FY 2013 – 2015 Triennial Performance Audit of Tracy Tracer

Submitted to: San Joaquin Council of Governments

March 2017

Submitted by:

TRIENNIAL PERFORMANCE AUDIT OF TRACY TRACER FISCAL YEAR 2013 - 2015

Table of Contents

Page

Section I ...... 1

Introduction ...... 1 Overview of the Transit System ...... 1 Systems Characteristics ...... 2

Section II ...... 6

Operator Compliance Requirements ...... 6 Performance Objectives ...... 10 Findings and Observations from Operator Compliance Requirements Matrix ...... 11

Section III ...... 11

Prior Triennial Performance Recommendations ...... 11

Section IV ...... 13

TDA Performance Indicators ...... 13 Findings from Verification of TDA Performance Indicators ...... 18

Section V ...... 19

Review of Operator Functions ...... 19

Operations ...... 19 Personnel...... 21 Maintenance...... 21 Planning ...... 22 Marketing ...... 22 General Administrations and Management ...... 23

Section VI ...... 24

Findings ...... 24 Triennial Audit Findings ...... 24 Recommendations ...... 25

Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

Section I

Introduction

California's Transportation Development Act (TDA) requires that a triennial performance audit be conducted of public transit entities that receive TDA revenues. The performance audit serves to ensure accountability in the use of public transportation revenue.

The San Joaquin Council of Governments (SJCOG) engaged Maze & Associates to conduct the Transportation Development Act (TDA) triennial performance audit of the public transit operators under its jurisdiction in San Joaquin County. This performance audit is conducted for the City of Tracy transit services covering the most recent triennial period, fiscal years 2012-13 through 2014-15.

The purpose of the performance audit is to evaluate the City's effectiveness and efficiency in its use of TDA funds to provide public transportation in its service area. This evaluation is required as a condition for continued receipt of these funds for public transportation purposes. In addition, the audit evaluates the City's compliance with the conditions specified in the California Public Utilities Code (PUC). This task involves ascertaining whether the City is meeting the PUC's reporting requirements. Moreover, the audit includes calculations of transit service performance indicators and a detailed review of the transit administrative functions. From the analysis that has been undertaken, a set of recommendations has been made which is intended to improve the performance of transit operations.

In summary, this TDA audit affords the opportunity for an independent, constructive and objective evaluation of the organization and its operations that otherwise might not be available. The methodology for the audit included in-person interviews with management, collection and review of agency documents, data analysis, and on-site observations. The Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities published by the California Department of Transportation (Caltrans) was used to guide in the development and conduct of the audit.

Overview of the Transit System

The City of Tracy completed the City Transit Analysis and Action Plan in 1998. At that time, it was recommended by the consultant that the City change from the previous dial-a-ride (Tracy Transit) to a combined fixed-route and paratransit service.

The City initiated a fixed-route service in December 2001 and a demand response service was introduced in January 2002 with reduced service hours. The former Tracy Transit services were discontinued. A phased implementation plan for the Tracer Paratransit taxi program started in September 2002 with a certification process, and in July 2003 the user portion of the taxi fare increased from 25 percent to 50 percent. Commuter routes were added in 2004. Since the 1998 report, the population of Tracy has grown substantially and the city limits have expanded. The 2000 U.S. Census found that the City of Tracy and environs surpassed the 50,000 mark in population to become an urbanized area. As a result, Tracy became eligible for approximately $1 million in annual Federal Transit Administration (FTA) Section 5307 grant funding for transit in FY 2003. The transit service is administered by the City's Parks and Community Services and is operated by a private contractor.

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Located in southwestern San Joaquin County near the border with Alameda County, Tracy is the second largest city in the county. Based on the 2010 U.S. Census, Tracy's population was 82,922, which grew 45.7 percent since the 2000 U.S. Census. The senior citizen population, comprised of residents aged 65 and over is 6.9 percent. The 2015 population for Tracy is estimated to be 85,296 as reported by the State Department of Finance. The city covers a 22 square mile area.

Historically, the city's development was derived from agriculture and transportation. In 1869, the Central Pacific Railroad completed a rail line through what would become Tracy. The railroad became a catalyst for growth and development. The city's proximity to the Bay Area and major highway corridors spurred major exurban residential growth during the 1980s and 1990s as well as attracted major distribution facilities.

Major highways serving Tracy include Interstate 205 (1-205) and Business Route 205 (formerly U.S. Highway SO). 1-205 is the main east-west highway connecting Tracy with Interstate 5 to the east and Interstate 580 (1-580) to the west. 1-205 serves as an important conduit connecting the San Joaquin Valley with the Bay Area. The alignment of 1-580 traverses Tracy to the southwest. Major arterial streets traversing Tracy include 11th Street (Business Route 205), Grant Line Road, and Tracy Boulevard.

System Characteristics

The City's transit system comprises a fixed-route and demand response paratransit service branded under the name Tracer. In addition, the City subsidizes taxi service to supplement the paratransit service during after-hours. The service area encompasses the Tracy city limits. The Tracer is supplemented by regional bus services provided by the San Joaquin Regional Transit District (SJRTD) intercity Route 797 and Hopper Route 90, which connect Tracy to Stockton. The Tracy Transit Station located on 6th Street in Downtown Tracy serves as the main transit hub and base of operations. The West Valley Mall also serves as a key transfer point. The service does not operate on Sundays and the following observed holidays: New Year's Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

Tracer Fixed-Route Service

Tracer currently operates four fixed and two commuter routes. Four fixed routes operate Monday through Friday from approximately 7:00 a.m. to 8:00 p.m. and Saturday from 9:00 a.m. to 7:00 p.m. Fixed-route service runs on 30-60 minute frequencies. The two commuter routes operate as a tripper service for commuters and students with several weekday morning and afternoon trips. Table I-1 provides a summary of Tracer's routes and operations.

Table I-1 Tracer Route System Route Number Frequency/Operation Destinations/Timepoints A Every 30-60 minutes (Monday through Friday • Tracy Transit Station from 7:00 a.m. to 7:58 p.m.; Saturdays from • City Hall on East St. 9:00 a.m. to 6:58 p.m.) • Clover at Tracy Blvd. • West Valley Mall Food Court • Walmart

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Route Number Frequency/Operation Destinations/Timepoints B Every 30-60 minutes (Monday through Friday • Tracy Transit Station from 7:00 a.m. to 7:58 p.m.; Saturdays from • Sutter Hospital 9:00 a.m. to 6:58 p.m.) • Coral Hollow at Lowell • Walmart • West Valley Mall Food Court • Winco • Astonia Gardens at Lowell C Every 60 minutes (Monday through Friday • Tracy Transit Station from 7:00 a.m. to 7:58 p.m.; Saturdays from • Senior Center at 9th Street 9:00 a.m. to 6:58 p.m.) • Safeway at 11th Street • Tracy Blvd. at Schulte Rd. • Rite Aid at MacArthur • Raleys at Tracy Blvd. • Schulte Rd. at Tracy Blvd. • McDonalds at 11th Street D Every 50-65 minutes (Monday through Friday • Tracy Transit Station 6:20 a.m. to 7:27 p.m.) • Holly Eaton Library Every 65 minutes (Saturdays from 9:00 a.m. • Sutter Hospital to 6:27 p.m.) • Antonio Loop Peak Hour Service (Monday through Friday • 11th Street Lammers Kimball 5:00 a.m. to 7:10 a.m. & 3:20 p.m. to 4:35 High p.m.; Mondays only 2:00 p.m. to 3:10 p.m.) • Mable at Josephine • Sycamore Pkwy. at Valpico • Whispering Wind • ACE Station E Two Morning Trips/Two Afternoon Trips • Tracy Transit Station (Commuter) (Monday through Friday 6:40 a.m. to 4:50 • City Hall at East Street p.m.; One additional Afternoon Trip on • Outlet Mall at MacArthur Mondays only) • Lowell at Astoria Gardens • Sutter Hospital • Holly Eaton Library • Lowell at Art Frieller • Kavanagh at North School

F Two Morning Trips/Two Afternoon Trips • Tracy Transit Station (Commuter) (Monday through Friday 6:40 a.m. to 5:10 • Hidden Lake p.m.; One additional Afternoon Trip on • Brookview at Lowes Park Mondays only) • ACE Station • Raleys at Tracy Blvd. • Holly Eaton Library • Senior Center at 9th St. Source: City of Tracy, as of December 1, 2015.

Paratransit

Tracer provides door-to-door demand responsive paratransit service to seniors age 65 and older and persons who, because of a disability or health-related condition, cannot access the fixed route service. All riders must be certified as eligible by the City of Tracy in accordance with the Americans with Disabilities Act (ADA) of 1990. Paratransit operates the same hours as the Tracer fixed-route service: Monday through Friday from approximately 7:00 a.m. to 8:00 p.m. and Saturday from 9:00 a.m. to 7:00 p.m. Same-day reservations or reservation changes are subject to a $0.75 surcharge. Trips can be scheduled up to one week in advance.

Maze & Associates ‐ 3 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

Tracer Paratransit Taxi Service

Tracer provides a subsidized paratransit taxi service to registered paratransit users during the non- operating hours for the Tracer paratransit service: Monday through Friday prior to 7:00 a.m. and after 8:00 p.m., Saturday prior to 9:00 a.m. and after 7:00 p.m., and all day on Sunday and certain holidays. Taxi tickets are available for purchase from the City's Finance Department at City Hall at a discounted rate of $10.00 for a ticket book valued at $20.00.

Fares

Tracy's transit fares are structured according to service type, passenger category, and fare media. The age requirement for the senior fare was increased from 60 to 65 effective February 2010. available for purchase are for daily, weekly, and 10-ride trips. Tracer does not offer a monthly pass program. Table I-2 provides a summary of Tracer's fares and payment media.

Table I-2 Tracer Fare Schedule Fixed Route Fares Adult $1.25 Student $1.00 Senior (Age 65+), Disabled, ADA, Medicare $0.50 ADA Attendant Free Child (Age 6 and under) Free Demand Response Senior (Age 65+), Disabled, ADA, Medicare $1.50 ADA Attendant with an ADA Certified Passenger Free Guests/Companions $1.75 Same Day Appointment Surcharge $0.75 Same Day Reservation Change Surcharge $0.75 Passes - Fixed Route Day Pass Adult $3.00 Day Pass Student $2.50 Day Pass Senior (Age 65+), Disabled, ADA, Medica $1.25 10-ride Ticket or Weekly Pass - Adult $12.50 10-ride Ticket or Weekly Pass - Student $10.00 10-ride Ticket or Weekly Pass - Senior (Age 65+), $5.00 Disabled, ADA, Medicare Source: City of Tracy, effective December 1, 2015

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Fleet

Tracer has 15 active vehicles in its total revenue fleet. Eight vehicles are used for demand response service, while seven vehicles are used for fixed-route service. All vehicles in the fleet are lift-equipped or have low floors and conform to the requirements of the ADA. In addition, ten vehicles are powered by compressed natural gas (CNG). Table I-3 summarizes the vehicle fleet for all revenue services.

Table I-3 Tracy Transit Fleet Inventory Year Make/Model Quantity Fuel Type Service Mode Seating Capacity 2002 Ford E450 Cutaway 2 CNG Demand Response 15 (2 W/C) 2002 Ford E450 1 CNG Fixed-Route 15 (2 W/C) 2004 Freightliner MST II 4 CNG Fixed-Route 33 (2 W/C) 2004 Ford E450 Cutaway 1 CNG Demand Response 15 (2 W/C) 2006 Freightliner MST II 2 CNG Fixed-Route 33 (2 W/C) 2010 Chevy Arboc Cutaway 3 Hybrid/Gas Demand Response 17 (3 W/C) 2010 Dodge Entervan 2 Gas Demand Response 4 (2 W/C) Total 15 Source: City of Tracy

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Section II

Operator Compliance Requirements

This section of the audit report contains the analysis of Tracy's ability to comply with state requirements for continued receipt of TDA funds. The evaluation uses the guidebook, Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Agencies, September 2008 (third edition), which was developed by the Department of Transportation (Caltrans) to assess transit operators. The guidebook contains a checklist of eleven measures taken from relevant sections of the Public Utilities Code and the California Code of Regulations. Each of these requirements is discussed in the table below, including a description of the system's efforts to comply with the requirements. In addition, the findings from the compliance review are described in the text following the table.

Table II-1 Operator Compliance Requirements Matrix Operator Compliance Reference Compliance Efforts Requirements The transit operator submitted Public Utilities Code, Section Completion/submittal dates: annual reports to the RTPA based 99243 upon the Uniform System of FY 2013: October 17, 2013 Accounts and Records established FY 2014: October 20, 2014 by the State Controller. Report is FY 2015: November 25, 2015 due 90 days after end of fiscal year (Sept. 28/29), or 110 days The FY 2015 Transit Operator (Oct. 19/20) if filed electronically Financial Transactions Reports (Internet). were submitted to the State Controller beyond the 90/110 days after the end of the fiscal year.

Reports were filed electronically

Conclusion: Partial Compliance. The operator has submitted Public Utilities Code, Section Completion/submittal dates: annual fiscal and compliance 99245 audits to the RTPA and to the FY 2013: May 30, 2014 State Controller within 180 days FY 2014: October 3, 2016 following the end of the fiscal FY 2015: October 3, 2016 year (Dec. 27), or has received the appropriate 90-day extension Conclusion: Partial by the RTPA allowed by law. Compliance.

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Table II-1 Operator Compliance Requirements Matrix Operator Compliance Reference Compliance Efforts Requirements The CHP has, within the 13 Public Utilities Code, Section The City of Tracy, through its months prior to each TDA claim 99251 B contract operator, participates in submitted by an operator, the CHP Transit Operator certified the operator's Compliance Program in which compliance with Vehicle Code the CHP has conducted Section 1808.1 following a CHP inspections within the 13 inspection of the operator's months prior to each TDA terminal. claim.

Inspections were conducted at MV Transportation located at Stockton Maintenance Facility at 1250 S. Wilson Way Stockton, CA, 95205:

Inspection dates applicable to the audit period were: 9/19 /12, 10/3/13 and 10/23/14

Inspections were found to be satisfactory.

Conclusion: Complied. The operator's claim for TDA Public Utilities Code, Section As a condition of approval, the funds is submitted in compliance 99261 City of Tracy's annual claims with rules and regulations for Local Transportation Funds adopted by the RTPA for such and State Transit Assistance are claims. submitted in compliance with the rules and regulations adopted by SJCOG.

Conclusion: Complied.

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Table II-1 Operator Compliance Requirements Matrix Operator Compliance Reference Compliance Efforts Requirements If an operator serves urbanized Public Utilities Code, Section As a contracted transit service and non-urbanized areas, it has 99270.1 provider under Article 8, the maintained a ratio of fare City of Tracy is subject to a revenues to operating costs at twostep process adopted by least equal to the ratio SJCOG [permitted under PUC determined by the rules and 9940S(c)]. The first is that TDA regulations adopted by the funds make up no more than 90 RTPA. percent of total operating funds minus depreciation. The second is to maintain certain performance measure objectives.

The FY 2015 objective was to maintain an operating cost per passenger at or below a standard calculated by SJCOG.

The objectives for subsequent fiscal years is to maintain a cost per revenue hour and subsidy per passenger at or below a standard calculated by SJCOG as well as maintain the number of passengers per revenue hour at or above a standard calculated by SJCOG.

Conclusion: Not Applicable. The operator's operating budget Public Utilities Code, Section Percentage increase in Tracy's has not increased by more than 99266 transit operating budget: 15% over the preceding year, nor is there a substantial increase or FY 2013: +8.39% decrease in the scope of FY 2014: +8.76 % operations or capital budget FY 2015: +18.78% provisions for major new fixed facilities unless the operator has Source: City of Tracy Transit reasonably supported and Operations Budget for FYs substantiated the change(s). 2013-2015

Conclusion: Complied.

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Table II-1 Operator Compliance Requirements Matrix Operator Compliance Reference Compliance Efforts Requirements If the operator serves a rural Public Utilities Code, Sections The City of Tracy is considered to be area, or provides exclusive 99268.2, 99268.4, 99268.5 an urbanized area. See above. services to elderly and disabled persons, it has maintained a ratio Conclusion: Not Applicable. of fare revenues to operating costs at least equal to one-tenth (10 percent).

The current cost of the Public Utilities Code, Section To be eligible for TDA funds, the operator's retirement system is 99271 annual TDA claims form requires a fully funded with respect to the sign-off from the transit claimant to officers and employees of its comply with standard assurances, public transportation system, or one of which is that the City of Tracy the operator is implementing a retirement system is funded. plan approved by the RTPA which will fully fund the The City contracts with a private retirement system within 40 operator, MV Transportation, while years. the City staff's retirement is funded through the California Public Employees Retirement System (CalPERS).

Conclusion: Complied. If the operator receives state California Code of As a recipient of State Transit transit assistance funds, the Regulations, Section Assistance Funds, the City of Tracy operator makes full use of funds 6754(a){3) is making full use of federal funds available to it under the Urban available under the Urban Mass Mass Transportation Act of Transportation Act of 1964 as 1964 before TDA claims are amended. granted. FY 2013: $723,531 FY 2014: $888,390 FY 2015: $722,658

Source: FY 13 – 15 Annual Fiscal and Compliance Audits

Conclusion: Complied.

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Performance Objectives

Table 11-2 provides the performance objectives for Article 8 claimants in lieu of the farebox recovery ratio. The performance objectives are cost per revenue hour, passengers per revenue hour, and subsidy per passenger. Tracy must meet at least 2 out 3 objectives or be within a 5 percent margin at the end of the third year. The performance standards for each year are compared against the calculation of actual standards attained in the annual financial audit. Certain cost exclusions and exemptions are included in the calculations.

Table II-2 Tracy Performance Objectives FY 2013 FY 2014 FY 2015 Total Operating Costs $2,404,040 $2,566,229 $2,912,824 Less TDA Eligible Exclusions Depreciation 868,036 1,023,668 1,018,685 Net TDA Operating Costs $1,536,004 $1,542,561 $1,894,139

Revenue Hours 22,526 22,764 31,097 Passengers 128,664 139,098 175,982

Fare Revenue 81,422 106,063 108,194 Federal Operating Revenue 1,973,621 940,197 1,171,286 Total Revenues $2,055,043 $1,046,260 $1,279,480

Performance Measures: Objective Objective Objective Cost Per Revenue Hour* $68.19 $121.09 $67.76 $123.51 $60.91 $126.23 Met Objective? Yes Yes Yes Passenger per Revenue Hour** 5.7 5.2 6.1 5.5 5.7 5.7 Met Objective? Yes Yes Yes Subsidy per Passenger* -4.03 $21.71 3.57 $21.15 3.49 $20.65 Met Objective? Yes Yes Yes *Performance measure is to not exceed objective **Performance measure is to maintain a minimum of the objective

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Findings and Observations from Operator Compliance Requirements Matrix

1. Of the compliance requirements pertaining to Tracy, the operator fully complied with five out of the seven applicable requirements. Tracy was in partial compliance with the timely submissions of the Transit Operator Financial Transactions Reports (State Controller’s Report) and annual fiscal and compliance reports for the fiscal years audited regard to the calculation of FTE data. Two additional compliance requirements are not applicable to Tracy.

2. Based on the available data, the City met the all three of the performance objectives for every fiscal year of the period being audited.

Section III

Prior Triennial Performance Recommendations

Tracy’s efforts to implement the recommendations made in the prior triennial audit are examined in this section of the report. For this purpose, each prior recommendation for the agency is described, followed by a discussion of the City’s efforts to implement the recommendation. Conclusions concerning the extent to which the recommendations have been adopted by the Agency are then presented.

Prior Recommendation 1 - Include year-to-date roadcalls in the monthly management report.

This recommendation is carried over from the prior performance audit. Roadcalls continue to be reported by the contractor on a month by month basis. It is suggested that roadcalls be added to the monthly management report that summarizes key performance for the current month, current quarter, and year-to- date. Although the contractor does track such data, year-to-date roadcalls are reported separately in the manual updates spreadsheet of the monthly report. It is suggested that this data be reported in the monthly management report summary page.

Actions taken by Tracy:

The City has not implemented this recommendation.

Conclusion:

The City will take this into consideration with future reports with the City’s current contractor.

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Prior Recommendation 2- Accurately report Full Time Equivalents by Mode in the State Controller Report

The FTE reporting in the Supplemental Data section of the State Controller Reports shows the same headcount for both fixed route and paratrasit modes. This is double counting. The proper accounting for this measure is to total the labor hours worked by city and contract operations staff for the transit system and then dividing by 2,000 hours per the TDA guidelines. A two step process is recommended for full implementation: The first is to calculate the correct FTE’s using the above formula, and the second is to then separate FTE’s between fixed route and paratransit for reporting in the State Controller Reports based on assignments or allocations of staff time to each transit mode.

Actions taken by Tracy:

Per review of the State Controller’s Reports for the fiscal year 2013 – 2015 for each mode, it appears the City has reported the full time equivalent information as required.

Conclusion:

This recommendation has been implemented.

Prior Recommendation 3- Closely monitor performance measures.

Tracy is subject to specific performance objectives as an Article 8 claimant in lieu of the farebox recovery ratio pursuant to TDA. The performance objectives for FYs 2011 and 2012 pertain to cost per revenue hour, passengers per revenue hour, and subsidy per passenger. Tracy must meet at least 2 out 3 objectives. During FY 2011 and FY 2012, Tracy did not meet any of the three performance objectives.

Based on this assessment, the City should remain diligent in exploring opportunities to meet these objectives through a combination of strategies including revenue enhancement, cost savings, and service/schedule adjustments that increase ridership.

The latest SRTP Update adopted in December 2009, provides recommendations for enhancing the transit system. In particular, the updated TDP conducted a review and evaluation of the current service and provides a series of steps that are intended to improve the performance of the service which should generally result in improved performance measures. As the SRTP recommendations are implemented, the city should closely monitor key performance measures against the TDA benchmarks from implementation of the SRTP.

Actions taken by Tracy:

Based on reasons in the fiscal year being audited, fiscal year 2013 – 2015, it appears the City meets the minimum requirements as outlined by the specific performance objectives. See table II-2.

Conclusion:

This recommendation has been implemented.

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Section IV

TDA Performance Indicators

This section reviews Tracy’s performance in providing transit service to the community in an efficient and effective manner. TDA requires that at least five specific performance indicators be reported, which are contained in the following tables. Farebox is not one of the five specific indicators, but provides another important gauge of performance. Therefore, farebox calculation is also included although it is not used as a compliance measure for TDA funding per SJCOG's evaluation criteria for Article 8 transit claimants. Two additional performance indicators, operating cost per mile and average fare per passenger, are included as well. Findings from the analysis are contained in the section following the tables.

Tables IV-1 through IV-3 provide the performance indicators for Tracy systemwide, fixed route and paratransit. Charts are also provided to depict the trends in the indicators. It is noted that the systemwide operating costs and fare revenues are based on audited figures, while fixed route and dial-a-ride costs and fare revenues are unaudited. The annual fiscal audits do not provide a modal breakdown:

Table IV-1 Tracy TDA Performance Indicators Systemwide Audit Period % Change FY Performance Data and Indicators FY 2012 FY 2013 FY 2014 FY 2015 2012-2015 Operating Cost $1,518,161 $1,536,004 $1,542,561 $1,894,139 24.8% Total Passengers 109,645 128,664 139,098 175,982 60.5% Vehicle Service Hours 20,191 22,526 22,764 31,097 54.0% Vehicle Service Miles 226,754 273,087 290,198 379,091 67.2% Employee FTE's 48 40 52 38 -20.8% Passenger Fares $80,893 $81,422 $106,063 $108,194 33.7%

Operating Cost per Passenger $13.85 $11.94 $11.09 $10.76 -22.3% Operating Cost per Vehicle Service Hours $75.19 $68.19 $67.76 $60.91 -19.0% Operating Cost per Vehicle Service Mile $6.70 $5.62 $5.32 $5.00 -25.4% Passengers per Vehicle Service Hour 5.4 5.7 6.1 5.7 4.2% Passengers per Vehicle Service Mile 0.48 0.47 0.48 0.46 -4.0% Vehicle Service Hours per Employee 420.6 563.2 437.8 818.3 94.5% Average Fare per Passenger $0.74 $0.63 $0.76 $0.61 -16.7% Fare Recovery Ratio 5.33% 5.30% 6.88% 5.71% 7.2%

Source: Annual Fiscal & Compliance Audits; State Controller's Reports

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Table IV-2 Tracy TDA Performance Indicators Fixed Route Audit Period % Change FY Performance Data and Indicators FY 2012 FY 2013 FY 2014 FY 2015 2012-2015 Operating Cost $1,451,120 $1,444,155 $1,488,900 $2,623,135 80.8% Total Passengers 91,703 113,709 124,159 158,823 73.2% Vehicle Service Hours 12,886 14,640 15,981 24,243 88.1% Vehicle Service Miles 149,017 201,764 228,817 313,380 110.3% Employee FTE's 24202612-50.0% Passenger Fares $48,467 $47,220 $57,004 $67,079 38.4%

Operating Cost per Passenger $15.82 $12.70 $11.99 $16.52 4.4% Operating Cost per Vehicle Service Hours $112.61 $98.64 $93.17 $108.20 -3.9% Operating Cost per Vehicle Service Mile $9.74 $7.16 $6.51 $8.37 -14.0% Passengers per Vehicle Service Hour 7.1 7.8 7.8 6.6 -7.9% Passengers per Vehicle Service Mile 0.62 0.56 0.54 0.51 -17.6% Vehicle Service Hours per Employee 536.9 732.0 614.7 2,020.3 276.3% Average Fare per Passenger $0.53 $0.42 $0.46 $0.42 -20.1% Fare Recovery Ratio 3.34% 3.27% 3.83% 2.56% -23.4%

Source: State Controller's Report

Table IV-3 Tracy TDA Performance Indicators Paratransit Audit Period % Change FY Performance Data and Indicators FY 2012 FY 2013 FY 2014 FY 2015 2012-2015 Operating Cost $257,045 $101,859 $103,914 $260,963 1.5% Total Passengers 17,942 14,955 14,937 17,171 -4.3% Vehicle Service Hours 7,305 6,803 6,783 6,935 -5.1% Vehicle Service Miles 77,737 71,323 61,381 65,711 -15.5% Employee FTE's 24 20 26 26 8.3% Passenger Fares $32,424 $24,061 $34,680 $27,507 -15.2%

Operating Cost per Passenger $14.33 $6.81 $6.96 $15.20 6.1% Operating Cost per Vehicle Service Hours $35.19 $14.97 $15.32 $37.63 6.9% Operating Cost per Vehicle Service Mile $3.31 $1.43 $1.69 $3.97 20.1% Passengers per Vehicle Service Hour 2.5 2.2 2.2 2.5 0.8% Passengers per Vehicle Service Mile 0.23 0.21 0.24 0.26 13.2% Vehicle Service Hours per Employee 304.4 340.2 260.9 266.7 -12.4% Average Fare per Passenger $1.81 $1.61 $2.32 $1.60 -11.4% Fare Recovery Ratio 12.61% 23.62% 33.37% 10.54% -16.4%

Source: State Controller's Report

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Graph IV-1 Operating Costs Systemwide, Fixed Route & Paratransit

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0 FY 2013 FY 2014 FY 2015 Systemwide $1,536,004 $1,542,561 $1,894,139 Fixed Route $1,444,155 $1,488,900 $2,623,135 Dial-a-Ride $101,859 $103,914 $260,963

Note: Systemwide are audited data, while modal costs are unaudited

Graph IV-2 Ridership Systemwide, Fixed Route & Paratransit

200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 FY 2013 FY 2014 FY 2015 Systemwide 128,664 139,098 175,982 Fixed Route 113,709 124,159 158,823 Dial-a-Ride 14,955 14,937 17,171

Note: Systemwide are audited data, while modal costs are unaudited

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Graph IV-3 Operating Cost per Passenger Systemwide, Fixed Route & Paratransit $120.00

$100.00

$80.00

$60.00

$40.00

$20.00

$- FY 2013 FY 2014 FY 2015 Systemwide $11.94 $11.09 $10.76 Fixed Route $98.64 $93.17 $108.20 Dial-a-Ride $6.81 $6.96 $15.20

Note: Systemwide are audited data, while modal costs are unaudited

Graph IV-4 Operating Cost per Vehicle Service Hour Systemwide, Fixed Route & Paratransit $120.00

$100.00

$80.00

$60.00

$40.00

$20.00

$0.00 FY 2013 FY 2014 FY 2015 Systemside $68.19 $11.09 $10.76 Fixed Route $98.64 $93.17 $108.20 Dial-a-Ride $14.97 $15.32 $37.63

Note: Systemwide are audited data, while modal costs are unaudited

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Graph IV-5 Passengers Per Vehicle Service Hour Systemwide, Fixed Route & Paratransit 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 FY 2013 FY 2014 FY 2015 Systemside 5.7 6.1 5.7 Fixed Route 7.8 7.8 6.6 Dial-a-Ride 2.2 2.2 2.5

Note: Systemwide are audited data, while modal costs are unaudited

Graph IV-6 Fare Recovery Ratio Systemwide, Fixed Route & Paratransit 50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% FY 2013 FY 2014 FY 2015 Systemside 5.30% 6.88% 5.71% Fixed Route 3.27% 3.83% 2.56% Dial-a-Ride 33.58% 47.21% 15.75%

Note: Systemwide are audited data, while modal costs are unaudited

Maze & Associates ‐ 17 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

Findings from Verification of TDA Performance Indicators

1. Operating costs Systemwide increased 24.8 percent over the past three years based on audited data from the FY 2012 base year through FY 2015. Fixed route operating costs increased 80.8 percent from the FY 2012 base year through FY 2015, while Paratransit operating costs increased by 1.5 percent based on unaudited data.

2. Ridership increased 60.5 percent Systemwide from the FY 2012 base year through FY 2015. Fixed route ridership increased 73.2 percent whereas Paratransit ridership decreased 4.3 percent.

3. Operating cost per passenger, an indicator of cost effectiveness, increased 18.4 percent Systemwide. Cost per passenger increased 4.4 percent on fixed route and increased 6.1 percent on Paratransit from the FY 2012 base year through FY 2015. The trend for this indicator reflects the increase in operating costs when compared to the decrease in passenger trips.

4. Operating cost per hour, an indicator of cost efficiency, decreased 22.3 percent Systemwide. The indicator exhibited an increase on the fixed route and Paratransit of 4.4 and 6.1percent, respectively. The trends in this indicator reflect the higher increases in Systemwide operating costs compared to the increases in service hours over the audit period.

5. Passengers per vehicle service hour, which measures the effectiveness of the service delivered, exhibited an increase of 4.2 percent Systemwide. The number of passengers per hour on the fixed route decreased by 7.9 percent from the FY 2012 base year through FY 2015. In contrast, passengers per hour on Paratransit did not exhibit any change in the same period.

6. The fare recovery ratio over the past three years increased Systemwide due to higher operating costs. The Systemwide farebox ratio increased 7.2 percent from the FY 2012 base year through FY 2015. On the modal level, farebox for fixed route decreased 23.4 percent while the Paratransit farebox recovery increased 24.9percent.

Maze & Associates ‐ 18 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

Section V

Review of Operator Functions This section provides an in-depth review of various functions within the City of Tracy. The review highlights accomplishments, issues and/or challenges that were determined during the audit period. The following functions were reviewed at the Tracy Transit Station:

 Operations  Personnel  Maintenance  Planning  Marketing  General Administration and Management

Within some departments are sub-functions that require review as well, such as Grants Administration that falls under General Administration.

Operations

The City of Tracy administers public fixed-route and paratransit as well as subsidized taxi service to supplement the paratransit service during after-hours. Tracy’s transit system underwent a series of adjustments in response to the local economic climate and increased demand. Ridership on the Tracer dropped significantly after the implementation of a fare increase in July 2010. The adult base fare was increased from $1.00 per trip to $1.25 per trip. There was also a $0.25 per trip increase in the student fare category.

During the audit period, the fixed-route service, operating under the name Tracer, consisted of three regular routes and three commuter routes. Commuter routes ran primarily during the morning and afternoon peak hours and served area schools and the Altamont Corridor Express (ACE) station. The City amended its taxi voucher program ordinance in 2011 to require taxi carriers’ participation in the voucher program and be ADA-compliant.

During the audit period, the City realigned its route system in order to capture increased ridership after the fare increase. The realignment was implemented in August 2012 and included added peak hour frequencies and service to Kimball High School that opened in 2010. Commuter Route “D” serves the campus, which is located near the intersection of Lammers and 11th Street toward the western edge of Tracy. The morning commuter routes operate as early as 6:45 a.m. New development has also been a factor on system realignment. The Cordes Ranch Business Park is a 1,600 acre mixed commercial and industrial planned development located at the intersection of Mountain House Road and 11th Street. The new Amazon Fulfillment and Distribution Center, which recently opened in Tracy, also provides increased ridership potential.

MV Transportation has served as the contractor operator for the Tracer since 2001. The operator contract is for a five-year term with 2 one-year options for extension. The most recent contract was executed in July 2011 and is in effect through June 2016.

Maze & Associates ‐ 19 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

On-time performance on the fixed-route is measured with the TimePoint tracking software, developed by MV Transportation. TimePoint software is a client web-based application that is used to track Automatic Vehicle Locator (AVL) and Geographic Positioning System (GPS) location data as service is running, compare it to scheduled time points, determine when service is on time, and alert individuals when it is not. This system provides on-time data reports for each stop that are geo-coded. The system was implemented under the current contract with MV Transportation. The parameters for an on-time departure are within five minutes of the scheduled timepoint. In conjunction with TimePoint, NextBus technology has also been implemented, which delivers real-time bus arrival information by text message based on the number assigned to each bus stop.

On the paratransit mode, on-time performance is tracked manually by the drivers. At the end of the run, the data are entered by dispatch into the RouteMatch software program. Drivers call into dispatch 15 minutes before each scheduled arrival on the manifest. Tracy’s RouteMatch database contains 488 names as of December 2012. The communication equipment utilized by the drivers in service is Nextel two-way radios. In addition, all transit vehicles are equipped with four cameras each with digital video recording (DVR) capabilities. One camera is directed outward toward the road.

Various performance data are tracked on the monthly management report compiled by the contract operator. The report includes data for both fixed route and paratransit service modes. One measure of service provision is customer service. Complaints are tracked on a monthly and year-to-date basis and are summarized in Table V-1 below.

Table V-1 Complaints FY 2013 FY 2014 FY 2015 Fixed-Route 62 10 55 Paratransit 69 3 12 Total 131 13 67

The number of complaints has shown steady increases over the triennial period. This may be attributed to the increased ridership on the Tracer, especially by students, as well from the fare increase. Complaints are received by the transit staff at the Transit Center as well as through the contact form on the City’s website. Video footage from the security cameras installed on the buses is also reviewed by City staff to determine a finding.

The monthly management report also gauges specific paratransit performance trends that affect ridership and on-time performance. These three metrics include cancellations, denials and no-shows. Table V-3 provides a summary of these performance trends:

Table V-2 Paratransit Performance Trends FY 2013 FY 2014 FY 2015 Cancellations 1,809 1,988 2,500 Denials 73 14 70 No-Shows 139 206 326

Maze & Associates ‐ 20 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

The number of cancellations gradually increased from FY 2013 through FY 2015. The number of denials saw a dramatic decrease in FY 2014 but spiked in FY 2015, with figures similar to 2013. The number of “no-shows” has also increased during the audit period due in part to the city’s enforcement of the no show policy.

Tracy utilizes standard Diamond fareboxes for fare collection on its transit vehicles. The City has decided to hold off on acquiring electronic fareboxes. Fare collection procedures involve having the drivers ensure that the proper fare is being placed into the farebox. At the end of each run, the closing dispatcher and supervisor drop the vaults at the City Corporation Yard. Fares are collected in designated pouches assigned to each bus and locked in a safe. On the following day, fares are counted at the Transit Center by the dispatcher and reservationist, who reconcile the count with the passenger manifest. After the count is conducted, the supervisor reviews and signs off on the reconciliation. The supervisor prepares an accounting sheet/deposit slip and takes the proceeds to the bank. There are no surveillance cameras installed in the space where the fare count and reconciliation take place.

Personnel

MV Transportation employs 25 staff in Tracy. Personnel consist of the General Manager, 8 full-time drivers, 13 part-time drivers, 3 reservationists, 1 road supervisor and 3 dispatchers. The contract operator reports high turnover during the audit period. During FY 2012, additional drivers were hired in order to meet the rising service demand.

Driver candidates undergo a background check involving Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) verifications. Once candidates pass the background check, they undergo 2 weeks of classroom and 3 weeks of behind-the-wheel training. MV Transportation utilizes the Avatar training program. New drivers also undergo Class B licensing preparation with air brake and passenger endorsement. The licensure is subject to DMV Restriction 64, which is limited to vehicles with automatic transmissions. Demand response drivers are required to have General Public Paratransit Vehicle (GPPV) certification. There are monthly safety meetings and 8 hours of supplemental Verification Transit Training (VTT) annually.

Maintenance

Vehicle maintenance is performed by the contractor in Stockton at the MV Transportation regional center located at 1250 South Wilson Way. The center has two service bays and one outside bay, which are two buses deep and able to accommodate up to seven vehicles (outside bay can hold up to three vehicles). Vehicle maintenance follows the industry standard of 45 days or 3,000 miles (up to 5,000 miles) which conform to the State’s GPPV regulations. Preventive maintenance inspections, measured quarterly, are completed within 500 miles of scheduled mileage. Parts are charged to the transit system as utilized. Vehicles are fueled and stored at the City’s Corporation Yard located at 520 North Tracy Boulevard. The CNG fueling pumps are both fast-fill and slow-fill. Pre-inspections are conducted by the drivers on a daily basis.

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One measure of vehicle maintenance is the number of roadcalls. However MV transportation was unable to provide data during the audit period.

Planning

The City of Tracy Parks and Community Services Short-Range Transit Plan (SRTP) was adopted in December 2009 and has a 10-year planning horizon. The SRTP sections comprise an introduction; transit needs assessment, fixed route and paratransit operations summary, regional transit overview, marketing plan update, and financial plan. The Planning Department has copies of the City’s transit plans. The Unmet Transit Needs hearing process is also used towards route and schedule planning.

The fare increase and service realignments were implemented based on a series of annual recommendations contained in the SRTP. For paratransit and subsidized taxi service, Tracy implemented recommendations pertaining to raising the age of eligibility from 60 to 65 years and the purchase of an integrated AVL/GPS system.

In addition, the transit system works in concert with the City’s Planning Department to ensure that new development is transit-accessible with the installation of bus stops and turnouts. Online book and retail seller, Amazon, has recently opened a one million square foot distribution and fulfillment center in Tracy projected to create up to 1,000 jobs. The Amazon facility is located in the ProLogis Park at 1605 North Chrisman Road.

Marketing

The City of Tracy utilizes electronic and print media to market its transit services. One the principal marketing tools is the City’s Web site (http://www.ci.tracy.ca.us/?navid=193). The website features an overview of the fixed-route, paratransit and subsidized taxi services. Users are able to access the Tracer paratransit eligibility application. In the upper right-hand corner of the website are links to the fixed route map and schedules, paratransit brochure and first time rider’s guide. The links are available in English and Spanish. There is also a link to the SJRTD at the bottom of the page. The City has not ventured into the social media arena to market the transit service in spite of having a Facebook page.

Maze & Associates ‐ 22 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

Brochures are updated as changes are made to the system, but usually not more than once every year. Schedule changes are made in concert with the start of the fiscal year and school term. During the month of August, the City offers free rides to students in order to familiarize them with using the Tracer. Utility bill inserts are another medium used to market the service. Press releases are sent out to area newspapers promoting free rides.

Unmet transit needs hearings are publicized in the Tracer brochures. Hearings are held in the afternoon and at the City Council meeting in the evening. Unmet transit needs findings include emails and letters received from the public. Other forms of community outreach have included the Tracy Dry Bean Festival held in September, local transportation fairs and visits to senior centers.

General Administration and Management

The City of Tracy was incorporated 1910 as a General Law City with a Council-Manager form of government. The City Council serves as the principal legislative body and is comprised of four council members and a directly elected mayor. Council members serve for staggered terms of four years and the mayor serves for a term of two years. Elected officials are subject to a two-term limit. The City Council meets on the first and third Tuesdays of the month at 7:00 p.m. in the City Council Chambers located at 333 Civic Center Plaza.

The City Manager is responsible for administrative and budgetary oversight of city departments. Public transit administration falls under the direction of the Parks and Community Services Department and overseen by a Management Analyst II, who spends an estimated 70 percent of time on transit and 30 percent on airport issues. Supporting the Management Analyst is a Transportation Coordinator. The Management Analyst has overseen the transit program since March 2008 and is involved with several SJCOG committees such as the Interagency Transit Committee (ITC) and the Technical Advisory Committee (TAC).

The City’s most recent FTA Triennial Review occurred in June 2015. Tracy was found deficiencies in 7 areas: Financial Management and Capacity, Technical Capacity, Maintenance, Americans with Disabilities Act (ADA), Title VI, Disadvantaged Business Enterprise, (DBE), and Drug-Free Workplace/Drug and Alcohol Program. The City addressed the deficiency in the charter bus review area regarding quarterly reporting requirements. All the remaining deficiencies have been corrected.

Grants Management

The City of Tracy relies on a variety of grants and other funding mechanisms to support its transit system. These grant sources are derived from local, state and federal programs and measures. Pursuant to TDA, the City receives Local Transportation Fund (LTF) proceeds under Article 8, Section 99400(c) and the State Transit Assistance (STA) fund. Local county Measure K, the one-half cent sales tax, also provides support toward transit services, although Tracy does not currently qualify for those funds. In November 2006, voters in San Joaquin County approved the renewal of the one-half cent sales tax, extending the life of the 1990-2011 sales tax program to the year 2041.

At June 30, 2015, the City has received grant monies of $2,080,300 from Measure K, $1,620,000 of Local Transportation Funds and Federal Transit Administration funds of $1,171,286.

Maze & Associates ‐ 23 Triennial Performance Audit of City of Tracy Transit Services – FY’s 2013 - 2015

Section VI

Findings

The following summarizes the major findings obtained from this Triennial Audit covering fiscal years 2013 through 2015. A set of recommendations is then provided.

Triennial Audit Findings

2. Based on the available data, the City met the all three of the performance objectives for every fiscal year of the period being audited.

3. Operating costs Systemwide increased 24.8 percent over the past three years based on audited data from the FY 2012 base year through FY 2015. Fixed route operating costs increased 80.8 percent from the FY 2012 base year through FY 2015, while Paratransit operating costs increased by 1.5 percent based on unaudited data.

4. Ridership increased 60.5 percent Systemwide from the FY 2012 base year through FY 2015. Fixed route ridership increased 73.2 percent whereas Paratransit ridership decreased 4.3 percent.

5. Operating cost per passenger, an indicator of cost effectiveness, increased 18.4 percent Systemwide. Cost per passenger increased 4.4 percent on fixed route and increased 6.1 percent on Paratransit from the FY 2012 base year through FY 2015. The trend for this indicator reflects the increase in operating costs when compared to the decrease in passenger trips.

6. Operating cost per hour, an indicator of cost efficiency, decreased 22.3 percent Systemwide. The indicator exhibited an increase on the fixed route and Paratransit of 4.4 and 6.1percent, respectively. The trends in this indicator reflect the higher increases in Systemwide operating costs compared to the increases in service hours over the audit period.

7. Passengers per vehicle service hour, which measures the effectiveness of the service delivered, exhibited an increase of 4.2 percent Systemwide. The number of passengers per hour on the fixed route decreased by 7.9 percent from the FY 2012 base year through FY 2015. In contrast, passengers per hour on Paratransit did not exhibit any change in the same period.

8. The fare recovery ratio over the past three years increased Systemwide due to higher operating costs. The Systemwide farebox ratio increased 7.2 percent from the FY 2012 base year through FY 2015. On the modal level, farebox for fixed route decreased 23.4 percent while the Paratransit farebox recovery increased 24.9 percent.

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Recommendations

1. Timely submission of annual fiscal and compliance audits

Public Utilities Code, Section 99245 states “A report on the audit shall be submitted to the transportation planning agency, transit development board, county transportation commission, and to the Controller within 180 days after the end of the fiscal year. However, the responsible entity may grant an extension of up to 90 days as it deems necessary.” Annual reports for FY 2013 through 2015 were submitted passed the 180 days initial deadline and the 90 day extension period. The City should implement proper financial closing procedures to ensure timely submission of required reports.

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