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METRO BOARD OF DIRECTORS
FINANCE & AUDIT WORKING COMMITTEE MEETING
NOVEMBER 17, 2014
9:00 AM
ACTION
1. Request Board approval of Monthly Financial Committee Reports including the Investment Reports. D. Sechler
2. Request Board approval of the FY2015 Investment Policy and Broker/Dealer List.
D. Sechler
BRIEFING
3. Monthly Compliance Report A. Smiley
4. Monthly Financial Reports D. Sechler
- Sales Tax Report
- Investment Report
- Debt Report
- Fuel Hedge Report
- Monthly Board Report
5. H-GAC Transportation Improvement Plan (TIP) Recommended Project. K. Luhrsen
6. Fare Policy Study J. Fernandez
7. Q-Card Distribution J. Fernandez
to be completed by Small Business
APPROVAL OF MONTHLY FINANCIALS
FINANCE
DEBBIE SECHLER
Request Board approval accepting the monthly committee reports, including investment reports.
No 0.00
Yes 0.00Yes 0.00Yes 0.00
0.00 0.00 0.00 0.00 0.00
Accept and approve monthly financial reports to include:
Sales Tax ReportInvestments ReportDebt ReportMonthly Board Report
Dealer Initial Purchase Rolls* Total Per Dealer
East West Bank 0 4 4
Jefferies, LLC 1 0 1
JPMorgan Securities, Inc. 2 0 2
Loop Capital Markets 4 3 7
Ramirez & Co. Inc. 5 9 14
Grand Total 12 16 28
* Rolls represent METRO exercising first right of refusal on maturing paper.
Summary of FY 2014 Dealer Transactions
Number of Transactions
Annual Broker/Dealer Review
• FY2014 Board Approved Broker/Dealers Robert W. Baird & Co. Blaylock Robert Van BOSC, Inc. Cantor Fitzgerald
Coastal Securities D. A. Davidson* Great Pacific Securities G.X.Clarke
Jefferies & Co. Inc. JPMorgan Securities, Inc.* Loop Capital Markets Mischler Financial Group, Inc
Piper Jaffray Ramirez & Co., Inc. Rice Financial Products Southwest Securities
SunTrust Robinson Humphrey Vining Sparks
* Indicates approved brokers who did not submit a PFIA compliant Certification for liability reasons. The firms declined to certify that they have implemented processes and procedures to preclude inappropriate transactions as required by PFIA. These firms are not recommended for re-approval for FY2015.
• New Brokers Requesting Consideration for FY2015 Cantella & Co. Inc. Stifel, Nicolaus & Co. Inc.
This firm submitted financial information and met all criteria set by METRO’s Investment Policy.
METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, TEXAS
INVESTMENT POLICY
As Proposed November 20, 2014
1.0 Policy
It is the policy of the Metropolitan Transit Authority of Harris County, Texas (“Metro”) to invest public funds in a
manner that will provide the highest investment return with maximum security while meeting the daily cash flow
demands of Metro, conforming to all state and local statutes governing the investment of public funds and giving
due consideration to the safety and risk of investments. This policy sets forth the investment program of Metro and
the guidelines to be followed in achieving its objectives.
Effective cash management is recognized as essential to good fiscal management. Investment interest is a source of
revenue to Metro. Metro’s portfolio shall be designed and managed to maximize investment earnings as a revenue
source, to be responsive to the public trust and to be in compliance with applicable legal requirements and
limitations.
Investments shall be made with the primary objectives of:
Preservation and safety of principal and diversification of the investment portfolio;
Maintenance of sufficient liquidity to meet operating needs and marketability of the investment if the need
arises to liquidate before maturity;
Understanding the suitability of the investment to the financial requirements of Metro and maintaining
public trust from prudent investment activities;
Yield and optimization of interest earnings on the portfolio.
2.0 Purpose
The purpose of this investment policy is to comply with Section 451.104, Texas Transportation Code, and Chapter
2256, Texas Government Code (the “Public Funds Investment Act”). The Public Funds Investment Act requires
Metro to adopt a written investment policy regarding the investment of its funds and funds under its control. This
investment policy addresses the methods, procedures and practices that must be exercised to ensure effective and
judicious fiscal management of Metro’s funds.
3.0 Scope
This investment policy shall govern the investment of all financial assets of Metro, except those listed on Schedule
1, which are set up and administered separately and whose investment activities are conducted by third parties in
accordance with instructions provided in ordinances, contracts, or escrow agreements, as applicable. The following
funds shall be subject to this investment policy and are accounted for in Metro’s Comprehensive Annual Financial
Report (“CAFR”):
General and Operating Funds;
Capital Project Funds;
Special Revenue Funds;
Debt Service Funds, including reserves and sinking funds, to the extent not required by law, orders,
resolutions or existing contracts to be kept segregated and managed separately;
Trust and Agency Funds, to the extent not required by law, orders, resolutions or existing contracts to be
kept segregated and managed separately.
Any new fund created by Metro shall be subject to this investment policy, unless specifically exempted from this
investment policy by the Board or by applicable law.
Metro will consolidate cash balances from all funds to maximize investment earnings. Investment income will be
allocated to the various funds based on their respective participation and in accordance with generally accepted
accounting principles.
4.0 Investment Objectives
General
Metro shall manage and invest its cash with four primary objectives, listed in order of priority:
Safety
Liquidity
Suitability
Yield (expressed as optimization of interest earnings)
The safety of the principal invested always remains the primary objective. All investments shall be designed and
managed in a manner responsive to the public trust and consistent with applicable law.
Metro shall maintain a comprehensive cash management program that includes collection of account receivables,
vendor payments in accordance with invoice terms and prudent investment of available cash. Cash management is
defined as the process of managing monies in order to insure maximum cash availability and maximum earnings on
short-term investment of idle cash.
Safety
Safety is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit and interest rate
risk.
Metro will minimize credit risk, the risk of loss due to the failure of the issuer or backer of the investment, by (i)
limiting investments to the safest types of investments; (ii) pre-qualifying financial institutions and broker/dealers
that Metro does business with; and (iii) diversifying the investment portfolio so that potential losses on individual
issuers will be minimized.
Metro will minimize the risk that interest earnings and the market value of investments in the portfolio will fall due
to changes in general interest rates by (i) structuring the investment portfolio so that investments mature to meet
cash requirements for ongoing operations, thereby avoiding the need to liquidate investments prior to maturity; (ii)
investing operating funds primarily in certificates of deposit, shorter-term securities, money market mutual funds or
local government investment pools functioning as money market mutual funds; and (iii) diversifying maturities and
staggering purchase dates to minimize the impact of market movements over time.
Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably
anticipated. This is accomplished by structuring the portfolio so that investments mature concurrent with cash needs
to meet anticipated demands. Because all possible cash demands cannot be anticipated, a portion of the portfolio
will be invested in shares of money market mutual funds or local government investment pools that offer same-day
liquidity. In addition, a portion of the portfolio will consist of securities with active secondary or resale markets.
Suitability
All investments shall be suitable for the type of fund invested, and the investment portfolio shall be designed with
the objective of meeting all legal requirements including yield restrictions. All participants in Metro’s investment
process shall seek to act responsibly as custodians of the public trust. Investment officers shall avoid any transaction
that might impair public confidence in Metro’s ability to govern effectively.
Yield (Optimization of Earnings)
The investment portfolio shall be designed with the objective of attaining a market rate of return through budgetary
and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment
is of secondary importance compared to the safety and liquidity objectives described above.
In order to minimize risk of loss due to interest rate fluctuations, investment maturities will not exceed the anticipated
cash flow requirements of the funds. Investment guidelines by fund-type are as follows:
5.0 Investment Strategies for Funds
General and Operating Funds
Investment guidelines for Metro’s general and operating funds are as follows:
Safety of Principal — All investments shall be in high quality securities with minimal default risk. Safety of principal
shall be further ensured through diversification by issuer, maturity range and security type.
Liquidity — The general and operating funds will have high liquidity needs. Overnight repurchase agreements, local
government investment pools and money market mutual funds can provide daily liquidity and may be utilized as
competitive yield alternatives to fixed maturity investments.
Suitability — Any investment authorized by this investment policy having a final maturity not to exceed two years is
suitable for general and operating funds.
Yield — Attaining a competitive market yield for comparable security types and portfolio restrictions is the desired
objective. The minimum yield objective shall be the trailing three month average of the 3-month T-bill yield.
Capital Project Funds
Funds on deposit in capital project funds will pay for capital expenditures of Metro projects. Investment guidelines for
such funds are as follows:
Safety — All investments shall be in high quality securities with minimal default risk. Maturities shall be placed to
correspond with the anticipated capital spending or construction draw schedules. . Safety of principal shall be further
ensured through diversification by issuer, maturity range and security type.
Liquidity — Capital project funds require high short-term liquidity as the construction draw schedules are frequently
uncertain. Overnight repurchase agreements, local government investment pools and money market mutual funds shall
provide daily liquidity and may be utilized as competitive yield alternatives to fixed maturity investments.
Suitability — any investments authorized by this investment policy not exceeding the expected construction draw
schedule are suitable for the capital project funds.
Yield — the most desirable yield objective when investing Capital Project Funds is to achieve a positive spread to the
arbitrage yield that corresponds to the specific bond issue. In market conditions in which this objective is not possible
within safety constraints, attaining a competitive market yield for comparable security types and portfolio restrictions is
the desired objective. In this case, the minimum yield objective shall be the trailing average of the yield on the Treasury
security corresponding to the weighted average maturity of the capital project fund portfolio.
Debt Service Funds
Investment guidelines for Metro debt service funds are as follows:
Safety of Principal — all investments shall be in high quality securities with no perceived default risk. Market price
fluctuations will however occur, by managing the debt service fund’s portfolio to not exceed the debt service payment
schedule the market risk of the overall portfolio will be minimized. Market conditions influence the attractiveness of
fully extending maturity to the next “unfunded” payment date. Generally, if investment rates are trending down, Metro
is best served by locking in fixed rate securities. If interest rates are flat or trending up, concurrent market conditions
will determine the attractiveness of extending maturity or investing in shorter alternatives. At no time shall the debt
service schedule be exceeded in an attempt to bolster yield.
Liquidity — Debt service funds have predictable payment schedules. Therefore, investment maturities shall not exceed
the anticipated cash flow requirements. Overnight repurchase agreements, local government investment pools and
money market mutual funds shall provide competitive yield alternatives for short term fixed maturity investments.
Suitability — any investment authorized by this investment policy is suitable for the debt service fund.
Yield — attaining a competitive market yield for comparable security-types and portfolio restrictions is the desired
objective. . The minimum yield objective shall be the trailing three month average of the 3-month T-bill yield.
Special Revenue Funds
Metro’s revenue funds are short term in nature and the investment guidelines are as follows:
Safety of Principal — all investments shall be in high quality short-term investments with no perceived default risk.
Diversification is less of a concern since revenue funds will be highly liquid.
Liquidity — Revenue funds require high short-term liquidity. Overnight repurchase agreements, local government
investment pools and money market mutual funds shall provide daily liquidity and may be utilized as competitive yield
alternatives to fixed maturity investments.
Suitability — Eligible investments will be limited to overnight repurchase agreements, $1 NAV money market funds, $1
NAV local government investment pools, Treasury, agency and commercial paper issues with final maturities of less
than 90 days.
Yield — attaining a competitive market yield for comparable security types and portfolio restrictions is the desired
objective. The minimum yield objective shall be the trailing one-month average of the four-week T-bill yield.
6.0 Responsibility and Control
Delegation of Authority
In accordance with the Public Funds Investment Act, the Board designates the officers or employees listed on
Schedule 2 as Metro’s Investment Officers. An Investment Officer is authorized to execute investment transactions
on behalf of Metro. No person may engage in an investment transaction or the management of Metro funds except
as provided under the terms of this investment policy as approved by the Board. Such investment authority granted
to the Investment Officers is effective until rescinded by the Board.
Quality and Capability of Investment Management
Metro shall provide periodic training in investments for the designated Investment Officers and other investment
personnel through courses and seminars offered by professional organizations, associations, and other independent
sources in order to insure the quality and capability of investment management in compliance with the Public Funds
Investment Act.
Training Requirement
In accordance with the Public Funds Investment Act, the designated Investment Officers shall attend an investment
training session no less often than once within every two of the Authority’s fiscal years and shall receive not less
than 10 hours of instruction relating to investment responsibilities. A newly appointed Investment Officer must
attend a training session of at least 10 hours of instruction within 12 months of the date the officer took office or
assumed the officer’s duties. The investment training session shall be provided by an independent source approved
by the Board. For purposes of this investment policy, an “independent source” from which investment training shall
be obtained shall include a professional organization, an institution of higher education or any other sponsor other
than a business organization with whom Metro may engage in an investment transaction.
Internal Controls
Metro’s Chief Financial Officer is responsible for establishing and maintaining an internal control structure designed
to ensure that Metro assets are protected from loss, theft or misuse. The internal control structure shall be designed
to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that
(i) the cost of a control should not exceed the benefits likely to be derived; and (ii) the valuation of costs and
benefits requires estimates and judgments by management.
Accordingly, the Chief Financial Officer shall establish a process for annual independent review by an external
auditor to assure compliance with policies and procedures. The internal controls shall address the following points:
Control of collusion
Separation of transaction authority from accounting and record keeping
Custodial safekeeping
Avoidance of physical delivery of securities
Clear delegation of authority to subordinate staff members
Written confirmation for telephone (voice) transactions for investments and wire transfers
Development of a safekeeping agreement with a depository bank or third party custodian
Prudence
The standard of prudence to be applied by an Investment Officer shall be the “prudent investor” rule, which states
that “investments shall be made with judgment and care, under circumstances then prevailing, which persons of
prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for
investment, considering the probable safety of their capital, as well as the probable income to be derived.” In
determining whether an Investment Officer has exercised prudence with respect to an investment decision, the
determination shall be made taking into consideration the following:
The investment of all funds over which the officer had responsibility rather than a consideration as to the
prudence of a single investment;
Whether the investment decision was consistent with this investment policy.
Indemnification
The Investment Officers, acting in accordance with written procedures and exercising due diligence, shall not be
held personally responsible for a specific investment’s credit risk or market price changes, provided that these
deviations are reported immediately and the appropriate action is taken to control adverse developments.
Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal business activity that would
conflict with the proper execution and management of the investment program, or that would impair their ability to
make impartial decisions. Employees and Investment Officers shall disclose any material interests in financial
institutions with which they conduct business. They shall further disclose any personal financial/investment
positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain
from undertaking personal investment transactions with the same individual with which business is conducted on
behalf of Metro.
An Investment Officer who has a personal business relationship with an organization seeking to sell an investment
to Metro shall file a statement disclosing that personal business interest. An Investment Officer who is related within
the second degree by affinity or consanguinity to an individual seeking to sell an investment to Metro shall file a
statement disclosing that relationship. A statement required under this subsection must be filed with the Texas
Ethics Commission and the Board.
7.0 Suitable and Authorized Investments
Portfolio Management
Metro currently has a “buy and hold” portfolio strategy. Maturity dates are matched with cash flow requirements
and investments are purchased with the intent to be held until maturity. However, investments may be liquidated
prior to maturity for the following reasons:
An investment with declining credit may be liquidated early to minimize loss of principal;
Cash flow needs of Metro may require that the investment be liquidated;
To improve the overall quality or maturity structure of the portfolio;
To enhance the interest earnings of the portfolio.
Authorized Investments
Metro funds governed by this policy may be invested in the instruments described below, all of which are authorized
by the Public Funds Investment Act. Investment of Metro funds in any instrument or security not authorized for
investment under such act is prohibited. Metro will not be required to liquidate an investment that becomes
unauthorized subsequent to its purchase.
(a) Obligations of the United States of America or its agencies and instrumentalities.
(b) Fully collateralized certificates of deposit issued by a state or national bank domiciled in the State
of Texas, a savings and loan association domiciled in the State that are fully insured for the
principal and accrued interest by the United States or an instrumentality of the United States
(c) Direct obligations of the State of Texas or its agencies and instrumentalities;
(d) Other obligations the principal and interest of which are unconditionally guaranteed or insured by,
or backed by the full faith and credit of the State of Texas or the United States of America or their
respective agencies and instrumentalities, including obligations that are fully guaranteed or insured
by the Federal Deposit Insurance or by the explicit full faith and credit of the United States of
America.
(e) Obligations of states, agencies, counties, cities and other political subdivisions of any state rated as
to investment quality by a nationally recognized investment rating firm not less than AA or its
equivalent;
(f) Fully collateralized repurchase agreements if Metro has obtained a signed Master Repurchase
Agreement with the company with which the agreement is entered, as authorized by the Public
Funds Investment Act or other applicable law;
(g) Commercial Paper with a stated maturity of 270 days or fewer from the date of issuance, and is
rated not less than A-1 or P-1 or an equivalent rating by at least two nationally recognized credit
rating agencies, as authorized by the Public Funds Investment Act or other applicable law;
(h) No-load money market mutual funds registered and regulated by the Securities Exchange
Commission, with a dollar-weighted average stated maturity of 90 days or fewer, which provides
investing entities with a prospectus and other information required by the Securities Exchange Act
of 1934 (15 U.S.C. Section 78a et seq.) or the Investment Company Act of 1940 (15 U.S.C.
Section 80a-1 et seq.) and which include in their investment objectives the maintenance of a stable
net asset value of $1 for each share, as authorized by the Public Funds Investment Act.
(i) Guaranteed investment contracts and flexible repurchase agreements, as authorized by the Public
Funds Investment Act or other applicable law.
(j) Local government investment pools that (i) meet the requirements of the Public Funds Investment
Act; (ii) are rated no lower than AAA, or AAAm or an equivalent rating by at least one nationally
recognized rating service; and (iii) seek to maintain a stable net asset value of $1 for each share, as
authorized by the Public Funds Investment Act.
(k) Any other investment authorized by the Public Funds Investment Act.
Credit Downgrade Provision
An investment that requires a minimum rating under this policy does not qualify as an authorized investment during
any period in which the investment does not have the minimum rating. All prudent measures consistent with this
policy will be taken to liquidate an investment that is downgraded to less than the required minimum rating.
Securities Lending
Metro may enter into a securities lending program with an authorized broker/dealer or financial institution in order
to enhance investment return. Metro may administer a securities lending program directly or, if conditions warrant,
use an outside agent. Should an agent be used, one will be selected by the Board using appropriate criteria.
Securities lending will only be transacted with a written agreement, approved by legal counsel, which details: (i)
acceptable types of collateral; (ii) standards for collateral custody and control; (iii) collateral valuation and initial
margin, accrued interest, marking to market, and margin calls; (iv) method for transmitting security income; and (v)
acceptable methods for delivery of securities and collateral.
Approved List of Money Market Mutual Funds and Investment Pools and Federal Agencies
An approved list of money market mutual funds and investment pools is attached to this investment policy as
Schedule 3. An approved list of federal agencies is attached to this investment policy as Schedule 4.
Not Authorized
The following types of investments are strictly prohibited.
(a) Obligations whose payment represents the coupon payments on the outstanding principal balance
of the underlying mortgage-backed security collateral and pay no principal. (Commonly referred
to as “IOs”)
(b) Obligations whose payment represents the principal stream of cash flow from the underlying
mortgage-backed security collateral and bears no interest. (Commonly referred to as “POs”)
(c) Collateralized mortgage obligations that have a stated final maturity date of greater than 10 years.
(d) Collateralized mortgage obligations, the interest rate of which is determined by an index that
adjusts opposite to the changes in a market index (Commonly referred to as “Inverse Floaters”).
Maximum Maturities
The longer the maturity of investments, the greater their price volatility. It is Metro’s policy to concentrate its
investment portfolio in shorter-term securities in order to limit principal risk caused by changes in interest rates.
Metro will attempt to match its investments with anticipated cash flow requirements. With the exception of
investments made for Capital Projects Funds, Metro will not directly invest in securities maturing more than two (2)
years from the date of purchase; however, the above described obligations, certificates or agreements may be
collateralized using longer dated investments.
Because no secondary market exists for repurchase agreements, the maximum maturity shall be 120 days, except in
the case of a guaranteed investment contract or flexible repurchase agreement for bond proceeds. The maximum
maturity for such an investment shall be determined in accordance with project cash flow projections and the
requirements of the governing bond order or resolution.
Diversification
It is the policy of Metro to diversify its investment portfolio. Metro recognizes that investment risks can result from
issuer defaults, market price changes or various technical complications leading to temporary illiquidity. All funds
shall be diversified to eliminate the risk of loss resulting from over-concentration of assets in a specific maturity, a
specific issuer or a specific class of securities. In establishing specific diversification strategies, the following
general policies and constraints shall apply:
(a) Limiting investments to avoid over-concentration in investments from a specific issuer or security
type, excluding U.S. Treasury securities and other investments backed by the full faith and credit
of the United States. .
(b) Limiting investments that have higher credit risks (example: commercial paper).
(c) Investing in investments with varying maturities. Portfolio maturities shall be staggered in a way
that avoids undue concentration of assets in a specific sector. Maturities shall be selected that
provide for stability of income and reasonable liquidity.
(d) Continuously investing a portion of the portfolio in readily available funds such as local
government investment pools (LGIPs), money-market funds or overnight repurchase agreements
to ensure that appropriate liquidity is maintained in order to meet ongoing obligations.
The following maximum limits, by instrument, are established for Metro’s total portfolio:
1. U.S. Treasury Securities 100%
2. Agencies and Instrumentalities 85%
3. Certificates of Deposit 25%
4. Corporate Commercial Paper* 20%
5. Municipal Commercial Paper 25%
6. Municipal Bonds or Notes 25%
7. Repurchase Agreements** 20%
8. Money Market Mutual Funds 50%
9. Authorized Investment Pools 75%
*FDIC insured Commercial Paper issued under TLGP is not subject to limitation
**Excluding flexible repurchase agreements for bond proceeds investments.
8.0 Selection of Banks and Broker/Dealers
Banks
Metro will maintain a list of qualified public depositories approved by the Board that are authorized to hold Metro
funds. Deposits will only be placed with those institutions that have:
(a) Provided audited financial statements;
(b) Submitted a written request or completed an application to be an authorized depository;
(c) Been designated by the Board as an authorized depository;
(d) Signed an appropriate form of security or collateral agreement; and
(e) Provided collateral as required by applicable law.
An annual review of the financial condition of each depository holding Metro funds will be conducted by Metro. A
current audited financial statement is required to be on file for each broker/dealer and financial institution that
transacts any investment activities with Metro.
Broker/Dealers
Metro will maintain a list of approved broker/dealers and financial institutions that have been approved by the Board
and are authorized to provide investment services in the State of Texas. Investments shall only be made with those
firms who qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule) and who have:
(a) Provided audited financial statements;
(b) Completed a response to all requested information in any Metro questionnaire relating to
creditworthiness, experience and reputation;
(c) Acknowledged, in writing, that the policy has been thoroughly reviewed by qualified
representatives dealing directly with Metro’s account and that the organization has implemented
reasonable procedures and controls in an effort to preclude investment transactions conducted
between Metro and the organization that are not authorized by Metro’s investment policy, except
to the extent that this authorization depends on an analysis of the makeup of Metro’s entire
portfolio or requires an interpretation of subjective investment standards; and
(d) Met any qualifications and standards recommended and approved by the Board.
An annual review of the financial condition and registrations of authorized broker/dealers and financial institutions
providing investment services will be conducted by Metro. In addition, the quantity of transactions conducted with
each approved broker/dealer will be reviewed at least annually. The results of this review and the related
recommendations shall be submitted to the Board. The Board shall, at least annually, review, revise, and adopt a list
of qualified brokers that are authorized to engage in investment transactions with Metro.
Securities shall be purchased using the delivery vs. payment method with the exception of investment pools and
mutual funds. Funds will be released after notification that the purchased security has been received.
Approved List
An approved list of banks and broker/dealers is attached to this investment policy as Schedule 5.
Competitive Quotes
Each investment transaction shall be based upon competitive quotations received from at least three (3)
broker/dealers approved by Metro. Competitive quotes shall be documented and retained as part of the transaction
record.
Investment Advisors
Metro may contract with an investment advisor, who shall adhere to the spirit, philosophy and specific term of this
Policy and shall invest within the same “Standard of Care.” The investment advisor must be registered with the
Securities and Exchange Commission (SEC) under the Investment Advisor’s Act of 1940 as well as with the Texas
State Securities Board. Advisors may assist Metro with the management of its funds and other responsibilities
including but not limited to, broker compliance, competitive bidding, reporting and security documentation.
An appointed Investment Advisor shall act solely in an advisory and administrative capacity, within the guidelines
of this Investment Policy. At no time shall the advisor take possession of securities or funds or otherwise be granted
discretionary authority to transact business on behalf of Metro.
9.0 Safekeeping of Securities and Collateral
To protect against potential fraud and embezzlement, the financial assets of Metro shall be secured through
safekeeping procedures. The Investment Officers shall be bonded to protect the public against possible
embezzlement and malfeasance.
Securing Deposits of Authority Funds
Metro shall contract with a bank or banks for the safekeeping of securities either owned by Metro as part of its
investment portfolio or held as collateral to secure demand or time deposits. Securities owned by Metro shall be
held in Metro’s name as evidenced by safekeeping receipts of the institution holding the securities.
Collateral for deposits will be held by a third party custodian designated by the entity and pledged to Metro as
evidenced by safekeeping receipts of the institution with which the collateral is deposited. Original safekeeping
receipts shall be obtained. Collateral may be held by the depository bank’s trust department, a Federal Reserve
Bank or branch of a Federal Reserve Bank, a Federal Home Loan Bank, or a third-party bank approved by Metro.
Collateral Policy
Consistent with the requirements of the Public Funds Collateral Act, it is the policy of Metro to require full
collateralization of all Metro funds on deposit with a depository bank. In order to anticipate market changes and
provide a level of security for all funds, the collateralization level will be 102% of market value of principal and
accrued interest on the deposits less the amount insured by the FDIC. At its discretion, Metro may require a higher
level of collateralization for certain security types. Securities pledged as collateral shall be held by an independent
third party with whom Metro has a current custodial agreement. Metro’s Chief Financial Officer is responsible for
entering into collateralization agreements with third-party custodians in compliance with this investment policy.
The agreements are to specify the acceptable security types for collateral, including provisions relating to possession
of the collateral, the substitution or release of collateral, ownership of collateral, and the method of collateral
valuation. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to Metro and retained in
file. Collateral shall be reviewed at least monthly to assure that the market value of the pledged securities is
adequate.
Collateral Defined
Metro shall accept only the following types of collateral:
Obligations of the United States or its agencies and instrumentalities.
Direct obligations of the State of Texas or its agencies and instrumentalities.
Collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United
States, the underlying security for which is guaranteed by an agency or instrumentality of the United
States, provided that these CMO’s do not fall under the Not Authorized section listed above.
Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to
investment quality by a nationally recognized rating firm not less than AA or its equivalent with a
remaining maturity of ten (10) years or less.
A surety bond issued by an insurance company rated as to investment quality by a nationally
recognized rating firm not less than A.
A letter of credit issued to the entity by the Federal Home Loan Bank.
Subject to Audit
All collateral shall be subject to inspection and audit by a Metro representative or Metro’s independent auditors.
10.0 Performance
Performance Standards
Metro’s investment portfolio will be managed in accordance with the parameters specified within this investment
policy. The portfolio shall be designed with the objective of obtaining a reasonable market yield through budgetary
and economic cycles, commensurate with the investment risk constraints and the cash flow requirements of Metro.
Performance Benchmark
It is the policy of Metro to purchase investments with maturity dates coinciding with cash flow needs. Through this
strategy, Metro shall seek to optimize interest earnings utilizing allowable investments available on the market at
that time. Market value will be calculated on a quarterly basis on all securities owned and compared to current book
value. Metro’s portfolio shall be designed with the objective of attempting to meet or exceed the average yield on
U.S. Treasury securities at a maturity level comparable to Metro’s weighted average maturity in days.
11.0 Reporting
Methods
The Investment Officer shall prepare an investment report on a quarterly basis that summarizes investment strategies
employed in the most recent quarter and describes the portfolio in terms of investment securities, maturities, and
yield to maturity.
The quarterly investment report shall include a summary statement of investment activity prepared in compliance
with generally accepted accounting principles. This summary will be prepared in a manner that will allow Metro to
ascertain whether investment activities during the reporting period have conformed to this investment policy. The
report will be provided to the Board. The report must:
Describe in detail the investment position;
Be prepared jointly by all Metro investment officers;
Be signed by each investment officer;
Contain a summary statement prepared in compliance with generally accepted accounting principles of
each pooled fund group that states the: beginning market value for the reporting period; additions and
changes to the market value during the period; ending market value for the period; fully accrued
interest for the reporting period;
State the book value and market value of each separately invested asset at the beginning and end of the
reporting period by the type of asset and fund type invested;
State the maturity date of each separately invested asset that has a maturity date;
State the fund for which each individual investment was acquired;
Include a statement of compliance of Metro’s investment portfolio with state law and the investment
strategy and policy approved by the Board.
An independent auditor will perform a formal annual review of the quarterly reports with the results reported to the
governing body
Monitoring Market Values and Ratings
Market value of all securities in the portfolio will be obtained from a reputable and independent source such as
Bloomberg and disclosed to the Board not less than quarterly in a written report. The Ratings of all investments
requiring a minimum rating to be considered an acceptable investment will be verified from a reputable, independent
source such as Bloomberg, Standard and Poors or Moody’s Investor Services and any downgrades disclosed to the
Board not less than quarterly in a written report. The Authority shall take all prudent measures that are consistent
with its investment policy to liquidate any investment that does not maintain the minimum rating prescribed by the
Texas Public Funds Investment Act.
12.0 Investment Policy Adoption
Metro’s investment policy shall be adopted by resolution of the Board. It is Metro’s intent to comply with all
applicable state laws and regulations. Metro’s investment policy shall be subject to revisions consistent with
changing laws, regulations, and needs of Metro. Metro shall adopt a resolution stating that it has reviewed the
policy and investment strategies annually, approving any changes or modifications.
SCHEDULES
Schedule 1 — Metro Funds Specifically Exempted From Investment Policy
Schedule 2 — List of Investment Officers
Schedule 3 — Approved List of Money Market Mutual Funds and Investment Pools
Schedule 4 — Approved List of Federal Agencies
Schedule 5 — Approved List of Banks and Broker/Dealers
Schedule 6 — Approved Sources for Public Funds Investment Training
Schedule 1 — Metro Funds Specifically Exempted From Investment Policy
Construction Funds and funds in the General Mobility Escrow are specifically exempted from the maximum
allocation guidelines set forth in Section 7.0.
Schedule 2 — List of Investment Officers
Debbie Sechler Executive Vice President of Finance & Administration
Phil F. Nguyen Director of Treasury Services
Daniel Weber Manager Banking, Investments & Debt Services
Philip Brenner Director of Office of Management & Budget
Schedule 3 — Approved List of Investment Pools, Money Market Mutual Funds and Overnight Sweep Fund
Investment Pools:
TexStar
LOGIC
TexPool
Money Market Mutual Funds:
Williams Capital Government Fund
SEI Investments Government Fund
AIM STIT Government and Agency Portfolio
JP Morgan U.S. Government Money Market Fund
Goldman Sachs Financial Square Government Fund/Select
Overnight Sweep Fund
JP Morgan U.S. Government Money Market Fund
Schedule 4 — Approved List of Federal Agencies
All indirect obligations of the U.S. “such as” :
Federal Farm Credit Bank
Federal Home Loan Bank
Federal Home Loan Mortgage Corporation
Federal National Mortgage Corporation
“and other federal agency obligations, the principal and interest of which are unconditionally
guaranteed or insured by or backed by the full faith and credit of the United States, its agencies
or instrumentalities.”
Direct Obligations of the State of Texas or any county, city, school district or other political subdivision of the State of Texas are also approved investments
Schedule 5 - Depository Banks and Broker/Dealers
Approved Depository Banks:
JPMorgan Chase
BBVA Compass (Formerly Guaranty Federal Savings)
East West Bank (For Certificates of Deposit Only)
Proposed Broker / Dealers
Robert W. Baird & Co.
Blaylock Robert Van
BOSC, Inc.
Cantella & Co. Inc.*
Cantor Fitzgerald
Coastal Securities
Great Pacific Securities
G.X. Clarke
Jefferies LLC
Loop Capital Markets
Mischler Financial Group, Inc.
Piper Jaffray
Ramirez and Co.
Rice Financial Products
Southwest Securities
Stifel, Nicolaus & Co. Inc.*
SunTrust Robinson Humphrey
Vining Sparks
*Indicates new Broker/Dealer recommended for Board approval
Schedule 6 – Approved Sources for Public Funds Investment Training
American Women’s Society of Certified Public Accountants
Chartered Financial Analyst Society
First Southwest Company
Government Finance Officers Association of Texas
Government Treasurers’ Organization of Texas
Public Financial Management
Texas Public Employees Retirement System
Texas Society of Certified Public Accountants
Texas State University
The Texas Association of Counties
The University of North Texas Center for Public Management
BOARD BRIEFING SUMMARY
SUBJECT: AGENDA ITEM #:
AGENDA DATE:
DEPARTMENT: PRESENTER:
SUMMARY:
MONTHLY FINANCIAL REPORTS
FINANCE & AUDIT DEBBIE SECHLER
- CFO's Report- FINANCE COMMITTEE REPORTa. SALES TAX REPORTb. INVESTMENT REPORTc. DEBT REPORTd. MONTHLY BOARD REPORT
The Monthly Report
of the
Chief Financial Officer
Finance & Audit Committee
November 17, 2014
Sales Tax Revenues Revenue thru Nov 2014 is $119.1 million
●$5.3 million or 4.6% over estimates
●$8.8 million or 8.0% over FY2014 year-to-date
Funds Received in
Compared to Estimate Compared to Prior Year
November $3.5M 5.7 % $5.9M 10.1%
October $1.8M 3.4 % $2.9M 5.6%
Revenue Results
Portfolio Summary
Fund Beginning Balance, $millions (09/30/2014)
Ending Balance, $millions (10/31/2014)
Earnings Rate
Benchmark Rate
General $245.8 $248.2 0.111% 0.025%
Construction 97.8 62.2 0.039 0.019
General Mobility 73.1 71.8 0.039 0.009
Budget Results
Debt
As of Total Debt (millions)
October 31, 2014 $ 1,129.0
September 30, 2014 $ 1,151.4
Finance & Audit Committee Meeting Report
October Sales Tax Report
$ 64,787,777 Rec’d in NOVEMBER / Sales in SEPTEMBER $ 119,117,978 FY2015 + 8.0% FY2015 Change over FY2014
Investment Report
$ 248,174,586 General Fund (0.111% vs. 0.025% Benchmark)
$ 62,191,029 Construction Fund (0.039% vs. 0.019% Benchmark)
$ 71,762,809 General Mobility Escrow Balance Inflows: $ 13.6 million from Sales Tax Outflows: $ 2.6 million to City of Houston
Debt Report $1,128,970,000 Outstanding Balance
METRO Board Meeting - November 19, 2014
Finance & Audit Committee Meeting Report
Monthly Board Report
With the exception of capital expenses, year-to-date FY2015 expenditures were within budget: • Operating. . . . . . . . . . . . . . $ (1.3M) or (3.1%) • METRORail Expansion. . . . $ 1.9M or 303.6% • Capital Improvements. . . . $ 1.2M or 81.4% • General Mobility. . . . . . . . .$ (10.5M) or (74.2%) • Debt Service. . . . . . . . . . . . $ (0.0M) or (0.0%)
Briefing Items • Monthly Compliance Report • Monthly Financial Reports • Fare Policy Study • Q-Card Distribution
Recommended for Board Action
• Approval of Monthly Financial Committee Reports including the Investment Reports
• Approval of the FY2015 Investment Policy and Broker/Dealers list
Recommended Authorizations for the President & CEO
METRO Board Meeting - November 19, 2014
CityInvoiced Council
City of Houston Projects Amount District15th Period: Safe Sidewalk Program 1,606,700.00$ Various15th Period: Arterial Travel Time Project 601,646.00 Various14th Period: Hirsch Road Project 216,920.00 B, H14th Period: Memorial Drive Paving & Drainage (N. Kirkwood to N. Eldridge) 114,013.85 TBD15th Period: Traffic Signal Management Program 16,000.00 Various16th Period: Bringhurst Bridge at Union Pacific Railroad 14,000.00 Various15th Period: Signalized Intersections Project 5,000.00 Various
2,574,279.85$
General Mobility ProgramPolitical Jurisdictions of Projects Funded in October 2014
METRO
Fiscal Year 2015 Monthly Board Report
Revenue • Expense • Ridership • Performance
October 2014
DRAFT
11/12/2014
Section A Summary
Section B Sales Tax Revenue
Section C Fare Revenue
Section D Grant and Interest & Miscellaneous Revenue
Section E Budget and Expense Summary
Section F Operating ExpensesOctober 2014 Budget vs. ActualFY2015 YTD Budget vs. ActualFY2015 YTD Major Variance ItemsFY2015 YTD Operating Budget/Expenses by Department
Section G Capital, General Mobility & Debt Service Expenditures
Section H Ridership by Service Category
Section I Performance StatisticsPerformance Statistic Notes
Section J Balance Sheet
October 2014MONTHLY BOARD REPORT
Table of Contents
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● Performance Indicator Summary:
Safety & Security Bus Accidents met the benchmark for both the month and year-to-date. Rail Accidents did not meetthe benchmark for both the month and the year-to-date. Total Major Security Incidents met both thebenchmark for the month and for the year-to-date. Major Security Incidents on METRO propertiesmet the benchmark for both the month and year-to-date.
Service Reliability On-Time Performance for Local Bus is below the minimum performance standard for the month andthe year-to-date. On-Time Performance for Park & Ride Bus met the minimum performance standardfor both the month and year-to-date. On-Time Performance for METROLift did not meet the minimumperformance standard for the month and year-to-date. On-Time Performance for Rail is not yetavailable. The Mean Distance Between Mechanical Failures (MDBF) for all buses met the minimumstandard for the month and year-to-date. MDBF for METROLift is above the minimum standard forboth the month and year-to-date.
Customer Service Complaint Contacts missed both the goal for the month and for the year-to-date. The number ofCommendations met the goal for the month and year-to-date. The Average Call Center AnswerDelay missed the goal for the month and year-to-date.
MONTHLY BOARD REPORTOctober 2014
Summary
There were no Capital Grant collections or budget programmed in October 2014.
Interest & Miscellaneous revenue year-to-date of $1.0 million through October 2014 is $0.2 million or 28.0% over budget.
METRORail ridership year-to-date of 1.2 million through October 2014 is 231,000 or 22.9% over last year.
Debt Service expenses of $15.0 million through October 2014 year-to-date is on budget.
FY2015 Sales Tax revenue through November 2014 is $119.1 million and $5.3 miliion or 4.6% over estimates. Sales Taxrevenue for October 2014 (FY2015) is $54.3 million, $1.8 million or 3.4% over estimates.
Fare Revenue year-to-date of $6.4 million through October 2014 is $0.2 million or 2.9% under budget.
Operating expenses year-to-date of $40.1 million through October 2014 are $1.3 million or 3.1% under budget.
METRORail Expansion expenses year-to-date of $2.5 million through October 2014 are $1.9 million or 303.6% over budget.
Other Capital Improvement Program expenses year-to-date of $2.8 million through October 2014 are $1.25 million or 81.4%over budget.
General Mobility Program expenses year-to-date of $3.7 million through October 2014 are $10.5 million or 74.2% underbudget.
Service Related Grant Revenue year-to-date of $0.4 million through October 2014 is $0.3 million or 38.4% under budget.
METROBus ridership (fixed route) year-to-date of 6.4 million through October 2014 is 8,000 or 0.1% under last year.
Section A Page 1
Budget Actual Variance %October 52.5 54.3 1.8 3.4%November 61.3 64.8 3.5 5.7%December - - - 0.0%January - - - 0.0%February - - - 0.0%March - - - 0.0%April - - - 0.0%May - - - 0.0%June - - - 0.0%July - - - 0.0%August - - - 0.0%September - - - 0.0%FY 2015 YTD 113.8$ 119.1$ 5.3$ 4.6%
Prior Year Current Year Variance %October 51.4$ 54.3$ 2.9 5.6%November 58.9 64.8 5.9 10.1%December - - - 0.0%January - - - 0.0%February - - - 0.0%March - - - 0.0%April - - - 0.0%May - - - 0.0%June - - - 0.0%July - - - 0.0%August - - - 0.0%September - - - 0.0%FY 2015 YTD 110.3$ 119.1$ 8.8$ 8.0%
Budget to Actual FY2015
Prior Year vs. Current Year($ millions)
MONTHLY BOARD REPORTOctober 2014
Sales Tax Revenue thru November 2014
($ millions)
Total FY2015 Sales Tax budget is $706.2 million
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
milli
ons
FY2015 Budget FY2015 Actual FY2014 Actual
Section B Page 2
Budget Actual Variance %October 6.6 6.4 (0.2) (2.9%)November - - - 0.0%December - - - 0.0%January - - - 0.0%February - - - 0.0%March - - - 0.0%April - - - 0.0%May - - - 0.0%June - - - 0.0%July - - - 0.0%August - - - 0.0%September - - - 0.0%
FY 2015 YTD 6.6$ 6.4$ (0.2)$ (2.9%)
Prior Year Current Year Variance %October 6.5 6.4 (0.1) (1.1%)November - - - 0.0%December - - - 0.0%January - - - 0.0%February - - - 0.0%March - - - 0.0%April - - - 0.0%May - - - 0.0%June - - - 0.0%July - - - 0.0%August - - - 0.0%September - - - 0.0%
FY 2015 YTD 6.5$ 6.4$ (0.1)$ (1.1%)
MONTHLY BOARD REPORTOctober 2014Fare Revenue
Total FY2015 Fare Revenue budget is $72.2 million
Budget to Actual FY2015($ millions)
Prior Year vs. Current Year($ millions)
Section C Page 3
Budget Actual Variance %October 0.7$ 0.4$ (0.3)$ (38.4%)November -$ -$ -$ 0.0%December -$ -$ -$ 0.0%January -$ -$ -$ 0.0%February -$ -$ -$ 0.0%March -$ -$ -$ 0.0%April -$ -$ -$ 0.0%May -$ -$ -$ 0.0%June -$ -$ -$ 0.0%July -$ -$ -$ 0.0%August -$ -$ -$ 0.0%September -$ -$ -$ 0.0%
FY 2015 YTD 0.7$ 0.4$ (0.3)$ (38.4%)
Budget Actual Variance %October 0.8$ 1.0$ 0.2$ 28.0%November -$ -$ -$ 0.0%December -$ -$ -$ 0.0%January -$ -$ -$ 0.0%February -$ -$ -$ 0.0%March -$ -$ -$ 0.0%April -$ -$ -$ 0.0%May -$ -$ -$ 0.0%June -$ -$ -$ 0.0%July -$ -$ -$ 0.0%August -$ -$ -$ 0.0%September -$ -$ -$ 0.0%
FY 2015 YTD 0.8$ 1.0$ 0.2$ 28.0%
($ millions)
Interest & Miscellaneous Revenue
MONTHLY BOARD REPORTOctober 2014
Service Related Grant Revenue
Budget to Actual FY2015($ millions)
Budget to Actual FY2015
Total FY2015 Service Related Grant budget is $75.8 million
Total FY2014 Interest & Miscellaneous Revenue budget is $10.8 million
Capital Grant RevenueYear-to-date Capital Grant revenue is $0.0 million versus $120.6
million budgeted
Section D Page 4
January #
April
MONTHLY BOARD REPORTOctober 2014
Budget and Expense Summary(in $ millions)
81.4%
(74.2%)
303.6%
(3.1%)
0.0%
$- $10 $20 $30 $40 $50
METRORail Expansion
CIP Program
GMP Budget
Debt Service Budget
Operating Budget
Budget Actual
Section E Page 5
Comparison of Budget to Actual for the Month (October 2014)
FY15 Annual October October $ Variance % VarianceBudget Budget Actual
Labor and Fringe Benefits $ 301,590,090 $ 25,003,687 $ 24,917,726 $ (85,961) (0.3%)Non-Labor 221,035,377 17,921,936 17,601,515 (320,421) (1.8%)Subtotal Labor & Non-Labor 522,625,467 42,925,623 42,519,241 (406,382) (0.9%)
Contingency 10,000,000 - - - 0.0%Allocation to Capital and GMP (17,633,767) (1,503,439) (2,394,658) (891,219) (59.3%)
Total Operating Budget $ 514,991,700 $ 41,422,184 $ 40,124,582 $ (1,297,602) (3.1%)
Comparison of Budget to Actual Year-to-Date October 2014 (1 month)
FY15 Annual Year-to-Date Year-to-Date $ Variance % VarianceExpense Category Budget Budget ActualWages $ 116,070,301 $ 9,608,351 $ 9,953,590 $ 345,239 3.6%Union Fringe Benefits $ 60,485,951 4,886,860 4,891,804 4,944 0.1%Subtotal Union Labor 176,556,252 14,495,211 14,845,394 350,183 2.4%
Salaries and Non-Union Wages 86,438,577 7,343,979 7,054,487 (289,492) (3.9%)Non-Union Fringe Benefits 38,595,261 3,164,497 3,017,845 (146,652) (4.6%)Subtotal Non-Union Labor 125,033,838 10,508,476 10,072,332 (436,144) (4.2%)
Subtotal Labor and Fringe Benefits 301,590,090 25,003,687 24,917,726 (85,961) (0.3%)
Services 41,330,171 2,829,355 1,776,314 (1,053,041) (37.2%)Materials and Supplies 21,652,539 1,740,075 1,789,436 49,361 2.8%Fuel and Utilities 52,000,949 4,561,487 4,487,174 (74,313) (1.6%)Casualty and Liability 4,516,671 408,187 347,195 (60,992) (14.9%)
Purchased Transportation 93,342,065 7,973,523 7,782,131 (191,392) (2.4%)Leases, Rentals and Misc. 8,192,982 409,309 1,419,265 1,009,956 246.7%Subtotal Non-Labor 221,035,377 17,921,936 17,601,514 (320,422) (1.8%)
Subtotal Labor and Non-Labor 522,625,467 42,925,623 42,519,241 (406,382) (0.9%)
Contingency 10,000,000 - - 0.0%Allocation to Capital and GMP (17,633,767) (1,503,439) (2,394,658) (891,219) (59.3%)Subtotal Contingency / Allocations (7,633,767) (1,503,439) (2,394,658) (891,219) (59.3%)
Total Operating Budget $ 514,991,700 $ 41,422,184 $ 40,124,582 $ (1,297,602) (3.1%)
(favorable)/unfavorable
Operating ExpensesOctober 2014
MONTHLY BOARD REPORT
(favorable)/unfavorable
Section F Page 6
Expense Type YTD Budget YTD Actual
Union Labor 14,495,211 $ 14,845,394 $ 350,183
(664,299)$
95,000
878,000 Non-Union Labor 10,508,476 10,072,332 (436,144)
Salaries and fringes primarily related to vacancies (293,000)
(197,000)Timing in the use of vacation and sick time (139,000)
Offset by
91,000 162,000
Services 2,829,355 1,776,314 (1,053,041)(250,000)
(183,000)(102,000)(94,000)(73,000)(73,000)(67,000)(61,000)
- Other miscellaneous services spread across the Authority (197,000)Materials & Supplies 1,740,075 1,789,436 49,361
Overruns in Service Delivery and Capital Programs -- Higher than planned expeditures in maintenance supplies, minor tools and parts 125,000 Underutilization in- General Office Supplies, tires & tubes (65,000)
Fuel & Utilities 4,561,487 4,487,174 (74,313)(46,000)(28,000)
Casualty and Liability 408,187 347,195 (60,992)Subrogation recovery is higher than anticipated (104,387)Offset byHigher than expected vehicle liability costs 42,000
Purchased Transportation 7,973,523 7,782,131 (191,392)
(118,000)
(73,000)
Leases, Rentals and Miscellaneous 409,309 1,419,265 1,009,956 Early payment of the Microsoft agreement license 1,000,000 Offset byTiming delays in discretionary items (Travel, Memberships, Subscriptions, etc.) (92,000)
Allocation to Capital and GMP (1,503,439) (2,394,658) (891,219)(370,000)
Other Authority related Capital & GMP projects and related overhead (521,000)Rail Capitalization
(favorable) / unfavorable
Underutilization in other areas throughout the Authority - mostly in:
Overtime mostly associated with APTA related services
- Support services
Timing variance in Planning's System Reimagining projects
- General legal fees
One time CMAQ Vanpool credit relates to City of Houston payment of transit benefits for employee vanpool fares for a one year period Actual scheduled hours for First Transit, hours for METROLift and Alternative services all lower than expected
Wages & Fringe Benefits - primarily mechanic, technician, cleaner, and operator vacancies
Overtime wages due to vacancies in bus operator positions and additional hours related to shuttle services for the APTA Conference
Lower than expected healthcare expenses resulting from vacancies and the effect of different employee healthcare election options than planned
- Education and training
Lower than expected expenses in routine phone services Lower than expected gasoline cost
MONTHLY BOARD REPORTOctober 2014
Major Operating Budget Variance Items - Categories with major variances
October 2014 Year-to-Date$ Variance
Processing delay in severance pay for certain personnel carried over from prior year
Benefits Trust Contribution - due to additional pay period in the current month
- Treasury equipment repairs and maintenance
- Facility maintenance for building, ground and bus operating facilities
- Legislative Coordination
- Building Ground and Maintenance
Section F Page 7
-----------------------Year-to-Date-------------------- --Current Month--
Department Annual Budget Budget Expense Variance Variance
3,096 Operations, Public Safety and Customer Service 398,402,945$ 33,646,125$ 32,580,190$ (1,065,935)$ (1,065,935)$ 74 Customer Service 4,726,516 410,272 362,524 (47,748) (47,748)
2,714 Operations 362,813,993 30,615,287 29,976,405 (638,882) (638,882) 302 Public Safety 29,661,459 2,515,527 2,216,207 (299,320) (299,320)
6 EVP Operations, Public Safety & Customer Service 1,200,977 105,039 25,054 (79,985) (79,985) 298 Finance & Administration 55,448,453 4,059,496 4,686,632 627,136 627,136
76 Finance 9,641,396 819,575 589,136 (230,439) (230,439) 39 Human Resources 18,714,491 1,599,773 1,193,833 (405,940) (405,940) 67 Information Technology 17,312,099 820,929 2,138,768 1,317,839 1,317,839
114 Procurement & Materials 9,402,230 787,270 734,719 (52,551) (52,551) 2 EVP Finance & Administration 378,237 31,949 30,176 (1,773) (1,773)
260 Planning, Engineering and Construction 34,376,484 2,590,839 2,130,667 (460,172) (460,172) 30 Engineering and Construction 119,188 141 (45,756) (45,897) (45,897)
188 Facility Maintenance 25,930,674 1,847,133 1,756,271 (90,862) (90,862) 40 Planning 8,312,951 742,420 420,152 (322,268) (322,268) 2 EVP Planning, Engineering & Construction 13,671 1,145 (0) (1,145) (1,145)
40 Gov't & Public Affairs 8,284,766 524,838 313,534 (211,304) (211,304) 3 Government Affairs 571,049 64,644 47,261 (17,383) (17,383)
24 Mktg & Corporate Communications 6,883,822 322,436 228,854 (93,582) (93,582) 7 Public Engagement 704,187 85,272 50,916 (34,356) (34,356) 6 Stakeholder Affairs 125,708 52,486 (13,497) (65,983) (65,983)
18 Legal 3,768,861 330,805 169,601 (161,204) (161,204) 14 Legal 3,352,876 297,817 137,327 (160,490) (160,490) 4 Records Management 415,985 32,988 32,274 (714) (714)
11 Executive & Board 2,040,111 157,617 138,783 (18,834) (18,834) 11 Audit 1,293,375 112,464 105,174 (7,290) (7,290)
Non-Departmental 1,376,705 - - - - Contingency 10,000,000 - - - -
3,734 TOTAL NET OPERATING 514,991,700$ 41,422,184$ 40,124,582$ (1,297,602)$ (1,297,602)$
Authorized EOY
Headcount
MONTHLY BOARD REPORTOctober 2014
Total Net Operating Budget / Expenses by Department
Section F Page 8
-----------------------Year-to-Date--------------------Department Budget Expense Variance Budget Expense VarianceOperations, Public Safety and Customer Service 33,646,125$ 32,580,190$ (1,065,935)$ 31,778,819$ 29,772,626$ (2,006,193)$
EVP Operations, Public Safety and Customer Service 105,039 25,054 (79,985) N/A N/A N/ACustomer Service 410,272 362,524 (47,748) 368,852 359,757 (9,095) Operations 30,615,287 29,976,405 (638,882) 28,914,861 27,288,892 (1,625,969) Public Safety 2,515,527 2,216,207 (299,320) 2,495,106 2,123,977 (371,129)
Finance & Administration 4,059,496 4,686,632 627,136 4,017,564 3,164,103 (853,461) EVP Finance & Administration 31,949 30,176 (1,773) N/A N/A N/AFinance 819,575 589,136 (230,439) 1,023,609 585,390 (438,219) Human Resources 1,599,773 1,193,833 (405,940) 1,471,544 1,271,499 (200,045) Information Technology 820,929 2,138,768 1,317,839 770,147 578,730 (191,417) Procurement & Materials 787,270 734,719 (52,551) 752,264 728,484 (23,780)
Planning, Engineering and Construction 2,590,839 2,130,667 (460,172) 2,653,395 1,913,764 (739,631) EVP Planning, Engineering & Construction 1,145 - (1,145) N/A N/A N/AEngineering and Construction 141 (45,756) (45,897) 29,384 38,060 8,676 Facility Maintenance 1,847,133 1,756,271 (90,862) 2,036,601 1,577,803 (458,798) Planning 742,420 420,152 (322,268) 587,410 297,901 (289,509)
Gov't & Public Affairs 524,838 313,534 (211,304) 655,740 325,847 (329,893) Government Affairs 64,644 47,261 (17,383) 47,572 48,731 1,159 Mktg & Corporate Communications 322,436 228,854 (93,582) 536,991 215,658 (321,333) Public Engagement 85,272 50,916 (34,356) 70,073 61,458 (8,615) Stakeholder Affairs 52,486 (13,497) (65,983) 1,104 - (1,104)
Legal 330,805 169,601 (161,204) 258,281 261,582 3,301 Legal 297,817 137,327 (160,490) 258,281 261,582 3,301 Records Management 32,988 32,274 (714) -
Executive & Board 157,617 138,783 (18,834) 138,711 119,134 (19,577) Audit 112,464 105,174 (7,290) 114,333 105,113 (9,220) Non-Departmental - - - - - - Contingency - - - - - - TOTAL NET OPERATING 41,422,184$ 40,124,581$ (1,297,603)$ 39,616,843$ 35,662,171$ (3,954,672)$
-----------------------Year-to-Date--------------------
MONTHLY BOARD REPORTOctober 2014
Total Net Operating Budget / Expenses by Departmentas of the end of October FY2015 vs. October FY2014
October FY2015 October FY2014
Section F Page 9
FY2015AnnualBudget Budget Actual $ % Budget Actual $ %
172.7$ 0.6$ 2.5$ 1.9$ 303.6% 0.6$ 2.5$ 1.9$ 303.6%
186.8 1.5 2.8 1.2 81.4% 1.5 2.8 1.2 81.4%
359.5$ 2.2 5.3 3.1 145.3% 2.2 5.3 3.1 145.3%
173.0$ 14.2 3.7 (10.5) (74.2%) 14.2 3.7 (10.5) (74.2%)
91.5$ 15.0$ 15.0$ 0.0$ 0.0% 15.0$ 15.0$ 0.0$ 0.0%
Total Capital Budget
General Mobility
VarianceVariance
METRORail Expansion
Debt Service
Capital Improvement Program
MONTHLY BOARD REPORTOctober 2014
Capital, General Mobility and Debt Service Expenses
($ millions)
Fiscal YTD October 2014
Budget vs. Actual - Month and Fiscal Year-to-Date
Month of October 2014
Section G Page 10
YTD % Change
Oct-14 Oct-13 Oct-14 Oct-14Service Category Oct-13 Oct-14 vs. YTD YTD vs.
Boardings Boardings Oct-13 Boardings Boardings Oct-13Fixed Route BusLocal 5,666,051 5,625,319 (0.7%) 5,666,051 5,625,319 (0.7%)Park & Ride 778,475 810,952 4.2% 778,475 810,952 4.2%Subtotal Fixed Route Bus 6,444,526 6,436,271 (0.1%) 6,444,526 6,436,271 (0.1%)METRORail 1,009,689 1,240,783 22.9% 1,009,684 1,240,783 22.9%Subtotal Fixed Route 7,454,215 7,677,054 3.0% 7,454,210 7,677,054 3.0%Special Events * 298 14,660 4819.5% 298 14,660 N.A.Total Fixed Route 7,454,513 7,691,714 3.2% 7,454,508 7,691,714 3.2%
Customized Bus ServicesMETROLift 163,625 176,142 7.6% 163,625 176,142 7.6%METRO STAR Vanpool 229,889 224,466 (2.4%) 229,889 224,466 (2.4%)Internal Service 72 0 100.0% 72 0 (100.0%)Subtotal Customized Bus 393,586 400,608 1.8% 393,586 400,608 1.8%
Subtotal Bus and Rail 7,848,099 8,092,322 3.1% 7,848,094 8,092,322 3.1%HOV/HOT Carpools, Vanpools, and Non-METRO Buses
2,328,014 2,103,465 (9.6%) 2,328,014 2,103,465 (9.6%)
Total System 10,176,113 10,195,787 0.2% 10,176,108 10,195,787 0.2%
January ############### January
January January
January January
Fixed route ridership is reported on the same basis as in the National Transit Database
MONTHLY BOARD REPORTOctober 2014
Ridership by Service Category
* The Special Events category of ridership reflects customer service oriented short-term additional motor bus service provided for events at Reliant Park such as football games and RODEO Houston.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP
Millions
Fixed Route and Total System RidershipFY2014 ‐ FY2015
FY2014 in Blue FY2015 in Green
Fixed Route Ridership
Total System Ridership
Section H Page 11
Benchmark Missed
FY2015 YTDSAFETY & SECURITY Monthly YTD FY2015 %
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Target GOAL YTD ChangeBus Accidents (Includes METROLift) 31 46 46 31 32.6% Bus Accidents per 100,000 vehicle miles 0.51 0.72 0.72 0.51 29.5%
Rail Accidents 7 5 5 7 40.0% Rail Accidents per 100,000 vehicle miles 4.24 6.58 6.58 4.24 35.5%
Major Security Incidents - total 45 45 45 45 0.0% Major Security Incidents per 100,000 boardings 0.556 0.640 0.640 0.556 13.1%
Major Security Incidents - METRO properties 12 28 28 12 57.1% Major Security Incidents per 100,000 boardings 0.148 0.397 0.397 0.148 62.6%
FY2015 YTDSERVICE & RELIABILITY Monthly YTD FY2015 %
OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Target GOAL YTD Change
Local Bus OTP 68.5% 69% 69% 68.5% 0.7%Park & Ride Bus OTP 77.0% 75% 75% 77.0% 2.7%Weighted Average Bus OTP 70.7% 71% 71% 70.7% 0.4%METROLift OTP 85.8% 87% 87% 85.8% 1.3%
Rail On-Time Performance N/A 90% 90% NA*
MDBF (Mean Distance Between Mechanical Failures) - All Buses 11,027 7,750 7,750 11,027 42.3%
MDBF (Mean Distance Between Mechanical Failures) - METROLift 14,978 13,000 13,000 14,978 15.2%
0.0% 0.0%FY2015 YTD
CUSTOMER SERVICE Monthly YTD FY2015 % OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Target GOAL YTD Change
*Complaint Contacts per 100,000 boardings 27.46 25.50 25.5 27.46 7.7%Commendations 316 250 250 316 26.4%Average Call Center Answer Delay (Sec.) 128 120 120 128 6.7%
* Note: Rail OTP is not yet available
Benchmark Met
MONTHLY BOARD REPORTOctober 2014
Performance Statistics
Fiscal Year 2015
≤
≤≤ ≤
≤≤≤
≤≤≤
≤
≤≤
≤≤
≥≥
≥
≥
≥≥
≥
≥
≤ ≤
≥ ≥
≤ ≤≥ ≥
≤
≥ ≥
≥ ≥≥ ≥
Section I Page 12
MONTHLY BOARD REPORTOctober 2014
Performance Statistic Definitions
Bus and Rail Accidents - An accident is a transit incident with passenger injuries that require immediatemedical treatment away from the scene or a collision between a revenue vehicle and an object such that theamount of damage exceeds $1,000. Bus accidents (which include METROLift) and rail accidents are reportedseparately and in terms of the absolute number of accidents and the relative number of accidents per100,000 vehicle miles. Rail accidents reflect collisions between METRORail and other vehicles, pedestrians,or bicyclists. This definition has been revised beginning in FY2011 to include pedestrian accidents.
Major Security Incidents - The total Major Security Incidents is based on two industry standards: the FBIUniform Crime Report and the National Transit Database (NTD) Report issued by the Federal TransitAdministration (FTA). The eight (8) categories included are: homicide, forcible rape, robbery, aggravatedassault, burglary, larceny and theft, motor vehicle theft and arson. This metric is reported both in terms of theabsolute number of incidents and the number of incidents per 100,000 boardings.
Major Security Incidents - METRO Properties - The total Major Security Incidents - METRO Properties isthe number of incidents that occur at Park & Ride lots, Transit Centers, on-board buses and trains and onLight Rail Vehicle (LRV) platforms. This metric is reported both in terms of the absolute number of incidentsand the number of incidents per 100,000 boardings.
On-Time Performance (OTP) - A local bus is considered on-time if it does not leave early and is within a five(5) minute window after the scheduled departure time. A Park & Ride bus is considered on-time if it does notdepart early (except in the morning when a bus can leave from a Park & Ride lot when full) and is within a five(5) minute window after the scheduled departure time, with measurements during peak hours. OTP ismeasured by the IVOMS system which calculates data to the second, and the five (5) minute window isdefined as anything less than six (6) minutes. For METRORail, a train departing from the beginning of the lineor arriving at the end of the line less than five (5) minutes after the scheduled time is considered on-time. ForMETROLift, a trip is considered on-time if the vehicle arrives within 30 minutes of the scheduled pick-up timeand no later than the appointment time.
Mean Distance Between Mechanical Failures (MDBF) - MDBF reflects any mechanical issue encounteredduring operation of the vehicle in revenue service that requires a maintenance action resulting from amechanical failure. Mechanical failures include warranty and fleet defects but exclude accidents.
Complaint Contacts - Patrons may contact METRO’s Customer Care Center to express dissatisfaction withMETRO. Contacts made via telephone and over the internet which result in a complaint record beinggenerated in the Public Comment System are reported as the number of contacts per 100,000 boardings.
Commendations - Patrons may contact METRO's Customer Care Center to recognize, compliment or praisea METRO employee or the METRO organization for exemplary work or performance. Contacts made viatelephone, internet, email or mail which result in a commendation record being generated in the PublicComment System are reported only on the basis of the absolute number of contacts received.
Average Call Center Answer Delay - METRO is committed to providing customers with accurate, customer-friendly bus and service information in a timely manner. Customers may obtain bus information overMETRO's website and by telephone using an interactive voice response system without speaking to arepresentative and with no customer wait time. For those customers who prefer to speak with arepresentative, METRO's goal is to answer their calls in 120 seconds or less.
Section I Page 13
October 31, 2013 ($) October 31, 2014 ($) Change ($)
Cash 3,402,635$ 7,151,691$ 3,749,056$ Receivables 143,567,883 138,434,276 (5,133,607)Inventory 21,568,741 25,053,041 3,484,300Investments 330,401,247 375,595,262 45,194,015Other Assets 87,001,994 37,250,329 (49,751,665)Property Net of Depreciation 2,582,663,092 2,771,666,988 189,003,896Land & Improvements 389,935,850 397,439,605 7,503,755
Total Assets and Other 3,558,541,442 3,752,591,192 194,049,750
LiabilitiesTrade Payables 87,923,530 65,342,052 (22,581,478)Accrued Payroll 28,915,297 27,898,428 (1,016,869)Commercial Paper 183,400,000 183,400,000 - Long-Term Liabilities 1,067,525,050 1,229,735,865 162,210,815Other Liabilities 73,439,715 24,533,297 (48,906,418)
Total Liabilities 1,441,203,592 1,530,909,642 89,706,050
Net Assets - Retained 2,117,337,850 2,221,681,550 104,343,700
Total Liabilities and Net Assets 3,558,541,442$ 3,752,591,192$ 194,049,750$
MONTHLY BOARD REPORTOctober 2014Balance Sheet
Section J Page 14
BOARD BRIEFING SUMMARY
SUBJECT: AGENDA ITEM #:
AGENDA DATE:
DEPARTMENT: PRESENTER:
SUMMARY:
METRO projects for inclusion in the Houston-Galveston Area Council's (H-GAC)2015-18 Transportation Improvement Program (TIP)
Planning, Engineering & Construction Clint Harbert
The Houston-Galveston Area Council (H-GAC) has issued a call for projects for the 2015-18 Transportation ImprovementProgram (TIP).
H-GAC's Transportation Policy Council (TPC) oversees development of and adopts the Transportation Improvement Plan.Projects included in the Transportation Improvement Plan are evaluated by H-GAC staff and Transportation Policy Council onmerits of the project.
For METRO's projects to be included in the 2015-18 Transportation Improvement Plan the projects must be submitted to H-GACby December 15, 2014.
The anticipated amount of money available for funding transit projects are as follows:A. Alternative Modes = 9-13% of totalB. Air Quality = 9-13% of total
1. Congestion Mitigation Air Quality (CMAQ) - $52.7M- 9% = $4,743,000-13% = $6,851,000
2. Surface Transportation Plan (STP) - $123.3M- 9% = $11,097,000-13% = $16,029,000
METRO recommends proposing two projects that meet grant eligibility requirements and are carried in our Long Range Plan(LRP):1. Cypress T-Ramp2. Magnolia Transit Center modifications
Capital Programs & Finance
Committee
H-GAC Transportation Improvement
Plan Call for Projects
November 2014
What is the Transportation
Improvement Plan Call for Projects?
• Transportation Improvement Plan is the first four (4) years of the region’s long range plan
• Funding specified and allocated to projects
• Projects compete for federal and state dollars
• H-GAC selects projects of regional significance
• Fiscal years 2015-2018
• Projects must meet regional goals
• Projects approved by Transportation Policy Council
2
• METRO projects likely qualify under Surface Transportation (STP) and Congestion Mitigation and Air Quality (CMAQ)
• 9% - 13% allocated to “alternative modes” and “air quality” projects
• $11 - $16M Surface Transportation Plan
• $4.7 - $6.8M Congestion Mitigation and Air Quality
70%
3%
19%
8%
27%
$636.3 Million Total Available Funding
Mobility - $442.3 Million(TxDOT Cat. 2 & Prop 1)
TAP - $17.9 Million(bicycle & pedestrian)
STP-MM - $123.3 Million
CMAQ - $52.7 Million
Funding Availability
3
Selection Process
• Competitive process
• Projects screened by:
• Readiness criteria & conformity impact
• Benefit/Cost analysis (safety, congestion,
asset management/operations, economic
competitiveness & environment)
• Planning factors (quantitative and
qualitative)
• Applications due by December 15, 2014
4
Proposed Project Submission –
Cypress L-Ramp
• Significant operational savings:
• Initial savings estimate: $400K - 600K/yr.
• Potential future demand savings increase to
approximately $800K/yr.
• Timing with US 290 construction is optimal
• Approximate Cost Estimate: $30 - $35M
• $24 - $28M federal request (80%)
• $6 – $7M METRO share (20%)
5
Proposed Project Submission –
Cypress L-Ramp
• Requires upfront commitment by METRO to
coordinate design activities with TxDOT
• Maintains construction feasibility for when
METRO chooses to advance project – either
through this grant or later
• Commitment would require METRO pay TxDOT
for design accommodation and purchase
additional ROW
6
Proposed Project Submission –
Cypress L-Ramp
• Upfront project costs to accommodate design: approximately $1.5 - $2.0M
• Currently, $934K in FTA 5307 is programmed for this projected and requires 20% local match: • Local cost estimated at $566K - $1.05M
• Includes ROW, TxDOT change order, environmental, and project management
• Additional project development and coordination with TxDOT based on committee concurrence
7
Cypress L-Ramp
8
Proposed Project Submission –
Magnolia Park Transit Center
• Current 4 bay facility, operating as a 6 bay
• Canopy structure needs updating
• Modifications needed to
interface with East End Light
Rail Transit
• Cost: $3,869,000
• $3,095,200 federal request
(80%)
• $773,800 METRO share
(20%) 9
Magnolia Park Transit Center
10
Requested Action
• Approve staff to submit one or both of the following projects to the 2015-2018 Transportation Improvement Plan (TIP) Call for Projects:
• Cypress L-Ramp
• Magnolia Park Transit Center Modifications
• Commit METRO project funds for Cypress L-Ramp to secure future construction feasibility and continued coordination with TxDOT
• Allow staff to explore use of Transportation Development Credits (TDC)
11
2015 - 2019 CAPITAL IMPROVEMENT PROGRAM - PROJECT REQUEST FORM METROUsed to request new or increased funding transfers from the Unallocated Project Funding (contingency) FY2014 - FY2019 CASH FLOW WITH HISTORY
Project: 422133 METRO Board Briefings/Authorizing Action:Schedule Data: Date Event Resolution # START COMPL 11/20/14 Board ReviewLand N/ADesign 06/01/15 10/31/15Constr. 04/01/16 09/30/16Operational Currently
Under Contract?: N
Project Category: ENState of Good Repair, Enhancement of Existing Assets or Service Expansion (SGR / EN / SE)Included in Regional Plan? YES
EXPENDED PLANNED EXPENDITURES ($ X 1,000)THRU REVISED
PROJECT CATEGORIES FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 TOTALProject Management - METRO Labor - 0 80 123 12 0 0 215Project Management - Expenses - 0 5 5 0 0 0 10Design - 0 201 134 0 0 0 335Design Services During Construction - 0 0 40 10 0 0 50Construction - 0 0 1,835 365 0 0 2,200Construction Management - 0 0 125 25 0 0 150Allocated Overhead - 0 51 78 8 0 0 137Contingency - 0 69 623 111 0 0 803
0TOTAL PROJECT COST 0 0 406 2,963 531 0 0 3,900
FUNDING SOURCEFEDERAL 5337 SGR 325 2,370 425 0 3,120DEBT 0METRO 0 0 81 593 106 0 0 780FUNDING TOTAL 0 0 406 2,963 531 0 0 3,900
OPERATING COST IMPACT Increase/(Decrease) 0 0 0 0 0 0 0 0
PROJECT TITLE & DESCRIPTION: Magnolia Transit Center ExpansionThe Magnolia Transit Center located in the vicinity of Harrisburg Blvd. and 70th Street is planned to undergo modification to include, but not be limited to, adding approximately 30 ft. of extensions to both ends of the existing canopy; extending the platform on both ends to increase the capacity from four (4) bus bays to six (6) bus bays; upgrades of the existing signage (English & Spanish); and the addition of platform amenities such as trash receptacles. JUSTIFICATION:
OPERATING IMPACT:
This expansion is necessary to meet the future demand as a result of the METRO Rail Expansion in the area and System Reimagining.
FY2015 -2019 CIP - Magnolia CIP Board 10/31/2014 2:14 PM
H:\Executive\Board File\Board Meeting Folders\2014 BOARD MEETINGS\11-NOVEMBER 2014\COMMITTEE MEETING - NOV\CAPITAL PROGRAMS - NOV\10.4- CIP Cut Sheet Cypress PR L-Ramp [FY2015 CIP] 11/7/2014 4:11 PM
2014 - 2018 CAPITAL IMPROVEMENT PROGRAM METROFY2015 - FY2019 CASH FLOW WITH HISTORY
Project: NEW SCHEDULE DATA: START COMPLLandDesignConstr.Operational
UNDER CONTRACT Y
CATEGORY / RANK EN
(SGR/EN/SE)
EXPENDED PLANNED EXPENDITURES ($ X 1,000)THRU REVISED
PROJECT CATEGORIES FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 TOTAL
0
Environmental 400 100 500Land/ROW 400 800 1,200Design 120 1,450 464 2,034Construction 420 8,580 7,946 16,946Construction Management 900 795 1,695Project Management - METRO Labor 95 225 994 874 2,188Project Management - Expenses 0Project Management - Outside A/E 95 225 994 874 2,188Procurement 0Allocated Overhead 60 143 631 555 1,389Contingency 319 589 2,513 2,209 5,630
0TOTAL PROJECT COST 0 0 1,909 3,532 15,076 13,253 0 33,770
FUNDING SOURCEFEDERAL 934 2,826 12,061 10,602 26,423DEBT 0METRO 0 0 975 706 3,015 2,651 0 7,347FUNDING TOTAL 0 0 1,909 3,532 15,076 13,253 0 33,770
OPERATING COST 0 0 0 0 0 0 0 0
OPERATING IMPACT: This project will provide a direct access from the existing Cypress Park & Ride lot to the US-290 Managed Lanes, and will improve bus and HOV operations from this facility.
PROJECT TITLE & DESCRIPTION: US-290/Cypress Park & Ride L-Ramp ROW Purchase: A TxDOT project will extend the single lane barrier separated HOV/HOT lane beyond the location of the existing Cypress Park & Ride facility. As part of the project a new T-Ramp is proposed from the Cypress Park & Ride lot to the Managed lanes. The layout of the proposed L-Ramp and associated travel lanes is outside of METRO's current right-of-way for the facility. METRO bus operations will be able to directly access the HOV/HOT lanes rather than exit the facility into mixed traffic to access the freeway. Buses would then need to merge across 4 lanes of traffic and enter the managed lanes at the next slip ramp entrance ramp.
JUSTIFICATION: The first year initiative will purchase the right-of-way and obtain environmental clearance necessary for METRO to construct the facility.
BOARD BRIEFING SUMMARY
SUBJECT: AGENDA ITEM #:
AGENDA DATE:
DEPARTMENT: PRESENTER:
SUMMARY:
Fare Policy Update
Finance/Office of Management and Budget Julie Fernandez
The purpose of this item is to brief the Finance & Audit and Customer Service Committees on the status of the Fare PolicyReview being conducted by the Texas A&M Transportation Institute, and on the Fare Strategy Working Group.
Fare Policy Update
November 2014
METRO’s Board Reviews, Adopts
and Revises Fare Policy
“…the fare structure and fare rates will be
reviewed annually and that fares will be
increased as necessary to account for the
effects of inflation on operating costs and to
maintain or improve the revenue/operating
expense ratio.” (Resolution 85-18)
2
Fare policy includes all aspects of fare payment…
2
Fare Policy Includes:
Fare Policy
Fare Structure
Pricing Strategy
Payment Options
Pricing Levels
Fare Collection & Technology
Type of
Collection/Verification
Payment Media/Technology
3
Source: “Transit Fare Policy, Structure and
Technology”, MIT – Transit Management Course
3
TTI was commissioned to review METRO’s fare policy.
Status: TTI Review of Fare Policy
Task Status Review and document METRO Board fare policy goals Completed
Review historical changes in fare structure to document impact on ridership and revenue
Completed
Review fare elasticity model Completed
Peer comparison of current fare policy Ongoing
Identify fare structure options for analysis Ongoing
Evaluate and recommend fare structure options; determine technology impacts
Ongoing
Goal: Identify and evaluate different options for a revised fare structure, including pricing strategies and fare collection technology
4
Next Steps
Month Task December 2014 Present findings to date, including peer agency
review
January/February 2015 Evaluate fare structure options and technology impacts
March 2015 Present final report of findings to Board
Goal: Identify and evaluate different options for a revised fare structure, including pricing strategies and fare collection technology
5
A working group is developing fare strategies concurrently
Fare Strategy Working Group
• Convened in October 2014
• Includes representatives from:
– Finance − Operations
– IT − Procurement
– Marketing − Public Safety
– Customer and Ridership Services
– Planning, Engineering and Construction
• Purpose:
– Propose fare policy goals for Board approval
– Draft a Three-Year and Five-Year Fare Strategy
6
Proposed Fare Policy Goals - 1
• Increase customer convenience
– Increase fare payment options and availability
– Support System Reimagining by facilitating transfers
– Design a fare system that encourages reverse commuting
– Work with regional partners to explore fare options
– Establish an ongoing fare media marketing plan
7
Proposed Fare Policy Goals - 2
• Create a sustainable revenue stream,
taking increased expenses into account
– Adopt a Board resolution to review all fares
periodically
– Review fare recovery with Finance & Audit
Committee semiannually
– Evaluate charging for parking at Park & Ride
lots meeting specified criteria
8
Proposed Fare Policy Goals - 3
• Create a sustainable fare infrastructure
– Implement a fare collection system infrastructure that is not completely proprietary (open architecture with API’s that METRO owns for interfacing)
– Develop and maintain portions of the fare collection system internally (i.e. web portal; consolidated reporting; etc.)
– Review infrastructure and reduce equipment where possible without adverse effect to customers
– Evaluate the costs of fare collection options versus the revenue received
9
Next Steps
Month Task
December 2014 Board Briefing on Preliminary Results of Fare Study
March 2015 Board Briefing on Fare Strategy and Fare Options Board Decision on Which Options to Pursue
10
Discussion
11
BOARD BRIEFING SUMMARY
SUBJECT: AGENDA ITEM #:
AGENDA DATE:
DEPARTMENT: PRESENTER:
SUMMARY:
On-Board Distribution of METRO Q Fare Cards and Day Passes
Finance/Office of Management and Budget Julie Fernandez
The purpose of this item is to brief the Finance & Audit and Customer Service Committees on a proposed pilot project toincrease availability of reloadable fare media by distributing METRO Q® fare cards and Day Passes on board Local buses. BusOperators would receive empty full fare cards to give to riders upon request. Riders could then load the card on board any Localbus.
Riders who begin their trip using rail could use their single-ride rail ticket as a transfer to bus within three hours of ticketpurchase. Once on board a bus, riders could then request a METRO Q fare card or Day Pass from the Bus Operator to use ona subsequent trip.
According to the marketing plan, riders would be informed of the program through multilingual bus cards, farebox stickers,Operator buttons, Marketing on Hold, and social media.
As this is a pilot program lasting up to six months, the FTA does not require that a fare equity analysis be conducted beforeproceeding; however, data from the project would be used in a later analysis. If the Board chose to make the change to thetransfer policy permanent, a resolution to modify the fare policy would be required, as Resolution 2006-68 requires that alltransfers be permitted only through use of a smart card.
Cash-Paying Customer Transfers Through On-Board Distribution
of Q Cards and Day Passes in a Pilot Program
November 2014
Cash-Paying Customer Transfers
• Approximately 10% of all customers pay cash (representing 26,300 average weekday boardings) Source: FY2011 Origin/Destination Survey
– 4% of all customers pay cash and make transfers (representing 10,500 average weekday boardings)
• Currently, the system does not allow cash-paying customers to transfer for free
• How can we address these types of transfers?
2
On-Board Cash Transfer Options Previously Presented
Paper Punch Transfer
Dispensed Paper Ticket
Increased Card Distribution
Mobile Ticketing
Pros Low cost Automatic ticket printing
Better customer service
Convenient for users
Cons Increased dwell time, conflicts,
theft/fraud potential
Very high cost Increased dwell time, conflicts,
theft/fraud potential
Must use Q Card/Day Pass to receive transfer
Requires smartphone
with data plan/credit
card
3
Increased card distribution and mobile ticketing best utilize the current fare system
Current Places to Obtain Smart Fare Media
• 277 Retailers
• 2 METRO RideStores
• By Mail – Mail In Form
– Online Form
4
Proposed Pilot On-Board Card Distribution Plan
• Bus Operators on Local routes would make Q Cards and Day Passes (without value) available to riders upon request, with a sleeve that explains how to use and load the card
• Riders can load value on cards using On-Board Reloader
• Riders who begin their trip on rail can use their rail ticket to transfer within three hours of purchase
• Pilot program (up to six months) allows for modification as needed and evaluation
5
Transferring from Bus to Rail / Bus to Bus
Rider asks Bus Operator for Q Card or Day Pass
Operator provides card with sleeve showing how to
load and use it
Rider loads card using on-board reloader (Local only)
Rider taps card on bus, activating 3-hour transfer
window
Rider taps card on next bus or at rail station within 3 hours and receives free
transfer
?? ?
3 hrs
6
Transferring from Rail to Bus / Rail to Rail
Rider buys single ride rail ticket from TVM
Ticket is valid for transfer to bus or rail within 3 hours of
purchase
Rider shows ticket to Bus Operator or Fare Inspector, who checks date and time
3 hrs
7
Estimated Costs
8
•
Recurring Costs
Q Cards/Day Passes $274,000
Card Sleeves 16,000
Farebox Stickers 0
Discounted Fare Brochures 0
Social Media/Marketing on Hold 0
One-Time Costs
Training $33,000
Replacement Rail Tickets 20,000
Card Holders 7,000
Bus Cards 5,000
Operator Buttons 1,000
TOTAL $356,000
Staff will work with Bus Operators to design card distribution process
Recurring Costs: $290,000 One-Time Costs: $ 66,000
December 2014
• Board Votes to Approve Pilot Program
February 2015
• Launch Pilot Program
May/June 2015
• Conduct Fare Equity Analysis of Pilot Program
• Solicit Public Comments
Proposed Implementation Timeline
9
Discussion
10
