Finance Committee Meeting June 2018
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Finance Committee Meeting June 2018 Committee Members L. Schwartz, Chair F. Ferrer, Vice Chair N. Brown* I. Greenberg* D. Jones C. Moerdler M. Pally S. Rechler P. Trottenberg V. Vanterpool J. Vitiello P. Ward C. Weisbrod C. Wortendyke N. Zuckerman Finance Committee Meeting 2 Broadway, 20th Floor Board Room New York, NY 10004 Monday, 6/18/2018 12:15 - 2:00 PM ET 1. PUBLIC COMMENTS PERIOD 2. APPROVAL OF MINUTES – MAY 21, 2018 Finance Committee Minutes - Page 4 3. 2018 COMMITTEE WORK PLAN 2018 Work Plan - Page 12 4. BUDGETS/CAPITAL CYCLE BudgetWatch (Handout) Finance Watch Finance Watch - Page 20 5. MTA HEADQUARTERS & ALL-AGENCY ITEMS Action Item 2018 State PWEF Assessment - Page 30 Report and Information Items Contract Change Order Report - Page 31 Update on IT Transformation Presentation (Exhibit Book and MTA.Info) Update on Procurement Consolidation Presentation (Exhibit Book & MTA.Info) Procurements MTAHQ Procurement Report - Page 35 MTAHQ Non-Competitive Procurements - Page 37 MTAHQ Competitive Procurements - Page 45 MTAHQ Ratifications - Page 48 6. METRO-NORTH RAILROAD & LONG ISLAND RAIL ROAD MNR Procurements - Page 50 LIRR Procurements - Page 54 7. NEW YORK CITY TRANSIT, and MTA BUS OPERATIONS NYCT Procurements - Page 58 8. BRIDGES AND TUNNELS B & T Procurements - Page 62 9. FIRST MUTUAL TRANSPORTATION ASSURANCE COMPANY (No Items) 10. MTA CONSOLIDATED REPORTS Statement of Operations - Page 68 Overtime - Page 75 Subsidy, Interagency Loans and Stabilization Fund Transactions - Page 80 Debt Service - Page 89 Positions - Page 91 Farebox Operating and Recovery Ratios - Page 94 MTA Ridership Report - Page 95 Fuel Hedge Program - Page 119 11. REAL ESTATE AGENDA Action Items Real Estate Action Items - Page 122 Report and Information Items Real Estate Info Items - Page 146 Date of next meeting: July 23rd @ 12:45pm Minutes of the MTA Finance Committee Meeting May 21, 2018 2 Broadway, 20th Floor Board Room New York, NY 10004 Scheduled 12:45 PM The following Finance Committee Members attended: Hon. Lawrence Schwartz, Chair Hon. Fernando Ferrer, Vice Chair Hon. Norman E. Brown Hon. David R. Jones Hon. John J. Molloy Hon. Mitchell H. Pally Hon. Veronica Vanterpool Hon. Carl Weisbrod Hon. Carl V. Wortendyke The following Finance Committee Members did not attend: Hon. Ira Greenberg Hon. Charles G. Moerdler Hon. Scott Rechler Hon. Polly Trottenberg Hon. James E. Vitiello Hon. Peter Ward Hon. Neal Zuckerman The following Board Members were also present: Hon. Andrew Albert Hon. Susan G. Metzger The following MTA staff attended: Robert Foran Douglas Johnson Patrick McCoy David Ross David Florio Chairman Schwartz called the May 21, 2018 meeting of the Finance Committee to order at 12:20 PM. I. Public Comments There were six public speakers.* Mr. Jason Pinero voiced his support of the Atlantic Ticket field study which will offer discounted Long Island Rail Road fares for customers traveling between Brooklyn and seven stations in Queens in a pilot program. Mr. Bradley Brashears, representing the New York City Transit Riders Council, voiced support for the Atlantic Ticket field study noting that the Council had conducted an analysis and found that more than 10,000 empty seats on LIRR between Atlantic Terminal and Southeast Queens during peak hours, and the field study will help ________________________________________________________________________________ Master Page # 4 of 155 - Finance Committee Meeting 6/18/2018 reduce fares and long commutes for certain riders, while generating more income producing seats. Mr. Brashears thanked MTA senior management for the work on the proposal. Mr. Murray Bodin discussed items noting progress for LIRR, specifically related to the announced partnering with GPS service providers such as Waze to prevent accidental turns onto grade crossing tracks, and that with this effort and Positive Trains Control there will no longer be dark areas along the railroads and this will be a great step forward. Mr. Charlton D’souza, a resident of Queens Village, discussed several items, including thanking the Board for the Atlantic Ticket field study, but noting that train service from Atlantic Terminal late night (between 2:00 to 5:00 AM) is needed for people who work at night. Mr. D’souza also commented on the card stock selection for passenger tickets, requested additional service to Hunters Point, Long Island City, mentioned a need for another vending machine at the Queens Village station, and requested additional Q60 bus service. Ms. Trudy Mason, member of the New York City Transit Riders Council, spoke in support of the Atlantic Ticket field study and noted it is a win-win for LIRR, NYCT, and customers by using underutilized commuter rail lines, providing public transportation in a transit desert as well as providing affordable transportation. Mr. Christopher Grief, also representing the New York City Transit Riders Council and people with disabilities, expressed his support for the Atlantic Ticket field study, noting it is important because it will improve transportation options, provide accessibility, aid overcrowding on certain lines, and address these needs in Brooklyn and southeast Queens. *Secretary’s note: Due to the early start of the meeting, Chairman Schwartz offered that anyone who had planned to speak, but was not available at the beginning of the meeting, could speak at the end. Ms. Mason’s and Mr. Grief’s remarks were made at the end of the meeting before adjournment. II. Approval of Minutes The Committee voted to approve the minutes to its prior meeting held on April 23, 2018 (see pages 4 through 9 of the Committee book). III. Committee Work Plan There were no changes to the Work Plan (see pages 10 through 16 of the Committee book). IV. Budgets/Capital Cycle A. BudgetWatch Mr. Douglas Johnson presented BudgetWatch (see the MTA website for the entire BudgetWatch http://web.mta.info/mta/ind-finance/budgetwatch.pdf). Reporting in BudgetWatch focuses on April operating results and subsidy results through May. Revenues: Mr. Johnson reported that for the month of April 2018, passenger revenues were $15 million unfavorable, increasing the unfavorable YTD variance to $56 million. Monthly and YTD results reflect the overall lower trend in subway and bus ridership. YTD results include the system- wide weather related impacts from several storms in March and Winter Storm Grayson in January. ________________________________________________________________________________ Master Page # 5 of 155 - Finance Committee Meeting 6/18/2018 Toll revenue was favorable by $5 million in April, increasing the favorable YTD variance to $19 million. Mr. Johnson noted that this offsets approximately a third of the passenger revenue shortfall for both the month and YTD. Expenses: Mr. Johnson reported that preliminary expenses for April were on target and YTD results were slightly favorable, mainly reflecting vacancy-related savings, higher overhead credits, and lower insurance and retiree benefit costs; these were offset by higher overtime and maintenance costs including those in support of the Subway Action Plan (SAP). It is expected that the total cost of the SAP will be covered by funding included in the State’s 2018-2019 Budget, including SAP overages incurred YTD. Debt Service costs were slightly unfavorable for April and YTD, reflecting a partial pre-funding of May 2018 debt service. Subsidies: Mr. Johnson reported that subsidies in May were favorable by $15 million. He further noted that the favorable $25 million Urban Tax variance more than offset an unfavorable timing variance for the Payroll Mobility Tax (PMT) and the continuing unfavorable trend in Mortgage Recording Tax (MRT) receipts. Total subsidies through May YTD were unfavorable by $53 million. Mr. Johnson noted that included in the YTD variance are unfavorable timing variances for MTA Aid and the Payroll Mobility Tax (PMT) and adjusting for these timing issues, total YTD subsidies would be slightly favorable. Overall: Mr. Johnson summarized that overall, preliminary YTD results were unfavorable due to the above-mentioned timing issues. Mr. Johnson commented that if YTD results were adjusted for timing, aggregate results would be on target or slightly better than budget. Mr. Johnson commented that the unfavorable results for passenger revenue and for the MRT remain a matter of concern and he anticipates those revenue forecasts will be reduced in the July Plan. Discussion: Mr. Albert inquired regarding the Station Maintenance billing and how that is paid to the MTA. Mr. Johnson responded that the billing is sent at the same time, but the cash receipts may come it separately. He further noted that staff will report on Stations Maintenance billing at a future meeting (November per the Work Plan), but everything billed has been received. B. FinanceWatch Mr. Patrick McCoy presented highlights from FinanceWatch (see pages 18 through 26 of the Committee book for the complete FinanceWatch report). Fuel Hedge: Mr. McCoy reported that that on April 28, 2018, MTA executed a 2.8 million gallon ultra-low sulfur diesel fuel hedge with Macquarie Group at an all-in price of $2.08/gallon. MTA’s existing approved commodity counterparties participated in bidding on the transaction: Cargill Incorporated; Goldman, Sachs & Co./ J Aron; J.P. Morgan Ventures Energy Corporation; and Macquarie Group. The hedge covers the period from April 2019 through March 2020. V. MTA Headquarters and All-Agency Items A. Action Item Mr. Johnson reported that the action item seeks approval to conduct the Atlantic Ticket Field Study (see pages 28 and 29 of the Committee book). ________________________________________________________________________________ Master Page # 6 of 155 - Finance Committee Meeting 6/18/2018 Mr. Johnson explained that the Atlantic Ticket Field Study will lower the cost of travel on LIRR to Atlantic Terminal from select New York City stations. The field study is designed to study the impacts of these lower railroad fares on customer travel choices, utilization of available capacity and impacts on operations. Due to the lowered railroad fares, and potential time savings and convenience, some NYCT customers may switch modes from subway and bus to LIRR.