Quorum = 3 Agenda Budget and Finance Tuesday, May 12, 2020, 4:00 p.m. DART Conference Room C – 1 st Floor 1401 Pacific Ave., Dallas, Texas 75202 Due to the COVID-19 virus DART Board Meeting rooms are closed to the public. All meetings will take place by videoconference and will be available at https://www.dart.org/about/board/boardvideo.asp 1. Roll Call 2. Approval of Minutes: April 28, 2020 3. *Review of FY 2020 Financial Projection and Preliminary FY 2021 Financial Outlook (Mark Enoch/Joe Costello) 4. Identification of Future Agenda Items 5. Adjournment *This Is A Briefing Item Only The Budget and Finance Committee may go into Closed Session under the Texas Open Meetings Act, Section 551.071, Consultation with Attorney, for any legal issues, under Section 551.072 Deliberation Regarding Real Property for Real Estate issues, arising or regarding any item listed on this Agenda. Chair – Mark Enoch Vice Chair – Jon-Bertrell Killen Members – Robert C. Dye, Michele Wong Krause and Paul N. Wageman Staff Liaison – Joe Costello DART ®
Transcript
Quorum = 3
Agenda Budget and Finance
Tuesday, May 12, 2020, 4:00 p.m. DART Conference Room C – 1st Floor 1401 Pacific Ave., Dallas, Texas 75202
Due to the COVID-19 virus DART Board Meeting rooms are closed to the
public. All meetings will take place by videoconference and will be available at https://www.dart.org/about/board/boardvideo.asp
1. Roll Call 2. Approval of Minutes: April 28, 2020 3. *Review of FY 2020 Financial Projection and Preliminary FY 2021
Financial Outlook (Mark Enoch/Joe Costello) 4. Identification of Future Agenda Items 5. Adjournment
*This Is A Briefing Item Only The Budget and Finance Committee may go into Closed Session under the Texas Open Meetings Act, Section 551.071, Consultation with Attorney, for any legal issues, under Section 551.072 Deliberation Regarding Real Property for Real Estate issues, arising or regarding any item listed on this Agenda.
Chair – Mark Enoch
Vice Chair – Jon-Bertrell Killen Members – Robert C. Dye, Michele Wong Krause and Paul N. Wageman
BUDGET AND FINANCE COMMITTEE MEETING April 28, 2020
Due to the COVID-19 virus, DART Board meeting rooms were closed to the public. All meetings took place by videoconference and are available at h ttps :/ /www.dart.org/a bout/boa rd/board video.asp.
The Dallas Area Rapid Transit Budget and Finance Committee meeting came to order at 3:53 p.m., Tuesday, April 28, 2020, via teleconference, at DART Headquarters, 1401 Pacific Avenue, Dallas, Texas, with Chair Enoch presiding.
The following Committee members were present: Mark Enoch, Jon-Bertrell Killen, Robert C. Dye, Michele Wong Krause, and Paul N. Wageman.
Other Board Members present: Jonathan R. Kelly, Ray Jackson, Sue S. Bauman, Eliseo Ruiz, Rick Stopfer, Gary Slagel, and Dominique P. Torres.
Others present: Gary Thomas, Gene Gamez, Joseph Costello, Dwight D. Bums, Senanu Adadevoh, Nancy Johnson, and Josefina Chavira.
1. Roll Call
2.
3.
Chair Enoch took Roll Call, confirming a quorum was present.
Chair Enoch stated the Committee would conduct the actions of the meeting by Roll Call vote. He then provided voting instructions prior to continuing with the agenda items.
Approval of Minutes: March 24, 2020
Ms. Wong Krause made a motion to approve the Minutes from the March 24, 2020, Budget and Finance Committee Meeting and enter into record as written.
Mr. Dye seconded.
Chair Enoch took a Roll Call vote, and the motion was approved unanimously.
Approval of Financial Standards for FY 2021 Budget and Twenty-Year Financial Plan Process
Mr. Joseph Costello, Chief Financial Officer, introduced Mr. Senanu Adadevoh, Assistant Vice President of Payments Systems and Statistical Reporting, who briefed the Committee (slides on file with the Office of Board Support) as follows:
• FY 2021 Budget and Financial Calendar Planning Process Calen~ar (slides 2-J)
• Presentation Outline (slide 4)
• Financial Standards Policy (slide 5)
• Financial Standards (slide 6)
• FY 2020 Financial Standards - B4 (slides 8-9)
• FY 2020 Financial Standards - B6 (slides 10-11)
• FY 2020 Financial Standards - D7 (slides 12-13)
• Recommendation (slide 14)
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After some discussion, Chair Enoch called for a motion and a second.
Mr. Killen moved to fonvard this draft resolution to the Committee-Of-The-Whole agenda, with a recommendation, stating the Financial Standards for the FY 2021 Budget and Twenty-Year Financial Plan process as shown in Exhibit 1 to this Resolution are approved.
Mr. Wageman seconded.
Chair Enoch took a Roll Call vote, and the motion was approved unanimously.
4. *Review of Quarterly Disclosure Update as of December 31, 2019
5.
6.
Mr. Costello stated, staff would brief the Committee on Agenda Item 4, along with Agenda Item 5, *Review of FY 2020 First Quarter Operating & Financial Performance Report. He then introduced Ms. Sherry Foster, Interim Assistant Vice President of Business Planning & Analysis, who briefed the Committee (slides on file with the Office of Board Support) as follows:
• Presentation Outline (slide I)
• Budget Summary (Revenues) (slide 3)
• Budget Summary (Operating Expenses) (Stide4)
• Quarterly Disclosure Update (slide 6)
*Review of FY 2020 First Quarter Operating & Financial Performance Report
Briefed jointly with Agenda Item 4, *Review of Quarterly Disclosure Update as of December 3 1, 2019.
*Review of FY 2020 Financial Projection and Preliminary FY 2021 Financial Outlook
Mr. Costello briefed the Committee (slides on file with the Office of Board Support) as follows:
• FY 2021 Budget and Financial Planning Process Calendar (slides t-2)
• Presentation Outline (slide 3)
• Financial Plan Priorities (slides 4-6)
• Order of Magnitude (slide 7)
• Operating Expense (slide 8)
• Sales Tax Loss (slide 9)
• April - September 50% Loss (slide to)
Ms. Foster continued to brief the Committee as follows:
• Order of Magnitude (slide 11)
• CARES Act Funding (slide 12)
• Operating Costs (slides 13)
• Order of Magnitude (slide t4)
• Capital Projects (slide 15)
Mr. Costello continued with the presentation as follows:
In order to get a complete picture and to consider all possible options, Ms. Wong Krause requested a model that showed the financial impact if DART was to defer the Cotton Belt Corridor Project.
In regard to FY 2021, Mr. Wageman noted the uncertainty of knowing what the demand for DAR T's service will be. He opined DART should not be providing a level of service that is significantly greater than the demand. Chair Wageman stated DART needs to figure out how to do this in a flexible way so they can react as the demand begins to return. He continued, as it is known, in recent years, DART has been in a descending order in ridership. Chair Wageman stated, he did not want this to be a regular budget process, and as Mr. Costello had noted, these were unusual times, where DART is going to be very focused on crafting a budget, however, he opined, this all has to be driven by the use of DART's service. Mr. Gary Thomas, President/Executive Director, responded, Mr. Wageman was correct in his assessment, noting that many agencies are already projecting that this modified Saturday level of service will be continued for several months, if not into the next fiscal year. He remarked this is one of the things that staff will be watching for in ridership, beginning Friday, May 1, 2020, as the Governor of Texas has issued the ability of some businesses to open up at 25%. He further stated, unfortunately, there are no real models on this, however, DART is working to provide service that will be flexible to the coming challenges and the returning riders as businesses become open. Chair Wageman stated this discussion should continue, whether in the Budget and Finance Committee (B&F) or in the Committee-of-the-Whole (COTW). He stated he would continue to work with Mr. Costello, and Mr. Thomas, on how DART will finish out this fiscal year financially.
Ms. Bauman noted she agreed with Mr. Wageman that the Board should understand the magnitude of the impact that these cuts will do to DART.
ln reference to the DARTzoom project and the reenvisioning of the DART bus system, Mr. Ruiz questioned, how the calendar of these projects will overlap the budgeting process. Mr. Thomas noted the timing actually could not be better, since they were aware the bus system, as it exists today, is somewhat inefficient and there are plenty of opportunities to make the system more efficient.
Mr. Killen noted he understood the use of Saturday service, although, he would be against cutting more service due to the possibility of DART going into a downward debt spiral and being a less useful system for people to use.
Mr. Kennedy stated he wanted to echo Mr. Killen's sentiments. He then requested an analysis on the service from before and after May 1, as the data begins to come in based on the governor' s edicts. Mr. Kennedy stated this would be so that the Board is able to understand on a route by route basis and geographical basis of where the ridership drops are occurring.
Ms. Wong Krause wanted information on any plans Mr. Thomas may have by looking at what the DART workforce will look like regarding temporary employees, part-time employees, and contracted employees before going to the fulltime employees. Mr. Thomas replied that staff is currently going through an analysis now, looking at different options.
Mr. Wageman remarked, in light of how this is going to work, and how the Board is going to be engaged, what is the timeline to bring this information to the Board. Mr. Costello
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stated for himself, he would envision having two Budget and Finance committee meetings a month, similar to the workshop, for the foreseeable future. Chair Enoch agreed, noting he would rather be in front of the curve.
After further discussion, Mr. Wageman recommended these discussions continue in the Budget and Finance Committee.
Mr. Kennedy interjected, to him, these discussions would be best done as a collaborative process between the B&F Committee and the Planning and Capital Programs Committee (PCP). He continued, the B&F Committee could oversee the situation on what the numbers should be and then the PCP Committee can look at the projects to see where savings can be had.
7. Identification of Future Agenda Items
Mr. Wageman requested Mr. Costello provide an update on where they are with the Amtrak, and the Denton County Transportation Authority (DCTA) agreements, and, in light of his April 3rd memo regarding the projects that are on hold, when will those projects be restarted in light of the governor' s orders, that will be effective Friday, May 151.
8. Adjournment
There being no further business to discuss, the meeting was adjourned at 5: 15 p.m.
Josefina Chavira, CAP Board Committee Secretary
/jc +Same Night Item *Briefing Item
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Agenda ReportAttachment:1. FY21 Budget & FinancialPlanning Process Calendar
DATE: May 12, 2020 SUBJECT:
Review of FY 2020 Financial Projection and Preliminary FY 2021 FinancialOutlook
RECOMMENDATION
This is a briefing item. No action is required at this time.
BUSINESS PURPOSE
• The purpose of this item is to brief the Committee on the financial projection for FY 2020 and apreliminary financial outlook for FY 2021.
• In order to obtain direction and input from the Board, a series of briefings and discussions willbe provided over the next few months as the FY 2021 Budget and Twenty-Year Financial Planare developed (see Attachment 1).
• Staff will present a series of briefings to the Budget & Finance Committee regarding thedevelopment of the FY 2021 Budget and Financial Plan in the face of the current economic andoperating environment.
• The discussion will help achieve Board Strategic Priority 6: Innovate to improve levels ofservice, business processes, and funding.
AGENDA ITEM NO. 3
FY20-FY21 Fin Outlook 5/1/2020 9:09:28 PM1
Attachment 1
FY 2021 Budget and Financial Planning Process Calendar Date Subject
March 24 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook
• Review of Financial Standards for FY 2021 Budget and Financial Planning Process
April 28 • Approval of Financial Standards for FY 2021 Budget and Financial Planning Process
• Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook
May 12 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook
May 26 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook
June 9 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook
June 23 • Review of FY 2020 Financial Projection & Preliminary FY 2021 Financial Outlook
• FY 2021 Budget and Financial Planning Process – Departmental Budget Presentations
July 7 • FY 2021 Budget and Financial Planning Process – Draft FY 2021 Annual Budget and Twenty-Year Financial Plan
August 11 • Budget & Finance Committee recommends approval to COTW/Board to send FY 2021 Budget and Twenty-Year Financial Plan to Service Area Cities
• Board approves sending FY 2021 Budget and Financial Plan to Service Area Cities
August 25 • Budget and Finance Committee recommends approval of the FY 2021 Annual Budget and Twenty-Year Financial Plan
August • Briefing for Service Area City Managers and Finance Directors
September 8 • Committee-of-the-Whole Review of FY 2021 Budget and Twenty-Year Financial Plan
September 22 • Board Approval of FY 2021 Budget and Twenty-Year Financial Plan
