 to order Please call the roll in advance and we do know that Cynthia Chase and John Leopold will not be in attendance today Dr. Bautorf here Director Kauffman Gomez present director Dutra Dr. Hagen Dr. Linde here director Matthews here director McPherson here director Rothwell here Dr. Rotkin here ex officio director Thomas Yeah, of course very well. Thank you It would like to announce that Carlos Landavira is What is available for Spanish language interpretation during today's meeting oral communications and for any other agenda item? Carlos would you like to just make an announcement, please that you're here? Good morning directors Carlos Landaveri your interpreter para las personas que necesiten traducción al español Estamos en el canal cero gracias. Thank you Okay, and also this meeting is being Televised by a community television of Santa Cruz County Channel 26 our technician is mr. Lynn Dutton and Today's Watsonville City technician is mr. Surreal Surreal Vazquez and thank you for that interpretation. I appreciate it. Thank you for your service I we will move to item number four for comments from the board of direct. Oh, excuse me As the only member from Watsonville, I would like to thank all of you and For coming to here from Watsonville. It's a wonderful wonderful event Since 2005 that I've been on the board I have enjoyed Welcoming people to from Santa Cruz to Watsonville and I'm sure our City Councilwoman from Watsonville Trina Kauffman Gomez would like to Yes, I'm happy to host this as often as you'd like to bring it to Watsonville. We'll happy to host this Okay, we're all on the same page on that one. That's great now any comments from the board of directors Director Rockin, I'll just point out that once again as you drive down highway one Realize the nature of the problem is you look at the people go in the other direction to work It's a nightmare and we have to try and see what we can do to address that problem It's it's obvious when you drive down and a lot of people in Santa Cruz Unfortunately, don't see that and don't understand how bad it really is right Yeah, I think and one of those issues that has been raised on occasion is that have bus lanes or HOV lanes, but bus lanes on there, but that would take a state Probably Well, we've tried it before and we may try it again, but boy that would really help I think people get on the bus to make that commute would help us a lot But as far as I know and I've been up on Sacramento for the last three days There is no legislation to that effect this year, but it's something we might think about in the future again Okay, any other comments for board this I Apologize for my last two absences for April and March. I Forget sometimes I'm a student first and a leader afterwards and the last two times you caught me at midterms and finals So I do apologize the last Some people have the phonious excuses, you know, really so it's got to get your priorities straight Yeah, I know I do my mother tells me all the time. Well, how did they go anyway? Pretty good They did had the finals midterms to go both of them perfect. That's good. Well, thank you for being here We really appreciate your attendance here today on any other comments from board of directors any Comments communications to the board of directors. Would anybody like to speak to us from the Audience that for items not on the agenda today. Hi, my name is ready by the Leon. Good morning first my name is ready by the Leon on from the Commission's on disability and I'm here today because I will to that to let you know that there's a better coming your way about two passengers that That frequently use para Cruz Who also work in Monterey County? they come here and a Few days ago, I don't know how long ago, but they were they couldn't get their paracruz tickets because the The booth was closing early the information booth was closing early and I wonder why it's closing early You know, they can't make it on time for them to get their tickets Hey, can you take what time was that is that in the morning? No, it wasn't the afternoon Late in the afternoon. It was early afternoon. We'll have our staff. Yeah, I can look at that and You know, I wish that you guys keep the booth more open Longer so that they can get their tickets You know the same hours that you have in Santa Cruz because I don't know what time you guys closed in Santa Cruz and I know that we don't have the same hours here I hope it gets It's okay. Thank you. We'll we'll look at that or staff and report back. Thank you. Okay. Thank you Is there anyone else from the public who would like to address this on items that are not on today's agenda? Okay Do we have any written communication communications from the Mac? No, okay Labor organization communications. Is there are there any? Yes, Eduardo. I've seen him Good morning Board of Directors of other multi-sewnal representing the bus operators impaired transit folks I want to report to you that HR seems to have a difficult time responding to employees when they complain it has taken months to get HR to answer to employees including one case that She finally responded after six months with a big or a big letter, but still no communication to the employee I know HR has a lot of a Lot of stuff in their plate But it's an acceptable for employees not to get a knowledge that they put forward a complaint and it's taken them You know it's taken months to get a response or if any a response Or any follow through we're still pending responses to employee complaints that haven't taken place and I am not definitely tired of hearing that she is busy and her complaints that HR was a mess before she arrived and what Metro would have done without her A main function of HR is to help employees, but seems there's no interest there Well, the you on the union side We definitely have issue with HR because it seems that they do not have no process or want to forget or want to forget About process HR seems to think Metro can implement and post policies and procedures without talking to union partner example removing Union from participating in interview panels without notice and I finally called, you know the CEO and then he set up a meeting and I finally got a letter saying that the Metro wants to take a different direction. Well, again, it's a it's process and a past practice and HR I'm willing to You know Do a a class for HR and addicts on past practice? We just definitely need to work on this issue about communication and process. Thank you Thank you There any other? Comments labor organization comments Good morning board members Michael Rios representing PSA SCI you Don Jeffries representing SCA SCI you good morning So there is an item That's not on the board agenda today That we would like to bring to your attention There is another item that is and that's item 18 which is the performance evaluation of the CEO So I don't know, but I don't know what the plan is for this But I do know that this looks an awful lot like the way that this was handled last year when the CEO Employment agreement was amended where the amended agreement was Discussed only in closed session. It was not published as part of the board agenda packet Which is this big departure from the way that's always been done in the past and I would like to present to the board. This is the a staff report from June 12th 2015 this was the first time that our current CEO's employment agreement was amended and As you can see we have a full staff report here We have the actual draft amended agreement as an attachment To the staff report and this was published in the agenda for the public to see and that's all that we're asking for is Transparency we would like the board to continue with the practice that they have done Going back 14 years at least because I found records dating back to 2004 where this was always the way that it was done I have multiple examples of that here. This isn't the only example so I you know it the board changed this practice last year and SCI you at that time came to the board and said, you know, we we are really unhappy that you did this Please don't do it again. Please don't do it going forward. Please go back to the way that this has always been done previously Publish the a staff report in the agenda so that the public has a chance to review it and to comment and That's what we're asking now. So I would like to give this to the board. This is the June 15th June 12th 2015 staff report. This is a great example of how it has always been done previously Thank you Thank you Can I ask that that just be mad the example be the scan and sent to us by email Okay, I still be scanned and given to the board. We'll take a look at it. Thank you Any other comments from labor? Do we have any additional documentation for agenda items today that are on there? Okay? We will move now to the consent agenda item number nine There are what twelve items on the consent agenda So anybody have any any director would like to pull an item? Anyone from the public would like to pull or discuss An item that's on the consent agenda We'll approve all the consent agenda Moved and seconded all in favor of approving the consent agenda. Aye. Aye opposed unanimously carried Okay, we will go to item number 10 the Presentation of employee longevity awards. We have three of them I think but one one person is not here today and that's Douglas Vest who has been with the transit district for ten years 1999 to 20 or 20 years 1999 to 2018 We really do appreciate his service to the transit district and I will have director Rockin present the The longevity plaques to those who are here the first number Michael doc Dukas Mitchell's Mitchell Dukas. Is that correct? Dukas? I hope He has been here for ten years and we appreciate we'd like to we'd love to hear a couple have a couple comments from you If we would please and congratulations and thank you for your service absolutely So if I knew I had to give this a little talk ten years ago, I would have reconsidered the whole job so Anyway, so my father-in-law actually worked for the Metro for 25 years retired in 2004 as the Facilities maintenance manager and I went to his retirement party four years before I started working at the Metro in 2004 and I met Probably a hundred employees and it was the first time I ever heard of paracruz Which is in their first year of service and I thought what a bunch of strange people and what is this whole paracruz thing? I had no idea that in four years I would be working there and that these people would become my second family and And the ten years has just flown by they're a bunch of great people April we're gonna miss her tremendously. This is her last board meeting Daniel is wonderful, and I hope he doesn't go anywhere. He is the greatest Everybody I work with is wonderful. I really love the job, and I don't plan on going anywhere So thank you guys very much. Well, I can tell from your enthusiasm You've served the public well and served the people of the transit is growing. Thank you very much for your service. Absolutely Thank you guys so much. You're welcome Jillian McLeese is here as well and To present the plaque it will be director Rotkin, and we would love to have a yeah photo op here We go. Wait a minute. Wait a minute. Let's let's get this right. Yeah, right come on She's retired She she started her service here at the transit district in 1985. Wow very nice First it's special that Mike presented it to me I think he's probably the only member that has been around as long as I have First I'd like to say thanks to my parents that trusted me to get in my 1958 VW bug in 1979 and drive-up and experience Santa Cruz for the first time. I then moved up here in 81 Just before I turned 18, and I spent the last the next four years Trying to convince the HR staff at Metro to hire me. I kept hearing I was too young. I didn't have any job history I was very persistent. I Was living with a couple bus drivers Frank Bauer and you Kiko Frank just retired a couple years ago and Eventually I convinced our base superintendent Judy Sousa to hire me. I knew every route There was I was kind of your bus groupie so to speak So I knew everything there was to know and finally I was brought on in 1985. I drove for 16 years and in 2000 I became a transit supervisor and then a few years later I became the scheduler so I do all the did all the vacation and all the daily schedule for the annual leave and what not for our bus drivers few people I'd like to say Acknowledge Devogal Wally Braunstetter Lauren Sudd Alan Ghosts Who else Larry Mungioli? I Know you guys are all over there laughing. I got so many people 30 years of people Angela and Debbie over here have been great during my career and Isaac and Daniel all you guys. It's been been wonderful I'd like to acknowledge our current Union leadership Michael reels. He's done a great job taking over Eduardo is doing you to you. I learned a lot from you to you in my career here. I learned about negotiations I learned about different work practices That was really cool and I guess finally I Would like to acknowledge a couple people who aren't with us anymore Chris Jones who was a wonderful? co-worker Judy Suza Marjel Han and Finally Mary Farrak who was a great leader She taught me to always do the right thing even if I was the only person in the world so once again board Thank you very much for all these years. Thank you For the that memory walk down memory lane that is really important For the district and we're so fortunate to have people who have stayed the course and been with us for so many years So thank you very much Yes, oh, excuse me. Donal. Donal in and that was lost It's got values gained because Jillian's volunteering and serving in our community and We're happy to have her okay Well, we've heard from Scott's Valley. We've heard from Watson, but let me have Santa Cruz capitol or anything whatever oh Excuse me prove the resolution Moved and seconded to prove the resolutions all those in favor. Hi posed sordid unanimously Before we get just as we go into the item number 12 the oral report from our CEO I would like to announce that there are news clips of the activities of the Metro since our last meeting They're on the back of the room if you'd like to look at that Now we just will hear The report from our CEO Alex Clifford. Thank you, Mr. Chair directors several items. I want to cover I'd like to start off with our HR manager Introducing her new assistant manager I really don't need to raise this that far Good morning Church human resource manager and I'd like to introduce to you Don Kermay my new assistant human resource manager Very good. Don't morning. Nice to meet you. Thank you Yeah, welcome to the district and you're where are you coming from? I'm coming from wholesale construction Good. Thank you very much. Welcome. Thank you district. We appreciate it. Thank you Mr. Clifford. Yes moving on. We had a fabulous media event at Involving UCSC and our articulated buses got really good media coverage on that and Thank you for the board members that attended and helped us out with that That was really a nice event and want to express our gratitude to Barrow Emerson and his team for the hard work They put in you know, we don't always have the people resources to pull these things off But they really dug in and made it happen. And I think it was a very good event. So right Barrow. Thank you for that And then and then in that same vein we have another one coming up on May 31st at 10 a.m. We'll hold that at the Pacific Station layover lot We'll have the buses layover in a different location during the event and that's our SB1 Measured event where we will showcase our New bus one of our new buses that remember we got three from Paul Revere that we're leasing at least to own and We also have a new Paracruise cutaway and a new pair of crews several new pair of crews Vans and so we'll bring one example of each of those We'll have some stickers on them to make it clear how they were funded and celebrate that Measured is already paying Dividends and SB1 is already paying dividends and and I think that's a good media event to begin to help the public understand Just how important SB1 is to this agency. Did you say the date and time again? Yeah, that's going to be May 31st 10 a.m. At the Pacific Station layover And we'll send out some notices too to make sure you know about that And then just as a reminder as we have for the last couple of months June 23rd through the 26th Santa Cruz County is hosting the APTA universities conference and That will be in Scots Valley at the Hilton Donald in is going to help us out with that speak and then if you're really really busy, but you can only attend something Please try to attend on the 24th the reception and Gina will again keep you posted on that We we you may not all know but one of your colleagues there has achieved a pretty major milestone Having graduated with his master's degree from USC and I think that has occurred since our last board member meeting And I think it would be appropriate to acknowledge our director for a job. Well done master. Dutra. Thank you I Think from any of us that have done our master's degree In a time in which we're employed or an elected office We know just how difficult that is to do and it is a very difficult thing to do so congratulations Congratulations All right two other items the house thud Transportation housing and urban development appropriations bill is As presented currently and of course it has process to go through so I just want to manage expectations But as presented currently has is is a real plus for us and they're going to plus it up You might recall last year. We were last year just a few months ago. We were celebrating the 2017 2018 plus ups which totaled $400 million and provided additional dollars to the Lono program the bus and bus facilities program and the formula programs which benefit us The good news is their initial presentation is 550 million plus up so even better than the The FY 18 and that will mean another 300 million Nationwide in the bus and bus facilities program and of course, you know, we just received a grant to to buy buses through the bus and bus facility program The 5307 which is our formula program is being plus they're proposed to be plused up 150 million The rural program 5311 program which we also receive money because we have rural service is plused up 50 million And then the Lono grant is plused up another 50 million So good news across the board and of course from a nationwide perspective What we are trying through apt and other organizations to encourage that these plus ups last year and this next year Become the new baseline for the fast-act renewal or the new Initiative whatever that might be in a couple of years Again managing expectations you recall after the president signed this last time. He said I'll never do this again So we do have to worry about getting it through the process not just just through the process But through to signature, but let's take the good news while we have it The the thud is proposing more money and we should take that and run with it for now And then lastly I just want to add an item some board members have asked me from time to time to try through my CEO presentation to talk about departmental accomplishments and and so that we talked amongst our staff and we thought well, why don't we add Monthly update on our internal promotions, you know, we do a lot of work to to improve in succession planning We do hire external candidates as you found out today But there's there's a lot of internal promotions that go on that you're not always seeing and so we've accumulated a list that covers since your last board meeting April and Into May and I just want to acknowledge those names Lucas iriguchi, and I apologize in advance if I mess up names He's he promoted internally from a facility maintenance worker one to facility maintenance worker two Maritza Mendoza dispatch scheduler to an admin assistant supervisor Rena Solario who left the admin assistant supervisor promoted into errands department as a purchasing assistant heaven Heather Forstner Jensen one of our newer CSRs promoted to a customer service coordinator, which is a sort of a semi supervisor kind of a position Adrienne Jimenez Promoted from a piece pair cruise operator to a bus operator and then last but not least Stefan Well, let's go promoted from a facility maintenance worker to To a senior facility maintenance worker So great news and and all of this really keeps the HR department super busy because any time you have a promotion You left behind a position that we need to go back and work to fill So they do a great job in the HR department trying to keep up and we're just excited to have so many internal promotions Mr. Chair directors that concludes my presentation, and I'm happy to answer any questions Okay, that that concludes your presentation, but there's one thing I would like to mention I don't know if it's ever been mentioned at a transit district board and it happened several months ago now But our own CEO Alex Clifford was recognized by the California Transit Association small operators to be the 2017 transit professional of the year at its annual convention in Riverside, which he is familiar with as well They really recognized his efforts and letting us know what the serious consequences We were in the we had a fiscal crisis not too long ago and because of his leadership and his letting us know the problems that are coming before us and The cooperative efforts we had from everybody from the unions from management from the board from the general public and general Recognizing and appreciating well not appreciating but recognizing the crisis the fiscal crisis We were in not so many months or years ago We are stabilized now as we're going to hear in our next financial report again But I think that the commendation I don't think it's been recognized here at the transit district board and Alex Clifford Thank you very much for your leadership and your your Recognition by the transit association small operators not so long ago. Thank you very much Okay, we will move on now to item number 13 to accept and filed the year-to-date monthly financial report Angela Aiken Okay, we'll move on Comments from the public All right, so today we're going through March 31st year-end monthly financial report for the month ending March You see a big swing on our operating revenue Please don't be alarmed what that is is we are taking a little over a million dollars a year out of the operating budget And putting it into the capital budget so that is a transfer into the capital budget That's not that we are losing revenues. We just happened to do it that month We've been able to streamline what we do so you won't see that again On our operating expenses. We are Underspending on our operating expenses for the month of March by $50,000. So overall This isn't a good picture for the month of March Just because of that transfer out of revenue, but for the year-to-date. We're doing great. We've got a million eight right now that we are able to Be above on revenues and below on expenses We're still over on labor overtime because we do have significant positions that are not filled and we have time that over time that we have to Incur because it's in the bids or it's in the schedules and things like that But overall from a fiscal perspective through the end of March, we're doing great. We've got about two million dollars that That we have going forward so far There it is budget actual against the budget the actuals the green. That's always good For the year-to-date Here's the differences passenger fares still and again, this is year-to-date So we've had passenger fares behind budget the whole year and then sales tax is Pulling ourselves up by the bootstraps We are we budgeted two and a half percent for sales tax and we're coming in still at about four point five So we're doing really good on sales tax the economy strong. I mean there people are spending money I don't know if you've heard the reports about the Memorial weekend next weekend Thanksgiving used to be the highest Travel weekend and now they're saying this coming Memorial weekend is going to be the highest ever So people have money to spend and money to travel Let's see moving on to our operating expenses. The actual is the purple budget is gold So we always have the purple below the gold We have a labor overtime right now those are the pieces if you take the first three pieces on that The labor the one more button. Oh, there it is. Okay, so the fable variants vacant positions Extended unpaid leaves, which we do have quite a few of those and then we have low lower medical Expenses this year and I'll be talking about next year here in a little bit We also have insurance premiums that have been lower and our workers comp is still coming in much lower than we thought we've we've been cleaning up those cases in HR and The dollars that we had Budgeted we are not expending so that's a good thing on the capital side. We have Spent two point three million dollars out of twenty million dollars. That's only eleven percent There's some pretty big projects in there that Take a while to get rolling plus we have other projects that we just have not gotten to yet But the the money that we do not spend in 2017 when you see the budget for 19 and 20 you will see that we are rolling those projects forward the money's not going away We're just taking the money along for the project And this is the spending on that so you see that we have construction projects of a million to going on right now and Some IT projects our revenue vehicles replacements $867,000 worth of that right now Non-revenue vehicle replacements we spent I think that's about 11 vehicles that we spent the 175 on and then a little bit of miscellaneous additional information unemployment rate Much lower than it was a year ago But our gasoline prices even though people are out there driving their cars or Spending fuel the fuel prices are much higher than they were a year ago on the ridership a Little bit lower than last year, but still hanging in there and the same for the highway 17 and the Cabrera Our operating expenses as of April 30th. This is the best picture. I can give you today just on the expense side We're still about 2.2 million dollars under spending on our expenses The labor is the only one that we are overspending on And we have a new slide for you This is a new slide that we're going to be doing from second quarter forward And so what this is showing you is our best guest today or our crystal ball today where we think we're going to end June 30th of any fiscal year so this time it's June 30th of this year when we come back For 2019 you won't see this slide again until we start the second quarter 2019 because the first three months Really don't mean anything to you by the time you get to the second quarter It's the actual numbers start meeting something so right now We budgeted about 51 and a half million dollars. We think we're going to be bringing in about 52 and a half Our operating expenses we budgeted 48. We don't think we're going to spend that much. We think we're only going to spend 46 They have transfers that so we had budgeted a 2.2 million dollars going to the capital budget that supports the equipment and the buses that we had approved and Then additionally because we are getting more revenue and we saved on the expenses that we had budgeted We think that we can move over a little over two million dollars into the operating capital reserve fund Now that's in accordance with the reserve policy The board has every option to do whatever you feel you want to do with this money You can buy the new buses and we've got 60 odd buses that we still need to to buy So what I've done here is from a fiscal responsibility Perspective I'm walking down the policy that we have in place for the reserves But you have the option to use this for equipment or buses or whatever you deem that we need that money for So by the time we get done with 2018 we should have a little over two million dollars to stick into the reserves our uncontrollable risk as of May 3rd Similar there is a slight change on the TDA that came down. It was seven hundred and thirty seven thousand now It's only six hundred and seventy one thousand dollars. They Amended their their estimate that it that they gave us so we're at about two point two million dollars this year and two point seven Million dollars next year. This is again the SB1 repeal if that Repeal is passed in November. Then we no longer receive the SB money starting January 1st of 2019 Then the SGR is the capital piece of that SB1 money I just like to make a comment that was mentioned about SB1 and And I notice the the gasoline prices are going up. That's a fraction of that is because of the The increase in the sales tax on gas that was approved by the legislature and signed by the governor That means about five billion dollars statewide local governments get half of that and That ballot measure is going to be on to repeal that That measure and we can see it. I think at one slide at least there's means three hundred and fourteen thousand dollars to this district So I just I think that probably are the gas prices because of supply and demand and not because of the sales tax Measure that was passed by the legislature and as I mentioned and signed by the governor it's going to be an important issue that's going to be on the November ballot to repeal that and Well if that happens, it's going to set back not only this district, but every every city and county in the state and If you want your roads fixed you'll vote no On repealing that come November, but I just want to mention that every time because it's going to be a big issue Come this fall and you're going to hear a lot about it anyone else Mike Just rockin I just say politically. Let's say it wasn't supply and demand was a conspiracy on the part of the oil companies doing it to us Well, okay, there you go Trying to be kinder and it's an election It's time to start talking the tree. There you go. Okay. Yes I think we also need to mention prop 69 which is on the June ballot to make sure that We're fiscally responsible of the money that we're receiving goes back into the transportation projects because that will Provide better assurance for people when they do see the November ballot of the issue of the repeal and Those that are concerned about the repeal would then see if the other one does go through That there's going to be a lot more accountability so that they actually know where their money is being spent and being reinvested that kind of thing So still get past June we have that election and that important part there And if it's possible, I have like just a couple questions. Sure the Should we look at something a bit more realistic on what your overtime is? I know that we have some vacancies But that keeps sticking out We seem to have that issue with other budgets that the overtime just like oh, this is just you know way out of hand But I just want to make sure that we're realistically budgeting what what should be necessary for an overtime I know that you had some Positions that weren't filled so there's an overtime that goes with it Should we be looking at something different than what you're saying that we're over budget for on the overtime expense? so we do a full Full comp budget and what that means is if we have 300 positions we budget for 300 positions and We have an algorithm that we use depending on each position How much overtime we've seen that that position has used in the past? And so we had some pretty big changes in this past fiscal year right at the beginning of the fiscal year You won't see that overtime move very much if you go back and look at what we've been showing you through the year We do our best to Mitigate the overtime that we have not accounted for one of the biggest things is in the Paracruz area of drivers and the fixed route drivers We are unable to bring some one person in at a time. I think they bring in a minimum of six Six people at a time so you could have a vacancy for a fixed route operator or a paratransit van operator For three months before you're able to put a class together and then that class goes for 12 weeks Well week so you're looking at about a six month period of time Where you may not have four to five operators and if you have that in both paracruz and fixed route Which I don't think that's happened, but the possibility is out there You will incur a lot of overtime that there's no way I could have ever budgeted for something like that all the other positions We try to fill as fast as we can we've had multiple accruements for mechanics We've had multiple accruements in the facility area We just not able to get people in here fast enough that are qualified to do the jobs that we have vacancies for It's very much a employee market The employer is having a rough time finding qualified candidates just to tag on to that if I might The overwhelming majority of this is in the bus operator. That's that's where it is. That's where you typically see it and We did we you know we monitor this we study this we get a lot of charts And we dig deeper into finding out what it causes the overtime to be where it is The fact is There's the obvious which is you're covering vacancies. You got to get the buses out We operate a system in which we say we want a hundred percent pull out We we don't want to say somebody didn't show up today on Unexpected absentee. They're sick for example, so we're not going to run that bus this morning We we choose to say it's all about the customer So we want to deliver a hundred percent of our service and there's a cost to doing that now after we studied this a great deal Last year we added a couple additional extra boards to the ranks the extra boards allow you some flexibility To try to react to that unexpected absenteeism those vacancies and whatnot and we're monitoring that The natural question which might have been what you were driving towards is when you have over times so significant Why don't you just hire some more people and bring overtime down and I wish it were that simple? It's just not You know over covering overtime is covering slots They're all over the board when you hire somebody you have somebody that you're putting on a shift and They're managing that shift or you're putting them on the extra board And you're hoping you put them on an extra board to cover where your your vacancies are going to be and they don't always end up Or you want them to be so it's a really complex thing But I want you to know we do study it and we have taken some measures to try to to adjust it at the end of the Day if you look at the sum total of the data that is the savings in Wages and benefits that result from the vacancies it nearly completely Offsets the overtime and that's really I think what as a policymaker you want to kind of watch for that We're running the model in that kind of a way Definitely it's always been a conversation when it comes to overtime and budgets and whatnot. I think I just have a couple of things What is your? Reserve policy. I think that I I saw in here that you had Everything satisfied, but there's I don't know what the policies are I think that there's still one left that I wasn't sure It's our policy not his. Oh, well, I mean what is our policy in terms of And then the other item too is I Think I've talked about it before getting something about CalPERS and then knowing what is that the current CalPERS Contribution versus the unfunded part of it so we can really see the two segments and That way the public is aware of it because it's We'll be having a lot more these kind of conversations throughout as we deal with the CalPERS and state needs to see this You know acknowledgement at this level that we need something done at the top end to help us down here on You gave us a lot of good questions that we need to answer It's gonna take us a couple of months to get that together and what we're gonna do is we're gonna go ahead and assemble that information and Then meet with you first to go through it and make sure that we got the answers the right way and then present that to the board So that's our plan. We're probably looking at getting together with you in about August at this point Is what yeah a little time after the election what now will be helpful well and in July is is you know the month going dark Your reserve policy you'll get a chance to revisit that again Later after we close the fiscal year so we close the fiscal year June 30 But it takes us another couple months at least to get through the audited closing once we get through the audited closing And we know what our our carryover or surplus is from the prior year. We'll come back to the board and we'll say here's here's what you had left over because we ran the business efficiently and We'll look we'll show you your policy will make some recommendations on which of those reserve buckets You want to you might want to consider dumping the money into and if you want to take some of that and carve it out and spend It on adding some buses it'll be your decision We'll make a recommendation But that'll probably occur at least two months after we close officially close the fiscal year Yeah, and for me just being a new member just you know baseline of here's what our summary is from the past so that when We do have that evaluation I know where we're going with it from that point for it because I just don't know what it is right now I see that it satisfied, but I don't know what the policy looks like So if you can just send me maybe that would be very helpful. I'll get that to you today. Thank you Director Reckon I Know Alex is aware of this, but there's another issue beyond Whether the money in terms of the overtime issue Whether you're balancing how much you're spending On overtime versus how much you're saving on labor But the other issue is whether we are driving our drivers into the ground and you know That's a balancing act because many senior drivers who have the That will be the ones most likely to get the first chance to do that appreciate overtime It's a way that they can make more money and do more for their families on the other hand Sometimes you reach a point where you're making people drive overtime and it's not good for them And it's not good for us because of safety issues if they're driving that many hours So I don't I don't know how you measure that or at what point, you know One way I measured is if I hear from Eduardo that like, you know There's like drivers going crazy because they're being made to drive every day and they don't get enough sleep That hasn't been happening, but if you know, that's one way we find out But other than that it'd be nice to understand how we're doing in that regard because maybe we need to get more I'm this is for next year's budget not past stuff But whether we need more extra board again because we are if there's a problem And I have no idea at this point whether people are being pushed to the edge or whether they would be desperate for more Overtime it's hard to know. I'm glad you brought that up And I neglected to say when we did that evaluation and added the extra boards last year. That was part of the discussion There is always that concern for safety not overworking our employees and it's not necessarily Overworking our employees. We know because seniority Takes as first stab at at overtime We know that a smaller subgroup tends to like the overtime and grabs on to that a lot That's why you see some of these newspaper articles once in a while about people earning double their base wage, right? Because of seniority they're grabbing on to that overtime. They're working a lot But we have to be thinking is that the right thing to do do we end up overworking people and then there's another part of it Which is that new generation? Maybe it's millennial. Maybe it's not but that new generation is not real not as Enthusiastic about accepting our offer when you take overtime, right? And so we're monitoring that and those are also contributing factors why we added some more extra boards now Here's the other part of the challenge When you add operators we'd like to be able to say we added operators and we put them out there And we increase the frequency on some line or we provided some new service When we choose to make the business decision to add them to the extra board We're just helping to maintain the business. We're not adding any net new service So there is a difficult balancing act we go through each time we look at that Thank you for bringing that up. That was important. Yes, sir. So when you're talking about overtime What do you know what the average amount of overtime typically is are they working two hours over time four hours over time? Are they working a 10-hour shift a 12-hour shift more complicated than just a simple answer? But we can we can give you some idea of that It's ever it's all we're not asking somebody to drive for 16 hours No, man, there's laws that regulate just how many hours they can be in the seat But it just it's such a complicated model. I can't even begin to explain it simplistically here The simple answer would be It varies from small pieces of work to entire shifts Okay, and not violating the law You know the questions from the board here Yeah, you know mr. Monsignor Yeah, can I just have you're all correct? I mean it's it's an issue and as Alex pointed out It's gonna be a bigger issue when those senior drivers retired within the next few years Because I know I'm with Alex and it's the millennial the new generation You know they they want to get you know plus 40 hours pay But want to work, you know less than 40 hours So that's it's gonna it's gonna be a challenge after those Individuals to take on on that extra work when they retired you're we're gonna we're gonna really you know see the difference Just trying to pull service out of Out of the yard. Thank you, you know it might make our lives more difficult But it's probably pretty healthy that there's people out there that think money is not the only thing that matters in life I appreciate that actually Are there any other comments? None from the board members any comment other comments from the public I would just like to follow up on a comment by director Kaufman Gomez about not to complicate the issues that are on the ballot but the prop 69 is on the ballot in this June election and The long and short of it is is that a pocket of money that the state has has always historic or historically has been Taken from the transportation pot and put elsewhere in the state This says in essence, we're gonna keep the transportation money Where it is for the purposes that it's designated for properly and so prop 69 keeps transportation money in In the state budget for transportation purposes That's probably the simplest you can get on that Fortunately the prop 69 is the number for the UC student vote on Increasing stuff says yes on both 69s on the June on the on the ballots this spring. Okay Good. Yes, any other comments? I think we need a vote to accept the Monthly financial report. I so moved Moved second second all those in favor. I pass unanimously. We'll go down to item number 14 the fiscal year 1920 operating budgets and capital budgets and to pass a resolution setting a public hearing for June 22nd to discuss them so in March we put forward the FY 19 FY 20 operating budget FY 19 capital budget for RTC purposes for our Money that comes from them Angela. Excuse me. Could you speak a little closer to the mic? Sorry. Thank you. Okay, I'll raise it. Yeah Yeah, that's That work better Better, okay So the overview for today's presentations a five-year budget plan We're going to be going over the revenues the expenses and some of the transfers that we talked about earlier The total revenue expense with the percent changes of CPI versus the expense Percent changes and the revenue percent changes the FY 19 operating budget changes that are From what we gave you in March. There are some significant ones there projected operating revenue reserve balances a little bit we talked about already and then in the 1920 non-controllable operating budget risk these are risks that I bring to you once a year of things that I think or As a as a group we think that might affect our budgets And then some ongoing activities that are incorporated into operating budget some memberships that were asked that we put forward And then the 19 capital budget So the first thing is the five-year budget plan This is something relatively new. We've only done this I think twice now We used to only do to your budget to your rolling budgets And that just wasn't giving us enough latitude forward to see what is coming down the path And so that we can react sooner than the next year that something might be happening So our total revenue resources for the five-year projection We're looking that sales tax is going to be almost 50% of the revenues that we bring in to the agency The next highest one is going to be our TD no our passenger fares at 18% and our TD a 13% We still get question about that. I always thought we got 23 percent of our budget from Passenger fair. So is that dropping or is it that's of a bigger a different budget percentage of something different? Well, it changes because we're getting more sales tax measure D move that around So depending on the percentages of the money that we used to get versus the percentages of the money we get today Those percentages in relation to each other are changing So we still receive the stick money and the STA money from the state a little bit of federal money But yeah passenger fairs the TDA money in the sales tax. Those are our three biggest revenue resources. Yes Did Move the whole thing up the podium moves up and then the mic will be close I have a question if I could oh, excuse me director Matthews I think I under I recall that we had to achieve 20% of our income from passenger fairs to qualify for grants or Is that a correct memory or? There's a Fairbox recovery percent. I do not have that on the top of my head. It's 20 something We have to meet it or exceed it or be below it for certain things Is that a risk? That's the point of my question there. I do not believe it is no, okay No, no, and then it's there's different fact This is all revenue and so when you get down to the Fairbox recovery, okay, they only take certain things into consideration So some okay So some of that pie wouldn't be included in the grant. I mean as far as grant applications go Is that right to make it a different? So we'd have a different percentage. I don't know Every grant application has different requirements and so depending on those requirements that they ask for that's the numbers We would put forward Let me just with this 18% that we have here Will do we still meet the threshold of 20% for it to go get to try to get those grants today? The answer today is yes, okay We'll go back and double-check that the one source that that's tied to is your tda, which is a significant source But I think what we have to do is go back and double-check it because I think what Angela is saying is correct You don't include all the expenses that we include in this pie chart for that particular calculation For example the pair of transit system might not be included in the base for what percentage you're recovering from your Riders on the fixed route service or something like that We that's what we need to just double-check and then even if you hit that it doesn't mean you don't you if you go below that You don't lose your tda. There is a process. I believe you have to go through with your local In our case RTC So we'll double-check that and and get back to you on that in June Thank you Revenue sign All right Total revenue sources of what we're showing you here is the line across the top is the expenses that we Are anticipating that we're going to be incurring over the next five year and as you can see our revenues We are anticipating our revenues are going to be slightly above the expenses that we think they're going to be coming in Total different picture than a couple years ago. So Feeling pretty good. We are we're doing a really good job of Shepherding through the expenses as well as finding as much money as we possibly can to run run this agency the best that we can So on the different colors tells you the different types of money It's just taking the pie and giving you and bars instead of in the pie And then putting the expense line on top so that you can see that the revenues are anticipated to be above the expenses On to the operating expenses. This is a pie chart for the operating expense 82% of that pie is personal expenses. We are in the service industry. So you would expect it to be on the higher side only 18% is our non-personnel expenses. Everything else is related to personnel Whether it's labor fringe or anything else related to a person providing service, which is what we do for business Then we did the same thing here We've shown you the revenue line and the expenses with the different sets of expenses that would be incurred over the next five years You do not want those bars to hit that line on top because then you would be spending just as much as you brought in So you always want that line to be hovering as far above those bars as possible And that shows that you are being again physically responsible on the expense side as well as the bringing in the revenue We're going from 53 million to 58, which is a good slow gradual increase our transfers We've made a commitment on the transfer side The board has made a commitment that we put three million dollars every year into the capital budget. And so that's what the 2.3 million dollars is or the 2.4 the blue on the bar there That's the commitment that the board has made to the operating budget or capital budget of putting that money in there The total together between the capital money that is already designated plus this operating money is a total of three million dollars every year the rest of it is the Surplus that we are Anticipating today that doesn't mean it's going to come in but with with the factors that we know today We are anticipating that we're going to have a little bit more revenue than expenses And so those gold bars on top would be potential transfers to the reserve accounts or Additional equipment or buses that you would like to buy so you can that's that's what the board would have the ability to use somewhere Yes, sorry, these are just transfers to the to the reserve fund But not the aggregate in the reserve fund. Is that correct? That's correct This is do we have a figure on what the total aggregate amount is it there? I'm anticipating Thank you director Rockin a Third option that the board has would be to look at again I want to be careful that I'm not asking for an answer today Or that we would make the decision today as part of the budget process, but it's possible We would see that there's enough of being transferred over that we can both make sure our reserves Not both all three things make sure our reserves are secure have enough money to buy buses in the capital accounts And perhaps expand some service in the district It's not going to be a lot like when no, I don't want to have people having high expectations We're going to you know have a lot of new service on the street But it's not impossible to imagine a new route or expanding Frequency on one of the routes and live oak for example. We saw the other day We may be under serving that urban area That kind of thing is something we could consider in the budget process here as well This this budget actually does that It anticipates adding one FTE for New service well one one FTE for service it's yet to be determined new service augmenting service But it's doing exactly that now what it does is because of our threat of SB 1 in November It programs a half a FTE So that you could bring that person aboard in January if we survive November And and then this budget adds yet another FTE in 2020 so between 2019 and 2020 you'll have two FTE's added So we're trying to try to appreciate that the board has sent that message in the past and has taken some action to add Some additional operators in this budget does that thank you Director Kauffman go miss. I certainly understand the holding pattern until after November here And making sure that we're cautiously putting our budget forward as a result of really carefully monitoring that The trend of your personnel if we're at 82 percent of our costs going to personnel What has been the historic trend versus is are we? Continuing to look at that being about 80% 82% in the future as well Or what kind of what's been the variance of 82% of our overall budget going to personnel It's been in the high 70s low 80s summers in there We can go back and look at that if you'd like, but that's just my ballpark off the top of my head today Okay, just so that we know that we're not, you know If that's a course of the plan or you know what the continuity of that looks like so we don't see something spike there But if there had been what did we do to resolve it or is our trend going that that I just want to make sure We're monitoring on that Yeah, the comments from the board This is a messy chart, but it means a lot when you know what it says the budget This is the total budget percent change versus a CPI change and so there's three bars on here There's a CPI which is right in the middle It's the red one stays pretty consistent And then you have the blue one that's all over the map and that's our revenue We've had times over the past ten years that We had no revenue coming in to cover the service so we were going to cut service We did cut service then we were given the ability to take capital money and convert it to operating So boom it spikes back up so we've Revenue is a really hard one for us to say this is what we're going to do with it You saw my previous slides. I got this nice little trend going for the next five years But that's the crystal ball, but there's always something that happens And so this shows you what we budgeted percent change on the CPI change the expenses as you can see on the expenses They they follow the revenues and then in the last two years since we got rid of the fiscal cliff that we were doing You can see that we are tracking pretty darn close to the CPI and that's what you want to see You don't want to see these ups and downs so much You want to see that you are pretty close to the CPI and that gives you a good feeling that you're doing the business The way the business should be running or the agencies should be running You don't have stuff coming in and going out in in Big amounts because that affects your service it affects your customers So we've been looking pretty good the last For the next two years, that's what we're budgeting, but as you can see for the last two years kind of all over the place Then we go forward to the actual so this is what actually happened with that previous chart Revenues are still a little bit of a swing, but our expenses are going with with the Revenues we are not close to the CPI in 2017, but we're projecting to be very close to CPI in 18 We're getting closer than we were in 14 and before but we still got some swings going on I'll tell you if we're looking up the the swings slings and arrows here going up and down if we can keep it at a level plane We're all magicians Very unpredictable yep outside of our our hands in some respects to So they're operating budget changes like I said We came to you with a detailed budget back in March and we've had some significant changes that we are presenting to you in the May budget So we have decreased the passenger fares that we showed you back in March. We have more actual passenger fare information so now it's July through March And so incorporating those actual information actual numbers we decreased the passenger fares a little bit We have increased sales tax sales tax is very strong right now And it's not showing any sign of stopping But it is a gradual strong so we've increased our sales tax on the measure D and the 1979 sales tax We've increased our TDA RTC changed what their Guestimate was so we changed it on our budget. We've also increased the miscellaneous grant funding That's the loan no grant that Alex said earlier that we got earlier this year So now we'll be getting that in 2019. So we added that Fuel tax credit. So this is a new one We've received fuel tax credit for over ten years and that's Fuel tax credit that we get from the feds and so about a month ago. We received an IRS letter No one likes getting IRS letters and neither did we and what they are claiming is that we are Not Doing the calculation correctly, but after ten years of doing the calculation exactly the same We are saying well, we are doing the calculation correctly So we're in conversations with IRS right now, but because that threat is out there. We have decreased our fuel tax credit I believe by two hundred thousand dollars We've reduced it because we get around three three fifty depending on how many gallons we use every year And so with them coming in saying that we're doing the calculation incorrectly And not having a clear judgment on that yet Taking the conservative side and saying we're not going to be able to get that two hundred thousand dollars They have the ability to go back three years. We have submitted two of those three years that they can audit so our total Risk right now is around four four hundred four hundred thousand to four and fifty thousand dollars that we may have to give Back to the IRS Not a good not a good thing So for FY 19 we are looking at increasing revenue by thirty nine thousand dollars by the time You could take all those puts and takes together and in 2019 or to 1920 we plan on adding about a hundred seventy five thousand dollars in revenue Or operating expense this kind of goes to what you guys were just talking about you took my thunder on that one We had eight positions in March that we had told you that we were going to either put in had put in or one Of them we were taking out so at this point because SB one is In in jeopardy as far as is financially concerned We decided to not put those positions in full-time for fiscal year 19 We decided to put them in January 1st, which is be six months if on no and at the November election The SB one is repealed We will not be hiring those positions that we put in January 1st if SB one is not repealed We will open up recruitments. Hopefully the next day so that we can have those individuals in here working by January 1st We had one position that we showed you in March that we added during the fiscal year 18 called the Customer service coordinator position that position is in there and we did delete a admin assistant position That position is deleted But all the other positions that we added including the bus operator positions have all been delayed till January of 2019 in 2020. We also had put in an additional fixed route bus operator because we got a Grant that we're going to be doing that with so you had two bus operators in the next two years If SB one comes through you have one additional in 2020 if the SB one is repealed on the non-personal expenses The only change that we had there that was significant was a good news our insurance our PLN PD The estimates came back and they were much less from CalTIP. So overall between those two things We are reducing our expenses in 19 by 375 thousand dollars, and we are reducing our expenses in 2020 by 61 the 61 obviously is the insurance and then about that much in 2019 is the insurance the rest of it You can contribute to the positions that we are delaying So reserves we just threw this slide in here. This is kind of a bucket slide We've had for a few years the ones that have been here a while love it and the ones that haven't been here I have no idea what I'm talking about These are our reserve buckets and we had the reserve policy and in this policy It tells us what our targets are so for workers comp. We have a target of 3.5 million Operating sustainability reserve. We had 7.3 is the target cash reserve Cash flow reserve. We have a target of 3 million Liability insurance is only half a million I say only because it's been much higher in past years and then we have operating capital reserve front has no target And what that is is that's the one that we throw Everything in to that you are able to take out of for emergencies or service or whatever the board would like to have that for What I've done here is I've shown that all the buckets are fully funded and we have money in the operating capital reserve fund So from a fiscal responsibility, I would say yay. Let's let's keep it there But it is the board's Decision to keep the reserves fully funded to take some of it and put it into buses and take some of it and put it in The service just remember this is one-time money. This is not money that I'm always going to be able to put into the reserve So my recommendation would be leave it here or buy something one-time like equipment Hey, I think this is the best news of the whole presentation now that and understanding to that It's with so many needs that we have I know that there could be some constituents and writers say well Why don't you just add more service and not have a reserve? But we've seen the swings of the revenue cycle as a particularly sales tax and what it means and how we have to adjust to it Stability is a key component of what we do in providing the service that we do as we're able to do but Also being in a position if grant opportunities should come up We have some some some money to we have a fleet of a hundred buses just about a hundred buses We need to upgrade more than 60 of them So there's a lot of need out there and there's a reason for reserves Sometimes difficult to explain but absolutely necessary and I'm glad we have it Yes, I share in Bruce's comments. We looked at this two years ago. Every one of these was in trouble and they're all fully funded It's fantastic. I do want to say that We asked the board asked a lot of questions about this Where you know these targets? Two years ago when we sort of set those targets and I asked for example questions about well Couldn't can't you cover can't one bucket help cover the other one? And there's no way to save some money and we spent a lot of time on it I just want people to know it's not like I got the answers that I needed to those questions I think the rest of the board did as well that there are reasons that those targets were set And if there's any new board members that don't understand, you know Why is it this target rather than some other target? You should meet with staff They can explain to you those are not just random numbers. We came up with a they're really necessary for our expected Likely you know things that could happen to us in there. It's a reasonable policy and I'm so gonna start it off Let's put it all on the street. Let's have service. Let's make it happen And there's a reasons for these reserves and I'm really happy to see that they're fully funded at this point Thank you. I I just want to kind of reiterate reiterate reiterate that as well I mean, I remember just few years ago when we looked at this. I was like, oh, there's no way We're gonna even even meet these needs I mean these these buckets were so empty and like we were like borrowing from other buckets and And in those of us that you know kind of see what what happens when you go through a recession or when you know It's you know issues hit like it hit Metro You understand how important buckets like these are to have funding in reserves because you can rely on that Otherwise you just won't be on the tip of a fiscal cliff You're gonna be over the cliff and you know a lot of cities and organizations have faced that so The fact that I could I see fully funded fully I feel like I'm like this is I'm looking at the future like this is I can't believe this happened so but I can't believe it because of the great leadership But I'm just excited that we were able to maintain this and now hopefully we can move forward and and start working on the capital projects that where We've been we've been needing so bad port badly such as like replacing our buses and Working on you know our station So I want to say thank you for you know the board who's you know was here in the past to help help Create the create these standards and for the current board so that we can continue to continue to meet these standards And that we can you know move forward and you know make Metro It's a really a place that we can you know be flourishing in so thank you very much Recommendation this is not what I'm going to do. This is what I am recommending you as Mike pointed out You have the decision still to put it in reserves put it towards buses put it towards equipment put it towards service So from a fiscal perspective, this is how I'm presenting it But you still have a decision to make on what you want to do with them Well, then I urged the decision to be made that we keep it like this I mean I was looking at this all wow fully we we worked really hard to get here But I mean the fact is that this is in reach So I mean this is gonna be up to us whether we want to keep this this or not So I mean I would urge people that we do this and then move on beyond that I know we're gonna get a probably a lot of backlash people saying let's you know Let's hire let's hire let's hire But we we've seen what happens when we're not responsible with our spending and we don't want to go back there So Dr. Hagan Yes, the one thing that I think is somewhat underplayed is the day-to-day operation of the bus We are so Desperately in need of a tremendous infusion into capital for new buses and until somehow We can accomplish some of that the capital reserve will be I Don't know how we can say drained But the day-to-day uses of the buses. That's our primary function Get people back and forth Twice this week on two different buses. We had to stop while the driver went to Do something to repair to get the bus going again? And these things can't be accomplished until we see Capital expense for new buses All these other buses buckets are wonderful But I'm coming back to hey you got to get me back and forth to the board meetings, too Okay, director lind. Yeah, and I think the important thing with keeping our operating capital reserve fund As high as we can is needing those matching funds to be able to be in a position when these grants come up Because even though there's been progress from the 62 buses. It's it. It's a daunting pass daunting task that are ahead that's ahead and So I'm happy to see that that bucket there and know that we have needs Those funds will be needed. So thank you. Mr. Chair if I might just tag on to that I would remind the board in the budget process last year when when you saw those empty buckets that Director due to refer to you the board said you need to come back with a plan on how we're going to fill them And we brought you back a plan and we said I think 2022 we would get them filled though So this is this is astounding to be able to have such a good year in which the budget was managed by all of these Managers behind me in such a great way that we have this kind of a potential carryover or surplus to program But I would just remind you what I said earlier, which is sort of consistent with the other comments When we get that final number a couple months after the close of the year We'll come back to you with a number of options and and it may be at that time of the year We say gee we have some grant opportunities. We've committed all of our money We need some additional matching money and you may say well, let's not fill them all this year But let's them all over the next couple of years, but that's still better than the 2022 you have options I would just ask you to keep those options open because you know the ground is a little uncertain right now a little liquid faction going on So let's see what happens in the next couple of months when we bring you up. Hopefully multiple recommendations I'll also just to plant a provocative seed here I'll also probably ask you to consider whether your current policy for the Sustainability Reserve Fund of just two months of operating is the right number. I don't think it is and This may be the time in which you need to think about doing a little bit more. So this bucket Growing a parallel to what our governor is doing the rainy day fund and the governor is is Preparing everybody for the fact that the economy is going to turn historically it does economies are cyclical And you need to be ready and we need to be thinking that way too and this is the bucket in which protects you To to have options so that you don't go you don't have to look at things like we're done years ago where the entire Reserve fund was not segregated this way And it was just drained to keep the service going on if you can focus on one bucket and Decide if you want to use that in a downturn of a market to keep the service going or to just keep it there In case there's funding disruption whatever that might be this bucket needs to grow in my opinion So I think we need to have a hard conversation about that Hey, director Kaufman who am I? Yes, this particular bucket in other budgets that I've looked at has been separated so that there isn't operations Which has you know for six months or whatever the policy of the reserves would be for the operating and then the other being capital because There are two different lines of expense that we're doing here for that particular bucket to sort of group them together I would see that we we actually should have two separate buckets to explain The money reserve on that and maybe there's a reason why this agency put them all in one versus what I've seen in the past where Here's our monthly reserve so that we can you know cover our capital Our operating expenses for several months of personnel wise Versus the capital reserve so that we can do some grant matching funds For when we go and seek the grants Are we that's the difference between the operating and sustainability reserve fund on the middle and the bottom right Which is the capital matching grant fund? I guess maybe I'm confused then because I'm seeing operating on both of them Yeah, what you don't see is remember the three million that Angela referred to you don't see that that gets programmed over into the capital This becomes the pot in the lower right-hand corner. This becomes the pot that First and foremost helps us to handle day-to-day things that happen. There are capital expenditures Anything over $2,000. I think is our threshold is a capital project. There are things that Happened throughout the year. We need to buy a vehicle. We need to buy a server those kinds of things come out of this pot and then the remainder of that So we try to keep a balance so we can react to day-to-day month-to-month changes and then the remainder of that can be Additional dollars that we use for those those grant matching opportunities, and that's that's again That's a business policy decision you want to make on how much of that you want to protect for Unexpected capital expenditures and how much you want to pull and go after some grant because we need more buses So I think we have what you want. Hopefully that explanation helped. Thank you It's okay go ahead. Oh those of you that don't like buckets. Here's the lines Same information They're going on to non-controllable operating budget risk for 19 and 20 these are just that we've come up with that We believe Could affect our revenues could affect our expenses, but we don't have the control over them So a passenger fairs transit fairs Fluctuation ridership, you know people ride or don't gas prices go up or down. That's another one here TDA STA 100% of the SB 1 is at risk due to the potential voter repeal in November So we've talked about that alternative fuel tax It has to be renewed every year that's actually a risk historically has been significantly delayed and then addition to this After we made this slide, of course the IRS letter came through Else we have to add on there the FTA. It's always subject to appropriation. We just have it this year We don't have it next year. It's just whenever the appropriation comes through. That's when we have the money Been pretty consistent because it's the federal government, but it is a risk sales tax always Stalled may stall and it's always contingent on whatever the consumer spends on the expense side Multiple things here C&G and diesel engine failures. We do have money in the capital budget to fix those but something that happens Fuel cost volatility. We do have some contracts on some of our fuel, but not all of it workers comp insurance We're doing pretty good right now, but we could have some significant increases there Medical insurance so medical insurance just yesterday, of course We got our numbers and these are preliminary numbers and for 2019 our preliminary numbers say we're going to be increasing our medical insurance between 18 and 25 percent depending on the plants So Not coming down any time soon or not being stagnant. So we that's our numbers We got from CalPERS two days ago. These are preliminary numbers If we get any other number between now and when this budget needs to be put together for June board meeting We will incorporate that increase into the June budget numbers Gentleman cost we do have a set number that we always put in the budget because there's always something that comes through We could have significantly more we could have significantly less The aging fleet we've talked about that where we absolutely need more buses 60 plus buses And when we don't replace those buses our maintenance costs go up So it's a balancing factor between how much maintenance you want to put into an older bus And how much of that money should we actually be putting into a newer bus? And how do you balance that to keep the service on the street? In using unfunded mandates, there's always something coming from the state There's always something coming from local and there's always something coming from the feds. We never know Becomes a mandate. We have to figure out how to do that mandate without additional monies Ongoing activities. This is something that we were asked to put in here These are things that we have budgeted for and things that Santa Cruz Metro participates in we do the fair We do a senior luncheon Santa Cruz folly if you provide service for We have a Metro advisory committee that meets and we give them a tour of all of our facilities once a year Santa Cruz seaside company. We do Agreement with them on late night service to get their Staff to and from the Watsonville area for the summer and then we also participate in leadership Santa Cruz We were also asked to publish the memberships that we are involved in I'm not going to go through them all We have them in front of you. So we have administrations listing finances listing and let me just talk to administration for a minute That's not just for Alex. That's for the agency. That's where we put the agency's Membership is into the admin budget Finance that is for the finance staff Human resources same thing purchasing and then fleet maintenance fleet maintenance is another one where it's not just for the fleet maintenance Staff is actually for the agency as a whole Under our capital budget, you know, I can go back in the last one. It'd be helpful in future to give us a total It's dollar amounts. Yeah. Oh Total per department. Yes. Yeah, these are things we these memberships for example Some of them are optional. I mean, I think they're useful for the most part We use them for lobbying and really help us a lot in terms of getting grants But it'd be nice to know what are we because I think the answer is we don't spend very much on them But it'd be nice to have that total number. We can do that On to the capital budget for 19. We are projecting to have a capital budget of about 22 million dollars The lesson 22 million dollars. This is where we plan on spending that money Fleet maintenance on the equipment side. We have some IT projects Silly upgrades and improvements As you can see almost 50% of our budget is the revenue vehicles That's that three million dollars. I was talking about plus plus plus. We have engine replacements We have repaint campaigns all kinds of things to keep our revenue vehicles on the street Transfers from the operating budget for the bus replacements non-revenue vehicles Dollar amounts with those On the last chart, what's the difference between the purple and the yellow? They're both include Bus replacements overlap of the category there Okay, so the purple is the transfers money. We're transferring in from the operating budget There's revenue and then the gold is the grant money Sorry couldn't see it from here going to the same place, but coming from different places. Yes, correct On the and so here's the funding sources for those projects that we want to do you have Read it from there So your federal grants are the gold part on the part on the bottom right you have operating capital reserve fund is the gray part on the Right-hand side and then your transfers are on the top You have the PTM ISCA the 1b money is still coming in for three million dollars and then we have the miscellaneous ones on the left-hand side That's the type of money. We're using to fund the 20 million dollars in capital my budget Any questions you can actually go to 14b1? That's where all the detail was I wasn't going to go through that today Unless you had specific questions online on which I'm happy to answer But that's the presentation Thank you. Any other questions from the board questions from the public the presentation Okay, we accept report And set the public hearing for our June meeting. Yes, 22nd. Yeah, June 22nd for the public hearing Second all those in favor. Hi pose unanimously approved Okay, now we will We're going to be going into budget sessions or excuse me closed session The budget on the mind talking about yeah, I don't want to go that fast. That's June 22nd. Okay Close session. Do we have anything that's going to be reportable? Okay, so it's possible. There could be something reportable Heading on how we how you guys handle your closed session. Okay? Any other questions? Did public want to comment on the closed session item No kidding. We definitely need to work on our relationship in communication So Alex, I will take myself. I will make myself available to you and More often to resolve a lot of the issues I want to thank you on the first good step to establish in a standing labor management Meeting monthly with us like you do with I say you and again, I want to look forward I want to look forward not backwards so I look forward to getting a year of cooperation just like the part of the city logo in this building Unity through cooperation and PS. I told you a few days ago Your number comes because of your new number your number comes up a span and myself And so don't feel bad if I don't answer it right away. Thank you Thanks for your comments. Thank you any other questions for the public any statements Okay, we we were going to closed session with the possibility of a public report that this meeting Public meeting is a adjourned until the June 22nd This means adjourned I'm going to review the meeting of the Santa Cruz metro board of directors close from Come back from recess on May 18th 2018 there are a few things we went through about the review process and all and I will have a director Rotten just explain that briefly and then we will go into the it was a proposed contract for the Executive the CEO. Yeah, so we got the input from SCI you specifically about Seen a written form of the recommendation for the or maybe multiple recommendations in the future We decided not at this time to Put this off for a month, but to make our decision today But we do want to have an immediate meeting with the committee to sit down with you and talk about how we can get Make sure that there's meaningful input into the review process I mean we think there's been some input but it in the future that probably could be expanded and we want to find ways That would be helpful for the unions to feel that they really are getting input into the review process for the CEO and the outcome of it So what we'll contact you to schedule that meeting as quickly as we can in terms of where we're going with it okay All right, then if we're as for a report on the executive session the we we all agreed that our CEO Alex Clifford has done a Fantastic job in the past four years to get us out of a deep hole and get us on the road to recovery Literally and we really really respect how you've been able to do this and made it very clear and publicly Also that your outreach to the community has been very very good We really appreciate that and we want more of it and we think we can get there with the marketing manager if we can do that With the passage of SB 1 and other things We have We have recommended that he received More than really a satisfactory Accommodation or recognition that we approve the contract is proposed So we're gonna what we want to do is you take a five-minute break. We'll pass out copies of the actual Proposal for this salary change arrangement It's already there in the table in the back I think if they read right make sure that there's enough time for people to have a look at it's not not a long document And then we'll come back and discuss it and have a formal vote whether we approve that or not Okay. Yes, what and that the change was In the process was something that was done with her Legal staff rather than the board change. Yes The I mean to continue as I might work out that the Change that took place just this making this point the change in the process from the way it used to be done When we actually published the stuff that's on that table earlier and there was a month or most of a month to comment on it Before that change was made by our attorney who found that in the industry its standard practice not to publish those things but What we'll have we'll talk about that and other things when we actually get together with the union to meet but that's Just so you understand it wasn't like Alex asked for that to be Not published or something that was done by our attorney when she gave us a bunch of recommendations for changing how we did processes in the in the district More comments comments from the public Well, let's let's wait give them about. Oh, yeah, anybody not had a chance to read. I think I've had a chance Okay, it's on the back table. Let's take let's take a five. Let's take a five minute break Okay, I'm I think that I hope that you've been able to have a I know it's been a brief review I'm sorry. I thought that maybe folks had read it Previously is there are there any comments from? Anybody in the public about the proposed contract mr. Montecino I just like to make you aware that you know, it's it's it's great Yeah, I actually done a lot of work, but I just want to make you aware that them that the employees have been in this plight that we Haven't received in a koala and you know, I know they're There they seem to be more and more frustrated Seeing these races not knocked on on his his work and what he's done with the district is just They've been with a without a koala or wage increase for now almost four years. So thank you. Thank you Any other comments? I? Understand what you're saying about the change of the process is just we're very disappointed that you've decided to discontinue with The past way that this was done It's just something that the public the public and in Santa Cruz has has come to expect they have appreciated it I'm sure and Just because something is not Required to be done doesn't mean it's not always the best way to do it So we're just disappointed, but we look forward to your reaching out to us for feedback on the process Thank you Comment from the board to do true Thank you. I just wanted to comment on that the comment right now I think that it's important that the the board is very open about creating a relationship I know that and they're gonna create an ad hoc committee or some sort of group to meet with the unions and hopefully we can really build a much stronger Relationship than they're in then possibly there is already So hopefully that's something that we can get out of this. I know that you know The conversation was sometimes, you know, we people were so used to things going a certain way and then it changes and But you know, maybe there should have been a better clarity and like this was what this was gonna happen And that didn't happen. So I want to apologize, you know Hopefully if we move forward with anything else if we we change the thing that will have better communication I think we're now creating a group to do that. So In regard to Alex, I want to say, you know, you did a good You did a great job and and thank you for you know helping us, you know, bring us out of this You know hole that we were in we saw the pots what they were four years or many years ago The pots are gonna look a lot different and and that's not not just because you but everybody else But I am you know, I just one of the comments that I made was that I remember when you came day one And you you've really grown and when we told you you need to you needed You know, maybe look at something differently or you know, work with the community or step out We've really seen you try so I want to say thank you We have some go ahead I Guess I'm all over the I just like to add On a one-to-one basis. I like this has been a justification of your existence here four years here Thank you. Thank you greatly Okay, I think I'd just like to mention this the standard Pretty much standard increase. There's a new salary schedule, but that's be taken into effect Included in this. I don't know if there's any other comments from the board or somebody would like to make a motion mr. Rotkin, oh, excuse me Ordinary bonus or something it's a step increase and we have not denied step increases to other employees What? Yeah, I don't know the exact percent is to life five percent. Yes, it's a five percent pay increase But it's a step increase and none of the other employees have been denied their step increases But I take to heart that concern the unions have the about their members Looking for increases that they haven't seen for a while because we were in such desperate shape And so we'll certainly be discussing that in the future. That's that's ahead of us. We understand that quite significantly I will move that we adopt the Language that's before us for the actual change in the step status or that move in the step status that's proposed Okay, the second and that's based on finding that he had that our CEO as far exceeded the minimal Satisfactory standard necessary for such a step increase Makeers you've made some great decisions over the last four years that have led us to stability I also want to acknowledge all of my staff and that's that's from the management down to the line level employees You know when I talk about accomplishments, that's not Clifford accomplished these things. That is the team did that You know it takes leadership to get things done, right? but these folks behind me and the folks that are not here in this room today they get the work done they're the ones that that you know put the stone to the grindstone or whatever the saying is and get it done and make it happen and and Make me look good, and and I'm great. I'm grateful for what they do and the support that they give me they're really good people and I Just want to say thank you to them and to you think it's been a great four years. Yes, the CEO Review ad hoc committee will be meeting with Alex to talk about the goals for the coming year In the near future and so that means going to get set up. Okay with that I think we will adjourn to June 22nd at 9 a.m. At the Santa Cruz City Council Chamber This meeting is adjourned