METRO-NORTH RAILROAD & LONG ISLAND RAIL ROAD MNR Procurements - Page 62 7. NEW YORK CITY TRANSIT, and MTA BUS OPERATIONS NYCT Procurements - Page 64 8. BRIDGES AND TUNNELS B & T Procurement - Page 72 9. FIRST MUTUAL TRANSPORTATION ASSURANCE COMPANY FMTAC Staff Summary - Page 74 FMTAC Related Materials (Available in the Exhibit Book and MTA.Info) - Page 75 10. MTA CONSOLIDATED REPORTS Statement of Operations - Page 76 Overtime - Page 83 Subsidy, Interagency Loans and Stabilization Fund Transactions - Page 87 Debt Service - Page 96 Positions - Page 98 Farebox Operating and Recovery Ratios - Page 101 MTA Ridership - Page 102 Fuel Hedge Program - Page 126 11. REAL ESTATE AGENDA Report on Transit Oriented Development & Station Access (Available in the Exhibit Book and MTA.Info) Action Items Real Estate Action Items - Page 130 Report and Information Items Real Estate Info Items - Page 153 Date of next meeting: Wednesday, June 26th at 1:30pm Minutes of the MTA Finance Committee Meeting April 15, 2019 2 Broadway, 20th Floor Board Room New York, NY 10004 Scheduled 12:45 PM The following Finance Committee Members attended: Hon. Lawrence Schwartz, Chair Hon. Susan E. Feinberg, Vice Chair Hon. Andrew Albert Hon. Norman E. Brown Hon. Fernando Ferrer Hon. Rhonda Herman Hon. Kevin Law Hon. Michael Lynton Hon. Polly Trottenberg The following Finance Committee Members did not attend: Hon. David R. Jones Hon. Haeda B. Mihaltses Hon. John Samuelsen Hon. Vincent Tessitore, Jr. Hon. Veronica Vanterpool Hon. Neal Zuckerman The following Board Members were also present: Hon. Susan G. Metzger The following MTA staff attended: Robert Foran David Keller Marcia Tannian David Ross David Florio Chairman Schwartz called the meeting of the Finance Committee to order at 12:45 PM. Later in the meeting, Chairman Schwartz welcomed the new Finance Committee Members, including Mr. Law, Vice Chair Feinberg, Mr. Lynton, and Ms. Herman. At that time, Chairman Schwartz noted the benefit of having the Chair of the NYCT and Bus Committee serving as Vice Chair on the Finance Committee, bringing an important synergy between the committees, especially related to fiscal and operational items. I. Public Comments There were four public speakers. Mr. Jason Pinero discussed his opinion of the need to reduce the budget, address the problem of fare evasion and revise procurement processes to make them more ________________________________________________________________________________ Master Page # 4 of 167 - Finance Committee Meeting 5/20/2019 competitive. Ms. Lisa Daglian, Executive Director of the Permanent Citizens Advisory Committee to the MTA, discussed the contract for AlixPartners regarding the restructuring plan (per recent enacted legislation) and requested that a rider representative be included in the discussions with AlixPartners, noting that customers of the MTA are important stakeholders and may provide insights into redundancies and implementing potential efficiencies. Mr. Murray Bodin commented on the changes at MTA, noting they are moving the authority in a positive direction, but he further noted his concern that the Manual on Uniform Traffic Control Devices from the Federal Highway Administration is not followed. Ms. Rachael Fauss, representing Reinvent Albany, discussed several items, including concern about having procurements listed as emergency, which may bypass established procurement rules, and the need to make these emergency contracts publicly available, as well as Reinvent Albany’s concerns specifically about the bidding process used for the AlixPartners contract and how it was described in March as not meeting competitive bidding requirements and in April is listed as being competitively bid, as well as questions regarding how the increase in its scope (per additional statutory requirements) meets competitive bidding requirements. II. Approval of Minutes The Committee voted to approve the minutes to its prior meeting held on March 25, 2019 (see pages 4 through 13 of the Committee book). III. Committee Work Plan There were no changes to the Work Plan (see pages 14 through 21 of the Committee book). IV. Budgets/Capital Cycle A. BudgetWatch Mr. Keller presented BudgetWatch (see the MTA website for the entire BudgetWatch http://web.mta.info/mta/ind-finance/budgetwatch.pdf). This month’s BudgetWatch focuses on March preliminary operating results and subsidy cash results through April, as measured against the Adopted Budget. Mr. Keller further noted that due to the early committee meeting cycle in April, results and variances explanations are more preliminary than usual. Revenues: Mr. Keller reported that preliminary passenger revenues were unfavorable in March by $5.7 million, reflecting unfavorable subway ($2.7 million), unfavorable combined bus ($2.4 million), unfavorable Metro-North ($1.2 million), along with favorable results for LIRR ($500 thousand), noting that results are under review at NYCT. Non-commutation ridership was higher at LIRR and lower at Metro-North, and overall ridership was below expectations for MTA Bus. Passenger revenues YTD were $4.2 million unfavorable. Toll revenues were favorable by $2.1 million for March, increasing the favorable YTD variance to $5.9 million. Expenses: Mr. Keller reported that preliminary expenses for March were $55 million favorable, reflecting vacancy savings, credits to operating expenses due to capital project activity, reduced non-labor spending, and timing. Expenses YTD were $137 million favorable. Mr. Keller noted that preliminary expenses reflect overtime, which was $11 million unfavorable for March and $35 million unfavorable YTD, mostly due to Subway Action Plan related intensified station cleaning ________________________________________________________________________________ Master Page # 5 of 167 - Finance Committee Meeting 5/20/2019 and track work. Debt service costs for March were $14 million favorable and YTD $26 million favorable, primarily due to timing. Subsidies: Mr. Keller reported that total subsidies in April were $30 million unfavorable. The Payroll Mobility Tax (PMT) was $20 million unfavorable, reflecting lower financial service industry bonus payouts. Real estate transaction taxes were $26 million unfavorable, which is the second consecutive month of unfavorable results after two favorable months. The Petroleum Business Tax (PBT) was favorable by $10 million, and the new For-Hire-Vehicle (FHV) surcharge was favorable by $6 million. MTA Aid and MMTOA were not scheduled for receipt in April. Mr. Keller summarized that YTD through April, subsidies were $22 million unfavorable; PMT was $41 million unfavorable, PBT was $9 million unfavorable, MTA Aid was $15 million favorable, real estate transaction taxes were $47 million favorable, FHV surcharge was $52 million unfavorable due to timing of transfers to the MTA. Overall: Mr. Keller summarized that overall preliminary YTD results were favorable due to lower operating expenses and strong Urban Tax collections, despite the shortfalls over the past two months. Combined farebox and toll revenues were on target. Preliminary expenses continue to favorably reflect savings from vacancies and underspending in non-labor categories. Discussion: Mr. Albert inquired regarding from experience, how long after a fare increase are trends and changes in ridership discernible. Mr. Keller noted the delay in the implementation of the fare and toll increase this year, but noted that normally an immediate change is noticed, but then the adjustment to ridership begins to smooth out again. He further noted that because the recent increases have not been large (compared to prior years), ridership changes have not been noticeable due to those increases. Chairman Schwartz, after welcoming the new Members, inquired about overtime and asked for information about which projects are causing increases in overtime, especially regarding station cleaning. Chairman Schwartz further commented that his concern is station cleaning has a budget of $600 million with 6,000 employees, so he is concerned about overtime expenses going up when there are resources already allocated to that category. Mr. Keller responded that staff will review and pull the information and provide that to the Members. B. FinanceWatch Ms. Marcia Tannian presented brief highlights from FinanceWatch (see pages 22 through