meeting of the audit and finance subcommittee€¦ · audit and finance subcommittee thursday,...

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 602-262-7433

MEETING OF THE

Audit and Finance Subcommittee

MEETING DATE

April 14, 2016

TIME 12:00 p.m.

LOCATION Valley Metro 101 N. 1st Ave., 10th Floor Lake Mead Conference Room Phoenix, AZ 85003

1

April 7, 2016

Audit and Finance Subcommittee Thursday, April 14, 2016

10th Floor, Lake Mead Conference Room 101 N. 1st Avenue, 10th Floor

12:00 p.m.

For those participating by telephone, please mute your phone when not speaking. Action Recommended

1. Public Comment

A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the AFS on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. Up to three minutes will be provided per speaker or a total of 15 minutes total for all speakers.

1. For information

2. Minutes Minutes from the March 10, 2016 AFS meeting are presented for approval.

2. For action

3. Fiscal Year 2016 Third Quarter Report John McCormack, Chief Financial Officer, will provide the third quarter financial report.

3. For information

4. Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21)

John McCormack, Chief Financial Officer, will provide information regarding the FY17 Budget and Five-Year Preliminary Operating Forecast and Capital Program (FY17 thru FY21).

4. For information

5. Financial Audit Services Contract Award John McCormack, Chief Financial Officer, will provide information regarding the procurement of Financial Audit Services from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP013-046756. The period of service will cover two fiscal years of FY17 and FY18.

5. For information

6. Management Policies and Procedures Update

Scott Smith, Interim CEO, will provide an informational update including progress made on Board directed policy and procedure changes in progress, as well as anticipated next steps for each area.

6. For information

7. Future BFS Agenda Items

Chair Williams will request future AFS agenda items from members and John McCormack will review the proposed future BFS agenda items.

7. For information

8. Next Meeting The next meeting of the AFS is May 12, 2016 at 12:00 p.m.

8. For information

Qualified sign language interpreters are available with 72 hours notice. Materials in alternative formats (large print, audiocassette, or computer diskette) are available upon request. For further information, please call Valley Metro at 602-262-7433 or TTY at 602-251-2039. To attend this meeting via teleconference, contact the receptionist at 602-262-7433 for the dial-in-information. The supporting information for this agenda can be found on our web site at www.valleymetro.org


DATE AGENDA ITEM 1 April 7, 2016 SUBJECT Public Comment PURPOSE A 15-minute opportunity will be provided to members of the public at the beginning of the meeting to address the AFS on all agenda items. The Chair may recognize members of the public during the meeting at his/her discretion. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT None

VALLEY METRO • 101 N 1ST AVE • STE 1300 • PHOENIX AZ • 85003 • 602-262-7433

DATE AGENDA ITEM 2 April 7, 2016

Summary Minutes

Valley Metro RPTA Budget and Finance Subcommittee Thursday, March 10, 2016

Lake Mead Conference Room 101 N. 1st Avenue, 10th Floor

Phoenix, AZ 12:00 p.m.

Members Present Councilmember Thelda Williams, City of Phoenix (Chair) Councilmember Eric Orsborn, City of Buckeye Councilmember Jenn Daniels, Town of Gilbert (via phone) Councilmember Suzanne Klapp, City of Scottsdale Councilmember Skip Hall, City of Surprise Chair Williams called the meeting to order at 12:02 p.m. 1. Public Comment None. 2. Minutes Minutes from the February 11, 2016 BFS meeting were presented for approval. IT WAS MOVED BY COUNCILMEMBER KLAPP, SECONDED BY COUNCILMEMBER ORSBORN AND UNANIMOUSLY CARRIED TO APPROVE THE FEBRUARY 11, 2016 BFS MINUTES. 3. Refunding Bond Issuance Authorization – Third Supplemental Resolution Paul Hodgins, Manager, Revenue Generation and Financial Planning provided a presentation which included the following:

3

There were no questions from the BFS. Chair Williams requested a motion and a second to forward this item to the Board for approval. IT WAS MOVED BY COUNCILMEMBER ORSBORN, SECONDED BY COUNCILMEMBER KLAPP AND UNANIMOUSLY CARRIED TO FORWARD TO THE BOARD OF DIRECTORS ADOPTION OF THE THIRD SUPPLEMENTAL RESOLUTION AUTHORIZING THE ISSUANCE OF TAX-EXEMPT, SENIOR LIEN BONDS IN FY 2016 IN AN AMOUNT SUFFICIENT TO REFUND CERTAIN MATURITIES OF THE SERIES 2009A BONDS AND TO PAY COSTS OF ISSUING THE BONDS.

4

4. Valley Metro RPTA Budget and Finance Subcommittee Name Change, Scope Expansion, and Inclusion of Valley Metro Rail (VMR) Representation

John McCormack, Chief Financial Officer, provided an overview of the proposed changes to the Budget and Finance Subcommittee. And also showed the committee structure of Valley Metro.

He noted the current responsibilities of the BFS are:

1. Annual operating and capital budget process of the agency 2. Review of budget inputs and assumptions 3. Oversight of the compilation of financial reports for the Boards and member agency

review 4. Review of the annual Transit Life Cycle Program and its financial model 5. Review of the five-year capital plan 6. Provide recommendations to the Board of Directors

He also noted that staff is recommending the expanded policy and agency oversight role for the BFS include:

1. Expand the scope to include oversight of an internal audit function; 2. Change the name to Valley Metro RPTA and Valley Metro Rail Audit and Finance

Subcommittee (AFS); and 3. Representation of VMR by requiring that two members of the Subcommittee

represent both RPTA and VMR.

5

Mr. McCormack said expansion of the Subcommittee to include VMR could be attained by maintaining the existing structure for membership, but adding a provision that in addition to the City of Phoenix permanent position, one the remaining four positions must also be a VMR Board member. More than two members of the BFS being members of the VMR Board would violate quorum requirements according to the VMR By-Laws. Mr. Smith commented that two internal auditors are planned for the FY 2017 Budget year. He said this auditing team would be reporting to the Board and would receive their instructions and work scope from the Board. He also noted that the City of Phoenix is continuing their audit of the agency and an expected to be complete in mid-April. He said that he expects to review a draft of the audit prior to it being made public. Chair Williams requested a motion and a second to expand the Budget and Finance Subcommittee as discussed. IT WAS MOVED BY COUNCILMEMBER HALL, SECONDED BY COUNCILMEMBER KLAPP AND UNANIMOUSLY CARRIED TO FORWARD TO THE BOARD OF DIRECTORS THE RESOLUTION DEFINING THE ROLE AND MEMBERSHIP OF THE AUDIT AND FINANCE SUBCOMMITTEE. 5. Future Agenda Item Requests Chair Williams requested information regarding procurement cards. Chair Williams said the next meeting of the BFS is scheduled for April 14, 2016 at 12:00 p.m. at Valley Metro. With no further discussion the meeting adjourned at 12:40 p.m.


DATE AGENDA ITEM 3 April 7, 2016 SUBJECT Fiscal Year 2016 Third Quarter Report PURPOSE To provide the third quarter financial report. BACKGROUND/DISCUSSION/CONSIDERATION None COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT Third Quarter Financial Report

4/7/2016

1

Finance DivisionFY16 Q3 Report

April 2016

Valley Metro RPTA Operating Results – Q3

2

RPTA Budget vs. Actual Report $ Millions

For the quarter ending March 31, 2016

3rd Quarter Year to Date

Operations Expenditures Budget Actual

Variance

(Unfav.) Budget Actual

Variance

(Unfav.)

Fixed Route Bus 21.5 21.3 0.2 64.6 62.2 2.4

Paratransit 7.9 7.2 0.7 23.6 22.0 1.6

Vanpool 0.3 0.1 0.2 0.8 0.6 0.2

Regional Services 2.8 2.3 0.5 8.3 7.0 1.3

Planning 0.6 0.5 0.1 1.7 1.5 0.2

Administration 0.6 0.4 0.2 1.8 1.4 0.4

METRO Rail (Salary, Fringe, OH) 4.3 4.4 (0.1) 13.0 12.1 0.9

Total Operations Expenditures 38.0 36.2 1.8 113.8 106.8 7.0

Agency FTE's Budget vs. Actual

For the quarter ending March 31, 20163rd Quarter

Valley Metro Integrated Budget Actual

Variance

(Unfav.)

Staff (Full Time Equivalents) 312 288 24

4/7/2016

2

Open Positions Status

3

Valley Metro Integrated Agency

FY 2016 Adopted Positions ‐ Status Update FY16 ‐ Q2 FY16 ‐ Q3

Dec Open Mar Open

Operations and Maintenance 20 14

Human Resources 2 2

Planning & Accessible Transit 1 1

Safety & Security 0 0

Information Technology 4 4

Communication & Marketing 0 0

Design & Construction 0 0

Finance 2 0

Executive 1 1

Legal 2 2

Total Open Positions 32 24

10% 8%

Total Authorized Positions 312 312

Valley Metro RPTA Capital Results – Q3

4

RPTA Budget vs. Actual Report $ Millions

For the quarter ending March 31, 2016

3rd Quarter Year to Date

Capital Expenditures Budget Actual

Variance

(Unfav.) Budget Actual

Variance

(Unfav.)

Bus Purchases

Valley Metro 0.1 0.0 0.1 0.4 0.0 0.4

Lead Agency 1.2 0.1 1.1 3.6 0.1 3.5

Paratransit Vehicles

Lead Agency 0.1 0.1 (0.0) 0.2 0.1 0.1

Vanpool Vehicles 0.8 0.0 0.8 2.3 2.1 0.2

Other Capital 1.5 0.5 1.0 4.6 0.9 3.7

METRO Rail 16.4 9.0 7.4 49.1 48.4 0.7

Total Capital Expenditures 20.1 9.7 10.4 60.2 51.6 8.6


DATE AGENDA ITEM 4 April 7, 2016 SUBJECT Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) PURPOSE To provide information regarding the FY17 Budget and Five-Year Preliminary Operating Forecast and Capital Program (FY17 thru FY21). BACKGROUND/DISCUSSION/CONSIDERATION The Valley Metro Regional Public Transportation Authority (RPTA) FY17 combined operating and capital budget (the budget) is $344.2 million (M) and includes $141.2M in projects funded with Proposition 400 Public Transportation Fund (PTF) revenues. Of the $141.2M PTF revenues, $80.2M is for bus operating and bus capital and $61.0M is for light rail/high capacity transit capital. The preliminary FY17 operating and capital budget has been prepared with the goal of delivering a fiscally prudent, balanced budget using carry forwards, reserves and bond proceeds. The budget was developed in compliance with Board of Directors’ adopted budget, financial and Transit Life Cycle Program (TLCP) policies. The annual budget is prepared on an accrual basis and adopted by the Board of Directors each fiscal year. The legal level of budgetary control is the total annual appropriated budget. With respect to Capital Budgets, project contingency accounting is used to control expenditures within available project funding limits. With respect to Operating Budgets, encumbrance accounting is not used and all appropriations lapse at the end of the year. Prior to final adoption, a proposed budget is presented to the Board of Directors for review and public comment is received. Final adoption of the budget must be on or before June 30 of each year. The total operating budget of $166.4M represents a $5.6M (3%) increase from the previous year’s operating budget of $160.9M. The total capital budget of $177.8M represents a $51.8M (41%) increase from the previous year’s capital budget of $126.0M. Details and explanations of the major budget changes are discussed in the attached Budget Analysis and Overview document. With the agency integration, the RPTA and Valley Metro Rail (VMR) budgets are developed with a unified staff plan, with department managers planning the level of effort required to meet the bus and rail activities. Salary and overhead charges to bus and rail projects are based on actual time worked on each project. For FY17 there are 310 employees budgeted in the integrated agency, with 131 FTE’s budgeted to RPTA activities and 179 budgeted to VMR activities. Compensation budget based on 2.5%

2

increase. For staff salary changes, merit increases are evaluated based on employee performance; division level control to manage total costs within budget. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020: Goal 2: Advance performance based operation

o Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-term sustainability.

COMMITTEE PROCESS Preliminary Budget Review: Financial Working Group: February 26, 2016 for information RTAG: March 16, 2016 for information TMC: April 6, 2016 for information Audit and Finance Subcommittee: April 14, 2016 for information Board of Directors: April 21, 2016 for information Proposed Budget Adoption: TMC: May 4, 2016 for action Audit and Finance Subcommittee: May 12, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION This item is being presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT Valley Metro Fiscal Year 2017 (FY17) Preliminary Operating and Capital Budget and Five-Year Operating Forecast and Capital Program (FY17 thru FY21) Executive Summary

4/5/2016

1

1

Valley Metro RPTAFY17

Budget Overview

April 2016

FY17 Baseline Operations

2

Passengers Revenue miles Operating Costs Fare RevenuesFixed Route BusFY16 17,263,000 11,403,000 $72,604,000 $13,265,000FY17 17,902,000 12,002,000 $75,561,000 $13,580,000Change 4% 5% 4% 2%

Baseline Trips Trips - Contingency Operating Costs Fare RevenuesParatransitFY16 487,000 $14,103,000 $1,727,000FY17 522,000 10,440 $15,580,000 $1,784,000Change 7% 2% 10% 3%

Passengers Revenue miles Operating Costs Fare RevenuesVanPoolFY16 1,136,000 6,108,000 $1,045,000 $1,148,000FY17 1,192,000 6,414,000 $967,000 $1,069,000Change 5% 5% -7% -7%

4/5/2016

2

FY17 Strategic Plan Initiatives

3

Improve Customer Satisfaction• Development of Fare Smart Card and Smart Phone mobile ticketing $0.4M• Renovation of Website and mobile phone travel aid applications $0.2M

Enhance services & facilities for seniors & people with disabilities• Implement seamless Regional Dial-a-Ride Service $2.5M

Maintain strong fiscal controls • Establishment of Internal Audit Department with direct reporting to Board Audit and

Finance Subcommittee $0.1M

Communicate availability, attractiveness and safety of transit service• Discretionary ridership advertising campaigns to continue to attract riders $0.1M

Valley Metro RPTA FY17 Sources of Revenues: $344.2M

4

4/5/2016

3

Valley Metro RPTA Revenues

5

Sources of Funds $millions

Funding Sources FY17 FY16 Change $ Change %

Public Transportation Funds $141.2 $133.9 $7.3 5%

Transit Service Agreements $30.8 $30.2 $0.7 2%

Federal Grants $39.8 $33.6 $6.1 18%

METRO Rail Reimbursement $17.1 $16.9 $0.2 1%

Fixed Route Fare Revenues $15.7 $16.3 -$0.6 -4%

AZ Lottery Proceeds $11.3 $11.3 $0.0 0%

Regional Area Road Funds $4.9 $4.8 $0.1 2%

Other Revenues $3.3 $2.0 $1.3 64%

Bond Proceeds $61.3 $0.0 $61.3

Carry forwards and Reserves $18.9 $38.0 -$19.1 -50%

Total $344.2 $286.9 $57.4 20%

Valley Metro RPTA FY17 Expenses: $344.2M

6

Carry Forward & Reserves

5%

Lead Agency Disbursements

21%

Transit Service Contracts & Fuel

28%

Personnel8%

Capital Expenditures11%

Bond Disbursements

13%

Bond P & I7%

AZ Lottery3% Other

3%Contracts

1%

4/5/2016

4

Valley Metro RPTA Expenses

7

Uses of Funds $millions

Uses of Funds FY17 FY16 Change $ Change %

PTF Pass-thru Disbursements $72.3 $69.5 $2.8 4%

Transit service contracts & fuel 94.6 89.1 5.5 6%

Capital 36.9 25.9 11.0 42%

RPTA & METRO Personnel Costs 27.2 26.3 0.8 3%

Bond Principal & Interest 25.4 24.2 1.2 5%

Contractual Agreements 3.8 4.0 -0.2 -6%

AZ Lottery Disbursements 11.2 11.2 0.0 0%

PTF Bond Pass-thru Disbursements 43.1 25.0 18.1 72%

Other Costs 11.0 11.2 -0.2 -2%

Carry forwards to Reserves 18.7 0.4 18.5

Total $344.2 $286.9 $57.4 20%

Integrated Agency Budget Assumptions: Staffing Costs

8

Staffing cost analysis

FY 17 FY 16 change pct change$ million

Salaries 19.6 18.8 0.8 4%

Fringe Benefits 7.6 7.5 0.1 2%

Total Salary and Fringe Benefits 27.2 26.3 0.9 3%

Analysis of changes Salary Fringe Total

Base Compensation FY16 18.8 7.5 26.3 Base increase 0.5 - 0.5 Position Changes 0.3 0.1 0.4

New Base Compensation FY17 19.6 7.6 27.2

Change FY17 Preliminary Budget vs. FY16 Adopted Budget 0.9 $ million

4/5/2016

5

9

Integrated Agency – FY17 Position Changes

Title Division Scope of Work

Manager, Internal Audit Chief Executive Office Agency Internal Controls with primary reporting to Board

Internal Audit Specialist Chief Executive Office Internal Control testing and compliance

Program Representative Planning & Accessible Transit Support East Valley, West Valley, and regional paratransit

Scheduler Operations and Maintenance ‐ RPTA Fixed Route Bus schedule analysis and managementProgram Coordinator Operations and Maintenance ‐ RPTA Fixed Route Bus contractor performance management

FIVE YEAR PLAN OVERVIEWFY 2017 THROUGH FY 2021

Valley Metro RPTA

10

4/5/2016

6

5-Year Operating Assumptions• Public Transportation Fund (PTF) - up approximately 5.4% annually

• Federal PM Revenues down from $8.9M to $7.6M in FY18, $7.0M FY21

• TLCP planned route service miles funded by PTF increase 588,000

• Transit service costs up 3% annually plus contingencies

• Fixed route fares up 5% in FY18

• VM operated paratransit ridershipFY17 up 7%FY18 – FY 20 + 5.3% per year overall Regional trips up 9.6%

• Administrative costs up 2% annually

11

Five Year Operating Forecast -Revenues

13

(thousands)

5-Year

Total

Revenues

Public Transportation Fund (ADOT) 793,606$

Less: AZDOR Assessment (4,973)

PTF Bond Proceeds 61,257

Less: Debt Service Bus & Rail (157,971)

Less: Rail Capital Funding (current) (268,669)

Net PTF for Operations 423,250$

Other Regional Funds 24,725$

Federal Funds 41,973

Transit service reimbursements 182,658

Fare Revenues 92,018

Alternative Fuel Tax Credit 1,228

Interest and other revenue 160

Total revenues 766,012$

4/5/2016

7

Five Year Operating Forecast -Expenditures

14

(thousands)

5-Year

Expenditures Total

Operations

Fixed Route 458,136$

Paratransit - EVDAR 47,350

Paratransit - NWDAR 10,515

Paratransit - Regional Trips 14,549

Paratransit - RideChoice 4,703

Vanpool Service 5,138

ADA 108,312

Total operations expenditures 648,704$

Transportation Demand Management 5,912$

Planning & Administration 24,668

Regional Services 42,018

Safety & Security 1,974

Operations Contingency 18,993

Total expenditures 742,269$

5-Year Capital Program Assumptions• Bus Fleet - $211 Million

– 475 replacement units; 93 expansion units

– 85% Federal /15% PTF

• Vanpool Fleet - $18 Million

– 301 replacement units; 100 expansion units 100% Federal STP

• Facilities and Equipment - $31.6 Million

– Peoria PNR and Transit Center - 80% Federal / 20% PTF

– North Glendale and Laveen Park and Rides - Local match PTF

– Regional Communications System - 80% Federal / 20% PTF

– Fare Collection/Paratransit Software Improvements - 100% PTF

– Mid-Life Bus Rebuilds (194 units) - 80% Federal / 20% PTF

15

4/5/2016

8

Five Year Capital Program- Revenues

16

(thousands)

5-YearTotal

RevenuesPublic transportation funds 46,696$ FTA - Section 5307 161,448 FTA - Section 5311 456 FTA - Section 5337 1,046 FTA - Section 5339 8,245 FHWA - STP 17,159 Member local match 100 Vehicle/parts proceeds 1,929 Capital assets reserve applied 1,740 Vanpool reserve applied 741 Undesig. Fund Balance Applied (PTF) 20,891

Total Revenues 260,451$

Five Year Capital Program- Expenditures

17

(thousands)

5-YearTotal

Expenditures by ProjectIT Infrastructure 2,747$ Standard Bus - Replacement 154,339 Standard Bus - Expansion 50,308 Express/BRT - Expansion 3,168 Rural Fleet - Replacement 1,173 Paratransit Fleet - Replacement 1,915 Vanpool Fleet - Replacement 13,462 Vanpool Fleet - Expansion 4,438 Fleet - Other 1,957 Transit Centers (4-Bay) 2,376 Bus Stop Passenger Amenities 535 Park & Rides 9,233 Vehicle Management/Communications Systems 6,546 Fare Collection Systems 505 State of Good Repair - Fleet Rebuild 7,749

Total Expenditures 260,451$

4/5/2016

9

18

Forecasted Reserve RequirementsProposed FY17-21 Five-Year Operating and Capital Forecast $ in Millions

RESERVE FUND FY17 FY18 FY19 FY20 FY21General Fund Operating Reserve $23.4 $23.7 $24.4 $25.2 $26.0Capital Reserve Fund $3.6 $3.0 $1.6 $2.5 $1.5Working Capital Reserve Fund $14.2 $5.9 $7.8 $5.8 $10.5Vanpool Reserve Fund $3.4 $3.5 $3.7 $3.9 $4.1Emergency Reserve Fund $1.0 $1.0 $1.0 $1.0 $1.0Total Reserves (July 1) $45.5 $37.1 $38.5 $38.4 $43.1

Forecasted Fund Balance Bus Fund Balance $86.0 $66.3 $51.8 $48.3 $41.4Rail Fund Balance $39.4 $57.8 $59.3 $53.4 $63.0Total Forecasted Fund Balance (July 1) $125.4 $124.1 $111.1 $101.7 $104.4

Budget Schedule FY17

19

Nov 19 FY17 Agency Budget Initiatives presented to Boards for information

Feb 18 Board approves service changes effective April 2016

Feb 26 Preliminary FY17 Budget presented to Fin. Working Group

Mar 1 Executive Summary & 5 year Plan posted to website

Apr 6 Draft Budget delivered to TMC/RMC/AFS

Apr 14 Member City Comments due

Apr 14 Budget presented for information to AFS

Apr 21 Budget presented to Board of Directors for information

May 19 Board Meeting for Budget Adoption

RPTA FY17 Preliminary Budget Executive Summary Valley Metro | 1

FY17 PRELIMINARY ANNUAL OPERATING AND CAPITAL BUDGET Valley Metro Regional Public Transportation Authority (RPTA) provides public transportation services for Maricopa County located in the metro Phoenix, Arizona. The FY17 Preliminary Budget covers the 12-month period between July 1, 2016 and June 30, 2017. Services include fixed route bus, paratransit, Dial-a-Ride, vanpool, regional planning, marketing, customer service, alternative transportation, trip reduction and fiscal management of regional Public Transportation Funds (PTF). FY17 Sources of Funds Total sources of funds for FY17 are $344.2M, an increase of $57.3M or 20% from FY16. For FY17, PTF sales tax revenues are increasing by $7.3M or 5% above last year. Federal grant revenues are increasing by $6.1M (18%) primarily due an increase in 5307 funding used to purchase bus fleet. It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital projects in the spring of 2017.

$0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0

Public Transportation Funds

Transit Service Agreements

Federal Grants

METRO Rail Reimbursement

Fixed Route Fare Revenues

AZ Lottery Proceeds

Regional Area Road Funds

Other Revenues

Bond Proceeds

Carry forwards and Reserves

FY17 FY16 Valley Metro RPTA Sources of Funds FY17 vs FY16

4/7/16


FY17 Uses of Funds Total uses of funds for FY17 are $344.2M, an increase of $57.3M or 20% from FY16. PTF Pass-thru Disbursements are increasing by $2.8M due to increased light rail construction and purchases of regional bus fleet. Transit service contracts and fuel are increasing by $5.5M or 6% primarily due to increases in contract rates and paratransit ridership. Capital expenditures are up $11.0M primarily due to bus fleet additions and land acquisition and regional fleet purchases. PTF Bond Pass-thru Disbursements are increasing by $18.1M due to increased light rail construction. In FY17, carry forwards to reserves include $18.4M in capital reserve increases.

$0.0 $20.0 $40.0 $60.0 $80.0 $100.0

PTF Pass-thru Disbursements

Transit service contracts & fuel

Capital

RPTA & METRO Personnel Costs

Bond Principal & Interest

Contractual Agreements

AZ Lottery Disbursements

PTF Bond Pass-thru Disbursements

Other Costs

Carry forwards to Reserves

FY17 FY16 Valley Metro RPTA Uses of Funds FY17 vs FY16

4/7/16


FY17 Uses of Funds – Comparisons of Services Provided Valley Metro RPTA’s primary activities include passenger services, regional services and capital funding. The table below depicts changes in the FY17 plan versus FY16.

FY17 Budget Baseline Service Assumptions Fixed Route Bus Services

East and West Valley routes operated by Valley Metro will increase revenue miles vs. FY16 service levels; fleet of 279 units to deliver 12.0 million vehicle revenue miles serving 17.9 million passenger trips in the coming year.

Bus service includes a combination of local, express, circulator, and rural route service.

Dial-a-Ride and Paratransit Services

East and West Valley demand response ADA and non-ADA services operated by Valley Metro will continue to serve portions of Maricopa County and the cities of El Mirage, Peoria, Sun City, Surprise and Youngtown in the West Valley and Chandler, Gilbert, Mesa, Scottsdale and Tempe in the East Valley.

$0.0 $20.0 $40.0 $60.0 $80.0 $100.0

+ Passenger Services

Fixed Route Bus Operations

Paratransit Operations

ADA Lead Agency Disbursements

Regional Vanpool Service

+ Regional Transit Services

Marketing and Outreach

Call Center

ADA Compliance

Rideshare and Trip Reduction

Service and Capital Planning

+ Capital Activities

Bus Equipment

Paratransit Lead Agency Capital

Vanpool Fleet

Light Rail Lead Agency Capital

Facilities and equipment

+ Fiscal & Administrative Services

Valley Metro Rail Staffing

Arizona Lottery Fund Disbursements

Debt Service

Cash Reserves Carried Forward

Valley Metro Administration

FY 17 FY 16Valley Metro RPTA Uses of Funds FY17 vs FY16

4/7/16


New for FY17 is seamless Regional ADA Dial-a-Ride service enabling qualified passengers to cross municipal boundaries without transfers, estimated at 47,000 trips.

For eligible ADA passengers, level of service is based on passenger reservation demand within service areas and hours of operation covered by fixed route bus routes.

For non-ADA passengers, service levels are set by member cities. Services are provided on a shared-ride basis by a mixed fleet comprised of taxi cabs,

vans and accessible vehicles; estimated at 522,000 annual passenger trips. Vanpool Services

Service levels are anticipated to increase over FY16 with 440 vehicles delivering 1.2 million passenger trips.

Regional Call Center and ADA Compliance Center

Customer Service levels anticipated to remain similar to FY16 for fixed route bus and light rail.

ADA paratransit eligibility certification levels are anticipated to rise to 5,550 as a result of increasing numbers of seniors, persons with disabilities applying for service and as current customers go through eligibility recertification. Travel training will continue to be provided for individuals with disabilities who wish to take advantage of Valley Metro’s expanding light rail and bus network.

Capital Procurement

101 standard bus replacements (81 units Phoenix, 8 units Scottsdale, 12 units RPTA) and 6 circulator replacements for RPTA

21 expansion buses (8 RPTA for Scottsdale Rd Service, 13 for RPTA) and 7 expansion circulators for RPTA

25 lead agency paratransit fleet vehicles for Phoenix

67 vanpool replacement units

$6.7M in park-and-rides, bus stop amenities and facilities

$3.7M in vehicle communication systems, camera bus upgrade and fare collection system upgrades

48 mid-life rebuilds of engines and transmissions

FY17 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

4/7/16


With the initiation of the FY17 budget process, staff has developed a number of initiatives that align with the Strategic Plan and will be incorporated into the FY17 budget, as summarized below.

RPTA Investment

Total Investment

Develop smart card fare program/mobile

ticketing430.0$ 860.0$

Renovate website & mobile site 200.0$ 300.0$

Enhance services & facilities for seniors & people with disabilities.

Develop a more seamless, cost-effective

ADA Dial-a-Ride network with cities as

partners

2,500.0$ 2,500.0$

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.

Valley Metro FY17 Investment$ Thousands

FY17 Initiatives1. Increase Customer Focus:

4/7/16


Total Investment

Operate an effective, reliable, high performing transit system.

Develop an asset management plan for

Valley Metro in conjunction with member

agencies

25.0$ 100.0$

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 to for

comprehensive training assessment and

new employee orientation programs

20.0$ 40.0$

Maintain strong fiscal controls to support Valley Metro’s

long-term sustainability.Establishing Internal Audit Department with

dual reporting responsibility to the Board of

Directors and VM Executive Office

94.5$ 189.0$

3. Grow Transit Ridership: FY17 Initiatives RPTA Investment

Total Investment

Communicate availability, attractiveness and safety of transit service

Conduct discretionary ridership campaigns

to continue to attract riders105.0$ 210.0$

4. Focus on Economic Development, Regional Competitiveness and Financial Resources: FY17 Initiatives

RPTA Investment

Total Investment

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: $100,000

100.0$ 100.0$

Pursue all available funding opportunities for transit projects and services

Aggressively pursue federal transit funding

opportunities at the regional level

- Conducting region-wide ITS study for

federal funds: $100,000

100.0$ 100.0$

5. Advance the Value of Transit: FY17 Initiatives RPTA Investment

Total Investment

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 transit63.0$ 126.0$

RPTA Investment

2. Advance Performance Based Operation: FY17 Initiatives

Valley Metro FY17 Investment$ Thousands

4/7/16


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 FY17, there are 310 employees budgeted in the integrated agency; 131 FTE’s are budgeted to RPTA activities; 179 to VMR activities. Staffing levels are reviewed on an annual basis with zero-base analysis of level of effort requirements 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. FY17 Compensation and Fringe Benefit Assumptions Total compensation budget is based on a 2.5% increase. For staff salary changes, merit increases are based on employee performance. Division level control is in place to contain total salary and fringe costs within budget. Agency health care costs will increase. Program design adjustments are in place to hold total agency fringe benefit cost increases to within 3% of FY16 levels.

Five new agency positions are planned to improve agency internal controls and strengthen fixed route bus and accessible transit contractor performance, as noted below.

Staffing cost analysisFY 17 FY 16 change pct change

$ million

FTE 310 312 -2 -1%

Salaries 19.6 18.8 0.8 4%

Fringe Benefits 7.6 7.5 0.1 2%

Total Salary and Fringe Benefits 27.2 26.3 0.9 3%

Analysis of changes Salary Fringe Total

Base Compensation FY16 18.8 7.5 26.3

Base increase 0.5 - 0.5

Position Changes 0.3 0.1 0.4

New Base Compensation FY17 19.6 7.6 27.2

Change FY17 Preliminary Budget vs. FY16 Adopted Budget 0.9 $ million

Title Division Scope of Work

Manager, Internal Audit Chief Executive Office Agency Internal Controls with primary reporting to Board

Internal Audit Specialist Chief Executive Office Internal Control testing and compliance

Program Representative Planning & Accessible Transit Support East Valley, West Valley, and regional paratransit

Scheduler Operations and Maintenance - RPTA Fixed Route Bus schedule analysis and managementProgram Coordinator Operations and Maintenance - RPTA Fixed Route Bus contractor performance management

4/7/16


FY17 Preliminary Budget Financial Summary In the table below, detailed revenues and expenses are shown with comparisons to the prior year’s preliminary and revised budgets. Amounts of increase or (decrease) are shown from the preliminary budget. The “Note” column (on the far right side) indicates reference to explanations which are provided in the following table.

Valley MetroRegional Public Transportation Authority

FY17 Prelim Operating & Capital Budget

Comparison to FY16 Adopted Budget

(In thousands)

FY17 FY16 FY16 Amount Percent***Prelim Adopted Revised Increase/ Increase/Budget Budget Budget Decrease (Decrease) Note

Sources of funds

Revenues:

Public transportation funds (PTF) 141,165$ 133,866$ 132,121$ 7,299$ 5% (1)

Transit service agreements 30,844 30,181 29,695 663 2%

Federal grants 39,773 33,644 18,114 6,129 18% (2)

VMR staff & administration reimbursement 17,137 16,889 16,889 248 1% (3)

Regional area road funds (RARF) 4,864 4,782 4,782 82 2%

Interest & other revenues 2,772 1,377 3,911 1,395 101% (4)

Local participation 297 199 199 98 49%

State & local grants 261 449 449 (188) -42%

Fixed Route Fare Revenues 15,664 16,265 16,347 (601) -4% (5)

AZ Lottery Proceeds 11,250 11,250 11,250 - 0%

Total revenues 264,027 248,902 233,758 15,125 6%

Bond proceeds 61,257 - - 61,257 100% (6)

Carryforwards & reserves 18,923 37,986 33,768 (19,063) -50% (7)

Total revenues & other sources of funds 344,207 286,888 267,526 57,319 20%

Uses of funds by category

Expenses:

Lead agency PTF disbursements 72,304$ 69,532$ 91,127$ 2,772$ 4% (8)

Transit service contracts and fuel 94,622 89,150 91,751 5,472 6% (9)

Capital outlay 36,850 25,882 7,783 10,968 42% (10)

Salary & fringe benefits 27,231 26,342 26,363 889 3% (11)

Bond principal & interest expense 25,433 24,235 24,235 1,198 5% (12)

Consultants & Maintenance contracts 3,771 3,992 3,754 (221) -6%

Contingency 1,942 1,668 1,418 274 16% (13)

Rent & facility costs 4,988 5,063 5,063 (75) -1%

Advertising 528 530 530 (2) 0%

Transit book, outreach mat. & online serv. 893 746 746 147 20%

Insurance & risk management 205 266 266 (61) -23%

Safety & security - - - - 0%

Lead agency RARF disbursements 500 500 500 - 0%Other administrative costs 1,938 2,432 2,440 (494) -20%AZ lottery Disbursements 11,200 11,200 11,200 - 0%

Lead agency bond disbursement 43,098 25,000 - 18,098 72% (14)

Total expenses 325,503 286,538 267,176 38,965 14%

Carryforwards & contributions to reserves 18,704 350 350 18,354 5244% (15)

Total expenses & other uses of funds 344,207$ 286,888$ 267,526$ 57,319$ 20%

Operating Budget 166,439$ 160,891$ 163,020$ 5,548$ 3.4%

Capital Budget 177,768 125,997 104,496 51,771 41.1%

Total Operating & Capital Budget 344,207$ 286,888$ 267,526$ 57,319$

*** Percentage change is compared to the FY16 Adopted Budget

4/7/16


Sources of FundsNote

1

2

3

4

5

6

7

It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital

projects in the spring of 2017.

Consumption of carryforwards & reserves are down by $19.1M due to decreased amount of sales tax

fund balance spending needed in FY17 for LRT capital construction activity

ExplanationPublic Transportation Funds from the Maricopa County Transportation Excise Tax are forecasted to

grow by 5%. Forecast is provided by ADOT. In FY17 the AZ Department of Revenue assessment

charge is estimated at $900K, which is a reduction to PTF revenue forecasted by ADOT. Adequate

reserves are in place should collections fall short of ADOT forecast projections.

Federal Grants overall are up by $6.1M from $33.7M to $39.8M. Primary cause for change is an

increase in 5307 funding used to purchase bus fleet. Planned bus fleet purchases for FY16 were

rescheduled to arrive in FY17.

Contributions from Valley Metro Rail for staff are $0.2M higher in FY 17 primarily due to VMR staff

additions to maintain the 26 mile rail service for the full 12 months. In FY16, VMR operated partial

year service for the Central Mesa and Northwest Extensions. Added 2 FTEs internal audit staff.

Interest and other revenues are expected to increase $1.4M over FY16. Revenues programmed

include alternative fuel tax credit ($1.2M) and increases in proceeds form disposing revenue vehicles

($0.2M)

Fixed route farebox revenue is forecasted to be approximately 4% less than what was budgeted in

FY16. Fare revenue decrease is due to ridership losses attributed to low gas prices and transfers

from bus to rail.

4/7/16


Uses of Funds by CategoryNote

8

9

10

11

12

13

14

15

Overall staff cost in FY17 of $27.2M is 8% of total budget. 3% Overall Salary and Fringe increase

$0.9M, broken down as follows: 2.5% base salary and fringe increase $0.5M, net cost increase of

position changes $0.3M Salary and $0.1 M Fringe.

Bond principal and interest expense is up 5% to $25.4M due to the series 2017 bond issue to

support funding for increased LRT capital construction activity.

Contingency is up from $1.7M to $1.9M. Primary contingency relates to fixed route bus contract

rates, fuel rates, and paratransit demand.

Lead Agency Bond Disbursements are Public Transportation Funding (PTF) amounts derived from

bond proceeds to Member Agencies and VMR for eligible capital transit expenditures. Lead Agency

Bond Disbursements are up by $18.1M due to increased LRT capital construction activity.

Carryforwards & contributions to reserves increased by $18.4M primarily due to the issuance of

bonds to support funding for increased LRT capital construction activity.

ExplanationLead Agency Disbursements are Public Transportation Funding (PTF) amounts to Member Agencies

and VMR for eligible operating and capital transit expenditures. Increase in PTF Lead Agency

Disbursements of $2.8M is primarily due to an increase in project development and construction

activity for light rail projects and lead agency disbursements for regional bus fleet.

Fixed route bus service levels operated by Valley Metro have increased with approximately 130,000

additional service miles added. Transit service contracts increases primarily reflect contractual rate

increases from fixed route service providers. Paratransit demand is forecasted to increase by 7%.

Capital Outlay was increased by $11.0M primarily due to land acquisition $2.2M and regional fleet

$7.0M; and $1.1M related to computers/software and site improvements $0.3M.

4/7/16


FY17 – FY21 PRELIMINARY FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM Valley Metro RPTA has the primary responsibility of implementing the operating and capital components of the transit element identified in the 20-year Regional Transportation Plan (RTP). The operating component includes the expansion of regional fixed route services, high-capacity transit alternatives, vanpools and paratransit services throughout the region. The capital component of the transit element of the RTP includes fleet replacement and expansion as well as the development of new park-and-rides, transit centers, passenger facilities and maintenance and operations facilities over the life of the plan. Construction of the light rail RTP components has been designated to Valley Metro Rail by Valley Metro RPTA and expenditures are shown as Rail Capital Funding in the Operating Forecast. For the Five-Year Operating Forecast, the operations revenues and expenditures are based on current costs, as used for the development of the preliminary FY17 operating budget, with an annual inflation escalation of three percent (3%) for the remaining four years. Other assumptions in the Five-Year Operating Forecast are as follows:

The Public Transportation Fund (PTF) grows by approximately 5.4% annually

Fixed route fares grow by 5% in FY18 with reduction of discounted fares and base fare increase in FY20

Paratransit ridership drives an 7% increase in number of trips delivered

Planning, Administration, Safety & Security, and Regional Services costs have been inflated two percent (2%) for the last four (4) years of the forecast

The proposed service changes within the five-year time period that have been incorporated into the plan as proposed by the Transit Life Cycle Program are as follows: FY17

No service changes FY18

Begin Route 104 Saturday service in Chandler

Begin PTF funding of Route 104 in Mesa FY19

Begin PTF funding of Route 50 in Scottsdale FY20

Begin PTF funding of Route 30 in Tempe

Begin PTF funding of Route 77 in Mesa FY21:

Begin PTF funding of Route 30 in Mesa

4/7/16


FY17 – FY21 Operating Forecast

(thousands)

5-YearTotal

Revenues

Public Transportation Fund (ADOT) 793,606$

Less: AZDOR Assessment (4,973)

PTF Bond Proceeds 61,257

Less: Debt Service Bus & Rail (157,971)

Less: Rail Capital Funding (current) (268,669)

Net PTF for Operations 423,250$

Other Regional Funds 24,725$

Federal Funds 41,973

Transit service reimbursements 182,658

Fare Revenues 92,018

Alternative Fuel Tax Credit 1,228

Interest and other revenue 160

Total revenues 766,012$

(thousands)

5-YearExpenditures TotalOperations

Fixed Route 458,136$

Paratransit - EVDAR 47,350

Paratransit - NWDAR 10,515

Paratransit - Regional Trips 14,549

Paratransit - RideChoice 4,703

Vanpool Service 5,138

ADA 108,312

Total operations expenditures 648,704$

Transportation Demand Management 5,912$

Planning & Administration 24,668

Regional Services 42,018

Safety & Security 1,974

Operations Contingency 18,993

Total expenditures 742,269$

Excess/(deficiency) of revenues

over expenditures - operations 23,744$ Less: Bus Capital Funding (67,585)$

Undesignated fund balance, July 1, 2015 85,950$

Excess/(deficiency) (43,841)

Undesignated fund balance, June 30, 2021 42,109$

The Five Year revenue operating

forecast begins with PTF sales tax

funds, which are estimated by

ADOT team of economists.

One Bond Issue is anticipated in

FY17.

Debt Service and Rail Capital

Funding requirements are

deducted to derive PTF available

for operations.

Operations expenditures for the

five-year period are impacted by

service contract increases and

paratransit demand ridership.

Due to aging population,

paratransit ridership is forecasted

to grow significantly.

Regional Services, Planning,

Safety & Security and Admin

costs are forecasted to grow

about 2% per year.

A $23.7M operating surplus is

projected, which will be used to

fund bus capital purchases along

with existing fund balance. The

current $86.0M balance has

been built to support the cyclical

bus capital drawdown.

Projected Operating Fund

Balance is $42.1M in FY21

4/7/16


FY17 – FY21 Capital Program

(thousands)

5-YearTotal

Revenues

Public transportation funds 46,696$

FTA - Section 5307 161,448

FTA - Section 5311 456

FTA - Section 5337 1,046

FTA - Section 5339 8,245

FHWA - STP 17,159

Member local match 100

Vehicle/parts proceeds 1,929

Capital assets reserve applied 1,740

Vanpool reserve applied 741

Undesig. Fund Balance Applied (PTF) 20,891

Total Revenues 260,451$

(thousands)

5-YearTotal

Expenditures by Project

IT Infrastructure 2,747$

Standard Bus - Replacement 154,339

Standard Bus - Expansion 50,308

Express/BRT - Expansion 3,168

Rural Fleet - Replacement 1,173

Paratransit Fleet - Replacement 1,915

Vanpool Fleet - Replacement 13,462

Vanpool Fleet - Expansion 4,438

Fleet - Other 1,957

Transit Centers (4-Bay) 2,376

Bus Stop Passenger Amenities 535

Park & Rides 9,233

Vehicle Management/Communications Systems 6,546

Fare Collection Systems 505

State of Good Repair - Fleet Rebuild 7,749

Total Expenditures 260,451$

Capital program funding sources

include new PTF sales tax and

PTF fund balance that has been

accumulated for cyclical bus fleet

replacement.

Total PTF funding over the five

years is $67.6M or 26% of capital

revenue.

Federal funding will provide

$188.4M or 72% of capital

revenue.

Capital program expenditures for

the upcoming five years are

primarily for fleet replacement and

expansion.

A total of 475 bus units are planned

for replacement and 93 for

expansion.

Vanpool fleet replacements total

301 units, with 100 expansion units

planned.

Paratransit fleet replacements total

164 units.

New transit center and park-and-

ride facilities are planned in the

West Valley. Vehicle

communications and fare collection

systems are also planned.

4/7/16


DATE AGENDA ITEM 5 April 7, 2016 SUBJECT Financial Audit Services Contract Award PURPOSE To provide information regarding the procurement of Financial Audit Services from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP013-046756. The period of service will cover two fiscal years of FY17 and FY18. BACKGROUND/DISCUSSION/CONSIDERATION Valley Metro Rail Inc. (VMR) and the Regional Public Transportation Authority (RPTA) collectively (Valley Metro), requested quotes from qualified firms of certified public accountants that were available for cooperative agreements on the State of Arizona Contract to complete the VMR and RPTA financial statement and Federal Single Audit Act audits for the fiscal years ending June 30, 2016 and 2017. Quotes were requested from four qualified certified public accounting firms on the State Contract with responses received from two firms. The fixed rates per firm are established in the State Contract. Valley Metro will procure the required financial audit services from CliftonLarsonAllen LLP utilizing a cooperative agreement through the State of Arizona contract. Cooperative Agreements are contracts that are solicited and awarded by other public entities and whose cooperative language allows Valley Metro to utilize these contracts for goods and services it requires. This professional services contract will have variable hours at the contracted fixed rates with a not-to-exceed maximum price. Of the two quotes received, Henry & Horne, PLC was determined to be 66% higher than the quote received from CliftonLarsonAllen LLP. The quote from CliftonLarsonAllen LLP had lower fixed rates and lower overall cost and was determined to be fair and reasonable.

These audits are to be performed in accordance with generally accepted auditing standards, as set forth in the General Accounting Office's (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1996 and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. In addition, these audits will include the “agreed upon procedures” for supplemental review of several accounting transaction areas which will include travel expenses, credit card expenditures, reimbursements to employees and contracts & procurement.

2

COST AND BUDGET The cost to procure the financial audit services for Valley Metro from CliftonLarsonAllen LLP on a cooperative agreement on the State Contract ADSP013-046756 is in the amount of $181,650. A 10% contract contingency of $18,165 is recommended for adjustments to scope of work for Supplemental Procedures that is included within the overall budget for the services. The VMR share for the two year contract will be $83,750 and to establish a 10% contract change contingency of $8,375. The FY17 portion is included in the overall budget established for audit services. The RPTA portion for the two year contract will be $97,900 and to establish a 10% contract change contingency of $9,790. The FY17 portion is included in the overall budget established for audit services. Costs for the financial audit services are included within the VMR and RPTA FY17 Operating and Capital Budgets. These costs for VMR will be city funded in the Agency Operating Budget in Project 4020. The costs for RPTA will be funded through the overhead allocation pools 1015 and 1016. STRATEGIC PLAN ALIGNMENT This item relates to the following goals and strategies in the Five-Year Strategic Plan, FY 2016 – 2020:

Goal 2: Advance performance based operation o Tactic E: Maintain strong fiscal controls to support Valley Metro’s long-

term sustainability. COMMITTEE PROCESS AFS: April 14, 2016 for information RTAG: April 19, 2016 for information TMC/RMC: May 4, 2016 for action Board of Directors: May 19, 2016 for action RECOMMENDATION This item is presented for information only. TMC and RMC will be asked forward to the Board of Directors authorization for the Interim CEO to procure the required financial audit services for Valley Metro from CliftonLarsonAllen LLP utilizing a Cooperative Agreement through the State of Arizona Contract ADSP013-046756 for $181,650 with a 10% contract contingency of $18,165.

CONTACT John McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT None


DATE AGENDA ITEM 6 April 7, 2016 SUBJECT Management Policies & Procedures Update PURPOSE To provide an informational update including progress made on Board directed policy and procedure changes in progress, as well as anticipated next steps for each area. BACKGROUND/DISCUSSION/CONSIDERATION In December 2015, the Boards requested a thorough review of, and updates to five priority policy areas. Those included the Credit Card Program; Travel & Entertainment; Ethics; Conflict of Interest; and Procurement. Staff will provide the Board with an update on policy revisions, along with a summary of the attached Policy Development Process which summarizes the approach being used in the development and revision of existing and future policies and procedures. COST AND BUDGET There are no budget impacts at this time. COMMITTEE PROCESS TMC/RMC: April 6, 2016 for information Audit Finance Subcommittee: April 14, 2016 for information Boards of Directors: April 21, 2016 for information RECOMMENDATION This item is presented for information only. CONTACT Scott Smith Interim-CEO 602-262-7433 [email protected] ATTACHMENT Policy Development Process

POLICY DEVELOPMENT PROCESS

PH

ASE

1

PO

LIC

Y D

EVEL

OP

MEN

TP

HA

SE 2

PO

LIC

Y R

EVIE

W &

AP

PR

OV

AL

PH

ASE

3C

OM

MU

NIC

ATE

, TR

AIN

, UP

DA

TE &

AR

CH

IVE

IDENTIFY NEED

DRAFT

STAKEHOLDERINPUT

LEGAL REVIEW

POLICY TEAMREVIEW

APPROVAL

COMMUNICATEPOLICY

TRAINING ANDCOMPLIANCE

REVIEW ANDUPDATE

ARCHIVE

• Valley Metro employee, division or department suggests need for policy• At least one responsible Director/Executive agrees to advance potential policy through development and review process• Responsible Director/Executive transmits potential policy to Valley Metro Policy Administrator1 to indicate potential policy is entering development and review process

• Responsible Director/Executive appoints responsible Division/Department to develop policy• Responsible Division/Department consults with Valley Metro Policy Team2 to draft policy in standard Valley Metro Policy Template3

• Responsible Division/Department shares draft with internal Valley Metro stakeholders• Responsible Director/Executive incorporates stakeholder feedback into draft

• Valley Metro Policy Team advances draft policy to General Counsel for legal review• Changes from legal review are incorporated into draft policy

• Valley Metro Team distributes policy draft and needs assessment to Executive Leadership Team (ELT)• Responsible Director/Executive incorporates ELT’s feedback into policy’s final draft for approval

• Team distributes policy draft and needs assessment to ELT• Team solicits Member Agency and Designated Recipient feedback and input• If a Management Policy, CEO approves policy following final input/review from ELT• If an Agency Policy, schedule for management and Policy Board(s) approval > Agency Policy may be made Interim-Agency Policy by CEO pending Board(s) approval

• Valley Metro Policy Administrator posts policy to online policy library and issues agency wide announcement of a new or substantially revised policy

• Responsible Manager/Director delivers additional strategic communication and training• Human Resources integrates new policy into new employee orientation• Responsible Director/Executive establishes support systems to achieve compliance

• Responsible Manager/Director notifies Policy Administrator of routine updates to existing polices• Policy Administrator notifies impacted agency sta�• Policy Administrator initiates review of polices by responsible Division at least every three years

• Policy Administrator maintains central repository/document control of superseded or withdrawn polices.

1 This person will be a designee from Legal or Executive Team. As of March 2016, this individual is Rob Antoniak who reports directly to Interim-CEO. This will likely move into Legal once strategic framework and tasks are completed as outlined by the Board during the CEO transition that began in December 2015

2 Directors or Designee from Legal/Procurement, Human Resources, Finance, Internal Audit or Division Author

3 Please refer to latest Valley Metro Policy Template available on intranet.valleymetro.org


DATE AGENDA ITEM 7 April 7, 2016 SUBJECT Future Agenda Item Requests PURPOSE For information BACKGROUND/DISCUSSION/CONSIDERATION Councilmember Williams will request future agenda items from members. John McCormack will review planned agenda items for May 12: FY17 Budget & FY17 – 21 Five-Year Plan Adoption 2016 Transit Life Cycle Plan Update Internal Audit Implementation Health Insurance Review

COST AND BUDGET None COMMITTEE PROCESS None RECOMMENDATION This item is presented for information only. CONTACT John P. McCormack Chief Financial Officer 602-495-8239 [email protected] ATTACHMENT Upcoming Meeting Dates for 2016

2

Budget and Finance Subcommittee

2016 Meeting Schedule

Thursday, May 12, 2016 12:00 PM

FY17 Budget & FY17 - 21 Five Year Plan Adoption

2016 Transit Life Cycle Plan Update

Internal Audit Implementation

Health Insurance Review

(Tentative) Thursday, June 9, 2016 12:00 PM

Management Policies and Procedures Update

Thursday, October 13, 2016 12:00PM

FY16 Year-End Review

FY17 First Quarter Reports

meeting of the audit and finance subcommittee€¦ · audit and finance subcommittee thursday,...

Documents