Los Angeles County One Gateway Plaza Metropolitan Transportation Authority Los Angeles. CA 90012-2952

213.922 .2000 Tel metro. net

Metro February 15, 2011

TO: BOARD OF DIRECTORS

THROUGH: ARTHUR T. LEAHY ~

FROM: TERRY MATSUMOTO '>

CHIEF EXECUTIVE OF}EEM

CHIEF FINANCIAL SERVIC S FFICER AND TREASURER

SUBJECT: TAP POSITIONS PROCESS

ISSUE

This report is to update the Board on the progress of the stored value portion of the TAP program.

DISCUSSION

Stored value, also known as e-cash and cash purse, has been the central element of UFSITAP since the beginning. At present, six municipal bus operators and MTA are operating the stored value features of the TAP system. The sale of stored value on our system has not yet been officially "launched" to the riding public in a marketing campaign.

The draft Positions Process, attached, documents how operators will be reimbursed for the value of the rides that are tapped on their systems. This draft was prepared with input from the TAP Operators group, the six municipal operators who have followed this process for the last 20 months. Other interested parties have been included in this circulation for final comments. This draft has also been distributed to the regional General Managers for their information.

We plan to let all riders know that stored value will be available to load on their TAP cards at operators' transit stores, Metro ticket vending machines, third party vendors and on the web by the end of March 2011.

NEXT STEPS

1. Obtain final comments and finalize the TAP Positions Process - February 2011 2. Review final document with the regional General Managers - March 2011 3. Complete launch of stored value - March 2011 4. Commence the reimbursement process - April 2011 5. Enroll additional operators when they are ready

ATTACHMENT

Draft TAP Positions Process

DRAFT

Version 0.01

TAP

Regional Positions Process

Prepared by

Metro TAP Operation

February 12, 2011

INTRODUCTION

The TAP Financial Business Rules shall serve as the guidelines for the preparation and execution

of the monthly clearing and settlement process by which TAP Participants shall receive fare

revenue from the Region or make payment to the Region for the sale of regional or other TAP

Participant fare products.

TAP TRANSACTIONS SUBJECT TO POSITION RECONCILIATION

The table on the following page summarizes the types of TAP transactions to be included in the

monthly Positions calculations. All sales transactions taking place on regional devices are

subject to regional clearing and settlement. All stored value transactions are subject to regional

clearing and settlement.

In addition, other financial activity must be included in the regional Positions process including

commissions paid for third party vendor pass and stored value sales, collection of TAP card fees,

and other adjustment activity. See Adjustments section later in this document for explanation.

OVERALL SETTLEMENT APPROACH

The settlement process shall 1) recognize the revenue earned by each TAP Participant, 2) the

cash already in each TAP Participant's possession, and 3) the net amount due to or from the

region for the prior month's activity. All payments will be between the TAP Participants and the

Region; not between the TAP Participants themselves. Any revenue collected by a TAP

Participant for the sale of another TAP Participant's fare product(s) will be payable to the

Region and the Region will recognize that revenue as part ofthe total revenue due to the

owning Participant. Payments to/from the Region each month will be net of all revenues

earned and cash received such that a single payment will be made by the Region to each TAP

Participant or from each TAP Participant to the Region each month.

FINANCIAL DATE/TRANSIT DATE

For purposes of calculating monthly regional Positions, the month shall consist of the 1st

through the last day of the month from 3:00:01 am to 3:00:00 am the following day, consistent

with the Transit Day (the time at which the day is considered to start and end) as recognized by

the NextFare system. Financial data taken from the NextFare system shall be determined by

the financial date; that is, the date the transaction entered the NextFare database and not

necessarily the day the transaction occurred. The timing delays of transactions on TAP devices

in the region (such as with bus farebox probing) often result in differences between when the

transaction occurred (transit date) and when it is seen in the NextFare system (financial date).

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