Board of Directors J U L Y 2 4 , 2 0

BOARD OF DIRECTORS

JULY 24, 2015

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

BOARD ROSTER SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

County Member Alternate

Orange: Shawn Nelson (Chair) Jeffrey Lalloway* Supervisor, 4th District Mayor Pro Tem, City of Irvine 2 votes County of Orange, Chairman OCTA Board, Chair OCTA Board

Gregory T. Winterbottom Todd Spitzer* Public Member Supervisor, 3rd District OCTA Board County of Orange OCTA Board

Riverside: Daryl Busch (Vice-Chair) Andrew Kotyuk* Mayor Council Member 2 votes City of Perris City of San Jacinto RCTC Board, Chair RCTC Board

Karen Spiegel Debbie Franklin* Council Member Mayor City of Corona City of Banning RCTC Board RCTC Board

Ventura: Keith Millhouse (2nd Vice-Chair) Brian Humphrey Mayor Pro Tem Citizen Representative 1 vote City of Moorpark VCTC Board VCTC Board

Los Angeles: Michael Antonovich Roxana Martinez Supervisor, 5th District Councilmember 4 votes County of Los Angeles, Mayor City of Palmdale Metro Board Metro Appointee

Hilda Solis Joseph J. Gonzales Supervisor, 1st District Councilmember County of Los Angeles City of South El Monte Metro Board Metro Appointee

Paul Krekorian Borja Leon Councilmember, 2nd District Metro Appointee Metro Board

Ara Najarian [currently awaiting appointment] Council Member City of Glendale Metro Board

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 SCRRA Board of Directors Roster Page 2

San Bernardino: Larry McCallon James Ramos* Mayor Supervisor, 3rd District 2 votes City of Highland County of San Bernardino, Chair SANBAG Board SANBAG Board

Paul Eaton Alan D. Wapner* Mayor Mayor Pro Tem City of Montclair City of Ontario SANBAG Board SANBAG Board

EX-OFFICIO MEMBERS

San Diego Association of Governments:

[CURRENTLY AWAITING APPOINTMENT]

Contact: Linda Culp Principal Planner – Rail

Southern California Association of Governments:

Art Brown Mayor, City of Buena Park

State of California:

Ryan Chamberlain Director, Caltrans District 12

Alternate: [CURRENTLY AWAITING APPOINTMENT]

*Alternates represent either member Revised 07/21/15

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY BOARD OF DIRECTORS MEETING

FRIDAY, JULY 24, 2015 – 10:00a.m. LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY (METRO) BOARD ROOM ONE GATEWAY PLAZA, 3RD FLOOR LOS ANGELES, CALIFORNIA 90012

TELECONFERENCE LOCATION 385 N. Arrowhead Avenue, 5th Floor Citrus Conference Room San Bernardino, CA 92415

AGENDA DESCRIPTIONS The agenda descriptions are intended to give notice to members of the public of a brief general description of items of business to be transacted or discussed. The posting of the recommended actions does not indicate what action will be taken. The Authority may take any action that it deems to be appropriate on the agenda item and is not limited in any way by the notice of the recommended action. The Chair reserves the right to discuss the items listed on the agenda in any order.

A person with a disability may contact the Board Secretary’s office at (213) 452-0255 or via email [email protected] at least 72-hours before the scheduled meeting to request receipt of an agenda in an alternative format or to request disability-related accommodations, including auxiliary aids or services, in order to participate in the public meeting. Later requests will be accommodated to the extent feasible.

SUPPORTING DOCUMENTATION The agenda, staff reports and supporting documentation are available from the Board Secretary, located at One Gateway Plaza, 12th Floor, Los Angeles, CA 90012, and on the Metrolink website at www.metrolinktrains.com under the Meetings & Agendas link.

PUBLIC COMMENTS ON AGENDA ITEMS AND ITEMS NOT ON THE AGENDA Members of the public wishing to address the Board of Directors regarding any item appearing on the agenda or any item not on the agenda, but within the subject matter jurisdiction of the Board, may do so by completing a Speaker’s Form and submitting it to the Board Secretary. All speakers will be recognized by the Chairman and will be considered under Item 4 (Public Comment). When addressing the Board, please state your name for the record. Please address the Board as a whole through the Chair. Please note comments to individual Board members or staff are not permitted when addressing the Board. A speaker’s comments shall be limited to three (3) minutes.

1. Call to Order

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 Board of Directors Meeting Agenda Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

2. Roll Call

3. Pledge of Allegiance

4. Public Comment

REGULAR CALENDAR

5. Approval of Meeting Minutes – July 10, 2015 Board of Directors Meeting

It is recommended that the Board approve the minutes of the July 10, 2015 Board of Directors Meeting. Page 1

6. Authorization to Finalize Terms and Conditions and Execute Keller Yard Track and Facility Utilization Agreement with Wabtec Global Services

Wabtec Global Services (Wabtec) has requested that they be allowed to utilize the track and facilities at the Authority’s Keller Yard on a non-exclusive basis to equip Burlington Northern Santa Fe (BNSF) Railway and Union Pacific Railroad (UPRR) locomotives with Positive Train Control (PTC) equipment. An agreement between Wabtec and the Authority is required for Wabtec’s utilization of the track and facilities.

It is recommended that the Board approve and authorize the Chief Executive Officer to finalize terms and conditions including pricing of an agreement with Wabtec for utilization of the Keller yard track and facility. There is no negative budget impact. However if the agreement is approved it would result in approximately $60,000 to $120,000 recollectable funding that would significantly reduce the cost of installing PTC equipment on at least three Authority leased locomotives and would allow performing other PTC related installation, repair and warranty work. Page 13

7. Contract No. EP181-13 – Tier 4 Locomotives – Exercise of Option for Additional Locomotives – ElectroMotive Diesel, Inc. and Strategy to Support Locomotive Fleet Availability

Purchase of new locomotives to replace 10 ElectroMotive Diesel (EMD) F-59s and 7 EMD F-59Rs, in lieu of rehabilitation, including the ongoing pursuit of grants and other funding to support such a purchase is required.

It is recommended that the Board authorize the Chief Executive Officer to exercise the option under Contract No. EP181-14 with Electromotive Diesel, Inc. (EMD), to procure up to 20 F-125 Tier 4 locomotives in an amount of $6,295,000 per locomotive for an increase in contract authority of $125,900,000 resulting in a not-to-exceed contract amount of $253,045,380. With projected grant awards, staff anticipates that the locomotive program can be funded within the FY2015-16 budgeted amounts and FY2016-17 and FY2017-18 budget forecasts. Staff is pursuing several strategies to

Board of Directors Meeting Agenda Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

ensure this, including negotiating with EMD to reduce deposits to activate the locomotive order, reprogramming existing unused funds in the rehabilitation program, working with grantors to match grant funds to payment schedules, and exploring financing such as a loan from one or more member agencies. Page 16

8. Contract No. JO117-16 – Track Rehabilitation Services – Contract Award – Veolia Transportation Maintenance and Infrastructure, Inc.

Track rehabilitation services are required to prevent deterioration of the existing track structure by using a systematic program to replace infrastructure assets. Work under Contract No. JO117-16 will include track rehabilitation, such as replacement of turnouts, replacement of failed wood crossties, rehabilitation of grade crossings and replacement of rail primarily in the River, Valley, Orange, San Gabriel, and Ventura subdivisions although work may be authorized and performed anywhere on the system.

It is recommended that the Board authorize the Chief Executive Officer to award Contract No. JO117-16 for Track Rehabilitation Services to the responsive and responsible bidder, Veolia Transportation Maintenance and Infrastructure, Inc. (VTMI), in an amount not-to-exceed $4,000,000. Award is subject to resolution of any protest timely filed. Funding for track and culvert rehabilitation services is included in the FY2013-14, and FY2014-15, Rehabilitation Budgets or will be recollectable under third party agreements. Federal funding comes in part from grants from the Federal Transit Administration (FTA). Work under this contract will be authorized by specific job orders. Actual funding commitments for those projects handled through the job order process are encumbered on a per project basis at the time the individual job order is approved and issued. Page 24

9. Contract No. QM145-15 – External Audit Services – Increase Contract Funding Authorization – Moss Adams LLP

An increase in the contract funding authorization for Moss Adams LLP is required due to include additional procedures necessary when completing the FY14 Comprehensive Annual Financial Report.

It is recommended that the Board authorize the Chief Executive Officer to amend Contract No. QM145-15 External Audit Services with Moss Adams LLP to increase the contract funding authorization by $70,000 for a new not-to-exceed contract funding authorization of $557,770. Funding for the External Audit Services is included in the FY2014-15 Operating Budget. Page 28

Board of Directors Meeting Agenda Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 4

10. Approval of Evaluation Criteria – Request for Proposal No. SP448-16 – Classification and Compensation Plan Review

Proposed evaluation criteria have been developed to initiate a competitive procurement to seek a qualified firm to provide a Classification and Compensation Plan Review for the Authority.

It is recommended the Board approve and recommend the proposed evaluation criteria detailed in Attachment 1 of the staff report specifying a weighting of eighty percent (80%) for technical qualifications and twenty (20%) for cost to seek a contractor to provide a review and recommendations for updating the Authority’s Classification and Salary Plan in accordance with Human Resources Policies and Procedures 2.1, Wage and Salary Administration – Salary Program Administration, 1.0 Procedures, 1.11 Maintenance of Salary Structure. The proposed evaluation criteria summarized below and detailed on Attachment 1, are consistent with the format and guidelines in Board- approved Contracts Administration and Procurement Policies and Procedures CON-7, Technical and Cost Criteria and Weights. Although the process of adopting evaluation criteria has no budget impact, funds for this project have been included in the proposed FY2015-16 Operating Budget. Page 31

11. Fare Policy Study Update

The Authority is conducting a consultant study to optimize fares and fare policy with the goal of increasing revenue while growing ridership. This item provides an update of current findings. A work plan and time line were presented at the June 26, 2015 Board meeting, at which time the Board requested an update to be provided at the July Board meeting.

The Board may receive and file this report. There is no immediate budget impact as a result of this update. Page 35

12. FY2014-15 Marketing Report

The Board requested staff to provide a report on the Authority’s marketing efforts and highlight industry best practices on solutions to help sustain, retain and grow ridership. The American Public Transportation Association (APTA) was mentioned as a benchmark for comparison.

The Board may receive and file this report. Marketing efforts are budgeted in the annual operating budget or paid for through third party recollectables. Page 190

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13. Capital Grant Summary Report

This report presents a quarterly summary of capital grant acquisition and closeout activities for the period from February 1, 2015 to June 30, 2015. This report focuses exclusively on grant acquisition and closeout activities undertaken by staff for the purposes of supporting the rehabilitation and new capital programs. It discusses grants that were secured through a formal application and does not include funds applied for by other agencies and passed through to the Authority.

The Board may receive and file this report. There is no budget impact as a result of this status report. Page 206 14. Preliminary Rehabilitation Program Reprogramming

Staff will provide an update on the Rehabilitation Program reprogramming efforts. The Authority has budgeted a total of $128.8M to the Rehabilitation Program over the past five fiscal years (FY2011-15). Currently, there are 142 Active Rehabilitation Projects for a total budget of $101.9M. Rehabilitation projects are delivered primarily within the Operating Divisions of Engineering and Construction, Track and Structures, Signals and Communications, and Equipment. Over the past five years, the Authority has completed 56 projects for a total of $26.9M.

The Board may receive and file this report. There is no budget impact as a result of this status report. Page 211

15. FY2014-15 Quarterly Accounts Receivable Status Report – Quarter Ended June 30, 2015

This report presents a preliminary status update on the accounts receivable for the fourth fiscal quarter, ended June 30, 2015, for the Authority.

The Board may receive and file this report. There is no budget impact as a result of this status report. Page 214

16. FY2014-15 Quarterly Investment Report – Quarter Ended June 30, 2015

Section VII of the Authority’s Annual Investment Policy requires that the Treasurer make a quarterly investment report to the Board of Directors, and Section 53646 of the California Government Code encourages local agencies to file this report. This report covers the quarter ended June 30, 2015.

The Board may receive and file this report. There is no budget impact as a result of this status report. Page 216

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17. Finance Update

Staff will provide an update on current accounting balances. There is no written document. The Board may receive and file this report.

18. Oracle Financial Information System Update

At the June 26, 2015, Board meeting, Vice-Chair Busch requested staff provide an update to the Board on the status of the Oracle Financial System.

The Board may receive and file this report. There is no budget impact as a result of this status report. Page 219 19. Empire Avenue / Interstate 5 Widening and Railroad Grade Separation Project

Staff is providing a status update on the Empire Avenue/Interstate 5 Widening and Railroad Grade Separation Project. A Caltrans project is underway to add high- occupancy vehicle (HOV) lanes to the Interstate 5 (I-5) freeway through the City of Burbank while elevating Metrolink’s Valley Subdivision main line and Brighton siding tracks onto an embankment for approximately two miles, thus facilitating the full grade separation of both Empire Avenue and Buena Vista Street. Rail services will operate on an adjacent, temporary shoofly track while the construction of the new main line and supporting structures is undertaken.

The Board may receive and file this report. There is no budgetary impact as a result of this status update. Page 223

20. Lifecycle Costs of Authority-Owned Assets

At its June 26, 2015 meeting, the Board has requested additional information regarding Authority-owned equipment lifecycle costs.

The Board may receive and file this report. There is no budget impact as a result of this item. Page 226

21. Online / Mobile Ticketing Update

Staff along with the Online / Mobile ticketing vendor, Masabi will deliver a project overview on the status of the application. There is no written document. The Board may receive and file this report.

22. System Safety Update

Staff will deliver a presentation on the System Safety statistics and the Lithuanian Pilot Program. There is no written document. The Board may receive and file this report.

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23. The Pulse of Metrolink

Staff will deliver a presentation including year-over-year metrics used to gauge railroad performance. There is no written document. The Board may receive and file this report.

24. Burlington Northern Santa Fe Railway – Third Party Delays Quarterly Report

Staff from Burlington Northern Santa Fe Railway (BNSF) will deliver a presentation to include the following items: On-Time Performance, Maintenance Planning/Issues, Grade Separations, and Scheduling. There is no written document. The Board may receive and file this report.

25. Chief Executive Officer’s Report

. Authority Update

26. Chair’s Comments

27. Board Members' Comments

CLOSED SESSION

28. Closed Session

a. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION – Pursuant to Government Code Section 54956.9(d)(1) – Manning v. Southern California Regional Rail Authority et al., Los Angeles Superior Court case no. BC 586170.

b. PUBLIC EMPLOYEE APPOINTMENT – Pursuant to Government Code Section 54957 Title: Chief Auditor

c. PUBLIC EMPLOYEE PERFORMANCE EVALUATION – Pursuant to Government Code Section 54957 Title: Senior Auditors

29. ADJOURNMENT

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING July 10, 2015

ITEM 5

BOARD MEMBERS/ALTERNATES IN ATTENDANCE: Votes OCTA: GREGORY WINTERBOTTOM 2 (2 votes)

RCTC: DARYL BUSCH (Vice-Chair) 1 (2 votes) KAREN SPIEGEL 1 Deborah Franklin

VCTC: -- (1 vote)

METRO: ARA NAJARIAN 3 (4 votes) Richard Katz 1

SANBAG: LARRY McCALLON 1 (2 votes) PAUL EATON 1 Alan Wapner

EX-OFFICIO MEMBERS

State of California -- SCAG --

STAFF/PRESENTERS:

ART LEAHY, Chief Executive Officer PATRICIA BRUNO, Chief Administrative Officer DON O. DEL RIO, General Counsel PATTY FRANCISCO, Director, Human Resources SAM JOUMBLAT, Chief Financial Officer SCOTT JOHNSON, Interim Director, Public Affairs ELISABETH LAZUARDI, Senior Auditor GARY LETTENGARVER, Chief Operations Officer DAVID ROGERS, Senior Auditor DEVON RYAN, Government Relations Administrator KARI HOLMAN, Assistant to the CEO/Board Secretary

Meeting minutes are prepared in a format that corresponds with the Board Meeting Agenda, which is incorporated by reference with these minutes. Board Agendas are available online at www.metrolinktrains.com under the Meetings and Agendas link or from the Board Secretary at (213) 452-0255.

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 1 SCRRA Board of Directors Meeting Minutes – July 10, 2015 Transmittal Date: July 17, 2015 Page 2

1. Call to Order

The July 10, 2015 Board of Directors Meeting was called to order by Vice-Chair Busch who presided over the meeting at 10:12 a.m. at the Dispatch and Operations Center, Training Room A located at 2704 Garey Avenue, Pomona, CA 91767.

2. Roll Call

The Board Secretary called roll to confirm a quorum of the Board was present.

3. Pledge of Allegiance

Director Franklin led the group in the pledge of allegiance.

Gary Lettengarver, Chief Operating Officer conducted a safety briefing.

4. Public Comment

At this time, Vice-Chair Busch inquired if any members of the public wished to address the Board. There were no requests to speak; therefore the Public Comment period was formally closed.

REGULAR CALENDAR

5. Approval of Meeting Minutes – June 26, 2015 Board of Directors Meeting

Upon a motion by Director Eaton and seconded by Director Katz, the Board approved staff’s recommendation. There was no opposition and the motion passed unanimously.

ACTION: The Board approved the minutes of the June 26, 2015 Board of Directors Meeting.

Vice-Chair Busch announced that the agenda would be taken out of order.

7. Amend Board Adopted Position – Senate Bill 9 – Greenhouse Gas Reduction Fund: Transit and Intercity Rail Capital Program

Upon a motion by Director Katz and seconded by Director McCallon, the Board approved staff’s recommendation. There was no opposition and the motion passed unanimously.

ACTION: The Board amended its position on SB 9 to a SUPPORT position.

2 SCRRA Board of Directors Meeting Minutes – July 10, 2015 Transmittal Date: July 17, 2015 Page 3

8. State and Federal Legislative Update

Devon Ryan, Government Relations Administrator provided a brief background on this item as detailed in the staff report. She mentioned that on Thursday, July 9, 2015 Senator Thune, Chairman of the Senate Commerce Committee, introduced Senate Bill 1732, the Comprehensive Transportation and Consumer Protection Act of 2015. This bill included a new PTC title that would give the Secretary the authority to extend on a case-by-case basis the PTC deadline, review updated plans with enforceable milestones. She noted that the bill would likely be marked up in the coming week and staff would continue their efforts to include the Authority’s legislative priorities. The current Surface Transportation bill would expire on July 31, 2015.

She reporting on the following state bills:

. SB 413 – (Board – Support position) recently amended to include enforcement of penalties for not yielding a seat to an elderly or disabled person optional. The amendment did not change staff’s recommendation to support this bill.

. AB 318 – (Board – Work with Author position) is now being held as a two-year bill.

Devon Ryan also noted that the State Legislature held its first Extraordinary Session informational hearing regarding California’s transportation funding challenges. Public transit was mentioned by several members as being part of the solution to gaining infrastructure. Staff will continue to advocate for public transit and commuter rail funding at the state level.

ACTION: The Board received and filed this report.

9. Level 3 Incident Communication to Board of Directors

Scott Johnson, Interim Director, Public Affairs provided a brief background on this item as detailed in the staff report.

Director Winterbottom mentioned that at a prior Board meeting, Chair Nelson commented on improving the time to following an incident for the train to be cleared. Scott Johnson replied that a few nights before, a train had struck a trespasser and the train had been cleared in about two and a half hours, which is about the quickest things can be cleared. There are several factors including time and location for both the coroner and relief crews, if necessary to arrive. Staff continues to communicate with various agencies throughout the system for improved processes.

The presentation is included as Attachment A to the minutes.

ACTION: The Board received and filed this report.

3 SCRRA Board of Directors Meeting Minutes – July 10, 2015 Transmittal Date: July 17, 2015 Page 4

6. Reorganization of the Operations Department and Reassignment of Audit Positions

Gary Lettengarver, Chief Operating Officer provided a brief background on this item as detailed in the staff report and requested approval of staff’s recommendations. He stressed the need for succession planning, properly align the Operations department, and to mirror the operating organization with other railroad agencies. This reorganization would divide the Operating department into three divisions each led with a Deputy Chief Operating Officer who would all continue to report directly to the Chief Operating Officer. It is expected that these three management trainees would work closely with each of the departments they are responsible for and then be crossed trained with the other two deputies. The goal would be to encourage competition when the position of Chief Operating Officer becomes vacant in a few years.

Art Leahy, Chief Executive Officer added that this is a critical piece to the future of the Authority. He noted that when he joined the Authority, the Board directed him to be cost-conscious and he believed that by ensuring the Internal Audit department was sufficiently staffed with 4 auditors, using vacant positions in that department to fill critical positions in the Operations department was one way to accomplish that. He assured the Board that under his leadership, audits will never be suppressed. He remarked that the two co-lead Senior Auditors have been included in Executive Leadership meetings and have full access to any and all documentation that is needed to complete their audits. Significant improvements have been seen during the last few months. Art Leahy reminded the Directors that the Internal Audit function continues to report directly to the Board.

David Rogers, Senior Auditor and Elisabeth Lazuardi, Senior Auditor spoke on the improved cooperation the Internal Audit department has received since leadership changed in April. David Rogers stated that he has worked at the Authority for two years and how well the Internal Audit department has been working. Elisabeth Lazuardi commented how supportive the Chief Executive Officer has been since his arrival. She noted that she has been employed at the Authority for one and a half years and that the entire Internal Audit team appreciates the support from the executive team.

Art Leahy commented that he has served in the capacity of a Chief Executive Officer for almost two decades and has never suppressed an audit. He very strongly believed in the importance of the audit function and committed to hold staff responsible if any department or person does not cooperate with the Internal Audit department. He reiterated that this recommendation in no way was an attempt to to reduce the audit function, but rather to strengthen it.

Vice-Chair Busch inquired from the members of the Internal Audit department if they believed that the suggested changes within their department would still allow for the department to function fully. David Rogers replied that he believed with the staffing level of four employees plus a bench of auditors at their disposal would allow them to complete their work responsibilities.

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Director Najarian remarked on his comfort level of discussing this item in the absence of some of the Board including the Chairman. He requested justification on the need for a third Deputy Chief Operating Officer (DCOO) and asked why those duties could not be divided between the other two DCOO’s. He also noted that he would have felt better if the Internal Audit department had a singular head which would allow for a clearer definition of duties and responsibility. Gary Lettengarver responded that each of the three DCOO’s would be responsible for one of the big four contracts. He noted that the third DCOO position would be responsible for some key areas such as fare collections [ticket vending machines (TVMs), online/mobile ticketing application], maintenance of equipment [coach rehabilitation / acceptance of Tier 4 locomotives] to name a few. Gary Lettengarver confirmed that this third DCOO would be a permanent position. Art Leahy added that this third position would also be responsible for grants and the Authority just received a grant award for Tier 4 locomotives which could save the member agencies millions of dollars, not to mention possible savings with the TVMs.

Director Najarian addressed the Internal Audit functions and expressed his concern for a singular head of that department, noting that he thought it unusual to have two co- leads. Art Leahy commented that if the Board desired to have one person as the lead for the Internal Audit department, he would comply. Director Najarian confirmed that his desire would be to have one person in charge.

Director Spiegel remarked that although the Board’s direction was to keep costs down, it was also the Board’s responsible to ensure that proper organization in the Internal Audit department existed. She agreed that there was a need to have a lead auditor report directly to the Board. She also commented that many of the cities that members of the Board represent have not have raises in years and it is difficult at times to justify salary increases. Director Spiegel agreed however that the Operations department needed to make improvements, with such important projects like Positive Train Control (PTC). She inquired as to the costs of all the changes in the Operations department were, keeping the Internal Audit department vacancies separate. Patty Francisco, Director, Human Resources stated that she did not have that information available at that time and could provide after the meeting. Director Spiegel stated that she looked at these two issues as separate items.

Director Wapner remarked that he disagreed with the previous comments. He believed that four auditors were too many and drew from his experience on other boards stating that auditors did not report directly to the Board. He also mentioned that the Board hired the Chief Executive Officer who is charged with running the organization successfully, and if unable to do so, then he would be held accountable.

Director Katz commented that the Internal Audit department was staffed with competent workers coupled with the transparency that the Chief Executive Officer was demanding. He added that changes instituted over the last six months were designed to ensure that the Authority does not revert back to past ways but continue to move forward.

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Director McCallon remarked that the Board hired Art Leahy to make improvements in the organization and it is important that the Board provide him with the tools necessary to be successful and in turn hold accountable for his decisions. He noted that the Internal Audit function is doing well and during his tenure as Chair last year David Rogers and Elisabeth Lazuardi had requested to be co-leads in the department.

A motion was made by Director Eaton and seconded by Director Winterbottom with comments. Director Winterbottom mentioned that some of the comments made by Director Wapner were valid. He also acknowledged that some of the issues the Authority faced because of past Board members from the Orange County Transportation Authority (OCTA). Although there were troubles, the Board entrusts the Chief Executive Officer to take the lead.

Director Spiegel reiterated that in her opinion the issues before the Board were two separate issues and requested clarification that the Internal Audit department would report directly to the Board or to the Chief Executive Officer.

Don Del Rio, General Counsel advised that if the Board decided to separate the recommendation into two separate items, it was suggested to have at the next Board meeting a closed session item on personnel issues and the Board could decide what to do with regards a lead Internal Audit department person and the reporting structure.

Director Najarian provided a substitute motion to amend the recommendation to include that there be one lead in the Internal Audit department. Director Spiegel seconded the substitute motion.

The Board engaged in a brief discussion on whether or not the Internal Audit department should continue to report to the Board or have it moved to report to the Chief Executive Officer.

The original motion was withdrawn.

Director McCallon provided a substitute motion to approve staff’s recommendation and change the reporting structure of the Internal Audit department to the Chief Executive Officer. Director Winterbottom seconded the substitute motion.

Director Najarian inserted an additional substitute motion to: 1) approve staff’s recommendation and create singular head within the Internal Audit department, and 2) Move the reporting structure of the Internal Audit department to the Chief Executive Officer. Director Spiegel seconded the substitute motion.

Don Del Rio stated that the Board had the authority at this meeting to create a singular lead in the Internal Audit department, however he advised that to ensure no violation with the Brown Act, the reporting structure be discussed under a separate agendized item at the next meeting.

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Following comments received from General Counsel, Director Najarian removed Item No. 2 from the last substitute motion.

Director McCallon agreed with General Counsel and requested to have the reporting structure included on the agenda at the next meeting.

Upon a motion by Director Najarian and seconded by Director Spiegel, the Board approved staff’s recommendation as amended shown below. There was no opposition and the motion passed unanimously.

ACTION: The Board:

1) Adjusted the salary grade of the Deputy Chief Operating Officer from Grade R ($128,850-$201,450) to Grade S ($148,377-$231,706);

2) Transferred and reassigned the current vacant positions of Chief Auditor and Executive Assistant positions from the Officer of the Chief Auditor to the Operations Department;

3) Reassigned the Chief Auditor position (Salary Grade T) to a Deputy Chief Operating Officer position (Salary Grade S) to provide a succession plan in the Office of the Chief Operating Officer; and

4) Reassigned the Executive Assistant position (Salary Grade F) to a Fare Collections Administrator position (Salary Grade G) to provide administrative and technical support in the Fare Collections Department.

5) Designate a single lead auditor in the Internal Audit department.

10. Chief Executive Officer’s Report

Art Leahy, Chief Executive Officer provided the following updates on the activities of the Authority:

. Positive Train Control (PTC) Safety Plan –

The Authority submitted its Safety Plan to the Federal Railroad Administration (FRA) which is the first step was required by the FRA to review and grant PTC certification by the December 31, 2015 deadline. The Authority is the first commuter railroad in the nation to do so.

. Handheld Fare Enforcement Devices –

Handheld fare enforcement devices have been introduced to a handful of Conductors and staff looks forward to the information these devices will provide as the Authority moves toward Online/Mobile ticketing.

. Metro Motion –

At a recent Metro Board meeting a motion was introduced regarding funding for Metrolink. The Metro Chief Executive Officer, Phil Washington wrote a letter to the Authority which was provided in a handout at the meeting to the Board. A response letter would be provided.

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11. Chair’s Comments

There were no additional comments from Vice-Chair Busch at this time.

12. Board Members' Comments

Director Katz commented that Lucy Jones with CalTech has been working on creating an earthquake warning system and steps are being taken to integrate this technology into the PTC System so that trains could begin breaking in advance of an earthquake. The warning system would be activated 20 seconds prior to an earthquake.

Director Spiegel requested staff to copy the member agencies when responding to the Metro motion letter mentioned during the Chief Executive Officer comments.

13. Tour of the Dispatch and Operations Center

The Board of Directors took part in a tour of the Authority’s Dispatch and Operations Center (DOC), which houses approximately 100 Authority and contract employees. The tour included the Dispatch Center, a 24 hour / 7 day operation, with 165 Metrolink, 44 Amtrak, and up to 50 freight trains dispatched daily over seven subdivisions consisting of 242.16 route miles, and partner railroads covering 269.84 route miles.

The Board members viewed the Positive Train Control (PTC) Lab, where new PTC equipment is tested prior to deploying in a live environment. Outside, in the parking lot shared with the Authority’s Melbourne facility (MSF), hy-rail vehicles were on display and staff discussed the vehicles various features.

14. ADJOURNMENT

There being no further business for consideration by the Board, the meeting was adjourned at 11:17 a.m.

Respectfully Submitted,

Kari Holman Assistant to the CEO/Board Secretary

8 Attachment A

Level 3 Incident Communication to Board of Directors

July 10, 2015 Board of Directors Meeting

Level 3 Incident

• Level 3 Incident – System-wide multiple-day train delays and cancellations resulting in regulatory intervention and/or national/international media attention.

• Safety and Security defined level 3 as any extraordinary occurrence of such magnitude that all departments and contractor resources must be utilized and mobilized to respond to the situation.

9 Attachment A

Current Communication Protocol:

• Following a level 3 incident, Metrolink Board Members and alternates, their designated staff, Technical Advisory Committee (TAC) members, member agency CEOs will receive a notification about train incidents on the Metrolink system via email. The Public Affairs department is responsible for communicating incidents to the Board Members, their alternates and staff.

• An email notification will be sent within 60 minutes after the incident is first reported, with appropriate updates and final notice.

• A conference call will take place within three (3) hours of the event between executive staff and Board members.

Updated Communication Protocol:

• Identified personnel, including the Metrolink Board of Directors will now receive an email from Public Affairs staff within five (5) minutes of staff being made aware: “Dispatch reports train 102 has struck a vehicle between Oxnard and Camarillo and derailed. Multiple injuries reported. More information to follow.” • A conference call will take place within three (3) hours (or sooner) of the event between executive staff and Board members. • Staff is working on the implementation of an incident response platform that would provide real-time views from the event. • Staff will provide training on the new protocols and response procedures.

10 Attachment A

Updated Communication Protocol Continued:

Public Affairs Staff Responsibilities: • One member will travel to the site. • One member will address media concerns. • One member will provide Board updates through the same channel of email.  Updates will be sent every half hour, if not sooner, as information is known.  The collection of emails will be sent in a blog style format for quick references for the Board serving as an update page.

QUESTIONS?

11 Attachment A

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 6

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Authorization to Finalize Terms and Conditions and Execute Keller Yard Track and Facility Utilization Agreement with Wabtec Global Services

Issue

Recommendation

Alternatives

The Board may:

1) Decline to authorize the track and facility utilization agreement; or

2) Direct staff to modify the terms and conditions including the pricing.

Background

Under the existing Contract No. H1636-10 PTC Vendor Integrator Contract, Wabtec as a subcontractor to Parsons has been installing PTC equipment on Authority locomotives and cab cars since 2011 and has essentially completed the installation work. Wabtec is preparing to demobilize their PTC installation equipment and trained installation staff from the Authority Keller Yard site in the next few months.

Wabtec recently approached the Authority and requested to utilize the Keller yard track and facilities by on a non-exclusive basis to install PTC equipment on BNSF and UPRR locomotives. A small limited pilot test program to equip BNSF locomotives with PTC

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 13 Authorization to Finalize Terms and Conditions and Execute Keller Yard Track and Facility Utilization Agreement with Wabtec Global Services Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2 equipment was conducted to determine if the concept of utilizing Keller Yard track and facilities was feasible. The pilot program was successful.

Draft terms and conditions for the Keller Yard utilization have been developed and key points are summarized below:

1. Wabtec must fulfill the same insurance and requirements as any outside contactor utilizing Authority property and enter into a standard right of entry agreement.

2. Wabtec will limit their utilization to Tracks Number 3 and 4 and the immediate surrounding area at Keller Yard for BNSF and UPRR equipment installation on a non-exclusive or shared basis with Authority equipment.

3. Wabtec staff will provide first priority to any Authority installation, repair, or warranty work including installation of PTC equipment on leased locomotives.

4. Either party may terminate the utilization agreement with a 90-days’ notice.

5. Wabtec will pay Authority in advance $15,000 for each quarter (three months) that Wabtec intends to utilize the Keller Yard track and facilities, or alternatively;

6. Provide a Keller Yard track and facility utilization for $1 for 12 months.Wabtec to provide the labor at no cost to install separately furnished Wabtec Railway Electronics (WRE) PTC Equipment on three leased F59 Locomotives as a component of a Parson H1636-10 PTCC Vendor/Integrator Contract Change Order.

7. Wabtec will install PTC equipment on the three AuthorityF59 leased locomotives at the rate of one locomotive per month after the necessary PTC equipment is on hand and a notice to proceed has been provided.

Entering into this agreement is favorable to the Authority because it will partially defray the fixed cost of maintaining and operating Keller Yard and more importantly will retain skilled PTC installation staff and specialized PTC installation equipment locally on Authority property. An estimate of the duration Wabtec would utilize Keller Yard is two years beginning in August 2015.

Budget Impact

There is no negative budget impact. However if the agreement is approved it would result in approximately $60,000 to $120,000 recollectable funding that would significantly reduce the cost of installing PTC equipment on at least three Authority leased locomotives and would allow performing other PTC related installation, repair and warranty work.

Prepared by: Darrell Maxey, Deputy Chief Operating Officer (PTC and Engineering) Lia McNeil-Kakaris, Assistant Director, Contracts and Procurement

Authorization to Finalize Terms and Conditions and Execute Keller Yard Track and Facility Utilization Agreement with Wabtec Global Services Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Gary Lettengarver Chief Operating Officer

Sam Joumblat Chief Financial Officer

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 7

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Contract No. EP181-13 – Tier 4 Locomotives – Exercise of Option for Additional Locomotives ElectroMotive Diesel, Inc. and Strategy to Support Locomotive Fleet Availability

Issue

Recommendation

Alternatives

The Board may:

1) Decline to approve exercising the option; or 2) Direct staff to provide additional analysis to support the provision of locomotives; or 3) Direct staff to pursue a rehabilitation-only strategy; or 4) Direct staff to issue a new competitive procurement

Background

At the December 14, 2012 meeting, the Board awarded Contract No. EP181-14 to EMD to procure up to 20 F-125 Tier 4 Locomotives in the amount of $129,400,000 plus a contingency of $8,000,000.

At its June 12, 2015 meeting, staff informed the Board of the Authority’s comprehensive approach to improve locomotive reliability and availability for service. Twenty locomotives are already planned to be replaced with new model F-125 locomotives, which are

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 16 Contract No. EP181-13 – Tier 4 Locomotives – Exercise of Option for Additional Locomotives ElectroMotive Diesel, Inc. and Strategy to Support Locomotive Fleet Availability Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2 manufactured by EMD and contain higher horsepower and Tier 4 emissions control. Also as reported at the June 12, 2015 Board meeting, EMD modified its option under the existing contract, Contract No. EP181-13 with EMD, on March 31, 2015, in three ways:

 Extension of period to exercise option to October 15, 2015  Extension of the number of units within the option from 10 to 20  Offer the units at the same base price under Contract No. EP181-13.

This provides an opportunity to consider exercising the option to support replacement of a portion of the existing fleet as well as to consider expansion of the fleet.

Strategy for Replacement of Existing Locomotives – 17 Units

In its June report, staff provided extensive operational and financial analysis that demonstrated the advantages of purchasing replacement units. The cost comparison showed that for the set of 17 locomotives, it is more cost-effective to purchase new locomotives to replace the fleet than to rehabilitate the old locomotives, only to have to replace them in 10 years when they reach the end of their useful life. Replacement with new locomotives also demonstrates several advantages over rehabilitation in operating costs and efficiencies. Furthermore, replacement of these two sub-fleets with new locomotives provides significant performance advantages, including higher speed, horsepower, and reliability. The report concluded with the recommendation for replacement of these 17 locomotives with new units.

For the existing fleet inventory, the recommended strategy is shown below:

Figure 1: Existing Fleet Inventory

Sub-fleet Recommended Strategy 19 EMD F-59s (’92-‘00) Replacement with 20 EMD F-125s [Tier 4] 1 EMD F-40 (‘80s) which is currently underway. Five retired units retained for AQMD testing. 10 EMD F-59s (’92-‘93) Replace with 10 EMD F-125s 7 EMD F-59Rs (‘92, repowered in ’10-’11) Replace with 7 EMD F-125s 15 MPI MP36s (’08-09) TBD TOTAL: 52 Dates reflect first year in service

Staff still recommends this strategy to purchase new replacement Tier 4 diesel locomotives even when considering the opportunities with electrification. As requested by the Board, a discussion of electrification is provided in Attachment A of this report.

17 Contract No. EP181-13 – Tier 4 Locomotives – Exercise of Option for Additional Locomotives ElectroMotive Diesel, Inc. and Strategy to Support Locomotive Fleet Availability Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3 Strategy for Additional Expansion Locomotives – 3 Units

Since the recommended quantity for replacement (17) is less than the total quantity available in the option (20), there is an opportunity to consider purchase of additional locomotives for expansion. Three locomotives have recently been leased in order to provide additional locomotive availability, while locomotives from the existing fleet are taken out for servicing. New replacement locomotives should increase reliability of the fleet dramatically and should correspondingly decrease overall fleet requirements. In parallel, staff has been undertaking an analysis of fleet requirements to accommodate potential future growth. According to one scenario of growth developed in concert with member agencies staff, one additional locomotive could be required by FY2018-19, and a total of three by FY2019-20.

The three additional locomotives in the option are available to be purchased to support a commitment to growth for the next five years. Los Angeles County Metropolitan Transportation Authority (Metro) has expressed their interest in two of the three and requested they be included in grant applications.

Grants and Funding Update

Authority staff has pursued multiple opportunities to secure additional outside funds to support the strategy of new replacement locomotives. As noted in the June 12 report, the Authority applied for $41.18 million in funds from the Transit and Intercity Rail Capital Program (TIRCP). On June 30, 2015, the State announced that the Authority received the full amount requested, only one of two agencies to be awarded the maximum eligible amount from the program. The funds will be applied to the 7 replacement F-59Rs and 2 new expansion locomotives. Metro will be responsible for the amount not covered by subsidies for two expansion locomotives.

Additionally, the Authority has an application with the South Coast Air Quality Management District (SCAQMD) to support up to 11 locomotives (ten replacement and one expansion). The SCAQMD has been a significant partner in supporting improvements to the locomotive fleet and reductions in emissions. An award from the SCAQMD is anticipated in the fall, in advance of expiration of the EMD option.

By sub-fleet, the availability of funding is summarized as follows:

For the 10 PH/PHI locomotives, the adopted FY2015-16 budget includes $33.4 million, in addition to $15.9 million approved in previous budget years. Of this total of $49.3 million, the budgeted member agency amount is $23.3 million and the budgeted subsidy from other sources is $26 million. Additional funding from SCAQMD is awaiting confirmation.

To support the seven PHRs, there is $17.6 million and $13.2 million in the FY2016-17 and FY2017-18 budget forecasts, respectively. With the availability of $32.0 million in TIRCP

18 Contract No. EP181-13 – Tier 4 Locomotives – Exercise of Option for Additional Locomotives ElectroMotive Diesel, Inc. and Strategy to Support Locomotive Fleet Availability Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 4 subsidy, member contribution will be adjusted to from the $30.8 million in the two fiscal years to $13.1 million. No SCAQMD subsidies are expected for this sub-fleet.

For the three expansion locomotives grant funding is being pursued. The TIRCP grant includes $9.15 million. Additional funding from SCAQMD is awaiting confirmation..

Anticipated expenditures by fiscal year are presented in Attachment B.

Contract Considerations in Exercising the Option

To procure up to 20 new locomotives, staff recommends exercising the existing option on Contract No. EP181-13 with EMD which currently expires on October 15, 2015. This recommendation is made after consideration of other alternatives including fleet that could be provided by other manufacturers. After completing a cost analysis, based on costs provided by others, staff recommends exercising the option both because the cost per unit is anticipated to be lower and because consistency of fleet type will ensure lower operating and maintenance costs as compared to a hybrid fleet.

A payment schedule is provided as Attachment B.

Budget Impact

With projected grant awards, staff anticipates that the locomotive program can be funded within the FY2015-16 budgeted amounts and FY2016-17 and FY2017-18 budget forecasts. Staff is pursuing several strategies to ensure this, including negotiating with EMD to reduce deposits to activate the locomotive order, reprogramming existing unused funds in the rehabilitation program, working with grantors to match grant funds to payment schedules, and exploring financing such as a loan from one or more member agencies.

Prepared by: Roderick Diaz, Director, Planning and Development Anne Louise Rice, Assistant Director, Grants Lia McNeil-Kakaris, Assistant Director, Contracts and Procurement Naresh Patel, Assistant Director, Standards and Design Mike Naoum III, Interim Manager, Grants Administration and Fiscal Management Richard Tripoli, Director, Equipment Maintenance

Roderick Diaz Director, Planning and Development

19 Contract No. EP181-13 – Tier 4 Locomotives – Exercise of Option for Additional Locomotives ElectroMotive Diesel, Inc. and Strategy to Support Locomotive Fleet Availability Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 5

Gary Lettengarver Chief Operating Officer

Sam Joumblat Chief Financial Officer

20 Attachment A

Discussion of Electrification as an Option for the Fleet

Even with procurement of up to 20 Tier 4 locomotives, as recommended in this report, in addition to the 20 already on order, the Authority continues to consider alternative means of future fleet propulsion. One method is electrification either through replacement of diesel locomotives with electric locomotives or through conversion of the entire fleet (locomotives and coaches) to electric multiple units (EMUs). Both of these would require construction of an overhead contact system (overhead electrical wires) over Metrolink’s rail network (including sections that are owned and managed by freight railroads – BNSF and Union Pacific).

Conversion to an electrically-powered fleet meets the performance objectives for the fleet, but requires significant investment. A comparison of Tier 4 diesel locomotives with electric locomotives shows that many of the performance objectives are met with electric locomotives (Figure 1). Electrification requires significant investments in both rolling stock and infrastructure. To convert rolling stock, an electrified locomotive costs at least $11- 12 million as compared to a Tier 4 diesel locomotive at $6.3-6.4 million. Alternately, conversion to EMUs which can be self-propelled without locomotives, costs approximately $6 million per EMU/car as compared to a non-propelled passenger car which costs approximately $3 million.

Figure 1: Performance Comparison of New Tier 4 Diesel Locomotive v. Electric Locomotive

New Locomotive Electric Locomotive Feature (F125) Immediate Reliability High High Horsepower 4,700 HP 8,000 HP Top Speed 125 mph 125 mph HSR Speed Compatible Compatible Compatibility Crash Energy Yes Yes Management Regenerative Yes Yes (as an option) Braking HEP Back-up Yes Yes (as an option) System Emissions Tier 4 Zero local emissions One locomotive One locomotive Performance needed for grades and needed for grades and Capability express service express service

21 The investment in infrastructure is also significant. For example, the Peninsula Corridor Joint Powers Authority, operator of Caltrain commuter rail service between Gilroy and San Francisco is pursuing an electrification project for the 56 mile portion of its 77 mile single route which runs between San Francisco and San Jose. This project is partially funded by the California High Speed Rail Project since it sets the stage for joint operation of high-speed rail service and Caltrain commuter rail service. Caltrain’s current estimate for cost for infrastructure, including EMUs is approximately $1.5 billion. Using this recent estimate, as well information from previous analyses of electrification, staff estimates that the total cost of electrification for the entire Metrolink network (infrastructure and rolling stock) could exceed $8 billion. More detailed studies would be needed to provide a more detailed and substantial estimate.

In the future, electrification of Metrolink’s entire 388 mile system can be a viable and attractive solution. However, several steps should be resolved before significant investments in electrification may be justified. First, the alignment and mode of operation of the state high-speed rail system should be defined, particularly the section between Palmdale and Anaheim. This would provide greater definition on the extent of opportunities for joint operation, similar to Caltrain. High Speed Rail Authority infrastructure investments along this entire corridor still needs to be defined and is likely many years away. Second, significant capacity enhancements (double and triple tracking and sidings) are necessary to enable the density of service that justifies electrification. Third, agreements with freight railroads on electrification of track infrastructure are necessary for both Metrolink controlled rights-of-way and freight-controlled rights-of-way. Freight operations are integrated much more significantly in Southern California than along the Caltrain right-of-way in the Bay Area. These three factors have profound influence of how the Metrolink system operates and are thus important to resolve in order to move forward with any strategy to electrify.

It is also worth noting that many technologies for alternative propulsion for locomotives can be considered for implementation. As a condition of accepting the SCAQMD grant for the first 20 Tier 4 replacement locomotives, the Authority agreed to make five of the retired units available for alternative energy testing. This will allow the Authority to demonstrate alternative(s), which may be suitable for its unique conditions. Testing will begin after a fully funded program is in place, which is anticipated in 2017.

22 ATTACHMENT B

Current Projected Cash Flow Requirements for 20 New Locomotives ($ in millions)

Quantity FY2015-16 FY2016- 17 FY2017- 18 Total

10 PH/PHIs $ 23.87 $ 14.71 $ 25.92 $ 64.50 7 PHRs $ 16.71 $ 14.71 $ 13.74 $ 45.16

3 Expansion (F-125s) $ 7.16 $ 4.41 $ 7.78 $ 19.35 20 Total $ 47.74 $ 33.83 $ 47.44 $ 129.01

Numbers rounded for presentation purposes

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 8

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Contract No. JO117-16 – Track Rehabilitation Services – Contract Award – Veolia Transportation Maintenance and Infrastructure, Inc.

Issue

Track rehabilitation services are required to prevent deterioration of the existing track structure by using a systematic program to replace infrastructure assets.

Recommendation

Alternative

The Board may reject all bids and direct staff to issue a new Invitation for Bid (IFB).

Background

California Public Contract Code, Section 20128.5, permits the Authority to enter into individual contracts at a maximum value of $4,000,000.

Since 2000, the Authority has awarded twenty-eight Job Order Contracts (JOCs) in accordance with Public Contract Code Section 20128.5, which permits AUTHORITY to enter into individual contracts for repair, remodeling and other repetitive work by JOCs, for a term of one year.

Work under Contract No. JO117-16 will include track rehabilitation, such as replacement of turnouts, replacement of failed wood crossties, rehabilitation of grade crossings and replacement of rail primarily in the River, Valley, Orange, San Gabriel, and Ventura subdivisions although work may be authorized and performed anywhere on the system.

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 24 Contract No. JO117-16 – Track Rehabilitation Services Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

The Authority issued an Invitation for Bid (IFB) on May 28, 2015. The solicitation was posted on the Authority’s website, advertised in publications in the five member counties, the Dodge Construction News and notices were sent directly to firms registered on the Authority’s website. Thirty-four (34) firms downloaded the solicitation and four firms attended the pre-bid conference held on June 10, 2015. Three bids were received and publicly opened on July 1, 2015, as follows:

Bidder Bid Amount

RailWorks Track Services, Inc. $6,157,463.00

Veolia Transportation Maintenance & $6,910,804.13 Infrastructure, Inc. (VTMI)

Herzog Contracting Corp. $7,257,355.00

Bids were submitted on the basis of typical work which is a hypothetical estimated work description for a “menu” of representative tasks (bid items) established by the Authority.

The unit prices submitted by a bidder establish the pricing that the bidder will be held to when performing work on individual job orders on an as-needed basis.

Bids received represent the aggregate of the unit prices required as listed above.

The Engineer’s estimate of $6,623,100.00 was prepared using the same hypothetical “menu” of representative bid items included on the bid forms and was prepared prior to submittal of bids by the contractors.

This project is funded in part by grants from the Federal Transit Administration (FTA), therefore Bidders were required to meet a Disadvantage Business Enterprise race conscious goal of four percent.

RailWorks Track Services (Railworks) the lowest bidder did not submit with their bid any DBE subcontractors and did not commit to a DBE contract goal. In accordance with the requirements of the IFB, within 48 hours of bid submittal, the Authority requested that Railworks provide their Good Faith Efforts (GFE) to indicate that they made the necessary steps to meet the DBE requirements of the IFB. The GFE requires Bidders to respond to 8 steps at 10 points per step, with a minimum of 60 points to meet the GFE requirements. Railworks’ submittal, as reviewed and assessed by the Authority’s DBE consultant did not meet the 60 point minimum and failed to meet all 8 steps. Their submittal did not provide any adequate proof or documentation indicating that efforts were made 10 days prior to bid submittal, to recruit any DBE subcontractors by advertising or providing proof of contacting DBE subcontractors. Therefore, Railworks submittal did not meet the requirements and was deemed non-responsive to the Authority’s DBE Program requirements.

25 Contract No. JO117-16 – Track Rehabilitation Services Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

VTMI and Herzog met and committed to meeting the 4% DBE race conscious goal.

VTMI, the second responsive and responsible bidder met all the requirements including meeting and committing to a Disadvantaged Business Enterprise (DBE) contract goal of four percent that was established for this U.S. Department of Transportation (DOT) assisted contract.

A bid comparison performed by staff indicated that VTMI’s unit prices, when compared to the Engineer’s estimate, were higher in the areas of track material, concrete and welding because the engineer’s estimate was based on past bid result data. VTMI’s unit prices are approximately 6% higher than the Engineer’s Estimate, but an average of all three bids submitted indicates that their unit prices are fair and reasonable.

As authorized by California Public Contract Code Section 20128.5, under this JOC contract, the Authority will engage VTMI for a one-year term to perform track rehabilitation, repair, remodeling or other repetitive work under individual job order tasks on an as- needed basis subject to the maximum contract authorization of $4,000,000. Compensation for the work will be based on the unit prices reflected in VTMI’s bid.

VTMI is the Authority’s current track and structure maintenance contractor and is providing satisfactory services.

VTMI, a responsive and responsible bidder, met all the requirements of this procurement, including certification to comply with the Buy America requirements in accordance with 49 USC Section 5323(i)(1) and 49 CFR Part 661.5, and is recommended for award.

Budget Impact

Funding for track and culvert rehabilitation services is included in the FY2013-14, and FY2014-15, Rehabilitation Budgets or will be recollectable under third party agreements. Federal funding comes in part from grants from the Federal Transit Administration (FTA). Work under this contract will be authorized by specific job orders. Actual funding commitments for those projects handled through the job order process are encumbered on a per project basis at the time the individual job order is approved and issued.

Prepared by: Aaron Azevedo, Project Engineer I Manchi Yi, Senior Contract & Compliance Administrator Lia McNeil-Kakaris, Assistant Director, Contracts and Procurement

Gary Lettengarver Chief Operating Officer

26 Contract No. JO117-16 – Track Rehabilitation Services Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 4

Sam Joumblat Chief Financial Officer

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 9

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Contract No. QM145-15 – External Audit Services – Increase Contract Funding Authorization – Moss Adams LLP

Issue

An increase in the contract funding authorization for Moss Adams LLP is required due to include additional procedures necessary when completing the FY14 Comprehensive Annual Financial Report.

Recommendation

Alternatives

The Board may:

1) Decline to increase the contract funding authorization; or

2) Modify the amount of the increase in contract funding authorization

Background

Public agencies are required to have an independent outside auditing firm conduct a Comprehensive Annual Financial Report (CAFR) and Single Audit of the Authority’s financial statements for the preceding fiscal year.

At the July 12, 2014 meeting, the Board awarded competitively procured Contract No. QM145-15 to Moss Adams LLP to perform external audit services for a period of three years with one two-year option for a total not-to-exceed amount of $487,770. This amount was based on estimated costs for each year’s audit.

One Gateway Plaza, Floor 12 – Los Angeles, CA 90012 28 Contract No. QM145-15– External Audit Services – Increase Contract Funding Authorization Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2 In May 2013, the Authority migrated from Oracle 11i to Oracle R12 with additional capability, including Grants Management. As part of the system conversion many transactions did not process correctly in the system, which required extensive research from the finance team in order to close the books for the year. This delayed the start of the audit. Due to the turnover in the finance department during 2014, there was a lack of knowledge transfer of historic information and processes. During the audit, Moss Adams discovered several additional instances and balances that required appropriate research and correction by staff and additional review by Moss Adams. Moss Adams had initially estimated an amount of $179,800 for the first year audit, but due to difficulties in completing the audit, the additional hours required to finalize the audit resulted in an increase of $70,000.

This increase is based on fully burdened labor rates that were included in Moss Adams’ original proposal and were used to price the additional hours required to complete the audit.

Therefore, it is recommended that the Board authorize the Chief Executive Officer to amend Contract No. QM145-15 for External Audit Services with Moss Adams LLP by increasing the contract amount of $487,770 by $70,000 to a new total not-to-exceed contract funding authorization amount of $557,770.

A letter received from Moss Adams regarding these additional expenses is included as Attachment A for reference.

Budget Impact

Funding for the External Audit Services is included in the FY2014-15 Operating Budget.

Prepared by: Thomas Franklin, Director of Finance Manchi Yi, Senior Contract & Compliance Administrator Lia McNeil-Kakaris, Assistant Director, Contracts and Procurement

Sam Joumblat Chief Financial Officer

29 Attachment A

June 25, 2015

Mr. Sam Joumblat Southern California Regional Rail Authority One Gateway Plaza, 12th Floor Los Angeles, California 90012

Re: FY 2014 Audit Services

Dear Sam:

Moss Adams and Southern California Regional Rail Authority executed a contract QM145‐15 for external audit services effective October 15, 2014. Moss Adams had initially estimated an amount of $179,800 for the first‐year audit, but due to difficulties in completing the audit, additional hours were required and incurred to finalize the audit. This additional effort resulted in an increase of audit fees for the FY 2014.

In May 2013, the Authority migrated from Oracle 11i to Oracle R12 with additional capability, including Grants Management. As part of the system conversion, many transactions did not process correctly in the system, which required extensive research from the finance team in order to close the books for the year. This delayed the start of the audit. Due to the turnover in the finance department during 2014, there was a lack of knowledge transfer of historic information and processes. During the audit, Moss Adams discovered several additional instances and balances that required appropriate research and correction by staff and additional review by Moss Adams. As a result, we are requesting an amendment to the contract QM145‐15 for a one‐time increase of FY 2014 audit fees by $70,000.

At this time we believe that audit fees stated in the contract for the remaining two fiscal years are adequate, unless unanticipated circumstances cause change in scope or unexpected issues arise.

Thank you for your consideration of this request. We very much appreciate our partnership with the Southern California Regional Rail Authority, and we look forward to working together in the future.

Please contact me at 425‐551‐5712 should you have any questions.

Sincerely,

Olga A. Darlington For Moss Adams LLP

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 10

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Approval of Evaluation Criteria – Request for Proposal No. SP448-16 – Classification and Compensation Plan Review

Issue

Proposed evaluation criteria have been developed to initiate a competitive procurement to seek a qualified firm to provide a Classification and Compensation Plan Review for the Authority.

Recommendation

It is recommended the Board approve and recommend the proposed evaluation criteria detailed in Attachment 1 specifying a weighting of eighty percent (80%) for technical qualifications and twenty (20%) for cost to seek a contractor to provide a review and recommendations for updating the Authority’s Classification and Salary Plan in accordance with Human Resources Policies and Procedures 2.1, Wage and Salary Administration – Salary Program Administration, 1.0 Procedures, 1.11 Maintenance of Salary Structure. The proposed evaluation criteria summarized below and detailed on Attachment 1, are consistent with the format and guidelines in Board-approved Contracts Administration and Procurement Policies and Procedures CON-7, Technical and Cost Criteria and Weights.

Alternatives

The Board may:

1) Recommend different proposal evaluation criteria or modify the proposed weights; and/or

2) Request a delay in the request to engage a consultant for a Classification and Compensation Plan Review.

Background

The Authority is seeking a firm to provide a Classification and Compensation Plan Review as required by Board approved Human Resources Policies and Procedures 2.1, Wage and Salary Administration – Salary Program Administration, 1.0 Procedures, 1.11 Maintenance of Salary Structure.

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 31 Approval of Evaluation Criteria – Request for Proposal No. SP448-16 – Compensation Analysis Study Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

In early 1998, the Board of Directors contracted with the Hay Group to perform a classification and compensation study. In March, 1999 after reviewing the results, the Board approved a Salary and Grade Structure and a Hay System for evaluating positions in the Classification and Salary Plan. The Board also approved policies and procedures for salary administration. The Hay System process and requirements became cumbersome over the years for a small Human Resources department and changes to the classifications were implemented based on a benchmarking process in lieu of using the very detailed Hay System point factor process. There are 234 unique job classifications within our current Plan.

Subsequent to the Board approval and formal adoption of the plan in 1999, the stand alone salary and grade structure was updated consistent with market trends each year until 2008. There was a small market study completed in 2006 resulting in the movement of a small number of positions within the grade structure. In 2010, a new Chief Executive Officer was hired and there were a number of re-organizations and increased hiring. As a result, in 2011, a market study was initiated to ensure that jobs were placed in the appropriate grade level. However, due to changes in leadership the implementation of the study was not consistently applied.

In addition, during the period, 2008 to 2012, the Board did not take any action to increase the salary grade structure and employees did not receive merit increases based on their performance causing the salaries to fall behind the market for similarly situated positions. In 2013, the Board approved a merit increase of three percent and in 2014, a Cost of Living Adjustment (COLA) of 1.14 percent. In both instances, new employees received prorated adjustments based on their time in position.

More recently, on June 26, 2015, the Board approved a salary resolution adjusting the salary grade and range structure by three percent and approved an updated classification and salary plan with the addition of several new job families. A three percent merit increase was also included with the budget to be implemented for employees who achieve performance milestones in accordance with the Board approved policy.

While the most recent actions of the Board will assist with bringing the compensation of current employees closer to market and the structure increase will assist with attracting new hires, it has been many years since the entire plan was reviewed. With the enactment of pension reform and the Authority having the lowest formula for retirement, it has become extremely difficult to retain current employees and compete in the market place for new hires. Therefore, it is prudent, at this time, to complete a full classification and compensation plan review.

Staff developed the evaluation criteria summarized below and detailed in Attachment 1 to secure a qualified and experienced firm whose proposal is the most advantageous to the Authority. The period of performance of the resulting contract is proposed to be one year with an estimated contract value of $250,000 for the term of the contract.

32 Approval of Evaluation Criteria – Request for Proposal No. SP448-16 – Compensation Analysis Study Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Evaluation Criteria:

Qualifications of Firm/Subcontractors/Staff 20% Project Management Understanding and Approach 45% Interview 15% Cost 20%

Budget Impact

Although the process of adopting evaluation criteria has no budget impact, funds for this project have been included in the proposed FY2015-16 Operating Budget.

Prepared by: Irene Shapiro, Manager, Human Resources Andrew Conriquez, Senior Contract & Compliance Administrator Lia McNeil-Kakaris, Assistant Director, Contracts & Procurement Patricia Francisco, Director, Human Resources

Patricia Torres Bruno Chief Administrative Officer

Sam Joumblat Chief Financial Officer

33 Approval of Evaluation Criteria – Request for Proposal No. SP448-16 – Compensation Analysis Study Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 4

ATTACHMENT 1

Request for Proposal No. SP448-15 Classification and Compensation Plan Review Proposed Evaluation Criteria Proposals will be evaluated based on the following: Qualifications of Firm/Subcontractors/Staff 20%  Demonstrated experience and expertise of the firm in completing the work and post implementation support for a Classification and 10 Compensation Plan Review  Demonstrated technical expertise, experience, financial stability and staff capacity to complete the study and support 10 implementation recommendations

Project Management Understanding and Approach 45%  Demonstrated understanding and detail provided in the Scope of Services, proposer’s Work Plan, Project Schedule, the ability to 30 meet the deadlines and the business process proposed for completing the work  Thoroughness in identifying the key personnel including subcontractors who have the appropriate expertise and who have 10 worked on projects similar to this specific assignment  Indication of the proposer’s unique qualifications to provide the required services and ability to complete the services within the project deadline. In particular, ability to gain access to data that 5 may not be readily available such as access to data for commuter rail properties and freight railroads

Interview 15%  Conversant in the relevant topics and terms necessary to complete the assignment and support implementation of the 5 recommendations  Indicated readiness to begin the project 5  Ability to provide a realistic timeline 5

Cost 20%  Reasonableness and competitiveness of costs as compared to other proposers to include detailed activities, hours and hourly rate 20 schedules; indirect expenses and cost of implementation consultation and support

100%

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 11

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Fare Policy Study Update

Issue

The Authority is conducting a study to optimize fares and fare policy with the goal of increasing revenue while growing ridership. This item provides an update of current findings.

Recommendation

The Board may receive and file this report.

Discussion

At its February 13, 2015 meeting, the Board directed staff to undertake a comprehensive review of Metrolink’s fares and fare policy to identify opportunities for increasing revenue and ridership. In response to this request, staff kicked off an extensive fare policy study led by a cross-departmental task force and a consultant team of national leaders in fare policy at CH2M Hill (CH2M) and LTK Engineering Services (LTK). A work plan and time line were presented at the June 26, 2015 Board meeting, at which time the Board requested an update to be provided at the July Board meeting.

Commuter Rail Peer Review CH2M has completed a peer review of other commuter rail agencies which included a combination of older and newer, as well as larger and smaller commuter rail systems serving major metropolitan in North America (Figure 1). An attempt was made to select a range of peer agencies that exhibit characteristics that would be instructive for evaluating Metrolink’s fare policy. Criteria for assessing peer agencies included:

 System size (route miles and ridership)  Number of lines and service characteristics  Interface with multi-modal transit systems  Fare structure (zones vs. station-to-station)  Ticket types and discounts  Farebox recovery ratio

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 35 Fare Policy Study Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

 Fare collection / fare enforcement practices  Transfer policies

None of the peers provide a direct match with the Metrolink system. However, each peer has some aspect of their service that is similar to Metrolink and can offer insights about industry best practices in dealing with challenges that are also faced by Metrolink.

A summary of selected peer agency characteristics is presented in Figure 1. Metrolink has the riders with the longest average trip length and the longest distance between stations of any of the peers. Metrolink is also one of the systems with the lowest level of service (train hours) given the size of the system (based on route miles). This, in part, explains Metrolink’s low ridership per train hour. It also suggests a high reliance on long-distance trips for ridership and revenue.

Figure 1: Peer Agencies and Key Metrics

Avg Total 2012 Passenger Year Directional Avg Miles 2012 Boardings Trip Operations No. of Route btwn 2012 Unlinked Train / Train Length Metro Area Began Stations Miles Stations Boardings Hours Hour (miles) Metrolink Los Angeles 1992 55 777.8 7.1 13,155,800 66,100 199 33 Caltrain San Francisco 1987 32 153.7 2.4 12,999,300 36,800 353 21.5 GO Transit Toronto 1967 63 281.3 2.2 47,102,100 n/a n/a 27.9 Long Island Rail Road New York 1834 124 638.2 2.6 96,953,120 242,085 400 21.5 MBTA/Commuter Rail Boston 1964 137 776.1 2.8 36,083,900 133,200 271 20.2 Metra Chicago 1984 241 980.4 2 74,246,600 229,800 323 22.7 NCTD/Coaster San Diego/Oceanside 1995 8 82.2 5.1 1,624,211 6,932 234 27.5 NJT/Commuter Rail New York 1979 164 1,001.80 3.1 81,353,900 272,900 298 23.4 SEPTA/Regional Rail Philadelphia 1966 154 446.9 1.5 36,899,200 188,100 201 14.2 Sound Transit/Sounder Seattle 2000 12 163.8 6.8 2,803,100 6,500 429 22.2 TriRail Miami 2003 17 142.2 4.2 4,005,967 32,960 122 28.8 UTA/FrontRunner Salt Lake City 2008 16 174.5 5.5 1,905,100 23,300 82 26.7 Peer Average 88 440.1 3.5 35,997,900 116,800 271 23.3

Sources: National Transit Database, FY 2012 Bureau of Labor Statistics, 2012 CPI-U Annual Average, 1982-84 = 100; US city average = 229.6 GO Transit, Info to GO (January 2014); boardings are FY2011 ridership

A review of financial performance metrics for the various peer agencies reveals that Metrolink’s average fare $0.18 per passenger mile is close to the average of all peers (Figure 2). Likewise, Metrolink has a farebox recovery ratio that is near the peer average (Figure 3). The data also show a strong correlation between average fare per passenger mile and farebox recovery ratio for Metrolink and its peers: as the average fare declines so does the farebox recovery ratio. Conversely, peers with higher farebox recovery ratios also tend to have higher average fares. For both characteristics Metrolink is near the middle of the range.

36 Fare Policy Study Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Figure 2. Figure 3.

Customer Survey As part of the stakeholder outreach, CH2M also conducted an online customer survey of current and former Metrolink riders. The survey was designed to understand how Metrolink customers use the system and their preferences for different fare alternatives.

A total of 4,339 survey responses were received, representing a broad cross-section of Metrolink customers with a fare media usage that is proportionately representative of overall Metrolink ridership.

Forty-seven percent of survey respondents said that they make a transfer to other transit services to complete their trip (Figure 4). They also indicated their likely response to a possible elimination of free transfers. Sixty-three percent of those riders who currently transfer indicate that they would take Metrolink less frequently, or not at all, if they were forced to pay for their transfers.

37 Fare Policy Study Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 4

Figure 4. Response to Change in Transfer Policy

If Metrolink Tickets Were No Longer Accepted as Transfers

Would stop taking Metrolink 36%

Would ride Metrolink less often 27% I would continue riding Metrolink 26%

Other 6%

Walk 2%

Don't know 2%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Survey respondents also shared their most preferred method for purchasing Metrolink tickets (Figure 5). More than half (58%) preferred mobile tickets through a smartphone app (31%), or online tickets for printing at their computer (27%) as their number one choice. Ticket Vending Machines were the preferred choice for 28% of respondents.

Figure 5. Purchase Preference

Q35: Number One Preference for Buying Tickets

Smartphone App 31%

Ticket vending machine 28% Online using a computer and printer 27% My employer 7%

Ticket window 4%

City Hall 1% Convenience store or supermarket 1%

0% 5% 10% 15% 20% 25% 30% 35%

Survey responses also included 417 responses from former riders who no longer take Metrolink. The majority of these former riders (56%) have switched to driving or car-pooling,

38 Fare Policy Study Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 5 while just ten percent have switched to other transit modes. Twenty-seven percent of former riders indicated they no longer have a need to make the trip.

This data also provides insight into the reasons and motivations why Metrolink riders stop taking Metrolink. Analysis of the data and individual comments allows us to group the reasons why riders stop taking Metrolink into three categories:

1. Personal reasons, such as retirement, a new home or job, or preference for the privacy and flexibility of a car. These reasons were cited most frequently. Respondents citing personal reasons were also least likely to be motivated to ride Metrolink again.

2. Service-related issues, such as reliability, schedule convenience, and travel time, were mentioned by 44% of former riders as reason why they stopped riding Metrolink, Service-related reasons were frequently mentioned together with cost.

3. High cost of fares was mentioned by a similar proportion of former riders. Cost was mentioned most frequently in combination with service-related issues. One respondent wrote: “You need to make the quality of service match what you charge people,” which suggests that customers desire highly reliable and frequent service to match the fare levels. Respondents also suggest that service improvements would be more effective than fare decreases to motivate former riders to take Metrolink again.

Strengths, Weaknesses, Opportunities, and Threats (SWOT)

The peer review, results from the stakeholder interviews, and the customer survey conducted in May and June of this year suggest strengths, weaknesses, opportunities, and threats (SWOT) of Metrolink’s current fare policy (Attachment A). Some of the key findings include:

Strengths:  The free transfer policy has allowed Metrolink to become one of the most inter- connected commuter rail systems in the country, with half of its riders connecting with other transit systems.  Unlike most of its peers, Metrolink provides ample free parking at most of its stations.  Revenue per passenger mile (yield) is in line with most peer agencies.

Weaknesses:  High minimum fares discourage short distance travel on Metrolink.  Inconsistent policies and enforcement strategies encourage fraud and fare evasion.  Metrolink dos not serve some of the region’s high income population and employment centers and, thus, captures a smaller share of the high income commuter market than many of its peers. Growth in younger and lower income ridership segments will exert pressure on fare levels.

39 Fare Policy Study Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 6

Opportunities:  Metrolink’s fare policy is flexible enough to allow individual member agencies to experiment with different fares and fare products within their counties.  The implementation of mobile ticketing provides the opportunity for more flexible and cost effective product offerings, including multi-ride tickets.  As the only transit system to serve most of Southern California, Metrolink is best positioned to advance regional fare integration with the potential to increase revenue and ridership for all transit providers.

Threats:  An aging and unreliable fare collection system negatively impacts the customer experience and results in revenue losses.  Deteriorating service reliability reduces the value of Metrolink fares and endangers customer retention.  Infrequent off-peak service impacts Metrolink’s ability to attract off-peak ridership.  Growing price competition from external bus and rail service providers may capture market share if Metrolink is unable to maintain excellent service quality as competitive advantage.

Budget Impact

There is no immediate budget impact as a result of this update.

Prepared by: Roderick Diaz, Director, Planning and Development Henning Eichler, Planning Manager (Planning & System Performance Analysis)

Roderick Diaz Director, Planning and Development

Gary Lettengarver Chief Operating Officer

40 Attachment A

in association with

Metrolink Fare Study Technical Memo #1: SWOT Analysis July 10, 2015 41 Executive Summary

Metrolink Fare Study

Fare Study purpose: Identify/recommend fare policy approaches to increase ridership, maximize revenue

• This Technical Memorandum provides the SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats), which was informed by: – Internal Stakeholder Interviews: discussions with Metrolink staff about the current fare system, including its strengths as well as fare-related challenges facing the agency – System Performance Analysis – Literature Review: research on elasticities of demand relevant to Metrolink – Peer Review: information from peer agencies on how they have address concerns similar to those facing Metrolink – Survey of current and former Metrolink riders

• The analysis has identified: – Strengths of the existing fare policy – those aspects of Metrolink’s fare policy that work well and should be retained – Weaknesses of the existing fare policy – those aspects of the fare policy that currently do not work well and are targets for improvement or correction – Opportunities – existing or emerging opportunities that could improve the fare policy, and actions that Metrolink must take to capture such opportunities – Threats/Challenges – emerging challenges that could affect Metrolink’s fare policy, and what can be done to overcome them

• The discussions also began the process of identifying alternatives to address the weaknesses and threats and leverage the opportunities.

42 2 Executive Summary

SWOTs Findings: Strengths

Ridership and Revenue System Performance • Since FY05, Metrolink ridership has been relatively stable, increasing 10% over nine years, while revenue has increased 79% as the average fare has increased 63%.

Fare System Strengths

• Unlike most of its peers, Metrolink offers ample free parking at most of its stations.

• Metrolink’s mileage-based system with station-to-station fares maximizes equity and is most intuitive to commuters familiar with Amtrak, taxi cab, or airline travel.

• Fare types and discounts address the needs of different market segments and are in line with most peers.

• Ticket yield (revenue per passenger mile) is in line with most peer agencies.

• The free transfer policy has allowed Metrolink to become one of the most inter-connected commuter rail systems in the country, with half of its riders connecting with other transit systems.

43 3 Executive Summary

SWOTs Findings: Weaknesses

Ridership and Revenue System Performance

• Among its peers, Metrolink has one of the lowest service levels (service hours) given the system’s number of route miles.

• The farebox recovery ratio has generally declined since FY08 as fare revenue has not offset increasing operating costs, and was 43.3% in FY14. As a result, the subsidy per passenger mile has increased 36% since FY05.

Fare System Weaknesses

• High minimum fares discourage short distance travel on Metrolink.

• Inconsistent policies and enforcement strategies encourage fraud and fare evasion.

• Metrolink captures a smaller share of high income population than many of its peers. Growth in younger and lower income ridership segments will exert pressure on fare levels.

44 4 Executive Summary

SWOTs Findings: Opportunities

• Competition between Metrolink and parallel express bus services could be turned to Metrolink’s advantage by creating opportunities share services and fare products, particularly given Metrolink’s interest in attracting demand for short trips by creating fares that are more competitive with parallel bus services.

• Metrolink’s fare policy is flexible enough to allow individual member agencies to experiment with different fares and fare products within their counties.

• The implementation of mobile ticketing provides the opportunity for more flexible product offerings, including multi-ride tickets. • As the largest transit system to serve most of Southern California, Metrolink is best positioned to advance regional fare integration.

45 5 Executive Summary

SWOTs Findings: Threats

• Infrequent off-peak service impacts Metrolink’s ability to attract off-peak ridership. • An aging and unreliable fare collection system negatively impacts the customer experience and results in revenue losses. • Deteriorating service reliability reduces the value of Metrolink fares and endangers customer retention. • Growing price competition from external bus and rail service providers may capture market share if Metrolink is unable to maintain excellent service quality as its competitive advantage. • Metrolink riders are more likely to have access to a car than riders of most peer commuter rail systems, which makes them more likely to switch to driving instead of taking Metrolink.

46 6 Organization of the Technical Memorandum

Overview of the Sections

• Organization of the Metrolink Fare Study Page 8 • Fare Policy Goals & Objectives 13 • SWOT Analysis – Ridership & Revenue System Performance 18 – Target Market 27 – Elasticity Responses 44 – External Factors 52 – Fare Structure & Ticket Types 64 – Fare Pricing 81 – Fare Structure & Pricing Opportunities 94 – Rider Category Discounts 107 – Transfer Policies 115 – Fare Payment Technology 135 – Fare Enforcement 146

47 7 Organization of Metrolink Fare Study

48 Organization of the Metrolink Fare Study

Overview of the Steps of the Study

1. Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis • Stakeholder Interviews: conducted interviews to gain insight into stakeholders’ fare-related concerns and potential fare structure changes. • Literature & Peer Review: – Reviewed literature on demand elasticities, including external factors such as employment, gas prices, and auto ownership, and factors in Metrolink’s control, such as service levels and service reliability. – Gathered information from other commuter rail agencies to complete a performance benchmarking exercise, determine best practices, and learn from fare innovations implemented elsewhere. • This technical memorandum documents the strengths and weaknesses of Metrolink’s existing fare structure as well as opportunities to modify or threats to changing the fare structure. 2. Customer Research • Online Survey was conducted in June to understand how riders use Metrolink’s existing ticket types and assess rider responses to different fare options. 3. Evaluation of Alternatives • A qualitative and quantitative assessment of fare alternatives will be conducted to understand the impacts of changes to the fare structure and pricing. • Based on the evaluation of the alternatives, recommended fare alternatives will be identified. Fare Policy Recommendation: Target for implementation Nov 1, 2015

49 9 Organization of the Metrolink Fare Study

Peer Review Commuter Rail Peers • Peers selected for this study include a combination of older and newer commuter rail systems serving major metropolitan areas in North America. 2012 Year Total Avg Miles 2012 2012 Boardings Passenger Operations No. of Directional btwn Unlinked Train / Train Trip Length Metro Area Began Stations Route Miles Stations Boardings Hours Hour (avg. miles) Metrolink Los Angeles 1992 55 777.8 7.1 13,155,800 66,100 199 33.0 Caltrain San Francisco 1987 32 153.7 2.4 12,999,300 36,800 353 21.5 GO Transit Toronto 1967 63 281.3 2.2 47,102,100 n/a n/a 27.9 Long Island Rail Road New York 1834 124 638.2 2.6 96,953,120 242,085 400 21.5 MBTA/Commuter Rail Boston 1964 137 776.1 2.8 36,083,900 133,200 271 20.2 Metra Chicago 1984 241 980.4 2.0 74,246,600 229,800 323 22.7 NCTD/Coaster San 1995 8 82.2 5.1 1,624,211 6,932 234 27.5 Diego/Oceanside NJT/Commuter Rail New York 1979 164 1,001.8 3.1 81,353,900 272,900 298 23.4 SEPTA/Regional Rail Philadelphia 1966 154 446.9 1.5 36,899,200 188,100 201 14.2 Sound Transit/Sounder Seattle 2000 12 163.8 6.8 2,803,100 6,500 429 22.2 Miami/ TriRail 2003 17 142.2 4.2 4,005,967 32,960 122 28.8 Ft Lauderdale UTA/FrontRunner Salt Lake City 2008 16 174.5 5.5 1,905,100 23,300 82 26.7 Peer Average 88 440.1 3.5 35,997,900 116,800 271 23.3 Sources: National Transit Database, FY 2012; Bureau of Labor Statistics, 2012 CPI-U Annual Average, 1982-84 = 100; US city average = 229.6; GO Transit, Info to GO (January 2014); boardings are FY2011 ridership

50 10 Organization of the Metrolink Fare Study

Peer Review

Commuter Rail Peers • Metrolink has been providing commuter rail service for 23 years. The majority of Metrolink’s peers are more established and have been operating longer than Metrolink, especially the Eastern peers that date back to the Pennsylvania Railroad or earlier. Only NCTD’s Coaster, Sound Transit’s Sounder, TriRail, and UTA FrontRunner began operations more recently.

• Average miles between stations is higher for Metrolink (7.1 miles) than all of these peers, except Sounder (6.8 miles). The average distance between stations for most peers is between 2-3 miles.

• Metrolink’s average passenger trip length (33.0 miles) is notably higher than all of its peers, which range from 14.2 miles (SEPTA) to 28.8 miles (TriRail) with an average of 23.3 miles across all of these peers.

• Metrolink’s 199 boardings per revenue train hour are lower than all but two peers (TriRail, FrontRunner). Peers range from 82 (FrontRunner) to 429 (SEPTA) boardings per revenue train hour, and average 271 across all of these peers.

51 11 Organization of the Metrolink Fare Study

Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis

• This SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis provides an understanding of Metrolink’s current fare policies and the opportunities to improve them. For the purpose of this technical memorandum, fare policy is defined to include elements such as fare structure, pricing, media, rider categories, and special fare programs

• Stakeholder interviews provided valuable insights for the Metrolink SWOT analysis. The peer review and literature review focused on topics of particular relevance to Metrolink and supplemented the results of the SWOT analysis.

• The SWOT analysis focuses on: – Fare Policy Goals & Objectives – the desired characteristics, attributes, and results of successful fare policy – Strengths of the existing fare policy – those aspects of Metrolink’s fare policy that work well and should be retained – Weaknesses of the existing fare policy – those aspects of the fare policy that currently do not work well and are targets for improvement or correction – Opportunities – existing or emerging opportunities that could improve the fare policy, and actions that Metrolink must take to capture such opportunities – Threats/Challenges – emerging challenges that could affect Metrolink’s fare policy, and what can be done to overcome them

52 12 Fare Policy Goals & Objectives

53 Fare Policy Goals & Objectives

Metrolink’s Fare Policy Goals & Objectives

• The primary objective of Metrolink’s Fare Study is to increase fare revenue and ridership.

• During stakeholder interviews, some additional goals and objectives were identified to help guide the Fare Study and provide the basis for evaluating fare alternatives: – Financial stability: establish a systemwide farebox recovery target and set fares to achieve it; provide for regular fare structure reviews and adjustments – Equitable fares: charge riders consistently based the distance traveled – Seamless transfers: enable riders to transfer easily to connecting transit providers; promote regional fare integration – Convenience: offer a variety of ticket types that serve the needs of the riders (e.g., weekend day pass) while providing for simplification of the fare system – Consistency: provide consistent discounts to specific rider categories; use consistent pricing on all Metrolink lines – Enforceability: simplify the fare structure by maintaining and enhancing ease of understanding, use, enforcement, and customer convenience and by making the media readily recognizable and durable – Competiveness: minimize ridership loss to parallel services and modes, including autos – Flexibility: identify opportunities to adjust fares to respond to market conditions and pilot alternative fare policies

54 14 Fare Policy Goals & Objectives

Peers’ Fare Policy Goals & Objectives

• Public transportation providers commonly establish goals and objectives for their fare policies.

• For example, in developing the original Metrolink fare policies, Metrolink’s overall goal was to attract ridership. The fare policy development was also guided by the following objectives: – Maximize ridership within revenue requirements. – Maximize equity: fare should reflect cost of providing the trip and distance traveled. – Fare should encourage long distance commutes. – Discount pre-paid fares.

• While the wording of fare policy goals and objectives are unique and specific to the conditions of each agency faces, the overall goals typically address ridership and/or revenue, with supporting strategies for achieving them.

• Increasingly, attention is directed to the role of fare policies and payment methods to support regional mobility, as well as factors to consider in setting prices. It is interesting to note that other agencies encourage customers to use other transit services to access their systems and/or promote seamless interagency travel, but only Metrolink’s fare policy funds those transfers and reimburses connecting agencies for allowing free transfers to customers with Metrolink fares.

• The following tables compare fare policy goals and objectives for many of Metrolink’s peer commuter rail agencies.

55 15 Fare Policy Goals & Objectives

Peers’ Fare Policy Goals & Objectives

• Increasing ridership and meeting revenue needs, Goals/Objectives Metrolink Caltrain GO Transit Metra NJT Sound Transit UTA including farebox Ridership recovery targets, are Increase ridership     primary fare policy goals Increase ridership while maintaining financial stability and objectives. Minimize impacts/transitions of fare changes   • Ease of understanding, Balance revenue and ridership maximization  consistency, and Ensure customer satisfaction/acceptance   simplicity of fare policies Recognize value of convenience, ability to pay   are also important. Ease of understanding (customers, fare enforcement)    Consistent ticket types and discounts  Simple to use/convenient fare payment options/seamless   travel Revenue Meet revenue goals/needs      Target a specific farebox recovery ratio    Maintain/improve financial health  Maximize revenues  Keep pace with inflation  Improve fare collection and reconciliation   Reduce costs of fare collection  

56 16 Fare Policy Goals & Objectives

Peers’ Fare Policy Goals & Objectives

• Agencies are using fare Goals/Objectives Metrolink Caltrain GO Transit Metra NJT Sound Transit UTA policies to encourage Regional Mobility use of transit services to Improve regional mobility  feed rail and improve Promote regional fare integration  regional mobility. Encourage use of transit services to feed rail     Promote seamless interagency travel  • When pricing fares, Pricing Considerations agencies consider the Market factors   cost of providing service Federal/State requirements (fare discounts)   and distance traveled. Consistent distance-based pricing   Cost of providing service      • More agencies are also Distance traveled/equity    moving toward adopting Service factors/level of service  multi-year fare policies Discount for prepaid fares  to facilitate the fare Reward frequent use   change process and Encourage off-peak, weekend, occasional ridership  avoid infrequent and Travel time, speed  significant fare Encourage local travel   increases. Coordinate pricing with other transit modes  Encourage long distance commutes   Fare Changes Pilot/test fare structure changes   Regular fare adjustments  

57 17 SWOT Analysis Ridership & Revenue System Performance

58 SWOT Analysis: Ridership & Revenue System Performance

Ridership and Revenue

Metrolink Ridership and Revenue • Since FY05, Metrolink ridership has been relatively 90 $8.00 stable while revenue has grown as the average fare has 80 $7.00 increased. 70 $6.00 • Between FY05 and FY14:

60 $5.00 – Ridership increased by 10%. 50 – Revenue increased by 79%. $4.00 40 Fare Average – Avg fare increased by 63%. $3.00 30 Revenue ($, millions)/Ridership (millions) millions)/Ridership ($, Revenue $2.00 20

10 $1.00

0 $0.00 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Revenue Ridership Average Fare

Source: SCRRA FY 2014 Comprehensive Annual Financial Report, p.74

59 19 SWOT Analysis: Ridership & Revenue System Performance

Ridership Annual Ridership (millions) 14.0 12.68 • Metrolink ridership began 12.25 12.02 12.24 12.01 11.98 12.08 11.27 11.75 12.0 10.69 declining in FY09 during the

Millions recession. Since FY08, 10.0 ridership is down 7%. While 8.0 ridership has begun to 6.0 stabilize again, it has not recovered to prerecession 4.0 ridership levels. 2.0 • Most significantly, average 0.0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 weekday ridership has declined by 11% since FY08. Average Weekday Ridership • Weekday riders account for 50,000 47,210 45,640 45,311 45,444 44,390 about 90-95% of ridership. 41,823 42,388 42,359 42,180 40,147 This has been declining as 40,000 weekday ridership has 30,000 declined and weekend ridership has increased. 20,000 • Between FY09 and FY14, 10,000 weekend ridership has increased by 41%. Growing 0 weekend ridership has offset FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 some of the ridership loss Source: SCRRA FY 2014 Comprehensive Annual Financial Report, p.74 Metrolink has experienced.

60 20 SWOT Analysis: Ridership & Revenue System Performance

Service Levels and Travel Patterns Service Hours 100,000 • Between FY05 and FY14, 78,658 74,611 77,310 Metrolink has increased 75,000 66,949 68,136 70,387 69,912 68,371 service hours by 27%. 61,793 63,674

50,000 • Between FY05 and FY13, passenger miles traveled increased by 29%. 25,000 • Between FY05 and FY13, 0 passenger miles travel per FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 boarding increased by 3%.

Passenger Miles Traveled per Boarding • Most of the growth in 40 34.5 34.6 passenger miles traveled is 33.7 34.2 34.4 34.3 34.4 34.4 33.0 due to increases in ridership. 30

0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Sources: (top) SCRRA FY 2014 Comprehensive Annual Financial Report, p.76; (bottom) National Transit Database, FY 2013

61 21 SWOT Analysis: Ridership & Revenue System Performance

Fare Revenue Annual Fare Revenue $90.0 $84.36 $85.67 $79.99 • Generally, fare revenue has $73.06 $74.17 $75.0 $69.89 $69.34 increased each year. Fare Millions $62.28 revenue increased by 79% $60.0 $54.66 $47.81 from FY05 to FY14. $45.0 • The increase in fare revenue $30.0 is primarily due to fare $15.0 increases and a 63% increase in the average fare $0.0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 from FY05 to FY14.

Average Fare $8.00 $7.29 $6.99 $6.58 $6.68 $5.97 $5.51 $5.78 $6.00 $5.18 $4.47 $4.46 $4.00

$2.00

$0.00 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Source: SCRRA FY 2014 Comprehensive Annual Financial Report, pp.71 and 74

62 22 SWOT Analysis: Ridership & Revenue System Performance

System Productivity Boardings per Service Hour 192.4 200 179.5 186.1 173.1 173.9 171.7 • In the last 10 years, 164.8 160.5 156.2 149.4 Metrolink has increased 150 service hours by 27%.

100 • Metrolink ridership has been relatively flat and has not kept pace with the increase 50 in service hours. As a result, service productivity 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 (boardings per service hour) has dropped significantly, Farebox Recovery Ratio 22% since the peak in FY06. 49.7% 49.9% 50% 45.4% 45.5% 44.9% 45.0% 42.6% 43.3% 43.7% 43.3% • The farebox recovery ratio 40% continues to decline and fare revenue has not offset 30% increasing operating costs.

20%

10%

0% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 Source: SCRRA FY 2014 Comprehensive Annual Financial Report, pp. 71, 74, and 76

63 23 SWOT Analysis: Ridership & Revenue System Performance

Cost Effectiveness Fare Revenue per Passenger Mile $0.25 • The ratio of the fare revenue

$0.19 $0.18 per passenger mile to $0.20 $0.17 $0.18 $0.16 $0.17 subsidy per passenger mile $0.15 $0.15 $0.13 $0.14 is close to 1:1.

$0.10 • Between FY05 and FY13, fare revenue increased by $0.05 76%, while the fare revenue per passenger mile $0.00 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 increased by only 37%.

Subsidy per Passenger Mile • The subsidy per passenger $0.25 mile has increased by 36% $0.20 since FY05. $0.19 $0.19 $0.20 $0.18 $0.18

$0.14 $0.15 $0.13 $0.13 $0.13 $0.12

$0.10

$0.05

$0.00 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Sources: SCRRA FY 2014 Comprehensive Annual Financial Report, pp. 71 and 72; National Transit Database, FY 2013

64 24 SWOT Analysis: Ridership & Revenue System Performance

FY14 Ridership by Line

Metrolink Lines Antelope Valley ~1.8 million (16%)

Inland Empire- Orange County (IEOC) ~1.3 million (11%)

Orange County ~2.5 million (22%)

Riverside ~1.2 million (10%)

San Bernardino ~3.2 million (28%)

Ventura County ~1.0 million (9%)

91 ~0.6 million (5%)

65 Source: SCRRA FY 2014 Comprehensive Annual Financial Report, p. 6 25 SWOT Analysis: Ridership & Revenue System Performance

Ridership and Revenue by Line Revenue $30 • The San Bernardino Line has the highest

$25 $23.91 Metrolink ridership and revenue, followed by the

Millions $20 $20.82 Orange County Line and Antelope Valley Line.

$15 $12.35 $10 $9.50 • The other lines have less ridership and revenue. $8.31 $5 $6.59 To a certain extent this is reflected by the lower $4.42 $0 service levels on these lines. FY09 FY10 FY11 FY12 FY13 FY14 Antelope Valley IEOC Orange County Riverside San Bernardino Ventura 91 Ridership 4.0

3.24 3.0 Millions 2.53

2.0 1.84 1.27 1.23 1.0 1.02 0.61 0.0 FY09 FY10 FY11 FY12 FY13 FY14 Antelope Valley IEOC Orange County Riverside San Bernardino Ventura 91 Source: SCRRA Fare Revenue and Ridership Reports

66 26 SWOT Analysis Target Market

67 SWOT Analysis: Target Market

Service Area Population by County

Metrolink Service Area Population (thousands) % Change Population (1000s) FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY05-FY14 Los Angeles County 9,816.2 9,798.6 9,780.8 9,785.5 9,801.1 9,818.6 9,887.3 9,951.7 10,017.1 10,116.7 3.1% Orange County 2,956.8 2,956.3 2,960.7 2,974.3 2,990.8 3,010.2 3,047.9 3,085.4 3,114.4 3,145.5 6.4% Riverside County 1,895.7 1,975.9 2,049.9 2,102.7 2,140.6 2,189.6 2,226.9 2,264.9 2,292.5 2,329.3 22.9% San Bernardino County 1,921.4 1,959.7 1,989.7 2,009.6 2,019.4 2,035.2 2,055.6 2,077.5 2,088.4 2,112.6 10.0% Ventura County 796.0 799.0 803.6 809.0 815.3 823.3 828.3 834.4 839.6 846.2 6.3% 5-County Population 17,386.1 17,489.6 17,584.6 17,681.1 17,767.2 17,877.0 18,045.9 18,213.8 18,351.9 18,550.3 6.7% Year-to-Year Change 0.6% 0.5% 0.5% 0.5% 0.6% 0.9% 0.9% 0.8% 1.1% Boardings 10,693.3 12,251.2 12,018.9 12,681.0 12,241.8 12,005.8 11,270.2 11,977.5 12,075.4 11,748.6 9.9% Year-to-Year Change 14.6% -1.9% 5.5% -3.5% -1.9% -6.1% 6.3% 0.8% -2.7% Boardings per Service 0.62 0.70 0.68 0.72 0.69 0.67 0.62 0.66 0.66 0.63 3.0% Area Population Source: SCRRA FY 2014 Comprehensive Annual Financial Report, p. 73; U.S. Census data

• Over the last decade, Metrolink boardings have increased 9.9%, while the population of the 5- county area grew 6.7%. Boardings also fluctuated more notably than population, which generally increased at a constant rate.

68 28 SWOT Analysis: Target Market

Service Area Population by County

Metrolink Service Area Population Demographics • Population demographics for the % Change Metrolink service area indicate that: Per Capita Income CY05 CY08 CY13 FY05-FY13 FY08-FY13 – In Los Angeles and Ventura Los Angeles County 36,513 42,114 46,530 27% 10% Orange County 47,172 51,688 54,519 16% 5% Counties, per capita incomes Riverside County 28,873 30,808 33,278 15% 8% are more than keeping pace San Bernardino County 27,806 30,524 32,747 18% 7% with inflation (as measured by Ventura County 42,079 46,348 50,507 20% 9% the growth in CPI); margins CPI-U (Los Angeles/Orange County/Riverside) 18.7% 7.6% are closer in the rest of the % Change Percent of Ethnic Riders CY06 CY08 CY14 FY06-FY14 FY08-FY14 service area. San Bernardino Line 70% 69% 70% 0% 1% – The service areas in Orange Riverside Line 78% 79% 73% -6% -8% and Ventura Counties have the Antelope Valley Line 55% 54% 60% 9% 11% highest per capita incomes of Ventura County Line 39% 42% 41% 5% -2% all five counties. Orange County Line 51% 50% 50% -2% 0% Inland Empire - Orange County Line 48% 51% 46% -4% -10% – Non-Caucasian riders have 91 Line 61% 57% 61% 0% 7% accounted for at least half of Source: SCRRA FY 2014 Comprehensive Annual Financial Report, p. 73 Metrolink’s boardings since Per capita income for CY14 not yet available’ CY13 is shown instead Percent of ethnic riders not available for CY05; CY06 is shown instead 2008 on every line except the IEOC line.

69 29 SWOT Analysis: Target Market

Existing Ridership & Revenue by Ticket Type

FY 2015 Ridership FY 2015 Fare Revenue Weekend Weekend Pass, 6.40% Roundtrip, Pass, 4.10% Roundtrip, 12.50% 12.10% One-Way, 18.90%

One-Way, 17.00%

Monthly Pass, 56.00% 7-Day Pass, 7-Day Pass, Monthly Pass, 8.40% 9.70% 54.80%

Source: FY2015 Ticket Sales

• Majority of Metrolink riders use a monthly pass for fare payment. Monthly passes account for 56% of ridership and 55% of fare revenue. • The remainder of Metrolink riders predominately purchase one-way or round-trip tickets. • Only 8.4% of Metrolink riders use a 7-day pass. • Weekend day pass usage is low; however, weekend ridership is steadily increasing. Between FY09 and FY14, weekend ridership increased by 41%. Growing weekend ridership has offset some of the ridership loss Metrolink has experienced.

70 30 SWOT Analysis: Target Market

Travel by Time Period

FY2014 Ridership by Time Period Service Miles by Time Period Weekend Weekend Night, 9% Night, 11% Weekday Weekday AM Peak, 2% 3% Weekday AM Peak, 33% Weekday 41%

PM Peak, PM Peak, Weekday Weekday 39% 32%

Midday, Midday, Weekday Weekday 9% 21%

Source: (left) SCRRA Ridership by Time Period, (right) derived from Number of Trains Between Stations

• Majority of Metrolink ridership (80%) occurs during the AM or PM peak periods.

• Generally, the share of Metrolink ridership by time period aligns with the share of service miles.

• During the AM and PM peak periods, the share of ridership is higher than the share of service miles, indicating a higher utilization during these time periods.

• The share of the ridership during the midday on weekdays is only 9% while the share of service miles is 21%, indicating lower utilization during this time period.

71 31 SWOT Analysis: Target Market

Trip Purpose

Overall Peak, Weekday • Overall, Metrolink riders predominately use Metrolink service for commuting 14% purposes, to travel to/from work, school, or 23% business meetings.

77% 86% • During off-peak periods and on weekends, Metrolink riders are more likely to use

Work/School Trip Work/School Trip Metrolink service for discretionary, non- Non-Work/School Trip Non-Work/School Trip work/school trips.

Weekend Midday, Weekday

24% 48% 52% 76%

Work/School Trip Work/School Trip Non-Work/School Trip Non-Work/School Trip

Source: SCRRA 2015 Metrolink Rider Survey

72 32 SWOT Analysis: Target Market

Ticket Type Usage

Ticket Type by Trip Purpose 100%

75%

50%

25%

0% Work/School Trip Non-Work/School Trip Monthly Pass 59% 17% 7-Day Pass 12% 5% One-Way or Round-Trip Ticket 26% 62% Weekend Pass 1% 8% Other 2% 8%

Source: SCRRA 2015 Metrolink Rider Survey

• Metrolink riders who are using Metrolink service for commuting purposes (work/school trips) are more likely to buy 7-day and monthly passes. • Metrolink riders who are using Metrolink service for discretionary purposes (non-work/school trips) are more likely to purchase one-way or roundtrip tickets.

73 33 SWOT Analysis: Target Market

Travel Frequency

Travel Frequency Ticket Type by Travel Frequency 100% Less than once a 6-7 days a 75% month, 7% week, 3% 1-3 days a 50% month, 7% 25% 1-2 days a week, 7% 0% Less 6-7 1-2 1-3 5 days 4 days 3 days than days a days a days a a week a week a week once a 5 days a week week month 3 days a month week, 51% week, 15% Monthly Pass 43.8% 73.7% 51.4% 39.4% 1.7% 0.0% 0.5% 7-Day Pass 24.2% 15.0% 12.8% 6.5% 1.0% 1.9% 0.5% 4 days a One-Way or Round-Trip Ticket 20.8% 10.0% 31.8% 49.6% 85.3% 78.2% 84.9% week, 10% Weekend Pass 2.1% 0.1% 0.5% 1.4% 5.5% 9.7% 10.4%

Source: SCRRA 2015 Metrolink Rider Survey Other 9.1% 1.2% 3.4% 3.1% 6.5% 10.3% 3.7% • Majority of Metrolink riders (79%) use Metrolink service frequently (more than 3 days a week). Half of Metrolink riders use the service 5 days a week. • Generally, Metrolink riders make rational choices and purchase the ticket type that provides them with the best value. • As currently priced, monthly and 7-day passes are underutilized by riders traveling 4 days or more a week. With a monthly pass multiplier of 28, the breakeven point for the monthly pass occurs approximately when a rider uses Metrolink 3.3 days a week. With a 7-day pass multiplier of 7, the breakeven point for the 7-day pass is approximately 3.5 days a week.

74 34 SWOT Analysis: Target Market

Automobile Access

Automobile Availability for Trip I have a car but Travel Mode if Metrolink Train Didn't Exist prefer to take 4% Metrolink 5% 6% Drive a car I currently 9% My car is broken / own or lease being serviced Carpool 6% 15% 3% I don’t have a car, I 43% Take another scheduled prefer to use Metrolink train Metrolink Take bus, Amtrak, or I have no car Metro Rail available to me I would not make the trip 26% 79% I am unable to drive or don’t know how Other / I don't know to drive 6%

Source: SCRRA 2015 Metrolink Rider Survey: Q25. Did you have an Source: SCRRA 2015 Metrolink Rider Survey: Q26. If the Metrolink train automobile available to make today’s trip instead of taking Metrolink? you are currently riding didn't exist, how would you make this trip?

• Majority of Metrolink riders have a car available, but they prefer to take Metrolink. • Riders’ top five reasons for taking Metrolink instead of driving are: less stress than driving, more relaxing, save money, better use of time, better for the environment. • If Metrolink did not exist, a large share of riders (43%) would choose to drive a car instead.

75 35 SWOT Analysis: Target Market

Fare Payment Method

Revenue by Transactions by Fare Payment Method by Ticket Type Fare Payment Method Fare Payment Method 100% Corp 27% 15% Other Card/ Other 75% 37% Corp 3% Account 2% 57% 60% Card/ 3% Account 50% 20% 82% 72% 25% 55% Cash 43% 40% 35% Credit/ 0% Round- 7-Day Monthly Weekend Debit Credit/ One-Way Debit Trip Pass Pass Day Pass Cash 57% 60% Other 20% 0% 1% 1% 6% 0% Corp Card/Corp Account 0% 1% 2% 37% 0% Cash 57% 27% 15% 2% 60% Source: Imputed Ridership Summary by Month – July 2013 to December 2014 Credit/Debit 43% 72% 82% 55% 40% • Majority of Metrolink’s fare revenues and transactions are from credit/debit sales. However, 20% of revenue comes from cash, and 35% of transactions are made with cash. • Majority of Metrolink riders who purchase a round-trip ticket, 7-day pass, or monthly pass pay using a credit or debit card. • For corporate members, monthly passes are the primary method for distributing benefits. Over a third of Metrolink riders who purchase a monthly pass use their Corporate Card or the monthly pass is paid for by Corporate Account. • Majority of Metrolink riders who purchase a one-way or weekend day pass pay with cash. Continuing to offering options to pay for fares with cash will be important to retain these riders.

76 36 SWOT Analysis: Target Market

Household Income of Riders

Ridership by Household Income 20% 19%

15% 15% 13% 11% 10% 9% 8% 7% 7% 6% 6% 5%

0% Less than $20,000 - $30,000 - $40,000 - $50,000 - $60,000 - $75,000 - $100,000 - $150,000 - $200,000 $20,000 $29,999 $39,999 $49,999 $59,999 $74,999 $99,999 $149,999 $199,999 or more Household Income Source: SCRRA 2015 Metrolink Rider Survey

• Majority of Metrolink riders are not low income. Two-thirds of Metrolink’s riders have a household income of greater than $50,000. • Ridership from low income households is much lower on both MBTA and VRE (19% and 4%, respectively). • Many of Metrolink’s peers capture a larger share of high income riders. For instance, median household income of Caltrain weekday riders is $119,500 compared to $78,000 for Metrolink weekday riders.

77 37 SWOT Analysis: Target Market

Household Income of Riders

Ticket Type by Household Income 100% 11% 23% 7% 33% 80% 46% 50% 53% 14% 65% 68% 67% 64% 60% 18% 63% 11% 12% 40% 51% 15% 7% 43% 11% 10% 9% 38% 20% 35% 29% 27% 23% 21% 22% 0% Less than $20,000 - $30,000 - $40,000 - $50,000 - $60,000 - $75,000 - $100,000 - $150,000 - $200,000 $20,000 $29,999 $39,999 $49,999 $59,999 $74,999 $99,999 $149,999 $199,999 or more Monthly Pass 11% 23% 33% 46% 50% 53% 65% 68% 67% 64% 7-Day Pass 7% 14% 18% 11% 12% 15% 11% 10% 9% 7% One-Way or Round-Trip Ticket 63% 51% 43% 38% 35% 29% 23% 21% 22% 27% Weekend Pass 6% 6% 3% 2% 2% 2% 1% 1% 1% 1% Other 12% 6% 4% 2% 1% 1% 1% 1% 1% 1% Source: SCRRA 2015 Metrolink Rider Survey • Lower income riders are more likely to use one-way and round-trip tickets than higher income riders. • As household income increases, riders are more likely to use a monthly pass. • As fare policy and pricing alternatives are considered, it will be important to make sure that low income riders will not be disproportionately burdened by the fare change.

78 38 SWOT Analysis: Target Market

Household Income of Riders

Travel Frequency by Household Income 100% 9% 9% 8% 16% 12% 12% 7% 14% 17% 15% 20% 80% 8% 13% 14% 21% 10% 12% 11% 13% 14% 8% 9% 13% 8% 12% 14% 60% 9% 17% 16% 9%

40% 15% 8% 61% 62% 63% 57% 57% 57% 9% 43% 51% 20% 33% 17%

0% Less than $20,000 - $30,000 - $40,000 - $50,000 - $60,000 - $75,000 - $100,000 - $150,000 - $200,000 or $20,000 $29,999 $39,999 $49,999 $59,999 $74,999 $99,999 $149,999 $199,999 more Less than once a month 16% 12% 9% 9% 8% 6% 3% 3% 3% 5% 1-3 days a month 21% 14% 12% 7% 6% 6% 3% 3% 2% 3% 1-2 days a week 17% 13% 10% 8% 6% 5% 3% 3% 3% 6% 3 days a week 15% 16% 13% 14% 12% 13% 17% 15% 20% 14% 4 days a week 9% 8% 9% 9% 8% 8% 9% 11% 12% 14% 5 days a week 17% 33% 43% 51% 57% 61% 62% 63% 57% 57% 6-7 days a week 5% 4% 5% 3% 3% 2% 3% 2% 3% 1% Source: SCRRA 2015 Metrolink Rider Survey

• As household income increases, Metrolink riders are more likely to travel 5 days a week. Travel frequency stabilizes when household income reaches $50,000.

79 39 SWOT Analysis: Target Market

Ethnicity of Riders

Ridership by Ethnic Background 40% 34% 30% 30%

20% 16% 12% 10% 5% 2% 1% 0% African Hispanic Asian Native American Caucasian Other American Hawaiian or Indian or (non-Hispanic) other Pacific Alaskan Native Islander

Source: SCRRA 2015 Metrolink Rider Survey

• Approximately one-third of Metrolink’s riders are Caucasian (non-Hispanic). • Approximately one-third of Metrolink’s riders are Hispanic. • The remaining one-third is predominately Asian or African American.

80 40 SWOT Analysis: Target Market

Ethnicity of Riders

Fare Product by Minority/Non-Minority Travel Frequency by Minority/Non-Minority 100% 100% 7% 7% 90% 5% 8% 6% 80% 8% 75% 47% 18% 55% 70% 14% 60% 9% 11% 50% 50% 11% 40% 11% 30% 50% 52% 20% 25% 35% 10% 31% 0% Minority Non-Minority Less than once a 7% 7% 0% month Minority Non-Minority 1-3 days a month 8% 5% Monthly Pass 47% 55% 1-2 days a week 8% 6% 7-Day Pass 11% 11% 3 days a week 14% 18% One-Way or Round-Trip Ticket 35% 31% 4 days a week 9% 11% Weekend Pass 2% 2% 5 days a week 50% 52% Other 4% 1% 6-7 days a week 3% 2% Source: SCRRA 2015 Metrolink Rider Survey • Non-minority riders are more likely to use monthly passes and less likely to purchase one-way and round-trip tickets. • As fare policy and pricing alternatives are considered, it will be important to make sure that the fare change will not cause a disparate impact on minority riders. • Travel frequency for minority and non-minority riders are very similar.

81 41 SWOT Analysis: Target Market

Peer Pricing to Target Specific Markets City-bound Suburban Off-Peak Ave Passenger Trip Agency Commuters Travel Travel Other Markets Length (miles) Metrolink ✔ ✔ ✔ beach 33.0 Caltrain ✔ Joint day pass w/VTA 21.5 GO Transit ✔ Special event promotional fares 27.9 Long Island Rail Road ✔ ✔ ✔ All-City weekend fare; racetrack 21.5 MBTA/Commuter Rail ✔ ✔ special events; Cape Flyer 20.2 Metra ✔ special event fares; weekend pass 22.7 NCTD/Coaster ✔ special events 27.5 NJT/Commuter Rail ✔ ✔ special events; family fares 23.4 SEPTA/Regional Rail ✔ ✔ airport, special events 14.2 Sound Transit/Sounder ✔ special event trains @ regular fare 22.2 TriRail ✔ three airports 28.8 UTA/FrontRunner ✔ ✔ special events 26.7 Sources for Average Passenger Trip Length (miles): 2012 National Transit Database, GO Transit, Info to GO (January 2014)

• All peers regard City-bound commuters as their core market, with most reporting this as accounting for 90+% of ridership. Fares to or through the City terminal are often higher. • While still a small percentage of total ridership, several peers report growth in City-bound off-peak demand, but little to no growth in non-City bound travel. Fares promoting suburban travel have had little impact on ridership. Service quality and City attractions have more impact, although comparative costs of alternative modes do influence decisions on transit use.

82 42 SWOT Analysis: Target Market

Peer Target Markets

• Peers’ fare structures and policies are also evolving, along with service levels and patterns, to recognize and meet the needs of new markets and travel patterns.

• While commuters traveling into Chicago are Metra’s target market, it is not a growing market. Metra’s reverse commute market is growing, but Metra has not yet adopted policies specifically for that market. Metra has introduced tickets and policies that target non-commute markets, such as Family Cars, Family Fares, and the $8 Weekend Pass, but not off-peak or reverse commute markets.

• For Toronto, GO Transit’s long term plans include a shift from peak service to/from the CBD to more frequent, two-way, all-day service. For now, GO Transit offers one-way tickets, day passes, and monthly passes and does not offer off-peak fares or products other than one-way tickets and day passes for non-commute markets.

• In Salt Lake City, UTA’s FrontRunner fares are designed to make longer trips more attractive by charging a base fee ($2.50) + a flat fee per station ($0.60). UTA is targeting annual pass customers via employers/universities near FrontRunner stations and off-peak day trippers with a group pass for four riders.

83 43 SWOT Analysis Elasticity Responses

84 SWOT Analysis: Elasticity Responses

Defining Elasticity

• Elasticity is a measure of customer demand response for a good or service, based on changes in various factors – in this case, customer demand response is measured by changes in ridership.

• These factors may include the price of transit service (own-price elasticities) or the price and availability of substitute services (cross elasticities).

• Elasticities range in values from -1.0 to +1.0: – Fare price elasticities, for example, are typically negative. An elasticity of -0.33 means that a 1% increase in transit fares would be expected to result in a -0.33% decrease in demand for transit service (ridership). – Employment elasticities, for example, are likely to be positive. With an employment elasticity of +0.25, a 1% increase in employment would be expected to result in a 0.25% increase in transit ridership.

• Factors affecting customer demand for transit service that are typically within transit agency control include: – Transit Fares/ Prices – Transit Service Levels – Transit Service Reliability

• Factors affecting customer demand for transit service that are typically outside of transit agency control include: – Regional or Local Employment – Gasoline Prices

85 45 SWOT Analysis: Elasticity Responses

Transit Fare Price Elasticity

• Initially developed in the 1960’s, the Simpson-Curtin elasticity (-0.33) has been frequently cited in transit literature, but is being replaced or modified as additional research has been published

• Previous Metrolink modeling efforts have considered how changes in transit fare prices have affected customer demand for service: – Systemwide weekday fare price elasticity was estimated as -0.214 (TranSystems/LTK, 2010) • Elasticities were found to differ by fare product (namely monthly pass customers) • No consistent relationship was found to exist between response to fare price changes and customer trip lengths – Systemwide fare price elasticity was estimated as -0.15 (CH2M, 2015) • No consistent relationship was found to exist between response to fare price changes and customer category (Adult, Student, Senior/Disabled)

• The results identified by both the TranSystems/LTK (2010) and CH2M (2015) modeling were generally consistent with fare elasticities for other commuter rail systems, which range from -0.09 to -0.22 (TCRP Report 95, Ch. 12)

86 46 SWOT Analysis: Elasticity Responses

Transit Service Elasticity

The academic literature has identified service elasticities in the range from +0.5 to +0.9. The Transportation Research Board suggests that “the typical commuter railroad patron is much more influenced by service frequency than by fares, although findings are not entirely consistent.” (Evans, John E. Traveler Response to Transportation System Changes Chapter 9—Transit Scheduling and Frequency. Transportation Research Board, Washington D.C. 2004).

87 47 SWOT Analysis: Elasticity Responses

Service Reliability Elasticity

• Very few studies have attempted to estimate service reliability elasticities based on observed behavior change. Most research has relied on stated-preference survey results.

• Metrolink Retention Survey findings (2015) provide some evidence that service reliability is a key factor in retaining existing customers, and enticing recently departed customers back onto the system: – Service problems were cited as a reason for defection by 44% of former Metrolink customers – Among the same group of former Metrolink customers, 60% cited improved service as a change that would motivate them to ride Metrolink again.

88 48 SWOT Analysis: Elasticity Responses

Regional / Local Employment Elasticity

• Metrolink modeling efforts have also considered how changes in regional employment have affected customer transit demand – Weekday customer demand with respect to regional employment was estimated as +0.338 (TranSystems/LTK, 2010)

• Published literature on transit demand with respect to employment provides a wide range of estimates, and varies based on geographic scale: – Kain & Liu (1999) found that transit demand with respect to regional employment had an elasticity of +0.25. – WMATA’s econometric ridership model (2010) includes DC-only employment in the weekday, Metrorail model (log-log specification, approx. elasticity of +0.72) – Fehr & Peers (2004), while developing a ridership model for BART, estimated that a doubling of population and employment within a ½ mile radius of a station would increase ridership by 23% (approximate elasticity of +0.23).

89 49 SWOT Analysis: Elasticity Responses

Gasoline Price Elasticity

• Metrolink modeling efforts have also considered how changes in regional gasoline prices have affected customer transit demand – Weekday customer demand with respect to regional gasoline price was estimated as +0.115 (TranSystems/LTK, 2010)

• Published literature on transit demand with respect to gasoline prices is extensive, with some studies identifying gasoline price elasticities for commuter rail transit services higher than modeling for Metrolink has suggested: – Iseki & Ali (2014) found that the importance of gasoline price for transit ridership was minimal when prices remained below certain thresholds, but once thresholds were exceeded ($3/gallon in their study), customer responses became more pronounced. They found that with gasoline prices above $3/gallon, the elasticity of commuter rail transit demand with respect to gasoline price was +0.205. – Blanchard (2009) found that commuter rail transit demand with respect to gasoline prices had an elasticity of between -0.01 to +0.21, depending on the city. – Maley & Weinberger (2009) found that commuter rail transit demand with respect to gasoline prices had an elasticity of +0.27. – Haire & Machemehl (2007) found that commuter rail transit demand with respect to gasoline prices had an elasticity of +0.27.

90 50 SWOT Analysis: Elasticity Responses

Applying Elasticity

• Factors such as those discussed here should be taken into account when considering and modeling alternative fare strategies for Metrolink

• Additional factors that are also believed to impact Metrolink ridership, such as service reliability and competition from commuter bus services, could and should also be considered qualitatively – outside of the elasticity-based fare analysis modeling.

91 51 SWOT Analysis External Factors

92 SWOT Analysis: External Factors

External Factors Impacting Ridership

• Several factors outside of the fare structure and pricing levels impact ridership, including but not limited to: – Population and employment growth – Metrolink service levels and reliability – Competitiveness with driving: gas prices, parking costs, toll levels – Competitiveness with parallel transit services

• The June 2015 online survey of current and former Metrolink riders also provide insights into factors that impact rider retention.

• A total of 387 responses were received from former Metrolink customers who indicated that they are no longer taking Metrolink. This subset of data was analyzed to learn about motivations for discontinuing use of Metrolink. Results are shown on the following pages.

93 53 SWOT Analysis: External Factors

Most Former Riders have Switched to Driving

• Among former Metrolink riders: – 56% have switched to driving or carpools. – 10% switched to other transit modes. – 27% no longer need to make the trip.

94 54 SWOT Analysis: External Factors

Reasons for Defection

• Among former Metrolink riders: – Cost and service problems were mentioned equally often (44% of riders) as reasons for no longer riding. – 40% of former riders stopped riding because of personal reasons alone. (multiple responses possible)

95 55 SWOT Analysis: External Factors

Motivating Former Riders to Return to Metrolink

• Among former Metrolink riders: WHAT WOULD MOTIVATE YOU TO RIDE AGAIN? – 35% would be motivated to Nothing ride again if service was improved. 17% Service – 15% would be motivated to improvements ride again if fares were 35% Other lowered. 8% – 25% would be motivated to ride again if service was improved and fares were lowered. Lower Service (multiple responses possible) fares improvements 15% & lower fares 25%

96 56 SWOT Analysis: External Factors

Competiveness with Driving

• In 2005, Metrolink began its transition from a zone- to mileage-based fare structure. The mileage-based fare structure is based on a fixed fee and per mileage charge. This per mileage charge is applied to pricing miles between station O-D pairs. • Several options were considered for pricing miles, including train track miles, driving miles, crow-flies miles, and a combination of these. The study concluded that a driving mile equivalent option offered the best alternative. • Pricing fares based on driving miles enables drivers to directly compare the cost of driving and taking transit. On Metrolink’s website, in addition to providing the pricing of Metrolink’s fares, the website also includes the price to drive based on AAA driving cost per mile. • Especially, after accounting for parking costs, Metrolink service provides travelers a more affordable option. In Metrolink’s 2015 rider survey, saving money was in the top three reasons riders choose to take Metrolink instead of driving.

97 57 SWOT Analysis: External Factors

Competiveness with Driving

• Customer sensitivity to changes in external pricing factors, such as fluctuating gasoline prices and/or parking prices, impact demand for Metrolink services.

• Metrolink’s relatively high share of customers with access to a vehicle (89% with some vehicle availability, per 2015 rider survey) may be suggestive of greater customer sensitivity to gasoline and parking price changes than other transit systems in the region. By comparison, auto availability tends to be lower among peers, averaging from 65% for Caltrain to 83% for Coaster. – Caltrain: 65% − Coaster: 83% − MBTA: 70%-79% – METRA: 80% − TriRail: 75%

• Metrolink should carefully consider fare pricing decisions when the price of external factors such as gasoline and parking prices decrease for sustained periods of time, as this could create a distinct threat to the achievement of ridership and fare revenue budgets.

• Customer sensitivity to external pricing factors is measured through cross-price elasticities. Estimation of cross-price elasticity may be estimated using econometric techniques (if detailed ridership data is available), customer stated preference surveys, and/or peer agency estimates.

• An additional challenge for Metrolink is the pricing of parking at Metrolink stations. While the cost of parking is out of Metrolink’s control, parking fees impact riders’ effective fares. Parking rates at Metrolink stations are set by local jurisdictions and cities that own the facilities. Because Metrolink does not control parking costs, Metrolink has limited means to induce riders to use underutilized stations. In addition, parking fees at Metrolink stations may undermine competitiveness with driving, and riders may choose to drive to their destinations instead of taking Metrolink.

98 58 SWOT Analysis: External Factors

Competiveness with Commuter Bus Services

• Metrolink competes with Express Bus service to downtown LA in a number of corridors: – Antelope Valley – Orange County – Riverside – San Bernardino – Ventura County

• The express bus service is provided by a number of partner agencies: – AVTA – Foothill Transit – LADOT – Metro – Montebello – OCTA – Santa Clarita Transit

• Metrolink has difficulty competing with a number of these services. – Favoring Metrolink  Favoring Express Bus • Competitive travel times • Significantly Lower Fares • More Frequent Peak Service

99 59 SWOT Analysis: External Factors

Competiveness with Commuter Bus Services

Number of Buses/Trains • Majority of the parallel Parallel Service Description Arriving Downtown Los Angeles between 6:30 AM - 9:30 AM bus service is provided by express buses. Parallel Bus Agency Service Corridor Service Type Route Metrolink Service • Majority of the agencies that offer AVTA Antelope Valley Express Bus 785 6 4 parallel bus service Santa Clarita Transit Antelope Valley Express Bus 799 7 5 LACMTA Orange County Express Bus 460 5 6 accept TAP. OCTA Orange County Express Bus 721 4 6 • Metrolink offers fewer Foothill Transit Riverside Express Bus 493 15 3 trips than the parallel Foothill Transit Riverside Express Bus 495 9 3 bus services. Foothill Transit Riverside Express Bus 497 11 3 Montebello Riverside Express Bus 341 6 3 LACMTA San Bernardino Express Bus Metro Silver 38 6 Foothill Transit San Bernardino Express Bus 498 19 6 Foothill Transit San Bernardino Express Bus 699 21 6 LA DOT Ventura County Express Bus 419 9 4 Agency accepts TAP More bus service than Metrolink

100 60 SWOT Analysis: External Factors

Competiveness with Express Bus Services

Parallel Service Description Travel Time Comparison to Downtown Los Angeles Express Bus Express Bus Express Bus Express Bus Travel Metrolink Metrolink Travel Time to Agency Route Departure Point Destination Time (minutes) Departure Station LA Union Station (minutes*) AVTA 785 Lancaster City Park 5th & Flower 116 Lancaster 133 Santa Clarita Transit 799 Santa Clarita Metrolink 5th & Flower 92 Santa Clarita 69 LACMTA 460 Disneyland: 6th & Los Angeles 103 Anaheim 61 Manchester & Harbor OCTA 721 Fullerton PnR 6th & Flower 55 Buena Park 46 Foothill Transit 493 Industry Metrolink 9th & Hope 84 Industry 48 Foothill Transit 495 Industry Metrolink 9th & Hope 57 Industry 48 Foothill Transit 497 Industry City Hall PnR 9th & Hope 52 Industry 48 Montebello 341 Taylor Ranch 5th & Beaudry 40 Montebello 32 LACMTA Metro Silver El Monte Bus Station 7th & Flower 30 El Monte 33 Foothill Transit 498 West Covina PnR 9th & Hope 45 Baldwin Park 44 Foothill Transit 699 Montclair Metrolink 9th & Hope 70 Montclair 66 LA DOT 419 Chatsworth Metrolink 7th & Hill 76 Chatsworth 55 * Includes 12 minutes for transit time from LA Union Station to • Express bus service provides a one-seat ride to downtown offices. 7th/Flower Most Metrolink riders must transfer at LA Union Station to reach their offices. Green highlights Metrolink service that is faster door-to-door • Several express bus services leave from Metrolink stations. than express bus • Generally, Metrolink’s travel time to Downtown Los Angeles after accounting for transfer time to Metro is faster than express bus service.

101 61 SWOT Analysis: External Factors

Competiveness with Express Bus Services

Parallel Service Description Fare Level Comparison (July 2015) Metrolink Metrolink: Departure Bus: Monthly Bus: EZ Transit Metrolink: Agency Route Bus: 1-way fare Bus: Multiplier Monthly pass Station pass fare Pass fare 1-way fare fare* AVTA 785 Lancaster $7.60 $266.00 $330.00 35 $15.00 $322.00 Santa Clarita Transit 799 Santa Clarita $4.25 $165.00 $220.00 39 $10.00 $210.00 LACMTA 460 Anaheim $3.25 $122.00 $132.00 38 $8.75 $245.00 OCTA 721 Buena Park $6.00 $187.50 n/a $7.75 $217.00 Foothill Transit 493 Industry $4.90 $170.00 $220.00 35 $8.50 $238.00 Foothill Transit 495 Industry $4.90 $170.00 $220.00 35 $8.50 $238.00 Foothill Transit 497 Industry $4.90 $170.00 $220.00 35 $8.50 $238.00 Montebello 341 Montebello $1.30 n/a n/a $5.75 $161.00 LACMTA Metro Silver El Monte $2.50 $122.00 $132.00 49 $6.50 $182.00 Foothill Transit 498 Baldwin Park $4.90 $170.00 $220.00 35 $7.25 $203.00 Foothill Transit 699 Montclair $4.90 $170.00 $220.00 35 $9.75 $273.00 LA DOT 419 Chatsworth $4.25 $140.00 $198.00 33 $9.50 $266.00 * Bus fares do not include Yellow highlights Metrolink fares that are at least 25% higher than parallel interagency transfer costs express bus fares Red highlights Metrolink fares that are • Metrolink one-way fares are typically 50-100% higher than parallel express at least 50% higher than parallel express bus fares bus fares. In some cases, more than 2x express bus one-way fares. Green highlights Metrolink fares that are lower than parallel express bus • The price of Metrolink monthly passes are higher than monthly passes for fares parallel bus service. * Metrolink monthly pass fares are compared to EZ Transit Pass monthly • The monthly pass price differential narrows when compared to the EZ fares Transit Pass fare.

102 62 SWOT Analysis: External Factors

Competiveness with Commuter Bus Services

• Metrolink’s commuter rail peers do not experience as much competition with parallel commuter bus services.

• While some of Metrolink’s peers only provide commuter rail services (e.g., Caltrain, Metra), other peers also operate commuter bus services (e.g., MBTA, UTA, Sound Transit, GO Transit).

• Many peers that operate commuter rail service but not bus services, often, have interagency coordination. For example, Santa Clara VTA, who provides commuter bus services within Santa Clara County, specifically makes sure to not to design competitive routes parallel to the Caltrain corridor. Instead, routes are designed to feed Caltrain stations. VTA also accepts 2+ zone Caltrain passes on its system to improve regional fare integration. No revenue sharing is associated with this interagency agreement.

• Peers that operate both commuter bus and rail services have financial incentives to provide service cost effectively and minimize competition between service types. Commuter rail monthly passes on these systems are often valid on all service types offered by the agency. For example:

– MBTA’s commuter rail passes are valid on the Subway, Local Bus, Express Bus, and Inner Harbor Ferry service.

– UTA’s flat fare Premium Express monthly pass is valid on all UTA fixed route services, including local and express buses, light rail, and streetcar, as well as Frontrunner.

103 63 SWOT Analysis Fare Structure and Ticket Types

104 SWOT Analysis: Fare Structure & Ticket Types

Metrolink’s Fare Structure

• Metrolink’s fare structure provides station-to-station fares that are intended to make Metrolink service competitive with automobile travel, by basing fares on highway mileage between stations. • Metrolink migrated its fare structure from the original zone-based system with the objective of providing a more fair, consistent and equitable pricing policy. The zone structure was considered inequitable with zones defined by geopolitical boundaries and pricing that penalized short trips crossing zone boundaries while favoring other longer trips within zones. • Because restructuring from the zones to station-to-station fares would result in winners and losers, the adjustments were phased in over ten years, to eliminate significant fare increases from year- to-year. The ten-year phase-in is complete with the July 1, 2015 fare change. FY 2016 full single- ride fares are based on $4.63 + $0.147/mile between stations. • Fares for the new station-to-station fare structure were originally capped at the 80-mile fare. This has been continued for the monthly passes, but no longer applies to other ticket types. • Discounts from full-fare single-ride prices continue to be applied for certain rider categories and ticket types. • All valid Metrolink tickets and passes are accepted for travel on local services participating in the EZ Transit Pass program (excluding Big Blue Bus). Metrolink compensates the transit agencies for the estimated number of transfers, while distributing this cost among all of its riders. The transfer charge is embedded in the fare and is transparent to the rider. All riders pay for this transfer capability, regardless of whether they will use it. • A pilot program included in the July 2015 fare adjustment lowers the Antelope Valley Line fares. The pilot includes a 25% discount on fares, and one-way fares for travel between adjacent stations are now set at $2.00/station or the mileage-based fare, whichever is lower.

105 65 SWOT Analysis: Fare Structure & Ticket Types

Peer Fare Structures

• Peers fare structures and policies are also evolving, along with service levels and patterns, to recognize and meet the needs of new markets.

• Caltrain is a zone-based system that targets frequent riders, including but not limited to commuters to and from San Francisco. The number of zones was reduced about 10 years ago to create longer zone lengths and reduce the average fare per mile. However, with the zoned fares, the cost per mile of any trip depends on the origin point within a zone

• GO Transit is a zone-based system with a monthly pass accumulator on Presto. GO Transit’s long term plans include a shift from peak service to/from the CBD to more frequent, two-way, all- day service. For now, GO Transit offers one-way tickets, day passes, and monthly passes and does not offer off-peak fares or products other than one-way tickets and day passes for non- commute markets.

106 66 SWOT Analysis: Fare Policy Alternatives

Peer Fare Structures

• Long Island Rail Road: Some peers charge higher fares for travel to or through the system’s max load point – typically the city terminal. The Long Island Rail Road’s fares recognize that the core market is commute trips into New York City, while creating discounts for “intermediate” travel in the six outlying zones. It also recognizes that achieving fare revenue goals requires balancing prices between the between the two markets – and does so by discounting trips that do not begin/end in the City: – The highest fares apply in Zone 1 (the City Terminal Zone, which includes several stations that serve the City and NYCT transit connections). Trips to Zone 1 account for about 95% of the LIRR’s trips. Peak fares apply only to travel to/from Zone 1. – Fares to Zone 3 (Zone 2 has been eliminated), which includes Jamaica station, a major transfer hub with its own max load points east of the station, are not as high as those to Zone 1, but higher than intermediate fares in outlying zones. – In outlying zones, fares are discounted to provide attractive fares for discretionary, non- commute trips, both for intermediate travel and for off-peak travel into the City.

107 67 SWOT Analysis: Fare Structure & Ticket Types

Peer Fare Structures

• Metra: While commuters traveling into Chicago are Metra’s target market, it is not a growing market. Metra’s reverse commute market is growing, but Metra has not yet adopted policies specifically for that market. Metra’s radial fare zones and pricing strategies target the longer- distance, core commute market, with a base fare and a per-zone charge. Although Metra’s policy of making percentage fare increase and rounding fares to the nearest $0.25 has made shorter trips more expensive, Metra has introduced policies that target non-commute markets, such Family Cars, Family Fares, and the $8 Weekend Pass, but not off-peak or reverse commute markets.

• NJT is a zone-based system, with consistent zone designations and distance calculations among the various rail lines, so that a 20-mile trip to the same destination is priced the same regardless of the rail line where the trip is made. However, NJT has a 3-tiered fare structure based on the rider’s origin/destination points. – New York: journeys beginning or ending at NY Penn Station. – New Jersey Terminal: journeys beginning or ending at Newark Penn Station or Hoboken Terminal. – Local: journeys not involving NYPS, Newark Penn or Hoboken. For comparable distances traveled the New York fare structure is the most expensive, followed by New Jersey Terminal, with Local fares the least expensive.

108 68 SWOT Analysis: Fare Policy Alternatives

Peer Fare Structures

• SEPTA: Other peers also have fare policies that accommodate travel through the max load point. In Philadelphia, SEPTA operates regional rail service over 13 branches to over 150 stations. The concentric zone structure is not line-specific and enables SEPTA to price trips that go through Center City (the max load point) at the highest fare zone in the trip when using a monthly or weekly pass. For trips that do not go to/from/through Center City, SEPTA offers a lower-priced Cross-County monthly pass.

• Sound Transit: Although Sounder commuter rail and Link light rail fares are mileage-based, the fare for travel on Sounder through Seattle’s King Street terminal is based on one leg of the two-leg trip when the fare is paid with an ORCA smart card. The distance calculation is not line-specific; the price of a through trip is set at the longest leg of the trip.

• UTA’s FrontRunner fares are designed to make longer trips more attractive by charging a base fare + a flat fee per station. UTA is targeting annual pass customers via employers/universities near FrontRunner stations and off-peak day trippers with a group pass for four riders. The decision to price FrontRunner fares at the same base fare as the local bus and light rail services is intended to facilitate transfers between FrontRunner and UTA’s first and last mile connections.

109 69 SWOT Analysis: Fare Structure & Ticket Types

Peer Fare Structures

Fare Collection/ Agency Structure Structure Characteristics Enforcement Electronic Fare Media Initiatives Metrolink Station-to- Base fare + mileage charge POP Metrolink ticket or pass w/limited- station use TAP product Mobile ticketing coming Caltrain Zoned 6 zones POP Clipper smart card accepted region- Avg zone length: 13 miles wide Base fare + zone charge GO Transit Zoned n/a POP PRESTO smart card accepted Base fare + zone charge region-wide Long Island Rail Road Zoned 8 zones On-board LIRR ticket or pass w/pre-encoded Base fare + zone charge MetroCard Mobile ticketing coming MBTA/Commuter Rail Zoned 11 zones On-board Rail pass w/ encoded CharlieCard Base fare + zone charge product Mobile ticketing Metra Zoned 12 zones On-board Mobile ticketing coming Avg zone length: 5 miles Base fare + zone charge

N/A: Not applicable n/a: not available

110 70 SWOT Analysis: Fare Structure & Ticket Types

Peer Fare Structures

Fare Structure Collection / Agency Structure Characteristics Enforcement Electronic Fare Media Initiatives NCTD/Coaster Zoned 3 zones POP Compass smart card accepted region-wide Base fare + zone Mobile ticketing charge NJT/Commuter Rail Zoned 23 zones On-board Mobile ticketing Avg zone length: 2-4 miles Base fare + zone charge SEPTA/Regional Rail Zoned 5 zones On-board KEY smart card coming Avg zone length: 4- 10 miles Base fare + zone charge Sound Transit/Sounder Station-to- Base fare + mileage POP ORCA smart card accepted region-wide station charge Mobile ticketing under consideration TriRail Zoned 6 zones POP EASY smart card accepted region-wide Base fare + zone charge UTA/FrontRunner Station-to- Base fare + per POP FAREPAY smart card accepted region-wide station station charge Mobile ticketing under consideration

N/A: Not applicable n/a: not available

111 71 SWOT Analysis: Fare Structure & Ticket Types

Peer Fare Structures

• The two peer systems with station-to-station (S2S) fares have proof-of-payment fare enforcement: – Sound Transit moved its Sounder service fares to S2S from a 5-zone structure shortly after inaugurating service, and initiated light rail service with S2S fares shortly thereafter. – UTA’s FrontRunner has been S2S-based since it was introduced in 2008. UTA is piloting a systemwide per-mile fare structure that would integrate with the FrontRunner fare structure.

• Peers with on-board fare collection (Long Island Railroad, MBTA, Metra, NJT and SEPTA) all have zoned fares. For example: – The Long Island Railroad moved to zoned fares in the 1970s, soon after it was acquired by the State. Since then, the LIRR has consolidated from 13 zones to eight. The zone structure greatly simplified the tariff tables used by train crew to sell tickets on-board and the S2S ticket types sold by ticket agents. – SEPTA developed a concentric circular zone structure following acquisition from Conrail and in advance of the opening of the Center City Connection between the Pennsylvania Railroad and Reading Railroad divisions. This restructuring eliminated fare disparities between the two divisions and simplified the fares for travel between them via the new Connection.

112 72 SWOT Analysis: Fare Structure & Ticket Types

Peer Fare Structures

• Five peers (Caltrain, GO Transit, Coaster, TriRail, TRE) have zoned fare structures with proof-of- payment fare enforcement. For example: – Caltrain retained its zone structure following transition from on-board fare collection to POP in the early 2000s. – GO Transit retained its zone structure following transition from a labor-intensive manual system of entry/exit ticket collection at the stations. – Coaster, TriRail and TRE initiated their services with zone fare structures.

113 73 SWOT Analysis: Fare Structure & Ticket Types

Metrolink’s Ticket Types

• Metrolink offers a range of ticket types that are intended to meet the needs of its customers, from infrequent or occasional riders to those who travel regularly, several times a week.

• Metrolink offers three ticket types that are valid throughout the week as well as one product that is valid only on weekends. All ticket types are available at TVMs and at ticket windows: – One-way tickets provide a three-hour window from time of purchase for a rider to complete a single one-way trip between an origin station and a destination station. – Round-trip tickets are valid for a round trip between an origin station and a destination station on the same day. Travel must begin within three hours from time of purchase and must be completed on the same day. – Prepaid ticket types include tickets that can be purchased in advance of the day of travel: • Monthly pass, which is valid for travel between an origin and a destination station during the calendar month, and for unlimited systemwide travel after 7 pm on Friday and until 11:59 pm on Sunday. Monthly pass holders may also ride both Metrolink and Amtrak trains within the validity of their pass at no additional charge. • $10 Weekend Day Pass provides unlimited systemwide travel on either Saturday or Sunday and is accepted a free transfer to connecting transit services, except Amtrak. • One-way and round-trip tickets may also be purchased for a future date.

114 74 SWOT Analysis: Fare Structure & Ticket Types

Metrolink’s Ticket Types

• Valid Metrolink tickets may also be used to make transfers between Metrolink and connecting transit agencies, thereby providing access to and from Metrolink stations.

• Most Metrolink tickets also work as EZ Transit Passes, which are valid for all day travel in Los Angeles County and on participating bus and Metro Rail lines.

• Metrolink’s ticket pricing strategies recognize the sensitivities of different markets to price and seek to establish a balance between demand and fare revenue generation. Pricing is discussed further in the next section.

115 75 SWOT Analysis: Fare Structure & Ticket Types

Peer Ticket Types

Multi- Monthly 7-Day/ Day Stored Value Agency One-Way Roundtrip trip Pass Weekly Pass Pass Other Pass (smart card) Metrolink     Weekend Day Caltrain  8-ride    Accumu- GO Transit    lator * Long Island Rail Road  10-trip    MBTA/Commuter Rail  10-ride  Metra  10-trip  Weekend Monthly, NCTD/Coaster     30-day NJT/Commuter Rail  10-trip   Tokens, SEPTA/Regional Rail    10-trip Sound Transit/Sounder     TriRail   12-trip  Weekend Day  UTA/FrontRunner     Note: Fare products available to the general adult public (excludes student passes, business/university/residential group products) * GO Transit offers a progressive monthly pass accumulator

116 76 SWOT Analysis: Fare Structure & Ticket Types

Peer Ticket Types

• Most peers sell a range of of tickets similar to Metrolink: – All offer one-way tickets and monthly passes. – Most offer a multi-trip ticket, usually a 10-trip ticket. – The three agencies that offer 7-day passes also have multi-trip tickets. Metrolink is the only agency that has a 7-day pass and does not currently also offer a multi-trip ticket. – Less common products include day passes and weekend or weekend day passes, although both Metra and Metrolink have found their versions of weekend passes to be very popular.

• Agencies with smart cards also offer stored value. Two commuter rail systems (MBTA, LIRR) are associated with agencies that have successful electronic fare collection systems: CharlieTicket and MetroCard, respectively. However, neither of those two commuter rail systems accepts electronic fare payment. Instead, they have developed a fare card that includes a flash pass for use on commuter rail and stored value for use on the connecting transit systems. In Chicago, Metra has not yet developed a way to participate in the Ventra fare payment system used by CTA and Pace.

117 77 SWOT Analysis: Fare Structure & Ticket Types

Usage by Ticket Type

Ridership by Ticket Type

Day Monthly Ridership One-way Roundtrip Multi-trip Pass Pass Other Pass ePurse Other Metrolink 17% 12% 58% 7-day: 7% Weekend: 6% Caltrain 19% 8-ride: 16% 12% 52% 2% Metra 13% 10-trip: 23% 60% Weekend: 4.3% Long Island Rail Road 34% 10-ride: 9% 2% 55% NJT/Commuter Rail 28% 18% 10-trip: 5% 47% Weekly: 3% Weekly: 11% SEPTA/Regional Rail 22% 10-trip: 6% 58% Student, Independence: 2%

Sound Transit/Sounder 3% 5% 21% Annual: 50% 21%

118 78 SWOT Analysis: Fare Structure & Ticket Types

Usage by Ticket Type

Fare Revenue by Ticket Type

Day Monthly Fare Revenue One-way Roundtrip Multi-trip Pass Pass Other Pass ePurse Other Metrolink 20% 13% 55% 7-day: 9% Weekend: 4% Caltrain 30% 8-ride: 13% 19% 39% Long Island Rail Road 40% 10-ride: 10% 1% 49% Metra 17% 10-trip: 27% 54% Weekend: 3% NJT/Commuter Rail 29% 23% 10-trip: 6% 40% Weekly: 3% Weekly: 10% SEPTA/Regional Rail 28% 10-trip: 8% 49% Student, Independence: 4% Sound Transit/Sounder 3% 6% 24% Annual: 47% 20%

119 79 SWOT Analysis: Fare Structure & Ticket Types

Usage by Ticket Type

Pass Usage Rates by Ticket Type

Day Pass 7-Day / Weekly Pass Monthly Pass Multiple Usage Multiple Usage Multiple Usage Metrolink 7 8 19.6 - 28 32-33 Caltrain 2.0 26.5 GO Transit 2.0 Long Island Rail Road 5 - 10 17 - 31 Metra 28.5 35 - 37 NJT/Commuter Rail 10 40 SEPTA/Regional Rail 6 - 8 21 - 29 Sound Transit/Sounder 2.0 36.0

• With the exception of Sounder, the majority of commuter rail riders use monthly passes, and monthly passes generate the largest share of each agency’s fare revenue. • Sounder is part of a very successful regional employer pass program. That program is responsible for 50% of Sounder boardings and 47% of Sounder fare revenue. • One-way fares also account for a significant share of both boardings and fare revenues, for all peers.

120 80 SWOT Analysis Fare Pricing

121 SWOT Analysis: Fare Pricing

Metrolink’s Fare Pricing

• Metrolink’s fare is based on a fixed fee that includes an embedded transfer and a mileage charge. – FY16 fixed fee: $4.63 – FY16 mileage charge: $0.147 • As a result of these pricing levels, Metrolink’s fares for short distance trips are significantly higher than other local transit services and discourage short distance trips on Metrolink. • Due to the length of average Metrolink trips, Metrolink average fares are high. According to NTD data, Metrolink’s average passenger miles traveled per boarding in FY13 was 35 miles. In FY16, this one-way fare will cost $9.75; a monthly pass will cost $273. To limit the maximum out-of- pocket cost, Metrolink’s fare structure caps the price of the monthly pass at 80 miles. Previously, pricing miles for other ticket types were also capped at 80 miles. • Lower income populations are less likely to purchase 7-day and monthly passes than higher income populations. The high upfront costs of the passes may limit lower income populations ability to afford to buy these passes and obtain the associated discounts. • Metrolink’s primary target market is commuters. These riders are less sensitive to fares than weekend travelers. As a way to incentivize weekend ridership, Metrolink offers a $10 day pass as well as allows monthly passholders to travel anywhere on the system. Other peers also offer a reduced price fares on the weekends: Metra weekend pass: $7; Tri-Rail weekend pass: $5 • Metrolink rounds fares to the nearest quarter. Majority of Metrolink’s commuter rail peers also round fares to the nearest quarter to simplify fare collection. However, one resulting implication is a more significant percent fare increases for shorter distance trips.

122 82 SWOT Analysis: Fare Pricing

Peer Fare Pricing Components

Fare Components Fare Agency Structure Base Fare Distance Charge Surcharges/Discounts Other Charges Rounding Metrolink Station-to- $4.63 $0.147/mile Ticket Type Fare: $1.63 x Embedded Transfer: Nearest Station ticket type multiplier* $0.86 x ticket type $0.25; (applies to one-way, RT, multiplier* nearest 7-day) $1.00 (monthly) Mileage basis: station-to-station driving *Ticket type multipliers: 1-way (1), RT (2), 7-day (7), miles (interlined trips shorter than the longest monthly pass (28) train leg pay the longest distance driving mile train leg) Caltrain Zoned $3.00 $2.00/additional zone $0.25 discount on Clipper Nearest one-way fares $0.25 GO Transit Zoned na na Discounts on Presto one- Minimum fare: Nearest way fares (per month): CAN$5.20 CAN$0.05 Rides 1-35: 10.0% Rides 36-40: 87.75% Rides 41+: 100%

NA: Not applicable n/a: Not available

123 83 SWOT Analysis: Fare Pricing

Peer Fare Pricing Components

Fare Components Fare Agency Structure Base Fare Distance Charge Surcharges/Discounts Other Charges Rounding Long Island Zoned No formula. Fares are highest for trips $5 charge for on-board Peak fare on Zone 1 Nearest Rail Road to/from City Terminal Zone (Zone 1), not as purchase one-way and 10-ride $1.00 high for trips to/from Zone 2 (Jamaica and tickets (monthly); eastern Queens). Trips within Nassau and nearest$0. Suffolk are low and flat across adjacent 25 (all zones, excluding Zone 14 – eastern Suffolk other) (beyond commuter territory) MBTA/ Zoned $2.10 (zone) $0.50-$1.00/additional $3 charge for on-board Commuter $2.75 (interzone) zone (zone) purchase Rail $0.25-$0.50/additional zone (interzone) Metra Zoned $2.75 $0.50/additional zone $3 charge for on-board Nearest purchase (at stations where $0.25 TVM or ticket agent is available) NJT/ Zoned Fares administered on zone-to-zone basis, $3 charge for on-board NY Penn Station Nearest Commuter not by number of zones traveled, but by purchase surcharge $0.25 Rail distance. Trips fall into one of three fare (one-way); structures: nearest - trips beginning/ending at NY Penn Station $1.00 - trips beginning/ending at a NJ terminal (monthly) (Newark, Hoboken) - local trips (not involving NYPS, Newark, Hoboken)

124 84 SWOT Analysis: Fare Pricing

Peer Fare Pricing Components

Fare Components Fare Agency Structure Base Fare Distance Charge Surcharges/Discounts Other Charges Rounding SEPTA/ Zoned - To/from CCP: Btw CCP/1 and: $1.00 -$1.50 charge for on- Onboard Regional $4.75 - Zone 2: $0.00 board purchase cash: Rail - Thru (via) CCP: - Zone 3: $1.25 $0.00 -$1.50 discount for next $1 $8.50 - Zone 4, $1.75 evening and weekend fare - All other trips - New Jersey: $5.25 (not to or thru Monthly pass: interline travel CCP): $3.50 anywhere within zone without fare for each leg CCP: Center City Philadelphia Sound Station-to- $2.75 $0.55 per mile ORCA regional pass: Nearest Transit/ station interline travel when pass $0.25 Sounder denomination covers fare of each leg TriRail Zoned $2.50 + 1-2 zones: $1.25/zone + 3rd zone: $0.65 + 4th zone: $0.60 + 5th zone: $0.65 UTA/ Station-to- $2.50 $0.60 per additional Nearest FrontRunner Station station $0.05

NA: Not applicable n/a: Not available

125 85 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Ticket Types

Fare Travel Agency Structure Range One-Way Roundtrip Multi-trip Metrolink Mileage 2 miles - $5.00-$27.50 $10.00-$55.00 N/A based 155 miles Discount: 0.0% Caltrain Zoned 2 miles - $3.00-$13.00 8-ride: $20.25-$94.25 (6 zones) 77 miles Per zone charge: $2.00 Discount: 7.5% GO Transit Zoned 4 miles - CAN$5.20-$20.80 (1) 111 miles (US$4.73-$18.93) MBTA/Commuter Rail Zoned 1-69 miles (1) $2.10-$11.50 10-ride: $21.00-$115.00 (11 zones) Metra Zoned 1 mile - $2.75-$6.25 10-trip: $27.50-$92.5 (12 zones) 63 miles Per zone charge: $0.50 Discount: 0.0% NJT/Commuter Rail Zoned n/a $2.25-$21.75 10-trip: $27.50-$62.5 Discount: 0.0% (not available for all trips) SEPTA/Regional Rail Zoned 1-84 miles $4.75-$9.00 10 trip: $38.00-80.00 (5 zones) Discount: 5-10% Sound Transit/Sounder Mileage 3 miles - $2.75-$5.25 based 48 miles UTA/FrontRunner Distance 5 miles - $2.50-$10.30 based 80 miles

126 86 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Ticket Types

Agency Monthly Pass 7-Day/Weekly Pass Day Pass Other Pass Metrolink $140-$462 $35.00-$192.50 Weekend Day: $10.00 Multiple: 16.8-28 Multiple: ~7 Caltrain $73-$338; Multiple: 26.5 $6.00-$26.00; Multiple: 2.0 GO Transit CAN$10.40-$41.60 (US$9.46-$37.86) Multiple: 2.0 MBTA/Commuter Rail $75.00-$362.00 Multiple: 31.4 - 35.7 Metra $78.25-$178 Weekend Pass: $7.00 Multiple: 28.5 NJT/Commuter Rail $133-$452 $16.50-$139.50 Multiple: not applicable Multiple: not applicable SEPTA/Regional Rail $101.00-$191.00 $27.25-$53.00 Joint SEPTA & NJ Transit Pass: Multiple: 21.3-29.4 Multiple: 5.7-8.2 $182.00-$612.00 Sound Transit/Sounder $99-$189; Multiple: 36 $5.50-$10.50; Multiple: 2.0 UTA/FrontRunner $198; Multiple: 19.2-79.2

127 87 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Ticket Types Notes: (1) estimated Fares for Caltrain, GO Transit, Metra, NJT, and Sound Transit are from 2014 peer review; fares for Metrolink, MBTA, SEPTA, and UTA are from this peer review. Caltrain: 8-trip ticket and monthly pass available only on Clipper. Monthly pass originally priced at 26 x cash fare; current 26.5 multiple is calculated from Clipper cash fare. GO Transit: Presto stored value fares are discounted from cash fares. MBTA: Monthly Commuter Rail pass and single ride tickets are available on CharlieCard. 10-ride pass is only available as paper ticket. Metra: on weekends and select holidays, Metra's Family Fares allow kids to ride free with an adult using a Monthly Pass, 10-Ride ticket, or Weekend Pass. New Jersey Transit: does not use multiples to price passes; pass products are priced to provide a discount assuming specific pass usage rates SEPTA/Regional Rail: When Regional Rail requires travel through Center City Philadelphia, the ticket is $8.50 at all times, whether on the same train or a connecting train. A TrailPass is valid for travel on Regional Rail between Center City Philadelphia and the zone indicated on the front of the pass. Fare zones are determined by distance from Center City Philadelphia. Sound Transit: Monthly pass is a regional monthly pass available on ORCA smart card; revenue sharing is based on individual trip making patterns. UTA: Passengers traveling through the North Temple station will not be charged for an additional station. This is not a free fare zone and passengers are still required to pay the FrontRunner base fare.

128 88 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Ticket Types

• Metrolink’s maximum one-way fare is significantly higher than its peers at $27.50. The peer with the next highest maximum fare NJT ($21.75), but Metrolink’s maximum trip length is significantly longer than peers. The most significant reason for the higher maximum fare is due to the significantly longer travel range for Metrolink (155 miles compared to 29-111 miles for peers).

• Metrolink’s 7-day pass multiplier of 7 aligns with SEPTA’s multiplier (ranges from 5.7 to 8.2).

• For trips under 80 miles, Metrolink’s monthly pass multiplier of 28 is in line with its peers’ multipliers that range from 21.3-36 (excluding UTA).

• Metrolink’s monthly pass cap at 80 miles is unique to its peers and impacts the monthly pass multiplier for trips over 80 miles. For trips over 80 miles monthly pass prices are capped at $462 (Adult) resulting in a decrease of the multiplier to below 28. Similarly, UTA has one flat price for its FrontRunner monthly pass, as such the monthly pass multiplier ranges from 19.2 to 79.2.

129 89 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Average Fare per Mile

• Since the distance between stations varies by operator and the Metrolink’s travel range is significantly longer its peers, a better strategy to compare pricing between peers is to look at the average one-way fare per mile. Fare Avg. One-Way Cash Agency Structure Travel Range One-Way Fare per Mile Smart Card (stored value) Metrolink Mileage 2-155 miles $5.00-$27.50 $2.50 - $0.18 N/A based Caltrain Zoned 2-77 miles $3.25-$13.25 $1.63 - $0.17 $2.75-$12.75 (6 zones) Discount (from cash fare): $0.25 (1) GO Transit Zoned 4-111 miles CAN$5.65-$21.05 CAN$1.41 (US$1.14) Discounts (from cash fare): (US$4.58-$17.05) CAN$0.19 (US$0.15) Rides 1-35: 10.0% Rides 36-40: 87.75% Rides 41+: 100% MBTA/Commuter Rail Zoned 1-69 miles (1) $2.10-$11.50 $2.10 - $0.16 Discount (from cash fare): $3.00 (11 zones) Metra Zoned 1-63 miles $3.25-$10.25 $3.25 - $0.16 N/A (12 zones) NJT/Commuter Rail Zoned n/a $2.25-$21.75 n/a N/A SEPTA/Regional Rail Zoned 1-84 miles $4.75-$9.00 $4.75 - $0.11 N/A (5 zones) Sound Transit/Sounder Mileage 3-48 miles $2.75-$5.25 $0.92 - $0.11 $2.75-$5.25 based Discount (from cash fare): $0.00 UTA/FrontRunner Distance 5-80 miles $2.50-$10.30 $0.50 - $0.13 based (1) Estimated N/A: Not applicable; n/a: Not available Fares for Caltrain, GO Transit, Metra, NJT, and Sound Transit are from 2014 peer review; fares for Metrolink, MBTA, SEPTA, and UTA are from this peer review.

130 90 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Average Fare per Mile

• The average one-way fare per mile was calculated as the minimum fare divided by the minimum miles and maximum fare divided by the maximum miles.

• While Metrolink’s lowest one-way fare is higher than all of its peers, the average one-way fare/mile for the shortest trip is lower than two of its peers: Metra and SEPTA.

• Metrolink’s one-way fare for its longer distance trips ($0.18 per mile) is slightly higher than its peers ($0.11 - $0.17 per mile).

• A few things also impact the fare for a trip include: – For some zoned fare systems (e.g., Caltrain, MBTA, Metra), fares are higher if the trip crosses a zone line. – In other zoned systems (LIRR), the fares are not the same in every zone + a trip of any given length may cross an extra zone boundary. – Some systems also have surcharges, for example, on SEPTA, there is a higher charge for trips to/from New Jersey.

131 91 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Average Fare per Mile

5-mile trip 33-mile trip Farebox Recovery Subsidy per Avg. Ratio Psgr Mile Fare Fare Avg. Fare/Mile Fare/Mile Metrolink 47% $0.21 $5.25 $1.05 $9.50 $0.29 Caltrain 56% $0.15 $3.25 or $5.25 $0.85 $9.25 $0.28

Long Island Railroad 50% $0.28 $3.00 - $8.25 $1.13 $5.50 - $13.00 $0.28 MBTA/Commuter Rail 43% $0.25 $2.10 or $2.75 $0.49 $9.75 $0.30 Metra 48% $0.20 $3.25 or $3.50 $0.68 $7.00 or $7.50 $0.22 NCTD/Coaster 40% $0.24 $4.00 $0.80 $5.50 $0.17 SEPTA/Regional Rail 53% $0.23 $4.75 $0.95 $6.50 or $9.00 $0.23 Sound Transit/Sounder 26% $0.44 $2.75 $0.55 $4.50 $0.14 TriRail 21% $0.38 $3.75 $0.75 $5.00 $0.15 UTA/FrontRunner 13% $0.34 $2.50 $0.50 $4.30 $0.13 Peer Average 46% $0.26 $0.74 $0.21 (excl. Metrolink)

Based on actual cash fares for 5- and 33-mile trips. Fares for Caltrain, GO Transit, Metra, NJT, and Sound Transit are from 2014 peer review; fares for Metrolink, MBTA, SEPTA, and UTA are from this peer review. • For a 5-mile trip, Metrolink is more expensive than all of its peers except Long Island Rail Road. • For a 33-mile trip, Metrolink is more expensive than all of its peers except MBTA.

132 92 SWOT Analysis: Fare Pricing

Peer Fare Pricing – Average Fare per Mile

AVERAGE FARE PER PASSENGER MILE AND FAREBOX RECOVERY RATIO ARE STRONGLY CORRELATED

$0.30 LIRR NJT $0.25 SEPTA

$0.20 MBTA METROLINK CALTRAIN Sounder METRA $0.15 Coaster

$0.10 TriRail

AVERAGE FARE PER PASSENGER MILE PASSENGER PER FARE AVERAGE $0.05 UTA

$0.00 10% 20% 30% 40% 50% 60% 70% FAREBOX RECOVERY RATIO

There is a correlation between the average fare per passenger mile and the farebox recovery ratio. As the average fare per passenger mile increases, so does the farebox recovery ratio. Conversely, as the average fare per passenger mile decreases, so does the farebox recovery ratio. Metrolink is among a cluster of peers.

133 93 SWOT Analysis Fare Structure & Pricing Opportunities

134 SWOT Analysis: Fare Structure & Pricing Opportunities

Fare Policy Alternatives

• As part of this Fare Study, several fare policy alternatives are being considered: – Systemwide Fare Decrease – Transition to Zone-Based Fare Structure – Rebalancing of Fixed Fee and Mileage Fee – Introduction of Station-to-Station Fare Structure to Encourage Short Distance Trips – Alternatives to Metrolink’s Embedded Interagency Transfer

• In the next task of this study, we will be further evaluating the feasibility of these fare policy alternatives. In addition, we will assess the ridership and revenue impacts of the alternatives resulting from the different pricing levels and structures.

• There are also other fare policy options that Metrolink should consider in the future.

135 95 SWOT Analysis: Fare Structure & Pricing Opportunities

Systemwide Fare Decrease

• Advantages – Based on the peer review, Metrolink’s fares are slightly higher than other commuter rail operators. Decreasing Metrolink’s fare will help attract more riders. – Metrolink is currently evaluating the effectiveness of this fare policy alternative by piloting a 25% discount on the Antelope Valley Line. – Consistent, systemwide fare changes are relatively easy to implement

• Disadvantages – While decreasing Metrolink’s fares will attract more ridership, it may have a negative impact on fare revenue and Metrolink’s farebox recovery ratio. Revenue and ridership modeling that will be conducted in the next task of the Fare Study will provide valuable insight into the potential impacts of fare decreases on revenue and ridership. – One of the advantages of market-based fare structures like Metrolink’s is their attractiveness to different riders and the ability to target different markets. An across-the-board fare decrease would not leverage the price sensitivities of Metrolink riders to optimize the fare structure. – Limiting fare changes to a systemwide fare decrease does not address structural problems with current fare policies, such as opportunities to attract short distance as well as long distance trips, simplify fares with a zoned fare structure, and consider alternatives to Metrolink’s embedded transfer.

136 96 SWOT Analysis: Fare Structure & Pricing Opportunities

Transition to Zone-Based Fare Structure

Fixed zone boundaries may be set throughout the Metrolink system, grouping stations into specific zones. Fares are based on the origin and destination zones of a trip. The simplest application sets fares based on the number of zone boundaries that are crossed. A more complex application can set fares for the specific zones traveled; i.e., a higher fare can be charged for travel within or to/from a particular zone (e.g., city terminal zone). • Advantages – Fare payment is streamlined. The fare table is greatly simplified. Visual fare inspection of printed fare media is simpler. Ticket selection is easier to navigate on the existing Metrolink TVMs with its limited number of buttons. • Disadvantages – Fare inequities result from grouping stations into zones. Trips originating from different stations in the same zone will have the same fare, with different distances traveled. Trips between two adjacent stations in different zones will cost more than longer travel within a zone. Instituting an intrazone fare for travel between any adjacent stations will somewhat mitigate this inequity. – Will not simplify the purchase transaction for the customer who will still be required to select their origin and destination stations. – May result in parking constraints at stations near zone boundaries as riders shift to other stations to take advantage of lower fares across a zone boundary. – May result in a high minimum fare.

137 97 SWOT Analysis: Fare Structure & Pricing Opportunities

Rebalancing of Fixed Fee and Mileage Fee

• Advantages – Metrolink’s mileage-based fare structure provides a direct connection to the distance traveled while addressing some of the challenges with zones, such as short-distance trips across zone boundaries. – Metrolink’s fixed fee / base fare is higher than its peers and discourages shorter distance trips. Lowering the fixed fee can help attract travelers making shorter distance trips by making Metrolink more price competitive with other transit services and driving.

• Disadvantages – Metrolink’s fixed fee includes an embedded transfer fee. When considering the base fare, it will be important to understand whether the minimum fare will cover the embedded transfer fee. – Lowering the fixed fee will likely require increasing the mileage charge. Metrolink’s primary target market is long-distance commuters. It will be important to set the mileage charge such that it does not discourage long distance trips.

138 98 SWOT Analysis: Fare Structure & Pricing Opportunities

Introduction of Station-to-Station Fare Structure to Encourage Short Distance Trips

• A station-to-station fare will decrease the price of short distance trip by pricing the fare at $1-$2 per station or the mileage-based fare, whichever is lower.

• Advantages – Metrolink’s fixed fee base fare is higher than its peers and discourages shorter distance trips. Providing a lower short distance fare can help attract travelers making shorter distance trips by making Metrolink more price competitive with other transit services and driving.

• Disadvantages – Metrolink’s fixed fee includes an embedded transfer fee. When considering the minimum fare, it will be important to understand whether the minimum fare will cover the embedded transfer fee. – When considering the minimum fare, it will be important to consider fares of local transit services, which generally cost around $2.

139 99 SWOT Analysis: Fare Structure & Pricing Opportunities

Other Fare Policies to Consider

Other fare policies that were discussed during stakeholder interviews that may warrant further evaluation in the future include:

• Eliminate under-utilized ticket types (e.g., roundtrip and 7-day) and reintroduce multi-ride tickets on mobile ticketing (e.g., 10-ride and 20-ride tickets) – Metrolink’s monthly pass is the most highly used fare product, accounting for 56.0% of Metrolink’s ridership and 54.8% of revenue. One-way fares also provide convenient fare payment methods for infrequent and low income riders. The roundtrip ticket and 7-day pass account for a small share of Metrolink’s ridership and revenue. The roundtrip ticket accounts for only 12.1% of ridership and 12.5% of revenue. The 7-day pass accounts for only 8.4% of ridership and 9.7% of revenue. The roundtrip ticket and 7-day pass could be replaced with a fare product to encourage infrequent riders to use Metrolink by providing more flexibility. – There has been interest in reintroducing 10-ride or 20-ride tickets to replace these ticket types. Metrolink had to discontinue its 10-ride tickets due to fare abuse. With the introduction of mobile ticketing and electronic fare enforcement, Metrolink should consider whether electronic multi-ride tickets would be a viable replacement for these ticket types. Metrolink could also discount these products to incentivize purchase and increase rider retention. – Metra and Caltrain have effectively attracted this market by offering a 10-ride and 8-ride tickets. Metra’s 10-ride tickets account for 23% of ridership; Caltrain’s 8-ride tickets account for 16% of ridership. Other peers that offer both multi-ride tickets and 7-day/weekly passes tend to see this market segment split between the ticket types.

140 100 SWOT Analysis: Fare Structure & Pricing Opportunities

Other Fare Policies to Consider

• Introduce off-peak fares to incentivize midday trips – As with commercial airlines, offering riders a fare incentive at times when demand for service is less, can be a prudent strategy to encourage the use of off‐peak service. Alternately, peak/off‐peak differential ticket pricing at commuter rail agencies could be thought of as a fare surcharge for passengers riding on high demand (peak period/peak direction) trains. – Commuter rail agencies commonly find that ridership is significantly higher on trains operating during peak periods and in the peak direction (to center city in AM and from center city in PM). Most off‐peak, reverse peak, and weekend trains typically have excess seating capacity. – One significant limitation in offering a off-peak fare for commuter rails is that the service levels during the midday and evening are lower making , especially newer commuter rail services. More “established” systems (Metra, NJT, SEPTA, LIRR/MNR, and Caltrain) have much more off-peak service than the systems that began service in last 25 years (Metrolink, TriRail, and the even more recent FrontRunner, Sounder). On some lines, there may be no reverse peak service and/or no off-peak service. – As Metrolink considers off-peak pricing, the agency should consider the service levels on its lines and whether there is a sizeable target market that would take advantage of the discount.

141 101 SWOT Analysis: Fare Structure & Pricing Opportunities

Other Fare Policies to Consider

• Offer more flexible passes (e.g., systemwide pass or add-on fares to extend the geography of a pass) – Increasing flexibility of Metrolink’s passes may incentivize riders to use their passes for new trips. Metrolink offers some flexibility today by allowing riders to use their monthly pass as a systemwide pass on the weekends and permitting riders to ride on parallel lines. – New options: a systemwide pass that is valid for any trip on the system or allowing riders to extend the geography of their passes by paying an upcharge. – Metrolink should evaluate the variability in travel patterns of riders to determine whether riders would want the flexibility to travel to destinations beyond the valid distance of their pass.

• Offer a annual pass through a subscription service – While a significant share of Monthly Pass buyers (37%) pay for their passes through a corporate account, 55% of monthly passholders pay for their pass with a credit or debit card. These riders may consider signing up for an annual pass through a monthly subscription service. Offering an annual pass through a monthly subscription service will help defray the upfront cost of an annual pass while helping increase rider retention. 65% of Metrolink monthly pass holders indicated interest in an annual pass.

142 102 SWOT Analysis: Fare Structure & Pricing Opportunities

Other Fare Policies to Consider

• Use mobile ticketing to cap fares through a fare accumulator – Fare accumulators cap fares paid based on a set threshold (number of boardings or value) within a defined period of time. Fares may be capped on a daily, weekly, or monthly basis. – Accumulators enable transit operators the ability to provide frequent riders with the best fare regardless of whether they can purchase a monthly pass upfront at the beginning of the month, helping improving affordability and equity. – GO Transit’s fare accumulator offers an increasing discount based on the number of trips: • Discounts on Presto one-way fares (per month): – Rides 1-35: 10.0% discount – Rides 36-40: 87.75% discount – Rides 41+: 100% After 40 trips, additional trips are free. – While fare accumulators have not been implemented on mobile ticketing, mobile ticketing provides the ability for Metrolink to track the number of trips made by a rider and calculate fares to implement a fare accumulator. – One challenge with mobile ticketing will be ensuring that riders will activate their ticket since riders will have the ability to activate their tickets when they see fare enforcement. When considering replacing a monthly pass with an accumulator, Metrolink should ensure that fares can be enforced. – Metrolink should also consider the revenue impact of extending pass discounts to all riders and the loss of upfront revenue at the beginning of the month from monthly pass sales.

143 103 SWOT Analysis: Fare Structure & Pricing Opportunities

Other Fare Policies to Consider

• Consider overlay fare products for discounted intra-county day passes, products, or line fares – Riverside County is considering an intra-county day pass to encourage intra-county travel on Metrolink, similar to the discontinued OCLink Day Pass. An intra-county day pass can help promote and incentivize intra-county travel on transit, especially in counties with a low share of travelers using transit to complete their trips. An intra-county day pass could also include free transfers to other local transit services enabling seamless travel for one price. – When considering an intra-county day pass or reduced fare, Metrolink must consider the impact on other ticket types. Implementation issues with the OCLink day pass: • Riders would purchase a day pass for travel within Orange County and a separate pass for travel outside of the County. • The day pass also cannibalized monthly pass revenue. – Offering a line fare may help simplify the fare payment process for infrequent riders. Often new and infrequent riders will request tickets based on the county or line instead of station. – Metrolink’s fare are distance-based. As such, when balancing the pricing of the day pass or line fares between short-distance and long-distance trips, there will be winners and losers. Similar to the weekend day passes, short distance riders may still be better off purchasing one-way or roundtrip fares for their specific OD station pairs. – Remove the 80 mile cap and introduce a regional pass (SoCal Pass) for unlimited travel and transfers to all other transit services that connect to Metrolink.

144 104 SWOT Analysis: Fare Structure & Pricing Opportunities

Other Fare Policies to Consider

• Introduce a loyalty pass that offers Metrolink fares at a discounted rate – An innovative way to provide Metrolink fares at a discounted rate is to offer a membership that entitles riders to discounted fares. – When considering this option, it will be extremely important to understand whether it would undermine or replace other ticket types such as monthly passes.

145 105 SWOT Analysis: Fare Structure & Pricing Opportunities

Title VI Implications

• FTA Circular 4602.1B: “Title VI and Title VI-Dependent Guidelines for Federal Transit Administration Recipients,” dated October 1, 2012 requires transit providers to perform a fare equity analysis prior to any fare changes to determine if there is a disparate impact on minorities. In addition, while low-income populations are not a protected class under Title VI, transit providers must also determine if there is a disproportionate burden on low income populations due to the overlap of environmental justice principles in this area. • Metrolink makes a determination of disparate impact/disproportionate burden if usage of the affected fare type by minority (or low income) populations exceeds the 5% threshold established by Metrolink’s Disparate Impact Policy and Disproportionate Burden Policy and if, cumulatively: – the absolute share of minority (or low income) riders subject to the adverse effects of the service or fare change(s) exceed the share of non-minority (or non-low income) riders that are subject to the adverse effects by 5% or more, OR – the absolute share of non-minority (or non-low income) riders subject to the benefits of the service or fare change(s) exceed the share of minority (or low income) riders that are subject to the benefits by 5% or more. • A Title VI fare equity analysis of the fare policy options in the Fare Study will be evaluated in Task Order 8. • As discussed in Metrolink’s target market, the share of Metrolink’s minority and low income riders who use one-way and roundtrip tickets are higher than the rest of the population. Low income populations also have different travel patterns and travel less frequently than higher income riders.

146 106 SWOT Analysis Rider Category Discounts

147 SWOT Analysis: Rider Category Discounts

Metrolink’s Rider Category Discounts

• Metrolink offers fare discounts for specific rider categories.

Rider Category Eligibility Requirements Discounts

Child Ages 5 and under Three children travel free with an adult using a valid ticket; each additional child pays the youth fare Youth, Ages 6-18 25% off one-way, round-trip, 7-day, monthly passes (effective Student Valid student ID required July 1, 2015) on request Senior Ages 65+ 25% off Monthly Pass and 7-Day Pass Photo ID with DOB 50% off One-Way and Round-Trip tickets required on request Active Military Valid Common Access 10% off One-Way and Round-Trip tickets Card (CAC) required on request Persons with Proof of eligibility required 25% off Monthly Pass and 7-Day Pass Disabilities on request 50% off One-Way and Round-Trip tickets LA County Access Services ID Card holders ride at no cost Personal Care Must board and alight with Allowed to accompany a person with a disability without Attendant (PCA) the person with a disability purchasing a ticket.

148 108 SWOT Analysis: Rider Category Discounts

Metrolink’s Rider Category Discounts

Ridership Distribution by Rider Category • Riders eligible for discounts account for 23% of Metrolink boardings and 20% of fare revenue. Virtually all of those boardings are made by seniors, riders with disabilities, and students: – Students account for 12.0% of boardings and 11.6% of fare revenue. – Seniors and persons with disabilities account for 10.8% of boardings, but only 7.8% of fare revenue, recognizing the higher discounts available for these riders. – Access riders represent 3.8% and PCAs represent 2% of total ridership. However, the ridership distribution does include not Access riders in Los Angeles County and PCAs who travel free on Metrolink because they are not reflected in ticket sales data.

Student Youth S/D 12.0% 10.8% 0.1% Military 0.1%

Adult, 76.9%

2015 Ridership Source: FY2015 Ticket Sales

149 109 SWOT Analysis: Rider Category Discounts

Peer Rider Category Discounts

Agency Senior Disabled Youth Child Student Active Military Metrolink 65 years + 6-18 years 0-5 years ID req'd ID req'd 25% (all fares) free 25% (all fares) 10% (one-way, RT) 50% (one-way, RT) 25% (7-day, monthly pass) Caltrain 65 years + 5-17 years 0-4 years University students 50% 50% 50% (all fare products) free GO Pass: $165/pass ($13,750 min. per school) GO Transit 65 years + 6-12 years 0-5 years elementary, junior high, 50% 50% (one-way fares) free secondary students 15% (Presto card) Long Island 65 years + 5-11 0-4 years Active Duty ID req’d Rail Road 50% (peak one way, peak free Off-peak fares at all 33%-50% (varies with round trip) times ticket type, time of day) MBTA/ 65 years + 50% 0-11 years Junior and high school Commuter Rail 50% free students Monday thru Friday Pass: $26 7-day Pass: $26 (valid in Zones 1A, 1, and 2 M- F) Metra 65 years + 7-11 years 0-6 years grade or high school students ID req'd 50% 50% 50% (one-way fares) free (one-way, 10-ride, monthly ~50% (one-way, 10- pass) trip)

150 110 SWOT Analysis: Rider Category Discounts

Peer Rider Category Discounts

Agency Senior Disabled Youth Child Student Active Military NCTD/Coaster 60 years + 6-18 years 0-5 years 50% (3-zone monthly) free 50% (one-way, RT) 75% (3-zone monthly) NJT/ 62 years + 5-11 years 0-4 years University Partnership Program ID req'd Commuter Rail 50% (all fare products) free 25% (monthly pass) 55% (one-way) 50% (one-way) SEPTA/ 65 years + 5-11 years 0-4 years Student Rail Pass: $5.60/day Regional Rail $1 regional rail 50% 50% of weekday fare Free University Pass: 10% fare within PA, (up to two 50% outside PA children) Sound Transit/ 65 years + 6-18 years 0-5 years Upass (ORCA) Sounder 50% 50% ~30% (one-way, free monthly pass) TriRail 65 years+ 5-12 years <5 years Ages 13-18 Veterans with 50% (one-way, 50% (one-way, RT, free 50% (one-way, RT, monthly) Disabilities RT, monthly) monthly) ID req’d 50% ID req’d ID required UTA/ 65 years + 50% 6-17 years 0-5 years Student 30-day Pass: $62.75 FrontRunner or 25% (monthly pass) (up to two Medicare card children) holders 50%

151 111 SWOT Analysis: Rider Category Discounts

Opportunities: Alternative Discounts and Policies

Standardized/Uniform Fare Discounts • Although Metrolink provides different discount levels and discounts on different products for different rider categories, discounts for seniors and persons with disabilities have been standardized, and with the July 2015 fare change, youth and student discounts will also be standardized.

• While some transit agencies have standardized fare discounts, none of the commuter rail systems included in this review have done so. However, they all meet or exceed Federal half fare requirements for seniors and persons with disabilities.

• Setting common fare discounts across all rider categories can simplify administration of the fare system. However, depending on the potential size of the market, establishing uniform fare discounts for all eligible riders on all ticket types could have an unwarranted impact on fare revenues without a commensurate increase in ridership.

• Consider consolidating discounts offered for specific rider categories only to the extent that they represent target markets. In those cases, consider the ticket types that best meet the travel patterns and needs of the specific markets.

152 112 SWOT Analysis: Rider Category Discounts

Opportunities: Alternative Discounts and Policies

Modification of Policy Governing Access Trips • Regional rail systems are not required to provide ADA complementary paratransit services for riders with disabilities. Metrolink has entered into an agreement with LA County’s Access Services to provide free transportation within LA County for ADA-eligible riders who present an Access identification card. Similar provisions are not offered in other counties served by Metrolink, creating confusion and making many riders think it is acceptable to ride free in other counties as well and making it difficulty to enforce fare payment for trips that cross county lines.

• Among agencies that operate only commuter rail, both Caltrain and LIRR offer the same half fare discounts to ADA riders that are provided to all persons with disabilities.

• In some cases, agencies that operate transit and commuter rail services and provide ADA complementary paratransit permit ADA-eligible riders to travel free on commuter rail (e.g., FrontRunner). In other cases, ADA-eligible commuter rail riders are offered the same discount as other riders with disabilities (e.g., NCTD provides free fares to ADA riders on bus and light rail services, but not on Coaster). Agencies like UTA that allow free trips on commuter rail do so because it is less costly than providing a complementary paratransit trip.

• Consider establishing a uniform policy and providing the same discount for all disabled riders, including Access riders, throughout the Metrolink system.

153 113 SWOT Analysis: Rider Category Discounts

Opportunities: Alternative Discounts and Policies

Modification of Policy Governing PCAs • Metrolink stakeholders expressed concern about fare abuses associated with providing free fares for Personal Care Attendants (PCAs). Specifically, there is concern that ADA-eligible Metrolink riders are inviting other passengers to travel free as their PCAs.

• The ADA requires that transit agencies permit PCAs to travel free with ADA riders who need to have one. However, regional rail systems are not required to provide ADA complementary paratransit services for ADA-eligible riders. The PCA concern arises because Metrolink has entered into an agreement with LA County’s Access Services to provide free transportation within LA County for ADA-eligible riders.

• Other commuter rail systems (Caltrain, LIRR) do not provide similar services and therefore do not encounter the abuse of PCA privileges. In Toronto, GO Transit riders who need a companion for assistance may bring one free of charge, but must obtain an endorsement on a paper ticket or on a Presto card so two people can ride using a single fare.

• If free fares are retained for Access riders in LA County, consider requiring proof of payment for all riders, including Access and all ADA-eligible riders and PCAs. Even if traveling for free, Access and PCA riders would be required to obtain a ticket from a TVM which would allow Metrolink track Access ridership.

154 114 SWOT Analysis Transfer Policies

155 SWOT Analysis: Transfer Policies

Seamless Travel

• Transfers are integral to provide a seamless transit system. Transfers increase customer convenience by enabling convenient origin-to-destination travel. • Metrolink’s original fare policy objectives in 1992 included: - Maximizing Customer Convenience in Fare Payment • Allow seamless transfers with all connecting bus operators • Attempt to negotiate joint prepaid fare media with other transit operators • Provide flexible fare payment including passes valid for specified time period, prepaid tickets valid for specified number of trips, and cash good for a single trip - Provide Free Transfers. • In order to provide this customer convenience and seamless travel between operators, Metrolink decided to include an embedded transfer fee in all of its tickets. Approximately half of Metrolink riders transfer to connecting transit service to access their home station and/or egress their destination station. Most transfer activity occurs at LA Union Station for riders to access Downtown Los Angeles or other destinations in the area. • Recently, Metrolink has been reconsidering its transfer policies. The majority of transfer activity to other transit operators occurs at LA Union Station. Questions have been raised about the equity of charging everyone for the embedded transfer even if they do not use it (especially those not traveling to/from Union Station). There is also interest in eliminating the embedded transfer to help lower the Metrolink fare. • Today, Metrolink reimburses to connecting transit operators approximately $7.5 million each year.

156 116 SWOT Analysis: Transfer Policies

Seamless Travel Access Mode to Metrolink Station 59% 60% • 59% of Metrolink riders drive to the Metrolink station from home. Only 11% use transit to access the station 40% near their home. 24% 20% 18% 19% 20% • 43% of Metrolink riders take transit 20% 13% between Metrolink and their non- 4% 7% 5% 2% 2% 2% 3% 1% 1% home destination. 0% Dropped Carpooled Drove car Transferred Transferred Bicycle Walked Other LA Union Station off/picked from/to from/to a up another train bus • Majority of Metrolink riders who travel Access/Egress Mode - Home Access/Egress Mode - Non-Home to/from Union Station rely on connecting transit services. Access Mode to Metrolink Station – LA Union Station • 41% of Metrolink riders who travel 45% 41% from home to Union Station take a 38% train; 19% take a bus.

30% • 38% Metrolink riders arriving at 21% 21% Union Station take a train to their 20% 19% non-home destinations; 21% take a 15% 10% 12% 7% bus. 5% 1% 1% 2% 1% 0% 1% • Many of the riders accessing Union 0% Dropped Carpooled Drove car Transferred Transferred Bicycle Walked Other Station via train are taking Metro Rail off/picked from/to from/to a service to connect to Metrolink and, up another train bus therefore, require TAP enabled media Access/Egress Mode - Home LAUS Access/Egress Mode - Non-Home LAUS to pass through rail fare gates.

157 117 SWOT Analysis: Transfer Policies

Metrolink Transfer Policy

• Metrolink offers connections to many other transit services. Metrolink riders can use their ticket for free transfers to connecting service to/from Metrolink station. Metrolink has interagency agreements with most transit operators that have serve Metrolink stations. Metrolink does not have agreements with a few connecting operators, such as Santa Monica Big Blue Bus.

• Metrolink establishes a transfer agreement contract for reimbursements with connecting operators. Metrolink has different interagency transfer agreements and reimbursement rates based on negotiations with each transit operator. There are some concerns about inequity in the reimbursement rates since they vary based on negotiations.

• Transit operators, who are not a part of the EZ Transit Pass Program, invoice Metrolink monthly or quarterly based on boarding counts keyed into the farebox by bus operators.

• The Metrolink ticket must be valid for the date of travel. Riders can pre-purchase tickets for future dates. Unless a rider has pre-purchased a ticket, the rider must pay for the boarding to the Metrolink station. Introducing mobile ticketing and on-line sales will impact Metrolink transfer agreements since riders with one-way or roundtrip tickets will be able to use the tickets for first mile transfers to reach the origin Metrolink station.

• In northern San Diego County, NCTD accepts Metrolink monthly passes for one free transfer to Sprinter and Breeze each way at Oceanside Transit Center.

158 118 SWOT Analysis: Transfer Policies

Metrolink Transfer Policy

EZ Transit Pass Program in Los Angeles County • In Los Angeles County, the EZ Transit Pass program allows Metrolink riders with valid Metrolink tickets unlimited free rides on participating operators' local services - any time, any day, any station, any direction of travel. An additional fare for express services may be required (e.g. Metro Silver Line). • EZ Transit Pass travel does not require a direct transfer between Metrolink and connecting bus/rail service. Essential, Metrolink tickets serve as an all day passes on operators who accept EZ Transit Pass. • EZ Transit Pass operators are reimbursed based on transfer rates from the rider surveys instead of counts provided by the operators. • Any trip beginning or ending in LA County are printed on TAP enabled tickets so that riders can pass through Metro Rail fare gates. On buses, operators visually inspect the tickets.

Interagency Transfer Agreements • Direct agreements with operator: Anaheim Transportation Network, AVTA, City of Corona, City of El Monte, City of Irvine, City of Simi Valley, City of Thousand Oaks, LACMTA/Metro, LA World Airports, Mountain Area Transit, NCTD, Omnitrans, OCTA, RTA, Santa Clarita, and Sunline Transit • EZ Pass Program: AVTA, Burbank Bus, Carson, Foothill Transit, Gardena Municipal Bus Lines, Glendale Beeline, LADOT, Montebello Bus Lines, Monterey Park Spirit Bus, Norwalk Transit, Pasadena ARTS, Santa Clarita Transit, and Torrance Transit

159 119 SWOT Analysis: Transfer Policies

Metrolink Transfer Policy

• Generally, the reimbursement rate is based on the transit operator’s base fare, and Metrolink pays for one of every two transfers. The idea is that most riders will make a roundtrip and that Metrolink and the other transit operator will share the cost. EZ Transit Pass operators are reimbursed on their average fare.

160 120 SWOT Analysis: Transfer Policies

Metrolink Transfer Policy

161 121 SWOT Analysis: Transfer Policies

Peer Transfer Policies

Interagency Free Fare Agreements Charges/Discounts Revenue Sharing Transfers Caltrain Yes SamTrans and VTA accept Caltrain 2+ $0 No zone passes for free bus/light rail trips Caltain Monthly Pass + Muni pass $5.00 discount on $70 Muni monthly Subsidy funded by pass Muni

GO Transit Yes TTC Metropass + GO fare sticker CAN$60 Unknown valid for unlimited travel between three downtown GO Transit stations Fare discounts on many local transit Discount varies by systems connecting operator

Metra Limited Metra pass + Link-Up: connections $55 CTA/Pace fund the on CTA during AM & PM peaks, all discounts; Metra day on Pace gives pass sales Metra Pass + Plus Bus: unlimited revenue to CTA/Pace rides on Pace $30 Long Island No Joint LIRR/NYCT Metrocard tickets No Rail Road and passes sold by LIRR at full fare for each

162 122 SWOT Analysis: Transfer Policies

Peer Transfer Policies

Interagency Revenue Free Transfers Fare Agreements Charges/ Sharing Discounts MBTA/Commuter Rail Commuter rail monthly Mobile monthly pass not valid for Not applicable CharlieCard passes valid transfers to subway and bus; on MBTA buses and priced $10 below full monthly subways pass

NCTD/Coaster One-way fares include Discount on Coaster fare with $0.50 Yes free transfers to bus and valid day pass or Compass Card discount light rail within 2 hours pass on Coaster Round-trip fares provide Regional Plus Day Pass valid on ticket free transfers all day all NCTD and MTS services NJT/Commuter Rail No Commuter rail monthly passes Not applicable valid on NJT light rail or bus lines for corresponding fare value SEPTA/Regional Rail No Regional Rail Trail Passes Not applicable accepted on all SEPTA transit services Sound ORCA Regional Pass Sounder riders with ORCA Yes Transit/Sounder allows free transfers Regional or Business Pass may among 6 participating ride Amtrak for free; requires Rail agencies when the Plus validation from TVM Sounder fare is the same or higher than the connecting service

163 123 SWOT Analysis: Transfer Policies

Peer Transfer Policies

Interagency Revenue Free Transfers Fare Agreements Charges/Discounts Sharing Trinity Railway Yes TRE and DART fares The T (Fort Worth) Unknown Express are the same; allow fares can be upgrades intermodal travel on to TRE by paying the any fare difference in price UTA/FrontRunner FrontRunner base fare Not applicable is the same as the local bus/light rail fare to encourage transfers Round-trip ticket provides free transfers to bus/light rail Virginia Railway VRE passes/tickets No Express accepted as flash passes for free transfers to many connecting buses

164 124 SWOT Analysis: Transfer Policies

Peer Transfer Policies

Caltrain • Caltrain has fare agreements with two connecting transit agencies. SamTrans and VTA accept Caltrain 2+ zone monthly passes for free travel on their buses and light rail at any time. There is no revenue sharing with this agreement. On SamTrans, 3 percent of customers said they paid with a Caltrain Monthly Pass. • Muni allows Caltrain to offer a Caltrain Monthly Pass+Muni at a $5 discount off the cost of purchasing the Muni pass separately. Muni funds the subsidy. GO Transit • GO Transit and the TTC have partnered on a one-year pilot project to give you more options to get to and from downtown Toronto. TTC Metropass holders who purchase a new monthly GO fare sticker for $60 can use it for unlimited travel between Exhibition, Union and Danforth GO Stations. • GO Transit offers fare discounts on many local transit systems for regular GO customers. The discount varies by connecting operator. Metra • 15-18% of Metra riders transfer. – The growing reverse commute market is more likely to use transfers to access Metra. – Metra offers interagency passes with CTA and Pace that are add-on passes to Metra’s monthly pass. These passes are used with Metra monthly pass. The discount on the passes is paid by CTA/Pace; Metra gives pass sales revenue to CTA/Pace. • Link-Up ($55) provides connections on CTA during weekday peak hours (6:00 am - 9:30 am & 3:30 pm - 7:00 pm) and anytime on Pace. • PlusBus ($30) provides unlimited rides on Pace buses.

165 125 SWOT Analysis: Transfer Policies

Peer Transfer Policies

Long Island Rail Road • LIRR fare products do not include transfers with NYCT or Long Island Bus services. Joint LIRR/MetroCard tickets and passes are sold by LIRR, but the full fare for each service is charged. MBTA/Commuter Rail • MBTA commuter rail monthly pass holders can use MBTA subways and buses with their CharlieTicket monthly pass for free. • MBTA offers mobile ticketing on all commuter rail routes and commuter boats. Since mobile ticketing is not accepted on MBTA subways or buses, MBTA prices its monthly pass at $10 below the full monthly pass. NCTD/Coaster • Coaster one-way fares include free transfers to Sprinter and Breeze bus service within two hours of purchase. Roundtrip fares include free transfers to Sprinter and Breeze all day. • NCTD also accepts transfers from MTS. Coaster riders receive a $0.50 discount on fares with valid day passes or Compass Card passes. • RegionPlus Day Pass ($12) is valid on both NCTD and MTS service. NJT/Commuter Rail • NJT commuter rail riders can use their monthly passes valued at $54 or more on any NJT light rail line or buses up to the number of zones indicated on the pass. Riders show their valid rail monthly pass to the bus operator or light rail fare inspector.

166 126 SWOT Analysis: Transfer Policies

Peer Transfer Policies

SEPTA/Regional Rail • Regional Rail Trailpasses are accepted for travel on all SEPTA transit services. • Regional rail cash fares and single-ride tickets do not include a transfer to transit. Sound Transit/Sounder • ORCA Regional Pass enables transfers to/from transit services of Sound Transit, King County Metro, Pierce Transit, Community Transit and Everett. Free transfer is possible when ORCA fare value (denomination) is at least as high as the fare of the service. • Amtrak serves three Sounder stations: King Street, Edmonds, and Everett. Similar to Metrolink, Sound Transit has arrangements with Amtrak that enables Sounder riders with an ORCA monthly pass or a ORCA Passport card to ride Amtrak for free. Before getting on the train, the rider must get a Rail Plus validation ticket from the ticket vending machine at the train station and show this ticket in addition to ORCA card to the conductor. The ticket includes the date, destination, and ORCA card number for fare inspection. TRE • TRE, DART and The T have a coordinated zone fare structure and similar fare products, simplifying transfers. DART and TRE fares are the same, enabling intermodal travel on the same fare. The T fares, which are lower, can be upgraded to TRE fare levels by paying the difference in price.

167 127 SWOT Analysis: Transfer Policies

Peer Transfer Policies

UTA/FrontRunner • The FrontRunner transfer rate is 1.64 (55% of passengers transfer). • FrontRunner base fare is priced at base local bus fare to encourage transfers. The FrontRunner roundtrip ticket is considered valid transfer for Bus and TRAX. • FrontRunner only connects with one other transit agency (Park City Transit, which has free fares). Only 1% of riders transfer; there is no revenue sharing. VRE • VRE passes and tickets do not include an “embedded transfer” fee but are accepted for free transfers to many connecting buses. Connecting transit operators provide these transfers for free and do not require to be reimbursed by VRE. VRE passes and tickets (including mobile) are accepted as “flash passes” for transfers and for visual inspections. • Approximately 15-20% of VRE riders transfer to connecting transit (almost half of Metrolink riders transfer).

168 128 SWOT Analysis: Transfer Policies

Opportunities: Alternative Transfer Policies

• In the Fare Study scope of work and during stakeholder interviews, several alternative transfer policies were proposed for evaluation. These will be further explored in an upcoming technical memorandum. – Elimination of All Transfers – Providing Embedded Transfers Only on 7-Day & Monthly Passes – Replacement of Embedded Transfer with Optional Transfer with Surcharge – Introduction of Joint Pass(es) with Other Transit Providers – Acceptance of EZ Transit Pass

169 129 SWOT Analysis: Transfer Policies

Opportunities: Alternative Transfer Policies

Elimination of All Transfers • Transfer privileges would no longer be available to Metrolink riders regardless of their Metrolink fare. Riders wishing to transfer to transit will be charged the full fare of the transit service and will need to pay separately

• Advantages – Eliminating the embedded transfer will enable Metrolink to reduce the price of its tickets. – Metrolink riders who do not need transfer will not need to pay the embedded transfer fee. – Eliminating transfer as an option can eliminate need to vend TAP-enabled tickets from Metrolink TVM, reducing media costs. – Eliminating the embedded transfer will reduce the average fare for riders who do not transfer by 12%

• Disadvantages – Metrolink riders who need to transfer will need to pay fares when they board another transit operator, impacting customer convenience and resulting in a less seamless travel experience. – Eliminating transfer will result in an effective fare increase for any riders who must make a transfer to another transit operator to complete their trip. – Eliminating the embedded transfer will increase commute costs for riders who transfer by 11%-34%, depending on the number of transfers they make

170 130 SWOT Analysis: Transfer Policies

Opportunities: Alternative Transfer Policies

Providing Embedded Transfers only on 7-Day & Monthly Passes • There would be no change for Metrolink 7-day or monthly pass holders. Transfer privileges would, however, no longer be available to those purchasing single ride or round trip tickets.

• Advantages – Restricting free transfers to commuter fare products will encourage riders to purchase pass products instead of one-way and roundtrip tickets. – Eliminating the embedded transfer will enable Metrolink to reduce the price of its one-way and roundtrip tickets. – Metrolink riders who do not need transfer will not need to pay the embedded transfer fee if they purchase one-way or roundtrip tickets. A variation of this alternative would be similar to the next alternative that would offer transfers as a surcharge, or in this case an add on pass. – Many peer agencies only include free transfers to other services in the purchase of monthly passes. – Cost savings from requiring less TAP-enabled ticket stock.

Providing Embedded Transfers only on 7-Day & Monthly Passes • Disadvantages – Impacts customer convenience and increases fares for riders who use Metrolink infrequently. – May have Title VI implications.

171 131 SWOT Analysis: Transfer Policies

Opportunities: Alternative Transfer Policies

Replacement of Embedded Transfer with Optional Transfer with Surcharge • Rather than automatically including transfer privileges with each Metrolink fare, adding the transfer privilege would be offered as an option with an appropriate surcharge that is lower than the full fare charged for the transfer.

• Advantages – Only riders who transfer will need to pay for transfers. Metrolink riders who do not need to transfer will not need to pay the embedded transfer fee. – Metrolink riders can purchase the transfer in the same transaction as the Metrolink ticket sale. This allows Metrolink to track the number of transfers issued as part of its ticket sales instead of just relying on transfer rates reported by transit operators. – Eliminating the embedded transfer will enable Metrolink to reduce the price of its tickets.

• Disadvantages – Since riders not using a transfer will no longer cross-subsidize transferring riders, the transfer surcharge for riders who transfer will increase from the embedded transfer fee today, especially for riders who connect at both ends of their trip.

172 132 SWOT Analysis: Transfer Policies

Opportunities: Alternative Transfer Policies Introduction of Joint Pass(es) with Other Transit Providers Metrolink will establish agreements with individual transit agencies for a joint pass that is honored on both services. These joint passes could be either the same price or perhaps with a surcharge. – Similar to Metrolink’s agreement with Amtrak, Metrolink could work with transit operators who provide parallel bus services to develop a joint pass that could be used on either service, enabling riders to have the flexibility to chose to use parallel bus service if more convenient for a specific trip. – Metrolink could also work with transit operators who provide first and last mile services to Metrolink stations to develop an add-on pass for riders to access the stations that could replace interagency transfers.

• Advantages Joint passes will: • increase flexibility of passes for riders, giving them more transit options. • continue to allow riders to transfer seamlessly between operators. • Disadvantages – Development of these agreements will require significant coordination with other transit operators. Given the number of operators who provide connecting service, this could be a significant undertaking. – Requires coordination in the sale of the joint pass and the allocation of revenues.

173 133 SWOT Analysis: Other Fare Policy Options

Opportunities: Alternative Transfer Policies

Acceptance of EZ Transit Pass • Metrolink could become a full participant in the Los Angeles County EZ Transit Pass program. This would enable riders with an EZ Transit Pass to utilize both regional rail and parallel express bus for their day-to-day commute while continuing to enjoy the transfer privileges to local transit services. Metrolink’s monthly passes are just slightly more expensive than the EZ Transit Pass that is accepted on parallel express bus service. However, the price of both Metrolink’s monthly pass and the EZ Transit Pass are higher than agency issued monthly passes for parallel bus service. Metrolink will need consider its monthly pass pricing when determining whether it will accept the EZ Transit Pass.

• Advantages – Accepting the EZ Transit Pass would be a step towards Metrolink participating in a regional fare product. The EZ Transit Pass is a monthly pass good for travel on 24 different transit operators, including Metro, throughout the Greater Los Angeles region. – Participation in the EZ Transit Pass program will enable riders to have the flexibility to chose to use parallel bus service if more convenient for a specific trip. • Disadvantages – Metrolink does not receive the revenue directly. Revenue for the EZ Transit Pass is collected by Metro and distributed to participating transit operators. – Metrolink only receives revenue if riders validate their Metrolink trip. May require Metrolink to install electronic validators to validate TAP EZ Transit Passes.

174 134 SWOT Analysis Fare Payment Technology

175 SWOT Analysis: Fare Payment Technology

Mobile Ticketing and Ticket Vending Machines

Ticket Vending Machines • Metrolink’s TVMs are operating well beyond their expected service life which has led to increased failures, degraded performance, higher maintenance costs, and not providing the service that customers rely on. • Metrolink must determine whether and how to replace the TVMs. The typically high capital and operating costs of traditional ticket vending machines can be offset by alternative forms of fare payment, and reduced roles of TVMs.

Mobile Ticketing • Mobile ticketing and other forms of electronic fare payment can provide innovative new fare payment options as well as traditional fare products and pricing structures. • Metrolink is introducing mobile ticketing and must determine how that fare payment option fits with other payment options available to Metrolink riders. • Improved regional interoperability and connectivity can be enabled through mobile ticketing.

176 136 SWOT Analysis: Fare Payment Technology

Opportunities: Enabling flexible fare policies

Mobile Ticketing and Electronic Payment Opportunities • Mobile ticketing and electronic fare payments will provide more fare options, including stored value, also known as electronic cash, that: – Can be preloaded and debited “as you go” for increased flexibility and ease of use – Can be used regionally, with different agencies or services deducting different amounts – Can include bonuses or incentives (i.e. load $20 and get a $2 bonus)

• Mobile ticketing and electronic fare payments can also accommodate traditional fare products and passes, including: – Calendar passes (such as monthly and weekly passes) activated on a calendar date – Rolling period passes (such as 31-day and 7-day passes) activated on first use – Trip-based products (such as 10- or 20-trip tickets) – Time-based passes (such as 2 hour, 24 hour, and weekend passes)

177 137 SWOT Analysis: Fare Payment Technology

Opportunities: Enabling flexible fare policies

Mobile Ticketing and Electronic Payment Opportunities • Several new fare pricing structures can also be supported, including: – Zoned or station-to-station fares – Flat or fixed fares – Time-of-day or day-of-week pricing

• Additional discount structures are possible, such as: – Fare capping (i.e. stop deducting fares at a predetermined cap) also known as best fares or fair fares – Fare capping provides improved equity since riders to not need to pay up front to get the benefit of a discounted period pass – Differential pricing for specific lines, stations, rider classifications, or product types

178 138 SWOT Analysis: Fare Payment Technology

Opportunities: Reduced reliance on TVMs

Mobile Ticketing Opportunities: Role of TVMs • Mobile ticketing can reduce reliance on expensive TVMs.

• Current TVMs are beyond their useful life, unreliable, and often confusing to use. – They are often out of service which have led to increased customer complaints and maintenance costs.

• Mobile ticketing offers significantly increased convenience for customers and removes the need for TVMS, reducing the number of complaints and maintenance costs.

• Metrolink will likely still need to replace TVMs or provide alternate sales channels for cash-paying customers. Title VI equity considerations require that all customers must be served, including unbanked.

• Reducing the reliance on TVMs may also reduce required TVM features: – Express TVMs may be lower cost alternatives to full featured TVMs. – Compact “parking” or “kiosk” style TVMs may be sufficient for cash or one way riders.

• Ultimately, mobile ticketing will help to reduce cash and TVM usage, driving them as low as possible, and can provide significant capital and operating cost savings.

179 139 SWOT Analysis: Fare Payment Technology

Opportunities: Improved regional connectivity

Mobile Ticketing Opportunities: Connectivity • By integrating with other proof of payment bus and rail services, mobile ticketing can increase regional transit use. – Both bus and rail operators that validate passes visually can validate a mobile ticketing app that uses visual proof of payment.

• The mobile ticketing app also provides a better user interface to support various fare policies, improving the customer experience and supporting seamless regional travel: – Different agency fare products and prices can be offered in the mobile app. – Several services can be made available on a single platform.

• Mobile ticketing apps can also integrate with non-transit services, such as: – Bike share, parking, tolling, and ride sharing services such as Uber and Lyft. – DART’s mobile ticketing app enables riders to book Uber service directly from the app.

180 140 SWOT Analysis: Fare Payment Technology

Opportunities: Alternative revenue streams with mobile ticketing

Mobile Ticketing Opportunities: Marketing • Mobile ads and marketing via mobile app: – Metrolink riders are a captive app audience, usually using the app at least twice/day. – SCRRA must be sensitive to customer privacy concerns and PII laws.

• Promotions can be used to help increase ridership: – Promotions can be pushed directly to app users on specific lines or services – SCRRA and participating transit services can team or share promotional opportunities. – Opportunities to provide passenger information and real time update.

• Local business marketing and collaboration: – Position (GPS) data can provide directed marketing opportunities with local businesses – May help drive ridership to specific events (Angels games, Disneyland, etc.) – Again, customer privacy concerns and PII laws must be a top priority.

181 141 SWOT Analysis: Fare Payment Technology

Threats: Current TVMs are aged and unreliable

Ticket Vending Machines • The current TVMs are almost 20 years old and beyond their useful life. – Originally manufactured by Ascom, which was purchased by ACS, which has since been purchased by Xerox.

• TVMs are complicated and difficult to use. – The interface is outdated, with slow response rates. – Inconsistency in station names is confusing to some customers.

• TVMs are breaking down with increasing frequency and unpredictability, resulting in steading increasing service calls and maintenance costs.

• Out-of-service TVMs prevent conductors and LA Sheriffs from enforcing fares. Customers who are unable to purchase a ticket due to an out of service TVM still need to board their train.

• When TVMs are unable to issue change, they issue paper vouchers which customers must redeem at a customer service center or mail. This is very inconvenient.

• Physical security is not robust enough. – There is an increasing number of vandalism, some TVMs have been broken into.

182 142 SWOT Analysis: Fare Payment Technology

Threats: Eliminating TVMs or cash acceptance has challenges

TVMs and Cash Acceptance • Removing station TVMs or cash acceptance will raise Title VI equity concerns, particularly because some Metrolink riders are unbanked or do not have access to mobile ticketing

• Staff have considered removing TVMs or cash acceptance in favor of a retail distribution network. This approach is being consider due to the high cost to procure and maintain new TVMs, but mobile ticketing may may also reduce the reliance on cash.

• Reliance on TVMs will be reduced with mobile ticketing, but cash customers will still need to be served. Cash payments currently account for 35% of Metrolink’s payment transactions, and mobile ticketing cannot accommodate cash payments.

• Other commuter rail agencies have maintained TVMs for non-frequent or occasional riders, although some streetcar or other onboard payment services do not have off board payment options.

• Compact or express TVMs may provide a lower cost alternative to full featured TVMs. Some agencies are purchasing “parking” or “kiosk” style TVMs with limited features, that allow agencies to configure payment options, including change issuance. – This approach can provide a combination of cash accepting and credit card-only TVMs depending on the needs at different stations.

183 143 SWOT Analysis: Fare Payment Technology

Threats: Retail distribution network has considerable costs

Retail Networks • Establishing a retail network across five counties can have high or unforeseen costs. SCRRA’s large area service area will require hundreds of retail vendors. Some stations are in remote locations with limited retail nearby. It may also be challenging to get retailers to agree to issue Metrolink fare media without financial incentives.

• First time customers may discover that they need to leave the station to purchase fare media. Some customers will regard this as an inconvenience that they are not willing to accept, contributing to declines in ridership. Retailers may also not be open yet during the AM commute.

• There will likely be equipment costs, installation, and training for each retailer. Across hundreds of retailers, equipment costs may be considerable. Signing, installing and training each retailer will require a dedicated staff.

• Five-county coverage will require several maintenance offices and a supply of spare retail equipment for replacements and repairs.

• Retail cashiers become de facto Metrolink representatives, but with limited familiarity with SCRRA policies and procedures and turnover among retail staff, SCRRA’s control over the customer experience may be limited.

• 3rd party retail network vendors have limited coverage and may charge commissions that can range from 5%-20%, depending on the terms of the agreement.

184 144 SWOT Analysis: Fare Payment Technology

Threats: Mobile ticketing challenges with regional transfers

Transfers • Maintaining transfer privileges with mobile ticketing may prove to be challenging.

• At gated LA Metro stations, TAP transfers require contactless interfaces. Staff are currently exploring two alternatives, but both have customer and cost impacts: 1. Require separate TAP card along with mobile ticketing app. 2. Install optical validators on every Metro faregate.

• Transfer implementation is unclear. There are different rules for different agencies, and customer purchase and/or activation of transfers will need to be designed for ease of use.

• Visual or proof of payment validation provides limited data: – If operators of regional partners only visually validate transfers, the data may be limited. – Requiring a bus tally or farebox classification action may not be reliable or complete. – Automated validation via optical reader provides more comprehensive enforcement and more reliable data.

• Other regions are pursuing mobile ticketing independently. LA Metro staff are working with SCRRA staff to collaborate on a mobile ticketing approach, but other counties and agencies are independently developing mobile ticketing apps that may be incompatible.

185 145 SWOT Analysis Fare Enforcement

186 SWOT Analysis: Fare Enforcement

Opportunities: Application of Electronic Technology

• Application of electronic technology can help to detect and track non-payment of fares. – Hand-held card readers can be used by train personnel to verify validity of fare payment. • Fare enforcement can scan QR (2-dimensional) bar codes printed on tickets or displayed on smart phones to verify validity either locally or via cellular connection with central system database. • If Metrolink chooses to participate in the EZ Transit Pass program, it will need to determine whether it will want to do visual inspection of the sticker affixed to the TAP card or whether it will want to use a handheld card reader to verify the pass is valid.

– Hand-held reader can also log each scan as a record of the transaction and to monitor productivity of conductors, reporting actual number of fares inspected.

– Smartphone devices today can be multi-purpose: • Inspect proof-of-payment – QR codes and contactless chip media; and • Create a record of violation (citation): scanning a drivers license or other CA ID to autofill personal information of violator onto electronic citation form, attaching digital photo of violator, and accepting electronic signature, emailing and/or printing copy of citation to violator.

– One challenge with fare enforcement of mobile ticketing will be the difficulty of verifying fares while passengers are asleep. Today, riders are allowed to wear a pouch with their tickets visible so that fare enforcement does not need to wake the riders. The LA County Sherriff has concerns about confrontations that may occur if riders need to be awakened to verify tickets.

187 147 SWOT Analysis: Fare Enforcement

Opportunities: Inspection and Enforcement Procedures

• Inspection and enforcement procedures can improve effectiveness and reduce evasion: – Vary trains and locations of inspections. – Utilize additional personnel to blitz entire cars or trains (“streetcar-ing”) with time to cite violators. – Where personal security is a concern, utilize sheriffs and security assistants with civilian conductors. – Use assistant conductors on lines with high ridership to assist the conductors with responsibilities and fare enforcement. – Establish an agency adjudication process, implementing CPC640e which authorizes an administrative procedure in lieu of court processing. The adjudication process is a civil action that enables the violator to pay a lower penalty to the agency in lieu of court processing, higher court fines and fees and a court record of infraction. Metrolink receives the penalty revenue directly. – Presence of on-board “train hosts” provides customer assistance and supports enforcement of rules.

188 148 SWOT Analysis: Fare Enforcement Threats: Preventing abuse of distance-based fares and new technology • Distance-based fare structure (i.e., not flat fare) can be abused with over-riding the paid fare (i.e., rider pays a short fare, but rides beyond its validity). – For proof-of-payment systems, varying the point of inspection and the frequency of fare inspection during a run from day-to-day, with no inspection one day and two or three the next will discourage this abuse. – Onboard fare collection requires tight monitoring and control to track the validity of fares paid, to prevent nonpayment and overriding.

• Delayed activation of mobile ticketing application can result in non-payment of fares on the occasion that fares are not inspected on a car or train. – Inspection patterns and procedures can be applied to discourage delayed activation of the purchased fare – Mobile application can be programmed to delay activation of the purchased fare or to alert inspector of the time of activation. – Amtrak’s mobile ticketing has a feature that allows conductors to remotely activate (force-lift) mobile tickets.

189 149

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 12

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: FY2014-15 Marketing Report

Issue

Recommendation

The Board may receive and file this report.

Background

At a board meeting in the Spring, Director Najarian asked if staff was following APTA best practices and benchmarking industry peers. The Authority staff does benchmark marketing efforts and trends of our industry. Furthermore, Authority staff looks outside of the transit industry to understand the latest marketing trends and works to incorporate new marketing efforts where appropriate. This approach has helped us stay relevant in the fast pace world of marketing in the second largest media market in the country.

Ridership and revenue continue to underperform projections. The Fiscal Year 2014-15 (FY15) budget assumed $91.4 million of fare revenue for 12.8 million passenger boardings. Approximately 91% of these boardings are projected for weekday train sets, with the remaining balance on weekend trains. For the quarter ending on March 31, 2015, Metrolink collected $62.6 million in fare revenues. At the end of Q3, fare revenue was $5.9 million or 8.5% less than projected in the FY2014-15 Budget. Staff is working to close out FY14/15 ridership and revenue reports and will be providing a year end summary in September.

Boardings are estimated based on daily conductor counts on all trains. Each time a passenger boards a train, it is counted as a single boarding (also referred to as an “unlinked trip”). Trips that require passengers to transfer to another Metrolink train to reach their final destination are counted as two unlinked trips.

The nature of the ridership decline is due to a variety of factors:

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 Losses in Monthly Pass ridership and overall customer experience, resulting in retention issues.

 The 2015 on-board survey shows that our retention rate is 78% annually. Key challenges of customer retention are On-Time Performance (OTP); Ticket Vending Machine (TVM) issues; increased and new parking fees at stations put in place by the respective cities; and expanded lower cost direct commuter bus service in similar Metrolink corridors.

 TVM breakdowns remained the number one issue reported from customers from August 2014 to April 2015 followed by on-time performance issues. FY2014-15 was the first time in Metrolink history that TVM issues surpassed that of OTP as the number one customer complaint issue.

 There is soft demand for commute trips to downtown Los Angeles which is reflected in flat or declining ridership for most transit operators in LA County. The downtown employment market continues to be weak but signs of improvement are showing on four of the seven lines coming into downtown Los Angeles. Overall Los Angeles County saw 2% employment growth last year. The government sector is starting to add jobs in the City of Los Angeles. However, office vacancies in the downtown LA central business district continue to run higher than other areas of the Southern California class A office market.

 The Authority’s OTP has been a challenge in recent months as continued testing for Positive Train Control have affected numerous trains, most especially on the San Bernardino Line. The May and June Customer Comments Report rank OTP as the number one customer complaint.

 There is continued high interest in Metrolink from the region as evidenced by the high percentage of new visitors to the website (47.31%) and call center (52%), however, train service, schedules, cost and station location (connectivity) continue to hinder growth.

Although ridership and revenue continue to be a challenge there are indications from Marketing campaigns that Metrolink is of strong interest to commuters in the region. Specific marketing campaigns have shown positive signs for the Authority. Below is a summary of the highlights from this report.

 The Authority holds the highest number of Facebook followers of any transit agency in the nation and is the only transit agency that is verified, indicating Facebook’s “seal of approval.”

 Google+ is Metrolink’s newest social media platform and by the end of FY2014-15 the site has generated over one million page views due to the drone imagery used.

 Trial ride campaigns through direct mail, door hanger and online campaigns generate the highest response rates, higher than industry standards for this tactic.

 Social media has become the most effective channel to market to specific geographic audiences in the region. The low cost, highly targeted, and measureable results of

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social media help the Authority effectively reach its market, particularly younger audiences, who are the riders of tomorrow.

 Average monthly ridership on the Orange County and 91 Lines have seen signs of improvement as compared to the rest of the system. Average monthly ridership has increased by 4% (7,464) in the peak and 10% (3,160) in the reverse peak on the Orange County and 91 Lines. Although other factors contribute to ridership gains (employment, schedules, service levels, etc.) these two lines are the focus of the I-5 South marketing campaign (recollectable from Caltrans).

 Digital advertising continues to be a growing area for marketers throughout the nation. The Authority advertises on Waze, a crowd sourcing traffic navigation app owned by Google. Our partnership with Waze has garnered the Authority with national attention with coverage in AdWeek Magazine for our innovative approach to geo-target advertisements to attract millennials and generation X. Millennials and generation X are the Authority’s fasting growing market segment, surpassing baby boomers as the largest group riding Metrolink.

 The Authority has experienced a 37% increase in email subscriptions from FY13/14 through integration of subscription opt-in features in direct mail, door hanger and online campaigns. This electronic communication channel will help market mobile/online ticketing.

 Continued Weekend Day Pass promotions as a way for Southern California’s to explore destinations and events through train travel. The Weekend Day Pass continues to help drive interest for the destination/leisure market. Weekend Day Pass sales increased by only 1% from FY2013-14.

 The school group trip and field trip program continues to perform well with 14,196 students on board in FY2014-15. Introducing these students to Metrolink is great for future education and exposure of the service.

 Website analytics for metrolinktrains.com indicate that 47.31% of traffic is from unique first time visitors. This indicates a strong interest in Metrolink from new users and strong response rates from ongoing marketing efforts. (Source: Google Analytics)

 Nearly 500,000 calls were received at the Metrolink call center during the 2015 fiscal year. 52% of calls were from first time callers. These calls are a combination of customers asking about schedules and service as well as first time callers responding to marketing campaigns. (Source: ALTA Resources Post Caller Survey)

 Partnerships with member agencies, Caltrans and municipalities continue to bring awareness of the Metrolink system. The Authority and its member agencies continue to meet bi-weekly and review upcoming marketing and sales promotions to leverage the marketing done in each county and to build a region-wide message. Staff is constantly looking for and exploring opportunities to work collaboratively to promote Metrolink. Additionally, these meetings allow the Authority to be consistent with branding and messaging as this is valuable to define and reinforce the Metrolink brand.

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 Staff negotiated the Authority’s first interior revenue advertising contract for one month of exposure for $23,000 beginning June 24, 2015 through July 25, 2015. The Authority is in the process of finalizing a contract with an external vendor to sell advertising on its behalf. Exterior advertising, interior advertising, online, and mobile are all avenues that are currently being explored.

Lessons Learned/Ongoing Challenges:

 Direct mail campaigns are one of the most effective ways to offer trial ride tickets to potential customers due to the highly targeted nature, however, there is an opportunity to have 100% market penetration with additional investment (currently only reaching 25% of the total market due to budget constraints). Direct mail campaigns are a foundational marketing tactic at transit agencies throughout the region.

 Customers respond at a higher rate to offers that are familiar to them. Staff tested a trial ride direct mail letter offering a three day pass as compared to two round trip tickets. The round trip ticket offer, although a lower value, out-performed the three day pass offer by two to one using similar creative.

The Commuter Market

The commuter market is defined as an individual who uses Metrolink service more than three days a week. The majority, 79%, of Metrolink riders fall into this category. Half of Metrolink riders use the service 5 days a week. 77% of the trips on Metrolink are for travel to/from work, school, or business meetings. Two-thirds of Metrolink riders have a household income greater than $50,000. (Source: 2015 On-board Survey). The median household income of a Metrolink rider is $78,030 and the median household income for LA County is $55,909. It is also important to note that 89% of Metrolink riders have an automobile, so commuting by Metrolink is a choice and not a necessity.

The Authority uses multiple tactics to target the commuter market. Two programs that are highlighted below target commuters geographically, based on where they live or work.

Corporate Partner Program (CPP)

Since 1994, this long-standing commuter benefits program is designed to grow ridership and revenues by targeting employees at businesses along the rail lines throughout the region. Corporate partners are considered corporations, municipalities and third parties vendors. These partners help to promote the program and are able to stand behind this alternative transportation option providing commuter transit that gets people to work rested and on time in an environmentally conscious way.

Corporate programs are common with most commuter rail agencies in the nation because of the tax savings that companies are eligible for through the federal commuter tax program. When administered through payroll, the purchase of Metrolink passes through CPP can result in a tax benefit for both employees and their employer. As of January 2014, the

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Federal tax code allows tax-free transportation fringe benefits of up to $130 per month per employee for transit expenses. CPP also satisfies Air Quality Management District (AQMD) Rule 2202 Requirements by qualifying as a commute reduction strategy under the Commuter Choice tax benefits program. Over $15.5 million of revenue is generated through the Corporate Partner Program (CPP).

Revenues collected through the CPP have increased slightly (2.5%) since 2011 as staff has put a focus on partnering with more employers in the region to increase sales. These partnerships allow for the Authority to market to employees through an Employee Transportation Coordinator (ETC), an internal employee with that corporation, which otherwise would be difficult to penetrate due to privacy concerns from corporations. Overall monthly pass revenue has not increased due to the shifting of commuters from non-CPP to CPP accounts. CPP is of interest to Metrolink because CPP riders tend to be retained longer than the non-CPP riders (average is about a year longer) and the convenience of the Corporate Quick Card and payroll deducted tax benefit savings are a positive benefit to the consumer.

The Authority has sales agreements with 162 corporate partners. Designated Employee Transportation Coordinators (ETCs) administer individual rideshare programs by arranging public transportation options for a variety of entities, i.e., residents of cities in our service area, third party administrators, retail locations, large and small companies and tenants of building management firms.

CPP service provides educational and promotional materials to clients to heighten awareness of commuter rail and ease of use. Every Corporate Partner designates an ETC to manage and promote our partnership in each company. The Authority keeps ETCs engaged by building relationships and supporting their rideshare goals through Rideshare Fairs, special events, focus groups and familiarization tours. Staff communicates important information, such as fare adjustments and schedule changes directly to ETCs who pass these advisories to their participants. In FY2014-15, staff attended 37 rideshare events.

This program targets the commuter at the work end of the trip. This program includes corporate clients purchasing multiple tickets/passes per month (Monthly Passes, 7-Day Passes and Round-Trip Tickets).

Corporate partnerships have grown in the past year with a refocus on securing new accounts. Since launching a direct sales program in FY2011-12, the Authority has grown from 120 corporate accounts to 162. Partners include the University of Southern California, Disney, Wageworks and Foothill Transit.

Throughout the year, Metrolink staff markets this program using the following tactics:

1. Distribute CPP sales information through existing channels (Metrolink Matters, station posters, interior advertising)

2. Attend rideshare events throughout the region

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3. Reach out to Human Resources and transportation managers via use of consistent email blasts, e-newsletters and video messages

4. Educate employees via the agency’s web page devoted to the corporate program

Special ridership programs exists within the Corporate Program as a way to increase ridership. The Irvine Spectrum TMA (Spectrumotion) has participated in the Corporate Partner Program since Metrolink service began in Orange County. They have used it to provide solo drivers with a free trial of Metrolink service knowing that a percentage of commuters who try Metrolink will continue to utilize it as their primary mode of transportation. Over the years, Spectrumotion has used the program to provide subsidized monthly passes, ten-trip tickets and now 7-Day passes. Nearly 4,000 commuters have become Metrolink riders as a result of the corporate partnership between the Authority and Spectrumotion.

Another collaboration is with the City of Irvine and their iShuttle service. This last mile connection, picking up at both the Irvine and Tustin Metrolink stations, provides riders with connections to their employer. This partnership has provided opportunities to collaborate on joint marketing efforts to strengthen both programs. The Authority includes iShuttle information in materials going to companies in the Irvine area; and provides the City of Irvine with promotional trial ride offer tickets for new commuters to use for iShuttle promotions. This win-win situation helps solve the last mile connection for the Authority’s commuters.

The Authority’s staff is constantly looking for opportunities to expand the Corporate Partner Program.

New Resident Direct Mail Campaign

The target audience for the direct mail campaign are new residents (homeowners or renters) who have recently relocated within a specific catchment area (within two to four miles) around Metrolink stations. This campaign targets riders on the home end and has become a cornerstone campaign for transit agencies throughout the nation because new residents are more likely to try something new in their neighborhood. The New Resident Direct Mail Campaign has proven to be a successful model to attract new riders to the system. The Authority has been conducting this type of campaign for several years as a core marketing strategy to increase ridership.

This past year, the Authority tested three types of mailers to understand the response rates of the different promotional ticket offers. The test included:

. a letter pack with a business reply card,

. a letter pack without a business reply card and

. a self-mailer with and without a business reply card.

. In addition, there were two different ticket types offered – two Round Trip tickets or a 3-Day Pass – included in the trial ride offer.

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Tracking the response rate for each of the different letter packs provided key data results that will help maximize returns of future campaigns. Additionally, this data will help the Authority refine its approach and methodology for continuous improvement.

The New Resident Direct Mail Campaign expanded from 29 to 54 stations from the previous year to ensure maximum exposure to potential new riders. During the six-month campaign, there were two mailings to approximately 11,000 households each month for a total of 130,488 mailers.

The letter pack with the business reply card had the highest redemption rate of 33% in comparison to the other test mailers. The promotional 2-Trip ticket performed 84% better than the introductory 3-Day Pass. The flexibility of the 2-Trip ticket over the 3-Day Pass was the primary reason for the overwhelming preference of the offer type.

An overall campaign performance of 4.17% was significantly higher than the industry average of 1.0% according to Chief Marketing Officer Council Worldwide, 2014. The Chief Marketing Officer Council is a global network of executives specifically dedicated to high- level knowledge exchange across a wide range of global industries. 69% of those surveyed were considered new riders and 55% who requested trial ride tickets rode the train. Of those who used the promotional tickets, there was a 16% conversion rate for new customers. The return on investment for the 2014 New Resident Campaign was 109%.

The annual total “new resident” market is 461,828 households and the Authority only reaches 101,000 households due to budget constraints. For a total cost of $369,463 the Authority could reach this highly targeted market.

Below is the cost, per county, to have 100% saturation of the new resident market. Marketing currently only has budget for 25% of this market.

County New Resident Cost Households Los Angeles 211,651 $169,321 Orange County 104,396 $ 83,517 Riverside 66,677 $ 53,342 San Bernardino 54,696 $ 43,757 Ventura 24,408 $ 19,526 Total 461,828 $369,463

I-5 South Commuter Incentive Program

The Authority is in its third year of a partnership with Caltrans to help mitigate traffic on the I-5 freeway in south Los Angeles County. This recollectable project aims to educate commuters through a multi-faceted marketing campaign of alternatives to driving the I-5 freeway during the ongoing construction to add a carpool lane and a general purpose lane in both directions.

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A license plate survey and subsequent focus groups identified the Authority’s target audience as residents (age 25 to 54, with 35 to 44 as the primary target) of eastern Los Angeles County, Riverside County and Orange County who are currently commuting on the I-5 and I-91 freeways by car. On average, these individuals drive over 30 miles to work, which takes them over an hour. They currently view the car as “the king” and the experience of driving gives them a sense of both freedom and control. However, many have expressed that they would switch to alternate modes of transportation if their commute increased by an additional 10 minutes or more – an event that is highly likely now with the continuing construction being conducted by Caltrans to expand the freeway.

The primary objective is to raise awareness of ongoing construction, remove vehicles from the road and promote Metrolink as the best alternative to driving to all commuters along the I-5 freeway. License plate survey information found that only one-third of commuters travel the I-5 three times in a work week and infrequent travelers make up two-thirds of traffic. Thus, multiple tactics are needed to reach such a broad market.

During FY2014-15, the I-5 South campaign leveraged multiple touch points to increase awareness of the upcoming construction (via informational updates on a microsite), and alternate modes of transportation available (via digital – paid search, display, and social media, newspaper, door hangers, radio and billboard) and trial-ride offers via a zip-code verifier site.

The trial-ride offers are two-fold:

. one via oversized door hangers along a two-mile radius of I-5 Metrolink stations; and

. via a zip code verifying offer that provides tickets to people who live and commute from Los Angeles to Orange County or the reverse.

These offers become the catalyst for behavior change. In FY2014-15, 14,837 trial ride tickets had been distributed to households in targeted areas.

Overall, ridership trends have shown a positive increase. In a recent survey for the campaign, 58% of respondents described themselves as new riders, and there has been a 7% conversion rate through the campaign so far. When comparing the campaign cost over the revenue gleaned from the campaign, there is a ROI of 155%. The door hanger campaign had an excellent redemption rate of 3.06%, which is almost three times greater than the industry average for coupon redemption rates.

Furthermore, ridership has seen a positive impact on the Orange County and 91 lines in both the peak and reverse-peak commuting. Since April of 2015, ridership has increased 4% (7,464) in the peak and 10% (3,160) in the reverse peak. The results showcased in this entry also exemplify a campaign where catchy creative and proper planning meet, motivating consumers against a difficult behavior change. As mentioned, the target views the car as king, but staff is making them revisit that behavior and look into more convenient, comfortable, and stress free methods of transportation, such as commuting via Metrolink trains.

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I-5 North Marketing Campaign

This recollectable project, funded by Los Angeles County Metropolitan Transportation Authority (Metro), started in April 2015 as a way to encourage commuters to utilize Metrolink as an alternative to the ongoing construction on the I-5 near Burbank. Leveraging the survey information and creative conception of the I-5 South project, the I-5 North Marketing Campaign expands the campaign’s reach to two additional lines, the Ventura County and Antelope Valley Lines. A multi-facetted campaign including billboard, digital and trial ride offers started in April 2015 and will continue for the next three years into 2018.

Preliminary results of the first trial ride offer door hanger campaign that dropped in April 2015 show a 1.09% redemption rate, slightly above industry average of 1.0%.

The Off-Peak and Weekend Market

Another market for Metrolink is off-peak and weekend travelers. Off-peak and weekend travelers tend to be younger (18-35) and have an average household income of $30,000 annually. A variety of tactics are used to reach the off-peak and weekend market.

School Group Trip Campaign

The Authority currently offers a discount to schools seeking to take a field trip using public transportation. A special flat rate of $3 per student and chaperon is charged for one-way or round-trips on Metrolink. The minimum group size is 15 students in grades K-12 with one chaperon per 10 students and a maximum of one chaperon per five students is required for all school travel.

The Authority will receive a reservation from the school organizers and will then select an off-peak train for their trip. Reservations must be made 6 weeks in advance and payment is required 30 day prior to travel date. Once payment is received, the Authority will mail the school organizers a travel voucher along with train safety guidelines that must be reviewed with all chaperons and students.

This past year, the Authority’s marketing department mailed a direct mail piece to 22,000 schools, school districts and children’s educational centers promoting this special program. 368 schools participated in a field trip or group trip using Metrolink bringing a total of 14,196 students onboard the train. This program brought in a total of $53,110 in revenue, and equally important, educators had the opportunity to teach their students about public transportation. Program revenue is down around $5,000 from the previous year. The Authority has discovered that most educators desire to bring the students onboard the train to teach them about public transportation rather than take them to a specific destination. Additionally, the Authority promotes the Metro policy that allows students a free connection to museums like the California Science Center if their school is located within Los Angeles County.

The Authority will continue to reach out to educational facilities in order to increase off peak ridership, promote the student program and educate the next generation of riders.

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Social Media

Metrolink has a managed presence on five social media channels, Facebook, Twitter, Instagram, YouTube and most recently, Google+. [Note: Metrolink is currently on LinkedIn to target the employer market and has done campaigns on Waze, Vine, Yelp and Pandora.]

Metrolink social media channels reach all markets that Metrolink is targeting however, because of the widespread use of social media with millennials, these channels are an essential tool to reach off-peak and weekend riders who are interested in riding the train and exploring Southern California. Metrolink’s social media channels are used strategically as communication tools for promotions and events, for sustainable public transit advocacy, and for providing excellent customer service. Five major social media channels have been the focus for FY2014-15 and those channels will be continued for FY2015-16.

Platforms

Facebook:

 Due to the Authority’s aggressive outreach and digital strategies, Metrolink’s Facebook reach has increased by 128% based on June 2014 to 2015 figures  Metrolink’s Facebook page continues to hold the #1 spot for transit agencies in the nation in terms of followers and engagement  Metrolink’s Facebook page has been “Verified” by Facebook. This is Facebook’s seal of approval. Of public transit agencies, only Metrolink has been verified due to its active engagement  Total Avg. Weekly Reach: 198,000  Total Avg. Daily Post Reach: 58,287  Page Likes: 63,800 (2013 – 27,239)  Fan-base geography: The top five cities Metrolink’s Facebook fans reside in: Los Angeles, Riverside, San Bernardino, Long Beach and Anaheim  Largest age group among fans: 25-34

Metrolink’s Facebook goals for FY2015-16 are:

 Achieve at least 200,000-250,000 range for total average weekly reach  Reach its 100,000th fan  Reach more female fans. 61% of our community are now males.

Twitter:

The primary use of Twitter is to communicate timely service updates. Metrolink provides train notifications on 8 Twitter accounts, covering all 7 individual train lines. In FY2015-16, the Authority hopes expand its Twitter-sphere of networking by tweeting more industry relevant content. Here is where Metrolink is currently:

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 Total Twitter followers on all accounts: 32,000 (2014 - 21,000)  Twitter followers on main account: 21,000 (2014 – 15,000)  Avg. number of tweets daily: 31.5

Metrolink’s Twitter goals for FY2015-16 are:

 Test new campaigns for promoted tweets and promoted Twitter accounts  Create better relationships with our customers. Identify and group its influencers and detractors.

Instagram:

Instagram is Metrolink’s newest social media channel. Metrolink joined Instagram in May 2013. Within the first 90 days, 500 followers were reached. Today there are over 27,000 user-generated photos of Metrolink. Each Metrolink Instagram post generates an average of 100 likes within the first hour. Instagram is Metrolink’s youngest demographic audience on social media.

Metrolink’s Instagram goals for FY2015-16 are:

 Reach 8,000 Instagram followers  Create at least 450 Instagram (pictures, graphics and videos)

YouTube:

Metrolink joined YouTube in January 2010. We use videos to communicate and educate our stakeholders about major service and operational changes, ticket purchase changes and marketing promotions and events.

Where Metrolink’s YouTube stands today:  Total video views: 400,000 (2014 - 130,000)  Total subscribers: 720 (2014 – 398)  Total videos: 105, 46 of which were created in the last 12 months Metrolink’s YouTube Channel goals for FY2015-16 are:  Reach 1,000 total channel subscribers  Reach 750,000 video views  Create an additional 45 videos

Google+:

Metrolink joined Google+ in March 2015. Within six months, over 1 million views were received.

 In May 2105, Metrolink was verified by Google

Metrolink’s goals for Google+ Page for FY2015-16 are:

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 Upload an additional 50 images to Google Maps to populate map areas of Metrolink routes and stations

 Reach 2 Million views

Bikes on Board Metrolink

The bicycle offers a unique opportunity to connect a passenger’s first and last mile commute as well as an off-peak/weekend rider. All Metrolink passenger cars are designed to hold three bikes. In 2011, the Authority introduced the Bike Car to the fleet increasing the bike capacity from three bikes to eighteen bikes. The Generation 1 Bike Cars were strategically placed on lines experiencing strong demand. The Authority later introduced the Generation 2 Bike Cars which had a modified design allowing for cyclists to sit near their bikes. This second generation Bike Car is designed to hold nine bikes.

Metrolink has the capacity to accommodate more bikes on trains and promotes this amenity through its marketing outreach. As the bike can be a useful tool to connect a passenger to a Metrolink station from their home or work, this has been incorporated as a solution to connectivity challenges. This message is incorporated in the Authority’s marketing initiatives where appropriate to target the biking commuter.

The biking commuter is not the only traveler bringing their bike onboard Metrolink. Metrolink has experienced significant bike ridership from the leisure rider traveling on the weekend to various destinations throughout Southern California. This leisure rider can be broken down to two types of cyclists, cross country and recreational.

The cross country cyclist will ride 30+ miles in one journey. This cyclist will typically park their car at a Metrolink station and ride their bike to another station, taking Metrolink back home at the end of the day. The cross country cyclists will spend a significant amount of money on their bike and can be targeted through the bike shops, bike magazines or sponsoring cycling events such as the local Amgen Tour of California.

The second type of leisure biker is the recreational cyclist. This individual will ride Metrolink to a destination, bike around a location then take Metrolink back home. The recreational cyclist is more focused on the entire day experience rather than the bike ride. A main appeal for this individual is the desire to travel with family or friends. The recreational cyclist can be targeted through social media, bike coalition outreach, and supporting events such as CicLAvia.

Metrolink carries more than 22,500 bicycles every month. Since launching the Bike Cars, Metrolink will carry its one millionth bike in August 2015. Bike ridership continues to grow slightly, increasing by 1.0% over last fiscal year. Metrolink supported all CicLAvia events in FY2014-15 by adding Bike Cars to every train serving the event. Operations plans to retrofit enough passenger cars to create Utility Cars which will allow for bike, surfboard and luggage storage on all trains. This will help accommodate surfers, weekend travelers, airport travelers and bicyclist on Metrolink.

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Email Marketing

The Authority has developed a robust eMarketing channel that allows for marketing to commuters as well as the off-peak/weekend rider. The Email marketing program is managed utilizing salesforce.com. This program allows the Authority to geo-target Emails to subscribers based on their content interest and line that they ride. The program which started in 2009 currently has 44,000 subscribers to the largest eNewsletter, Offers and Promotions. All marketing programs are integrated to promote the acquisition of new subscribers. The Authority has experienced a 37% year to date subscriptions growth over FY2013/14 by integrating email opt-in features in direct mail, door hanger and online campaigns. This growing marketing channel will be instrumental in the success of mobile ticketing.

Special Event/Destinations Marketing

The Authority markets special events and destinations as a way to bring awareness to train service, reduce vehicle miles traveled and to attract potential riders to the system. The Authority created a special “Destinations and Events” website to assist potential riders with purchasing a ticket, schedules, tips and event information. Special event/ destinations are great opportunities to market to ethnic groups in Southern California. Riders can get to destinations anytime throughout the year, the majority travel on the weekend and utilize the $10 Weekend Day Pass. The Authority has sold more than 2.4 million Weekend Day Passes since the pass was introduced in 2011. Although successful since launching in 2011, Weekend Day Pass sales have only increased by less than 1% since FY2013-14. A renewed marketing campaign to 18-35 year olds will help to draw awareness and interest to this deeply discounted pass.

The following destinations have been selected based on their proximity to a Metrolink station or connectivity partner and the popularity of the location based on search results from metrolinktrains.com:

• Beach (Oceanside / San Clemente Pier) • Disneyland • San Bernardino Railroad Museum • Downtown Fullerton • San Juan Mission • Olvera Street • Little Tokyo • Chinatown • Grand Park • Regan Library • Riverside Mission Inn • Universal Studios/CityWalk • California Science Center/ Exposition Park/ L.A. Coliseum • Music Center (Dorothy Chandler, Mark Taper, Ahmanson, Disney Concert Hall) • LA Live/ Staples Center/ Convention Center • Hollywood Walk of Fame/ Chinese Theatre/ Dolby Theater/ Madame Tussauds

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• Downtown LA Museums- Museum of Contemporary Art/The Broad Museum

The following events have been selected based on the proximity to a Metrolink station or connectivity partner and the popularity of the location based on search results from metrolinktrains.com:

• Angels Express • Dodger Stadium Express Bus • CicLAvia • Fullerton Railroad Days/ National Train Day • San Bernardino Railroad Days (cancelled for FY15) • Orange County Fair • Los Angeles County Fair • Sports-hockey, basketball, baseball, etc. • Lunar New Year • Rose Parade/ Rose Bowl • Festival of Whales • Festival of Books • Auto Club Speedway • Swallows Day Parade • Fiesta Broadway/Cinco de Mayo • Bike to Work Week • Ocean Festival • USC Football • San Clemente Sea Fest • Upland Lemon Festival • Thanksgiving Weekend Promotion • OC International Auto Show

Some destinations and events require the need to develop special train service. In FY2014- 15, UC Irvine chartered a special train for service to and from their commencement at Anaheim Stadium. Grants from the South Coast Air Quality Management District (SCAQMD) provide funding for special chartered service for the Angels Express, Auto Club Speedway and The Rail Series. The goal of the SCAQMD grant is to reduce vehicle miles traveled. Chartered trains can set unique fares for passengers as an incentive to ride.

APTA Participation and Recognition

The Authority’s marketing staff attend the annual APTA Marketing and Communications Workshop where transit marketing professional’s network and share best practices on growing ridership and revenue. Additionally, APTA recognizes successful delivery of innovative and engaging public transit and marketing programs through the annual AdWheel Awards program. This awards program asks transit agencies to submit applications of marketing/communications programs. Transit marketing professionals review applications submitted by its members and rate them. Marketing programs are entered in one of five categories covering digital, print advertising, social media, traditional media, or special events. The Authority was awarded the highest number of APTA grand prize awards of

203 FY2014-15 Marketing Report Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 15 transit agencies in these categories for the past two years, winning two grand prizes in 2013 and two in 2014. Five grand prizes are awarded each year. This recognition provides validation from peers that the Authority’s marketing strategies are national models and in several cases on the cutting edge of marketing.

FY2015-16 Strategies

Commuter Market

In FY2015-16, staff will target the commuter market to increase ridership across the region. This will be achieved by fare media adjustments, expanding and developing commuter markets, raising the level of awareness of potential riders and developing partnerships. Through the following efforts, the Authority will continue to enhance its system with the goal of increasing ridership and revenue.

1. Collaborate with service area transit operators to improve connectivity for commuters [ex: Rail to Bus potential partnership with the Antelope Valley Transit Authority (AVTA)]. Explore opportunities with car sharing services such as Uber and Lyft to assist with first and last mile solutions.

2. Onboard marketing to build awareness and loyalty among current riders.

3. Continue the successful direct mail campaigns to new residents who move into a station catchment area as a way to offer a trial ride on Metrolink.

4. Encourage commuters to switch to Online/Mobile ticketing as a goal to increase convenience.

5. Leverage partnerships with LOSSAN, Caltrans, and Member Agencies to promote Metrolink as a viable commuting option in the region. Furthermore, work to cross promote and join market connecting services with transit partners and municipalities.

6. Promote new fare products and offerings like the 25% off student/youth discount, the $2 station-to-station fare and the 25% reduction on the Antelope Valley Line.

Preliminary data from July 1 to July 12, 2015 from the Antelope Valley Line Fare Reduction Pilot show a reduction of revenue of 31%. Ridership has also decreased by 3.22%. However, weekend ridership has grown by 17%. Staff will continue to monitor ridership and revenue trends with this pilot. The marketing campaign is in full swing with radio advertisements, digital ads (on Waze, Pandora, and Facebook, YouTube), newspaper ads, billboards and use of existing Metrolink marketing channels (email marketing, social media, Metrolink Matters, etc.). The campaigns first direct mail piece will drop at the end of July. As of July 16, 2015, the Antelope Valley Line YouTube video has over 100,000 views.

204 FY2014-15 Marketing Report Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 16

Off-peak and Weekend Marketing

For FY2015-16, the Authority will continue to target the weekend commuter to increase ridership across the region, raise the level of awareness among potential riders and improve the brand position of Metrolink. This strategy involves the following marketing efforts:

1. Target riders showing greatest potential to increase ride frequency, youth, senior, Asian and Latin markets.

2. Year-round marketing to include:

a) Website: Incorporate mobile/online ticketing b) Digital advertising: Online advertising, social media and email marketing c) Education (via collateral materials): Rack brochures, posters promoting destinations, etc.

3. Establish partnerships with regional venues to capitalize on event travel and awareness (e.g., Los Angeles Angels of Anaheim, Auto Club Speedway, baseball games, trade shows citywide conventions)

4. Develop an integrated media campaign to reach potential, current and former riders with weekend promotion. Encourage trial rides and leverage seasonality of special events.

5. Encourage commuters to switch to Online/Mobile ticketing as a goal to increase convenience.

Revenue Advertising

The Authority is in the process of finalizing a contract with an external vendor to sell advertising. Exterior advertising, interior advertising, online, and mobile are all avenues that are currently being explored.

Staff negotiated its first Metrolink interior revenue advertising contract for one month of exposure for $23,000 beginning June 24, 2015 through July 25, 2015.

Budget Impact

Marketing efforts are budgeted in the annual operating budget or paid for through third party recollectables.

Prepared by: Mark Waier, Manager, Sales and Marketing Mark Nitti, Director, Customer Engagement Robert Turnauckas, Chief Marketing and Communications Officer

Robert Turnauckas Chief Marketing and Communications Officer

205

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 13

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Capital Grant Summary Report

Issue

This report presents a quarterly summary of capital grant acquisition and closeout activities for the period from February 1, 2015 to June 30, 2015.

Recommendation

The Board may receive and file this report.

Background

The Authority applies for grant funding from federal, state, regional and local entities to deliver its rehabilitation and new capital programs. These programs are composed of projects that rehabilitate, enhance and expand the Metrolink rail system.

This report focuses exclusively on grant acquisition and closeout activities undertaken by staff for the purposes of supporting the rehabilitation and new capital programs. It discusses grants that were secured through a formal application and does not include funds applied for by other agencies and passed through to the Authority. The activities described below cover a five month period from February 1, 2015 to June 30, 2015.

Grants Received

In the first seven months of FY2014-15, from July 1, 2014 to January 31, 2015, nine grants were awarded and secured, totaling $58.9 million (Figure 1). In the timeframe of this report, the last five months of FY15, from February 1, 2015 to June 30, 2015, one Federal Transit Administration (FTA) formula grant totaling $3.6 million was awarded and executed. These funds support the FY15 rehabilitation program.

Additionally, one state formula grant was awarded and funds were received, totaling $483,312. Five state discretionary grants were also awarded. One of them, totaled $41.2 million and represents the largest state discretionary grant award the Authority has ever received. The grant amount is the maximum amount eligible for award under the State’s new Transit and Intercity Rail Capital Program (TIRCP), funded by cap and trade proceeds. The grant will enable purchase of nine new Tier 4 locomotives. Seven are replacement units and two are expansion locomotives, the latter of which are sponsored by

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 206 Capital Grant Summary Report Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

Los Angeles County Metropolitan Transportation Authority (Metro). A cumulative total of $8 million in state discretionary grants was also awarded for grade crossing improvements on the San Bernardino Line and speed increases on the Antelope Valley Line. State grants typically have a significant gap in time between the award and execution date, which can be as long as a year or more, particularly if bond sales are involved. Consequently, none of the state discretionary grants has been executed in the timeframe of this report.

Figure 1: Summary of Capital Grants Applied for by the Authority and Secured February 1, 2015 – June 30, 2015 – Last Five Months of FY15 (in millions)

Federal Formula Funds (Sections State State Program or Grant Award 5307, 5309 and 5337 Formula Discretionary Project Date Assigned by Member Funds Funds Agencies) Rehab Program $3.6 6/18/2015 TVMs $0.48 6/19/15 Hellman Avenue Grade $2.3 5/28/15 Crossing Improvement Ramona Blvd Grade Crossing $1.5 6/25/15 Improvement Citrus Ave Grade Crossing $1.5 6/25/15 Improvement Speed Increases at CP $2.7 6/25/15 Soledad Nine Tier 4 $41.2 6/30/15 Locomotives *Numbers are rounded for presentation purposes and shown in millions

Current Active Grants

With the one new FTA grant identified in Figure 1 above, the Authority currently manages 19 active FTA federal formula grants, totaling $245.7 million and one Federal Railroad Administration (FRA) grant totaling $13.5 million.

With the one new state formula grant and the five new state discretionary grants identified in Figure 1, the Authority currently manages 20 active state grants totaling $276.9 million.

Though there were no new regional grants awarded in the last five months of FY15, the Authority currently manages one active South Coast Air Quality Management District (SCAQMD) grant, valued at $52 million.

207 Capital Grant Summary Report Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Grant Closure

During this period, the Authority has closed one FTA grant totaling $0.84 million. There are four additional federal FRA grants totaling $27.3 million and eleven state grants, totaling $104.5 million that are currently in the process of closing out. Finally there are eight FTA grants totaling $67.2 million that are identified for closeout within the next 12 months.

Attached is a summary of grant balances for federal grants (Appendix A) and state and regional grants (Appendix B). It is important to note that the five state discretionary grants discussed above have not been executed and therefore do not have grant numbers, so they are not included in the summary in Appendix B. Once they are executed, they will be included.

Quarterly reports to the Board will be provided, if grant award activity has occurred in that period. The reports will be discussed in advance with the Technical Advisory Committee (TAC).

Budget Impact

There is no budget impact as a result of this status report.

Prepared by: Anne Louise Rice, Assistant Director, Grants Vicky Au, Grants Funding and Reporting Administrator Mike Naoum III, Interim Manager, Grants Administration and Fiscal Management Jerri Stoyanoff, Grants Accountant I Steven Hung, Financial Analyst I

Roderick Diaz Director, Planning and Development

Gary Lettengarver Chief Operating Officer

Sam Joumblat Chief Financial Officer

208 APPENDIX A FTA GRANTS

FTA TOTAL GRANT FEDERAL GRANT GRANT SECTION AMOUNT AMOUNT REIMBURSED REMAINING BALANCE CA‐03‐0662 5309 17,886,603 17,620,450 266,153 CA‐03‐0747 5309 7,675,299 7,205,721 469,578 CA‐04‐0045 5309 1,064,625 769,698 294,927 CA‐05‐0205 5309 5,258,845 4,618,833 640,012 CA‐05‐0208 5309 5,400,980 5,061,129 339,851 CA‐05‐0223 5309 5,586,921 4,888,651 698,270 CA‐05‐0235 5309 46,258,740 40,192,799 6,065,941 CA‐05‐0258 5309 8,891,620 7,211,076 1,680,544 CA‐05‐0271 5309 21,228,712 10,469,448 10,759,264 CA‐54‐0001 5337 314,952 22,651 292,301 CA‐54‐0014 5337 31,591,144 2,074,086 29,517,058 CA‐90‐X908 5307 64,700,000 64,405,626 294,374 CA‐90‐Y323 5307 6,570,411 6,507,936 62,475 CA‐90‐Y412 5307 3,540,364 3,324,352 216,012 CA‐90‐Y579 5307 332,076 246,273 85,803 CA‐90‐Y608 5307 1,606,720 1,431,373 175,347 CA‐90‐Y687 5307 7,001,915 5,235,088 1,766,827 CA‐90‐Y934 5307 2,617,801 2,018,681 599,120 CA‐90‐Y992 5307 8,173,372 1,742,762 6,430,610 TOTAL 245,701,100 185,046,633 60,654,467 FRA GRANT 75FRA0007 N/A 13,500,000 12,000,633 1,499,367

209 APPENDIX B STATE GRANTS STATE GRANT GRANT EXPIRATION TOTAL GRANT AMOUNT REMAINING GRANT DATE AMOUNT REIMBURSED BALANCE 07A0052‐05‐A1, A2, A6 12/31/2015 1,500,000 361,931 1,138,069 07A0052‐05‐A3, A5 12/11/2015 1,500,000 393,500 1,106,500 07A0052‐06‐A2 3/16/2016 12,000,000 8,098,818 3,901,182 07A0052‐07 6/30/2018 12,200,000 7,696,570 4,503,430 07A0052‐07‐A2 6/30/2018 22,800,000 15,250,834 7,549,166 07A0052‐08 5/23/2016 60,000,000 12,052,153 47,947,847 07A0052‐08 A3 5/29/2017 8,500,000 0 8,500,000 Extension to 3/31/16 9,036,070 6061‐0001 pending 8,910,091 125,979 6161‐0001 3/31/16 8,214,070 7,477,720 736,350 6261‐0001 9/30/2015 8,156,923 7,883,148 273,775 6661‐0001 3/31/2016 7,869,070 3,343,539 4,525,531 75A0322 12/31/2015 46,550,000 27,011,669 19,538,331 75A0413 4/30/2017 7,418,000 0 7,418,000 75A0423 12/31/2017 8,200,000 0 8,200,000 75GS0027 12/11/2016 1,325,000 1,048,216 276,784 75GS0032 NONE 500,000 420,337 79,663 75GS0033 NONE 4,841,000 174,448 4,666,552 FY08‐14 PTMISEA ‐ ALL AGENCIES 6/30/19‐6/30/2020* 40,901,553 31,198,819 9,702,734 FY15 PTMISEA 6/30/2020* 14,862,561 0 14,862,561 14/15‐2‐‐20O LCTOP 3/31/2016 486,312 0 486,312 TOTAL 276,860,559 131,321,793 145,538,766 REGIONAL GRANT AQMD CARL MOYER 13441 6/15/2018 52,000,000 0 52,000,000

*Extension to 6/30/21 expected in the FY 16/17 Budget.

210

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 14

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Preliminary Rehabilitation Program Reprogramming

Issue

Staff will provide an update on the Rehabilitation Program reprogramming efforts.

Recommendation

The Board may receive and file this report.

Background

The Authority has an annual Rehabilitation Program that extends the useful life of existing capital assets through activities such as the replacement of worn ties and rail, replacement of worn or outdated signal system components, rehabilitation of tunnels, bridges and culverts, programmed rehabilitation of rolling stock components such as car door operators and heating/ventilation/air conditioning (HVAC), and midlife overhaul of rail cars and locomotives.

The Authority has budgeted a total of $128.8M to the Rehabilitation Program over the past five fiscal years (FY2011-15). Currently, there are 142 Active Rehabilitation Projects for a total budget of $101.9M. Rehabilitation projects are delivered primarily within the Operating Divisions of Engineering and Construction, Track and Structures, Signals and Communications, and Equipment. Over the past five years, the Authority has completed 56 projects for a total of $26.9M.

To ensure timely project delivery and to meet local, state and federal funding expirations, the Authority has set specific guidelines for the internal management of Rehabilitation program expenditures:

Year 1 – 5%, Year 2 – 40%, Year 3 – 70%, Year 4 – 100%

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 211 Preliminary Rehabilitation Program Reprogramming Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

Reprogramming Efforts

The same Operating Divisions that deliver the Rehabilitation program also deliver the PTC Program, Locomotive Procurement, New Capital Projects and Public Projects. Due to limited staff resources, several Rehabilitation projects have fallen behind schedule and cannot be completed at this time. In addition, there are some active projects that no longer have the same high priority ranking as when they were first proposed or have experienced a change of approach such as the recent decision to purchase new locomotives instead of overhauling existing units. Staff is evaluating these projects and proposing to reprogramm some of the funds.

For the FY2012-13 and FY2013-14 Rehabilitation program years, $1.04M and $2.48M of projects have been preliminarily identified as eligible for reprogramming. For the FY2014- 15 year, funding for the full program was not available for expenditure until December 2014 and June 2015 due to delays in grant availability. Nonetheless, $17.3M is preliminarily recommended for reprogramming given a change in priorities.

The table below (Figure 1) summarizes the projects by fiscal year that are being evaluated for reprogramming. Also presented are the number of projects funded over the past five fiscal years, including the budget, expenditures and percent expended. These reprogramming efforts are complicated by fund sharing ratios among member agencies. Currently, only Systemwide and River subdivision projects can be reprogrammed to high priority Systemwide projects such as PTC, Locomotive, and TVM Procurement. The remainder of projects programmed to specific subdivisions such as the Valley sub, the San Gabriel sub, or the Orange sub can only be reprogrammed to projects within the County from which the funding comes.

Figure 1: Summary of Rehabilitation Reprogramming Recommendations Under Evaluation ($K)

# of Expended Percent Proposed # of Projects Funding Budget thru 5/15 Expend Reprogram Projects FY11&12 47 26,217 26,216 25,289 96.5% - 0 FY13 42 26,690 26,596 18,885 71.0% 1,040 3 FY14 58 28,080 27,973 5,203 18.6% 2,478 6 FY15 51 47,788 47,284 125 0.3% 17,299 4 Total 198 128,776 128,068 49,502 38.7% 20,817 13

Over the next two months, staff will finalize their Rehabilitation Reprogramming recommendations and return to the Board for consideration. Staff will also continue to work collaboratively with our member agencies on this effort.

212 Preliminary Rehabilitation Program Reprogramming Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Budget Impact

There is no budget impact as a result of this status report.

Prepared by: Mary Lou Williams, Assistant Director, Program Management Office Greg Wong, Program Management Analyst II

Gary Lettengarver Chief Operating Officer

Roderick Diaz Director, Planning and Development

213

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 15

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: FY2014-15 Quarterly Accounts Receivable Status Report – Quarter Ended June 30, 2015

Issue

This report presents a preliminary status update on the accounts receivable for the fourth fiscal quarter, ended June 30, 2015, for the Authority.

Recommendation

The Board may receive and file this report.

Background

The Authority’s sources of funds include passenger fares, dispatching and maintenance of way revenues, member agencies operating and capital subsidies, and state and federal grant programs.

As of June 30, 2015, the total outstanding accounts receivable balance as indicated in the table below, is $65.5 million. Of the total accounts receivable, $46.7 million is current (30 days or less), and $18.7 million is past due. Additionally, approximately $12.6 million of the accounts receivable are over 90 days.

Accounts Receivable Aging

1‐30 31‐60 61‐90 91‐180 Over 180 Account Description Total Days Days Days Days Days OPERATING SUBSIDIES RECEIVABLE $ 40.1 $40.1 $ ‐ $ ‐ $ ‐ $0.0 RECOLLECTABLE RECEIVABLES 10.9 2.1 3.4 1.1 1.3 3.1 CAPITAL CONTRIBUTIONS RECEIVABLE 6.2 ‐ ‐ ‐ 0.5 5.7 FARES RECEIVABLE 4.0 2.2 0.1 0.6 1.0 0.2 SHARED USE RECEIVABLES 3.0 2.3 0.1 ‐ 0.1 0.5 DUE FROM OTHER AGENCIES 1.6 0.1 1.2 (0.2) (0.1) 0.5 OTHER RECEIVABLES (0.3) (0.1) (0.0) (0.1) (0.0) (0.1)

$65.5 $ 46.7 $4.8 $1.4 $2.8 $9.8

100% 71% 7% 2% 4% 15% The accounts receivable are composed of:

One Gateway Plaza, Floor 12 – Los Angeles, CA 90012 214 FY2014-15 Quarterly Accounts Receivable Status Report – Quarter Ended June 30, 2015 Transmittal Date: July 17 2015 Meeting Date: July 24, 2015 Page 2

 Operating Subsidies Receivable – Due every quarter from the five member agencies relating to operating subsidies.  Capital Contributions Receivable – Due from member agencies and other state and federal grantors such as Federal Transit Administration for capital and rehabilitation projects (i.e., construction and rehabilitation of rail infrastructure system).  Due From Other Agencies – Due from other agencies such as California Department of Transportation (CalTrans) for construction projects.  Recollectable Receivables -- Due from both private and public agencies for projects such as special train services, construction of capital projects on behalf of third parties and flagging services.  Shared Use Receivables – Due from other rail partners such as Amtrak and Union Pacific Railroad Company for sharing rail lines.  Fares Receivable – Due from customers purchasing passenger fares for commuter rail services.  Other Receivables– Cash received pending application to the correct account.

Finance continues to reconcile and collect outstanding receivables for fare, dispatching, maintenance-of-way, capital program, and third party agreement revenue. In addition, Finance continues to generate invoices to customers for expenditures paid and incurred by the Authority, and compiling detailed transactions in support of future billings. As a result of this effort, outstanding receivables greater than 90 days was reduced by 4.2 million or 25% since the third quarter of FY15. Staff will bring to the Board accounts receivables that need to be written off, if any.

Budget Impact

There is no budget impact as a result of this status report.

Prepared by: Amanda Alton, Accounts Receivable and Collections Manager

Sam Joumblat Chief Financial Officer

215

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 16

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: FY2014-15 Quarterly Investment Report – Quarter Ended June 30, 2015

Issue

Recommendation

The Board may receive and file this report.

Background

The Authority is currently managing a portfolio of $77.2 million in cash, cash equivalents, and investment funds. The portfolio is comprised of operating cash, restricted and unrestricted funds. Approximately $33.2 million of unrestricted operating cash is currently on hand as of June 30, 2015, representing about 43% of total funds. The remaining balance is comprised of restricted funds totaling $44 million.

Amount Unrestricted Accounts Cash on Hand $ 33.2

Restricted Accounts Bank of America Money Market Reserves 3.7 Local Agency Investment Fund (LAIF) 40.3 $ 44.0

TOTAL$ 77.2

One Gateway Plaza, Floor 12 – Los Angeles, CA 90012 216 FY2014-15 Quarterly Investment Report – Quarter Ended June 30, 2015 Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

Restricted Funds

Local Agency Investment Fund (LAIF)

The LAIF is a pooled fund managed by the State Treasurer in which the Authority is a voluntary participant. It is an investment alternative for California’s local governments and offers local agencies the opportunity to participate in a major portfolio that invests hundreds of millions of dollars in securities. The majority of LAIF funds is restricted for Proposition 1B (Prop 1B) investments.

Prop 1B was approved by California voters on November 7, 2006 to authorize $19.9 billion of state general obligation bonds for specific transportation programs intended to “relieve congestion, facilitate goods movement, improve air quality, and enhance the safety of the state’s transportation system.” Prop 1B funds are awarded to agencies based on various deciding factors such as anticipated project costs and potential benefits of the project. The Authority has submitted applications to the state and is a recipient of Prop 1B funds. It is important to note that the Prop 1B funds are strictly from the state and do not include federal funds. Prop 1B funds are designated for specific purposes such as rehabilitation, safety or modernization improvements, capital service enhancements or expansions, new capital projects or for rolling stock procurement, rehabilitation, or replacement.

Bank of America (BofA) Money Market Fund

The Authority has also established a separate restricted account held with BofA money market reserves. Funds invested in the BofA money market reserves have historically been, and continue to be, restricted by the Board in connection with the lease/leaseback program. As of June 30, 2015, approximately $3.7 million is invested in BofA money market reserves.

Historically, the Board restricted the proceeds from the lease/leaseback transactions for capital maintenance of rolling stock to ensure it is in good condition to meet and maximize its useful life. Additionally, earnings from the transactions can also be used for specific purposes as approved and directed by the Board.

Interest Amount Earned

Total interest earned on LAIF for the quarter ended June 30, 2015, is $30,420.49, representing a 0.28% annual interest rate.

Investment Portfolio Compliance

The composition of the investment portfolio as of June 30 2015, complies with the provisions of the Authority’s Annual Investment Policy as the LAIF account has a balance of $40.3 million, below the $50 million stipulated by policy.1 Also, funds invested in BofA represent approximately 8.4% of the total investment funds, below the 20% required by policy.

1 Based on the Investment Policy as adopted on January 23, 2015, the maximum deposit allowed in the LAIF account is $50 million, and funds invested in Money Market Funds cannot exceed 20% of total investment funds.

217 FY2014-15 Quarterly Investment Report – Quarter Ended June 30, 2015 Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Cash Sufficiency

Approximately $33.2 million of operating cash is on hand as of June 30, 2015. This is above the $25 million threshold that was informally set as a minimum.

Budget Impact

There is no budget impact as a result of this status report.

Prepared by: Amanda Alton, Accounts Receivable and Collections Manager

Sam Joumblat Chief Financial Officer

218

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 18

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Oracle Financial Information System Update

Issue

At the June 26, 2015, Board meeting, Vice-Chair Busch requested staff provide an update to the Board on the status of the Oracle Financial System.

Recommendation

The Board may receive and file this report.

Background

System Conversion

In May 2013, the Authority went live with Oracle Financial System, Version R12. One of the drivers for implementing this new version was the addition of the Grants Module and budgetary controls, whereas the previous version 11i did not. There were a number of decisions made at the time of project planning and implementation that, in retrospect, were not in the best interest of the Authority. These included:

(1) not going live at a fiscal year-end, which meant that fiscal year 2013 data resided in the two systems, 11i and R12;

(2) not converting the transactional data from 11i into the new R12 system causing the necessity for transactions to be researched in both systems, 11i and R12, this cumbersome process is still necessary now and for the foreseeable future;

(3) the grant balances were not verified resulting in many balances being converted incorrectly; and

(4) prior to implementation, the two systems did not run in parallel to ensure that R12 was producing the same results as 11i, whereas having parallel runs is customary in these situations to ensure a successful implementation and could have caught many system errors;

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 219 Oracle Financial Information System Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

(5) dropping the project number from the General Ledger accounting string, which caused audit and reconciliation issues;

(6) custom processes not tested thoroughly to ensure proper recording of transactions; and

(7) not implementing the Fixed Asset Module when the system went live, which caused non-compliance with FTA-required data elements for each asset.

Financial Closes

Because of issues with the R12 Financial System and a number of position vacancies in the Finance Department, KPMG Advisory was retained in order to close fiscal year 2013 and interface with the independent auditor, Macias Consulting. FY13 was closed in March 2014 and the audit report, with a modified opinion, was issued in June 2014. No monthly closes have taken place in R12; the last monthly close was in 11i in December 2012. A multitude of system issues have prevented the monthly closes and instead, only annual closes took place in R12 for FY13 through FY15. The majority of these system issues have now been resolved and others have workaround solutions. Staff has recently developed a plan to implement monthly closes starting with the month of July 2015 close.

Oracle Rehabilitation Project

At the July 11, 2014, meeting, the Board approved a contract with KPMG technical consulting to assist staff with the rehabilitation of the Oracle Financial System. A team that consisted of KPMG, Finance, and Information Technology (IT) was formed and met constantly in order to address the issues in a set order of priority. One of the first tasks that the team undertook was to implement the more than 400 system patches that have accumulated since the system went live. This brought the system current and repaired many of the problems that were known for which Oracle had developed a fix. The team worked to identify, research and correct over 18,000 stuck transactions that were keeping data from posting to the appropriate accounts in the system and contributing to inaccurate reports. Many reasons could have a transaction stuck and not port correctly which included: budgetary controls, incorrect accounting string, inadequate award amount, and award expiration. These stuck transactions were a major reason that monthly closes could not be completed as the system will not allow closing with unposted transactions.

Other improvements included implementing the Fixed Asset Module, adding the project number to the General Ledger accounting string, streamlining system access, and correcting reports generated by the system.

However, the biggest part of the effort was spent on the Grants Module. Because of the improper implementation, the Grants Module was not functioning properly, which caused some billings to be generated partially outside the system versus systematic processing. This caused grants data generated from Oracle to be inaccurate and created reporting difficulties. The problem was exacerbated with the passage of time and the volume of

220 Oracle Financial Information System Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3 incorrect data that has accumulated in the system. The time and effort required in the billing of old transactions became so onerous that it was halted in favor of billing more current transactions to improve the cash flow. Finance and IT worked together with KPMG to develop a solution to convert the data to facilitate and improve the billing process. The implementation of this solution, however, will require significant staff time in order to correct. As awards and projects are closed, reconciliations of all old projects will be undertaken and any unbilled transactions will be billed.

As part of this project, staff was trained on new processes that were developed and refresher courses were given on other processes that were used incorrectly.

This rehabilitation project started in earnest in September 2014 and was completed in March 2015, meeting the objectives it was set out to achieve. Attachment A has a more comprehensive list of the project accomplishments.

Future Enhancements

Although the Oracle Financial System has been significantly improved, there are a number of enhancements that will make the accounting process more efficient. These include:  Correcting all the funding information in the Grants Module to allow the system to produce accurate reports. This will eliminate the parallel system of Excel spreadsheets used in order to ensure accuracy of billing the granting agencies.  Implementing a system to track third party deposits in Oracle to get a more efficient method of ensuring the system can track net amounts.  Implementing a user-friendly reporting tool. Oracle has stopped supporting the current “Discoverer” reporting tool. In addition, it is cumbersome to use and requires technical know-how. Finance and IT have been evaluating software packages from different vendors.  Documenting desk top procedures and processes to allow for staff cross training and mitigate staff turn-over.  Developing procedures to minimize the number of stuck transactions and ensure that all transactions have successfully posted, which is critical to the month-end close process. Staff will start monthly financial closes with the month of July 2015.  Eliminating duplicate manual entries by having an automated interface between Application Extender (AX), where invoice images reside, and the Oracle Financial System.  Eliminating duplicate manual entries by having an automated interface between Asset Works (the inventory system) and the Oracle Financial System.  Developing reports and automated alerts that will assist with monitoring of transactions, tracking of budgets, and producing audit reports.

221 Oracle Financial Information System Update Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 4

Budget Impact

There is no budget impact as a result of this status report.

Prepared by: Sam Joumblat, Chief Financial Officer Tom Franklin, Controller Amanda Alton, Accounts Receivable & Collection Manager Michael Naoum, Grants & Fiscal Management Interim Manager Christine Wilson, Budgets & Financial Analysis Manager

Sam Joumblat Chief Financial Officer

222

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 19

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Empire Avenue/Interstate 5 Widening and Railroad Grade Separation Project

Issue

Staff is providing a status update on the Empire Avenue/Interstate 5 Widening and Railroad Grade Separation Project.

Recommendation

The Board may receive and file this report.

Background

A Caltrans project is underway to add high-occupancy vehicle (HOV) lanes to the Interstate 5 (I-5) freeway through the City of Burbank while elevating Metrolink’s Valley Subdivision main line and Brighton siding tracks onto an embankment for approximately two miles, thus facilitating the full grade separation of both Empire Avenue and Buena Vista Street. Rail services will operate on an adjacent, temporary shoofly track while the construction of the new main line and supporting structures is undertaken. Staff is providing construction management services to Caltrans for the railroad work.

Status Report as of July 7, 2015

 Two mile shoofly track under construction, planned for completion in early August 2015 to allow Signal and PTC system testing and integration  Advance work for retaining walls for new railroad embankment underway  Off-site fabrication of railroad bridge decks for new Empire Avenue and Buena Vista Street grade separations nearing completion  Buena Vista Street to be closed to vehicular and pedestrian traffic over July 18-19 weekend to allow shoofly track to be installed across street and associated grade crossing gates and signal system to be relocated and tested  New shoofly track to be connected into existing main line during an absolute work window (no rail service) over Labor Day weekend, September 5-7. Shoofly will become immediately operational, at current main line speed, and with full PTC compliance

One Gateway Plaza, 12th Floor, Los Angeles, CA 90012 223 Empire Avenue/Interstate 5 Widening and Railroad Grade Separation Project Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

 Removal of existing main line track, construction of new bridge foundations, abutments and bridge decks, and completion of retaining walls and earth embankments for the new rail alignment to be undertaken between September 2015 and August 2016  Rail service planned to be returned to the new grade separated main line and extended Brighton siding in September 2016

Impacts to Passengers during Construction

 There will be minimal impact to passengers during construction. The shoofly track will not add any delays because the operational speed remains the same.

Budget Impact

There is no budgetary impact as a result of this status update.

Prepared by: Patricia Watkins, Interim Director of Engineering and Construction

Gary Lettengarver Chief Operating Officer

224 Empire Avenue/Interstate 5 Widening and Railroad Grade Separation Project Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 3

Installation of shoofly track adjacent to existing main line

Construction of retaining walls to support new railroad embankment

225

SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY

TRANSMITTAL DATE: July 17, 2015

MEETING DATE: July 24, 2015 ITEM 20

TO: Board of Directors

FROM: Arthur T. Leahy

SUBJECT: Lifecycle Costs of Authority-Owned Assets

Issue

At its June 26, 2015 meeting, the Board requested additional information regarding Authority- owned equipment lifecycle costs.

Recommendation

The Board may receive and file this report.

Background

At the June 26, 2015 Board meeting, the Board requested staff provide a report detailing lifecycle costs of Authority-owned equipment and a long term capital plan for all equipment utilized by the Authority in the scope of Metrolink Equipment Operations.

Board Member Requests

At the meeting, Director Humphrey noted that because the Authority made a significant amount of large machinery purchases, staff should be paying close attention to the peak value, useful life, disposition schedule and/or possibly diminished returns on investment the Authority could receive for these items. Director Spiegel inquired if there was a strategy for the budgeting of all equipment and schedule for their useful life.

To address both concerns from Director Humphry and Director Spiegel staff recognizes the importance of asset management and its financial influence on the organization. The Equipment Department is committed to understanding and improving the useful life of Authority assets through detailed data collection and analysis in concert with useful life capital planning. The documents provided are examples of data collection, lifecycle cost and the capital replacement planning already in progress. The plan takes in to account capital planning for facilities, facility equipment, machinery and Rolling Stock. The plan is fluid at this point but on track to provide the best possible near, mid and long term requirements for the Metrolink operation. Behind the capital plan is equipment performance and cost data and a replacement schedule that coincides with the equipment lifecycle termination.

One Gateway Plaza, 12th Floor – Los Angeles, CA 90012 226 Lifecycle Costs of Authority-Owned Assets Transmittal Date: July 17, 2015 Meeting Date: July 24, 2015 Page 2

Equipment Lifecycles

The cost to maintain a Metrolink asset over its useful life is considered its lifecycle. The asset may have anywhere from a 10 to 40 year life depending on the asset. To calculate this lifecycle, staff considers scheduled maintenance, repairs and overhaul costs over its useful life. The annual maintenance costs take into account all federal, state and local regulations as well as labor and material costs. No operating costs are considered.

Asset Lifecycle Strategy

Lifecycle analysis and the extension of the asset life is paramount. Maintenance and capital planning strategies are changing at Metrolink. The new approach will open the door to data based asset decision making. True lifecycle decisions are based on asset condition data analysis over time. We can then know when an assets reliable and cost effective life ends. The new Equipment Maintenance Strategy is centered around this approach.

Rolling Stock Fleet Plan

The Authority’s new Rolling Stock Fleet Plan, targeted for Board approval fall 2015, will clearly point out the new direction of rolling stock maintenance. The plan will detail the lifecycle based maintenance strategies to be applied across the Metrolink rolling stock fleet to achieve and maintain a state of good repair consistent with Moving Ahead for Progress in the 21st Century Act (MAP-21) Transit Asset Management Plan requirements.

Attachment 1 provides a list of all facilities, equipment, and rolling stock status. Attachment 2 is a sample 10-year rehabilitation forecast.

Budget Impact

There is no budget impact associated with this item.

Prepared by: Richard Tripoli, Director, Maintenance of Equipment

Gary Lettengarver Chief Operating Officer

227 ATTACHMENT 1 Facilities, Equipment, Rolling Stock Status

FACILITIES CONDITION STATUS REPORT

Planned Annual Service Date Replacement / Useful Life Overhaul Cost Cost To Replace Useful Life Lifecycle Cost CMF Maintenance Overhaul 1992 N/A $1.6m N/A $200m N/A Wheel True 1992 2015 2025 $45,000 $800,000 $5m 2022 $1,250,000 Drop Table 1992 2016 2025 $9,000 $185,000 $1.5m 2022 $275,000 Crane 25T 1992 2016 2036 $12,000 $400,000 $600k 2015 $520,000 Crane 10T 1992 2017 2020 $6,000 $200,000 $400k 2020 $260,000 Crane 5T 2011 2021 2030 $3,000 $100,000 $100k 2021 $130,000 Crane 2T 1992 2017 2027 $1,000 $425,000 $60k 2022 $435,000 Roof 2011 2031 2031 $1,000 $150,000 $300k 2031 $120,000 HVAC 2011 2021 2031 $3,000 $75,000 $200k 2031 $105,000 Car mover elec 2013 2021 2031 $1,000 $35,000 $300k 2028 $45,000 End of Life Car mover Diesel 2002 2020 $5,000 $35,000 $400k 2020 $85,000 2019

2021 upgrade Train wash 1992 to recycle 2031 $10,000 $40,000 $ 1.5m 2025 $140,000 water Fuel System 1992 2025 2040 $25,000 $900,000 $6.5m 2040 $1,150,000 Sanding System 1992 2036 2040 $10,000 $600,000 $2.2m 2040 $700,000 Compressed Air 1992 2020 2030 $20,000 $200,000 $800k 2025 $400,000 Emerg Generators 1992 2032 2042 $2,500 $200,000 $800k 2032 $225,000 Hy- rail Manlift 1992 2017 2027 $2,500 N/A $100k 2010 $100,000 Elec. Manlift 1992 2017 2027 $1,500 N/A $80k 2010 $60,000 Elevator 1992 2017 Upgrade 2027 $4,800 N/A $600k 2017 $192,000 NOX Monitoring 1992 2016 2015 $10,000 N/A $75k 2015 $230,000 Oil Water Seperator 2 1992 2018 2028 $4,000 $60,000 $300k 2025 $100,000 Ground Power 17 1992 As needed N/A $4,000 $100,000 $425k N/A $140,000 Ground Power 5 2012 As needed N/A $1,000 $25,000 $125k N/A $35,000

MOC 1996 $50,000 $9.0m $500,000 Battery UPS 2002 Backup as 2024 $4,800 $40,000 $150k 2024 $88,000 needed Emerg Generator 2002 2018 2028 $4,800 $10,000 $30k 2030 $58,000 Roof 2015 New 2035 $1,000 N/A $75k 2035 $20,000 HVAC 2012 New 2028 $7,200 $60,000 $400k 2028 $132,000

228 ATTACHMENT 1 (cont.) Facilities, Equipment, Rolling Stock Status (cont.)

DOC 2014 $125,000 $100m $1,250,000 UPS 2014 New 2045 $9,600 $100,000 $2.0m 2045 $196,000 HVAC 2014 New 2030 $9,600 $200,000 $1.8m 2030 $296,000 Roof 2014 New 2034 $1,000 N/A $125k 2034 $20,000 Elevator 2014 New 2044 $4,800 N/A $300k 2044 $144,000 Emerg Generator 2014 New 2044 $7,200 $20,000 $600k 2044 $92,000

Melbourne 2010 $50,000 $12.0m $500,000 HVAC 2013 2023 2028 $7,200 $60,000 $300k 2028 $132,000 Roof 2013 2033 2033 $1,000 N/A $120k 2033 $20,000 Elevator 2013 2044 2044 $4,800 N/A $300k 2044 $144,000 Emerg Generator 2013 2023 2043 $4,800 $10,000 $100k 2043 $58,000

MOW 1992 $12,000 $500k $120,000 Roof 2000 2020 2030 $1,000 N/A $80k 2030 $30,000 HVAC 2000 2025 2017 $2,400 $2,500 $10k 2017 $26,500

EMF 2010 $800,000 $100m $8,000,000 Roof 2010 2030 2030 $1,000 N/A $220K 2030 $20,000 HVAC 2010 2020 2025 $4,800 $6,500 $40k 2025 $54,500 Train Wash 2010 2015 2040 $10,000 $40,000 $1.5m 2040 $140,000 Emerg Generator 2010 2020 2025 $4,800 $6,000 $30k 2025 $54,000 Compressed Air 2010 2020 2030 $4,000 $4,000 $20k 2030 $44,000 Ground Power 16 2010 As Needed N/A $4,000 $95,000 $400k N/A $135,000

MARINE WAY Modular Offices 2013 2033 2043 $9,000 N/A $800k 2043 $270,000

229 ATTACHMENT 1 (cont.) Facilities, Equipment, Rolling Stock Status (cont.)

Layover Facilities

Riverside Ground Power 6 2001 As needed N/A $2,000 $30,000 $150k N/A $50,000 Compressed Air 2001 2020 2020 $3,000 $2,500 $20k 2020 $32,500 HVAC 2015 2025 2030 $3,600 $4,000 $20k 2030 $40,000 Roof 2015 2035 2035 $1,000 N/A $40k 2035 Emerg Generator 2015 2025 2035 $4,800 $4,000 $25k 2035 $52,000 IEMF Ground Power 2 2003 As needed N/A $1,000 $10,000 $50k N/A $20,000 Compessed Air 2003 As needed 2020 $1,000 $2,500 $15k 2020 $12,500 Roof 2003 Not Required 2012 $4,000 N/A $25k 2012 Oil Water Seperator 2003 Not Required 2033 $1,000 $6,000 $50k 2033 $16,000 Lancaster Ground Power 1 1994 As needed N/A $1,000 $5,000 $25k N/A $15,000 Compressed Air 1994 As needed 2020 $1,000 $2,500 $8.0k 2020 $12,500 Moorpark Ground Power 4 1992 As needed N/A $1,000 $20,000 $100k N/A $30,000 Compressed Air 1992 As needed 2016 $3,000 $4,000 $10k 2016 $34,000 Crew Base 1992 2019 2039 $1,000 N/A $200k 2010 $40,000 Ventura Ground power 1 1995 As needed N/A $1,000 $5,000 $25k N/A $15,000 Compressed Air 1995 As needed 2020 $1,000 $3,000 $10k 2020 $13,000 Crew Base 1995 2020 2035 $4,000 N/A $250k 2035 $160,000 Keller Ground Power 4 2010 As needed N/A $1,000 $20,000 $100k N/A $30,000 Compressed Air 2010 As needed 2025 $1,000 $4,000 $10k 2025 $14,000 Modular Office 2010 2030 2040 $1,000 N/A $250k 2040 $30,000 Material Moving Equip 1992/2011 2017 2010/2027 $120,000 $100,000 $800k 2010/2026 $1,300,000 Taylor Dunne Carts 1992/2011 2017 - 2020 2010/2027 $125,000 $125,000 $450k 2010/2026 $1,375,000

230 ATTACHMENT 1 (cont.) Facilities, Equipment, Rolling Stock Status (cont.)

Annual Planned Annual 1st Maintenance Overhaul Cost. 30 YR Lifecycle / Rolling Stck Service Date Replacement / Retire Useful Life Purchase Price Lifecycle Cost Cost Parts & MP36 to Tier 4 Unit Overhaul Per Unit Labor # Units Gen 1 88 1992 2016-17-18 2031 2033 $48,000 $1,350,000 $2,100,000 $2,148,000 $2,790,000 Gen 2 7 1993 2018 2033 2033 $48,000 $1,350,000 $2,300,000 $2,348,000 $2,790,000 Gen 3 26 2002 2018 2033 2033 $48,000 $1,350,000 $2,500,000 $2,548,000 $2,790,000 Rotem 137 2011-2013 Progressive 2041-2043 2041-2043 $42,000 $1,100,000 $2,800,000 $2,842,000 $2,540,000 F59PH 15 1992/93 2016 /2017 2022 $110,000 $2,400,000 NA $2,510,000 N/A F59PHI 6 1995 2017 2005 $90,000 $2,500,000 NA $2,590,000 N/A F59PHI (FTA ) 4 2002 ? 2017 2033 $90,000 $2,500,000 NA $2,590,000 N/A F59PHI 2 1998 2017 2028 $90,000 $2,500,000 NA $2,590,000 N/A F59PHR 7 1992 2017 30 $101,000 $2,500,000 NA $2,601,000 N/A F40PH 1 1985 2016 30 $50,000 N/A NA N/A N/A MP36 15 2009 2022 2040 2039 $80,000 $4,000,000 $3,600,000 $3,680,000 $5,440,000 F125 40 2016/2017 Progressive 2046 -2048 30 $52,000 $4,240,000 $6,500,000 $4,292,000 $5,680,000

231 ATTACHMENT 1 (cont.) Lifecycle Costs Rubber Tire Fleet

LIFECYCLE COSTS RUBBER TIRE FLEET MAINTENANCE AND REPAIR

Average # Vehicles 1st YEAR 2nd YEAR 3rd YEAR 4th YEAR 5th YEAR 6th YEAR 7th YEAR 8th YEAR 9th YEAR 10th YEAR Fleet Lifecycle

CLASS A (HEAVY DUTY $87,000 $91,000 $96,000 $103,000 $113,000 $125,000 $137,000 $156,000 $179,000 $218,000 $1,305,000 $43,500 AND HY-RAIRAIL) 30 CLASS B (MEDIUM DUTY $68,000 $72,000 $79,000 $85,000 $96,000 $109,000 $119,000 $133,000 $151,000 $167,000 $1,079,000 $34,806 VEHICLES) 31 CLASS C (ADMIN & LIGHT $27,000 $36,000 $47,000 $59,000 $81,000 $114,000 $162,000 $191,000 $221,000 $254,000 $1,192,000 $10,739 DUTY VEHICLES) 111

232 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

233 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

234 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

235 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

236 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

237 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

238 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

239 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

240 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

241 ATTACHMENT 1 (cont.) Rubber Tire Fleet Maintenance Condition Report and Replacement Plan

242 WORKING DRAFT Attachment 2 METROLINK 10-YEAR REHABILITATION FORECAST CONSTANT 2015 DOLLARS ($) THIS DOCUMENT IS NOT OFFICIAL AS IT IS WORK IN PROGRESS

Responsible Line REHABILITATION PROJECT DESCRIPTION Source of Project Type FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 TOTAL Manager

Estimate (Yr-1) (Yr-2) (Yr-3) (Yr-4) (Yr-5) (Yr-6) (Yr-7) (Yr-8) (Yr-9) (Yr-10) Facilities 57 Rehab IEMF compressed air system and roof condition rpt Facilities Harrington $31,250 $21,000 $52,250 Replace/rehab Moorpark OLP compressed air system Facilities 164 and crew trailer condition rpt Facilities Harrington $14,000 $280,000 $294,000 Replace/rehab East Ventura OLP compressed air Facilities 165 system condition rpt Facilities Harrington $14,000 $14,000 Replace high mileage MOW and SCRRA assigned and 186 pool vehicles. ROM Facilies/Fleet Harrington $0 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $3,600,000 Replace 3 hy-rail and 2 MOW specialty Vehicles (FY 187 16). FY 16 budgt Facilies/Fleet Harrington $662,000 $662,000 188 Replace 2 forklifts and 2 Taylor Dunn yard carts. FY 16 budgt Facilities Harrington $360,000 $360,000 Replace hyrail (1), standard boom lisft (1), and Diesel Facilities 189 car mover (1) condition rpt Facilities Harrington $0 $440,000 $500,000 $940,000

Remove asphalt, concrete and soil, repipe drain lines Facilities 190 and resonstruct locomotive steam cleaning area condition rpt Facilities Harrington $0 $1,402,000 $1,402,000 Extend pavement near Progressive Track to allow for 191 LCM. ROM Facilities Harrington $2,500,000 $2,500,000 Facilities 192 Replace CMF Wheel True machine condition rpt Facilities Harrington $6,250,000 $6,250,000 Facilities 193 Replace CMF Drop Table condition rpt Facilities Harrington $1,875,000 $1,875,000 Facilities 194 Replace CMF 10T and 2T shop cranes condition rpt Facilities Harrington $575,000 $575,000 Rehabilitation of CMF systems and equipment (HVAC, train wash, fuel system, sanding system, 195 ground power) as needed for SOGR. ROM Facilities Harrington $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $2,400,000 Facilities 196 Replace CMF compressed air system condition rpt Facilities Harrington $1,000,000 $1,000,000 $2,000,000 Facilities 197 Replace hy-rail manlift and elect manlift condition rpt Facilities Harrington $252,000 $252,000 Facilities 198 Rehab CMF elevator. Replace elevator in 2022. condition rpt Facilities Harrington $150,000 $750,000 $900,000 Facilities 199 Replace MOC UPS & emergency generators condition rpt Facilities Harrington $225,000 $225,000 Facilities 200 Rehab MOW building HVAC and roof condition rpt Facilities Harrington $25,000 $112,000 $137,000 Facilities 201 Rehab EMF HVAC condition rpt Facilities Harrington $25,000 $25,000

243 1 of 4 WORKING DRAFT Attachment 2 METROLINK 10-YEAR REHABILITATION FORECAST CONSTANT 2015 DOLLARS ($) THIS DOCUMENT IS NOT OFFICIAL AS IT IS WORK IN PROGRESS

Responsible Line REHABILITATION PROJECT DESCRIPTION Source of Project Type FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 TOTAL Manager

Facilities 202 Rehab Keller Yard compressed air system condition rpt Facilities Harrington $12,500 $12,500 Overhaul 15 MPI MP36 units (7 in 22, 8 in 23) and Rolling Stock - 207 upgrade to Tier-4. ($4.8M/unit) Fleet Plan Locomotives R. Tripoli $33,600,000 $38,400,000 $72,000,000 Rolling Stock - 208 Lifecycle overhaul - Order #1 (20) F125 locomotives Fleet Plan Locomotives R. Tripoli $3,164,000 $3,164,000 $3,811,000 $1,099,000 $5,429,000 $4,487,000 $8,726,000 $4,880,000 $34,760,000 Fleet Plan + 1 Rolling Stock - 209 Lifecycle overhaul - Order #2 (20) F125 locomotives year Locomotives R. Tripoli $3,164,000 $3,164,000 $3,811,000 $1,099,000 $5,429,000 $4,487,000 $8,726,000 $29,880,000 Complete overhaul of Gen 1 rail cars, including CEM components, and interior components for longer- Rolling Stock - 210 distance trips. (88 cars @ $1.35M/car) FY 16 budget Rail Cars R. Tripoli $40,500,000 $20,250,000 $20,250,000 $20,250,000 $17,550,000 $118,800,000 Restore to service 15 rail cars. The scope includes cab to coach conversions, lighting updates, wheels and rotors, HVAC retrofit, seat foam and fabric, Rolling Stock - 211 batteries and COT&S. FY 16 budget Rail Cars R. Tripoli $1,500,000 $1,500,000

Complete Overhaul of 7 Gen-2 Bombardier rail cars Car rehab Rolling Stock - 212 (7 cars @ $1.35M/car) forecast Rail Cars R. Tripoli $0 $9,450,000 $9,450,000 Complete Overhaul of 26 Gen-3 Bombardier rail cars Car rehab Rolling Stock - 213 (26 cars @ $1.35M/car) forecast Rail Cars R. Tripoli $0 $17,550,000 $17,550,000 $35,100,000

Bombardier car HVAC System overhaul and upgrade Rolling Stock - 214 to R-407C, 8-yr cycle ($25K/car * 15 cars/yr + agency) Rail Cars R. Tripoli $715,000 $405,000 $405,000 $324,000 $324,000 $324,000 $2,497,000

Overhaul Bombardier car Door Motors, controllers Rolling Stock - 215 and modules, 8-yr lifecycle ($48K/car * 15 cars/yr) Rail Cars R. Tripoli $342,500 $777,600 $777,600 $777,600 $777,600 $3,452,900 Overhaul Bombardier car Batteries, 8-yr lifecycle Rolling Stock - 216 ($12K/car * 15 cars/yr) Rail Cars R. Tripoli $194,400 $194,400 $194,400 $194,400 $777,600 Overhaul Bombardier car Trucks, 8-yr lifecycle Rolling Stock - 217 ($120K/car * 15ars/yr) Rail Cars R. Tripoli $1,944,000 $1,944,000 $1,944,000 $1,944,000 $7,776,000 Overhaul Bombardier car Window Gaskets, 8-yr Rolling Stock - 218 lifecycle ($10K/car * 15cars/yr) Rail Cars R. Tripoli $162,000 $162,000 $162,000 $162,000 $648,000 Rotem car Door Controller, operator & module Rotem rehab Rolling Stock - 219 overhaul ($48K/car, 45-46 cars/year + 8% agency) worksheet Rail Cars R. Tripoli $0 $2,332,800 $2,384,640 $2,384,640 $7,102,080 Rotem car Seat Cushion & upholstery replacement Rotem rehab Rolling Stock - 220 ($90K/car, 45-46 cars/year + agaency) worksheet Rail Cars R. Tripoli $4,374,000 $4,374,000 $4,374,000 $13,122,000 Rotem car Pushback Coupler replacement ($75/car, Rotem rehab Rolling Stock - 221 45-46 cars/year + agency) worksheet Rail Cars R. Tripoli $3,645,000 $3,726,000 $3,726,000 $11,097,000 Rotem car Window Gasket replacement ($10K/car, 8- Rotem rehab Rolling Stock - 222 yr cycle, 45-46 cars/yr + agency) worksheet Rail Cars R. Tripoli $486,000 $496,800 $496,800 $1,479,600

244 2 of 4 WORKING DRAFT Attachment 2 METROLINK 10-YEAR REHABILITATION FORECAST CONSTANT 2015 DOLLARS ($) THIS DOCUMENT IS NOT OFFICIAL AS IT IS WORK IN PROGRESS

Responsible Line REHABILITATION PROJECT DESCRIPTION Source of Project Type FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 TOTAL Manager

Replace windows ($600/window*44/car= $26,400, Rotem rehab Rolling Stock - 223 34-35 cars/year + agency) worksheet Rail Cars R. Tripoli $969,408 $969,408 $969,408 $2,908,224 Rotem car Toilet system replacement with gravity Rotem rehab Rolling Stock - 224 system ($50K/car, 27-28 cars/year + agency) worksheet Rail Cars R. Tripoli $1,458,000 $1,458,000 $1,458,000 $1,512,000 $1,512,000 $7,398,000

Rotem car Truck overhaul and Air Bag replacement Rotem rehab Rolling Stock - 225 ($120K/car, 45-46 cars/year + agency) worksheet Rail Cars R. Tripoli $5,832,000 $5,961,600 $11,793,600 Rotem car 480v T/L rewire ($60K/car, 45-46 Rotem rehab Rolling Stock - 226 cars/year + agency) worksheet Rail Cars R. Tripoli $2,916,000 $2,916,000 Rotem car HVAC overhaul ($20K/car, 68-69 Rotem rehab Rolling Stock - 227 cars/year + agency) worksheet Rail Cars R. Tripoli $1,468,800 $1,490,400 $2,959,200 Rotem car Trainline Recepticle and wiring Rotem rehab Rolling Stock - 228 replacement ($5K/car, 45-46 cars/year + agency) worksheet Rail Cars R. Tripoli $243,000 $248,400 $248,400 $739,800 Rotem car LVPS/ replace CB, TXMRS and relay Rotem rehab Rolling Stock - 229 overhaul ($12K/car, 45-46 cars/year + agency) worksheet Rail Cars R. Tripoli $583,200 $596,160 $596,160 $1,775,520 Rotem car Battery replacement ($12K/car, 68-69 Rotem rehab Rolling Stock - 230 cars/year + aagency) worksheet Rail Cars R. Tripoli $881,280 $894,240 $1,775,520 Rotem car Carpet/Flooring replacement with rubber non-slip material ($50K/car, 27-28 cars/year + Rotem rehab Rolling Stock - 231 agency) worksheet Rail Cars R. Tripoli $1,458,000 $1,458,000 $1,458,000 $1,512,000 $5,886,000 Rotem car Carbody recondition and replace decals Rotem rehab Rolling Stock - 232 ($100K/car, 45-46 cars/year + agency) worksheet Rail Cars R. Tripoli $4,860,000 $4,860,000 Rolling Stock 233 CMF 4 (25 ton) car jacks to be replaced Cars R Tripoli $200,000

234 Car mover elec (rehab) $30,000

235 Car mover Diesel end of life replacement $400,000 CMF Train wash overhaul and upgrade to recycle 236 water $1,200,000

237 Compressed Air $800,000

238 Emerg Generators $200,000

239 Crane 2 Ton $60,000

240 Crane 5 ton $100,000

241 Crane 10 ton $200,000 245 3 of 4 WORKING DRAFT Attachment 2 METROLINK 10-YEAR REHABILITATION FORECAST CONSTANT 2015 DOLLARS ($) THIS DOCUMENT IS NOT OFFICIAL AS IT IS WORK IN PROGRESS

Responsible Line REHABILITATION PROJECT DESCRIPTION Source of Project Type FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 TOTAL Manager

241 Drop Table replacement $1,500,000

243 Replace wheel machine with new $5,000,000

244 Oil water separator $300,000 Re-plumb locomotive wash area drainage to feed oil 245 water separator east side of locomotive shop $600,000

246

246 4 of 4