Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
JUNE 18, 2025
Subject
SUBJECT: METROLINK FY2025-26 ANNUAL WORK PROGRAM AND PASSENGER RAIL SUPPORTIVE ACTIONS
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
CONSIDER:
A. APPROVING programming the Los Angeles County Metropolitan Transportation Authority’s (“Metro”) share of the Southern California Regional Rail Authority’s (SCRRA) Fiscal Year (FY) 2025-26 Operating, Rehabilitation, and Capital Budget in the amount of $216,565,092 as described in Attachment A;
B. EXTENDING the lapsing dates for funds previously allocated to SCRRA for State of Good Repair (SGR) and capital project Memoranda of Understanding (MOUs) as follows:
• Ticket Vending Machine (TVM) Replacement Project extended from June 30, 2025, to December 31, 2026
• FY 2016-17 SGR Program extended from June 30, 2025, to December 31, 2026
• FY 2017-18 SGR Program extended from June 30, 2025 to December 31, 2026
• FY 2018-19 SGR Program extended from June 30, 2025 to June 30, 2027
• FY 2019-20 SGR Program extended from June 30, 2025 to December 31, 2027
• FY 2020-21 SGR Program extended from June 30, 2025 to June 30, 2027
• Doran Street Grade Separation Project extended from March 31, 2025, to December 31, 2027
• LINK US Task 2 Project extended from June 30, 2025, to December 31, 2026;
C. APPROVING the FY 2025-26 Transfers to Other Operators’ payment rate of $1.10 per boarding to Metro and an EZ Pass reimbursement cap to Metro of $5,592,000; and
D. AUTHORIZING the Chief Executive Officer to negotiate and execute all necessary agreements between Metro and SCRRA for the approved funding.
Issue
ISSUE
Metro is a member of the SCRRA Joint Powers Authority (JPA), operator of the “Metrolink” regional commuter rail service. The JPA requires member agencies, on an annual basis, to approve their share of the SCRRA budget, comprising Metrolink Operations, SGR, and New Capital projects. SCRRA transmitted the FY 2025-26 budget to the JPA member agencies on April 30, 2025 (Attachment A). SCRRA is seeking member agency approval before adopting its FY 2025-26 budget on June 27, 2025. This report includes staff recommendations for funding Metro’s contribution to the FY 2025-26 Metrolink budget.
Background
BACKGROUND
SCRRA operates the Metrolink commuter rail service within Los Angeles (LA) County, the surrounding counties of Orange, Riverside, San Bernardino, and Ventura, and northern San Diego County. Metrolink service is complemented by the Los Angeles-San Diego-San Luis Obispo (LOSSAN) intercity rail corridor operated by Amtrak. Metrolink and LOSSAN service will connect directly into the future high-speed rail network being built by the California High-Speed Rail Authority. Metrolink will also connect with the future Brightline West system that will operate between Las Vegas and Rancho Cucamonga.
Metro, as the regional transportation planning agency for LA County, works with Metrolink and other passenger rail operators to plan and develop a more holistic, seamless, and multimodal approach to moving people throughout LA County and Southern California between local communities and regional destinations. The Metro Board annually allocates Metro's member agency subsidy to support Metrolink operations, which is 51.3% of Metrolink's total operations budget. SCRRA utilizes an established “all share” formula approved by all the member agencies based on train miles attributed to each respective member agency. Metro’s share is based on 151 miles of Metro owned ROW. The Metro Board appoints four of the Metrolink Board’s eleven voting members.
Metro’s ability to deliver better mobility, air quality, and economic opportunity for LA County residents and reduce greenhouse gas (GHG) emissions and vehicle miles traveled (VMT) in the region depends in part on an effective working relationship with Metrolink, LOSSAN, and other transit operators in the region. To that end, the CEO created the Multimodal Integrated Planning (MIP) unit in the Countywide Planning and Development Department (CPD) to better align and coordinate planning for and with Metrolink, LOSSAN, and other passenger rail operators so that Metro can better serve local communities and improve LA County’s regional transportation system and air quality.
Discussion
DISCUSSION
PROGRAMMING FOR METRO’S SHARE OF SCRRA’S FY 2025-26 BUDGET
Metrolink is requesting that Metro provide $216,565,092 in funding for Metro’s JPA member agency share of SCRRA’s FY 2025-26 Budget, consisting of $141,356,992 for Metrolink Commuter Rail Operations and $75,208,100 combined for SGR and New Capital projects.
Metrolink Commuter Rail Operations - $141,356,992
SCRRA’s total FY 2025-26 Budget request for Metrolink Commuter Rail Operations from all JPA Member Agencies is $275,508,494. Metro’s share of Metrolink Commuter Rail Operations is $141,356,992 (51.3%). This total is a $3,597,160 increase (2.6%) over FY 2024-25 funding levels. The FY 2025-26 budget increase is due to costs necessary to implement new FRA regulations and 2028 Olympic readiness.
As part of the FY 2025-26 budget, Metrolink has executed the consolidation of train operations, equipment, and facilities maintenance functions into one contract which will increase efficiency by having one vendor responsible for these functions which were previously delivered through separate contracts. In addition, Metrolink’s new Optimized Service Schedule will be fully implemented; this schedule is designed to increase accessibility and convenience by attracting new riders, restore service eliminated during the COVID pandemic, and respond to the changing commuter patterns in the post-COVID environment by becoming an all-day and weekend regional rail operator instead of strictly a commuter rail (peak hour) service. This service optimization will allocate resources and crews more efficiently by operating more midday and off-peak service which is anticipated to result in higher ridership per service route. The member agencies continue to work collaboratively with SCRRA to ensure that appropriate and cost-effective service levels are implemented. In addition, for efficiency and cost-savings purposes, Metro contracts with SCRRA to maintain Metro-owned ROW that is beyond the 20-foot center of track up to Metro’s property line; this Metro-only cost is now included in the SCRRA operations funding annual budget amount.
While Metro staff appreciate SCRRA’s cost containment efforts by keeping the FY26 operating funding request to a minimal increase of 2.6%, Metro does have concerns that SCRRA’s costs as well as the amount of member subsidy requested to support operations continues to increase. Member agency subsidies have increased to 78% since the COVID pandemic due to Metrolink's decreased revenues and fare box recovery because of decreased ridership. Pre-COVID, member agencies only contributed 49% of Metrolink operating costs. This trend is not sustainable as Metro’s share of Metrolink’s rapidly increasing operating requests exceeds Metro’s annual sales tax revenues dedicated to Metrolink Operations (Proposition C 10% and Measure M 1%), which are further impacted by lower sales tax receipts than forecasted. Over the past five years, SCRRA’s operating costs have increased $103 million but have not resulted in a commensurate increase in ridership or fare revenues.
Metro staff recommends working with SCRRA and the other member agencies to identify cost savings opportunities and new external funding sources to supplement constrained sales tax revenues. The current member agency subsidy requirements are unsustainable, especially as service expands and capacity-enhancing projects are implemented across the system in support of realizing Metrolink’s Southern California Optimized Rail Expansion (SCORE) program. Reduced office building occupancy rates as well as the continued trend of telecommuting suggest Metrolink ridership will continue to have difficulty reaching pre-COVID levels without adding significant costs associated with more service. Metro staff are in the process of developing a strategic plan that will include as part of its scope a review of Metrolink operations and capital needs and identify future cost savings, sustainable investments, service improvements, and new revenue streams for Metrolink operations and capital needs. To that end, Metro has encouraged Metrolink to develop a cohesive, necessary and thoughtful development of a Metrolink strategic plan to target non-returning riders, identify new markets, and implement new fare media strategies and modified service to respond to the “new normal” of changing trip patterns. To begin this process, Metrolink is implementing a new fare structure in FY26 to bring more riders and revenue onto Metrolink’s system using existing service to increase ridership beyond simply adding more service.
The Student Adventure Pass (SAP) Metrolink operated in recent years has made a positive impact on increasing ridership by offering free fares for K-12, technical school, college, and university students in the Southern California region. However, due to the demand for SAP usage exceeding available grant funding received through the Low Carbon Transit Operations Program (LCTOP), Metrolink FY 2025-26 student fares will no longer be free and students will now have to pay 50% of the fare costs going forward to make the new Student Youth Discount program more sustainable in the long run. Prior to launching the SAP, Metrolink offered a 25% discount to students. Metro is supportive of the Student Youth Discount program but has requested that Metrolink adopt a regional approach to partner with the universities and colleges in its service area to develop a cost-sharing arrangement to offset potential future member agency contributions given the Student Youth Discount program’s rising costs and the potential for LCTOP funds not being available in future years for this program.
Ridership
Metrolink has recovered 70% of its pre-pandemic ridership, steadily making gains despite the impacts of work-from-home and lower office occupancy rates over the past five years (see Table 1). In April 2025 Metrolink ridership set a new post-pandemic record with over 715,000 boardings. This growth in ridership is the result of several trends, including student ridership growth (up 77% from the prior year), better on-time performance, improved optimized scheduling, and more trains in service. Metrolink seeks to build on these positive trends with service improvements to be implemented in FY26.
Table 1
Metrolink Pre-Pandemic Ridership and Post-Pandemic Recovery by Line
|
LINE |
PRE-PANDEMIC MONTHLY RIDERSHIP |
APRIL 2025 RIDERSHIP |
% RECOVERY BY LINE |
|
91/Perris Valley |
76,247 |
75,835 |
99% |
|
Antelope Valley |
158,409 |
133,224 |
84% |
|
IEOC |
111,099 |
65,702 |
59% |
|
Orange County |
244,672 |
142,796 |
58% |
|
Riverside |
79,983 |
28,051 |
35% |
|
San Bernardino |
254,709 |
185,214 |
73% |
|
Ventura |
93,342 |
69,553 |
75% |
|
Arrow |
N/A |
15,051 |
N/A |
|
TOTALS |
1,018,460 |
715,428 |
70% |
SGR and New Capital Projects - $75,208,100
Through the annual budget process, SCRRA requests SGR and New Capital project funding which will maintain the Metrolink commuter rail system ensuring a healthy safety culture, creating better service reliability, and improving service along the ROW, of which Metro owns 151 miles. Metrolink’s FY 2025-26 total SGR and New Capital budget request from all member agencies is $153,080,000, consisting of $137,502,000 for SGR and $15,578,000 for New Capital Projects (see SGR and New Capital Project List in Attachment A). Metro’s member agency share is $75,208,100 (49.1% of the total $153,080,000) for the FY 2025-26 Rehabilitation and Capital projects, consisting of the following:
• $37,214,350 for 26 systemwide SGR projects, with costs to be shared by all member agencies, for projects such as rebuilding and rehabilitating locomotives, overhauling railcars, replacing the Central Maintenance Facility roof, rehabilitating bridges, culverts, tunnels and building facilities, replacing the LA Union Station backup generator, upgrading Metrolink’s server, upgrading signal, conducting track rehabilitation, making positive train control enhancements, and replacing maintenance of way vehicles and equipment;
• $30,594,200 for 12 line-specific projects within Los Angeles County on the San Bernardino and Antelope Valley Lines to rehabilitate signal system, conduct Tunnel 25 Geotechnical testing and design, upgrade customer information systems, rehabilitate five culverts and six bridge structures, upgrade control points, signals, crossings, rail, ballast and tie replacement, and implement grade crossing improvements;
• $7,399,550 for nine New Capital Projects comprised of a mobile train dispatch operations center, construction of a positive train control training center, electric vehicle (EV) infrastructure for Metrolink yards and non-revenue vehicles, Union Station West Portal ticket office refurbishment, new budget system and portable wheel true and rotor change out equipment.
Metro staff have been working collaboratively with SCRRA and the other member agencies to review Metrolink’s FY 2025-26 SGR and New Capital programs, which align with the member agencies’ funding commitments. Staff continue to work with SCRRA to prioritize urgent SGR track, bridges, culverts, structures, and signal projects to maintain safety and service reliability.
Extend Lapsing Dates for Eight SGR and Capital Project MOUs
SCRRA rehabilitation/renovation and capital projects maintain Metrolink’s system safety and safety culture, ensure state of good repair, and modernize the Metrolink system. SCRRA’s project delivery schedule for rehabilitation/renovation projects spans over a five-year period.
This Recommendation will extend eight MOUs (five for SCRRA SGR projects and three for capital projects) that would otherwise lapse on or before June 30, 2025. Due to unforeseen material supplier and project work delays, SCRRA is requesting time extensions. SCRRA has indicated their work is in progress, that many projects are close to completion, and that these eight projects will be completed and invoiced by the requested extension dates.
Transfers to Other Operators
Metro provides transfers of Metrolink passengers to other LA County operators via the EZ pass program (e.g. Big Blue Bus, OCTA, Dash, etc.) which is a seamless and convenient transfer process for riders utilizing the Metrolink service to make first/last mile connections within LA County. In exchange for the transfers, Metrolink reimburses Metro at the rate of $1.10 per boarding. This recommendation is requesting that the maximum reimbursement amount Metrolink can bill Metro not exceed $5,592,000. This amount is sufficient to fund the EZ pass program.
Granting CEO Authority
Upon the Board approving this item, a corresponding MOU will be required to be executed clarifying responsibilities and expectations of Metro and SCRRA entering into this funding agreement. This recommendation is requesting Board approval for the CEO to negotiate all necessary terms and execute the MOU funding agreement.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of these recommendations will improve safety for Metrolink passengers and the local communities in which Metrolink operates. All Metrolink operations, SGR, and new capital projects will comply with the applicable Federal Railroad Administration, California Public Utilities Commission, and other regulatory standards. Through approval of this item Metro will be funding safety-related improvements on the Metrolink system to support safer travel of LA County residents and visitors.
Financial_Impact
FINANCIAL IMPACT
The funding for this action is included in the FY26 budget in Cost Center 0444, Non-Dept. - Subsidies to Metrolink, under projects 410064 - Commuter Rail OS, and 460064 - Metrolink Transit Capital. The state of good repair and capital costs programmed for in this action will require multi-year funding beyond the FY26 budgeted amounts. The Cost Center Manager will be responsible for annual budget funding allocations for future fiscal years. The Extending Lapsing Dates, Transfers to Other Operators and Granting CEO Authority recommendations have no financial impact.
Impact to Budget
The source of funding for this action will come from Proposition C 10%, Measure M 1% and Measure R 3% that are dedicated funding for Metrolink operations, maintenance, state of good repair and capital projects.
Equity_Platform
EQUITY PLATFORM
The recommendations support SCRRA’s Metrolink commuter rail operations, providing residents, workers, students, and families with a regional public transportation option to access jobs, resources, and services across the Greater Los Angeles region. Metrolink enables residents who may not be able to afford to live in high-cost areas to access quality jobs and services in those areas while living in more affordable neighborhoods. These neighborhoods include Equity Focused Communities in Palmdale/Lancaster, the East San Fernando Valley, El Monte, Pomona, and Gateway Cities. Metro funds its share of Metrolink’s overall operations as a member agency. Metrolink establishes its equity-based programs separate from Metro.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
As part of these ongoing efforts, this item is expected to contribute to further reductions in VMT. This item supports Metro’s systemwide strategy to reduce VMT through investment in Metrolink operations and equipment purchase of Tier 4 low emission locomotives that will improve and further encourage transit ridership, ridesharing, and active transportation. Metro’s Board-adopted VMT reduction targets were designed to build on the success of existing investments, and this item aligns with those objectives.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The recommendations support the Metro Vision 2028 Strategic Plan goals 1, 4 and 5 as follows:
• Goal 1.2: Invest in a world-class transit system that is reliable, convenient, and attractive to more users for more trips;
• Goal 4.1 Work with partners to build trust and make decisions that support the goals of the Vision 2028 Plan;
• Goal 5.2 Exercise good public policy judgment and sound fiscal stewardship.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Metro Board could authorize a different budget amount than what SCRRA has transmitted for FY 2025-26. However, staff do not recommend a different budget amount since Metro has worked closely with SCRRA and the member agencies to create a balanced FY 2025-26 budget request that supports Metrolink’s post-COVID service plans and ensures sufficient SGR to meet safety, service, and reliability needs.
Metrolink has suggested that Metro provide 5307, 5337, and SB 125 funds to cover the funding gap. While other member agencies with smaller transit systems may take this approach, Metro proactively crafted its sales tax measures to include dedicated Metrolink funding carveouts (Proposition C 10%, Measure M 1% and Measure R 3%). However, while these carveouts were more than sufficient to cover Metrolink’s budget ask in years past, Metrolink’s funding request now exceeds the amounts generated by the dedicated carveouts while preserving 5307, 5337 and SB 125 funds for Metro operations and other uses as determined by the Metro Board. Any diversion of these funds for Metrolink use would reduce funding available for Metro operations.
Next_Steps
NEXT STEPS
The SCRRA Board is scheduled to adopt their FY 2025-26 budget on June 27, 2025. Upon SCRRA’s Board adopting their budget, Metro will execute the corresponding funding agreement. Metro staff will monitor the implementation of SCRRA’s budget and report back to the Board with any issues requiring action. Metro is firmly supportive and committed to being a strategic partner with SCRRA.
Attachments
ATTACHMENT
Attachment A - SCRRA FY 26 Budget Transmittal
Prepared_by
Prepared by: Yvette Ford, Senior Manager, Passenger Rail Planning,
(213) 418-3176
Michael Cano, Senior Executive Officer (interim), Countywide Planning and Development, (213) 418-3010
Nicole Ferrara, Deputy Chief Planning Officer, (213) 547-4322
Reviewed_By
Reviewed by: Ray Sosa, Chief Planning Officer, (213) 547-4274
