Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
FEBRUARY 18, 2016
FINANCE, BUDGET AND AUDIT COMMITTEE
FEBRUARY 17, 2016
Subject/Action
SUBJECT: FY17 PRELIMINARY CAPITAL BUDGET
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE status report on FY17 Preliminary Capital Budget.
Issue
ISSUE
The FY17 Capital Program currently valued at $2.02 billion represents the annual cashflow of a multi-year plan totaling $15.5 billion to improve the transportation system for Los Angeles County. This program is a plan to deliver transit expansion projects funded and leveraged through Measure R. The program also includes projects for maintaining Metro assets in a state of good repair with a strong emphasis on safety and security improvements. The preliminary FY17 Capital Program will be included and finalized as part of the overall agency budget to be considered for Board adoption in May.
Discussion
DISCUSSION
Transit expansion continues in FY17. In partnership with our Federal funding partners, Measure R has allowed Metro to deliver on our promise for regional mobility. As we expand our transportation network, we continue to focus on maintaining our assets in a state of good repair. Together, all elements of the Capital Program serve as an economic growth engine for the region, contributing to the transformation of local communities by improving transportation infrastructure, creating jobs and delivering on the promise of improved mobility.
A summary of the $2.02 billion preliminary FY17 Capital Program and a description of each category are shown below. Additional program level details are shown in Attachment A.
|
Category |
FY17 Cashflow Estimate ($ in millions) |
|
Measure R Transit Expansion |
$1,681 |
|
State of Good Repair & Asset Improvements |
296 |
|
New Projects - First Year Investment |
42 |
|
Total |
$2,020 |
Measure R Transit Expansion
The completion of the Gold Line Foothill Extension 2A to Azusa and the Expo 2 Extension to Santa Monica is expected to increase transit ridership by attracting new long term riders. Looking back, we have seen significant growth in transit ridership along corridors where rail service has been added. Based on a Spring 2012 analysis as shown in the table below, combining bus and rail boardings along travel corridors illustrates a significant increase in bus and rail usage after new rail line openings.
|
Rail Line |
Average Weekday Boardings (Bus & Rail Combined) |
|
|
Before Rail Opening |
2012 After Rail Opening |
% Change |
|
Blue |
41,971 |
104,001 |
148% |
|
Red |
51,306 |
161,168 |
214% |
|
Green |
11,074 |
49,640 |
348% |
|
Gold |
31,199 |
60,922 |
95% |
Improvements will continue in FY17 with continued efforts to design and construct the Crenshaw/LAX project, Regional Connector, South Western Yard and Westside Purple Line Subway Extension. Key assumptions include approval for Westside Purple Line Subway Extension Section 3 acceleration to be considered in February 2016. New light rail vehicles are planned for continued delivery through FY17 to support the agency’s service expansion needs for the Expo II and Foothill openings.
State of Good Repair & Asset Improvements
The FY17 Capital Program will maintain Metro’s assets in a State of Good Repair (SGR). Projects are in place to optimize the mix of maintenance, overhauls and replacements. At the forefront of the SGR program are vehicle replacements for bus, light rail and heavy rail. Component overhauls, engine replacements and vehicle midlife service will continue in FY17 to improve fleet performance. The preliminary budget also includes provisions to improve ITS infrastructure and Safety/Security for the benefit of our patrons and employees and to keep Metro’s assets up to date with the latest technologies.
New Projects - First Year Investment
New improvements include a variety of projects, such as a new 40’ replacement bus procurement, P2550 light rail vehicle component overhaul, preventative maintenance and safety related projects. Measure R funding is planned for a $14 million increase in insurance coverage for Westside Purple Line Subway Extension and Airport Connector construction accommodations.
The $42 million amount represents the first year investment for new projects with a total Life of Project budget (LOP) of $400 million. All projects with LOP budgets greater than $5 million will be brought separately to the Board for review and adoption.
Financial_Impact
FINANCIAL IMPACT
The FY17 Capital Program plan will be part of the balanced budget to be presented to the Board for adoption in May 2016.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The annual budget serves as the legal authority to obligate and spend funds. Failure to adopt the budget would severely impede Metro’s stated goal of improving transportation in Los Angeles County.
Next_Steps
NEXT STEPS
A complete FY17 Budget will be presented to the Board in May 2016 for approval. The Board and Board staff will be briefed with updates and additional information as it becomes available in the months prior to FY17 Budget adoption.
Attachments
ATTACHMENTS
Attachment A - FY17 Preliminary Capital Program Summary
Attachment B - FY17 New Project Requests
Prepared_by
Prepared by:
Quintin Sumabat, Deputy Executive Officer - Finance
Office of Management and Budget, (213) 922-2277
Reviewed_By:
Reviewed By:
Nalini Ahuja , Chief Financial Officer / Executive Director Finance & Budget
