FY17 ADOPTED ANNUAL OPERATING AND CAPITAL BUDGET
Valley Metro Regional Public Transportation Authority (RPTA) provides public transportation
services for Maricopa County located in the metro Phoenix, Arizona. The FY17 Adopted Budget
covers the 12-month period between July 1, 2016 and June 30, 2017. Services include fixed
route bus, paratransit, Dial-a-Ride, vanpool, regional planning, marketing, customer service,
alternative transportation, trip reduction and fiscal management of regional Public
Transportation Funds (PTF).
FY17 Sources of Funds
Total sources of funds for FY17 are $344.3M, an increase of $57.4M or 20% from FY16. For
FY17, PTF sales tax revenues are increasing by $7.3M or 5% above last year. Federal grant
revenues are increasing by $6.1M (18%) primarily due an increase in 5307 funding used to
purchase bus fleet. It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to
support rail capital projects in the spring of 2017.

FY17

FY16

Valley Metro RPTA Sources of Funds FY17 vs FY16
$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

Public Transportation Funds
Transit Service Agreements
Federal Grants
METRO Rail Reimbursement
Fixed Route Fare Revenues
AZ Lottery Proceeds
Regional Area Road Funds
Other Revenues
Bond Proceeds
Carry forwards and Reserves

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 1

FY17 Uses of Funds
Total uses of funds for FY17 are $344.3M, an increase of $57.4M or 20% from FY16. PTF
Pass-thru Disbursements are increasing by $2.8M due to increased light rail construction and
purchases of regional bus fleet. Transit service contracts and fuel are increasing by $5.5M or
6% primarily due to increases in contract rates and paratransit ridership. Capital expenditures
are up $11.0M primarily due to regional fleet additions and land acquisition. PTF Bond Passthru Disbursements are increasing by $18.1M due to increased light rail construction. In FY17,
carry forwards to reserves include $18.4M in capital reserve increases.

FY17

FY16

Valley Metro RPTA Uses of Funds FY17 vs FY16
$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

PTF Pass‐thru Disbursements
Transit service contracts & fuel
Capital
RPTA & METRO Personnel Costs
Bond Principal & Interest
Contractual Agreements
AZ Lottery Disbursements
PTF Bond Pass‐thru Disbursements
Other Costs
Carry forwards to Reserves

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 2

FY17 Uses of Funds – Comparisons of Services Provided
Valley Metro RPTA’s primary activities include passenger services, regional services and capital
funding. The table below depicts changes in the FY17 plan versus FY16.

FY 17

FY 16

Valley Metro RPTA Uses of Funds FY17 vs FY16
$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

+ Passenger Services
Fixed Route Bus Operations
Paratransit Operations
ADA Lead Agency Disbursements
Regional Vanpool Service
+ Regional Transit Services
Marketing and Outreach
Call Center
ADA Compliance
Rideshare and Trip Reduction
Service and Capital Planning
+ Capital Activities
Bus Equipment
Paratransit Lead Agency Capital
Vanpool Fleet
Light Rail Lead Agency Capital
Facilities and equipment
+ Fiscal & Administrative Services
Valley Metro Rail Staffing
Arizona Lottery Fund Disbursements
Debt Service
Cash Reserves Carried Forward
Valley Metro Administration

FY17 Budget Baseline Service Assumptions
Fixed Route Bus Services
 East and West Valley routes operated by Valley Metro will increase revenue miles
vs. FY16 service levels; fleet of 279 units to deliver 12.0 million vehicle revenue
miles serving 17.9 million passenger trips in the coming year.
 Bus service includes a combination of local, express, circulator, and rural route
service.
Dial-a-Ride and Paratransit Services
 East and West Valley demand response ADA and non-ADA services operated by
Valley Metro will continue to serve portions of Maricopa County and the cities of El
Mirage, Peoria, Sun City, Surprise and Youngtown in the West Valley and Chandler,
Gilbert, Mesa, Scottsdale and Tempe in the East Valley.

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 3






New for FY17 is seamless Regional ADA Dial-a-Ride service enabling qualified
passengers to cross municipal boundaries without transfers, estimated at 47,000
trips.
For eligible ADA passengers, level of service is based on passenger reservation
demand within service areas and hours of operation covered by fixed route bus
routes.
For non-ADA passengers, service levels are set by member cities.
Services are provided on a shared-ride basis by a mixed fleet comprised of taxi cabs,
vans and accessible vehicles; estimated at 522,000 annual passenger trips.

Vanpool Services
 Service levels are anticipated to increase over FY16 with 440 vehicles delivering 1.2
million passenger trips.
Regional Call Center and ADA Compliance Center
 Customer Service levels anticipated to remain similar to FY16 for fixed route bus and
light rail.
 ADA paratransit eligibility certification levels are anticipated to rise to 5,550 as a
result of increasing numbers of seniors, persons with disabilities applying for service
and as current customers go through eligibility recertification. Travel training will
continue to be provided for individuals with disabilities who wish to take advantage of
Valley Metro’s expanding light rail and bus network.
Capital Procurement
 101 standard bus replacements (81 units Phoenix, 8 units Scottsdale, 12 units
RPTA) and 6 circulator replacements for RPTA
 21 expansion buses (8 RPTA for Scottsdale Rd Service, 13 for RPTA) and 7
expansion circulators for RPTA
 25 lead agency paratransit fleet vehicles for Phoenix
 67 vanpool replacement units
 $6.7M in park-and-rides, bus stop amenities and facilities
 $3.7M in vehicle communication systems, camera bus upgrade and fare collection
system upgrades
 48 mid-life rebuilds of engines and transmissions

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 4

FY17 Goals and Initiatives
In January 2015, the Valley Metro RPTA and Valley Metro Rail Boards adopted the Valley Metro
Strategic Plan for FY16 through FY20. The Strategic Plan provides clear definition of the
purpose of the organization and establishes realistic goals and objectives for a five-year period.
This plan ensures the most effective use of the organization’s resources by focusing those
resources on key priorities. Below are the five, overarching goals identified in the Strategic Plan:
1.
2.
3.
4.
5.

Increase customer focus
Advance performance based operation
Grow transit ridership
Focus on economic development, regional competitiveness and financial resources
Advance the value of transit

With the initiation of the FY17 budget process, staff has developed a number of initiatives that
align with the Strategic Plan and will be incorporated into the FY17 budget, as summarized
below.
Valley Metro FY17
Investment
$ Thousands
1. Increase Customer Focus:

FY17 Initiatives

Improve Customer Satisfaction
Develop smart card fare program/mobile
Integration of greater, more effective technology, improving
passenger information systems with real time data, such as the ticketing
website, facility signage and a Ridekick mobile application, and
implementation of an enhanced fare media solution, including
smart cards and mobile ticketing.
Renovate website & mobile site

Enhance services & facilities for seniors & people with
disabilities.

RPTA FY17 Adopted Budget Executive Summary

Develop a more seamless, cost-effective
ADA Dial-a-Ride network with cities as
partners

RPTA
Investment

Total
Investment

$

430.0 $

860.0

$

200.0 $

300.0

$

2,500.0 $

2,500.0

Valley Metro | 5

2. Advance Performance Based Operation:

FY17 Initiatives

Valley Metro FY17
Investment
$ Thousands
RPTA
Total
Investment Investment

Operate an effective, reliable, high performing transit
system.

Develop an asset management plan for
Valley Metro in conjunction with member
agencies

$

25.0 $

100.0

Maintain a culture to recruit and retain a qualified and
diverse workforce.

Develop a program to recruit and retain a
qualified and diverse workforce.
Consultant engagement to for
comprehensive training assessment and
new employee orientation programs

$

20.0 $

40.0

94.5 $

189.0

Maintain strong fiscal controls to support Valley Metro’s
long-term sustainability.

3. Grow Transit Ridership:
Communicate availability, attractiveness and safety of
transit service
4. Focus on Economic Development, Regional
Competitiveness and Financial Resources:

Establishing Internal Audit Department with
dual reporting responsibility to the Board of $
Directors and VM Executive Office
FY17 Initiatives
Conduct discretionary ridership campaigns
to continue to attract riders

FY17 Initiatives

RPTA
Investment

$

Total
Investment

105.0 $

RPTA
Investment

210.0

Total
Investment

Work with local communities to leverage transit oriented
development (TOD) to increase investment in transit

Research and monitor and report regional
trends regarding TOD implementation and
successes
- Support to TOD working group and PNR
utilization study: $100,000

$

100.0 $

100.0

Pursue all available funding opportunities for transit
projects and services

Aggressively pursue federal transit funding
opportunities at the regional level
- Conducting region-wide ITS study for
federal funds: $100,000

$

100.0 $

100.0

5. Advance the Value of Transit:

FY17 Initiatives

Develop and implement a communications plan to inform Continue media campaign to raise greater
awareness of the value of transit
and educate the public on the value of transit

RPTA FY17 Adopted Budget Executive Summary

RPTA
Investment

$

Total
Investment

63.0 $

126.0

Valley Metro | 6

Agency Staff Overview
Valley Metro RPTA and Valley Metro Rail budgets are developed with a unified staff plan, with
department managers planning the level of effort required to meet the bus and rail activities.
For FY17, there are 310 employees budgeted in the integrated agency; 131 FTE’s are budgeted
to RPTA activities; 179 to VMR activities. Staffing levels are reviewed on an annual basis with
zero-base analysis of level of effort requirements to fulfill work requirements in the five-year
period commencing with the beginning of the new fiscal year. Salary and fringe benefit
compensation levels are measured against comparable regional agencies, member cities and
peer transit agencies located in the western U.S.
FY17 Compensation and Fringe Benefit Assumptions
Total compensation budget is based on a 2.5% increase. For staff salary changes, merit
increases are based on employee performance. Division level control is in place to contain total
salary and fringe costs within budget.
Agency health care costs will increase. Program design adjustments are in place to hold total
agency fringe benefit cost increases to within 3% of FY16 levels.
Staffing cost analysis
FY 17

FY 16

change

pct change

$ million
Salaries

19.6

18.8

0.8

4%

Fringe Benefits
Total Salary and Fringe Benefits

7.6
27.2

7.5
26.3

0.1
0.9

2%
3%

Analysis of changes
Base Compensation FY16
Base increase
Position Changes
New Base Compensation FY17

Salary

Fringe

18.8
0.5
0.3
19.6

7.5
0.1
7.6

Change FY17 Adopted Budget vs. FY16 Adopted Budget

Total
26.3
0.5
0.4
27.2
0.9

$ million

Five new agency positions are planned to improve agency internal controls and strengthen fixed
route bus and accessible transit contractor performance, as noted below.
Title

Division

Scope of Work

Manager, Internal Audit Chief Executive Office
Internal Audit Specialist Chief Executive Office

Agency Internal Controls with primary reporting to Board
Internal Control testing and compliance

Program Representative Planning & Accessible Transit

Support East Valley, West Valley, and regional paratransit

Scheduler
Program Coordinator

Fixed Route Bus schedule analysis and management
Fixed Route Bus contractor performance management

Operations and Maintenance ‐ RPTA
Operations and Maintenance ‐ RPTA

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 7

FY17 Adopted Budget Financial Summary
In the table below, detailed revenues and expenses are shown with comparisons to the prior
year’s adopted and revised budgets. Amounts of increase or (decrease) are shown from the
adopted budget. The “Note” column (on the far right side) indicates reference to explanations
which are provided in the following table.
Valley Metro
Regional Public Transportation Authority
FY17 Adopted Operating & Capital Budget
Comparison to FY16 Adopted Budget
(In thousands)
FY17
Adopted
Budget
Sources of funds
Revenues:
Public transportation funds (PTF)
Transit service agreements
Federal grants
VMR staff & administration reimbursement
Regional area road funds (RARF)
Interest & other revenues
Local participation
State & local grants
Fixed Route Fare Revenues
AZ Lottery Proceeds
Total revenues

$

Bond proceeds
Carryforwards & reserves
Total revenues & other sources of funds
Uses of funds by category
Expenses:
Lead agency PTF disbursements
Transit service contracts and fuel
Capital outlay
Salary & fringe benefits
Bond principal & interest expense
Consultants & Maintenance contracts
Contingency
Rent & facility costs
Advertising
Transit book, outreach mat. & online serv.
Insurance & risk management
Lead agency RARF disbursements
Other administrative costs
AZ lottery Disbursements
Lead agency bond disbursement
Total expenses

$

Carryforwards & contributions to reserves
Total expenses & other uses of funds

Operating Budget
Capital Budget
Total Operating & Capital Budget

141,162 $
30,868
39,773
17,137
4,864
3,020
297
260
15,664
11,250
264,295

FY16
Adopted
Budget

133,866 $
30,181
33,644
16,889
4,782
1,377
199
449
16,265
11,250
248,902

FY16
Revised
Budget

132,121 $
29,695
18,114
16,889
4,782
3,911
199
449
16,347
11,250
233,758

Amount
Increase/
Decrease

Percent***
Increase/
(Decrease)

7,296
687
6,129
248
82
1,643
98
(189)
(601)
15,393

5%
2%
18%
1%
2%
119%
49%
-42%
-4%
0%
6%

(1)

(6)
(7)

61,257
18,705

37,986

33,768

61,257
(19,281)

100%
-51%

344,257

286,888

267,526

57,369

20%

72,365 $
94,622
36,858
27,231
25,433
3,771
1,946
4,988
528
893
205
500
1,915
11,200
43,098
325,553

69,532 $
89,150
25,882
26,342
24,235
3,992
1,668
5,063
530
746
266
500
2,432
11,200
25,000
286,538

91,127 $
91,751
7,783
26,363
24,235
3,754
1,418
5,063
530
746
266
500
2,440
11,200
267,176

2,833
5,472
10,976
889
1,198
(221)
278
(75)
(2)
147
(61)
(517)
18,098
39,015

4%
6%
42%
3%
5%
-6%
17%
-1%
0%
20%
-23%
0%
-21%
0%
72%
14%

350

350

18,354

18,704

(2)
(3)
(4)

(5)

(8)
(9)
(10)
(11)
(12)
(13)

(14)

5244% (15)

$

344,257 $

286,888 $

267,526 $

57,369

20%

$

166,417 $
177,840
344,257 $

160,891 $
125,997
286,888 $

163,020 $
104,496
267,526 $

5,526
51,843
57,369

3.4%
41.1%

$

Note

*** Percentage change is compared to the FY16 Adopted Budget

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 8

Sources of Funds
Note
Explanation
1 Public Transportation Funds from the Maricopa County Transportation Excise Tax are forecasted to
grow by 5%. Forecast is provided by ADOT. In FY17 the AZ Department of Revenue assessment
charge is estimated at $900K, which is a reduction to PTF revenue forecasted by ADOT. Adequate
reserves are in place should collections fall short of ADOT forecast projections.
2

Federal Grants overall are up by $6.1M from $33.7M to $39.8M. Primary cause for change is an
increase in 5307 funding used to purchase bus fleet. Planned bus fleet purchases for FY16 were
rescheduled to arrive in FY17.

3

Contributions from Valley Metro Rail for staff are $0.2M higher in FY 17 primarily due to VMR staff
additions to maintain the 26 mile rail service for the full 12 months. In FY16, VMR operated partial year
service for the Central Mesa and Northwest Extensions. Added 2 FTEs internal audit staff.

4

Interest and other revenues are expected to increase $1.6M over FY16. Revenues programmed
include alternative fuel tax credit ($1.2M), increases in proceeds form disposing revenue vehicles
($0.2M), and interest earnings ($0.2M).
Fixed route farebox revenue is forecasted to be approximately 4% less than what was budgeted in
FY16. Fare revenue decrease is due to ridership losses attributed to low gas prices and transfers from
bus to rail.

5

6

It is anticipated that RPTA will issue $61.3M in new series 2017 bonds to support rail capital projects in
the spring of 2017.

7

Consumption of carryforwards & reserves are down by $19.3M due to decreased amount of sales tax
fund balance spending needed in FY17 for LRT capital construction activity

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 9

Uses of Funds by Category
Note
Explanation
8 Lead Agency Disbursements are Public Transportation Funding (PTF) amounts to Member Agencies
and VMR for eligible operating and capital transit expenditures. Increase in PTF Lead Agency
Disbursements of $2.8M is primarily due to an increase in project development and construction
activity for light rail projects and lead agency disbursements for regional bus fleet.
9

Fixed route bus service levels operated by Valley Metro have increased with approximately 138,000
additional service miles added. Transit service contracts increases primarily reflect contractual rate
increases from fixed route service providers. Paratransit demand is forecasted to increase by 7%.

10 Capital Outlay was increased by $11.0M primarily due to land acquisition $2.2M and regional fleet
$7.0M; and $1.1M related to computers/software and site improvements $0.3M.
11 Overall staff cost in FY17 of $27.2M is 8% of total budget. 3% Overall Salary and Fringe increase
$0.9M, broken down as follows: 2.5% base salary and fringe increase $0.5M, net cost increase of
position changes $0.3M Salary and $0.1M Fringe.
12 Bond principal and interest expense is up 5% to $25.4M due to the series 2017 bond issue to
support funding for increased LRT capital construction activity.
13 Contingency is up from $1.7M to $1.9M. Primary contingency relates to fixed route bus contract
rates, fuel rates, and paratransit demand.
14 Lead Agency Bond Disbursements are Public Transportation Funding (PTF) amounts derived from
bond proceeds to Member Agencies and VMR for eligible capital transit expenditures. Lead Agency
Bond Disbursements are up by $18.1M due to increased LRT capital construction activity.
15 Carryforwards & contributions to reserves increased by $18.4M primarily due to the issuance of
bonds to support funding for increased LRT capital construction activity.

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 10

FY17 – FY21 ADOPTED FIVE-YEAR OPERATING FORECAST AND CAPITAL PROGRAM
Valley Metro RPTA has the primary responsibility of implementing the operating and capital
components of the transit element identified in the 20-year Regional Transportation Plan (RTP).
The operating component includes the expansion of regional fixed route services, high-capacity
transit alternatives, vanpools and paratransit services throughout the region. The capital
component of the transit element of the RTP includes fleet replacement and expansion as well as
the development of new park-and-rides, transit centers, passenger facilities and maintenance and
operations facilities over the life of the plan. Construction of the light rail RTP components has
been designated to Valley Metro Rail by Valley Metro RPTA and expenditures are shown as Rail
Capital Funding in the Operating Forecast.
For the Five-Year Operating Forecast, the operations revenues and expenditures are based on
current costs, as used for the development of the adopted FY17 operating budget, with an annual
inflation escalation of three percent (3%) for the remaining four years. Other assumptions in the
Five-Year Operating Forecast are as follows:
 The Public Transportation Fund (PTF) grows by approximately 5.4% annually
 Fixed route fares grow by 5% in FY18 with reduction of discounted fares and base fare
increase in FY20
 Paratransit ridership drives an 7% increase in number of trips delivered
 Planning, Administration, Safety & Security, and Regional Services costs have been
inflated two percent (2%) for the last four (4) years of the forecast
The proposed service changes within the five-year time period that have been incorporated into
the plan as proposed by the Transit Life Cycle Program are as follows:
FY17
 No service changes
FY18



Begin Route 104 Saturday service in Chandler
Begin PTF funding of Route 104 in Mesa



Begin PTF funding of Route 50 in Scottsdale




Begin PTF funding of Route 30 in Tempe
Begin PTF funding of Route 77 in Mesa



Begin PTF funding of Route 30 in Mesa

FY19

FY20

FY21:

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 11

FY17 – FY21 Operating Forecast
(thousands)
5-Year
Total
Revenues
Public Transportation Fund (ADOT)
Less: AZDOR Assessment
PTF Bond Proceeds
Less: Debt Service Bus & Rail
Less: Rail Capital Funding (current)
Net PTF for Operations
Other Regional Funds
Federal Funds
Transit service reimbursements
Fare Revenues
Alternative Fuel Tax Credit
Interest and other revenue
Total revenues

$

$

793,606
(4,973)
61,257
(157,971)
(268,669)
423,250

$

24,716
41,973
182,574
92,008
1,228
160

$

765,910

The Five Year revenue operating
forecast begins with PTF sales tax
funds, which are estimated by
ADOT team of economists.
One Bond Issue is anticipated in
FY17.
Debt Service and Rail Capital
Funding requirements are
deducted to derive PTF available
for operations.

(thousands)
Expenditures
Operations
Fixed Route
Paratransit - EVDAR
Paratransit - NWDAR
Paratransit - Regional Trips
Paratransit - RideChoice
Vanpool Service
ADA
Total operations expenditures
Transportation Demand Management
Planning & Administration
Regional Services
Safety & Security
Operations Contingency
Total expenditures
Excess/(deficiency) of revenues
over expenditures - operations
Less: Bus Capital Funding

5-Year
Total
$

$
$

$

458,136
48,046
10,736
13,580
4,703
5,128
108,312
648,642
5,903
24,548
42,003
1,984
18,993
742,073

$

23,836

$

(67,596)

Operations expenditures for the
five-year period are impacted by
service contract increases and
paratransit demand ridership.
Due to aging population,
paratransit ridership is forecasted
to grow significantly.
Regional Services, Planning,
Safety & Security and Admin
costs are forecasted to grow
about 2% per year.
A $24.0M operating surplus is
projected, which will be used to
fund bus capital purchases along
with existing fund balance. The
current $86.0M balance has
been built to support the cyclical
bus capital drawdown.
Projected Operating Fund
Balance is $42.2M in FY21

Undesignated fund balance, July 1, 2015
Excess/(deficiency)

$

85,950
(43,759)

Undesignated fund balance, June 30, 2021

$

42,191

RPTA FY17 Adopted Budget Executive Summary

Valley Metro | 12

FY17 – FY21 Capital Program
(thousands)
5-Year
Total
Revenues
Public transportation funds
FTA - Section 5307
FTA - Section 5311
FTA - Section 5337
FTA - Section 5339
FHWA - STP
Member local match
Vehicle/parts proceeds
Capital assets reserve applied
Vanpool reserve applied
Undesig. Fund Balance Applied (PTF)
Total Revenues

$

$

46,967
161,448
456
1,046
8,245
17,159
100
1,929
1,740
741
20,631
260,462

(thousands)
5-Year
Total
Expenditures by Project
IT Infrastructure
Standard Bus - Replacement
Standard Bus - Expansion
Express/BRT - Expansion
Rural Fleet - Replacement
Paratransit Fleet - Replacement
Vanpool Fleet - Replacement
Vanpool Fleet - Expansion
Fleet - Other
Transit Centers (4-Bay)
Bus Stop Passenger Amenities
Park & Rides
Vehicle Management/Communications Systems
Fare Collection Systems
State of Good Repair - Fleet Rebuild
Total Expenditures

RPTA FY17 Adopted Budget Executive Summary

$

$

2,750
154,347
50,308
3,168
1,173
1,915
13,462
4,438
1,957
2,376
535
9,233
6,546
505
7,749
260,462

Capital program funding sources
include new PTF sales tax and
PTF fund balance that has been
accumulated for cyclical bus fleet
replacement.
Total PTF funding over the five
years is $67.6M or 26% of capital
revenue.
Federal funding will provide
$188.4M or 72% of capital
revenue.

Capital program expenditures for
the upcoming five years are
primarily for fleet replacement and
expansion.
A total of 475 bus units are planned
for replacement and 93 for
expansion.
Vanpool fleet replacements total
301 units, with 100 expansion units
planned.
Paratransit fleet replacements total
164 units.
New transit center and park-andride facilities are planned in the
West Valley. Vehicle
communications and fare collection
systems are also planned.

Valley Metro | 13