Boards of Directors

MEETINGS OF THE Boards of Directors

RPTA/VMR RPTA Board of Valley Metro Rail Joint Meeting Directors Board of Directors

Date Thursday, May 18 2017

Starting time 11:15 a.m.

Meetings to occur sequentially

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

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

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

May 11, 2017

Joint Meeting Agenda RPTA Board of Directors and Valley Metro Rail Board of Directors Thursday, May 18, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor 11:15 a.m.

Action Recommended

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

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

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

Scott Smith, CEO, will brief the Boards of Directors on current issues.

3. Minutes 3. For action

Minutes from the April 20, 2017 Joint Boards of Directors meeting are presented for approval.

4. Possible Executive Session 4. For possible action The Boards may vote to enter Executive Session for the purpose of obtaining legal advice with regard to any matter on the agenda pursuant to A.R.S. 38-431.03(A)(3) (Legal Advice) and A.R.S. 38- 431.03(A)(4) (Litigation, Contract Negotiations, and Settlement Discussions) to discuss and consult with attorney(s) concerning Valley Metro’s position regarding claim(s) and related issues, and to instruct and authorize attorney(s) to proceed regarding claims that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve possible litigation.

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

5. Executive Session Action Items 5. For possible action The Boards may take action related to items discussed as part of Agenda Item 4.

6. Fiscal Year 2017 Quarterly Reports 6. For information

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

7. Travel, Expenditures and Solicitations 7. For information

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

8. Future Agenda Items Request and Report on Current 8. For information Events

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

Qualified sign language interpreters are available with 72 hours notice. Materials in alternative formats (large print, audiocassette, or computer diskette) are available upon request. For further information, please call Valley Metro at 602-262-7433 or TTY at 602-251-2039. To attend this meeting via teleconference, contact the receptionist at 602-262-7433 for the dial-in-information. The supporting information for this agenda can be found on our web site at www.valleymetro.org.

DATE AGENDA ITEM 1 May 11, 2017

SUBJECT Items from Citizens Present

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

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT None

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

DATE AGENDA ITEM 2 May 11, 2017

SUBJECT Chief Executive Officer’s Report

PURPOSE Scott Smith, Chief Executive Officer, will brief the Board on current issues.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT None

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

DATE AGENDA ITEM 3 May 11, 2017

Minutes of a Joint Meeting of Valley Metro RPTA and Valley Metro Rail Boards of Directors Thursday, April 18, 2017 11:15 a.m.

RPTA Meeting Participants Councilmember Thelda Williams, City of Phoenix, Chair Councilmember Suzanne Klapp, City of Scottsdale, Vice Chair Councilmember Lauren Tolmachoff, City of Glendale, Treasurer Councilmember Pat Dennis, City of Avondale Councilmember Eric Orsborn, City of Buckeye Councilmember Mark Stewart for Vice Mayor Kevin Hartke, City of Chandler Councilmember Jack Palladino, City of El Mirage Councilmember Brigette Peterson, Town of Gilbert Councilmember Sharolyn Hohman, City of Goodyear Supervisor Steve Gallardo, Maricopa County Councilmember Chris Glover, City of Mesa Vice Mayor Jon Edwards, City of Peoria (phone) Councilmember Skip Hall, City of Surprise Mayor Mark Mitchell, City of Tempe Councilmember Linda Laborin, City of Tolleson Mayor Everett Sickles, Town of Wickenburg

Valley Metro Rail Meeting Participants Mayor Mark Mitchell, City of Tempe, Chair Councilmember Chris Glover, City of Mesa, Vice Chair Councilmember Mark Stewart for Vice Mayor Kevin Hartke, City of Chandler Councilmember Thelda Williams, City of Phoenix

Chair Williams called the joint meeting to order at 11:21 a.m. The pledge was recited.

1. Public Comment

Chair Williams said first on the agenda are citizen comments. And I do have three. Dianne Barker. You have up to three minutes.

Ms. Barker said I'm Dianne Barker. And I'm a transit passenger. And I just wanted to let you know that this is what a passenger looks like.

I read the comments from KTAR today from City of Phoenix giving this body Valley Metro Rail, anyway, $50 million for the extension. I'm all for really good transportation VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

and certainly South Phoenix. I've gone there for years using the bus system. But I noticed all of the comments without exception had to do with - we're going to be importing the homeless down to South Phoenix. So that's like an attitude and I'd like to dispel that.

I really was not -- I'll be honest -- in favor of the fifty because I know from 2012 the city gave sixty million, which hasn't been paid back yet. Our public transit director has let me know that it is on the budget and I still will be looking at that.

I want us all in transportation to know that I think there's a big picture in all of transportation and I just happen -- I don't want to ramble here, but in regards to the big picture, I was out at the Tempe streetcar yesterday and talking to them about mobility and looking, and I offered them -- you know, I used transit to go down there and I was on Mill Avenue and the sidewalks are very skinny in relation to the populous that's walking. Then they have all these cars. And they want to bring in a trolley. So I said it's way too narrow down there. I said what about, you know, a moving sidewalk that would have seats that would go along and people could get on it then they'd get off at the restaurant they view and like that. Well, our friend Marvin said that's how that sounds like a tram. That would really work better and they need to lessen the other traffic. Well, the engineer that was there kind of laughed, he said, oh, but you've got to figure it out and ask me an engineering question for this.

Anyway, I brought you the Tempe streetcar. I did give that input. I let them know again what my mantra was, the big picture. We've got the sun corridor, we need to look at that as multimodal. My choice would be build the best train you could find in the world because it's supposed to be a regional area for economics here and there.

All of this needs to fit in. If we did that, South Phoenix could have a huge beautiful interactive mobile center that would really surpass, I believe, your present plans. And so when I talked to Bennet the planes that are flying out of the airport, if they were to change the routes from the lawsuit that where the planes are flying over historic areas, they would go back over 51st Avenue, and ADOT is building with federal money a huge bypass there, so where I'm going with this -- it's the big picture. We need to take all these components and put it down to see where we're going and how it fits in to move people.

Chair Williams said thank you. I must be in a hurry today, because I forgot to introduce our newest member on this Board. Linda Laborin, I believe, is brand new to us and she is representing the City of Tolleson. But welcome. Delighted to have you here.

Next is Judy Hartman.

Ms. Hartman said the one thing I have heard two things that we are discontinuing on the bus sale of tickets. As of about a week from now, I think this is the worst thing anybody thought up. At least in Mesa, I only know of six, seven places you can buy a bus ticket.

We need more of them. Authorize more businesses to sell them, because it's not going 2

to work. I'm lucky I don't have to worry about it, but I don't like that.

Also, I have heard that there will be no more as of July 1st, Dial-A-Ride tickets. If this is true, it's going to make it very difficult for me to use Dial-A-Ride, so and where I live now during the summer, Dial-A-Ride's my only way out. So that's what I wanted you guys to know.

Chair Williams said thank you.

Mr. Smith said Madam Chair, I can soothe Judy's concerns. We are not ending on-board sales of tickets on the buses. What will be ending as of June 1st is the premium that we're currently charging if you buy an all-day pass on board. So we're actually making it easier to buy a ticket on board. You can now buy an all-day pass on board our bus and not pay the premium.

And as far as July 1st, we are changing providers, but the ability to utilize Dial-A-Ride service will not be diminished. There may be a little difference in the process, but we're actually making it easier to utilize the services as of July 1st.

Chair Williams said thank you. I hope she heard that. Did you hear that, Ms. Hartman? Okay. So kill that rumor out in the community. Howard May.

Mr. May said good afternoon. Everywhere I go I find things, and since I moved I found a lot of things. One of the things I love is NextRide system and I use it a lot. In fact, I actually showed somebody else how to use it the other day.

I think there should be a standard on where those signs are. I know for a fact on Priest and Washington there's one that's way up high. I think I have a card in for that.

One of the things that I think Blue would agree with me on is the ability to find a bus book. If you're on a four o'clock morning bus you might be able to find one on a bus. But some reason you guys decided to get rid of them off the buses. And not everybody has the ability to go down to Central Station to pick one up.

I understand you want to go to where everybody's using mobile. I know how to use my mobile, but there are people out in the community that are low income that do not have a smartphone and do not know where to find a bus book nor do they know how to use all the technology that we have for that.

And while I'm on my travels, I moved to a different spot of Phoenix and found ten bus stops, three in which had NextRide signs that were either damaged, missing, or totally scratched all you saw was white. I think there should be a standard on where the NextRide signs are and that they are easy to see.

Right now I'm working with somebody at this agency to try to get the ones on the light rail board to be slightly bigger. I love the light rail boards. Those are easy to see, easy to figure out, but some things some of the people have to find on their own. Thank you. 3

Chair Williams said thank you. Blue Crowley.

Mr. Crowley said why are you here? I hope that you would reflect on that as you're sitting there as in that you have the parochial responsibility to represent your constituencies, but you're also here to represent all of the taxpayers of Maricopa County that contribute to what you spend the money on. That's why when I see that the rural route still hasn't been established back to Wickenburg, and I'm doing whatever I can to get it done.

And, as I said, why are you here. Well, it's based on something I was a part of writing. And that was the Prop 400. And in that we said you need to hook up the communities and have to go rural out to Queen Creek, Tonopah, along Interstate 8 and the corridor of Gila Bend, which is an economic engine in that area, just as Goodyear and Avondale are economic engines where they are.

But I don't see the connectivity. I don't see the commitment by you electeds or any of your communities when, Mesa, 60 percent has nothing when it comes to transportation. Peoria, Surprise, Goodyear, Avondale has got some improvements and such, but when are you going to get the job done by having a little bit of a commitment and doing it.

Supposedly we're going to be getting 60 percent of the moneys that go to transportation. And when I hear that, well, the project's going to be two and a half billion dollars for rail, I go, oh my God, we've got three billion dollars we're going to be spending on buses and that. All of you are going to put in an infrastructure as in bus stops, not Park-and-Rides, bus stops. Covered bus stops as in if you have somebody waiting for a bus over ten minutes when it's a hundred and seventeen, it's injurious to their health. Is that negligence on your part or what?

And since I do get to cover all the non-action agenda items on it, something I brought up at the managers and that's this trips and expenses. I see the legislative conference. I see the general counsel going to an affairs seminar. And I ask again what is it they got there, what were they doing for us, and what they got, have they shared it with us, because we're spending the money to send them to these things.

And when the safety director has to go to Washington to figure out how they're going to put together her - well, it's one of the expenses.

Chair Williams said thank you. Next on our agenda is the Chief Executive Officer's Report.

2. Chief Executive Officer’s Report

Mr. Smith said Final Four weekend, we are so very proud -- I am proud of this organization for things that I will admit I had virtually nothing to do with because the people who are passionate about what they do were here long before I was and continue to serve this community in an incredible way. 4

A couple weeks ago, we had the opportunity as a region of hosting the Final Four truly - - and not only a national but an international event, but this not only put the onus on us to provide services, but it also created almost a perfect storm for us. Because on Sunday, for example, we had in downtown Phoenix not only the Fan Fest, which was here at the Convention Center; we had the March Madness Music Festival at Margaret Hance Park, which was oversubscribed, you might want to say; we had the Diamondbacks opening game, which went to the bottom of the ninth, which meant 47,000 fans were going out into the downtown at the same time; the Pride Festival, the Tempe Arts Festival.

We had a lot of events happening at the same time. And our system not only was able to handle that safely and securely, but did in a way that I'm proud of all of them.

To give you an example of where we were for the two and a half days Friday afternoon, Saturday, and Sunday, our system handled well over 220,000 riders. That's more than the average of about 130,000 that we would have, so it's about almost a 70 percent increase. And many of those times it was concentrated and yet our system responded.

What does it take to respond to that kind of thing, well over and above our normal staff. We had seventy-five rail operators and supervisors who came to work to help efficiently transport riders. We had seventy light rail vehicle platform and system maintenance technicians keeping the trains running. I was in the operations center, and it's quite an adventure being there when you have trains that are completely full. They're lined up on the system. You have this big board telling them where they are, and, all of a sudden, you get a call in that there's a medical emergency on one of our trains and that train's going to have to stop and wait for the fire department to show up, and oh, no, the entire system now is stopping.

Then you have somebody who happens to hit an emergency button and open an emergency door on a train headed westbound and the train has to stop. And there's some tense moments where you're thinking the entire system is going to come to a grinding halt and then the staff and everybody rushes to make things right and they continue on and it's great to watch.

Forty-five fare inspectors in partnership with TSA, Phoenix Police Transit Enforcement Unit, canine teams from around the Valley and actually from even out of state. We had some LA County Sheriff's Department here to provide security. Forty bus operators and supervisors providing special transit event transportation as we ran shuttles from our 19th Avenue Montebello Station out to University of Phoenix Stadium, forty-two customer service representatives, and seventy-five Valley Metro ambassadors were on platforms and other areas. That's what it takes over and above the normal day's work.

So I appreciate all of them. As I've said, a lot of people were responsible at Valley Metro and in your cities for making that a successful event.

I also had the opportunity of going to the streetcar coalition meeting where leaders from 5

around the country met to discuss some of our challenges. Of course with our Tempe streetcar ready to start hopefully in design we had a great meeting last night and starting construction soon. It was good to compare notes with other systems.

Streetcars tend to be the most popular form right now. There are several streetcar systems in development. One in Detroit is starting revenue service next month. We have others in Cincinnati and Kansas City that have recently opened. Oklahoma City's on the drawing board and of course here in Tempe, so it was good to be able to share with them and also talk about the challenge we have which is, of course, the federal budget and whether they will be a participant as they have already committed to informally on Tempe and we're waiting for that process to make a formal commitment.

Would like to do a shout-out to our partners at MAG. All of you are part of MAG who on April 12th, just this last Wednesday, celebrated fifty years of serving the region.

To document the agency's history, MAG's producing a series of decade by decade videos that will be released to your cities. It's really interesting to see how this Valley has changed, but also how we've worked together as a region to do things.

To give you an idea as to what MAG means, not only to our Valley -- it was one of the first metropolitan planning organizations in the entire country. And while we may be frustrated by what we do as a region sometimes, MAG is literally held up throughout this country as an example of ways that regions can come together and get things done.

As a matter of fact, some of their items like their construction standards and building standards are literally not only used here in the Valley but are used in the State and by other states as their standards. So appreciate MAG in all they do.

I'd like to talk about Valley Metro's arts line rotating transit art series. I know that's a mouthful, but we are trying to identify the light rail as truly an arts line that brings people to a variety of experiences along our twenty-six miles. Whether it be a concert or a museum or the arts on our line, we connect people with opportunities.

What we do is that the transit art series showcases the talent of local and emerging artists on our trains, buses, and at the Roosevelt Valley Metro rail station for the benefit of patrons and for the downtown Phoenix Roosevelt Historic District. Twice a year new artists will be featured on our system both on the trains and at the stops.

And this artist is Lauren Lee, who's a local fine artist and muralist. Her artwork Bloom will be up at the Roosevelt Central Station and used in buses and rail cars throughout the summer. It's a way that we are part of the community.

I'd like to tell you that coming up on April 30th, we'll conduct an internal rail rodeo competition. Of course, last year in June, we had the opportunity to host the International Rail Rodeo, which our local teams, by the way, did very, very well. And overall I think they finished third in the entire country as far as performance.

This is a local competition where operators and maintainers go through a set of standards and of tests, and then the winners will go back to Baltimore, Maryland, in June which is the site of this year's International Rail Rodeo.

I'd also like to recognize, as I'm trying to do on a monthly basis, some of our staff who, as I've said, do an amazing job. This month we'd like to talk about the maintenance of equipment or our MOE group. These are the ones that keep our trains running, and also our maintenance of way, they're the ones that keep our train tracks running.

Yes, we have -- there's a lot of work to be done in making sure the wires and the switches and all the things happen so that we run our trains on time every day. The MOE group has gone 297 days that's over almost 91,000 man and woman hours, I guess you could call them person hours, without a lost time injury. Our MOW group has gone 362 days, over a year, or nearly 80,000 hours without lost time injury. That's a pretty significant accomplishment.

Here in the room today we have some employees that are responsible for this accomplishment. I'd like to introduce to you Tim Valenzuela, Rick White, Joe Schultz, Danny Martinez, Trish North, Ken Raghunandan. If you are all there, would you please stand. Those of you who are there. Give them a round.

That's quite an accomplishment for on both areas to go that long without having an injury and to be safe. We try to do our best to provide a safe and secure place for not only our passengers, but obviously our employees and team members, and if they're safe, we believe that they make it safe for all of our passengers. So appreciate all of the work that they do and will continue to do.

I'd also like to introduce to you Mary Modelski. There she is. Mary joined us just a couple weeks ago. She is our new internal auditor. This is a position that you authorized about a year ago and it has taken us that long to find just the right person, and Mary comes to us from -- well, is actually coming home. She's originally from the Chicago area but spent a long time here in the Valley working before she took a job up in the Bay Area with Alameda County and now returns home to her Chandler home, which she actually never sold when she went up to work in Oakland, so she has just started and already had made a big difference for us.

So Madam Chair, that's my report. Thank you very much.

Chair Williams said does anyone have any questions? Eric?

Councilmember Orsborn said I have a question regarding the success of the national championship weekend and the rides that were done that weekend. Do we have data to show the revenue increase? I'm assuming there's a significant increase in tickets that were bought. And especially when you have 44,000 people coming out of a ball game, and I'm assuming a lot of those folks had rode the train in and are riding it back out, can you all provide some sort of data on how those tickets were bought, the total increase for that weekend, and what we see as an organize increase in revenues? 7

Mr. Smith said we can get that information for you. We do obviously track our sales on a daily, hourly, and by transaction basis, so Paul Hodgins will pull that information for those dates to be able to get it to you.

Chair Williams said anyone else? Please, from the City of Phoenix thank your staff. They did an outstanding job. We heard nothing but praise for how well your routes went, the train went, the buses, the coordination. Whether they were in town or out of town, everyone mentioned how great it was. So thank you all very much.

Mr. Smith said well, thank you. And tell them thank you for their thank you. Appreciate it. It was really a joint effort and that was the great thing is as you went down and saw around the way that our security services with Phoenix PD and the coordination was pretty incredible. It was nice to see the region come together and have a success on that level.

Chair Williams said and I know many of them worked on it for months.

Mr. Smith said over a year, well over a year. If I could -- and you know, since you mentioned that, although it was a team effort Adrian Ruiz, Ray Abraham is not here, our head of operations, Hillary Foose, our director, those were the ones that were primary.

But those are the three that really took the lead and their groups and their teams of organizing the coordination for Valley Metro. So thanks to them for all that they did. And Dan Filipino. I guess since Ray's not here Dan Filipino, who's the head of our rail operations, rub that in.

I can tell you that being down at the operations control center, you know, that was a fun, exciting, happening place to see things that were going on. A lot of people come together to make sure that we not only have the full trains but safe trains. So thank you.

3. Minutes

Chair Williams said that takes us to the minutes of March 16. Any questions, discussion, amendments, changes, or motion?

IT WAS MOVED BY VICE MAYOR KLAPP, SECONDED BY COUNCILMEMBER PETERSON AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 16, 2017 JOINT BOARDS OF DIRECTORS MEETING MINUTES.

4. Purchase of Cisco Smart Net Total Care; Cisco Voice Licensing and Software; and Other Related Software Licenses

Mr. Smith said this was added just recently and I apologize for that. We normally don't like to throw things on the agenda at the last minute, but the circumstance of this addition merited its being added.

What this basically is we run, as you can imagine, an information, a computer system, information technology system that is very complex. A lot of it is run by equipment, software, and licenses that are provided to us by Cisco, which is a major provider of servers and those kind of things.

We have historically have had a hodgepodge of service plans. AppleCare for the Cisco equipment to over 2,400 licenses for software, hundreds of pieces of equipment. And as these pieces of equipment were purchased, the service plans for each equipment -- piece of equipment or software was added to, so we had a literal list of hundreds of different service plans.

This service plan is called Smart Net Total Care. Prior to about a year ago, prior to his leaving, our IT director Bill Tseui included in the budget that you approved for last year a little over five hundred thousand dollars to combine all of these service plans into a single service plan that was a blanket plan. He left and was -- he was running that project.

He left a couple months ago with that conversion unfinished. It slipped through the cracks and Rob Antoniak, our chief operating officer, found out, just literally a week or two ago, that our service plan was expiring. This would have left us completely exposed from a protection standpoint. We would not have had that. Our local provider was very gracious to extend their service uninterrupted appending your authorization.

So what you have before you is a three-year service plan contract that will be a blanket contract for the entire system. We're combining so that all the system has a singular expiration date, but it's a $540,000 deal that covers a three-year period.

As I've said, it is included in the fiscal '17 budget. It will be expensed over those three years, but that's what we're bringing to you and that's why it was a last second deal. We felt it was sort of important that we not wait another month to get permanent coverage established.

Chair Williams said good idea. Any questions? Do we have a motion to approve staff's recommendation?

Councilmember Dennis said I just have one question. Does any additional equipment that comes on will that be then added into this contract?

Mr. Smith said yes, it will. Anything that comes in under Cisco, whether it be software license or whatever, are anticipated under this plan, so it is a blanket companywide plan.

Councilmember Dennis said and it doesn't increase the cost?

Mr. Smith said no.

Chair Williams said do I have a motion? 9

IT WAS MOVED BY COUNCILMEMBER ORSBORN, SECONDED BY COUNCILMEMBER PETERSON AND UNANIMOUSLY CARRIED TO AUTHORIZE THE CEO TO PURCHASE CISCO SMART NET TOTAL CARE FOR A THREE-YEAR PERIOD THROUGH JUNE 2020; CISCO VOICE LICENSING AND SOFTWARE; AND OTHER RELATED SOFTWARE LICENSES FROM AUTHORIZED RESELLER EXTREME INTEGRATION THROUGH THE STATE OF ARIZONA APPROVED MOHAVE EDUCATIONAL SERVICES COOPERATIVE, INC., AT A COST OF $523,189.19.

5. Possible Executive Session

This item was not heard.

6. Executive Session Action Items

This item was not heard.

7. Travel, Expenditures and Solicitations

Councilmember Hall said I did have a couple of questions on the, Scott, on the active request for proposals. My question is, how many people are in this business that deliver these light rail vehicles or whatever? I mean, how many -- when you put an RFP out how many people respond?

Mr. Smith said it varies. I believe on our light rail vehicle we had three response.

Councilmember Hall said so there's three people in that business?

Mr. Smith said yes. Well, there's a lot more companies in the business, but whether they respond or not depends on a lot of things. First of all, how we've spec 'd the machines, and if the cars fit. A lot of it is whether the manufacturer has the capacity to build these cars. This has become a challenge because recent acts of Congress have included a Buy America plan. And that has increased the level of American sourced goods. Now I believe it's 70 percent. It's moved from 60 to 65 to 70 percent of the car must be built with American sourced labor, because we actually have to do audits.

What that's done is that a lot of European car makers and Chinese have somewhat been scrambling to get in the market, so it's not a large group, but it is more than one or two.

Councilmember Hall said but is it true that you need a two and a half year lead time?

Mr. Smith said oh, yes. It's usually -- we try to get them down to thirty to thirty-six months and that's because there are a lot of cars being purchased with a manufacturing capacity that's not that great. So that two and a half to three years is a good lead time for these vehicles. 10

Councilmember Hall said okay. Then my other question was what is a PowerEdge R730 servers. What are those?

Mr. Smith said PowerEdge R730 – on the expenditures list? Those are servers for the computer. We bought them from Dell Computers. So we're constantly buying servers that run our system internally, run everything from our phone system to our accounting system to our Internet interface and those are what those are.

Councilmember Hall said so we just added capacity?

Mr. Smith said well, we're either adding capacity or servers have reached the end of their useful life and we're replacing. I can't remember -- I don't know -- Rob's not here. I don't know exactly if that was an addition. I can get that information for you though.

Chair Williams said can I ask a follow-up question, if you don't mind, on that? Like a year or so ago we purchased servers and you made sure that one was off site? Is that still true?

Mr. Smith said we do have backup in offsite locations, yes. We have a duplicity built in. It's not at the level we really want it to be, but we do have servers in multiple locations. So that if something's goes down, there's hopefully a backup. Not hopefully, we plan for a backup elsewhere.

Chair Williams said okay. Thank you.

8. Future Agenda Items Request and Report on Current Events

Chair Williams said does anyone have anything they would like to bring up and submit? All right. Hearing none, this meeting will be adjourned.

With no further discussion the meeting adjourned at 11:55 a.m.

DATE AGENDA ITEM 4 May 11, 2017

SUBJECT Possible Executive Session

PURPOSE The Boards may vote to enter Executive Session for the purpose of obtaining legal advice with regard to any matter on the agenda pursuant to A.R.S. 38-431.03(A)(3) (Legal Advice) and A.R.S. 38-431.03(A)(4) (Litigation, Contract Negotiations, and Settlement Discussions) to discuss and consult with attorney(s) concerning Valley Metro’s position regarding claim(s) and related issues, and to instruct and authorize attorney(s) to proceed regarding claims that are the subject of negotiations, in pending or contemplated litigation or in settlement discussions conducted in order to avoid or resolve possible litigation.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION The Board may vote to enter Executive Session.

CONTACT Michael Minnaugh General Counsel 602-262-7433 [email protected]

ATTACHMENT None

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

DATE AGENDA ITEM 5 May 11, 2017

SUBJECT Executive Session Action Items

PURPOSE The Board may take action related to items discussed as part of the Agenda Item 4.

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION The Board may take action related to the items discussed as part of Agenda Item 10.

CONTACT Michael Minnaugh General Counsel 602-262-7433 [email protected]

ATTACHMENT None

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

DATE AGENDA ITEM 5 May 11, 2017

SUBJECT Fiscal Year 2017 Quarterly Reports

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

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

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

COST AND BUDGET None

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

RECOMMENDATION This item is presented for information only.

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

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

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

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

Operations & Maintenance FY17 Q3 Report May 2017

Regional Ridership

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

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

1 4/26/2017

Fixed Route Bus – East Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

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

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

Fixed Route Bus – West Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

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

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

2 4/26/2017

Light Rail

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

On-Time Performance ≥ 95% 92% 92% 94%

Complaints Per 100,000 Boardings ≤ 3.0 0.6 0.4 0.4

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

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

Customer Service – Call Center

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

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

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

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

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

3 4/27/2017

Safety, Security & Quality Assurance FY17 Q3 Report

May 2017

Bus Accidents

Total NTD 100 92 85

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

These include all contacts made

1 4/27/2017

Dial-a-Ride Accidents

Total NTD

5 No NTD 4 3 Reportable Incidents 01

FY17 Q2 FY16 Q3 FY17 Q3 3

Police Incidents - Bus

13 10 8 7 5 3

FY17 Q2 FY17 Q3 Total Incidents Criminal Damage Other

2 4/27/2017

Rail Accidents

16 15

12 12 11 11

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

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

FY17 Q2 FY16 Q3 FY17 Q3

% of total ridership 6

3 4/27/2017

Fare Inspections and Fare Evasions

Inspected and Fare Evasion Percentage 20.0%

18.0% 16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

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

Fare Compliance Total Inspections for Q1= 647,591

94% 94% 94%

FY17 Q2 FY16 Q3 FY17 Q3 8

4 4/27/2017

Citations Issued by Allied Barton

304 273

217

FY17 Q2 FY16 Q3 FY17 Q3

Top Violations

250

200 207

150

100

81 61 50

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

5 4/27/2017

Fare Sweeps Total Activity

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

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

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

2357

187 164 195 19 0 3 14 0

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

Platform Park N' Ride 12

6 4/27/2017

Quality Assurance

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

7 4/26/2017

Capital and Service Development FY17 Q3 Report May 2017

Transit Service Development FY17 Q3 Report

1 4/26/2017

Transit Planning Projects

Project/Study Name Name Completion Completion DateDate Status Status

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

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

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

Transit Planning Projects

Project/Study Name Completion Date Status

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

2 4/26/2017

Transit Planning Projects

Project/Study Name Completion Date Status

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

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

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

Accessible Transit Services FY17 Q3 Report

3 4/26/2017

Dial-a-Ride – East Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

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

On-Time Performance ≥ 95% 96% 96% 95%

Complaints Per 1,000 Trips ≤ 1.5 2.2 2.5 2.3

Cost Per Trip -- $26.72 $26.62 $26.72

Dial-a-Ride – West Valley

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

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

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

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

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

*Mobility Center trips are included in this data

8 8

4 4/26/2017

Dial-a-Ride – Regional

Performance Indicator Target FY17 Q2 FY16 Q3 FY17 Q3

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

On-Time Performance ≥ 95% 97% N/A 97%

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

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

9 9

Other Accessibility Services

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

5 4/26/2017

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

– Expanding service to Surprise 11

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

6 4/26/2017

Capital Planning, Design & Construction FY17 Q3 Report

South Central LRT

Project Complete Current Phase Phase Complete

2023 Project Development Fall 2017

Status

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

7 4/26/2017

Northwest LRT Extension Phase II

Project Phase Current Phase Status Complete Complete

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

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

8 4/26/2017

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

OMC Expansion

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

9 4/26/2017

Peoria Park-and-Ride

Project Current Phase Phase Complete Complete

Summer 2019 Environmental Spring 2017

Status

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

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

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

10 4/26/2017

Northeast LRT Feasibility Study

Project Current Phase Phase Complete Complete 2034 Feasibility Study Fall 2017

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

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

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

11 4/26/2017

50th Street Light Rail Station

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

50th Street Project Cost and Budget

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

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

12 4/26/2017

50th Street Project Schedule Description Baseline Current % Complete

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

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

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

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

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

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

Gilbert Road Extension

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

13 4/26/2017

GRE Project Cost and Budget

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

GRE Project Schedule

Description Baseline Current % Complete

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

14 4/26/2017

Tempe Streetcar

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

Tempe Streetcar Project Schedule

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

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

15 4/26/2017

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

16 4/26/2017

Communication & Marketing FY17 Q3 Report

May 2017

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

1 4/26/2017

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

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

2 4/26/2017

Marketing Update

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

• Conducted “Rail Ride” promotion with Mega 104.3 5

3 4/26/2017

Finance Division FY17 Q3 Report

May 2017

Valley Metro RPTA Operating Results – Q3

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

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

1 4/26/2017

Valley Metro RPTA Capital Results – Q3

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

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

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

Valley Metro Rail Operating Results – Q3

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

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

2 4/26/2017

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

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

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

Valley Metro Rail Capital Results – Q3

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

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

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

Total Capital 29.2 10.4 18.8 64.4 19.0 45.4 6

DATE AGENDA ITEM 7 May 11, 2017

SUBJECT Travel, Expenditures and Solicitations

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

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

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

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

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

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

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

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

UPCOMING SOLICITATIONS

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

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

DATE AGENDA ITEM 8 May 11, 2017

SUBJECT Future Agenda Items Request and Report on Current Events

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

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT Pending Items Request

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

Pending Items Request

Item Requested Date Requested Planned Follow-up Date

May 11, 2017

Board of Directors Thursday, May 18, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor 11:15 a.m.

Action Recommended

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

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

2. Minutes 2. For action

Minutes from the April 20, 2017 Board meeting are presented for approval.

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

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

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

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

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

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

Staff recommends that the Board of Directors approve the 2017 Transit Life Cycle Program – Bus Update.

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

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

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

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

6. Next Meeting 6. For information

The next meeting of the Board is scheduled for Thursday, June 22, 2017 at 12:15 p.m. Please note time change.

DATE AGENDA ITEM 1 May 11, 2017

SUBJECT Public Comment on Agenda Action Items

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

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT None

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

DATE AGENDA ITEM 2 May 11, 2017 Minutes of the Valley Metro RPTA Board of Directors Thursday, April 20, 2017 11:15 a.m.

RPTA Meeting Participants Councilmember Thelda Williams, City of Phoenix, Chair Councilmember Suzanne Klapp, City of Scottsdale, Vice Chair Councilmember Lauren Tolmachoff, City of Glendale, Treasurer Councilmember Pat Dennis, City of Avondale Councilmember Eric Orsborn, City of Buckeye Vice Mayor Kevin Hartke, City of Chandler Councilmember Jack Palladino, City of El Mirage Councilmember Brigette Peterson, Town of Gilbert Councilmember Sharolyn Hohman, City of Goodyear Supervisor Steve Gallardo, Maricopa County Councilmember Chris Glover, City of Mesa Vice Mayor Jon Edwards, City of Peoria (phone) Councilmember Skip Hall, City of Surprise Mayor Mark Mitchell, City of Tempe Councilmember Linda Laborin, City of Tolleson Mayor Everett Sickles, Town of Wickenburg

Chair Williams called the meeting to order at 11:56 a.m.

1. Items for Citizens Present

Chair Williams said first on the agenda are the citizen comments. We will have speakers come up. Howard May. You have three minutes. Please give your name and number for the record.

Mr. May said Howard from Phoenix now. It was Glendale. You have short range transit program, and something -- Blue all he talks about a lot -- is areas of town where you do not have buses. You passed a thing called Prop 400.

I'm glad to say that I saw in your short range transit program you're bringing back some things that were taken away. For example, eventually you will -- Route 29, Route 41 back in Avondale and some other things coming down the pipe like Bell Road going farther west than Arrowhead. And I'm glad that I see that listed there. However, some things got skipped like Camelback was supposed to go to Litchfield Road that was in Prop 400. I do not see that in the short range. Again, areas of town that are in the – check my notes here. And that's it for that. Thank you.

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

Chair Williams said thank you. Next is Blue Crowley. Three minutes, Blue.

Mr. Crowley said well, what you had to say last night at council and what ICE needs to do and it's not the cities -- any of your jobs, but that's a half a minute I'd like to get back, but we'll go on from there.

The Park and Ride up there in Peoria every one of those parking spots is going to cost the same amount as a bus stop. Could you please in a concentric circle in your future plans knowing where those buses are going to be going put, well, is it going to be a two hundred space one, because when it comes to that short range plan and such, you're right. Peoria does try to get involved, but if you consider how big you are and I start at Arrowhead mall and go everything north and west knowing that you don't have any transit connecting you to Surprise or anywhere else, I go, nice that this is the first step. How is this actually multimodal? How is this actually in the amount of money being put out working for those people?

And I'm sorry, Mr. Smith, on my pronunciation, but when I went to your staff and asked them before I came up here how to do it, they said that, and I wasn't doing this as the group, I was going at it as in each individual and why are you here, each of you, look in your hearts. And I'll give you a minute back just because it was so nice to say nice things about you.

Chair Williams said thank you, Blue. That's all the requests to speak I have.

2. Minutes

Chair Williams said we will go to the minutes of the meeting of March 16, 2017. Does anyone have any discussion, comments, amendments, or a motion?

IT WAS MOVED BY COUNCILMEMBER HALL, SECONDED BY VICE MAYOR KLAPP AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 16, 2017 BOARD MEETING MINUTES.

3. Consent Agenda

Chair Williams said the consent agenda items are presented for action. Does anyone have any questions? Do I have a motion?

IT WAS MOVED BY COUNCILMEMBER ORSBORN, SECONDED BY VICE KLAPP AND UNANIMOUSLY CARRIED TO APPROVE THE CONSENT AGENDA.

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

Chair Williams said this takes us to Item 4. And I believe, Mr. Smith, you get to introduce this.

Mr. Smith said thank you, Madam Chair. I'd like to introduce Paul Hodgins, our Chief Financial Officer, who's going to give you the most recent update to our budget. This is a process that actually began about six months ago with meetings with subcommittees such as, working groups and subcommittees, members of your city staff have been meeting with Paul, finance groups, transit professionals to go over details on this budget since last October. And also we have reviewed on two or three occasions with the Audit and Finance Subcommittees some of the details and they've been very, very good at asking questions and clarifications, so this is the most recent version.

And Paul will tell you how this will fit in as we go down toward next month when we will have a final approval of the budget, but I’ll turn it other to Paul who can take it from there. Paul.

Mr. Hodgins said thank you, Mr. Smith. Madam Chair, members of the Board, this is an information item today for discussion. Just kind of at a high level, I would say that the FY18 budget really is driven by growth. Growth in the services we operate, an increase in the number of capital projects we're delivering, and the personnel needs that we've assumed to meet that growth.

I do want to highlight that much of the growth in the capital projects, for instance, is driven by Valley Metro Rail and that does impact the RPTA budget. RPTA is the employer for all staff. We track work effort between RPTA and VMR, so you'll see a significant increase in the operating budget for RPTA, but a lot of that is a result of rail activity.

So I've tried to highlight the differences, kind of separate those out, so we can see what the rail impact is versus increases in RPTA.

So at a very high level we're looking at revenues of roughly $310 million. The largest sources being the regional funds, Prop 400, federal funds, and then some local and fare revenues.

In terms of the operating revenues, and here's where I have some of the numbers split out, so the top box are RPTA projects specifically, so public transportation funds being the largest source. Transit service agreements, these are reimbursements from the cities for services we operate, I think is the next largest. Fare revenues we have a total of $151 million in operating revenues which is about a 6 percent -- just under a 6 percent increase from the FY17 budget.

The next box is what I consider more pass through type funds. We get reimbursements from Valley Metro Rail for mainly staff effort on their behalf, so we're looking at about a 20 percent increase in those reimbursements. Arizona Lottery funds, we get some lottery funds which then get distributed back out to the cities. They really are pass through.

So about $32 million in pass through funds for a total operating revenue budget of $183 million, which is about 7 percent higher than fiscal '17.

On the capital side, RPTA capital revenues increasing by nearly 30 percent. Most of that is really federal grants related to bus purchases. There's a significant increase in the fleet. Well, I'll get to that with the revenues. But that's really driven by the capital budget.

The second box are more of the pass through. We get Prop 400 funds that come into RPTA, and the rail capital funds we set aside at a -- about 43 percent of the funds are dedicated to rail by Board policy, so we have about $43 million dollars in rail capital funds for the rail program, so overall about a $127 million in capital revenues.

On the expense side, again, $310 million, the largest categories being transit service contracts, lead agency disbursements, personnel and capital expenditures, the next largest.

In terms of the break down on the RPTA operating expenses, fixed-route service, which is bus service, being the largest category about $93 million up almost 7 percent. There is an increase in the service provided plus some increase in the contract cost, and some very minor changes, small changes, in terms of dollars, but a couple of high percentage changes in the other categories.

Overall, it's about a $150 million in operating expenses about a 6 percent increase. And again the pass through, Metro personnel costs about $21 million, just under $21 million. We disbursed about half million of our RARF funds, the regional area road funds, that are used for planning and administration costs. Then again the lottery disbursements. So overall a $183 million in operating expenditures.

And on the capital side, regional fleet, that's mainly bus replacements is the largest category, about $38 million. Many of those were ordered in fiscal '17, but the payment will happen in fiscal '18, so those got deferred. That's the main reason it's up 28 percent overall for those deferrals in fleet.

So $83 million overall in capital with about $35 million will disburse as lead agency disbursements to Valley Metro Rail and $10 million reserved for future. It's just added to the rail fund balance. Overall $127 million in capital expenses. So that's the high level. I wanted to address just a couple of the growth issues. So as a chart representing 4

revenue miles operated, it goes back to fiscal '14 then projected out to 2026. The purple line at the top is our fixed-route service, revenue miles operated. You can see from seventeen to eighteen is the jump that I mentioned. That's why there's a 7 percent increase in the fixed-route cost. Blue line is our vanpool program. It's kind of a steady growth. Red line is paratransit. We've assumed about a 5 percent growth in trips heading out. And then the green line is our light rail service that we operate. And you can see the jumps as extensions are completed and go into operation, so we have a few projects over the life that will begin operations.

And then as far as the growth in capital projects, this is the light rail capital project schedule. You can see the many projects that are underway. In fiscal '18 we'll have three projects in construction or finishing design moving into construction. We have several projects still in design and a few projects in project development, but multiple projects going on at once that are driving the need for additional staff, so we've made some assumptions.

Just at a high level, we have some staff versus consultant. We've had this discussion internally for probably close to a year.

Given the work that we see moving forward does it make sense to continue to hire mainly consultants or are there some positions that we can bring in house because there's a long term need.

So what we have are 22 positions that I would say are in lieu of consultants. Some of them would be conversions of existing consultants that we bring in house and some are new positions for the growth that we look at and say, well, we want to bring these in house rather than hire a consultant.

Our criteria there is we're looking at a minimum of a three year need for those positions. So if there's at least three years of work we'll look to bring those in house rather than have a consultant. And for those 22 positions, we've estimated that it would save us roughly $1.3 million dollars a year over hiring the consultants.

And the other thing that we're looking at, specifically for the capital projects, is hiring those as term positions. So if we bring somebody in for the Tempe streetcar or South Central that it's advertised that way and it's hired just for that project. There may be work after that project is done and we could keep them on, but it's really -- those positions are just -- well I don't want to say guaranteed -- but really hired for those specific projects or for a specific time period.

We also have a few positions that are related to strategic initiatives either through our adopted strategic plan or the IT strategic plan, mainly safety and security, and then obviously some IT positions. And then there's general growth. Those would be support positions that we need in human resources, finance, procurement. Those areas that 5

show up on the RPTA budget, but they really support both agencies and get allocated out through our overhead pool.

So what we're proposing we had 310 positions assumed in the 2017 budget. We've added 15 during the year in fiscal '17. We're proposing an additional 35 positions for fiscal '18. This is aggressive, but as I mentioned, we have a lot of work going on. We're looking to make the most of the funds, the project funds that we have, and we believe it's prudent to bring a lot of these positions in house and then to add the growth so that we can deliver the projects that you expect.

Shown below is kind of what we estimate the work effort to be. So we have -- of the 35 new positions, it's about just under thirteen would be supporting RPTA and then twenty two supporting VMR.

And what this means in terms of where the funding comes from -- I'm sorry. Was there a question?

Councilmember Hall said Paul, I see a difference from our finance committee meeting a week ago to today. Is it we're accelerating like five more positions in ‘18 versus what we talked about in the finance committee meeting? Because in fiscal year ’18, our finance committee meeting was thirty positions and you added one in capital and service development and four in communication and marketing.

Mr. Hodgins said yes.

Councilmember Hall said in fiscal year ’18. So is there a rationale for that why we accelerated those?

Mr. Hodgins said yes. Those positions are specifically project based. We've been continuing to analyze what we need. I know that Hillary and Hillary's group have been looking at mostly the community relations and business assistance needs. And I think those are the positions that we ended up advancing and those are specific

Councilmember Hall said but what happened this last week though to make those changes?

Mr. Hodgins said well, I think we probably -- it's not necessarily just the last week. It's been an ongoing evolution, you know, so we have to kind of have these materials ready for AFS, so we're presenting what we knew at the time, but knowing we were still doing some work in the background looking at the specific needs.

Councilmember Hall said okay. Well, that kind of stood out to me. That's a lot more positions in 2018, so it impacts the fiscal year ‘18 budget more.

Mr. Hodgins said right.

Councilmember Hall said those five positions.

Mr. Hodgins said right. I believe those specific positions were all project based.

Councilmember Stewart said a quick question about the contract versus full time FTEs. You mentioned you'd been using consultants. What happens if we don't fill those positions with qualified candidates? Does that revert back and do we pull those FTEs out of the budget?

And if it is on a three year project plan, will these positions be sunsetted at the end of those three years? Final question, sorry. And, forgive me, but is the -- are Valley Metro employees part of the overall statewide or the retirement plan? So will these people go into the retirement plan for the next twenty five years after they retire?

Mr. Hodgins said yes, Madam Chair, Councilmember Stewart, I'll answer the last one first. Yes. The Valley Metro RPTA is part of the Arizona State Retirement System, so they would become part of that.

Councilmember Stewart said so does the $1.2 million savings factor that in?

Mr. Hodgins said yes. I think there were a couple of other questions.

As far as the term positions, if there isn't additional work -- and based on the plan right now, we see that there is likely additional work, but we don't know what will happen in Washington. We don't know if there will be another recession.

Based on the current plan there would be additional work for them, but if there isn't, the position would be sunsetted.

And in terms of hiring qualified candidates, we believe we can get good candidates for these positions, but if we go out there and we don't find the caliber of person that we need, we won't just hire someone to fill it. We'll revert back to a consultant and eliminate that position from the budget.

Councilmember Tolmachoff said thank you, Madam Chair. Does Valley Metro have any employees that are under this type of employment already so basically, contract but not contract employees?

Mr. Hodgins said other than the CEO who has a contract with a term in it, no. We do not currently have any term employees. So this would be something new for us.

Councilmember Tolmachoff said I'm just wondering the mechanics of hiring somebody, 7

as you said, for a three year contract and then it ends up because of federal funding or other things that may happen in the future that their employment is not needed but they have a three year contract, how would that work?

Mr. Hodgins said we wouldn't offer them a three year contract necessarily. The only position the agency that's a contract employee is the CEO. Everybody else is hired technically at will.

So we advertise that it's for a project. If it doesn't work out, then the position goes away, the employment goes away, because they're all employed at will.

Mr. Smith said and as a point of clarification, these are driven not by FTEs but by dollars and workload. The dollars are included in the project budgets. This does not impact whether we have thirty employees or thirty contractors does not impact the project budget. The money is there; the workload is there.

So if either the money or the workload goes away, there is no need for those services to be provided whether they're provided by consultants or by employees. If the money or the project goes away, then there's no work to do be done and that position would be eliminated, whether it be a consultant or a Valley Metro.

The attempt here is basically to really to align the person doing that more closely with Valley Metro and also the added benefit is to have consistency. You have someone here as opposed to with contract. You know contracted personnel come, they go. We love our contractors. They provide a very important service to us.

But also to be able to -- there's a sizable savings in project funds. And, you know, if we can get the same level and quality of service for a specified period of time as we could using a contractor, I would love to be able to use those funds on some other part of the project where we could easily utilize those funds.

Councilmember Tolmachoff said so is this something that other transit authorities are doing in other parts of the country?

Mr. Hodgins said yes. Term positions are quite common with other transit authorities, government agencies. The federal government does quite a lot of it. So we're looking at examples of what kind of wording they use in their advertisements, and so we'll make sure that we're kind of using the best practices that are out there.

Councilmember Dennis said can I just follow up on that question? And so when they're hired, in their employment contract does it indicate that this is a term evaluation based on project?

Mr. Hodgins said yes, they would be hired knowing that they are hired for a term, either 8

three years or a specific project. They do not have an employment contract, per se. They would just be hired as a regular employee but knowing that it's for that specific term with no promise of work beyond that.

Mr. Smith said we don't have a contract, per se, but we do have an offer letter. That goes out. And in that offer letter describes the duties and the area that they'll be working in. So on those positions we would say you're being hired as project to fit with this project, and your employment is conditioned upon funding for this project and the existence of this project. It would be made very clear that this is a project related employment.

Councilmember Dennis said I just want to make sure it's clarified because you have people looking to apply and having them understand that this could be just a term employment.

Mr. Smith said right. It will be discussed. It will be included. And in the, for example, the offer letter it will be spelled out specifically this is project related position.

Councilmember Dennis said I just have one other item. In your documentation under the added staff, when you get into the operations and maintenance -- and this is just consistency in the way you presented it.

Under the funding you either have VMR, you know, member cities, but when you get into that section of operations of maintenance for like the assistant manager of rail operations, from that section down, you just have member cities; you don't have VMR member cities where you do that throughout the other. So it's just about consistence. I just want to make sure it's consistent throughout the whole document. Thank you.

Councilmember Stewart said on the term employees is it possible to be able to review those terms as a Board as we get down the line so when the projects are coming to fruition we can kind of evaluate those term positions, or will those term positions be moved to other projects? Like keeping the good and maybe having the opportunity to move people that aren't performing.

Mr. Hodgins said well, I think we could certainly have the Board review the parameters of the program. I mean, I don't know if you're asking to review specific employees, but I think we would make our best judgment at the time, if there's additional work and how people get moved around. So, I mean, we certainly could have some review of how we do the term employee program.

Councilmember Stewart said sure. I understand. It was not about specific employees to look at their performance reviews. It was more about looking at the number of people you have set aside for a three year FTE, and when that project sunsets, if there are no other projects coming in behind that for them to work on, would the board be reviewing 9

that to decide whether or not that would be sunsetted?

Mr. Hodgins said we would certainly identify that as part of the budget process, if there are new projects with term positions or if people get shifted into those new term positions, that would be all part of the budget process.

Vice Mayor Klapp said, I just wanted to add that this is a process and that what you're seeing today will come back to the budget committee again for discussion. So we've talked about a lot of these issues already that are coming up, and we'll take whatever comments here today to our budget committee to talk about further. So this is not the final budget. This is just an update on what's going on within the discussions about the budget for next year.

Mr. Smith said Madam Chair, if I might also, to expand on what Councilmember Stewart asked for. These positions, this work, whether it be consultant or otherwise, are funded by specific project budgets. So there is a self-policing that goes through as you look at the projects that are coming up in the capital expenditures. As you saw, there's a lot of work for project related. If there's no money there then there's no way to pay the people and there's no work there either.

So there is a sort of a self-policing, and what we will do is as we come to the end of a project or if there is a change in a project, we certainly can get into the details and say this project we were going to build this, we're not going to build it now, so those project funds have now terminated; therefore, this work will no longer be needed whether it's a consultant or whether it's a Valley Metro employee that position would be eliminated. And we could certainly keep the Board up to date as to how those projects are funded and what the status of that funding is.

Councilmember Peterson said have we completed the zero based budget effort here with RPTA?

Mr. Hodgins said we have not. That is one of my goals is to do that next year to do a complete review of the staffing from a zero-based perspective. I know it seems like asking for a lot of positions before we've completed that may be premature, but just given the level of work effort that we see with the projects, we're trying to be cost effective in bringing these people in house rather than hiring consultants, but certainly that's something we'll be evaluating over the next few months.

Councilmember Peterson said okay. You read my mind that it seems like you might be putting the cart before the horse -- since we haven't completed that effort. And I'd really like us to take that into consideration as we move forward this year. Thank you.

Mr. Smith said and just so we understand, whether these are FTEs or not, these positions will be filled. They'll just be filled by consultants. We'll just continue on with 10

the way we're doing things. And I know this is confusing because of the way that we budget in our cities and everything, but the way this work will be done. It just depends on who does it and whether it's a consulting firm that does it or whether it's a Valley Metro employee that does it.

Vice Mayor Klapp said one other thought, the past application to the way we budget in cities, back in the recession many of our cities cut employees, so what we did over the years after that is we just increased, you know, increased overtime and overtime and overtime for a lot of these current employees. And I kind of see this as the same way. That there comes a point in time where you’ve got to stop paying a lot of overtime. You’ve got to hire people, because it's expensive to add overtime to your budget and it's also not fair for your employees.

So as far as this is concerned when you're hiring consultants during a period of time for the last few years probably had to do with not wanting to add full time people which was back in the recession you didn't want to do that.

But today it seems to me that this is a good process to follow is if you're looking at consultant positions and saying these are not good for the long term health of the organization, even though these people may not be here but for three or four years or whatever it is. They are now internal employees that are part of the organization. It's much easier to get projects done if you're working within then having a lot of outside consultants working with internal people, as well as you save money.

So the bottom line is you're bringing people in as full time employees and you’re saving money, it's kind of to me a no brainer that you've got to take a look at converting outside consultants to full time people, even if it's not going to be for the next thirty years, but most jobs aren't that way anymore anyway. Most people understand that jobs may be for three to five years and you may be looking for something else.

So that was the thought process within, at least my process, but some of the discussion that took place within the Budget and Finance Committee was about the reasons for converting consultants over to employees makes a great deal of sense at this time.

Chair Williams said if I could just follow up for one second. At our committee, too, we talked about the phase-in as the project phase that we aren't going to run out and hire fifty employees the first day, because it is important to have consistency, save money, and bring some expertise for continuity.

Councilmember Hall said exactly. Through the Chair, and to clarify, we're not eliminating totally consultants. There's still going to be consultants that have a high degree of certain specific skill levels that we need, but we are reducing their capacity in the organization by adding employees and saving money.

Mr. Smith said Councilmember Hall, many of these positions don't exist right now, because the projects haven't gotten there, so we're adding -- the decision is do we have the consultant staff this position, or do we do it as a Valley Metro.

And a lot of those that we’re adding, it's not that were replacing somebody; we just won't hire a consultant, we'll hire someone in-house, so these are added positions that are going to happen either way.

Chair Williams said I don't know if you have further slides, but what might help is the projects that we're talking about the whole committee might not be familiar with the number of projects and the dollar amount.

Chair Williams said was there a project list? Oh, yeah. I mean, you can see where the needs are.

Mr. Smith said if you look at 2018, 2019, and 2020 all the different -- those are projects that don't exist now. We've gone from where we were really a single line on the Valley Metro Rail, and that's why it's difficult.

This creates a weird thing. If we were just talking Valley Metro Rail, most of you would not be involved in this decision. But because of the way we're set up with the two agencies, everybody is technically an RPTA employee. That doesn't mean your city pays for someone doing work on Valley Metro Rail.

What happens is they're employed by RPTA, which means you have jurisdiction over them. Then we bill Valley Metro Rail for their salary. So many of these positions, while they'll be RPTA employees, RPTA will never bear the burden of paying their salary. And, as you can see, all of the projects that are right now in the pipeline that are coming up and we’ll get even busier and busier as we start construction on Tempe streetcar and on South Central and on Northwest and Capitol I 10 and West Phoenix/Glendale projects, all of which add up to well over two billion dollars in total projects, those will all be in the pipeline at a given time, and there will be a spike in things that are needed. The other thing is that in order to ramp up for these, obviously, you have more accounting transactions, you have more HR needs, you have more type of things that are RPTA that are paid for through overhead allocations from Valley Metro Rail.

So I want to make sure that all of you who are not in the rail -- and if I were you, I would be thinking wait, wait a second. Why am I paying for something related to rail? You're not.

But even though they're on the books, they are being paid out of the project budget for Valley Metro Rail.

But it is confusing, but, believe me, in the scheme of things it does even out. 12

Chair Williams said well, I think on that slide it shows under development, but it's very preliminary. I mean, we're not talking about there's real design, there's real route fixed.

Mr. Smith said for example, South Central will not begin construction for over two years, and yet we have a very extensive community outreach program and will for the next two years as we're in design. We have to add at least four positions in our community outreach just because it's a six mile stretch. We just had one last night where you had how many Valley Metro staff there in Tempe and we haven't turned a piece of dirt. So these efforts go on for many years before you actually break ground.

Chair Williams said but what I'm talking about are some of the other ones like the Northeast and the Capitol one. Those are still in preliminary discussion

Mr. Smith said and we haven't added those, yeah.

Chair Williams said yeah. Adds a lot of dollars and a lot of personnel that's going to be needed.

Mr. Smith said one of these reasons why some of those positions got pulled into ‘18 is because we realize that on South Central we need more sooner because of the nature of the planning process.

Councilmember Tolmachoff said so does the $1.5 million anticipated savings is that built into the cost of accommodating more the larger number of Valley Metro personnel as far as office space and all of the things that you need when you increase staff? Do you have the ability to accommodate them in your space that you currently have? And I just want to know if the cost was built into that number that you gave me if that's going to be the savings?

Mr. Hodgins said yes. We have assumed that the cost savings is based on an estimate of salaries, fringes, and overhead, which includes rent space, although we don't currently have space to accommodate all of them, we're looking at some opportunities to expand the number of spaces on the floors we have and potential additional space in the building.

But any of those additional costs that are needed for rail projects, for instance, we're looking at how we best allocate the cost of that, so some of that cost could be charged directly to the projects if it's staff for the projects.

But part of the savings analysis does include an estimate of overhead, which includes rent, so we've tried to accommodate it the best we can.

Mr. Smith said and, once again, whether it's an employee or a consultant, they're going 13

to be sitting in the same cubicle, so we're going to need space no matter what.

Councilmember Hall said Paul, I know your staff does a good job, but I have a little better more of a comfort level that we have an internal auditor now where we can make sure that those cities don't pay for rail; right, Scott?

Mr. Hodgins said she's already asked some very good questions.

Chair Williams said would you like to continue?

Mr. Hodgins said I won't spend too much time on this slide. This is kind of our effort to look at where those new positions, the thirty five positions, really get charged and how they get funded.

So the top box are the staff effort for RPTA, and it's about an $800,000 impact most of which is through kind of our administrative and regional costs. Really, it goes as part of overhead, so finance, HR, those types.

There's only one position that really impacts member city contributions and that's about a $30,000 impact to what the member cities would pay for service through RPTA. The bulk of the additional effort over three million is part of Valley Metro Rail and will be reimbursed through RPTA. And again, one and three quarter million of that is specifically for capital projects, three quarters of a million for planning and project development, so those other projects that are still in the planning stages that are part of the regional plan, and then about $650 thousand would be operations -- rail operations that are funded by the member cities. And those are positions to support the additional service we're providing now, to support purchasing the additional vehicles, bringing them in to service, to support of the expansion needs, and preparing for future expansion.

Mr. Smith said so, Paul, if I could, I don't want to cut you off, but here's the most important number for you. What check are you going to cut? And if you look at that, Paul, go over that once again that member city contributions.

All the other -- the expansion in service, we're able to expand bus service, for example, because of an uptick in revenues received through Prop 400. And that's what goes through the life cycle and the planning that we do. We're able to uptick.

So there is service, but that's covered by primarily by additional funds. We have some funds in the RARF funds. And I hate using that acronym, but I can never remember what it means. But those are also those are not asking for additional funds. So how much of that member city contributions on RPTA, Paul?

Mr. Hodgins said is about $30,000. 14

Mr. Smith said $30,000 combined for all of you is the net cost of these additional of the increased service, increased positions. The net cost to you is $30,000 spread out among the, what is it, the 16 entities.

On the Valley Metro Rail side, it's much greater because we're adding mileage and we now have, for example, Northwest a full fiscal year. We're adding some operations numbers to prepare for additional opportunity. We're playing catch up, as Vice Mayor Klapp said, where we held back on some positions. And with the increased operations, we're needing to maybe play catch up with a couple of positions that we've done without for the last two or three years, so that's really the net, net of what it's going to cost to you as opposed to taking out of existing funds or additional funds that are coming in through the half cent sales tax.

Paul, is that okay?

Mr. Hodgins said yes. So very quickly I'll go over our five-year plan. It's just very high level. We have some assumptions are PTF, the Prop 400 revenues that’s given to us by ADOT. They do the forecasting. It's about just over 5 percent growth per year. We have some additional assumptions on federal revenues coming in, service costs about a 3 percent per year growth, you know, in administrative costs, so we've made some assumptions on how the costs grow.

So overall, the five year total for operating revenues, we have about $810 million in PTF that comes in, but again, some of that is for rail. Some of that comes off the top for debt service about $120 million; $254 million is our pass through to the light rail program leaving about $436 million over the five years for operations.

We get some other regional funds, federal funds, transit service reimbursements, again, those are contributions from our member cities for the service they purchased -- that's the next largest category -- $225 million fare revenue. So total revenues over the five year, just over $818 million.

On the expenditures side, again, our largest expenditure for RPTA is fixed route, almost half a billion dollars. The different Dial A Ride programs, vanpool, and then ADA reimbursements to some of the cities for just over seven hundred million in operating expenditures. Then some of the other programs our TDM, which is commute solutions, ShareTheRide, those things, planning and admin. Regional services include our call center and our marketing, regional marketing, safety and security, and then some contingency for total operating expenditures of about $820 million.

For our five year capital program, the largest, again, bus fleet replacements. Bus fleet purchases are the largest share of our capital program over 400 replacement units. And we do have 68 expansion, which are identified as part of the short range transit 15

program. The bulk of those are federally funded.

Our vanpool fleet is actually 100 percent federally funded through flexible funds and the service transportation program. And about $25 million for facilities and equipment for various projects.

So overall, it's $225 million in revenues, federal being by far the largest component with about $50 to $60 million in public transportation funds and fund balance that we're using.

And just kind of a highlight of the expenditures again, fleet being the largest, $225 million over the next five years in capital expenditures.

And again, this item, looking at the schedule, this is for information and discussion today. We'll be coming back through our committee process, the management committees, Audit and Finance Subcommittee, and back to the Board May 18th of adoption. And that concludes this presentation. I'd be happy to answer any additional questions.

Councilmember Palladino said you're showing revenue of $818 million and we're spending $820 million. What's to justify that 15 percent increase? I mean, you're hiring thirty five or forty five more people and we're going at a deficit here. Why?

Mr. Hodgins said it's a good question. We do show a slight deficit in this version of the budget and we're working towards eliminating that in the next version. We do see in the first two years there is a little bit of a deficit as we hire some of these positions and use some of our fund balance, but that goes away towards the end, but we're working to completely eliminate over the five years. So hopefully when we bring the budget back in May you'll see that reverse.

Mr. Smith said Madam Chair, if I might, I just want to put something on the table for all of you. As you know, one of the budget items that impacts most of you that we continue to monitor, and I just want to let you know that this is still sort of a moving target, is the regional paratransit.

This is an on demand service, something which this region worked many, many years to try and accomplish to have paratransit that crosses city lines and enables accessible transit for the entire Valley.

When we walked into that, this is new territory. We saw an immediate surge in demand which leveled off, but we want to let you know that we have not gone through a full year's cycle. We saw another surge in March, and we're monitoring it very carefully to see whether that was just a seasonal blip or whether that entails maybe a different change, so we're going to be talking with your staffs very carefully and monitoring that. 16

And before we get back in May, we'll have an update on what that might portend, because that's one thing that's a concern of ours is simply that where will that head, because that is a program which is beneficial which we all agree with, but it's also one that we haven't quite without the full year or year and a half, two years know exactly what the -- where it will level off and where it will end up.

So I just wanted to keep that on the radar, and we will be working with your staffs on that issue.

Chair Williams said thank you. I'm glad you mentioned that.

5. 2017 Transit Life Cycle Program - Bus Update

Chair Williams said we will go to the next item, I think you get to continue, for the Transit Life Cycle Program

Mr. Hodgins said yes. Thank you. This is our annual update. Again, this is an information item this month for discussion. And this is the bus program summary only.

I would characterize this update as relatively minor. We do have some changes, but I will start with our chart of anticipated revenues. And just for perspective that top blue line is what we anticipated back in Prop 400. This is where we thought we would be before the recession hit.

The bottom two lines, the green line represents the forecast that we got in 2015. The purple line is our current 2016 forecast. It's slightly lower. Between now and the end of the program, it means about a twenty five million dollar decrease for the bus program.

Mr. Smith said and, Paul, if you could, cumulative over the life cycle that's a net difference in what's the revenue between what was budgeted or anticipated in the Prop 400 and what we'll actually have to work with.

Mr. Hodgins said for the transit program as a total, it was about a $5 billion estimate for revenues, and we're at -- we expect now about $2.9, so that's for bus and rail combined, but it's a $2.1 billion dollar deficit with about again 57 percent allocated to the bus program, 43 to rail.

Mr. Smith said so well over a billion-dollar shortfall from what we anticipated under the Prop 400 plan.

Mr. Hodgins said so, as I mentioned, we do have some minor changes mostly related to the short range transit program that's developed. We take the first two years that are really committed. We incorporate those into the life cycle for those route improvements that are funded through the life cycle. 17

We do have some changes to the ADA reimbursements mostly related to the regional Dial-a-Ride growth in that program. Some of the cities have asked for some additional reimbursements through the region, and some very minor updates to the fleet plan. Overall our expenditures, very small change again from last year, just under $3.1 billion dollars in expenditures, $1.7 billion in operations, and about $1.3 billion in capital.

Revenues, you can see the small change in the PTF, some minor adjustments to the other revenue sources for $3.1 billion in revenue. And the overall cash flow summary, there are no future financings for the bus program. This is strictly a pay-as-you-go. We had one financing back in 2009, but we show a net fund balance of about $25 million dollars. That's small but it's positive which is a good thing. And it's a slight decrease from last year. I think it was about $43 million last year.

And then the last thing in the bus program, we have the jurisdictional equity policy that looks at where the Prop 400 revenues are spent and we look at it by subregion: east, west, and central, and we want to get within 2 and 1/2 percent, plus or minus, for each subregion. And then each subregion is within the 2 and 1/2 percent, so we are within the policy.

Mr. Smith said I want to make sure. I know that not many of you were around here. Once again, for those of you who weren't around -- and I don't think any of us were around when this thing for Prop 400 was developed. These were the allocations that were basically part of the grand bargain, is what I call it. When the region got together and decided how they would split up the moneys that would come in from Prop 400, of course, there was a major freeway road program, one third of that money went to transit.

And then each region decided how they would -- what moneys they wanted in their pot. There were three pots created: East Valley, West Valley, Central/City of Phoenix. But the policy allocation is well, which one -- the policy allocation is the one that would have been or is through the plan.

Mr. Hodgins said right. It represents how projects were allocated in the plan.

Mr. Smith said so in the Prop 400 plan adjusted when it was rebalanced for the lower revenue, that's how those were planned. The reason why the numbers are so different, for example, you might be wondering, well, why is East Valley and West Valley so different.

Because the West Valley as a group as a region decided to take more money in the freeway/highway program than they did in transit program. The East Valley decided to take more money in transit than they did in road. The reason for that you had the Loop 303 that needed to be completed, I 10 widening, a lot of projects that got pulled over 18

from Prop 300 just happened to fall more in the West Valley than the East Valley.

So the leaders who sat around this table and at MAG at the time decided to make that allocation. And so we've been operating under for transit services you in the East Valley and the West Valley, those are the funds that were decided originally when Prop 400, the grand bargain, was made. Okay.

So when we do our life cycle plan, for example, those are the funds we work with and why sometimes it might be easier in one area than another area to add service or to change service because we go back to look at this jurisdictional equity, which we have to keep balanced, we don't shift money from the East Valley to the West Valley and so forth, because that's not what was decided.

And this will hold until we go to a Prop 500 or whatever the successor of 400 is. Then there will be another grand bargain, and we have no idea how that will play out. And many of you probably will be part of that process. Okay. I hope that explains, because I know there's a lot of questions about why we have these -- jurisdictionally -- have these differences. Was I mostly correct on that, Paul?

Mr. Hodgins said absolutely. That concludes the presentation. If there are any questions, I'd be happy to answer them.

Chair Williams said thank you for the presentation and information.

6. Future Agenda Items Request and Report on Current Events

None.

Chair Williams said our next meeting will be May 18 at 11:15 a.m. We are adjourned.

With no further discussion the meeting adjourned at 12:47 p.m.

DATE AGENDA ITEM 3A May 11, 2017

SUBJECT Farebox Software Maintenance and Support Contract Award

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

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

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

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

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

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

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

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

ATTACHMENT None

DATE AGENDA ITEM 3B May 11, 2017

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

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

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

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

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

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

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

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

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

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

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

ATTACHMENT None

DATE AGENDA ITEM 3C May 11, 2017

SUBJECT 2017 Transit Life Cycle Program - Bus Update

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

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

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

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

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

Bus Program

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Goal 2: Advance performance based operation • Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability

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

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

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

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

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

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

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

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

DATE AGENDA ITEM 4 May 11, 2017

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

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

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

The preliminary FY18 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards and reserves when needed. The budget was developed in compliance with Board of Directors’ adopted budget, financial and Transit Life Cycle Program (TLCP) policies.

The annual budget is prepared on an accrual basis and adopted by the Board of Directors each fiscal year. The legal level of budgetary control is the total annual appropriated budget. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year.

The total operating budget of $184.8M represents a $13.5M (8%) increase from the previous year’s operating budget of $171.4M. The operating budget includes expenses incurred by RPTA on behalf of Valley Metro Rail (VMR) and which are reimbursed by VMR. Those expenses are primarily related to staff working directly on VMR projects and RPTA overhead. The operating budget for VMR expenses is $21.9M, up from $17.8M in FY17, which represents an increase of 23 percent. The remaining operating budget for RPTA is $162.9M, up from $153.5M in FY17, an increase of 6.1 percent.

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

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

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

The RPTA and Valley Metro Rail (VMR) budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. Salary and overhead charges to bus and rail projects are based on actual time worked on each project. For FY18 there are 360 employees budgeted in the integrated agency, with 151 FTE’s budgeted to RPTA activities and 209 budgeted to VMR activities. Compensation budget based on 3.0% increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget.

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

• Goal 2: Advance performance based operation o Tactic C: Deliver projects and services on-time/on-budget. o Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability.

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

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

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

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

ATTACHMENT None

The Valley Metro FY18 Budget Executive Summary and Fiscal FY18 Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY18 thru FY22) are posted on the Valley Metro website.

5/10/2017

Valley Metro RPTA FY18 Proposed Budget Overview

May 2017

FY18 Highlights

• Growth in services operated

• Increase in number of capital projects

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

1 5/10/2017

Valley Metro RPTA FY18 Revenues: $311.4M

Valley Metro RPTA Operating Revenues

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

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

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

2 5/10/2017

Valley Metro RPTA Capital Revenues

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

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

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

Valley Metro RPTA FY18 Expenses: $311.4M

3 5/10/2017

Valley Metro RPTA Operating Expenses

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

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

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

Valley Metro RPTA Capital Expenses

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

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

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

4 5/10/2017

Service Operated by Valley Metro

Revenue Miles Operated 18.0

16.0

14.0

12.0

10.0 millions 8.0

6.0

4.0

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

Fixed Route Paratransit Vanpool Light Rail 9

LRT Capital Project Schedule

5 5/10/2017

Staffing Assumptions

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

FY18-20 Proposed Staffing Levels

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

6 5/10/2017

FY18 Proposed Staffing Costs and Funding

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

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

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

Valley Metro RPTA

FIVE YEAR PLAN OVERVIEW FY 2018 THROUGH FY 2022

7 5/10/2017

5-Year Operating Assumptions

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

Five Year Operating Forecast - Revenues

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

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

8 5/10/2017

Five Year Operating Forecast - Expenditures

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

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

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

5-Year Capital Program Assumptions

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

9 5/10/2017

Five Year Capital Program- Revenues

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

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

10 5/10/2017

Recommendation

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

DATE AGENDA ITEM 5 May 11, 2017

SUBJECT Future Agenda Items Request and Report on Current Events

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

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT Pending Items Request

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

Pending Items Request

Item Requested Date Requested Planned Follow-up Date

2 5/10/2017

Valley Metro Light Rail Vehicle Contract Award May 2017

Background

• In January 2016, a RFP was issued for the purchase of 11 light rail vehicles (LRV) and options up to 67 additional vehicles over a seven-year period

• Procurement based on specific technical specifications and “Best Value” selection process 2

1 5/10/2017

Selection Process

• The Selection Committee consisted of three committees: Technical, Commercial and Price Evaluation

• The Selection Committee members included representatives from Valley Metro, the City of Mesa, and two non-voting Technical Advisors from a consultant firm

• “Best Value” Trade-Off Analysis

• Independent Analysis of Pricing Reasonableness

Selection Process (cont.) • RFP included the following evaluation criteria:

Evaluation Criteria Compliance to the Technical Specifications 300 Points Past Performance and Capability of the Firm 75 Points Qualifications and Experience of LRV Manufacturers/Suppliers 75 Points Approach to Design and Quality Assurance 100 Points Delivery and Production Schedule 50 Points Price 400 Points TOTAL POINTS AVAILABLE 1,000 Points • Two firms submitted proposals prior to the closing date on October 17, 2016

2 5/10/2017

Evaluation Scoring • Best and Final Offers (BAFO) were submitted by both firms on Feb. 1, 2017

• The selection committee reviewed, scored and ranked the BAFO utilizing the published evaluation criteria and “Best Value” Trade-Off methodology

Proposers by Points and Rank Order Technical Points Price Points Total Points

Siemens Industry Inc. 530 400 930 Kinkisharyo International LLC 546 303 849

Evaluation Scoring (cont.) It was determined by the Selection Committee that Siemens Industry Inc. provided the “best overall value” to Valley Metro for its LRV program.

3 5/10/2017

Price Difference (Millions)

Quantity Kinkisharyo Siemens Difference

11 Vehicles – Initial $76.1 $57.9 $18.2

67 Vehicles - Options $384.3 $285.2 $99.1

TOTAL $460.4 $343.1 $117.3

Life Cycle Incremental Cost Analysis Estimated One-Time Costs for Initial 11 Vehicle Purchase Costs Technical Training – Current Maintenance Staff $730,000 Equipment - Maintenance $330,000 Parts Storage – Construction of Mezzanine in Stock Room, $520,000 Shelving, Pallet Racks, Cabinets Administrative, MMIS Database Enhancement, SOPs $150,000 Current Operator & Supervisor Training $440,000 TOTAL ESTIMATED COSTS $2,170,000

One-Time Costs – Purchase of LRV Options Estimated Costs Additional Shelving, Narrow Isle Forklift for Basement $250,000

On-Going Cost of 20-Year Life Cycle Estimated Costs Technical Training – New Hire - Maintenance Staff $3,200,000 New Hire - Operator or Supervisor Training $1,400,000 8

4 5/10/2017

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

May 11, 2017

Board of Directors Thursday, May 18, 2017 Lake Powell Conference Room 101 N. 1st Avenue, 10th Floor 11:15 a.m.

Action Recommended

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

2. Minutes 2. For action

Minutes from the April 20, 2017 Board meeting are presented for approval.

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

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

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

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

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

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

Staff recommends that the Board of Directors approve the 2017 Transit Life Cycle Program – Light Rail Update.

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

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

3E. 50th Street Light Rail Station Construction Contract 3E. For action Amendment

Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to amend the Construction Manager At Risk contract with Stacy and Witbeck, Inc. to construct the 50th Street Light Rail Station for an amount not to exceed $13,228,809 plus an additional $661,440 (5%) contingency for unforeseen circumstances.

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

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

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

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

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

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

7. Next Meeting 7. For Information

The next meeting of the Board is scheduled for Thursday, June 22, 2017 at 12:15 p.m. Please note time change.

DATE AGENDA ITEM 1 May 11, 2017

SUBJECT Public Comment on Agenda Action Items

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT None

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

DATE AGENDA ITEM 2 May 11, 2017

Minutes of the Valley Metro Rail Board of Directors Thursday, April 20, 2017 11:15 a.m.

Meeting Participants Mayor Mark Mitchell, City of Tempe, Chair Councilmember Chris Glover, City of Mesa Councilmember Mark Stewart for Vice Mayor Kevin Hartke, City of Chandler Thelda Williams, City of Phoenix

Chair Mitchell called the meeting to order at 12:47 p.m.

1. Public Comment

Mr. May said thank you, members of the light rail board. One of the things I loved was when the contractor did the Northwest extension, and I rave about Stacy & Witbeck a lot about what they did. In fact, they had an app that you could use to find out different things about the construction and whatnot.

One of the things they did was they had nice little maps that showed you exactly what was closed in the segments when they were doing construction. When I went out to the Gilbert Road a few years back, I noticed that they had different barriers that they used on the Gilbert Road Extension. When we did the north 19th in the Central line, we had big red and white barriers.

At night it's hard to see the barriers that Gilbert Road is using and there's a few things I'd like to speak to, on behalf of that off line, about my ideas. In fact, you should have barriers that are easy to see at night. The ones that are being used on Gilbert Road they look a little bit smaller and a little bit thinner. And I think that the barriers I loved on Central and 19th North were big red Lego blocks, red and white ones, which I felt safer behind at a bus stop.

And one of the things they did on 19th North is they had wood ramps as temporary bus stops. So thank you.

Mr. Crowley said for the action items, I'm glad that the Tempe is getting done. I appreciate the third party utility agreement, but I was looking at it, there was three hundred thousand dollars for the SRP to do things with some irrigation ditches. And I look at the easement and the right of way on Central Avenue and that and, I'm

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

going, well, it's right in the middle, what are they gonna have to do with those irrigation ditches. Drop them any further deeper or what? What is three hundred thousand dollars getting us, and what is it that we're doing?

I also remember that when Wulf was showing off how that was supposed to look, you didn't have my bike lanes in it. Are we still going to make it correctly, because there is a bike lane there now, that when the whole project is completed that bike lane is still there. And if so, when you do show the pictures of what you're going to be doing and how it's going to be done, do it to its totality.

There was at the manager's meeting a thing that I thought was going to be on the agenda today, and its acquisition of a bunch of rail cars. And the difference in the two companies and how much they're going to be charging was more than interesting. And I'm trying to figure out all the different parts of that equation as in the difference in a hundred and fifty billion dollars -- two hundred and fifty billion dollars and that when, one, we have the one company's vehicles now, but they're going to charge us more than the other company to get it.

And, I'm going, well, I never do see three cars. Do we have that capacity already? And aren't the cars interchangeable to hook on together? And if not, why didn't we build it correctly so that those things could happen and be, you know. Like I said, when you guys were originally saying what you were going to do, it sounded like the maximum car would be six of them and now I find that it's three of them and you say that you can get six hundred people on it and that's two hundred people per car is what the equations are. And, I just go, what are we doing? How are we doing it? And how is it getting done. And if there is that much of a disparity between the contractor that we already have and are using all their equipment, isn't there a chance you go to both of them and say, you know, we want even a sweeter deal than this that we put out, and can you match the prices. Thank you for your time.

2. Minutes

Chair Mitchell said the next item on our agenda is our minutes from March 16, 2017. Is there a motion for approval regarding the minutes?

IT WAS MOVED BY COUNCILMEMBER GLOVER, SECONDED BY COUNCILMEMBER WILLIAMS AND UNANIMOUSLY CARRIED TO APPROVE THE MARCH 16, 2017 BOARD MEETING MINUTES.

3. Consent Agenda

Chair Mitchell said the next item is our consent agenda. Is there anyone that would like to have any items removed from the consent agenda? Could you please get my

attention? Seeing none, I look for a motion regarding the consent agenda as is?

IT WAS MOVED BY COUNCILMEMBER GLOVER, SECONDED BY COUNCILMEMBER TOLMACHOFF AND UNANIMOUSLY CARRIED TO APPROVE THE CONSENT AGENDA. 4. Tempe Streetcar Vehicles Contract Award

Chair Mitchell said the next item is the Tempe Streetcar Contract Award. Mr. Smith

Mr. Smith said thank you, Mr. Chair, members of the committee, we do not have a formal presentation on this item. The memo was pretty extensive. I just want to point out a couple of significant items related to that, because there were questions and issues during the management committee about this.

This, the methodology that we use in this procurement is different than what is normally used in cities and other things, because it's not a low bid. It's a best value. The reason why it's a best value is because of the complexity of our system, the needs of the car, and whether they can meet our minimum operating standards create value considerations that we need to take into account.

This is especially true on the Tempe Streetcar where we are implementing a new technology. The technology is battery propulsion. Approximately one half of the three mile, a little over a mile, maybe one third to one half of the route in Tempe is going to be off wire and is going so you'll pull up and the pantograph that connects to the wire will go down and the car will switch to battery powered and will run the distance on battery power.

So the requirement that we look very carefully into whether that car can not only perform admirably and efficiently in a wired condition and whether it can perform in an off wire position became especially important.

In this environment, we did both a technical review and then a best value evaluation, which included pricing. And then we had a third party independent pricing review. This is consistent with FTA requirements when you have a best value proposition. So as our team went through this, they looked at the technical review and in your memo, if you look at it, there was a wide disparity between the technical score given to Brookville Equipment and the other bidder, which was Inekon Group, and that was because simply there were issues and questions given to Inekon, as it related to battery propulsion and other things, that either they could not, did not answer, or did not answer in a manner that was deemed acceptable by the review committee, so the scores were quite a bit different.

When the pricing came in, Inekon's cars were definitely priced lower than the Brookville. As a matter of fact, I think there was almost a five million dollar difference in a base price. Once again, that base price is before you consider technical differences, the reliability and other things. After the evaluation on the best value, the committee believed that, or determined that, Brookville actually was a lower cost than Inekon even though Inekon was a lower price. I want to make that perfectly clear to you that that was the analysis thay went through and there was a variety of technical reasons why that happened.

Then we went on to the third part which was an independent review of what, based on the specifications that we issued, what would be a fair price for a car. We had an outside consulting group who looked at that, and we judged the price that Brookville had offered us against what this committee believed would be a reasonable price and those prices did match. They were within 1 percent.

So based on that information, the review committee recommended that we accept the Brookville bid proposal and that overall that Brookville provided the best value for us, and therefore, we move ahead with a six car procurement. This is the proposal that is before you.

And we also have here, he just happened to be around, Mr. Michael White -- Michael, are you still around there -- who's the director of sales, in from western Pennsylvania where Brookville is headquartered, and will be available if you had any questions or anything either during the meeting or after the meeting, he, I'm sure, would be willing to tell you why he believes Brookville is the best value and is our best purchase.

That's a very quick overview as to the process. And I want to give it to you because it is, once again, it is unique and it's a bit different, but it is well within established procedures and is approved by the FTA as a process for this type of procurement.

Chair Mitchell said thank you, Mr. Smith. And thank all the staff from Valley Metro as well as the City of Tempe for the assistance on this project. This is a unique vehicle that we are looking at. It is not the same size as our light rail cars. It is a streetcar similar to like what we're looking at down in Tucson.

I know Brookville had some other streetcars in other parts of the United States that they're producing the same technology that we are looking for in terms of an off wire component especially on Mill Avenue with the trees from an esthetic standpoint. And hopefully as technology progresses, we'll see even more of an opportunity to get rid of some of these wires in the future. So thank you for that. Is there a motion regarding Item No. 4?

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

5. Valley Metro Rail Fiscal Year ‘18 Preliminary Operating and Capital Budget and Five Year Operating Forecast and Capital Program.

Chair Mitchell said the next item is our Valley Metro Rail Fiscal Year ‘18 Preliminary Operating and Capital Budget and Five Year Operating Forecast and Capital Program. Mr. Smith.

Mr. Smith said I am more than glad to turn it other to Paul Hodgins, our CFO, to talk about the budget.

Mr. Hodgins said thank you, Mr. Smith. Mr. Chair, members of the Board, I have a brief overview of our annual operating budget and then our five year.

Just to start off, just a highlight of what we assumed for our baseline operations, we're looking at fairly flat, same number of revenue miles, no major expansions this year. We're anticipating the boardings to be relatively flat. We had some big expansion, mostly due to the additional extensions. We've seen kind of -- that's slowed down a little bit, so we're assuming basically flat.

Operating cost increasing about 7 percent, average fare being again flat at about 85 cents.

In terms of our operating revenues, the largest source is from member city contributions mostly for rail operations, about $14 million in fare revenues, and then some smaller amounts, a little bit from the PTF sales tax, pass through from RPTA mostly for project, actually entirely for project development activities. So $67 million dollars in operating revenues, it's just under $10 million higher than the fiscal '17 budget

In terms of the rail operating expenses, we have three main categories: Our revenue operations, as I mentioned, it's about a $3 million increase and I have a slide to highlight some of the big changes. There's nearly a 50 percent increase, $6 million in future project development, which I'll talk about again, and then a small increase in our agency operating budget, that's more of the administrative side. So a $67 million dollar operating budget.

Some of the key changes in our rail operations, as we mentioned during the RPTA presentation, we do have some increased staffing to support the operations, not just current operations but the anticipated changes coming.

We have also included a systemwide Wi Fi on light rail. It's about a $500,000 dollars of the increase to implement that. We have additional security costs that were approved by the Board. We have incorporated the new cost for the ACI contract, the transportation services, which is actually a little bit lower than previous years in the budget. And then, again, as the system starts to age, we do have some increased vehicle and fleet maintenance costs.

For the project development, we have lots of activities going on. We have three corridors that are completing preliminary engineering. And just as a quick overview, all of the planning we do from looking at alignments all the way through 30 percent design, we consider as part of the project development included in that budget. After 30 percent design then it becomes part of the capital budget, so it becomes a capital project. So we have three projects in fiscal '18 that we expect to complete project development, which is why you'll see them in both budgets.

And then we have continued studies on several other corridors: the West Phoenix/Central Glendale, Northeast a little bit, Fiesta-Downtown Chandler. And then we're working on an expansion plan for the operations and maintenance center. And there is one new project. It's a design activity for the I 10/I 17 bus ramp. I have a slide to kind of highlight what that is. This is really part of the Capitol I 10 West extension. It's a ramp that connects downtown, the Capitol area, up the frontage road for I 17, and then over onto I-10.

And we're proposing advancing that ahead of the light rail project to use it as a bus ramp initially. So it will enhance and improve the bus services. The map shows the orange line or what buses currently do coming in from the West Valley. They come all the way in come down and circulate back out to the Capitol so a lot of extra miles. With this ramp, they would just come down hit the Capitol first and go out. So there's actually an operational savings to the bus program to those West Valley expresses and rapids coming in by doing this project. So we have, as I mentioned, $2 million dollars. It's a big increase to the project development budget to start to move this project along.

Again, here's our Capitol project schedule. We saw this earlier. We noted there's a lot of projects moving concurrently not just through project development, but we have a lot in the capital budget.

The rail revenues in the capital budget, we do anticipate programming some Section 5309, that's the capital investment grant program funds for Tempe streetcar. Although we don't know exactly what's going to happen in Washington, we are moving forward

assuming that we get a Small Starts grant agreement for the streetcar and that those funds begin to flow for us. We have a significant amount of CMAQ, the Congestion Mitigation Air Quality program largely for the Gilbert Road Extension and also for the light rail vehicle purchases, the expansion vehicles. And then some other couple of smaller federal grants and some member city contributions, mostly from Phoenix for the South Central Project and the Prop 400 revenues coming in. So significant increase in capital revenues from $99 million to over $200 million.

On the expenses, you can see the main projects: We have Gilbert Road at $75 million. That's a big increase as that project moves forward through construction; Tempe Streetcar as we move through the design and ultimately into construction; 50th Street Station and South Central also some significant increases there.

That last category, systemwide improvements, there's a big increase. There are a few main reasons for that. One is that there are milestone progress payments for the eight light rail expansion vehicles. I think it's about ten or twelve million dollars of that budget is specifically for the vehicles. We have some major LRV component overhauls, some door modifications for our ticket vending machines to accommodate new pin pads to meet security specifications, and then a retrofit of our station lighting to put in LED lights, so there's some significant projects in that systemwide improvements line.

Mr. Smith said and, Paul, if I might, those eight vehicles you'll get around the May agenda for approval. That procurement is already out. It was supposed to be on this. It got delayed, and so you'll have that next month for the purchase of those eight vehicles.

Mr. Hodgins said right. The order is for 11; three are for Gilbert Road and included in that project budget; the other eight are for expansion.

That concludes the annual budget. I'll move forward to the five year unless there are any specific questions.

Chair Mitchell said any questions? No. Thank you. Mr. Hodgins said thank you. Some of the assumptions we've made is Gilbert Road opening for service in May of 2019. The Tempe Streetcar opening in September of 2020. Those will certainly impact our rail operations budget. We assume that are current transportation and security contracts will be enhanced to service those new extensions. Maintenance, our preventive maintenance, will continue to increase as the system and the vehicles age.

We've assumed that fare revenues as an average fare will be flat for the system. And that when the streetcar comes on board that will be about half of the light rail average fares, about 43 cents per ride for the streetcar.

So overall five year sources and uses, operation and maintenance obviously is the largest expenditure growing from about $48 million to almost $62 million in fiscal '22 as those extensions and new corridors come on board. Project development, you see the large amount in fiscal '18 of almost $18 million, but as those projects move out of project development and into capital that comes back down to perhaps a more normal level down to just under $9 million in fiscal '22.

Agency operating budget we've assumed just a small growth, so about $336 million roughly over the five years for expenses. The largest contributors are obviously member city for the rail operations and regional funds for the project development. And for the five year project development, again, this is just the detail. You can see in fiscal '18 the number of projects that we’re working on and why it's such a large increase from '17 and again that kind of ramps down.

Capital sources of funds, primarily, well, we have some local sources. Phoenix is contributing for the South Central and the Northwest. Tempe has some funds on the streetcar. Mesa is funding part of the Gilbert Road, the local share. And then West Phoenix/Central Glendale there's some local funds involved there, so about $446 million in local funds over the five years, another $275 million from the regional Prop 400, some TPANs, the Transportation Project Advancement Notes, from Mesa to complete the Gilbert Road. And then again, almost eight hundred million dollars in federal, which is a big assumption, especially on the FTA, the capital improvement grants, it's over half a billion. The CMAQ is a little more stable. We get that through flexible program. It's part of the Regional Transportation Plan. We do get those funds. They are, I would say, less at risk than the 5309 funds.

So one and a half billion dollars in capital revenues. Uses of those, as you can see, Gilbert Road, Tempe Streetcar we'll complete. A number of other projects, we have about twenty million dollars for the OMC expansion, which we'll complete in 2021 to accommodate the new vehicles, and then as we continue to work on some of the other projects.

CNPA projects, CNPA is a concurrent non-project activity. Those are typically projects that the cities will ask us to do if we're already digging up, could you enhance this sewer, could you do this; they're not technically part of the project, but we'll do them since we're there anyway, and those are funded typically by the cities.

And then the systemwide improvements, again, the first two years are largely for the light rail vehicle expansion vehicles. So one and a half billion over the five years. Again, this is for information today. We'll be back through next month for adoption. And I'd be happy to answer any questions, Mr. Chair.

Chair Mitchell said thank you. Any questions? Thank you very much.

6. 2017 Transit Life Cycle Program Update

Chair Mitchell said next is our 2017 Transit Life Cycle Program Update. Mr. Smith

Mr. Hodgins said this is just the rail program. We discussed the bus program at the previous meeting. Pretty much the same slide to start off with the rail portion, it's significantly lower than obviously the Prop 400 what we assumed. For the rail program, the lesser of the forecast decreases about $20 million. It's about a $20 million decrease for the rail program. It's just a shot of our high-capacity transit map.

There are a couple of date changes, which I'll note. Tempe Streetcar we've updated that to 2020. Gilbert Road we've updated to 2019 with the updated cost estimate that came to the Board, I think a couple three months ago, and then we've updated the cost estimate for the Northwest Phase II project. We’ve also updated the cost estimate for the West Phoenix/Central Glendale project. It's currently in the plan as a five mile project. All indications, although we haven't finalized the alignment, is that it will probably be closer to seven miles.

So to facilitate some of the discussions in the planning with the cities, we're updating the cost to show a seven mile corridor, even though it hasn't been fully defined. Next year's update we will have a more specific alignment, more specific cost and funding assumptions.

The other thing we've added or updated is the expansion of the operations and maintenance center. We've updated our cost estimate. It's slightly higher than our revenue sources. We're assuming that some of the costs will come out of the South Central project, but rather than have the remaining costs in the other corridors and have to wait and phase in the work, we've advanced those, we've taken them out of the corridors and called it a separate project to expedite the completions. We can just get it all done at once. And the revenues assumed for that, besides the portion coming from South Central which would be the capital improvement grant program and the regional PTF, the rest of it would come from CMAQ funds that we're advancing out of the Capitol I-10 West and West Phoenix/Central Glendale with PTF as the local match.

The capital revenue assumptions, West Phoenix/Central Glendale, we've increased the local revenues and we've changed the allocation of the local costs consistent with a longer project. The other thing we've assumed that there's no new financing for the PTF. We had in the past included a couple of financings, the latest being in 2022, and it's just with the increased cost, it's not practical to assume that the PTF can finance -- do any financing in 2022 because it has to be paid off by the end of the tax in 2025. So to kind of help the discussion of how we move forward with these projects, we're showing pay as you go for PTF. And then as we move forward with each of the projects, we will work with the cities to look at alternatives; whether it is city financing,

whether it's TPANs, it's TIFIA, or other methods to meet the cash flow needs for each project.

So overall corridor costs, we're looking at about $3.1 billion for the 20 years, which is an increase of almost $350 million over last year's model. Other capital costs, roughly the same, it's about an eight million dollar increase, mainly for the OMC expansion as we continue to refine that project. So overall capital expenditures of just over $3.7 million dollars.

Revenues, primarily PTF, the regional sales tax, down a little bit, and FTA capital investment grant, a significant (unintelligible) over a billion dollars anticipated from that. And then some other sources, some local funding, so $3.8 billion overall. With no new financing that leaves basically a fund balance at the end of 2025, calendar '25 of just under $74 million dollars. We are not proposing to allocate to any projects at this time, but we know over the next year or two we'll have some discussions about if we continue to show a fund balance of that size, how we program that to projects through the end of 2026.

That concludes the presentation. I'd be happy to answer any questions.

Chair Mitchell said thank you, Paul. Are there any questions? Thank you. This item was for information only.

7. Future Agenda Items Request and Report on Current Events

Chair Mitchell said the next item is our future agenda items and report on current claims.

Seeing none, our next meeting is May 18th right here at 11:15. We are adjourned.

With no further discussion the meeting adjourned at 1:14 p.m.

DATE AGENDA ITEM 3A May 11, 2017

SUBJECT South Central Light Rail Extension Design Contract Award

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ATTACHMENT None

DATE AGENDA ITEM 3B May 11, 2017

SUBJECT Tempe Streetcar Construction Manager at Risk Contract Amendment

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

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

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

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

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

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

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

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

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

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

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

STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020: • Goal 2: Advance performance based operation o Tactic C: Deliver projects and services on-time/on-budget. • Goal 3: Grow transit ridership o Tactic A: Expand and improve transit services to reach new markets. Tactic B: Improve connectivity of transit services for greater effectiveness.

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

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

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

ATTACHMENT None

DATE AGENDA ITEM 3C May 11, 2017

SUBJECT 2017 Transit Life Cycle Program - Rail Update

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

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

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

Rail/High Capacity Transit Program

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

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

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

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

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

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

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

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

* schedule changes from 2016 TLCP

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

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

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

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

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

Goal 2: Advance performance based operation • Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability

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

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

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

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

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

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

Light Rail and High Capacity System Map With updated completion dates

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

DATE AGENDA ITEM 3D May 11, 2017

SUBJECT Contract with RouteMatch to Develop the Application Associated with Federal Transit Administration (FTA) Mobility on Demand (MOD) Sandbox Grant

PURPOSE To request authorization for the Chief Executive Officer (CEO) to enter into an agreement with RouteMatch for services related to the FTA MOD Sandbox Grant implementation for an amount not to exceed $1,000,000 ($800,000 paid for by FTA grant funds, as well as $200,000 of in-kind services contributed by RouteMatch as the 20% local match)

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

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

COST AND BUDGET There is no budget impact to Valley Metro. The FTA MOD Sandbox Grant provides the funding for this activity; and Valley Metro Rail will use the grant funds to reimburse RouteMatch, our co-applicant for this grant.

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

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

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

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

RECOMMENDATION Staff recommends that the Board of Directors authorize the CEO to enter into an agreement with RouteMatch for services related to the FTA MOD Sandbox Grant implementation for an amount not to exceed $1,000,000 ($800,000 paid for by FTA grant funds, as well as $200,000 of in-kind services contributed by RouteMatch as the 20% local match).

CONTACT Rob Antoniak Chief Operating Officer 602.495.8209 [email protected]

ATTACHMENT None

DATE AGENDA ITEM 3E May 11, 2017

SUBJECT 50th Street Light Rail Station Construction Contract Amendment

PURPOSE To request authorization for the Chief Executive Officer (CEO) to amend the Construction Manager At Risk (CM@Risk) contract with Stacy and Witbeck, Inc. to construct the 50th Street Light Rail Station for an amount not to exceed $13,228,809 plus an additional $661,440 (5%) contingency for unforeseen circumstances.

BACKGROUND/DISCUSSION/CONSIDERATION The 50th Street Light Rail Station project consists of building a new station on the existing line located on Washington Street in East Phoenix. The station will provide access to this growing area, including new developments and the Ability 360 facility. The Ability 360 facility houses multiple agencies focused on providing services for people with disabilities.

Stacy and Witbeck initially entered into a CM@Risk contract with Valley Metro in August 2016. This contract involves two phases: pre-construction services, which occurs parallel to the project’s design process, and the construction phase. Stacy and Witbeck has worked closely with the design consultant to provide them with a good understanding of the project to minimize risks and assure constructability. Design is now nearly complete and Stacy and Witbeck has negotiated a Gross Maximum Price (GMP) for the construction of the project in cooperation with the design consultant and Valley Metro staff.

Station construction consists of building a split-platform on either side of the existing light rail tracks. The platforms and passenger amenities will be consistent with existing stations on the light rail line, but will include enhanced design features as a result of the Phoenix “Mayor’s Innovation Games” and to better serve people with disabilities. Signalized pedestrian crossings will be installed at the ends of the platforms. No major track-work or overhead electrical contact system work is expected on the project. The construction effort will also include street reconstruction, utility relocations and enhancements to sidewalk areas. An art element (1% of construction cost) is also included. Project completion is scheduled for May 2019.

COST AND BUDGET The 50th Street Light Rail Station project is funded by the City of Phoenix and is made possible as a result of the Proposition 104 transportation sales tax approved by Phoenix voters in August 2015. The negotiated cost for the CM@Risk contractor’s construction services is $13,228,809. A 5% contingency, to be held by staff, is also needed to address unforeseen changes and circumstances that may arise during the project’s design.

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

Project funding is included in the Valley Metro Rail Adopted FY17 Operating and Capital Budget. Contract obligations beyond FY17 are incorporated into the Five-Year Operating Forecast and Capital Program (FY17 thru FY21).

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

RECOMMENDATION Staff recommends that the RMC forward to the Board of Directors authorization for the CEO to amend the Construction Manager At Risk contract with Stacy and Witbeck, Inc. to construct the 50th Street Light Rail Station for an amount not to exceed $13,228,809 plus an additional $661,440 (5%) contingency for unforeseen circumstances.

CONTACT Wulf Grote, PE Director, Capital and Service Development 602.322.4420 [email protected]

ATTACHMENT None

DATE AGENDA ITEM 4 May 11, 2017

SUBJECT Light Rail Vehicles Contract Award

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

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

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

The RFP included the following evaluation criteria:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

• Goal 2: Advance performance based operation o Tactic A: Operate an effective, reliable, high performing transit system

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

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

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

ATTACHMENT Additional Requirements and Cost

Life Cycle Incremental Cost Analysis

One-Time Cost for initial 11 Vehicle Purchase:

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

Maintenance Equipment $330,000

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

Administrative, MMIS Database Enhancements, SOPs $150,000

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

Total Estimated Costs $2,170,000

One-Time Costs – Purchase of Additional 67 LRVs:

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

On-Going Cost of 20-Year Life Cycle:

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

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

Total Vehicle Bid Price Difference (Millions)

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

DATE AGENDA ITEM 5 May 11, 2017

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

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

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

The preliminary FY18 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards, reserves and bond proceeds. The budget was developed in compliance with Board of Directors’ adopted budget, financial and Transit Life Cycle Program (TLCP) policies.

The annual budget is prepared on a modified accrual basis and adopted by the Board of Directors each fiscal year. The legal level of budgetary control is the total annual appropriated budget. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year.

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

With the agency integration, the RPTA and Valley Metro Rail (VMR) budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. Salary and overhead charges to bus and rail projects are based on actual time worked on each project. For FY18 there are 360 employees budgeted in the integrated agency, with 151 FTE’s budgeted to RPTA activities and 209 budgeted to VMR activities. Compensation budget based on 3.0% increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget.

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

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

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

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

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

ATTACHMENT None

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

5/10/2017

Valley Metro Rail FY18 Proposed Budget Overview May 2017

FY18 Preliminary Annual Budget

1 5/10/2017

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

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

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

Valley Metro Rail Revenues - Operating

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

2 5/10/2017

FY18 Operations Changes

• Increased staffing levels to support operations

• Systemwide Wi-Fi on light rail

• Additional security costs approved by the Board

• New costs for ACI operations contract

• Increased vehicle and facility maintenance

FY18 Project Development Changes

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

3 5/10/2017

I-10/I-17 Ramp

Valley Metro Rail Expenses - Operating

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

4 5/10/2017

Baseline: LRT Capital Project Schedule Calendar Year View

Valley Metro Rail Revenues – Capital

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

5 5/10/2017

FY18 Systemwide Improvements

• Increased costs

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

– Major LRV component overhauls

– TVM door modifications

– Station lighting retrofits (LED lights)

Valley Metro Rail Expenses – Capital

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

6 5/10/2017

FY18-22 Preliminary Five-Year Forecast

5-Year Operating Assumptions:

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

7 5/10/2017

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

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

5-Year Operating Uses and Sources

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

SOURCES OF FUNDS ($,000) FY18 FY19 FY20 FY21 FY22 TOTAL Fare Revenues$ 14,300 $ 14,842 $ 15,180 $ 15,600 $ 15,894 $ 75,816 Advertising 1,100 1,100 1,100 1,100 1,100 5,500 Phoenix 21,129 20,673 20,737 20,800 21,869 105,206 Tempe 7,295 7,469 7,509 12,126 13,675 48,074 Mesa 5,964 6,074 8,942 8,974 9,366 39,320 Glendale 48 1,439 46 43 45 1,620 Chandler 661 45 46 43 45 839 Regional 13,658 9,778 9,178 8,176 8,412 49,201 Federal 2,966 1,429 1,495 1,564 1,635 9,089 Total Sources$ 67,120 $ 62,849 $ 64,233 $ 68,426 $ 72,039 $ 334,666

8 5/10/2017

5-Year Capital Projects Uses of Funds

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

5-Year Capital Projects Source of Funds

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

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

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

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

9 5/10/2017

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

DATE AGENDA ITEM 6 May 11, 2017

SUBJECT Future Agenda Items Request and Report on Current Events

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

BACKGROUND/DISCUSSION/CONSIDERATION None

COST AND BUDGET None

COMMITTEE PROCESS None

RECOMMENDATION This item is presented for information only.

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

ATTACHMENT Pending Items Request

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

Pending Items Request

Item Requested Date Requested Planned Follow-up Date