SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY MINUTES OF THE SCRRA BOARD OF DIRECTORS REGULAR MEETING January 10, 2014 ITEM 16(a) BOARD MEMBERS/ALTERNATES IN ATTENDANCE: Votes SANBAG: PATRICK MORRIS (Chair) 1 (2 votes) PAUL EATON 1 Larry McCallon Alan Wapner OCTA: MICHAEL HENNESSEY (Vice-Chair) 1 1 (2 votes) Carolyn Cavecche 1 RCTC: DARYL BUSCH (2 nd Vice-Chair) 1 (2 votes) KAREN SPIEGEL 2 1 Andrew Kotyuk Adam Rush 3 VCTC: KEITH MILLHOUSE 1 (1 vote) METRO: MICHAEL ANTONOVICH 4 PAUL KREKORIAN 5 1 (4 votes) ARA NAJARIAN 1 Bob Bartlett 1 Richard Katz 1 Jaime de la Vega 1 Tom Lackey EX-OFFICIO MEMBERS State of California -- SCAG Ron Roberts STAFF: MICHAEL P. DePALLO, Chief Executive Officer DON O. DEL RIO, General Counsel GEOFFREY FORGIONE, Associate General Counsel BARBARA MANNING, Chief Auditor AL SCALA, Chief Projects and Contract Compliance Officer KARI HOLMAN, Board Secretary CORRECTED MINUTES AS NOTED ON PAGE 2 1 Vice-Chair Hennessey arrived during the discussion of Item No. 4 and left during the discussion of Item No. 11. 2 Director Spiegel left during the discussion of Item No. 7. 3 Directors de la Vega and Rush arrived following the vote on Item No. 3. 4 Director Antonovich arrived during the discussion of Item No. 14. 5 Director Krekorian arrived during the discussion of Item No. 3 and left during the discussion of Item No. 8. One Gateway Plaza, 12 th Floor, Los Angeles, CA 90012
Page 2 Meeting minutes are prepared in a format that corresponds with the Board Meeting Agenda, which is incorporated by reference with these minutes. SCRRA Board Agendas are available online at www.metrolinktrains.com under the Meetings and Agendas link or from the Board Secretary at (213) 452-0255. 1. Call to Order The January 10, 2014 SCRRA Board of Directors Meeting was called to order by Chair Morris who presided over the meeting at 10:04 a.m. at the Metro Board Room, One Gateway Plaza, 3 rd Floor, Los Angeles, CA 90012. Chair Morris informed the Board that effective January 1, 2014 new legislation (SB 751) amended the Brown Act requiring a verbal vote on all action items. He noted that Counsel was in the process of seeking clarification on this bill and that until such clarification is provided, the Board Secretary would hold a roll call vote for all items listed on the agenda requiring Board action. 2. Pledge of Allegiance Director Cavecche led the group in the Pledge of Allegiance. 3. Election of Officers Director Millhouse requested when conducting future elections, staff provide a written report and include the bylaws as clarification was needed regarding the position of Chair. Don Del Rio, General Counsel reported that according to the bylaws the County will hold seat for a two year term which is renewed annually. Following the upcoming end of term for Chair Morris, the Board would at that time nominate and elect a new Chair from the SANBAG delegation that serves as a voting member. He further noted that the counties rotate on a bi-annual basis as spelled out in the bylaws. Nominations for Chair were opened. Director Eaton made a motion to nominate current Chair Patrick Morris, from San Bernardino County, to the position of Chair. This motion was seconded by Director Busch. The Board Secretary did a roll call vote. Aye votes were received from Chair Morris, Directors Eaton, Cavecche, Busch, Spiegel, Millhouse Najarian and Bartlett. There was no opposition and the motion passed unanimously. Nominations for Vice-Chair were opened. Director Cavecche made a motion to nominate current Vice-Chair Michael Hennessey, from Orange County, to the position of Vice-Chair. This motion was seconded by Director Spiegel. The Board Secretary did a roll call vote. Aye votes were received from Chair Morris, Directors Eaton, Cavecche, Busch, Spiegel, Millhouse, Najarian and Bartlett. There was no opposition and the motion passed unanimously. Nominations for 2 nd Vice-Chair were opened. Director Spiegel made a motion to nominate current 2 nd Vice-Chair Daryl Busch, from Riverside County, to the position of 2 nd Vice-Chair. This motion was seconded by Director Millhouse. The Board
Page 3 Secretary did a roll call vote. Aye votes were received from Chair Morris, Directors Eaton, Cavecche, Busch, Spiegel, Millhouse, Krekorian, Najarian and Bartlett. There was no opposition and the motion passed unanimously. 4. Public Comment Jose Rodriguez, started his comments with wishing the Board a Happy New Year. He remarked that he was disappointed that the Holiday Train did not happen in 2013 and asked that the Board consider operating the special train in 2014. He also asked the Board to consider no fare increase to passengers this year. REGULAR CALENDAR 5. Approval of Minutes December 13, 2013 Board of Directors Meeting Upon a motion by Director Eaton and seconded by Director Busch, the Board Secretary did a roll call vote. Aye votes were received from Chair Morris, Director Eaton, Vice-Chair Hennessey, Directors, Cavecche, Busch, Spiegel, Millhouse, Krekorian, Najarian and Bartlett. There was no opposition and the motion passed unanimously. ACTION: The Board approved the Minutes of the December 13, 2013 Board of Directors Meeting. 6. Board Member and Employee Recognition Years of Service The Board recognized SCRRA employees and Board members who have completed one, five, ten, fifteen and twenty years of service between January 1 and December 31, 2013. This list of employees is as follows: 1 Y E A R Name Job Title Service Date Don Del Rio General Counsel 1/3/12 Aparna Badani Lead, Oracle Finance & Procurement 1/9/12 Sharon Kee Project Engineer 1/9/12 Amiya O Bannon Customer Engagement Representative 3/5/12 Alexander Chrisman Lead, Customer Engagement Representative 3/12/12 Sallie Garcia Customer Engagement Representative 3/12/12 Troy Greenhagen Lead, Customer Engagement Representative 3/12/12 Mary Saccoccio Executive Assistant 3/12/12 Maria Mondala-Duncan Legal Assistant 3/14/12
Page 4 Geoffrey Forgione Associate General Counsel 3/29/12 Carol Graves Train Dispatcher 4/2/12 Barbara Cantu Executive Officer Assistant 4/9/12 Yolanda Daugherty Manager, Grants Administration & Fiscal Management 4/9/12 Functional Lead, Customer Engagement & Kevin Liu Communication 4/9/12 Sonny Ibrahim Contract & Compliance Administrator 5/14/12 Rowena Padua Senior Contract & Compliance Administrator 5/21/12 Kevin Scroggins Security Manager 5/21/12 Amy Wang Senior Contract & Compliance Administrator 5/21/12 Scott Johnson Assistant Public Affairs Officer 5/29/12 Juan Mora Operations Compliance Officer 6/11/12 Roxann Nunez Communications Coordinator 6/11/12 Katherine Sims Department Assistant 6/18/12 Jeremy Shedd Materials Supervisor CMF 7/30/12 Paul Anninos Administrative Management Specialist 8/6/12 Jeffrey Gold Dispatching Manager 8/20/12 Ramon Ortiz Labor Compliance Analyst 9/17/12 Loren Jackson Customer Engagement Representative 9/23/12 Jenelle Vasquez Customer Engagement Representative 9/25/12 Dolores Vargas-Villegas Executive Assistant 10/1/12 Maria Cousart Buyer 10/15/12 Michael DePallo Chief Executive Officer 10/15/12 Christina Pinkney Buyer 10/22/12 Steve Soghomonian Project Engineer 10/22/12 William Garrett Senior Counsel, Risk Manager 11/12/12 Nithya Karunanayake Financial Analyst I 11/12/12 Jennifer Strait Contracts Data Analyst I 12/10/12 Darryl Pittman Cost Accountant I 12/31/12 Swagata Sengupta Program Management Analyst II 12/31/12 5 Y E A R S
Page 5 Name Job Title Service Date Jack Shilgevorkian Senior Network Engineer 2/11/08 Illya Robertson Communications Coordinator 3/10/08 Mark Simmons Train Dispatcher 3/31/08 Karl Tellez Lead, Customer Engagement Representative 3/31/08 Christos Sourmelis ROW Crossings Engineer 6/9/08 Kari Holman Board Secretary 7/21/08 William Doran Director, Engineering & Construction 7/28/08 Assistant Director, Communications & PTC Onboard Jerone Hurst Systems 10/6/08 Sherry Kelley Manager, Customer Engagement 10/20/08 Gregg Kraal Customer Relations Supervisor 10/20/08 Charlene Simons Fare Collections Services Administrator 10/20/08 Trischelle Baysden Service Design & Compliance Administrator 11/3/08 Stephanie Diaz Lead, Customer Engagement Representative 11/10/08 Lex Sood Lead, Maintenance Technician 12/1/08 1 0 Y E A R S Name Job Title Service Date Armando Ibarra Maintenance Technician 2/3/03 Kimberley Turner Field Operations Administrator 2/18/03 Rachel Chaires Manager, Customer Engagement 06/02/2003 1 5 Y E A R S Name Job Title Service Date Sandra Martinez Customer Relations Supervisor 02/16/1998 Tracy Berge Public Safety & Environment Manager 05/04/1998 Elba Guerrero Grants Reporting & Compliance Coordinator 05/05/1998 Sandra Martinez-Luna Business Analyst 06/15/1998 Larry Graham Supervisor, Dispatching Operations 07/16/1998 Daniel Richards Signal Standards Compliance Officer 12/07/1998 2 0 Y E A R S
Page 6 Name Job Title Service Date Jaime Romo Assistant Director PTC Technical Services 02/01/1993 Kenneth Dolph Train Dispatcher 03/29/1993 Gary Peterson Train Dispatcher 04/01/1993 Sheryl Carrerow Manager, Corporate Accounts 08/16/1993 Jacqueline Tyler Supervisor, Dispatching Operations 11/21/1993 The list of Board members is as follows: 1 Y E A R Name Agency Appointment Date Tom Lackey Metro July 2012 1 0 Y E A R S Name Agency Appointment Date Ara Najarian Metro January 2007 Richard Katz Metro October 2008 Jaime de la Vega Metro October 2008 1 5 Y E A R S Name Agency Appointment Date Robert Bartlett Metro January 1998 ACTION: The Board received and filed this report. 7. Positive Train Control Program Update of Project Status and Contract No. H1636-10 Change Orders Darrell Maxey, Senior Director, PTC and C&S Systems, delivered a presentation and provided a brief background on this item as detailed in the staff report. Director Millhouse asked for clarification of what constitutes a good test. Darrell Maxey stated that this would mean a clean run along a line segment that was operating with PTC fully functional and operating without an interruption. Director Rush inquired if the CAD system needed to be replaced if would there be an impact to the equipment currently installed on the trains. Darrell Maxey stated that there would not be an impact as the system would be compatible. Director Najarian expressed concern regarding the $5.4 million shortfall and potential use of the Proposition 1B Public Transportation Modernization, Improvement, and
Page 7 Service Enhancement Account (PTIMISEA) funds. He stated that if the Authority was to use funds previously earmarked for sealed corridor projects, what would be the plan to fund the outstanding sealed corridor projects. Darrell Maxey responded by saying that staff felt that the use of the PTIMISEA funds was a good way to use those funds since the funds are given to the Authority directly. He understood the concern of possibly using funds earmarked for sealed corridor project but noted that currently 19 sealed corridor projects have been completed or are close to completion in the Los Angeles County. Director Najarian requested that staff return to the Board to discuss other funding options to replenish the monies that would not be used for the sealed corridor. Michael DePallo, Chief Executive Officer stated that staff would review the budget and return to the Board next month outlining other funding options. A copy of the presentation is available upon request from the Board Secretary. ACTION: The Board received and filed this report. 8. TAP Program Update At this time, Chair Morris called on members of the public who had requested to speak on this item. Jose Rodriguez, made a request to the Board to consider to allow passengers with the Metro EZPass TAP card ride the Metrolink system using that card. Russell Case, Director, Fare Collections, delivered a presentation and provided a brief background on this item as detailed in the staff report. Chair Morris asked if staff has monitored other transit agencies who offer online and smartphone ticketing options to see if savings from ticket stock had been realized. Russell Case replied that staff has looked at both airline and transit agencies around the world and approximately 30 to 40% of passengers have converted to using online ticketing options. He also commented that he would return to the Safety and Operations Committee in the upcoming months to report on an upcoming facelift project with the Ticket Vending Machines (TVMs). Director Millhouse inquired if the tracking of transfers also included those transferring to buses. Russell Case responded that this data applied only to those passengers who transfer via the Los Angeles County Metropolitan Transportation Authority (Metro) subway system. Director Millhouse asked for clarification on what the current transfer rate that the Authority pays to Metro. Robert Turnauckas, Chief Administrative Officer noted that the current transfer rate is $1.25 with $0.81 cents of that built in to the cost of the ticket. He mentioned that approximately 64 to 65% of riders are using this transfer. He added that currently bus transfers are made but with the use of visual inspections only. He also noted that staff will be working with Metro to revise the Memorandum of
Page 8 Understanding (MOU) for the next Fiscal year and the TAP information is extremely beneficial. It was requested that staff provide the transfer information for both the subway and bus systems within Los Angeles County. Robert Turnauckas stated that he would be able to retrieve data from Metro. A copy of the presentation is available upon request from the Board Secretary. ACTION: The Board received and filed this report. 9. Finance Department Update Doug Farrow, Senior Partner, KPMG provided an update of finance issues. discussed the following four areas as of December 31, 2013: He Cash Position Accounts Receivables Accounts Payables Restricted Accounts $38 million approximate $58 million balance. Significant cash collections have been received in the amount of $110 million over the past 3 months. The Authority has billed approximately $3 million in Capital and $27 million in Operating costs over the last 3 months. $48 million balance. Staff is paying approximately $15 million in each of the two check runs per month. It was reported that access on two restricted accounts have been obtained. Local Agency Investment Fund (LAIF) account balance of $39 million and Bank of America money market reserves account balance of $4 million. Protocols have drafted for withdrawal of Proposition 1B funds that reside in the LAIF account. Director Cavecche inquired if data for large and complicated funded projects have been entered into the financial system. Doug Farrow noted that a task force has been formed to aid in looking at these larger programs such as Positive Train Control (PTC). He noted that the Tier 4 project has been entered into the system along with a few smaller projects and these are working properly. Director Millhouse wanted confirmation that procedures would be established and followed to ensure that the advancements made in the finance area would continue to move forward after the departure of KPMG. Doug Farrow confirmed that in the beginning of their assignment, they were focused on the cash flow, accounts receivables and accounts payables. Now that these are stabilized, KPMG would now begin to focus on policies and procedures.
Page 9 Vice-Chair Hennessey asked if any transfers had been made from the restricted accounts. Doug Farrow stated that only 1 transfer was made for reimbursement of funds for Proposition 1B but that procedures and protocols are now in place. A copy of the presentation is available upon request from the Board Secretary. ACTION: The Board received and filed this report. 10. Internal Audit Department Update Barbara Manning, Chief Auditor, provided a brief background on this item as detailed in the staff report. Chair Morris asked if financial policies and procedures are being revised. Barbara Manning stated that included in her report was a corrective action plan which noted that KPMG would review and make necessary adjustments to the polices Director Cavecche expressed her frustration to see these significant deficiencies in the report on page 25. She stated that she felt that standards that are in place may not be complied with and wondered if that is the case, how it would be handled. She also stated that the vacancies of finance staff need to be filled. Director Cavecche requested staff return to the Board next month to address how these issues are being handled since KPMG does not have the ability to counsel staff when compliance is not being met and who would hold said responsibility. Vice-Chair Hennessey inquired about the issue of the extra monies given to former employees and wondered if staff would be able to collect those monies back from them. Don Del Rio stated that he would work with Barbara Manning to see if that would be a possibility and noted that this issue had not been addressed with the former employees. Director Cavecche requested that when reporting on audits to include the year(s) that the audit covers for clarity. Director Millhouse mentioned that employees have to acknowledge receipt that they read the policies and procedures and would be held accountable should they not comply. He felt that the overall the Authority has great employees who are dedicated and committed and encouraged KPMG to revise the policies and procedures as discussed. Chair Morris asked how the grants management system issues were progressing. Barbara Manning noted that KPMG would be providing additional persons who are Oracle experts to assist and she added that slow and steady progress to retrieve reports in the Oracle system. A copy of the presentation is available upon request from the Board Secretary. ACTION: The Board received and filed this report.
Page 10 11. Chair s Comments Chair Morris reminded the Board to complete the strategic plan survey and to turn in their confirmations for the upcoming Board Workshop in February 2014. 12. Chief Executive Officer s Report o Authority Update On Time Performance For the month of December, it was reported that on-time performance was 94.75% which is strong and consistent with November s on-time performance of 94.79%. In the absence of third-party failures, on-time performance would be 97.22%. APTA Position The American Public Transit Association s (APTA) position on PTC advocates for extending the current 2015 PTC deadline to 2018 and to allow alternative technologies in lieu of PTC. The Southern California contention comprised of Metrolink, OCTA and Metro strongly disagree and are of the position the 2015 date should remain and any alternative technology implemented must provide the same or greater level of safety standards of PTC and be interoperable with PTC. In light of the tragic accident at Metro North, PTC has received more focus and scrutiny by Congress and the press. Recently Metrolink, OCTA and Metro and have requested that APTA reconsider its position and APTA leadership agreed. Michael DePallo stated he, Art Leahy and Darrell Johnson participated in a phone discussion along with mediator Phil Washington from Denver. Currently, Metrolink staff, OCTA and Metro are participating in an APTA Commuter Rail CEO meeting in Chicago to continue the discussion on a common solution. Staff is encouraged that a resolution may be near and will keep the Board updated on the progress. 13. Board Members' Comments Director Millhouse requested staff to deliver a report on the plan to improve the appearances of the trains as it is a direct reflection on the Authority. CLOSED SESSION The Board convened into Closed Session at 11:50 a.m. to discuss Item No. 14 a. and b., and reconvened in Open Session at 2:09 p.m., at which time Counsel indicated there were no reportable actions from Closed Session. 14. Closed Session a. CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION Pursuant to Subdivision (d)(1) of Government Code Section 54956.9 Charles Steffensmeier v. Metrolink, et al., L.A.S.C. Case No. BC492596 b. CONFERENCE WITH LABOR NEGOTIATORS Pursuant to Government Code Section 54957.6
Page 11 Agency Designated Representative: Chief Executive Officer Unrepresented Employees: Chief Administrative Officer, Chief Financial Officer, Chief Information Officer, Chief Operating Officer, Chief of Staff, Government and Regulatory Affairs Manager, Human Resources Director, Human Resources Manager 15. ADJOURNMENT There being no further business for consideration by the Board, the meeting was adjourned at 2:10 p.m. Respectfully Submitted, Kari Holman Board Secretary