Modesto Triennial Performance Audit FY 2015/16 - 2017/18

FINAL REPORT MAY 2019

City of Modesto Triennial Performance Audit FY 2015/16 - 2017/18

moore & associates

City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Table of Contents

Chapter 1: Executive Summary ...... 01

Chapter 2: Review Scope and Methodology ...... 05

Chapter 3: Program Compliance ...... 09

Chapter 4: Prior Recommendations ...... 15

Chapter 5: Data Reporting Analysis ...... 17

Chapter 6: Performance Analysis ...... 19

Chapter 7: Functional Review ...... 37

Chapter 8: Findings and Recommendations ...... 49

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

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Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 1 Executive Summary

In 2018, the Stanislaus Council of Governments (Stan COG) selected Moore & Associates, Inc., to prepare Triennial Performance Audits of itself as the RTPA and the four transit operators to which it allocates TDA funding. Moore & Associates is a consulting firm specializing in public transportation. Selection of the consultant followed a competitive procurement process.

The California Public Utilities Code requires all recipients of Transit Development Act (TDA) Article 4 funding to complete an independent audit on a three-year cycle in order to maintain TDA funding eligibility. Audits of Article 8 recipients are encouraged.

The Triennial Performance Audit is designed to be an independent and objective evaluation of the City of Modesto as a public transit operator, providing operator management with information on the economy, efficiency, and effectiveness of its programs across the prior three fiscal years. In addition to assuring legislative and governing bodies (as well as the public) that resources are being economically and efficiently utilized, the Triennial Performance Audit fulfills the requirement of PUC Section 99246(a) that the RTPA designate an entity other than itself to conduct a performance audit of the activities of each operator to whom it allocates TDA funds.

This chapter summarizes key findings and recommendations developed during the Triennial Performance Audit (TPA) of the City of Modesto’s public transit program for the period Fiscal Year 2015/16 through Fiscal Year 2017/18.

The City of Modesto operates Modesto Area Express (MAX), which is comprised of seventeen local fixed- routes and two commuter routes. The local service operates within the Modesto Urbanized Area and Salida. Service is available on weekdays from 5:45 a.m. through 9:30 p.m., Saturdays from 7:15 a.m. through 9:00 p.m., and Sundays from 8:45 a.m. through 8:15 p.m. The service does not operate on designated holidays. Riders may connect with Modesto ACE Express, Modesto BART Express, Stanislaus Regional Transit (StaRT), Amtrak, and Ceres Area Transit (CAT).

The City operates two commuter bus services: Modesto ACE Express and Modesto BART Express. The ACE service provides three trips in the morning from Modesto's Vintage Faire Mall park and ride to the Lathrop/Manteca Altamont Commuter Express and four return trips in the evening. The BART service operates five round trips between the Modesto Transit Center and the Dublin/Pleasanton BART station. Both services operate on weekdays only.

The City also operates Modesto Area Dial-A-Ride (MADAR), a door-to-door, curb-to-curb demand- response service available to registered seniors and qualified disabled residents. Trips are provided on a first-come, first served basis. Requests for service may be made the day before or up to seven days in advance. 1

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

This performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require the audit team plans and performs the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit objectives. Moore & Associates believes the evidence obtained provides a reasonable basis for our findings and conclusions.

This audit was also conducted in accordance with the processes established by the California Department of Transportation (Caltrans), as outlined in the Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities.

The Triennial Performance Audit includes five elements:

 Compliance requirements,  Follow-up of prior report recommendations,  Analysis of program data reporting,  Performance Audit, and  Functional review.

Test of Compliance The City of Modesto met the test of compliance with respect to all Transportation Development Act (TDA) regulations.

Status of Prior Recommendations

1. Include additional locally generated revenue in the farebox recovery and TDA fiscal audits. Status: Implemented.

2. Refine performance standards for the transit service. Status: Implemented.

3. Pursue Short Range Transit Plan update. Status: Implemented.

Findings and Recommendations Based on discussions with City staff, analysis of program performance, and an audit of program compliance and function, the audit team presents no compliance findings.

Moore & Associates has identified one functional finding. While this finding does not affect TDA compliance, we feel it is significant enough to be addressed within this audit:

1. The City needs a comprehensive SRTP with a five- to ten-year planning horizon.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Program Recommendations In completing this Triennial Performance Audit, Moore & Associates submits the following recommendations for the City of Modesto. They are divided into two categories: TDA Program Compliance Recommendations and Functional Recommendations. TDA Program Compliance Recommendations are intended to assist in bringing the operator into compliance with the requirements and standards of the TDA, while Functional Recommendations address issues identified during the audit that are not specific to TDA compliance.

Given there are no compliance findings, only functional findings and recommendations are presented below.

Exhibit 1.1 Summary of Audit Recommendations Functional Recommendations Importance Timeline Prepare a comprehensive Short-Range Transit Plan 1 Medium FY 2020/21 with a five- to ten-year planning horizon.

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Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 2 Review Scope and Methodology

The Triennial Performance Audit (TPA) of the City of Modesto’s public transit program covers the three- year period ending June 30, 2018. The California Public Utilities Code requires all recipients of Transit Development Act (TDA) funding to complete an independent review on a three-year cycle in order to maintain TDA funding eligibility.

In 2018, the Stanislaus Council of Governments (StanCOG) selected Moore & Associates, Inc., to prepare Triennial Performance Audits of itself as the RTPA and the four transit operators to which it allocates TDA funding. Moore & Associates is a consulting firm specializing in public transportation. Selection of the consultant followed a competitive procurement process.

The Triennial Performance Audit is designed to be an independent and objective evaluation of the City of Modesto as a public transit operator. Direct benefits of a Triennial Performance Audit include providing operator management with information on the economy, efficiency, and effectiveness of its programs across the prior three years; helpful insight for use in future planning; and assuring legislative and governing bodies (as well as the public) that resources are being economically and efficiently utilized. Finally, the Triennial Performance Audit fulfills the requirement of PUC Section 99246(a) that the RTPA designate an entity other than itself to conduct a performance audit of the activities of each transit operator to which it allocates TDA funds.

This performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require the audit team plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit objectives. Moore & Associates believes the evidence obtained provides a reasonable basis for our findings and conclusions.

The audit was also conducted in accordance with the processes established by the California Department of Transportation (Caltrans), as outlined in the Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities, as well as Government Audit Standards published by the U.S. Comptroller General.

Objectives A Triennial Performance Audit has five primary objectives:

1. Assess compliance with TDA regulations; 2. Review improvements subsequently implemented as well as progress toward adopted goals; 3. Review the accuracy of data reporting; 4. Evaluate the efficiency and effectiveness of the transit operator; and 5. Provide sound, constructive recommendations for improving the efficiency and functionality of the transit operator. 5

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Scope The TPA is a systematic review of performance evaluating the efficiency, economy, and effectiveness of the transit operator. The audit of the City of Modesto included five tasks:

1. A review of compliance with TDA requirements and regulations. 2. An assessment of the implementation of recommendations contained in prior performance audits. 3. A verification of the methodology for calculating performance indicators including the following activities:  Assessment of internal controls,  Test of data collection methods,  Calculation of performance indicators, and  Evaluation of performance. 4. Examination of the following functions:  General management and organization;  Service planning;  Scheduling, dispatching, and operations;  Personnel management and training;  Administration;  Marketing and public information; and  Fleet maintenance. 5. Conclusions and recommendations to address opportunities for improvement based upon analysis of the information collected and the audit of the transit operator’s major functions.

Methodology The methodology for the Triennial Performance Audit of the City of Modesto included thorough review of documents relevant to the scope of the audit, as well as information contained on the City’s website. The documents reviewed included the following (spanning the full three-year period):

 Triennial Performance Audit report for the prior audit period;  Monthly performance reports;  State Controller Reports;  NTD reports;  Annual budgets;  TDA fiscal audits;  Transit marketing collateral;  Fleet inventory;  Preventive maintenance schedules and forms;  Accident/road call logs;  Customer complaint logs;  Short Range Transit Plan; and  Organizational chart. 6

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

The methodology for this review included a site visit to the City’s Transit offices (1010 Tenth Street, Modesto) on February 20, 2019. The site visit included interviews with Adam Barth (Transit Manager), Roland Fecteau (Transit Analyst), Laurie French (Administrative Analyst), Angela Swanson (Transit Analyst), Maria Garnica (Financial Analyst), David Barr (Fleet Manager), Jeff Custer (Operations Supervisor), Susanna Zavala (National Express General Manager), Rosa Garcia-White (Storer General Manager), and Jennipher Marquez (Storer Assistant Manager). The site visit included a tour of the City’s Corporation Yard, located at 1609 Eighth Street, which houses MAX operations and maintenance. The audit team also toured Storer’s facility at 1216 Doker Drive, which houses MADAR operations and maintenance, as well as the City’s transit center (located at 1001 Ninth Street).

This report is comprised of eight chapters divided into three sections:

1. Executive Summary: A summary of the key findings and recommendations developed during the Triennial Performance Audit process. 2. TPA Scope and Methodology: Methodology of the review and pertinent background information. 3. TPA Results: In-depth discussion of findings surrounding each of the subsequent elements of the audit:  Compliance with statutory and regulatory requirements,  Progress in implementing prior recommendations,  Data analysis,  Performance measures and trends,  Functional audit, and  Findings and recommendations.

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Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 3 Program Compliance

This section examines the City of Modesto’s compliance with the Transportation Development Act as well as relevant sections of the California Code of Regulations. An annual certified fiscal audit confirms TDA funds were apportioned in conformance with applicable laws, rules, and regulations. The Stanislaus Council of Governments considers full use of funds under California Code of Regulations (CCR) 6754(a) as referring to operating funds but not capital funds. The TPA findings and related comments are delineated in Exhibit 3.1.

Compliance was determined through discussions with City of Modesto staff as well as a physical inspection of relevant documents including the fiscal audits for each year of the triennium, TDA claim forms, State Controller annual filings, California Highway Patrol terminal inspections, year-end performance reports, and other compliance-related documentation.

The City of Modesto met the test of compliance with respect to all Transportation Development Act (TDA) regulations.

Recent Changes Regarding Compliance Two changes specific to the TDA and TDA funding went into effect beginning July 1, 2016. The first change was an amendment to the Public Utilities Code specific to the definition of operating cost and what costs can be excluded. It should be noted that many of the exclusions pertain only to changes in certain costs, either over the prior year or beyond the change in the Consumer Price Index. They do not apply to all costs related to specified exclusion categories.

Senate Bill 508, dated October 9, 2015, amended Section 99268.17 to read as follows:

99268.17 (a) Notwithstanding subdivision (a) of Section 99247, the following costs shall be excluded from the definition of “operating cost” for the purposes of calculating any required ratios of fare revenues to operating cost specified in this article:

(1) The additional operating costs required to provide comparable complementary paratransit service as required by Section 37.121 of Title 49 of the Code of Federal Regulations, pursuant to the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 120101 et seq.), as identified in the operator’s paratransit plan pursuant to Section 37.139 of Title 49 of the Code of Federal Regulations that exceed the operator’s costs required to provide comparable paratransit service in the prior year as adjusted by the Consumer Price Index.

(2) Cost increases beyond the change in the Consumer Price Index for all of the following: 9 (A) Fuel. (B) Alternative fuel programs. (C) Power, including electricity.

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(D) Insurance premiums and payments in settlement of claims arising out of the operator’s liability. (E) State and federal mandates.

(3) Startup costs for new services for a period of not more than two years.

(b) The exclusion of costs from the definition of operating costs in subdivision (a) applies solely for the purpose of this article and does not authorize an operator to report an operating cost other than as defined in subdivision (a) of Section 99247 or a ratio of fare revenue to operating cost other than as that ratio is described elsewhere in this article, to any of the following entities:

(1) The Controller pursuant to Section 99243. (2) The entity conducting the fiscal audit pursuant to Section 99245. (3) The entity conducting the performance audit pursuant to Section 99246.

The second change, also contained within Senate Bill 508, related to the type of funds that can be used to supplement farebox revenue. Prior to this bill, “local funds” was defined as “revenues derived from taxed imposed by the operator or by a county transportation commission.” Senate Bill 508 amended Section 99268.19 to read:

99268.19 If fare revenues are insufficient to meet the applicable ratio of fare revenues to operating cost required by this article, an operator may satisfy that requirement by supplementing its fare revenues with local funds. As used in this section, “local funds” means any non-federal or non-state grant funds or other revenues generated by, earned by, or distributed to an operator.

This expanded definition opens up new revenue sources that can be used to offset farebox shortfalls. Applicable revenues include funds received through advertising, interest income, sale of surplus vehicles, and other such sources. While these funds are no longer limited to those generated by local taxes, they cannot be state or federal funds.

Another change affected the submittal deadline for the State Controller’s Transit Operators Financial Transaction Report. Beginning with Fiscal Year 2016/17, the submittal deadline was changed from 110 days following the end of the fiscal year (typically October 18-20) to seven months following the end of the fiscal year (January 31). The original submittal deadline was in force during reporting for FY 2015/16, while the new deadline was utilized for FY 2016/17 forward.

In 1997, Senate Bill 344 authorized the implementation of Transit Cost-Sharing within Stanislaus County. It was intended to “facilitate coordination and provision of needed transit services, while ensuring that transit systems within Stanislaus County are operated effectively and efficiently.”1 This process is implemented by a Transit Cost Sharing Committee, which consists of a representative appointed from each local government in Stanislaus County. It meets annually to review TDA claims, review operator compliance with established criteria, determine the status of any “probationary” service, and prepare a 10 recommendation to StanCOG committees and the StanCOG Board.

1 StanCOG, Transit Cost Sharing Procedures, adopted 1998, amended 2013, page 3. Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Appendix T of the StanCOG Regional Transit Plan (RTP) stipulates alternative farebox recovery ratios as allowed under Senate Bill 903, which was approved in 2018. Given Stanislaus County became an urbanized county as of the 2010 census, urbanized operators were required to meet a 20 percent farebox recovery ratio for fixed-route services. For the operators in Stanislaus County, this has been a challenge. The alternative farebox recovery ratios in effect during the audit period are shown below.

City of Ceres  Ceres Area Transit (Urbanized Area Fixed-Route) – 15 percent  Ceres Dial-A-Ride (Paratransit Dial-A-Ride) – 10 percent City of Modesto  Modesto Area Express (Urbanized Area Fixed-Route) 15 percent (combined)  Modesto Area Dial-A-Ride (Paratransit Dial-A-Ride) City of Turlock  Turlock Transit (Urbanized Area Fixed-Route) – 15 percent  Dial-A-Ride Turlock (Paratransit Dial-A-Ride) – 10 percent Stanislaus County Regional Transit (StaRT)  Fixed-Route/Demand Response Services – 10 percent

SB 903 “authorizes StanCOG, when determining if specified operators have met the requirements for claims for transit funds for the 2018/19 and the 2019/20 fiscal years, to reduce the applicable ratio of fare revenues to operating cost for specified operators by up to five percentage points from the ratio that was effective during the 2015/16 fiscal year.”2 Per SB 903, the City of Modesto would be eligible for its farebox recovery ratios to be reduced to 10 percent for fixed-route and five percent for Dial-A-Ride.

Effective FY 2018/19, per StanCOG’s updated Transit Cost Sharing Procedures (2019), the following performance standards were in effect.

City of Ceres  Ceres Area Transit (Urbanized Area Fixed-Route) – 20 percent  Ceres Dial-A-Ride (Paratransit Dial-A-Ride) – 10 percent City of Modesto  Modesto Area Express (Urbanized Area Fixed-Route) – 20 percent  Modesto Area Dial-A-Ride (Paratransit Dial-A-Ride) – 10 percent City of Turlock  Turlock Transit (Urbanized Area Fixed-Route) – 20 percent  Dial-A-Ride Turlock (Paratransit Dial-A-Ride) – 10 percent Stanislaus County Regional Transit (StaRT)  Fixed-Route/Demand Response Services – 15 percent

2 StanCOG, Regional Transit Plan, Appendix T, “Transportation Development Act Fare Box Recovery Ratios.” Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Exhibit 3.1 Transit Development Act Compliance Requirements Compliance Element Reference Compliance Comments FY 2015/16: September 21, 2016 State Controller Reports submitted on time. PUC 99243 In compliance FY 2016/17: December 7, 2017 FY 2017/18: January 22, 2019 Fiscal and compliance audits submitted within 180 FY 2015/16: December 14, 2016 days following the end of the fiscal year (or with up PUC 99245 In compliance FY 2016/17: November 13, 2017 to 90-day extension). FY 2017/18: November 26, 2018 Transdev (MAX) January 7, 2015 February 9, 2016 March 6, 2017

National Express Transit (MAX) Operator’s terminal rated as satisfactory by CHP PUC 99251 B In compliance March 1, 2018 within the 13 months prior to each TDA claim.

Storer (Dial-A-Ride) July 1, 2015 July 20, 2016 July 13, 2017 April 25, 2018 Operator’s claim for TDA funds submitted in compliance with rules and regulations adopted by PUC 99261 In compliance the RTPA. If operator serves urbanized and non-urbanized areas, it has maintained a ratio of fare revenues to PUC 99270.1 Not applicable operating costs at least equal to the ratio determined by the rules and regulations adopted by the RTPA. An operator receiving allocations under Article 8(c) may be subject to regional, countywide, or subarea performance criteria, local match requirements, or PUC 99405 Not applicable fare recovery ratios adopted by resolution of the RTPA. The operator’s operating budget has not increased FY 2015/16: +4.24% by more than 15% over the preceding year, nor is FY 2016/17: +4.14% there a substantial increase or decrease in the scope FY 2017/18: +1.74% of operations or capital budget provisions for major PUC 99266 In compliance new fixed facilities unless the operator has Source: TDA claims, FY 2016 – FY reasonably supported and substantiated the 2018. change(s). The operator’s definitions of performance measures are consistent with the Public Utilities Code Section PUC 99247 In compliance 99247.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Compliance Element Reference Compliance Comments FY 2015/16: 20.69% FY 2016/17: 20.66% If the operator serves an urbanized area, it has PUC 99268.2, FY 2017/18: 22.83% maintained a ratio of fare revenues to operating In compliance 99268.4, 99268.1 cost at least equal to one-fifth (20 percent). Source: TDA fiscal audits, FY 2016 – FY 2018. If the operator serves a rural area, it has PUC 99268.2, maintained a ratio of fare revenues to operating Not applicable 99268.4, 99268.5 cost at least equal to one-tenth (10 percent). FY 2015/16: N/A For a claimant that provides only services to FY 2016/17: 10.47% elderly and handicapped persons, the ratio of fare PUC 99268.5, CCR FY 2017/18: 10.39% In compliance revenues to operating cost shall be at least 10 6633.5 percent. Source: TDA fiscal audits, FY 2016 – FY 2018. The current cost of the operator’s retirement system is fully funded with respect to the officers The City contracts for its transit and employees of its public transportation system, operations. City staff have PUC 99271 In compliance or the operator is implementing a plan approved retirement benefits through by the RTPA, which will fully fund the retirement CalPERS. system for 40 years. As a recipient of STA funds, the City of Modesto is making full use of funds available to it under the Urban Mass Transportation Act of 1964. If the operator receives State Transit Assistance funds, the operator makes full use of funds FY 2016: $3,374,557 (operating) available to it under the Urban Mass CCR 6754 (a) (3) In compliance $356,224 (capital) Transportation Act of 1964 before TDA claims are FY 2017: $3,906,674 (operating) granted. $1,593,712 (capital) FY 2018: $3,840,600 (operating) $1,085,737 (capital)

Source: NTD reports, FY 2016 – FY 2018. In order to use State Transit Assistance funds for operating assistance, the operator’s total operating cost per revenue hour does not exceed the sum of the preceding year’s total plus an amount equal to the product of the percentage Beginning in FY 2018, STA change in the CPI for the same period multiplied by eligibility calculations were the preceding year’s total operating cost per PUC 99314.6 In compliance included within the City’s TDA revenue hour. An operator may qualify based on fiscal audit. the preceding year’s operating cost per revenue hour or the average of the three prior years. If an operator does not meet these qualifying tests, the operator may only use STA funds for capital purposes. 13

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Compliance Element Reference Compliance Comments A transit claimant is precluded from receiving monies from the Local Transportation Fund and the State Transit Assistance Fund in an amount which exceeds the claimant's capital and operating costs less the actual amount of fares received, the CCR 6634 In compliance amount of local support required to meet the fare ratio, the amount of federal operating assistance, and the amount received during the year from a city or county to which the operator has provided services beyond its boundaries.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Chapter 4 Prior Recommendations

This section reviews and evaluates the implementation of prior Triennial Performance Audit recommendations. This objective assessment provides assurance the City of Modesto has made quantifiable progress toward improving both the efficiency and effectiveness of its public transit program.

The prior audit – completed in November 2016 by Michael Baker International for the three fiscal years ending June 30, 2015 – included three recommendations:

1. Include additional locally generated revenue in the farebox recovery and TDA fiscal audits.

Discussion: The prior audit noted Modesto would be subject to a higher urbanized farebox recovery ratio standard. Historically, revenues considered in the farebox ratio calculation have consisted primarily of passenger fares. New state legislation (SB 508) allows for other locally generated revenues in the farebox ratio. Examples of possible other local support revenues may include interest earnings, gains on the sale of capital assets, lease revenues generated by transit-owned property, alternative fueling services, advertising revenues, and donations other than cash donations made in lieu of a prescribed fare. During the prior audit period, the City executed an agreement with Stott Outdoor Advertising which generates extra revenues. The prior audit recommended the annual TDA fiscal audit calculate the farebox ratio inclusive of applicable additional revenue. The audit also recommended the City’s Transit Division work with the City Finance Department to ensure other local transit revenues are included in the farebox ratio in the TDA fiscal audit for MAX and MADAR.

Progress: In FY 2017/18, the City used local supplementation including Measure L, advertising (on buses and bus stop benches), and special fares resulting from an agreement with Modesto Junior College. The City’s TDA fiscal audits include a detailed analysis of farebox recovery ratio compliance.

Status: Implemented.

2. Refine performance standards for the transit service.

Discussion: With some route restructuring and scheduling changes, new performance data is generated to gauge the relative efficiency and effectiveness of the service. Performance data that is collected can be compared to benchmarks that measure the progress made in the delivery of service. Modesto should refine its performance benchmarks for key metrics that reflect the changes as part of continuous efforts to improve the system. Some of these metrics include on-time performance, passengers per hour, operating cost per passenger, 15 and operating cost per hour. The metrics can be updated on a regular basis such as calculating a rolling three-year average, and/or adjusting for an index such as the consumer

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price index. The update to the Short Range Transit Plan may help towards development of the metrics.

Progress: The 2018 SRTP established guiding policies for transit planning as well as three key metrics: passengers per hour, farebox recovery ratio, and on-time performance. These metrics are reviewed and updated periodically.

Status: Implemented.

3. Pursue Short Range Transit Plan update.

Discussion: The prior audit noted the City has yet to commission the preparation of a transit plan. There were no significant planning studies or initiatives undertaken by the City during the prior audit period. In lieu of an adopted transit development plan, the City made route restructuring and scheduling changes based on route performance monitoring and customer feedback. Modesto also relied on its collaboration with StanCOG to address its short-range and long-range transit planning needs. Transit issues were generally addressed in the StanCOG Regional Transportation Plan and FTIP.

The City programmed the development of a Short Range Transit Plan in its 2016 FTIP. The prior audit also noted MAX is now subject to a 20 percent system-wide farebox ratio. These new developments will require more focused analysis and planning. Therefore, it was suggested the City prioritize plans to develop a Short Range Transit Plan, which could follow the findings from an anticipated efficiency study to be commissioned by StanCOG.

Progress: A “mini” short-range transit plan was completed in May 2018. The City noted it was looking at undertaking a more comprehensive SRTP, but had yet to identify a completion deadline.

Status: Implemented.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Chapter 5 Data Reporting Analysis

An important aspect of the Triennial Performance Audit process is assessing how effectively and consistently the transit operator reports performance statistics to local, state, and federal agencies. Often as a condition of receipt of funding, an operator must collect, manage, and report data to different entities. Ensuring such data are consistent can be challenging given the differing definitions employed by different agencies as well as the varying reporting timeframes. This chapter examines the consistency of performance data reported by the City of Modesto to the State Controller and Federal Transit Administration specific to the audit period. Submissions to these entities were included within the State Controller’s Transit Operators Financial Transactions Report (TOR) and the National Transit Database (NTD) report, respectively.

Exhibit 5.1 provides a comparison between performance data reported within the TOR and NTD reports for the current audit period (ending FY 2015/16 through FY 2017/18) and the data reported via monthly performance reports and TDA fiscal audits.

 Operating Cost: There were significant variances in operating cost between what was reported in the TDA fiscal audits, NTD reports, and State Controller Reports. This is due to differences in how several expenses are reported to the various entities. Some of the differences specific to the NTD report are due to the inclusion of depreciation costs. NTD requires the City to report depreciation for vans owned by Storer, but it is not reported as depreciation on the TDA audit (it is reported as part of the operating contract). State Controller Reports do not exclude any depreciation in FY 2015/16 and FY 2016/17. In addition, for the TDA audit, total labor expenses include holiday pay, sick pay, and other types of pay to employees. For the State Controller Reports, no leave is reported as labor, but as other operating expenses. For NTD, direct charge agreements are reported as labor, but for TDA and the State Controller Report they fall under contractual services.  Vehicle Service Hours: Discrepancies between the State Controller Report data and data in the other reports is due to the exclusion of taxi operating data from the State Controller Report.  Vehicle Service Miles: Discrepancies between the State Controller Report data and data in the other reports is due to the exclusion of taxi operating data from the State Controller Report.  Passengers: Discrepancies between the State Controller Report data and data in the other reports may be due to the exclusion of taxi operating data from the State Controller Report.  Full-time Equivalent Employees: While the City utilizes the TDA definition of FTE, the data contained on the State Controller’s Report is not totally consistent with the hourly calculations provided to the audit team.

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Exhibit 5.1 Data Reporting Consistency System-Wide Performance Measure FY 2015/16 FY 2016/17 FY 2017/18 Operating Cost (Actual $) TDA fiscal audit $15,278,209 $15,850,285 $16,091,432 National Transit Database $16,160,997 $16,651,696 $17,381,103 State Controller Report $15,801,166 $16,302,765 $16,685,550 Fare Revenue (Actual $) TDA fiscal audit $2,939,307 $2,966,144 $2,797,681 National Transit Database $2,925,192 $2,755,049 $2,797,679 State Controller Report $2,925,192 $2,777,227 $2,797,679 Vehicle Service Hours (VSH) Monthly Performance Reports 188,969 192,693 192,550 National Transit Database 188,969 192,693 192,550 State Controller Report 183,619 187,343 190,207 Vehicle Service Miles (VSM) Monthly Performance Reports 2,412,948 2,446,111 2,299,413 National Transit Database 2,412,948 2,446,111 2,299,413 State Controller Report 2,361,147 2,391,466 2,275,750 Passengers Monthly Performance Reports 3,241,665 2,878,789 2,686,938 National Transit Database 3,241,665 2,878,789 2,686,938 State Controller Report 3,229,354 2,878,624 2,681,074 Full-Time Equivalent Employees State Controller Report 176 173 190 Per City methodology 173 179 181

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Chapter 6 Performance Analysis

Performance indicators are typically employed to quantify and assess the efficiency of a transit operator’s activities. Such indicators provide insight into current operations as well as trend analysis of operator performance. Through a review of indicators, relative performance as well as possible inter- relationships between major functions is revealed.

The Transportation Development Act (TDA) requires recipients of TDA funding to track and report five performance indicators:

 Operating Cost/Passenger,  Operating Cost/Vehicle Service Hour,  Passengers/Vehicle Service Hour,  Passengers/Vehicle Service Mile, and  Vehicle Service Hours/Employee.

To assess the validity and use of performance indicators, the audit team performed the following activities:

 Assessed internal controls in place for the collection of performance-related information,  Validated collection methods of key data,  Calculated performance indicators, and  Evaluated performance indicators.

The procedures used to calculate TDA-required performance measures for the current triennium were verified and compared with indicators included in similar reports to external entities (i.e., State Controller and Federal Transit Administration).

Operating Cost The Transportation Development Act requires an operator to track and report transit-related costs reflective of the Uniform System of Accounts and Records developed by the State Controller and the California Department of Transportation. The most common method for ensuring this occurs is through a compliance audit report prepared by an independent auditor in accordance with California Code of Regulations Section 66673. The annual independent financial audit should confirm the use of the Uniform System of Accounts and Records. Operating cost – as defined by PUC Section 99247(a) – excludes the following:

3 CCR Section 6667 outlines the minimum tasks which must be performed by an independent auditor in conducting the annual fiscal and compliance audit of the transit operator.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

 Cost in the depreciation and amortization expense object class adopted by the State Controller pursuant to PUC Section 99243,  Subsidies for commuter rail services operated under the jurisdiction of the Interstate Commerce Commission,  Direct costs of providing charter service, and  Vehicle lease costs.

Vehicle Service Hours and Miles Vehicle Service Hours (VSH) and Miles (VSM) are defined as the time/distance during which a revenue vehicle is available to carry fare-paying passengers, and which includes only those times/miles between the time or scheduled time of the first passenger pickup and the time or scheduled time of the last passenger drop-off during a period of the vehicle's continuous availability.4 For example, demand- response service hours include those hours when a vehicle has dropped off a passenger and is traveling to pick up another passenger, but not those hours when the vehicle is unavailable for service due to driver breaks or lunch. For both demand-response and fixed-route services, service hours will exclude hours of "deadhead" travel to the first scheduled pick-up, and will also exclude hours of "deadhead" travel from the last scheduled drop-off back to the terminal. For fixed-route service, a vehicle is in service from first scheduled stop to last scheduled stop, whether or not passengers board or exit at those points (i.e., subtracting driver lunch and breaks but including scheduled layovers).

Passenger Counts According to the Transportation Development Act, total passengers is equal to the total number of unlinked trips (i.e., those trips that are made by a passenger that involve a single boarding and departure), whether revenue-producing or not.

Employees Employee hours is defined as the total number of hours (regular or overtime) which all employees have worked, and for which they have been paid a wage or salary. The hours must include transportation system-related hours worked by persons employed in connection with the system (whether or not the person is employed directly by the operator). Full-Time Equivalent (FTE) is calculated by dividing the number of person-hours by 2,000.

Fare Revenue Fare revenue is defined by California Code of Regulations Section 6611.2 as revenue collected from the farebox plus sales of fare media. (Fare revenue does not include additional local revenues that can be used to supplement the farebox recovery ratio.)

4 A vehicle is considered to be in revenue service despite a no-show or late cancellation if the vehicle remains available for passenger use.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

TDA Required Indicators To calculate the TDA indicators for the City of Modesto, the following sources were employed:

 Operating Cost was not independently calculated as part of this audit. Operating Cost data were obtained via TDA fiscal audits for each fiscal year covered by this audit. Operating Cost from the reports was compared against that reported to the State Controller and NTD and was determined to be consistent with TDA guidelines. In accordance with PUC Section 99247(a), the reported costs excluded depreciation and other allowable expenses.  Fare Revenue was not independently calculated as part of this audit. Fare Revenue data were obtained via TDA fiscal audits for each fiscal year covered by this audit. Fare revenue from the reports is consistent with TDA guidelines.  Vehicle Service Hours (VSH) data were obtained via State Controller Reports for each fiscal year covered by this audit. Data from these reports were then compared with information included within the City’s monthly performance data summary reports. The City’s calculation methodology is consistent with PUC guidelines.  Vehicle Service Miles (VSM) data were obtained via State Controller Reports for each fiscal year covered by this audit. Data from these reports were then compared with information included within the City’s monthly performance data summary reports. This methodology is consistent with PUC guidelines.  Unlinked trip data were obtained via State Controller reports for each fiscal year covered by this audit. Data from these reports were then compared with information included within the City’s monthly performance data summary reports. The City’s calculation methodology is consistent with PUC guidelines.  Full-Time Equivalent (FTE) methodology was provided by the City and is consistent with the TDA definition (hours worked divided by 2,000).

System Performance Trends Operating cost changed relatively little between FY 2012/13 and FY 2017/18, exhibiting only an 8.8 percent net increase. Fare revenue increased noticeably in FY 2014/15 but decreased in the two years that followed, ending the six-year period with a net increase of just 1.4 percent.

System-wide Vehicle Service Hours (VSH) saw a net increase of 4.3 percent across the six-year period, though VSH levels fluctuated from year to year. Vehicle Service Miles (VSM) decreased by 2.8 percent between FY 2012/13 and FY 2017/18, which is consistent with the lack of significant changes in operating cost or VSH. Despite the consistent level of service, ridership experienced a net decrease of 28.9 percent across the six-year period.

Cost-related performance indictors increased during the audit period, with operating cost/passenger increasing at a greater rate due to the decline in ridership. System-wide unaided farebox recovery declined across the audit period except for FY 2014/15. Passengers per VSH and VSM have decreased along with overall ridership decline.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report

Exhibit 6.1 System Performance Indicators System-wide Performance Measure FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 Operating Cost (Actual $) $15,476,151 $16,262,700 $15,456,182 $15,801,166 $16,302,765 $16,838,486 Annual Change 5.1% -5.0% 2.2% 3.2% 3.3% Fare Revenue (Actual $) $2,758,914 $2,768,614 $3,079,730 $2,925,192 $2,777,227 $2,797,679 Annual Change 0.4% 11.2% -5.0% -5.1% 0.7% Vehicle Service Hours (VSH) 184,565 176,006 188,539 188,969 192,693 192,550 Annual Change -4.6% 7.1% 0.2% 2.0% -0.1% Vehicle Service Miles (VSM) 2,366,587 2,240,589 2,358,284 2,412,948 2,446,111 2,299,413 Annual Change -5.3% 5.3% 2.3% 1.4% -6.0% Passengers 3,781,359 3,744,544 3,532,033 3,241,665 2,878,789 2,686,938 Annual Change -1.0% -5.7% -8.2% -11.2% -6.7% Employees 142 160 169 176 173 190 Annual Change 12.7% 5.6% 4.1% -1.7% 9.8% Performance Indicators Operating Cost/VSH (Actual $) $83.85 $92.40 $81.98 $83.62 $84.60 $87.45 Annual Change 10.2% -11.3% 2.0% 1.2% 3.4% Operating Cost/Passenger (Actual $4.09 $4.34 $4.38 $4.87 $5.66 $6.27 Annual Change 6.1% 0.8% 11.4% 16.2% 10.7% Passengers/VSH 20.49 21.28 18.73 17.15 14.94 13.95 Annual Change 3.8% -11.9% -8.4% -12.9% -6.6% Passengers/VSM 1.60 1.67 1.50 1.34 1.18 1.17 Annual Change 4.6% -10.4% -10.3% -12.4% -0.7% Farebox Recovery 17.8% 17.0% 19.9% 18.5% 17.0% 16.6% Annual Change -4.5% 17.0% -7.1% -8.0% -2.5% Hours/Employee 1299.8 1100.0 1115.6 1,073.7 1,113.8 1013.4 Annual Change -15.4% 1.4% -3.8% 3.7% -9.0% TDA Non-Required Indicators Operating Cost/VSM $6.54 $7.26 $6.55 $6.55 $6.66 $7.32 Annual Change 11.0% -9.7% -0.1% 1.8% 9.9% VSM/VSH 12.82 12.73 12.51 12.77 12.69 11.94 Annual Change -0.7% -1.7% 2.1% -0.6% -5.9% Fare/Passenger $0.73 $0.74 $0.87 $0.90 $0.96 $1.04 Annual Change 1.3% 17.9% 3.5% 6.9% 7.9% Sources: FY 2012/13 – FY 2014/15 data from prior Triennial Performance Audit. FY 2016/17 and FY 2017/18 financial data from State Controller Reports; FY 2015/16 – FY 2017/18 operating data and FY 2015/16 financial data from NTD reports.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.2 System Ridership Exhibit 6.3 System Operating Cost/VSH 4,000,000 3,744,544 $94.00 $92.40

3,500,000 3,781,359 3,229,354 $92.00 3,528,369 $90.00 3,000,000 $87.45 $88.00 2,500,000 2,878,624 2,686,938 $86.00 2,000,000 $84.00 1,500,000 $84.60 $82.00 $83.85 $83.62 1,000,000 $81.98 $80.00

500,000 $78.00

0 $76.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Exhibit 6.4 System Operating Cost/VSM Exhibit 6.5 System VSM/VSH $7.40 $7.26 $7.32 13.00 12.77 $7.20 12.80 12.82 12.73 12.69 12.60 $7.00 12.40 12.51 $6.80 12.20 $6.60 $6.66 12.00 $6.55 $6.40 $6.54 $6.55 11.80 11.94

$6.20 11.60

$6.00 11.40 23 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.6 System Operating Cost/Passenger Exhibit 6.7 System Passengers/VSH $7.00 25.00 $6.27

$6.00 21.28 $4.89 20.00 $5.66 20.49 $5.00 $4.34 18.71 15.00 17.09 $4.00 $4.38 $4.09 14.94 13.95 $3.00 10.00

$2.00 5.00 $1.00

$0.00 0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Exhibit 6.8 System Passengers/VSM Exhibit 6.9 System VSH/FTE 1.80 1400

1.60 1.67 1200 1,299.8 1.60 1.40 1.50 1000 1,115.6 1,113.8 1,100.0 1,073.7 1.20 1.34 1,013.4 1.00 1.18 1.17 800

0.80 600 0.60 400 0.40 200 0.20

0.00 0 24 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.10 System Farebox Recovery Exhibit 6.11 System Fare/Passenger 21.0% $1.20 19.9% 20.0% $1.00 $1.04 19.0% $0.96 $0.91 $0.80 $0.87 18.0% 18.5% $0.73 $0.74 $0.60 17.8% 17.0% 17.0% 17.0% $0.40 16.0% 16.6%

15.0% $0.20

14.0% $0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Fixed-Route Service Operating cost changed little between FY 2012/13 and FY 2017/18, exhibiting only a 10.7 percent net increase. Fare revenue increased noticeably in FY 2014/15 but decreased in the second and third years that followed, ending the six-year period with a net increase of just 0.5 percent.

Fixed-Route Vehicle Service Hours (VSH) saw a net increase of 11.7 percent across the six-year period, though VSH levels fluctuated. Vehicle Service Miles (VSM) saw little change between FY 2012/13 and FY 2017/18, which is consistent with the lack of significant changes in operating cost or VSH. Ridership experienced a net decrease of 29.4 percent across the six-year period, with the most significant decrease (24.2 percent) taking place during the current audit period.

Cost-related performance indictors increased during the audit period, with operating cost/passenger increasing at a greater rate due to the decline in ridership. Fixed-Route unaided farebox recovery declined across the audit period except for FY 2014/15. Passengers per VSH and VSM have decreased along with overall ridership decline.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.12 Fixed-Route Performance Indicators Fixed-Route Performance Measure FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 Operating Cost (Actual $) $12,344,245 $13,051,033 $12,646,137 $12,981,003 $13,028,187 $13,659,109 Annual Change 5.7% -3.1% 2.6% 0.4% 4.8% Fare Revenue (Actual $) $2,499,176 $2,505,735 $2,774,201 $2,598,624 $2,460,410 $2,512,594 Annual Change 0.3% 10.7% -6.3% -5.3% 2.1% Vehicle Service Hours (VSH) 144,404 145,248 152,124 151,089 156,258 161,231 Annual Change 0.6% 4.7% -0.7% 3.4% 3.2% Vehicle Service Miles (VSM) 1,843,043 1,843,944 1,937,742 1,947,743 1,991,113 1,903,908 Annual Change 0.0% 5.1% 0.5% 2.2% -4.4% Passengers 3,666,824 3,630,874 3,416,314 3,108,307 2,762,922 2,589,049 Annual Change -1.0% -5.9% -9.0% -11.1% -6.3% Employees 102 119 126 130 128 132 Annual Change 16.7% 5.9% 3.2% -1.5% 3.1% Performance Indicators Operating Cost/VSH (Actual $) $85.48 $89.85 $83.13 $85.92 $83.38 $84.72 Annual Change 5.1% -7.5% 3.4% -3.0% 1.6% Operating Cost/Passenger (Actual $) $3.37 $3.59 $3.70 $4.18 $4.72 $5.28 Annual Change 6.8% 3.0% 12.8% 12.9% 11.9% Passengers/VSH 25.39 25.00 22.46 20.57 17.68 16.06 Annual Change -1.6% -10.2% -8.4% -14.1% -9.2% Passengers/VSM 1.99 1.97 1.76 1.60 1.39 1.36 Annual Change -1.0% -10.5% -9.5% -13.0% -2.0% Farebox Recovery 20.2% 19.2% 21.9% 20.0% 18.9% 18.4% Annual Change -5.2% 14.3% -8.7% -5.7% -2.6% Hours/Employee 1415.7 1220.6 1207.3 1162.2 1220.8 1221.4 Annual Change -13.8% -1.1% -3.7% 5.0% 0.1% TDA Non-Required Indicators Operating Cost/VSM $6.70 $7.08 $6.53 $6.66 $6.54 $7.17 Annual Change 5.7% -7.8% 2.1% -1.8% 9.6% VSM/VSH 12.76 12.70 12.74 12.89 12.74 11.81 Annual Change -0.5% 0.3% 1.2% -1.2% -7.3% Fare/Passenger $0.68 $0.69 $0.81 $0.84 $0.89 $0.97 Annual Change 1.3% 17.7% 3.0% 6.5% 9.0% Sources: FY 2012/13 – FY 2014/15 data from prior Triennial Performance Audit. FY 2016/17 and FY 2017/18 financial data from State Controller Reports; FY 2015/16 – FY 2017/18 operating data and FY 2015/16 financial data from NTD reports.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.13 Fixed-Route Ridership Exhibit 6.14 Fixed-Route Operating Cost/VSH 4,000,000 $92.00 3,630,874 $89.85 3,500,000 $90.00 3,666,824 3,108,307 3,000,000 3,416,314 2,589,049 $88.00 2,500,000 2,762,922 $85.92 $84.72 $86.00 2,000,000 $84.00 $85.48 1,500,000 $82.00 $83.38 1,000,000 $83.13

500,000 $80.00

- $78.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Exhibit 6.15 Fixed-Route Operating Cost/VSM Exhibit 6.16 Fixed-Route VSM/VSH $7.40 13.00 12.89 $7.17 12.80 12.70 $7.20 12.74 $7.08 12.76 12.60 12.74

$7.00 12.40

12.20 $6.80 12.00

$6.60 $6.70 11.80 $6.66 11.81 $6.54 11.60 $6.40 $6.53 11.40

$6.20 11.20 28 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.17 Fixed-Route Operating Cost/Passenger Exhibit 6.18 Fixed-Route Passengers/VSH $6.00 $5.28 30.00 $4.72 $5.00 25.00 $4.18 25.39 25.00 $4.00 $3.59 20.00 22.46 20.57 $3.70 $3.00 15.00 17.68 $3.37 16.06

$2.00 10.00

$1.00 5.00

0.00 $0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Exhibit 6.19 Fixed-Route Passengers/VSM Exhibit 6.20 Fixed-Route VSH/FTE 2.50 1600.0

1400.0 2.00 1,415.7 1200.0 1.99 1.97 1,220.6 1,207.3 1,220.8 1,221.4 1,162.2 1.50 1.76 1000.0 1.60 800.0 1.39 1.36 1.00 600.0

400.0 0.50 200.0

0.00 0.0 29 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.21 Fixed-Route Farebox Recovery Exhibit 6.22 Fixed-Route Fare/Passenger 23.0% $1.20 21.9% 22.0% $1.00

21.0% $0.97 $0.80 $0.84 $0.89 20.0% $0.81 20.2% 20.0% $0.60 $0.68 $0.69 19.0% 19.2% 18.9% $0.40 18.0% 18.4%

17.0% $0.20

16.0% $0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Demand-Response Service Demand-response performance indicators include data for both Modesto Area Dial-A-Ride and the MADAR back-up taxi program.

Operating cost appeared to fluctuate significantly during FY 2014/15 and FY 2015/16, though it experienced only a 1.5 percent net decrease between FY 2012/13 and FY 2017/18. Fare revenue increased noticeably in FY 2014/15 but decreased in FY 2017/18 by 10.0 percent, ending the six-year period with a net increase of 9.8 percent.

Demand-response Vehicle Service Hours (VSH) saw a net decrease of 22.0 percent across the six-year period, with a significant decrease (23.4 percent) in FY 2013/14 and significant increase (18.4 percent) in FY 2014/15. Vehicle Service Miles (VSM) saw a decrease of 24.5 percent between FY 2012/13 and FY 2017/18, with the most significant decrease (24.2 percent) in FY 2013/14. Ridership experienced a net decrease of 14.5 percent across the six-year period despite an increase in FY 2015/16, with the most significant decreases taking place during the current audit period.

Cost-related performance indictors increased during the audit period, with operating cost/passenger increasing at a greater rate due to the decline in ridership. Demand-response unaided farebox recovery declined across the audit period except for FY 2014/15. Passengers per VSH and VSM have increased despite overall ridership decline due to the significant decreases in VSH and VSM.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.23 Demand-Response Performance Indicators Demand-Response Performance Measure FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 Operating Cost (Actual $) $3,131,906 $3,211,667 $2,810,045 $3,179,964 $3,274,578 $3,179,377 Annual Change 2.5% -12.5% 13.2% 3.0% -2.9% Fare Revenue (Actual $) $259,738 $262,879 $305,529 $326,568 $316,817 $285,085 Annual Change 1.2% 16.2% 6.9% -3.0% -10.0% Vehicle Service Hours (VSH) 40,161 30,758 36,415 37,880 36,435 31,319 Annual Change -23.4% 18.4% 4.0% -3.8% -14.0% Vehicle Service Miles (VSM) 523,544 396,645 420,542 465,205 454,998 395,505 Annual Change -24.2% 6.0% 10.6% -2.2% -13.1% Passengers 114,535 113,670 112,055 121,047 115,702 97,889 Annual Change -0.8% -1.4% 8.0% -4.4% -15.4% Employees 40 41 43 46 45 58 Annual Change 2.5% 4.9% 7.0% -2.2% 28.9% Performance Indicators Operating Cost/VSH (Actual $) $77.98 $104.42 $77.17 $83.95 $89.87 $101.52 Annual Change 33.9% -26.1% 8.8% 7.1% 13.0% Operating Cost/Passenger (Actual $) $27.34 $28.25 $25.08 $26.27 $28.30 $32.48 Annual Change 3.3% -11.2% 4.8% 7.7% 14.8% Passengers/VSH 2.85 3.70 3.08 3.20 3.18 3.13 Annual Change 29.6% -16.7% 3.8% -0.6% -1.6% Passengers/VSM 0.22 0.29 0.27 0.26 0.25 0.25 Annual Change 31.0% -7.0% -2.3% -2.3% -2.7% Farebox Recovery 8.3% 8.2% 10.9% 10.3% 9.7% 9.0% Annual Change -1.3% 32.8% -5.5% -5.8% -7.3% Hours/Employee 1004.0 750.2 846.9 823.5 809.7 540.0 Annual Change -25.3% 12.9% -2.8% -1.7% -33.3% TDA Non-Required Indicators Operating Cost/VSM $5.98 $8.10 $6.68 $6.84 $7.20 $8.04 Annual Change 35.4% -17.5% 2.3% 5.3% 11.7% VSM/VSH 13.04 12.90 11.55 12.28 12.49 12.63 Annual Change -1.1% -10.4% 6.3% 1.7% 1.1% Fare/Passenger $2.27 $2.31 $2.73 $2.70 $2.74 $2.91 Annual Change 2.0% 17.9% -1.1% 1.5% 6.4% Sources: FY 2012/13 – FY 2014/15 data from prior Triennial Performance Audit. FY 2016/17 and FY 2017/18 financial data from State Controller Reports; FY 2015/16 – FY 2017/18 operating data and FY 2015/16 financial data from NTD reports.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.24 Demand-Response Ridership Exhibit 6.25 Demand-Response Operating Cost/VSH 140,000 $120.00 121,047 $104.42 113,670 120,000 $100.00 115,702 $101.52 100,000 114,535 112,055 $80.00 $89.87 97,889 $83.95 80,000 $77.98 $77.17 $60.00 60,000 $40.00 40,000

20,000 $20.00

- $0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Exhibit 6.26 Demand-Response Operating Cost/VSM Exhibit 6.27 Demand-Response VSM/VSH $9.00 13.50 $8.10 13.04 $8.00 12.90 $8.04 13.00 $7.00 12.63 $7.20 12.49 $6.00 $6.68 $6.84 12.50 12.28 $5.98 $5.00 12.00 $4.00

$3.00 11.50 11.55 $2.00 11.00 $1.00

$0.00 10.50 33 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.28 Demand-Response Operating Cost/Passenger Exhibit 6.29 Demand-Response Passengers/VSH $35.00 $32.48 4.00 3.70 $28.30 $30.00 $28.25 3.50 $26.27 3.00 $25.00 3.20 $27.34 3.08 3.18 3.13 $25.08 2.50 2.85 $20.00 2.00 $15.00 1.50

$10.00 1.00

$5.00 0.50

0.00 $0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Exhibit 6.30 Demand-Response Passengers/VSM Exhibit 6.31 Demand-Response VSH/FTE 0.350 1200.0 1,004.0 0.287 0.300 1000.0 846.9 823.5 809.7 0.250 0.266 0.260 800.0 0.254 0.248 0.200 0.219 750.2 600.0 0.150 540.0 400.0 0.100

0.050 200.0

0.000 0.0 34 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 6.32 Demand-Response Farebox Recovery Exhibit 6.33 Demand-Response Fare/Passenger 12.0% 10.9% $3.50 10.3% 9.7% $3.00 10.0% 9.0% $2.91 $2.50 $2.73 $2.74 8.0% $2.70 8.3% 8.2% $2.00 $2.27 $2.31 6.0% $1.50 4.0% $1.00

2.0% $0.50

0.0% $0.00 FY 2012/13 FY 2013/14 FY 2014/15 FY 2015/16 FY 2016/17 FY 2017/18 FY 2012/13FY 2013/14FY 2014/15FY 2015/16FY 2016/17FY 2017/18

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

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Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report Chapter 7 Functional Review

A functional review of the City of Modesto’s public transit program is intended to assess the effectiveness and efficiency of the operator. Following a general summary of the City’s transit services, this chapter addresses seven functional areas. The list, taken from Section III of the Performance Audit Guidebook published by Caltrans, reflects those transit services provided by the City of Modesto through its transit program:

 General management and organization;  Service planning;  Scheduling, dispatch, and operations;  Personnel management and training;  Administration;  Marketing and public information; and  Fleet maintenance.

Service Overview The City of Modesto operates Modesto Area Express (MAX), which is comprised of seventeen local fixed- routes and two commuter routes. The local service operates within the Modesto Urbanized Area and Salida. Service is available on weekdays from 5:45 a.m. through 9:30 p.m., Saturdays from 7:15 a.m. through 9:00 p.m., and Sundays from 8:45 a.m. through 8:15 p.m. The service does not operate on designated holidays. Riders may connect with Modesto ACE Express, Modesto BART Express, Stanislaus Regional Transit (StaRT), Amtrak, and Ceres Area Transit (CAT).

Day passes, seven day passes, and 31-day passes are available for purchase on smartphones via Token Transit as well as at the City of Modesto Finance Department, Modesto Area Express office, Bear Postal and Business Center, and Buddy’s Mail Room. Ticket books and passes are also available for purchase by mail. MAX to BART and MAX to ACE tickets and passes may be purchased only at the City of Modesto Finance Department, Modesto Area Express office and via Token Transit. Modesto Junior College students ride fare-free by displaying their student ID card with a current semester sticker. 37

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 7.1 Fare Structure Fare Category Fare Modesto Area Express Regular one-way fare $2.00 Student fare (preschool – college with valid ID) $1.50 MJC student (with valid ID) Free Discounted one-way fare (senior 65+/disabled/Medicare card holders) $1.00 Student field trips (per person, pre-paid) $.50 Children age 4 and under (when accompanied by a parent/guardian) Free Personal Care Attendant (PCA) (when accompanying an eligible individual) Free All day pass $4.00 7-day pass $15.00 Regular 31-day pass $58.00 Student 31-day pass $48.00 Discounted 31-day pass (senior 65+/disabled/Medicare card holders) $29.00 Regular single-ride tickets (pack of 50) $100.00 Student single-ride tickets (pack of 50) $75.00 Discounted single-ride tickets (pack of 50) $50.00 MAX to ACE One-way fare $3.00 20-ride ticket $42.00 MAX to BART One-way fare $14.00 Round-trip fare $16.00 7-day pass $50.00 31-day pass $175.00 Modesto Area Dial-A-Ride One-way cash fare $3.00 10-ride ticket pack $30.00 Children under 5 (when accompanied by a parent/guardian) Free Personal Care Attendant (PCA) Free

General Management and Organization MAX operations are provided under contract to National Express (NEXT), which assumed operations in on July 1, 2017. Prior to then transit operations were contracted to TransDev. The City’s Public Works Department provides maintenance for all fixed-route vehicles. MADAR operations and maintenance are provided under contract to Storer Transit Systems. The most recent five-year contract began on June 28, 2014.

The Transit Manager and one of the Transit Analysts meet with NEXT every week. The City’s Transit Analyst meets with Storer on a monthly basis. Management monitors key performance indicators through monthly reports from the two operations contractors. Fixed-route performance is reviewed by 38 route. Some performance metrics/goals were developed as part of the adopted SRTP.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

The Transit department is fully and appropriately staffed, with internal reporting clearly defined. Currently, both the Transit and Fleet Services departments report to the Public Works Director, but the Transit Manager does not directly oversee Transit Maintenance. This has presented some challenges.

The City’s Transit Manager sits on StanCOG’s Social Services Transportation Advisory Council (SSTAC) as a transit representative. He also participated in monthly transit manager meetings.

The City did not make any significant changes to its fixed-route system during the audit period, although service to Empire was transferred to StaRT. Management monitors key performance indicators through monthly reports from the two operations contractors. Fixed-route performance is reviewed by route. Some performance metrics/goals were developed as part of the adopted SRTP. The City also adjusted its Dial-A-Ride service area to do a better job of meeting its performance parameters. A taxi program was started along with the most recent Storer contract. In prior years, the City had concerns regarding Storer’s ability to stay within the appropriate windows for Dial-A-Ride performance due to traffic, the street network, etc. As part of the current contract, Storer provides five taxi vehicles to supplement the Dial-A-Ride service. They can be used for missed pick-ups, for long distance trips, or as supplemental vehicles during peak traffic times to help the rest of the MADAR system function more efficiently.

Other notable activities during the audit period include the following:

 Initial steps toward electrification, with electric Proterra buses placed into service in early 2019;  Introduction of real-time bus information, including bus tracker technology;  Upgraded fareboxes and new fare media;  Revitalized branding and introduced new marketing program;  Bus stop improvements; and  The design phase of planned transit center improvements.

The seven-member City Council serves as the City’s principal policy making body and members are elected for four-year terms and are limited to two terms. The City Council meets the first, second, and third Tuesday of the month at 5:30 p.m. at Modesto City Hall (1010 10th Street). This location is served by all but one MAX route via the City’s transit center, located two blocks away.

The City has an ADA advisory committee which meets at least twice a year. The committee has met more frequently during the past year as the City is in the midst of an RFP process for MADAR (due to the end of the existing contract in 2019). There is no other citizen advisory body beyond StanCOG’s SSTAC. The City Council is supportive of transit and has no significant concerns.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Exhibit 7.2 Organizational Chart

Source: City of Modesto, 2019.

Service Planning The City adopted its most recent SRTP in May 2018. It was completed in-house and includes an evaluation of the existing service as well as improvement plans for operations, capital, rolling stock, and bus stops. Operational and administrative improvements span a three-year horizon, while capital improvements look ahead five years and rolling stock replacement ten years. The SRTP also includes a list of visionary projects, which do not have a designated timeline for implementation.

Surveys are often conducted as part of a larger planning effort (such as the SRTP). The City tries to do at least one survey a year. The most recent MAX customer survey was conducted in May and June 2018, which garnered more than 325 responses.

The City of Modesto actively works to identify residential, retail, office, and industrial development centers which may require transportation. An agreement exists with Modesto Junior College where students can ride fare-free by displaying a valid student ID. 40

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Concerns regarding specialized transportation – specifically, the lack of technology – were addressed in the preparation of the current MADAR contract. The contract also includes more liquidated damages and a taxi program to improve performance.

The City also engages the public in many outreach events. Public meetings are held in advance of fare or route changes, not just to warn the public, but to give them an opportunity to tell the City how things are working before plans are finalized. Participation at informal outreach events invite more honest discourse, allowing MAX staff to engage the public effectively, informally, and personally.

Scheduling, Dispatch, and Operations With two operations contracts, the City has slightly different practices for scheduling, dispatch, and operations. These are addressed specific to each contractor below.

MAX (National Express) MAX fixed-route service is operated out of the City’s transit operations and maintenance facility. Drivers are represented by Teamsters Local 386. Assignments are based on seniority and bids are conducted quarterly. Operator staff consists of 98 full-time, two part-time, and three on-call employees. Part-time employees bid on up to 30 hours per week of routes.

NEXT provides a sufficient number of drivers. Call-out time is two hours prior to the beginning of the shift. Road supervisors and dispatchers are trained and licensed to drive.

All drivers are qualified to drive every route and service except BART routes, which require more training and certification. They also have to be eligible to operate the electric Proterra vehicles. This training is done in house. Currently, 58 drivers are trained on the Proterra vehicles.

City staff pulls and dumps farebox vaults at the fuel island/probing station in the City’s operations and maintenance facility. Loomis armored car picks up the fares and handles all counting.

MADAR (Storer) Modesto Area Dial-A-Ride (MADAR) is operated under contract with Storer out of its Doker Drive facility that is shared with the County of Stanislaus and City of Ceres. MADAR driver assignments are based on ability, training, and seniority. Most senior drivers work Monday through Friday. They are not represented. Some drivers may be cross-utilized between contracts depending on need, skills, and seniority.

There are a sufficient number of drivers to conduct the service. Road supervisors and dispatchers are trained licensed to drive as well. Times are called out two hours prior to the shift. Due to customer complaints and absenteeism, an employee of the month program is planned to be implemented and employees will be recognized at monthly safety meetings. Drivers are paid for safety meetings.

MADAR part-time drivers received raised wages in order to compete with neighboring Turlock 41 and SJRTD. All dispatchers, road supervisors, and management are drivers in order to cover

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

unexpected absences. School bus division at 501 Beard Ave is reached out to for transit-trained drivers. Some work part-time on weekends.

MADAR uses Diamond drop-vault fareboxes. They are emptied Monday & Thursday nights and switched out with an empty vault. They are then opened at the City which handles all counting and deposits in the City’s accounts (Transit counts the fares, while Finance reconciles and deposits the fares).

Personnel Management and Training With two operations contracts, the City has slightly different practices for personnel management and training. These are addressed specific to each contractor below.

MAX (National Express) Part-time drivers are provided no benefits except what is required by state statute. They have the option of buying into medical insurance.

NEXT provides a TSI-certified on-site safety and training manager. Drivers receive 144 hours of training. NEXT’s trainer can take recruits all the way through training, even if a recruit already has a Class A or Class B license. Ideally, ridealongs are conducted every 30 days. Recruitment is ongoing through NEXT’s corporate recruiter.

Progressive discipline is in accordance with the Collective Bargaining Agreement (CBA). All safety-sensitive personnel are subject to DAMIS reporting.

NEXT is preparing to launch an employee of the month program, which will be based on customer feedback and absenteeism. Awardees will be recognized at monthly safety meeting.

MADAR (Storer) MADAR recruitment is ongoing as well. Back of the bus ads, Indeed, and job fairs at EDD/unemployment office have brought in recruits. Ridealongs are required before interviews to cut down on applicants not knowing what the job entails.

MADAR drivers receive no benefits beyond statutory requirements. Employees can buy in to benefit plans. MADAR drivers are eligible for driver of the month, can purchase medical at their own cost, and are statutorily provided sick time. Storer offers a 401(k) plan to all full-time employees.

MADAR has annual and ongoing performance evaluations and annual random safety observations, which fall within Storer’s security program. Employees can accumulate up to seven positive safety points and can qualify for up to $500 bonus on anniversary date. CSR/dispatch calls are recorded and randomly reviewed for quality.

MADAR program has a full-time California state-certified instructor and a safety- and DMV- certified trainer that do DMV road tests and follows DMV policies. Training includes bus 42 evacuation, fire extinguishers, first aid, and blood-borne pathogens.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Monthly safety meetings occur with agendas and rotating topics. CPR training is not conducted as it is not required by contract. Turnover is small, with the most common reason being wages. Others retire or finish school in a different profession, and very few are terminated.

Storer maintains a picnic area at its McDonald yard that it uses for periodic barbecues and picnics to reward employees.

Administration The Transit Manager and Financial Analyst do the budgeting for transit on an annual basis. It is then incorporated into the City budget and goes to council. Mid-year adjustments above a designated threshold have to be approved by the council.

One of the Transit Analysts is responsible for applying for grants and milestone reporting. The Financial Analyst manages grants, handles the financial elements of NTD reporting and FTA claims, and does the reporting for several state grants. The Administrative Analyst prepares the NTD report. Appropriate policies are in place for grant management.

The Risk Management department is part of the City’s Human Resources department. A procedure is in place for processing accident and injury claims. Most claims go through the contractor. The City is self- insured. A transit-specific disaster preparedness plan does not exist.

Contract management responsibilities are clearly assigned within the organization. Contractor invoices are submitted monthly. Bus stops are maintained by full-time city staffer, who operates out of the traffic department. Bus stop cleaning is handled through a contract with StanCOG.

Timesheets are all electronic. The Transit Manager reviews timesheets for the transit division on a biweekly basis. Direct deposit is generally mandatory, as the City no longer issues checks. Those without direct deposit receive their pay on a prepaid card.

Invoice terms, quantities, and prices are verified against approved purchase orders. A system is in place which ensures goods or services have been received before an invoice is paid. The City procures fuel through its Fleet division. The Transit division procures transit buses. MADAR vehicles are provided by Storer as part of a turnkey contract.

Marketing and Public Relations The City’s Transit Improvement Plan (dated August 2016) included several marketing-related activities. The City engaged an outside marketing consultant in July 2017. The initial marketing plan included the following goals and objectives for transit.

A. Run a sustainable system. 1. Increase/meet farebox recovery ratio by increasing fixed-route ridership. 2. Increase public awareness of MAX programs and services. B. Make MAX easy to use. 1. Redesign marketing collateral. 43 2. Update website. 3. Engage with riders to determine how MAX is used.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

C. Create a positive image about public transit. 1. Create a consistent brand with cohesive color, design, and messaging. 2. Participation at community events, organizations, businesses, academic institutions, and tradeshows. 3. Engage community through social media. 4. Engage non-riding public to enhance awareness and perception of MAX. 5. Organize promotional events.

During the first year of the contract, the marketing consultant updated the City’s fare media, Ride Guide, bus stop information, system map, onboard notices, and several other brochures. It also launched Facebook and Twitter platforms and began posting a minimum of four times per week on Facebook and five times per week on Twitter (@TheMAXBus). The consultant provides monthly content and monitors the accounts, providing responses as warranted. Other marketing activities during the audit period include a redesign of the City’s transit website (www.modestoareaexpress.com), development of a “presentation in a box,” Bike to Work Day, and Dump the Pump Day.

National Express processes all customer service for MAX out of the Modesto Transit Center. They are staffed during all operating hours consisting of a total of six representatives and one supervisor. Some are bilingual. The customer complaint system GoModesto can be used to file into an electronic system. One staffer at transit center files complaint, follows up, then finalizes the complaint. They provided monthly reports for call volume, abandonment rate, wait-time, etc. Comparable data is collected through Storer.

Maintenance With two operations contracts, the City has slightly different practices for fleet maintenance. These are addressed specific to each contractor below.

MAX (City) While operation of the MAX program is contracted to National Express, the City provides all maintenance for the program. A preventative maintenance program is in place. Maintenance is guided by the manufacturer and is based on time and mileage. Most engines are checked every 5,000 miles or six months. Buses are reviewed once per week. The warranty recovery program is very good. The fleet includes a sufficient number of vehicles.

The current City-owned facility was built in 2012 and can handle all repairs that are not sent out. It serves 62 buses. It can accommodate 75-100 buses with six bays. Very few buses are sent out. They do not paint, decal, or refinish buses but do body and structural repair. The facility has in- ground and portable lifts as well as a fire suppression system. It also features a bench for testing the GFI fareboxes and has all software for all systems on the vehicles. Communication with dispatch via cell phone is good.

Transit Maintenance is staffed by eight mechanics, two crew leaders, two storekeepers, and three service workers (who handle facility maintenance, fueling, and overnight cash control). The parts room is secure and tracked electronically via AssetWorks. Parts are attached to 44 electronic work orders. Transit is part of the citywide yard. The fire department is renting a bay during the construction of its new facility. An MOU governing this arrangement is in place.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Buses are inspected once a week. Those that are written up on the DVIR do not run until the repair is completed. There is enough of a spare fleet to accommodate this. Pre-trip inspections are done on paper. Every day a down list is created. The out-of-service list is hand-delivered to dispatch. Dispatch takes those vehicles out of service and develops a spares list for that day. Mechanics are then ready for morning pullout. NEXT does not have access to AssetWorks. AssetWorks compiles together a list of vehicles due for service. Every month, a verification of both date and mileage is run to double-check accuracy. Service trucks can do quick repairs in the field such as tire changes.

MADAR (Storer) MADAR vehicles are checked every 45 days or 3,000 miles, which conforms with the manufacturer’s recommended schedule. The ManagerPlus platform tracks inventory, work orders, etc.

MADAR utilizes separate dedicated white boards for mechanics. They communicate vehicles being held for service. Once the vehicle is ready to be put into service it is removed. Vehicles are assigned based on service type and level of demand.

The MADAR facility is capable of handling repairs not sent out and very little is outsourced. Body work may have to be sent out. No other contractors work out of the facility. There are a sufficient number of vehicles to provide services. A pre-trip process is in place with paper documentation.

Exhibit 7.3 Fleet Inventory # of Year Make Model Mode Owner Vehicles 1 1999 MCI 102D3 Fixed-route City 7 2003 Gillig G20B102N4 Fixed-route City 7 2003 Gillig G20D102N4 Fixed-route City 1 2006 Gillig G19D102N4 Fixed-route City 1 2007 MCI D4000 Fixed-route City 5 2008 Gillig C21D102N4 Fixed-route City 7 2009 Gillig G27D102N4 Fixed-route City 1 2012 MCI D4500 Fixed-route City 8 2014 Gillig G27D102N4 Fixed-route City 11 2015 Gillig G27D102N4 Fixed-route City 3 2015 Gillig G27B102N4 Fixed-route City 1 2017 MCI D4500 Fixed-route City 4 2017 Gillig LOW FLOOR Fixed-route City 5 2018 Proterra Electric Fixed-route City 2 2008 Eldorado National Chevy 4500 Dial-A-Ride Storer 14 2014 Eldorado National Aerotech Dial-A-Ride Storer 1 2014 ElDorado National Amerivan PT Dial-A-Ride Storer 45 5 Minivan Taxi Storer

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Modesto Transit Center . Modesto Transit Center bus bays.

46 MAX vehicles at Modesto Transit Center. Pass sales windows at Modesto Transit Center.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

MAX vehicle at City operations facility. MAX electric vehicle at City operations facility.

Vehicle storage at City operations facility. MAX fuel island and probing station. 47

Moore & Associates, Inc. | 2018 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

MAX vehicle in City maintenance facility. MAX vehicle in City maintenance facility.

MADAR vehicle at Storer facility. MADAR vehicle at Storer facility. 48

Moore & Associates, Inc. | 2018 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report Chapter 8 Findings and Recommendations

Conclusions Moore & Associates finds the City of Modesto to be in compliance with the requirements of the Transportation Development Act. In addition, the entity generally functions in an efficient, effective, and economical manner.

Findings and Recommendations Based on discussions with City staff, analysis of program performance, and an audit of program compliance and function, the audit team presents no compliance findings.

Moore & Associates has identified one functional finding. While this finding does not affect TDA compliance, we feel it is significant enough to be addressed within this audit:

1. The City needs a comprehensive SRTP with a five- to ten-year planning horizon.

Given there are no compliance findings, only functional findings and recommendations are provided.

Functional Finding 1: The City needs a comprehensive SRTP with a five- to ten-year planning horizon.

Criteria: The prior audit recommended the preparation of an updated Short-Range Transit Plan.

Condition: While the City prepared a “mini” updated SRTP that was adopted in 2018, that Plan only includes improvements through 2020. As elements of that Plan are implemented, the City should prepare a more formal and comprehensive SRTP to provide a comprehensive blueprint for the City to maintain a 20 percent farebox recovery ratio as well as continue to provide appropriate service for the Modesto community.

Cause: The City sought a planning document that could be prepared in-house within the short-term.

Effect: The 2018 SRTP provided effective guidance across a short-term horizon. 49 Recommendation: Prepare a comprehensive Short-Range Transit Plan with a five- to ten-year planning horizon.

Moore & Associates, Inc. | 2019 City of Modesto Triennial Performance Audit, FY 2015/16 - 2017/18 Final Report

Recommended Action(s): Budget for the development of a formal, comprehensive Short-Range Transit Plan to guide program and service development across the next five to ten years.

Timeline: FY 2020/21 (2019/20 if possible).

Anticipated Cost: Depends upon scope of project, but likely at least $50,000.

Exhibit 8.1 Summary of Audit Recommendations Functional Recommendations Importance Timeline Prepare a comprehensive Short-Range Transit Plan 1 Medium FY 2020/21 with a five- to ten-year planning horizon.

Moore & Associates, Inc. | 2019