VALLEY METRO RAIL FY18 Budget EXECUTIVE SUMMARY VMR FY18 Adopted Budget Executive Summary Valley Metro | 1 FY18 ADOPTED ANNUAL OPERATING AND CAPITAL BUDGET Valley Metro Rail, Inc. (VMR) is a public non-profit corporation whose members are the cities of Chandler, Glendale, Mesa, Phoenix, and Tempe. VMR plans, designs, constructs and operates light rail/high-capacity transit system in metro Phoenix, Arizona. FY18 Operating Activities Total Operating Activities for FY18 are $67.1 million, an increase of $9.3M or 16% from Amended FY17. Primary sources of funds are $67.1M as detailed below: Fare revenue forecasted at $14.3M, based on current trends in average fare and ridership Member city funding of $35.1M is up from $31.1M due to base service increase of $2.9M, reduced fare revenue -$1.6M, $1.0M decrease for future projects, and $0.5 M increase for agency operations. Public Transportation Fund (PTF) sales tax revenue is $11.2M. PTF funding requirements for project development activities are up by $3.9M. Primary uses of funds are also $67.1M as detailed below: Revenue operations is $47.9M, up due to maintenance costs to maintain the system in a state of good repair, increased fare inspection and security resources and the deployment of Wi-Fi to all light rail vehicles. Future project development is $17.6M, up primarily due to increase in planning activities related to future corridors and system planning.
Transcript
VALLEY METRO RAIL
FY18 Budget EXECUTIVE SUMMARY
VMR FY18 Adopted Budget Executive Summary Valley Metro | 1
FY18 ADOPTED ANNUAL OPERATING AND CAPITAL BUDGET Valley Metro Rail, Inc. (VMR) is a public non-profit corporation whose members are the cities of Chandler, Glendale, Mesa, Phoenix, and Tempe. VMR plans, designs, constructs and operates light rail/high-capacity transit system in metro Phoenix, Arizona. FY18 Operating Activities Total Operating Activities for FY18 are $67.1 million, an increase of $9.3M or 16% from Amended FY17. Primary sources of funds are $67.1M as detailed below:
Fare revenue forecasted at $14.3M, based on current trends in average fare and ridership
Member city funding of $35.1M is up from $31.1M due to base service increase of $2.9M, reduced fare revenue -$1.6M, $1.0M decrease for future projects, and $0.5 M increase for agency operations.
Public Transportation Fund (PTF) sales tax revenue is $11.2M. PTF funding requirements for project development activities are up by $3.9M.
Primary uses of funds are also $67.1M as detailed below: Revenue operations is $47.9M, up due to maintenance costs to maintain the system in
a state of good repair, increased fare inspection and security resources and the deployment of Wi-Fi to all light rail vehicles.
Future project development is $17.6M, up primarily due to increase in planning activities related to future corridors and system planning.
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$0.0 $10.0 $20.0 $30.0 $40.0
Fare Revenue
Advertising Revenue
Federal 5307 PM
Federal 5339
Federal CMAQ
TIGER
Member Cities
MAG / RPTA (RARF)
PTF Sales Tax Revenue
FY17 FY18 VMR Operating Sources of Funds FY17 vs FY18
$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0
Revenue Operations
Future Project Development
Agency Operating Budget
FY17 FY18 VMR Operating Uses of Funds FY17 vs FY18
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FY18 Capital Activities Total Capital Activities for FY18 are $203.5 million, an increase of $104.6M or 106% from Amended FY17. Primary sources of funds are $203.5M as detailed below:
FTA – Section 5309 programmed at $29.2M to support Tempe Streetcar project construction activities.
Federal CMAQ is $104.3M, up from $65.3M for SCADA, Gilbert Road Extension, Tempe Streetcar, LRV purchase, and Operations & Maintenance Center (OMC) expansion.
PTF sales tax revenue is $20.2M, down from $35.6M last year primarily due to completion of Northwest extension, offset by increased funding for Tempe Streetcar, System Improvements and Non Prior Rights Utilities.
Primary uses of funds are $203.5M as detailed below:
Gilbert Road Extension $75.2M Tempe Streetcar $51.0M South Central Extension $33.6M Systemwide Improvements $28.3M 50th Street Station $10.0M OMC Expansion $3.2M SCADA $2.0M
$0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0
FTA ‐ Section 5309
Federal CMAQ
Federal 5337 SOGR
Federal 5312 MOD
Member Cities
PTF Bond Revenue
PTF Sales Tax Revenue
FY17 FY18 VMR Capital Sources of Funds FY17 vs FY18
Member City FY17 revenue of ‐$46.0M includes payment of $60.0M advance to Phoenix.
VMR FY18 Adopted Budget Executive Summary Valley Metro | 4
VMR FY18 Adopted Budget Executive Summary Valley Metro | 5
FY18 Baseline Service and Capital Plan Assumptions Passenger Services Rail Operations Service Frequency Plan
Weekday trains will run with two to three cars at 12-minute intervals during peak hours and 15 to 20-minute intervals off peak.
Weekends do not require peak service trains and will operate with two cars at 15 to 20-minute headways.
Ridership and Fare Revenue
Total ridership is forecasted at 16.8M passengers for FY18 with fare revenues generating $14.3M
Project Development High-Capacity Transit Projects
The Regional Transportation Plan (RTP), adopted by the Maricopa Association of Governments (MAG) and financed under the one-half cent sales tax extension, identifies 66 miles of light rail/high-capacity transit corridors to be implemented by 2034.
The 1.9-mile Gilbert Road Extension, to serve east Mesa, is in construction phase. The 3.0-mile Tempe Streetcar project progresses into final design and pre-construction
activities. City of Phoenix voters approved Proposition 104 (Transportation 2050), a 35-year
transportation plan that would expedite several miles of light rail/high-capacity transit and add additional corridors to the regional high-capacity transit system. Under the plan and timing as shown on next page, additional service areas are identified:
o 5.0-mile South Central Extension o 1.5-mile NW Extension Phase II o 5.0-mile West Phoenix/Central Glendale transit corridor o 1.5-mile Capitol/I-10 West Extension (Phase I) o 9.5-mile Capitol/I-10 West Extension (Phase II) o 12.0-mile Northeast Phoenix transit corridor
OMC expansion to meet needs of future extensions. The OMC expansion would include modifications to the Maintenance of Equipment (MOE) building, storage tracks and cleaning platform.
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The timing of the projects in the program is depicted on the following schedule shown below:
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FY18 Goals and Initiatives In January 2015, the Valley Metro RPTA and Valley Metro Rail Boards adopted the Valley Metro Strategic Plan for FY16 through FY20. The Strategic Plan provides clear definition of the purpose of the organization and establishes realistic goals and objectives for a five-year period. This plan ensures the most effective use of the organization’s resources by focusing those resources on key priorities. Below are the five, overarching goals identified in the Strategic Plan:
1. Increase customer focus 2. Advance performance based operation 3. Grow transit ridership 4. Focus on economic development, regional competitiveness and financial resources 5. Advance the value of transit
A number of initiatives that align with the Strategic Plan are incorporated into the FY18 budget, as summarized below.
1. Increase Customer Focus: FY18 Initiatives
Develop smart card fare program/mobile ticketing
Renovate website & mobile site
Evaluate and enhance passenger safety and security.
Increasing rail fare inspection and security resources
Improve Customer SatisfactionIntegration of greater, more effective technology, improving passenger information systems with real time data, such as the website, facility signage and a Ridekick mobile application, and implementation of an enhanced fare media solution, including smart cards and mobile ticketing.
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2. Advance Performance Based Operation: FY18 Initiatives
Operate an effective, reliable, high performing transit system.
Develop an asset management plan for Valley Metro in conjunction with member agencies
Enhance Valley Metro’s role in sustainability and the environment.
Implement the Sustainability Action Plan with focus of updating of design standards and urban design guidelines.
Deliver projects and services on-time/on-budget.
Advance projects and services in the current regional transportation plan and Transit Life Cycle program.
Expediting S Central CorridorExpediting Northwest Phase IIAdvancing Northeast Corridor feasibility study
Maintain a culture to recruit and retain a qualified and diverse workforce.
Develop a program to recruit and retain a qualified and diverse workforce. Consultant engagement for comprehensive training assessment and new employee orientation programs
Maintain strong fiscal controls to support Valley Metro’s long-term sustainability.
Fully staff Audit Department with dual reporting responsibility to the Board of Directors and VM Executive Office
With the recent
passage of
Transportation 2050 in
the City of Phoenix, rail
service to North, South
and West Phoenix
neighborhoods are
being moved forward.
Planned completion
dates are shown.
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FY18 Goals and Initiatives
3. Grow Transit Ridership: FY18 Initiatives
Improve connectivity of transit services for greater effectiveness.
Analyze the region’s transit system to optimize connectivity between transit services, including new LRT extensions- Fiesta Downtown Chandler Study- West Glendale Feasibility Study
Communicate availability, attractiveness and safety of transit service
Conduct discretionary ridership campaigns to continue to attract riders
4. Focus on Economic Development, Regional Competitiveness and Financial Resources:
FY18 Initiatives
Work with local communities to leverage transit oriented development (TOD) to increase investment in transit
Research and monitor and report regional trends regarding TOD implementation and successes- Support to TOD working group and PNR utilization study
5. Advance the Value of Transit: FY18 Initiatives
Develop and implement a communications plan to inform and educate the public on the value of transit
Continue media campaign to raise greater awareness of the value of transit
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Agency Staff Overview Valley Metro RPTA and Valley Metro Rail budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. For FY18, there are 360 employees budgeted; 151 FTE’s are budgeted to RPTA activities; 209 to VMR activities. Staffing levels are reviewed on an annual basis to fulfill work requirements in the five-year period commencing with the beginning of the new fiscal year. Salary and fringe benefit compensation levels are measured against comparable regional agencies, member cities and peer transit agencies located in the western U.S. FY18 Compensation and Fringe Benefit Assumptions Total compensation budget is based on a 3.0% increase. For staff salary changes, merit increases are based on employee performance. Agency health care costs will increase. Program design adjustments are in place to hold total agency fringe benefit cost increases to within 3% of FY17 levels. FY18-FY20 Staffing Needs The Valley Metro Regional Public Transportation Authority (RPTA) and Valley Metro Rail, Inc. (VMR) are in a period of significant expansion of the system and services. In order to meet the needs of our members and deliver projects, Valley Metro is in need of additional resources. In looking at the expansion plans over the next decade, it is clear that a number of positions are in demand for an extended period of time. The additional staff resources are categorized in three ways: positions that would otherwise be filled with consultants, positions added as a result of strategic initiatives, and support positions added to address agency growth in general.
Consultant versus Staff
22 of the 35 positions are conversions from consultants Costs of consultants typically include larger overhead plus profit Approximately $1.3M in costs will be avoided by hiring these positions Project positions will be hired for project term or specific term (3-5 years)
Positions to Fulfill Strategic Initiatives
14 positions related to strategic initiatives o Increase Customer Focus
3 Operations Communications Specialists o Evaluate and enhance passenger safety and security
o Board Adopted Information Technology Strategic Plan 8 positions over the next 3 fiscal years
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General Growth
Need for additional support positions with agency growth (HR and Finance)
Below is a table summarizing the changes in staff positions adopted for FY18 and preliminary positions for FY19 and FY20.
Adopted Mid‐Year Adopted Preliminary Preliminary
Division 2017 Additions 2018 2019 2020
Capital and Service Development 38 4 11 4
Communication & Marketing 29 8 3
Executive Office 10 1 2
Finance 20 2 3
Human Resources 8 2
Information Technology 9 2 3 3
Internal Audit 2
Legal 12 2
Operations and Maintenance ‐ RPTA 58 7 1
Operations and Maintenance ‐ VMR 118 4 2
Safety and Security 6 1 3
Total Positions 310 15 35 15 3
RPTA 129.3 8.6 12.8 8.2 3.0
VMR 180.7 6.4 22.2 6.8 0.0
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Valley Metro
Regional Public Transportation AuthorityFY18 Summary of New Positions
Department Position In Lieu of
Consultant/Contract BLANK
Division Position Current New Term
CEO Executive Office Manager, Business Processes Developer
CEO Executive Office Project Assistant X
Communication & Marketing Deputy Manager, Community Relations (Construction) X X
Communication & Marketing Deputy Manager, Community Relations (Planning) X X
Communication & Marketing Program Coordinator (Marketing) X
Communication & Marketing Program Coordinator (Community Relations) X X
Communication & Marketing Program Coordinator (Community Relations) X X
Communication & Marketing Program Coordinator (Community Relations) X X
Communication & Marketing Program Coordinator (Business Assistance) X X
Communication & Marketing Lead Graphic Designer X
Capital and Service Development Program Controls Lead X X
Capital and Service Development Senior Project Manager ‐ Design X X
Capital and Service Development Civi l Engineer X X
Capital and Service Development Construction Inspector X X
Capital and Service Development Office Engineer X X
Capital and Service Development Art Specialist X XCapital and Service Development Rail Systems Engineering Manager X
Capital and Service Development Planner II X
Capital and Service Development Planner I X
Capital and Service Development GIS Coordinator
Capital and Service Development Eligibility Specialist
Finance Accountant I X
Finance Accountant II
Human Resources HR Program Manager
Human Resources Training & Development Administrator
Information Technology Manager, Information Technology X
Information Technology IT Administrative Specialist X
Operations and Maintenance Administrative Assistant II
Operations and Maintenance Assistant Manager, Rail Operations
Operations and Maintenance Assistant Superintendent LRV Maintenance
Operations and Maintenance Assistant Manager, LRT System
Operations and Maintenance Systems Engineer
Safety and Security Senior Project Certification Coordinator X XSafety and Security Transit Bus Safety Security Coordinator
Safety and Security Project Assistant X
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Below is a table that summarizes the impacts of funding the FY18 positions, comparing fully burdened costs for the additional positions relative to the base positions at the end of FY17. Costs shown are in millions.
RPTA Base
FY18
Additions % Change
Planning and Capital Projects (PTF/RARF) $1.24 $0.09 7.0%
Administrative and Regional Projects (PTF/RARF) $8.90 $0.62 7.0%
Operations ‐ Regionally Funded $1.30 $0.05 3.8%
Operations ‐ Member City Contributions $0.93 $0.03 3.5%
Sub‐total RPTA $12.37 $0.79 6.4%
VMR Base
FY18
Additions % Change
Planning (PTF/RARF) $4.14 $0.74 17.8%
Capital (Project funded) $4.37 $1.76 40.3%
Member City Contributions $12.61 $0.65 5.2%
Sub‐total VMR $21.11 $3.15 14.9%
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FY18 Adopted Budget Financial Summary
In the figures below, detailed revenues and expenses are shown with comparisons to the prior year’s amended budget. The “Note” column (on the far right side) indicates reference to explanations which are provided in the following table.
Subtotal Capital 98,924$ 203,496$ 104,572$ Total Uses 156,762$ 270,616$ 113,854$
Budget Analysis Note #
Note Budget Analysis - Uses of Funds1 FY18 rail operating costs increase by 7% over FY17 levels. Maintenance costs rise with
scheduled preventive maintenance activities to maintain the system in a state of good repair.Initiatives for FY18 include increased fare inspection and security resources and the deployment of Wi-Fi to all 50 light rail vehicles.
2 Future Project Development costs are up by $5.7M due to increase in planning activities related tofuture corridors and system planning; primarily due to the I-10/I-17 ramp design.
3 Agency operating costs are increased $0.5M due to restructuring of the Executive Office toinclude administration and project management duties.
4 Northwest Extension Phase I capital project is complete.
5 Central Mesa Extension base project costs are down by $2.7M. Remaining activity in FY18 isrelated to the train signal control system upgrade.
6 Gilbert Road LRT Extension base project cost are up $31.6M due to increased constructionactivity and progress payments on 3 vehicles. Annual expenditures forecasted at $75.2M.
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Note Budget Analysis - Uses of Funds7 Tempe Streetcar project costs are up $35.6M. Annual expenditures forecasted at $51.0M, which
includes NPR costs of $12.5M.
8 50th Street LRT Station costs are up by $3.9M for design and pre-construction activities.
9 South Central Capital Project pre-construction activities to ramp up in FY18. Non-prior rightsutilities relocations ($4.2M) are included. Annual design and project management expendituresforecasted at $33.6M.
10 Operations & Maintenance Center Expansion pre-construction activities begin in FY18. Annualdesign and project management expenditures forecasted at $3.2M.
11 Non-Prior Rights (NPR) costs are now included within the capital projects.
12 No CNPA work planned to occur for Gilbert Road LRT Extension in FY18.
13 Systemwide Improvements include the purchase of 8 light rail vehicles for future extensions($16.0M), LRV overhauls ($3.7M), LRV Wi-Fi ($2.5M), Mobile ticketing ($0.7), improvements forstation lighting and railing, security camera component upgrades, ticket vending machineupgrades and other activities ($5.3M).
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Note Budget Analysis - Sources of Funds14 Fare revenue forecasted at $14.3M, based on current trends in average fare and ridership;
assumes 16.8 million rides with an average fare forecasted to be $0.85 per ride in FY18.
15 Federal 5339 funds are at $1.6M due to the I-10/I-17 Bus Ramp Design project within the FutureProject Development budget.
16 Federal CMAQ funds are programmed at $1.4M due to the Capitol/I-10 West project for pre-construction activities.
17 Member City contributions for Operations are up from $31.1M to $35.1M in FY18 due to baseservice increase of $2.9M, reduced fare revenue -$1.6M, $1.0M decrease for future projects, and$0.5M increase for agency operations.
18 PTF Sales Tax revenue funding requirements for project development are up by $3.9M, primarilyrelated to Northwest Phase II, Phoenix I-10 Capitol projects, I-10/I-17 bus ramp, and Operationsand Maintenance Center expansion.
19 FTA - Section 5309 funds are programmed at $29.2M to support Tempe Streetcar projectconstruction activities.
20 Federal CMAQ increasing by $38.9M due to increasing funding requirements for constructionactivity. FY18 programmed activity includes Central Mesa Extension SCADA ($1.6M), GilbertRoad ($70.9M), Tempe Streetcar ($16.0M), Systemwide Improvements ($13.2M), and Operationsand Maintenance Center expansion ($2.6M).
21 Federal 5337 SOGR programmed at $1.3M to assist in funding O&M activities required to maintain a state of good repair.
22 Member City contributions for Capital Projects total $48.0M for FY18. Project amounts for FY18include South Central funding by Phoenix ($33.6M), 50th Street Station funding by Phoenix($10.0M), Gilbert Road Extension funding by Mesa ($4.3M), and Concurrent Non-Project Activities(CNPA) work for Tempe Streetcar ($0.1M).
23 In FY17, the City of Phoenix was repaid $60.0M in advances the City made in FY13 and FY14 toaccelerate completion of the NW Extension. Funding is from Public Transportation Funds.
24 It is anticipated that RPTA will not issue bonds to support rail capital projects in the FY18.
25 PTF Sales Tax funding will be reduced from $35.6M to $20.2M primarily due to constructioncompletion for Northwest Extension, offset by increased funding requirements for TempeStreetcar, Systemwide Improvements and Non Prior Rights Utilities.
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FY18 – FY22 ADOPTED FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM The Valley Metro Rail Five-Year Operating and Capital Program identifies anticipated operating costs, capital projects and costs and the associated funding sources. The FY18 – FY22 Five-Year Operating and Capital Program is submitted to the Board of Directors along with the FY18 Operating and Capital Budget. Five-Year Operating Assumptions
1.9-mile Gilbert Road Extension opens revenue service in May 2019 50th Street Station opens revenue service in Mid 2019 3.0-mile Tempe Streetcar opens revenue service in September 2020
The Operations & Maintenance (O&M) costs are projected based on current cost history with a general inflation escalation factor of 3.0%. Anticipated structural changes to staffing, contract and materials expenses are forecasted to meet customer demand and maintain the system in a state of good repair. System-wide and specific light rail corridor project development activities are included in the operating budget. Once a project alignment has been approved by local and regional policy makers and federal environmental approvals are secured the project costs are recorded in the capital program. Agency Operating costs include those costs not directly allocable to capital projects or to passenger operations. Included are costs of annual audit, federal and state legislative representation and memberships to transportation related organizations. Fares Effective March 2013, the current Regional Fare Policy is as follows:
*Reduced Fare – Youth (6 – 18), seniors (age 65 and over) and people with disabilities
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FY18 – FY22 Operating Uses and Sources of Funds Operating costs and funding planned for the FY18 – FY22 planning horizon are summarized as follows:
FY18 FY19 FY20 FY21 FY22 TOTALUSES OF FUNDS ($,000)
Total Sources 67,120$ 62,849$ 64,233$ 68,426$ 72,039$ 334,666$
VMR FY18 Adopted Budget Executive Summary Valley Metro | 19
FY18 – FY22 Capital Program
Valley Metro Rail currently has a number of transit projects in various stages of planning, design or construction. The sources and overall uses of funds associated with these projects and activities are projected to be $1.6B through the five-year planning horizon. These uses and sources of funds are summarized as follows:
Funding is derived from three primary sources: a combination of local and regional sales taxes and federal grants. The TPAN notes are issued by the City of Mesa, and repaid with a combination of federal and local revenues.
