Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
NOVEMBER 16, 2016
Subject/Action
SUBJECT: FUND EXCHANGE IN SUPPORT OF SCRRA ADOPTED WORK PROGRAM
ACTION: APPROVE REVENUE-NEUTRAL FUND EXCHANGE AGREEMENT BETWEEN METRO, VCTC AND SCRRA
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute a revenue-neutral fund exchange agreement between Metro, the Ventura County Transportation Commission (VCTC) and the Southern California Regional Rail Authority (SCRRA) to fund FY16 and FY17 SCRRA rehabilitation projects.
Issue
ISSUE
Metro and VCTC are among the partner agencies in the Joint Exercise of Powers Authority (JPA) that form the SCRRA, operators of the Metrolink commuter rail system in the Southern California region. VCTC does not have a local transportation sales tax, and, for many years VCTC has funded a portion of its annual Metrolink operating subsidies by exchanging its federal formula funds with Metro local Proposition C10% (PC10) funds within the SCRRA’s rehabilitation budgets.
Starting in FY 2015-16, as a result of increases in operating subsidies for Metrolink and reduced availability of Metro’s PC10 funding, the previously-utilized funding mix is no longer available for SCRRA Rehabilitation projects to facilitate VCTC’s annual operating fund exchange. Metro currently funds SCRRA rehabilitation projects with Measure R3% which are restricted to capital funding and are ineligible for operations. The change in the available funding has left VCTC without a vehicle to meet its operating subsidy obligations for Metrolink.
Discussion
DISCUSSION
VCTC has placed a proposed transportation sales tax measure on the November ballot and if adopted by Ventura County voters, would provide the majority of funding for their local obligation beginning in FY18. Additionally, the SCRRA, working with the Member Agencies, is also exploring the introduction of federal funding for Preventive Maintenance within the operating program. These two combined actions are expected to provide a long term solution on behalf of VCTC and provide additional options for our partners within the agency.
However, in order to address the current shortfall resulting from the rapid increase in subsidy requirements, and allow VCTC time to implement these potential alternative and additional sources of Metrolink operating support, Metro agreed to assist VCTC in identifying possible short-term solutions.
Staff, working with our partner agencies and the FTA, have identified two proposed, revenue neutral, multi-agency exchanges of FTA funding that would provide the short term resolution of VCTC’s shortfall and ensure the ongoing viability of the partnership. The exchanges are summarized in Attachment A and described below.
The first consists of an exchange of Section 5337 funds between VCTC, the Orange County Transportation Authority (OCTA), and Metro in the amount of $6,857,000. VCTC would provide federal funding to support SCRRA projects sponsored by OCTA within the SCRRA operating system. OCTA would provide funds to Metro eligible for exchange resulting from Metro and OCTAs sharing the same federally designated Urbanized Area (UZA). These funds are applicable to State of Good Repair projects within the UZA and can be used for Metro Rail’s State of Good Repair program.
Secondly, an exchange of FTA Section 5307 funds between VCTC and Metro in the amount of $5,103,189 is proposed, with funding applied to eligible Metro Rail Preventive Maintenance expenses.
For these fund exchanges, Metro would provide $11,960,189 of local funds to SCRRA to be applied exclusively to VCTC’s operating subsidy obligations. Upon completion of the transfers of funds, Metro is under no further obligation to support future exchanges.
Financial_Impact
FINANCIAL IMPACT
The proposed actions are revenue neutral to Metro and the transactions are all expected to be completed within the current fiscal year. The result of the exchange is an increase in federal funds for Metro’s Rail Preventive Maintenance program offset by a reduction in local funds.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board could choose to not approve the execution of the proposed fund exchange agreement. This is not recommended as this action is revenue neutral to Metro, supports our partner agency VCTC in the SCRRA JPA, and will ensure current commuter rail operations in Los Angeles County are not negatively impacted.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute the Fund Exchange Agreement between the parties and ensure appropriate FTIP revisions are executed.
Attachments
ATTACHMENTS
Attachment A Summary of Exchanges
Prepared_by
Prepared by: Drew Phillips, Director, Budget, (213) 922-2109
Cosette Stark, DEO, Regional Grants Management, (213) 922-2822
Marinela De Castro, Senior Manager, Transportation Planning, (213) 922-6166
Reviewed_By
Reviewed by: Therese McMillan, Chief Planning Officer, (213) 922-7077
Nalini Ahuja, Chief Financial Officer, (213) 922-3088
