1. Community Advisory Committee
FY18 Draft Budget
Community Advisory Committee
June 13, 2017

2. Major Issues Short Term Mid Term Long Term Minimum Wage
COR Recommendations
New Eligibility Facility/New Contractor
West/Central Region – New Contract 11/1/17
Mid Term
Co-Location
VoIP
Centralized Reservations
Long Term
Centralized Dispatch
If you will remember, we negotiated rates for our contractors through FY18 to address the impact of minimum wage. However, we wanted to wait until after the receipt of proposals for the West/Central region to get a better gauge of pricing.
If you will remember, we will have another increase to the minimum wage in July 2018 of $1.25
And another increase in July 2019 of $1.00
And a final increase of $0.75 in July of 2020.
West/Central and Santa Clarita will not have to be negotiated as these two contracts will have been bid by the start of FY19. However, for the remainder, we will have to come back to board to address the financial impact.
In order for Access to modernize, we will need to have a true co-location for IT. Co-location will set the foundation for migrating to VOIP – this will generate savings of approximately 1.5 to $2 million annually.
Colocation also sets the stage for centralized reservations in the shorter term rather than years away.
Then, if it makes sense we will move to centralized dispatch.

3. Other Issues Grants STP Funding Parents With Disabilities
Marking and Tethering Grant
Access to Work
STP Funding
Current allocation is only through FY19
PWD Grant will expire in November /December timeframe. Currently in discussions with MV to determine if we will continue to operate this service
MAT grant – Funding will run out sometime this fiscal year.
ATW – Operating funds are enough to cover another year to year and a half. We will again apply for this grant for both operating and capital.
STP Funding
Our STP allocation only runs through FY Metro will have to go their Board to seek Access’ STP allocations for future years beginning FY 2020 through FY 2024

4. HDR – Historical Data Year Actual Trips HDR Projected % Difference
FY13
2,677,808
2,617,060
-2.3%
FY14
2,933,690
2,786,564
-4.7%
FY15
3,157,388
3,182,653
0.8%
FY16
3,351,612
3,437,249
2.6%
*FY17
1,718,372
1,751,425
1.9%
HDR is the independent firm that provides us with passenger projections.
We in turn use these projections to estimate the number of trips that the projected number of passengers will generate.
Up until two years ago, we would receive their estimates very late in the fiscal year but the estimates were based on actual data through January or february of the current fiscal year.
Metro has since requested that Access submit budget figures by March 1. In order to do that we have had to request the estimates be delivered to us much earlier. This has also meant that the data provided to HDR only contains actual numbers through November or December of the current year. HDR uses historical numbers from years past to estimate the remaining months and project growth for the following year.
As you can see, in FY13 and FY14, HDR estimates were below actuals. Access addressed the funding shortfall by reprogramming capital funds for operating. Of course, this meant that our fleet was not being replaced as it should have been as capital purchases were diminished in order to accommodate the funding shortfall.
We can no longer reprogram capital funds as the new MOU requires us to submit an accepted purchase order before we are allowed to draw down the funds.
So what happened in the last two and half years? A LOT! The economy turn around and people actually believed, the unexpected glut in oil has led to depressed fuel prices at the pump for the last two years. Yet another event was the change in the law that allowed undocumented persons to apply for drivers licenses.
All of these things have had an impact and reduced demand for our services.
What is happening this year? Well, everything that I just mentioned and one more thing: Not El Nino but perhaps is La nina. The number of rainy days this year has suppressed the number of trips since november!

5. HDR Projections Year Trips % Growth 2016 4,334,872 - 2017 4,506,664
3.96%
2018
4,799,412
6.50%
2019
5,137,155
7.04%
2020
5,508,335
7.23%
2021
5,912,627
7.34%
2022
6,348,773
7.38%
2023
6,816,556
7.37%
2024
7,323,125
7.43%
2025
7,872,064
7.50%
2026
8,471,770
7.62%
HDR’s projection for this year is for passenger growth to rise by 3.96% However, in upcoming years, the expectation is that passenger growth will increase significantly averaging well over 7% per year.

6. Direct Costs - Detail Paratransit Operations - Direct Cost
Partial Detail
Budget
% of Total Funding
% of Operating Costs
Purchased Transportation Services
124,654,887
70.4%
74.7%
Fuel
320,864
0.2%
Access to Work
1,583,396
0.9%
Rancho Los Amigos Shuttle
110,400
0.1%
MTA Shuttle Service -
0.0%
Other
17,540,672
9.9%
10.5%
Total Direct Cost
144,210,220
81.5%
86.4%
Now I will move on to our draft budget:
Operations is our biggest part of the budget.
As you can see here, Purchased transportation alone is over 128 million.
In the Other category includes items such as insurance at 7.1mm, contracted call center at 2.1MM, phones at1.5mm, salaries and other items as detailed in the detailed budget provided to you.

7. Budget by Category 2017-2018 Budget % of Total Funding
Budget
% of Total Funding
% of Operating Costs
Paratransit Operations
146,735,271
82.9%
87.9%
Eligibility Determination
12,589,365
7.1%
7.5%
CTSA Function
551,356
0.3%
Administrative Expense
7,026,170
4.0%
4.2%
Operating Expense
166,902,161
94.3%
100.0%
Capital Expenditures
10,000,000
5.6%
Total Expenses & Captial Expenditures
176,902,161

8. Funding Sources Total Funding $ 177,033,087 Operating Funds Funding
Proposition C - Discretionary Funds
$ 89,803,475
Section 5316 JARC (Access to Work Grant #2)
$ ,000
Section FTA STP Funding - (88.53% of Contracted Paratransit Operations)
$ 64,566,000
Section 5316 JARC (Access to Work Program)
$ ,698
Section 5317 New Freedom Grant (Tether Strap and Marking Program) + OOS
$ ,810
Interest Income / Miscellaneous
$ ,000
Disposal of Retired Vehicles
$ ,000
Passenger Fares
$ 10,170,179
Measure M? -
Operating Revenues Subtotal 6/30/2018
$ 166,902,162
Major issues with funding:
We do not yet know how much funding will be allocated from Measure M – Thus it is blank. My presumption is that as we negotiate the funding MOU, we will supplant Prop C funding for Measure M funds..
For capital funds, we are proposing to utilize 5310 funds to purchase vehicles for the upcoming fiscal year.
At this point, I have not programmed any additional capital expenses for FY18
Capital Funds
Funding
Section MAP21/Toll Lane Grant
$ 10,130,925
Capital Expenditures Subtotal
Total Funding
$ 177,033,087

9. Demand Growth Cost of Trip Growth $6,614,824 FY17 Trips 3,558,043
3,745,538
Increase in Trips
187,495
% Increase
5.3%
Variable Cost Per Trip
$35.28
Cost of Trip Growth
$6,614,824
The increase in trips is projected to be about 5.3% for next year.
This translates into 187,500 more trips.
Utilizing the variable cost per trip of $35.28 the increase in funding required to accommodate growth is about $6.6 million

10. Other Items FY17 Service Demand FY18 Insurance premiums Fuel COR
As I mentioned earlier, service demand is running about 2% lower than the original projection. This 2% amounts to roughly $3 million – We will need demand to stay at or below that in order for us to remain within our allocated funds for FY17.
For FY18, Again we have only programmed 5310 funds for capital expenditures
Fuel continues to be budgeted at $3.50 – There is some risk there as fuel has now begun to increase slightly. Personally I noticed that unleaded has now gone over the $3 dollar mark – something that has not happened in a couple of years. The way the fuel peg is structured, we are covered budget wise as long as the fuel stays between $2.80 and $ Below $2.80 and we will have additional savings, if over $4.20 the budgeted savings will not materialize and we will have to a shortfall in this category.
I have not budgeted any funds to cover implementation of possible recommendations that come out of the comprehensive operational review.
With all that said, I will take any questions you may have.